UNCONDITIONAL LIMITED GUARANTY AGREEMENT
THIS UNCONDITIONAL LIMITED GUARANTY AGREEMENT (the "GUARANTY"), dated
as of December 19, 1996, made by GST USA, Inc., a Washington corporation (the
"GUARANTOR"), in favor of NTFC CAPITAL CORPORATION, a Delaware corporation (the
"LENDER"), and any assignee of the Lender.
RECITALS:
A. Guarantor desires to induce the Lender to enter that certain
Equipment Loan and Security Agreement dated as of December , 1996 (the "LOAN
AGREEMENT"), by and between the Lender and GST Equipco, Inc., a Washington
corporation ("BORROWER"), which is a wholly owned subsidiary of the Guarantor
(and each is a direct or indirect subsidiary of GST Telecommunications, Inc., a
Canadian corporation). Pursuant to the Loan Agreement the Lender will, at the
request of Borrower, provide financing for Borrower to acquire from Northern
Telecom Inc. and lease to Affiliates certain equipment, additions, upgrades and
software (collectively, the "EQUIPMENT") pursuant to the terms of the Loan
Agreement. Such financings shall be referred to herein from time to time as the
"LOANS".
B. The Lender is willing to enter into the Loan Agreement, and advance
the Loans, subject to the terms and conditions set forth in the Loan Agreement
and related instruments, agreements and documents executed by and between
Borrower and the Lender (as amended, modified, supplemented or replaced from
time to time, the "LOAN DOCUMENTS"), but only so long as Guarantor
unconditionally guarantees the timely performance and payment by Borrower of
each and every obligation under the Loan Documents, subject to the limitations
stated herein.
C. Guarantor acknowledges that the Lender would not be willing to enter
into the Loan Documents without the guaranty by Guarantor under the terms of
this Guaranty.
D. Guarantor is wholly owned by GST Telecommunications, Inc., which
also owns (indirectly) one hundred percent (100%) of the outstanding capital
stock of Borrower, and Guarantor expects to increase its business, and the
business of its other direct and indirect Affiliates, through the use of the
Equipment to be leased by Affiliates from Borrower and will receive direct and
indirect benefit from the Lender's extension of credit to Borrower.
NOW, THEREFORE, in order to induce the Lender to enter into the Loan
Documents with Borrower and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, Guarantor hereby agrees
as follows:
TERMS:
ARTICLE 1
DEFINITIONS
SECTION 1.1 CERTAIN TERMS. The following terms (whether or not
underscored) when used in this Guaranty, including its preamble and recitals,
shall have the following meanings (such definitions to be equally applicable to
the singular and plural forms thereof):
"BORROWER" has the meaning assigned to that term in Recital A
hereto, and its successors and assigns, and includes without
limitation: (i) the Borrower as debtor-in-possession or any trustee in
any bankruptcy proceeding; (ii) any trustee, receiver, custodian,
conservator, or other similar appointee over Borrower or over any of
Borrower's property pursuant to any court proceeding of any kind or
otherwise; and (iii) any successor person.
"EQUIPMENT" has the meaning assigned to that term in Recital A
hereto.
"GUARANTEED OBLIGATIONS" has the meaning assigned to that term
in SECTION 2.1 hereof.
"GUARANTOR" has the meaning assigned to that term in Recital A
hereto, and its successors and permitted assigns, and shall include
without limitation: (i) the Guarantor as debtor-in- possession or any
trustee in any bankruptcy proceeding; (ii) any trustee, receiver,
custodian, conservator, or other similar appointee over Guarantor or
over any of Guarantor's property pursuant to any court proceeding of
any kind or otherwise; and (iii) any successor person.
"GUARANTY" means this Guaranty, as the same may be amended,
supplemented, amended and restated or otherwise modified from time to
time.
"LOAN AGREEMENT" has the meaning assigned to that term in
Recital A hereto.
"LOANS" has the meaning assigned to that term in Recital A
hereto.
"LOAN DOCUMENTS" has the meaning assigned to that term in
Recital B hereto.
SECTION 1.2 LOAN DOCUMENTS DEFINITIONS. Unless otherwise defined herein
or the context otherwise.requires, terms used in this Guaranty, including its
preamble and recitals, have the meanings provided in the Loan Documents.
ARTICLE 2
GUARANTY
SECTION 2.1 GUARANTY. Guarantor hereby unconditionally and irrevocably
guarantees, subject to the limitations expressed herein, the full and prompt
payment when due, whether at stated maturity, by acceleration or otherwise
(including, without limitation, all amounts which would have become due but for
the operation of the automatic stay under Section 362(a) of the Federal
Bankruptcy Code, 11 U.S.C.
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362(a)), of any and all indebtedness and obligations of any kind and character
whatsoever of Borrower to the Lender and any and all extensions, renewals and
replacements of such indebtedness, arising under any of the Loan Documents
including, but not limited to, the Loan Agreement, the Note, or any other
document executed by Borrower in connection therewith, or of Guarantor
hereunder, whether such indebtedness is:
(i) characterized as the payment of principal, interest,
premium, fees, costs, expenses or otherwise;
(ii) presently existing or hereafter incurred or arising;
(iii) from time to time reduced and thereafter increased or
entirely extinguished and thereafter reincurred;
(iv) foreseen or unforeseen, direct or indirect, absolute or
contingent, primary or secondary, secured or unsecured,
matured or unmatured, of the same class or type or of
different classes or types;
(v) created by or arising under contract, tort, guaranty,
overdraft, recovery of avoided payments or otherwise;
(vi) contracted for by Borrower alone or jointly and
severally with another or others;
(vii) incurred by Borrower prior to, during, or after any
filing by Borrower or against Borrower of any petition or
request for liquidation, reorganization, arrangement,
adjudication as a bankrupt, relief as a debtor, or other
relief under bankruptcy, insolvency, or similar laws now or
hereafter in affect in the United States of America or any
state or territory thereof or any foreign jurisdiction, and
notwithstanding Borrower's legal status as a debtor or a
debtor-in-possession or Borrower's discharge in any such
proceeding; and/or
(viii) created or incurred with or without notice to Guarantor.
The foregoing obligations are referred to herein collectively as the "Guaranteed
Obligations." This Guaranty constitutes a guaranty of payment when due and not
merely of collection, and Guarantor specifically agrees that it shall not be
necessary or required that the Lender or any holder of any Loan exercise any
right, assert any claim or demand or enforce any remedy whatsoever against the
Borrower before or as a condition to the Guaranteed Obligations of any Guarantor
hereunder.
SECTION 2.2 ACCELERATION OF GUARANTY. Guarantor agrees that, in the
event of the dissolution or insolvency of the Guarantor, or the inability or
failure of the Guarantor to pay its debts as it become due, or an assignment by
the Guarantor for the benefit of creditors, or the commencement of any case or
proceeding in respect of the Guarantor under any bankruptcy, insolvency or
similar laws, and if such event shall occur at a time when any of the Guaranteed
Obligations of the Borrower may not then be due and payable, Guarantor will pay
to the Lender forthwith the full amount which would be payable hereunder by
Guarantor if all such Guaranteed Obligations were then due and payable.
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SECTION 2.3 GUARANTY ABSOLUTE. Except as limited in SECTION 2.8 below,
this Guaranty shall be construed as a continuing, absolute, unconditional and
irrevocable guarantee of payment and shall remain in full force and effect until
all Guaranteed Obligations of the Borrower have been paid in full, all
obligations of Guarantor hereunder have been paid in full and obligations of
Lender under all Loan Documents shall have terminated. Guarantor guarantees that
the Guaranteed Obligations will be paid strictly in accordance with the terms of
the Loan Agreement, and that all other Guaranteed Obligations shall be paid
strictly in accordance with the terms of the Loan Documents, regardless of any
law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Lender with respect thereto.
The liability of Guarantor under this Guaranty shall be absolute and
unconditional irrespective of:
(a) any lack of validity, legality or enforceability of the
Loan Agreement, the Note, any other Loan Document or any other
agreement or instrument relating to any thereof;
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Guaranteed Obligations, or any
compromise, renewal, extension, acceleration or release with respect
thereto, or any other amendment or waiver of or any consent to
departure from the Loan Agreement or any other Loan Document;
(c) any addition, exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Guaranteed
Obligations;
(d) the failure of the Lender or any holder of a Loan
Document:
(i) to assert any claim or demand or to enforce any
right or remedy against the Borrower or any other person or
entity (including any other guarantor) under the provisions of
the Loan Agreement or any other Loan Document or otherwise, or
(ii) to exercise any right or remedy against any other
guarantor of, or collateral securing, any Guaranteed
Obligations of the Borrower;
(e) any amendment to, rescission, waiver, or other
modification of, or any consent to departure from, any of the terms of
the Loan Agreement or any other Loan Document;
(f) any defense, set-off or counter-claim which may at any
time be available to or be asserted by the Borrower against the Lender;
(g) any reduction, limitation, impairment or termination of
the Guaranteed Obligations of the Borrower for any reason, including
any claim of waiver, release, surrender, alteration or compromise, and
shall not be subject to (and Guarantor hereby waives any right to or
claim of) any defense or setoff, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality,
non-genuineness, irregularity, compromise, unenforceability of, or any
other event or occurrence affecting, the Guaranteed Obligations of the
Borrower or otherwise; or
(h) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, the
Borrower or Guarantor.
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SECTION 2.4 REINSTATEMENT, ETC. Guarantor agrees that this Guaranty
shall continue to be effective or be reinstated, as the case may be, if at any
time any payment (in whole or in part) of any of the Guaranteed Obligations is
rescinded or must otherwise be restored by any the Lender or any holder of any
Loan Document, upon the insolvency, bankruptcy or reorganization of the Borrower
or otherwise, all as though such payment had not been made.
SECTION 2.5 WAIVER. Guarantor hereby waives promptness, diligence,
notice of acceptance and any other notice with respect to any of the Guaranteed
Obligations and this Guaranty and any requirement that the Lender protect,
secure, perfect or insure any security interest or lien or any property subject
thereto or exhaust any right or take any action against the Borrower or any
other person or entity (including any other guarantor) or any collateral.
SECTION 2.6 WAIVER OF SUBROGATION. Guarantor hereby irrevocably waives
any claim or other rights which it may now or hereafter acquire against the
Borrower that arise from the existence, payment, performance or enforcement of
Guarantor's obligations under this Guaranty or any other Loan Document,
including any right of subrogation, reimbursement, exoneration, or
indemnification, any right to participate in any claim or remedy of the Lender
against the Borrower or any collateral which the Lender now has or hereafter
acquires, whether or not such claim, remedy or right arises in equity, or under
contract, statute or common law, including the right to take or receive from the
Borrower, directly or indirectly, in cash or other property or by set-off or in
any manner, payment or security on account of such claim or other rights. If any
amount shall be paid to Guarantor in violation of the preceding sentence and the
Guaranteed Obligations shall not have been paid in cash in full and the Loan
Documents have not been terminated, such amount shall be deemed to have been
paid to Guarantor for the benefit of, and held in trust for, the Lender, and
shall forthwith be paid to the Lender to be credited and applied upon the
Guaranteed Obligations, whether matured or unmatured. Guarantor acknowledges
that it will receive direct and indirect benefits from the financing
arrangements contemplated by the Loan Agreement and the other Loan Documents and
that the waiver set forth in this Section is knowingly made in contemplation of
such benefits.
SECTION 2.7 SUCCESSORS, TRANSFEREES AND ASSIGNS; TRANSFERS, OF LOANS,
ETC. This Guaranty shall:
(a) be binding upon Guarantor, and its permitted successors,
transferees and assigns;
and
(b) inure to the benefit of and be enforceable by the Lender
and its permitted successors, transferees and assigns.
Without limiting the generality of clause (b), to the extent the Lender assigns
or otherwise transfers (in whole or in part) any Loan or Loan Documents held by
it to any other person or entity, such other person or entity shall thereupon
become vested with the corresponding rights and benefits granted to the Lender
under this Guaranty.
SECTION 2.8 LIMITATION OF GUARANTY. The financial obligations of
Guarantor hereunder shall be limited in aggregate amount to the lesser of (i)
forty-five percent (45%) of Borrower's aggregate Obligations outstanding under
the Loan Agreement from time to time or (ii) Twenty-Five Million Dollars
($25,000,000.00).
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 REPRESENTATIONS AND WARRANTIES. Guarantor hereby represents
and warrants to the Lender as follows:
(a) Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of its state of
incorporation and has full corporate power and authority to enter into
this Guaranty and to carry out the transactions contemplated hereby and
thereby.
(b) The execution and delivery by Guarantor of this Guaranty
and the consummation by Guarantor of the transactions contemplated
hereby have been duly authorized by all necessary corporate action of
Guarantor. This Guaranty has been duly executed and delivered by
Guarantor and constitutes the legal, valid and binding obligation of
Guarantor enforceable against Guarantor in accordance with its terms,
subject, as to enforcement only, to bankruptcy, insolvency,
reorganization, moratorium or similar laws at the time in effect
affecting the enforceability of the rights of creditors generally.
(c) The execution and delivery of this Guaranty and the
consummation by Guarantor of the transactions contemplated hereby have
not resulted, and will not (with or without the lapse of time or the
giving of notice or both) result, (i) in any breach of any of the terms
or provisions of, or constitute a default under, the charter or bylaws
of Guarantor, any agreement, license or other instrument, any law, rule
or regulation or any judgment, decree or order of any court to which
Guarantor is a party or by which its property may be bound, or (ii) in
the creation or imposition of any claim, lien charge or encumbrance of
any-nature whatsoever upon, or give to others any claim, interest or
right, with respect to any of the properties, assets, contracts or
licenses of Guarantor.
ARTICLE 4
MISCELLANEOUS
SECTION 4.1 LOAN DOCUMENT. This Guaranty is a Loan Document executed
pursuant to the Loan Agreement.
SECTION 4.2 BINDING ON SUCCESSORS, TRANSFEREES AND ASSIGNS; ASSIGNMENT.
In addition to, and not in limitation of SECTION 2.7, this Guaranty shall be
binding upon Guarantor and its successors, permitted transferees and permitted
assigns and shall inure to the benefit of and be enforceable by the Lender and
its successors, transferees and assigns (to the full extent provided pursuant to
SECTION 2.7); PROVIDED, HOWEVER, that Guarantor may not transfer or assign any
of its obligations hereunder without the prior written consent of the Lender,
and no such assignment, if permitted, will operate to relieve Guarantor of its
obligations hereunder.
SECTION 4.3 AMENDMENTS, ETC. No amendment or waiver of any provision of
this Guaranty nor consent to any departure by Guarantor therefrom shall in any
event be effective unless the same shall
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be in writing and signed by the Lender and Guarantor, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
SECTION 4.4 ADDRESSES FOR NOTICES. All notices and other communications
provided for hereunder shall be in writing or by facsimile transmission and, if
to Guarantor, mailed, given by facsimile transmission or delivered to it,
addressed to it at 0000 Xxxxx Xxxx Xxxxxxxx Xxx, Xxxxxxxxx, Xxxxxxxxxx 00000,
Attention: Chief Financial Officer (facsimile number (000) 000-0000), with a
copy to Xxxxxx Xxxxxxxx Frome & Xxxxxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000-0000, Attention: Xxxxxxx Xxxxx, Esq. and Xxxxxx Xxxxxxxxx, Esq.
(facsimile number (000) 000-0000, and if to the Lender, mailed, given by
facsimile transmission or delivered to it, addressed to it at 000 Xxxxxx Xxx,
Xxxxxxxxx, Xxxxxxxxx 00000, Attention: Legal Department (facsimile number (615)
734-5283), with a copy to the Lender Corporation, 000 Xxxxxx Xxx, Xxxxxxxxx,
Xxxxxxxxx 00000, Attention: Manager, Credit, (facsimile number (000) 000-0000),
or as to each party at such other address as shall be designated by such party
in a written notice to each other party complying as to delivery with the terms
of this Section. Any notice, if mailed and properly addressed with postage
prepaid, shall be deemed given when received; any notice, if transmitted by
facsimile transmission or delivery, shall be deemed given when received.
SECTION 4.5 NO WAIVER; REMEDIES. No failure on the part of the Lender
to exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law or equity.
SECTION 4.6 CONTINUING GUARANTY. This Guaranty is a continuing guaranty
and shall (a) remain in full force and effect until final payment in full of the
Guaranteed Obligations and all other amounts payable under this Guaranty,
subject to reinstatement in accordance with SECTION 2.4 hereof, (b) be binding
upon Guarantor, its successors and permitted assigns, and (c) inure to the
benefit of and be enforceable by the Lender for its benefit and the benefit of
the Lender and its permitted successors, transferees and assigns.
SECTION 4.7 SEVERABILITY. Any provision of this Guaranty which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Guaranty or affecting the validity
or enforceability of such provisions in any other jurisdiction.
SECTION 4.8 CONSENT TO JURISDICTION AND VENUE; WAIVERS.
(a) GUARANTOR HEREBY IRREVOCABLY CONSENTS TO THE JURISDICTION
OF THE FEDERAL COURTS SITTING IN THE MIDDLE DISTRICT OF TENNESSEE, AND
IF NO FEDERAL JURISDICTION EXISTS, TO THE JURISDICTION AND VENUE OF THE
STATE COURTS OF TENNESSEE FOR ANY SUIT BROUGHT OR ACTION COMMENCED IN
CONNECTION WITH THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE
OBLIGATIONS, AND AGREES NOT TO CONTEST VENUE OR JURISDICTION IN ANY
SUCH COURTS. IN ANY SUCH LITIGATION, GUARANTOR WAIVES PERSONAL SERVICE
OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, AND AGREES THAT THE SERVICE
THEREOF MAY BE MADE BY CERTIFIED OR REGISTERED MAIL DIRECT TO GUARANTOR
AT ITS ADDRESS SET FORTH IN SECTION 4.4 HEREOF. IN THE ALTERNATIVE, IN
ITS SOLE DISCRETION, LENDER
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MAY EFFECT SERVICE UPON GUARANTOR IN ANY OTHER FORM OR MANNER PERMITTED
BY LAW. THE CHOICE OF FORUM SET FORTH HEREIN SHALL NOT BE DEEMED TO
PRECLUDE THE ENFORCEMENT OF ANY JUDGMENT OBTAINED IN SUCH FORUM OR THE
TAKING OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE THE SAME IN ANY
APPROPRIATE JURISDICTION.
(b) GUARANTOR AND LENDER HEREBY KNOWINGLY AND WILLINGLY WAIVE
THEIR RESPECTIVE RIGHTS TO DEMAND A JURY TRIAL IN ANY ACTION OR
PROCEEDING INVOLVING THIS GUARANTY, ANY OTHER LOAN DOCUMENT, THE
GUARANTEED OBLIGATIONS, OR ANY RELATIONSHIP BETWEEN THE LENDER AND
GUARANTOR. GUARANTOR WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THE
FOREGOING WAIVERS WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY AND
VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH
LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED
AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
(c) THE LENDER SHALL HAVE NO LIABILITY UNDER OR IN CONNECTION
WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS FOR SPECIAL,
EXEMPLARY, PUNITIVE, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES OF
ANY SORT IN ANY SUIT BROUGHT OR ACTION COMMENCED IN CONNECTION WITH
THIS GUARANTY, THE OTHER LOAN DOCUMENTS, OR THE GUARANTIED OBLIGATIONS,
AND, EXCEPT TO THE EXTENT PROHIBITED BY LAW, EACH PARTY WAIVES ANY
RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH ACTION ANY SPECIAL,
EXEMPLARY, PUNITIVE, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES OF
ANY SORT OTHER THAN ACTUAL DAMAGES.
(d) TO THE EXTENT THAT GUARANTOR HAS OR HEREAFTER MAY ACQUIRE
ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION, EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR TO ITS PROPERTY, GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH
IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTY.
(e) BY EXECUTING THIS GUARANTY, GUARANTOR HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS GUARANTY BROUGHT
IN ANY OF THE AFORESAID COURTS, AND HEREBY FURTHER IRREVOCABLY AND
UNCONDITIONALLY WAIVES AND AGREES
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NOT TO PLEAD ANY CLAIM THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN
ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
SECTION 4.9 GOVERNING LAW. This Guaranty shall be governed by and
construed in accordance with the internal laws of the State of New York.
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written, and the Lender has accepted it by its duly authorized
officer.
GST USA, INC.
By: /s/ Xxxxxxxx X. Xxxxxx
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Name: Xxxxxxxx X. Xxxxxx
Title: Senior Vice President
Accepted:
NTFC CAPITAL CORPORATION
By: /s/ illegible
--------------------------
Name:
Title:
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