EXHIBIT 4.20
SUBSIDIARY GUARANTEE
SUBSIDIARY GUARANTEE, dated as of February ___, 2005, made by each of
the signatories hereto (together with any other entity that may become a party
hereto as provided herein) (the "GUARANTORS"), in favor of the holders
(collectively, the "HOLDERS") of those certain 7% Convertible Debentures, due
February ___, 2005, 2009 (the "DEBENTURES") issued pursuant to that certain
Securities Purchase Agreement (the "PURCHASE AGREEMENT"), dated February 9,
2005, between Access Integrated Technologies, Inc., a Delaware corporation (the
"COMPANY") and the original purchasers of Debentures (the "PURCHASERS").
NOW, THEREFORE, in consideration of the premises and to induce the
Purchasers to enter into the Purchase Agreement and to carry out the
transactions contemplated thereby, each Guarantor hereby agrees with the Holders
as follows:
1. DEFINITIONS. Unless otherwise defined herein, terms defined in the
Purchase Agreement and used herein shall have the meanings given to them in the
Purchase Agreement. The words "hereof," "herein," "hereto" and "hereunder" and
words of similar import when used in this Guarantee shall refer to this
Guarantee as a whole and not to any particular provision of this Guarantee, and
Section and Schedule references are to this Guarantee unless otherwise
specified. The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms. The following
terms shall have the following meanings:
"GUARANTEE" means this Subsidiary Guarantee, as the same may be
amended, supplemented or otherwise modified from time to time.
"OBLIGATIONS" means all monetary obligations of the Company, under the
Debentures, together with all reasonable attorneys' fees, disbursements and
all other costs and expenses of collection incurred by Holders in enforcing
any of such obligations and/or this Guarantee.
"PERMITTED DEBT" means trade payables and indebtedness consisting of
capitalized lease obligations and purchase money indebtedness incurred in
connection with acquisition of capital assets and obligations under
sale-leaseback arrangements with respect to newly acquired or leased
assets; PROVIDED, HOWEVER, that in each case such obligations are not
secured by liens on any assets of the applicable Guarantor and may only be
secured by the assets so acquired or leased thereafter.
"PERMITTED LIEN" mean (a) Liens with respect to the payment of taxes
or governmental charges in all cases which are not yet due or which are
subject to a good faith contest; (b) any Liens incurred in connection with
Permitted Debt provided that such liens are not secured by assets of the
applicable Guarantor other than the assets so acquired or leased; and (c)
statutory Liens of landlords or equipment lessors against any property of
the applicable Guarantor in favor of suppliers, mechanics, carriers,
materialmen, warehousemen or workmen.
2. GUARANTEE.
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(a) GUARANTEE.
(i) The Guarantors hereby, jointly and severally, unconditionally
and irrevocably, guarantee to the Holders and their respective
successors, indorsees, transferees and assigns, the prompt and
complete payment and performance by the Company when due (whether at
the stated maturity, by acceleration or otherwise) of the Obligations.
(ii) Anything herein or in any other Transaction Document to the
contrary notwithstanding, the maximum liability of each Guarantor
hereunder and under the other Transaction Documents shall in no event
exceed the amount which can be guaranteed by such Guarantor under
applicable federal and state laws, including laws relating to the
insolvency of debtors, fraudulent conveyance or transfer or laws
affecting the rights of creditors generally (after giving effect to
the right of contribution established in Section 2(b)).
(iii) Each Guarantor agrees that the Obligations may at any time
and from time to time exceed the amount of the liability of such
Guarantor hereunder without impairing the guarantee contained in this
Section 2 or affecting the rights and remedies of the Holders
hereunder.
(iv) The guarantee contained in this Section 2 shall remain in
full force and effect until all the Obligations and the obligations of
each Guarantor under the guarantee contained in this Section 2 shall
have been satisfied by payment in full.
(v) No payment made by the Company, any of the Guarantors, any
other guarantor or any other Person or received or collected by the
Holders from the Company, any of the Guarantors, any other guarantor
or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to
time in reduction of or in payment of the Obligations shall be deemed
to modify, reduce, release or otherwise affect the liability of any
Guarantor hereunder which shall, notwithstanding any such payment
(other than any payment made by such Guarantor in respect of the
Obligations or any payment received or collected from such Guarantor
in respect of the Obligations), remain liable for the Obligations up
to the maximum liability of such Guarantor hereunder until the
Obligations are paid in full.
(vi) Notwithstanding anything to the contrary in this Guarantee,
with respect to any defaulted non-monetary Obligations the specific
performance of which by the Guarantors is not reasonably possible
(e.g. the issuance of the Company's Common Stock), the Guarantors
shall only be liable for making the Holders whole on a monetary basis
for the Company's failure to perform such Obligations in accordance
with the Transaction Documents.
(b) RIGHT OF CONTRIBUTION. Each Guarantor hereby agrees that to the
extent that a Guarantor shall have paid more than its proportionate share
of any payment made hereunder, such Guarantor shall be entitled to seek and
receive contribution from and against any other Guarantor hereunder which
has not paid its proportionate share of such payment. Each Guarantor's
right of contribution shall be subject to the terms and conditions of
Section 2(c). The provisions of this Section 2(b) shall in no respect limit
the obligations and liabilities of any
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Guarantor to the Holders, and each Guarantor shall remain liable to the
Holders for the full amount guaranteed by such Guarantor hereunder.
(c) NO SUBROGATION. Notwithstanding any payment made by any Guarantor
hereunder or any set-off or application of funds of any Guarantor by the
Holders, no Guarantor shall be entitled to be subrogated to any of the
rights of the Holders against the Company or any other Guarantor or any
collateral security or guarantee or right of offset held by the Holders for
the payment of the Obligations, nor shall any Guarantor seek or be entitled
to seek any contribution or reimbursement from the Company or any other
Guarantor in respect of payments made by such Guarantor hereunder, until
all amounts owing to the Holders by the Company on account of the
Obligations are paid in full. If any amount shall be paid to any Guarantor
on account of such subrogation rights at any time when all of the
Obligations shall not have been paid in full, such amount shall be held by
such Guarantor in trust for the Holders, segregated from other funds of
such Guarantor, and shall, forthwith upon receipt by such Guarantor, be
turned over to the Holders in the exact form received by such Guarantor
(duly indorsed by such Guarantor to the Holders, if required), to be
applied against the Obligations, whether matured or unmatured, in such
order as the Holders may determine.
(d) AMENDMENTS, ETC. WITH RESPECT TO THE OBLIGATIONS. Each Guarantor
shall remain obligated hereunder notwithstanding that, without any
reservation of rights against any Guarantor and without notice to or
further assent by any Guarantor, any demand for payment of any of the
Obligations made by the Holders may be rescinded by the Holders and any of
the Obligations continued, and the Obligations, or the liability of any
other Person upon or for any part thereof, or any collateral security or
guarantee therefor or right of offset with respect thereto, may, from time
to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Holders,
and the Purchase Agreement and the other Transaction Documents and any
other documents executed and delivered in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part, as the
Holders may deem advisable from time to time, and any collateral security,
guarantee or right of offset at any time held by the Holders for the
payment of the Obligations may be sold, exchanged, waived, surrendered or
released. The Holders shall have no obligation to protect, secure, perfect
or insure any Lien at any time held by them as security for the Obligations
or for the guarantee contained in this Section 2 or any property subject
thereto.
(e) GUARANTEE ABSOLUTE AND UNCONDITIONAL. Each Guarantor waives any
and all notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by the Holders upon the
guarantee contained in this Section 2 or acceptance of the guarantee
contained in this Section 2; the Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or
renewed, extended, amended or waived, in reliance upon the guarantee
contained in this Section 2; and all dealings between the Company and any
of the Guarantors, on the one hand, and the Holders, on the other hand,
likewise shall be conclusively presumed to have been had or consummated in
reliance upon the guarantee contained in this Section 2. Each Guarantor
waives to the extent permitted by law diligence, presentment, protest,
demand for payment and notice of default or nonpayment to or upon the
Company or any of the Guarantors with respect to the Obligations. Each
Guarantor understands and agrees that the guarantee contained in this
Section 2 shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) any other collateral
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security therefor or guarantee or right of offset with respect thereto at
any time or from time to time held by the Holders, (b) any defense, set-off
or counterclaim (other than a defense of payment or performance or fraud or
misconduct by Holders) which may at any time be available to or be asserted
by the Company or any other Person against the Holders, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of the
Company or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Company for the
Obligations in bankruptcy or in any other instance, with the exception of
judicial discharge of any Guarantor by a bankruptcy or other federal or
state court to which the parties have submitted themselves pursuant to
Section 5(k)(i). When making any demand hereunder or otherwise pursuing its
rights and remedies hereunder against any Guarantor, the Holders may, but
shall be under no obligation to, make a similar demand on or otherwise
pursue such rights and remedies as they may have against the Company, any
other Guarantor or any other Person or against any collateral security or
guarantee for the Obligations or any right of offset with respect thereto,
and any failure by the Holders to make any such demand, to pursue such
other rights or remedies or to collect any payments from the Company, any
other Guarantor or any other Person or to realize upon any such collateral
security or guarantee or to exercise any such right of offset, or any
release of the Company, any other Guarantor or any other Person or any such
collateral security, guarantee or right of offset, shall not relieve any
Guarantor of any obligation or liability hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or available as a
matter of law, of the Holders against any Guarantor. For the purposes
hereof, "demand" shall include the commencement and continuance of any
legal proceedings.
(f) REINSTATEMENT. The guarantee contained in this Section 2 shall
continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Obligations is rescinded
or must otherwise be restored or returned by the Holders upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Company or any Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for,
the Company or any Guarantor or any substantial part of its property, or
otherwise, all as though such payments had not been made.
(g) PAYMENTS. Each Guarantor hereby guarantees that payments hereunder
will be paid to the Holders without set-off or counterclaim in U.S. dollars
at the address set forth or referred to in the Purchase Agreement.
3. REPRESENTATIONS AND WARRANTIES. Each Guarantor hereby makes the
following representations and warranties to Holders as of the date hereof:
(a) ORGANIZATION AND QUALIFICATION. The Guarantor is a corporation,
duly incorporated, validly existing and in good standing under the laws of
the applicable jurisdiction set forth on Schedule 1, with the requisite
corporate power and authority to own and use its properties and assets and
to carry on its business as currently conducted. The Guarantor has no
subsidiaries other than those identified as such on the Disclosure
Schedules to the Purchase Agreement. The Guarantor is duly qualified to do
business and is in good standing as a foreign corporation in each
jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, except where the failure to
be so qualified or in good standing, as the case may be, could not,
individually or in the aggregate, (x) adversely
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affect the legality, validity or enforceability of any of this Guarantee in
any material respect, (y) have a material adverse effect on the results of
operations, assets, prospects, or financial condition of the Guarantor or
(z) adversely impair in any material respect the Guarantor's ability to
perform fully on a timely basis its obligations under this Guarantee (a
"MATERIAL ADVERSE EFFECT").
(b) AUTHORIZATION; ENFORCEMENT. The Guarantor has the requisite
corporate power and authority to enter into and to consummate the
transactions contemplated by this Guarantee, and otherwise to carry out its
obligations hereunder. The execution and delivery of this Guarantee by the
Guarantor and the consummation by it of the transactions contemplated
hereby have been duly authorized by all requisite corporate action on the
part of the Guarantor. This Guarantee has been duly executed and delivered
by the Guarantor and constitutes the valid and binding obligation of the
Guarantor enforceable against the Guarantor in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally the enforcement of, creditors' rights
and remedies or by other equitable principles of general application.
(c) NO CONFLICTS. The execution, delivery and performance of this
Guarantee by the Guarantor and the consummation by the Guarantor of the
transactions contemplated thereby do not and will not (i) conflict with or
violate any provision of its Certificate of Incorporation or By-laws or
(ii) conflict with, constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Guarantor is a party, or
(iii) result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental
authority to which the Guarantor is subject (including Federal and state
securities laws and regulations), or by which any material property or
asset of the Guarantor is bound or affected, except in the case of each of
clauses (ii) and (iii), such conflicts, defaults, terminations, amendments,
accelerations, cancellations and violations as could not, individually or
in the aggregate, have or result in a Material Adverse Effect. The business
of the Guarantor is not being conducted in violation of any law, ordinance
or regulation of any governmental authority, except for violations which,
individually or in the aggregate, do not have a Material Adverse Effect.
(d) CONSENTS AND APPROVALS. The Guarantor is not required to obtain
any consent, waiver, authorization or order of, or make any filing or
registration with, any court or other federal, state, local, foreign or
other governmental authority or other person in connection with the
execution, delivery and performance by the Guarantor of this Guarantee. (e)
PURCHASE AGREEMENT. The representations and warranties of the Company set
forth in the Purchase Agreement as they relate to such Guarantor, each of
which is hereby incorporated herein by reference, are true and correct as
of each time such representations are deemed to be made pursuant to such
Purchase Agreement, and the Holders shall be entitled to rely on each of
them as if they were fully set forth herein, provided, that each reference
in each such representation and warranty to the Company's knowledge shall,
for the purposes of this Section 3, be deemed to be a reference to such
Guarantor's knowledge.
4. COVENANTS.
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(a) Each Guarantor covenants and agrees with the Holders that, from
and after the date of this Guarantee until the Obligations shall have been
paid in full, such Guarantor shall take, and/or shall refrain from taking,
as the case may be, each commercially reasonable action that is necessary
to be taken or not taken, as the case may be, so that no Event of Default
(as defined in the Debentures) is caused by the failure to take such action
or to refrain from taking such action by such Guarantor.
(b) So long as any of the Obligations are outstanding, each Guarantor
will not directly or indirectly on or after the date of this Guarantee:
(i) except for (A) Permitted Debt and (B) $1,700,000 of unsecured
indebtedness for borrowed money on the property and assts of ADM
Cinema Corporation ("ADM") to be incurred in connection with the
acquisition of certain of the assets of Xxxxxxxx Square Cinema, LLC
d/b/a Pavilion Theatre, a New York limited liability company, enter
into, create, incur, assume or suffer to exist any indebtedness for
borrowed money of any kind, including but not limited to, a guarantee,
on or with respect to any of its property or assets now owned or
hereafter acquired or any interest therein or any income or profits
therefrom that is senior to, or pari passu with, in any respect, such
Guarantor's obligations hereunder;
(ii) except for Permitted Liens, enter into, create, incur,
assume or suffer to exist any liens of any kind, on or with respect to
any of its property or assets now owned or hereafter acquired or any
interest therein or any income or profits therefrom that is senior to,
in any respect, such Guarantor's obligations hereunder;
(iii) amend its certificate of incorporation, bylaws or other
charter documents so as to adversely affect any rights of the Holder
hereunder;
(iv) repay, repurchase or offer to repay, repurchase or otherwise
acquire more than a de minimis number of shares of its Common Stock or
other equity securities; or
(v) enter into any agreement with respect to any of the
foregoing.
5. MISCELLANEOUS.
(a) AMENDMENTS IN WRITING. None of the terms or provisions of this
Guarantee may be waived, amended, supplemented or otherwise modified except
in writing by the Holders.
(b) NOTICES. All notices, requests and demands to or upon the Holders
or any Guarantor hereunder shall be effected in the manner provided for in
the Purchase Agreement; PROVIDED that any such notice, request or demand to
or upon any Guarantor shall be addressed to such Guarantor at its notice
address set forth on SCHEDULE 5(B).
(c) NO WAIVER BY COURSE OF CONDUCT; CUMULATIVE REMEDIES. The Holders
shall not by any act (except by a written instrument pursuant to Section
5(a)), delay, indulgence, omission or otherwise be deemed to have waived
any right or remedy hereunder or to have acquiesced in any default under
the Transaction Documents or Event of Default. No failure to
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exercise, nor any delay in exercising, on the part of the Holders, any
right, power or privilege hereunder shall operate as a waiver thereof. No
single or partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. A waiver by the Holders of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right
or remedy which the Holders would otherwise have on any future occasion.
The rights and remedies herein provided are cumulative, may be exercised
singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
(d) ENFORCEMENT EXPENSES; INDEMNIFICATION.
(i) Each Guarantor agrees to pay, or reimburse the Holders for,
all its costs and expenses incurred in collecting against such
Guarantor under the guarantee contained in Section 2 or otherwise
enforcing or preserving any rights under this Guarantee and the other
Transaction Documents to which such Guarantor is a party, including,
without limitation, the reasonable fees and disbursements of counsel
to the Holders.
(ii) Each Guarantor agrees to pay, and to save the Holders
harmless from, any and all liabilities with respect to, or resulting
from any delay in paying, any and all stamp, excise, sales or other
taxes which may be payable or determined to be payable in connection
with any of the transactions contemplated by this Guarantee.
(iii) Each Guarantor agrees to pay, and to save the Holders
harmless from, any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this
Guarantee to the extent the Company would be required to do so
pursuant to the Purchase Agreement.
(iv) The agreements in this Section shall survive repayment of
the Obligations.
(e) SUCCESSOR AND ASSIGNS. This Guarantee shall be binding upon the
successors and assigns of each Guarantor and shall inure to the benefit of
the Holders and their respective successors and assigns; provided that no
Guarantor may assign, transfer or delegate any of its rights or obligations
under this Guarantee without the prior written consent of the Holders.
(f) COUNTERPARTS. This Guarantee may be executed by one or more of the
parties to this Guarantee on any number of separate counterparts (including
by telecopy), and all of said counterparts taken together shall be deemed
to constitute one and the same instrument.
(g) SEVERABILITY. Any provision of this Guarantee 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 hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
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(h) SECTION HEADINGS. The Section headings used in this Guarantee are
for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
(i) INTEGRATION. This Guarantee represents the agreement of the
Guarantors and the Holders with respect to the subject matter hereof and
thereof, and there are no promises, undertakings, representations or
warranties by the Holders relative to subject matter hereof and thereof not
expressly set forth or referred to herein or in the other Transaction
Documents.
(j) GOVERNING LAW. THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK
WITHOUT REGARD TO ANY PRINCIPLES OF CONFLICTS OF LAWS.
(k) SUBMISSION TO JURISDICTIONAL; WAIVER. Each Guarantor hereby
irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Guarantee and the other Transaction
Documents to which it is a party, or for recognition and enforcement
of any judgment in respect thereof, to the non-exclusive general
jurisdiction of the Courts of the State of New York, located in New
York County, New York, the courts of the United States of America for
the Southern District of New York, and appellate courts from any
thereof;
(ii) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court
or that such action or proceeding was brought in an inconvenient court
and agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such Guarantor at its address referred to in the Purchase
Agreement or at such other address of which the Holders shall have
been notified pursuant thereto;
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to xxx in any other jurisdiction; and
(v) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or
proceeding referred to in this Section any special, exemplary,
punitive or consequential damages.
(l) ACKNOWLEDGEMENTS. Each Guarantor hereby acknowledges that:
(i) it has been advised by counsel in the negotiation, execution
and delivery of this Guarantee and the other Transaction Documents to
which it is a party;
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(ii) the Holders have no fiduciary relationship with or duty to
any Guarantor arising out of or in connection with this Guarantee or
any of the other Transaction Documents, and the relationship between
the Guarantors, on the one hand, and the Holders, on the other hand,
in connection herewith or therewith is solely that of debtor and
creditor; and
(iii) no joint venture is created hereby or by the other
Transaction Documents or otherwise exists by virtue of the
transactions contemplated hereby among the Guarantors and the Holders.
(m) [Reserved].
(n) RELEASE OF GUARANTORS. Subject to Section 2.6, each Guarantor will
be released from all liability hereunder concurrently with the repayment in
full of all amounts owed under the Purchase Agreement, the Debentures and
the other Transaction Documents.
(o) SENIORITY. Subject to the other terms and conditions of this
Guarantee, the Obligations of each of the Guarantors hereunder rank senior
in priority to any other unsecured Debt (as defined in the Debentures) of
such Guarantor.
(p) WAIVER OF JURY TRIAL. EACH GUARANTOR AND, BY ACCEPTANCE OF THE
BENEFITS HEREOF, THE PURCHASERS, HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
GUARANTEE AND FOR ANY COUNTERCLAIM THEREIN.
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IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee to be
duly executed and delivered as of the date first above written.
[SUBSIDIARY]
By:_________________________________
Name:
Title:
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SCHEDULE 1
GUARANTORS
The following are the names, notice addresses and jurisdiction of
organization of each Guarantor.
COMPANY
JURISDICTION OF OWNED BY
INCORPORATION PERCENTAGE
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