Exhibit 10.9
ATLANTIC FUND GUARANTY
GUARANTY (as amended, modified, restated and/or supplemented from time to time,
this "GUARANTY"), dated as of April 11, 2006, made by UNICORN WORLDWIDE HOLDINGS
LIMITED, a British Virgin Islands corporation (together with its successors, the
"GUARANTOR"), in favor of NAVISITE, INC., a Delaware corporation (together with
its successors, the "COMPANY").
WITNESSETH :
WHEREAS, Company and Atlantic Investors, LLC ("ATLANTIC"), a principal
shareholder of Company, are party to that certain Loan Agreement, dated as of
the date hereof (as amended, modified, restated and/or supplemented from time to
time as permitted under the Credit Agreement (defined below), the "SUBORDINATED
LOAN AGREEMENT"), pursuant to which Atlantic is obligated to provide certain
loans to Company (the "SUBORDINATED Loans") subject to the terms and conditions
thereof;
WHEREAS, Guarantor is a managing member of Atlantic;
WHEREAS, Company, certain of its subsidiaries, the lenders party
thereto (together with their successors and assigns, the "SENIOR LENDERS") and
Silver Point Finance, LLC, as Administrative Agent (in such capacity, together
with its successors and assigns, the "SENIOR AGENT") and as Collateral Agent are
parties to that certain Credit and Guaranty Agreement, dated as the date hereof
(as amended, modified, restated and/or supplemented from time to time, the
"CREDIT AGREEMENT"), pursuant to which the Lenders have agreed to make certain
loans (the "SENIOR LOANS") to Company subject to the terms and conditions
thereof:
WHEREAS, it is a condition to the effectiveness of the Credit
Agreement that Atlantic and Company enter into the Subordinated Loan Agreement
and that Guarantor execute and deliver this Guaranty;
WHEREAS, Guarantor will obtain benefits from the incurrence of the
Senior Loans by Company under the Credit Agreement and the Subordinated Loans by
Company under the Subordinated Loan Agreement and, accordingly, desires to
execute this Guaranty in order to satisfy the condition described in the second
preceding paragraph and to induce the Senior Lenders to make loans to Company
under the Credit Agreement;
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to Guarantor, the receipt and sufficiency of which are hereby
acknowledged, Guarantor hereby covenants and agrees as follows:
1. GUARANTY. Guarantor irrevocably, absolutely and unconditionally
guarantees as a primary obligor and not merely as surety, to Company Atlantic's
timely
performance of its obligation to make Subordinated Loans to Company under the
Subordinated Loan Agreement on the terms and subject to the conditions contained
in the Subordinated Loan Agreement (all such obligations being herein
collectively called the "GUARANTEED OBLIGATIONS").
EACH OF THE PARTIES HERETO ACKNOWLEDGES AND AGREES THAT SENIOR AGENT AND EACH OF
THE SENIOR LENDERS ARE DIRECT THIRD-PARTY BENEFICIARIES OF GUARANTOR'S
UNDERTAKING AND AGREEMENTS HEREUNDER AND THAT SENIOR AGENT MAY ENFORCE THE
GUARANTEED OBLIGATIONS DIRECTLY, WITH OR WITHOUT THE CONSENT OR COOPERATION OF
COMPANY.
In this regard, Guarantor agrees that in the event that Company or Senior Agent
provides a request for a Credit Advance (as defined in the Subordinated Loan
Agreement) to Atlantic or to Guarantor, Guarantor shall cause Atlantic to (or in
the event that Atlantic fails to, Guarantor shall), fund the Subordinated Loan
requested thereby to Company in immediately available funds on or before 2:00
p.m. prevailing Boston time within four Business Days of Company's or Senior
Agent's request therefor.
2. LIABILITY OF GUARANTOR ABSOLUTE. The liability of Guarantor
hereunder is primary, absolute and unconditional and is exclusive and
independent of any security for or other guaranty or other support of the
Guaranteed Obligations and the liability of Guarantor hereunder shall not be
affected or impaired by any circumstance or occurrence whatsoever, including,
without limitation: (a) any other continuing or other guaranty or undertaking of
Guarantor or of any other party as to the Guaranteed Obligations, (b) the
failure of Guarantor to receive any benefit from or as a result of its
execution, delivery and performance of this Guaranty, (c) any action or inaction
by Senior Agent or Senior Lenders, (d) any invalidity, rescission, irregularity
or unenforceability of all or any part of the Guaranteed Obligations, (e) any
change of ownership of Atlantic or Company or the existence of any insolvency
proceeding with respect to, or any other change in the legal status of, Atlantic
or Company, (f) any change in, or the imposition of, any law, decree, regulation
or other act of any governmental authority which does or might impair, delay or
in any way affect the validity, enforceability or the payment when due of the
Guaranteed Obligations, (g) the failure of Atlantic or Company to maintain in
full force, validity or effect or to obtain or renew when required all
approvals, licenses or consents of any governmental authority or any other
person required in connection with the Guaranteed Obligations or this Guaranty,
or to take any other action required in connection with the performance of all
obligations pursuant to the Guaranteed Obligations or this Guaranty, (h) the
disallowance of all or any portion of the Guaranteed Obligations under Section
502 or 506 of the Bankruptcy Code; (i) any change in the time, manner or place
of performance of the Guaranteed Obligations, or in any other term of the Credit
Agreement or the Subordinated Loan Agreement, or any other amendment or waiver
of or any consent to any departure from the Credit Agreement or the Subordinated
Loan Agreement, including, without limitation, any increase in the obligations
of Atlantic under the Subordinated Loan Agreement; (j) any taking,
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exchange, release or non-perfection of any other collateral, or any taking,
release or amendment or waiver of or consent to departure from any guaranty, for
all or any of the obligations of the Atlantic, Company or any of its
subsidiaries under the Credit Agreement or the Subordinated Loan Agreement; (k)
any change, restructuring or termination of the corporate structure or existence
of Atlantic, Company or any of its subsidiaries or (l) any other fact or
circumstance which might otherwise constitute grounds at law or equity for the
discharge or release of Guarantor from its obligations hereunder, all whether or
not Guarantor shall have had notice or knowledge of any act or omission referred
to in the foregoing clauses (a) through (1) of this paragraph.
3. OBLIGATIONS OF GUARANTOR INDEPENDENT. The obligations of Guarantor
hereunder are independent of the obligations of any other guarantor or Atlantic,
and a separate action or actions may be brought and prosecuted against Guarantor
whether or not action is brought against any other guarantor or Atlantic and
whether or not any other guarantor, or Atlantic shall be joined in any such
action or actions. Guarantor waives the benefits of any statute of limitations
affecting its liability hereunder or the enforcement thereof.
4. WAIVERS BY GUARANTOR. (a) Guarantor hereby waives notice of
acceptance of this Guaranty and notice of the existence, creation or incurrence
of any new or additional liability to which it may apply, and waives promptness,
diligence, presentment, demand of payment, demand for performance, protest,
notice of dishonor or nonpayment of any such liabilities, suit or taking of
other action by Company, Senior Agent or any Senior Lender against, and any
other notice to, any party liable thereon, and Guarantor further hereby waives
any and all notice of the creation, renewal, extension or accrual of any of the
Guaranteed Obligations and notice or proof of reliance by Company, Senior Agent
or any Senior Lender upon this Guaranty, and the Guaranteed Obligations shall
conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended, modified, supplemented or waived, in reliance upon this
Guaranty.
(b) Guarantor waives any right to require Company, Senior Agent or any
Senior Lender to: (i) proceed against Atlantic, any other guarantor of the
Guaranteed Obligations or any other party; (ii) proceed against or exhaust any
security held by Company, Senior Agent or any Senior Lender or (iii) pursue any
other remedy in Company's, Senior Agent's or any Senior Lender's power
whatsoever. Guarantor waives any defense based on or arising out of any defense
of Atlantic, any other guarantor of the Guaranteed Obligations or any other
party other than performance in full of the Guaranteed Obligations, including,
without limitation, any defense based on or arising out of the disability of
Atlantic, any other guarantor of the Guaranteed Obligations or any other party,
or the unenforceability of the Guaranteed Obligations or any part thereof from
any cause, or the cessation from any cause of the liability of Atlantic other
than the performance in full of the Guaranteed Obligations.
(c) Guarantor has knowledge and assumes all responsibility for being
and keeping itself informed of Atlantic's financial condition, affairs and
assets, and of all other
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circumstances bearing upon the risk of nonperformance of the Guaranteed
Obligations and the nature, scope and extent of the risks which Guarantor
assumes and incurs hereunder, and has adequate means to obtain from Atlantic on
an ongoing basis information relating thereto.
(d) Guarantor warrants and agrees that each of the waivers set forth
in Section 3 and in this Section 4 is made with full knowledge of its
significance and consequences and that if any of such waivers are determined to
be contrary to any applicable law or public policy, such waivers shall be
effective only to the maximum extent permitted by applicable law.
5. RIGHTS OF COMPANY, SENIOR AGENT AND SENIOR LENDERS. Company, Senior
Agent and the Senior Lenders may at any time and from time to time without the
consent of, or notice to, Guarantor, without incurring responsibility to
Guarantor, without impairing or releasing the obligations or liabilities of
Guarantor hereunder, upon or without any terms or conditions and in whole or in
part:
(a) change the manner, place or terms of payment of, and/or change,
increase or extend the time of payment of, renew, increase or alter, any of the
Guaranteed Obligations or any of the obligations under the Credit Agreement, any
security therefor, or any liability incurred directly or indirectly in respect
thereof, and the guaranty herein made shall apply to any Guaranteed Obligations
as so changed, extended, increased, accelerated, renewed or altered;
(b) take and hold security for the performance of the Guaranteed
Obligations and sell, exchange, release, surrender, impair, realize upon or
otherwise deal with in any manner and in any order any property or other
collateral by whomsoever at any time pledged or mortgaged to secure, or
howsoever securing, the Guaranteed Obligations or any liabilities (including any
of those hereunder) incurred directly or indirectly in respect thereof or
hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against Atlantic,
Company or any subsidiary thereof;
(d) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof;
(e) act or fail to act in any manner which may deprive Guarantor of
its right to subrogation against Atlantic to recover full indemnity for any
payments made pursuant to this Guaranty; and/or
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(f) take any other action or omit to take any other action which would
give rise to a legal or equitable discharge of Guarantor from its liabilities
under this Guaranty (including, without limitation, any action or omission
whatsoever that might otherwise vary the risk of Guarantor or constitute a legal
or equitable defense to or discharge of the liabilities of guarantor or surety
or that might otherwise limit recourse against Guarantor).
No invalidity, illegality, irregularity or unenforceability of all or any part
of the Guaranteed Obligations, the Subordinated Loan Agreement or any other
agreement or instrument relating to the Guaranteed Obligations or of any
security or guarantee therefor shall affect, impair or be a defense to this
Guaranty, and this Guaranty shall be primary, absolute and unconditional
notwithstanding the occurrence of any event or the existence of any other
circumstances which might constitute a legal or equitable discharge of a surety
or guarantor except performance in full of the Guaranteed Obligations.
6. CONTINUING GUARANTY. This Guaranty is a continuing one and all
liabilities to which it applies or may apply under the terms hereof shall be
conclusively presumed to have been created in reliance hereon. No failure or
delay on the part of Company, Senior Agent or any Senior Lender in exercising
any right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein expressly specified
are cumulative and not exclusive of any rights or remedies which Company, Senior
Agent or any Senior Lender would otherwise have. No notice to or demand on
Guarantor in any case shall entitle Guarantor to any other further notice or
demand in similar or other circumstances or constitute a waiver of the rights of
Company, Senior Agent or any Senior Lender to any other or further action in any
circumstances without notice or demand. It is not necessary for Company, Senior
Agent or any Senior Lender to inquire into the capacity or powers of Atlantic or
the officers, directors, partners or agents acting or purporting to act on its
or their behalf, and any indebtedness made or created in reliance upon the
professed exercise of such powers shall be guaranteed hereunder.
7. REPRESENTATIONS, WARRANTIES AND COVENANTS OF GUARANTOR. (A) In
order to induce the Senior Lenders to make Senior Loans to Company pursuant to
the Credit Agreement, Guarantor represents, warrants and covenants to Senior
Agent and Senior Lenders that:
(a) Guarantor is duly organized and validly existing and in good
standing under the laws of the jurisdiction of its organization;
(b) Guarantor has the corporate, partnership or limited liability
company power and authority to execute, deliver and perform the terms and
provisions of this Guaranty and has taken all necessary corporate, partnership
or limited liability company action, as the case may be, to authorize the
execution, delivery and performance by it of this Guaranty;
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(c) Guarantor has duly executed and delivered this Guaranty, and this
Guaranty constitutes the legal, valid and binding obligation of Guarantor
enforceable in accordance with its terms, except to the extent that the
enforceability hereof or thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws generally affecting
creditors' rights and by equitable principles (regardless of whether enforcement
is sought in equity or at law);
(d) neither the execution, delivery or performance by Guarantor of
this Guaranty, nor compliance by it with the terms and provisions hereof and
thereof, will (i) contravene any provision of any applicable law, statute, rule
or regulation or any applicable order, writ, injunction or decree of any court
or governmental instrumentality, (ii) conflict with or result in any breach of
any of the terms, covenants, conditions or provisions of, or constitute a
default under, or result in the creation or imposition of (or the obligation to
create or impose) any lien upon any of the property or assets of Guarantor
pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement,
credit agreement, or any other material agreement, contract or instrument to
which Guarantor is a party or by which it or any of its property or assets is
bound or to which it may be subject or (iii) violate any provision of the
certificate or articles of incorporation, by-laws, partnership agreement or
limited liability company agreement (or equivalent organizational documents), of
Guarantor;
(e) no order, consent, approval, license, authorization or validation
of, or filing, recording or registration with (except as have been obtained or
made prior to the date when required and which remain in full force and effect),
or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection
with, (i) the execution, delivery and performance of this Guaranty by Guarantor
or (ii) the legality, validity, binding effect or enforceability of this
Guaranty;
(f) there are no actions, suits or proceedings pending or, to
Guarantor's knowledge, threatened (i) with respect to this Guaranty or (ii) with
respect to Guarantor that could reasonably be expected to materially and
adversely affect (a) the business, operations, property, assets, liabilities or
condition (financial or otherwise) of Guarantor or (b) the rights or remedies of
Company, Senior Agent or the Senior Lenders hereunder or the ability of
Guarantor to perform its obligations hereunder; and
(g) an executed (or conformed) copy of the Subordinated Loan Agreement
has been made available to a senior officer of Guarantor and such officer is
familiar with the contents thereof.
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Guarantor agrees that the foregoing representations and warranties shall be
deemed to have been made by Guarantor on the date of this Guaranty, on the date
of each request for a Credit Advance under the Subordinated Loan Agreement and
on and as of the date of each Subordinated Loan.
(B) Guarantor covenants and agrees that so long as Guarantor has any
obligations hereunder (i) it will maintain a net worth of no less the
US$20,000,000 of Net Worth as at the last day of each fiscal quarter of Company
and (ii) it will provide, within 15 days of the end of each such fiscal quarter,
Senior Agent with a certification from counsel or a financial advisor reasonably
satisfactory to Guarantor to such effect. As used herein, "NET WORTH" shall
mean, at any time, (i) the assets of Guarantor at such time minus (ii) all
liabilities of Guarantor at such time (including, in any event, all unfunded
commitments (whether definite or conditional) at such time).
8. EXPENSES. Guarantor hereby agrees to pay all reasonable
out-of-pocket costs and expenses of Company and Senior Agent in connection with
the enforcement of this Guaranty and the protection of their respective rights
hereunder and any amendment, waiver or consent relating hereto (including, in
each case, without limitation, the reasonable fees and disbursements of counsel
(including in-house counsel) employed by Company or Senior Agent.
9. BENEFIT AND BINDING EFFECT. This Guaranty shall be binding upon
Guarantor and its successors and assigns and shall inure to the benefit of
Company, Senior Agent, the Senior Lenders and their respective successors and
assigns. All references herein to Atlantic shall be deemed to include its
successors and assigns including, without limitation, a receiver, trustee or
debtor in possession of or for the Borrower.
10. AMENDMENTS; WAIVERS. Neither this Guaranty nor any provision
hereof may be changed, waived, discharged or terminated except with the written
consent of Guarantor, Company and Senior Agent.
11. NOTICE. Except as otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be sent or delivered by mail, facsimile or courier service and all
such notices and communications shall, when mailed, sent by facsimile
transmission or sent by courier, be effective when deposited in the mails,
delivered to the overnight courier, as the case may be, or sent by facsimile,
except that notices and communications to Senior Agent until received by Senior
Agent. All notices and other communications shall be in writing and addressed to
such party at its address set forth opposite its signature page below or at such
other address as any of the Persons listed above may hereafter notify the others
in writing.
12. REINSTATEMENT. If any claim is ever made upon Company (directly or
indirectly) for repayment or recovery of any amount or amounts received in
payment or on account of any of the Guaranteed Obligations and any of the
aforesaid payees repays all or part of said amount by reason of (i) any
judgment, decree or order of any court or administrative body
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having jurisdiction over such payee or any of its property or (ii) any
settlement or compromise of any such claim effected by such payee with any such
claimant (including, without limitation, Atlantic), then and in such event
Guarantor agrees that any such judgment, decree, order, settlement or compromise
shall be binding upon Guarantor, notwithstanding termination hereof or the
termination of the Subordinated Loan Agreement and Guarantor shall be and remain
liable to the aforesaid payees hereunder for the amount so repaid or recovered
to the same extent as if such amount had never originally been received by any
such payee.
13. CONSENT TO JURISDICTION; SERVICE OF PROCESS; AND WAIVER OF TRIAL
BY JURY. (a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW) THEREOF.
(b) All judicial proceedings arising out of or relating to this
Guaranty, or any of the Guaranteed Obligations, may be brought in any state or
federal court of competent jurisdiction in the state, county and city of New
York. By executing this Guaranty, Guarantor, for itself and in connection with
its properties, irrevocably (a) accepts generally and unconditionally the
nonexclusive jurisdiction and venue of such courts; (b) waives any defense of
forum non conveniens; (c) agrees that service of all process in any such
proceeding in any such court may be made in conformity with subsection (c) below
is sufficient to confer personal jurisdiction over Guarantor in any such
proceeding in any such court, and otherwise constitutes effective and binding
service in every respect; and (d) agrees that Company, Senior Agent and the
Senior Lenders retain the right to serve process in any other manner permitted
by law or to bring proceedings against Guarantor in the courts of any other
jurisdiction.
(c) Guarantor hereby agrees that process may be served on it by
certified mail, return receipt requested, to the address specified in Section 11
or on National Corporate Research, Ltd. ("NCR") located at 000 X. 00xx Xxxxxx,
Xxxxx 000, Xxx Xxxx, XX 00000, and hereby appoints NCR as its agent to receive
such service of process. Any and all service of process and any other notice in
any such action, suit or proceeding shall be effective against Guarantor if
given by registered or certified mail, return receipt requested, or by any other
means or mail which requires a signed receipt, postage prepaid, mailed as
provided above. In the event NCR shall not be able to accept service of process
as aforesaid and if Guarantor shall not maintain an office in New York City,
Guarantor shall promptly appoint and maintain an agent qualified to act as an
agent for service of process with respect to the courts specified in this
Section 13(b) above, and acceptable to Senior Agent, as Guarantor's authorized
agent to accept and acknowledge on Guarantor's behalf service of any and all
process which may be served in any such action, suit or proceeding.
(d) GUARANTOR, COMPANY, SENIOR AGENT AND EACH SENIOR LENDER (BY THEIR
ACCEPTANCE OF THE BENEFITS OF THIS GUARANTY) EACH
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HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS GUARANTY, OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
14. COUNTERPARTS. This Guaranty may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
15. PAYMENTS. All payments made by Guarantor hereunder will be made
without setoff, counterclaim or other defense.
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IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be executed
and delivered as of the date first above written.
Address:
c/o Xxx Xxxxxxxx UNICORN WORLDWIDE HOLDINGS LIMITED,
Xxxxxx Xxxxxx LLP as Guarantor
Times Square Tower
Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: 000-000-0000
Telecopier: 000-000-0000 By: /s/ X. X. XxXxxxx,
------------------------------------
Name: X. X. XxXxxxx
Title: Director
Accepted and Agreed to:
NAVISITE, INC.
By: /s/ Xxxx X. Xxxxx, Xx.,
---------------------------------
Name: Xxxx X. Xxxxx, Xx.
Title: CFO
Notice Address:
000 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxx, Xx.,
Chief Financial Officer
Facsimile: 000-000-0000
and
BRL Law Group LLC
00 Xx. Xxxxx Xxx., Xxxxx 000
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Rosedale
Facsimile: 000-000-0000
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SILVER POINT FINANCE, LLC,
as Senior Agent
By: /s/ Xxxxxxx Xxxxxxxx,
--------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Authorized Signatory
Notice Address:
x/x Xxx Xxxx xx Xxx Xxxx
Xxxxx Xxxxxx
000 X. Xxx Xxxxxxx Xxxx., Xxx 0000
Xxxxxx, Xxxxx 00000
Phone: 000-000-0000
Fax: 000-000-0000
Email: xxxxxxxxxxx@xxxx-xxxxxx.xxx
With a copy to:
xxxxxxx@xxxxxxxxxxxxxxxxxx.xxx
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