Exhibit 10.23
AMENDED AND RESTATED GUARANTEE
GUARANTEE dated as of May 21, 1998 made by LIONBRIDGE
TECHNOLOGIES, INC., a Delaware corporation (the "GUARANTOR") in favor of SILICON
VALLEY BANK (the "BANK").
W I T N E S S E T H :
WHEREAS, pursuant to the Loan Agreement dated as of September 26, 1997
among Lionbridge Technologies Holdings B.V. and Lionbridge Technologies B.V.,
each a Netherlands company with limited liability (together, the "BORROWERS")
and the Bank (the "ORIGINAL LOAN AGREEMENT"), the Bank agreed, subject to the
terms and conditions thereof, to make credit extensions to the Borrowers;
WHEREAS, it was a condition precedent to the obligation of the Bank to
make credit extensions to the Borrowers under the Original Loan Agreement that,
among other things, the Guarantor shall have executed and delivered a guarantee
of the obligations of the Borrowers under the Original Loan Agreement,
including, without limitation, the Borrowers' obligations under their promissory
note to the Bank issued pursuant to the Original Loan Agreement (the "ORIGINAL
NOTE");
WHEREAS, the Guarantor is the registered and beneficial owner of
approximately 60.4% of the outstanding capital stock of Lionbridge Technologies
Holdings B.V. which in turn is the registered owner of all the outstanding
capital stock of Lionbridge Technologies, B.V. and as a consequence the
Guarantor will derive benefit from the Bank's agreement to make Credit
Extensions to the Borrowers;
WHEREAS, the Guarantor entered into a Guarantee dated September 26,
1997 in favor of the Bank (the "ORIGINAL GUARANTEE");
WHEREAS, the Borrowers wish to enter into a Loan Document Modification
Agreement of even date amending the Original Loan Agreement (the Original Loan
Agreement as so amended, and as the same may hereafter be further amended,
modified, supplemented, extended or restated from time to time, the "Loan
Agreement") pursuant to which they will issue to the Bank an Amended and
Restated Note of even date herewith in the original principal amount of
$8,000,000 (as the same may hereafter be amended, modified, increased,
supplemented, extended or restated from time to time, the "Note");
WHEREAS, it is a condition to the Bank's entering into the Loan
Modification Agreement that the Guarantor enter into an amended and restated
guarantee on the terms set forth in this guarantee (as the same may be amended,
modified, supplemented, extended or restated from time to time, the
"GUARANTEE");
WHEREAS, the Guarantor now wishes to enter into this Guarantee in order
to induce
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the Bank to enter into the above referenced Loan Modification Agreement;
NOW, THEREFORE, in consideration of the premises and to induce
the Bank to make advances and other extensions of credit to the Borrowers
thereunder, the Guarantor hereby agrees with the Bank as follows:
1. DEFINED TERMS. Unless otherwise defined herein, terms which
are defined in the Loan Agreement and used herein are so used as so defined. In
addition, the following terms shall have the meanings set forth below:
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(a) the business, operations, property, condition (financial or
otherwise) or prospects of the Guarantor and its Subsidiaries taken as
a whole, (b) the ability of the Guarantor to perform its obligations
under this Guarantee, or (c) the validity or enforceability of this
Guarantee, or the rights of the Bank hereunder.
"OBLIGATIONS" shall mean all obligations of the Borrowers to
the Bank, whether such obligations are now existing or hereafter
incurred or created, joint or several, direct or indirect, absolute or
contingent, due or to become due, matured or unmatured, liquidated or
unliquidated, arising by contract, operation of law or otherwise,
including, without limitation, (a) all principal of and interest
(including, without limitation, any interest which accrues after the
commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of the Borrowers) on any
advance to the Borrowers under the Loan Agreement or the Note; (b) all
other amounts (including, without limitation, any fees or expenses)
payable by the Borrowers under the Loan Agreement, the Note or any
other Loan Document; (c) all amounts payable to the Bank in connection
with the issuance of any letter of credit by the Bank for the account
of the Borrowers or any drawing thereunder, including without
limitation, any reimbursement obligation and letter of credit fees
payable under any letter of credit application or reimbursement
agreement executed by the Borrowers in connection with any such letter
of credit; and (d) any renewals, refinancings or extensions of any of
the foregoing.
2. GUARANTEE. The Guarantor hereby unconditionally and
irrevocably guarantees to the Bank the prompt and complete payment and
performance by the Borrowers when due (whether at stated maturity, by
acceleration or otherwise) of the Obligations. The Guarantor further agrees to
pay any and all expenses (including, without limitation, all reasonable fees and
disbursements of counsel to the Bank) which may be paid or incurred by the Bank
in enforcing, or obtaining advice of counsel in respect of, any of its rights
under this Guarantee. The Guarantee shall remain in full force and effect until
the Obligations are paid in full and the Bank's obligation to make Advances or
other Credit Extensions under the Loan Agreement is terminated, notwithstanding
that from time to time prior thereto the Borrowers may be free from any
Obligations.
3. RIGHT OF SET-OFF. Regardless of the adequacy of any
collateral or other means of obtaining repayment of the Obligations, any
deposits (general or special, time or demand, provisional or final, including,
but not limited to indebtedness evidenced by a
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certificate of deposit, whether matured or unmatured) and any other indebtedness
at any time held or owing by the Bank to the Guarantor may, at any time and from
time to time after the occurrence of an Event of Default, without prior notice
to the Guarantor or compliance with any other condition precedent now or
hereafter imposed by statute, rule of law, or otherwise (all of which are hereby
expressly waived to the extent permitted by law) be set off, appropriated, and
applied by the Bank against any and all obligations of the Guarantor to the Bank
then due and payable in such manner as the Bank in its sole discretion may
determine, and the Guarantor hereby grants the Bank a continuing security
interest in such deposits and indebtedness for the payment and performance of
such obligations.
4. SUBROGATION AND CONTRIBUTION. Until payment and performance
in full of all the Obligations, the Guarantor irrevocably and unconditionally
waives any and all rights to which it may be entitled, by operation of law or
otherwise, (a) to be subrogated, with respect to any payment made by the
Guarantor hereunder, to the rights of the Bank against the Borrowers, or
otherwise to be reimbursed, indemnified or exonerated by the Borrowers in
respect thereof or (b) to receive any payment, in the nature of contribution or
for any other reason, from any other guarantor of the Obligations with respect
to any payment made by the Guarantor hereunder.
5. EFFECT OF BANKRUPTCY STAY. If acceleration of the time for
payment or performance of any of the Obligations is stayed upon the insolvency,
bankruptcy or reorganization of the Borrowers or any other Person or otherwise,
all such amounts otherwise subject to acceleration shall nonetheless be payable
by the Guarantor under this Guarantee forthwith upon demand.
6. RECEIPT OF LOAN DOCUMENTS, ETC. The Guarantor confirms,
represents and warrants to the Bank that (i) it has received true and complete
copies of the Loan Agreement, the Note and the other Loan Documents entered into
as of the date hereof from the Borrowers, has read the contents thereof and
reviewed the same with legal counsel of its choice; (ii) no representations or
agreements of any kind have been made to the Guarantor which would limit or
qualify in any way the terms of this Guarantee; (iii) the Bank has made no
representation to the Guarantor as to the creditworthiness of the Borrowers; and
(iv) the Guarantor has established adequate means of obtaining from the
Borrowers on a continuing basis information regarding the Borrowers' financial
condition. The Guarantor agrees to keep adequately informed from such means of
any facts, events, or circumstances which might in any way affect the
Guarantor's risks under this Guarantee, and the Guarantor further agrees that
the Bank shall have no obligation to disclose to the Guarantor any information
or documents acquired by the Bank in the course of its relationship with the
Borrowers.
7. AMENDMENTS, ETC. WITH RESPECT TO THE OBLIGATIONS. The
obligations of the Guarantor under this Guarantee shall remain in full force and
effect without regard to, and shall not be released, altered, exhausted,
discharged or in any way affected by any circumstance or condition (whether or
not the Borrowers shall have any knowledge or notice thereof), including without
limitation (i) any amendment or modification of or supplement to the Loan
Agreement, the Note, or any other Loan Document, or any obligation, duty or
agreement of the Borrowers or any other Person thereunder or in respect thereof,
(ii) any assignment or transfer in whole or in part of any of the Obligations,
(iii) any furnishing or
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acceptance of any direct or indirect security or guaranty, or any release of or
non-perfection or invalidity of any direct or indirect security or guaranty, for
any of the Obligations, (iv) any waiver, consent, extension, renewal,
indulgence, settlement, compromise or other action or inaction under or in
respect of the Loan Agreement, the Note, or any other Loan Document, or any
exercise or nonexercise of any right, remedy, power or privilege under or in
respect of any such instrument (whether by operation of law or otherwise), (v)
any bankruptcy, insolvency, reorganization, arrangement, readjustment,
composition, liquidation or similar proceeding with respect to the Borrowers or
any other Person (other than the Guarantor) or any of their respective
properties or creditors or any resulting release or discharge of any
Obligations, (vi) the voluntary or involuntary sale or other disposition of all
or substantially all the assets of the Borrowers or any other Person, (vii) the
voluntary or involuntary liquidation, dissolution or termination of the
Borrowers or any other Person, (viii) any invalidity or unenforceability, in
whole or in part, of any term hereof or of the Loan Agreement, the Note, or any
other Loan Document, or any obligation, duty or agreement of the Borrowers or
any other Person (other than the Guarantor) thereunder or in respect thereof, or
any provision of any applicable law or regulation purporting to prohibit the
payment or performance by the Borrowers or any other Person (other than the
Guarantor) of any Obligations, (ix) any failure on the part of the Borrowers or
any other Person for any reason to perform or comply with any term of the Loan
Agreement, the Note, or any other Loan Document or any other agreement, or (x)
any other act, omission or occurrence whatsoever, whether similar or dissimilar
to the foregoing. The Guarantor authorizes the Borrowers, each other guarantor
in respect of Obligations and the Bank at any time in its discretion, as the
case may be, to alter any of the terms of Obligations.
8. GUARANTOR AS PRINCIPAL. If for any reason the Borrowers or
any other Person is under no legal obligation to discharge any Obligations, or
if any other moneys included in Obligations have become unrecoverable from the
Borrowers or any other Person by operation of law or for any other reason,
including, without limitation, the invalidity or irregularity in whole or in
part of any Obligation or of the Loan Agreement, the Note, or any other Loan
Document, the legal disability of the Borrowers or any other obligor in respect
of Obligations, any discharge of or limitation on the liability of the Borrowers
or any other person or any limitation on the method or terms of payment under
any Obligation, or of the Loan Agreement, the Note, or any other Loan Document,
which may now or hereafter be caused or imposed in any manner whatsoever
(whether consensual or arising by operation of law or otherwise), this Guarantee
shall nevertheless remain in full force and effect and shall be binding upon the
Guarantor to the same extent as if the Guarantor at all times had been the
principal obligor on all Obligations.
9. WAIVER OF DEMAND, NOTICE, ETC. The Guarantor hereby waives,
to the extent not prohibited by applicable law, (i) all presentments, demands
for performance, notice of nonperformance, protests, notices of protests and
notices of dishonor in connection with the Obligations or the Loan Agreement,
the Note, or any other Loan Document, including but not limited to notice of
additional indebtedness constituting Obligations or the existence, creation or
incurring of any new or additional indebtedness or obligation or of any action
or non-action on the part of the Borrowers, the Bank, any endorser or creditor
of the Borrowers or any other Person; (ii) any notice of any indulgence,
extensions or renewals granted to any obligor with respect to Obligations; (iii)
any requirement of diligence or promptness in the enforcement of
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rights under the Loan Agreement, the Note, or any other Loan Document, or any
other agreement or instrument directly or indirectly relating thereto or to the
Obligations; (iv) any enforcement of any present or future agreement or
instrument relating directly or indirectly thereto or to the Obligations; (v)
notice of any of the matters referred to in PARAGRAPH 8 above, (vi) any defense
of any kind which the Guarantor may now have with respect to his liability under
this Guarantee; (vii) any right to require the Bank, as a condition of
enforcement of this Guarantee, to proceed against the Borrowers or any other
Person or to proceed against or exhaust any security held by the Bank at any
time or to pursue any other right or remedy in the Bank's power before
proceeding against the Guarantor; (viii) any defense that may arise by reason of
the incapacity, lack of authority, death or disability of any other Person or
Persons or the failure of the Bank to file or enforce a claim against the estate
(in administration, bankruptcy, or any other proceeding) of any other Person or
Persons; (ix) any defense based upon an election of remedies by the Bank; (x)
any defense arising by reason of any "one action" or "anti-deficiency" law or
any other law which may prevent the Bank from bringing any action, including a
claim for deficiency, against the Guarantor, before or after the Bank's
commencement of completion of any foreclosure action, either judicially or by
exercise of a power of sale; (xi) any defense based upon any lack of diligence
by the Bank in the collection of any Obligation; (xii) any duty on the part of
the Bank to disclose to the Guarantor any facts the Bank may now or hereafter
know about the Borrowers or any other obligor in respect of Obligations; (xiii)
any defense arising because of an election made by the Bank under Section
1111(b)(2) of the Federal Bankruptcy Code; (xiv) any defense based on any
borrowing or grant of a security interest under Section 364 of the Federal
Bankruptcy Code; and (xv) any defense based upon or arising out of any defense
which the Borrowers or any other Person may have to the payment or performance
of Obligations (including but not limited to failure of consideration, breach of
warranty, fraud, payment, accord and satisfaction, strict foreclosure, statute
of frauds, bankruptcy, infancy, statute of limitations, lender liability and
usury). Guarantor acknowledges and agrees that each of the waivers set forth
herein on the part of the Guarantor is made with Guarantor's full knowledge of
the significance and consequences thereof and that under the circumstances the
waivers are reasonable. If any such waiver is determined to be contrary to any
applicable law or public policy, such waiver shall be effective only to the
extent permitted by such law or public policy.
10. REINSTATEMENT. This Guarantee 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 Bank upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Borrowers or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Borrowers or any substantial part of its property, or
otherwise, all as though such payments had not been made.
11. PAYMENTS. The Guarantor hereby agrees that the Obligations
will be paid to the Bank without set-off or counterclaim in U.S. Dollars at the
office of the Bank located at 0000 Xxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000,
or to such other location as the Bank shall notify the Guarantor.
12. REPRESENTATIONS AND WARRANTIES. The Guarantor represents
and warrants that:
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(a) CORPORATE EXISTENCE. The Guarantor is a corporation duly
incorporated and validly existing under the laws of the jurisdiction
of its incorporation, and is duly licensed or qualified as a foreign
corporation in all states wherein the nature of its property owned or
business transacted by it makes such licensing or qualification
necessary.
(b) NO VIOLATION. The execution, delivery and performance of
this Guarantee will not contravene any provision of law, statute, rule
or regulation to which the Guarantor or any of its Significant
Subsidiaries is subject or any judgment, decree, franchise, order or
permit applicable to the Guarantor or any of its Significant
Subsidiaries, or will conflict or will be inconsistent with or will
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 the Guarantor or any of its
Significant Subsidiaries pursuant to the terms of any contractual
obligation of the Guarantor or any of its Significant Subsidiaries, or
violate any provision of the corporate charter or by-laws of the
Guarantor.
(c) CORPORATE AUTHORITY AND POWER. The execution, delivery and
performance of this Guarantee is within the corporate powers of the
Guarantor and has been duly authorized by all necessary corporate
action.
(d) ENFORCEABILITY. This Guarantee constitutes a valid and
binding obligation of the Guarantor enforceable against the Guarantor
in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally
and except as enforceability may be subject to general principles of
equity, whether such principles are applied in a court of equity or at
law.
(e) GOVERNMENTAL APPROVALS. No order, permission, consent,
approval, license, authorization, registration or validation of, or
filing with, or exemption by, any governmental authority is required
to authorize, or is required in connection with, the execution,
delivery and performance of this Guarantee, or the taking of any
action contemplated hereby or thereby.
(f) FINANCIAL STATEMENTS. The Guarantor has heretofore
furnished the Bank with draft copies of the audited consolidated
balance sheet of the Guarantor and its Subsidiaries as of December 31,
1997, and a draft of the related audited consolidated statements of
income and of cash flows for the fiscal year of the Guarantor and its
Subsidiaries ended on such date, examined by Coopers & Xxxxxxx. Such
financial statements (including in each case the related schedules and
notes) fairly present the consolidated financial condition of the
Guarantor and its Subsidiaries as of December 31, 1997, and the
consolidated results of their operations and their consolidated cash
flows for the fiscal year then ended.
(g) The Guarantor has heretofore furnished the Bank with
complete and
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correct copies of the unaudited consolidated balance sheet of the
Guarantor and its Subsidiaries as of April 30, 1998, and the related
consolidated statements of income and of cash flows for the four-month
period ended on such date. Such financial statements (including in
each case the related schedules and notes) fairly present the
consolidated financial condition of the Guarantor and its Subsidiaries
as of April 30, 1998, and the consolidated results of their operations
and their consolidated cash flows for the four-month period ended on
such date (subject to year-end audit adjustments).
(h) Neither the Guarantor nor any of its Subsidiaries has any
material liabilities, contingent or otherwise, including liabilities
for taxes or any unusual forward or long-term commitments or any
guarantee, which are not disclosed by or included in the financial
statements referred to above or in the notes thereto, and there has
been no development or event, nor any prospective development or event,
including any unrealized or anticipated losses from any unfavorable
commitments of the Guarantor or any of its Subsidiaries, which could
reasonably be expected to have a Material Adverse Effect. During the
period from December 31, 1996 to the date hereof: (i) there has been no
sale, transfer or other disposition by the Guarantor or any of its
Subsidiaries of any material part of its business or property and no
purchase or other acquisition of any business or property (including
any capital stock of any Person) material in relation to the
consolidated financial condition of the Guarantor and its Subsidiaries
at December 31, 1996; and (ii) neither the Guarantor nor any of its
Subsidiaries has made a Restricted Payment, or agreed or committed
itself to make a Restricted Payment. For purposes hereof, "Restricted
Payment" means, with respect to the Guarantor or any Subsidiary
thereof, (a) any dividend or other distribution on any shares of
capital stock of the Guarantor or such Subsidiary (except dividends
payable solely in shares of capital stock or rights to acquire capital
stock of the Guarantor, and dividends payable solely to the Guarantor
or a Subsidiary of the Guarantor), or (b) any payment on account of the
purchase, redemption, retirement or acquisition of (i) any shares of
the capital stock of the Guarantor or a Subsidiary thereof or (ii) any
option, warrant, convertible security or other right to acquire shares
of the capital stock of the Guarantor or a Subsidiary thereof, other
than, in either case, payments made solely to the Guarantor or a
Subsidiary of the Guarantor, and (c) any required or optional payment
of any principal of, or premium or interest on, or any required or
optional purchase, redemption or other retirement or other acquisition
of any subordination debt issued by Guarantor or a Subsidiary of
Guarantor.
(i) All financial statements (including in each case the
related schedules and notes) referred to above have been prepared in
accordance with GAAP applied consistently throughout the periods
involved (except as approved by the Accountants and as disclosed
therein).
(j) LITIGATION. There are no actions, suits or proceedings
pending or, to the Guarantor's knowledge, threatened against or
affecting the Guarantor or any of its Subsidiaries before any
governmental authority, which in any one case or in the aggregate, if
determined adversely to the interests of the Guarantor or any
Subsidiary thereof, would have a Material Adverse Effect.
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(k) COMPLIANCE WITH OTHER INSTRUMENTS; COMPLIANCE WITH LAW.
Neither the Guarantor nor any Subsidiary thereof is in default under
(i) any contractual obligation, where such default could have a
Material Adverse Effect, or (ii) the terms of any agreements relating
to any Indebtedness of the Guarantor or such Subsidiary.
(l) Neither the Guarantor nor any Subsidiary thereof is in
default with respect to any applicable statute, rule, writ,
injunction, decree, order or regulation of any Governmental Authority
having jurisdiction over the Guarantor or any Subsidiary thereof which
could reasonably be expected to have a Material Adverse Effect.
(m) SUBSIDIARIES. The Guarantor has no Subsidiaries except as
set forth on attached Schedule A. The Guarantor represents that
Lionbridge Technologies France, a private company organized under the
laws of France ("Lionbridge-France") is a wholly-owned subsidiary of
Lionbridge Technologies Holdings B.V. ("Holdings"). Neither
Lionbridge-France nor Lionbridge-Ireland is subject to any restriction
or constraint under any agreement, contract or arrangement to which it
is a party (including without limitation in connection with any
financing), or, except as described on SCHEDULE A, under applicable law
that would impede or interfere with their ability to declare and pay
cash dividends to Holdings or to borrow funds from or advance funds to
any member of the Consolidated Group (collectively, a "Cash Transfer
Restriction").
(n) INVESTMENT COMPANY STATUS; LIMITS ON ABILITY TO INCUR
INDEBTEDNESS. The Guarantor is not an "investment company" or a
company "controlled by" an investment company within the meaning of
the Investment Company Act of 1940, as amended. The Guarantor is not
subject to regulation under any Federal or State statute or regulation
which limits its ability to incur Indebtedness.
(o) TITLE TO PROPERTY. The Guarantor and each of its
Subsidiaries has good and marketable title to all of its properties and
assets, in each case including the properties and assets reflected in
the consolidated balance sheet of the Guarantor and its Subsidiaries as
December 31, 1996, except properties and assets disposed of since that
date in the ordinary course of business, and none of such properties or
assets is subject to (i) any Lien except for Permitted Liens, or (ii) a
defect in title or other claim other than defects and claims that, in
the aggregate, would have no Material Adverse Effect. The Guarantor
enjoys peaceful and undisturbed possession under all leases necessary
in any material respect for the operation of its properties and assets,
none of which contains any unusual or burdensome provisions which could
reasonably be expected to have a Material Adverse Effect. All such
leases are valid and subsisting and are in full force and effect.
(p) ERISA PLANS. Each "employee benefit plan," "employee
pension benefit plan," "defined benefit plan," or "multiemployer plan,"
which the Guarantor has established or maintained or to which the
Guarantor is required to contribute (collectively, the "PLANS") is in
compliance in all material respects with all applicable provisions of
ERISA and the Internal Revenue Code of 1986 as amended, and the rules
and regulations thereunder, except where failure to so comply would not
have a Material Adverse Effect. There have been no "prohibited
transactions" under ERISA
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with respect to the Plans which would result in any material liability
to the Guarantor under ERISA or the Code. As used in the Loan
Documents, the terms "employee benefit plan," "employee pension
benefit plan," "defined benefit plan," and "multiemployer plan" shall
have the respective meanings assigned to such terms in Section 3 of
ERISA. The Guarantor thereof has not incurred any material
"accumulated funding deficiency" within the meaning of ERISA or
incurred any material liability to the PBGC in connection with a Plan
(or other class of benefit which the PBGC has elected to insure)
established or maintained by the Guarantor.
(q) TAXES. All tax returns of the Guarantor and its
Subsidiaries required to be filed have been timely filed, all taxes,
fees and other governmental charges (other than those being contested
in good faith by appropriate proceedings diligently conducted and with
respect to which adequate reserves have been established and, in the
case of AD VALOREM taxes or betterment assessments, no proceedings to
foreclose any lien with respect thereto have been commenced and, in all
other cases, no notice of lien has been filed or other action taken to
perfect or enforce such lien) shown thereon which are payable have been
paid. The charges and reserves on the books of the Guarantor and its
Subsidiaries in respect of all income and other taxes are adequate, and
the Guarantor knows of no additional assessment or any basis therefor.
The Federal income tax returns of the Guarantor and its Subsidiaries
have not been audited within the last three years, all prior audits
have been closed, and there are no unpaid assessments, penalties or
other charges arising from such prior audits.
(r) REPRESENTATIONS OF BORROWERS. The representations and
warranties of the Borrowers set forth in Section 5 of the Loan
Agreement are true and correct as of the date thereof.
13. COVENANTS. The Guarantor hereby covenants and agrees with
the Bank that, from and after the date of this Guarantee until the Obligations
are paid in full and the obligation of the Bank to make Advances or other Credit
Extensions is terminated:
(a) BORROWERS' COVENANTS. The Guarantor shall cause the
Borrowers to comply with and discharge all of their covenants and
agreements contained in the Loan Agreement.
(b) QUICK RATIO. Commencing with the fiscal quarter ending
March 31, 1999, the Guarantor shall cause the Consolidated Group to
maintain at the end of each such fiscal quarter a ratio of Quick
Assets to Current Liabilities of not less than 0.75 to 1.0.
For purposes of this subparagraph (b), "Quick Assets" shall mean, as of
any applicable date, the consolidated cash, cash equivalents, accounts
receivable and investments with maturities of less than 90 days of the
Consolidated Group determined in accordance with GAAP; and "Current
Liabilities" shall mean, as of any applicable date, all amounts that
should, in accordance with GAAP, be included as current liabilities on
the consolidated balance sheet of the Guarantor and its Subsidiaries,
as at such date, plus, to the extent not already included therein, all
outstanding Credit Extensions made under
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the Loan Agreement, including all Indebtedness that is payable upon
demand or within one year from the date of determination thereof
unless such Indebtedness is renewable or extendable at the option of
the Guarantor, a Borrower or any Subsidiary to a date more than one
year from the date of determination, but excluding any Indebtedness
incurred by the Guarantor or any Subsidiary that is subordinated to
debt owing by the Guarantor or any Subsidiary to the Bank on terms
acceptable to the Bank and is identified as such by the Bank
("Subordinated Debt").
(c) MINIMUM EBITDA. The Guarantor shall cause the Consolidated
Group to have at the end of each of the following fiscal quarters
minimum EBITDA not less than the respective amounts set forth below
opposite such fiscal quarter:
Fiscal Quarter Minimum Ebitda
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Quarter Ending 6/30/98 ($500,000)
Quarter Ending 9/30/98 $500,000
Quarter Ending 12/31/98 $1,000,000
Quarter Ending 3/31/99 and thereafter $750,000
For purposes of this subparagraph (c) "EBITDA" means, for any
applicable fiscal period, consolidated net income (or loss) after
taxes for such period of the Guarantor and its Subsidiaries as
determined in accordance with GAAP, plus the following to the extent
deducted in computing the foregoing: (i) Interest Expense (as defined
below); (ii) taxes; (iii) depreciation; and (iv) amortization of good
will and other intangibles. "Interest Expense" means, for any
applicable fiscal period, the sum of the aggregate amount of interest
required to be paid in cash during such period on Indebtedness of the
Guarantor and its Subsidiaries (on a consolidated basis).
(d) FINANCIAL STATEMENTS, REPORTS, CERTIFICATES. The Guarantor
shall deliver to Bank: (i) as soon as available, but in any event
within thirty (30) days after the end of each month, a company prepared
consolidated balance sheet and income statement covering the
consolidated operations of the Consolidated Group during such period,
in a form and certified by an officer of the Guarantor reasonably
acceptable to Bank; (ii) as soon as available, but in any event within
ninety (90) days after the end of the fiscal year of the Consolidated
Group, audited consolidated and consolidating financial statements of
the Consolidated Group, prepared in accordance with GAAP, consistently
applied, together with an unqualified opinion on such financial
statements of an independent certified public accounting firm
reasonably acceptable to Bank; (iii) within five (5) days of filing,
copies of all statements, reports and notices sent or made available
generally by the Guarantor and the Borrowers to their security holders
or to any holders of Subordinated Debt and all reports on Form 10-K,
10-Q and 8-K or similar reports filed with the Securities and Exchange
Commission or any other public authority; (iv) promptly upon receipt of
notice thereof, a report of any legal actions pending or threatened
against the Guarantors, any Borrower or any Designated
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Subsidiary that could result in damages or costs of Five Hundred
Thousand Dollars ($500,000) or more; and (v) such budgets, sales
projections, operating plans or other financial information as Bank
may reasonably request from time to time.
Within thirty (30) days after the last day of each month, the
Guarantor shall deliver to Bank with the monthly financial statements a
Compliance Certificate signed by a Responsible Officer in substantially
the form of EXHIBIT A hereto.
Bank shall have a right from time to time hereafter to audit
the books and records of Guarantor at Guarantor's expense, provided
that such audits will be conducted no more often than twice in any year
unless an Event of Default has occurred and is continuing.
(e) NO CASH TRANSFER RESTRICTIONS. The Guarantor shall not
permit Lionbridge-France, Lionbridge-Ireland, any other Designated
Subsidiary or any other direct or indirect Subsidiary of the
Guarantors or the Borrowers to become subject to any Cash Transfer
Restriction.
14. SUBORDINATION OF CLAIMS AGAINST BORROWERS. Without
limiting the provisions of PARAGRAPH 4 hereof, the Guarantor hereby irrevocably
agrees that any and all claims which the Guarantor may now or hereafter have
against the Borrowers or any other guarantor of the Obligations, including,
without limitation, the benefit of any setoff or counterclaim or proof against
dividend, composition or payment by the Borrowers or such other guarantor, shall
be subject and subordinate to the prior payment in full of all of the
Obligations to the Bank. After the occurrence and during the continuation of an
Event of Default, the Guarantor shall not claim from the Borrowers or such other
guarantor, or with respect to any of their respective properties, any sums which
may be owing to the Guarantor, or have the benefit of any setoff or counterclaim
or proof against dividend, composition or payment by the Borrowers or such other
guarantor, until all the Obligations shall have been paid in full. Should any
payment or distribution or security or the benefit of proceeds thereof be
received by the Guarantor upon or with respect to amounts due to him from the
Borrowers or any other guarantor of the Obligations after an Event of Default
has occurred and is continuing and prior to the payment in full of all
Obligations, the Guarantor will forthwith deliver the same to the Bank in
precisely the form received (except for endorsement or assignment where
necessary), for application in or towards repayment of the Obligations and,
until so delivered, the same shall be held in trust as property of the Bank. In
the event of the failure of the Guarantor to make any such endorsement or
assignment, the Bank is hereby irrevocably authorized to make the same on behalf
of the Guarantor.
15. 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.
16. PARAGRAPH HEADINGS. The paragraph headings used in this
Guarantee are for convenience of reference only and are not to affect the
construction hereof or be taken into
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consideration in the interpretation hereof.
17. NO WAIVER, CUMULATIVE REMEDIES. The Bank shall not by any
act (except by a written instrument pursuant to PARAGRAPH 18 hereof), delay,
indulgence, omission or otherwise, be deemed to have waived any right or remedy
hereunder or to have acquiesced in any Event of Default or in any breach of any
of the terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Bank, 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
Bank of any right or remedy hereunder on any one occasion shall not be construed
as a bar to any right or remedy which the Bank 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 rights or remedies
provided by law.
18. MISCELLANEOUS. This Guarantee constitutes the entire
agreement of the Guarantor with respect to the matters set forth herein. This
Guarantee supersedes and restates in its entirety that certain Guarantee of the
Guarantor dated as of September 26, 1997, in favor of the Bank, which prior
Guarantee shall no longer be of any further force and effect. None of the terms
or provisions of this Guarantee may be waived, amended, supplemented or
otherwise modified except by a written instrument executed by the Guarantor and
the Bank, provided that any provision of this Guarantee may be waived by the
Bank in a letter or agreement executed by the Bank or by telecopy from the Bank.
This Guarantee shall be binding upon the successors and assigns of the Guarantor
and shall inure to the benefit of the Bank and its successors and assigns.
19. WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION; GOVERNING
LAW. THE GUARANTOR AND THE BANK BY ITS ACCEPTANCE HEREOF EACH HEREBY EXPRESSLY
WAIVES ANY RIGHT IT MAY NOW OR HEREAFTER HAVE TO A JURY TRIAL IN ANY SUIT,
ACTION, PROCEEDING OR COUNTERCLAIM WHICH ARISES OUT OF, BASED UPON OR BY REASON
OF THIS GUARANTEE, ANY LOAN DOCUMENT (AS DEFINED IN THE LOAN AGREEMENT), OR THE
TRANSACTIONS CONTEMPLATED HEREBY. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN
FULLY DISCUSSED BY THE BANK AND THE GUARANTOR, AND SHALL BE SUBJECT TO NO
EXCEPTIONS.
BY ITS EXECUTION AND DELIVERY OF THIS GUARANTEE, THE GUARANTOR ACCEPTS
FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY,
THE NON-EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE COMMONWEALTH OF MASSACHUSETTS IN ANY ACTION, SUIT OR
PROCEEDING OF ANY KIND AGAINST IT WHICH ARISES OUT OF OR BY REASON OF THIS
GUARANTEE, ANY LOAN DOCUMENT (AS DEFINED IN THE LOAN AGREEMENT), OR THE
TRANSACTIONS CONTEMPLATED HEREBY, IN ADDITION TO ANY OTHER COURT IN WHICH SUCH
ACTION, SUIT OR PROCEEDING MAY BE BROUGHT, IRREVOCABLY AGREES TO BE BOUND BY ANY
JUDGMENT RENDERED BY ANY SUCH COURT
-13-
IN ANY SUCH ACTION, SUIT OR PROCEEDING IN WHICH IT SHALL HAVE BEEN SERVED WITH
PROCESS IN THE MANNER HEREINAFTER PROVIDED, AND TO THE EXTENT THAT IT MAY
LAWFULLY DO SO, WAIVES AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE
OR OTHERWISE, IN SUCH ACTION, SUIT OR PROCEEDING ANY CLAIMS THAT IT IS NOT
PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURT, THAT ITS PROPERTY IS
EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION, THAT THE ACTION, SUIT OR
PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE THEREOF IS
IMPROPER.
THIS GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.
20. NOTICES. All notices under this Guarantee shall be in
writing, and shall be delivered by hand, by an internationally recognized
commercial overnight delivery service, by U.S. first class mail or by telecopy,
delivered, addressed or transmitted, if to the Bank, at its address or telecopy
number set forth in the Loan Agreement, and if to the Guarantor, at its address
or telecopy number set out below its signature in this Guarantee. Such notices
shall be effective (a) in the case of hand deliveries, when received, (b) in the
case of an overnight delivery service, on the next Business Day after being
placed in the possession of such delivery service, with delivery charges
prepaid, (c) in the case of mail, three days after deposit in the U.S. postal
system, first class postage prepaid and (d) in the case of telecopy notices,
when electronic indication of receipt is received. Either party may change its
address and telecopy number by written notice to the other.
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IN WITNESS WHEREOF, the undersigned has caused this Guarantee to be
duly executed and delivered as of the date first above written.
LIONBRIDGE TECHNOLOGIES, INC.
By
---------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Chief Financial Officer
Address for Notices:
Lionbridge Technologies, Inc.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
Accepted and agreed to:
SILICON VALLEY BANK
By:
-----------------------------------
Xxxxxx X. Xxxx
Vice President
SCHEDULE A
GUARANTOR'S (LIONBRIDGE TECHNOLOGIES, INC.'S) SUBSIDIARIES
Lionbridge Technologies, Inc. owns 60% of Lionbridge Technologies Holdings B.V.
Lionbridge Technologies Holdings B.V. wholly owns Lionbridge Technologies
Ireland, Lionbridge Technologies B.V., and Lionbridge Technologies France.
EXHIBIT A
COMPLIANCE CERTIFICATE
TO: SILICON VALLEY BANK
FROM: Lionbridge TECHNOLOGIES, INC.
The undersigned authorized officer of Lionbridge Technologies, Inc.
(the "Guarantor") hereby certifies that in accordance with the terms and
conditions of the Guarantee in favor of Bank (the "Guarantee"), (i) except as
noted below, Consolidated Group is in complete compliance for the period ending
_______ with all required financial covenants set forth herein and the Borrowers
are in complete compliance with their covenants as set forth in the Loan
Agreement to which they are a party and (ii) all representations and warranties
of Guarantor in the Guarantee and Borrowers stated in the Agreement are true and
correct in all material respects as of the date hereof. Attached herewith are
the required documents supporting the above certification. The Officer further
certifies that these are prepared in accordance with Generally Accepted
Accounting Principles (GAAP) and are consistently applied from one period to the
next except as explained in an accompanying letter or footnotes.
PLEASE INDICATE COMPLIANCE STATUS BY CIRCLING YES/NO UNDER
"COMPLIES" COLUMN.
Reporting Covenant Required Complies
------------------ -------- --------
Monthly financial statements Monthly within 30 days Yes No
Annual (CPA Audited) FYE within 90 days Yes No
10Q and 10K Within 5 days after filing Yes No
with the SEC
A/R & A/P Agings Monthly within 30 days Yes No
A/R Audit Initial and Semi-Annual Yes No
Financial Covenant Required Actual Complies
------------------ -------- ------ --------
Maintain for the quarters indicated:
Minimum Quarterly Quick Ratio
commencing with the quarter
ending March 31, 1999 0.75 to 1.0 _____:1.0 Yes No
Minimum Profitability
Quarter Ending 6/30/98 ($500,000) $________ Yes No
Quarter Ending 9/30/98 $500,000 $________ Yes No
Quarter Ending 12/31/98 $1,000,000 $________ Yes No
Quarter Ending 3/31/99
and thereafter $750,000 $________ Yes No
COMMENTS REGARDING EXCEPTIONS: See Attached.
Sincerely,
-----------------------------------
SIGNATURE
TITLE:
-----------------------------
DATE:
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