Execution Copy
GUARANTEE
This GUARANTEE (this "GUARANTEE"), dated as of December 23, 2005, is
entered into by and among Xxxxx Xxxxxxxx Corporation, a company incorporated
under the laws of the British Virgin Islands (the "COMPANY"), and Apax Europe VI
A, L.P. ("FUND A") and Apax Europe VI-1, L.P. ("FUND 1" and, together with Fund
A, the "GUARANTOR"). Capitalized terms used herein without definition have the
meanings given to them in the Merger Agreement (as defined below).
RECITALS
WHEREAS, concurrently with the execution and delivery of this Guarantee,
the Company, BMD Venture Capital B.V., a Netherlands limited liability company
("PARENT") and Elmira (BVI) Unlimited, an unlimited company organized under the
laws of the British Virgin Islands and a direct wholly-owned subsidiary of
Parent ("MERGER SUB"), are entering into an Agreement and Plan of Merger, dated
as of the date hereof (the "MERGER AGREEMENT"), providing for the Merger of
Merger Sub with and into the Company upon the terms and subject to the
conditions set forth therein;
WHEREAS, Parent is an Affiliate of the Guarantor; and
WHEREAS, in order to induce the Company to enter into the Merger
Agreement, the Guarantor has agreed to enter into this Guarantee;
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Guarantor hereby agree as follows:
1. GUARANTEE. The Guarantor hereby absolutely, irrevocably and
unconditionally guarantees to the Company the prompt and complete payment and
performance of Parent's and Merger Sub's obligations to the Company arising (i)
under the Merger Agreement in the event of an intentional breach by Parent or
Merger Sub of such obligations or (ii) under Section 7.2(e) of the Merger
Agreement (the "GUARANTEED OBLIGATIONS"); PROVIDED, HOWEVER, that the maximum
aggregate liability of the Guarantor hereunder, when taken together with all
amounts paid by Parent or Merger Sub to the Company with respect to all claims
pursuant to or in connection with the Merger Agreement (including pursuant to
Section 7.2(e) thereof), shall not exceed the amount of fifty million dollars
(US$ 50,000,000) (the "MAXIMUM AMOUNT"). The Company hereby agrees that in no
event shall the Guarantor be required to pay to any Person under, in respect of,
or in connection with this Guarantee, when taken together with all amounts paid
by Parent or Merger Sub to the Company with respect to all claims pursuant to or
in connection
with the Merger Agreement (including pursuant to Section 7.2(e) thereof), more
than the Maximum Amount, and that Guarantor shall not have any obligation or
liability to any Person relating to, arising out of or in connection with, this
Guarantee other than as expressly set forth herein. Fund A and Fund 1 shall be
jointly and severally responsible for the Guaranteed Obligations and any
obligations of the Guarantor under this Guarantee.
2. TERMS OF GUARANTEE.
(a) This Guarantee is one of payment, not collection, and a separate
action or actions may be brought and prosecuted against the Guarantor to enforce
this Guarantee, irrespective of whether any action is brought against Parent or
Merger Sub or whether Parent or Merger Sub is joined in any such action or
actions. The Company shall not be obligated to file any claim relating to the
Guaranteed Obligations in the event that Parent and/or Merger Sub becomes
subject to a bankruptcy, reorganization or similar proceeding, and the failure
of the Company to so file shall not affect the Guarantor's obligations
hereunder. In the event that any payment to the Company in respect of the
Guaranteed Obligations is rescinded or must otherwise be returned for any reason
whatsoever, the Guarantor shall remain liable hereunder with respect to the
Guaranteed Obligations as if such payment had not been made.
(b) Notwithstanding any other provision of this Guarantee, the Company
hereby agrees that the Guarantor may assert, as a defense to any payment or
performance by such Guarantor under this Guarantee, any defense that Parent or
Merger Sub could assert against the Company under the terms of the Merger
Agreement.
3. CHANGES IN OBLIGATIONS, CERTAIN WAIVERS.
(a) The Guarantor agrees that the Company may at any time and from time to
time, without notice to or further consent of the Guarantor, extend the time of
payment of any of the Guaranteed Obligations (provided that the foregoing shall
be subject to the consent of Parent and Merger Sub to the extent such extension
involves an amendment of the Merger Agreement), and may also make any agreement
with Parent or Merger Sub, for the extension, renewal, payment, compromise,
discharge or release thereof, in whole or in part, or for any modification of
the terms thereof or of any agreement between the Company and Parent and/or
Merger Sub without in any way impairing or affecting the Guarantor's obligations
under this Guarantee. The Guarantor agrees that the obligations of the Guarantor
hereunder shall not be released or discharged, in whole or in part, or otherwise
affected by (a) the failure (or delay) of the Company to assert any claim or
demand or to enforce any right or remedy against Parent or Merger Sub; (b) any
change in the time, place or manner of payment of any of the Guaranteed
Obligations or any rescission, waiver, compromise, consolidation or other
amendment or modification of any of the terms or provisions of the Merger
Agreement or any other agreement evidencing, securing or otherwise executed in
connection with any of the Guaranteed Obligations; (c) the addition,
substitution or release of any entity or other person interested in the
transactions contemplated by the Merger Agreement; (d) any change in the
corporate existence, structure or ownership of
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Parent or Merger Sub; (e) any insolvency, bankruptcy, reorganization or other
similar proceeding affecting Parent or Merger Sub; (f) the existence of any
claim, set-off or other right which the Guarantor may have at any time against
Parent or Merger Sub or the Company, whether in connection with the Obligations
or otherwise; or (g) the adequacy of any other means the Company may have of
obtaining payment of any of the Guaranteed Obligations. To the fullest extent
permitted by law, the Guarantor hereby expressly waives any and all rights or
defenses arising by reason of any law which would otherwise require any election
of remedies by the Company. The Guarantor waives promptness, diligence, notice
of the acceptance of this Guarantee and of the Guaranteed Obligations,
presentment, demand for payment, notice of non-performance, default, dishonor
and protest, notice of any Guaranteed Obligations incurred and all other notices
of any kind, all defenses which may be available by virtue of any valuation,
stay, moratorium law or other similar law now or hereafter in effect, any right
to require the marshalling of assets of Parent or Merger Sub, and all suretyship
defenses generally. The Guarantor acknowledges that it will receive substantial
direct and indirect benefits from the transactions contemplated by the Merger
Agreement and that the waivers set forth in this Guarantee are knowingly made in
contemplation of such benefits.
(b) The Guarantor hereby unconditionally and irrevocably agrees not to
exercise any rights that it may now have or hereafter acquire against Parent or
Merger Sub, and Fund A and Fund 1 hereby unconditionally and irrevocably agree
not to exercise any rights that they may now have or hereafter acquire against
each other, in each case that arise from the existence, payment, performance, or
enforcement of the Guarantor's obligations under or in respect of this Guarantee
or any other agreement in connection therewith, including, without limitation,
any right of subrogation, reimbursement, exoneration, contribution or
indemnification and any right to participate in any claim or remedy of the
Company against Parent and/or Merger Sub, whether or not such claim, remedy or
right arises in equity or under contract, statute or common law, including,
without limitation, the right to take or receive from Parent and/or Merger Sub,
directly or indirectly, in cash or other property or by set-off or in any other
manner, payment or security on account of such claim, remedy or right, unless
and until all of the Guaranteed Obligations and all other amounts payable under
this Guarantee shall have been paid in full in cash. If any amount shall be paid
to the Guarantor in violation of the immediately preceding sentence at any time
prior to the payment in full in cash of the Guaranteed Obligations and all other
amounts payable under this Guarantee, such amount shall be received and held in
trust for the benefit of the Company, shall be segregated from other property
and funds of the Guarantor and shall forthwith be paid or delivered to the
Company in the same form as so received (with any necessary endorsement or
assignment) to be credited and applied to the Guaranteed Obligations and all
other amounts payable under this Guarantee, in accordance with the terms of the
Merger Agreement, whether matured or unmatured, or to be held as collateral for
any Guaranteed Obligations or other amounts payable under this Guarantee
thereafter arising.
4. SOLE REMEDY.
(a) The Company hereby acknowledges and agrees that each of Parent and
Merger Sub have no assets as of the date hereof, and that the Company shall not
have any right to cause
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any monies to be contributed to Parent or Merger Sub by any current, former or
prospective stockholder of Parent, Merger Sub or Guarantor or any of their
respective Affiliates or any current, former or prospective officer, director,
employee, general or limited partner, member or investor of the foregoing.
(b) The Company hereby agrees that, except in the case of fraud by the
Guarantor, no Person other than the Guarantor shall have any obligation or
liability arising out of, in connection with or relating to this Guarantee and
that, except in the case of fraud by the Guarantor, neither the Company nor any
other Person shall have any remedy, recourse or right of recovery hereunder
against any current, former or prospective stockholder of Parent, Merger Sub or
Guarantor or any of their respective Affiliates (other than Guarantor) or any
current, former or prospective officer, director, employee, general or limited
partner, member or investor of the foregoing (including of Guarantor), whether
through Guarantor or otherwise, by or through attempted piercing of the
corporate veil, by or through a claim by or on behalf of Parent or Merger Sub
against Guarantor or against any current, former or prospective stockholder of
Guarantor or any of its Affiliates or any current, former or prospective
officer, director, employee, general or limited partner, member or investor of
the foregoing or otherwise.
(c) Except in the case of fraud by the Guarantor, recourse by the Company
against the Guarantor under this Guarantee shall be the sole and exclusive
remedy of the Company against the Guarantor or any of its Affiliates (other than
Parent and Merger Sub) in respect of any liabilities or obligations arising
under, or in connection with, the Merger Agreement or the transactions
contemplated thereby. The Company hereby covenants and agrees that, except in
the case of fraud by the Guarantor, it shall not institute, and shall cause its
Affiliates not to institute, any proceeding or bring any other claim arising
under, or in connection with, the Merger Agreement (including by reason of the
Financing Commitment related to the Equity Financing) or the transactions
contemplated thereby, against the Guarantor or any of its Affiliates (other than
Parent and Merger Sub), except for claims by the Company against the Guarantor
under this Guarantee. Nothing set forth in this Guarantee shall affect or be
construed to affect any liability of Parent or Merger Sub to the Company or
shall confer or give, or shall be construed to confer or give, to any Person
other than the Company (including any Person acting in a representative
capacity) any rights or remedies against any Person in respect of or relating to
any obligation or liability of the Guarantor arising out of, in connection with
or relating to this Guarantee.
(d) Except in the case of fraud by the Guarantor, the Company acknowledges
and agrees that neither Parent nor Merger Sub shall have any liability to the
Company in respect of any claims for monetary damages that the Company may bring
against Parent or Merger Sub pursuant to or in connection with the Merger
Agreement or this Guarantee that are in an aggregate amount, together with all
other such claims that have been brought by the Company against and paid by
Parent and/or Merger Sub, all amounts paid by Parent pursuant to Section 7.2(e)
of the Merger Agreement and all amounts paid pursuant to this Guarantee, in
excess of the Maximum Amount, and that if the payment to the Company of any
judgment for monetary damages, when taken together with any amounts paid by
Parent pursuant to Section 7.2(e) of the Merger Agreement and any amounts paid
pursuant to this Guarantee, would cause the Maximum
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Amount to be exceeded, such judgment shall be paid only in such portion as would
not cause the Maximum Amount to be exceeded.
5. TERMINATION. This Guarantee shall terminate at the Effective Time. In
the event that the Company or any of its Affiliates asserts in any litigation
relating to this Guarantee that the provisions of Section 1 hereof limiting the
maximum aggregate liability of the Guarantors to the Maximum Amount or the
provisions of Section 4 hereof are illegal, invalid or unenforceable in whole or
in part, the obligations of the Guarantor under this Guarantee shall terminate
forthwith and shall thereupon be null and void; PROVIDED, however, that if the
Guarantor asserts in any litigation or other proceeding that this Guarantee is
illegal, invalid or unenforceable in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws affecting creditors' rights generally, and
general equitable principles (whether considered in a proceeding in equity or at
law), then, to the extent the Company prevails in such litigation or proceeding,
the Guarantor shall pay on demand all reasonable fees and out of pocket expenses
of the Company in connection with such litigation or proceeding.
6. CONTINUING GUARANTEE. Unless terminated pursuant to the provisions of
Section 5 hereof, this Guarantee is a continuing one and shall remain in full
force and effect until the indefeasible payment and satisfaction in full of the
Guaranteed Obligations, and shall be binding upon, inure to the benefit of and
be enforceable by, the parties hereto and their respective successors and
permitted transferees and assigns.
7. REPRESENTATIONS AND COVENANTS OF GUARANTOR.
(i) ORGANIZATION; AUTHORIZATION. Guarantor is a legal entity duly
organized and validly existing and in good standing under the
Laws of its jurisdiction of organization. The execution and
delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly
authorized by all necessary action of Guarantor, and no other
action or proceedings are necessary to authorize this Agreement
or the consummation of the transactions contemplated hereby. This
Guarantee has been duly and validly executed and delivered by
Guarantor and this Guarantee constitutes a legal, valid and
binding obligation of Guarantor enforceable against Guarantor in
accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or
other similar Laws affecting creditors' rights generally and by
general equitable principles.
(ii) NO CONFLICT. The execution and delivery by Guarantor of this
Guarantee does not, and the consummation of the transactions
contemplated hereby, and compliance with the provisions hereof
will not (i) result in any violation of, or default (with or
without notice or lapse of time, or both)
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under, or give rise to a right of termination, cancellation or
acceleration of any obligation under any Contract to which
Guarantor is a party or by which Guarantor is bound or result in
the creation of any Lien upon any of the properties or assets of,
(ii) conflict with or result in any violation of any provision of
the organizational documents of Guarantor or (iii) conflict with
or violate any Laws or Orders applicable to Guarantor, other
than, in the case of clauses (i) and (iii), any such violation,
conflict, default, termination, cancellation, acceleration, Lien
or other circumstance that would not prevent or materially delay
Guarantor from performing its obligations under this Guarantee or
taking any action necessary to consummate the transactions
contemplated hereby.
(iii) CAPACITY. The Guarantor has the financial capacity to pay and
perform its obligations under this Guarantee, and all funds
necessary for the Guarantor to fulfill its obligations under
this Guarantee shall be available to the Guarantor for so long
as this Guarantee shall remain in effect.
8. ENTIRE AGREEMENT. This Guarantee constitutes the entire agreement, and
supersedes all other prior agreements and understandings, both written and oral,
between the parties, or any of them, with respect to the subject matter hereof
and thereof and except for the right of the Company, on behalf of its
shareholders, to pursue damages (subject to Section 8.11 of the Merger
Agreement) in the event of Parent's or Merger Sub's intentional breach of the
Merger Agreement, which right is hereby acknowledged and agreed by Guarantor,
this Agreement is not intended to and shall not confer upon any person other
than the parties hereto any rights or remedies hereunder.
9. AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of this
Guarantee shall be valid and binding unless it is in writing and signed, in the
case of an amendment, by the Guarantor and the Company, or in the case of
waiver, by the party against whom the waiver is sought to be enforced. No waiver
by a party of any breach or violation of, or default under, this Guarantee shall
be deemed to extend to any prior or subsequent breach, violation or default
hereunder or to affect in any way any rights arising by virtue of any such prior
or subsequent occurrence. No delay or omission by any party in exercising any
right, power or remedy under this Guarantee (nor any partial exercise of the
same) shall operate as a waiver thereof. Each and every right, remedy and power
hereby granted to the Company or allowed it by law or other agreement shall be
cumulative and not exclusive of any other, and may be exercised by the Company
at any time or from time to time.
10. COUNTERPARTS. This Guarantee may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument. This Guarantee shall
become effective when duly executed by each party hereto.
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11. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally or
sent by telecopy or telex, overnight courier service or by registered or
certified mail (postage prepaid, return receipt requested), to the respective
parties at the following addresses or at such addresses as shall be specified by
the parties by like notice:
(a) If to the Guarantor:
Apax Europe VI A, L.P.
00-00 Xxxxxxxx Xxxx
Xx. Xxxxx Xxxx,
Xxxxxxxx, Xxxxxxx Xxxxxxx
and
Apax Europe VI-1, L.P.
00-00 Xxxxxxxx Xxxx
Xx. Xxxxx Xxxx
Xxxxxxxx, Xxxxxxx Xxxxxxx
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Four Times Square
New York, New York
Telecopy: (000) 000-0000
Attention: Xxx X. Xxxxx
Xxxxxx X. Xxxxx
and
Xxxxxxxx Chance U.S. LP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx Xxxxxxxx
(b) If to the Company:
Xxxxx Xxxxxxxx Corporation
9/F, Novel Industrial Xxxxxxxx
000-000 Xxx Xxx Xxx Xxxx
Xxxxxx Sha Wan, Kowloon
Hong Kong
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Telecopy: (000) 000-0000
Attention: Xxxxx X.X. Xxxx
with copies to:
Xxxxx Xxxxxxxx USA, Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx Xxxxxxxxx, Esq.
with copies to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx
12. GOVERNING LAW. This Guarantee shall be governed by and construed in
accordance with the laws of the State of New York, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof,
except to the extent that mandatory provisions of federal law apply.
13. JURISDICTION AND VENUE; SERVICE OF PROCESS. Each of the parties hereto
irrevocably agrees that any legal action or proceeding with respect to this
Guarantee and the rights and obligations arising hereunder, or for recognition
and enforcement of any judgment in respect of this Guarantee and the rights and
obligations arising hereunder brought by the other party hereto or its
successors or assigns shall be brought and determined exclusively in a federal
court (or if not able to be brought in such court, in a state court) located in
the Borough of Manhattan, City of New York. Each of the parties hereto hereby
irrevocably submits with regard to any such action or proceeding for itself and
in respect of its property, generally and unconditionally, to the personal
jurisdiction of the aforesaid courts and agrees that it will not bring any
action relating to this Guarantee or any of the transactions contemplated by
this Guarantee in any court other than the aforesaid courts. Each of the parties
hereto hereby irrevocably waives, and agrees not to assert, by way of motion, as
a defense, counterclaim or otherwise, in any action or proceeding with respect
to this Guarantee, (a) any claim that it is not personally subject to the
jurisdiction of the above-named courts for any reason other than the failure to
serve in accordance with this Section 13, (b) any claim that it or its property
is exempt or immune from jurisdiction of any such court or from any legal
process commenced in such courts (whether through service of notice, attachment
prior to judgment, attachment in aid of execution of judgment, execution of
judgment or otherwise) and (c) to the fullest extent permitted by the applicable
Law, any claim that (i) the suit, action or proceeding in such court is brought
in an inconvenient forum, (ii) the venue of such suit, action or proceeding is
improper or (iii) this Guarantee, or the subject mater hereof, may not be
enforced in or by such courts. Each of the parties hereto agrees that a final
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judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Each of the parties hereto irrevocably consents to service of
process in any such action or proceeding in the manner provided for notices in
Section 11 of this Guarantee; PROVIDED, however, that nothing in this Guarantee
shall affect the right of any party hereto to serve process in any other manner
permitted by law.
14. WAIVER OF JURY TRIAL. EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT
ANY CONTROVERSY THAT MAY ARISE UNDER THIS GUARANTEE IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT
CANNOT BE WAIVED, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS GUARANTEE
AND ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE SUCH WAIVER, (B) IT UNDERSTANDS AND HAS
CONSIDERED THE IMPLICATIONS OF SUCH WAVER, (C) IT MAKES SUCH WAVER VOLUNTARILY,
AND (D) IT HAS BEEN INDUCED TO ENTER INTO THIS GUARANTEE BY, AMONG OTHER THINGS,
THE MUTUAL WAIVER AND CERTIFICATIONS CONTAINED IN THIS SECTION 14.
15. SEVERABILITY. Any term or provision of this Guarantee that is invalid
or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Guarantee or affecting the validity or enforceability of any terms or provisions
of this Guarantee in any other jurisdiction so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party; PROVIDED, however, that this Guarantee may not be enforced
without giving effect to the limitation of the amount payable hereunder to the
Maximum Amount provided in Section 1 hereof and to the provisions of Sections 3
and 4 hereof. No party hereto shall assert, and each party shall cause its
respective Affiliates not to assert, that this Guarantee or any part hereof is
invalid, illegal or unenforceable.
16. HEADINGS. Headings are used for reference purposes only and do not
affect the meaning or interpretation of this Guarantee.
17. PARTIES IN INTEREST. This Guarantee shall be binding upon and inure
solely to the benefit of each party hereto and their respective successors and
permitted assigns, and nothing in this Guarantee, express or implied, is
intended to or shall confer upon any other Person any rights, benefits or
remedies of any nature whatsoever under or by reason of this Guarantee.
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18. NO ASSIGNMENT. The Guarantor may not assign its rights, interests or
obligations hereunder to any other person (except by operation of law) without
the prior written consent of the Company.
[Signatures follow on next page]
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IN WITNESS WHEREOF, the undersigned have executed and delivered this
Guarantee as of the date first above written.
/s/ Xxxxx Xxxxxxxxx /s/ Xxxx Xxxxxxxxxx
------------------------------------------
Name: Xxxxx Xxxxxxxxx Name: Xxxx Xxxxxxxxxx
Title: Director Title: Director
Apax Partners Europe Managers Ltd.
acting in its capacity as manager of
Apax Europe VI-1, L.P.
/s/ Xxxxx Xxxxxxxxx /s/ Xxxx Xxxxxxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxxxxx Name: Xxxx Xxxxxxxxxx
Title: Director Title: Director
Apax Partners Europe Managers Ltd.
acting in its capacity as manager of
Apax Europe VI-A, L.P.
Xxxxx Xxxxxxxx Corporation
By. /s/ Xxxxx X. Xxxx
----------------------------
Name: Xxxxx X. Xxxx
Title: Chief Executive Officer and President
