EXHIBIT 99.2
EXECUTION
NEITHER THIS GUARANTY, NOR ANY COMMON STOCK ISSUABLE UPON EXERCISE
OF THE CONVERSION PRIVILEGE SET FORTH IN THE NOTE REFERRED TO HEREIN HAS
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND THIS GUARANTY, SUCH NOTE AND, IF ISSUED ANY SUCH
STOCK MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT
(1) PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND IN EACH CASE
IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES.
GUARANTY
--------
In order to induce Payee to extend credit to Maker pursuant to the
Note attached hereto (the "NOTE"; terms defined therein and not otherwise
defined herein being used herein as therein defined), the undersigned
("GUARANTOR") hereby irrevocably and unconditionally guaranties, as primary
obligor and not merely as surety, the due and punctual payment in full of all
Obligations (as hereinafter defined) when the same shall become due, whether at
stated maturity, by acceleration, demand or otherwise (including amounts that
would become due but for the operation of the automatic stay under Section
362(a) of the Bankruptcy Code, 11 U.S.C. ss. 362(a)). The term "OBLIGATIONS" is
used herein in its most comprehensive sense and includes any and all obligations
of Maker now or hereafter made, incurred or created, whether absolute or
contingent, liquidated or unliquidated, whether due or not due, and however
arising under or in connection with the Note.
Guarantor acknowledges that a portion of the advances under the Note
may be advanced to Guarantor and that the Obligations are being incurred for and
will inure to the benefit of Guarantor.
Any interest on any portion of the Obligations that accrues after
the commencement of any proceeding, voluntary or involuntary, involving the
bankruptcy, insolvency, receivership, reorganization, liquidation or arrangement
of Maker (or, if interest on any portion of the Obligations ceases to accrue by
operation of law by reason of the commencement of said proceeding, such interest
as would have accrued on such portion of the Obligations if said proceeding had
not been commenced) shall be included in the Obligations because it is the
intention of Guarantor and Payee that the Obligations should be determined
without regard to any rule of law or order that may relieve Maker of any portion
of such Obligations.
In the event that all or any portion of the Obligations is paid by
Maker, the obligations of Guarantor hereunder shall continue and remain in full
force and effect or be reinstated, as the case may be, in the event that all or
any part of such payment(s) is rescinded or recovered directly or indirectly
from Payee as a preference, fraudulent transfer or otherwise, and any such
payments that are so rescinded or recovered shall constitute Obligations.
Upon the failure of Maker to pay any of the Obligations when and as
the same shall become due, Guarantor will upon demand pay, or cause to be paid,
in cash, to Payee an amount equal to the aggregate of the unpaid Obligations.
Guarantor agrees that its obligations hereunder are irrevocable,
absolute, independent and unconditional and shall not be affected by any
circumstance which constitutes a legal or equitable discharge of a guarantor or
surety other than payment in full of the Obligations. In furtherance of the
foregoing and without limiting the generality thereof, Guarantor agrees as
follows: (a) this Guaranty is a guaranty of payment when due and not of
collectibility; (b) Payee may enforce this Guaranty upon the occurrence of an
Event of Default under the Note notwithstanding the existence of any dispute
between Maker and Payee with respect to the existence of such event; (c) the
obligations of Guarantor hereunder are independent of the obligations of Maker
under the Note and the obligations of any other guarantor of the obligations of
Maker under the Note and a separate action or actions may be brought and
prosecuted against Guarantor whether or not any action is brought against Maker
or any of such other guarantors and whether or not Maker is joined in any such
action or actions; (d) Guarantor's payment of a portion, but not all, of the
Obligations shall in no way limit, affect, modify or abridge Guarantor's
liability for any portion of the Obligations that has not been paid; (e) Payee
may from time to time, without notice or demand and without affecting the
validity or enforceability of this Guaranty or giving rise to any limitation,
impairment or discharge of Guarantor's liability hereunder, (i) renew, extend,
accelerate or otherwise change the time, place, manner or terms of payment of
the Obligations, (ii) settle, compromise, release or discharge, or accept or
refuse any offer of performance with respect to, or substitutions for, the
Obligations or any agreement relating thereto and/or subordinate the payment of
the same to the payment of any other obligations, (iii) request and accept other
guaranties of the Obligations and take and hold security for the payment of this
Guaranty or the Obligations, (iv) release, exchange, compromise, subordinate or
modify, with or without consideration, any security for payment of the
Obligations, any other guaranties of the Obligations, or any other obligation of
any Person with respect to the Obligations, (v) enforce and apply any security
now or hereafter held by or for the benefit of Payee in respect of this Guaranty
or the Obligations and direct the order or manner of sale thereof, or exercise
any other right or remedy that Payee may have against any such security, as
Payee in its discretion may determine consistent with any applicable security
agreement, including foreclosure on any such security pursuant to one or more
judicial or nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable, and (vi) exercise any other rights available to it
under the Note, at law or in equity; and (f) this Guaranty and the obligations
of Guarantor hereunder shall be valid and enforceable and shall not be subject
to any limitation, impairment or discharge for any reason (other than payment in
full of the Obligations), including without limitation the occurrence of any of
the following, whether or not Guarantor shall have had notice or knowledge of
any of them: (i) any failure to assert or enforce or agreement not to assert or
enforce, or the stay or enjoining, by order of court, by operation of law or
otherwise, of the exercise or enforcement of, any claim or demand or any right,
power or remedy with respect to the Obligations or any agreement relating
thereto, or with respect to any other guaranty of or security for the payment of
the Obligations, (ii) any waiver, amendment or modification of, or any consent
to departure from, any of the terms or provisions (including without limitation
provisions relating to events of default) of the Note or any agreement or
instrument executed pursuant thereto, or of any other guaranty or security for
the Obligations, (iii) the Obligations, or any agreement relating thereto, at
any time being found to be illegal, invalid or unenforceable in any respect,
(iv) the application of payments received from any source to the payment of
indebtedness other than the Obligations, even though Payee might have elected to
apply such payment to any part or all of the Obligations, (v) any failure to
perfect or continue perfection of a security interest in any collateral which
secures any of the Obligations, (vi) any defenses, set-offs or counterclaims
which Maker may allege or assert against Payee in respect of the Obligations,
including but not limited to failure of consideration, breach of warranty,
payment, statute of frauds, statute of limitations, accord and satisfaction and
usury, and (vii) any other act or thing or omission, or delay to do any other
act or thing, which may or might in any manner or to any extent vary the risk of
Guarantor as an obligor in respect of the Obligations. This Guaranty is a
continuing guaranty and shall be binding upon Guarantor and its successors and
assigns, and Guarantor irrevocably waives any right to revoke this Guaranty as
to future transactions giving rise to any Obligations.
Guarantor hereby waives, for the benefit of Payee: (a) any right to
require Payee, as a condition of payment or performance by Guarantor, to (i)
proceed against Maker, any other guarantor of the Obligations or any other
Person, (ii) proceed against or exhaust any security held from Maker, any other
guarantor of the Obligations or any other Person, (iii) proceed against or have
resort to any balance of any deposit account or credit on the books of Payee in
favor of Maker or any other Person, or (iv) pursue any other remedy in the power
of Payee whatsoever; (b) any defense arising by reason of the incapacity, lack
of authority or any disability or other defense of Maker including, without
limitation, any defense based on or arising out of the lack of validity or the
unenforceability of the Obligations or any agreement or instrument relating
thereto or by reason of the cessation of the liability of Maker from any cause
other than payment in full of the Obligations; (c) any defense based upon any
statute or rule of law which provides that the obligation of a surety must be
neither larger in amount nor in other respects more burdensome than that of the
principal; (d) any defense based upon Xxxxx's errors or omissions in the
administration of the Obligations, except behavior which amounts to bad faith;
(e) (i) any principles or provisions of law, statutory or otherwise, which are
or might be in conflict with the terms of this Guaranty and any legal or
equitable discharge of Guarantor's obligations hereunder, (ii) the benefit of
any statute of limitations affecting Guarantor's liability hereunder or the
enforcement hereof, (iii) any rights to set-offs, recoupments and counterclaims,
and (iv) promptness, diligence and any requirement that Payee protect, secure,
perfect or insure any security interest or lien or any property subject thereto;
(f) notices, demands, presentments, protests, notices of protest, notices of
dishonor and notices of any action or inaction, including acceptance of this
Guaranty, notices of default under the Note or any agreement or instrument
related thereto, notices of any renewal, extension or modification of the
Obligations or any agreement related thereto, notices of any extension of credit
to Maker and notices of any of the matters referred to in the preceding
paragraph and any right to consent to any thereof; and (g) to the fullest extent
permitted by law, any defenses or benefits that may be derived from or afforded
by law which limit the liability of or exonerate guarantors or sureties, or
which may conflict with the terms of this Guaranty.
Until the Obligations shall have been paid in full, Guarantor shall
withhold exercise of (a) any claim, right or remedy, direct or indirect, that
Guarantor now has or may hereafter have against Maker or any of its assets in
connection with this Guaranty or the performance by Guarantor of its obligations
hereunder, in each case whether such claim, right or remedy arises in equity,
under contract, by statute, under common law or otherwise and including without
limitation (i) any right of subrogation, reimbursement or indemnification that
Guarantor now has or may hereafter have against Maker, (ii) any right to
enforce, or to participate in, any claim, right or remedy that Payee now has or
may hereafter have against Maker, and (iii) any benefit of, and any right to
participate in, any collateral or security now or hereafter held by Payee, and
(b) any right of contribution Guarantor may have against any other guarantor of
any of the Obligations. Guarantor further agrees that, to the extent the
agreement to withhold the exercise of its rights of subrogation, reimbursement,
indemnification and contribution as set forth herein is found by a court of
competent jurisdiction to be void or voidable for any reason, any rights of
subrogation, reimbursement or indemnification Guarantor may have against Maker
or against any collateral or security, and any rights of contribution Guarantor
may have against any such other guarantor, shall be junior and subordinate to
any rights Payee may have against Maker, to all right, title and interest Payee
may have in any such collateral or security, and to any right Payee may have
against such other guarantor.
Any indebtedness of Maker now or hereafter held by Guarantor is
hereby subordinated in right of payment to the Obligations, and any such
indebtedness of Maker to Guarantor collected or received by Guarantor after an
Event of Default has occurred and is continuing shall be held in trust for Payee
and shall forthwith be paid over to Payee to be credited and applied against the
Obligations.
Guarantor agree to pay, or cause to be paid, on demand, and to save
Payee harmless against liability for, any and all reasonable costs and expenses
(including fees and disbursements of counsel and allocated costs of internal
counsel) incurred or expended by Payee in connection with the enforcement of or
preservation of any rights under this Guaranty.
It is not necessary for Payee to inquire into the capacity or powers
of Guarantor or Maker or the officers, directors or any agents acting or
purporting to act on behalf of any of them.
Payee shall have no obligation to disclose or discuss with Guarantor
its assessment, or Guarantor's assessment, of the financial condition of Maker.
Guarantor has adequate means to obtain information from Maker on a continuing
basis concerning the financial condition of Maker and its ability to perform its
obligations under the Note, and Guarantor assumes the responsibility for being
and keeping informed of the financial condition of Maker and of all
circumstances bearing upon the risk of nonpayment of the Obligations. Guarantor
hereby waives and relinquishes any duty on the part of Payee to disclose any
matter, fact or thing relating to the business, operations or conditions of
Maker now known or hereafter known by Payee.
Guarantor acknowledges that pursuant to the terms of the Note, Payee
may require that the Obligations be paid in Common Stock. Guarantor acknowledges
and agrees to pay any Obligations in Common Stock that Maker has requested be
paid in Common Stock pursuant to the terms of the Note. By their acceptance of
this Guaranty, each of Payee, any transferee or assignee of Payee and their
respective successors and assigns (i) represent and warrant to Guarantor and
Maker that it is an "accredited investor" as that term is defined in Regulation
D under the Securities Act, and is it acquiring the Note and this Guaranty and
will acquire any Common Stock issuable upon conversion of the Note for its own
account, for investment, and not with a view to the distribution thereof, and
(ii) agree that, as a condition precedent to its obligation to issue Common
Stock pursuant to this Guaranty, Guarantor may require that Payee reaffirm the
representations and warranties set forth in this paragraph and may cause any
certificate or certificates evidencing such Common Stock to be printed with the
following a legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND SUCH SHARES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (1) PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS UNDER THE
SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, AND IN EACH CASE IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES.
The rights, powers and remedies given to Payee by this Guaranty are
cumulative and shall be in addition to and independent of all rights, powers and
remedies given to Payee by virtue of any statute or rule of law or in the Note
or any agreement between Guarantor and Payee or between Maker and Payee. Any
forbearance or failure to exercise, and any delay by Xxxxx in exercising, any
right, power or remedy hereunder shall not impair any such right, power or
remedy or be construed to be a waiver thereof, nor shall it preclude the further
exercise of any such right, power or remedy.
Guarantor hereby represents and warrants to Payee that: (a)
Guarantor is duly organized, validly existing and in good standing under the
laws of the state of its incorporation; (b) Guarantor has the corporate power,
authority and legal right to execute, deliver and perform this Guaranty and has
taken all necessary corporate action to authorize its execution, delivery and
performance of this Guaranty; (c) this Guaranty has been duly executed and
delivered by a duly authorized officer of Guarantor, and this Guaranty
constitutes the legally valid and binding obligation of Guarantor, enforceable
against Guarantor in accordance with its terms, except as enforcement may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws or equitable principles relating to or limiting creditors'
rights generally; (d) the execution, delivery and performance of this Guaranty
including, without limitation, the issuance of Common Stock of Guarantor as
required by any Conversion Notice, will not violate any provision of any
existing law or regulation binding on Guarantor, or any order, judgment, award
or decree of any court, arbitrator or governmental authority binding on
Guarantor, or the certificate of incorporation or bylaws of Guarantor or any
securities issued by Guarantor, or any mortgage, indenture, lease, contract or
other agreement, instrument or undertaking to which Guarantor is a party or by
which Guarantor or any of its assets may be bound, the violation of which would
have a material adverse effect on the business, operations, assets or financial
condition of Guarantor and its Subsidiaries, taken as a whole, and will not
result in, or require, the creation or imposition of any lien on any of its
property, assets or revenues pursuant to the provisions of any such mortgage,
indenture, lease, contract or other agreement, instrument or undertaking, and
(e) all shares of Common Stock issued pursuant to the Guaranty, when issued,
will be duly authorized, validly issued, fully paid and non-assessable and free
of any Lien or adverse claim, and will not be subject to Guarantor's compliance
with or satisfaction of any pre-emptive or similar rights held by the holders of
Guarantor's Common Shares or such holders' waiver of any such rights.
Guarantor hereby covenants and agrees that it shall: (a) promptly
provide to Payee all financial and operational information with respect to
Guarantor and its subsidiaries as Payee may reasonably request; (b) not merge or
consolidate with any other Person, or sell, lease or otherwise dispose of all or
any substantial part of its property or assets to any other Person, (c) reserve
and keep available for issuance at all times that the Note is outstanding a
sufficient number of authorized but unissued shares of Common Stock to allow it
to capitalize Maker with or otherwise transfer to Maker a sufficient number of
shares of Common Stock to allow Maker to satisfy its obligations to issue Common
Stock as required by the Note and this Guaranty and, if at any time, the number
of authorized but unissued shares shall not be sufficient for such purpose, the
Guarantor shall take all such corporate action as may be necessary to increase
its authorized but unissued shares of Common Stock to such number shares as
shall be sufficient for such purpose; (d) from time to time capitalize Maker
with Common Stock or otherwise transfer Common Stock to Maker to allow Maker to
satisfy its obligations to issue Common Stock as required by the Note; (e) list
or cause to be listed on each national securities exchange, the NASDAQ Stock
Market or any other exchange or market on which the Common Stock may then be
listed, any Common Stock issued hereunder, and (f) comply with all federal,
state and other applicable securities laws regulating the offer, issuance and
delivery of the Common Stock by itself or Maker, provided, however, that nothing
in the Note or this Guaranty shall require that Guarantor file a registration
statement under the Securities Act or any state securities law, or file a
prospectus or take any similar action in any other jurisdiction.
This Guaranty shall inure to the benefit of Payee and its successors
and assigns. In case any provision in or obligation under this Guaranty shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF GUARANTOR AND PAYEE
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST GUARANTOR ARISING OUT OF OR
RELATING TO THIS GUARANTY MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY
OF THIS GUARANTY GUARANTOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY
AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS
GUARANTY. Guarantor hereby agrees that service of all process in any such
proceeding in any such court may be made by registered or certified mail, return
receipt requested, to Guarantor at its address set forth below its signature
hereto, such service being hereby acknowledged by Guarantor to be sufficient for
personal jurisdiction in any action against Guarantor in any such court and to
be otherwise effective and binding service in every respect. Nothing herein
shall affect the right to serve process in any other manner permitted by law or
shall limit the right of Payee to bring proceedings against Guarantor in the
courts of any other jurisdiction.
XXXXXXXXX AND, BY THEIR ACCEPTANCE OF THE BENEFITS OF THIS GUARANTY,
PAYEE AND ANY SUBSEQUENT HOLDER OF THE NOTE, HEREBY IRREVOCABLY AGREE TO WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS GUARANTY OR ANY DEALINGS BETWEEN THEM RELATING TO
THE SUBJECT MATTER OF THIS GUARANTY AND THE GUARANTOR/BENEFICIARY RELATIONSHIP
THAT IS BEING ESTABLISHED. The scope of this waiver is intended to be
all-encompassing of any and all disputes that may be filed in any court and that
relate to the subject matter of this transaction, including without limitation
contract claims, tort claims, breach of duty claims and all other common law and
statutory claims. Guarantor and, by their acceptance of the benefits of this
Guaranty, Payee and any subsequent holder of the Note, each (i) acknowledges
that this waiver is a material inducement to enter into a business relationship,
that each has already relied on this waiver in entering into this Guaranty or
making the loan evidenced by the Note, as the case may be, and that each will
continue to rely on this waiver in their related future dealings, and (ii)
further warrants and represents that each has reviewed this waiver with its
legal counsel and that each knowingly and voluntarily waives its jury trial
rights following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
OF THIS GUARANTY. In the event of litigation, this provision may be filed as a
written consent to a trial by the court.
This Guaranty may be executed in any number of counterparts and by
the different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original for all purposes; but
all such counterparts together shall constitute but one and the same instrument.
This Guaranty shall become effective as to each Guarantor upon the execution of
a counterpart hereof by such Guarantor (whether or not a counterpart hereof
shall have been executed by any other Guarantor) and receipt by Xxxxx of written
or telephonic notification of such execution and authorization of delivery
thereof.
IN WITNESS WHEREOF, Xxxxxxxxx caused this Guaranty to be executed by
its duly authorized officer as of the date set forth below.
FIBERCORE, INC .
By: ________________________________
Name:
Title:
Dated as of: December 20, 2002
Address:
000 Xxxxxxxxx Xxxx, P.O. Box 180
Charlton, MA 01507
