Exhibit 5
GUARANTY OF PAYMENT
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THIS GUARANTY OF PAYMENT (this "GUARANTY") is made this 30th day
of December, 1997, by XXXX INTERNATIONAL HOLDINGS, INC., a Delaware
corporation ("GUARANTOR") in favor of XXXXXX FINANCIAL, INC., a
Delaware corporation, as agent for the benefit of the Lenders (in its
capacity as Agent for the Lenders, "AGENT").
RECITALS
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A. Financial Accommodations. Guarantor and Zephyros Acquisition
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Corporation ("BORROWER") are entering into that certain Tender Offer
Loan Agreement dated as of the date hereof with Agent and certain
financial institutions from time to time party thereto (collectively,
"LENDERS") (as it may be amended, restated, supplemented or otherwise
modified and in effect from time to time, the "LOAN AGREEMENT")
providing for loans and other financial accommodations to be made by
Lenders to Borrower;
B. Purpose. Borrower desires to incur such loans pursuant to the
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Agreement for the purpose of financing a portion of the purchase price
of all of the Target Shares pursuant to the Offer to Purchase;
C. Inducement. Borrower is a wholly-owned subsidiary of Guarantor
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and as such, Guarantor will derive direct and indirect economic
benefits from the making of loans and other financial accommodations
under the Loan Agreement;
In consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Guarantor hereby agrees as follows:
SECTION 1 DEFINED TERMS
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All capitalized terms used herein and not otherwise defined shall
have the meanings assigned to such term in the Loan Agreement.
SECTION 2 THE GUARANTY
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2.1 GUARANTY OF OBLIGATIONS. Guarantor unconditionally and
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absolutely guarantees the full and prompt payment and performance when
due, whether at maturity or earlier, by reason of acceleration or
otherwise, and at all times thereafter, of the indebtedness,
liabilities and obligations of every kind and nature of Borrower to
Agent or Lenders arising under or in any way relating to the Loan
Agreement or any of the other Loan Documents, howsoever created,
incurred or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, due or to become due, and
howsoever owned, held or acquired by Agent, for the benefit of Lenders
(collectively, the "OBLIGATIONS"). Without limitation to the
foregoing, the Obligations shall include (a) all reasonable attorneys'
and paralegals' fees, costs and expenses and all court costs and costs
of appeal incurred by Agent in collecting any amount due Lenders under
this Guaranty or in prosecuting any action against Borrower, Guarantor
or any other guarantor with respect to all or any part of the
Obligations and (b) all interest, fees, costs and expenses due Lenders
after the filing of a bankruptcy petition by or against Borrower
regardless of whether such amounts can be collected during the
pendency of the bankruptcy proceedings.
2.2 CONTINUING GUARANTY; GUARANTY OF PAYMENT. This Guaranty is a
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continuing guaranty of the Obligations, and Guarantor agrees that the
obligations of Guarantor to Agent, for the benefit of Lenders,
hereunder shall be primary obligations, shall not be subject to any
counterclaim, set-off, abatement, deferment or defense based upon any
claim that Guarantor may have against Agent, Borrower or any other
person or entity, and shall remain in full force and effect without
regard to, and shall not be released, discharged or affected in any
way by any circumstances or condition (whether or not Guarantor shall
have any knowledge thereof), including, without limitation: (a) the
attempt or the absence of any attempt by Agent to obtain payment or
performance by Borrower or any other guarantor (this being a guaranty
of payment and performance and not of collection); (b) Agent's delay
in enforcing Guarantor's Obligations hereunder, or any prior partial
exercise by Agent of any right or remedy against Guarantor hereunder;
(c) the lack of validity or enforceability of, or Agent's waiver or
consent with respect to, any provision of any instrument evidencing,
securing or otherwise relating to the Obligations, or any part
thereof; (d) the failure by Agent to take any steps to perfect,
maintain and enforce its security interests, or to preserve its rights
to any security or collateral, for the Obligations; (e) any voluntary
or involuntary bankruptcy, insolvency, reorganization, arrangement,
readjustment, assignment for the benefit of creditors, composition,
receivership, liquidation, marshalling of assets and liabilities or
similar events or proceedings with respect to Borrower or Guarantor,
as applicable, or any of their respective properties (each, an
"INSOLVENCY PROCEEDING"), or any action taken by Agent, any trustee or
receiver or by any court in any such proceeding; (f) in any proceeding
under Title 11 of the United States Code (11 U.S.C. Section 101 et
seq.), as amended (the "BANKRUPTCY CODE"), (i) any election by Agent
under Section 1111(b)(2) of the Bankruptcy Code, (ii) any borrowing or
grant of a security interest by Borrower as debtor-in-possession under
Section 364 of the Bankruptcy Code, (iii) the inability of Agent to
enforce the Obligations against Borrower by application of the
automatic stay provisions of Section 362 of the Bankruptcy Code, or
(iv) the disallowance, under Section 502 of the Bankruptcy Code, of
all or any portion of Agent's claim(s) against Borrower for repayment
of the Obligations; (g) the failure of Guarantor to receive notice of
any intended disposition of the collateral for the Obligations; (h)
any merger or consolidation of Borrower into or with any other entity,
or any sale, lease or transfer of any of the assets of Borrower or
Guarantor to any other person or entity; (i) any change in the
ownership of Borrower or any change in the relationship between
Borrower and Guarantor, or any termination of any such relationship;
and (k) any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of Borrower, Guarantor or any
other guarantor.
Guarantor hereby expressly waives and surrenders any defense to
its liability under this Guaranty based upon any of the foregoing
acts, omissions, agreements, waivers or matters. It is the purpose and
intent of this Guaranty that the obligations of Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
2.3 RIGHTS OF AGENT. Agent is hereby authorized, without notice
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to or demand of Guarantor and without affecting the liability of
Guarantor hereunder, to take any of the following actions from time to
time: (a) increase or decrease the amount of, or renew, extend,
accelerate or otherwise change the time for payment of, or other terms
relating to, the Obligations, or otherwise modify, amend or change the
terms of any promissory note or other agreement evidencing, securing
or otherwise relating to any of the Obligations, including, without
limitation, the making of additional advances thereunder; (b) accept
and apply any payments on or recoveries against the Obligations from
any source, and any proceeds of any security therefor, to the
Obligations in such manner, order and priority as Agent may elect; (c)
take, hold, sell, release or otherwise dispose of all or any security
for the Obligations or the payment of this Guaranty; (d) settle,
release, compromise, collect or otherwise liquidate the Obligations or
any portion thereof; (e) accept, hold, substitute, add or release any
other guaranty or endorsements of the Obligations; and (f) at any time
after maturity of the Obligations, appropriate and apply toward
payment of the Obligations (i) any indebtedness due or to become due
from Agent to Guarantor, and (ii) any moneys, credits, or other
property belonging to Guarantor at any time held by or coming into the
possession of Agent or any affiliates thereof, whether for deposit or
otherwise.
SECTION 3 GUARANTOR'S WAIVERS
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3.1 STATUTES OF LIMITATION. Guarantor irrevocably waives all
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statutes of limitation as a defense to any action or proceeding
brought against Guarantor by Agent, to the fullest extent permitted by
law.
3.2 ELECTION OF REMEDIES. Guarantor irrevocably waives any
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defense based upon an election of remedies made by Agent or any other
election afforded to Agent pursuant to applicable law, including,
without limitation, (a) any election to proceed by judicial or
nonjudicial foreclosure or by deed in lieu thereof, or any election of
remedies which destroys or otherwise impairs the subrogation rights of
the Guarantor or the rights of the Guarantor to proceed against
Borrower for reimbursement, or both, (b) the waiver by Agent, either
by action or inaction of Agent or by operation of law, of a deficiency
judgment against Borrower, and (c) any election pursuant to an
Insolvency Proceeding.
3.3 RIGHTS OF SUBROGATION AND OTHER RIGHTS. Guarantor irrevocably
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waives (a) all rights at law or in equity to seek subrogation,
contribution, indemnification or any other form of reimbursement or
repayment from Borrower or any other person or entity now or hereafter
primarily or secondarily liable for any of the Obligations for any
disbursements made by Guarantor under or in connection with this
Guaranty, (b) all claims of any kind or type against Borrower as a
result of any payment made by Guarantor to Agent, and (c) any right to
participate in any security now or hereafter held by Agent. In
furtherance, and not in limitation, of the foregoing, Guarantor agrees
that any payment to Agent pursuant to this Guaranty shall be deemed a
contribution to the capital of Borrower or other obligated party and
shall not constitute Guarantor a creditor of such party. Guarantor
further agrees that to the extent the waiver of its rights of
subrogation as set forth herein is found by a court of competent
jurisdiction to be void or voidable for any reason, any rights of
subrogation Guarantor may have against Borrower or against any
collateral or security for any of the Obligations shall be junior and
subordinate to any rights Agent may have against Borrower and to all
right, title and interest Agent may have in such collateral or
security.
3.4 DEMANDS AND NOTICES. Guarantor irrevocably waives all
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presentments, demands for performance, protests, notices of protest,
notices of dishonor, notices of acceptance of this Guaranty and of the
existence, creation or incurring of new or additional Obligations, and
demands and notices of every kind that may be required to be given by
any statute or rule or law.
3.5 BORROWER INFORMATION; OTHER DEFENSES. Guarantor irrevocably
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waives (a) any duty of Agent to advise Guarantor of any information
known to Agent regarding the financial condition of Borrower (it being
the obligation of Guarantor to keep informed regarding such
condition), and (b) any defense based on any claim that Guarantor's
obligations exceed or are more burdensome than those of Borrower, and
any and all other defenses now or at any time hereafter available to
Guarantor at law or in equity.
SECTION 4 REPRESENTATIONS AND WARRANTIES
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Guarantor represents and warrants to Agent as follows:
4.1 EXISTENCE; AUTHORITY; EXECUTION. To the extent Guarantor is a
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corporation, limited liability company or limited partnership,
Guarantor hereby represents and warrants that: (a) it is duly
organized, validly existing, and in good standing under the laws of
the state of its incorporation or formation; and (b) this Guaranty has
been duly and validly authorized, executed and delivered and
constitutes the binding obligation of Guarantor, enforceable in
accordance with its terms.
4.2 FINANCIAL STATEMENTS. All financial statements and other
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financial information furnished or to be furnished to Agent (a) are or
will be true and correct and do or will fairly represent the financial
condition of Guarantor (including all contingent liabilities), and (b)
were or will be prepared in accordance with generally accepted
accounting principles, or such other accounting principles as may be
acceptable to Agent at the time of their preparation, consistently
applied. There has been no material adverse change in Guarantor's
financial condition since the dates of the statements most recently
furnished Agent.
4.3 NO DEFAULTS. There is no existing event of default, and no
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event has occurred which with the passage of time and/or the giving of
notice or both will constitute an event of default, under any
agreement to which Guarantor is a party, the effect of which event of
default will impair performance by Guarantor of the Obligations
pursuant to and as contemplated by the terms of this Guaranty, and
neither the execution and delivery of this Guaranty nor compliance
with the terms and provisions hereof will violate any presently
existing provision of law or any presently existing regulation, order,
writ, injunction or decree of any court or governmental department,
commission, board, bureau, agency or instrumentality, or constitute a
default under, any agreement to which Guarantor is a party or by which
Guarantor is bound.
4.4 NO LITIGATION. There are no actions, suits or proceedings
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pending or, to the knowledge of Guarantor, threatened against the
Guarantor before any court or any governmental, administrative,
regulatory, adjudicatory or arbitrational body or agency of any kind
that will adversely affect performance by the Guarantor of his
obligations pursuant to and as contemplated by the terms and
provisions of this Guaranty.
4.5 ACCURACY. Neither this Guaranty nor any document, financial
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statement, credit information, certificate or statement heretofore
furnished or required herein to be furnished to Agent by the Guarantor
contains any untrue statement of fact or omits to state a fact
material to this Guaranty.
SECTION 5 EVENTS OF DEFAULT
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Upon the occurrence of any of the following events, Agent may,
without notice to Borrower or Guarantor, declare any or all of the
Obligations, whether or not then due, immediately due and payable by
Guarantor under the Guaranty, and Agent shall be entitled to enforce
the obligations of Guarantor hereunder:
5.1 DEFAULT BY BORROWER. Borrower shall default in the payment or
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performance of any of the Obligations guarantied hereby, after giving
effect to any applicable notice and cure provisions.
5.2 FAILURE TO PERFORM. Guarantor fails to perform any of its
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obligations under this Guaranty or any agreement under which security
is given therefor, or this Guaranty is revoked or terminated by
Guarantor, or any representation or warranty made or given by
Guarantor to Agent proves to be false or misleading in any material
respect on the date made.
5.3 INSOLVENCY PROCEEDING. The making by Guarantor of any
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assignment for the benefit of creditors, or a trustee or receiver
being appointed for Guarantor or for any property of Guarantor, or
Guarantor becoming insolvent or the subject of any Insolvency
Proceeding and, in the case of such a proceeding being commenced
against Guarantor, such proceeding is not dismissed within forty-five
(45) days following the commencement date thereof.
5.4 DISSOLUTION. Guarantor dissolves or liquidates, or the
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business of Guarantor is suspended or terminated for any reason.
SECTION 6 MISCELLANEOUS
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6.1 REVIVAL AND REINSTATEMENT. If at any time all or any part of
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any payment theretofore applied by Agent to any of the Obligations is
or must be rescinded or returned by Agent for any reason whatsoever
(including, without limitation, the insolvency, bankruptcy or
reorganization of Borrower), such Obligations shall, for the purposes
of this Guaranty, to the extent such payment is or must be rescinded
or returned, be deemed to have continued in existence, notwithstanding
such application by Agent, and this Guaranty shall continue to be
effective or be reinstated, as the case may be, as to such
Obligations, all as though such application by Agent had not been
made.
6.2 NO MARSHALING. Agent has no obligation to marshal any assets
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in favor of Guarantor, or against or in payment of (a) any of the
Obligations, or (b) any other obligation owed to Agent by Guarantor,
Borrower, or any other person.
6.3 NO MODIFICATION, WAIVER OR RELEASE WITHOUT WRITING. Except as
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may otherwise be expressly set forth herein, this Guaranty may not be
modified, amended, revised, revoked, terminated, changed or varied in
any way whatsoever, nor shall any waiver of any of the provisions of
this Guaranty be binding upon Agent, except as expressly set forth in
a writing duly executed by Agent. No waiver by Agent of any default
shall operate as a waiver of any other default or the same default on
a future occasion, and no action by Agent permitted hereunder shall in
any way affect or impair Agent's rights or the obligations of
Guarantor under this continuing Guaranty.
6.4 ASSIGNMENT; SUCCESSORS AND ASSIGNS. Guarantor may not assign
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Guarantor's obligations or liabilities under this Guaranty. Subject to
the preceding sentence, this Guaranty shall be binding upon the
parties hereto and their respective heirs, executors, successors,
representatives and assigns and shall inure to the benefit of the
parties hereto and their respective successors and assigns. Agent may
assign its rights under this Guaranty.
6.5 INTEGRATION. This Guaranty and the other Loan Documents
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represent the entire agreement of Guarantor with respect to the
subject matter of this Guaranty.
6.6 RIGHTS CUMULATIVE. All of Agent's rights under this Guaranty
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are cumulative. The exercise of any one right does not exclude the
exercise of any other right given in this Guaranty or any other right
of Agent not set forth in this Guaranty.
6.7 SEVERABILITY. Whenever possible each provision of this
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Guaranty shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Guaranty
shall be prohibited by or invalid under such law, such provision shall
be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining
provisions of this Guaranty.
6.8 MATERIAL INDUCEMENT; CONSIDERATION. Guarantor acknowledges
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and agrees that Agent is specifically relying upon the
representations, warranties, agreements and waivers contained herein
and that such representations, warranties, agreements and waivers
constitute a material inducement to Agent to accept this Guaranty and
to enter into the Loan Agreement and the transactions contemplated
therein. Guarantor further acknowledges that it expects to benefit
from Agent's extension of financing accommodations to Borrower because
of its relationship to Borrower, and that it is executing this
Guaranty in consideration of that anticipated benefit.
6.9 INDEMNIFICATION. Guarantor agrees to indemnify, pay and hold
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Agent and its officers, directors, employees, agents, and attorneys
(collectively called the "INDEMNITEES") harmless from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, expenses and disbursements of any
kind or nature whatsoever (including the reasonable fees and
disbursements of counsel for such Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or
threatened, whether or not such Indemnitee shall be designated a party
thereto) that may be imposed on, incurred by, or asserted against that
Indemnitee, in any manner relating to or arising out of this Guaranty
or the exercise of any right or remedy hereunder or under the other
documents pertaining to the Obligations (the "INDEMNIFIED
LIABILITIES"); provided that Guarantor shall have no obligation to an
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Indemnitee hereunder with respect to Indemnified Liabilities arising
from the gross negligence or willful misconduct of that Indemnitee as
determined by a court of competent jurisdiction. To the extent that
the undertaking to indemnify, pay and hold harmless set forth in the
preceding sentence may be unenforceable because it violates any law or
public policy, Guarantor shall contribute the maximum portion that it
is permitted to pay and satisfy under applicable law to the payment
and satisfaction of all Indemnified Liabilities incurred by the
Indemnitees or any of them.
6.10 COUNTERPARTS. This Guaranty may be executed in counterparts,
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each of which shall be deemed an original, but all of which, when
taken together, shall be deemed one and the same agreement.
6.11 GOVERNING LAW. This Guaranty shall be governed by and
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construed in accordance with the internal laws of the State of New
York, without regard to conflicts of law principles.
6.12 VENUE. GUARANTOR HEREBY CONSENTS TO THE JURISDICTION OF ANY
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STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF NEW YORK STATE OF
NEW YORK AND IRREVOCABLY AGREES THAT, SUBJECT TO AGENT'S ELECTION, ALL
ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS GUARANTY
SHALL BE LITIGATED IN SUCH COURTS. GUARANTOR EXPRESSLY SUBMITS AND
CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY
DEFENSE OF FORUM NON CONVENIENS. GUARANTOR HEREBY WAIVES PERSONAL
SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF
PROCESS MAY BE MADE UPON GUARANTOR BY CERTIFIED OR REGISTERED MAIL,
RETURN RECEIPT REQUESTED, ADDRESSED TO GUARANTOR, AT THE ADDRESS SET
FORTH IN THIS AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE TEN (10)
DAYS AFTER THE SAME HAS BEEN POSTED.
6.13 WAIVER OF JURY TRIAL. GUARANTOR AND AGENT HEREBY WAIVE THEIR
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RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS GUARANTY. GUARANTOR AND AGENT
ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A
BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN ENTERING
INTO THIS GUARANTY AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER
IN THEIR RELATED FUTURE DEALINGS. BORROWER AND AGENT WARRANT AND
REPRESENT THAT EACH HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY
WAIVER WITH LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS.
6.14 WAIVERS. THE WAIVERS SET FORTH HEREIN (INCLUDING, WITHOUT
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LIMITATION, SECTIONS 2.2 AND 3 ABOVE) ARE KNOWINGLY, INTENTIONALLY,
AND VOLUNTARILY MADE BY GUARANTOR, AND GUARANTOR ACKNOWLEDGES THAT
NEITHER AGENT NOR ANY PERSON ACTING ON BEHALF OF AGENT HAS MADE ANY
REPRESENTATIONS OF FACT TO INDUCE THESE WAIVERS OR IN ANY WAY TO
MODIFY OR NULLIFY ITS EFFECT. GUARANTOR FURTHER ACKNOWLEDGES THAT IT
HAS BEEN REPRESENTED (OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED) IN
THE SIGNING OF THIS GUARANTY AND IN THE MAKING OF THESE WAIVERS BY
INDEPENDENT LEGAL COUNSEL, SELECTED OF ITS OWN FREE WILL, AND THAT IT
HAS HAD THE OPPORTUNITY TO DISCUSS THESE WAIVERS WITH COUNSEL.
Guarantor has duly executed this Guaranty as of the date and year
first above written.
XXXX INTERNATIONAL HOLDINGS, INC.
By: /s/ Xxx X. Xxxxxxxx
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Name: Xxx X. Xxxxxxxx
Title: Chairman of the Board of Directors
ACKNOWLEDGED AND ACCEPTED BY:
XXXXXX FINANCIAL, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxx
Title: Senior Vice President
