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Exhibit 99.2
GUARANTY
GUARANTY, dated January 31, 2001 (this "Agreement"), made by Xxxx.xxx,
Inc., a Delaware corporation ("Guarantor"), in favor of AT&T Corp. ("Lender").
Capitalized terms used but not defined herein have the meanings given to such
terms in the Note referred to below.
WHEREAS, Lender and Swift Telecommunications, Inc. ("Swift") have entered
into an Asset Purchase Agreement, dated December 13, 2000 (the "Purchase
Agreement");
WHEREAS, pursuant to the Purchase Agreement, Swift has issued to Lender a
promissory note in the original principal amount of $35,000,000 (the "Note");
WHEREAS, as of the date hereof Swift and Guarantor have entered into a
Merger Agreement, pursuant to which Swift will be merged into Guarantor or one
of Guarantor's subsidiaries; and
WHEREAS, it is a condition precedent to Lender's obligation to close the
transactions contemplated by the Purchase Agreement, and to accept the Note at
closing, that Guarantor shall have executed and delivered this Guaranty;
NOW, THEREFORE, in consideration of the premises and in order to induce
Lender to consummate the transactions contemplated by the Purchase Agreement,
including, without limitation, its acceptance of the Note, and in exchange for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Guarantor hereby agrees with Lender as follows:
1. Limited Guaranty
Guarantor hereby unconditionally guarantees the punctual payment when due,
whether at stated maturity, by acceleration or otherwise, of the principal
amount of the Note, together with interest accrued thereon and expenses relating
thereto, including any and all expenses (including reasonable counsel fees and
expenses) incurred by Lender in enforcing any rights under this Guaranty,
provided, that the liability of Guarantor hereunder for amounts payable under
the Note shall be limited to $15,000,000 of principal payments due under the
Note, together with interest accruing thereon under the Note (including, without
limitation, default interest accruing under Section 1(c) of the Note) and any
costs or expenses incurred by Lender in collecting amounts under this Guaranty
or enforcing any rights under this Guaranty (collectively, the "Guaranteed
Obligations"), provided, further, that such limitation shall not apply to the
liability of Guarantor to indemnify and reimburse Lender for any losses,
damages, costs, liabilities or expenses (including reasonable legal fees and
expenses) incurred by Lender arising out of any breach of a representation,
warranty, covenant or agreement made by Guarantor hereunder. Without limiting
the generality of the foregoing but subject to the limitations set forth in the
provisos to the first sentence of this Section 1, Guarantor's liability shall
extend to all amounts that constitute part of the Guaranteed Obligations by
Swift to Lender under the Loan Documents even though they are unenforceable or
not allowable
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due to the existence of a bankruptcy, reorganization or similar proceeding
involving Swift. This is a guaranty of payment and not collection.
2. Guaranty Absolute
Guarantor guarantees that the Guaranteed Obligations will be paid strictly
in accordance with the terms of the Loan Documents, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting any
of such terms or the rights of Lender with respect thereto. The obligations of
Guarantor under this Guaranty are independent of the Guaranteed Obligations, and
a separate action or actions may be brought and prosecuted against Guarantor to
enforce this Guaranty, irrespective of whether any action is brought against
Swift or any other guarantor or whether Swift or any other guarantor is joined
in any such action or actions. The liability of Guarantor under this Guaranty
shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any Loan Document or any
agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any other
term of, all or any of the Guaranteed Obligations, or any other amendment or
waiver of or any consent to departure from any Loan Document;
(c) any taking, exchange or release of, or non-perfection of any security
interest in, any Collateral (as defined in the Pledge Agreement and the Security
Agreement);
(d) any manner of application of Collateral to all or any of the
Guaranteed Obligations, or any manner of sale or other disposition of any
Collateral for all or any of the Guaranteed Obligations or any other assets of
Swift or any of its Subsidiaries;
(e) any change, restructuring or termination of the corporate structure or
existence of Swift or any of its Subsidiaries, and any termination of or change
in the relationship between Swift and Guarantor; or
(f) any other circumstance (including, without limitation, any statute of
limitations) that might otherwise constitute a defense available to, or a
discharge of, Swift or a guarantor.
This Guaranty shall continue to be effective or be reinstated, as the case
may be, if at any time any payment of any of the Guaranteed Obligations is
rescinded or must otherwise be returned by Lender upon the insolvency,
bankruptcy or reorganization of Swift or otherwise, all as though such payment
had not been made. In the event of any such reinstatement, Guarantor shall
re-execute and redeliver all documents, and take all other actions necessary or
appropriate to reinstate this Guaranty in full force and effect and to
effectuate its intent.
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3. Waivers and Agreements
(a) Guarantor hereby irrevocably waives promptness, diligence, notice of
acceptance and any other notice with respect to any of the Guaranteed
Obligations and this Guaranty and any requirement that Lender protect, secure,
perfect or insure any Lien or any property subject thereto or exhaust any right
or take any action against Swift or any other Person or any Collateral.
(b) Guarantor hereby irrevocably agrees that any claim or other rights
that it may now or hereafter acquire against Swift or any guarantor of Swift's
obligations under the Note that arise from the existence, payment, performance
or enforcement of Guarantor's obligations under this Guaranty or any other Loan
Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of Lender against Swift or any such guarantor
or any Pledged Shares, 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 Swift or any such guarantor, 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, shall be
subordinated to the payment in full of all amounts due and owing and the
performance of all obligations under the Note and the other Loan Documents and
shall not be made or exercised until the date Swift has indefeasibly paid in
full in cash all amounts due and owing under the Note and the other Loan
Documents. If any amount shall be paid to Guarantor in violation of the
preceding sentence at any time prior to the later of the indefeasible payment in
full of the Guaranteed Obligations and all other amounts payable under this
Guaranty and the Maturity Date, such amount shall be held in trust for the
benefit of Lender and shall forthwith be applied to the Guaranteed Obligations
and all other amounts payable under this Guaranty, whether matured or unmatured,
in accordance with the terms of the Loan Documents, or be held as Collateral for
any Guaranteed Obligations or other amounts payable under this Guaranty
thereafter arising.
(c) Guarantor acknowledges that it will receive direct and indirect
benefits from the financing accommodations contemplated by the Loan Documents
and that the waivers set forth in this Section 3 are knowingly made in
contemplation of such benefits.
4. Payments
Guarantor hereby unconditionally and irrevocably agrees that any payments
made pursuant to this Guaranty will be paid at the place specified in the Note
for payments in immediately available funds, free and clear of, and without
deduction for, any and all taxes, levies, imposts, deductions and withholdings
whatsoever imposed, levied, collected or assessed with respect thereto by any
political subdivision or taxing authority thereof or by any country or any
political subdivision or taxing authority thereof (other than income taxes or
franchise taxes of the United States of America or any political subdivision
thereof) strictly in accordance with the terms and provisions of the Loan
Documents. If
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such payments are subject to any such tax, levy, impost, deduction or
withholding, then such payments shall be increased to such amount which, after
provision for such tax, levy, impost, deduction or withholding, is necessary to
yield and remit to Lender the amount which would have been received absent such
tax, levy, impost, deduction or withholding, and Guarantor shall furnish Lender
such evidence or certification of making such tax, levy, impost, deduction or
withholding as Lender may request.
5. Right to Set Off
Upon (a) the occurrence and during the continuance of any Event of Default
and (b) the declaration by Lender that all amounts owing under the Note are
immediately due and payable, Lender is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all funds or properties at any time held, and other indebtedness at any time
owning, by or on behalf of Lender to or for the credit or the account of
Guarantor or hereafter existing under or in respect of this Guaranty,
irrespective of whether Lender shall have made any demand under this Guaranty
and although such obligations may be unmatured. The rights of Lender under this
Section 4 are in addition to any other rights and remedies that Lender may have.
6. Representations and Warranties
Guarantor hereby represents and warrants as follows:
(a) Organization and Authority
Guarantor is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has all requisite corporate
power and lawful authority to carry on its business as it is currently being
conducted.
(b) Authorization
Guarantor has all requisite corporate power and authority to execute and
deliver this Guaranty and to perform fully its obligations hereunder. The
execution, delivery and performance of this Guaranty by Guarantor have been duly
authorized by all necessary corporate action of Guarantor, and no other board of
directors, shareholder or other corporate proceeding by or on behalf of
Guarantor is necessary to authorize the execution, delivery or performance of
this Guaranty.
(c) Enforceability
This Guaranty constitutes the valid and legally binding obligation of
Guarantor, enforceable against Guarantor in accordance with its terms, subject
to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance or
transfer, moratorium or similar laws affecting creditors' rights generally; and
(ii) general principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity).
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(d) Freedom to Contract
The execution, delivery and performance of this Guaranty by Guarantor will
not: (i) violate or conflict with any provision of the certificate of
incorporation or by-laws of Guarantor, each as amended; (ii) violate any of the
terms, conditions or provisions of any applicable law, rule, statute,
regulation, order, writ, injunction, judgment, or decree of any Governmental
Authority; or (iii) conflict with or result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default under
any of the terms, conditions or provisions of any agreement, arrangement or
understanding to which Guarantor is a party. No authorization, approval, order,
license, permit, franchise or consent of, and no registration, declaration or
filing with, any Governmental Authority, is required in connection with
Guarantor's execution, delivery and performance of this Guaranty.
(e) Litigation
There is no action, suit, inquiry, litigation, proceeding or investigation
by or before any Governmental Authority, pending or, to Guarantor's knowledge,
threatened, against Guarantor or its business or assets, nor is Guarantor
subject to any judgment, order or decree entered in any lawsuit or proceeding,
which could impair its ability to perform any of its obligations under this
Guaranty.
7. Guarantor's Covenants
(a) Guarantor shall not enter into any transaction or take any action,
including, without limitation, the transfer of any asset, or omit to take any
action that could reasonably be expected to materially and adversely affect
Guarantor's ability to make any payment of principal or interest or expenses in
respect of any Guaranteed Obligation or otherwise impair its ability to perform
any of its obligations under this Guaranty.
(b) Guarantor shall permit representatives of Lender to visit and inspect
properties of Guarantor during reasonable hours and upon reasonable notice to
Guarantor, inspect Guarantor's books and records, and discuss with the principal
officers of Guarantor its businesses, assets, liabilities, financial position,
results of operations and prospects.
(c) Guarantor shall notify Lender immediately upon the institution of any
litigation, or the occurrence of any other event or circumstance, or any change
in its assets, properties, financial condition or prospects, which could
reasonably be expected to materially and adversely affect its ability to perform
any of its obligations under this Guaranty.
(d) If and for so long as Guarantor is not a public reporting company for
purposes of the Securities Exchange Act of 1934, as amended, Guarantor will
deliver to Lender financial statements, that are equivalent to those required to
be delivered by Swift
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under the Note, at such times as Swift is required to deliver its financial
statements under the Note. All such financial statements shall at the time they
are delivered be certified as true and correct in all material respects by
Guarantor's chief financial officer.
8. Miscellaneous
(a) Amendments, Etc.
No amendment or waiver of any provision of this Guaranty, and no consent
to any departure by Guarantor herefrom, shall in any event be effective unless
the same shall be in writing and signed by Guarantor and Lender, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
(b) Notices
All notices and other communications under this Guaranty shall be in
writing and shall be deemed given when delivered personally, mailed by
registered or certified mail, return receipt requested, sent by recognized
overnight delivery service (signature of receipt requested) or, to the extent
receipt is confirmed, by telecopy or telefax (provided that such party also
sends a copy by personal delivery or registered or certified mail, return
receipt requested, or recognized overnight delivery service, signature of
receipt requested), to the following addresses (or to such other address as a
party may have specified by notice given to the other party pursuant to this
provision):
Guarantor:
Xxxx.xxx, Inc.
Xxxxx 000
00 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: CEO
With a copy to:
Xxxx.xxx, Inc.
Xxxxx 000
00 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxxx
000-000-0000
Lender:
AT&T Corp.
000 Xxxxx Xxxxx Xxxxxx
Xxxx 0000X0
Xxxxxxxxxxx, XX 00000
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Attention: Xxxxxxx X. Xxxx, CFO M&A
Fax Number: 000-000-0000
With a copy to:
Xxxxxxx Xxxxxxxxxx
General Attorney
AT&T Corp.
000 Xxxxx Xxxxx Xxxxxx
Room 3235C2
Xxxxxxx Xxxxx, XX 00000-0000
Fax Number: 000-000-0000
(c) Governing Law, Choice Of Forum, No Trial By Jury
(i) THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
ITS CONFLICT OF LAWS PRINCIPLES, EXCEPT AS REQUIRED BY MANDATORY
PROVISIONS OF LAW.
(ii) ANY LEGAL ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS GUARANTY MAY BE INSTITUTED IN ANY STATE OR FEDERAL COURT LOCATED
IN NEW YORK COUNTY, STATE OF NEW YORK, AND EACH PARTY AGREES NOT TO
ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR OTHERWISE, IN ANY SUCH ACTION,
SUIT OR PROCEEDING, ANY CLAIM THAT IT IS NOT SUBJECT PERSONALLY TO THE
JURISDICTION OF SUCH COURTS, THAT ITS PROPERTY IS EXEMPT OR IMMUNE FROM
ATTACHMENT OR EXECUTION, THAT THE ACTION, SUIT OR PROCEEDING IS BROUGHT IN
AN INCONVENIENT FORUM, THAT THE VENUE OF THE ACTION, SUIT OR PROCEEDING IS
IMPROPER OR THAT THIS GUARANTY OR THE SUBJECT MATTER HEREOF MAY NOT BE
ENFORCED IN OR BY SUCH COURT, AND HEREBY WAIVES ANY OFFSETS IN ANY SUCH
ACTION, SUIT OR PROCEEDING. EACH PARTY FURTHER IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUCH ACTION, SUIT OR PROCEEDING. ANY
AND ALL SERVICE OF PROCESS AND ANY OTHER NOTICE IN ANY SUCH ACTION, SUIT
OR PROCEEDING SHALL BE EFFECTIVE AGAINST ANY PARTY IF GIVEN PERSONALLY OR
BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY ANY OTHER
MEANS OF MAIL THAT REQUIRES A SIGNED RECEIPT, POSTAGE PREPAID, MAILED TO
SUCH PARTY AS HEREIN PROVIDED, OR BY PERSONAL SERVICE ON SUCH PARTY WITH A
COPY OF SUCH PROCESS MAILED TO SUCH PARTY BY REGISTERED OR CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, POSTAGE PREPAID. NOTHING HEREIN CONTAINED SHALL
BE DEEMED TO AFFECT THE RIGHT OF ANY
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PARTY TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY OTHER PARTY IN ANY
JURISDICTION OTHER THAN NEW YORK IN CONNECTION WITH ACTIONS INITIATED BY
THIRD PARTIES IN SUCH OTHER JURISDICTIONS.
(iii) BY ITS EXECUTION AND DELIVERY OF THIS GUARANTY, GUARANTOR
HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVES ANY RIGHTS IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS GUARANTY, THE NOTE OR
ANY OTHER LOAN DOCUMENT, ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF GUARANTOR OR LENDER IN CONNECTION
HEREWITH OR THEREWITH. THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER
TO MAKE ADVANCES UNDER THE NOTE.
(d) Waiver
Guarantor hereby waives promptness, diligence, notice of acceptance and
any other notice with respect to Guarantor's obligations hereunder and any
requirement that Lender exhaust any right or take any action against Swift or
Guarantor or another Person.
(e) Rights Cumulative
No failure on the part of Lender to exercise, and no delay in exercising,
any right or power hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right or power preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of Lender provided herein are cumulative and are in addition to,
and not exclusive of, any rights or remedies provided by law. No provision for a
specific remedy shall be deemed to limit Lender's remedies at law or in equity.
The rights of Lender hereunder are not conditional or contingent on any attempt
by Lender to exercise any of its rights under any other document against
Guarantor or against any other Person.
(f) Assignment
This Guaranty shall be binding on Guarantor and its successors and
permitted assigns (including any trustee succeeding to the rights of Guarantor
pursuant to Chapter 11 of the Bankruptcy Code or pursuant to any conversion to a
case or cases under Chapter 7 of the Bankruptcy Code), and shall inure, together
with all rights and remedies of Lender hereunder, to the benefit of Lender and
its successors and assigns, provided that Guarantor may not assign any of its
rights or obligations hereunder without the prior written consent of Lender and
any purported assignment without such consent shall be null and void.
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(g) Survival of Representations and Warranties
All representations and warranties of Guarantor contained herein or made
in connection herewith shall survive the making of and shall not be waived by
the execution and delivery of this Guaranty or any other Loan Document or any
investigation by Lender. All covenants and agreements of Guarantor contained
herein shall continue in full force and effect from and after the date hereof
until the indefeasible payment in full of the Guaranteed Obligations.
(h) Severability
Whenever possible each provision of this 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, illegal, unenforceable or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition, illegality, unenforceability or invalidity under such law,
without invalidating the remainder of such provision or the remaining provisions
of this Guaranty.
(i) Interpretation
Guarantor and Lender have participated jointly in the negotiation and
drafting of this Guaranty. In the event that any ambiguity or question of intent
or interpretation arises, this Guaranty shall be construed as if drafted jointly
by the parties hereto and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of authorship of any provisions of this
Guaranty.
(j) Headings
Section headings in this Guaranty are included for convenience of
reference only and shall not constitute a part of this Guaranty for any other
purpose.
(k) Counterparts
This Guaranty may be executed in counterparts (and by different parties
hereto on different counterparts), each of which shall constitute an original,
but all of which, when taken together, shall constitute a single contract.
Delivery of an executed counterpart of a signature page to this Guaranty by
telecopy shall be as effective as delivery of a manually executed counterpart of
this Guaranty.
(l) Entire Agreement
This Guaranty (together with any schedules and exhibits hereto) and the
Note embodies the entire agreement between the parties hereto relating to the
transactions provided for herein and therein and supersede all prior
understandings and agreements, whether written or oral, between the parties
hereto with respect to such transactions.
[Signature page follows]
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IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly executed
and delivered as of the date first above written.
XXXX.XXX, INC.
By s/Xxxxx Xxxxxxxx
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Xxxxx Xxxxxxxx
Senior Vice President
Accepted by:
AT&T CORP.
By
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Name:
Title:
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