EXHIBIT 10.78
GUARANTY OF PAYMENT
THIS GUARANTY OF PAYMENT (this "Guaranty") is made as of January 29,
1998 by XxxxxXxx Technologies, Inc., a Delaware corporation ("Guarantor") in
favor of Xxxxxx Financial, Inc., a Delaware corporation ("Lender").
RECITALS
A. Financial Accommodations. Lender and XxxxxXxx Technologies of
Minnesota, Inc., and XxxxxXxx Technologies of Georgia, Inc. (collectively
referred to herein as "Borrower") are concurrently herewith entering into that
certain Loan and Security Agreement (the "Loan Agreement") of even date herewith
pursuant to which Lender shall extend financial accommodations to Borrower.
B. Inducement. To induce Lender to extend to Borrower the financial
accommodations set forth in the Loan Agreement, Guarantor is willing to execute
and deliver this Guaranty.
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
All capitalized terms used herein shall have the meanings ascribed
thereto in the Loan Agreement unless otherwise defined herein.
SECTION 2 THE GUARANTY
2.1 Guaranty of Obligations. Guarantor jointly and severally (if more
than one), unconditionally and absolutely, if more than one, 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 Lender, including those 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 Lender
(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 Lender in
collecting any amount due Lender 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
Lender 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
continuing guaranty of the Obligations, and Guarantor agrees that the
obligations of Guarantor to Lender 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 Lender, Borrower or any
other person or entity, and shall remain in 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 Lender to obtain payment or performance by Borrower or any other
guarantor (this being a guaranty of payment and performance and not of
collection); (b) Lender's delay in enforcing Guarantor's Obligations hereunder,
or any prior partial exercise by Lender of any right or remedy against Guarantor
hereunder; (c) the lack of validity or enforceability of, or Lender'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
Lender 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, marshaling 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 Lender, 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 Lender under Section 111 l(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 Lender 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 Lender'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; (k) the death or
incapacity of Guarantor; and (l) 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.
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2.3 Rights of Lender. Lender is hereby authorized, without notice 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 Lender 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 Lender to Guarantor, and (ii) any
moneys, credits, or other property belonging to Guarantor at any time held by or
coming into the possession of Lender or any affiliates thereof, whether for
deposit or otherwise.
SECTION 3 GUARANTOR'S WAIVERS
3.1 Statutes of Limitation. Guarantor irrevocably waives all statutes
of limitation as a defense to any action or proceeding brought against Guarantor
by Lender, to the fullest extent permitted by law.
3.2 Election of Remedies. Guarantor irrevocably waives any defense
based upon an election of remedies made by Lender or any other election afforded
to Lender 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 Lender, either by
action or inaction of Lender 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
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 any 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 Lender, and (c) any
right to participate in any security now or hereafter held by Lender. In
furtherance, and not in limitation, of the foregoing, Guarantor agrees that any
payment to Lender pursuant to this Guaranty shall be deemed a contribution to
the capital of Borrower
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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 Lender may have
against Borrower and to all right, title and interest Lender may have is such
collateral or security.
3.4 Demands and Notices. Guarantor irrevocably waives all 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 waives
(a) any duty of Lender to advise Guarantor of any information known to Lender
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
Guarantor represents and warrants to Lender as follows:
4.1 Existence, Authority; Execution. To the extent Guarantor is a
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 financial
information furnished or to be furnished to Lender (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 Lender 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 Lender.
4.3 No Defaults. There is no existing event of default, and no 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
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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 pending
or 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
statement, credit information, certificate or statement heretofore furnished or
required herein to be furnished to Lender by the Guarantor contains any untrue
statement of fact or omits to state a fact material to this Guaranty.
SECTION 5 EVENTS OF DEFAULT
Upon the occurrence of any of the following events, Lender 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 Lender shall be entitled to enforce the obligations of Guarantor hereunder:
5.1 Default by Borrower. Borrower shall default in the payment or
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
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 Lender proves to be
false or misleading in any material respect.
5.3 Insolvency Proceeding. The making by Guarantor of any 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
thirty (30) days following the commencement date thereof
5.4 Death or Dissolution. Guarantor dies, dissolves or liquidates, or
the business of Guarantor is suspended or terminated for any reason.
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SECTION 6 MISCELLANEOUS
6.1 Revival and Reinstatement. If at any time all or any part of any
payment theretofore applied by Lender to any of the Obligations is or must be
rescinded or returned by Lender 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 Lender, 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 Lender had not been made.
6.2 No Marshaling. Lender has no obligation to marshal any assets in
favor of Guarantor, or against or in payment of (a) any of the Obligations, or
(b) any other obligation owed to Lender by Guarantor, Borrower, or any other
person.
6.3 No Modification, Waiver or Release Without Writing. Except as 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
Lender, except as expressly set forth in a writing duly executed by Lender. No
waiver by Lender of any default shall operate as a waiver of any other default
or the same default on a future occasion, and no action by Lender permitted
hereunder shall in any way affect or impair Lender's rights or the obligations
of Guarantor under this Continuing Guaranty.
6.4 Assignment; Successors and Assigns. Guarantor may not assign
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. Lender may assign its rights under this Guaranty.
6.5 Integration. This Guaranty is the entire agreement of Guarantor
with respect to the subject matter of this Guaranty.
6.6 Rights Cumulative. All of Lender's rights under this Guaranty 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 Lender not set forth in
this Guaranty.
6.7 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 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.
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6.8 Material Inducement Consideration. Guarantor acknowledges and
agrees that Lender 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 Lender to
accept this Guaranty and to enter into the Loan Agreement and the transaction
contemplated therein. Guarantor further acknowledged that it expects to benefit
from Lender'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 Lender
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 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 is violative of 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, 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 construed in
accordance with the internal laws of the State of Illinois, without regard to
conflicts of law provisions.
6.12 Venue. GUARANTOR, IN ORDER TO INDUCE LENDER TO ACCEPT THIS
GUARANTY, AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND
SUFFICIENCY OF WHICH HEREBY IS ACKNOWLEDGED, AGREES THAT ALL ACTIONS OR
PROCEEDINGS ARISING DIRECTLY, INDIRECTLY OR OTHERWISE IN CONNECTION WITH, OUT
OF, RELATED TO OR FROM THIS GUARANTY SHALL BE LITIGATED, AT LENDER'S SOLE
DISCRETION AND ELECTION, ONLY IN COURTS HAVING A SITUS WITHIN THE COUNTY OF
XXXX, STATE OF ILLINOIS. GUARANTOR HEREBY CONSENTS AND SUBMITS TO THE
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JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURT LOCATED WITHIN SAID COUNTY AND
STATE. GUARANTOR HEREBY IRREVOCABLY APPOINTS AND DESIGNATES CT CORPORATION
SYSTEM, WHOSE ADDRESS IS GUARANTOR, C/O CT CORPORATION SYSTEM, 000 X. XXXXXXX
XXXXXX, XXXXXXX, XXXXXXXX 00000, AS ITS DULY AUTHORIZED AGENT FOR SERVICE OF
LEGAL PROCESS AND AGREES THAT SERVICE OF SUCH PROCESS UPON SUCH PARTY SHALL
CONSTITUTE PERSONAL SERVICE OF PROCESS UPON SUCH PARTY. IN THE EVENT SERVICE IS
UNDELIVERABLE BECAUSE SUCH AGENT MOVES OR CEASES TO DO BUSINESS IN CHICAGO,
ILLINOIS, GUARANTOR SHALL, WITHIN TEN (10) DAYS AFTER LENDER'S REQUEST, APPOINT
A SUBSTITUTE AGENT (IN CHICAGO, ILLINOIS) ON ITS BEHALF AND WITHIN SUCH PERIOD
NOTIFY LENDER OF SUCH APPOINTMENT. IF SUCH SUBSTITUTE AGENT IS NOT TIMELY
APPOINTED, LENDER SHALL, IN ITS SOLE DISCRETION, HAVE THE RIGHT TO DESIGNATE A
SUBSTITUTE AGENT UPON FIVE (5) DAYS' NOTICE TO GUARANTOR. GUARANTOR HEREBY
CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURT
LOCATED WITHIN SAID COUNTY AND STATE. GUARANTOR HEREBY WAIVES ANY RIGHT IT MAY
HAVE TO TRANSFER OR CHANGE THE VENUE OF ANY LITIGATION BROUGHT AGAINST IT BY
LENDER ON THIS GUARANTY IN ACCORDANCE WITH THIS PARAGRAPH.
6.13 Waiver of Jury Trial. GUARANTOR, AND BY ITS ACCEPTANCE OF THIS
GUARANTY, LENDER, HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING BASED UPON, OR RELATED TO, THE SUBJECT MATTER OF THIS
GUARANTY AND THE BUSINESS RELATIONSHIP THAT IS BEING ESTABLISHED. THIS WAIVER IS
KNOWINGLY, INTENTIONALLY AND VOLUNTARILY MADE BY GUARANTOR, AND BY ITS
ACCEPTANCE OF THIS GUARANTY, LENDER, AND GUARANTOR ACKNOWLEDGES THAT NEITHER
LENDER NOR ANY PERSON ACTING ON BEHALF OF LENDER HAS MADE ANY REPRESENTATIONS OF
FACT TO INCLUDE THIS WAIVER OF TRIAL BY JURY OR HAS TAKEN ANY ACTIONS WHICH IN
ANY WAY MODIFY OR NULLIFY ITS EFFECT.
6.14 Waivers. THE WAIVERS SET FORTH HEREIN (INCLUDING, WITHOUT
LIMITATION, SECTIONS 2.2 AND 3 ABOVE) ARE KNOWINGLY, INTENTIONALLY, AND
VOLUNTARILY MADE BY GUARANTOR, AND GUARANTOR ACKNOWLEDGES THAT NEITHER LENDER
NOR ANY PERSON ACTING ON BEHALF OF LENDER 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.
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Guarantor has duly executed this Guaranty as of the date and year first
above written.
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Guarantor
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