EXHIBIT 10.8
GUARANTEE
August 16, 2000
Wells Fargo Business Credit, Inc.
245 South Los Robles Avenue, Suite 600
Pasadena, California 91101
Re: XIT CORPORATION AND CXR TELCOM CORPORATION ("BORROWER")
Ladies and Gentlemen:
Wells Fargo Business Credit, Inc. ("LENDER") and XIT Corporation and
CXR Telcom Corporation (together, "BORROWER") have entered into certain
financing arrangements pursuant to which Lender may make loans and advances and
provide other financial accommodations to Borrower as set forth in the Credit
and Security Agreement, dated August 16, 2000, by and between Borrower and
Lender (as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced, the "CREDIT AGREEMENT"),
and other agreements, documents and instruments referred to therein or at any
time executed and/or delivered in connection therewith or related thereto,
including, but not limited to, this Guarantee (all of the foregoing, together
with the Credit Agreement, as the same now exist or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced, being
collectively referred to herein as the "FINANCING AGREEMENTS").
Due to the close business and financial relationships between
Borrower and the undersigned ("GUARANTOR"), in consideration of the benefits
which will accrue to Guarantor and as an inducement for and in consideration
of Lender making loans and advances and providing other financial
accommodations to Borrower pursuant to the Credit Agreement and the other
Financing Agreements, Guarantor hereby agrees in favor of Lender as follows:
1. GUARANTEE.
(a) Guarantor absolutely and unconditionally guarantees and
agrees to be liable for the full and indefeasible payment and performance when
due of the following (all of which are collectively referred to herein as the
"GUARANTEED OBLIGATIONS"): (i) all obligations, liabilities and indebtedness of
any kind, nature and description of Borrower to Lender and/or its affiliates,
including principal, interest, charges, fees, costs and expenses, however
evidenced, whether as principal, surety, endorser, guarantor or otherwise,
whether arising under the Credit Agreement, the other Financing Agreements or
otherwise, whether now existing or hereafter arising, whether arising before,
during or after the initial or any renewal term of the Credit Agreement or after
the commencement of any case with respect to Borrower under the United States
Bankruptcy Code or any similar statute (including, without limitation, the
payment of interest and other amounts, which would accrue and become due but for
the commencement of such case, whether or not such amounts are allowed or
allowable in whole or in part in any such case and including loans, interest,
fees, charges and expenses related thereto and all other
obligations of Borrower or its successors to Lender arising after the
commencement of such case), whether direct or indirect, absolute or
contingent, joint or several, due or not due, primary or secondary,
liquidated or unliquidated, secured or unsecured, and however acquired by
Lender and (ii) all expenses (including, without limitation, attorneys' fees
and legal expenses) incurred by Lender in connection with the preparation,
execution, delivery, recording, administration, collection, liquidation,
enforcement and defense of Borrower's obligations, liabilities and
indebtedness as aforesaid to Lender, the rights of Lender in any collateral
or under this Guarantee and all other Financing Agreements or in any way
involving claims by or against Lender directly or indirectly arising out of
or related to the relationships between Borrower, Guarantor or any other
Obligor (as hereinafter defined) and Lender, whether such expenses are
incurred before, during or after the initial or any renewal term of the
Credit Agreement and the other Financing Agreements or after the commencement
of any case with respect to Borrower or Guarantor under the United States
Bankruptcy Code or any similar statute.
(b) This Guarantee is a guaranty of payment and not of
collection. Guarantor agrees that Lender need not attempt to collect any
Guaranteed Obligations from Borrower, Guarantor or any other Obligor or to
realize upon any collateral, but may require Guarantor to make immediate
payment of all of the Guaranteed Obligations to Lender when due, whether by
maturity, acceleration or otherwise, or at any time thereafter. Lender may
apply any amounts received in respect of the Guaranteed Obligations to any of
the Guaranteed Obligations, in whole or in part (including attorneys' fees
and legal expenses incurred by Lender with respect thereto or otherwise
chargeable to Borrower or Guarantor) and in such order as Lender may elect.
(c) Payment by Guarantor shall be made to Lender at the
office of Lender from time to time on demand as Guaranteed Obligations become
due. Guarantor shall make all payments to Lender on the Guaranteed
Obligations free and clear of, and without deduction or withholding for or on
account of, any setoff, counterclaim, defense, duties, taxes, levies,
imposts, fees, deductions, withholding, restrictions or conditions of any
kind. One or more successive or concurrent actions may be brought hereon
against Guarantor either in the same action in which Borrower or any other
Obligor is sued or in separate actions. In the event any claim or action, or
action on any judgement, based on this Guarantee is brought against Guarantor,
Guarantor agrees not to deduct, set-off, or seek any counterclaim for or
recoup any amounts which are or may be owed by Lender to Guarantor.
2. LIMITATION.
(a) Notwithstanding Section 1 or any other provision hereof,
the aggregate liability of Guarantor hereunder shall not exceed the amount of
advances made against Borrower's Inventory outstanding from time to time, PLUS
interest accrued after a demand by Lender to pay and perform the Guaranteed
Obligations and any reasonable costs, expenses and other charges (including, but
not limited to, reasonable attorney's fees and legal expenses), related to the
collection of the obligations owing under this Guaranty, or any part thereof,
and in enforcing this Guarantee.
(b) Payments and pre-payments of the Guaranteed Obligations by
Borrower, by any other guarantor of any of the Guaranteed Obligations or by any
other person (other than Guarantor), or the application of any proceeds from
foreclosure or other exercise of remedies
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against any property at any time serving as collateral security for all or
any part of the Guaranteed Obligations, for purposes of this Section 2, shall
be deemed to be applied first to that portion of the Guaranteed Obligations
that exceeds the above limitation and last to that portion of the Guaranteed
Obligations that does not exceed the above limitation.
(c) This Guarantee shall terminate if Borrower's
consolidate income statement, prepared internally in accordance with
generally accepted accounting principles on a basis consistent with prior
practices, reflects a net profit after tax for the 11 month period ending
November 30, 2000 of at least $1,300,000 from Borrower's domestic operations.
3. WAIVERS AND CONSENTS.
(a) Notice of acceptance of this Guarantee, the making of
loans and advances and providing other financial accommodations to Borrower
and presentment, demand, protest, notice of protest, notice of nonpayment or
default and all other notices to which Borrower or Guarantor is entitled are
hereby waived by Guarantor. Guarantor also waives notice of and hereby
consents to, (i) any amendment, modification, supplement, extension, renewal,
or restatement of the Credit Agreement and any of the other Financing
Agreements, including, without limitation, extensions of time of payment of
or increase or decrease in the amount of any of the Guaranteed Obligations,
interest rate, fees, other charges, or any collateral, and the guarantee made
herein shall apply to the Credit Agreement and the other Financing Agreements
and the Guaranteed Obligations as so amended, modified, supplemented,
renewed, restated or extended, increased or decreased, (ii) the taking,
exchange, surrender and releasing of collateral or guarantees now or at any
time held by or available to Lender for the obligations of Borrower or any
other party at any time liable on or in respect of the Guaranteed Obligations
or who is the owner of any property which is security for the Guaranteed
Obligations (individually, an "Obligor" and collectively, the "Obligors"),
(iii) the exercise of, or refraining from the exercise of any rights against
Borrower or any other Obligor or any collateral, (iv) the settlement,
compromise or release of, or the waiver of any default with respect to, any
of the Guaranteed Obligations and (v) any financing by Lender of Borrower
under Section 364 of the United States Bankruptcy Code or consent to the use
of cash collateral by Lender under Section 363 of the United States
Bankruptcy Code. Guarantor agrees that the amount of the Guaranteed
Obligations shall not be diminished and the liability of Guarantor hereunder
shall not be otherwise impaired or affected by any of the foregoing.
(b) No invalidity, irregularity or unenforceability of all
or any part of the Guaranteed Obligations shall affect, impair or be a
defense to this Guarantee, nor shall any other circumstance which might
otherwise constitute a defense available to or legal or equitable discharge
of Borrower in respect of any of the Guaranteed Obligations, or Guarantor in
respect of this Guarantee, affect, impair or be a defense to this Guarantee.
Without limitation of the foregoing, the liability of Guarantor hereunder
shall not be discharged or impaired in any respect by reason of any failure
by Lender to perfect or continue perfection of any lien or security interest
in any collateral or any delay by Lender in perfecting any such lien or
security interest. As to interest, fees and expenses, whether arising before
or after the commencement of any case with respect to Borrower under the
United States Bankruptcy Code or any similar statute, Guarantor shall be
liable therefor, even if Borrower's liability for such amounts does not, or
ceases to, exist by operation of law. Guarantor acknowledges that Lender has
not made any
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representations to Guarantor with respect to Borrower, any other Obligor or
otherwise in connection with the execution and delivery by Guarantor of this
Guarantee and Guarantor is not in any respect relying upon Lender or any
statements by Lender in connection with this Guarantee.
(c) Guarantor hereby irrevocably and unconditionally waives
and relinquishes all statutory, contractual, common law, equitable and all
other claims against Borrower, any collateral for the Guaranteed Obligations
or other assets of Borrower or any other Obligor, for subrogation,
reimbursement, exoneration, contribution, indemnification, setoff or other
recourse in respect to sums paid or payable to Lender by Guarantor hereunder
and Guarantor hereby further irrevocably and unconditionally waives and
relinquishes any and all other benefits which Guarantor might otherwise
directly or indirectly receive or be entitled to receive by reason of any
amounts paid by or collected or due from Guarantor, Borrower or any other
Obligor upon the Guaranteed Obligations or realized from their property.
4. SUBORDINATION. Payment of all amounts now or hereafter owed to
Guarantor by Borrower or any other Obligor is hereby subordinated in right of
payment to the indefeasible payment in full to Lender of the Guaranteed
Obligations and all such amounts and any security and guarantees therefor are
hereby assigned to Lender as security for the Guaranteed Obligations.
5. ACCELERATION. Notwithstanding anything to the contrary contained
herein or any of the terms of any of the other Financing Agreements, the
liability of Guarantor for the entire Guaranteed Obligations shall mature and
become immediately due and payable, even if the liability of Borrower or any
other Obligor therefor does not, upon the occurrence of any act, condition or
event which constitutes an Event of Default as such term is defined in the
Credit Agreement.
6. ACCOUNT STATED. The books and records of Lender showing the
account between Lender and Borrower shall be admissible in evidence in any
action or proceeding against or involving Guarantor as PRIMA FACIE proof of
the items therein set forth, and the monthly statements of Lender rendered to
Borrower, to the extent to which no written objection is made within thirty
(30) days from the date of sending thereof to Borrower, shall be deemed
conclusively correct and constitute an account stated between Lender and
Borrower and be binding on Guarantor.
7. TERMINATION. This Guarantee is continuing, unlimited, absolute
and unconditional. All Guaranteed Obligations shall be conclusively presumed
to have been created in reliance on this Guarantee. Guarantor shall continue
to be liable hereunder until one of Lender's officers actually receives a
written termination notice from Guarantor sent to Lender at its address set
forth above by certified mail, return receipt requested and thereafter as set
forth below. Revocation or termination hereof by Guarantor shall not affect,
in any manner, the rights of Lender or any obligations or duties of Guarantor
under this Guarantee with respect to (a) Guaranteed Obligations which have
been created, contracted, assumed or incurred prior to the receipt by Lender
of such written notice of revocation or termination as provided herein,
including, without limitation, (i) all amendments, extensions, renewals and
modifications of such Guaranteed Obligations (whether or not evidenced by new
or additional agreements, documents
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or instruments executed on or after such notice of revocation or
termination), (ii) all interest, fees and similar charges accruing or due on
and after revocation or termination, and (iii) all attorneys' fees and legal
expenses, costs and other expenses paid or incurred on or after such notice
of revocation or termination in attempting to collect or enforce any of the
Guaranteed Obligations against Borrower, Guarantor or any other Obligor
(whether or not suit be brought), or (b) Guaranteed Obligations which have
been created, contracted, assumed or incurred after the receipt by Lender of
such written notice of revocation or termination as provided herein pursuant
to any contract entered into by Lender prior to receipt of such notice. The
sole effect of such revocation or termination by Guarantor shall be to
exclude from this Guarantee the liability of Guarantor for those Guaranteed
Obligations arising after the date of receipt by Lender of such written
notice which are unrelated to Guaranteed Obligations arising or transactions
entered into prior to such date. Without limiting the foregoing, this
Guarantee may not be terminated and shall continue so long as the Credit
Agreement shall be in effect (whether during its original term or any
renewal, substitution or extension thereof).
8. REINSTATEMENT. If after receipt of any payment of, or proceeds of
collateral applied to the payment of, any of the Guaranteed Obligations,
Lender is required to surrender or return such payment or proceeds to any
Person for any reason, then the Guaranteed Obligations intended to be
satisfied by such payment or proceeds shall be reinstated and continue and
this Guarantee shall continue in full force and effect as if such payment or
proceeds had not been received by Lender. Guarantor shall be liable to pay to
Lender, and does indemnify and hold Lender harmless for the amount of any
payments or proceeds surrendered or returned. This Section 8 shall remain
effective notwithstanding any contrary action which may be taken by Lender in
reliance upon such payment or proceeds. This Section 8 shall survive the
termination or revocation of this Guarantee.
9. AMENDMENTS AND WAIVERS. Neither this Guarantee nor any provision
hereof shall be amended, modified, waived or discharged orally or by course
of conduct, but only by a written agreement signed by an authorized officer
of Lender. Lender shall not by any act, delay, omission or otherwise be
deemed to have expressly or impliedly waived any of its rights, powers and/or
remedies unless such waiver shall be in writing and signed by an authorized
officer of Lender. Any such waiver shall be enforceable only to the extent
specifically set forth therein. A waiver by Lender of any right, power and/or
remedy on any one occasion shall not be construed as a bar to or waiver of
any such right, power and/or remedy which Lender would otherwise have on any
future occasion, whether similar in kind or otherwise.
10. GOVERNING LAW; CHOICE OF FORUM; SERVICE OF PROCESS; JURY TRIAL
WAIVER.
(a) The validity, interpretation and enforcement of this
Guarantee and any dispute arising out of the relationship between Guarantor and
Lender, whether in contract, tort, equity or otherwise, shall be governed by the
internal laws of the State of California (without giving effect to principles of
conflicts of law).
(b) Guarantor hereby irrevocably consents and submits to the
non-exclusive jurisdiction of the Courts of the State of California and the
United States District Court for the
5
Central District of California and waives any objection based on venue or
FORUM NON CONVENIENS with respect to any action instituted therein arising
under this Guarantee or any of the other Financing Agreements or in any way
connected with or related or incidental to the dealings of Guarantor and
Lender in respect of this Guarantee or any of the other Financing Agreements
or the transactions related hereto or thereto, in each case whether now
existing or hereafter arising and whether in contract, tort, equity or
otherwise, and agrees that any dispute arising out of the relationship
between Guarantor or Borrower and Lender or the conduct of any such persons
in connection with this Guarantee, the other Financing Agreements or
otherwise shall be heard only in the courts described above (except that
Lender shall have the right to bring any action or proceeding against
Guarantor or his or her property in the courts of any other jurisdiction
which Lender deems necessary or appropriate in order to realize on any
collateral at any time granted by Borrower or Guarantor to Lender or to
otherwise enforce its rights against Guarantor or his or her property).
(c) Guarantor hereby waives personal service of any and all
process upon Guarantor and consents that all such service of process may be
made by certified mail (return receipt requested) directed to his or her
address set forth on the signature pages hereof and service so made shall be
deemed to be completed five (5) days after the same shall have been so
deposited in the U.S. mails, or, at Lender's option, by service upon
Guarantor in any other manner provided under the rules of any such courts.
Within thirty (30) days after such service, Guarantor shall appear in answer
to such process, failing which Guarantor shall be deemed in default and
judgment may be entered by Lender against Guarantor for the amount of the
claim and other relief requested.
(d) GUARANTOR HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF
ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS GUARANTEE
OR ANY OF THE OTHER FINANCING AGREEMENTS OR (ii) IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF GUARANTOR AND LENDER IN RESPECT OF
THIS GUARANTEE OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE TRANSACTIONS
RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. GUARANTOR HEREBY
AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT GUARANTOR OR LENDER
MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT
AS WRITTEN EVIDENCE OF THE CONSENT OF GUARANTOR AND LENDER HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(e) Lender shall not have any liability to Guarantor
(whether in tort, contract, equity or otherwise) for losses suffered by
Guarantor in connection with, arising out of, or in any way related to the
transactions or relationships contemplated by this Guarantee, or any act,
omission or event occurring in connection herewith, unless it is determined
by a final and non-appealable judgment or court order binding on Lender that
the losses were the result of acts or omissions constituting gross negligence
or willful misconduct. In any such litigation, Lender shall be entitled to
the benefit of the rebuttable presumption that it acted in good faith and with
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the exercise of ordinary care in the performance by it of the terms of the
Credit Agreement and the other Financing Agreements.
11. NOTICES. All notices, requests and demands hereunder shall be in
writing and (a) made to Lender at its address set forth above and to
Guarantor at his or her address set forth below, or to such other address as
either party may designate by written notice to the other in accordance with
this provision, and (b) deemed to have been given or made: if delivered in
person, immediately upon delivery; if by telex, telegram or facsimile
transmission, immediately upon sending and upon confirmation of receipt; if
by nationally recognized overnight courier service with instructions to
deliver the next business day, one (1) business day after sending; and if by
certified mail, return receipt requested, five (5) days after mailing.
12. PARTIAL INVALIDITY. If any provision of this Guarantee is held
to be invalid or unenforceable, such invalidity or unenforceability shall not
invalidate this Guarantee as a whole, but this Guarantee shall be construed
as though it did not contain the particular provision held to be invalid or
unenforceable and the rights and obligations of the parties shall be
construed and enforced only to such extent as shall be permitted by
applicable law.
13. ENTIRE AGREEMENT. This Guarantee represents the entire agreement
and understanding of these parties concerning the subject matter hereof, and
supersedes all other prior agreements, understandings, negotiations and
discussions, representations, warranties, commitments, proposals, offers and
contracts concerning the subject matter hereof, whether oral or written.
14. SUCCESSORS AND ASSIGNS. This Guarantee shall be binding upon
Guarantor and his or her heirs, executors, administrators, successors and
assigns and shall inure to the benefit of Lender and its successors,
endorsees, transferees and assigns.
15. CONSTRUCTION. All references to the term "Guarantor" wherever
used herein shall mean Guarantor and his or her heirs, executors,
administrators, successors and assigns (including, without limitation, any
receiver, trustee or custodian for Guarantor or any of his or her assets or
Guarantor in his or her capacity as debtor or debtor-in-possession under the
United States Bankruptcy Code). All references to the term "Lender" wherever
used herein shall mean Lender and its successors and assigns and all
references to the term "Borrower" wherever used herein shall mean Borrower
and its successors and assigns (including, without limitation, any receiver,
trustee or custodian for Borrower or any of its assets or Borrower in its
capacity as debtor or debtor-in-possession under the United States Bankruptcy
Code). All references to the term "Person" or "person" wherever used herein
shall mean any individual, sole proprietorship, partnership, corporation
(including, without limitation, any corporation which elects subchapter S
status under the Internal Revenue Code of 1986, as amended), limited
liability company, limited liability partnership, business trust,
unincorporated association, joint stock corporation, trust, joint venture or
other entity or any government or any agency or instrumentality or political
subdivision thereof. All references to the plural shall also mean the
singular and to the singular shall also mean the plural.
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IN WITNESS WHEREOF, Guarantor has executed and delivered this
Guarantee as of the day and year first above written.
WITNESS:
/s/ Dorothy H. Lane /s/ Carmine T. Oliva
- ------------------------------- ----------------------------------------
Carmine T. Oliva
Social Security#: ###-##-####
----------------------
Home Address: 901 Little River Dr
--------------------------
Elizabeth City, N.C. 27909
--------------------------
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N.C. D.L. ALL-PURPOSE ACKNOWLEDGMENT
STATE OF N.C. D.L. )
) SS.
COUNTY OF Pasquotank )
-------------------------
On 16 August 2000, before me, D.L. Dorothy H. Lane,
-------------- ------------------------------------------,
Date Name and Title of Officer (e.g. "Jane
Doe, Notary Public")
personally appeared Carmine T. Oliva
----------------------------------------------------------,
Name of Signer(s)
[X] personally known to me - OR - [ ] proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s)
is/are subscribed to the within instrument
and acknowledged to me that he/she/they
executed the same in his/her/their
authorized capacity(ies), and that by his/
her/their signature(s) on the instrument
the person(s), or the entity upon behalf
of which the person(s) acted, executed the
instrument.
WITNESS my hand and official seal.
/s/ Dorothy H. Lane
------------------------------------------
Signature of Notary Public
OPTIONAL
Though the data below is not required by law, it may prove valuable to persons
relying on the document and could prevent fraudulent reattachment of this form.
CAPACITY(IES) CLAIMED BY SIGNER(S) DESCRIPTION OF ATTACHED DOCUMENT
[X] Individual
[ ] Corporate Officer
Guarantee
-------------------------------- -------------------------------------
Title(s) Title or Type of Document
[ ] Partner(s) [ ] Limited
[ ] General -------------------------------------
[ ] Attorney-in-Fact Number of Pages
[ ] Trustee(s)
[ ] Guardian/Conservator
[ ] Other:
--------------------------------- -------------------------------------
Date of Document
Signer is Representing:
Name of Person(s) or Entity(ies)
--------------------------------- -------------------------------------
Signer(s) Other Than Named Above
---------------------------------