EXHIBIT 10.4
SUBSIDIARIES GUARANTY
GUARANTY, dated as of April 25, 1996, made by each of the undersigned
(each a "Guarantor" and collectively, the "Guarantors"). Except as otherwise
defined herein, terms used herein and defined in the Credit Agreement (as
hereinafter defined) shall be used herein as so defined.
W I T N E S S E T H :
WHEREAS, Vernitron Corporation (the "Borrower"), certain financial
institutions from time to time party thereto (the "Banks") and Banque Paribas,
as Agent (the "Agent"), have entered into a Credit Agreement, dated as of April
25, 1996 (as modified, supplemented or amended from time to time, the "Credit
Agreement"), providing for the making of Loans to the Borrower and the issuance
of, and participation in, Letters of Credit issued for the account of the
Borrower as contemplated therein (the Banks and the Agent being herein called
the "Bank Creditors");
WHEREAS, the Borrower or any of its Subsidiaries may from time to time
enter into, or guaranty, one or more (i) interest rate protection agreements
(including, without limitation, interest rate swaps, caps, floors, collars and
similar agreements), (ii) foreign exchange contracts, currency swap agreements
or other similar agreements or arrangements designed to protect against the
fluctuations in currency values and/or (iii) other types of hedging agreements
from time to time (collectively, the "Interest Rate Protection or Other Hedging
Agreements"), with Banque Paribas in its individual capacity, any Bank or a
syndicate of financial institutions organized by Banque Paribas or any such Bank
or an affiliate of Banque Paribas or such Bank (even if Banque Paribas or any
such Bank ceases to be a Bank under the Credit Agreement for any reason) and any
such institution that participates in such Interest Rate Protection or Other
Hedging Agreements and their subsequent assigns (collectively, the "Other
Creditors" and, together with the Bank Creditors, are herein called the
"Creditors");
WHEREAS, each Guarantor is a direct or indirect Subsidiary of the
Borrower;
WHEREAS, it is a condition to the making of Loans and the issuance of,
and participation in, Letters of Credit under the Credit Agreement and to the
Other
Creditors entering into the Interest Rate Protection or Other Hedging Agreements
that each Guarantor shall have executed and delivered this Guaranty; and
WHEREAS, each Guarantor will obtain benefits from the incurrence of
Loans by the Borrower and the issuance of Letters of Credit for the account of
the Borrower under the Credit Agreement and the entering into of the Interest
Rate Protection or Other Hedging Agreements and, accordingly, desires to execute
this Guaranty in order to satisfy the conditions described in the preceding
paragraph;
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to each Guarantor, the receipt and sufficiency of which are hereby
acknowledged, each Guarantor hereby makes the following representations and
warranties to the Creditors and hereby covenants and agrees with each Creditor
as follows:
1. Each Guarantor irrevocably and unconditionally, and jointly and
severally, guarantees (i) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of (x) the principal of and
interest on the Notes issued by, and Loans made to, the Borrower under the
Credit Agreement and all reimbursement obligations and Unpaid Drawings with
respect to Letters of Credit issued under the Credit Agreement, and (y) all
other obligations and indebtedness (including, without limitation, indemnities,
Fees and interest thereon) of the Borrower owing to the Bank Creditors now
existing or hereafter incurred under, arising out of or in connection with the
Credit Agreement and the other Credit Documents and the due performance and
compliance by the Borrower with the terms, conditions and agreements contained
in the Credit Documents (all such principal, interest, obligations and
liabilities being herein collectively referred to as the "Credit Document
Obligations") and (ii) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations and
indebtedness (including, without limitation, indemnities, fees and interest
thereon) owing by the Borrower to the Other Creditors under any Interest Rate
Protection or Other Hedging Agreement, whether such Interest Rate Protection or
Other Hedging Agreement is now in existence or hereafter arising, and the due
performance and compliance by the Borrower with the terms, conditions and
agreements contained therein (all such obligations and indebtedness being herein
collectively called the "Interest Rate Protection Obligations"; and together
with the Credit Document Obligations are herein collectively called the
"Guaranteed Obligations"); PROVIDED, that the maximum amount payable by each
Guarantor hereunder shall at no time exceed the Maximum Amount (as hereinafter
defined) of such Guarantor. As used herein, "Maximum Amount" of each Guarantor
means an amount equal to 95% of the amount by which (i) the present fair
saleable value of such Guarantor's
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assets exceeds (ii) the total liabilities of such Guarantor (including the
maximum amount reasonably expected to come due in respect of contingent
liabilities, other than contingent liabilities of such Guarantor hereunder) in
each case determined on the Initial Borrowing Date or on the day any demand is
made under this Guaranty, whichever date results in the higher Maximum Amount.
Subject to the proviso in the second preceding sentence, each Guarantor
understands, agrees and confirms that the Creditors may enforce this Guaranty up
to the full amount of the Guaranteed Obligations against such Guarantor without
proceeding against the Borrower, against any security for the Guaranteed
Obligations, against any other Guarantor, or against any other guarantor under
any other guaranty covering the Guaranteed Obligations. This Guaranty shall
constitute a guaranty of payment and not of collection. All payments by each
Guarantor under this Guaranty shall be made on the same basis as payments by the
Borrower under Sections 4.03 and 4.04 of the Credit Agreement.
2. Additionally, each Guarantor, jointly and severally,
unconditionally and irrevocably, guarantees the payment of any and all
Guaranteed Obligations of the Borrower to the Creditors whether or not due or
payable by the Borrower upon the occurrence in respect of the Borrower of any of
the events specified in Section 10.05 of the Credit Agreement, and
unconditionally and irrevocably, jointly and severally, promises to pay such
Guaranteed Obligations to the Creditors, or order, on demand, in lawful money of
the United States.
3. The liability of each Guarantor hereunder is exclusive and
independent of any security for or other guaranty of the indebtedness of the
Borrower whether executed by such Guarantor, any other Guarantor, any other
guarantor or by any other party, and the liability of such Guarantor hereunder
shall not be affected or impaired by: (i) any direction as to application of
payment by the Borrower; (ii) any other continuing or other guaranty,
undertaking or maximum liability of a guarantor or of any other party as to the
indebtedness of the Borrower; (iii) any payment on or in reduction of any such
other guaranty or undertaking; (iv) any dissolution, termination or increase,
decrease or change in personnel by the Borrower; or (v) any payment made to any
Creditor on the indebtedness which any Creditor repays the Borrower pursuant to
court order in any bankruptcy, reorganization, arrangement, moratorium or other
debtor relief proceeding, and each Guarantor waives any right to the deferral or
modification of its obligations hereunder by reason of any such proceeding.
4. The obligations of each Guarantor hereunder are independent of
the obligations of any other Guarantor, any other guarantor or the Borrower, and
a separate action or actions may be brought and prosecuted against each
Guarantor whether or not action is brought against any other Guarantor, any
other guarantor or the Borrower, and whether or
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not any other Guarantor, any other guarantor or the Borrower be joined in any
such action or actions. Each Guarantor waives, to the fullest extent permitted
by law, the benefit of any statute of limitations affecting its liability
hereunder or the enforcement thereof. Any payment by the Borrower or other
circumstance which operates to toll any statute of limitations as to the
Borrower shall operate to toll the statute of limitations as to each Guarantor.
5. Each Guarantor hereby waives notice of acceptance of this
Guaranty and notice of any liability to which it may apply, and waives
promptness, diligence, presentment, demand of payment, protest, notice of
dishonor or nonpayment of any such liabilities, suit or taking of other action
taken by the Agent or any other Creditors against, and any other notice to, any
party liable thereon (including such Guarantor or any other Guarantor or
guarantor).
6. Any Creditor may at any time and from time to time (but only upon
the agreement and consent of the Borrower or its Subsidiaries to the extent
otherwise required by the relevant agreement) without the consent of, or notice
to, any Guarantor, without incurring responsibility to any Guarantor, without
impairing or releasing the obligations of any Guarantor hereunder, upon or
without any terms or conditions and in whole or in part (and each Guarantor
hereby irrevocably waives any defenses it may now or hereafter have in any way
relating to any and all of the following):
(i) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew or alter, any of the Guaranteed
Obligations, any security therefor, or any liability incurred directly or
indirectly in respect thereof, and the guaranty herein made shall apply to
the Guaranteed Obligations as so changed, extended, renewed or altered;
(ii) sell, exchange, release, surrender, realize upon or otherwise
deal with in any manner and in any order any property by whomsoever at any
time pledged or mortgaged to secure, or howsoever securing, the Guaranteed
Obligations or any liabilities (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and/or any offset
thereagainst;
(iii) exercise or refrain from exercising any rights against the
Borrower, any Guarantor or others or otherwise act or refrain from acting;
(iv) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or
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any part thereof to the payment of any liability (whether due or not) of
the Borrower to creditors of the Borrower;
(v) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Creditors regardless of
what liabilities of the Borrower remain unpaid;
(vi) consent to or waive any breach of, or any act, omission or
default under, any of the Interest Rate Protection or Other Hedging
Agreements or any of the Credit Documents or any of the instruments or
agreements referred to therein, or otherwise amend, modify or supplement
any of the Interest Rate Protection or Other Hedging Agreements or any of
the Credit Documents or any of such other instruments or agreements; and/or
(vii) act or fail to act in any manner referred to in this
Guaranty which may deprive any Guarantor of its right to subrogation
against the Borrower to recover full indemnity for any payments made
pursuant to this Guaranty.
7. No invalidity, irregularity or unenforceability of all or any
part of the Guaranteed Obligations or of any security therefor shall affect,
impair or be a defense to this Guaranty, and this Guaranty shall be primary,
absolute and unconditional notwithstanding the occurrence of any event or the
existence of any other circumstances which might constitute a legal or equitable
discharge of a surety or guarantor except payment in full of the Guaranteed
Obligations.
8. This Guaranty is a continuing one and all liabilities to which it
applies or may apply under the terms hereof shall be conclusively presumed to
have been created in reliance hereon. No failure or delay on the part of any
Creditor in exercising any right, power or privilege hereunder and no course of
dealing between any Guarantor and any Creditor shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
expressly specified are cumulative and not exclusive of any rights or remedies
which any Creditor would otherwise have. No notice to or demand on any
Guarantor in any case shall entitle such Guarantor to any other further notice
or demand in similar or other circumstances or constitute a waiver of the rights
of any Creditor to any other or further action in any circumstances without
notice or demand.
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9. Any indebtedness of the Borrower now or hereafter held by any
Guarantor is hereby subordinated to the indebtedness of the Borrower to the
Creditors; and such indebtedness of the Borrower to any Guarantor, if the Agent,
after an Event of Default has occurred, so requests, shall be collected,
enforced and received by such Guarantor as trustee for the Creditors and be paid
over to the Creditors on account of the indebtedness of the Borrower to the
Creditors, but without affecting or impairing in any manner the liability of
such Guarantor under the other provisions of this Guaranty. Prior to the
transfer by such Guarantor of any note or negotiable instrument evidencing any
indebtedness of the Borrower to such Guarantor, such Guarantor shall mark such
note or negotiable instrument with a legend that the same is subject to this
subordination. Without limiting the generality of the foregoing, each Guarantor
hereby agrees with the Creditors that it will not exercise any right of
subrogation which it may at any time otherwise have as a result of this Guaranty
(whether contractual, under Section 5.09 of the Bankruptcy Code, or otherwise)
until all Guaranteed Obligations have been paid in full in cash.
10. (a) Each Guarantor waives any right (except as shall be required
by applicable statute and cannot be waived) to require the Creditors to (i)
proceed against the Borrower, any other Guarantor, any other guarantor or any
other party, (ii) proceed against or exhaust any security held from the
Borrower, any other Guarantor, any other guarantor or any other party or (iii)
pursue any other remedy in the Creditors' power whatsoever. Each Guarantor
waives any defense based on or arising out of any defense of the Borrower, any
other Guarantor, any other guarantor or any other party other than payment in
full of the Guaranteed Obligations, including without limitation any defense
based on or arising out of the disability of the Borrower, any other Guarantor,
any other guarantor or any other party, or the unenforceability of the
Guaranteed Obligations or any part thereof from any cause, or the cessation from
any cause of the liability of the Borrower other than payment in full of the
Guaranteed Obligations. The Creditors may, at their election, foreclose on any
security held by the Agent, the Collateral Agent or the other Creditors by one
or more judicial or nonjudicial sales, whether or not every aspect of any such
sale is commercially reasonable (to the extent such sale is permitted by
applicable law), or exercise any other right or remedy the Creditors may have
against the Borrower or any other party, or any security, without affecting or
impairing in any way the liability of any Guarantor hereunder except to the
extent the Guaranteed Obligations have been paid in full. Each Guarantor waives
any defense arising out of any such election by the Creditors, even though such
election operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of such Guarantor against the Borrower or
any other party or any security.
(b) Each Guarantor waives all presentments, demands for performance,
protests and notices, including without limitation notices of nonperformance,
notices of protest,
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notices of dishonor, notices of acceptance of this Guaranty, and notices of the
existence, creation or incurring of new or additional indebtedness. Each
Guarantor assumes all responsibility for being and keeping itself informed of
the Borrower's financial condition and assets, and of all other circumstances
bearing upon the risk of nonpayment of the Guaranteed Obligations and the
nature, scope and extent of the risks which such Guarantor assumes and incurs
hereunder, and agrees that the Creditors shall have no duty to advise any
Guarantor of information known to them regarding such circumstances or risks.
11. In order to induce the Banks to make Loans to the Borrower, and
to issue, and participate in, Letters of Credit for the account of the Borrower,
pursuant to the Credit Agreement and to induce the Other Creditors to execute,
deliver and perform the Interest Rate Protection and Other Hedging Agreements,
each Guarantor hereby represents, warrants and covenants that:
(i) Such Guarantor and each of its Subsidiaries (x) is a duly
organized and validly existing corporation in good standing under the laws
of the jurisdiction of its incorporation, (y) has the corporate power and
authority to own its property and assets and to transact the business in
which it is engaged and presently proposes to engage and (z) is duly
qualified and is authorized to do business and is in good standing in each
jurisdiction where the ownership, leasing or operation of property or the
conduct of its business requires such qualification except for failures to
be so qualified which, in the aggregate, would not have a material adverse
effect on the performance, business, assets, nature of assets, liabilities,
operations, properties, condition (financial or otherwise) or prospects of
such Guarantor or of such Guarantor and its Subsidiaries taken as a whole.
(ii) Such Guarantor has the corporate power to execute, deliver and
perform the terms and provisions of this Guaranty and has taken all
necessary corporate action to authorize the execution, delivery and
performance by it of this Guaranty. Such Guarantor has duly executed and
delivered this Guaranty, and this Guaranty constitutes its legal, valid and
binding obligation enforceable in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, reorganization,
moratorium or similar laws relating to or limiting creditors' rights
generally or by general equitable principles (regardless of whether the
issue of enforceability is considered in a proceeding in equity or at law).
(iii) Neither the execution, delivery or performance by such
Guarantor of this Guaranty, nor compliance by it with the terms and
provisions hereof, (x) will contravene any provision of any law, statute,
rule or regulation or any order, writ,
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injunction or decree of any court or governmental instrumentality, (y) will
conflict with or result in any breach of any of the terms, covenants, conditions
or provisions of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien (except pursuant
to the Security Documents) upon any of the property or assets of such Guarantor
pursuant to the terms of any indenture, mortgage, deed of trust, credit
agreement or loan agreement, or any other agreement, contract or instrument to
which such Guarantor is a party or by which it or any of its property or assets
is bound or to which it may be subject or (z) will violate any provision of the
Certificate of Incorporation or By-Laws (or similar organizational documents) of
such Guarantor or any of its Subsidiaries.
(iv) No order, consent, approval, license, authorization or validation
of, or filing, recording or registration with (except as have been obtained
or made prior to the Initial Borrowing Date and are in full force and
effect), or exemption by, any governmental or public body or authority, or
any subdivision thereof, is required to authorize, or is required in
connection with, (x) the execution, delivery and performance of this
Guaranty or (y) the legality, validity, binding effect or enforceability of
this Guaranty.
(v) There are no actions, suits or proceedings pending or, to the
best knowledge of any Guarantor, threatened (x) with respect to this
Guaranty, (y) with respect to any Indebtedness of the Guarantor or any of
its Subsidiaries or (z) that are reasonably likely to materially and
adversely affect the performance, business, assets, nature of assets,
liabilities, operations, properties, condition (financial or otherwise) or
prospects of such Guarantor and its Subsidiaries taken as a whole.
(vi) On the date hereof and after giving effect to the incurrence by
such Guarantor of the Contingent Obligations evidenced by this Guaranty,
(x) the assets of such Guarantor, at a fair valuation, will exceed its
debts, (y) the Guarantor will have sufficient capital to conduct its
business and (z) such Guarantor will not have incurred debts, and does not
intend to incur debts, beyond its ability to pay such debts as they mature.
For purposes of this clause (vi), "debt" means any liability on a claim,
and "claim" means (x) right to payment, whether or not such right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured, or unsecured;
or (y) right to an equitable remedy for breach of performance if such
breach gives rise to a payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured,
disputed, undisputed, secured, or unsecured.
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12. Each Guarantor covenants and agrees that on and after the date
hereof and until the Total Commitment and all Letters of Credit have terminated
and all Guaranteed Obligations have been paid in full, such Guarantor shall
take, or will refrain from taking, as the case may be, all actions that are
necessary to be taken or not taken so that no violation of any provision,
covenant or agreement contained in Section 8 or 9 of the Credit Agreement, and
so that no Default or Event of Default, is caused by the actions of such
Guarantor or any of its Subsidiaries.
13. Each Guarantor hereby jointly and severally agrees to pay all
reasonable out-of-pocket costs and expenses of each Creditor in connection with
the enforcement of this Guaranty and the protection of such Creditor's rights
hereunder, and in connection with any amendment, waiver or consent relating
hereto (including, without limitation, the reasonable fees and disbursements of
counsel (including in-house counsel) employed by any of the Creditors).
14. This Guaranty shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the Creditors and their
successors and assigns.
15. Neither this Guaranty nor any provision hereof may be changed,
waived, discharged or terminated in any manner whatsoever unless in writing duly
signed by the Agent (with, except as provided in Section 13.12 of the Credit
Agreement, the consent of the Required Banks) and each Guarantor directly
affected thereby (it being understood that the release or addition of any
Guarantor hereunder shall not constitute a change or waiver affecting any
Guarantor other than the Guarantor so released or added); PROVIDED, HOWEVER,
that any change, waiver, modification or variance affecting the rights and
benefits of a single Class (as defined below) of Creditors (and not all
Creditors in a like or similar manner) shall require the written consent of the
Requisite Creditors (as defined below) of such Class of Creditors. For the
purpose of this Guaranty, the term "Class" shall mean each class of Creditors,
I.E., whether (x) the Bank Creditors as holders of the Credit Document
Obligations or (y) the Other Creditors as holders of the Interest Rate
Protection Obligations. For the purpose of this Guaranty, the term "Requisite
Creditors" of any Class shall mean each of (x) with respect to the Credit
Document Obligations, the Required Banks and (y) with respect to the Interest
Rate Protection Obligations, the holders of at least a majority of all
obligations outstanding from time to time under the Interest Rate Protection or
Other Hedging Agreements.
16. Each Guarantor acknowledges that an executed (or conformed) copy
of the Credit Agreement has been made available to its principal executive
officers and such officers are familiar with its contents.
17. In addition to any rights now or hereafter granted under
applicable law (including, without limitation, Section 151 of the New York
Debtor and Creditor Law) and not by way of limitation of any such rights, upon
the occurrence and during the continuance of an
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Event of Default (such term to mean and include any "Event of Default" under,
and as defined in, the Credit Agreement or any payment default (after giving
effect to any grace period applicable thereto) under any Interest Rate
Protection or Other Hedging Agreement and shall in any event, include without
limitation any payment default on any of the Guaranteed Obligations after giving
effect to any grace period applicable thereto), each Creditor is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to any Guarantor or to any other Person, any
such notice being hereby expressly waived, to set off and to appropriate and
apply any and all deposits (general or special) and any other indebtedness at
any time held or owing by such Creditor (including, without limitation, by
branches and agencies of such Creditor wherever located) to or for the credit or
the account of such Guarantor, against and on account of the obligations and
liabilities of such Guarantor to such Creditor under this Guaranty, irrespective
of whether or not such Creditor shall have made any demand hereunder and
although said obligations, liabilities, deposits or claims, or any of them,
shall be contingent or unmatured.
18. All notices, requests, demands or other communications pursuant
hereto shall be deemed to have been duly given or made when delivered to the
Person to which such notice, request, demand or other communication is required
or permitted to be given or made under this Guaranty, addressed to such party at
(i) in the case of any Bank Creditor, as provided in the Credit Agreement, (ii)
in the case of any Guarantor, at its address set forth opposite its signature
below, and (iii) in the case of any Other Creditor, as provided in the Security
Agreement; or in any case at such other address as any of the Persons listed
above may hereafter notify the others in writing.
19. If claim is ever made upon any Creditor for repayment or recovery
of any amount or amounts received in payment or on account of any of the
Guaranteed Obligations and any of the aforesaid payees repays all or part of
said amount by reason of (a) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (b) any settlement or compromise of any such claim effected by such payee
with any such claimant (including the Borrower), then and in such event each
Guarantor agrees that any such judgment, decree, order, settlement or compromise
shall be binding upon it, notwithstanding any revocation hereof or the
cancellation of any Note or any Interest Rate Protection or Other Hedging
Agreement or other instrument evidencing any liability of the Borrower, and such
Guarantor shall be and remain liable to the aforesaid payees hereunder for the
amount so repaid or recovered to the same extent as if such amount had never
originally been received by any such payee.
20. Any acknowledgment or new promise, whether by payment of
principal or interest or otherwise and whether by the Borrower or other Persons
liable in respect of the Guaranteed Obligations (including any Guarantor), with
respect to any of the Guaranteed Obligations shall, if the statute of
limitations in favor of any Guarantor against any Creditor
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shall have commenced to run, toll the running of such statute of limitations,
and if the period of such statute of limitations shall have expired, prevent the
operation of such statute of limitations.
21. (A) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY
MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF
THIS GUARANTY, EACH GUARANTOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS WITH RESPECT TO SUCH ACTIONS OR
PROCEEDINGS. EACH GUARANTOR HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND
EMPOWERS CT CORPORATION SYSTEMS, INC. WITH OFFICES ON THE DATE HEREOF AT 1633
BROADWAY, NEW YORK, NEW YORK, AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE,
ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY,
SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY
BE SERVED IN ANY SUCH ACTION OR PROCEEDING. IF FOR ANY REASON SUCH DESIGNEE,
APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, EACH GUARANTOR
AGREES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT ON THE TERMS AND FOR THE
PURPOSES OF THIS PROVISION SATISFACTORY TO THE AGENT FOR THE BANKS UNDER THIS
GUARANTY. EACH GUARANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
EACH GUARANTOR AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH
SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL
AFFECT THE RIGHT OF ANY OF THE CREDITORS TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
ANY GUARANTOR IN ANY OTHER JURISDICTION.
(B) EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS
OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS GUARANTY OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (A) ABOVE
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AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY
SUCH COURT THAT SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
22. (a) It is the desire and intent of each Guarantor and the
Creditors that this Guaranty shall be enforced against each Guarantor to the
fullest extent permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. In furtherance of the foregoing,
it is noted that the obligations of each Guarantor has been limited as provided
in Section 1 hereof.
(b) If, however, and to the extent, that the obligations of any
Guarantor under this Guaranty shall be adjudicated to be invalid or
unenforceable for any reason (including, without limitation, because of any
applicable state or federal law relating to fraudulent conveyances or
transfers), then the amount of the Guaranteed Obligations of such Guarantor (but
not the Guaranteed Obligations of any other Guarantor unless such other
Guarantor or Guarantors are individually subject to the circumstances covered by
this Section 22) shall be deemed to be reduced and the affected Guarantor shall
pay the maximum amount of the Guaranteed Obligations which would be permissible
under applicable law.
23. This Guaranty may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with the Borrower and the Agent.
24. In the event that all of the capital stock of one or more
Guarantors is sold in connection with a sale permitted by Section 9.02 of the
Credit Agreement and the proceeds of such sale or sales are applied in
accordance with the provisions of Section 4.02 of the Credit Agreement, to the
extent applicable, each Guarantor (x) all of the capital stock of which is so
sold or (y) which is a Subsidiary of a Guarantor all of the capital stock of
which is so sold, shall be released from this Guaranty and this Guaranty shall,
as to each Guarantor or Guarantors, terminate, and have no further force or
effect.
25. EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS GUARANTY, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
-12-
26. All payments made by any Guarantor hereunder will be made without
setoff, counterclaim or other defense.
* * *
-13-
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
executed and delivered as of the date first above written.
ADDRESS:
*7777 Fay Avenue PRECISION AEROTECH, INC.,
Suite 200 as a Pledgor
La Jolla, CA 92037
Attention: President
Tel: (619) 456-2992 By
Fax: (619) 456-3809 -------------------------------
Title:
c/o L&S Machine Co., Inc. L&S AEROTECH, INC.,
*2019 Southwest Boulevard as a Pledgor
Wichita, KS 67277
Attention: President
Tel: (316) 942-0181 By
Fax: (316) 942-6082 -------------------------------
Title:
*6717 Alabama Highway 157 SPEEDRING, INC.,
Cullman, AL 35057 as a Pledgor
Attention: President
Tel: (205) 737-5200
Fax: (205) 737-5203 By
-------------------------------
Title:
*2909 Waterview Drive SPEEDRING SYSTEMS, INC.,
Rochester Hills, MI 48309-4600 as a Pledgor
Attention: President
Tel: (810) 853-2540
Fax: (810) 853-2808 By
-------------------------------
Title:
- -----------------------------
*/ With a copy to:
Vernitron Corporation
645 Madison Avenue
New York, NY 10022
Attention: President
-14-
Accepted and Agreed to:
Banque Paribas,
as Agent for the Banks
By_________________________
Title:
By_________________________
Title:
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