EXECUTION COPY
EXHIBIT 99.3
SUBSIDIARY GUARANTY
SUBSIDIARY GUARANTY ("SUBSIDIARY GUARANTY") dated as of January 27, 2004
made by Virco Mgmt. Corporation, a Delaware corporation and a subsidiary of the
below referenced Borrower (the "GUARANTOR"), in favor of Wells Fargo Bank,
National Association (the "BANK"), the lender under the Credit Agreement dated
as of even date herewith (as the same may be amended, restated, modified or
supplemented from time to time, the "CREDIT AGREEMENT") between Virco Mfg.
Corporation, a Delaware corporation (the "BORROWER"), and the Bank.
RECITALS
WHEREAS, pursuant to the Credit Agreement, the Bank has agreed to make
certain loans and extend certain other financial accommodations to the Borrower;
WHEREAS, the Guarantor expects to realize direct and indirect benefits as a
result of the availability of the aforementioned loans to the Borrower and the
resulting financial and business support which will be provided to the Guarantor
by the Borrower; and
WHEREAS, as a condition to the Bank entering into the Credit Agreement, the
Bank has required the Guarantor execute and deliver this Subsidiary Guaranty and
to guaranty the Guarantied Obligations of the Borrower on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises set forth above, the terms
and conditions contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Definitions. This Subsidiary Guaranty is one of the Loan Documents.
Terms defined in the Credit Agreement and not otherwise defined herein are used
herein as therein defined. In addition, as used herein, the following terms
shall have the meanings respectively set forth after each:
"Bank" has the meaning set forth in the first paragraph hereof.
"Guarantied Obligations" means all Obligations, liabilities and other
Indebtedness of the Borrower at any time and from time to time owed to the Bank
in respect of the Credit Agreement, each of the other Loan Documents or any
Hedge Agreement to which the Borrower is a party (including, without limitation,
(a) principal of and interest on all Advances and the Term Loan outstanding from
time to time under the Credit Agreement (or evidenced by Line of Credit Note or
the Term Note) and (b) any amounts in respect of fees and costs of the Bank that
are required to be repaid by the Borrower, in each case whether due or to become
due, matured or unmatured, liquidated or unliquidated, or contingent or
non-contingent, including obligations of performance as well as obligations of
payment, and including interest that accrues after the commencement of any
bankruptcy or insolvency proceeding by or against the Borrower, the Guarantor or
any other Person.
"Subsidiary Guaranty" means this Subsidiary Guaranty, and any extensions,
modifications, renewals, restatements, reaffirmations, supplements or amendments
hereof.
2. Guaranty of Guarantied Obligations. The Guarantor hereby, irrevocably
and unconditionally guaranties and promises to pay and perform on demand the
Guarantied Obligations and each and every one of them, including all amendments,
modifications, supplements, renewals or extensions of any of them, whether such
amendments, modifications, supplements, renewals or extensions are evidenced by
new or additional instruments, documents or agreements or change in the rate of
interest on any Guarantied Obligation or the security therefor, or otherwise.
3. Nature of Guaranty. This Subsidiary Guaranty is irrevocable and
continuing in nature and relates to any Guarantied Obligations now existing or
hereafter arising. This Subsidiary Guaranty is a guaranty of prompt and punctual
payment and performance and is not merely a guaranty of collection.
4. Relationship to Other Agreements. Nothing herein shall in any way
modify or limit the effect of terms or conditions set forth in any other
document, instrument or agreement executed by the Guarantor or in connection
with the Guarantied Obligations, but each and every term and condition hereof
shall be in addition thereto. All provisions contained in the Credit Agreement
or any other Loan Document that apply to Loan Documents generally are fully
applicable to this Subsidiary Guaranty and are incorporated herein by this
reference.
5. Subordination of Indebtedness of the Borrower to the Guarantor to the
Guarantied Obligations. The Guarantor agrees that:
(a) Any Indebtedness of the Borrower now or hereafter owed to the
Guarantor hereby is subordinated in right of payment to the Guarantied
Obligations.
(b) If the Bank so requests, upon the occurrence and during the
continuance of any Event of Default, all such Indebtedness of the Borrower now
or hereafter owed to the Guarantor shall be collected, enforced and received by
the Guarantor as trustee for the Bank and shall be paid over to the Bank in kind
on account of the Guarantied Obligations, but without reducing or affecting in
any manner the obligations of the Guarantor under the other provisions of this
Subsidiary Guaranty.
(c) Should the Guarantor fail to collect or enforce any such Indebtedness
of the Borrower now or hereafter owed to the Guarantor and pay the proceeds
thereof to Bank in accordance with Section 5(b) hereof, the Bank as the
Guarantor's attorney-in-fact may do such acts and sign such documents in the
Guarantor's name as the Bank considers necessary or desirable to effect such
collection, enforcement and/or payment.
6. Waivers and Consents. The Guarantor acknowledges that the obligations
undertaken herein involve the guaranty of obligations of Persons other than that
of the Guarantor and, in full recognition of that fact, consents and agrees that
the Bank may, at any time and from time to time, without notice or demand, and
without affecting the enforceability or continuing effectiveness hereof: (a)
supplement, modify, amend, extend, renew, accelerate or otherwise change the
time for payment or the terms of the Guarantied Obligations or any part thereof,
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including any increase or decrease of the rate(s) of interest thereon; (b)
supplement, modify, amend or waive, or enter into or give any agreement,
approval or consent with respect to, the Guarantied Obligations or any part
thereof, or any of the Loan Documents to which the Guarantor is not a party or
any additional security or guaranties, or any condition, covenant, default,
remedy, right, representation or term thereof or thereunder; (c) accept new or
additional instruments, documents or agreements in exchange for or relative to
any of the Loan Documents or the Guarantied Obligations or any part thereof; (d)
accept partial payments on the Guarantied Obligations; (e) receive and hold
additional security or guaranties for the Guarantied Obligations or any part
thereof; (f) release, reconvey, terminate, waive, abandon, fail to perfect,
subordinate, exchange, substitute, transfer and/or enforce any security or
guaranties, and apply any security and direct the order or manner of sale
thereof as the Bank in its sole and absolute discretion may determine; (g)
release any Person from any personal liability with respect to the Guarantied
Obligations or any part thereof; (h) settle, release on terms satisfactory to
the Bank or by operation of applicable laws or otherwise liquidate or enforce
any Guarantied Obligations and any security or guaranty therefor in any manner,
consent to the transfer of any security and bid and purchase at any sale; and/or
(i) consent to the merger, change or any other restructuring or termination of
the corporate existence of the Borrower, the Guarantor or any other Person, and
correspondingly restructure the Guarantied Obligations, and any such merger,
change, restructuring or termination shall not affect the liability of the
Guarantor or the continuing effectiveness hereof, or the enforceability hereof
with respect to all or any part of the Guarantied Obligations.
Upon the occurrence and during the continuance of any Event of Default, the
Bank may enforce this Subsidiary Guaranty independently as to the Guarantor and
independently of any other remedy or security the Bank at any time may have or
hold in connection with the Guarantied Obligations. The Guarantor expressly
waives any right to require the Bank to marshal assets in favor of the Borrower
or to proceed against the Borrower, or against any other guarantor of or other
surety for the Guarantied Obligations, or upon or against any security or
remedy, before proceeding to enforce this Subsidiary Guaranty, in such order as
it shall determine in its sole and absolute discretion. The Bank may file a
separate action or actions against the Borrower and/or the Guarantor without
respect to whether action is brought or prosecuted with respect to any security
or against any other Person, or whether any other Person is joined in any such
action or actions. The Guarantor agrees that the Bank and the Borrower and any
Affiliates of the Borrower may deal with each other in connection with the
Guarantied Obligations or otherwise, or alter any contracts or agreements now or
hereafter existing between any of them, in any manner whatsoever, all without in
any way altering or affecting the security of this Subsidiary Guaranty. The
Bank's rights hereunder shall be reinstated and revived, and the enforceability
of this Subsidiary Guaranty shall continue, with respect to any amount at any
time paid on account of the Guarantied Obligations which thereafter shall be
required to be restored or returned by the Bank upon the bankruptcy, insolvency
or reorganization of the Borrower or any other Person, or otherwise, all as
though such amount had not been paid. The rights of the Bank created or granted
herein and the enforceability of this Subsidiary Guaranty with respect to the
Guarantor at all times shall remain effective to guaranty the full amount of all
the Guarantied Obligations even though the Guarantied Obligations, or any part
thereof, or any security or guaranty therefor, may be or hereafter may become
invalid or otherwise unenforceable as against the Borrower or any other surety
and whether or not the Borrower shall have any personal liability with respect
thereto. The Guarantor expressly waives any and all defenses now or
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hereafter arising or asserted by reason of (a) any disability or other defense
of the Borrower with respect to the Guarantied Obligations, (b) the
unenforceability or invalidity of any security or guaranty for the Guarantied
Obligations or the lack of perfection or continuing perfection or failure of
priority of any security for the Guarantied Obligations, (c) the cessation for
any cause whatsoever of the liability of the Borrower (other than by reason of
the full payment and performance of all Guarantied Obligations), (d) any failure
of the Bank to marshal assets in favor of the Borrower or any other Person, (e)
any act or omission of the Bank or others that directly or indirectly results in
or aids the discharge or release of the Borrower or the Guarantied Obligations
or any security or guaranty therefor by operation of law or otherwise, (f) any
law which provides that the obligation of a surety or guarantor must neither be
larger in amount nor in other respects more burdensome than that of the
principal or which reduces a surety's or guarantor's obligation in proportion to
the principal obligation, (g) any failure of the Bank or others to file or
enforce a claim in any bankruptcy or insolvency, administration, receivership,
creditors arrangement or other analogous proceeding with respect to any Person,
(h) the election by the Bank, in any bankruptcy proceeding of any Person, of the
application or non-application of Section 1111(b)(2) of the Bankruptcy Code, (i)
any extension of credit or the grant of any Lien under Section 364 of the
Bankruptcy Code, (j) any use of cash collateral under Section 363 of the
Bankruptcy Code, (k) any agreement or stipulation with respect to the provision
of adequate protection in any bankruptcy proceeding of any Person, (l) the
avoidance of any Lien or security in favor of the Bank for any reason, (m) any
bankruptcy, insolvency, administration, receivership, or analogous situations,
reorganization, arrangement, readjustment of debt, liquidation or dissolution
proceeding commenced by or against any Person, including any discharge of, or
bar or stay against collecting, all or any of the Guarantied Obligations (or any
interest thereon) in or as a result of any such proceeding, or (n) any action
taken by the Bank that is authorized by this Section or any other provision of
any Loan Document. The Guarantor expressly waives all setoffs and counterclaims
(except the Guarantor shall be entitled to assert any claim that is available to
the primary obligor in respect of the Guarantied Obligations; provided that no
such claim shall excuse the Guarantor from its obligation to pay the Guarantied
Obligations upon demand pursuant to Section 2 hereof), presentment, demands for
payment or performance, notices of nonpayment or nonperformance, protests,
notices of protest, notices of dishonor and all other notices or demands of any
kind or nature whatsoever with respect to the Guarantied Obligations (except
notices expressly required by the Loan Documents), and all notices of acceptance
of this Subsidiary Guaranty or of the existence, creation or incurrence of new
or additional Guarantied Obligations.
Without limiting the foregoing, the Guarantor intends to waive any and all
of the rights and defenses described in California Civil Code Sections
2819-2825, inclusive, and 2856(a) (including any similar laws enacted and in
effect in any other jurisdiction), without regard to the inclusion of any
particular language or phrases in this Subsidiary Guaranty to waive any such
rights and defenses or any references to statutory provisions or judicial
decisions.
7. Condition of the Borrower and Subsidiaries. The Guarantor represents
and warrants to the Bank that the Guarantor has established adequate means of
obtaining from the Borrower, on a continuing basis, financial and other
information pertaining to the businesses, operations and condition (financial
and otherwise) of the Borrower and its properties, and the Guarantor now is and
hereafter will be completely familiar with the businesses, operations and
condition (financial and otherwise) of the Borrower and its properties. The
Guarantor hereby
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expressly waives and relinquishes any duty on the part of the Bank (should any
such duty exist) to disclose to the Guarantor any matter, fact or thing related
to the businesses, operations or condition (financial or otherwise) of the
Borrower or its properties, whether now known or hereafter known by the Bank
during the life of this Subsidiary Guaranty. With respect to any of the
Guarantied Obligations, the Bank need not inquire into the powers of the
Borrower or the officers or employees acting or purporting to act on its behalf,
and all Guarantied Obligations made or created in good faith reliance upon the
professed exercise of such powers shall be secured hereby.
8. Liens on Real Property. In the event that all or any part of the
Guarantied Obligations at any time are secured by any mortgage, charge or other
instruments creating or granting Liens on any interests in real property or
land, the Guarantor authorizes the Bank, upon the occurrence of and during the
continuance of any Event of Default, at its sole option, without notice or
demand and without affecting any Guarantied Obligations of the Guarantor, the
enforceability of this Subsidiary Guaranty, or the validity or enforceability of
any Liens of the Bank on any collateral, to foreclose or enforce any or all
mortgages, charges or other instruments by judicial or nonjudicial sale or by
otherwise selling the relevant real property or land under the terms of such
mortgage, charge or other instrument. The Guarantor expressly waives all rights
and defenses that the Guarantor may have because the obligations of the Borrower
under the Loan Documents to which it is a party are secured by real property.
This means, among other things, that the Bank may collect from the Guarantor
without first foreclosing on any personal or real property collateral pledged by
Borrower. If the Bank forecloses or enforces on any real property collateral
pledged by the Borrower, the amount of the obligations of the Borrower under the
Loan Documents to which it is a party may be reduced only by the price for which
that collateral is sold at the foreclosure sale, even if the collateral is worth
more than the sale price, and the Bank may collect from the Guarantor even if
the Bank, by foreclosing on the real property collateral, has destroyed any
right that the Guarantor may have to collect from the Borrower. This is an
unconditional and irrevocable waiver of any rights and defenses the Guarantor
may have because the obligations of the Borrower under the Loan Documents to
which it is a party are secured by real property. These rights and defenses
include, but are not limited to, any rights or defenses based upon Section 580a,
580b, 580d, or 726 of the California Code of Civil Procedure (and any similar
laws enacted and in effect in any other jurisdiction). The Guarantor further
waives all rights and defenses arising out of an election of remedies by the
Bank, even though that election of remedies, such as a nonjudicial foreclosure
with respect to security for a Guarantied Obligation, has destroyed the
Guarantor's rights of subrogation and reimbursement against the Borrower by the
operation of Section 580d of the California Code of Civil Procedure or
otherwise. The Guarantor expressly waives any right to receive notice of any
judicial or nonjudicial foreclosure or sale of any real property or interest
therein subject to any such deeds of trust or mortgages or other instruments and
the Guarantor's or any other Person's failure to receive any such notice shall
not impair or affect the Guarantor's Obligations or the enforceability of this
Subsidiary Guaranty or any rights of the Bank created or granted hereby.
9. Subordination of Subrogation Claims. Without limiting the provisions
of Section 5 hereof, the Guarantor agrees to waive any and all claims of the
Guarantor against the Borrower, any endorser or any other guarantor or surety
with respect to all or any part of the Guarantied Obligations, or against any of
their respective properties, including any and all rights of subrogation,
reimbursement, indemnification and contribution. Notwithstanding any right of
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the Guarantor to ask, demand, sue for, take or receive any payment from the
Borrower, all rights, Liens and security interests of the Guarantor, whether now
or hereafter arising and howsoever existing, in any assets of the Borrower shall
be and hereby are subordinated to the rights of the Bank.
10. Understandings With Respect to Waivers and Consents. The Guarantor
warrants and agrees that each of the waivers and consents set forth herein are
made with full knowledge of their significance and consequences, with the
understanding that events giving rise to any defense or right waived may
diminish, destroy or otherwise adversely affect rights which the Guarantor
otherwise may have against the Borrower, the Bank or others, or against any
collateral, and that, under the circumstances, the waivers and consents herein
given are reasonable and not contrary to public policy or law. The Guarantor
acknowledges that it has either consulted with legal counsel regarding the
effect of this Subsidiary Guaranty and the waivers and consents set forth
herein, or has made an informed decision not to do so. If this Subsidiary
Guaranty or any of the waivers or consents herein are determined to be
unenforceable under or in violation of applicable law, this Subsidiary Guaranty
and such waivers and consents shall be effective to the maximum extent permitted
by law.
11. Representations and Warranties. The Guarantor hereby makes as to it
each and every representation and warranty applicable to the Guarantor set forth
in Article II of the Credit Agreement as if set forth in full herein.
12. Costs and Expenses. The Guarantor shall pay promptly upon demand, the
reasonable costs and expenses of the Bank in connection with the negotiation,
preparation, syndication, execution and delivery of the Loan Documents and any
amendment thereof or waiver thereof. The Guarantor shall also pay on demand, the
reasonable costs and expenses of the Bank in connection with the restructuring,
reorganization (including a bankruptcy reorganization of the Borrower) and
enforcement or attempted enforcement of the Loan Documents, and any matter
related thereto. The foregoing costs and expenses shall include any applicable
filing fees, recording fees, search fees, and other out-of-pocket expenses and
the reasonable fees and out-of-pocket expenses of any legal counsel (including
reasonably allocated costs of legal counsel employed by the Bank), independent
public accountants and other outside experts retained by the Bank, whether or
not such costs and expenses are incurred or suffered by the Bank in connection
with or during the course of any bankruptcy or insolvency proceedings of the
Borrower.
13. Construction of this Guaranty. This Subsidiary Guaranty is intended to
give rise to absolute and unconditional obligations on the part of the
Guarantor; hence, in any construction hereof, notwithstanding any provision of
any Loan Document to the contrary, this Subsidiary Guaranty shall be construed
strictly in favor of the Bank, as the case may be, in order to accomplish its
stated purpose.
14. Liability. Notwithstanding anything to the contrary elsewhere
contained herein or in any Loan Document to which the Guarantor is a party, the
aggregate liability of the Guarantor hereunder for payment and performance of
the Guarantied Obligations shall not exceed an amount which, in the aggregate,
is $1.00 less than that amount which if so paid or performed by the Guarantor
would constitute or result in a "fraudulent transfer", "fraudulent conveyance",
or
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terms of similar import, under applicable state or federal law, including
without limitation, Section 548 of the Bankruptcy Code. The liability of the
Guarantor hereunder is independent of any other guaranties at any time in effect
with respect to all or any part of the Guarantied Obligations, and the
Guarantor's liability hereunder may be enforced regardless of the existence of
any such guaranties. Any termination by or release of any guarantor in whole or
in part shall not affect the continuing liability of the Guarantor hereunder,
and no notice of any such termination or release shall be required. The
execution hereof by the Guarantor is not founded upon an expectation or
understanding that there will be any other guarantor of the Guarantied
Obligations.
15. THIS SUBSIDIARY GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA.
16. Arbitration.
(a) Arbitration. The parties hereto agree, upon demand by any party, to
submit to binding arbitration all claims, disputes and controversies between or
among them (and their respective employees, officers, directors, attorneys, and
other agents), whether in tort, contract or otherwise arising out of or relating
to in any way (i) the loan and related Loan Documents which are the subject of
the Credit Agreement and this Subsidiary Guaranty and the negotiation,
execution, collateralization, administration, repayment, modification,
extension, substitution, formation, inducement, enforcement, default or
termination thereof; or (ii) requests for additional credit thereunder.
(b) Governing Rules. Any arbitration proceeding will (i) proceed in a
location in California selected by the American Arbitration Association ("AAA");
(ii) be governed by the Federal Arbitration Act (Title 9 of the United States
Code), notwithstanding any conflicting choice of law provision in any of the
documents between the parties; and (iii) be conducted by the AAA, or such other
administrator as the parties shall mutually agree upon, in accordance with the
AAA's commercial dispute resolution procedures, unless the claim or counterclaim
is at least $1,000,000 exclusive of claimed interest, arbitration fees and costs
in which case the arbitration shall be conducted in accordance with the AAA's
optional procedures for large, complex commercial disputes (the commercial
dispute resolution procedures or the optional procedures for large, complex
commercial disputes to be referred to, as applicable, as the "Rules"). If there
is any inconsistency between the terms hereof and the Rules, the terms and
procedures set forth herein shall control. Any party who fails or refuses to
submit to arbitration following a demand by any other party shall bear all costs
and expenses incurred by such other party in compelling arbitration of any
dispute. Nothing contained herein shall be deemed to be a waiver by any party
that is a bank of the protections afforded to it under 12 U.S.C. ss.91 or any
similar applicable state law.
(c) No Waiver of Provisional Remedies, Self-Help and Foreclosure. The
arbitration requirement does not limit the right of any party to (i) foreclose
against real or personal property collateral; (ii) exercise self-help remedies
relating to collateral or proceeds of collateral such as setoff or repossession;
or (iii) obtain provisional or ancillary remedies such as replevin, injunctive
relief, attachment or the appointment of a receiver, before during or after the
pendency
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of any arbitration proceeding. This exclusion does not constitute a waiver of
the right or obligation of any party to submit any dispute to arbitration or
reference hereunder, including those arising from the exercise of the actions
detailed in sections (i), (ii) and (iii) of this paragraph.
(d) Arbitrator Qualifications and Powers. Any arbitration proceeding in
which the amount in controversy is $5,000,000 or less will be decided by a
single arbitrator selected according to the Rules, and who shall not render an
award of greater than $5,000,000. Any dispute in which the amount in controversy
exceeds $5,000,000 shall be decided by majority vote of a panel of three
arbitrators; provided however, that all three arbitrators must actively
participate in all hearings and deliberations. The arbitrator will be a neutral
attorney licensed in the State of California or a neutral retired judge of the
state or federal judiciary of California, in either case with a minimum of ten
years experience in the substantive law applicable to the subject matter of the
dispute to be arbitrated. The arbitrator will determine whether or not an issue
is arbitratable and will give effect to the statutes of limitation in
determining any claim. In any arbitration proceeding the arbitrator will decide
(by documents only or with a hearing at the arbitrator's discretion) any
pre-hearing motions which are similar to motions to dismiss for failure to state
a claim or motions for summary adjudication. The arbitrator shall resolve all
disputes in accordance with the substantive law of California and may grant any
remedy or relief that a court of such state could order or grant within the
scope hereof and such ancillary relief as is necessary to make effective any
award. The arbitrator shall also have the power to award recovery of all costs
and fees, to impose sanctions and to take such other action as the arbitrator
deems necessary to the same extent a judge could pursuant to the Federal Rules
of Civil Procedure, the California Rules of Civil Procedure or other applicable
law. Judgment upon the award rendered by the arbitrator may be entered in any
court having jurisdiction. The institution and maintenance of an action for
judicial relief or pursuit of a provisional or ancillary remedy shall not
constitute a waiver of the right of any party, including the plaintiff, to
submit the controversy or claim to arbitration if any other party contests such
action for judicial relief.
(e) Discovery. In any arbitration proceeding discovery will be permitted
in accordance with the Rules. All discovery shall be expressly limited to
matters directly relevant to the dispute being arbitrated and must be completed
no later than 20 days before the hearing date and within 180 days of the filing
of the dispute with the AAA. Any requests for an extension of the discovery
periods, or any discovery disputes, will be subject to final determination by
the arbitrator upon a showing that the request for discovery is essential for
the party's presentation and that no alternative means for obtaining information
is available.
(f) Class Proceedings and Consolidations. The resolution of any dispute
arising pursuant to the terms of this Agreement shall be determined by a
separate arbitration proceeding and such dispute shall not be consolidated with
other disputes or included in any class proceeding.
(g) Payment Of Arbitration Costs And Fees. The arbitrator shall award all
costs and expenses of the arbitration proceeding.
(h) Real Property Collateral; Judicial Reference. Notwithstanding anything
herein to the contrary, no dispute shall be submitted to arbitration if the
dispute concerns indebtedness
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secured directly or indirectly, in whole or in part, by any real property unless
(i) the holder of the mortgage, lien or security interest specifically elects in
writing to proceed with the arbitration, or (ii) all parties to the arbitration
waive any rights or benefits that might accrue to them by virtue of the single
action rule statute of California, thereby agreeing that all indebtedness and
obligations of the parties, and all mortgages, liens and security interests
securing such indebtedness and obligations, shall remain fully valid and
enforceable. If any such dispute is not submitted to arbitration, the dispute
shall be referred to a referee in accordance with California Code of Civil
Procedure Section 638 et seq., and this general reference agreement is intended
to be specifically enforceable in accordance with said Section 638. A referee
with the qualifications required herein for arbitrators shall be selected
pursuant to the AAA's selection procedures. Judgment upon the decision rendered
by a referee shall be entered in the court in which such proceeding was
commenced in accordance with California Code of Civil Procedure Sections 644 and
645.
(i) Miscellaneous. To the maximum extent practicable, the AAA, the
arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business or by applicable law or
regulation. If more than one agreement for arbitration by or between the parties
potentially applies to a dispute, the arbitration provision most directly
related to the Loan Documents or the subject matter of the dispute shall
control. This arbitration provision shall survive termination, amendment or
expiration of any of the Loan Documents or any relationship between the parties.
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IN WITNESS WHEREOF, the Guarantor has executed this Subsidiary Guaranty by
its duly authorized officer as of the date first written above.
VIRCO MGMT. CORPORATION,
a Delaware corporation
By: /s/ Robert E. Dose
-----------------------
Name: Robert E. Dose
Title: VP Finance
Signature Page to
Virgo Mgmt. Corporation
Subsidiary Guaranty