GUARANTY AGREEMENT

 

 

 

1. Guaranty of Guaranteed Obligations.  As an inducement to Lenders to make the Loans or otherwise extend credit and other financial accommodations to Borrowers under the Loan Agreement, Guarantor, for value received, does hereby unconditionally, irrevocably, and absolutely guarantee to Administrative Agent and Lenders the prompt and full payment and performance of the Guaranteed Obligations when due, whether at stated maturity, by acceleration or otherwise.  This Guaranty Agreement is and shall be an absolute, unconditional, irrevocable, and continuing unlimited guaranty of payment, and not solely of collection.  Notwithstanding anything in this Guaranty Agreement to the contrary, the amount of the Guaranteed Obligations shall be limited to a maximum aggregate amount equal to the largest amount that would not render this Guaranty Agreement subject to avoidance as a fraudulent transfer or conveyance under any Applicable Laws, after giving effect to all other liabilities of Guarantor, contingent or otherwise, that are relevant under such laws, and after giving effect to the value, as assets (as determined under the applicable provisions of such laws) of any rights of Guarantor to contribution, indemnity, and/or subrogation from any Borrower or any other Person.

2. Representations and Warranties.  Guarantor hereby represents and warrants to Administrative Agent and each other Lender Party as follows:  Guarantor (a) is wholly-owned by Parent (who also wholly-owns Drake), (b) is an Affiliate of Drake and (c) has received and will receive a direct and indirect material benefit from the transactions evidenced by and contemplated in the Loan Agreement and the other Loan Documents.  This Guaranty Agreement is given by Guarantor in furtherance of the direct and indirect business interests, and is necessary to the conduct, promotion, and attainment of the businesses of Borrowers.  The value of the consideration received and to be received by Guarantor is reasonably worth at least as much as the liability and obligation of Guarantor hereunder.  Guarantor is currently informed of the financial condition of Borrowers and of all other circumstances which a diligent inquiry would reveal and which bear upon the risk of nonpayment of the Guaranteed Obligations.  Guarantor has read and understands the terms and conditions of the Loan Documents.  Guarantor is familiar with, and has had an opportunity to review the books and records regarding, the financial condition of Borrowers and is familiar with the value of any and all Collateral intended to be security for the payment of all or any part of the Guaranteed Obligations; provided, that Guarantor is not relying on such financial condition or the existence or value of any such security as an inducement to enter into this Guaranty Agreement. Guarantor has adequate means to obtain, on a continuing basis, information concerning the financial condition of Borrowers.  Guarantor has not been induced to enter into this Guaranty Agreement on the basis of a contemplation, belief, understanding, or agreement that any Person other than Borrowers or Guarantor will be liable to pay the Guaranteed Obligations.  No Lender Party has made any representation, warranty, or statement to Guarantor in order to induce Guarantor to execute this Guaranty Agreement.

 

 

3. Covenants.  Guarantor hereby agrees to comply with each covenant and agreement contained in the Loan Agreement applicable to it as a Credit Party or a Guarantor, as applicable.

4. Obligations Not Impaired.  Guarantor agrees that its obligations under this Guaranty Agreement shall not be released, diminished, impaired, reduced, or affected by the occurrence of any one or more of the following events: (a) lack of organizational authority of any Borrower; (b) any receivership, insolvency, bankruptcy, or other proceedings affecting any Borrower or its property; (c) partial or total release or discharge of any Borrower or any other Person from the performance of any obligation contained in any instrument or agreement evidencing, governing, or securing all or any part of the Guaranteed Obligations, whether occurring pursuant to any Applicable Law or otherwise; (d) any change in the time, manner, or place of payment of, or in any other term of, or any increase or decrease in the amount of, all the Guaranteed Obligations, or any portion thereof, or any other amendment or waiver of any term of, or any consent to departure from any requirement of, any of the Loan Documents; (e) the taking or accepting of any collateral security for all or any part of the Guaranteed Obligations, this Guaranty Agreement, or any other guaranty; (f) the taking or accepting of any other guaranty for all or any part of the Guaranteed Obligations; (g) any failure to acquire, perfect, or continue any security interest or lien on Collateral securing all or any part of the Guaranteed Obligations or on any property securing this Guaranty Agreement; (h) any exchange, release, or subordination of any security interest or lien on any Collateral, or any release, amendment, waiver, or subordination of any term of any guaranty of the Guaranteed Obligations or any other impairment of any collateral security or guaranty now or hereafter securing all or any part of the Guaranteed Obligations; (i) any failure to dispose of any collateral security at any time securing all or any part of the Guaranteed Obligations or this Guaranty Agreement, provided such failure to dispose is commercially reasonable under the circumstances and is otherwise consistent with any Applicable Law; (j) any merger, reorganization, consolidation, or dissolution of any Borrower or any other Person at any time liable for any of the Obligations, any sale, lease, or transfer of any or all of the assets of any Borrower or any other Person at any time liable for any of the Obligations, or any change in name, business, organization, location, composition, structure, or organization of any Borrower or any other Person at any time liable for any of the Obligations; (k) any change of control or any other change in the capitalization or Equity Interest ownership of any Borrower or any other Person at any time liable for any of the Obligations; (l) any invalidity or unenforceability of or defect or deficiency in any of the Loan Documents or all or any part of the Guaranteed Obligations; (m) avoidance or subordination of the Guaranteed Obligations, or any portion thereof, (n) the unenforceability of all or any part of the Guaranteed Obligations against any Borrower because any interest contracted for, charged, or received in respect of the Guaranteed Obligations exceeds the amount permitted by any Applicable Law; (o) any waiver, consent, extension, forbearance, or granting of any indulgence by Administrative Agent or any other Lender Party with respect to the Guaranteed Obligations or any provision of any of the Loan Documents; (p) any delay in or lack of enforcement of any remedies under the Loan Documents; (q) the act of creating all or any part of the Guaranteed Obligations is ultra vires, or the officers or other representatives creating all or any part of the Guaranteed Obligations acted in excess of their authority; (r) any election of remedies by Administrative Agent or any other Lender Party; (s) any of the Loan Documents were forged; (t) the election by Administrative Agent or any other Lender Party in any proceeding under the Bankruptcy Code of the application of Section 1111(b)(2) thereof; (u) any borrowing or grant of a security interest by any Borrower as debtor-in-possession, under Section 364 of the Bankruptcy Code; (v) any use by any Borrower (whether with the consent of Administrative Agent or any other Lender Party or otherwise) of cash collateral during the pendency of any bankruptcy proceeding; (w) the making of post-petition loans or any other provision for the extension of post-petition credit to any Borrower as debtor-in-possession in any bankruptcy proceedings; (x) the disallowance in bankruptcy of all or any portion of the claims of Administrative Agent or any other Lender Party for payment of any of the Guaranteed Obligations; or (y) any other circumstance which might otherwise constitute a legal or equitable discharge or defense available to any Borrower or Guarantor (other than that the Guaranteed Obligations shall have been paid and performed in full excluding any contingent indemnification Obligations that survive termination of the Loan Agreement and this Guaranty Agreement in accordance with the terms thereof and hereof).

 

5. Consent and Waiver.

6. Default.  Upon the occurrence and during the continuation of an Event of Default, Guarantor agrees to pay to Administrative Agent, on behalf of Lender Parties, at its office located in Dallas County, Texas, or at such other place as Administrative Agent may specify to Guarantor in writing, on written demand by Administrative Agent and without further notice of dishonor and without notice of any kind to Borrowers, Guarantor, or any other Person, the full unpaid amount of the Guaranteed Obligations, in immediately available funds, or such lesser amount, if any, as may then be due and payable and demanded by Administrative Agent, on behalf of Lender Parties, from time to time.  If acceleration of the time for payment of any amount payable by Borrowers under or with respect to any of the Guaranteed Obligations is stayed or otherwise delayed upon the insolvency, bankruptcy, or reorganization of any Borrower, all such amounts otherwise subject to acceleration under the terms of the Guaranteed Obligations shall nonetheless be payable by Guarantor hereunder promptly on demand by Administrative Agent, and Guarantor, expressly and unconditionally agrees to make such payment to Administrative Agent, on behalf of Lender Parties, in full.

 

7. No Waiver.  No failure on the part of either Administrative Agent or any other Lender Party to exercise, and no forbearance, delay or omission by either Administrative Agent or any other Lender Party in exercising, any right or remedy hereunder shall impair such right or remedy or operate or be construed as a waiver thereof or any acquiescence therein, nor shall any single or partial exercise of any right or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right or remedy hereunder.

8. Notice of Sale.  In the event that Guarantor is entitled to receive any notice under the UCC, as it exists in the state governing any such notice, of the sale or other disposition of any Collateral or other property securing all or any part of the Guaranteed Obligations or this Guaranty Agreement, it is agreed that at least ten (10) days written notice to Guarantor of the time and place of any public sale, or the time after which any private sale or other disposition may be made of any such Collateral or other property, shall be deemed to be reasonable notice in conformity with such requirements.

9. Payment by Guarantor.  Whenever Guarantor pays any sum which is or may become due under this Guaranty Agreement, written notice must be delivered to Administrative Agent contemporaneously with such payment.

10. Binding Effect.  This Guaranty Agreement is for the benefit of Administrative Agent, each other Lender Party and their successors, and in the event of an assignment by any Lender Party of the Guaranteed Obligations or any part thereof in accordance with the terms of the Loan Agreement, such Lender Party's assigns, and the rights and benefits hereunder, to the extent applicable to the indebtedness, liabilities, and obligations so assigned, shall be deemed transferred with such indebtedness, liabilities, and obligations without necessity of further express action.  This Guaranty Agreement is binding upon Guarantor and its successors and assigns.

11. Subordination of Indebtedness and Liens.  The payment of any and all principal of and interest on all Debt of any Borrower to the Guarantor, whether direct, indirect, fixed, contingent, liquidated, unliquidated, joint, several, or joint and several, now or hereafter existing, due or to become due to Guarantor under any and all circumstances, including, without limitation, any rights of subrogation of Guarantor in respect of any payment by Guarantor under this Guaranty Agreement (herein called the "Subordinated Debt"), shall in all respects be subordinate and junior in right of payment and enforcement to the prior payment and enforcement in full of the Guaranteed Obligations as provided in this Section (excluding contingent Guaranteed Obligations that survive termination of the Loan Agreement and this Guaranty Agreement in accordance with the terms hereof and thereof).  Except to the extent, if any, as may be expressly permitted by the Loan Agreement, no payment shall be made on or with respect to the Subordinated Debt unless and until the Guaranteed Obligations shall have been paid and performed in full (excluding contingent Guaranteed Obligations that survive termination of the Loan Agreement and this Guaranty Agreement in accordance with the terms hereof and thereof).  In the event that Guarantor shall receive any payment on account of the Subordinated Debt in violation of this Section, Guarantor will hold, or cause to be held (as the case may be), any amount so received in trust for the benefit of Administrative Agent and the other Lender Parties and will forthwith deliver, or cause to be delivered (as the case may be), such payment to Administrative Agent, in the form received, to be applied to the Guaranteed Obligations.  All security interests and liens, if any, at any time securing payment of all or any part of the Subordinated Debt (herein called the "Subordinated Liens") shall be and remain inferior and subordinate to the security interests and liens securing payment of all or any part of the Guaranteed Obligations, regardless of whether such Subordinated Liens presently exist or are hereafter created or when such Subordinated Liens were created, perfected, filed, or recorded (provided that the foregoing shall not be interpreted or deemed to allow the existence of any security interests or liens that are prohibited by the Loan Documents).  Guarantor shall not exercise or enforce any creditors' rights or remedies that it may have against any Borrower, or foreclose, repossess, sequester, or otherwise institute any action or proceeding (whether judicial or otherwise, including, without limitation, the commencement of, or joinder in, any bankruptcy, insolvency, reorganization, liquidation, receivership, or other debtor relief law) to enforce the Subordinated Debt or any Subordinated Lien on any assets of any Borrower unless and until the Guaranteed Obligations shall have been paid and performed in full (excluding contingent Guaranteed Obligations that survive termination of the Loan Agreement and this Guaranty Agreement in accordance with the terms hereof and thereof).  The terms and provisions of this Section are given by Guarantor as additional rights and benefits to any and all other subordination agreements heretofore, concurrently herewith, or hereafter executed by Guarantor to or in favor of Administrative Agent and the other Lender Parties, and nothing in this Guaranty Agreement shall be deemed to in any way negate or replace any other such previous, concurrent, or subsequent subordination agreements.

 

12. Right of Setoff.  Guarantor hereby grants to Lender Parties a right of offset to secure the payment of the Guaranteed Obligations and Guarantor's obligations and liabilities hereunder, which right of offset shall be upon any and all monies, securities, and other property of Guarantor, and the proceeds therefrom, now or hereafter held or received by or in transit to Administrative Agent or any other Lender Party from or for the account of Guarantor, whether for safekeeping, custody, pledge, transmission, collection, or otherwise, and also upon any and all deposits (general or special), credits and claims of Guarantor at any time existing against Administrative Agent and any other Lender Party.  Upon the occurrence of any Event of Default, Administrative Agent and each other Lender Party is hereby authorized at any time and from time to time after the occurrence of any Event of Default and during the continuance thereof, without notice to Guarantor, to offset, appropriate and apply any and all items hereinabove referred to against the Guaranteed Obligations and Guarantor's obligations and liabilities hereunder irrespective of whether or not Administrative Agent or such other Lender Party shall have made any demand under this Guaranty Agreement and although such obligations and liabilities may be contingent or unmatured.  Administrative Agent agrees promptly to notify Guarantor after any such offset and application made by Administrative Agent or any other Lender Party, provided that the failure to give such notice shall not affect the validity of such offset and application.  The rights of Administrative Agent and the other Lender Parties under this section are in addition to, and shall not be limited by, any other rights and remedies (including other rights of offset) which Administrative Agent and the other Lender Parties may have.

13. Invalid Provisions.  If any provision of this Guaranty Agreement is held to be illegal, invalid, or unenforceable under present or future laws effective during the term hereof, such provision shall be fully severable, this Guaranty Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision was not a part hereof, and the remaining provisions hereof shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance herefrom.  Notwithstanding any language to the contrary contained herein, no provision herein or in any other Loan Document evidencing the Guaranteed Obligations shall require the payment or permit the collection of interest in excess of the maximum permitted by any Applicable Law.

 

14. Modification in Writing.  No modification, consent, amendment, or waiver of any provision of this Guaranty Agreement, and no consent to any departure by Guarantor herefrom, shall be effective unless the same shall be in writing and signed by a duly authorized officer of Administrative Agent and, as to any modification or amendment, Guarantor, and then shall be effective only in the specific instance and for the specific purpose for which given.

15. Limited Effect of Notices; Consents.  No notice to or demand on, or consent by, Guarantor in any case shall, of itself, entitle Guarantor to any other or further notice or demand, or right to grant or refuse consent, in similar or other circumstances.

16. Cumulative Rights.  All rights and remedies of Administrative Agent and the other Lender Parties under this Guaranty Agreement are cumulative of each other and of every other right or remedy which Administrative Agent and the other Lender Parties may otherwise have under any applicable law or under any other agreement.

17. Expenses.  Guarantor agrees to pay, without duplication of any amounts paid under Section 14.5 of the Loan Agreement, on written demand all reasonable costs and expenses incurred by Administrative Agent or any other Lender Party in connection with the negotiation, preparation, execution, and performance of this Guaranty Agreement and any and all amendments, modifications, renewals, restatements, and/or supplements hereto from time to time, including, without limitation, reasonable and documented attorneys fees.  If Guarantor should breach or fail to perform any provision of this Guaranty Agreement, Guarantor agrees to pay to Administrative Agent and Lender Parties all reasonable costs and expenses incurred by Administrative Agent and Lender Parties in the enforcement of this Guaranty Agreement from time to time, including, without limitation, reasonable attorneys fees.

18. GOVERNING LAW; VENUE; WAIVER OF JURY TRIAL.

19. Notices.  All notices or demands by any party relating to this Guaranty Agreement shall be given as set forth in the Loan Agreement.

20. Survival.  All representations, warranties, covenants, and agreements of Guarantor in this Guaranty Agreement shall survive the execution of this Guaranty Agreement.

21. Counterparts.  This Guaranty Agreement may be executed in any number of counterparts and a telecopy or other electronic transmission of any such executed counterpart shall be deemed valid as an original.

22. FINAL AGREEMENT.  THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES HERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES HERETO.

 

GUARANTY AGREEMENT (BLONDER TONGUE FAR EAST, LLC) - Page 11

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