EXHIBIT 10.17
PERFORMANCE GUARANTY
This PERFORMANCE GUARANTY (this "Performance Guaranty"), dated as of
August 15, 2002, made by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LTD., a Bermuda limited company (the
"Guarantor"), in favor of FOOTHILL CAPITAL CORPORATION, a California
corporation, as arranger and administrative agent for the Lenders referred to
below (in such capacity, the "Agent"). Capitalized terms not otherwise defined
herein that are defined in the Loan Agreement referred to below shall when used
herein have the meanings specified in the Loan Agreement.
PRELIMINARY STATEMENTS:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Funding LLC, a Delaware limited liability company (the
"Borrower"), the lenders that are signatories thereto (each a "Lender" and
collectively, the "Lenders") and the Agent are entering into a Loan and Security
Agreement, dated as of August 15, 2002 (as amended, supplemented or otherwise
modified from time to time, the "Loan Agreement"), pursuant to which the
Borrower may borrow certain revolving loans in an aggregate principal amount not
to exceed $40,000,000 in order to finance the purchase of the Subject Accounts
pursuant to the Purchase Agreement referred to below.
Concurrently with the entering into of the Loan Agreement, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Constructors, Inc., a Delaware corporation ("FW Constructors"), ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Energy Corporation, a Delaware corporation ("FW Energy"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Energy Services, Inc., a California corporation ("FW Energy Services"), ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Power Group, Inc., a Delaware corporation ("FW Power"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
USA Corporation, a Delaware corporation ("FW USA"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, Inc., a
Delaware corporation ("▇▇ ▇▇▇▇", and together with FW Constructors, FW Energy,
FW Energy Services, FW Power and FW USA collectively, the "Originators" and
individually, an "Originator"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital & Finance Corporation, a
Delaware corporation ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital"), as the initial Servicer (in
such capacity, the "Servicer"), and the Borrower, are entering into a Purchase,
Sale and Contribution Agreement, dated as of August 15, 2002 (as amended,
supplemented or otherwise modified from time to time, the "Purchase Agreement"),
pursuant to which the Originators have and will sell and/or contribute
Receivables and Related Rights (as defined in the Purchase Agreement) to the
Borrower.
Concurrently with the entering into of the Loan Agreement and the
Purchase Agreement, the Borrower, the Agent and the Servicer are entering into
the Servicing Agreement, dated as of August 15, 2002 (as amended, supplemented
or otherwise modified from time to time, the "Servicing Agreement"), pursuant to
which ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital will be engaged as the Servicer of the Receivables
and Related Rights.
NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Guarantor hereby agrees as
follows:
SECTION 1. Unconditional Undertaking; Enforcement. (a) The Guarantor
hereby unconditionally and irrevocably undertakes and agrees with the Agent, for
the benefit of the Agent and the Lenders, that, in the event that the Servicer
or any Originator shall fail in any manner whatsoever to perform or observe any
of the terms, covenants, conditions, agreements and undertakings to be performed
or observed by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital in its capacity as Servicer or any
Originator under the Purchase Agreement or the Servicing Agreement in accordance
with the terms thereof (all such terms, covenants, conditions, agreements and
undertakings on the part of the Servicer or any Originator to be performed or
observed being collectively called the "Guaranteed Obligations"), when the same
shall be required to be performed or observed under such agreement, then the
Guarantor shall guarantee and ensure that the Servicer, the Originators, or the
Guarantor or some other Person duly and punctually performs and observes each
Guaranteed Obligation. It shall not be a condition to the accrual of the
obligation of the Guarantor hereunder to guarantee and ensure the performance or
observance of any of the Guaranteed Obligations that the Agent shall have first
made any request of or demand upon or given any notice to the Guarantor or any
other Person or have instituted any action or proceeding against the Guarantor
or any other Person in respect thereof.
(b) The Agent may proceed to enforce the obligations of the Servicer
or any Originator, as the case may be, under this Section 1 after their failure
to perform such obligations in accordance with the terms of the Purchase
Agreement or Servicing Agreement without first pursuing or exhausting any right
or remedy which the Agent may have against the Servicer, any Originator or any
other Person or with respect to the Receivables or the Related Security (each as
defined in the Purchase Agreement), as the case may be.
SECTION 2. Obligation Absolute. The Guarantor undertakes and agrees
with and for the benefit of the Agent to ensure the performance of all
Guaranteed Obligations strictly in accordance with the terms of the Purchase
Agreement and the Servicing Agreement. The obligations of the Guarantor under
this Performance Guaranty are independent of the Guaranteed Obligations, and a
separate action or actions may be brought and prosecuted against the Guarantor
to enforce this Performance Guaranty, irrespective of whether any action is
brought against the Servicer or any Originator or whether the Servicer or any or
all of the Originators is joined in any such action or actions. The obligations
of the Guarantor under this Performance Guaranty shall be absolute and
unconditional irrespective of:
(i) any lack of validity or enforceability of the Purchase
Agreement or the Servicing Agreement (other than as a result of any
lack of validity or enforceability against the Agent);
(ii) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Guaranteed Obligations, or any
other amendment or waiver of or any consent to departure from the
Purchase Agreement or the Servicing Agreement;
(iii) any taking, exchange, release or non-perfection of any
collateral, or any taking, release or amendment or waiver of or consent
to departure from any other guaranty, for all or any of the Guaranteed
Obligations;
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(iv) any manner of application of collateral, or proceeds
thereof, to all or any of the Guaranteed Obligations, or any manner of
sale or other disposition of any collateral for all or any of the
Guaranteed Obligations or any other assets of the Servicer or any
Originator;
(v) any change, restructuring or termination of the corporate
structure or existence of the Servicer or any Originator;
(vi) the insolvency, bankruptcy or reorganization of the
Servicer or any Originator, or any stay or discharge of any of the
Guaranteed Obligations in connection therewith; or
(vii) any other circumstance which might otherwise constitute
a defense (except for a valid defense of the Servicer or any
Originator, as the case may be, not arising as a result of the
Servicer's or any Originator's breach of its obligations under the
Purchase Agreement or the Servicing Agreement, as applicable) available
to, or a discharge of the Servicer or any Originator.
This Performance Guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time any payment or performance of any of the
Guaranteed Obligations is rescinded or must otherwise be returned by the Agent
or any Lender upon the insolvency, bankruptcy or reorganization of the Servicer
or any Originator or otherwise, all as though such payment had not been made.
SECTION 3. Waiver. The Guarantor hereby waives promptness, diligence,
notice of acceptance and any other notice with respect to any of the Guaranteed
Obligations and this Performance Guaranty and any requirement that the Agent
protect, secure, perfect or insure any security interest or lien or any property
subject thereto or exhaust any right or take any action against the Servicer,
any Originator or any other Person or any collateral.
SECTION 4. Subrogation. The Guarantor will not exercise any rights
that it may acquire by reason of any payment or performance hereunder, whether
by way of subrogation, reimbursement or otherwise until all Guaranteed
Obligations have been discharged.
SECTION 5. Consent to Jurisdiction; Waiver of Immunities.
(a) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
PERFORMANCE GUARANTY MAY BE BROUGHT IN ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ IN
THE COUNTY OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS PERFORMANCE
GUARANTY, THE GUARANTOR CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO
THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE GUARANTOR HEREBY IRREVOCABLY
APPOINTS ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, INC., ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, ATTENTION: VICE PRESIDENT AND GENERAL COUNSEL (THE "PROCESS AGENT"),
AS ITS AGENT TO RECEIVE ON BEHALF OF THE GUARANTOR AND ITS PROPERTY SERVICE OF
COPIES OF THE SUMMONS AND COMPLAINT AND ANY OTHER PROCESS WHICH MAY BE SERVED IN
ANY SUCH ACTION OR PROCEEDING. SUCH SERVICE MAY BE MADE BY MAILING (BY CERTIFIED
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OR REGISTERED MAIL, POSTAGE PREPAID AND RETURN RECEIPT REQUESTED) OR DELIVERING
A COPY OF SUCH PROCESS TO THE GUARANTOR IN CARE OF THE PROCESS AGENT AT THE
PROCESS AGENT'S ABOVE ADDRESS, AND THE GUARANTOR HEREBY IRREVOCABLY AUTHORIZES
AND DIRECTS THE PROCESS AGENT TO ACCEPT SUCH SERVICE ON ITS BEHALF. AS AN
ALTERNATIVE METHOD OF SERVICE, THE GUARANTOR ALSO IRREVOCABLY CONSENTS TO THE
SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING
OF COPIES OF SUCH PROCESS TO THE GUARANTOR AT ITS ADDRESS SPECIFIED IN SECTION
10 HEREOF. THE GUARANTOR AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
(b) NOTHING IN THIS SECTION 5 SHALL AFFECT THE RIGHT OF THE
AGENT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE
RIGHT OF THE AGENT TO BRING ANY ACTION OR PROCEEDING AGAINST THE GUARANTOR OR
ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTIONS, INCLUDING, WITHOUT
LIMITATION, THE COURTS OF BERMUDA.
(c) THE GUARANTOR IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT
PERMITTED BY LAW, ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT
OF THIS PERFORMANCE GUARANTY OR ANY DOCUMENT RELATED HERETO. TO THE EXTENT THAT
THE GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, THE GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTY.
SECTION 6. Representations and Warranties. The Guarantor
hereby represents and warrants as follows:
(a) The Guarantor is a limited company duly organized and in
existence under the laws of Bermuda.
(b) The execution, delivery and performance by the Guarantor
of this Performance Guaranty are within the Guarantor's company powers and have
been duly authorized by all necessary company action and do not contravene (i)
the Guarantor's organizational documents or (ii) any law or contractual
restriction binding on or affecting the Guarantor.
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(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery and performance by the Guarantor of
this Performance Guaranty or any other document or instrument to be delivered in
connection herewith.
(d) This Performance Guaranty is the legal, valid and binding
obligation of the Guarantor enforceable against the Guarantor in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity, regardless of whether
enforceability is considered in a proceeding in equity or at law.
(e) Except as set forth in the most recent Form 10-Q quarterly
reports and Form 10-K annual report of the Guarantor or FW LLC and in Schedule
5.6 to the Loan Agreement, to the Guarantor's knowledge, there are no pending or
threatened actions, suits or proceedings affecting the Guarantor or any of its
Subsidiaries before any court, governmental agency or arbitrator, which, if
decided adversely to the Guarantor or any of its Subsidiaries, could reasonably
be expected to materially adversely affect the ability of the Guarantor to
perform its obligations under this Performance Guaranty, or which purports to
affect the legality, validity or enforceability of this Performance Guaranty.
(f) There are no conditions precedent to the effectiveness of
this Performance Guaranty.
SECTION 7. Covenants. The Guarantor agrees that, until the
Purchase and Sale Termination Date (as defined in the Purchase Agreement), the
Guarantor will, unless the Agent shall otherwise consent in writing:
(a) Preserve and maintain its company existence, rights,
franchises and privileges in the jurisdiction of its organization, and qualify
and remain qualified in good standing as a foreign entity in each jurisdiction
where the failure to preserve and maintain such existence, rights, franchises,
privileges and qualification would materially adversely affect the ability of
the Guarantor to perform its obligations hereunder.
(b) Deliver to the Agent, with a copy to each Lender:
(i) as soon as available, but in any event within 90 days
after the end of each of the Guarantor's fiscal years, consolidated financial
statements of the Guarantor and its Subsidiaries for each such fiscal year,
audited by independent certified public accountants reasonably acceptable to the
Agent and certified, without any qualifications, by such accountants to have
been prepared in accordance with GAAP (such audited financial statements to
include a balance sheet, income statement, and statement of cash flow and, if
prepared, such accountants' letter to management),
(ii) as soon as available, but in any event within 45 days
after the end of each fiscal quarter during each of the Guarantor's fiscal
years:
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(A) a company prepared consolidated balance sheet,
consolidated income statement and consolidated statement of cash flow of the
Guarantor and its Subsidiaries for each such fiscal quarter, and
(B) a certificate signed by the chief financial officer of the
Guarantor, to the effect that the financial statements delivered under clause
(A) above have been prepared in accordance with GAAP (except for the lack of
footnotes and being subject to year-end audit adjustments) and fairly present in
all material respects, the financial condition of the Guarantor and its
Subsidiaries on a consolidated basis, and
(iii) as soon as available, but in any event within 10 days
after the end of each month during each of the Guarantor's fiscal years, a
statement of the cash position of the Guarantor and its Subsidiaries (both
domestic and foreign) as of the end of the preceding month.
SECTION 8. Amendments, Etc. No amendment or waiver of any
provision of this Performance Guaranty, and no consent to any departure by the
Guarantor herefrom, shall in any event be effective unless the same shall be in
writing and signed by the Agent, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
SECTION 9. Expenses. The Guarantor will upon demand pay to the
Agent the amount of any and all reasonable expenses, including reasonable
attorneys' fees and expenses, which they may incur in connection with the
exercise or enforcement of any of their respective rights or interests
hereunder.
SECTION 10. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing (including by
facsimile) and mailed, telecopied, telegraphed, telexed, cabled or delivered to
it, if to the Guarantor, at its address at ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Treasurer (facsimile (▇▇▇) ▇▇▇-▇▇▇▇), with a
copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital & Finance Corporation, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, and if to the Agent, at its address designated
in the Loan Agreement, or, as to any party, at such other address as shall be
designated by such party in a written notice to each other party. All such
notices and other communications shall, when mailed or faxed, be effective when
deposited in the mails or faxed, respectively.
SECTION 11. No Waiver; Remedies. No failure on the part of the
Agent to exercise, and no delay in exercising, any right hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and not exclusive of
any remedies provided by law.
SECTION 12. Continuing Agreement. This Performance Guaranty is
a continuing agreement and shall (i) remain in full force and effect until the
later of (x) the payment in full of the Guaranteed Obligations and all other
amounts payable under this Performance Guaranty and (y) one year and a day after
the Purchase and Sale Termination Date, (ii) be binding upon the Guarantor, its
successors and assigns, and (iii) inure to the benefit of, and be enforceable
by, the Agent, the Lenders and their respective successors, transferees and
assigns;
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it being understood that this Performance Guaranty is not a guaranty of the
obligations of any Servicer that replaces ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital in such
capacity.
SECTION 13. GOVERNING LAW. THIS PERFORMANCE GUARANTY SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REFERENCE TO CONFLICT OF LAWS PRINCIPLES.
SECTION 14. WAIVER OF JURY TRIAL. THE GUARANTOR AND THE AGENT
HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS PERFORMANCE GUARANTY OR THE ACTIONS OF THE AGENT IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
SECTION 15. Currency; Judgment. This is an international
financial transaction in which the specification of a currency and payment to
the Agent's Account in New York City is of the essence. Unrestricted and
transferable lawful money of the United States of America ("Dollars") shall be
the currency of account in the case of all payments pursuant to or arising under
this Performance Guaranty, and all such payments shall be made to the Agent's
Account in New York City in immediately available funds. The obligations of the
Guarantor to the Agent under this Performance Guaranty shall not be discharged
by any amount paid in any other currency or in a place other than by deposit
into the Agent's Account in New York City to the extent that the amount so paid
after conversion under this Performance Guaranty and transfer to New York City
does not yield the amount of Dollars in New York City due under this Performance
Guaranty. If, for the purposes of obtaining judgment in any court, it is
necessary to convert a sum due hereunder in Dollars into another currency (the
"Other Currency"), the rate of exchange used shall be that at which the Agent
could, in accordance with normal banking procedures, purchase Dollars with the
Other Currency on the Business Day preceding that on which final judgment is
given. The obligation of the Guarantor in respect of any such sum due from it to
the Agent or the Lenders hereunder shall, notwithstanding any judgment in such
Other Currency, be discharged only to the extent that, on the Business Day
immediately following the date on which the Agent receives any sum adjudged to
be so due in the Other Currency, the Agent may, in accordance with normal
banking procedures, purchase Dollars with the Other Currency. If the Dollars so
purchased are less than the sum originally due to the Agent in Dollars, the
Guarantor agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify the Agent and the Lenders against such loss, and if the
Dollars so purchased exceed the sum originally due to the Agent in Dollars, the
Agent agrees to remit to the Guarantor such excess.
IN WITNESS WHEREOF, the Guarantor has caused this Performance
Guaranty to be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LTD.
By:
Name:
Title:
Accepted as of the
date hereof:
FOOTHILL CAPITAL CORPORATION, as Agent
By:
Name:
Title:
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