Exhibit 10.13
GUARANTY AGREEMENT
dated September 8, 1997
Between the Registrant and The First National Bank of
Chicago
HURCO GUARANTY
THIS HURCO GUARANTY, dated as of September __, 1997, executed by HURCO
COMPANIES, INC. (the "Guarantor"), in favor of THE FIRST NATIONAL BANK OF
CHICAGO, a national banking association ("FNBC").
WHEREAS, the Company is the indirect parent of Hurco Europe Limited and
Hurco GmbH Werkzeugmaschinen CIM - Bausteine Vertrieb und Service (collectively,
the "European Subsidiaries"); and
WHEREAS, the European Subsidiaries are party with FNBC to a Letter
Agreement as of even date herewith (the "European Facility"), pursuant to which
FNBC may lend to the European Subsidiaries amounts not to exceed in the
aggregate at any time outstanding the Dollar Equivalent (as defined therein) of
$5,000,000; and
WHEREAS, it is a condition to the effectiveness of the European
Facility and to other loan transactions between the Company and affiliates of
FNBC that the Company guarantee payment and performance of all obligations of
the European Subsidiaries under the European Facility (collectively, the
"Obligations") pursuant to this Guaranty Agreement.
NOW, THEREFORE, for valuable consideration, receipt of which is
acknowledged, and as further consideration to FNBC to enter into the
transactions contemplated by the European Facility (together with this Guaranty
and all other documents, agreements, instruments and certificates executed in
connection therewith, the "Operative Documents"), the Guarantor agrees with FNBC
as follows:
1. Guaranty of Obligations. (a) The Guarantor hereby absolutely and
unconditionally, as primary obligor and not merely as surety, (i) guarantees to
FNBC the prompt payment of the principal of and any and all accrued and unpaid
interest on the Obligations when due, whether by scheduled maturity,
acceleration or otherwise, all in accordance with the terms of this Guaranty and
the other Operative Documents, including amounts due under any extensions
thereof or substitutions therefor, and all other amounts which may be payable by
the Company or the Guarantor to FNBC in connection with or pursuant to the
Operative Documents, including without limitation default interest,
indemnification payments, and all costs and expenses incurred by FNBC in
connection with enforcing any obligations of the European Subsidiaries or either
of them or the Guarantor hereunder or thereunder, including without limitation
the reasonable fees and disbursements of counsel for FNBC, and (ii) guarantees
the prompt performance and observance of each term, covenant or agreement
contained herein or therein to be performed or observed on the part of the
European Subsidiaries or either of them or the Guarantor.
(b) If for any reason any duty, agreement or obligation of the
European Subsidiaries or either of them shall not be performed or observed as
provided for in the Operative Documents, or if any amount payable under or in
connection with the Obligations shall not be paid in full when the same becomes
due and payable, the Guarantor undertakes to perform or cause to be performed
promptly each of such duties, agreements and obligations and to pay forthwith
each such amount to FNBC, regardless of any defense or setoff or counterclaim
which the European Subsidiaries or either of them may have or assert, and
regardless of any other condition or contingency.
2. Nature of Guaranty. This Guaranty is an absolute and unconditional
and irrevocable guaranty of payment and not a guaranty of collection and is
wholly independent of and in addition to other rights and remedies of FNBC and
is not contingent upon FNBC pursuing any such rights and remedies, such pursuit
being hereby waived by the Guarantor. This Guaranty covers all present and
future Obligations, whether direct or indirect and absolute or contingent, of
whatever nature and however arising or evidenced.
3. Waivers and Other Agreements. The Guarantor hereby unconditionally
(a) waives any requirement that FNBC, in the event of any default by the
European Subsidiaries or either of them, first make demand upon, or seek to
enforce remedies against, the European Subsidiaries or either of them before
demanding payment under or seeking to enforce this Guaranty, (b) covenants that
this Guaranty will not be discharged except by complete payment and performance
of all Obligations of the European Subsidiaries or either of them to FNBC, (c)
agrees that this Guaranty shall remain in full force and effect without regard
to, and shall not be affected or impaired by, without limitation, any
invalidity, irregularity or unenforceability in whole or in part of this
Agreement or any other Operative Document, or any limitation on the liability of
the European Subsidiaries or either of them thereunder, or any limitation on the
method or terms of payment which may now or hereafter be caused or imposed in
any manner whatsoever, (d) waives diligence, presentment and protest with
respect to, and any notice of default or dishonor in the payment of any amount
at any time payable by the European Subsidiaries or either of them under or in
connection with the Obligations, and further waives any requirement of notice of
acceptance of, or other formality relating to, this Guaranty, and (e) agrees
that the amounts guaranteed hereunder shall include any amounts paid by the
European Subsidiaries or either of them or the Guarantor to FNBC which may be
required to be returned to the payor or to its representative or to a trustee,
custodian or receiver for the European Subsidiaries or either of them or the
Guarantor.
4. Obligations Absolute. The obligations, covenants, agreements and
duties of the Guarantor under this Guaranty shall not be released, affected or
impaired by any of the following, whether or not undertaken with notice to or
consent of the Guarantor: (a) any assignment or transfer, in whole or in part,
of the Obligations, or (b) any waiver by FNBC, or by any other person, of the
performance or observance by the European Subsidiaries or either of them of any
of the agreements, covenants, terms or conditions contained in the Operative
Documents, or (c) any indulgence in or the extension of the time for payment by
the European Subsidiaries or either of them of any amounts payable under or in
connection with this Agreement or any other Operative Document, or of the time
for performance by the European Subsidiaries or either of them of any other
obligations under or arising out of the Operative Documents or any related
document, or the extension or renewal thereof, or (d) the modification,
amendment or waiver from time to time of this Guaranty or any other Operative
Document, any such modification, amendment, or waiver being expressly authorized
without further notice to or consent of the European Subsidiaries or either of
them or the Guarantor, or (e) the voluntary or involuntary liquidation, sale, or
other disposition of all or substantially all of the assets of the European
Subsidiaries or either of them or any receivership, insolvency, bankruptcy,
reorganization, or other similar proceedings affecting the European Subsidiaries
or either of them or any of its assets, or (f) the release of any security for
the Obligations, or the impairment of or failure to perfect an interest in any
such security, or (g) the merger or consolidation of the European Subsidiaries
or either of them or the Guarantor with any other person, or (h) the release or
discharge of the European Subsidiaries or either of them or the Guarantor from
the performance or observance of any agreement, covenant, term or condition
contained in the Operative Documents by operation of law, or (j) any other cause
whether similar or dissimilar to the foregoing (other than full payment and
performance of the Obligations) which would release, affect or impair the
obligations, covenants, agreements or duties of the European Subsidiaries or
either of them or the Guarantor hereunder or thereunder.
5. Remedies of FNBC. In the event that any of the Obligations is not
promptly paid by the European Subsidiaries or either of them when it becomes
due, upon demand or otherwise, the holder thereof may require the Guarantor to
pay all or any portion of the outstanding principal balance thereof, with
interest thereon to date of payment, without regard to any security for or other
guaranty of such indebtedness; provided, however, that nothing herein contained
shall prevent FNBC from instituting legal proceedings with respect to any of the
Obligations with or without making the European Subsidiaries or either of them
or the Guarantor a party to the suit or from exercising any other rights
available to it, and only the net proceeds therefrom, after deducting all
charges and expenses, shall be applied to reduce the amount due on the
Obligations.
6. Subrogation Agreement. If the Guarantor makes a payment in respect
of the Obligations, it shall be subrogated to the rights of the payee against
the European Subsidiaries with respect to such payment; provided, that the
Guarantor hereby waives its rights to any payment by way of subrogation until
all the Obligations shall have been paid or performed in full.
7. Representations and Warranties. As of the date hereof and as of the
date of each loan or other advance made by FNBC to the European Subsidiaries or
either of them, the Guarantor represents and warrants that:
(a) Corporate Existence and Power. The Guarantor is a
corporation duly organized, validly existing and in good standing under the laws
of State of Indiana and is duly qualified to do business in each additional
jurisdiction where such qualification is necessary under applicable law and
where failure to be so duly qualified would have a material, adverse effect on
the financial condition of the Guarantor. The Guarantor has all requisite
corporate power to own its properties and to carry on its business as now being
conducted and as proposed to be conducted, and to execute and deliver this
Guaranty and to engage in the transactions contemplated by this Guaranty.
(b) Corporate Authority. The execution, delivery and
performance by the Guarantor of this Guaranty are within its corporate powers,
have been duly authorized by all necessary corporate action and are not in
contravention of any law, rule or regulation, or of any judgment, decree, writ,
injunction, order or award of any arbitrator, court or governmental authority,
or of the terms of the Guarantor's charter or by-laws, or of any contract or
undertaking to which the Guarantor is a party or by which it or its property may
be bound or affected.
(c) Binding Effect. This Guaranty is the legal, valid
and binding obligation of
the Guarantor, enforceable against the Guarantor in accordance with its terms.
8. Covenants. The Guarantor agrees that, until all Obligations have
been satisfied, unless FNBC shall otherwise consent in writing, it shall
preserve and maintain its corporate existence, rights, privileges, licenses,
franchises and permits and qualify and remain qualified as a validly existing
corporation in good standing in each jurisdiction in which such qualification is
necessary under applicable law and where failure to be so qualified would have a
material adverse effect on the financial condition of the Guarantor.
9. Remedies. (a) Upon the occurrence and during the continuance of any
Event of Default (as defined in any of the Operative Documents), FNBC may, in
addition to the remedies provided in the Operative Documents, enforce its rights
either by suit in equity, or by action at law, or by other appropriate
proceedings, whether for the specific performance (to the extent permitted by
law) of any covenant or agreement contained in this Guaranty or in aid of the
exercise of any power granted in this Guaranty and may enforce payment under
this Guaranty and any of its other rights available at law or in equity.
(b) Upon the occurrence and during the continuance of any
Event of Default (as defined in any of the Operative Documents), FNBC is hereby
authorized at any time and from time to time, without notice to the Guarantor
(any requirement for such notice being expressly waived by the Guarantor), to
set off and apply against any and all of the obligations of the Guarantor then
or thereafter existing under this Guaranty all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by FNBC to or for the credit or the account of the Guarantor and
any property of the Guarantor from time to time in FNBC's possession,
irrespective of whether or not FNBC shall have made any demand hereunder and
although such obligations may be contingent and unmatured. The rights of FNBC
under this paragraph are in addition to other rights and remedies (including,
without limitation, other rights of setoff) which FNBC may have.
(c) To the extent that it lawfully may, the Guarantor agrees
that it will not at any time insist upon or plead, or in any manner whatever
claim or take any benefit or advantage of any applicable present or future stay,
extension or moratorium law, which may affect observance or performance of the
provisions of this Guaranty or any Operative Document; nor will it claim, take
or insist upon any benefit or advantage of any present or future law providing
for the evaluation or appraisal of any security for its obligations hereunder or
the obligations under the Operative Documents prior to any sale or sales thereof
which may be made under of by virtue of any instrument governing the same; nor
will it, after any such sale or sales, claim or exercise any right, under any
applicable law, to redeem any portion of such security so sold.
10. Severability; Enforceability. If any one or more provisions of this
Guaranty should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected, impaired, or prejudiced thereby. If any
portion of the obligations of the Guarantor under this Guaranty shall be
determined by a court of competent jurisdiction to be invalid, unenforceable or
avoidable, the remaining portion of the Guarantor's obligations under this
Guaranty shall not in any way be affected, impaired, or prejudiced thereby and
shall remain valid and enforceable to the fullest extent permitted by applicable
law. If all or any portion of the Guarantor's obligations under this Guaranty
would otherwise be determined by a court of competent jurisdiction to be
invalid, unenforceable or avoidable under Section 548 of the federal Bankruptcy
Code or under a similar applicable law of any jurisdiction, then,
notwithstanding any other provisions of the Guaranty to the contrary, the
Guarantor's obligation or portion thereof under this Guaranty shall be limited
to the greatest of (i) the value of any quantifiable economic benefits accruing
to the Guarantor as a result of this Guaranty, (ii) an amount equal to 95% of
the excess on the date the relevant liabilities were incurred of the present
fair saleable value of the Guarantor's assets over the amount of all the
Guarantor's liabilities, contingent or otherwise, and (iii) the maximum amount
for which this Guaranty is determined to be enforceable.
11. Amendments, Etc. This Guaranty may be amended from time to time and
any provision hereof may be waived by the parties hereto. No such amendment or
waiver of any provision of this Guaranty nor consent to any departure by the
Guarantor therefrom shall in any event be effective unless the same shall be in
writing and signed by FNBC, and then such amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
12. Notices. All notices and other communications hereunder shall be in
writing and shall be delivered or sent to the Guarantor at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ATTN: Chief Financial Officer, Facsimile No. (317)
328-2811, and to FNBC at ▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ENGLAND,
or to such other address as may be designated by the Guarantor or FNBC by notice
to the other party hereto. All notices and other communications shall be deemed
to have been given at the time of actual delivery thereof to such address, or if
sent by certified or registered mail, postage prepaid, to such address, on the
third day after the date of mailing, provided, however, that notices to FNBC
shall not be effective until received.
13. Conduct No Waiver; Remedies Cumulative. The obligations of the
Guarantor under this Guaranty are continuing obligations and a fresh cause of
action shall arise in respect of each event of default hereunder. No course of
dealing on the part of FNBC, nor any delay or failure on the part of FNBC in
exercising any right, power or privilege hereunder shall operate as a waiver of
such right, power or privilege or otherwise prejudice FNBC's rights and remedies
hereunder; nor shall any single or partial exercise thereof preclude any further
exercise thereof or the exercise of any other right, power or privilege. No
right or remedy conferred upon or reserved to FNBC under this Guaranty is
intended to be exclusive of any other right or remedy, and every right and
remedy shall be cumulative and in addition to every other right or remedy given
hereunder or now or hereafter existing under any applicable law. Every right and
remedy given by this Guaranty or by applicable law to FNBC may be exercised from
time to time and as often as may be deemed expedient by FNBC.
14. Reliance on and Survival of Various Provisions. All terms,
covenants, agreements, representations and warranties of the Guarantor made
herein or in any certificate or other document delivered pursuant hereto shall
be deemed to be material and to have been relied upon by FNBC, notwithstanding
any investigation heretofore or hereafter made by FNBC or on FNBC's behalf.
15. Successors and Assigns. The rights and remedies of FNBC hereunder
shall inure to the benefit of, and the duties and obligations of the Guarantor
hereunder shall be binding upon their respective successors and assigns,
provided that the Guarantor may not assign its duties and obligations hereunder
without FNBC's consent.
16. Governing Law. This Guaranty is a contract made under, and the
rights and obligations of the parties hereunder, shall be governed by and
construed in accordance with, the laws of the State of Indiana applicable to
contracts to be made and to be performed entirely with such State.
17. Definitions; Headings. Terms used but not defined herein and which
are defined in the Operative Documents shall have the respective meanings
ascribed thereto in the Operative Documents. The headings of the various
subdivisions hereof are for convenience of reference only and shall in no way
modify any of its terms or provisions hereof.
18. Construction of Certain Provisions. All computations required
hereunder and all financial terms used herein shall be made or construed in
accordance with generally accepted accounting principles unless such principles
are inconsistent with the express requirements of this Guaranty. If any
provision of this Guaranty refers to any action to be taken by any person, or
which such person is prohibited from taking, such provision shall be applicable
whether such action is taken directly or indirectly by such person, whether or
not expressly specified in such provision.
19. Waiver of Jury Trial. FNBC and the Guarantor, after consulting or
having had the opportunity to consult with counsel, knowingly, voluntarily and
intentionally waive any right either of them may have to a trial by jury in any
litigation based upon or arising out of this Guaranty or any related instrument
or agreement or any of the transactions contemplated by this Guaranty or any
course of conduct, dealing, statements (whether oral or written) or actions of
either of them. Neither FNBC nor the Guarantor shall seek to consolidate, by
counterclaim or otherwise, any such action in which a jury trial has been waived
with any other action in which a jury trial cannot be or has not been waived.
These provisions shall not be deemed to have been modified in any respect or
relinquished by either FNBC or the Guarantor except by a written instrument
executed by both of them.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed and delivered as of the day and year first above written.
HURCO COMPANIES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
Its:_______________