Exhibit 10.34
GUARANTY & AGREEMENT
Guaranty and Agreement ("Guaranty") between the Guarantor named below and
Svenska Handelsbanken AB (publ) (including any branch, agency or other office
thereof, the "Bank"), dated as of .. May, 2005.
1. SPECIAL TERMS
The following terms and provisions shall apply to this Guaranty; the
meaning of any term in this or other sections of this Guaranty expressed in
the singular shall apply, mutatis mutandis, to the same term expressed in
the plural and vice versa.
BORROWER:
American Technical Ceramics Europe AB,
Swedish company registration No. 556572-7756,
address: ▇▇▇▇▇▇▇▇▇▇▇ ▇, ▇▇-▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇.
GUARANTOR:
American Technical Ceramics Corp.
Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇.▇. ▇▇▇▇▇-▇▇▇▇ ▇▇▇.
GUARANTEED OBLIGATIONS: All obligations of the Borrower to the Bank, now
existing or hereafter arising under the following documents (including any
modifications thereof or substitutions therefor, the "Loan Documents"):
DOCUMENTS:
Instrument of Debt dated September 9, 2005.
PRINCIPAL AMOUNT GUARANTEED:
SEK twelve million (12,000,000).
2. GUARANTY
2.1 Continuing Guaranty of Payment. In consideration of the Bank agreeing
to the Loan Documents and/or extending or continuing credit to the Borrower
in connection therewith, the Guarantor irrevocably, absolutely and
unconditionally guarantees to the Bank the payment when due of all
Guaranteed Obligations, provided that the amount thereof so guaranteed
shall not exceed the Principal Amount Guaranteed, as stated in Section 1,
together with interest thereon and other charges related thereto. For
purposes of this Guaranty, the Guaranteed Obligations shall be due on the
earliest of:
a. the due date thereof (by acceleration or otherwise),
b. with respect to any obligation due on demand, upon demand therefor
made by the Bank upon the Borrower or the Guarantor,
c. the giving of notice by the Bank to the Borrower or Guarantor of the
occurrence of any default by the Guarantor hereunder (including,
without limitation, any material misrepresentation by the Guarantor
herein or in connection herewith),
d. the occurrence of a material adverse change in the financial
condition, business or operations of the Borrower or the Guarantor,
e. the Borrower shall disaffirm or disavow any of its obligations under
the Loan Documents or the Guarantor shall disaffirm any of its
obligations hereunder,
f. the Borrower or the Guarantor shall admit in writing its inability to
pay its debts as they become due,
g. any indebtedness (direct or contingent) for borrowed money of the
Borrower shall not be paid as and when the same becomes due and
payable, including any applicable grace period, or
h. the commencement of any bankruptcy, insolvency or similar proceeding
by or against the Borrower or the Guarantor.
This is a guaranty of payment rather than of collection; this is also a
continuing guaranty and all liabilities to which this Guaranty applies, or
may apply, under the terms hereof shall be presumed to have been created in
reliance hereon.
2.2 Nature of Obligations. The obligations of the Guarantor to make payments
to the Bank hereunder are direct and primary obligations which shall not be
discharged for any reason until the Bank has been indefeasibly paid in full.
Without limiting the generality of the foregoing, the obligations of the
Guarantor hereunder shall remain in force irrespective of:
a. any invalidity, illegality or unenforceability of, or any defect in,
any of the Loan Documents or Guaranteed Obligations,
b. the existence or absence of any legal action to enforce the Guaranteed
Obligations or the Loan Documents or any security therefor, the
issuance of any judgment therefor or the execution of any such
judgment, or
c. any other circumstance which might otherwise constitute a defense
available to or discharge of, a guarantor or surety of any type other
than any affirmative defense which the Borrower may have with respect
to the Guaranteed Obligations.
This Guaranty is several and independent of, and may be enforced regardless
of, any other obligation (direct or contingent) of the Guarantor or any
other "Person" (such term to include any person or legal or governmental
entity, association, agency or instrumentality) with respect to the
Guaranteed Obligations.
2.3 Payments. All payments by the Guarantor hereunder shall be made to the
Bank without set-off or counterclaim at its office set forth below (or as the
Bank may otherwise direct) in SEK and in immediately available funds.
3. SPECIAL AGREEMENTS OF GUARANTOR
3.1 Subordination. Subject to the next following sentence of this Section
3.1:
a. all claims of the Guarantor against the Borrower shall be subject and
subordinate to the prior payment to the Bank of all Guaranteed
Obligations and all obligations of the Guarantor hereunder, and
b. the Guarantor shall not be entitled to receive any payment or
exercise any set-off in respect of any such claim and, to the extent
any such payment is received (whether directly, by way of dividend in
bankruptcy, set-off or otherwise), the Guarantor will forthwith
deliver the same (or the value thereof) to the Bank in precisely the
form received (except for endorsement or assignment where necessary),
for application to the Guaranteed Obligations and, until so
delivered, the same shall be held in trust as the property of the
Bank.
Notwithstanding the foregoing, until the occurrence of any default or event
of default under the Loan Documents or this Guaranty, the Guarantor may
receive and retain payment in respect of any obligation owed to it by the
Borrower. If the Guarantor fails to make any necessary endorsement or
assignment on any instrument of payment to which the Bank is entitled, the
Bank and any of its officers or employees are hereby irrevocably authorized
to make the same on behalf of the Guarantor.
3.2 No Subrogation. The Guarantor hereby waives any right of subrogation
that it may have with respect to any payment that it may have made to the
Bank hereunder.
3.3 No Contribution. The Guarantor agrees that it shall have no legal or
equitable right or claim (by way of indemnification, contribution or
otherwise) against any subsidiary or affiliate of the Bank which has issued
a guaranty to the Bank in respect of the Guaranteed Obligations.
3.4 Waivers. Except to the extent required by law which cannot be waived,
the Guarantor waives notice of acceptance of this Guaranty and notice of
any liability to which it may apply, and waives diligence, presentment,
demand for payment, protest, notice of dishonor or nonpayment of any such
liabilities, suit or taking other action or making any demand by the Bank
against, and any other notice to, any party liable thereon (including the
Guarantor). The Guarantor agrees that the Bank may at any time and from
time to time, upon or without any terms or conditions and in whole or in
part:
a. change the manner, place or terms of, and/or change or extend the time
of payment of, renew or alter, any of the Guaranteed Obligations, any
security therefor, or any liability incurred directly or indirectly in
respect thereof, and this Guaranty shall apply to the Guaranteed
Obligations so changed, extended, renewed or altered,
b. fail to record, perfect or protect, or sell, exchange, release,
surrender, realize upon or otherwise deal with in any manner and in
any order, any property or Person whatsoever at any time securing or
guaranteeing the Guaranteed Obligations or any liabilities (including
any of those hereunder) incurred directly or indirectly in respect
thereof or hereof, and/or any offset thereagainst,
c. exercise or refrain from exercising any rights against the Borrower or
any other Person (including any guarantor) or otherwise act or refrain
from acting,
▇. ▇▇▇▇▇▇ or compromise any of the Guaranteed Obligations, any security
therefor or any liability (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part of the Guaranteed
Obligations to the payment of any other liability (whether due or not)
of the Borrower to the creditors of the Borrower (including the Bank),
e. apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Bank regardless of
what liability or liabilities of the Borrower remain unpaid, provided
that payments by the Guarantor pursuant to this Guaranty shall be
applied to its obligations hereunder, but in such order as the Bank
may determine,
f. consent to or waive any breach of any act, omission or default under,
or modify or amend any provision of, the Loan Documents, and/or
g. increase the amount of indebtedness of the Borrower to the Bank,
whether under the Loan Documents or otherwise.
It is understood and agreed that the Bank may take any such action without
the consent of, or notice to, the Guarantor, without incurring
responsibility to the Guarantor, and without impairing or releasing the
obligations of the Guarantor hereunder.
3.5 Amounts Reclaimed. If claim is made upon the Bank for repayment or
recovery of any amount received on account of any of the Guaranteed
Obligations and the Bank repays all or part of said amount by reason of:
a. any judgment, decree or order of any court, administrative body or
trustee in bankruptcy (or other Person acting on behalf of the
Borrower or its estate) or,
b. any settlement or compromise of any such claim effected by the Bank
with any such claimant (including the Borrower),
then, and in any such event, the Guarantor agrees that any such judgment,
decree, order, settlement or compromise shall be binding upon the
Guarantor, notwithstanding any cancellation of the Loan Documents or this
Guaranty, and the Guarantor shall be and remain liable to the Bank
hereunder for the amount so repaid or recovered to the same extent as if
such amount had never been received by the Bank; provided, however, that
the foregoing shall not apply in the event of a repayment or recovery
resulting from any affirmative defense asserted by the Borrower.
3.6 Interest; Late Fee. If the Guarantor fails to pay when due any
obligation hereunder, then, to the extent permitted by law, such obligation
shall bear interest, payable on demand, from the due date thereof until
paid at a fluctuating rate per annum equal to the rate which the Bank
announces from time to time at its principal office as its Base Lending
Rate; provided that no such additional interest shall be payable in respect
of any such
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obligation on which interest is simultaneously accruing pursuant to the
Loan Documents.
3.7 The Borrower. The Guarantor will not cease to own (directly or
indirectly), free and clear of all liens and encumbrances, the interest in
the Borrower which it presently owns and will not agree to sell or subject
to any lien, encumbrance or any other security device such interest at any
future time, until the Loan Documents are terminated and all Guaranteed
Obligations and all obligations of the Guarantor hereunder are paid in
full.
3.8 Information. The Guarantor will promptly furnish to the Bank its
audited annual report (including its annual financial statements which
shall be prepared in accordance with generally accepted accounting
principles consistently applied) as well as any interim reports as soon as
they are available; however not later than, in case of the annual reports
120 days, and in other cases 60 days, after the end of the financial period
to which they relate, and such information regarding its and the Borrower's
business, affairs and financial condition as the Bank may from time to time
reasonably request.
4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS
In order to induce the Bank to agree to the Loan Documents, to extend or
continue the credit provided thereby and to accept this Guaranty, the
Guarantor makes the following representations, warranties and agreements
which shall survive the execution and delivery of this Guaranty:
4.1 Organizational Status and Power. The Guarantor:
a. is, and will continue to be, duly organized and validly existing
under the law of the jurisdiction of its organization, as indicated
in Section 1, and
b. has the power to own its assets, to conduct its business as now
conducted and to enter into and perform the provisions of this
Guaranty.
4.2 Legality. The entering into and performance by the Guarantor of this
Guaranty:
a. have been duly authorized by all necessary corporate and stockholder
action or other action required by its organizational documents, and
b. do not contravene any existing law or any legal order applicable to,
or license or permit granted to, the Guarantor, or any agreement or
instrument to which the Guarantor is a party or to which it or any of
its assets is subject or any provision of the Guarantor's
organizational documents.
This Guaranty is the legal, valid and binding obligation of the Guarantor,
enforceable in accordance with its terms.
4.3 Governmental Approvals. Neither any action by or with any U.S.
governmental or public body or authority (including, without limitation, any
exchange control or monetary authority), or any subdivision thereof, nor any
other legal formality is required in connection with the entering into,
performance or enforcement of this Guaranty (collectively, "Governmental
Approvals"), except such as has been obtained or taken and with respect to
which a copy or other satisfactory evidence thereof has been furnished to
the Bank. The Guarantor will maintain all requisite Governmental Approvals
until the Loan Documents are terminated and the Guaranteed Obligations and
all of its obligations hereunder are paid in full.
4.4 Financial Condition. The most recent year-end financial statements of
the Guarantor furnished to the Bank prior to the date hereof have been
prepared in accordance with generally accepted accounting principles
consistently applied and fairly present the financial condition and the
results of operations of the Guarantor as at the end of and for the
reporting period covered thereby. There are no material liabilities or any
material unrealized or anticipated losses from unfavorable commitments which
are not disclosed in such financial statements. There has been no material
adverse change in the operations, business or financial condition of the
Guarantor from that set forth in such financial statements; and there are no
legal proceedings pending or, to the knowledge of the Guarantor threatened,
against or affecting the Guarantor with respect to any agreement or
instrument to which it is a party or to which it or any of its assets are
subject, which might (individually or in the aggregate) result in such a
material adverse change.
4.5 Investment Company Act. The Guarantor is not required to register under
the Investment Company Act of 1940, as amended (the "Act"), and the entering
into of this Guaranty and the performance thereof do not violate any
provision of the Act.
4.6 Borrower. The Guarantor owns and shall continue to own (directly or
indirectly) the ownership interest in the Borrower indicated in the first
paragraph of this Guaranty.
On each anniversary of the date of this Agreement, the Guarantor shall deliver
to the Bank a certificate of an authorized officer of the Guarantor wherein the
Guarantor shall reaffirm to the Bank the continuing truth and validity of the
representations and warranties set forth in the foregoing Section 4.The failure
of the Guarantor to deliver and/or the Bank to demand such delivery of the
foregoing certificate shall in no way affect or invalidate the continuing nature
of the representations and warranties set forth in the foregoing Section 4.
5. MISCELLANEOUS
5.1 Payment of Expenses. The Guarantor agrees to pay all out-of-pocket
costs and expenses of the Bank arising in connection with the preparation
administration and enforcement of, or preservation of its rights under,
this Guaranty (including, without limitation, the fees and expenses of
attorneys for the Bank), and all stamp taxes (including interest and
penalties, if any) which may be payable in respect of this Guaranty or of
any modification of this Guaranty.
5.2 Judgment Currency. If, for the purpose of obtaining judgment in any
court, it is necessary to convert a sum due hereunder into any other
currency (the "Other Currency"), the rate of exchange used shall be that
with which in accordance with normal banking procedures the Bank could
purchase United States 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 sum due from it to the Bank hereunder,
notwithstanding judgment in such Other Currency, shall be discharged only
to the extent that on the business day following receipt by the Bank of any
sum
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adjudged to be so due in the Other Currency, the Bank may in accordance
with normal banking procedures purchase United States dollars with the
Other Currency; if the United States dollars so purchased shall be less
than the sum originally due to the Bank in United States dollars, the
Guarantor agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify the Bank against such loss.
5.3 Entire Agreement; Modification. This Guaranty may be modified only by
an instrument in writing signed by the party against whom enforcement of
the modification is sought. This Guaranty and the Loan Documents constitute
the entire understanding and agreement of the parties hereto with respect
to the subject matter hereof, and shall supersede all previous agreements
and understandings with respect thereto.
5.4 THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK (without regard to principles of conflicts of law).
5.5 Notices. Communications given to any party in connection with this
Guaranty shall be in English and in writing and shall be effective when
delivered at its address set forth herein, as the same may be changed by
written notice to the other party. Written communications may be in any
form of writing howsoever transmitted other than facsimile.
5.6 Waiver. The Bank's rights, powers, privileges and remedies under this
Guaranty or applicable law are cumulative and not exclusive and shall not
be waived, precluded or limited by any failure or delay in the exercise
thereof or by the Bank's exercise, or partial exercise, of any thereof or
by any course of dealing between the Guarantor and the Bank. No notice to
or demand on the Guarantor in any case shall entitle the Guarantor to any
other or further notice or demand in similar or other circumstance or
constitute a waiver of the right of the Bank to any other or further action
in any circumstance without notice or demand.
5.7 Descriptive Headings. The descriptive headings used in this Guaranty
are for convenience only and shall not be deemed to affect the meaning or
construction of any provision hereof.
5.8 Benefit of Guaranty. This Guaranty shall be binding upon the Guarantor
and its successors and assigns and shall inure to the benefit of, and be
enforceable by, the Bank and its successors and assigns and, in particular,
any holder or assignee from time to time of the Loan Documents; provided
that the Guarantor may not assign any of its rights or obligations hereunder
without the prior written consent of the Bank.
5.9 Set-Off. Upon the occurrence of any default or an event of default under
the Loan Documents or this Guaranty, the Bank is authorized at any time and
from time to time, without notice to the Guarantor or to any other Person,
any such notice being hereby expressly waived, to set off and apply any and
all deposits (general or special) and any other indebtedness at any time
held or owing by the Bank to or for the credit or the account of the
Guarantor against and on account of the obligations of the Guarantor under
this Guaranty, irrespective of whether or not the Bank shall have made any
demand hereunder or any demand for payment of any Guaranteed Obligation and
although said obligations, liabilities or claims, or any of them, shall be
contingent or unmatured, and the Guarantor hereby grants to the Bank a
security interest in all such deposits and indebtedness.
5.10 Jurisdiction and Immunity. The Guarantor represents and agrees that it
is not entitled to, and to the extent it hereafter becomes so entitled
hereby waives, any immunity, sovereign or otherwise, with respect to itself
and its property from jurisdiction, service, attachment (both before and
after judgment) and execution in legal proceedings to enforce or collect
upon this Guaranty.
5.11 Survival. The provisions of Sections 3.5 and 5.1 and 5.10 shall survive
the termination and cancellation of this Guaranty and, after cancellation
and return to the Guarantor, a photocopy hereof may be submitted as evidence
of such surviving obligations. Nothing herein shall preclude the Bank from
establishing such obligations by other means.
5.12 WAIVER OF JURY TRIAL. EACH OF THE GUARANTOR AND THE BANK HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY AND ALL RIGHTS IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING
OUT OF, UNDER, OR IN CONNECTION WITH THIS GUARANTY OR ANY OTHER DOCUMENT OR
AGREEMENT EXECUTED IN CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS OF THE
GUARANTOR, THE BORROWER OR THE BANK. THIS PROVISION IS A MATERIAL INDUCEMENT
FOR THE BANK'S EXTENDING TO THE BORROWER THE CREDIT FACILITY TO WHICH THIS
GUARANTY RELATES.
5.13 Consent to Jurisdiction. The Guarantor hereby agrees that ANY LEGAL
ACTION OR PROCEEDING AGAINST THE GUARANTOR WITH RESPECT TO THIS GUARANTY OR ANY
LOAN DOCUMENT MAY BE BROUGHT IN ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ IN THE CITY
OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW
YORK, as the Bank may elect, and, by execution and delivery hereof, the
Guarantor accepts and consents to, for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts and
agrees that such jurisdiction shall be exclusive with respect to any action or
proceeding brought by it against the Bank and any question relating to usury.
Service of process out of any of such courts may be made by mailing copies
thereof by registered or certified mail, postage prepaid, to the Guarantor at
its address for notices as specified herein and will become effective 30 days
after such mailing. The Guarantor agrees that Sections 5-1401 and 5-1402 of the
General Obligations Law of the State of New York shall apply to this Guaranty
and the Loan Documents and waives any right to any defense of, or to dismiss any
action or proceeding brought before said court on the basis of, forum non
conveniens.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed and
delivered by its duly authorized officer(s) as of the date first above written.
NAME OF GUARANTOR:
AMERICAN TECHNICAL CERAMICS CORP.
ADDRESS:
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Signature: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
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Title: Vice President - Finance
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ACCEPTED AS OF THE DATE FIRST ABOVE WRITTEN:
SVENSKA HANDELSBANKEN AB (publ)
Skarholmen Branch
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Signature: /S/ ▇▇▇▇▇▇▇ WADING
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Title: Branch Manager
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Signature: /S/ ▇▇▇▇ TARRODI
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Title: Account Manager
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