Limited Guarantee Signature Page
Exhibit
2.3
This
LIMITED GUARANTEE, dated
as of November 17, 2008 (this “Limited Guarantee”),
by ▇▇▇▇▇ ▇▇▇▇▇ (the “Guarantor”), in favor
of Zones, Inc., a Washington corporation (the “Company”).
1. Guarantee. To
induce the Company to enter into that certain First Amendment to the Agreement
and Plan of Merger, dated as of the date hereof (as so amended, and as further
amended, restated, supplemented or otherwise modified from time to time, the
“Merger
Agreement”) by and between the Company and Zones Acquisition Corp., a
Washington corporation (“Zac”), the Guarantor
hereby absolutely, irrevocably and unconditionally guarantees to the Company, on
the terms and conditions set forth herein, the due and punctual performance and
discharge of the payment obligations of Zac under Section 5.05(d) of the Merger
Agreement (such obligations under the Merger Agreement, the “Obligations”);
provided, however, that the maximum amount payable by the Guarantor under this
Limited Guarantee shall not exceed $5,000,000, plus interest thereon from the
date of demand, plus all attorneys’ fees, collection costs and enforcement
expenses with respect thereto (such aggregate amount, the “Cap”), it being
understood that this Limited Guarantee may not be enforced against the Guarantor
without giving effect to the Cap, and that the Guarantor shall not have any
obligation or liability to any Person relating to, arising out of or in
connection with this Limited Guarantee other than as expressly set forth herein.
The Company further acknowledges that in the event that Zac has any unsatisfied
Obligations, payment of unsatisfied Obligations by the Guarantor (or by any
other Person on behalf of the Guarantor), accompanied by a written transmittal
document, received by the Company, advising that such payment is made under the
Limited Guarantee for such purpose, shall constitute satisfaction of the
Guarantor’s obligations to the extent of such payment. Each capitalized term
used and not defined herein shall have the meaning ascribed to it in the Merger
Agreement, except as otherwise provided.
2. Nature of
Guarantee. The Company shall not be obligated to file any
claim relating to the Obligations in the event that Zac becomes subject to a
bankruptcy, reorganization or similar proceeding, and the failure of the Company
to so file shall not affect the Guarantor’s obligations hereunder. In the event
that any payment to the Company in respect of the Obligations is rescinded or
must otherwise be returned for any reason whatsoever, the Guarantor shall remain
liable hereunder with respect to the Obligations (subject to the Cap) as if such
payment had not been made. This Limited Guarantee is an unconditional guarantee
of payment and not of collection.
3. Changes in Obligations,
Certain Waivers. The Guarantor agrees that the Company may at
any time and from time to time, without notice to or further consent of the
Guarantor, extend the time of payment of any of the Obligations, and may also
make any agreement with Zac for the amendment, modification, extension, renewal,
payment, compromise, discharge or release thereof, in whole or in part, without
in any way impairing or affecting any of the Guarantor’s obligations under this
Limited Guarantee. The Guarantor agrees that its obligations hereunder shall not
be released or discharged, in whole or in part, or otherwise affected by (a) the
failure or delay on the part of the Company to assert any claim or demand or to
enforce any right or remedy against Zac; (b) any change in the time, place or
manner of payment of any of the Obligations or any rescission, waiver,
compromise, consolidation or other amendment or modification of any of the terms
or provisions of the Merger Agreement made in accordance with the terms thereof
or any agreement evidencing, securing or otherwise executed in connection with
any of the Obligations; (c) any change in the corporate existence, structure or
ownership of Zac; (d) any insolvency, bankruptcy, reorganization or other
similar proceeding affecting Zac; (e) the existence of any claim, set-off or
other right which the Guarantor may have at any time against Zac or the Company,
whether in connection with the Obligations or otherwise; or (f) the adequacy of
any other means the Company may have of obtaining payment related to the
Obligations. To the fullest extent permitted by law, the Guarantor hereby
expressly waives any and all rights or defenses arising by reason of any Law
which would otherwise require any election of remedies by the Company. The
Guarantor hereby waives promptness, diligence, notice of the acceptance of this
Limited Guarantee and of the Obligations, presentment, demand for payment,
notice of non-performance, default, dishonor and protest, notice of any
Obligations incurred and all other notices of any kind (other than notice to Zac
pursuant to the Merger Agreement), all defenses which may be available by virtue
of any valuation, stay, moratorium law or other similar Law now or hereafter in
effect, any right to require the marshalling of assets of Zac, and all
suretyship defenses generally (other than fraud or willful misconduct by the
Company or any of its subsidiaries or affiliates, defenses to the payment of the
Obligations that are available to Zac under the Merger Agreement or breach by
the Company of this Limited Guarantee). The Guarantor acknowledges that it will
receive substantial direct and indirect benefits from the transactions
contemplated by the Merger Agreement and that the waivers set forth in this
Limited Guarantee are knowingly made in contemplation of such
benefits.
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The
Guarantor hereby expressly and unconditionally waives any rights that it may now
have or hereafter acquire against Zac that arise from the existence, payment,
performance, or enforcement of the Guarantor’s obligations under or in respect
of this Limited Guarantee or any other agreement in connection therewith,
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution or indemnification and any right to participate in any
claim or remedy of the Company against Zac, whether or not such claim, remedy or
right arises in equity or under contract, statute or common law, including,
without limitation, the right to take or receive from Zac, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right, unless and until
all of the amounts payable under this Limited Guarantee shall have been paid in
full in immediately available funds. If any amount shall be paid to the
Guarantor in violation of the immediately preceding sentence at any time prior
to the payment in full in immediately available funds of all amounts payable
under this Limited Guarantee, such amount shall be received and held in trust
for the benefit of the Company, shall be segregated from other property and
funds of the Guarantor and shall forthwith be paid or delivered to the Company
in the same form as so received (with any necessary endorsement or assignment)
to be credited and applied to the Obligations and all other amounts payable
under this Limited Guarantee, in accordance with the terms of the Merger
Agreement, whether matured or unmatured, or to be held as collateral for any
Obligations or other amounts payable under this Limited Guarantee thereafter
arising. Notwithstanding anything to the contrary contained in this Limited
Guarantee, the Company hereby agrees that to the extent Zac is relieved of any
of Zac’s obligations with respect to the Obligations, the Guarantor shall be
similarly relieved of its obligations under this Limited Guarantee; provided,
that Guarantor shall not be relieved of its obligations under this Limited
Guarantee as a result of any insolvency, bankruptcy, reorganization, or similar
proceeding affecting Zac or as a result of any Company action taken directly or
indirectly by Guarantor.
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4. No Waiver; Cumulative
Rights. No failure on the part of the Company to exercise, and no delay
in exercising, any right, remedy or power hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by the Company of any right,
remedy or power hereunder preclude any other or future exercise of any right,
remedy or power hereunder. Each and every right, remedy and power hereby granted
to the Company shall be cumulative and not exclusive of any other, and may be
exercised by the Company at any time or from time to time.
5. Representations and
Warranties of the Guarantor. The Guarantor hereby represents and warrants
that:
(a) this
Limited Guaranty has been duly and validly executed by the
Guarantor;
(b) assuming
the due authorization, execution and delivery by the Company, this Limited
Guarantee constitutes a legal, valid and binding obligation of the Guarantor
enforceable against the Guarantor in accordance with its terms, subject to (i)
the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar Laws affecting creditors’ rights generally, and (ii)
general equitable principles (whether considered in a proceeding in equity or at
law); and
(c) the
Guarantor has the financial capacity to pay and perform its obligations under
this Limited Guarantee, and all funds necessary for the Guarantor to fulfill its
obligations under this Limited Guarantee shall be available to the Guarantor for
so long as this Limited Guarantee shall remain in effect in accordance with
Section 8 of this Limited Guarantee.
6. No Assignment.
Neither the Guarantor nor the Company may assign or delegate their rights,
interests or obligations hereunder to any other Person without the prior written
consent of the other party hereto.
7. Notices. Except for
notices that are specifically required by the terms of this Limited Guarantee to
be delivered orally, all notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed given if
delivered personally, telecopied (which is confirmed) or sent by overnight
courier (providing proof of delivery) to the parties at the following addresses
(or at such other address for a party as shall be specified by like
notice):
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if
to the Company to:
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Special
Committee of the Board of Directors
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▇▇▇▇▇▇▇
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c/o
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Facsimile: (▇▇▇)
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Attention: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
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with
a copy (which shall not constitute notice) to:
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DLA
Piper US LLP
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Facsimile: (▇▇▇)
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Attention: ▇▇▇▇
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with
an additional copy (which shall not constitute notice)
to:
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▇▇▇▇▇▇ PC
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Facsimile: (▇▇▇)
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Attention: ▇▇▇▇▇▇▇
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if
to the Guarantor to:
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Facsimile: (▇▇▇)
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with
a copy (which shall not constitute notice) to:
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▇▇▇▇▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ LLP
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Facsimile: (▇▇▇)
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Attention: ▇▇▇▇
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8. Continuing Guarantee.
This Limited Guarantee may not be revoked or terminated and shall remain in full
force and effect and shall be binding on the Guarantor, its successors and
assigns until all of the obligations payable under this Limited Guarantee have
been paid in full. Notwithstanding the foregoing, this Limited Guarantee shall
terminate and the Guarantor shall have no further obligations under this Limited
Guarantee as of the earliest of (i) the Effective Time, (ii) satisfaction
in full of the Obligations subject to the Cap, and (iii) 180 days after any
termination of the Merger Agreement in accordance with its terms except as to
any claim for payment of any Obligation or fulfillment of Guarantor’s
obligations hereunder. Nothing herein is intended to create any
personal liability of the Guarantor with regard to this Guaranty, the Merger
Agreement or the transactions contemplated thereby, or the Shareholder Voting
and Support Agreement dated of even date herewith by and among the Company, the
Guarantor and ▇▇▇▇▇ ▇▇▇▇▇ (the “Support Agreement”)
except as expressly provided herein or therein.
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9. No Recourse.
Notwithstanding anything that may be expressed or implied in this Limited
Guarantee, the Merger Agreement or any document or instrument delivered in
connection therewith, by its acceptance of the benefits of this Limited
Guarantee, the Company covenants, agrees and acknowledges that no Person other
than the Guarantor (both individually and his marital community) has any
obligations hereunder and that the Company has no right of recovery under this
Limited Guarantee, the Merger Agreement or any document or instrument delivered
in connection therewith, or for any claim based on, in respect of, or by reason
of, such obligations or their creation, against, and no personal liability shall
attach to, any former, current or future director, officer, employee, agent,
manager, shareholder, affiliate, controlling Person or assignee of the Guarantor
or Zac or any former, current or future director, officer, employee, agent,
general or limited partner, manager, member, stockholder, affiliate, controlling
Person or assignee of any of the foregoing (each, other than Guarantor, an
“Affiliate”),
through Zac or otherwise, whether by or through attempted piercing of the
corporate veil, by or through a claim by or on behalf of Zac against the
Guarantor or any Affiliate (including a claim to enforce the Equity Commitment
Letters), by the enforcement of any assessment or by any legal or equitable
proceeding, by virtue of any Law, or otherwise, except as set forth in the
Merger Agreement, the Support Agreement or herein. The Company
further covenants, agrees and acknowledges that the only rights of recovery that
the Company has in respect of the Merger Agreement or the transactions
contemplated thereby are its rights to recover from Zac (but not any of its
Affiliates) under and to the extent expressly provided in the Merger Agreement,
remedies against the Guarantor and ▇▇▇▇▇ ▇▇▇▇▇ under the Support Agreement, and
rights to recover from the Guarantor under and to the extent expressly provided
in this Limited Guarantee subject, in each case, to the limitations described
therein and herein. The Company acknowledges and agrees that Zac has no assets
other than cash in a de
minimis amount and that no additional funds are expected to be
contributed to Zac unless and until the Closing occurs. Recourse against the
Guarantor under and pursuant to the terms of this Limited Guarantee shall be the
sole and exclusive remedy of the Company and all of its Affiliates against the
Guarantor and his Affiliates (except for Zac) with respect to the
Obligations.
10. Governing Law;
Jurisdiction. This Limited Guarantee shall be governed by, and construed
in accordance with, the laws of the State of Washington, without giving effect
to the conflict of law principles that would require the application of the law
of another jurisdiction. Each of the parties hereto irrevocably (a) consents to
submit itself to the personal jurisdiction of any state or federal court sitting
in the State of Washington in the event any dispute arises out of this Limited
Guarantee or any of the transactions contemplated by this Limited Guarantee, and
(b) agrees that it will not bring any action relating to this letter, the
Agreement or the transactions contemplated by the Agreement in any court other
than any state or federal court sitting in the State of Washington.
Notwithstanding the foregoing, any judgment from any such court described above
may be enforced by any party in any other court in any other
jurisdiction.
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11. WAIVER OF JURY TRIAL.
EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS LIMITED GUARANTEE.
12. Counterparts. This
Limited Guarantee may be executed in any number of counterparts (including by
facsimile or electronic transmission), each such counterpart when executed being
deemed to be an original instrument, and all such counterparts shall together
constitute one and the same agreement.
13. No Third Party
Beneficiaries. Except as provided in Section 9, the parties hereby agree
that their respective representations, warranties and covenants set forth herein
are solely for the benefit of the other party hereto, in accordance with and
subject to the terms of this Limited Guarantee, and this Limited Guarantee is
not intended to, and does not, confer upon any Person other than the parties
hereto any rights or remedies hereunder, including, the right to rely upon the
representations and warranties set forth herein.
14. Miscellaneous.
(a) This
Limited Guarantee contains the entire agreement between the parties relative to
the subject matter hereof and supercedes all prior agreements and undertakings
between the parties with respect to the subject matter hereof, including, but
not limited to, the Limited Guarantee dated July 30, 2008 between Guarantor and
the Company, which is terminated and of no further force or
effect. No modification or waiver of any provision hereof shall be
enforceable unless approved by the Company and the Guarantor in
writing.
(b) Any
term or provision hereof that is prohibited or unenforceable in any jurisdiction
shall be, as to such jurisdiction, ineffective solely to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction;
provided, however, that this Limited Guarantee may not be enforced without
giving effect to the Cap, as provided in Section 1 hereof, and the provisions of
Section 9 and this Section 15(b).
(c) The
descriptive headings herein are inserted for convenience of reference only and
are not intended to be part of or to affect the meaning or interpretation of
this Limited Guarantee.
(d) The
Guarantor will pay or reimburse the Company for all costs, expenses and
attorneys’ fees paid or incurred by the Company in endeavoring to collect and
enforce the Obligations and in enforcing this Guaranty, including, without
limitation, fees and costs incurred in a bankruptcy proceeding.
(e) Guarantor
acknowledges that: ORAL
AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM
ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON
LAW.
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IN
WITNESS WHEREOF, Guarantor and Company have executed, or caused to be executed
by a duly authorized officer, as applicable, this Limited Guarantee as of the
date first written above.
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GUARANTOR:
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COMPANY:
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Zones,
Inc.
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/s/ ▇▇▇▇▇ ▇▇▇▇▇
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By:
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/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its:
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Chair, Special Committee of the Board of Directors of Zones,
Inc.
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SPOUSE’S
CONSENT:
I
acknowledge that I have read the foregoing Guarantee and understand and consent
to the contents thereof.
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/s/ ▇▇▇▇▇ ▇▇▇▇▇
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Limited Guarantee Signature
Page