EXHIBIT 10.17
CONFORMED AS EXECUTED
SUBSIDIARIES GUARANTY
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SUBSIDIARIES GUARANTY, dated as of May 10, 1999 (as amended, modified
or supplemented from time to time, this "Guaranty"), made by each of the
undersigned guarantors (each a "Guarantor," and together with any other entity
that becomes a guarantor hereunder pursuant to Section 26 hereof, the
"Guarantors"). Except as otherwise defined herein, capitalized terms used
herein and defined in the Credit Agreement (as defined below) shall be used
herein as therein defined.
W I T N E S S E T H :
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WHEREAS, IDT Corporation (the "Borrower"), the lenders from time to
time party thereto (the "Lenders"), ▇▇▇▇▇▇ Commercial Paper Inc., as
Documentation Agent, CIBC World Markets Corp., as Syndication Agent, and Bankers
Trust Company, as Administrative Agent (together with any successor
administrative agent, the "Administrative Agent"), have entered into a Credit
Agreement, dated as of May 10, 1999 (as amended, modified, or supplemented from
time to time, the "Credit Agreement"), providing for the making of Loans to, and
the issuance of Letters of Credit for the account of, the Borrower as
contemplated therein (the Lenders, the Collateral Agent, the Issuing Lender and
the Administrative Agent are herein called the "Lender Creditors");
WHEREAS, the Borrower may at any time and from time to time enter into
one or more Interest Rate Protection Agreements or Other Hedging Agreements with
one or more Lenders or any affiliate thereof (each such Lender or affiliate,
even if the respective Lender subsequently ceases to be a Lender under the
Credit Agreement for any reason, together with such ▇▇▇▇▇▇'s or affiliate's
successors and assigns, if any, collectively, the "Other Creditors," and
together with the Lender Creditors, the "Secured Creditors");
WHEREAS, each Guarantor is a direct or indirect Subsidiary of the
Borrower;
WHEREAS, it is a condition to the making of Loans to, and the issuance
of Letters of Credit for the account of, the Borrower under the Credit Agreement
that each Guarantor shall have executed and delivered this Guaranty; and
WHEREAS, each Guarantor will obtain benefits from the incurrence of
Loans to, and the issuance of Letters of Credit for the account of, the Borrower
under the Credit Agreement and the entering into by the Borrower of Interest
Rate Protection Agreements or Other Hedging Agreements and, accordingly, desires
to execute this Guaranty in order to satisfy the conditions described in the
preceding paragraph;
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NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to each Guarantor, the receipt and sufficiency of which are hereby
acknowledged, each Guarantor hereby makes the following representations and
warranties to the Secured Creditors and hereby covenants and agrees with each
Secured Creditor as follows:
1. Each Guarantor, jointly and severally, irrevocably, absolutely and
unconditionally guarantees: (i) to the Lender Creditors the full and prompt
payment when due (whether at the stated maturity, by acceleration or otherwise)
of (x) the principal of, premium, if any, and interest on the Notes issued by,
and the Loans made to, the Borrower under the Credit Agreement, and all
reimbursement obligations and Unpaid Drawings with respect to Letters of Credit
issued under the Credit Agreement and (y) all other obligations (including
obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due), liabilities and indebtedness owing by the
Borrower to the Lender Creditors under the Credit Agreement and any other Credit
Document to which the Borrower is a party (including, without limitation,
indemnities, Fees and interest thereon), whether now existing or hereafter
incurred under, arising out of or in connection with the Credit Agreement and
any such other Credit Document and the due performance and compliance by the
Borrower with all of the terms, conditions and agreements contained in all such
Credit Documents (all such principal, premium, interest, liabilities,
indebtedness and obligations being herein collectively called the "Credit
Document Obligations"); and (ii) to each Other Creditor the full and prompt
payment when due (whether at the stated maturity, by acceleration or otherwise)
of all obligations (including obligations which, but for the automatic stay
under Section 362(a) of the Bankruptcy Code, would become due), liabilities and
indebtedness owing by the Borrower under any Interest Rate Protection Agreement
and Other Hedging Agreement, whether now in existence or hereafter arising, and
the due performance and compliance by the Borrower with all of the terms,
conditions and agreements contained in the Interest Rate Protection Agreements
and Other Hedging Agreements (all such obligations, liabilities and indebtedness
being herein collectively called the "Other Obligations," and together with the
Credit Document Obligations, the "Guaranteed Obligations"). Each Guarantor
understands, agrees and confirms that the Secured Creditors may enforce this
Guaranty up to the full amount of the Guaranteed Obligations against such
Guarantor without proceeding against any other Guarantor, the Borrower, against
any security for the Guaranteed Obligations, or under any other guaranty
covering all or a portion of the Guaranteed Obligations.
2. Additionally, each Guarantor, jointly and severally,
unconditionally, absolutely and irrevocably, guarantees the payment of any and
all Guaranteed Obligations whether or not due or payable by the Borrower upon
the occurrence in respect of the Borrower of any of the events specified in
Section 10.05 of the Credit Agreement, and unconditionally and irrevocably,
jointly and severally, promises to pay such Guaranteed Obligations to the
Secured Creditors, or order, on demand, in legal tender of the United States.
This Guaranty shall constitute a guaranty of payment, and not of collection.
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3. The liability of each Guarantor hereunder is primary, absolute and
unconditional and is exclusive and independent of any security for or other
guaranty of the indebtedness of the Borrower whether executed by such Guarantor,
any other Guarantor, any other guarantor or by any other party, and the
liability of each Guarantor hereunder shall not be affected or impaired by any
circumstance or occurrence whatsoever, including, without limitation: (a) any
direction as to application of payment by the Borrower or by any other party,
(b) any other continuing or other guaranty, undertaking or maximum liability of
a guarantor or of any other party as to the Guaranteed Obligations, (c) any
payment on or in reduction of any such other guaranty or undertaking, (d) any
dissolution, termination or increase, decrease or change in personnel by the
Borrower, (e) any payment made to any Secured Creditor on the indebtedness which
any Secured Creditor repays the Borrower pursuant to court order in any
bankruptcy, reorganization, arrangement, moratorium or other debtor relief
proceeding, and each Guarantor waives any right to the deferral or modification
of its obligations hereunder by reason of any such proceeding, (f) any action or
inaction by the Secured Creditors as contemplated in Section 6 hereof or (g) any
invalidity, irregularity or unenforceability of all or any part of the
Guaranteed Obligations or of any security therefor.
4. The obligations of each Guarantor hereunder are independent of the
obligations of any other Guarantor, any other guarantor or the Borrower, and a
separate action or actions may be brought and prosecuted against each Guarantor
whether or not action is brought against any other Guarantor, any other
guarantor or the Borrower and whether or not any other Guarantor, any other
guarantor or the Borrower be joined in any such action or actions. Each
Guarantor waives, to the fullest extent permitted by law, the benefits of any
statute of limitations affecting its liability hereunder or the enforcement
thereof. Any payment by the Borrower or other circumstance which operates to
toll any statute of limitations as to the Borrower shall operate to toll the
statute of limitations as to each Guarantor.
5. Each Guarantor hereby waives notice of acceptance of this Guaranty
and notice of any liability to which it may apply, and waives promptness,
diligence, presentment, demand of payment, protest, notice of dishonor or
nonpayment of any such liabilities, suit or taking of other action by the
Administrative Agent or any other Secured Creditor against, and any other notice
to, any party liable thereon (including such Guarantor, any other Guarantor, any
other guarantor or the Borrower).
6. Any Secured Creditor may at any time and from time to time without
the consent of, or notice to, any Guarantor, without incurring responsibility to
such Guarantor, without impairing or releasing the obligations of such Guarantor
hereunder, upon or without any terms or conditions and in whole or in part:
(a) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew or alter, any of the Guaranteed Obligations
(including any increase or decrease in the rate of interest thereon), any
security therefor, or any liability incurred directly or
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indirectly in respect thereof, and the guaranty herein made shall apply to the
Guaranteed Obligations as so changed, extended, renewed or altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, impair, realize upon or
otherwise deal with in any manner and in any order any property by whomsoever at
any time pledged or mortgaged to secure, or howsoever securing, 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, any other Credit Party, any Subsidiary thereof or otherwise act or
refrain from acting;
(d) release or substitute any one or more endorsers, Guarantors,
other guarantors, the Borrower or other obligors;
(e) settle 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 thereof to the payment of any liability (whether due
or not) of the Borrower to creditors of the Borrower other than the Secured
Creditors;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Secured Creditors regardless of
what liabilities of the Borrower remain unpaid;
(g) consent to or waive any breach of, or any act, omission or
default under, any of the Interest Rate Protection Agreements or Other Hedging
Agreements, the Credit Documents or any of the instruments or agreements
referred to therein, or otherwise amend, modify or supplement any of the
Interest Rate Protection Agreements or Other Hedging Agreements, the Credit
Documents or any of such other instruments or agreements;
(h) act or fail to act in any manner referred to in this Guaranty
which may deprive such Guarantor of its right to subrogation against the
Borrower to recover full indemnity for any payments made pursuant to this
Guaranty; and/or
(i) take any other action which would, under otherwise applicable
principles of common law, give rise to a legal or equitable discharge of such
Guarantor from its liabilities under this Guaranty.
7. This Guaranty is a continuing one and all liabilities to which it
applies or may apply under the terms hereof shall be conclusively presumed to
have been created in reliance hereon. No failure or delay on the part of any
Secured Creditor in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of
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any right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein expressly specified are cumulative and not exclusive of any
rights or remedies which any Secured Creditor would otherwise have. No notice to
or demand on any Guarantor in any case shall entitle such Guarantor to any other
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of any Secured Creditor to any other or further action in
any circumstances without notice or demand. It is not necessary for any Secured
Creditor to inquire into the capacity or powers of the Borrower or the officers,
directors, partners or agents acting or purporting to act on its behalf, and any
indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.
8. Any indebtedness of the Borrower now or hereafter held by any
Guarantor is hereby subordinated to the indebtedness of the Borrower to the
Secured Creditors, and such indebtedness of the Borrower to any Guarantor, if
the Administrative Agent or the Collateral Agent, after the occurrence and
during the continuance of an Event of Default, so requests, shall be collected,
enforced and received by such Guarantor as trustee for the Secured Creditors and
be paid over to the Secured Creditors on account of the indebtedness of the
Borrower to the Secured Creditors, but without affecting or impairing in any
manner the liability of such Guarantor under the other provisions of this
Guaranty. Without limiting the generality of the foregoing, each Guarantor
hereby agrees with the Secured Creditors that it will not exercise any right of
subrogation which it may at any time otherwise have as a result of this Guaranty
(whether contractual, under Section 509 of the Bankruptcy Code or otherwise)
until all Guaranteed Obligations have been irrevocably paid in full in cash.
9. (a) Each Guarantor waives any right (except as shall be required
by applicable law and cannot be waived) to require the Secured Creditors to:
(i) proceed against the Borrower, any other Guarantor, any other guarantor of
the Guaranteed Obligations or any other party; (ii) proceed against or exhaust
any security held from the Borrower, any other Guarantor, any other guarantor of
the Guaranteed Obligations or any other party; or (iii) pursue any other remedy
in the Secured Creditors' power whatsoever. Each Guarantor waives any defense
based on or arising out of any defense of the Borrower, any other Guarantor, any
other guarantor of the Guaranteed Obligations or any other party other than
payment in full of the Guaranteed Obligations, including, without limitation,
any defense based on or arising out of the disability of the Borrower, any other
Guarantor, any other guarantor of the Guaranteed Obligations or any other party,
or the unenforceability of the Guaranteed Obligations or any part thereof from
any cause, or the cessation from any cause of the liability of the Borrower
other than payment in full of the Guaranteed Obligations. The Secured Creditors
may, at their election, foreclose on any security held by the Administrative
Agent, the Collateral Agent or the other Secured Creditors by one or more
judicial or nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable, or exercise any other right or remedy the Secured
Creditors may have against the Borrower or any other party, or any security,
without affecting or impairing in any way the liability of any Guarantor
hereunder except to the extent the Guaranteed Obligations have been paid in full
in cash. Each Guarantor waives any defense arising out of any such election by
the
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Secured Creditors, even though such election operates to impair or extinguish
any right of reimbursement or subrogation or other right or remedy of such
Guarantor against the Borrower or any other party or any security.
(b) Each Guarantor waives all presentments, demands for performance,
protests and notices, including, without limitation, notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation or incurring of new or additional
indebtedness. Each Guarantor assumes all responsibility for being and keeping
itself informed of the Borrower's financial condition and assets, and of all
other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks which such Guarantor
assumes and incurs hereunder, and agrees that the Secured Creditors shall have
no duty to advise any Guarantor of information known to them regarding such
circumstances or risks.
10. The Secured Creditors agree that this Guaranty may be enforced
only by the action of the Administrative Agent or the Collateral Agent, in each
case acting upon the instructions of the Required Lenders (or, after the date on
which all Credit Document Obligations have been paid in full, the holders of at
least the majority of the outstanding Other Obligations) and that no other
Secured Creditors shall have any right individually to seek to enforce or to
enforce this Guaranty or to realize upon the security to be granted by the
Security Documents, it being understood and agreed that such rights and remedies
may be exercised by the Administrative Agent or the Collateral Agent or, after
all the Credit Document Obligations have been paid in full, by the holders of at
least a majority of the outstanding Other Obligations, as the case may be, for
the benefit of the Secured Creditors upon the terms of this Guaranty and the
Security Documents. The Secured Creditors further agree that this Guaranty may
not be enforced against any director, officer, employee, partner, member or
stockholder of any Guarantor (except to the extent such partner, member or
stockholder is also a Guarantor hereunder).
11. In order to induce the Lenders to make Loans to, and issue
Letters of Credit for the account of, the Borrower pursuant to the Credit
Agreement, and in order to induce the Other Creditors to execute, deliver and
perform the Interest Rate Protection Agreements and Other Hedging Agreements,
each Guarantor represents, warrants and covenants that:
(a) Such Guarantor (i) is a duly organized and validly existing
corporation, partnership or limited liability company, as the case may be, in
good standing under the laws of the jurisdiction of its organization, except as
(and to the extent) set forth in Section 7.01 of the Credit Agreement, (ii) has
the corporate, partnership or limited liability company, power and authority,
as the case may be, to own its property and assets and to transact the business
in which it is engaged and presently proposes to engage and (iii) is duly
qualified and is authorized to do business and is in good standing in each
jurisdiction where the conduct of its business requires such qualification
except for failures to be so qualified which, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.
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(b) Such Guarantor has the corporate, partnership or limited
liability company, power and authority, as the case may be, to execute, deliver
and perform the terms and provisions of this Guaranty and each other Credit
Document to which it is a party and has taken all necessary corporate,
partnership or limited liability company, action, as the case may be, to
authorize the execution, delivery and performance by it of this Guaranty and
each such other Credit Document. Such Guarantor has duly executed and delivered
this Guaranty and each other Credit Document to which it is a party, and this
Guaranty and each such other Credit Document constitutes the legal, valid and
binding obligation of such Guarantor enforceable in accordance with its terms,
except to the extent that the enforceability hereof or thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws generally affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law).
(c) Neither the execution, delivery or performance by such Guarantor
of this Guaranty or any other Credit Document to which it is a party, nor
compliance by it with the terms and provisions hereof and thereof, will (i)
contravene any provision of any applicable law, statute, rule or regulation or
any applicable order, writ, injunction or decree of any court or governmental
instrumentality, (ii) conflict with or result in any breach of any of the terms,
covenants, conditions or provisions of, or constitute a default under, or result
in the creation or imposition of (or the obligation to create or impose) any
Lien (except pursuant to the Security Documents) upon any of the property or
assets of such Guarantor or any of its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, loan agreement, credit agreement, or any
other material agreement, contract or instrument to which such Guarantor or any
of its Subsidiaries is a party or by which it or any of its property or assets
is bound or to which it may be subject or (iii) violate any provision of the
certificate of incorporation or by-laws (or equivalent organizational documents)
of such Guarantor or any of its Subsidiaries.
(d) No order, consent, approval, license, authorization or validation
of, or filing, recording or registration with (except as have been obtained or
made or as otherwise provided in Section 7.04 of the Credit Agreement), or
exemption by, any governmental or public body or authority, or any subdivision
thereof, is required to authorize, or is required for, (i) the execution,
delivery and performance of this Guaranty by such Guarantor or any other Credit
Document to which such Guarantor is a party or (ii) the legality, validity,
binding effect or enforceability of this Guaranty or any other Credit Document
to which such Guarantor is a party.
(e) There are no actions, suits or proceedings pending or, to such
Guarantor's knowledge, threatened (i) with respect to this Guaranty or any other
Credit Document to which such Guarantor is a party or (ii) with respect to such
Guarantor that, either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
12. Each Guarantor covenants and agrees that on and after the
Effective Date and until the termination of the Total Commitment and all
Interest Rate Protection Agreements and Other Hedging Agreements and until such
time as no Note or Letter of Credit remains
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outstanding and all Guaranteed Obligations have been paid in full, such
Guarantor will comply, and will cause each of its Subsidiaries to comply, with
all of the applicable provisions, covenants and agreements contained in Sections
8 and 9 of the Credit Agreement, and will take, or will refrain from taking, as
the case may be, all actions that are necessary to be taken or not taken so that
it is not in violation of any provision, covenant or agreement contained in
Section 8 or 9 of the Credit Agreement, and so that no Default or Event of
Default, is caused by the actions of such Guarantor or any of its Subsidiaries.
13. The Guarantors hereby jointly and severally agree to pay all
reasonable out-of-pocket costs and expenses of each Secured Creditor in
connection with the enforcement of this Guaranty and of each Agent in connection
with any amendment, waiver or consent relating hereto (including in each case,
without limitation, the reasonable fees and disbursements of counsel employed by
each Secured Creditor).
14. This Guaranty shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the Secured Creditors
and their successors and assigns.
15. Neither this Guaranty nor any provision hereof may be changed,
waived, discharged or terminated except with the written consent of each
Guarantor directly affected thereby and with the written consent of either (x)
the Required Lenders (or to the extent required by Section 13.12 of the Credit
Agreement, with the written consent of each Lender) at all times prior to the
time on which all Credit Document Obligations have been paid in full or (y) the
holders of at least a majority of the outstanding Other Obligations at all times
after the time on which all Credit Document Obligations have been paid in full;
provided, that any change, waiver, modification or variance affecting the rights
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and benefits of a single Class (as defined below) of Secured Creditors (and not
all Secured Creditors in a like or similar manner) shall also require the
written consent of the Requisite Creditors (as defined below) of such Class of
Secured Creditors (it being understood that the addition or release of any
Guarantor hereunder shall not constitute a change, waiver, discharge or
termination affecting any Guarantor other than the Guarantor so added or
released). For the purpose of this Guaranty, the term "Class" shall mean each
class of Secured Creditors, i.e., whether (x) the Lender Creditors as holders of
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the Credit Document Obligations or (y) the Other Creditors as the holders of the
Other Obligations. For the purpose of this Guaranty, the term "Requisite
Creditors" of any Class shall mean (x) with respect to the Credit Document
Obligations, the Required Lender (or to the extent required by Section 13.12 of
the Credit Agreement, each Lender) and (y) with respect to the Other
Obligations, the holders of at least a majority of all obligations outstanding
from time to time under the Interest Rate Protection or Other Hedging
Agreements.
16. Each Guarantor acknowledges that an executed (or conformed) copy
of each of the Credit Documents and Interest Rate Protection Agreements or Other
Hedging Agreements has been made available to a senior officer of such Guarantor
and such officer is familiar with the contents thereof.
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17. In addition to any rights now or hereafter granted under
applicable law (including, without limitation, Section 151 of the New York
Debtor and Secured Creditor Law) and not by way of limitation of any such
rights, upon the occurrence and during the continuance of an Event of Default
(such term to mean and include any "Event of Default" as defined in the Credit
Agreement or any payment default under any Interest Rate Protection Agreement or
Other Hedging Agreement continuing after any applicable grace period), each
Secured Creditor is hereby authorized, at any time or from time to time, without
notice to any Guarantor or to any other Person, any such notice being expressly
waived, to set off and to appropriate and apply any and all deposits (general or
special) and any other indebtedness at any time held or owing by such Secured
Creditor to or for the credit or the account of such Guarantor, against and on
account of the obligations and liabilities of such Guarantor to such Secured
Creditor under this Guaranty, irrespective of whether or not such Secured
Creditor shall have made any demand hereunder and although said obligations,
liabilities, deposits or claims, or any of them, shall be contingent or
unmatured. Notwithstanding anything to the contrary contained in this Section
17, no Secured Creditor shall exercise any such right of set-off without the
prior consent of the Administrative Agent or the Required Lenders if, and so
long as, the Guaranteed Obligations shall be secured by any Real Property
located in the State of California, it being understood and agreed, however,
that this sentence is for the sole benefit of the Secured Creditors and may be
amended, modified or waived in any respect by the Required Lenders without the
requirement of prior notice to or consent by any Credit Party and does not
constitute a waiver of any rights against any Credit Party or against any
Collateral.
18. All notices, requests, demands or other communications pursuant
hereto shall be sent or delivered by mail, telegraph, telex, telecopy, cable or
overnight courier service and all such notices and communications shall, when
mailed, telegraphed, telexed, telecopied, or cabled or sent by overnight
courier, be effective when deposited in the mails, delivered to the telegraph
company, cable company or overnight courier, as the case may be, or sent by
telex or telecopier and when mailed shall be effective three Business Days
following deposit in the mail with proper postage, except that notices and
communications to the Administrative Agent or any Guarantor shall not be
effective until received by the Administrative Agent or such Guarantor, as the
case may be. All notices and other communications shall be in writing and
addressed to such party at (i) in the case of any Lender Creditor, as provided
in the Credit Agreement, (ii) in the case of any Guarantor, as provided in the
Security Agreement and (iii) in the case of any Other Creditor, at such address
as such Other Creditor shall have specified in writing to the Guarantors; or in
any case at such other address as any of the Persons listed above may hereafter
notify the others in writing.
19. If claim is ever made upon any Secured Creditor for repayment or
recovery of any amount or amounts received in payment or on account of any of
the Guaranteed Obligations and any of the aforesaid payees repays all or part of
said amount by reason of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (ii) any settlement or compromise of any such claim effected by such payee
with any such claimant (including the Borrower) then and in such event each
Guarantor agrees that
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any such judgment, decree, order, settlement or compromise shall be binding upon
such Guarantor, notwithstanding any revocation hereof or other instrument
evidencing any liability of the Borrower, and such Guarantor shall be and remain
liable to the aforesaid payees hereunder for the amount so repaid or recovered
to the same extent as if such amount had never originally been received by any
such payee.
20. (a) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE SECURED
CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. Any legal action or
proceeding with respect to this Guaranty or any other Credit Document to which
any Guarantor is a party may be brought in the courts of the State of New York
or of the United States of America for the Southern District of New York in each
case located in the City of New York, and, by execution and delivery of this
Guaranty, each Guarantor hereby irrevocably accepts for itself and in respect of
its property, generally and unconditionally, the jurisdiction of the aforesaid
courts. Each Guarantor hereby further irrevocably waives any claim that any
such court lacks personal jurisdiction over such Guarantor, and agrees not to
plead or claim in any legal action or proceeding with respect to this Guaranty
or any other Credit Document to which such Guarantor is a party brought in any
of the aforesaid courts that any such court lacks personal jurisdiction over
such Guarantor. Each Guarantor further irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or proceeding
by the mailing of copies thereof by registered or certified mail, postage
prepaid, to such Guarantor at its address set forth opposite its signature
below, such service to become effective 30 days after such mailing. Each
Guarantor hereby irrevocably waives any objection to such service of process and
further irrevocably waives and agrees not to plead or claim in any action or
proceeding commenced hereunder or under any other Credit Document to which such
Guarantor is a party that such service of process was in any way invalid or
ineffective. Nothing herein shall affect the right of any of the Secured
Creditors to serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against each Guarantor in any other
jurisdiction.
(b) Each Guarantor hereby irrevocably waives (to the fullest extent
permitted by applicable law) any objection which it may now or hereafter have to
the laying of venue of any of the aforesaid actions or proceedings arising out
of or in connection with this Guaranty or any other Credit Document to which
such Guarantor is a party brought in the courts referred to in clause (a) above
and hereby further irrevocably waives and agrees not to plead or claim in any
such court that such action or proceeding brought in any such court has been
brought in an inconvenient forum.
(c) EACH GUARANTOR AND EACH SECURED CREDITOR (BY ITS ACCEPTANCE OF
THE BENEFITS OF THIS GUARANTY) HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS GUARANTY, THE OTHER
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CREDIT DOCUMENTS TO WHICH SUCH GUARANTOR IS A PARTY OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
21. In the event that all of the capital stock of one or more
Guarantors is sold or otherwise disposed of or liquidated in compliance with the
requirements of Section 9.02 of the Credit Agreement (or such sale or other
disposition has been approved in writing by the Required Lenders (or all Lenders
if required by Section 13.12 of the Credit Agreement)) and the proceeds of such
sale, disposition or liquidation are applied in accordance with the provisions
of the Credit Agreement, to the extent applicable, such Guarantor shall upon
consummation of such sale or other disposition (except to the extent that such
sale or disposition is to the Borrower or another Subsidiary thereof) be
released from this Guaranty automatically and without further action and this
Guaranty shall, as to each such Guarantor or Guarantors, terminate, and have no
further force or effect (it being understood and agreed that the sale of one or
more Persons that own, directly or indirectly, all of the capital stock of any
Guarantor shall be deemed to be a sale of such Guarantor for the purposes of
this Section 21).
22. At any time a payment in respect of the Guaranteed Obligations is
made under this Guaranty, the right of contribution of each Guarantor against
each other Guarantor shall be determined as provided in the immediately
following sentence, with the right of contribution of each Guarantor to be
revised and restated as of each date on which a payment (a "Relevant Payment")
is made on the Guaranteed Obligations under this Guaranty. At any time that a
Relevant Payment is made by a Guarantor that results in the aggregate payments
made by such Guarantor in respect of the Guaranteed Obligations to and including
the date of the Relevant Payment exceeding such Guarantor's Contribution
Percentage (as defined below) of the aggregate payments made by all Guarantors
in respect of the Guaranteed Obligations to and including the date of the
Relevant Payment (such excess, the "Aggregate Excess Amount"), each such
Guarantor shall have a right of contribution against each other Guarantor who
has made payments in respect of the Guaranteed Obligations to and including the
date of the Relevant Payment in an aggregate amount less than such other
Guarantor's Contribution Percentage of the aggregate payments made to and
including the date of the Relevant Payment by all Guarantors in respect of the
Guaranteed Obligations (the aggregate amount of such deficit, the "Aggregate
Deficit Amount") in an amount equal to (x) a fraction the numerator of which is
the Aggregate Excess Amount of such Guarantor and the denominator of which is
the Aggregate Excess Amount of all Guarantors multiplied by (y) the Aggregate
Deficit Amount of such other Guarantor. A Guarantor's right of contribution
pursuant to the preceding sentences shall arise at the time of each computation,
subject to adjustment to the time of each computation; provided, that no
--------
Guarantor may take any action to enforce such right until the Guaranteed
Obligations have been irrevocably paid in full in cash, it being expressly
recognized and agreed by all parties hereto that any Guarantor's right of
contribution arising pursuant to this Section 22 against any other Guarantor
shall be expressly junior and subordinate to such other Guarantor's obligations
and liabilities in respect of the Guaranteed Obligations and any other
obligations owing under this Guaranty. As used in this Section 22: (i) each
Guarantor's "Contribution Percentage" shall mean the percentage obtained by
dividing (x) the Adjusted Net Worth (as defined below) of such
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Guarantor by (y) the aggregate Adjusted Net Worth of all Guarantors; (ii) the
"Adjusted Net Worth" of each Guarantor shall mean the greater of (x) the Net
Worth (as defined below) of such Guarantor and (y) zero; and (iii) the "Net
Worth" of each Guarantor shall mean the amount by which the fair salable value
of such Guarantor's assets on the date of any Relevant Payment exceeds its
existing debts and other liabilities (including contingent liabilities, but
without giving effect to any Guaranteed Obligations arising under this Guaranty)
on such date. All parties hereto recognize and agree that, except for any right
of contribution arising pursuant to this Section 22, each Guarantor who makes
any payment in respect of the Guaranteed Obligations shall have no right of
contribution or subrogation against any other Guarantor in respect of such
payment until all of the Guaranteed Obligations have been irrevocably paid in
full in cash. Each of the Guarantors recognizes and acknowledges that the rights
to contribution arising hereunder shall constitute an asset in favor of the
party entitled to such contribution. In this connection, each Guarantor has the
right to waive its contribution right against any Guarantor to the extent that
after giving effect to such waiver such Guarantor would remain solvent, in the
determination of the Required Lenders.
23. Each Guarantor and each Secured Creditor (by its acceptance of
the benefits of this Guaranty) hereby confirms that it is its intention that
this Guaranty not constitute a fraudulent transfer or conveyance for purposes of
the Bankruptcy Code, the Uniform Fraudulent Conveyance Act of any similar
Federal or state law. To effectuate the foregoing intention, each Guarantor and
each Secured Creditor (by its acceptance of the benefits of this Guaranty)
hereby irrevocably agrees that the Guaranteed Obligations guaranteed by such
Guarantor shall be limited to such amount as will, after giving effect to such
maximum amount and all other (contingent or otherwise) liabilities of such
Guarantor that are relevant under such laws, and after giving effect to any
rights to contribution pursuant to any agreement providing for an equitable
contribution among such Guarantor and other Guarantors, result in the Guaranteed
Obligations of such Guarantor in respect of such maximum amount not constituting
a fraudulent transfer or conveyance.
24. This Guaranty may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with the Guarantors and the Administrative
Agent.
25. All payments made by any Guarantor hereunder will be made without
setoff, counterclaim or other defense and on the same basis as payments are made
by the Borrower under Sections 4.03 and 4.04 of the Credit Agreement.
26. It is understood and agreed that any Subsidiary of the Borrower
that is required to execute a counterpart of this Guaranty after the date hereof
pursuant to the Credit Agreement shall become a Guarantor hereunder by executing
a counterpart hereof and delivering the same to the Administrative Agent.
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* * *
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
executed and delivered as of the date first above written.
IDT INTERNATIONAL, CORP., as a Guarantor
By:/s/: ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------
Title: Secretary
IDT INTERNET SERVICES, INC., as a Guarantor
By:/s/: ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Title: Secretary
MEDIA RESPONSE, INC., as a Guarantor
By:/s/: ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------
Title: Secretary
YOVELLE RENAISSANCE CORPORATION, as a Guarantor
By:/s/: ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------
Title: Secretary
NUESTRA VOZ DIRECT INC., as a Guarantor
By:/s/: ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------
Title: Secretary
▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇, INC., as a Guarantor
By:/s/: ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------
Title: Secretary
DIPCHIP CORP., as a Guarantor
By:/s/: ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------
Title: Secretary
INTEREXCHANGE, INC., as a Guarantor
By:/s/: ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------
Title: Chief Operating Officer
Accepted and Agreed to:
BANKERS TRUST COMPANY,
as Collateral Agent
By:/s/: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------
Title: Principal