Microsoft Word 10.0.2627; EXHIBIT 10.21
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FIFTH AMENDMENT TO LOAN AGREEMENT
THIS FIFTH AMENDMENT ("Amendment") made as of this 30th day of January,
2004 among MANCHESTER TECHNOLOGIES, INC., formerly known as Manchester Equipment
Co., Inc. a New York corporation having its principal place of business at 000
Xxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 (the "Borrower"), MANCHESTER
INTERNATIONAL LTD., a New York corporation having its principal place of
business at 000 Xxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 ("International" or a
"Guarantor"), MANTECH COMPUTER SERVICES, INC., a New York corporation having its
principal place of business at 000 Xxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000
("ManTech" or a "Guarantor"), ELECTROGRAPH SYSTEMS, INC., a New York corporation
having its principal place of business at 00 Xxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxx
Xxxx 00000 ("Electrograph" or a "Guarantor"), COASTAL OFFICE PRODUCTS, INC., a
Maryland corporation having its principal place of business at 000 Xxxx Xxxxxx,
Xxxxxxxxx, Xxx Xxxx 00000 ("Coastal" or a "Guarantor"), 0X.XXX, INC., a New York
corporation having its principal place of business at 000 Xxxx Xxxxxx,
Xxxxxxxxx, Xxx Xxxx 00000 ("4U" or a "Guarantor"), TEXPORT TECHNOLOGY GROUP,
INC., a New York corporation having its principal place of business 000 Xxxx
Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 ("Texport" or a "Guarantor"), MARKETPLACE
0X.XXX, INC., a New York corporation having its principal place of business at
000 Xxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 ("Marketplace" or a "Guarantor"),
LEARNING TECHNOLOGY GROUP, LLC, a New York limited liability company having its
principal place of business at 000 Xxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000
("Learning" or a "Guarantor"), XXXXXXX CONSULTING GROUP, INC., a Delaware
corporation having its principal place of business at 000 Xxxxxxx Xxxx, Xxxxxx,
Xxxxxxx 00000 ("Xxxxxxx" or a "Guarantor"), COMPUTER DISCOUNT DIRECT, INC., a
New York corporation having its principal place of business at 000 Xxxx Xxxxxx,
Xxxxxxxxx, Xxx Xxxx 00000 ("Direct" or a "Guarantor"), MANCHESTER TECHNOLOGY
GROUP, INC., a New York corporation having its principal place of business at
000 Xxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 ("MTG" or a "Guarantor"), MANCHESTER
ENTERPRISE GROUP, INC., a New York corporation having its principal place of
business at 000 Xxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx ("Enterprise" or a
"Guarantor"), e.TRACK SOLUTIONS, INC., a New York corporation with its principal
place of business at 000 Xxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 ("e.track" or a
"Guarantor") and TELSTARR PROFESSIONAL SERVICES, INC., a New York corporation
having its principal place of business at 000 Xxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx
00000 ("Tellstarr" or a "Guarantor")and CITIBANK, N.A., successor to European
American Bank, having an office at 000 Xxxxxxxx Xxxxxxxx Xxxxxxx, Xxxxxxxxx, Xxx
Xxxx 00000 ("Citibank" or a "Bank") and CITIBANK, N.A., successor to European
American Bank, as agent for the Banks (the "Agent").
W I T N E S S E T H :
WHEREAS, the Borrower, the Guarantors, the Agent and the Banks entered
into a Loan Agreement dated as of the 25th day of June, 1999, which Loan
Agreement has heretofore been amended pursuant to that certain First Amendment
dated as of August 14, 2000, that certain Second Amendment dated as of March 27,
2001, that certain Third Amendment dated as of October 10, 2001 and that certain
Fourth Amendment dated as of July 30, 2002 (as so amended, the "Agreement"); and
WHEREAS, the Banks have made loans to the Borrower as evidenced by
certain notes of the Borrower and specifying interest to be paid thereon; and
WHEREAS, the Borrower has created subsidiaries Direct, MTG, Enterprise and
Telstarr; and
WHEREAS, each of Direct, MTG, Enterprise and Telstarr is required
pursuant to the terms of the Agreement to become a party to the Agreement and to
guaranty all of the Borrower's obligations thereunder; and
WHEREAS the Borrower and the Guarantors have requested that the Agent
and the Banks agree to:
(i) consent to the dissolution of Guarantors MEC, Solutions,
MSS, Close Outs, MEC Internet Services, Inc., 47 Computers, Odd Lots and Almost
New; and
(ii) amend certain of the financial requirements set forth in
the Agreement.
NOW, THEREFORE, in consideration of Ten ($10.00) Dollars and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrower, the Guarantors, the Agent and the Banks do hereby
agree as follows:
1. Defined Terms. As used in this Amendment, capitalized terms, unless
otherwise defined, shall have the meanings set forth in the Agreement.
2. Representations and Warranties. As an inducement for the Agent and
the Banks to enter into this Amendment, the Borrower and each Guarantor
represents and warrants as follows:
A. That with respect to the Agreement and the Loan Documents
executed in connection therewith and herewith:
(i) There are no defenses or offsets to the
Borrower's or any Guarantor's obligations under the Agreement
as amended hereby, the Notes or any of the Loan Documents or
any other agreements in favor of the Banks referred to in the
Agreement, and if any such defenses or offsets exist without
the knowledge of the Borrower or any Guarantor, the same are
hereby waived.
(ii) All of the representations and warranties made
by the Borrower and any Guarantor in the Agreement as amended
hereby are true and correct in all material respects as if
made on the date hereof, except for those made with respect to
a particular date, which such representations and warranties
are restated as of such date; and provided further that the
representations and warranties set forth in Section 4.01(f) of
the Agreement shall relate to the consolidated financial
statements of the Borrower and its Consolidated Affiliates for
the fiscal year ended July 31, 2003 and the 3 month period
ended October 31, 2003.
(iii) As of the date hereof, there are no Loans
outstanding.
3. Consent to Dissolution. The Agent and the Bank hereby consent to the
dissolution of each of MEC, Solutions, MSS, Close Outs, MEC Internet Services,
Inc., 47 Computers, Odd Lots and Almost New.
4. Parties to Agreement. Each of Direct, MTG, Enterprise and Telstarr
shall be deemed parties to the Agreement, as amended hereby.
5. Amendments. The following amendments are hereby made to the
Agreement:
(a) The definition of Interest Coverage Ratio is hereby
amended to read as follows:
""Interest Coverage Ratio" means, as to the Borrower and its
Consolidated Affiliates for any period, the ratio of (i) EBIT
for such period to (ii) interest expense for such period. The
Interest Coverage Ratio shall be measured and tested at the
end of each fiscal quarter for a period covering the four (4)
fiscal quarters then ended and shall exclude (i) charges not
exceeding $2,500,000.00 relating to Xxxxxxx incurred during
the quarterly period ended July 31, 2003, and (ii) interest
incurred in connection with that certain $8,200,000.00 Capital
Lease(s) dated March 14, 2003 between the Borrower and GE
Capital."
(b) Section 5.02(l) is hereby amended to read as follows:
"(l) Losses. Incur a net loss for any fiscal year or in any
consecutive four (4) quarter period (excluding charges not
exceeding $2,500,000.00 relating to Xxxxxxx incurred during
the quarterly period ended July 31, 2003)."
(c) Section 5.03(a) is hereby amended to read as follows:
"(a) Minimum Consolidated Tangible Net Worth. The Borrower and
its Consolidated Affiliates will maintain at all times a
Consolidated Tangible Net Worth of not less than
$31,000,000.00, to be tested at the end of each fiscal
quarter."
(d) Section 5.03(d) is hereby amended to read as follows:
"(d) Funded Debt to EBITDA Ratio. The Borrower and Guarantors
will maintain at all times on a consolidated basis, a Funded
Debt to EBITDA Ratio, of not greater than 3.00 to 1.00, to be
tested at the end of each fiscal quarter (excluding (i)
charges not exceeding $2,500,000.00 relating to Xxxxxxx
incurred during the quarterly period ended July 31, 2003, and
(ii) that certain $8,200,000.00 Capital Lease(s) dated March
14, 2003 between the Borrower and GE Capital)."
6. Effectiveness. This Amendment shall become effective upon the
occurrence of the following events and the receipt and satisfactory review by
the Agent and its counsel of the following documents:
(a) The Agent shall have received this Amendment, duly
executed by the Borrower and each Guarantor.
(b) The Agent shall have received copies of any and all
modifications of the documentation referred to in Section 3.01 of the Agreement
which could result in a Material Adverse Change.
(c) The Agent shall have received an amendment fee in the
amount of $1,500.00.
(d) The Agent's counsel shall have been paid their fees and
disbursements in connection with this Amendment.
(e) The Agent shall have received from each of Direct, MTG,
Enterprise and Telstarr a Guaranty.
7. Governing Law. This Amendment shall be governed by, and construed in
accordance with, the laws of the State of New York.
8. Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
9. Ratification. Except as hereby amended, the Agreement and all other
Loan Documents executed in connection therewith shall remain in full force and
effect in accordance with their originally stated terms and conditions. The
Agreement and all other Loan Documents executed in connection therewith, as
amended hereby, are in all respects ratified and confirmed.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the year and date first above written.
CITIBANK, N.A., as Agent
By:____________________________
Name: Xxxxxx X. Xxxxxx
Title: Vice President
CITIBANK, N.A.
By:____________________________
Name: Xxxxxx X. Xxxxxx
Title: Vice President
MANCHESTER TECHNOLOGIES, INC.
By:____________________________
Name: Xxxxx X. Xxxxxxxxx
Title: President
EACH OF THE GUARANTORS LISTED ON
SCHEDULE A HERETO
By:____________________________
Name: Xxxxx X. Xxxxxxxxx
Title: President
LEARNING TECHNOLOGY
GROUP, LLC
By: MANCHESTER TECHNOLOGIES, INC., Member
By:____________________________
Name: Xxxxx X. Xxxxxxxxx
Title: President
SCHEDULE A
MANCHESTER INTERNATIONAL LTD.
MANTECH COMPUTER SERVICES, INC.
ELECTROGRAPH SYSTEMS, INC.
COASTAL OFFICE PRODUCTS, INC.
0X.XXX, INC.
TEXPORT TECHNOLOGY GROUP, INC.
MARKETPLACE 0X.XXX, INC.
XXXXXXX CONSULTING GROUP, INC.
COMPUTER DISCOUNT DIRECT, INC.
MANCHESTER TECHNOLOGY GROUP, INC.
MANCHESTER ENTERPRISE GROUP, INC.
TELSTARR PROFESSIONAL SERVICES, INC.
E.TRACK SOLUTIONS, INC.
Microsoft Word 10.0.2627;
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GENERAL GUARANTEE
(Corporation)
Garden City, New York as of January 30, 2004
FOR VALUE RECEIVED, and in consideration of loans made or to be made or
credit otherwise extended or to be extended by CITIBANK, N.A., successor to
European American Bank ("Citibank") (Citibank being a "Bank" and the term
"Banks" also referring to one or more other Persons which may become lenders
under the Loan Agreement described below) and in further consideration of any
loans or other credit to be extended by Citibank in its capacity as the Agent
under the Loan Agreement described below (the "Agent"), to or for the account of
MANCHESTER TECHNOLOGIES, INC. and each of the entities set forth in Schedule B
hereto (jointly and severally, the "Borrower") from time to time and at any time
and for other good and valuable consideration and to induce the Banks, in their
discretion, to make or commit to make such loans or extensions of credit,
including, but not limited to, the Loans, as defined in the Loan Agreement (the
"Extensions of Credit"), and to make or grant such renewals, extensions,
releases of collateral or relinquishments of legal rights as to the Agent or the
Banks may seem advisable, each of COMPUTER DISCOUNT DIRECT, INC., a New York
corporation having its principal place of business at 000 Xxxx Xxxxxx,
Xxxxxxxxx, Xxx Xxxx 00000, MANCHESTER TECHNOLOGY GROUP, INC., a New York
corporation having its principal place of business at 000 Xxxx Xxxxxx,
Xxxxxxxxx, Xxx Xxxx 00000, MANCHESTER ENTERPRISE GROUP, INC., a New York
corporation having its principal place of business at 000 Xxxx Xxxxxx,
Xxxxxxxxx, Xxx Xxxx and TELSTARR PROFESSIONAL SERVICES, INC., a New York
corporation having its principal place of business at 000 Xxxx Xxxxxx,
Xxxxxxxxx, Xxx Xxxx 00000 (hereinafter jointly and severally referred to as the
"Guarantor"), absolutely and unconditionally guarantees to the Banks and the
Agent, their respective successors, endorsees and assigns, the prompt and
complete payment when due, whether by acceleration or otherwise, of all present
or future obligations and liabilities of any and all kinds of the Borrower to
any of the Banks or the Agent and of all instruments of any nature evidencing or
relating to any such obligations and liabilities upon which the Borrower or one
or more parties and the Borrower is or may become liable to any of the Banks or
the Agent, whether incurred by the Borrower as maker, indorser, drawer,
acceptor, guarantor, accommodation party, counterparty, purchaser, seller or
otherwise, and whether due or to become due, secured or unsecured, absolute or
contingent, joint and/or several, and howsoever or whenever acquired by any of
the Banks or the Agent and whether incurred pursuant to or in connection with
that certain Loan Agreement dated as of June 25, 1999 among the Agent, the
Banks, the Borrower, the Guarantor and others, which Loan Agreement has
heretofore been amended pursuant to that certain First Amendment dated as of
August 14, 2000, that certain Second Amendment dated as of March 27, 2001, that
certain Third Amendment dated as of October 10, 2001, that certain Fourth
Amendment dated as of July 30, 2002 and that certain Fifth Amendment of even
date herewith (as so amended and as may be further amended from time to time,
the "Loan Agreement") (all of which are herein collectively referred to as the
"Obligations"), whether due or to become due, and irrespective of the
genuineness, validity, regularity, discharge, release or enforceability of such
Obligations, or of any instrument evidencing any of the Obligations or of any
collateral therefor or of the existence or extent of such collateral or of the
obligation of the Guarantor under this Guaranty. The Obligations shall include
interest accruing thereon before or after the commencement of any insolvency,
bankruptcy or reorganization proceeding in respect of the Borrower or any other
guarantor of the Obligations whether or not such interest is an allowable claim
in any such proceeding and irrespective of the discharge or release of the
Borrower or any other guarantor in such proceeding. Capitalized terms used
herein without definition shall have the meanings given such terms in the Loan
Agreement.
1. The Guarantor hereby agrees that the Agent may enforce the
provisions of this Guaranty for itself and/or on behalf of the Banks. The
Guarantor hereby further agrees that the Agent or any of the Banks may at any
time and from time to time, either before or after the maturity thereof, without
notice to or reservation of rights against or further consent of the Guarantor
(i) extend the time of payment of, change the amount of, exchange, release,
substitute or surrender any collateral for, renew or extend any of the
Obligations or increase the interest rate thereon or (ii) make any agreement
with the Borrower or with any other guarantor of the Obligations or any other
party to or person liable on any of the Obligations, or interested therein, or
with any hypothecator of collateral for the Obligations, for the extension,
renewal, payment, compromise, discharge or release thereof, in whole or in part,
or for any modification of the terms thereof or of any agreement between the
Agent and/or any of the Banks and the Borrower or any such other party or
person. The Guarantor agrees that this Guaranty shall not be impaired or
otherwise affected by any failure to call for, take, hold, protect or perfect,
continue the perfection of or enforce any security interest in or other lien
upon, any collateral for the Obligations, or by any failure to exercise, delay
in the exercising or waiver of, or forebearance with respect to, any right or
remedy available to the Agent with respect to the Obligations. Any of the
foregoing shall not in any way impair or affect this Guaranty or the obligation
of the Guarantor hereunder.
2. The Guarantor hereby acknowledges that it has derived or expects to
derive a financial or other benefit from each and every Obligation incurred by
the Borrower to the Agent or any of the Banks reasonably equivalent to the
obligation of the Guarantor hereunder.
3. The Guarantor waives notice of the acceptance of this Guaranty and
of the making of any such loans or extensions of credit or the incurrence of any
Obligation, presentment to or demand of payment from anyone whomsoever liable
upon any of the Obligations, protest, notice of presentment, non-payment or
protest and notice of any sale or other disposition of collateral security or
any default of any sort.
4. To secure the liabilities of the Guarantor under this Guaranty, the
Guarantor hereby grants to the Agent and each of the Banks a security interest
in and a lien upon all personal property of the Guarantor or in which the
Guarantor may have an interest which is now or may at any time hereafter come
into the possession or control of the Agent or any of the Banks, (including
property held by the Agent or any of the Banks in a fiduciary capacity) or of
any third party acting on their behalf (the "Collateral"), whether for the
express purpose of being used by the Agent or any of the Banks as collateral
security or for safekeeping or for any other or different purpose, including
such personal property as may be in transit by mail or carrier for any purpose
or covered or affected by any documents in the Agent's or any Bank's possession
or control, or in the possession or control of any third party acting on behalf
of the Agent or any of the Banks, or any collateral which secures any other
obligations of the Guarantor to the Agent or any of the Banks. The Guarantor
hereby authorizes the Agent or any of the Banks in their discretion, at any
time, to appropriate and apply upon any of their liabilities of the Guarantor
under this Guaranty any such property of the Guarantor and to charge any of such
liabilities against any balance of any account standing to the credit of the
Guarantor on the books of the Agent or any of the Banks. To satisfy the
liabilities of the Guarantor under this Guaranty, the Agent and the Banks shall
have, in addition to all other rights and remedies allowed by law, the rights
and remedies of a secured party under the Uniform Commercial Code as in effect
in the State of New York at the date hereof and, without limiting the generality
of the foregoing, the Agent or any Bank may immediately, without demand of
performance and without notice of intention to sell or otherwise to dispose of
or of the time or place of sale or of redemption or other notice or demand
whatsoever to the Guarantor, all of which are hereby expressly waived, to the
extent permitted by law, and without advertisement, sell at public or private
sale, grant options to purchase or otherwise realize upon, in the State of New
York, or elsewhere, the whole or from time to time any part of the said
Collateral upon which the Agent or such Bank shall have a security interest and
lien as aforesaid, and after deducting from the proceeds of sale or other
disposition of the said Collateral all expenses (including all reasonable
expenses for legal services of every kind and other expenses as set forth below)
shall apply the residue of such proceeds towards the payment of any of the
liabilities of the Guarantor under this Guaranty in such order as the Agent or
such Bank shall elect, the Guarantor remaining liable for any deficiency
remaining unpaid after such application. If notice of any sale or other
disposition is required by law to be given, the Guarantor hereby agrees that a
notice sent at least five (5) days before the time of any intended public sale
or of the time after which any private sale or other disposition of the said
Collateral is to be made, shall be reasonable notice of such sale or other
disposition.
5. At any such sale or other disposition of said Collateral the Agent
or any of the Banks or any person designated by the Agent or any of the Banks
may itself purchase the whole or any part of the Collateral sold or otherwise
disposed of, free from any right of redemption on the part of the Guarantor,
which right, to the extent permitted by law, is hereby waived and released.
6. The Guarantor agrees that the aforementioned Collateral secures, and
further agrees to pay on demand, all expenses (including reasonable expenses for
legal services, whether or not litigation is commenced and cost of any insurance
and payment of taxes or other charges) of, or incidental to, the custody, care,
sale or collection of, or realization upon, any of the said Collateral or in any
way relating to the enforcement or protection of the rights of the Agent or any
of the Banks hereunder or under or with respect to any of the Obligations.
7. This is a continuing Guaranty and shall remain in full force and
effect and shall apply to all Obligations notwithstanding that at any particular
time any or all of the Obligations shall have been paid in full. No attempted
revocation shall release the Guarantor or affect in any manner the rights,
remedies, powers, security interests and liens of the Agent or any of the Banks
under this Guaranty with respect to any of the Obligations. If any of the
present or future Obligations are guaranteed by persons, partnerships, limited
liability companies or corporations in addition to the Guarantor, the death,
release or discharge in whole or in part, or the bankruptcy, liquidation or
dissolution of one or more of them, shall not discharge or affect the
liabilities of the Guarantor under this Guaranty.
8. This Guaranty shall continue to be effective, or be reinstated, as
the case may be, if at any time any payment, or any part thereof, of any of the
Obligations is rescinded or must otherwise be restored or returned by the Agent
or any of the Banks upon insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Borrower or the Guarantor, or otherwise, or upon or as a
result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, the Borrower or the Guarantor or any substantial
part of their property, or otherwise, all as though such payments had not been
made.
9. This Guaranty is a guaranty of payment and not of collection, and
neither the Agent nor any of the Banks shall be under an obligation to take any
action against the Borrower or any other person liable with respect to any of
the Obligations or resort to any collateral security held by any of them to
secure any of the Obligations as a condition precedent to the Guarantor being
obligated to make payment and to perform as agreed herein. The Guarantor hereby
waives any rights to interpose any defense, counterclaim or offset of any nature
and description which it may have or which may exist between and among the Agent
or any of the Banks, the Borrower and/or the Guarantor other than payment.
Neither the Agent, the Banks nor their respective successors, endorsees or
assigns shall have any obligation to protect, secure, perfect or insure any lien
at any time held by any of them as security for the Obligations or for this
Guaranty or any property subject thereto or hereto, but at the Agent's or such
Bank's sole option and without prejudice may do so or incompletely do so, and
the Guarantor's obligations hereunder shall in no way be affected by reason
thereof. This Guaranty may be assigned by the Agent and its benefits shall inure
to the successors, indorsees and assigns of the Agent.
10. THE GUARANTOR, THE AGENT AND THE BANKS HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY WHICH THE
GUARANTOR, THE AGENT AND THE BANKS MAY HAVE IN ANY ACTION, PROCEEDING, CLAIM OR
COUNTERCLAIM, AT LAW OR IN EQUITY, IN CONNECTION WITH THIS GUARANTY OR THE
TRANSACTIONS RELATED HERETO. THE GUARANTOR REPRESENTS AND WARRANTS THAT NO
REPRESENTATIVE OR AGENT OF THE AGENT OR ANY OF THE BANKS HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT THE AGENT OR ANY OF THE BANKS WILL NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THIS JURY TRIAL WAIVER. THE GUARANTOR
ACKNOWLEDGES THAT THE AGENT AND THE BANKS HAVE BEEN INDUCED TO ACCEPT THIS
GUARANTY BY, AMONG OTHER THINGS, THE PROVISIONS OF THIS SECTION.
11. Until such time as the Obligations have been indefeasibly paid in
full, the Guarantor hereby waives all rights to be subrogated to the rights of
the Agent or any of the Banks with respect to the Obligations. In addition, the
Guarantor hereby waives, until such time as the Obligations have been
indefeasibly paid in full, any right to proceed against the Borrower, now or
hereafter, for contribution, indemnity, reimbursement and all other suretyship
rights and claims, whether direct or indirect, liquidated or contingent, whether
arising under express or implied contract or by operation of law, which the
Guarantor may now or hereafter have against the Borrower with respect to the
Obligations and the Guarantor agrees that it will not take any such action
against the Borrower or against any other person seeking contribution,
reimbursement or indemnification by the Borrower or such other person with
respect to the Obligations. The Guarantor also hereby waives, until such time as
the Obligations have been indefeasibly paid in full, any rights to recourse to
or with respect to any assets of the Borrower. The Guarantor agrees that in
light of the waivers contained in this Paragraph 11, the execution of this
Guaranty shall not be deemed to make the Guarantor a creditor of the Borrower,
and that for the purposes of Sections 547 and 550 of the United States
Bankruptcy Code (11 U.S.C. Sec. 547, 550), the Guarantor shall not be deemed a
creditor of the Borrower. If any amount shall be paid to the Guarantor on
account of such subrogation rights at any time when all such Obligations shall
not have been indefeasibly paid in full, such amount shall be held in trust for
the benefit of the Agent and the Banks and shall forthwith be paid to the Agent
to be credited and applied upon the Obligations.
12. The Guarantor authorizes the Agent to date this Guaranty and to
complete any blank space herein according to the terms upon which this Guaranty
was given. Any notice to any party hereto shall be given as provided for in the
Loan Agreement.
13. No failure on the part of the Agent or any of the Banks 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
Agent or any of the Banks of any right, remedy or power hereunder preclude any
other or future exercise of any other right, remedy or power.
14. Each and every right, remedy and power hereby granted to the Agent
or any of the Banks or allowed them by law or other agreement shall be
cumulative and not exclusive of any other right, remedy and power, and may be
exercised by the Agent or any of the Banks at any time and from time to time.
15. This Guaranty embodies the entire agreement and understanding
between the Agent, the Banks and the Guarantor and supersedes all prior
agreements and understandings relating to the subject matter hereof. This
Guaranty may not be amended, and compliance with its terms may not be waived,
orally or by course of dealing, but only by a writing signed by an authorized
officer of the Agent.
16. This Guaranty shall be construed and interpreted and all rights and
obligations hereunder shall be determined, in accordance with the laws of the
State of New York, without regard to principles of conflict of laws. The
Guarantor agrees that any action or proceeding relating in any way to this
Guaranty shall be brought and enforced in the courts of the State of New York or
the United States District Court for the Southern or Eastern District of New
York, and irrevocably submits to the jurisdiction of each such court in any
action or proceeding arising out of or relating to this Guaranty, and the
Guarantor irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in such New York State or Federal Court.
In furtherance of the foregoing, the Guarantor hereby irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of venue in any action or proceeding relating in any way to
this Guaranty brought in the Supreme Court of the State of New York within
Nassau and Suffolk Counties or the United States District Court for the Eastern
District of New York and any claim that such action or proceeding brought in any
such court has been brought in an inconvenient forum. Notwithstanding the
foregoing, the Agent or any of the Banks may bring any action or proceeding
against the Guarantor or its property in the courts of such jurisdictions as are
deemed necessary by the Agent or any of the Banks in its sole and absolute
discretion. The Guarantor agrees to pay all costs and expenses incurred by the
Agent or any of the Banks incidental to or in any way relating to the
enforcement of the Obligations or the obligations of or the protection of the
rights of the Agent or any of the Banks hereunder, including, but not limited
to, reasonable attorneys' fees and expenses, whether or not litigation is
commenced.
17. This Guaranty shall remain in full force and effect until there is
indefeasible cash payment of the Obligations in full and the Total Commitment
and each of the Commitments of the Banks have terminated. No payment or payments
made by any person or received or collected by the Agent or any of the Banks
from any person by virtue of any action or proceeding or any setoff or
appropriation or application, at any time or from time to time, in reduction of
or in payment of the Obligations shall be deemed to modify, reduce, release or
otherwise affect the liability of the Guarantor hereunder which shall,
notwithstanding any such payment or payments, remain in place until there is
cash payment of the Obligations in full.
18. The Guarantor represents and warrants that all necessary and proper
corporate action has been taken to make this Guaranty and all of the provisions
hereof the valid and binding obligations of the Guarantor, enforceable against
the Guarantor in accordance with its terms.
19. Every provision of this Guaranty is intended to be severable and
any provision(s) of this Guaranty which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or enforceability without invalidating the remaining provisions
hereof, and any prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
20. None of the terms or provisions of this Guaranty may be waived,
amended, supplemented or otherwise modified except by a written instrument
executed by the Guarantor, the Agent and the Banks.
21. If this Guaranty is executed by two or more parties, they shall be
jointly and severally liable hereunder, and the word "Guarantor" wherever used
herein shall be construed to refer to each of such parties separately, all in
the same manner and with the same effect as if each of them had signed separate
instruments; and in any such case this Guaranty shall not be revoked or impaired
as to any one or more of such parties by the death or dissolution of any of the
others or by the revocation or release of any liabilities hereunder of any one
or more of such other parties and the Bank may proceed against none, one or more
of the Guarantors at one time, or from time to time, in its sole and absolute
discretion.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
executed by its authorized officer as of this 30th day of January, 2004.
EACH OF THE GUARANTORS LISTED ON
SCHEDULE A HERETO
By:____________________________
Name: Xxxxx X. Xxxxxxxxx
Title: President
SCHEDULE A
COMPUTER DISCOUNT DIRECT, INC MANCHESTER TECHNOLOGY GROUP, INC MANCHESTER
ENTERPRISE GROUP, INC TELSTARR PROFESSIONAL SERVICES, INC.
SCHEDULE B
ADDITIONAL BORROWERS
MANCHESTER INTERNATIONAL LTD.
MANTECH COMPUTER SERVICES, INC.
ELECTROGRAPH SYSTEMS, INC.
COASTAL OFFICE PRODUCTS, INC.
0X.XXX, INC.
TEXPORT TECHNOLOGY GROUP, INC.
MARKETPLACE 0X.XXX, INC.
XXXXXXX CONSULTING GROUP, INC.
E.TRACK SOLUTIONS, INC.
LEARNING TECHNOLOGY GROUP, LLC
