GUARANTY
This Guaranty (the "Guaranty") is made and entered into as of December 15,
1998, (the "Effective Date"), by Incomnet Communications Corporation (formerly
known as National Telephone & Communications, Inc.), a Delaware corporation
("Guarantor"), in favor of Ironwood Telecom LLC, a Colorado limited liability
company ("Lender"). This Guaranty is executed and delivered in connection with a
(i) Term Note in the original principal amount of $8,374,610.64 dated as of the
Effective Date (the "Term Note") (ii) a Worldcom Promissory Note in the original
principal amount of $3,456,151.56 dated as of the Effective Date, evidencing the
assignment of Guarantor's Worldcom Debt to Lender (the "Worldcom Note") and
(iii) an Amended and Restated First Bank Promissory Note in the original
principal amount of $4,954,707.80 dated as of the Effective Date evidencing the
assignment of Guarantor's First Bank Debt to Lender (the "First Bank Note").
Each of the Term Note, the Worldcom Note and the First Bank Note are secured by
the Loan and Security Agreement dated as of the Effective Date (the "Loan
Agreement") among Lender, Borrower, Guarantor and all three promissory notes
shall be referred to herein collectively as the "Notes".
Guarantor, for the benefit of Lender, agrees as set forth below.
1. Definitions.
Any capitalized term not otherwise defined in this Guaranty shall have the
meaning given to the term in the Loan Agreement.
2. Guaranty.
Guarantor unconditionally guaranties to Lender the timely (whether as
scheduled or upon acceleration) payment and performance by Borrower of the
following (the "Guarantied Obligations"):
2.1. The principal, interest and other charges or amounts due under the
Notes and the other Loan Documents (whether by acceleration or otherwise) and
all renewals, extensions, modifications and rearrangements of any of the Loan
Documents;
2.2. The other obligations set forth in or arising out of the Notes and
the other Loan Documents;
2.3. Any of the forgoing arising out of or in connection with any renewal,
extension or other modification of the Notes or any of the other Loan Documents;
2.4. Any of the foregoing arising after Borrower has commenced or become
subject to any proceeding under the Bankruptcy Code, including any advances made
to Borrower, any interest that accrues after the filing of the bankruptcy
petition (even if the interest cannot be collected in the proceeding under the
Bankruptcy Code), and attorneys fees.
If Borrower fails to pay or perform any of the Guarantied Obligations, Guarantor
will immediately pay or perform the obligation upon the written request of the
Lender.
3. Lender's Direct Rights.
3.1. This is a guaranty of payment and performance and is not a guaranty
of collection.
3.2. In the event that Borrower fails timely to pay or perform under any
of the Notes or any of the other Guarantied Obligations, Lender may enforce its
rights under this Guaranty without first seeking to obtain payment or
performance from:
3.2.1. Borrower;
3.2.2. Any other guarantor;
3.2.3. Any collateral Lender may hold for any of the Notes or any of
the other Loan Documents or any guaranty of any of the Notes or any of the other
Loan Documents, including this one; or
3.2.4. Exercise of any other remedy or right that Lender may have.
3.3. In the event Borrower becomes subject to a voluntary or involuntary
proceeding under the Bankruptcy Code, Lender may immediately pursue its rights
under this Guaranty, even though Lender may be stayed from accelerating or
collecting the Guarantied Obligations as against Borrower.
4. Continuing Guaranty.
This is a continuing guaranty of the Guarantied Obligations and may not be
terminated.
5. No Notice Required.
Lender does not have to notify Guarantor of any of the following events
and Guarantor will not be released or exonerated from its obligations under this
Guaranty if it is not notified of these events:
5.1. Borrower's failure to pay timely any amount owed under any of the
Notes or any of the other Loan Documents or to pay or perform any of the other
Guarantied Obligations;
5.2. Borrower's failure to perform any other obligation under any of the
Notes, the Loan Agreement, or any other Loan Document;
5.3. Any sale or other disposition of any collateral for any of the Notes,
for the other Guarantied Obligations, or for any guaranty of any of the Notes or
any of the Guarantied Obligations;
5.4. Lender's acceptance of this Guaranty;
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5.5. Any renewal, extension or other modification of any of the Notes, any
other Loan Document, or any of the other Guarantied Obligations; or
5.6. All other notices to which it might be entitled.
6. Guarantor's Additional Waivers.
Guarantor waives any right it may have to any of the following acts:
6.1. Demand;
6.2. Presentment;
6.3. Diligence;
6.4. Protest;
6.5. Notice of dishonor; and
6.6. Any other notice to which it may be entitled.
7. No Release of Guarantor.
Lender may do any of the following, by action or inaction, without
releasing or exonerating Guarantor from any of its obligations under this
Guaranty:
7.1. Renew, extend or otherwise modify or alter any of the Notes, the Loan
Agreement, any other Loan Document or any of the other Guarantied Obligations;
7.2. Release Borrower from any of the Guarantied Obligations;
7.3. Sell, release, subordinate, impair, waive or otherwise fail to obtain
or perfect a security interest in, or realize upon, any collateral for any of
the Notes, any of the other Guarantied Obligations, or any other guaranty of any
of the Notes;
7.4. Advance additional funds in its discretion for purposes related to
the purposes set forth in the Loan Agreement;
7.5. From time to time and without first requiring performance on the part
of Borrower and without being required to exhaust any or all security held by
Lender, to look to and require performance by Guarantor of any obligation on the
part of Guarantor to be performed pursuant to the terms hereof, by action at law
or in equity or both, and further to collect in any such action its costs and
expenses, including reasonable attorneys' fees incurred in enforcing its rights
hereunder;
7.6. Foreclose on any collateral for any of the Notes or a guaranty of any
of the Notes in a manner that diminishes, impairs or precludes the right of
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Guarantor to enjoy any rights of subrogation against Borrower or any other
guarantor, or to obtain reimbursement, performance, or indemnification for
payment or performance under this Guaranty;
7.7. Make an election under Bankruptcy Code ss. 1111(b)(2);
7.8. Permit or suffer the creation of secured or unsecured credit or debt
under Bankruptcy Code ss. 364;
7.9. Permit or suffer the disallowance, avoidance or subordination of any
of the Guarantied Obligations or collateral for any of the Guarantied
Obligations;
7.10. Fail to exercise any right or remedy it may have with respect to the
payment or performance of any of the Notes, any of the other Loan Documents or
any of the other Guarantied Obligations; or
7.11. Fail to obtain a guaranty, other assurance of payment, or credit
enhancement from any other person.
8. No Subrogation, etc.
Guarantor waives and shall not seek to exercise any of the following
rights that it may have against Borrower, any other guarantor, or any collateral
provided by Borrower or any other guarantor, for any amounts paid by it, or acts
performed by it, under this Guaranty:
8.1. Subrogation;
8.2. Reimbursement;
8.3. Performance;
8.4. Indemnification (including any rights to indemnification set forth in
this Guaranty).
9. Subordination of Guarantor.
9.1. Subordination of Claims.
All principal and interest on all existing and future indebtedness,
liabilities, and obligations of Borrower to Guarantor, whether fixed or
contingent, matured or unmatured, and liquidated or unliquidated (the
"Subordinated Debt") shall at all times be subordinated in right of payment to
the payment and performance of the Notes, the other Loan Documents and the other
Guarantied Obligations.
9.2. Payments.
Upon the occurrence of any default, event of default or Event of Default
under any of the Loan Documents, Guarantor will not accept any payments on any
of the Subordinated Debt. If no default, event of default or Event of Default
has occurred under any of the Loan Documents
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and Guarantor receives any payment on the Subordinated Debt, it will hold such
payment in trust for the benefit of Lender; if any default, event of default or
Event of Default has occurred under any of the Loan Documents and Guarantor
receives any payment on the Subordinated Debt, it shall immediately deliver such
payment to Lender, but, in either event, without otherwise reducing or affecting
in any manner the liability of Guarantor under the other provisions of this
Guaranty.
9.3. Attorney-in-Fact.
Guarantor appoints Lender Guarantor's attorneyinfact to file claims, and
receive payments, on behalf of Guarantor with respect to any of the Subordinated
Debt in any proceeding by or against Borrower under the Bankruptcy Code
(including Chapters 7 or 11), any assignment for the benefit of Lenders made by
Borrower, or in any other reorganization or insolvency proceeding.
10. Miscellaneous.
10.1. Revival of Debt.
Guarantor's obligations under this Guaranty shall again include amount
returned by Lender in the event that Lender must return any amount paid by
Borrower or any other guarantor of the Notes or of any of the other Guarantied
Obligations because of the application of:
10.1.1. the Bankruptcy Code;
10.1.2. any fraudulent transfer law; or
10.1.3. any law respecting preferences.
10.2. No Marshalling.
Lender has no obligation to xxxxxxxx any assets in favor of Guarantor, or
against or in payment of:
10.2.1. the Notes,
10.2.2. any of the other Guarantied Obligations, or
10.2.3. any other obligation owed to Lender by Guarantor, Borrower,
or any other person.
10.3. Fees and Costs.
Guarantor will pay all of Lender's fees and costs incurred in enforcing
this Guaranty, including Lender's reasonable attorneys' fees.
10.4. Assignment.
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Guarantor may not assign his obligations or liabilities under this
Guaranty. Subject to the preceding sentence, this Guaranty shall be binding upon
the parties hereto and their respective heirs, executors, successors,
representatives and assigns and shall inure to the benefit of the parties hereto
and their respective successors and assigns. Lender may assign its rights under
this Guaranty.
10.5. Applicable Law.
The law of the state of Colorado will apply to the interpretation and
enforcement of this Guaranty except that no doctrine of choice of law shall be
and to apply the laws of any other state or jurisdiction.
10.6. Indemnification by Borrower.
Borrower will indemnify Guarantor against, and hold it harmless from, all
payments which Guarantor may at any time be required to make to Lender under
this Guaranty.
10.7. Integration.
This Guaranty is the entire agreement of Borrower and Guarantor with
respect to the subject matter of this Guaranty.
10.8. Rights Cumulative.
All of Lender's rights under this Guaranty are cumulative. The exercise of
any one right does not exclude the exercise of any other right given in this
Guaranty or any other right of Lender not set forth in this Guaranty.
10.9. Rules of Construction.
The following rules shall apply in interpreting the meaning of this
Guaranty:
10.9.1. "Includes" and "including" are not limiting;
10.9.2. "Or" is not exclusive; and
10.9.3. "All" includes "any" and "any" includes "all."
10.10. Severability.
If any provision of this Guaranty is unenforceable, or otherwise invalid,
the remaining provisions of this Guaranty shall be enforced to the fullest
possible extent.
10.11. Notices.
Lender may give any notice to Guarantor at the following address, until
changed in writing by notice given by Borrower:
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Incomnet Communications Corporation
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Mr. Xxxxx Xxxxxxx
10.12. Joint and Several Liability.
The obligations hereunder of the persons and/or entities constituting
Guarantor under this Guaranty are joint and several.
10.13. Headings; Number; Gender.
Section headings used in this Guaranty are for convenience only. They are
not a part of this Guaranty and shall not be used in construing it. Wherever
appropriate in this Guaranty, the singular shall be deemed to also refer to the
plural, and the plural to the singular, and pronouns of certain genders shall be
deemed to include either or both of the other genders.
10.14. Review of Documents.
Guarantor acknowledges that he has copies of and is fully familiar with
each and every Loan Document.
10.15. Counterparts.
This Guaranty may be executed in counterparts, each of which shall be
deemed an original, but all of which, when taken together, shall be deemed one
and the same agreement.
10.16. Acknowledgment of Waivers.
Guarantor acknowledges that certain provisions of this Guaranty operate as
waivers of rights that Guarantor would otherwise have under applicable law.
IN WITNESS WHEREOF, the undersigned have executed this Guaranty as of the
date first above written.
"Guarantor"
INCOMNET COMMUNICATIONS CORPORATION, formerly known as
NATIONAL TELEPHONE & COMMUNICATIONS, INC.
By: /s/ Xxxxx Xxxxxxx
--------------------------------
Xxxxx Xxxxxxx
President and Chief Executive Officer
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AGREEMENT OF BORROWER
Incomnet, Inc., a California corporation, hereby agrees to indemnify
Incomnet Communications Corporation. as set forth in Section 10.6 to the
foregoing Guaranty.
INCOMNET, INC.,
a California corporation
By: /s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
President and Chief Executive Officer
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