THIS GUARANTEE
(“Guarantee”), dated October 25, 2005, is by each
of the undersigned (each individually, a “Guarantor”
and collectively, “Guarantors”) in favor of Wachovia
Bank, National Association, a National Banking Association
(“Lender”), having an office at 301 South College
Street, Charlotte, NC 28288-0479.
WHEREAS, Lender
has entered into financing arrangements pursuant to which Lender
may make loans and advances and provide other financial
accommodations to US LEC Corp. (“Borrower”) as set
forth in the Loan and Security Agreement, dated of even date
herewith, by and among Borrower, certain affiliates of Borrower,
and Lender (as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced,
the “Loan Agreement”), and the other agreements,
documents and instruments referred to therein or at any time
executed and/or delivered in connection therewith or related
thereto, including, but not limited to, this Guarantee (all of the
foregoing, together with the Loan Agreement, as the same now exist
or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced, being collectively referred to
herein as the “Financing Agreements”); and
WHEREAS, due to
the close business and financial relationships between Borrower and
each Guarantor, in consideration of the benefits which will accrue
to Guarantors and as an inducement for and in consideration of
Lender making loans and advances and providing other financial
accommodations to Borrower pursuant to the Loan Agreement and the
other Financing Agreements;
NOW, THEREFORE, in
consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, each Guarantor hereby jointly and severally agrees in
favor of Lender as follows:
(a) Each
Guarantor absolutely and unconditionally, jointly and severally,
guarantees and agrees to be liable for the full and indefeasible
payment and performance when due of all of the Obligations, as
defined in the Loan Agreement (all of which are collectively
referred to herein as the “Guaranteed
Obligations”)
(b) This
Guarantee is a guaranty of payment and not of collection. Each
Guarantor agrees that Lender need not attempt to collect any
Guaranteed Obligations from Borrower, any one of Guarantors or any
other Obligor or to realize upon any Collateral, but may require
any one of Guarantors to make immediate payment of all of the
Guaranteed Obligations when due, whether by maturity, acceleration
or otherwise, or at any time thereafter. Lender shall apply any
amounts received in respect of the Guaranteed Obligations to any of
the Guaranteed Obligations, in whole or in part (including
attorneys’ fees and legal expenses incurred by
Lender with
respect thereto or otherwise chargeable to Borrower or Guarantors)
and in such order as Lender may elect.
(c) Payment
by Guarantors shall be made to Lender at the office of Lender from
time to time on demand as Guaranteed Obligations become due.
Guarantors shall make all payments to Lender on the Guaranteed
Obligations free and clear of, and without deduction or withholding
for or on account of, any setoff, counterclaim, defense, duties,
taxes, levies, imposts, fees, deductions, withholding, restrictions
or conditions of any kind. One or more successive or concurrent
actions may be brought hereon against any Guarantor either in the
same action in which Borrower or any of the other Guarantors or any
other Obligor is sued or in separate actions.
2.
Waivers and Consents .
(a) Notice of
acceptance of this Guarantee, the making of loans and advances and
providing other financial accommodations to Borrower and
presentment, demand, protest, notice of protest, notice of
nonpayment or default and all other notices to which Borrower or
any of Guarantors are entitled are hereby waived by each Guarantor.
Each Guarantor also waives notice of and hereby consents to,
(i) any amendment, modification, supplement, extension,
renewal, or restatement of the Loan Agreement and any of the other
Financing Agreements that is signed by an authorized officer of
Borrower, including, without limitation, extensions of time of
payment of or increase or decrease in the amount of any of the
Guaranteed Obligations, the interest rate, fees, other charges, or
any Collateral, and the guarantee made herein shall apply to the
Loan Agreement and the other Financing Agreements and the
Guaranteed Obligations as so amended, modified, supplemented,
renewed, restated or extended, increased or decreased,
(ii) the taking, exchange, surrender and releasing of
Collateral or guarantees now or at any time held by or available to
Lender for the obligations of Borrower or any other party at any
time liable on or in respect of the Guaranteed Obligations or who
is the owner of any property which is security for the Guaranteed
Obligations (individually, an “Obligor” and
collectively, the “Obligors”), including, without
limitation, the surrender or release by Lender of any one of
Guarantors hereunder, (iii) the exercise of, or refraining
from the exercise of any rights against Borrower, any Guarantor or
any other Obligor or any Collateral, (iv) the settlement,
compromise or release of, or the waiver of any default with respect
to, any of the Guaranteed Obligations and (v) any financing by
Lender of Borrower under Section 364 of the United States
Bankruptcy Code or consent to the use of cash Collateral by Lender
under Section 363 of the United States Bankruptcy Code. Each
Guarantor agrees that the liability of Guarantors hereunder shall
not be otherwise impaired or affected by any of the
foregoing.
(b) No
invalidity, irregularity or unenforceability of all or any part of
the Guaranteed Obligations shall affect, impair or be a defense to
this Guarantee, nor shall any other circumstance which might
otherwise constitute a defense available to or legal or equitable
discharge of Borrower in respect of any of the Guaranteed
Obligations, or any one of Guarantors in respect of this Guarantee,
affect, impair or be a defense to this Guarantee. Without
limitation of the foregoing, the liability of Guarantors hereunder
shall not be discharged or impaired in any respect by reason of any
failure by Lender to perfect or continue perfection of any lien or
security interest in any Collateral or any delay by Lender in
perfecting any such lien or security interest. As to interest, fees
and expenses, whether arising before or after the commencement of
any case with respect to Borrower under the United
States
2
Bankruptcy Code
or any similar statute, Guarantors shall be liable therefor, even
if Borrower’s liability for such amounts does not, or ceases
to, exist by operation of law. Each Guarantor acknowledges that
Lender has not made any representations to any Guarantor with
respect to Borrower, any other Obligor or otherwise in connection
with the execution and delivery by Guarantors of this Guarantee and
Guarantors are not in any respect relying upon Lender or any
statements by Lender in connection with this Guarantee.
(c) Until the
Guaranteed Obligations are paid in full, each Guarantor hereby
irrevocably and unconditionally waives and relinquishes all
statutory, contractual, common law, equitable and all other claims
against Borrower, any Collateral for the Guaranteed Obligations or
other assets of Borrower or any other Obligor, for subrogation,
reimbursement, exoneration, contribution, indemnification, setoff
or other recourse in respect to sums paid or payable to Lender by
each Guarantor hereunder and each Guarantor hereby further
irrevocably and unconditionally waives and relinquishes any and all
other benefits which Guarantors might otherwise directly or
indirectly receive or be entitled to receive by reason of any
amounts paid by or collected or due from Guarantors, Borrower or
any other Obligor upon the Guaranteed Obligations or realized from
their property.
3.
Subordination . All amounts now or hereafter owed to any or
all of Guarantors by any Borrower or any other Obligor under this
Guarantee is hereby subordinated in right of payment to the
indefeasible payment in full to Lender of the Guaranteed
Obligations and all such amounts and any security and guarantees
therefor are hereby assigned to Lender as security for the
Guaranteed Obligations.
4.
Acceleration . Upon the receipt of notice by Borrower from
Lender in accordance with Section 10.2(b) of the Loan
Agreement of the acceleration of the Obligations and demand for
immediate payment thereof, the liability of Guarantors for the
entire Guaranteed Obligations shall mature and become immediately
due and payable, even if the liability of any or all of Borrower or
any other Obligor therefor does not, upon the occurrence of any
act, condition or event which constitutes an Event of Default as
such term is defined in the Loan Agreement.
5.
Account Stated . The books and records of Lender showing the
account between Lender and Borrower shall be admissible in evidence
in any action or proceeding against or involving Guarantors as
presumptive evidence of the items therein set forth, and the
monthly statements of Lender rendered to Borrower, to the extent to
which no written objection is made within thirty (30) days from the
date such statement has been received by Borrower, shall be deemed
conclusively correct and constitute an account stated among Lender
and Borrower and be binding on Guarantors.
6.
Termination . This Guarantee is continuing, unlimited,
absolute and unconditional. All Guaranteed Obligations shall be
conclusively presumed to have been created in reliance on this
Guarantee. Each Guarantor shall continue to be liable hereunder
until one of Lender’s officers actually receives a written
termination notice from a Guarantor sent to Lender at its address
set forth above by certified mail, return receipt requested and
thereafter as set forth below. Such notice received by Lender from
any Guarantor shall not constitute a revocation or termination of
this Guarantee as to any of the other Guarantors. Revocation or
termination hereo
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