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Continuing Guaranty

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Sectors: Computer Hardware
Governing Law: California , View California State Laws
Effective Date: November 28, 2001
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Exhibit 10.17


This CONTINUING GUARANTY, dated as of November 28, 2001, is made by 3COM CORPORATION , a Delaware corporation (" Guarantor "), in favor of the Lenders (as defined below) and BANK OF AMERICA, N.A., as agent for the Lenders (in such capacity as agent, together with its successors and assigns, the " Agent "), in light of the following:


WHEREAS, 3Com Technologies, an exempted limited liability company incorporated in the Cayman Islands (" 3Com Technologies ") and 3Com Europe Limited, a company incorporated in England and Wales with registered number 2600346 (" 3Com UK " and, collectively with 3Com Technologies, the " Borrowers ") are currently entering into that certain Credit Agreement, of even date herewith (as amended, supplemented, or otherwise modified from time to time, the " International Credit Agreement ") with various financial institutions (together with their successors and assigns, the " Lenders "), Bank of America, N.A., as " Bank " and " Issuing Bank " thereunder and as security trustee (" Trustee ") and Agent (collectively, the Lenders, Bank, Issuing Bank, Trustee, and Agent are referred to herein as the " Credit Parties ");

WHEREAS, 3Com Technologies is an indirect wholly-owned subsidiary of Guarantor, and 3Com UK is an indirect wholly-owned subsidiary of 3Com Technologies;

WHEREAS, Guarantor will derive substantial, direct and indirect benefit from the transactions contemplated by the International Credit Agreement; and

WHEREAS, as a condition to the Credit Parties extending certain financial accommodations to Borrowers pursuant to the International Credit Agreement, the Credit Parties have required that Guarantor guarantee the Guaranteed Obligations (as defined below).

FOR GOOD AND VALUABLE CONSIDERATION, Guarantor irrevocably and unconditionally undertakes and agrees for the benefit of the Credit Parties as follows:



1.1 Definitions. All initially capitalized terms used but not defined in this Guaranty shall have the meanings set forth in the International Credit Agreement. In addition, the following terms shall have the following meanings:

" Bankruptcy Code " means any applicable bankruptcy or insolvency act or law, including the US Bankruptcy Code, now or hereafter existing, and any and all rules issued or promulgated in connection therewith.

" Borrowers " has the meaning set forth in the recitals hereto, and includes all successors-in-interest of each such corporation by operation of law or otherwise, including any "Trustee" (as defined in the Bankruptcy Code) or debtor-in-possession, and any successor-in-interest arising out of any merger or reorganization involving each such corporation.

" Credit Parties " has the meaning set forth in the recitals hereto.

" Guaranteed Obligations " means all present and future loans, advances, liabilities, obligations, covenants, duties, and Debt owing by Borrowers to the Credit Parties, arising under or relating to the International Credit Agreement or any other Loan Document, whether or not evidenced by


any note, or other instrument or document, whether arising from an extension of credit, opening of a letter of credit, reimbursement obligations relating to Letters of Credit, acceptance, loan, guaranty, indemnification or otherwise, whether direct or indirect (including, without limitation, those debts of Borrowers arising under or related to the International Credit Agreement or any other Loan Document acquired by assignment from others, and any participation by the Credit Parties in Borrowers' debts arising under or related to the International Credit Agreement or any other Loan Document), absolute or contingent, due or to become due, primary or secondary, as principal or guarantor, and including, without limitation, all interest (including interest that, but for the filing of a petition under the Bankruptcy Code with respect to any Borrower, would have accrued on any such obligations, indebtedness, or liabilities), charges, reasonable expenses, fees, attorneys' and paralegals' fees and disbursements, filing fees and any other sums chargeable to Borrowers under the International Credit Agreement or under another Loan Document, whether made, incurred, or created before or after any entry of order for relief with respect to any Borrower in a case under the Bankruptcy Code and whether recovery is or hereafter becomes barred by any statue of limitations or otherwise becomes unenforceable for any reason whatsoever, including any act or failure to act by the Credit Parties.

" Guarantor " has the meaning set forth in the introduction hereto.

" Guaranty " means this Continuing Guaranty, any concurrent or subsequent exhibits or schedules hereto, and any extensions, supplements, amendments, or modifications to or in connection with this Continuing Guaranty, or to any such schedules or exhibits.

" Lender " has the meaning set forth in the introduction hereto.

" International Credit Agreement " has the meaning set forth in the recitals hereto.

" US Bankruptcy Code " means the Bankruptcy Reform Act of 1978 (11 U.S.C. Sections 101-1330), as amended or supplemented from time to time, and any successor statute, and any and all rules issued or promulgated in connection therewith.

" US Credit Agreement " means that certain Credit Agreement, of even date herewith, among Guarantor, Agent, Bank, and certain other financial institutions signatory thereto.

1.2 Construction. Unless the context of this Guaranty clearly requires otherwise: (a) references to the plural include the singular and references to the singular include the plural; (b) references to any gender include the other gender; (c) the terms "include" and "including" are not limiting; and (d) the term "or" has the inclusive meaning represented by the phrase "and/or." The terms "hereof," "herein," "hereby," and "hereunder," and other similar terms in this Guaranty, refer to this Guaranty as a whole and not to any particular provision of this Guaranty. References in this Guaranty to any "determination," or any matter being "determined," by the Credit Parties include good faith estimates (in the case of quantitative determinations), and good faith beliefs (in the case of qualitative determinations) by the Credit Parties and mean that any such determination so made shall be conclusive absent manifest error. Unless otherwise specified, section and subsection references are to this Guaranty. Any reference to any statute, law, or regulation shall include all amendments thereto and revisions thereof. Any reference herein to any of the Loan Documents includes any and all alterations, amendments, extensions, modifications, renewals, or supplements thereto or thereof, as applicable. If there exists any inconsistency between the terms of the US Credit Agreement and this Agreement or if the terms, conditions, or obligations under this Agreement are any more restrictive on Guarantor than those provided with respect to Guarantor under the US Credit Agreement, then the terms of the US Credit Agreement shall prevail, so that nothing herein contained shall impose any greater or more onerous liability or restriction on Guarantor than is imposed under the US Credit Agreement. To the extent any provision of the US Credit Agreement addresses the same subject matter covered by a provision hereunder, actions or omissions which are expressly permitted or not prohibited


by the terms of the US Credit Agreement shall not constitute a breach of the express or implied terms of this Agreement.


2.1 Promise to Pay and Perform. Guarantor unconditionally and irrevocably guarantees to the Credit Parties the payment and performance of the Guaranteed Obligations when and as the same shall become due and payable (whether at stipulated date of maturity or any accelerated or earlier date (including the date of any required prepayment)). It is Guarantor's intent that this Guaranty is a guaranty of payment and not a guaranty of collection. If any Borrower fails to pay or perform any Guaranteed Obligation on or before the date when due (whether at the stipulated date of maturity or any accelerated or earlier date (including the date of any required prepayment)), Guarantor shall unconditionally and immediately make such payment or render such performance upon demand therefor by the Agent.

2.2 Cumulative Obligations. The obligations of Guarantor hereunder are in addition to any other obligations of Guarantor under any other guaranties of the Guaranteed Obligations or other obligations of any Borrower or any other Person at any time given to any Credit Party. This Guaranty shall not affect or invalidate any such other guaranties.

2.3 Continuing Guaranty. This Guaranty is a continuing guaranty and shall remain in full force and effect notwithstanding the fact that, at any particular time, no Guaranteed Obligations may be outstanding. This Guaranty includes Guaranteed Obligations arising under successive transactions continuing, compromising, extending, increasing, modifying, releasing, or renewing the Guaranteed Obligations, changing the interest rate, payment terms, or other terms and conditions thereof, or creating new or additional Guaranteed Obligations after prior Guaranteed Obligations have been satisfied in whole or in part.

2.4 Joint and Several Obligation; Independent Obligation. Guarantor is directly, jointly and severally with all other guarantors of the Guaranteed Obligations or any portion thereof, liable to the Credit Parties. The obligations of Guarantor hereunder are direct and primary and are independent of the obligations of Borrowers or any other such guarantor, and a separate action may be brought against Guarantor irrespective of whether an action is brought against Borrowers or any other such other guarantor or whether any Borrower or any such other guarantor is joined in such action. Guarantor's liability hereunder shall not be contingent upon the exercise or enforcement by any Credit Party of any remedies it may have against any Borrower or any other guarantor or the enforcement of any Lien or realization upon any security the Credit Parties may at any time possess. Any release which may be given by the Credit Parties to any Borrower or any other guarantor shall not release Guarantor. Guarantor acknowledges that the Credit Parties shall have the right to seek recourse against Guarantor to the fullest extent provided for herein and no election by the Credit Parties to proceed in one form of action or proceeding, or against any party or on any obligation, shall constitute a waiver of the Credit Parties' right to proceed in any other form of action or proceeding or against other parties unless they have expressly waived such right in writing.


3.1 Nature and Application of Payments. Guarantor shall make all payments hereunder in immediately available lawful money of the United States, without deduction or withholding (whether for taxes (whether income, excise, or otherwise) or offset). Without regard to the form in which received, the Credit Parties may apply any payment with respect to the Guaranteed Obligations or any other amounts due hereunder in such order as is provided for in Section 3.8 of the International Credit Agreement, irrespective of any contrary instructions received from any other Person.


3.2 Revival. In the event that, for any reason, all or any portion of any payment to the Credit Parties is set aside or restored, including, but not limited to, payments subject to a right of any Person whomsoever, including any Borrower, any Borrower as debtor in possession, or any trustee (whether appointed under the Bankruptcy Code or otherwise) of Borrower's assets to invalidate or set aside such payments, to seek to recoup the amount of such payments or any portion thereof, or to declare same to be fraudulent or preferential, whether voluntarily or involuntarily, and repaid by the Credit Parties for any reason after being made by Guarantor, the amount so set aside shall be revived as a Guaranteed Obligation and Guarantor shall be liable for the full amount the Credit Parties are required to repay plus all costs and expenses (including attorneys' fees, costs, and expenses) incurred by them in connection therewith.


Guarantor represents and warrants as follows (which representations and warranties shall be true, correct, and complete in all respects at all times):

4.1 Reliance by Guarantor; Financial Condition of Borrowers. This Guaranty is not made by Guarantor in reliance on any representation or warranty, express or implied, by the Credit Parties concerning the financial condition of Borrowers, the nature, value, or extent of any security for the Guaranteed Obligations, or any other matter. Guarantor is presently informed of the financial condition of Borrowers and of all other circumstances which a diligent inquiry would reveal and which bear upon the risk of nonpayment of the Guaranteed Obligations. Guarantor has read and reviewed each of the Loan Documents and understands the terms and conditions thereof.

4.2 Adequate Consideration. The consideration given or provided, or to be given or provided, by the Credit Parties in connection with this Guaranty is adequate and satisfactory in all respects, and represents reasonably equ
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