Guaranty Obligations Unless otherwise specified, the amount of any Guaranty Obligation shall be the lesser of the principal amount of the obligations guaranteed and still outstanding and the maximum amount for which the guaranteeing Person may be liable pursuant to the terms of the instrument embodying such Guaranty Obligation.
Guaranty of the Obligations Subject to the provisions of Section 7.2, Guarantors jointly and severally hereby irrevocably and unconditionally guaranty to Administrative Agent for the ratable benefit of the Beneficiaries the due and punctual payment in full of all Obligations when the same shall become due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise (including amounts that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a)) (collectively, the “Guaranteed Obligations”).
Recourse Obligations The Mortgage Loan documents for each Mortgage Loan (a) provide that such Mortgage Loan becomes full recourse to the Mortgagor and guarantor (which is a natural person or persons, or an entity or entities distinct from the Mortgagor (but may be affiliated with the Mortgagor) that collectively, as of the date of origination of the related Mortgage Loan, have assets other than equity in the related Mortgaged Property that are not de minimis) in any of the following events (or negotiated provisions of substantially similar effect): (i) if any petition for bankruptcy, insolvency, dissolution or liquidation pursuant to federal bankruptcy law, or any similar federal or state law, shall be filed by, consented to, or acquiesced in by, the Mortgagor; (ii) the Mortgagor or guarantor shall have solicited or caused to be solicited petitioning creditors to cause an involuntary bankruptcy filing with respect to the Mortgagor or (iii) voluntary transfers of either the Mortgaged Property or controlling equity interests in the Mortgagor made in violation of the Mortgage Loan documents; and (b) contains provisions for recourse against the Mortgagor and guarantor (which is a natural person or persons, or an entity or entities distinct from the Mortgagor (but may be affiliated with the Mortgagor) that collectively, as of the date of origination of the related Mortgage Loan, have assets other than equity in the related Mortgaged Property that are not de minimis), for losses and damages resulting from the following (or negotiated provisions of substantially similar effect): (i) the Mortgagor’s misappropriation of rents after an event of default, security deposits, insurance proceeds, or condemnation awards; (ii) the Mortgagor’s fraud or intentional material misrepresentation; (iii) breaches of the environmental covenants in the Mortgage Loan documents; or (iv) the Mortgagor’s commission of intentional material physical waste at the Mortgaged Property (but, in some cases, only to the extent there is sufficient cash flow generated by the related Mortgaged Property to prevent such waste).
Litigation and Contingent Obligations There is no litigation, arbitration, governmental investigation, proceeding or inquiry pending or, to the knowledge of any of their officers, threatened against or affecting the Borrower or any of its Subsidiaries which could reasonably be expected to have a Material Adverse Effect or which seeks to prevent, enjoin or delay the making of any Loans. Other than any liability incident to any litigation, arbitration or proceeding which could not reasonably be expected to have a Material Adverse Effect, the Borrower has no material contingent obligations not provided for or disclosed in the financial statements referred to in Section 5.4.
Guaranteed Indebtedness No Credit Party shall create, incur, assume or permit to exist any Guaranteed Indebtedness except (a) by endorsement of instruments or items of payment for deposit to the general account of any Credit Party, and (b) for Guaranteed Indebtedness incurred for the benefit of any other Credit Party if the primary obligation is expressly permitted by this Agreement.
Surety Obligations No Borrower or Subsidiary is obligated as surety or indemnitor under any bond or other contract that assures payment or performance of any obligation of any Person, except as permitted hereunder.
Warranty Obligations
(a) Project Co represents, warrants and covenants that:
(i) the Works shall conform to the requirements of this Project Agreement, Good Industry Practice, Applicable Law and all professional engineering principles generally accepted as standards of the industry in the Province of Ontario;
(ii) the Works shall be free of defects, including design defects, errors and omissions; and
(iii) materials and equipment shall be of good quality and in compliance with this Project Agreement.
(b) During the Warranty Period and subject to Section 11.15(c), Project Co shall promptly, at its sole cost and expense, correct and Make Good all Construction Defects arising in respect of the Works. For greater certainty, Project Co is required to correct and Make Good Construction Defects related to any Product during the applicable Warranty Period despite Project Co having obtained on Contracting Authority’s behalf industry- standard or other equipment warranties in accordance with Section 11.15(f). For all work to correct Construction Defects, the applicable Warranty Period shall be extended for a further two years from the date of the last work completed in respect of such corrective Works. For clarity, any extension of a Warranty Period for the purposes of a correction shall only apply to the relevant Construction Defect and not the Works as a whole.
(c) In addition to the obligation to correct and Make Good Construction Defects during the Warranty Period, Project Co shall at its expense correct and Make Good any Construction Defects that could not reasonably have been ascertained by a competent person in accordance with Good Industry Practice during a visual inspection of the Works (“Construction Latent Defect”), provided Contracting Authority gives Project Co written Notice of the Construction Latent Defect within the time frame applicable to such Construction Latent Defect pursuant to the Limitations Act, 2002 (Ontario).
(d) The warranties described in this Section 11.15 shall cover labour and material, including, the costs of removal and replacement of covering materials. The warranties shall not limit extended warranties on any Product or item of equipment called for elsewhere in the Output Specifications or otherwise provided by any manufacturer of such Product or equipment.
(e) If Project Co fails to correct and Make Good any Construction Defects or Construction Latent Defects in accordance with Sections 11.15(b) and 11.15(c) and in the time period specified in Section 11.16(a) or Section 11.16(b), as applicable, without prejudice to any other right or remedy Contracting Authority may have, Contracting Authority may correct such Construction Defects or Construction Latent Defects at Project Co’s sole cost and expense.
(f) Project Co shall obtain warranties from the manufacturers of each of the Products for the duration(s) and in accordance with the applicable requirements specified in the Output Specifications in the name of and to the benefit of both Project Co and Contracting Authority. Where, in respect of a Product warranty, the Output Specifications do not specify a specific duration and/or other requirements, Project Co shall obtain industry-standard warranties from the applicable manufacturers in the name of and to the benefit of Project Co and Contracting Authority which shall extend no less than two years from the Substantial Completion Date. Each Product warranty shall be issued by the applicable manufacturer and delivered to Project Co no later than 30 days prior to the Substantial Completion Date. Project Co shall ensure that each Product warranty, including any Product warranty extended under this Section 11.15(f), is fully assigned to Contracting Authority, at no cost or expense to Contracting Authority, at the end of the Warranty Period, as such Warranty Period may be extended in accordance with Section 11.15(b).
Intercompany Indebtedness The Company shall not create, incur, assume or otherwise become or remain directly or indirectly liable with respect to any Indebtedness arising from loans from any Subsidiary to the Company unless (a) such Indebtedness is unsecured and (b) such Indebtedness shall be expressly subordinate to the payment in full in cash of the Obligations on terms satisfactory to the Administrative Agent.
Limitation on Guarantee Obligations Create, incur, assume or suffer to exist any Guarantee Obligation except:
(a) the Guarantees and the Equipment Lease Guarantees, and any Refinancing Indebtedness incurred in respect thereof;
(b) up to $5,000,000 in the aggregate of Guarantee Obligations of HCLP or any of its Subsidiaries in connection with indebtedness incurred by customers of HCLP or any of its Subsidiaries; provided, that the proceeds of any such indebtedness shall be used by such customers to purchase natural gas compressors or oil and gas production equipment from HCLP or any of its Subsidiaries;
(c) Guarantee Obligations (in respect of obligations not constituting Indebtedness) arising under agreements entered into by HCLP or any of its Subsidiaries in the ordinary course of business;
(d) guarantees in respect of Indebtedness (other than Subordinated Debt and the 2003 Notes) permitted under this Agreement;
(e) Guarantee Obligations of Hanover and any of its Subsidiaries arising pursuant to the Equipment Lease Transactions, and any Refinancing Indebtedness incurred in respect thereof;
(f) the Guarantor Obligations of HCLP in the nature of a guarantee or indemnification for, in each case, performance obligations (and not Indebtedness) as contemplated by the HMS Transactions;
(g) the Subordinated Guarantee Obligations of Hanover arising under the TIDES Guarantees, and any Refinancing Indebtedness incurred in respect thereof;
(h) the 2003 Notes Subordinated Guarantee; and
(i) Guarantee Obligations of Hanover and any of its Subsidiaries arising pursuant to the Equipment Lease Refinancing, and any Refinancing Indebtedness incurred in respect thereof. Notwithstanding the foregoing, Subsidiaries of Hanover may not provide Guarantee Obligations in respect of the 2008 Notes (or any permitted refinancing thereof), the Hanover Convertible Notes, the Hanover Zero Coupon Subordinated Notes or other indebtedness issued by Hanover (other than the 2003 Notes and any Refinancing Indebtedness incurred in respect thereof, the guarantees of which shall be subordinated to the Obligations).
Contingent Obligations Borrower shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create or become or remain liable with respect to any Contingent Obligation, except:
(i) Borrower may become and remain liable with respect to Contingent Obligations in respect of Letters of Credit issued under this Agreement and Subsidiaries of Borrower may become and remain liable with respect to Contingent Obligations in respect of the Subsidiary Guaranty;
(ii) Borrower and its Subsidiaries may become and remain liable with respect to other Contingent Obligations (including letters of credit) in an aggregate amount not to exceed $750,000 at any time;
(iii) Borrower and its Subsidiaries may become and remain liable with respect to Contingent Obligations under the Related Agreements or otherwise in respect of customary indemnification and purchase price adjustment obligations incurred in connection with (x) Asset Sales or other sales of assets permitted by the terms hereof, and (y) acquisitions permitted under this Agreement;
(iv) Borrower and its Subsidiaries may become and remain liable with respect to Contingent Obligations in respect of any Indebtedness of Borrower or any of its Subsidiaries permitted by subsection 7.1;
(v) Borrower and its Subsidiaries, as applicable, may remain liable with respect to Contingent Obligations described in Schedule 7.4 annexed hereto;
(vi) Borrower and its Subsidiaries may become and remain liable with respect to Contingent Obligations incurred in the ordinary course of business with respect to surety and appeal bonds, performance bonds and other similar obligations;
(vii) Borrower and its Subsidiaries may become and remain liable with respect to Contingent Obligations incurred in the ordinary course of business under indemnity agreements to title insurers to cause such title insurers to issue title insurance policies to Administrative Agent and/or to Borrower or any of its Subsidiaries pursuant to the terms hereof; and
(viii) Borrower and its Subsidiaries may become and remain liable with respect to Contingent Obligations incurred in the ordinary course of business (consistent with past practices) under Currency Agreements in an aggregate amount not to exceed $12,000,000 outstanding at any time.
