Common use of Release of Guaranty by Guarantors Clause in Contracts

Release of Guaranty by Guarantors. Each Guaranty by a Guarantor shall provide by its terms that it shall be automatically and unconditionally released and discharged, and no further action by such Guarantor, the Borrower or the Collateral Agent is required for the release of the such Guarantor’s Guaranty, upon: (i) any sale, exchange, disposition or transfer (by merger, amalgamation, consolidation or otherwise) of (i) the Capital Stock of such Guarantor, after which the applicable Guarantor is no longer a Restricted Subsidiary or (ii) all or substantially all the assets of such Guarantor, in each case if such sale, exchange, disposition or transfer is made in compliance with the applicable provisions of this Agreement; (ii) the release or discharge of the guarantee by such Guarantor of Indebtedness under a guarantee (other than a guarantee of the ABL Credit Agreement or the Senior Notes) that resulted in the creation of such Guaranty, except a discharge or release by or as a result of payment under such guarantee (it being understood that a release subject to a contingent reinstatement is still a release, and that if any such Guaranty is so reinstated, such Guaranty shall also be reinstated to the extent that such Subsidiary Guarantor would then be required to provide a Guaranty pursuant to Section 7.12 hereof) (notwithstanding the foregoing, a Guaranty provided by a Guarantor on the Closing Date may not be released and discharged pursuant to this Section 11.06(a)(ii)); and (b) the designation of any Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary in compliance with the applicable provisions of this Agreement.