EXHIBIT 99.7
MDCP GUARANTY
This MDCP GUARANTY is entered into as of November 28, 2000 by Madison
Dearborn Capital Partners, L.P., a Delaware limited partnership ("MDCP",
hereinafter referred to as the "GUARANTOR"), in favor of and for the benefit of
BANKERS TRUST COMPANY, as agent for and representative of (in such capacity
herein called "GUARANTIED PARTY") the financial institutions constituting the
Revolving B Loan Lenders ("LENDERS") party to the Credit Agreement (as
hereinafter defined; capitalized terms defined therein and not otherwise defined
herein being used herein as therein defined).
RECITALS.
X. Xxxxx Nurseries, Inc., a California corporation ("COMPANY"), Sun Gro
Horticulture Canada Ltd., a Canadian corporation and successor by amalgamation
to Lakeland Canada Ltd. ("Sun Gro Canada"; together with Company, the
"BORROWERS"), have entered into that certain Amended and Restated Credit
Agreement dated as of June 26, 1998, by and among Borrowers, Guarantied Party,
Bank of America, N.A. (formerly Bank of America National Trust and Savings
Association), as syndication agent, Xxxxxx Trust and Savings Bank as
documentation agent, Deutsche Bank Canada as Canadian agent and the financial
institutions party thereto (said Amended and Restated Credit Agreement, as
amended to the date hereof and as it may hereafter be amended, supplemented or
otherwise modified from time to time, being the "CREDIT AGREEMENT").
B. Guarantor is a controlling shareholder of the Company and thus the
Guarantied Obligations (as hereinafter defined) are being incurred for and will
inure to the benefit of Guarantor (which benefits are hereby acknowledged).
C. It is a condition precedent to the making of the Revolving B Loans under the
Credit Agreement that Company's obligations thereunder be guarantied by
Guarantor.
D. Guarantor is willing irrevocably and unconditionally to guaranty the
Company's obligations under the Revolving B Loans.
NOW, THEREFORE, based upon the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
in order to induce Lenders to make the Revolving B Loans thereunder, Guarantor
hereby agrees as follows:
SECTION 1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS. As used in this Guaranty, the following
terms shall have the following meanings unless the context otherwise requires:
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"EVENT OF DEFAULT" has the meaning assigned to that term in Section 5.
"GUARANTIED OBLIGATIONS" has the meaning assigned to that term in
subsection 2.1.
"GUARANTY" means this MDCP Guaranty dated as of November 10, 2000, as
it may be amended, supplemented or otherwise modified from time to
time.
"PAYMENT IN FULL", "PAID IN FULL" or any similar term means payment in
full of the Guarantied Obligations including, without limitation, all
principal, interest, costs, fees and expenses (including, without
limitation, legal fees and expenses) of Lenders and Agent as required
under the Loan Documents.
1.2 INTERPRETATION.
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(a) References to "Sections" and "subsections" shall be to Sections
and subsections, respectively, of this Guaranty unless otherwise
specifically provided.
(b) In the event of any conflict or inconsistency between the terms,
conditions and provisions of this Guaranty and the terms, conditions
and provisions of the Credit Agreement, the terms, conditions and
provisions of this Guaranty shall prevail.
SECTION 2. THE GUARANTY
2.1 GUARANTY OF THE GUARANTIED OBLIGATIONS. Guarantor hereby irrevocably
and unconditionally guaranties, as primary obligor and not merely as surety, the
due and punctual payment in full of all Guarantied 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. (S) 362(a)). The term "GUARANTIED OBLIGATIONS"
means:
(a) any and all Obligations of Company now or hereafter made, incurred
or created, whether absolute or contingent, liquidated or
unliquidated, whether due or not due, and however arising under or in
connection with the Revolving B Loans under the Credit Agreement and
the other Loan Documents including those arising under successive
borrowing transactions under the Credit Agreement which shall either
continue the Obligations of Company with respect to the Revolving B
Loans or from time to time renew them after they have been satisfied;
and
(b) those expenses set forth in subsection 2.9 hereof;
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provided however, that in no event shall Guarantor's liabilities
under this Guaranty with respect to the Guarantied Obligations exceed,
in the aggregate, Thirty Million Dollars ($30,000,000).
2.2 CONTRIBUTION BY GUARANTOR. Guarantor under this Guaranty, and each
guarantor under other guaranties relating solely to the Revolving B Loans (the
"RELATED GUARANTIES") which contain a contribution provision similar to that set
forth in this subsection 2.2, together desire to allocate among themselves
(collectively, the "CONTRIBUTING GUARANTORS"), in a fair and equitable manner,
their obligations arising under this Guaranty and the Related Guaranties.
Accordingly, in the event any payment or distribution is made on any date by
Guarantor under this Guaranty or a guarantor under a Related Guaranty (a
"FUNDING GUARANTOR") that exceeds its Fair Share (as defined below) as of such
date, that Funding Guarantor shall be entitled to a contribution from each of
the other Contributing Guarantors in the amount of such other Contributing
Guarantor's Fair Share Shortfall (as defined below) as of such date, with the
result that all such contributions will cause each Contributing Guarantor's
Aggregate Payments (as defined below) to equal its Fair Share as of such date.
"FAIR SHARE" means, with respect to a Contributing Guarantor as of any date of
determination, an amount equal to (i) the ratio of (x) the Fair Share
Contribution Amount (as defined below) with respect to such Contributing
Guarantor to (y) the aggregate of the Fair Share Contribution Amounts with
respect to all Contributing Guarantors, multiplied by (ii) the aggregate amount
paid or distributed on or before such date by all Funding Guarantors under this
Guaranty and the Related Guaranties in respect of the obligations guarantied.
"FAIR SHARE SHORTFALL" means, with respect to a Contributing Guarantor as of any
date of determination, the excess, if any, of the Fair Share of such
Contributing Guarantor over the Aggregate Payments of such Contributing
Guarantor. "FAIR SHARE CONTRIBUTION AMOUNT" means, with respect to a
Contributing Guarantor as of any date of determination, the maximum aggregate
amount of the obligations of such Contributing Guarantor under this Guaranty
and/or the Related Guaranties, as applicable, that would not render its
obligations hereunder or thereunder subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of Title 11 of the United States Code
or any applicable provisions of comparable state law; provided that, solely for
purposes of calculating the "Fair Share Contribution Amount" with respect to any
Contributing Guarantor for purposes of this subsection 2.2, any assets or
liabilities of such Contributing Guarantor arising by virtue of any rights to
subrogation, reimbursement or indemnification or any rights to or obligations of
contribution hereunder or under any similar provision contained in a Related
Guaranty shall not be considered as assets or liabilities of such Contributing
Guarantor. "AGGREGATE PAYMENTS" means, with respect to a Contributing Guarantor
as of any date of determination, an amount equal to (i) the aggregate amount of
all payments and distributions made on or before such date by such Contributing
Guarantor in respect of this Guaranty and/or the Related Guaranties (including,
without limitation, in respect of this subsection 2.2 or any similar provision
contained in a Related Guaranty), minus (ii) the aggregate amount of all
payments received on or before such date by such Contributing Guarantor from the
other Contributing Guarantors as contributions under this subsection 2.2 or any
similar provision contained in a Related Guaranty. The amounts payable as
contributions hereunder and under similar provisions in the Related Guaranties
shall be determined as of the date on which the related payment or distribution
is made by the applicable Funding Guarantor. The allocation among
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Contributing Guarantors of their obligations as set forth in this subsection 2.2
or any similar provision contained in a Related Guaranty shall not be construed
in any way to limit the liability of any Contributing Guarantor hereunder or
under a Related Guaranty. Each Contributing Guarantor under a Related Guaranty
is a third party beneficiary to the contribution agreement set forth in this
subsection 2.2.
2.3 PAYMENT BY GUARANTOR; APPLICATION OF PAYMENTS. Guarantor hereby
agrees, in furtherance of the foregoing and not in limitation of any other right
which Agent or any other Person may have at law or in equity against Guarantor
by virtue hereof, that upon the failure of Company to pay any of the Guarantied
Obligations when and as 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. (S) 362(a)),
Guarantor will upon demand by the Requisite Lenders or the Agent (acting on
behalf of the Lenders) pay, or cause to be paid, in cash, to Agent for the
ratable benefit of Lenders, an amount equal to the sum of the unpaid principal
amount of all Guarantied Obligations then due as aforesaid, accrued and unpaid
interest on such Guarantied Obligations (including, without limitation, interest
which, but for the filing of a petition in bankruptcy with respect to Company,
would have accrued on such Guarantied Obligations, whether or not a claim is
allowed against such Borrower for such interest in any such bankruptcy
proceeding) and all other Guarantied Obligations then owed to Agent and/or
Lenders as aforesaid up to a maximum amount for all such payments of Thirty
Million Dollars ($30,000,000). All such payments shall be applied promptly from
time to time by Agent:
First, to the payment of the costs and expenses of any collection or
other realization under this Guaranty, including reasonable compensation to
Agent and its agents and counsel, and all expenses, liabilities and advances
made or incurred by Agent in connection therewith;
Second, to the payment of all other Guarantied Obligations in such
order as Agent shall elect; and
Third, after payment in full of all Guarantied Obligations, to the
payment to Guarantor, or its successors or assigns, or to whomsoever may be
lawfully entitled to receive the same or as a court of competent
jurisdiction may direct, of any surplus then remaining from such payments.
2.4 LIABILITY OF GUARANTOR ABSOLUTE. Guarantor agrees that its obligations
hereunder are irrevocable, absolute, independent and unconditional and shall not
be affected by any circumstance which constitutes a legal or equitable discharge
of a guarantor or surety other than payment in full of the Guarantied
Obligations. In furtherance of the foregoing and without limiting the
generality thereof, Guarantor agrees as follows:
(a) This Guaranty is a guaranty of payment when due and not of
collectibility.
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(b) Agent may enforce this Guaranty upon (i) the occurrence and during
the continuation of an Event of Default described in subsections 8.1, 8.6,
8.7, and 8.13 of the Credit Agreement and (ii) an occurrence and during the
continuation of an Event of Default under Section 5 of this Guaranty.
(c) The obligations of Guarantor hereunder are independent of the
obligations of any Borrower under the Loan Documents and the obligations of
any other guarantor of the obligations of any Borrower under the Loan
Documents, and a separate action or actions may be brought and prosecuted
against Guarantor whether or not any action is brought against any Borrower
or any of such other guarantors and whether or not any Borrower is joined in
any such action or actions.
(d) Except as set forth in subsection 2.1, Guarantor's payment of a
portion, but not all, of the Guarantied Obligations shall in no way limit,
affect, modify or abridge Guarantor's liability for any portion of the
Guarantied Obligations which has not been paid. Without limiting the
generality of the foregoing, if Agent is awarded a judgment in any suit
brought to enforce Guarantor's covenant to pay a portion of the Guarantied
Obligations, such judgment shall not be deemed to release Guarantor from its
covenant to pay the portion of the Guarantied Obligations that is not the
subject of such suit.
(e) Agent or any Lender, upon such terms as it deems appropriate,
without notice or demand and without affecting the validity or
enforceability of this Guaranty or giving rise to any reduction, limitation,
impairment, discharge or termination of Guarantor's liability hereunder,
from time to time may (i) renew, extend, accelerate, increase the rate of
interest on, or otherwise change the time, place, manner or terms of payment
of the Guarantied Obligations; (ii) settle, compromise, release or
discharge, or accept or refuse any offer of performance with respect to, or
substitutions for, the Guarantied Obligations or any agreement relating
thereto and/or subordinate the payment of the same to the payment of any
other obligations; (iii) request and accept other guaranties of the
Guarantied Obligations and take and hold security for the payment of this
Guaranty or the Guarantied Obligations; (iv) release, surrender, exchange,
substitute, compromise, settle, rescind, waive, alter, subordinate or
modify, with or without consideration, any security for payment of the
Guarantied Obligations, any other guaranties of the Guarantied Obligations,
or any other obligation of any Person with respect to the Guarantied
Obligations; (v) enforce and apply any security now or hereafter held by or
for the benefit of Agent or any Lender in respect of this Guaranty or the
Guarantied Obligations and direct the order or manner of sale thereof, or
exercise any other right or remedy that Agent or Lenders, or any of them,
may have against any such security, as Agent in its discretion may determine
consistent with the Credit Agreement and any applicable security agreement,
including foreclosure on any such security pursuant to one or more judicial
or nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable, and even though such action operates to impair or
extinguish any right of reimbursement or subrogation or other right or
remedy of Guarantor against any
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Borrower or any security for the Guarantied Obligations; and (vi) exercise
any other rights available to it under the Loan Documents.
(f) This Guaranty and the obligations of Guarantor hereunder shall be
valid and enforceable and shall not be subject to any reduction, limitation
(except as set forth in subsection 2.1), impairment, discharge or
termination for any reason (other than payment in full of the Guarantied
Obligations), including without limitation the occurrence of any of the
following, whether or not Guarantor shall have had notice or knowledge of
any of them: (i) any failure or omission to assert or enforce or agreement
or election not to assert or enforce, or the stay or enjoining, by order of
court, by operation of law or otherwise, of the exercise or enforcement of,
any claim or demand or any right, power or remedy (whether arising under the
Loan Documents, at law, in equity or otherwise) with respect to the
Guarantied Obligations or any agreement relating thereto, or with respect to
any other guaranty of or security for the payment of the Guarantied
Obligations; (ii) any rescission, waiver, amendment or modification of, or
any consent to departure from, any of the terms or provisions (including
without limitation provisions relating to events of default) of the Credit
Agreement, any of the other Loan Documents or any agreement or instrument
executed pursuant thereto, or of any other guaranty or security for the
Guarantied Obligations, in each case whether or not in accordance with the
terms of the Credit Agreement or such Loan Document or any agreement
relating to such other guaranty or security; (iii) the Guarantied
Obligations, or any agreement relating thereto, at any time being found to
be illegal, invalid or unenforceable in any respect; (iv) the application of
payments received from any source (other than payments received pursuant to
the other Loan Documents or from the proceeds of any security for the
Guarantied Obligations, except to the extent such security also serves as
collateral for indebtedness other than the Guarantied Obligations) to the
payment of indebtedness other than the Guarantied Obligations, even though
Agent or Lenders, or any of them, might have elected to apply such payment
to any part or all of the Guarantied Obligations; (v) any Lender's or
Agent's consent to the change, reorganization or termination of the
corporate structure or existence of any Borrower or any of its Subsidiaries
and to any corresponding restructuring of the Guarantied Obligations; (vi)
any failure to perfect or continue perfection of a security interest in any
collateral which secures any of the Guarantied Obligations; (vii) any
defenses, set-offs or counterclaims which any Borrower may allege or assert
against Agent or any Lender in respect of the Guarantied Obligations,
including but not limited to failure of consideration, breach of warranty,
payment, statute of frauds, statute of limitations, accord and satisfaction
and usury; and (viii) any other act or thing or omission, or delay to do any
other act or thing, which may or might in any manner or to any extent vary
the risk of Guarantor as an obligor in respect of the Guarantied
Obligations.
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2.5 WAIVERS BY GUARANTOR. Guarantor hereby waives, for the benefit of
Lenders and Agent:
(a) any right to require Agent or Lenders, as a condition of payment or
performance by Guarantor, to (i) proceed against any Borrower, any other
guarantor of the Guarantied Obligations or any other Person, (ii) proceed
against or exhaust any security held from any Borrower, any other guarantor
of the Guarantied Obligations or any other Person, (iii) proceed against or
have resort to any balance of any deposit account or credit on the books of
Agent or any Lender in favor of any Borrower or any other Person, or (iv)
pursue any other remedy in the power of Agent or any Lender whatsoever;
(b) any defense arising by reason of the incapacity, lack of authority
or any disability or other defense of any Borrower including, without
limitation, any defense based on or arising out of the lack of validity or
the unenforceability of the Guarantied Obligations or any agreement or
instrument relating thereto or by reason of the cessation of the liability
of any Borrower from any cause other than payment in full of the Guarantied
Obligations;
(c) any defense based upon any statute or rule of law which provides
that the obligation of a surety must be neither larger in amount nor in
other respects more burdensome than that of the principal;
(d) any defense based upon Agent's or any Lender's errors or omissions
in the administration of the Guarantied Obligations, except behavior which
amounts to bad faith or gross negligence;
(e) (i) any principles or provisions of law, statutory or otherwise,
which are or might be in conflict with the terms of this Guaranty and any
legal or equitable discharge of Guarantor's obligations hereunder, (ii) the
benefit of any statute of limitations affecting Guarantor's liability
hereunder or the enforcement hereof, (iii) any rights to set-offs,
recoupments and counterclaims, and (iv) promptness, diligence and any
requirement that Agent or any Lender protect, secure, perfect or insure any
security interest or lien or any property subject thereto;
(f) notices, demands, presentments, protests, notices of protest,
notices of dishonor and notices of any action or inaction, including
acceptance of this Guaranty, notices of default under the Credit Agreement
or any agreement or instrument related thereto, notices of any renewal,
extension or modification of the Guarantied Obligations or any agreement
related thereto, notices of any extension of credit to any Borrower and
notices of any of the matters referred to in subsection 2.4 and any right to
consent to any thereof; and
(g) any defenses or benefits that may be derived from or afforded by
law which limit the liability of or exonerate guarantors or sureties, or
which may conflict with the terms of this Guaranty.
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2.6 CERTAIN CALIFORNIA LAW WAIVERS. As used in this subsection 2.6, any
reference to "the principal" includes any or all Borrowers, and any reference to
"the creditor" includes Agent and each Lender. In accordance with Section 2856
of the California Civil Code:
(a) Guarantor agrees to withhold the exercise of any and all rights of
subrogation, reimbursement and contribution against any Borrower, against
any other guarantor of any of the Guarantied Obligations, and against any
collateral or security for any of the Guarantied Obligations, until the
Guarantied Obligations and all other Obligations under the Credit Agreement
shall have been paid in full, the Commitments shall have terminated and all
Letters of Credit shall have expired or been cancelled, all as more fully
set forth in subsection 2.7;
(b) Guarantor waives any and all other rights and defenses available to
Guarantor by reason of Sections 2787 to 2855, inclusive, 2899 and 3433 of
the California Civil Code, including without limitation any and all rights
or defenses Guarantor may have by reason of protection afforded to the
principal with respect to any of the Guarantied Obligations, or to any other
guarantor of any of the Guarantied Obligations with respect to any of such
guarantor's obligations under its guaranty, in either case pursuant to the
antideficiency or other laws of the State of California limiting or
discharging the principal's indebtedness or such guarantor's obligations,
including without limitation Section 580a, 580b, 580d, or 726 of the
California Code of Civil Procedure; and
(c) Guarantor waives all rights and defenses arising out of an election
of remedies by the creditor, even though that election of remedies, such as
a nonjudicial foreclosure with respect to security for a Guarantied
Obligation, has destroyed Guarantor's rights of subrogation and
reimbursement against the principal by the operation of Section 580d of the
Code of Civil Procedure or otherwise; and even though that election of
remedies by the creditor, such as nonjudicial foreclosure with respect to
security for an obligation of any other guarantor of any of the Guarantied
Obligations, has destroyed Guarantor's rights of contribution against such
other guarantor.
No other provision of this Guaranty shall be construed as limiting the
generality of any of the covenants and waivers set forth in this subsection 2.6.
In accordance with subsection 6.6 below, this Guaranty shall be governed by, and
shall be construed and enforced in accordance with, the internal laws of the
State of New York, without regard to conflicts of laws principles. This
subsection 2.6 is included solely out of an abundance of caution, and shall not
be construed to mean that any of the above-referenced provisions of California
law are in any way applicable to this Guaranty or to any of the Guarantied
Obligations.
2.7 GUARANTOR'S RIGHTS OF SUBROGATION, CONTRIBUTION, ETC. Until the
Guarantied Obligations and all other Obligations under the Credit Agreement
shall have been paid in full, the Commitments shall have been terminated and all
Letters of Credit shall have
XXVII-8
expired or been cancelled, Guarantor hereby waives any claim, right or remedy,
direct or indirect, that Guarantor now has or may hereafter have against any
Borrower or any Borrower's assets in connection with this Guaranty or the
performance by Guarantor of its obligations hereunder, in each case whether such
claim, right or remedy arises in equity, under contract, by statute (including
without limitation under California Civil Code Section 2847, 2848 or 2849),
under common law or otherwise and including without limitation (i) any right of
subrogation, reimbursement or indemnification that Guarantor now has or may
hereafter have against any Borrower, (ii) any right to enforce, or to
participate in, any claim, right or remedy that Agent or any Lender now has or
may hereafter have against any Borrower, and (iii) any benefit of, and any right
to participate in, any collateral or security now or hereafter held by Agent or
any Lender. In addition, until the Guarantied Obligations and all other
Obligations under the Credit Agreement shall have been paid in full, the
Commitments shall have been terminated and all Letters of Credit shall have
expired or been cancelled, Guarantor shall withhold exercise of any right of
contribution Guarantor may have against any other guarantor of any of the
Guarantied Obligations (including without limitation any such right of
contribution under California Civil Code Section 2848 or under a Related
Guaranty as contemplated by subsection 2.2). Guarantor further agrees that, to
the extent the waiver or agreement to withhold the exercise of its rights of
subrogation, reimbursement, indemnification and contribution as set forth herein
is found by a court of competent jurisdiction to be void or voidable for any
reason, any rights of subrogation, reimbursement or indemnification Guarantor
may have against any Borrower or against any collateral or security, and any
rights of contribution Guarantor may have against any such other guarantor,
shall be junior and subordinate to any rights Agent or Lenders may have against
any Borrower, to all right, title and interest Agent or Lenders may have in any
such collateral or security, and to any right Agent or Lenders may have against
such other guarantor. If any amount shall be paid to Guarantor on account of any
such subrogation, reimbursement or indemnification rights at any time when all
Guarantied Obligations and all other Obligations under the Credit Agreement
shall not have been paid in full, such amount shall be held in trust for Agent
on behalf of Lenders and shall forthwith be paid over to Agent for the benefit
of Lenders to be credited and applied against the Guarantied Obligations,
whether matured or unmatured, in accordance with the terms hereof.
2.8 SUBORDINATION OF OTHER OBLIGATIONS. Any indebtedness of any Borrower
now or hereafter held by Guarantor is hereby subordinated in right of payment to
the Guarantied Obligations, and any such indebtedness of any Borrower to
Guarantor collected or received by Guarantor after an Event of Default has
occurred and while it is continuing shall be held in trust for Agent on behalf
of Lenders and shall forthwith be paid over to Agent for the benefit of Lenders
to be credited and applied against the Guarantied Obligations but without
affecting, impairing or limiting in any manner the liability of Guarantor under
any other provision of this Guaranty.
2.9 EXPENSES. Guarantor agrees to pay, or cause to be paid, on demand, and
to save Agent and Lenders harmless against liability for, any and all costs and
expenses (including reasonable fees and disbursements of counsel and reasonable
allocated costs of internal counsel) incurred or expended by Agent or any Lender
in connection with the enforcement of or preservation of any rights under this
Guaranty.
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2.10 CONTINUING GUARANTY; TERMINATION OF GUARANTY. This Guaranty is a
continuing guaranty and shall remain in effect until all of the Guarantied
Obligations and all other Obligations under the Credit Agreement shall have been
paid in full, the Commitments shall have terminated and all Letters of Credit
shall have expired or been cancelled. After all of the Guarantied Obligations
and all other Obligations under the Credit Agreement shall have been paid in
full, the Commitments shall have terminated and all Letters of Credit shall have
expired or been cancelled, this Guaranty shall terminate, subject to the
provisions of subsection 2.14(c) of this Guaranty. Guarantor hereby irrevocably
waives any right to revoke this Guaranty as to future transactions giving rise
to any Guarantied Obligations.
2.11 AUTHORITY OF GUARANTOR OR BORROWERS. It is not necessary for Lenders
or Agent to inquire into the capacity or powers of Guarantor, any Borrower or
the officers, directors or any agents acting or purporting to act on behalf of
any of them.
2.12 FINANCIAL CONDITION OF BORROWERS. Any Loans may be granted to any
Borrower or continued from time to time without notice to or authorization from
Guarantor regardless of the financial or other condition of Company or any
Borrower at the time of any such grant or continuation. Lenders and Agent shall
have no obligation to disclose or discuss with Guarantor their assessment, or
Guarantor's assessment, of the financial condition of any Borrower. Guarantor
has adequate means to obtain information from Company or each Borrower on a
continuing basis concerning the financial condition of Company or each Borrower
and its ability to perform its obligations under the Loan Documents, and
Guarantor assumes the responsibility for being and keeping informed of the
financial condition of Company or each Borrower and of all circumstances bearing
upon the risk of nonpayment of the Guarantied Obligations. Guarantor hereby
waives and relinquishes any duty on the part of Agent or any Lender to disclose
any matter, fact or thing relating to the business, operations or conditions of
any Borrower now known or hereafter known by Agent or any Lender.
2.13 RIGHTS CUMULATIVE. The rights, powers and remedies given to Lenders
and Agent by this Guaranty are cumulative and shall be in addition to and
independent of all rights, powers and remedies given to Lenders and Agent by
virtue of any statute or rule of law or in any of the other Loan Documents or
any agreement between Guarantor and Lenders and/or Agent or between any Borrower
and Lenders and/or Agent. Any forbearance or failure to exercise, and any delay
by any Lender or Agent in exercising, any right, power or remedy hereunder shall
not impair any such right, power or remedy or be construed to be a waiver
thereof, nor shall it preclude the further exercise of any such right, power or
remedy.
2.14 BANKRUPTCY; POST-PETITION INTEREST; REINSTATEMENT OF GUARANTY. (a) So
long as any Guarantied Obligations or any other Obligations under the Credit
Agreement remain outstanding, Guarantor shall not, without the prior written
consent of Agent in accordance with the terms of the Credit Agreement, commence
or join with any other Person in commencing any bankruptcy, reorganization or
insolvency proceedings of or against any Borrower. The obligations of Guarantor
under this Guaranty shall not be reduced, limited, impaired, discharged,
deferred, suspended or terminated by any proceeding, voluntary or
XXVII-10
involuntary, involving the bankruptcy, insolvency, receivership, reorganization,
liquidation or arrangement of any Borrower or by any defense which any Borrower
may have by reason of the order, decree or decision of any court or
administrative body resulting from any such proceeding.
(b) Guarantor acknowledges and agrees that any interest on any portion
of the Guarantied Obligations which accrues after the commencement of any
proceeding referred to in clause (a) above (or, if interest on any portion of
the Guarantied Obligations ceases to accrue by operation of law by reason of the
commencement of said proceeding, such interest as would have accrued on such
portion of the Guarantied Obligations if said proceedings had not been
commenced) shall be included in the Guarantied Obligations because it is the
intention of Guarantor and Agent that the Guarantied Obligations which are
guarantied by Guarantor pursuant to this Guaranty should be determined without
regard to any rule of law or order which may relieve any Borrower of any portion
of such Guarantied Obligations. Guarantor will permit any trustee in
bankruptcy, receiver, debtor in possession, assignee for the benefit of
creditors or similar person to pay Agent, or allow the claim of Agent in respect
of, any such interest accruing after the date on which such proceeding referred
to in clause (a) above is commenced.
(c) In the event that all or any portion of the Guarantied Obligations
are paid by any Borrower, the obligations of Guarantor hereunder shall continue
and remain in full force and effect or be reinstated, as the case may be, in the
event that all or any part of such payment(s) are rescinded or recovered
directly or indirectly from Agent or any Lender as a preference, fraudulent
transfer or otherwise, and any such payments which are so rescinded or recovered
shall constitute Guarantied Obligations for all purposes under this Guaranty.
2.15 SET OFF. In addition to any other rights any Lender or Agent may have
under law or in equity, if any amount shall at any time be due and owing by
Guarantor to any Lender or Agent under this Guaranty, such Lender or Agent is
authorized at any time or from time to time, without notice (any such notice
being hereby expressly waived), to set off and to appropriate and to apply any
and all deposits (general or special, including but not limited to indebtedness
evidenced by certificates of deposit, whether matured or unmatured) and any
other indebtedness of any Lender or Agent owing to Guarantor and any other
property of Guarantor held by any Lender or Agent to or for the credit or the
account of Guarantor against and on account of the Guarantied Obligations and
liabilities of Guarantor to any Lender or Agent under this Guaranty.
SECTION 3. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders and Agent to accept this Guaranty and to
enter into the Credit Agreement and to make the Revolving B Loans thereunder,
Guarantor hereby represents and warrants to Lenders that the following
statements are true and correct in all material respects:
3.1 DUE FORMATION OF LIMITED PARTNERSHIP. Guarantor is duly formed and
validly existing limited partnership under the laws of the State of Delaware,
with the power
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under the Delaware Revised Uniform Limited Partnership Act (the
"Act") and its partnership agreement (the "Partnership Agreement") to own its
property and assets and to transact the business in which it is now engaged and
has obtained the requisite certificates of registration or authority or other
such qualifications to do business in each of the jurisdictions where its
ownership or lease of property or the conduct of its business requires such
certifications, except for failures to be so qualified, authorized or licensed
that would not in the aggregate have a material adverse effect on the business,
operations, assets or financial condition of Guarantor.
3.2 LIMITED PARTNERSHIP POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
Guarantor has the power, authority and legal right to execute, deliver and
perform this Guaranty under the Act and the Partnership Agreement, and all
obligations required hereunder and has taken all necessary action to authorize
its Guaranty hereunder on the terms and conditions hereof and its execution,
delivery and performance of this Guaranty and all obligations required
hereunder. No consent of any other Person including, without limitation,
Partners or creditors of Guarantor, and no license, permit, approval or
authorization of, exemption by, notice or report to, or registration, filing or
declaration with, any governmental authority is required by Guarantor in
connection with this Guaranty or the execution, delivery, performance, validity
or enforceability of this Guaranty and all obligations required hereunder. This
Guaranty has been, and each instrument or document required hereunder will be,
executed and delivered by a duly authorized officer of Guarantor, and this
Guaranty constitutes, and each instrument or document required hereunder when
executed and delivered hereunder will constitute, the legally valid and binding
obligation of Guarantor, enforceable against Guarantor in accordance with its
terms, except as enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws or equitable
principles relating to or limiting creditors' rights generally.
3.3 NO LEGAL BAR TO THIS GUARANTY. The execution, delivery and performance
of this Guaranty and the documents or instruments required hereunder will not
violate any provision of any existing law or regulation binding on Guarantor, or
any order, judgment, award or decree of any court, arbitrator or governmental
authority binding on Guarantor, or the Partnership Agreement of Guarantor or any
securities issued by Guarantor, or any mortgage, indenture, lease, contract or
other agreement, instrument or undertaking to which Guarantor is a party or by
which Guarantor or any of its assets may be bound, the violation of which would
have a material adverse effect on the business, operations, assets or financial
condition of Guarantor, and will not result in, or require, the creation or
imposition of any Lien on any of its property, assets or revenues pursuant to
the provisions of any such mortgage, indenture, lease, contract or other
agreement, instrument or undertaking.
SECTION 4. COVENANTS
Guarantor covenants and agrees that, unless and until all of the Guarantied
Obligations shall have been paid in full and the Commitments shall have
terminated, unless Requisite Lenders and Lenders holding a majority of the
Revolving B Loan Exposure shall otherwise consent in writing:
XXVII-12
4.1 PARTNERSHIP EXISTENCE, ETC. Guarantor shall at all times
preserve and keep in full force and effect its partnership existence and all
rights and franchises material to its business.
4.2 COMPLIANCE WITH LAWS, ETC. Guarantor shall comply in all
material respects with all applicable laws, rules, regulations and orders, such
compliance to include, without limitation, paying when due all taxes,
assessments and governmental charges imposed upon it or upon any of its
properties or assets or in respect of any of its franchises, businesses, income
or property before any penalty or interest accrues thereon.
4.3 BOOKS AND RECORDS. Guarantor shall keep and maintain books of
record and account with respect to its operations in accordance with generally
accepted accounting principles and shall permit Agent and its officers,
employees and authorized agents, to the extent Agent in good xxxxx xxxxx
necessary for the proper administration of this Guaranty, to examine, copy and
make excerpts from the books and records of Guarantor and to inspect the
properties of Guarantor, both real and personal, at such reasonable times as
Agent may request and upon reasonable notice.
4.4 DELIVERY OF QUARTERLY AND ANNUAL FINANCIAL REPORTS. As soon as
available and in any event within 45 days after the end of each Fiscal Quarter,
Guarantor will deliver to Agent and Lenders quarterly financial reports for
Guarantor. As soon as available and in any event within 90 days after the end
of each Fiscal Year, Guarantor will deliver to Agent and Lenders annual audited
financial reports for Guarantor.
4.5 UNENCUMBERED ASSETS. Guarantor agrees to maintain not less than
$55,000,000 in unencumbered marketable securities (excluding any securities
issued by Holdings or any of its subsidiaries) until payment of all Guarantied
Obligations under this Guaranty.
4.6 NOTICE OF ADVERSE CONDITIONS OR EVENTS. Guarantor shall deliver
to Agent written notice regarding all conditions or events which may materially
and adversely affect the Guaranty or the performance of Madison Dearborn
Partners, L.P., the general partner of MDCP (the "GENERAL PARTNER"), under this
Guaranty.
SECTION 5. EVENTS OF DEFAULT
If any of the following conditions or events ("Events of Default") shall
occur, such condition or event shall constitute an Event of Default hereunder:
5.1 BREACH OF CERTAIN COVENANTS. Failure of Guarantor or the General
Partner to perform or comply with any term or condition contained in this
Guaranty and such failure to perform or comply shall not have been remedied
within 15 days after the earlier of (i) General Partner becoming aware of such
default or (ii) receipt by General Partner of notice from Agent or any Lender of
such default; or
XXVII-13
5.2 BREACH OF WARRANTY. Any representation, warranty, certification or
other statement made by Guarantor or its General Partner in the Guaranty or in
any statement or certificate at any time given by Guarantor or its General
Partner in writing pursuant hereto or in connection herewith shall be false in
any material respect on the date as of which made; or
5.3 INVOLUNTARY BANKRUPTCY; APPOINT OF RECEIVER, ETC. (i) A court having
jurisdiction in the premises shall enter a decree or order for relief in respect
of Guarantor or its General Partner in an involuntary case under the Bankruptcy
Code or under any other Insolvency Laws which decree or order is not stayed; or
any other similar relief shall be granted under any applicable Insolvency Laws;
or (ii) an involuntary case shall be commenced against Guarantor or its General
Partner under the Bankruptcy Code or under any other Insolvency Laws; or a
decree or order of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, sequestrator, trustee, custodian or other
officer having similar powers over Guarantor or its General Partner, or over all
or a substantial part of its property, shall have been entered; or there shall
have occurred the involuntary appointment of an interim receiver, trustee or
other custodian of Guarantor or its General Partner for all or a substantial
part of its property; or a warrant of attachment, execution or similar process
shall have been issued against any substantial part of the property of Guarantor
or its General Partner, and any such event described in this clause (ii) shall
continue for 60 days unless dismissed, bonded or discharged; or
5.4 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. (i) Guarantor or
its General Partner shall have an order for relief entered with respect to it or
commence a voluntary case under the Bankruptcy Code or under any other
Insolvency Laws, or shall consent to the entry of an order for relief in an
involuntary case, or to the conversion of an involuntary case to a voluntary
case, under any such law, or shall consent to the appointment of or taking
possession by a receiver, trustee or other custodian for all or a substantial
part of its property; or Guarantor or its General Partner shall make any
assignment for the benefit of creditors; or (ii) Guarantor or its General
Partner shall be unable, or shall fail generally, or shall admit in writing its
inability, to pay its debts as such debts become due; or the Guarantor or its
General Partner (or any governing body thereof) shall adopt any resolution or
otherwise authorize any action to approve any of the actions referred to in
clause (i) above or this clause (ii); or
5.5 DISSOLUTION. Any order, judgment or decree shall be entered against
Guarantor or its General Partner decreeing the dissolution or split up of
Guarantor or its General Partner and such order shall remain undischarged or
unstayed for a period in excess of 30 days; or
5.6 CHANGE IN GENERAL PARTNER. General Partner ceases to be the general
partner of MDCP or to be controlled directly or indirectly by at least two of
the four Approved Partners, as defined in the Partnership Agreement, who are
active employees of the Partnership, as of the date hereof.
XXVII-14
SECTION 6. MISCELLANEOUS
6.1 SURVIVAL OF WARRANTIES. All agreements, representations and warranties
made herein shall survive the execution and delivery of this Guaranty and the
other Loan Documents and any increase in the Commitments under the Credit
Agreement.
6.2 NOTICES. Any communications between Agent and Guarantor and any
notices or requests provided herein to be given may be given by mailing the
same, postage prepaid, or by telex, facsimile transmission or cable to each such
party at its address set forth in the Credit Agreement, on the signature pages
hereof or to such other addresses as each such party may in writing hereafter
indicate. Any notice, request or demand to or upon Agent or Lenders or
Guarantor shall not be effective until received.
6.3 SEVERABILITY. In case any provision in or obligation under this
Guaranty shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
6.4 AMENDMENTS AND WAIVERS. No amendment, modification, termination or
waiver of any provision of this Guaranty, and no consent to any departure by
Guarantor therefrom, shall in any event be effective without the written
concurrence of Requisite Lenders under the Credit Agreement and Lenders holding
a majority of the Revolving B Loan Exposure and, in the case of any such
amendment or modification, Guarantor. Any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given.
6.5 HEADINGS. Section and subsection headings in this Guaranty are
included herein for convenience of reference only and shall not constitute a
part of this Guaranty for any other purpose or be given any substantive effect.
6.6 APPLICABLE LAW. THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF
GUARANTOR, AGENT AND LENDERS HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
6.7 SUCCESSORS AND ASSIGNS. This Guaranty is a continuing guaranty and
shall be binding upon Guarantor and its successors and assigns. This Guaranty
shall inure to the benefit of Lenders, Agent and their respective successors and
assigns. Guarantor shall not assign this Guaranty or any of the rights or
obligations of Guarantor hereunder without the prior written consent of all
Lenders. Any Lender may, without notice or consent, assign its interest in this
Guaranty in whole or in part. The terms and provisions of this Guaranty shall
inure to the benefit of any transferee or assignee of any Loan, and in the event
of such transfer or assignment the rights and privileges herein conferred upon
Lenders and Agent
XXVII-15
shall automatically extend to and be vested in such transferee
or assignee, all subject to the terms and conditions hereof.
6.8 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST GUARANTOR ARISING OUT OF OR RELATING TO THIS
GUARANTY MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION
IN THE STATE OF NEW YORK AND BY EXECUTION AND DELIVERY OF THIS GUARANTY
GUARANTOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY
AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY
ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS GUARANTY. Guarantor
hereby agrees that service of all process in any such proceeding in any such
court may be made by registered or certified mail, return receipt requested, to
Guarantor at its address provided in subsection 6.2, such service being hereby
acknowledged by Guarantor to be sufficient for personal jurisdiction in any
action against Guarantor in any such court and to be otherwise effective and
binding service in every respect. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right of
Agent or any Lender to bring proceedings against Guarantor in the courts of any
other jurisdiction.
6.9 WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY LAW,
GUARANTOR AND, BY ITS ACCEPTANCE OF THE BENEFITS HEREOF, AGENT EACH HEREBY
AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS GUARANTY. The scope of this waiver is
intended to be all-encompassing of any and all disputes that may be filed in any
court and that relate to the subject matter of this transaction, including
without limitation contract claims, tort claims, breach of duty claims and all
other common law and statutory claims. Guarantor and, by its acceptance of the
benefits hereof, Agent each (i) acknowledges that this waiver is a material
inducement for Guarantor and Agent to enter into a business relationship, that
Guarantor and Agent have already relied on this waiver in entering into this
Guaranty or accepting the benefits thereof, as the case may be, and that each
will continue to rely on this waiver in their related future dealings and (ii)
further warrants and represents that each has reviewed this waiver with its
legal counsel, and that each knowingly and voluntarily waives its jury trial
rights following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS GUARANTY. In the event of litigation, this Guaranty may be filed as a
written consent to a trial by the court.
6.10 NO OTHER WRITING. This writing is intended by Guarantor and Agent as
the final expression of this Guaranty and is also intended as a complete and
exclusive statement of the terms of their agreement with respect to the matters
covered hereby. No course of dealing, course of performance or trade usage, and
no parol evidence of any nature, shall be
XXVII-16
used to supplement or modify any terms of this Guaranty. There are no conditions
to the full effectiveness of this Guaranty.
6.11 FURTHER ASSURANCES. At any time or from time to time, upon the request
of Agent, Guarantor shall execute and deliver such further documents and do such
other acts and things as Agent may reasonably request in order to effect fully
the purposes of this Guaranty.
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XXVII-17
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first written above.
MADISON DEARBORN CAPITAL PARTNERS, L.P.
By: MADISON DEARBORN
PARTNERS, L.P., its General Partner
By: Madison Dearborn Partners, Inc.
its General Partner
By: /s/ Xxxx X. Xxxx
Name: Xxxx X. Xxxx
Title Managing Director
Address: Three First Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxx
XXVII-18
