EXECUTION COPY
3/31/98
NY3:#7156046v3
This Guaranty Agreement (the "Guaranty"), dated as of
March 31, 1998, is made by JBS International, Inc., a Barbados
corporation ("Guarantor"), in favor of Teachers Insurance and
Annuity Association of America ("Teachers") and each other
holder from time to time of any of the Notes referred to below
(Teachers and each such other holder being collectively referred
to herein as the "Noteholders").
RECITALS:
WHEREAS, Xxxx X. Xxxxxxxxxx & Son, Inc., a Delaware
corporation ("Borrower"), has entered into that certain Note
Purchase Agreement dated as of August 30, 1995 (as in effect on
the date hereof, the "Note Agreement") under which Teachers
purchased, and the Borrower issued and sold, among other things,
$15,000,000 aggregate principal amount of 9.38% Senior
Subordinated Notes due 2005 (the "Notes"); and
WHEREAS, Borrower and Guarantor are parties to the
Bank Agreement and (in the case of the Borrower) the Amended and
Restated Prudential Note Purchase Agreement (each as defined in
the Note Agreement) pursuant to which Borrower has incurred (and
in the future may incur) Senior Indebtedness (as so defined) to
the Banks and Prudential (each as so defined) (and Guarantor may
be a co-obligor with respect to such Senior Indebtedness under
the Bank Agreement), and the Note Agreement contemplates that in
the future Borrower may incur, pursuant to the terms of the Note
Agreement, additional Senior Indebtedness;
WHEREAS, Guarantor has entered into a Guaranty dated
as of March 31, 1998 with Prudential (as in effect from time to
time, the "Prudential Guaranty") pursuant to which Guarantor has
guaranteed the obligations of Borrower under the Bank Agreement
and the Restated Prudential Note Purchase Agreement,
respectively, and Guarantor may in the future enter into
additional guarantees of Senior Indebtedness of Borrower
("Additional Guaranties");
WHEREAS, all parties acknowledge that the indebtedness
and obligations contemplated by the Note Agreement have been
incurred for and will inure, in part, to the benefit of
Guarantor; and
WHEREAS, in order to enter into an amendment of the
Note Agreement, Teachers requires that this Guaranty be executed
and delivered;
NOW THEREFORE, for value received, to satisfy one of
the conditions precedent to the amendment of Note Agreement, to
induce any transferee to accept the transfer of all or any part
of any Note, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged,
Guarantor agrees as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. As used in this Guaranty,
the following terms shall have the meanings set forth below:
"Additional Guaranties" shall have the meaning
specified in the Recitals hereto.
"Borrower" shall have the meaning specified in the
Recitals hereto.
"Guarantor" shall have the meaning specified in the
introductory paragraph hereof.
"Indebtedness" shall mean all of the indebtedness,
obligations and liabilities existing on the date hereof or
arising from time to time thereafter, whether direct or
indirect, joint or several, actual, absolute or contingent,
matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise,
of Borrower to the Noteholders under or in respect of the Note
Agreement (as such Agreement relates to the Notes) or the Notes,
including, without limitation, the principal of and interest and
Make-Whole Amount, if any, on the Notes.
"Note Agreement" shall have the meaning specified in
the Recitals hereto.
"Noteholders" shall have the meaning specified in the
introductory paragraph hereof.
"Notes" shall have the meaning specified in the
Recitals hereto.
"Prudential Guaranty" shall have the meaning specified
in the Recitals hereto.
"Senior Indebtedness" shall mean all obligations and
liabilities (including in respect of costs, expenses and fees)
of Guarantor on the date hereof or arising from time to time
thereafter under the Bank Agreement, the Prudential Guaranty and
any Additional Guaranty, provided, however, that, to the extent
that any portion of such Senior Indebtedness under the Bank
Agreement or any such Guaranty is in respect of interest owing
on any Senior Indebtedness (as defined in the Note Agreement),
such portion of such Senior Indebtedness under any such Guaranty
shall exclude interest accruing during any bankruptcy,
insolvency or similar proceeding more than two years after the
date of any filing by or against Borrower or the Guarantor, as
the case may be, of such proceeding.
"Subordinated Indebtedness" shall mean all obligations
and liabilities (including in respect of costs, expenses and
fees) of Guarantor on the date hereof or arising from time to
time thereafter under this Guaranty.
"Teachers" shall have the meaning specified in the
introductory paragraph hereof.
SECTION 1.2 OTHER DEFINITIONS. Capitalized terms
that are used in this Guaranty and not defined in this Guaranty
shall have the meaning ascribed to them in the Note Agreement.
ARTICLE II
THE GUARANTY
SECTION 2.1 GUARANTY OF PAYMENT AND PERFORMANCE OF
OBLIGATIONS. Guarantor absolutely, unconditionally and
irrevocably guarantees the full and prompt payment in United
States currency when due (whether at maturity, a stated
prepayment date or earlier by reason of acceleration or
otherwise) and at all times thereafter, and the due and punctual
performance, of all Indebtedness together with all costs and
expenses, including without limitation all court costs and
expenses and attorneys' fees, paid or incurred by the
Noteholders in endeavoring to enforce this Guaranty or in
pursuing any action against Borrower or Guarantor or enforcing
any rights of the Noteholders in the security, if any, for the
Indebtedness or for liabilities of Guarantor hereunder, and any
taxes, fees or penalties which may be paid or payable in
connection therewith. This is a continuing guaranty of payment
and performance not of collection.
Upon an Event of Default, the Noteholders may, at
their sole election and without notice, proceed directly and at
once against Guarantor to seek and enforce performance of, and
to collect and recover, the Indebtedness, or any portion
thereof, without first proceeding against Borrower, any other
Person, or any security for the Indebtedness or for the
liability of any such other Person or the Guarantor hereunder.
The Noteholders shall have the exclusive right to determine the
application of payments and credits, if any, from Guarantor,
Borrower or from any other Person on account of the Indebtedness
or otherwise.
SECTION 2.2 OBLIGATIONS UNCONDITIONAL. The
obligations of Guarantor under this Guaranty shall be
continuing, absolute and unconditional, irrespective of (i) the
invalidity or unenforceability of any part or all of the Note
Agreement or any Note or any other agreement; (ii) the absence
of any attempt by the Noteholders to collect the Indebtedness or
any portion thereof from Borrower or other action to enforce the
same; (iii) the waiver or consent by the Noteholders with
respect to any provision of the Note Agreement or any Note or
any other agreement or applicable law; (iv) any failure by the
Noteholders to acquire, perfect or maintain any security
interest or lien in, or take any steps to preserve its rights to
any security for the Indebtedness or any portion thereof or for
the liability of Guarantor hereunder; (v) any defense arising by
reason of any disability or other defense (other than a defense
of payment, unless the payment on which such defense is based
was or is subsequently invalidated, declared to be fraudulent or
preferential, otherwise avoided and/or required to be repaid to
Borrower, Guarantor, the estate of either Borrower or Guarantor,
a trustee, receiver or any other Person under any bankruptcy
law, state or federal law, common law or equitable cause, in
which case there shall be no defense of payment with respect to
such payment) of Borrower or any other Person liable on the
Indebtedness or any portion thereof; (vi) Lender's election, in
any proceeding instituted under Chapter 11 of Title 11 of the
Federal Bankruptcy Code (11 U.S.C. 101 et seq.) (the "Bankruptcy
Code"), of the application of Section 1111(b)(2) of the
Bankruptcy Code; (vii) any borrowing or grant of a security
interest to the Noteholders by Borrower, as
debtor-in-possession, or extension of credit, under Section 364
of the Bankruptcy Code; (viii) the disallowance or avoidance of
all or any portion of the Noteholders' claim(s) for repayment of
the Indebtedness under the Bankruptcy Code or any similar state
law or the avoidance of any security for the Indebtedness or any
security for the liability of Guarantor hereunder; (ix) any
amendment to, waiver or modification of, or consent under any
provision of the Note Agreement or any Note or any other
agreement; (x) any change in any provision of any applicable law
or regulation; (xi) any order, judgment, writ, award or decree
of any court, arbitrator or governmental authority, domestic or
foreign, binding on or affecting Guarantor or Borrower or any of
their assets; (xii) the charter or by-laws of Guarantor or
Borrower; (xiii) any mortgage, indenture, lease, contract, or
other agreement (including without limitation any agreement with
stockholders), instrument or undertaking to which Guarantor or
Borrower is a party or which purports to be binding on or affect
Guarantor or Borrower or any of their assets; or (xiv) any other
circumstance which might otherwise constitute a legal or
equitable discharge or defense of a guarantor.
SECTION 2.3 NOTEHOLDERS' FREEDOM TO ACT. The
Noteholders are authorized, without notice and without affecting
the liability of Guarantor hereunder, from time to time to (i)
renew, extend, accelerate or otherwise change the time for
payment of, or other terms relating to, the Indebtedness or any
portion thereof, or otherwise modify, amend or change the terms
of the Note Agreement or any Note or any other agreement; (ii)
accept partial payments on the Indebtedness; (iii) take and hold
security or additional guaranties or sureties for the
Indebtedness or any portion thereof or any other liabilities of
Borrower, the obligations of Guarantor under this Guaranty and
the obligations under any other guaranties and sureties of the
Indebtedness, and exchange, enforce, waive, release, sell,
transfer, assign or otherwise deal with any such security,
guaranty or surety; (iv) apply such security and direct the
order or manner of sale thereof as the Noteholders may determine
in their sole discretion; (v) settle, release, compromise,
collect or otherwise liquidate the Indebtedness or any portion
thereof and any security therefor in any manner; (vi) extend
additional loans, credit and financial accommodations and
otherwise create additional Indebtedness; (vii) waive strict
compliance with the terms of the Note Agreement or any Note or
any other agreement and otherwise forbear from asserting the
Noteholders' rights and remedies thereunder; (viii) enforce or
forbear from enforcing the guaranty or surety of any other
guarantor or surety of the Indebtedness, any portion thereof or
release any such guarantor or surety; and (ix) assign this
Guaranty in part or in whole in connection with any assignment
of the Indebtedness or any portion thereof.
SECTION 2.4 WAIVERS OF GUARANTOR. Guarantor waives
all set-offs and counterclaims and all presentments, demands for
performance, notices of nonperformance, protests, notices of
protest, notices of dishonor and diligence with respect to the
Indebtedness and the obligations of Guarantor hereunder, the
filing of any claims with a court in the event of receivership
or bankruptcy of Borrower, and notices of acceptance of this
Guaranty. Guarantor further waives all notices that the
principal amount, any payment or any portion thereof, any
interest or Make-Whole Amount on the Indebtedness or any portion
thereof is due, notices of any and all proceedings to collect
from Borrower, anyone primarily or secondarily liable with
respect to the Indebtedness or any portion thereof, or from
anyone else, and, to the extent permitted by law, notices of
exchange, sale, surrender or other handling of any security
securing payment of the Indebtedness or this Guaranty. The
Guarantor agrees that the Noteholders shall not be under any
obligation to xxxxxxxx any assets in favor of Guarantor or
against or in payment of any or all of the Indebtedness.
Guarantor hereby waives and releases Borrower from any
and all "claims" (as defined in Section 101(4) of the Bankruptcy
Code) to which Guarantor is or would at any time be entitled by
virtue of its obligations under this Guaranty, including,
without limitation, any right of subrogation (whether
contractual, under Section 509 of the Bankruptcy Code or
otherwise), reimbursement, contribution, indemnity, exoneration
or similar right against Borrower. Guarantor further waives any
right to demand security from Borrower and any benefit of, and
any right to participate in, any security given to the
Noteholders to secure payment of the Indebtedness or any other
liability of Borrower to the Noteholders.
SECTION 2.5 REVIVAL. To the extent that Borrower or
Guarantor makes a payment or payments, or a transfer of an
interest in any property to any Noteholder or any Noteholder
enforces its rights in any security for the liabilities of
Guarantor hereunder or exercises its right of set-off, and such
payment, payments, transfer, or the proceeds of such enforcement
or set-off, or any portion of such payment, payments, transfer
or proceeds are subsequently invalidated, declared to be
fraudulent or preferential, set aside, otherwise avoided or
required to be repaid to Borrower, Guarantor, the estate of
either Borrower or Guarantor, a trustee, receiver or any other
party under any bankruptcy law, state or federal law, common law
or equitable cause, then to the extent of such recovery,
avoidance or repayment, the obligation or part of such
obligation originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had
not been made or such payment, enforcement or set-off had not
occurred.
SECTION 2.6 OBLIGATION TO KEEP INFORMED. Guarantor
shall be responsible for keeping itself informed of the
financial condition of Borrower and any other Persons primarily
or secondarily liable on the Indebtedness or any portion
thereof, and of all other circumstances bearing upon the risk of
nonpayment of the Indebtedness or any portion thereof, and
Guarantor agrees that the Noteholders shall have no duty to
advise Guarantor of information known to the Noteholders
regarding such condition or any such circumstance. If any
Noteholder, in its discretion, undertakes at any time or from
time to time to provide any such information to Guarantor, such
Noteholder shall not be under any obligation (i) to undertake
any investigation, whether or not a part of its regular business
routine, (ii) to disclose any information which such Noteholder
wishes to maintain confidential, or (iii) to make any other or
future disclosures of such information or any other information
to Guarantor.
SECTION 2.7 BANKRUPTCY. If any Event of Default
specified in Subsection (H) to (J), inclusive, of Section 12.1 of the
Note Agreement shall occur and be continuing, any and all
obligations of Guarantor shall forthwith become due and payable
without notice.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Guarantor represents, covenants and warrants as
follows:
SECTION 3.1 ORGANIZATION. Guarantor is a corporation
duly organized and existing in good standing under the laws of
Barbados. Guarantor is duly qualified and authorized to
transact business as a foreign corporation and is in good
standing in every jurisdiction in which the nature of the
business conducted by it or the ownership of its properties or
assets makes such qualification necessary, except where the
failure to be in good standing or to be so qualified or
authorized would not have a material adverse effect on the
business, condition (financial or otherwise) or operations of
Guarantor.
SECTION 3.2 POWER AND AUTHORITY. Guarantor has all
requisite corporate power to conduct its business as currently
conducted and as currently proposed to be conducted. Guarantor
has all requisite corporate power to execute, deliver and
perform its obligations under this Guaranty. The execution,
delivery and performance by Guarantor of this Guaranty have been
duly authorized by all requisite corporate action on the part of
Guarantor. Guarantor has duly executed and delivered this
Guaranty and this Guaranty constitutes the legal, valid and
binding obligations of Guarantor, enforceable against Guarantor
in accordance with its terms.
SECTION 3.3 CONFLICTING AGREEMENTS AND OTHER MATTERS.
Guarantor is not a party to any contract or agreement or subject
to any charter or other corporate restriction which materially
and adversely affects its business, property or assets, or
financial condition. Neither the execution nor delivery of this
Guaranty nor fulfillment of nor compliance with the terms and
provisions hereof, will conflict with, or result in a breach of
the terms, conditions or provisions of, or constitute a default
under, or result in any violation of, or result in the creation
of any Lien upon any of the properties or assets of Guarantor
pursuant to, the charter or by-laws of Guarantor, any award of
any arbitrator or any agreement (including any agreement with
stockholders), instrument, order, judgment, decree, statute,
law, rule or regulation to which Guarantor is subject.
Guarantor is not a party to, or otherwise subject to any
provision contained in, any instrument evidencing Indebtedness
(as defined in the Note Agreement) of Guarantor, any agreement
relating thereto or any other contract or agreement (including
its charter) which limits the amount of, or otherwise imposes
restrictions on the creation of, any guarantee.
ARTICLE IV
SUBORDINATION OF SUBORDINATED INDEBTEDNESS
SECTION 4.1 SUBORDINATED INDEBTEDNESS SUBORDINATED TO
SENIOR INDEBTEDNESS. The provisions of this Article IV apply
notwithstanding anything to the contrary in this Guaranty.
Teachers and Guarantor, for themselves and their respective
successors and assigns, covenant and agree, and each holder of
any Note, by its acceptance thereof, shall be deemed to have
agreed, that the payment from whatever source of the
Subordinated Indebtedness, shall be subordinate and subject in
right of payment, to the extent and in the manner set forth in
this Article IV, to the prior payment in full in cash of all
Senior Indebtedness, and that each holder of such Senior
Indebtedness, with respect to Senior Indebtedness now existing
or hereafter arising, shall be deemed to have acquired such
Senior Indebtedness in reliance upon the covenants and
provisions contained in this Article IV.
SECTION 4.2 SUBORDINATED NOTES SUBORDINATED TO PRIOR
PAYMENT OF ALL SENIOR INDEBTEDNESS ON DISSOLUTION, LIQUIDATION,
REORGANIZATION, ETC. Upon any payment or distribution of the
assets of Guarantor of any kind or character, whether in cash,
property or securities (including any collateral, whether the
proceeds thereof or in kind, at any time securing the
Subordinated Indebtedness), to creditors upon any dissolution,
or winding-up, or total or partial liquidation, or
reorganization, or recapitalization or readjustment of Guarantor
or its securities (whether voluntary or involuntary, or in
bankruptcy, insolvency, reorganization, liquidation,
receivership proceedings, or upon an assignment for the benefit
of creditors, or any other marshalling of the assets and
liabilities of Guarantor or otherwise), then in such event:
(A) all Senior Indebtedness shall first be paid in
full in cash or have provision made for such payment (any
such provision having been agreed to in writing by the
holders of the Senior Indebtedness), before any payment is
made on account of Subordinated Indebtedness from any
source whatsoever;
(B) any payment or distribution of assets of
Guarantor of any kind or character from any source what-
soever, whether in cash, property or securities (other than
equity securities of Guarantor as reorganized or
readjusted or equity securities of Guarantor or any other
company, trust or corporation provided for by a plan of
reorganization or readjustment, or securities the payment
of which is subordinate, at least to the extent provided in
this Article IV with respect to the Subordinated
Indebtedness, to the payment of all Senior Indebtedness at
the time outstanding and to the payment of all securities
issued in exchange therefor to holders of such Senior
Indebtedness at the time outstanding), to which the holders
of the Subordinated Indebtedness would be entitled except
for the provisions of this Article IV, shall be paid or
delivered by any debtor, custodian or other person making
such payment or distribution, directly to the holders of
such Senior Indebtedness, or their representative or
representatives, ratably according to the aggregate amounts
remaining unpaid on account of such Senior Indebtedness
held or represented by each, for application to payment of
all such Senior Indebtedness remaining unpaid, to the
extent necessary to pay all such Senior Indebtedness in
full in cash after giving effect to any concurrent payment
or distribution, or provision therefor, to, the holders of
such Senior Indebtedness; and
(C) in the event that, notwithstanding the foregoing
provisions of this Section 4.2, any payment or distribution
of assets of Guarantor of any kind or character from any
source whatsoever, whether in cash, property or securities
(other than equity securities of Guarantor as reorganized
or readjusted or equity securities of Guarantor or any
other company, trust or corporation provided for by a plan
of reorganization or readjustment, or securities the
payment of which is subordinate, at least to the extent
provided for in this Article IV with respect to the
Subordinated Indebtedness, to the payment of all Senior
Indebtedness at the time outstanding and to the payment of
all securities issued in exchange therefor to the holders
of such Senior Indebtedness at the time outstanding), shall
be received by any Noteholder before all such Senior
Indebtedness is paid in full in cash, or provision made for
its payment (any such provision having been agreed to in
writing by the holders of the Senior Indebtedness), such
payment or distribution shall be held in trust for the
benefit of, and shall be immediately paid or delivered by
such Noteholder to, as the case may be, the holders of such
Senior Indebtedness remaining unpaid or unprovided for, or
their representative or representatives, for application to
the payment of all such Senior Indebtedness remaining
unpaid, ratably according to the aggregate amounts
remaining unpaid on account of the Senior Indebtedness held
or represented by each, to the extent necessary to pay all
such Senior Indebtedness in full in cash after giving
effect to any concurrent payment or distribution, or
provision therefor, to the holders of such Senior
Indebtedness.
Guarantor shall give prompt notice to each Noteholder
of any dissolution, winding-up, liquidation, reorganization,
recapitalization or readjustment of Guarantor.
Upon any distribution of assets of Guarantor referred
to in this Article IV, the Noteholders shall be entitled to rely
upon any order or decree made by any court of competent
jurisdiction in which such dissolution, winding-up, liquidation,
reorganization, recapitalization or readjustment proceeding is
pending, or a certificate of the liquidating trustee or agent or
other Person making any distribution to such holders, for the
purpose of ascertaining the Persons entitled to participate in
such distribution, the holders of the Senior Indebtedness, the
amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to
this Article IV.
SECTION 4.3 NO PAYMENTS WITH RESPECT TO SUBORDINATED
INDEBTEDNESS IN CERTAIN CIRCUMSTANCES.
(A) No payment on account of the Subordinated
Indebtedness shall be made (directly or indirectly, by set-
off, redemption, repurchase or in any other manner) at any
time when the Noteholders are not entitled to receive
payments in respect of the Notes pursuant to 13.3(A) of
the Note Agreement.
(B) At any time when the Noteholders are not entitled
to receive payments in respect of the Subordinated
Indebtedness thereof pursuant to the foregoing Subsection
(A) and so long as the maturity of no Senior Indebtedness
(as defined in the Note Agreement) has been accelerated,
the Noteholders shall not be entitled to declare any amount
due hereunder or institute or maintain any proceeding
seeking any other remedy against Guarantor or any of its
subsidiaries in respect of the Subordinated Indebtedness,
whether contractual, at law or in equity or otherwise.
(C) Following any acceleration of the maturity of any
Senior Indebtedness (as defined in the Note Agreement) and
as long as such acceleration shall continue unrescinded and
unannulled, the Senior Indebtedness shall first be paid in
full in cash or have provision made for such payment (any
such provision having been agreed to in writing by the
holders of the Senior Indebtedness), before any payment is
made (directly or indirectly, by set-off, redemption,
repurchase or in any other manner) on account of or applied
on the Subordinated Indebtedness from any source
whatsoever.
(D) Following any acceleration of the maturity of all
or any portion of the Notes and so long as such
acceleration shall continue unrescinded and unannulled, all
Senior Indebtedness then due, or becoming due by
acceleration or otherwise, shall be first paid in full in
cash, or provision made for such payment (any such
provision having been agreed to in writing by the holders
of the Senior Indebtedness), before any payment is made
(directly or indirectly, by set-off, redemption, repurchase
or in any other manner) on the Subordinated Indebtedness.
(E) In furtherance of the provisions of this Article
IV, in the event that any payment on the Subordinated
Indebtedness shall be made (from any source whatsoever) and
received by any Noteholder, which is not then permitted by
the foregoing provisions of this Section 4.3, such payment
shall be held in trust for the benefit of, and shall be
immediately paid over to the holders of Senior Indebtedness
or their representative or representatives, ratably
according to the aggregate amounts remaining unpaid on
account of the Senior Indebtedness held or represented by
each, for application to the payment of all Senior
Indebtedness remaining unpaid, whether or not then due and
payable.
SECTION 4.4 NO IMPAIRMENT OF SUBORDINATION;
REINSTATEMENT. No right of any present or future holder of any
Senior Indebtedness to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of Guarantor or by any act or
failure to act by any such holder (including any exercise or
non-exercise of any right, power or remedy under or in respect
of the Senior Indebtedness or any document relating thereto or
any release or discharge by any holder of Senior Indebtedness of
any guaranty thereof or security therefor), or by any non-
compliance by Guarantor with the terms, provisions and covenants
of this Guaranty and any other document relating thereto,
regardless of any knowledge thereof which any such holder may
have. Each Noteholder agrees that the rights of the holders of
Senior Indebtedness under this Article IV shall be automatically
reinstated if and to the extent that any payment by Guarantor or
any other Person to the holders of Senior Indebtedness is
rescinded or must otherwise be returned by any holder of Senior
Indebtedness as a result of any proceedings in bankruptcy or
reorganization.
SECTION 4.5 HOLDERS OF SUBORDINATED NOTES TO BE
SUBROGATED TO RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS. Subject
to the prior payment in full in cash of all Senior Indebtedness,
the Noteholders shall be subrogated to the rights of the holders
of Senior Indebtedness to receive payments or distributions of
assets of Guarantor applicable to the Senior Indebtedness until
Subordinated Indebtedness shall be paid in full, and for
purposes of such subrogation, no payments or distributions to
the holders of Senior Indebtedness of assets, whether in cash,
property or securities, distributable to the holders of Senior
Indebtedness under the provisions hereof to which the
Noteholders would be entitled except for the provisions of this
Article IV, and no payment pursuant to the provisions of this
Article IV to the holders of Senior Indebtedness by the
Noteholders shall, as between Guarantor, its creditors other
than the holders of its Senior Indebtedness, and the Noteholders
be deemed to be a payment by Guarantor to or on account of such
Senior Indebtedness, it being understood that the provisions of
this Article IV are, and are intended, solely for the purpose of
defining the relative rights of the Noteholders, on the one
hand, and the holders of its Senior Indebtedness, on the other
hand.
SECTION 4.6 OBLIGATIONS OF GUARANTOR UNCONDITIONAL.
Nothing contained in this Article IV or elsewhere in this
Guaranty is intended to or shall impair, as between Guarantor
and its creditors, other than the holders of its Senior
Indebtedness, the obligations of Guarantor, which are absolute
and unconditional, to pay to the Noteholders the Subordinated
Indebtedness as and when the Subordinated Indebtedness shall
become due and payable in accordance with the terms of this
Guaranty, or to affect the relative rights of the Noteholders
and creditors of Guarantor other than the holders of its Senior
Indebtedness, nor, except as otherwise expressly provided in
this Article IV shall anything herein or therein prevent any
Noteholder from exercising all remedies otherwise permitted by
applicable law upon the happening of an Event of Default under
the Note Agreement, subject to the rights, if any, under this
Article IV of the holders of Senior Indebtedness.
Nothing contained in this Article IV or elsewhere in
this Guaranty shall, except during the pendency of any
dissolution, winding-up, liquidation, reorganization,
recapitalization or readjustment of Guarantor, affect the
obligation of Guarantor to make, or prevent Guarantor from
making at any time (except under the circumstances described
under Sections 4.2 and 4.3) payment of the Subordinated
Indebtedness.
SECTION 4.7 HOLDERS OF SUBORDINATED NOTES ENTITLED TO
ASSUME PAYMENTS NOT PROHIBITED IN ABSENCE OF NOTICE. No
Noteholder shall at any time be charged with knowledge of the
existence of any facts which would prohibit the making of any
payment to it, unless and until such Noteholder shall have
received written notice thereof at its principal office from
Guarantor or from one or more holders of Senior Indebtedness or
from any representative or representatives thereof; and prior to
the receipt of any such written notice each such Noteholder
shall be entitled to assume conclusively that no such facts
exist, without, however, limiting any such rights of holders of
Senior Indebtedness under this Article IV to recover from the
Noteholders any payment made to any such Noteholder which it is
not entitled under this Article IV to retain.
Each Noteholder shall be entitled to rely on the
delivery to it of a written notice by a Person representing
itself to be a holder of Senior Indebtedness to establish that
such notice has been given by a holder of Senior Indebtedness.
In the event that any Noteholder determines in good faith that
further evidence is required with respect to the right of any
Person as a holder of Senior Indebtedness to participate in any
payment or distribution pursuant to this Article IV, such
Noteholder may request such Person to furnish evidence to the
reasonable satisfaction of such Noteholder as to the amount of
Senior Indebtedness held by such Person, the extent to which
such Person is entitled to participate in such payment or
distribution and any other facts pertinent to the rights of such
Person under this Article IV, and if such evidence is not
furnished such Noteholder may defer any payment to such Person
pending judicial determination as to the right of such Person to
receive such payment.
SECTION 4.8 INFORMATION AS TO SUBORDINATION.
Guarantor will not, and will not permit any of its subsidiaries
or agents to, publish or give to any creditor or prospective
creditor of Guarantor or any of its subsidiaries any copy,
statement or summary (or acquiesce in the publication or giving
of any such copy, statement or summary) as to the subordination
of the rights of the Noteholders without also stating, or
causing to be stated (in a conspicuous manner in the case of any
document) that such subordination is solely for the benefit of
the holders of Senior Indebtedness and not for the benefit of
any other creditor of Guarantor or any of its subsidiaries.
SECTION 4.9 AMENDMENT TO ARTICLE IV. Notwithstanding
anything to the contrary in this Guaranty, no amendment or
modification may be made with respect to the provisions of
(i) this Article IV or (ii) any other provisions of this
Agreement if such amendment or modification would alter or
impair the rights of the holders of the Senior Indebtedness
under this Article IV, in either case without the written
consent of the Agent (so long as any Senior Indebtedness under
the Bank Agreement is outstanding) and the Required Prudential
Holders (so long as any Senior Indebtedness under the Existing
Prudential Notes or the Private Shelf Notes is outstanding) and
the holders of a majority of the outstanding principal amount of
the Senior Indebtedness.
ARTICLE V
MISCELLANEOUS
SECTION 5.1 SUCCESSORS, ASSIGNS AND PARTICIPANTS.
This Guaranty shall be binding upon Guarantor and its successors
and assigns and shall inure to the benefit of Teachers and its
successors, transferees and assigns and each other Noteholder;
all references herein to Guarantor shall be deemed to include
its successors and assigns, and all references herein to
Teachers or any other Noteholder shall be deemed to include its
successors and assigns. This Guaranty shall be enforceable by
the Noteholders and any of the Noteholders' successors, assigns
and participants, and any such successors and assigns shall have
the same rights and benefits with respect to the Borrower under
this Guaranty as Teachers hereunder.
SECTION 5.2 FURTHER ASSURANCES. Guarantor agrees, at
the sole cost and expense of Guarantor, to promptly do all such
things and execute all such documents as the Noteholders may
consider necessary or desirable to preserve the rights and
powers of the Noteholders hereunder.
SECTION 5.3 NOTICES. Except as otherwise expressly
provided herein, any notice required or desired to be served,
given or delivered hereunder shall be in writing, and shall be
deemed to have been validly served, given or delivered five days
after deposit in the United States mails, with proper postage
prepaid, or upon delivery by courier or upon transmission by
telex, telecopy or similar electronic medium to the following
addresses:
(i) If to Teachers at:
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Securities Division
Re: Xxxx X. Xxxxxxxxxx & Son, Inc.
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
(ii) If to any other Noteholder, to the address of
such Noteholder as it appears in the note register maintained
pursuant to 14 of the Note Agreement;
(iii) If to Guarantor at:
JBS International, Inc.
c/o Xxxx X. Xxxxxxxxxx & Son, Inc.
0000 Xxxxx Xxxx
Xxx Xxxxx Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxx, Chairman and
President
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
Xxxxxxx X. Xxxxxxx, Esq.
Jenner & Block
Xxx XXX Xxxxx
Xxxxxxx, Xxxxxxxx 00000
or to such other address as each party designates to the other
in the manner herein prescribed.
SECTION 5.4 AMENDMENTS, WAIVERS AND CONSENTS. No
amendment or waiver of or consent to any departure by Guarantor
from any provision of this Guaranty, shall be binding on the
Noteholders except as expressly set forth and consented to in a
writing duly signed and delivered by the Required Holders of the
Notes, and then such amendment, waiver or consent shall be
effective only in the specific instance and for the specific
purpose for which given. No course of dealing between Guarantor
and the Noteholders, nor any failure on the part of the
Noteholders to exercise any right, power or remedy nor any delay
on the part of the Noteholders in exercising any right, power or
remedy shall operate as a waiver thereof, and no single or
partial exercise by the Noteholders of any right, power or
remedy shall preclude any further exercise thereof by the
Noteholders. No waiver of any right, power or remedy shall be
deemed to occur by any act or knowledge of any Noteholder, its
agents, trustees, officers or employees or be binding against
any Noteholder, except as expressly set forth in a writing duly
signed and delivered by the Required Holders of the Notes. No
waiver by the Required Holders of any default shall operate as a
waiver of any other default or the same default on a future
occasion, and no action by any Noteholder permitted hereunder
shall in any way affect or impair any of any Noteholders'
rights, powers or remedies or the obligations of Guarantor under
this Guaranty. Any determination by a court of competent
jurisdiction of the amount of any part of the Indebtedness shall
be conclusive and binding on Guarantor irrespective of whether
Guarantor was a party to the suit or action in which such
determination was made. As used herein, the term "this Guaranty"
and references thereto shall mean this Guaranty as it may from
time to time be amended or supplemented.
SECTION 5.5 GOVERNING LAW. THIS GUARANTY SHALL BE
INTERPRETED AND THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO
DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO
CONFLICTS OF LAW PROVISIONS) AND DECISIONS OF THE STATE OF
ILLINOIS.
SECTION 5.6 SUBMISSION TO JURISDICTION. GUARANTOR
HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL
COURT LOCATED WITHIN THE CITY OF NEW YORK OR WITHIN THE COUNTY
OF XXXX, STATE OF ILLINOIS, AND IRREVOCABLY AGREES THAT, SUBJECT
TO THE NOTEHOLDERS' SOLE AND ABSOLUTE ELECTION, ALL ACTIONS OR
PROCEEDINGS RELATING TO THIS GUARANTY OR ANY OTHER DOCUMENT
EXECUTED IN CONNECTION HEREWITH TO WHICH GUARANTOR IS A PARTY
MAY BE LITIGATED IN SUCH COURTS, AND GUARANTOR WAIVES ANY
OBJECTION WHICH IT MAY HAVE BASED ON IMPROPER VENUE OR FORUM NON
CONVENIENS TO THE CONDUCT OF ANY PROCEEDING IN ANY SUCH COURT
AND WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT, AND
CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY MAIL OR
MESSENGER ON XXXX X. XXXXXXXXXX & SON, INC. AT THE ADDRESS SET
FORTH IN SECTION 5.3 ABOVE AND THAT SERVICE SO MADE SHALL BE
DEEMED TO BE COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT OR
FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN POSTED TO
GUARANTOR'S ADDRESS AS SET FORTH IN SECTION 5.3. THE
NOTEHOLDERS AND GUARANTOR ACKNOWLEDGE THAT THE TIME AND EXPENSE
REQUIRED FOR TRIAL BY JURY EXCEED THE TIME AND EXPENSE REQUIRED
FOR A BENCH TRIAL AND HEREBY WAIVE, TO THE EXTENT PERMITTED BY
LAW, TRIAL BY JURY, AND WAIVE ANY BOND OR SURETY OR SECURITY
UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF
THE NOTEHOLDERS. NOTHING CONTAINED IN THIS SUBSECTION 5.6 SHALL
AFFECT THE RIGHT OF THE NOTEHOLDERS TO SERVE LEGAL PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF THE
NOTEHOLDERS TO BRING ANY ACTION OR PROCEEDING AGAINST GUARANTOR
OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION.
SECTION 5.7 COUNTERPARTS. This Guaranty may be
executed in any number of counterparts, each of which shall be
an original with the same effect as if the signatures thereto
and hereto were upon the same instrument.
SECTION 5.8 INTERPRETATION; PARTIAL INVALIDITY.
Whenever possible each provision of this Guaranty shall be
interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be
prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the
remaining provisions of this Guaranty.
SECTION 5.9 NO USURY. Nothing contained in this
Guaranty shall be construed or shall so operate either presently
or prospectively to require Guarantor to pay any amount under
this Guaranty on account of the Indebtedness that constitutes
interest in excess of the maximum amount of interest permitted
by law to be charged on all or any portion of the Indebtedness
and to be guaranteed by Guarantor hereunder. If any interest in
excess of the maximum amount of interest permitted by law to be
charged and to be guaranteed hereunder is provided for, or is
adjudicated to be provided for, with respect to all or any
portion of the Indebtedness, then in such event (i) the
provisions of this Section 4.9 shall govern and control; (ii)
Guarantor shall not be obligated to pay any amount under this
Guaranty that constitutes interest in excess of that so
permitted on all or any portion of the Indebtedness; (iii) any
amount paid by Guarantor to the Noteholders under this Guaranty
that constitutes interest in excess of that so permitted on all
or any portion of the Indebtedness shall, at the option of the
Noteholders, be (A) applied as a credit against the then unpaid
but due and owing amount under this Guaranty, (B) refunded to
the Guarantor or (C) applied or refunded pursuant to any
combination of the foregoing; (iv) this Guaranty shall have been
deemed to have been, and shall be, reformed and modified to
reflect, Guarantor's guarantee hereunder of the payment of the
Indebtedness to the extent interest included therein is
permitted by law to be charged and to be guaranteed by Guarantor
hereunder; and (v) Guarantor shall not have any action against
the Noteholders for any damages whatsoever arising out of the
payment or collection of any such amount.
SECTION 5.10 TAXES. (a) Any and all payments by the
Guarantor hereunder shall be made free and clear of and without
deduction for any and all present or future taxes, deductions,
charges or withholdings, and all liabilities with respect
thereto, including without limitation, such taxes, deductions,
charges, withholdings or liabilities whatsoever imposed,
assessed, levied or collected by any taxing authority and all
(other than to the extent due to the gross negligence or willful
misconduct of any Noteholder) interest, penalties, expenses or
similar liabilities with respect thereto ("Taxes"), excluding
however, from the definition of Taxes, in the case of each
Noteholder, taxes imposed on its income (including penalties and
interest payable in respect thereof), and franchise taxes
imposed on it by the jurisdiction under the laws of which such
Noteholder is organized or any political subdivision thereof.
If the Guarantor shall be required by law to deduct any Taxes
from or in respect of any sum payable hereunder to any
Noteholder, (i) the sum payable shall be increased as may be
necessary so that after making all required deductions
(including deductions applicable to additional sums payable
under this Section 5.10) such Noteholder receives an amount
equal to the sum it would have received had no such deductions
been made and (ii) the Guarantor shall pay the full amount
deducted to the relevant taxation authority or other authority
in accordance with applicable law.
(b) In addition, the Guarantor agrees to pay any
present or future stamp or documentary taxes or any other excise
or property taxes, charges or similar levies that arise from any
payment made hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Guaranty
(hereinafter included within the definition of "Taxes").
(c) The Guarantor will indemnify each Noteholder for
the full amount of Taxes (including without limitation, any
Taxes imposed by any jurisdiction on amounts payable under this
Section 5.10) paid by such Noteholder and any liability arising
therefrom or with respect thereto, whether or not such Taxes
were correctly or legally asserted. This indemnification shall
be made within five days from the date such Noteholder makes
written demand therefor; provided however, to the extent that
any Noteholder is reimbursed for any Tax that was incorrectly or
illegally asserted in connection with this Guaranty, such
Noteholder shall promptly return to the Guarantor the amount of
such reimbursement net or any costs of recovery, together with
any interest that may have been paid by the taxing jurisdiction
with respect thereto, to the extent the Guarantor has actually
paid such Noteholder with respect thereto.
(d) Promptly after the date on which payment of any
Taxes are due pursuant to applicable law, the Guarantor will, at
the request of any Noteholder, furnish to such Noteholder
evidence in form and substance satisfactory to such Noteholder
that the Guarantor has met its obligations under this Section
5.10.
(e) Without prejudice to the survival of any other
agreement of the Guarantor, the agreement and obligations of the
Guarantor contained in this Section 5.10 shall survive the
payment in full of any other amounts due under this Guaranty.
SECTION 5.11 MISCELLANEOUS. The section headings
used in this Guaranty are for convenience of reference only and
shall not define or limit the provisions of this Guaranty. All
remedies under this Guaranty are cumulative and are not
exclusive of any other remedies provided by law.
[Signature pages to follow]
IN WITNESS WHEREOF, Guarantor and Teachers have caused
this Guaranty to be duly executed as of the date first above
written.
JBS INTERNATIONAL, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
-------------------------
Title: President
---------
TEACHERS INSURANCE AND
ANNUITY ASSOCIATION OF
AMERICA
By: /s/ Xxxxx X. Xxxxxx
-------------------------
Title: Associate Director
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