EXHIBIT 10.25
SUBSIDIARY GUARANTY
This SUBSIDIARY GUARANTY is entered into as of October 23, 1997 by THE
UNDERSIGNED (each a "GUARANTOR" and collectively, "GUARANTORS") in favor of and
for the benefit of FIRST UNION NATIONAL BANK, as administrative agent for and
representative of (in such capacity herein called "GUARANTIED PARTY") the
financial institutions ("LENDERS") party to the Credit Agreement referred to
below and any Interest Rate Exchangers (as hereinafter defined), and, subject to
subsection 3.12, for the benefit of the other Beneficiaries (as hereinafter
defined).
RECITALS
A. The Pantry, Inc., a Delaware corporation ("COMPANY"), has entered
into that certain Credit Agreement dated as of October 23, 1997 with Guarantied
Party, Syndication Agent and Lenders (said Credit Agreement, as it may hereafter
be amended, supplemented or otherwise modified from time to time, being the
"CREDIT AGREEMENT"; capitalized terms defined therein and not otherwise defined
herein being used herein as therein defined).
B. Company may from time to time enter, or may from time to time have
entered, into one or more Interest Rate Agreements (collectively, the "LENDER
INTEREST RATE AGREEMENTS") with or one or more Lenders (in such capacity,
collectively, "INTEREST RATE EXCHANGERS") in accordance with the terms of the
Credit Agreement, and it is desired that the obligations of Company under the
Lender Interest Rate Agreements, including the obligation of Company to make
payments thereunder in the event of early termination thereof (all such
obligations being the "INTEREST RATE OBLIGATIONS"), together with all
obligations of Company under the Credit Agreement and the other Loan Documents,
be guarantied hereunder.
C. A portion of the proceeds of the Loans may be advanced to
Guarantors and thus the Guarantied Obligations (as hereinafter defined) are
being incurred for and will inure to the benefit of Guarantors (which benefits
are hereby acknowledged).
D. It is a condition precedent to the making of the initial Loans
under the Credit Agreement that Company's obligations thereunder be guarantied
by Guarantors.
E. Guarantors are willing irrevocably and unconditionally to guaranty
such obligations of Company.
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 and Guarantied Party to enter into the Credit
Agreement and to make
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Loans and other extensions of credit thereunder and to induce Interest Rate
Exchangers to enter into the Lender Interest Rate Agreements, Guarantors hereby
agree as follows:
SECTION 1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS. As used in this Guaranty, the following terms
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shall have the following meanings unless the context otherwise requires:
"BENEFICIARIES" means Guarantied Party, Syndication Agent, Lenders and
any Interest Rate Exchangers.
"GUARANTIED OBLIGATIONS" has the meaning assigned to that term in
subsection 2.1.
"GUARANTY" means this Subsidiary Guaranty dated as of October 23, 1997,
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 all principal, interest,
costs, fees and expenses (including reasonable legal fees and expenses) of
Beneficiaries as required under the Loan Documents and the Lender Interest
Rate Agreements.
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. Subject to the provisions of
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subsection 2.2(a), Guarantors jointly and severally hereby irrevocably and
unconditionally guaranty 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" is used herein in its most comprehensive sense and
includes:
(a) any and all Obligations of Company and any and all Interest Rate
Obligations, in each case now or hereafter
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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 Credit Agreement and the other Loan Documents and the
Lender Interest Rate Agreements, including those arising under successive
borrowing transactions under the Credit Agreement which shall either
continue the Obligations of Company or from time to time renew them after
they have been satisfied and including interest which, but for the filing of
a petition in bankruptcy with respect to Company, would have accrued on any
Guarantied Obligations, whether or not a claim is allowed against Company
for such interest in the related bankruptcy proceeding; and
(b) those expenses set forth in subsection 2.8 hereof.
2.2 LIMITATION ON AMOUNT GUARANTIED; CONTRIBUTION BY GUARANTORS. (a)
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Anything contained in this Guaranty to the contrary notwithstanding, if any
Fraudulent Transfer Law (as hereinafter defined) is determined by a court of
competent jurisdiction to be applicable to the obligations of any Guarantor
under this Guaranty, such obligations of such Guarantor hereunder shall be
limited to a maximum aggregate amount equal to the largest amount that would not
render its obligations hereunder 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 (collectively, the "FRAUDULENT
TRANSFER LAWS"), in each case after giving effect to all other liabilities of
such Guarantor, contingent or otherwise, that are relevant under the Fraudulent
Transfer Laws (specifically excluding, however, any liabilities of such
Guarantor (x) in respect of intercompany indebtedness to Company or other
affiliates of Company to the extent that such indebtedness would be discharged
in an amount equal to the amount paid by such Guarantor hereunder and (y) under
any guaranty of Subordinated Indebtedness which guaranty contains a limitation
as to maximum amount similar to that set forth in this subsection 2.2(a),
pursuant to which the liability of such Guarantor hereunder is included in the
liabilities taken into account in determining such maximum amount) and after
giving effect as assets to the value (as determined under the applicable
provisions of the Fraudulent Transfer Laws) of any rights to subrogation,
reimbursement, indemnification or contribution of such Guarantor pursuant to
applicable law or pursuant to the terms of any agreement (including any such
right of contribution under subsection 2.2(b).
(b) Guarantors under this Guaranty together desire to allocate among
themselves, in a fair and equitable manner, their obligations arising under this
Guaranty. Accordingly, in the event any payment or distribution is made on any
date by any Guarantor under this 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 Guarantors in the amount of
such other Guarantor's
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Fair Share Shortfall (as defined below) as of such date, with the result that
all such contributions will cause each Guarantor's Aggregate Payments (as
defined below) to equal its Fair Share as of such date. "FAIR SHARE" means,
with respect to a Guarantor as of any date of determination, an amount equal to
(i) the ratio of (x) the Adjusted Maximum Amount (as defined below) with respect
to such Guarantor to (y) the aggregate of the Adjusted Maximum Amounts with
respect to all Guarantors multiplied by (ii) the aggregate amount paid or
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distributed on or before such date by all Funding Guarantors under this Guaranty
in respect of the obligations guarantied. "FAIR SHARE SHORTFALL" means, with
respect to a Guarantor as of any date of determination, the excess, if any, of
the Fair Share of such Guarantor over the Aggregate Payments of such Guarantor.
"ADJUSTED MAXIMUM AMOUNT" means, with respect to a Guarantor as of any date of
determination, the maximum aggregate amount of the obligations of such Guarantor
under this Guaranty, determined as of such date in accordance with subsection
2.2(a); provided that, solely for purposes of calculating the "Adjusted Maximum
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Amount" with respect to any Guarantor for purposes of this subsection 2.2(b),
any assets or liabilities of such Guarantor arising by virtue of any rights to
subrogation, reimbursement or indemnification or any rights to or obligations of
contribution hereunder shall not be considered as assets or liabilities of such
Guarantor. "AGGREGATE PAYMENTS" means, with respect to a 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 Guarantor in
respect of this Guaranty (including in respect of this subsection 2.2(b)) minus
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(ii) the aggregate amount of all payments received on or before such date by
such Guarantor from the other Guarantors as contributions under this subsection
2.2(b). The amounts payable as contributions hereunder shall be determined as
of the date on which the related payment or distribution is made by the
applicable Funding Guarantor. The allocation among Guarantors of their
obligations as set forth in this subsection 2.2(b) shall not be construed in any
way to limit the liability of any Guarantor hereunder.
2.3 PAYMENT BY GUARANTORS; APPLICATION OF PAYMENTS. Subject to the
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provisions of subsection 2.2(a), Guarantors hereby jointly and severally agree,
in furtherance of the foregoing and not in limitation of any other right which
any Beneficiary may have at law or in equity against any 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)),
Guarantors will upon demand pay, or cause to be paid, in cash, to Guarantied
Party for the ratable benefit of Beneficiaries, 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 interest
which, but for the filing of a petition in bankruptcy with
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respect to Company, would have accrued on such Guarantied Obligations, whether
or not a claim is allowed against Company for such interest in the related
bankruptcy proceeding) and all other Guarantied Obligations then owed to
Beneficiaries as aforesaid. All such payments shall be applied promptly from
time to time by Guarantied Party as provided in subsection 2.4D of the Credit
Agreement.
2.4 LIABILITY OF GUARANTORS ABSOLUTE. Each Guarantor agrees that its
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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, each Guarantor agrees as follows:
(a) This Guaranty is a guaranty of payment when due and not of
collectibility.
(b) Guarantied Party may enforce this Guaranty upon the occurrence of
an Event of Default under the Credit Agreement notwithstanding the existence
of any dispute between Company and any Beneficiary with respect to the
existence of such Event of Default.
(c) The obligations of each Guarantor hereunder are independent of the
obligations of Company under the Loan Documents or the Lender Interest Rate
Agreements and the obligations of any other guarantor (including any other
Guarantor) of the obligations of Company under the Loan Documents or the
Lender Interest Rate Agreements, and a separate action or actions may be
brought and prosecuted against such Guarantor whether or not any action is
brought against Company or any of such other guarantors and whether or not
Company is joined in any such action or actions.
(d) Payment by any Guarantor of a portion, but not all, of the
Guarantied Obligations shall in no way limit, affect, modify or abridge any
Guarantor's liability for any portion of the Guarantied Obligations which
has not been paid. Without limiting the generality of the foregoing, if
Guarantied Party is awarded a judgment in any suit brought to enforce any
Guarantor's covenant to pay a portion of the Guarantied Obligations, such
judgment shall not be deemed to release such Guarantor from its covenant to
pay the portion of the Guarantied Obligations that is not the subject of
such suit, and such judgment shall not, except to the extent satisfied by
such Guarantor, limit, affect, modify or abridge any other Guarantor's
liability hereunder in respect of the Guarantied Obligations.
(e) Any Beneficiary, upon such terms as it deems appropriate, without
notice or demand and without affecting the validity or enforceability of
this Guaranty or giving
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rise to any reduction, limitation, impairment, discharge or termination of
any 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 (including
any other Guarantor) with respect to the Guarantied Obligations; (v) enforce
and apply any security now or hereafter held by or for the benefit of such
Beneficiary 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 such Beneficiary may have against any such security, in each
case as such Beneficiary in its discretion may determine consistent with the
Credit Agreement or the applicable Lender Interest Rate 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 any Guarantor against Company or any
security for the Guarantied Obligations; and (vi) exercise any other rights
available to it under the Loan Documents or the Lender Interest Rate
Agreements.
(f) This Guaranty and the obligations of Guarantors hereunder shall be
valid and enforceable and shall not be subject to any reduction, limitation,
impairment, discharge or termination for any reason (other than payment in
full of the Guarantied Obligations), including the occurrence of any of the
following, whether or not any 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 or the Lender Interest Rate Agreements, 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
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modification of, or any consent to departure from, any of the terms or
provisions (including provisions relating to events of default) of the
Credit Agreement, any of the other Loan Documents, any of the Lender
Interest Rate Agreements 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, such Lender Interest Rate Agreement
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 any of the Lender Interest
Rate Agreements 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 any
Beneficiary might have elected to apply such payment to any part or all of
the Guarantied Obligations; (v) any Beneficiary's consent to the change,
reorganization or termination of the corporate structure or existence of
Company 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
Company may allege or assert against any Beneficiary in respect of the
Guarantied Obligations, including 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 any Guarantor as an obligor in respect of the
Guarantied Obligations.
2.5 WAIVERS BY GUARANTORS. Each Guarantor hereby waives, for the benefit
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of Beneficiaries:
(a) any right to require any Beneficiary, as a condition of payment or
performance by such Guarantor, to (i) proceed against Company, any other
guarantor (including any other Guarantor) of the Guarantied Obligations or
any other Person, (ii) proceed against or exhaust any security held from
Company, any such other guarantor or any other Person, (iii) proceed against
or have resort to any balance of any deposit account or credit on the books
of any Beneficiary in favor of Company or any other Person, or (iv) pursue
any other remedy in the power of any Beneficiary whatsoever;
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(b) any defense arising by reason of the incapacity, lack of authority
or any disability or other defense of Company including 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 Company 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 any Beneficiary's errors or omissions in the
administration of the Guarantied Obligations, except behavior which amounts
to bad faith;
(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 such Guarantor's obligations hereunder, (ii)
the benefit of any statute of limitations affecting such 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 any Beneficiary 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,
the Lender Interest Rate Agreements 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 Company 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.
2.6 GUARANTORS' RIGHTS OF SUBROGATION, CONTRIBUTION, ETC. Each Guarantor
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hereby waives any claim, right or remedy, direct or indirect, that such
Guarantor now has or may hereafter have against Company or any of its assets in
connection with this Guaranty or the performance by such Guarantor of its
obligations hereunder, in each case whether such claim, right or remedy arises
in equity, under contract, by statute, under common law or otherwise and
including (a) any right of subrogation, reimbursement or indemnification that
such Guarantor now has or may hereafter have against Company, (b) any right to
enforce, or
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to participate in, any claim, right or remedy that any Beneficiary now has or
may hereafter have against Company, and (c) any benefit of, and any right to
participate in, any collateral or security now or hereafter held by any
Beneficiary. In addition, until the Guarantied Obligations shall have been
indefeasibly paid in full and the Commitments shall have terminated and all
Letters of Credit shall have expired or been cancelled, each Guarantor shall
withhold exercise of any right of contribution such Guarantor may have against
any other guarantor (including any other Guarantor) of the Guarantied
Obligations (including any such right of contribution under subsection 2.2(b)).
Each 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 such Guarantor may have against
Company or against any collateral or security, and any rights of contribution
such Guarantor may have against any such other guarantor, shall be junior and
subordinate to any rights any Beneficiary may have against Company, to all
right, title and interest any Beneficiary may have in any such collateral or
security, and to any right any Beneficiary may have against such other
guarantor. If any amount shall be paid to any Guarantor on account of any such
subrogation, reimbursement, indemnification or contribution rights at any time
when all Guarantied Obligations shall not have been paid in full, such amount
shall be held in trust for Guarantied Party on behalf of Beneficiaries and shall
forthwith be paid over to Guarantied Party for the benefit of Beneficiaries to
be credited and applied against the Guarantied Obligations, whether matured or
unmatured, in accordance with the terms hereof.
2.7 SUBORDINATION OF OTHER OBLIGATIONS. Any indebtedness of Company or any
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Guarantor now or hereafter held by any Guarantor (the "OBLIGEE GUARANTOR") is
hereby subordinated in right of payment to the Guarantied Obligations, and any
such indebtedness collected or received by the Obligee Guarantor after an Event
of Default has occurred and is continuing shall be held in trust for Guarantied
Party on behalf of Beneficiaries and shall forthwith be paid over to Guarantied
Party for the benefit of Beneficiaries to be credited and applied against the
Guarantied Obligations but without affecting, impairing or limiting in any
manner the liability of the Obligee Guarantor under any other provision of this
Guaranty.
2.8 EXPENSES. Guarantors jointly and severally agree to pay, or cause to
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be paid, on demand, and to save Beneficiaries harmless against liability for,
any and all costs and expenses (including fees and disbursements of counsel and
allocated costs of internal counsel) incurred or expended by any Beneficiary in
connection with the enforcement of or preservation of any rights under this
Guaranty.
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2.9 CONTINUING GUARANTY. This Guaranty is a continuing guaranty and shall
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remain in effect until all of the Guarantied Obligations shall have been paid in
full and the Commitments shall have terminated and all Letters of Credit shall
have expired or been cancelled. Each Guarantor hereby irrevocably waives any
right to revoke this Guaranty as to future transactions giving rise to any
Guarantied Obligations.
2.10 AUTHORITY OF GUARANTORS OR COMPANY. It is not necessary for any
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Beneficiary to inquire into the capacity or powers of any Guarantor or Company
or the officers, directors or any agents acting or purporting to act on behalf
of any of them.
2.11 FINANCIAL CONDITION OF COMPANY. Any Loans may be granted to Company or
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continued from time to time, and any Lender Interest Rate Agreements may be
entered into from time to time, in each case without notice to or authorization
from any Guarantor regardless of the financial or other condition of Company at
the time of any such grant or continuation or at the time such Lender Interest
Rate Agreement is entered into, as the case may be. No Beneficiary shall have
any obligation to disclose or discuss with any Guarantor its assessment, or any
Guarantor's assessment, of the financial condition of Company. Each Guarantor
has adequate means to obtain information from Company on a continuing basis
concerning the financial condition of Company and its ability to perform its
obligations under the Loan Documents and the Lender Interest Rate Agreements,
and each Guarantor assumes the responsibility for being and keeping informed of
the financial condition of Company and of all circumstances bearing upon the
risk of nonpayment of the Guarantied Obligations. Each Guarantor hereby waives
and relinquishes any duty on the part of any Beneficiary to disclose any matter,
fact or thing relating to the business, operations or conditions of Company now
known or hereafter known by any Beneficiary.
2.12 RIGHTS CUMULATIVE. The rights, powers and remedies given to
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Beneficiaries by this Guaranty are cumulative and shall be in addition to and
independent of all rights, powers and remedies given to Beneficiaries by virtue
of any statute or rule of law or in any of the other Loan Documents, any of the
Lender Interest Rate Agreements or any agreement between any Guarantor and any
Beneficiary or Beneficiaries or between Company and any Beneficiary or
Beneficiaries. Any forbearance or failure to exercise, and any delay by any
Beneficiary 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.
2.13 BANKRUPTCY; POST-PETITION INTEREST; REINSTATEMENT OF GUARANTY. (a) So
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long as any Guarantied Obligations remain outstanding, no Guarantor shall,
without the prior written consent of Guarantied Party acting pursuant to the
instructions of Requisite Obligees (as defined in subsection 3.14), commence
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or join with any other Person in commencing any bankruptcy, reorganization or
insolvency proceedings of or against Company. The obligations of Guarantors
under this Guaranty shall not be reduced, limited, impaired, discharged,
deferred, suspended or terminated by any proceeding, voluntary or involuntary,
involving the bankruptcy, insolvency, receivership, reorganization, liquidation
or arrangement of Company or by any defense which Company may have by reason of
the order, decree or decision of any court or administrative body resulting from
any such proceeding.
(b) Each 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 Guarantors and Beneficiaries that the Guarantied Obligations which
are guarantied by Guarantors pursuant to this Guaranty should be determined
without regard to any rule of law or order which may relieve Company of any
portion of such Guarantied Obligations. Guarantors will permit any trustee in
bankruptcy, receiver, debtor in possession, assignee for the benefit of
creditors or similar person to pay Guarantied Party, or allow the claim of
Guarantied Party in respect of, any such interest accruing after the date on
which such proceeding is commenced.
(c) In the event that all or any portion of the Guarantied Obligations
are paid by Company, the obligations of Guarantors 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 any Beneficiary 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.
2.14 NOTICE OF EVENTS. As soon as any Guarantor obtains knowledge thereof,
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such Guarantor shall give Guarantied Party written notice of any condition or
event which has resulted in (a) a material adverse change in the financial
condition of any Guarantor or Company or (b) a breach of or noncompliance with
any term, condition or covenant contained herein or in the Credit Agreement, any
other Loan Document, any Lender Interest Rate Agreement or any other document
delivered pursuant hereto or thereto.
2.15 SET OFF. In addition to any other rights any Beneficiary may have
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under law or in equity, if any amount shall at any time be due and owing by any
Guarantor to any Beneficiary under this Guaranty, such Beneficiary is authorized
at any time or from time to time, without notice (any such notice being
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hereby expressly waived), to set off and to appropriate and to apply any and all
deposits (general or special, including indebtedness evidenced by certificates
of deposit, whether matured or unmatured) and any other indebtedness of such
Beneficiary owing to such Guarantor and any other property of such Guarantor
held by any Beneficiary to or for the credit or the account of such Guarantor
against and on account of the Guarantied Obligations and liabilities of such
Guarantor to any Beneficiary under this Guaranty.
2.16 DISCHARGE OF GUARANTY UPON SALE OF GUARANTOR. If all of the stock of
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any Guarantor or any of its successors in interest under this Guaranty shall be
sold or otherwise disposed of (including by merger or consolidation) in an Asset
Sale not prohibited by subsection 7.7 of the Credit Agreement or otherwise
consented to by Requisite Lenders, the Guaranty of such Guarantor or such
successor in interest, as the case may be, hereunder shall automatically be
discharged and released without any further action by any Beneficiary or any
other Person effective as of the time of such Asset Sale; provided that, as a
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condition precedent to such discharge and release, Guarantied Party shall have
received evidence satisfactory to it that arrangements satisfactory to it have
been made for delivery to Guarantied Party of the applicable Net Asset Sale
Proceeds.
SECTION 3. MISCELLANEOUS
3.1 SURVIVAL OF WARRANTIES. All agreements, representations and
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warranties made herein shall survive the execution and delivery of this Guaranty
and the other Loan Documents and the Lender Interest Rate Agreements and any
increase in the Commitments under the Credit Agreement.
3.2 NOTICES. Any communications between Guarantied Party and any Guarantor
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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 Guarantied Party
or any Guarantor shall not be effective until received.
3.3 SEVERABILITY. In case any provision in or obligation under this
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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.
3.4 AMENDMENTS AND WAIVERS. No amendment, modification, termination or
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waiver of any provision of this Guaranty, and no consent to any departure by any
Guarantor therefrom, shall in any event be effective without the written
concurrence of Guarantied Party and, in the case of any such amendment or
modification,
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each Guarantor against whom enforcement of such amendment or modification is
sought. Any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given.
3.5 HEADINGS. Section and subsection headings in this Guaranty are
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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.
3.6 APPLICABLE LAW; RULES OF CONSTRUCTION. THIS GUARANTY AND THE RIGHTS
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AND OBLIGATIONS OF GUARANTORS AND BENEFICIARIES HEREUNDER SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF
THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. The
rules of construction set forth in subsection 1.3 of the Credit Agreement shall
be applicable to this Guaranty mutatis mutandis.
3.7 SUCCESSORS AND ASSIGNS. This Guaranty is a continuing guaranty and
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shall be binding upon each Guarantor and its respective successors and assigns.
This Guaranty shall inure to the benefit of Beneficiaries and their respective
successors and assigns. No Guarantor shall assign this Guaranty or any of the
rights or obligations of such Guarantor hereunder without the prior written
consent of all Lenders. Any Beneficiary 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 such Beneficiary shall automatically extend to and be
vested in such transferee or assignee, all subject to the terms and conditions
hereof.
3.8 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL JUDICIAL
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PROCEEDINGS BROUGHT AGAINST ANY GUARANTOR ARISING OUT OF OR RELATING TO THIS
GUARANTY, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL
COURT OF COMPETENT JURISDICTION IN XXX XXXXX, XXXXXX XXX XXXX XX XXX XXXX. BY
EXECUTING AND DELIVERING THIS AGREEMENT, EACH GUARANTOR, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION
AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) 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 SUCH GUARANTOR AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH
SUBSECTION 3.2;
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(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH GUARANTOR IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT BENEFICIARIES RETAIN THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST SUCH GUARANTOR
IN THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 3.8 RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST
EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR
OTHERWISE.
3.9 WAIVER OF TRIAL BY JURY. EACH GUARANTOR AND, BY ITS ACCEPTANCE OF THE
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BENEFITS HEREOF, EACH BENEFICIARY 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 contract claims, tort claims,
breach of duty claims and all other common law and statutory claims. Each
Guarantor and, by its acceptance of the benefits hereof, each Beneficiary, each
(i) acknowledges that this waiver is a material inducement for such Guarantor
and Beneficiaries to enter into a business relationship, that such Guarantor and
Beneficiaries 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 (OTHER THAN BY A
MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 3.9 AND EXECUTED
BY GUARANTIED PARTY AND EACH GUARANTOR), 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.
3.10 NO OTHER WRITING. This writing is intended by Guarantors and
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Beneficiaries 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 used to supplement or
modify any terms of this Guaranty. There are no conditions to the full
effectiveness of this Guaranty.
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3.11 FURTHER ASSURANCES. At any time or from time to time, upon the
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request of Guarantied Party, Guarantors shall execute and deliver such further
documents and do such other acts and things as Guarantied Party may reasonably
request in order to effect fully the purposes of this Guaranty.
3.12 ADDITIONAL GUARANTORS. The initial Guarantors hereunder shall be
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such of the Restricted Subsidiaries of Company as are signatories hereto on the
date hereof. From time to time subsequent to the date hereof, additional
Restricted Subsidiaries of Company may become parties hereto, as additional
Guarantors (each an "ADDITIONAL GUARANTOR"), by executing a counterpart of this
Guaranty. Upon delivery of any such counterpart to Administrative Agent, notice
of which is hereby waived by Guarantors, each such Additional Guarantor shall be
a Guarantor and shall be as fully a party hereto as if such Additional Guarantor
were an original signatory hereof. Each Guarantor expressly agrees that its
obligations arising hereunder shall not be affected or diminished by the
addition or release of any other Guarantor hereunder, nor by any election of
Administrative Agent not to cause any Subsidiary of Company to become an
Additional Guarantor hereunder. This Guaranty shall be fully effective as to
any Guarantor that is or becomes a party hereto regardless of whether any other
Person becomes or fails to become or ceases to be a Guarantor hereunder.
3.13 COUNTERPARTS; EFFECTIVENESS. This Guaranty may be executed in any
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number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original for all purposes; but all such counterparts together shall
constitute but one and the same instrument. This Guaranty shall become
effective as to each Guarantor upon the execution of a counterpart hereof by
such Guarantor (whether or not a counterpart hereof shall have been executed by
any other Guarantor) and receipt by Guarantied Party of written or telephonic
notification of such execution and authorization of delivery thereof.
3.14 GUARANTIED PARTY AS ADMINISTRATIVE AGENT.
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(a) Guarantied Party has been appointed to act as Guarantied Party
hereunder by Lenders and, by their acceptance of the benefits hereof, Interest
Rate Exchangers. Guarantied Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action, solely in
accordance with this Guaranty and the Credit Agreement; provided that Guarantied
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Party shall exercise, or refrain from exercising, any remedies hereunder in
accordance with the instructions of (i) Requisite Lenders or (ii) after payment
in full of all Obligations under the Credit Agreement and the other Loan
Documents, the holders of a majority of the aggregate notional amount (or, with
respect to any Lender Interest Rate Agreement that has been terminated in
accordance with its terms,
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the amount then due and payable (exclusive of expenses and similar payments but
including any early termination payments then due) under such Lender Interest
Rate Agreement) under all Lender Interest Rate Agreements (Requisite Lenders or,
if applicable, such holders being referred to herein as "REQUISITE OBLIGEES").
In furtherance of the foregoing provisions of this subsection 3.14, each
Interest Rate Exchanger, by its acceptance of the benefits hereof, agrees that
it shall have no right individually to enforce this Guaranty, it being
understood and agreed by such Interest Rate Exchanger that all rights and
remedies hereunder may be exercised solely by Guarantied Party for the benefit
of Beneficiaries in accordance with the terms of this subsection 3.14.
(b) Guarantied Party shall at all times be the same Person that is
Administrative Agent under the Credit Agreement. Written notice of resignation
by Administrative Agent pursuant to subsection 9.5 of the Credit Agreement shall
also constitute notice of resignation as Guarantied Party under this Guaranty;
removal of Administrative Agent pursuant to subsection 9.5 of the Credit
Agreement shall also constitute removal as Guarantied Party under this Guaranty;
and appointment of a successor Administrative Agent pursuant to subsection 9.5
of the Credit Agreement shall also constitute appointment of a successor
Guarantied Party under this Guaranty. Upon the acceptance of any appointment as
Administrative Agent under subsection 9.5 of the Credit Agreement by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Guarantied Party under this Guaranty, and the
retiring or removed Guarantied Party under this Guaranty shall promptly (i)
transfer to such successor Guarantied Party all sums held hereunder, together
with all records and other documents necessary or appropriate in connection with
the performance of the duties of the successor Guarantied Party under this
Guaranty, and (ii) take such other actions as may be necessary or appropriate in
connection with the assignment to such successor Guarantied Party of the rights
created hereunder, whereupon such retiring or removed Guarantied Party shall be
discharged from its duties and obligations under this Guaranty. After any
retiring or removed Guarantied Party's resignation or removal hereunder as
Guarantied Party, the provisions of this Guaranty shall inure to its benefit as
to any actions taken or omitted to be taken by it under this Guaranty while it
was Guarantied Party hereunder.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, each of the undersigned Guarantors has caused this
Guaranty to be duly executed and delivered by its officer thereunto duly
authorized as of the date first written above.
[LIST ALL RESTRICTED SUBSIDIARIES]
By __________________________________
Title _______________________________
Address: ____________________________
____________________________
____________________________
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IN WITNESS WHEREOF, the undersigned Additional Guarantor has caused
this Guaranty to be duly executed and delivered by its officer thereunto duly
authorized as of ______________, 199_.
____________________________________
(Name of Additional Guarantor)
By __________________________________
Title _______________________________
Address: ____________________________
____________________________
____________________________
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