Exhibit 4.19
SUBSIDIARIES GUARANTY
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SUBSIDIARIES GUARANTY, dated as of November ___, 2003 (as amended,
amended and restated, modified and/or supplemented from time to time, this
"Guaranty"), made by each of the undersigned (each, a "Guarantor" and, together
with any other entity which becomes a party hereto pursuant to Section 24,
collectively, the "Guarantors"). Except as otherwise defined herein, terms used
herein and defined in the Credit Agreement (as defined below) shall be used
herein as therein defined.
W I T N E S S E T H :
WHEREAS, Quality Distribution, Inc. ("Holdings"), Quality
Distribution, LLC (the "Borrower"), the lenders from time to time party thereto
(the "Lenders"), Deutsche Bank Securities Inc, and Bear Xxxxxxx Corporate
Lending Inc., as Co-Syndication Agents (the "Co-Syndication Agents"), JPMorgan
Chase Bank, as Documentation Agent (the "Documentation Agent"), and Credit
Suisse First Boston, acting through its Cayman Islands Branch, as Administrative
Agent (the "Administrative Agent"), have entered into a Credit Agreement, dated
as of November ___, 2003 (as amended, amended and restated, modified and/or
supplemented from time to time, the "Credit Agreement"), providing for the
making of Loans to the Borrower and the issuance of, and participation in,
Letters of Credit for the account of the Borrower, all as contemplated therein
(with the Lenders, the Documentation Agent, the Co-Syndication Agents, the
Administrative Agent and the Collateral Agent being herein called the "Lender
Creditors");
WHEREAS, the Borrower may at any time and from time to time enter into
one or more Interest Rate Protection Agreements or Other Hedging Agreements with
one or more Lenders or any affiliate thereof (each such Lender or affiliate,
even if the respective Lender subsequently ceases to be a Lender under the
Credit Agreement for any reason, together with such Xxxxxx's or affiliate's
successors and assigns, if any, collectively, the "Other Creditors" and,
together with the Lender Creditors, the "Creditors");
WHEREAS, each Guarantor is a direct or indirect Subsidiary of
Holdings;
WHEREAS, it is a condition precedent to the making of Loans and the
issuance of, and participation in, Letters of Credit for the account of the
Borrower under the Credit Agreement and to the Other Creditors entering into
Interest Rate Protection Agreements and/or Other Hedging Agreements with the
Borrower that each Guarantor shall have executed and delivered this Guaranty;
and
WHEREAS, each Guarantor will obtain benefits from the incurrence of
Loans by the Borrower and the issuance of, and participation in, Letters of
Credit for the account of the Borrower under the Credit Agreement and the
entering into of Interest Rate Protection Agreements and/or Other Hedging
Agreements with an Other Creditor and, accordingly, desires to execute this
Guaranty in order to satisfy the conditions described in the preceding paragraph
and to induce the Lenders to make and maintain Loans to the Borrower and issue
Letters of Credit for the account of the Borrower and the Other Creditors to
enter into and/or maintain Interest Rate Protection Agreements and/or Other
Hedging Agreements with the Borrower;
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NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to each Guarantor, the receipt and sufficiency of which are hereby
acknowledged, each Guarantor hereby makes the following representations and
warranties to the Creditors and hereby covenants and agrees with each Creditor
as follows:
1. Each Guarantor, jointly and severally, irrevocably, absolutely
and unconditionally guarantees: (i) to the Lender Creditors the full and prompt
payment when due (whether at the stated maturity, by acceleration or otherwise)
of (x) the principal of, premium, if any, and interest on all Notes issued, and
all Loans made, under the Credit Agreement and all reimbursement obligations and
Unpaid Drawings with respect to Letters of Credit and (y) all other obligations
(including obligations which, but for any automatic stay under Section 362(a) of
the Bankruptcy Code, would become due) and liabilities owing by the Borrower to
the Lender Creditors (including, without limitation, indemnities, Fees and
interest thereon (including any interest accruing after the commencement of any
bankruptcy, insolvency, receivership or similar proceeding at the rate provided
for in the Credit Agreement, whether or not such interest is an allowed claim in
any such proceeding)) now existing or hereafter incurred under, arising out of
or in connection with the Credit Agreement or any other Credit Document and the
due performance and compliance by the Borrower with the terms, conditions,
covenants and agreements contained in the Credit Documents (all such principal,
premium, interest, liabilities, indebtedness and obligations under this clause
(i), except to the extent consisting of obligations or liabilities with respect
to Interest Rate Protection Agreements or Other Hedging Agreements, being herein
collectively called the "Credit Document Obligations"); and (ii) to each Other
Creditor the full and prompt payment when due (whether at the stated maturity,
by acceleration or otherwise) of all obligations (including obligations which,
but for any automatic stay under Section 362(a) of the Bankruptcy Code, would
become due) and liabilities owing by the Borrower to the Other Creditors
(including, without limitation, indemnities, fees and interest thereon
(including any interest accruing after the commencement of any bankruptcy,
insolvency, receivership or similar proceeding at the rate provided for in the
respective Interest Rate Protection Agreements or Other Hedging Agreements,
whether or not such interest is an allowed claim in any such proceeding)) under
each Interest Rate Protection Agreement and each Other Hedging Agreement,
whether now in existence or hereafter arising, and the due performance and
compliance by the Borrower with all terms, conditions, covenants and agreements
contained therein (all such obligations and liabilities under this clause (ii)
being herein collectively called the "Other Obligations", and together with the
Credit Document Obligations are herein collectively called the "Guaranteed
Obligations"). Each Guarantor understands, agrees and confirms that the
Creditors may enforce this Guaranty up to the full amount of the Guaranteed
Obligations against each Guarantor without proceeding against any other
Guarantor, the Borrower, against any security for the Guaranteed Obligations, or
against any other guarantor under any other guaranty covering all or a portion
of the Guaranteed Obligations. This Guaranty shall constitute a guaranty of
payment and not of collection. All payments by each Guarantor under this
Guaranty shall be made on the same basis as payments by the Borrower under
Sections 4.03 and 4.04 of the Credit Agreement.
2. Additionally, each Guarantor, jointly and severally,
unconditionally and irrevocably, guarantees the payment of any and all
Guaranteed Obligations to the Creditors
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whether or not due or payable by the Borrower upon the occurrence in respect of
the Borrower of any of the events specified in Section 10.05 of the Credit
Agreement, and unconditionally and irrevocably, jointly and severally, promises
to pay such Guaranteed Obligations to the Creditors, or order, on demand, in
U.S. Dollars.
3. The liability of each Guarantor hereunder is primary, absolute,
joint and several, and unconditional and is exclusive and independent of any
security for or other guaranty of the Guaranteed Obligations whether executed by
such Guarantor, any other Guarantor, any other guarantor of the Borrower or by
any other party, and the liability of each Guarantor hereunder shall not be
affected or impaired by (i) any direction as to application of payment by the
Borrower or by any other party, (ii) any other continuing or other guaranty,
undertaking or maximum liability of a guarantor or of any other party as to the
Guaranteed Obligations, (iii) any payment on or in reduction of any such other
guaranty or undertaking, (iv) any dissolution, termination or increase, decrease
or change in personnel by the Borrower, (v) any payment made to any Creditor on
the Guaranteed Obligations which any Creditor repays the Borrower pursuant to
court order in any bankruptcy, reorganization, arrangement, moratorium or other
debtor relief proceeding, and each Guarantor waives any right to the deferral or
modification of its obligations hereunder by reason of any such proceeding, (vi)
any action or inaction by the Creditors as contemplated in Section 6 hereof or
(vii) any invalidity, irregularity or unenforceability of all or any part of the
Guaranteed Obligations or of any security therefor.
4. The obligations of each Guarantor hereunder are independent of
the obligations of any other Guarantor, any other guarantor of the Borrower or
the Borrower, and a separate action or actions may be brought and prosecuted
against each Guarantor whether or not action is brought against any other
Guarantor, any other guarantor of the Borrower or the Borrower and whether or
not any other Guarantor, any other guarantor of the Borrower or the Borrower be
joined in any such action or actions. Each Guarantor waives, to the fullest
extent permitted by law, the benefit of any statute of limitations affecting its
liability hereunder or the enforcement thereof. Any payment by the Borrower or
other circumstance which operates to toll any statute of limitations as to the
Borrower shall operate to toll the statute of limitations as to each Guarantor.
5. Each Guarantor hereby waives notice of acceptance of this
Guaranty and notice of any liability to which it may apply, and waives
promptness, diligence, presentment, demand of payment, protest, notice of
dishonor or nonpayment of any such liabilities, suit or taking of other action
by the Administrative Agent or any other Creditor against, and any other notice
to, any party liable thereon (including such Guarantor, any other guarantor of
the Borrower or the Borrower).
6. Any Creditor may at any time and from time to time without the
consent of, or notice to, any Guarantor, without incurring responsibility to
such Guarantor, without impairing or releasing the obligations of such Guarantor
hereunder, upon or without any terms or conditions and in whole or in part:
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(i) change the manner, place or terms of payment of, and/or change,
increase or extend the time of payment of, renew or alter, any of the Guaranteed
Obligations (including any increase or decrease in the rate of interest thereon
or the principal amount thereof), any security therefor, or any liability
incurred directly or indirectly in respect thereof, and the guaranty herein made
shall apply to the Guaranteed Obligations as so changed, extended, renewed or
altered;
(ii) take and hold security for the payment of the Guaranteed Obligations
and/or sell, exchange, release, surrender, impair, realize upon or otherwise
deal with in any manner and in any order any property by whomsoever at any time
pledged or mortgaged to secure, or howsoever securing, the Guaranteed
Obligations or any liabilities (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and/or any offset
thereagainst;
(iii) exercise or refrain from exercising any rights against the Borrower,
any Guarantor, any other guarantor of the Borrower or others or otherwise act or
refrain from acting;
(iv) settle or compromise any of the Guaranteed Obligations, any security
therefor or any liability (including any of those hereunder) incurred directly
or indirectly in respect thereof or hereof, and may subordinate the payment of
all or any part thereof to the payment of any liability (whether due or not) of
the Borrower to creditors of the Borrower;
(v) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Creditors regardless of what
liabilities of the Borrower remain unpaid;
(vi) release or substitute any one or more endorsers, guarantors,
Guarantors, the Borrower or other obligors;
(vii) consent to or waive any breach of, or any act, omission or default
under, any of the Interest Rate Protection Agreements or Other Hedging
Agreements, the Credit Documents or any of the instruments or agreements
referred to therein, or otherwise amend, modify or supplement any of the
Interest Rate Protection Agreements or Other Hedging Agreements, the Credit
Documents or any of such other instruments or agreements;
(viii) act or fail to act in any manner referred to in this Guaranty which
may deprive such Guarantor of its right to subrogation against the Borrower to
recover full indemnity for any payments made pursuant to this Guaranty; and/or
(ix) take any other action or omit to take any other action which would,
under otherwise applicable principles of common law, give rise to a legal or
equitable discharge of such Guarantor from its liabilities under this Guaranty
(including, without limitation,
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any action or omission whatsoever that might otherwise vary the risk of the
Guarantor or constitute a legal or equitable defense to or discharge of the
liabilities of a guarantor or surety or that might otherwise limit recourse
against the Guarantor).
7. No invalidity, irregularity or unenforceability of all or any
part of the Guaranteed Obligations or of any security therefor shall affect,
impair or be a defense to this Guaranty, and this Guaranty shall be primary,
absolute and unconditional notwithstanding the occurrence of any event or the
existence of any other circumstances which might constitute a legal or equitable
discharge of a surety or guarantor except payment in full of the Guaranteed
Obligations.
8. This Guaranty is a continuing one and all liabilities to which
it applies or may apply under the terms hereof shall be conclusively presumed to
have been created in reliance hereon. No failure or delay on the part of any
Creditor in exercising any right, power or privilege hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
expressly specified are cumulative and not exclusive of any rights or remedies
which any Creditor would otherwise have. No notice to or demand on any Guarantor
in any case shall entitle such Guarantor to any other further notice or demand
in similar or other circumstances or constitute a waiver of the rights of any
Creditor to any other or further action in any circumstances without notice or
demand. It is not necessary for any Creditor to inquire into the capacity or
powers of Holdings or any of its Subsidiaries or the officers, directors,
partners or agents acting or purporting to act on its behalf, and any
indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.
9. Any indebtedness of the Borrower now or hereafter held by any
Guarantor is hereby subordinated to the indebtedness of the Borrower to the
Creditors; and such indebtedness of the Borrower to any Guarantor, if the
Administrative Agent, after the occurrence and during the continuance of an
Event of Default , so requests, shall be collected, enforced and received by
such Guarantor as trustee for the Creditors and be paid over to the Creditors on
account of the indebtedness of the Borrower to the Creditors, but without
affecting or impairing in any manner the liability of such Guarantor under the
other provisions of this Guaranty. Prior to the transfer by any Guarantor of any
note or negotiable instrument evidencing any indebtedness of the Borrower to
such Guarantor, such Guarantor shall mark such note or negotiable instrument
with a legend that the same is subject to this subordination. Without limiting
the generality of the foregoing, each Guarantor hereby agrees with the Creditors
that it will not exercise any right of subrogation which it may at any time
otherwise have as a result of this Guaranty (whether contractual, under Section
509 of the Bankruptcy Code or otherwise) until all Guaranteed Obligations have
been irrevocably paid in full in cash.
10. (a) Each Guarantor waives any right (except as shall be required
by applicable statute and cannot be waived) to require the Creditors to: (i)
proceed against the Borrower, any other Guarantor, any other guarantor of the
Borrower or any other party; (ii) proceed against or exhaust any security held
from the Borrower, any other Guarantor, any other guarantor
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of the Borrower or any other party; or (iii) pursue any other remedy in the
Creditors' power whatsoever. Each Guarantor waives any defense based on or
arising out of any defense of the Borrower, any other Guarantor, any other
guarantor of the Borrower or any other party other than payment in full in cash
of the Guaranteed Obligations, including, without limitation, any defense based
on or arising out of the disability of the Borrower, any other Guarantor, any
other guarantor of the Borrower or any other party, or the unenforceability of
the Guaranteed Obligations or any part thereof from any cause, or the cessation
from any cause of the liability of the Borrower other than payment in full in
cash of the Guaranteed Obligations. The Creditors may, at their election,
foreclose on any security held by the Administrative Agent, the Collateral Agent
or the other Creditors by one or more judicial or nonjudicial sales, whether or
not every aspect of any such sale is commercially reasonable (to the extent such
sale is permitted by applicable law), or exercise any other right or remedy the
Creditors may have against the Borrower or any other party, or any security,
without affecting or impairing in any way the liability of any Guarantor
hereunder except to the extent the Guaranteed Obligations have been paid in full
in cash. Each Guarantor waives any defense arising out of any such election by
the Creditors, even though such election operates to impair or extinguish any
right of reimbursement or subrogation or other right or remedy of such Guarantor
against the Borrower, any other Guarantor or any other party or any security.
(b) Each Guarantor waives all presentments, demands for performance,
protests and notices, including, without limitation, notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation or incurring of new or additional
indebtedness. Each Guarantor assumes all responsibility for being and keeping
itself informed of the Borrower's financial condition and assets, and of all
other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks which such Guarantor
assumes and incurs hereunder, and agrees that the Creditors shall have no duty
to advise any Guarantor of information known to them regarding such
circumstances or risks.
(c) Until such time as the Guaranteed Obligations have been paid in
full in cash, each Guarantor hereby waives all contractual, statutory or common
law rights of reimbursement, contribution or indemnity from the Borrower or any
other Guarantor which it may at any time otherwise have as a result of this
Guaranty.
11. In order to induce the Lenders to make Loans and issue Letters of
Credit pursuant to the Credit Agreement, and in order to induce the Other
Creditors to execute, deliver and perform the Interest Rate Protection
Agreements or Other Hedging Agreements, each Guarantor represents, warrants and
covenants that:
(a) such Guarantor (i) is a duly organized and validly existing
Company and is in good standing under the laws of the jurisdiction of its
organization, and has the Company power and authority to own its property
and assets and to transact the business in which it is engaged and
presently proposes to engage and (ii) is duly qualified and is authorized
to do business and is in good standing in all jurisdictions where it is
required
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to be so qualified except where the failure to be so qualified could
reasonably be expected to have a Material Adverse Effect.
(b) such Guarantor has the Company power and authority to execute,
deliver and carry out the terms and provisions of this Guaranty and each
other Document (for purposes of this Guaranty, such term to mean and
include each Document (as defined in the Credit Agreement) and each
Interest Rate Protection Agreement and each Other Hedging Agreement with an
Other Creditor) to which it is a party and has taken all necessary Company
action to authorize the execution, delivery and performance by it of each
such Document. Such Guarantor has duly executed and delivered this Guaranty
and each other Document to which it is a party, and each such Document
constitutes the legal, valid and binding obligation of such Guarantor
enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws generally affecting creditors'
rights and by equitable principles (regardless of whether enforcement is
sought in equity or law).
(c) neither the execution, delivery or performance by such Guarantor
of this Guaranty or any other Document to which it is a party, nor
compliance by it with the terms and provisions hereof and thereof: (i) will
contravene any applicable material provision of any law, statute, rule or
regulation, or any order, writ, injunction or decree of any court or
governmental instrumentality, (ii) will conflict or be inconsistent with or
result in any breach of, any of the terms, covenants, conditions or
provisions of, or constitute a default under, or (other than pursuant to
the Security Documents) result in the creation or imposition of (or the
obligation to create or impose) any Lien upon any of the property or assets
of such Guarantor or any of its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, credit agreement, loan agreement or any
other agreement or other instrument to which such Guarantor or any of its
Subsidiaries is a party or by which it or any of its property or assets is
bound or to which it may be subject or (iii) will violate any provision of
the certificate of incorporation or by-laws (or equivalent organizational
documents) of such Guarantor or any of its Subsidiaries.
(d) no order, consent, approval, license, authorization or validation
of, or filing, recording or registration with, or exemption by, any foreign
or domestic governmental or public body or authority, or any subdivision
thereof, is required to authorize, or is required in connection with, (i)
the execution, delivery and performance of this Guaranty or any other
Document to which such Guarantor is a party, or (ii) the legality,
validity, binding effect or enforceability of this Guaranty or any other
Document to which such Guarantor is a party.
12. Each Guarantor covenants and agrees that on and after the date
hereof and until the termination of the Total Commitment and all Interest Rate
Protection Agreements and Other Hedging Agreements with an Other Creditor, no
Note or Letter of Credit remains outstanding and all other Guaranteed
Obligations have been paid in full (other than those arising from indemnities
for which no request has been made), such Guarantor shall take, or will refrain
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from taking, as the case may be, all actions that are necessary to be taken or
not taken so that no violation of any provision, covenant or agreement contained
in Section 8 or 9 of the Credit Agreement, and so that no Event of Default, is
caused by the actions of such Guarantor or any of its Subsidiaries.
13. The Guarantors hereby jointly and severally agree to pay all
out-of-pocket costs and expenses of each Creditor in connection with the
enforcement of this Guaranty and the protection of such Creditor's rights
hereunder, and in connection with any amendment, waiver or consent relating
hereto (including, without limitation, the fees and disbursements of counsel
employed by the Administrative Agent or any of the Creditors).
14. This Guaranty shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the Creditors and their
successors and assigns.
15. Neither this Guaranty nor any provision hereof may be changed,
waived, discharged or terminated in any manner whatsoever unless in writing duly
signed by the Administrative Agent (with the consent of (x) the Required Lenders
or, to the extent required by Section 13.12 of the Credit Agreement, all of the
Lenders, at all times prior to the time at which all Credit Document Obligations
have been paid in full, or (y) the holders of at least a majority of the
outstanding Other Obligations at all times after the time at which all Credit
Document Obligations have been paid in full) and each Guarantor directly
affected thereby (it being understood that the addition or release of any
Guarantor hereunder shall not constitute a change, waiver, discharge or
termination affecting any Guarantor other than the Guarantor so added or
released); provided, that any change, waiver, modification or variance affecting
the rights and benefits of a single Class (as defined below) of Creditors (and
not all Creditors in a like or similar manner) shall also require the written
consent of the Requisite Creditors (as defined below) of such Class. For the
purpose of this Guaranty, the term "Class" shall mean each class of Creditors,
i.e., whether (i) the Lender Creditors as holders of the Credit Document
Obligations or (ii) the Other Creditors as holders of the Other Obligations. For
the purpose of this Guaranty, the term "Requisite Creditors" of any Class shall
mean each of (i) with respect to the Credit Document Obligations, the Required
Lenders and (ii) with respect to the Other Obligations, the holders of at least
a majority of all Other Obligations outstanding from time to time under the
Interest Rate Protection Agreements and/or Other Hedging Agreements.
16. Each Guarantor acknowledges that an executed (or conformed) copy
of each of the Credit Documents and the Interest Rate Protection Agreements and
Other Hedging Agreements with an Other Creditor has been made available to its
principal executive officers and such officers are familiar with the contents
thereof.
17. In addition to any rights now or hereafter granted under
applicable law (including, without limitation, Section 151 of the New York
Debtor and Creditor Law) and not by way of limitation of any such rights, upon
the occurrence and during the continuance of an Event of Default (such term to
mean and include any "Event of Default" as defined in the Credit Agreement or
any payment default under any Interest Rate Protection Agreement or Other
Hedging Agreement and shall in any event, include, without limitation, any
payment default on
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any of the Guaranteed Obligations continuing after any applicable grace period),
each Creditor is hereby authorized at any time or from time to time, without
notice to any Guarantor or to any other Person, any such notice being expressly
waived, to set off and to appropriate and apply any and all deposits (general or
special) and any other indebtedness at any time held or owing by such Creditor
to or for the credit or the account of such Guarantor, against and on account of
the obligations and liabilities of such Guarantor to such Creditor under this
Guaranty, irrespective of whether or not such Creditor shall have made any
demand hereunder and although said obligations, liabilities, deposits or claims,
or any of them, shall be contingent or unmatured. Each Creditor (by its
acceptance of the benefits hereof) acknowledges and agrees that the provisions
of this Section 17 are subject to the sharing provisions set forth in Section
13.06(b) of the Credit Agreement.
18. All notices, requests, demands or other communications pursuant
hereto shall be deemed to have been duly given or made when delivered to the
Person to which such notice, request, demand or other communication is required
or permitted to be given or made under this Guaranty, addressed to such party at
(i) in the case of any Lender Creditor, as provided in the Credit Agreement,
(ii) in the case of any Guarantor, c/o:
[Quality Distribution, LLC]
________________________________
________________________________
________________________________
Attention: ____________________
Telephone No.:__________________
Telecopier No.:_________________
and (iii) in the case of any Other Creditor, at such address as such Other
Creditor shall have specified in writing to the Guarantor; or in any case at
such other address as any of the foregoing Persons may hereafter notify the
others in writing.
19. If claim is ever made upon any Creditor for repayment or recovery
of any amount or amounts received in payment or on account of any of the
Guaranteed Obligations and any of the aforesaid payees repays all or part of
said amount by reason of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over such Creditor or any of its
property or (ii) any settlement or compromise of any such claim effected by such
Creditor with any such claimant (including the Borrower), then and in such event
each Guarantor agrees that any such judgment, decree, order, settlement or
compromise shall be binding upon such Guarantor, notwithstanding any revocation
hereof or the cancellation of any Note or any Interest Rate Protection Agreement
or Other Hedging Agreement or other instrument evidencing any liability of the
Borrower, and such Guarantor shall be and remain liable to such Creditor
hereunder for the amount so repaid or recovered to the same extent as if such
amount had never originally been received by any such Creditor.
20. (A) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE CREDITORS
AND OF THE UNDERSIGNED HEREUNDER SHALL BE
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GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
(B) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR
ANY OTHER CREDIT DOCUMENT TO WHICH ANY GUARANTOR IS A PARTY MAY BE BROUGHT IN
THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS GUARANTY,
EACH GUARANTOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS. EACH GUARANTOR HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH
COURTS LACK JURISDICTION OVER SUCH GUARANTOR, AND AGREES NOT TO PLEAD OR CLAIM,
IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR ANY OTHER
CREDIT DOCUMENT TO WHICH IT IS A PARTY BROUGHT IN ANY OF THE AFORESAID COURTS,
THAT ANY SUCH COURT LACKS JURISDICTION OVER SUCH GUARANTOR. EACH GUARANTOR
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO EACH GUARANTOR AT
ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME
EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH GUARANTOR HEREBY IRREVOCABLY WAIVES
ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND
AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR
UNDER ANY OTHER CREDIT DOCUMENT TO WHICH SUCH GUARANTOR IS A PARTY THAT SERVICE
OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT
THE RIGHT OF ANY OF THE CREDITORS TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST EACH
GUARANTOR IN ANY OTHER JURISDICTION.
(C) EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS
OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS GUARANTY OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (B) ABOVE AND HEREBY
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
(D) EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTER-
Page 11
CLAIM ARISING OUT OF OR RELATING TO THIS GUARANTY, THE OTHER CREDIT DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
21. In the event that all of the capital stock or other equity
interests of one or more Guarantors is sold or otherwise disposed of (to a
Person other than Holdings or a Subsidiary thereof) or liquidated in compliance
with the requirements of Section 9.02 of the Credit Agreement (or such sale,
disposition or liquidation has been approved in writing by the Required Lenders
(or all Lenders if required by Section 13.12 of the Credit Agreement)) and the
proceeds of such sale, disposition or liquidation are applied in accordance with
the provisions of the Credit Agreement, to the extent applicable, such Guarantor
shall be released from this Guaranty automatically and without further action
and this Guaranty shall, as to each such Guarantor or Guarantors, terminate, and
have no further force or effect (it being understood and agreed that the sale of
one or more Persons that own, directly or indirectly, all of the capital stock
or other Equity Interests of any Guarantor shall be deemed to be a sale of such
Guarantor for the purposes of this Section 21). 22. All payments made by any
Guarantor hereunder will be made without setoff, counterclaim or other defense.
23. This Guaranty may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with the Borrower and the Administrative
Agent.
24. It is understood and agreed that any Subsidiary of Holdings that
is required to execute a counterpart of this Guaranty after the date hereof
pursuant to the Credit Agreement shall become a Guarantor hereunder by (x)
executing and delivering a counterpart hereof to the Administrative Agent or (y)
executing a joinder agreement in form and substance satisfactory to the
Administrative Agent and delivering same to the Administrative Agent, in each
case as may be requested by (and in form and substance satisfactory to) the
Administrative Agent and (y) taking all actions as specified in this Guaranty as
would have been taken by such Guarantor had it been an original party to this
Guaranty, in each case with all documents and actions required to be taken to be
taken above to the reasonable satisfaction of the Administrative Agent.
25. Notwithstanding anything else to the contrary in this Guaranty,
the Creditors agree (by their acceptance of the benefits of this Guaranty) that
this Guaranty may be enforced only by the action of the Administrative Agent or
the Collateral Agent, in each case acting upon the instructions of the Required
Lenders (or, after the date on which all Credit Document Obligations have been
paid in full, the holders of at least a majority of the outstanding Other
Obligations), and that no other Creditor shall have any right individually to
seek to enforce or to enforce this Guaranty or to realize upon the security to
be granted by the Security Documents, it being understood and agreed that such
rights and remedies may be exercised by
Page 12
the Administrative Agent or the Collateral Agent or the holders of at least a
majority of the outstanding Other Obligations, as the case may be, for the
benefit of the Creditors upon the terms of this Guaranty and the Security
Documents. The Creditors further agree that this Guaranty may not be enforced
against any director, officer, employee, or stockholder of any Guarantor (except
to the extent such stockholder is also a Guarantor hereunder). It is understood
that the agreement in this Section 25 is among and solely for the benefit of the
Lenders and that if the Required Lenders so agree (without requiring the consent
of any Guarantor), this Guaranty may be directly enforced by any Creditor.
26. At any time a payment in respect of the Guaranteed Obligations is
made under this Guaranty, the right of contribution of each Guarantor hereunder
against each other such Guarantor shall be determined as provided in the
immediately following sentence, with the right of contribution of each Guarantor
to be revised and restated as of each date on which a payment (a "Relevant
Payment") is made on the Guaranteed Obligations under this Guaranty. At any time
that a Relevant Payment is made by a Guarantor that results in the aggregate
payments made by such Guarantor hereunder in respect of the Guaranteed
Obligations to and including the date of the Relevant Payment exceeding such
Guarantor's Contribution Percentage (as defined below) of the aggregate payments
made by all Guarantors hereunder in respect of the Guaranteed Obligations to and
including the date of the Relevant Payment (such excess, the "Aggregate Excess
Amount"), each such Guarantor shall have a right of contribution against each
other Guarantor who has made payments hereunder in respect of the Guaranteed
Obligations to and including the date of the Relevant Payment in an aggregate
amount less than such other Guarantor's Contribution Percentage of the aggregate
payments made to and including the date of the Relevant Payment by all
Guarantors hereunder in respect of the Guaranteed Obligations (the aggregate
amount of such deficit, the "Aggregate Deficit Amount") in an amount equal to
(x) a fraction the numerator of which is the Aggregate Excess Amount of such
Guarantor and the denominator of which is the Aggregate Excess Amount of all
Guarantors multiplied by (y) the Aggregate Deficit Amount of such other
Guarantor. A Guarantor's right of contribution pursuant to the preceding
sentences shall arise at the time of each computation, subject to adjustment to
the time of any subsequent computation; provided, that no Guarantor may take any
action to enforce such right until the Guaranteed Obligations have been
irrevocably paid in full in cash and the Total Commitment and all Letters of
Credit have been terminated, it being expressly recognized and agreed by all
parties hereto that any Guarantor's right of contribution arising pursuant to
this Guaranty against any other Guarantor shall be expressly junior and
subordinate to such other Guarantor's obligations and liabilities in respect of
the Guaranteed Obligations and any other obligations owing under this Guaranty.
As used in this Section 26: (i) each Guarantor's "Contribution Percentage" shall
mean the percentage obtained by dividing (x) the Adjusted Net Worth (as defined
below) of such Guarantor by (y) the aggregate Adjusted Net Worth of all
Guarantors; (ii) the "Adjusted Net Worth" of each Guarantor shall mean the
greater of (x) the Net Worth (as defined below) of such Guarantor and (y) zero;
and (iii) the "Net Worth" of each Guarantor shall mean the amount by which the
fair salable value of such Guarantor's assets on the date of any Relevant
Payment exceeds its existing debts and other liabilities (including contingent
liabilities, but without giving effect to any Guaranteed Obligations arising
under this Guaranty or any guaranteed obligations arising under
Page 13
any guaranty of the New Senior Subordinated Notes) on such date. All parties
hereto recognize and agree that, except for any right of contribution arising
pursuant to this Section 26, each Guarantor who makes any payment in respect of
the Guaranteed Obligations shall have no right of contribution or subrogation
against any other Guarantor in respect of such payment. Each of the Guarantors
recognizes and acknowledges that the rights to contribution arising hereunder
shall constitute an asset in favor of the party entitled to such contribution.
In this connection, each Guarantor has the right to waive its contribution right
against any Guarantor to the extent that after giving effect to such waiver such
Guarantor would remain solvent, in the determination of the Required Lenders.
27. Each Guarantor and each Creditor (by its acceptance of the
benefits of this Guaranty) hereby confirms that it is its intention that this
Guaranty not constitute a fraudulent transfer or conveyance for purposes of the
Bankruptcy Code, the Uniform Fraudulent Conveyance Act of any similar Federal or
state law. To effectuate the foregoing intention, each Guarantor and each
Creditor (by its acceptance of the benefits of this Guaranty) hereby irrevocably
agrees that the Guaranteed Obligations guaranteed by such Guarantor shall be
limited to such amount as will, after giving effect to such maximum amount and
all other (contingent or otherwise) liabilities of such Guarantor that are
relevant under such laws (it being understood that it is the intention of the
parties to this Guaranty and the parties to any guaranty of the New Senior
Subordinated Notes that, to the maximum extent permitted under applicable laws,
the liabilities in respect of the guarantees of the New Senior Subordinated
Notes shall not be included for the foregoing purposes and that, if any
reduction is required to the amount guaranteed by any Guarantor hereunder and
with respect to the New Senior Subordinated Notes that its guarantee of amounts
owing in respect of the New Senior Subordinated Notes shall first be reduced)
and after giving effect to any rights to contribution pursuant to any agreement
providing for an equitable contribution among such Guarantor and the other
Guarantors, result in the Guaranteed Obligations of such Guarantor in respect of
such maximum amount not constituting a fraudulent transfer or conveyance.
Notwithstanding the provisions of the two preceding sentences, as between the
Creditors and the holders of the New Senior Subordinated Notes, it is agreed
(and the provisions of the New Senior Subordinated Notes Indenture so provide)
that any diminution (whether pursuant to court decree or otherwise) of any
Guarantor's obligation to make any distribution or payment pursuant to this
Guaranty shall have no force or effect for purposes of the subordination
provisions contained in the New Senior Subordinated Notes Indenture, and that
any payments received in respect of a Guarantor's obligations with respect to
the New Senior Subordinated Notes shall be turned over to the holders of the
Guarantor Senior Debt (as defined in the New Senior Subordinated Notes
Indenture) (or obligations which would have constituted Guarantor Senior Debt if
same had not been reduced or disallowed) of such Guarantor (which Guarantor
Senior Debt shall be calculated as if there were no diminution thereto pursuant
to this Section 27 or for any other reason other than the irrevocable payment in
full in cash of the respective obligations which would otherwise have
constituted Guarantor Senior Debt) until all such Guarantor Senior Debt (or
obligations which would have constituted Guarantor Senior Debt if same had not
been reduced or disallowed) has been irrevocably paid in full in cash.
* * *
Page 14
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
executed and delivered as of the date first above written.
[GUARANTOR], as a Guarantor
By:
-------------------------------------
Name:
Title:
Accepted and Agreed to:
CREDIT SUISSE FIRST BOSTON,
acting through its Cayman Islands Branch,
as Administrative Agent for the Lenders
By:
----------------------------------
Name:
Title:
