EXHIBIT (e)(7)
[FORM OF]
GUARANTEE AGREEMENT dated as of [ ], 2001, between
IBP, INC., a Delaware corporation (the "Subsidiary
Guarantor"), and THE CHASE MANHATTAN BANK, as
administrative agent (the "Administrative Agent") for
the Banks (as defined in the Credit Agreement referred
to below).
Reference is made to the Credit Agreement dated as of January 12,
2001 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among Tyson Foods, Inc., a Delaware corporation (the
"Borrower"), the banks from time to time party thereto (the "Banks"), The Chase
Manhattan Bank, as Administrative Agent, Xxxxxxx Xxxxx Capital Corporation, as
Syndication Agent, and SunTrust Banks, Inc., as Documentation Agent. Capitalized
terms used herein and not defined herein shall have the meanings assigned to
such terms in the Credit Agreement.
The Banks have agreed to make Loans to the Borrower pursuant to, and
upon the terms and subject to the conditions specified in, the Credit Agreement.
Among other uses, the Loans are expected to be used to acquire the Subsidiary
Guarantor and to repay or refinance the Subsidiary Guarantor's indebtedness
outstanding pursuant to IBP Credit Agreement. The Subsidiary Guarantor
acknowledges that it will derive the foregoing and other substantial benefits
pursuant to the Credit Agreement and from the making of the Loans by the Banks
to the Borrower. The obligations of the Banks to make Loans are conditioned on,
among other things, the execution and delivery by the Subsidiary Guarantor of
this Guarantee Agreement. In order to induce the Banks to make Loans, the
Subsidiary Guarantor is willing to execute this Agreement.
Accordingly, the parties hereto agree as follows:
SECTION 1. Guarantee. Upon the effectiveness of this Guarantee
pursuant to the terms of Section 6, and subject to the limitations contained in
Section 5, the Subsidiary Guarantor hereby irrevocably and unconditionally
guarantees, as a guarantee of payment and not merely of collection, all Loans,
other Indebtedness, advances, debts, liabilities, obligations, covenants and
duties owing by the Borrower to any Bank, the Administrative Agent, any
Affiliate of any of the foregoing or any Indemnified Party, of any kind or
nature, present or future, whether or not evidenced by any note, guaranty or
other instrument, arising under the Credit Agreement or under any other Loan
Document, whether or not for the payment of money, whether arising by reason of
an extension of credit, loan, guaranty, indemnification, or in any other manner,
whether direct or indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising and however
acquired (including all interest, charges, expenses, fees, attorneys' fees and
disbursements (including the allocated cost of in-house counsel) and any other
sum chargeable to the Borrower under the Credit Agreement or any other Loan
Document and all interest and other monetary obligations accruing during the
pendency of any bankruptcy, insolvency, receivership or similar proceeding,
regardless of whether allowed or allowable in such proceeding) (collectively,
the "Obligations"). The Subsidiary Guarantor further agrees that the due and
punctual payment of the Obligations may be extended or renewed, in
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whole or in part, without notice to or further assent from it, and that it will
remain bound upon its Guarantee hereunder notwithstanding any such extension or
renewal of any Obligation. Each and every default in payment of the principal
of and premium, if any, or interest on any Obligation shall give rise to a
separate cause of action hereunder, and separate suits may be brought hereunder
as each cause of action arises.
The Subsidiary Guarantor waives presentment to, demand of payment
from and protest to the Borrower of any of the Obligations, and also waives
notice of acceptance of its obligations and notice of protest for nonpayment.
The obligations of the Subsidiary Guarantor hereunder shall not be affected by
(a) the failure of any Bank, the Administrative Agent, any beneficiary of any
indemnification, fee or expense obligation undertaken by the Borrower under any
Loan Document or the successors and assigns of each of the foregoing (each, a
"Beneficiary" and, collectively, the "Beneficiaries") to assert any claim or
demand or to enforce any right or remedy under any Loan Document, any guarantee
or any other agreement or instrument against the Borrower under the provisions
of this Agreement, any other Loan Document or otherwise; (b) any extension or
renewal of any of the Obligations; (c) any rescission, waiver, amendment or
modification of, or release from, any of the terms or provisions of this
Agreement or any other Loan Document or agreement; provided, however, that
without the prior written consent of the Subsidiary Guarantor, there shall be no
modification or amendment to the commencement date of Subsidiary Guarantor's
obligations under this Agreement, nor any modifications to Section 5 or Section
6, including the termination provisions hereof; (d) the release of (or the
failure to perfect a security interest in) any security held by any Beneficiary
for the performance of the Obligations or any of them; (e) the failure or delay
of any Beneficiary to exercise any right or remedy against any other guarantor
of the Obligations; (f) any default, failure or delay, wilful or otherwise, in
the performance of the Obligations; or (g) any other act, omission or delay to
do any other act which may or might in any manner or to any extent vary the risk
of the Subsidiary Guarantor or otherwise operate as a discharge of the
Subsidiary Guarantor as a matter of law or equity or which would impair or
eliminate any right of the Subsidiary Guarantor to subrogation; provided,
however, that without the prior written consent of the Subsidiary Guarantor,
there shall be no modification or amendment to this Guarantee Agreement (or to
any defined term incorporated by reference into this Guarantee Agreement from
any other agreement) that changes the commencement date of Subsidiary
Guarantor's obligations under this Agreement, nor any modifications to Section 5
or Section 6, including the termination provisions hereof.
The Subsidiary Guarantor further agrees that its agreement hereunder
constitutes a promise of payment when due (whether or not any bankruptcy or
similar proceeding shall have stayed the accrual or collection of any of the
Obligations or operated as a discharge thereof) and not merely of collection,
and waives any right to require that any resort be had by any Beneficiary to any
balance of any deposit account or credit on the books of any Beneficiary in
favor of the Borrower or any other Person.
Except as expressly provided in this Agreement, the obligations of
the Subsidiary Guarantor hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason, and shall not be subject
to any defense or setoff, counterclaim, recoupment or termination whatsoever, by
reason of the invalidity, illegality or unenforceability of the Obligations, or
any impossibility in the performance of the Obligations or otherwise.
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Except as expressly provided in this Agreement, the Subsidiary
Guarantor further agrees that its obligations hereunder shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any Obligation is rescinded or must otherwise be restored by
any Beneficiary upon the bankruptcy or reorganization of the Borrower or
otherwise.
In furtherance of the foregoing and not in limitation of any other
right which any Beneficiary may have at law or in equity against the Subsidiary
Guarantor by virtue hereof, upon the failure of the Borrower to pay any
Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, and subject to the terms
of this Agreement, the Subsidiary Guarantor hereby promises to and will, upon
receipt of written demand by the Administrative Agent, forthwith pay, or cause
to be paid, to the Administrative Agent for distribution to the Beneficiaries in
cash an amount equal to the sum of (i) the unpaid principal amount of such
Obligations then due, (ii) accrued and unpaid interest and fees on such
Obligations and (iii) all other monetary Obligations then due.
Upon payment in full by the Subsidiary Guarantor of any Obligation,
the repaid Bank shall, in a reasonable manner, assign to the Subsidiary
Guarantor the Obligation owed to it and so paid by the Subsidiary Guarantor to
such Bank, such assignment to be pro tanto to the extent to which the Obligation
in question was discharged by the Subsidiary Guarantor, or make such disposition
thereof as the Subsidiary Guarantor shall direct (all without recourse to any
Beneficiary and without any representation or warranty by any Beneficiary).
Upon payment by the Subsidiary Guarantor of any sums as provided
above, all rights of the Subsidiary Guarantor against the Borrower arising as a
result thereof by way of right of subrogation or otherwise shall in all respects
be subordinated and junior in right of payment to the prior indefeasible payment
in full of all the Obligations owed by the Borrower to the Beneficiaries.
Except as expressly provided in this Agreement, nothing shall
discharge or satisfy the liability of the Subsidiary Guarantor hereunder except
the full performance and payment of the Obligations.
SECTION 2. Defenses of the Borrower Waived. The Administrative Agent
and the Banks may, at their election, foreclose on any security held by one or
more of them by one or more judicial or nonjudicial sales, accept an assignment
of any such security in lieu of foreclosure, compromise or adjust any part of
the Obligations, make any other accommodation with the Borrower, the Subsidiary
Guarantor or any other guarantor or exercise any other right or remedy available
to them against the Borrower, the Subsidiary Guarantor or any other guarantor,
without affecting or impairing in any way the liability of the Subsidiary
Guarantor hereunder except to the extent the Obligations have been fully,
finally and indefeasibly paid in cash. Pursuant to applicable law, the
Subsidiary Guarantor waives any defense arising out of any such election even
though such election operates, pursuant to applicable law, to impair or to
extinguish any right of reimbursement or subrogation or other right or remedy of
the Subsidiary Guarantor against the Borrower or any guarantor, as the case may
be, or any security.
SECTION 3. Information. The Subsidiary Guarantor assumes all
responsibility for being and keeping itself informed of the Borrower's financial
condition
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and assets, and of all other circumstances bearing upon the risk of
nonpayment of the Obligations and the nature, scope and extent of the risks that
the Subsidiary Guarantor assumes and incurs hereunder, and agrees that none of
the Administrative Agent and the Banks will have any duty to advise the
Subsidiary Guarantor of information known to it or any of them regarding such
circumstances or risks.
SECTION 4. Representations and Warranties; Agreements. The
Subsidiary Guarantor represents and warrants as to itself that all
representations and warranties relating to the Subsidiary Guarantor contained in
any Loan Document are true and correct in all material respects. The Subsidiary
Guarantor agrees that the provisions of Section 3.05 of the Credit Agreement
shall apply equally to the Subsidiary Guarantor with respect to payments made by
it hereunder.
SECTION 5. Termination; Limitation of Guarantee Amount. (a) The
Guarantees made hereunder (A) shall terminate upon the completion of the Merger
or (B) in the event the Merger does not occur prior thereto, shall (i) subject
to clause (ii) below, terminate when all the Obligations have been paid in full
and the Banks have no further commitment to lend under the Credit Agreement and
(ii) shall continue to be effective or be reinstated, as the case may be, if at
any time payment, or any part thereof, of any Obligation is rescinded or must
otherwise be restored by the Administrative Agent or any Bank upon the
bankruptcy or reorganization of the Borrower, the Subsidiary Guarantor or
otherwise. Notwithstanding any other provision in this Guarantee Agreement, in
the event and after the Subsidiary Guarantor and/or the Borrower terminate(s)
the Merger Agreement in accordance with its terms as in effect on the Effective
Date, the Subsidiary Guarantor's obligations hereunder shall be limited to an
amount equal to $1,250,000,000.
(b) Notwithstanding anything in this Guarantee Agreement to the
contrary, the Subsidiary Guarantor's liability under this Guarantee Agreement
shall be limited to an amount not to exceed as of any date of determination the
greater of: (A) the amount of Indebtedness of the Subsidiary Guarantor
(including the IBP Credit Agreement) refinanced by funds obtained from the
Borrower; and (B) the amount which could be claimed by the Administrative Agent
and the Banks from the Subsidiary Guarantor under this Guarantee Agreement
without rendering such claim voidable or avoidable under Section 548 of Chapter
11 of the Bankruptcy Code or under any applicable state Uniform Fraudulent
Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or state
corporate law or common law (such highest amount determined hereunder being the
Subsidiary Guarantor's "Maximum Liability"). The Subsidiary Guarantor agrees
that the Obligations may at any time and from time to time exceed the Maximum
Liability without impairing this Guarantee Agreement or affecting the rights and
remedies of the Administrative Agent hereunder provided nothing in this Section
5 shall be construed to increase the Subsidiary Guarantor's obligations
hereunder beyond its Maximum Liability.
SECTION 6. Binding Agreement; Assignments. Whenever in this
Agreement any Bank or the Administrative Agent is referred to, such reference
shall be deemed to include the successors and assigns of such party; and all
covenants, promises and agreements by or on behalf of the Subsidiary Guarantor
that are contained in this Agreement shall bind and inure to the benefit of each
such party and their respective successors and assigns. This Agreement shall
become effective as to the Subsidiary Guarantor as of the date on which the debt
outstanding under the IBP Credit Agreement is
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repaid or refinanced (it being understood that the Subsidiary Guarantor's
obligations under this Guarantee Agreement on any date prior to the Acquisition
Date shall be limited to $950,000,000) and when a counterpart hereof executed on
behalf of the Subsidiary Guarantor shall have been delivered to the
Administrative Agent, and a counterpart hereof shall have been executed on
behalf of the Administrative Agent, and thereafter shall be binding upon the
Subsidiary Guarantor and the Administrative Agent and their respective
successors and assigns, and shall inure to the benefit of the Subsidiary
Guarantor, the Administrative Agent and the Banks, and their respective
successors and assigns, except that the Subsidiary Guarantor shall not have the
right to assign its rights or obligations hereunder or any interest herein, and
any such attempted assignment shall be void.
SECTION 7. Waivers; Amendment. (a) No failure or delay of the
Administrative Agent or any Bank in exercising any power or right hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the
Administrative Agent or any Bank hereunder or under the Credit Agreement or any
other Loan Document are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of this
Agreement or any other Loan Document or consent to any departure by the
Subsidiary Guarantor therefrom shall in any event be effective unless the same
shall be permitted by paragraph (b) below, and then such waiver or consent shall
be effective only in the specific instance and for the purpose for which given.
No notice or demand on the Subsidiary Guarantor in any case shall entitle the
Subsidiary Guarantor to any other or further notice or demand in similar or
other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to a written agreement entered into between
the Subsidiary Guarantor and the Administrative Agent (with the prior written
consent of the Banks if required under the Credit Agreement).
SECTION 8. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 9. Notices. All communications and notices hereunder shall
be in writing and given as provided in Section 10.01 of the Credit Agreement.
All communications and notices hereunder to the Subsidiary Guarantor shall be
given to the address set forth below, with a copy to the Borrower:
IBP, inc.
000 Xxxxxxx Xxxx Xxxxx
Xxxxxx Xxxxx, Xxxxx Xxxxxx 00000
Attention: Treasurer
SECTION 10. Survival of Agreement; Severability. (a) Subject to the
provisions of Section 5, all covenants, agreements, representations and
warranties made by the Subsidiary Guarantor herein and in the certificates or
other instruments prepared or delivered in connection with or pursuant to this
Agreement shall be considered to have been relied upon by the Administrative
Agent and the Banks and shall survive the making
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by the Banks of the Loans, regardless of any investigation made by any of them
or on their behalf, and shall continue in full force and effect until the
earlier of (a) the date of the completion of the Merger and (b) the date the
principal or any accrued interest on any Loan or any other fee or amount payable
under this Agreement or any other Loan Document is no longer outstanding and
unpaid and the Commitments have been terminated.
(b) In the event any one or more of the provisions contained in this
Agreement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby (it being understood
that the invalidity of a particular provision in a particular jurisdiction shall
not in and of itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 11. Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute a single contract, and shall become effective as
provided in Section 6. Delivery of an executed signature page to this Agreement
by facsimile transmission shall be as effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 12. Rules of Interpretation. The rules of interpretation
specified in Sections 1.03 and 1.04 of the Credit Agreement shall be
applicable to this Agreement.
SECTION 13. Jurisdiction; Consent to Service of Process. (a) The
Subsidiary Guarantor hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of any New York State court
or Federal court of the United States of America sitting in New York City, and
any appellate court from any thereof, in any action or proceeding arising out of
or relating to this Agreement, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State court or, to the extent permitted by law,
in such Federal court. Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law. Nothing in this Agreement shall affect any right that the Administrative
Agent or any Bank may otherwise have to bring any action or proceeding relating
to this Agreement against the Subsidiary Guarantor or its properties in the
courts of any jurisdiction.
(b) The Subsidiary Guarantor hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement in any New
York State or Federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
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(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 14. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF THE BANKS, THE ADMINISTRATIVE AGENT, THE BORROWER OR THE SUBSIDIARY
GUARANTOR. EACH PARTY HERETO ACKNOWLEDGES THAT IT AND THE OTHER PARTY HERETO
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 15. Right of Setoff. Upon the occurrence and during the
continuation of any Event of Default, each of the Administrative Agent and the
Banks is hereby authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
Indebtedness at any time owing by such Person to or for the credit or the
account of the Subsidiary Guarantor against any or all the obligations of the
Subsidiary Guarantor now or hereafter existing under this Agreement held by such
Person, irrespective of whether or not such Person shall have made any demand
under this Agreement. The rights of each Person under this Section are in
addition to other rights and remedies (including other rights of setoff) which
such Person may have.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
IBP, INC.,
by -------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as
Administrative Agent,
by -------------------------------------
Name:
Title:
