EXHIBIT 1.1(B)
[FORM OF SUBSIDIARY GUARANTY]
THIS GUARANTY (this "Guaranty") dated [ ] is made by each of the
undersigned (each, a "Guarantor"), in favor of the holders from time to time of
the Notes hereinafter referred to, including each purchaser named in the Note
Purchase Agreement hereinafter referred to, and their respective successors and
assigns (collectively, the "Holders" and each individually, a "Holder").
W I T N E S S E T H:
WHEREAS, CARRIAGE SERVICES, INC., a Delaware corporation (the "Company"),
and the initial Holders have entered into a Note Purchase Agreement dated as of
July 1, 1999 (the Note Purchase Agreement as amended, supplemented, restated or
otherwise modified from time to time in accordance with its terms and in effect,
the "Note Purchase Agreement");
WHEREAS, the Note Purchase Agreement contemplates the issuance by the
Company of up to $300,000,000 aggregate principal amount of Notes (as defined in
the Note Purchase Agreement) in series;
WHEREAS, the Company owns all of the issued and outstanding capital stock
of each Guarantor and, by virtue of such ownership and otherwise, such Guarantor
will derive substantial benefits from the purchase by the Holders of the
Company's Notes;
WHEREAS, each Guarantor derives substantial financial, management and
other benefits as a Subsidiary of the Company and expects to continue to do so
in the future;
WHEREAS, each Guarantor may reasonably be expected to benefit, directly or
indirectly, from this Guaranty.
WHEREAS, it is a condition precedent to the obligation of the Holders to
purchase the Notes that each Guarantor shall have executed and delivered this
Guaranty for the benefit of the Holders and it is and will be a condition to the
sale of subsequent series of the Notes that this Guaranty run in favor of the
holders of such subsequent series of Notes; and
WHEREAS, each Guarantor finds it advantageous, desirable and in its best
interests to execute and deliver this Guaranty to satisfy the conditions
described in the preceding paragraph;
NOW, THEREFORE, in consideration of the premises and other benefits to the
Guarantors, and of the purchase of the Company's Notes by the Holders, and for
other good and valuable consideration, the receipt and sufficiency of which are
acknowledged, each Guarantor makes this Guaranty as follows:
Exhibit 1.1(b)
SECTION 1. DEFINITIONS. Any capitalized terms not otherwise herein
defined shall have the meanings attributed to them in the Note Purchase
Agreement.
SECTION 2. GUARANTY. Each Guarantor unconditionally and irrevocably
guarantees to the Holders the due, prompt and complete performance and payment
by the Company of the principal of, Make-Whole Amount, if any, and interest on,
and each other amount due under, the Notes or the Note Purchase Agreement (the
Notes and the Note Purchase Agreement being sometimes hereinafter collectively
referred to as the "Note Documents") when and as the same shall become due and
payable (whether at stated maturity or by required or optional prepayment or by
declaration or otherwise) in accordance with the terms thereof, including
interest and other amounts owed under the terms thereof for which the Company
has obtained relief under bankruptcy or other laws providing for relief from
creditors (such amounts payable by the Company under the terms of the Note
Documents, and all other monetary obligations of the Company thereunder, being
sometimes collectively hereinafter referred to as the "Obligations"). This
Guaranty is a guaranty of payment and not just of collectibility and is in no
way conditioned or contingent upon any attempt to collect from the Company or
upon any other event, contingency or circumstance whatsoever. If for any reason
whatsoever the Company shall fail or be unable duly, punctually and fully to pay
such amounts as and when the same shall become due and payable, each Guarantor,
without demand, presentment, protest or notice of any kind, will forthwith pay
or cause to be paid such amounts to the Holders under the terms of such Note
Documents, in lawful money of the United States, at the place specified in the
Note Purchase Agreement, or perform or comply with the same or cause the same to
be performed or complied with, together with interest (to the extent provided
for under such Note Documents) on any amount due and owing from the Company.
Each Guarantor, promptly after demand, will pay to the Holders the reasonable
costs and expenses of collecting such amounts or otherwise enforcing this
Guaranty, including, without limitation, the reasonable fees and expenses of
counsel. Notwithstanding the foregoing, the right of recovery against each
Guarantor under this Guaranty is limited to the extent it is judicially
determined with respect to any Guarantor that entering into this Guaranty would
violate Section 548 of the United States Bankruptcy Code or any comparable
provisions of any state law, in which case such Guarantor shall be liable under
this Guaranty only for amounts aggregating up to the largest amount that would
not render such Guarantor's obligations hereunder subject to avoidance under
Section 548 of the United States Bankruptcy Code or any comparable provisions of
any state law.
SECTION 3. GUARANTOR'S OBLIGATIONS UNCONDITIONAL. The obligations of each
Guarantor under this Guaranty shall be primary, absolute and unconditional
obligations of such Guarantor, shall not be subject to any counterclaim,
set-off, deduction, diminution, abatement, recoupment, suspension, deferment,
reduction or defense based upon any claim such Guarantor or any other Person may
have against the Company or any other Person, and to the full extent permitted
by applicable law shall remain in full force and effect without regard to, and
shall not be released, discharged or in any way affected by, any circumstance or
condition whatsoever (whether or not such Guarantor or the Company shall have
any knowledge or notice thereof), including:
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Exhibit 1.1(b)
(a) any termination, amendment or modification of or deletion from
or addition or supplement to or other change in any of the Note Documents
or any other instrument or agreement applicable to any of the parties to
any of the Note Documents;
(b) any furnishing or acceptance of any security, or any release of
any security, for the Obligations, or the failure of any security or the
failure of any Person to perfect any interest in any collateral;
(c) any failure, omission or delay on the part of the Company to
conform or comply with any term of any of the Note Documents or any other
instrument or agreement referred to in paragraph (a) above, including,
without limitation, failure to give notice to any Guarantor of the
occurrence of a "Default" or an "Event of Default" under any Note
Document;
(d) any waiver of the payment, performance or observance of any of
the obligations, conditions, covenants or agreements contained in any Note
Document, or any other waiver, consent, extension, indulgence, compromise,
settlement, release or other action or inaction under or in respect of any
of the Note Documents or any other instrument or agreement referred to in
paragraph (a) above or any obligation or liability of the Company, or any
exercise or non-exercise of any right, remedy, power or privilege under or
in respect of any such instrument or agreement or any such obligation or
liability;
(e) any failure, omission or delay on the part of any of the Holders
to enforce, assert or exercise any right, power or remedy conferred on
such Holder in this Guaranty, or any such failure, omission or delay on
the part of such Holder in connection with any Note Document, or any other
action on the part of such Holder;
(f) any voluntary or involuntary bankruptcy, insolvency,
reorganization, arrangement, readjustment, assignment for the benefit of
creditors, composition, receivership, conservatorship, custodianship,
liquidation, marshaling of assets and liabilities or similar proceedings
with respect to the Company, any Guarantor or to any other Person or any
of their respective properties or creditors, or any action taken by any
trustee or receiver or by any court in any such proceeding;
(g) any discharge, termination, cancellation, frustration,
irregularity, invalidity or unenforceability, in whole or in part, of any
of the Note Documents or any other agreement or instrument referred to in
paragraph (a) above or any term hereof;
(h) any merger or consolidation of the Company or any Guarantor into
or with any other corporation, or any sale, lease or transfer of any of
the assets of the Company or any Guarantor to any other Person;
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Exhibit 1.1(b)
(i) any change in the ownership of any shares of capital stock of
the Company or any change in the corporate relationship between the
Company and any Guarantor, or any termination of such relationship;
(j) any release or discharge, by operation of law, of any Guarantor
from the performance or observance of any obligation, covenant or
agreement contained in this Guaranty; or
(k) any other occurrence, circumstance, happening or event
whatsoever, whether similar or dissimilar to the foregoing, whether
foreseen or unforeseen, and any other circumstance that might otherwise
constitute a legal or equitable defense or discharge of the liabilities of
a guarantor or surety or that might otherwise limit recourse against any
Guarantor.
SECTION 4. FULL RECOURSE OBLIGATIONS. The obligations of each Guarantor
set forth herein constitute the full recourse obligations of such Guarantor
enforceable against it to the full extent of all its assets and properties.
SECTION 5. WAIVER. Each Guarantor unconditionally waives, to the extent
permitted by applicable law, (a) notice of any of the matters referred to in
Section 3, (b) notice to such Guarantor of the incurrence of any of the
Obligations, notice to such Guarantor or the Company of any breach or default by
the Company with respect to any of the Obligations or any other notice that may
be required, by statute, rule of law or otherwise, to preserve any rights of the
Holders against such Guarantor, (c) presentment to or demand of payment from the
Company or such Guarantor with respect to any amount due under any Note Document
or protest for nonpayment or dishonor, (d) any right to the enforcement,
assertion or exercise by any of the Holders of any right, power, privilege or
remedy conferred in the Note Purchase Agreement or any other Note Document or
otherwise, (e) any requirement of diligence on the part of any of the Holders,
(f) any requirement to exhaust any remedies or to mitigate the damages resulting
from any default under any Note Document, (g) any notice of any sale, transfer
or other disposition by any of the Holders of any right, title to or interest in
the Note Purchase Agreement or in any other Note Document and (h) any other
circumstance whatsoever that might otherwise constitute a legal or equitable
discharge, release or defense of a guarantor or surety or that might otherwise
limit recourse against such Guarantor.
SECTION 6. SUBROGATION, CONTRIBUTION, REIMBURSEMENT OR INDEMNITY. Until
one year and one day after all Obligations have been indefeasibly paid in full,
each Guarantor agrees not to take any action pursuant to any rights that may
have arisen in connection with this Guaranty to be subrogated to any of the
rights (whether contractual, under the United States Bankruptcy Code, as
amended, including section 509 thereof, under common law or otherwise) of any of
the Holders against the Company or against any collateral security or guaranty
or right of offset held by the Holders for the payment of the Obligations. Until
one year and one day after all Obligations have been indefeasibly paid in full,
each Guarantor agrees not to take any action pursuant to any contractual, common
law, statutory or other rights of reimbursement, contribution, exoneration or
indemnity (or any similar right) from or against the Company that
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Exhibit 1.1(b)
may have arisen in connection with this Guaranty. So long as the Obligations
remain, if any amount shall be paid by or on behalf of the Company to such
Guarantor on account of any of the rights waived in this paragraph, such amount
shall be held by such Guarantor in trust, segregated from other funds of such
Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over
to the Holders (duly endorsed by such Guarantor to the Holders, if required), to
be applied against the Obligations, whether matured or unmatured, in such order
as the Holders may determine. The provisions of this paragraph shall survive the
term of this Guaranty and the payment in full of the Obligations.
SECTION 7. EFFECT OF BANKRUPTCY PROCEEDINGS, ETC. This Guaranty shall
continue to be effective or be automatically reinstated, as the case may be, if
at any time payment, in whole or in part, of any of the sums due to any of the
Holders pursuant to the terms of the Note Purchase Agreement or any other Note
Document is rescinded or must otherwise be restored or returned by such Holder
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
the Company or any other Person, or upon or as a result of the appointment of a
custodian, receiver, trustee or other officer with similar powers with respect
to the Company or other Person or any substantial part of its property, or
otherwise, all as though such payment had not been made. If an event permitting
the acceleration of the maturity of the principal amount of the Notes shall at
any time have occurred and be continuing, and such acceleration shall at such
time be prevented by reason of the pendency against the Company or any other
Person of a case or proceeding under a bankruptcy or insolvency law, each
Guarantor agrees that, for purposes of this Guaranty and its obligations
hereunder, the maturity of the principal amount of the Notes and all other
Obligations shall be deemed to have been accelerated with the same effect as if
any Holder had accelerated the same in accordance with the terms of the Note
Purchase Agreement or other applicable Note Document, and such Guarantor shall
forthwith pay such principal amount, Make-Whole Amount, if any, and interest
thereon and any other amounts guaranteed hereunder without further notice or
demand.
SECTION 8. TERM OF AGREEMENT. This Guaranty and all guaranties, covenants
and agreements of each Guarantor contained herein shall continue in full force
and effect and shall not be discharged until such time as all of the Obligations
shall be paid and performed in full and all of the agreements of each Guarantor
hereunder shall be duly paid and performed in full.
SECTION 9. REPRESENTATIONS AND WARRANTIES. Each Guarantor represents
and warrants to each Holder that:
(a) such Guarantor is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of organization
and has the corporate power and authority to own and operate its property,
to lease the property it operates as lessee and to conduct the business in
which it is currently engaged;
(b) such Guarantor has the corporate power and authority and the
legal right to execute and deliver, and to perform its obligations under,
this Guaranty, and has taken all necessary corporate action to authorize
its execution, delivery and performance of this Guaranty;
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Exhibit 1.1(b)
(c) this Guaranty constitutes a legal, valid and binding obligation
of such Guarantor enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law);
(d) the execution, delivery and performance of this Guaranty will
not violate any provision of any requirement of law or material
contractual obligation of such Guarantor and will not result in or require
the creation or imposition of any Lien on any of the properties, revenues
or assets of such Guarantor pursuant to the provisions of any material
contractual obligation of such Guarantor or any requirement of law;
(e) no consent or authorization of, filing with, or other act by or
in respect of, any arbitrator or Governmental Authority is required in
connection with the execution, delivery, performance, validity or
enforceability of this Guaranty;
(f) no litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the knowledge of
such Guarantor, threatened by or against such Guarantor or any of its
properties or revenues (i) with respect to this Guaranty or any of the
transactions contemplated hereby or (ii) that could reasonably be expected
to have a material adverse effect upon the business, operations or
financial condition of such Guarantor and its Subsidiaries taken as a
whole;
(g) the execution, delivery and performance of this Guaranty will
not violate any provision of any order, judgment, writ, award or decree of
any court, arbitrator or Governmental Authority, domestic or foreign, or
of the charter or by-laws of such Guarantor or of any securities issued by
such Guarantor; and
(h) after giving effect to the transactions contemplated herein, (i)
the present fair salable value of the assets of such Guarantor is in
excess of the amount that will be required to pay its probable liability
on its existing debts as said debts become absolute and matured, (ii) such
Guarantor has received reasonably equivalent value for executing and
delivering this Guaranty, (iii) the property remaining in the hands of
such Guarantor is not an unreasonably small capital, and (iv) such
Guarantor is able to pay its debts as they mature.
SECTION 10. NOTICES. All notices under the terms and provisions hereof
shall be in writing, and shall be delivered or sent by telex or telecopy or
mailed by first-class mail, postage prepaid, addressed (a) if to the Company or
any Holder at the address set forth in, the Note Purchase Agreement or (b) if to
any Guarantor, in care of the Company at the Company's address set forth in the
Note Purchase Agreement, or in each case at such other address as the Company,
any Holder or a Guarantor shall from time to time designate in writing to the
other parties. Any notice so addressed shall be deemed to be given when actually
received.
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Exhibit 1.1(b)
SECTION 11. SURVIVAL. All warranties, representations and covenants made
by each Guarantor herein or in any certificate or other instrument delivered by
it or on its behalf hereunder shall be considered to have been relied upon by
the Holders and shall survive the execution and delivery of this Guaranty,
regardless of any investigation made by any of the Holders. All statements in
any such certificate or other instrument shall constitute warranties and
representations by such Guarantor hereunder.
SECTION 12. SUBMISSION TO JURISDICTION. Each Guarantor irrevocably submits
to the jurisdiction of the courts of the State of Illinois and of the courts of
the United States of America having jurisdiction in the State of Illinois for
the purpose of any legal action or proceeding in any such court with respect to,
or arising out of, this Guaranty, the Note Purchase Agreement or the Notes. Each
Guarantor consents to process being served in any suit, action or proceeding by
mailing a copy thereof by registered or certified mail, postage prepaid, return
receipt requested, to the address of such Guarantor specified in or designated
pursuant to the Note Purchase Agreement. Each Guarantor agrees that such service
upon receipt (i) shall be deemed in every respect effective service of process
upon it in any such suit, action or proceeding and (ii) shall, to the fullest
extent permitted by law, be taken and held to be valid personal service upon and
personal delivery to such Guarantor.
SECTION 13. MISCELLANEOUS. Any provision of this Guaranty that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, each Guarantor hereby waives any provision of law that
renders any provisions hereof prohibited or unenforceable in any respect. The
terms of this Guaranty shall be binding upon, and inure to the benefit of, each
Guarantor and the Holders and their respective successors and assigns. No term
or provision of this Guaranty may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by each Guarantor and the
Holders. The section and paragraph headings in this Guaranty and the table of
contents are for convenience of reference only and shall not modify, define,
expand or limit any of the terms or provisions hereof, and all references herein
to numbered sections, unless otherwise indicated, are to sections in this
Guaranty. This Guaranty shall in all respects be governed by, and construed in
accordance with, the laws of the State of Illinois, including all matters of
construction, validity and performance.
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Exhibit 1.1(b)
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
duly executed as of the day and year first above written.
[ ]
By:_________________________________
Name:_______________________________
Title:______________________________
[Add Signature Block of each Subsidiary Guarantor]
8
Exhibit 1.1(b)
