SUBSIDIARY GUARANTY AGREEMENT
THIS UNCONDITIONAL GUARANTY AGREEMENT (this "Guaranty"), dated as of
January 16, 1998, is made by each of the Subsidiary Guarantors listed on the
signature pages hereto (the "Subsidiary Guarantors"), in favor of FIRST UNION
NATIONAL BANK, a national banking association, as Administrative Agent (the
"Administrative Agent"), for the ratable benefit of itself and the financial
institutions (the "Lenders") that are, or may from time to time become,
parties to the Credit Agreement (as hereinafter defined).
STATEMENT OF PURPOSE
Pursuant to the terms of the Credit Agreement dated as of January 16,
1998 by and among Xxxxxxxx Industries ("Xxxxxxxx"), subject to and in
accordance with Addendum A to the Credit Agreement, Sterling Electronics
Corporation ("Sterling", and together with Xxxxxxxx, the "Borrower"), the
Lenders party thereto and the Administrative Agent (as amended, restated,
supplemented or otherwise modified from time to time, the "Credit
Agreement"), the Lenders have extended certain credit facilities to the
Borrower as more particularly described therein. The Borrower and the
Subsidiary Guarantors comprise one integrated financial enterprise, and all
Extensions of Credit to the Borrower will inure, directly or indirectly, to
the benefit of each of the Subsidiary Guarantors.
In connection with the transactions contemplated by the Credit
Agreement, the Lenders have requested, and each of the Subsidiary Guarantors
has agreed to execute and deliver, this Guaranty.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein, and to induce the Lenders to continue to make
available Extensions of Credit pursuant to the Credit Agreement, it is agreed
as follows:
SECTION 1. DEFINITIONS. Capitalized terms used herein (including the
preamble hereof) shall have the meanings assigned to them in the Credit
Agreement, unless the context otherwise requires or unless otherwise defined
herein. References in the Credit Agreement to a "Guaranty Agreement" or
herein to this "Guaranty" shall include and mean this Guaranty, including all
amendments and supplements hereto now or hereafter in effect.
SECTION 2. GUARANTY OF OBLIGATIONS OF THE BORROWER. Each Subsidiary
Guarantor hereby, jointly and severally with each other Subsidiary Guarantor,
unconditionally guarantees to the Administrative Agent for the ratable
benefit of itself, the Lenders, and their respective successors, endorsees,
transferees and assigns, the prompt payment (whether at stated maturity, by
acceleration or otherwise) and performance of all Obligations of the
Borrower, whether primary or secondary (whether by way of endorsement or
otherwise), whether now existing or hereafter arising, whether or not from
time to time reduced or extinguished (except by payment thereof) or hereafter
increased or incurred, whether or not recovery may be or hereafter become
barred by the statute of limitations, whether enforceable or unenforceable as
against the Borrower, whether or not discharged, stayed or otherwise affected
by any bankruptcy, insolvency or other similar law or
proceeding, whether created directly with the Administrative Agent or any
Lender or acquired by the Administrative Agent or any Lender through
assignment, endorsement or otherwise, whether matured or unmatured, whether
joint or several, as and when the same become due and payable (whether at
maturity or earlier, by reason of acceleration, mandatory repayment or
otherwise), in accordance with the terms of any such instruments evidencing
any such obligations, including all renewals, extensions or modifications
thereof (all Obligations of the Borrower to the Administrative Agent or any
Lender, including all of the foregoing, being hereinafter collectively
referred to as the "Guaranteed Obligations"); PROVIDED, that notwithstanding
anything to the contrary contained herein, it is the intention of each
Subsidiary Guarantor and the Lenders that, in any proceeding involving the
bankruptcy, reorganization, arrangement, adjustment of debts, relief of
debtors, dissolution or insolvency or any similar proceeding with respect to
any Subsidiary Guarantor or its assets, the amount of such Subsidiary
Guarantor's obligations with respect to the Guaranteed Obligations shall be
in, but not in excess of, the maximum amount thereof not subject to avoidance
or recovery by operation of applicable law governing bankruptcy,
reorganization, arrangement, adjustment of debts, relief of debtors,
dissolution, insolvency, fraudulent transfers or conveyances or other similar
laws (including, without limitation, 11 U.S.C. Section 547, Section 548,
Section 550 and other "avoidance" provisions of Title 11 of the United States
Code), applicable in any such proceeding to such Subsidiary Guarantor and
this Guaranty (collectively, "Applicable Insolvency Laws"). To that end, but
only in the event and to the extent that such Subsidiary Guarantor's
obligations with respect to the Guaranteed Obligations or any payment made
pursuant to the Guaranteed Obligations would, but for the operation of the
foregoing proviso, be subject to avoidance or recovery in any such proceeding
under Applicable Insolvency Laws, the amount of such Subsidiary Guarantor's
obligations with respect to the Guaranteed Obligations shall be limited to
the largest amount which, after giving effect thereto, would not, under
Applicable Insolvency Laws, render such Subsidiary Guarantor's obligations
with respect to such Guaranteed Obligations unenforceable or avoidable or
otherwise subject to recovery under Applicable Insolvency Laws. To the extent
any payment actually made pursuant to the Guaranteed Obligations exceeds the
limitation of the foregoing proviso and is otherwise subject to avoidance and
recovery in any such proceeding under Applicable Insolvency Laws, the amount
subject to avoidance shall in all events be limited to the amount by which
such actual payment exceeds such limitation and the Guaranteed Obligations as
limited by the foregoing proviso shall in all events remain in full force and
effect and be fully enforceable against such Subsidiary Guarantor. The
foregoing proviso is intended solely to preserve the rights of the
Administrative Agent hereunder against such Subsidiary Guarantor in such
proceeding to the maximum extent permitted by Applicable Insolvency Laws and
neither such Subsidiary Guarantor, the Borrower, any other Subsidiary
Guarantor nor any other Person shall have any right or claim under such
proviso that would not otherwise be available under Applicable Insolvency
Laws in such proceeding.
SECTION 3. NATURE OF GUARANTY. Each Subsidiary Guarantor agrees that
this Guaranty is a continuing, unconditional guaranty of payment and
performance and not of collection, and that its obligations under this
Guaranty shall be primary, absolute and unconditional, irrespective of, and
unaffected by:
(a) the genuineness, validity, regularity, enforceability or any
future amendment of, or change in, the Credit Agreement or any other Loan
Document or any other
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agreement, document or instrument to which the Borrower or any Subsidiary
thereof is or may become a party;
(b) any structural change in, restructuring of or other similar
change of the Borrower or any of its Subsidiaries (including, without
limitation, each Subsidiary Guarantor);
(c) the absence of any action to enforce this Guaranty, the Credit
Agreement or any other Loan Document or the waiver or consent by the
Administrative Agent or any Lender with respect to any of the provisions
of this Guaranty, the Credit Agreement or any other Loan Document;
(d) the existence, value or condition of, or failure to perfect its
Lien against, any security for or other guaranty of the Guaranteed
Obligations or any action, or the absence of any action, by the
Administrative Agent or any Lender in respect of such security or guaranty
(including, without limitation, the release of any such security or
guaranty); or
(e) any other action or circumstances which might otherwise
constitute a legal or equitable discharge or defense of a surety or
guarantor (other than payments not then due and owing or payments already
made);
it being agreed by each Subsidiary Guarantor that, subject to the proviso in
Section 2 hereof, its obligations under this Guaranty shall not be discharged
until the final and indefeasible payment and performance, in full, of the
Guaranteed Obligations and the termination of the Commitments; PROVIDED, as
long as such sale is permitted by the Credit Agreement, any Subsidiary
Guarantor which is sold shall be released from this Guaranty, and this
Guaranty shall terminate with respect to such Subsidiary Guarantor upon any
such permitted sale. To the extent permitted by law, each Subsidiary
Guarantor expressly waives all rights it may now or in the future have under
any statute (including without limitation North Carolina General Statutes
Section 26-7, et. seq. or similar law), or at law or in equity, or otherwise,
to compel the Administrative Agent or any Lender to proceed in respect of the
Guaranteed Obligations against the Borrower or any other party or against any
security for or other guaranty of the payment and performance of the
Guaranteed Obligations before proceeding against, or as a condition to
proceeding against, such Subsidiary Guarantor. To the extent permitted by
law, each Subsidiary Guarantor further expressly waives and agrees not to
assert or take advantage of any defense based upon the failure of the
Administrative Agent or any Lender to commence an action in respect of the
Guaranteed Obligations against the Borrower, such Subsidiary Guarantor, any
other guarantor or any other party or any security for the payment and
performance of the Guaranteed Obligations. Each Subsidiary Guarantor agrees
that any notice or directive given at any time to the Administrative Agent or
any Lender which is inconsistent with the waivers in the preceding two
sentences shall be null and void and may be ignored by the Administrative
Agent or Lender, and, in addition, may not be pleaded or introduced as
evidence in any litigation relating to this Guaranty for the reason that such
pleading or introduction would be at variance with the written terms of this
Guaranty, unless the Administrative Agent and the Required Lenders have
specifically agreed otherwise in writing. The foregoing waivers are of the
essence of
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the transaction contemplated by the Loan Documents and, but for this Guaranty
and such waivers, the Administrative Agent and Lenders would decline to enter
into the Credit Agreement.
SECTION 4. DEMAND BY THE ADMINISTRATIVE AGENT. In addition to the
terms set forth in Section 3, and in no manner imposing any limitation on
such terms, if all or any portion of the then outstanding Guaranteed
Obligations under the Credit Agreement are declared to be immediately due and
payable, then the Subsidiary Guarantors shall, upon demand in writing
therefor by the Administrative Agent to the Subsidiary Guarantors, pay all or
such portion of the outstanding Guaranteed Obligations then declared due and
payable. Payment by the Subsidiary Guarantors shall be made to the
Administrative Agent, to be credited and applied upon the Guaranteed
Obligations, in immediately available federal funds to an account designated
by the Administrative Agent or at the address referenced herein for the
giving of notice to the Administrative Agent or at any other address that may
be specified in writing from time to time by the Administrative Agent.
SECTION 5. WAIVERS. In addition to the waivers contained in Section 3,
each Subsidiary Guarantor, to the extent permitted by law, waives and agrees
that it shall not at any time insist upon, plead or in any manner whatever
claim or take the benefit or advantage of, any appraisal, valuation, stay,
extension, marshalling of assets or redemption laws, or exemption, whether
now or at any time hereafter in force, which may delay, prevent or otherwise
affect the performance by such Subsidiary Guarantor of its obligations under,
or the enforcement by the Administrative Agent or the Lenders of, this
Guaranty. Each Subsidiary Guarantor further hereby waives diligence,
presentment, demand, protest and notice of whatever kind or nature with
respect to any of the Guaranteed Obligations and waives the benefit of all
provisions of law which are or might be in conflict with the terms of this
Guaranty. Each Subsidiary Guarantor represents, warrants and agrees that its
obligations under this Guaranty are not and shall not be subject to any
counterclaims, offsets or defenses of any kind against the Administrative
Agent, the Lenders or the Borrower whether now existing or which may arise in
the future.
SECTION 6. BENEFITS OF GUARANTY. The provisions of this Guaranty are
for the benefit of the Administrative Agent, the Lenders and their respective
permitted successors, transferees, endorsees and assigns, and nothing herein
contained shall impair, as between the Borrower, the Administrative Agent and
the Lenders, the obligations of the Borrower under the Loan Documents. In
the event all or any part of the Guaranteed Obligations are transferred,
endorsed or assigned by the Administrative Agent or any Lender to any Person
or Persons in accordance with the Credit Agreement, any reference to an
"Administrative Agent", or "Lender" herein shall be deemed to refer equally
to such Person or Persons.
SECTION 7. MODIFICATION OF LOAN DOCUMENTS ETC. If the Administrative
Agent or the Lenders shall at any time or from time to time, with or without
the consent of, or notice to, the Subsidiary Guarantors:
(a) change or extend the manner, place or terms of payment of, or
renew or alter all or any portion of, the Guaranteed Obligations;
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(b) take any action under or in respect of the Loan Documents in the
exercise of any remedy, power or privilege contained therein or available
to it at law, in equity or otherwise, or waive or refrain from exercising
any such remedies, powers or privileges;
(c) amend or modify, in any manner whatsoever, the Loan Documents;
(d) extend or waive the time for performance by any Subsidiary
Guarantor, any other guarantor, the Borrower or any other Person of, or
compliance with, any term, covenant or agreement on its part to be
performed or observed under a Loan Document (other than this Guaranty), or
waive such performance or compliance or consent to a failure of, or
departure from, such performance or compliance;
(e) take and hold security or collateral for the payment of the
Guaranteed Obligations or sell, exchange, release, dispose of, or
otherwise deal with, any property pledged, mortgaged or conveyed, or in
which the Administrative Agent or the Lenders have been granted a Lien, to
secure any Debt of any Subsidiary Guarantor, any other guarantor or the
Borrower to the Administrative Agent or the Lenders;
(f) release anyone who may be liable in any manner for the payment
of any amounts owed by any Subsidiary Guarantor, any other guarantor or
the Borrower to the Administrative Agent or any Lender;
(g) modify or terminate the terms of any intercreditor or
subordination agreement pursuant to which claims of other creditors of any
Subsidiary Guarantor, any other guarantor or the Borrower are subordinated
to the claims of the Administrative Agent or any Lender; or
(h) apply any sums by whomever paid or however realized to any
amounts owing by any Subsidiary Guarantor, any other guarantor or the
Borrower to the Administrative Agent or any Lender in such manner as the
Administrative Agent or any Lender shall determine in its reasonable
discretion (provided that such application is in accordance with the
Credit Agreement);
then neither the Administrative Agent nor any Lender shall incur any
liability to any Subsidiary Guarantor as a result thereof, and no such action
shall impair or release the obligations of any Subsidiary Guarantor under
this Guaranty.
SECTION 8. REINSTATEMENT. Each Subsidiary Guarantor agrees that, if
any payment made by the Borrower or any other Person applied to the
Obligations is at any time annulled, set aside, rescinded, invalidated,
declared to be fraudulent or preferential or otherwise required to be
refunded or repaid or the proceeds of any collateral are required to be
refunded by the Administrative Agent or any Lender to the Borrower, its
estate, trustee, receiver or any other party, including, without limitation,
any Subsidiary Guarantor, under any Applicable Law or equitable cause, then,
to the extent of such payment or repayment, each Subsidiary Guarantor's
liability hereunder (and any Lien securing such liability) shall be and
remain in full force and effect, as fully as if such payment
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had never been made, and, if prior thereto, this Guaranty shall have been
canceled or surrendered (and if any Lien or collateral securing such
Subsidiary Guarantor's liability hereunder shall have been released or
terminated by virtue of such cancellation or surrender), this Guaranty (and
such Lien) shall be reinstated in full force and effect, and such prior
cancellation or surrender shall not diminish, release, discharge, impair or
otherwise affect the obligations of such Subsidiary Guarantor in respect of
the amount of such payment (or any Lien securing such obligation).
SECTION 9. REPRESENTATIONS AND WARRANTIES. To induce the Lenders to
execute the Credit Agreement and make any Extensions of Credit, each
Subsidiary Guarantor hereby represents and warrants that:
(a) such Subsidiary Guarantor has the corporate right, power
and authority to execute, deliver and perform this Guaranty and has
taken all necessary corporate action to authorize its execution,
delivery and performance of, this Guaranty;
(b) this Guaranty constitutes the legal, valid and binding
obligation of such Subsidiary 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 the
availability of equitable remedies;
(c) the execution, delivery and performance of this Guaranty
will not violate in any material respects any provision of any
Applicable Law or material contractual obligation of such Subsidiary
Guarantor and will not result in the creation or imposition of any
Lien upon or with respect to any property or revenues of such
Subsidiary Guarantor; except those which could not reasonably be
expected to have a Material Adverse Effect;
(d) no consent or authorization of, filing with, or other act
by or in respect of, any arbitrator or Governmental Authority and no
consent of any other Person (including, without limitation, any
stockholder or creditor of such Subsidiary Guarantor), is required in
connection with the execution, delivery, performance, validity or
enforceability of this Guaranty;
(e) no actions, suits or proceedings before any arbitrator or
Governmental Authority are pending or, to the knowledge of such
Subsidiary Guarantor, threatened against such Subsidiary Guarantor or
against any of its properties with respect to this Guaranty or any of
the transactions contemplated hereby, except those which could not
reasonably be expected to have a Material Adverse Effect; and
(f) as of the Closing Date, such Subsidiary Guarantor (a) has
capital sufficient to carry on its business and transactions and all
business and transactions in which it engages and is able to pay its
debts as they mature, (b) owns property
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having a value, both at fair valuation and at present fair saleable value,
greater than the amount required to pay its probable liabilities
(including contingencies) and (c) does not believe that it will incur debts
or liabilities beyond its ability to pay such debts or liabilities as they
mature.
SECTION 10. REMEDIES.
(a) Upon the occurrence of any Event of Default, with the consent of
the Required Lenders, the Administrative Agent may, or upon the request of
the Required Lenders, the Administrative Agent shall, enforce against the
Subsidiary Guarantors their respective obligations and liabilities hereunder
and exercise such other rights and remedies as may be available to the
Administrative Agent hereunder, under the Loan Documents or otherwise.
(b) No right or remedy herein conferred upon the Administrative Agent
is intended to be exclusive of any other right or remedy contained herein or
in any other Loan Document or otherwise, and every such right or remedy
contained herein and therein or now or hereafter existing at law, or in
equity, or by statute, or otherwise shall be cumulative. The Required
Lenders may instruct the Administrative Agent to pursue, or refrain from
pursuing, any remedy available to the Administrative Agent at such times and
in such order as the Required Lenders shall determine, and the Required
Lenders' election as to such remedies shall not impair any remedies against
any Subsidiary Guarantor not then exercised. In addition, any election of
remedies which results in the denial or impairment of the right of the
Administrative Agent to seek a deficiency judgment against the Borrower shall
not impair any Subsidiary Guarantor's obligation to pay the full amount of
the Guaranteed Obligations.
SECTION 11. NO SUBROGATION. Notwithstanding any payment or payments by
any of the Subsidiary Guarantors hereunder, or any set-off or application of
funds of any of the Subsidiary Guarantors by the Administrative Agent or any
Lender, or the receipt of any amounts by the Administrative Agent or any
Lender with respect to any of the Guaranteed Obligations, none of the
Subsidiary Guarantors shall be entitled to be subrogated to any of the rights
of the Administrative Agent or any Lender against the Borrower or any of the
other Subsidiary Guarantors or against any collateral security held by the
Administrative Agent or any Lender for the payment of the Guaranteed
Obligations nor shall any of the Subsidiary Guarantors seek any reimbursement
from the Borrower or any of the other Subsidiary Guarantors in respect of
payments made by such Subsidiary Guarantor in connection with the Guaranteed
Obligations, until all amounts owing to the Administrative Agent and the
Lenders on account of the Guaranteed Obligations are paid in full and the
Commitments are terminated. If any amount shall be paid to any Subsidiary
Guarantor on account of such subrogation rights at any time when all of the
Guaranteed Obligations shall not have been paid in full, such amount shall be
held by such Subsidiary Guarantor in trust for the Administrative Agent,
segregated from other funds of such Subsidiary Guarantor, and shall,
forthwith upon receipt by such Subsidiary Guarantor, be turned over to the
Administrative Agent in the exact form received by such Subsidiary Guarantor
(duly endorsed by such Subsidiary Guarantor to the Administrative Agent, if
required) to be applied against the Guaranteed Obligations, whether matured
or unmatured, in such order as set forth in the Credit Agreement.
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SECTION 12. MISCELLANEOUS.
(a) ENTIRE AGREEMENT; AMENDMENTS. This Guaranty, together with the
other Loan Documents, constitutes the entire agreement between the parties
with respect to the subject matter hereof and supersedes all prior agreements
with respect to the subject matter hereof and may not be amended or
supplemented except by a writing signed by each Subsidiary Guarantor and the
Administrative Agent, consented to by such Lenders as required by Section
14.11 of the Credit Agreement.
(b) HEADINGS. Titles and captions of sections and subsections in this
Guaranty are for convenience of reference only, and neither limit nor amplify
the provisions of this Guaranty.
(c) SEVERABILITY. In the event that any one or more of the provisions
contained in this Guaranty shall be determined to be invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision or provisions in every other respect and
the remaining provisions of this Guaranty shall not be in any way impaired.
(d) NOTICES. All notices and communications hereunder shall be given
in accordance with Section 14.1 of the Credit Agreement.
(e) BINDING EFFECT. This Guaranty shall bind each Subsidiary Guarantor
and shall inure to the benefit of the Administrative Agent, the Lenders and
their respective permitted successors and assigns. No Subsidiary Guarantor
may assign this Guaranty or delegate any of its duties hereunder, other than
in connection with the merger of such Subsidiary Guarantor into such other
Person as permitted by Section 11.5 of the Credit Agreement.
(f) NON-WAIVER. The failure of the Administrative Agent or any Lender
to enforce any right or remedy hereunder, or promptly to enforce any such
right or remedy, shall not constitute a waiver thereof, nor give rise to any
estoppel against the Administrative Agent or any Lender, nor excuse any
Subsidiary Guarantor from its obligations hereunder. Any waiver of any such
right or remedy by the Lenders must be in writing and signed by the Required
Lenders.
(g) TERMINATION. This Guaranty shall terminate and be of no further
force or effect on the date when the Guaranteed Obligations have been
indefeasibly paid in full and the Commitments terminated.
(h) GOVERNING LAW. This Guaranty shall be governed by and construed
and enforced in accordance with the laws of the State of North Carolina,
without reference to the conflicts or choice of law principles thereof.
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(i) CONSENT TO JURISDICTION. Each Subsidiary Guarantor hereby
irrevocably consents to the personal jurisdiction of the state and federal
courts located in Mecklenburg County, North Carolina, in any action, claim or
other proceeding arising out of any dispute in connection with this Guaranty,
any rights or obligations hereunder, or the performance of such rights and
obligations. Each Subsidiary Guarantor hereby irrevocably consents to the
service of a summons and complaint and other process in any action, claim or
proceeding brought by the Administrative Agent or any Lender in connection
with this Guaranty, any rights or obligations hereunder, or the performance
of such rights and obligations, on behalf of itself or its property, in the
manner referenced in Section 12(d). Nothing in this Section 12(i) shall
affect the right of the Administrative Agent or any Lender to serve legal
process in any other manner permitted by Applicable Law or affect the right
of the Administrative Agent or any Lender to bring any action or proceeding
against any Subsidiary Guarantor or its properties in the courts of any other
jurisdictions.
(j) BINDING ARBITRATION; WAIVER OF JURY TRIAL.
(i) BINDING ARBITRATION. Upon demand of any party, whether made
before or after institution of any judicial proceeding, any dispute, claim
or controversy arising out of, connected with or relating to this Guaranty
or any other Loan Documents ("Disputes"), between or among parties to this
Guaranty or any other Loan Document shall be resolved by binding
arbitration as provided herein. Institution of a judicial proceeding by a
party does not waive the right of that party to demand arbitration
hereunder. Disputes may include, without limitation, tort claims,
counterclaims, claims brought as class actions, claims arising from Loan
Documents executed in the future, or claims concerning any aspect of the
past, present or future relationships arising out or connected with the
Loan Documents. Arbitration shall be conducted under and governed by the
Commercial Financial Disputes Arbitration Rules (the "Arbitration Rules")
of the American Arbitration Association and Title 9 of the U.S. Code. All
arbitration hearings shall be conducted in Charlotte, North Carolina. The
expedited procedures set forth in Rule 51, ET SEQ. of the Arbitration
Rules shall be applicable to claims of less than $1,000,000. All
applicable statutes of limitation shall apply to any Dispute. A judgment
upon the award may be entered in any court having jurisdiction. The panel
from which all arbitrators are selected shall be comprised of licensed
attorneys. The single arbitrator selected for expedited procedure shall
be a retired judge from the highest court of general jurisdiction, state
or federal, of the state where the hearing will be conducted.
(ii) JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE
ADMINISTRATIVE AGENT, EACH LENDER AND EACH SUBSIDIARY GUARANTOR HEREBY
IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO
ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS GUARANTY OR THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR
OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND
OBLIGATIONS.
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(iii) PRESERVATION OF CERTAIN REMEDIES. Notwithstanding the
preceding binding arbitration provisions, the parties hereto and the Loan
Documents preserve, without diminution, certain remedies that such Persons
may employ or exercise freely, either alone, in conjunction with or during
a Dispute. Each such Person shall have and hereby reserves the right to
proceed in any court of proper jurisdiction or by self help to exercise or
prosecute the following remedies: (A) all rights to foreclose against any
real or personal property or other security by exercising a power of sale
granted in the Loan Documents or under applicable law or by judicial
foreclosure and sale, (B) all rights of self help including peaceful
occupation of property and collection of rents, set off, and peaceful
possession of property, (C) obtaining provisional or ancillary remedies
including injunctive relief, sequestration, garnishment, attachment,
appointment of receiver and in filing an involuntary bankruptcy
proceeding, and (D) when applicable, a judgment by confession of judgment.
Preservation of these remedies does not limit the power of an arbitrator
to grant similar remedies that may be requested by a party in a Dispute.
(k) LIMITATION OF LIABILITY. Neither the Administrative Agent, the
Lenders nor any Affiliate thereof shall have any liability with respect to,
and each Subsidiary Guarantor hereby waives, releases and agrees not to xxx
upon, any claim for any special, indirect, punitive, exemplary or
consequential damages suffered by such Subsidiary Guarantor in connection
with, arising out of, or in any way related to this Guaranty and the other
Loan Documents, the transactions contemplated herein or therein, or any act,
omission or event occurring in connection herewith or therewith, except for
such acts, omissions or events which constitute gross negligence or willful
misconduct by the Administrative Agent or any Lender.
(l) EXPENSES. The Subsidiary Guarantors agree that they will reimburse
the Administrative Agent and each Lender for all reasonable out-of-pocket
expenses (including reasonable attorneys' fees and expenses) incurred by the
Administrative Agent or such Lender in connection with the enforcement of the
obligations of the Subsidiary Guarantors under this Guaranty and any other
Loan Documents and all reasonable out-of-pocket expenses (including
reasonable attorneys' fees and expenses) incurred by the Administrative Agent
in connection with the amendment or modification of this Guaranty.
(m) INDEMNITIES. Each Subsidiary Guarantor agrees to hold the
Administrative Agent and the Lenders harmless from and against all losses
suffered by the Administrative Agent and the Lenders in connection with (i)
the exercise by the Administrative Agent or the Lenders of any right or
remedy granted to them under this Guaranty, (ii) any claim, and the
prosecution or defense thereof, arising out of or in any way connected with
this Guaranty, and (iii) the collection or enforcement of the Obligations,
the Guaranteed Obligations or any of them; PROVIDED, that such Subsidiary
Guarantor shall not be obligated to reimburse the Administrative Agent or any
Lender for costs and expenses, or indemnify the Administrative Agent or the
Lenders for any loss, resulting from the gross negligence or willful
misconduct of the Administrative Agent or the Lenders. Notwithstanding any
termination of this Guaranty, the indemnities to which the Administrative
Agent and Lenders are entitled under this Guaranty shall continue in full
force and effect and shall protect the Administrative Agent and the Lenders
against events arising after such termination as well as before.
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[(n) EFFECTIVENESS OF STERLING ELECTRONICS CORPORATION AS A GUARANTOR. The
rights and obligations of Sterling as a Guarantor hereunder, subject to the
terms and provisions of this Agreement, shall not be effective until the
Administrative Agent has received evidence, in form and substance acceptable to
the Administrative Agent, of the Acquisition Filing in the manner set forth in
Section 6.3(d) of the Credit Agreement; PROVIDED that Sterling shall execute
and deliver to the Administrative Agent this fully executed Guaranty Agreement
signed by Sterling in conjunction with the delivery by the other parties hereto
of their respective signature pages to this Agreement, the Credit Agreement and
the other Loan Documents.]
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IN WITNESS WHEREOF, each of the Subsidiary Guarantors has executed and
delivered this Guaranty under seal as of the date first above written.
[CORPORATE SEAL] XXXXXXXX INDUSTRIES TECHNOLOGY
PRODUCTS
By: /s/ XXXXXX XXXXX
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Xxxxxx Xxxxx
President and Chief Executive Officer
