GUARANTEE AGREEMENT made by KADANT INC. and certain of its Subsidiaries in favor of JPMORGAN CHASE BANK, N.A., as Administrative Agent Dated as of February 13, 2008
Exhibit
99.2
made
by
and
certain of its Subsidiaries
in favor
of
JPMORGAN
CHASE BANK, N.A.,
as
Administrative Agent
Dated as
of February 13, 2008
TABLE OF
CONTENTS
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Page
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DEFINED
TERMS
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1
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1.1
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Definitions
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1
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1.2
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Other
Definitional Provisions
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3
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SECTION
2.
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Guarantee
OF SUBSIDIARY GUARANTORS
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3
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2.1
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Guarantee
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3
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2.2
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Right
of Contribution
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4
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2.3
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No
Subrogation
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4
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2.4
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Amendments,
etc. with respect to the Borrower Obligations and the Foreign Subsidiary
Borrower Obligations
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4
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2.5
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Guarantee
Absolute and Unconditional
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5
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2.6
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Reinstatement
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5
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2.7
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Payments
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6
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SECTION
3.
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GUARANTEE
OF BORROWER
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6
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3.1
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Guarantee
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6
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3.2
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No
Subrogation
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6
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3.3
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Amendments,
etc. with respect to the Foreign Subsidiary Borrower
Obligations
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7
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3.4
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Guarantees
Absolute and Unconditional
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7
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3.5
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Reinstatement
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8
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3.6
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Payments
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8
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SECTION
4.
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MISCELLANEOUS
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8
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4.1
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Amendments
in Writing
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8
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4.2
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Notices
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8
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4.3
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No
Waiver by Course of Conduct; Cumulative Remedies
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8
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4.4
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Enforcement
Expenses; Indemnification
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9
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4.5
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Successors
and Assigns
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9
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4.6
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Set-Off
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9
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4.7
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Counterparts
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9
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4.8
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Severability
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9
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4.9
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Section
Headings
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10
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4.10
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Integration
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10
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4.11
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GOVERNING
LAW
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10
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4.12
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Submission
To Jurisdiction; Waivers
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10
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4.13
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Acknowledgements
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10
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4.14
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Additional
Guarantors
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11
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4.15
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WAIVER
OF JURY TRIAL
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11
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SCHEDULES
Schedule
1 Notice
Addresses of Guarantors
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GUARANTEE
AGREEMENT, dated as of February 13, 2008, made by Kadant Inc. (the “Borrower”) and each
of the Subsidiary Guarantors (as defined herein) signatories hereto (together
with each other entity that becomes a party hereto as a Subsidiary Guarantor as
provided herein), in favor of JPMorgan Chase Bank, N.A., as Administrative Agent
(in such capacity, the “Administrative
Agent”) for the banks and other financial institutions or entities (the
“Lenders”) from
time to time parties to the Credit Agreement, dated as of February 13, 2008 (as
amended, supplemented or otherwise modified from time to time, the “Credit Agreement”),
among the Borrower, the Foreign Subsidiary Borrowers from time to time parties
thereto, the Lenders and the Administrative Agent.
W I T N E S S E T H:
WHEREAS,
pursuant to the Credit Agreement, the Lenders have severally agreed to make
extensions of credit to the Borrower and the Foreign Subsidiary Borrowers upon
the terms and subject to the conditions set forth therein;
WHEREAS,
the Borrower is a member of an affiliated group of companies that includes each
Subsidiary Guarantor;
WHEREAS,
the proceeds of the extensions of credit under the Credit Agreement may be used
in part to enable the Borrower to make valuable transfers to the Subsidiary
Guarantors in connection with the operation of their respective
businesses;
WHEREAS,
the Borrower, the Foreign Subsidiary Borrowers and the Subsidiary Guarantors are
engaged in related businesses, and each Subsidiary Guarantor will derive
substantial direct and indirect benefit from the making of the extensions of
credit under the Credit Agreement; and
WHEREAS,
it is a condition precedent to the obligation of the Lenders to make their
respective extensions of credit to the Borrower and the Foreign Subsidiary
Borrowers under the Credit Agreement that the Borrower and the Subsidiary
Guarantors shall have executed and delivered this Agreement to the
Administrative Agent for the ratable benefit of the Lenders;
NOW,
THEREFORE, in consideration of the premises and to induce the Administrative
Agent and the Lenders to enter into the Credit Agreement and to induce the
Lenders to make their respective extensions of credit to the Borrower or the
Foreign Subsidiary Borrowers thereunder, the Borrower and each Subsidiary
Guarantor hereby agrees with the Administrative Agent, for the ratable benefit
of the Lenders, as follows:
SECTION
1. DEFINED TERMS
1.1 Definitions. (a) Unless
otherwise defined herein, terms defined in the Credit Agreement and used herein
shall have the meanings given to them in the Credit Agreement.
(b) The
following terms shall have the following meanings:
“Agreement”: this
Guarantee Agreement, as the same may be amended, supplemented or otherwise
modified from time to time.
“Borrower
Obligations”: the collective reference to the unpaid principal
of and interest on the Loans and Reimbursement Obligations and all other
obligations and liabilities of the Borrower (including, without limitation, the
guarantee in Section 3 hereof, the interest accruing at the then applicable rate
provided in the Credit Agreement after the maturity of the Loans and
Reimbursement Obligations and interest accruing at the then applicable rate
provided in the Credit Agreement after the filing of any petition in bankruptcy,
or the commencement of any insolvency, reorganization or like proceeding,
relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) to the Administrative
Agent or any Lender (or, in the case of any Specified Swap Agreement, any
Affiliate of any Lender), whether direct or indirect, absolute or contingent,
due or to become due, or now existing or hereafter incurred, which may arise
under, out of, or in connection with, the Credit Agreement, this Agreement, the
other Loan Documents, any Letter of Credit, any Specified Swap Agreement or any
other document made, delivered or given in connection with any of the foregoing,
in each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the Administrative Agent or
to the Lenders that are required to be paid by the Borrower pursuant to the
terms of any of the foregoing agreements). For the avoidance of
doubt, “Borrower Obligations” shall include all Foreign Subsidiary Borrower
Obligations of all Foreign Subsidiary Borrowers.
“Foreign
Subsidiary”: any Subsidiary organized under the laws of any
jurisdiction outside the United States of America.
“Foreign Subsidiary Borrower
Obligations”: with respect to each Foreign Subsidiary
Borrower, the collective reference to the unpaid principal of and interest on
the Loans made to such Foreign Subsidiary Borrowers and Reimbursement
Obligations of such Foreign Subsidiary Borrower and all other obligations and
liabilities of such Foreign Subsidiary Borrower (including, without limitation,
interest accruing at the then applicable rate provided in the Credit Agreement
after the maturity of the Loans made to such Foreign Subsidiary Borrower and
Reimbursement Obligations of such Foreign Subsidiary Borrower and interest
accruing at the then applicable rate provided in the Credit Agreement after the
filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to such Foreign Subsidiary Borrower,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding) to the Administrative Agent or any Lender, whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, the
Credit Agreement, this Agreement, the other Loan Documents, any Letter of Credit
or any other document made, delivered or given in connection with any of the
foregoing, in each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the Administrative Agent or
to the Lenders that are required to be paid by such Foreign Subsidiary Borrower
pursuant to the terms of any of the foregoing agreements).
“Guarantor
Obligations”: with respect to any Guarantor, all obligations
and liabilities of such Guarantor which may arise under or in connection with
this Agreement (including, without limitation, Section 2 and Section 3, as
applicable) or any other Loan Document to which such Guarantor is a party, in
each case whether on account of guarantee obligations, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the Administrative Agent or
to the Lenders that are required to be paid by such Guarantor pursuant to the
terms of this Agreement or any other Loan Document).
“Guarantors”: each
Subsidiary Guarantor and for the purposes of Section 3 hereof only, the
Borrower.
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“Subsidiary
Guarantor”: the collective reference to each Material Domestic
Subsidiary of the Borrower, together with each other Domestic Subsidiary of the
Borrower that may become a Subsidiary Guarantor as provided in Section 4.14
hereof.
1.2 Other Definitional
Provisions. (a) The
words “hereof,” “herein”, “hereto” and “hereunder” and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement, and Section and Schedule references
are to this Agreement unless otherwise specified.
(b) The
meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.
SECTION
2. GUARANTEE OF SUBSIDIARY
GUARANTORS
2.1 Guarantee. (a) Each
of the Subsidiary Guarantors hereby, jointly and severally, unconditionally and
irrevocably, guarantees to the Administrative Agent, for the ratable benefit of
the Lenders and their respective successors, indorsees, transferees and assigns,
the prompt and complete payment and performance by the Borrower when due and by
the Foreign Subsidiary Borrowers when due (whether at the stated maturity, by
acceleration or otherwise) of the Borrower Obligations and the Foreign
Subsidiary Borrower Obligations.
(b) Anything
herein or in any other Loan Document to the contrary notwithstanding, the
maximum liability of each Subsidiary Guarantor hereunder and under the other
Loan Documents shall in no event exceed the amount which can be guaranteed by
such Subsidiary Guarantor under applicable federal and state laws relating to
the insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2).
(c) Each
Subsidiary Guarantor agrees that the Borrower Obligations and the Foreign
Subsidiary Borrower Obligations may at any time and from time to time exceed the
amount of the liability of such Subsidiary Guarantor hereunder without impairing
the guarantee contained in this Section 2 or affecting the rights and remedies
of the Administrative Agent or any Lender hereunder.
(d) The
guarantee contained in this Section 2 shall remain in full force and effect
until all the Borrower Obligations and the Foreign Subsidiary Obligations and
the obligations of each Subsidiary Guarantor under the guarantee contained in
this Section 2 shall have been satisfied by payment in full in cash, no Letter
of Credit shall be outstanding and the Commitments shall be terminated,
notwithstanding that from time to time during the term of the Credit Agreement
the Borrower and the Foreign Subsidiary Borrowers may be free from any Borrower
Obligations and any Foreign Subsidiary Borrower Obligations,
respectively.
(e) No
payment made by the Borrower, any Foreign Subsidiary Borrower, any of the
Subsidiary Guarantors, any other guarantor or any other Person or received or
collected by the Administrative Agent or any Lender from the Borrower, any
Foreign Subsidiary Borrower, any of the Subsidiary Guarantors, any other
guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Borrower Obligations or the Foreign Subsidiary
Borrower Obligations shall be deemed to modify, reduce, release or otherwise
affect the liability of any Subsidiary Guarantor hereunder which shall,
notwithstanding any such payment (other than any payment made by such Subsidiary
Guarantor in respect of the Borrower Obligations or the Foreign Subsidiary
Borrower Obligations or any payment received or collected from such Subsidiary
Guarantor in respect of the Borrower Obligations or the Foreign Subsidiary
Borrower Obligations ), remain liable for the Borrower Obligations (as reduced
by
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any such
payment) and the Foreign Subsidiary Borrower Obligations (as reduced by any such
payment), up to the maximum liability of such Subsidiary Guarantor hereunder
until the Borrower Obligations and the Foreign Subsidiary Borrower Obligations
are paid in full in cash, no Letter of Credit shall be outstanding and the
Commitments are terminated.
2.2 Right of
Contribution. Each
Subsidiary Guarantor hereby agrees that, to the extent that a Subsidiary
Guarantor shall have paid more than its proportionate share of any payment made
hereunder, such Subsidiary Guarantor shall be entitled to seek and receive
contribution from and against any other Subsidiary Guarantor hereunder which has
not paid its proportionate share of such payment. Each Subsidiary
Guarantor’s right of contribution shall be subject to the terms and conditions
of Section 2.3. The provisions of this Section 2.2 shall in no
respect limit the obligations and liabilities of any Subsidiary Guarantor to the
Administrative Agent and the Lenders, and each Subsidiary Guarantor shall remain
liable to the Administrative Agent and the Lenders for the full amount
guaranteed by such Subsidiary Guarantor hereunder.
2.3 No
Subrogation. Notwithstanding
any payment made by any Subsidiary Guarantor hereunder or any set-off or
application of funds of any Subsidiary Guarantor by the Administrative Agent or
any Lender, no Subsidiary Guarantor shall be entitled to be subrogated to any of
the rights of the Administrative Agent or any Lender against the Borrower, any
Foreign Subsidiary Borrower or any other Subsidiary Guarantor or any guarantee
or right of offset held by the Administrative Agent or any Lender for the
payment of the Borrower Obligations or the Foreign Subsidiary Borrower
Obligations, nor shall any Subsidiary Guarantor seek or be entitled to seek any
contribution or reimbursement from the Borrower, any Foreign Subsidiary Borrower
or any other Subsidiary Guarantor in respect of payments made by such Subsidiary
Guarantor hereunder, until all amounts owing to the Administrative Agent and the
Lenders by the Borrower and the Foreign Subsidiary Borrowers on account of the
Borrower Obligations or the Foreign Subsidiary Borrower Obligations, are paid in
full in cash, no Letter of Credit shall be outstanding 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 Borrower
Obligations or the Foreign Subsidiary Borrower Obligations shall not have been
paid in full in cash, such amount shall be held by such Subsidiary Guarantor in
trust for the Administrative Agent and the Lenders, 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 indorsed by such Subsidiary
Guarantor to the Administrative Agent, if required), to be applied against the
Borrower Obligations and the Foreign Subsidiary Borrower Obligations, whether
matured or unmatured, in such order as the Administrative Agent may
determine.
2.4 Amendments, etc. with
respect to the Borrower Obligations and the Foreign Subsidiary
Borrower Obligations. (a) Each
Subsidiary Guarantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against any Subsidiary Guarantor and without
notice to or further assent by any Subsidiary Guarantor, any demand for payment
of any of the Borrower Obligations or the Foreign Subsidiary Borrower
Obligations made by the Administrative Agent or any Lender may be rescinded by
the Administrative Agent or such Lender and any of the Borrower Obligations or
Foreign Subsidiary Borrower Obligations continued, and the Borrower Obligations
or the Foreign Subsidiary Borrower Obligations, or the liability of any other
Person upon or for any part thereof, or any guarantee therefor or right of
offset with respect thereto, may, from time to time, in whole or in part, be
renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Administrative Agent or any Lender, and the
Credit Agreement and the other Loan Documents and any other documents executed
and delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Administrative Agent (or the Required
Lenders or all Lenders, as the case may be) may deem advisable from time to
time, and any guarantee or right of offset at any time held by the
Administrative Agent or any Lender for the payment of the Borrower
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Obligations
or the Foreign Subsidiary Borrower Obligations may be sold, exchanged, waived,
surrendered or released. Neither the Administrative Agent nor any
Lender shall have any obligation to protect, secure, perfect or insure any Lien
at any time held by it as security for the Borrower Obligations or the Foreign
Subsidiary Borrower Obligations or for the guarantee contained in this Section 2
or any property subject thereto.
2.5 Guarantee Absolute and
Unconditional. Each
Subsidiary Guarantor waives any and all notice of the creation, renewal,
extension or accrual of any of the Borrower Obligations or the Foreign
Subsidiary Borrower Obligations and notice of or proof of reliance by the
Administrative Agent or any Lender upon the guarantee contained in this Section
2 or acceptance of the guarantee contained in this Section 2; the Borrower
Obligations, the Foreign Subsidiary Borrower Obligations and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived, in reliance upon the guarantee contained in this
Section 2; and all dealings between the Borrower, each Foreign Subsidiary
Borrower and any of the Subsidiary Guarantors, on the one hand, and the
Administrative Agent and the Lenders, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Section 2. Each Subsidiary Guarantor
waives diligence, presentment, protest, demand for payment and notice of default
or nonpayment to or upon the Borrower, any Foreign Subsidiary Borrower or any of
the Subsidiary Guarantors with respect to the Borrower Obligations and the
Foreign Subsidiary Borrower Obligations. Each Subsidiary Guarantor
understands and agrees that the guarantee contained in this Section 2 shall be
construed as a continuing, absolute and unconditional guarantee of payment
without regard to (a) the validity or enforceability of the Credit Agreement or
any other Loan Document, any of the Borrower Obligations, the Foreign Subsidiary
Borrower Obligations or any guarantee or right of offset with respect thereto at
any time or from time to time held by the Administrative Agent or any Lender,
(b) any defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the
Borrower, any Foreign Subsidiary Borrower or any other Person against the
Administrative Agent or any Lender; other than any right of defense, set-off or
counterclaim specifically available to the Borrower, any Foreign Subsidiary
Borrower or any other Person under the Loan Documents, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of the Borrower,
any Foreign Subsidiary Borrower or such Subsidiary Guarantor) which constitutes,
or might be construed to constitute, an equitable or legal discharge of the
Borrower for the Borrower Obligations, any Foreign Subsidiary Borrower of its
Foreign Subsidiary Borrower Obligations, or of such Subsidiary Guarantor under
the guarantee contained in this Section 2, in bankruptcy or in any other
instance. When making any demand hereunder or otherwise pursuing its
rights and remedies hereunder against any Subsidiary Guarantor, the
Administrative Agent or any Lender may, but shall be under no obligation to,
make a similar demand on or otherwise pursue such rights and remedies as it may
have against the Borrower, any Foreign Subsidiary Borrower, any other Subsidiary
Guarantor or any other Person or against any guarantee for the Borrower
Obligations and the Foreign Subsidiary Borrower Obligations or any right of
offset with respect thereto, and any failure by the Administrative Agent or any
Lender to make any such demand, to pursue such other rights or remedies or to
collect any payments from the Borrower, any Foreign Subsidiary Borrower, any
other Subsidiary Guarantor or any other Person or to realize upon any such
guarantee or to exercise any such right of offset, or any release of the
Borrower, any Foreign Subsidiary Borrower, any other Subsidiary Guarantor or any
other Person or any such guarantee or right of offset, shall not relieve any
Subsidiary Guarantor of any obligation or liability hereunder, and shall not
impair or affect the rights and remedies, whether express, implied or available
as a matter of law, of the Administrative Agent or any Lender against any
Subsidiary Guarantor. For the purposes hereof “demand” shall include
the commencement and continuance of any legal proceedings.
2.6 Reinstatement. The
guarantee contained in this Section 2 shall continue to be effective, or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any of the Borrower Obligations or any of the Foreign Subsidiary Borrower
Obligations is rescinded or must otherwise be
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restored
or returned by the Administrative Agent or any Lender upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Borrower, any
Foreign Subsidiary Borrower or any Subsidiary Guarantor, or upon or as a result
of the appointment of a receiver, intervenor or conservator of, or trustee or
similar officer for, the Borrower, any Foreign Subsidiary Borrower or any
Subsidiary Guarantor or any substantial part of its property, or otherwise, all
as though such payments had not been made.
2.7 Payments. Each
Subsidiary Guarantor hereby guarantees that payments due hereunder will be paid
to the Administrative Agent without set-off or counterclaim in Dollars at the
Funding Office.
SECTION
3. GUARANTEE OF
BORROWER
3.1 Guarantee. (a) The
Borrower hereby unconditionally and irrevocably guarantees to the Administrative
Agent, for the ratable benefit of the Lenders and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and
performance by each Foreign Subsidiary Borrower when due (whether at the stated
maturity, by acceleration or otherwise) of each such Foreign Subsidiary
Borrower’s Foreign Subsidiary Borrower Obligations.
(b) The
guarantee contained in this Section 3 shall remain in full force and effect
until all of each Foreign Subsidiary Borrower’s Foreign Subsidiary Borrower
Obligations shall have been satisfied by payment in full in cash by such Foreign
Subsidiary Borrower, no Letter of Credit issued on behalf of such Foreign
Subsidiary Borrower shall be outstanding and the Commitments to extend credit to
such Foreign Subsidiary Borrower shall be terminated, notwithstanding that from
time to time during the term of the Credit Agreement such Foreign Subsidiary
Borrower may be free from its Foreign Subsidiary Borrower
Obligations.
(c) No
payment made by any Foreign Subsidiary Borrower, any Subsidiary Guarantor or any
other Person or received or collected by the Administrative Agent or any Lender
from any Foreign Subsidiary Borrower, any Subsidiary Guarantor or any other
Person by virtue of any action or proceeding or any set-off or appropriation or
application at any time or from time to time in reduction of or in payment of
such Foreign Subsidiary Borrower’s Foreign Subsidiary Borrower Obligations shall
be deemed to modify, reduce, release or otherwise affect the liability of the
Borrower hereunder which shall, notwithstanding any such payment (other than any
payment made by the Borrower in respect of such Foreign Subsidiary Borrower’s
Foreign Subsidiary Borrower Obligations or any payment received or collected
from the Borrower in respect of such Foreign Subsidiary Borrower’s Foreign
Subsidiary Borrower Obligations), remain liable for such Foreign Subsidiary
Borrower’s Foreign Subsidiary Borrower Obligations (as reduced by any such
payment) until such Foreign Subsidiary Borrower’s Foreign Subsidiary Borrower
Obligations are paid in full in cash, no Letter of Credit issued on behalf of
such Foreign Subsidiary Borrower shall be outstanding and the Commitments to
extend credit to such Foreign Subsidiary Borrower are terminated.
3.2 No
Subrogation. Notwithstanding
any payment made by the Borrower hereunder or any set-off or application of
funds of the Borrower by the Administrative Agent or any Lender, the Borrower
shall not be entitled to be subrogated to any of the rights of the
Administrative Agent or any Lender against any Foreign Subsidiary Borrower or
any guarantee or right of offset held by the Administrative Agent or any Lender
for the payment of such Foreign Subsidiary Borrower’s Foreign Subsidiary
Borrower Obligations, nor shall the Borrower seek or be entitled to seek any
contribution or reimbursement from any Foreign Subsidiary Borrower in respect of
payments made by the Borrower hereunder, until all amounts owing to the
Administrative Agent and the Lenders by such Foreign Subsidiary Borrower on
account of its Foreign Subsidiary Borrower Obligations, are paid in full in
cash,
6
no Letter
of Credit issued on behalf of such Foreign Subsidiary Borrower shall be
outstanding and the Commitments to extend credit to such Foreign Subsidiary
Borrower are terminated. If any amount shall be paid to the Borrower
on account of such subrogation rights at any time when all of a Foreign
Subsidiary Borrower’s Foreign Subsidiary Borrower Obligations shall not have
been paid in full in cash, such amount shall be held by the Borrower in trust
for the Administrative Agent and the Lenders, segregated from other funds of the
Borrower and shall, forthwith upon receipt by the Borrower be turned over to the
Administrative Agent in the exact form received by the Borrower be (duly
indorsed by the Borrower to the Administrative Agent, if required), to be
applied against such Foreign Subsidiary Borrower’s Foreign Subsidiary Borrower
Obligations, whether matured or unmatured, in such order as the Administrative
Agent may determine.
3.3 Amendments, etc. with
respect to the Foreign Subsidiary Borrower Obligations. The
Borrower shall remain obligated hereunder notwithstanding that, without any
reservation of rights against the Borrower and without notice to or further
assent by the Borrower, any demand for payment of any of the Foreign Subsidiary
Borrower Obligations of any Foreign Subsidiary Borrower made by the
Administrative Agent or any Lender may be rescinded by the Administrative Agent
or such Lender and the Foreign Subsidiary Borrower Obligations of any Foreign
Subsidiary Borrower continued, and the Foreign Subsidiary Borrower Obligations
of such Foreign Subsidiary Borrower, or the liability of any other Person upon
or for any part thereof, or any guarantee therefor or right of offset with
respect thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived, surrendered or
released by the Administrative Agent or any Lender, and the Credit Agreement and
the other Loan Documents and any other documents executed and delivered in
connection therewith may be amended, modified, supplemented or terminated, in
whole or in part, as the Administrative Agent (or the Required Lenders or all
Lenders, as the case may be) may deem advisable from time to time, and any
guarantee or right of offset at any time held by the Administrative Agent or any
Lender for the payment of such Foreign Subsidiary Borrower’s Foreign Subsidiary
Borrower Obligations may be sold, exchanged, waived, surrendered or
released. Neither the Administrative Agent nor any Lender shall have
any obligation to protect, secure, perfect or insure any Lien at any time held
by it as security for any Foreign Subsidiary Borrower’s Foreign Subsidiary
Borrower Obligations or for the guarantee contained in this Section 3 or any
property subject thereto.
3.4 Guarantees Absolute and
Unconditional. The
Borrower waives any and all notice of the creation, renewal, extension or
accrual of any of the Foreign Subsidiary Borrower Obligations of any Foreign
Subsidiary Borrower and notice of or proof of reliance by the Administrative
Agent or any Lender upon the guarantee contained in this Section 3 or acceptance
of the guarantee contained in this Section 3; the Foreign Subsidiary Borrower
Obligations of any Foreign Subsidiary Borrower and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived, in reliance upon the guarantee contained in this
Section 3; and all dealings between the Borrower or the Foreign Subsidiary
Borrowers, on the one hand, and the Administrative Agent and the Lenders, on the
other hand, likewise shall be conclusively presumed to have been had or
consummated in reliance upon the guarantee contained in this Section
3. The Borrower waives diligence, presentment, protest, demand for
payment and notice of default or nonpayment to or upon the any Foreign
Subsidiary Borrower with respect to the Foreign Subsidiary Borrower
Obligations. The Borrower understands and agrees that the guarantee
contained in this Section 3 shall be construed as a continuing, absolute and
unconditional guarantee of payment without regard to (a) the validity or
enforceability of the Credit Agreement or any other Loan Document, any of the
Foreign Subsidiary Borrower Obligations of any Foreign Subsidiary Borrower or
any other guarantee or right of offset with respect thereto at any time or from
time to time held by the Administrative Agent or any Lender, (b) any defense,
set-off or counterclaim (other than a defense of payment or performance) which
may at any time be available to or be asserted by such Foreign Subsidiary
Borrower or any other Person against the Administrative Agent or any Lender,
other than any right or defense, set-off or counterclaim specifically available
to such Foreign
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Subsidiary
Borrower or any other Person under the Loan Documents, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of any Foreign
Subsidiary Borrower or the Borrower) which constitutes, or might be construed to
constitute, an equitable or legal discharge of such Foreign Subsidiary Borrower
of its Foreign Subsidiary Borrower Obligations, or of the Borrower under the
guarantee contained in this Section 3, in bankruptcy or in any other
instance. When making any demand hereunder or otherwise pursuing its
rights and remedies hereunder against the Borrower, the Administrative Agent or
any Lender may, but shall be under no obligation to, make a similar demand on or
otherwise pursue such rights and remedies as it may have against the Foreign
Subsidiary Borrowers, any Subsidiary Guarantor or any other Person or against
any guarantee for the Foreign Subsidiary Borrower Obligations or any right of
offset with respect thereto, and any failure by the Administrative Agent or any
Lender to make any such demand, to pursue such other rights or remedies or to
collect any payments from any Foreign Subsidiary Borrower, any Subsidiary
Guarantor or any other Person or to realize upon any such guarantee or to
exercise any such right of offset, or any release of any Foreign Subsidiary
Borrower, any Subsidiary Guarantor or any other Person or any such guarantee or
right of offset, shall not relieve the Borrower of any obligation or liability
hereunder, and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of the Administrative Agent or
any Lender against the Borrower. For the purposes hereof “demand”
shall include the commencement and continuance of any legal
proceedings.
3.5 Reinstatement. The
guarantee contained in this Section 3 shall continue to be effective, or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any of the Foreign Subsidiary Borrower Obligations of any Foreign Subsidiary
Borrower is rescinded or must otherwise be restored or returned by the
Administrative Agent or any Lender upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of such Foreign Subsidiary Borrower or upon or as
a result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, such Foreign Subsidiary Borrower or any
substantial part of its property, or otherwise, all as though such payments had
not been made.
3.6 Payments. The
Borrower hereby guarantees that payments due hereunder will be paid to the
Administrative Agent without set-off or counterclaim in Dollars at the Funding
Office.
SECTION
4. MISCELLANEOUS
4.1 Amendments in
Writing. None
of the terms or provisions of this Agreement may be waived, amended,
supplemented or otherwise modified except in accordance with Section 10.1 of the
Credit Agreement.
4.2 Notices. All
notices, requests and demands to or upon the Administrative Agent or any
Guarantor hereunder shall be effected in the manner provided for in Section 10.2
of the Credit Agreement; provided that any
such notice, request or demand to or upon any Guarantor (other than the
Borrower) shall be addressed to such Person at its notice address set forth on
Schedule 1.
4.3 No Waiver by Course of
Conduct; Cumulative Remedies. Neither
the Administrative Agent nor any Lender shall by any act (except by a written
instrument pursuant to Section 4.1), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in any
Default or Event of Default. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent or any Lender, any right,
power or privilege hereunder shall operate as a waiver thereof. No
single or partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. A waiver by the Administrative Agent or
any Lender of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which the Administrative Agent or such
Lender would
8
otherwise
have on any future occasion. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of
any other rights or remedies provided by law.
4.4 Enforcement Expenses;
Indemnification. (a) Each
Guarantor agrees to pay or reimburse each Lender and the Administrative Agent
for all its costs and expenses incurred in collecting against such Guarantor
under the guarantee contained in Section 2 or Section 3, as the case may be, or
otherwise enforcing or preserving any rights under this Agreement and the other
Loan Documents to which such Guarantor is a party, including, without
limitation, the fees and disbursements of counsel to each Lender and of counsel
to the Administrative Agent.
(b) Each
Guarantor agrees to pay, and to save the Administrative Agent and the Lenders
harmless from, any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement to the extent the Borrower
would be required to do so pursuant to Section 10.5 of the Credit
Agreement.
(c) The
agreements in this Section 4.4 shall survive repayment of the Obligations and
all other amounts payable under the Credit Agreement and the other Loan
Documents.
4.5 Successors and
Assigns. This
Agreement shall be binding upon the successors and assigns of each Guarantor and
shall inure to the benefit of the Administrative Agent and the Lenders and their
successors and assigns; provided that no
Guarantor may assign, transfer or delegate any of its rights or obligations
under this Agreement without the prior written consent of the Administrative
Agent.
4.6 Set-Off. (a) Each
Guarantor hereby irrevocably authorizes the Administrative Agent and each Lender
at any time and from time to time while an Event of Default shall have occurred
and be continuing, without notice to such Guarantor or other Guarantor, any such
notice being expressly waived by each Guarantor, to set-off and appropriate and
apply any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by the Administrative Agent or
such Lender to or for the credit or the account of such Guarantor, or any part
thereof in such amounts as the Administrative Agent or such Lender may elect,
against and on account of the obligations and liabilities of such Guarantor to
the Administrative Agent or such Lender hereunder and claims of every nature and
description of the Administrative Agent or such Lender against such Guarantor,
in any currency, whether arising hereunder, under the Credit Agreement, any
other Loan Document or otherwise, as the Administrative Agent or such Lender may
elect, whether or not the Administrative Agent or any Lender has made any demand
for payment and although such obligations, liabilities and claims may be
contingent or unmatured. The Administrative Agent and each Lender
shall notify such Guarantor promptly of any such set-off and the application
made by the Administrative Agent or such Lender of the proceeds thereof,
provided that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of the Administrative Agent
and each Lender under this Section 4.6 are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which the
Administrative Agent or such Lender may have.
4.7 Counterparts. This
Agreement may be executed by one or more of the parties to this Agreement on any
number of separate counterparts (including by telecopy), and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
4.8 Severability. Any
provision of this Agreement which 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
9
unenforceability
in any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction.
4.9 Section
Headings. The
Section headings used in this Agreement are for convenience of reference only
and are not to affect the construction hereof or be taken into consideration in
the interpretation hereof.
4.10 Integration. This
Agreement and the other Loan Documents represent the agreement of the
Guarantors, the Administrative Agent and the Lenders with respect to the subject
matter hereof and thereof, and there are no promises, undertakings,
representations or warranties by the Administrative Agent or any Lender relative
to subject matter hereof and thereof not expressly set forth or referred to
herein or in the other Loan Documents.
4.11 GOVERNING
LAW. THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
4.12 Submission To Jurisdiction;
Waivers. Each
Guarantor hereby irrevocably and unconditionally:
(a) submits
for itself and its property in any legal action or proceeding relating to this
Agreement and the other Loan Documents to which it is a party, or for
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the State of New York, the
courts of the United States of America for the Southern District of
New York, and appellate courts from any thereof;
(b) consents
that any such action or proceeding may be brought in such courts and waives any
objection that it may now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(c) agrees
that service of process in any such action or proceeding may be effected by
mailing a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to such Guarantor at its address
referred to in Section 4.2 or at such other address of which the Administrative
Agent shall have been notified pursuant thereto;
(d) agrees
that nothing herein shall affect the right to effect service of process in any
other manner permitted by law or shall limit the right to xxx in any other
jurisdiction; and
(e) waives,
to the maximum extent not prohibited by law, any right it may have to claim or
recover in any legal action or proceeding referred to in this Section any
special, exemplary, punitive or consequential damages.
4.13 Acknowledgements. Each
Guarantor hereby acknowledges that:
(a) it has
been advised by counsel in the negotiation, execution and delivery of this
Agreement and the other Loan Documents to which it is a party;
(b) neither
the Administrative Agent nor any Lender has any fiduciary relationship with or
duty to any Guarantor arising out of or in connection with this Agreement or any
of the other Loan Documents,
10
and the
relationship between the Guarantors, on the one hand, and the Administrative
Agent and Lenders, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and
(c) no joint
venture is created hereby or by the other Loan Documents or otherwise exists by
virtue of the transactions contemplated hereby among the Lenders or among the
the Guarantors and the Lenders.
4.14 Additional
Guarantors. (a)Each
Material Domestic Subsidiary of the Borrower that is required to become a party
to this Agreement pursuant to Section 6.9 of the Credit Agreement shall become a
Subsidiary Guarantor for all purposes of this Agreement upon execution and
delivery by such Material Domestic Subsidiary of an Assumption Agreement in the
form of Annex 1 hereto.
(b) Each
other Domestic Subsidiary (other than a Material Domestic Subsidiary) of the
Borrower that voluntarily desires to become a party to this Agreement pursuant
to Section 6.9 of the Credit Agreement shall become a Subsidiary Guarantor for
all purposes of this Agreement upon execution and delivery by such Domestic
Subsidiary of an Assumption Agreement in the form of Annex 1
hereto.
4.15 WAIVER OF
JURY TRIAL. EACH
GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AND FOR ANY COUNTERCLAIM THEREIN.
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IN
WITNESS WHEREOF, each of the undersigned has caused this Guarantee Agreement to
be duly executed and delivered as of the date first above written.
KADANT
INC., as a Guarantor
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By:
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/s/ Xxxxxx X.
X’Xxxxx
|
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Name: Xxxxxx
X. X’Xxxxx
|
|
|
Title: Executive
Vice President and Chief Financial
Officer
|
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KADANT
BLACK XXXXXXX INC., as a Subsidiary Guarantor
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By:
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/s/ Xxxxxx X.
X’Xxxxx
|
|
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Name: Xxxxxx
X. X’Xxxxx
|
|
|
Title: Executive
Vice President and Chief Financial
Officer
|
FIBERPREP
INC., as a Subsidiary Guarantor
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By:
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/s/ Xxxxxx X.
X’Xxxxx
|
|
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Name: Xxxxxx
X. X’Xxxxx
|
|
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Title: Executive
Vice President and Chief Financial
Officer
|
KADANT
INTERNATIONAL HOLDINGS INC., as a Subsidiary Guarantor
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By:
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/s/ Xxxxxx X.
X’Xxxxx
|
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Name: Xxxxxx
X. X’Xxxxx
|
|
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Title: Executive
Vice President and Chief Financial
Officer
|
KADANT
WEB SYSTEMS INC., as a Subsidiary Guarantor
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By:
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/s/ Xxxxxx X.
X’Xxxxx
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Name: Xxxxxx
X. X’Xxxxx
|
|
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Title: Executive
Vice President and Chief Financial
Officer
|
KADANT
XXXXXXX INC., as a Subsidiary Guarantor
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By:
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/s/ Xxxxxx X.
X’Xxxxx
|
|
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Name: Xxxxxx
X. X’Xxxxx
|
|
|
Title: Executive
Vice President and Chief Financial
Officer
|
