PARENT GUARANTY AGREEMENT
PARENT GUARANTY AGREEMENT (this "Agreement"), dated this 18th day of
June, 1998, by and between XXXXXX BUILDING PRODUCTS, INC., a Delaware
corporation ("Guarantor"), and BMCA KEY ACQUISITION CORP., a Delaware
corporation ("Buyer"), on its own behalf and on behalf of the other Buyer
Related Parties (as defined in the Asset Purchase Agreement referred to below).
W I T N E S S E T H:
WHEREAS, Buyer and Xxxxxx-Xxxxx, Inc., a Delaware corporation
("Seller") have entered into an Asset Purchase Agreement, dated May 26, 1998
(the "Asset Purchase Agreement"), providing for the sale by Seller to Buyer of
substantially all of the assets of Seller;
WHEREAS, Guarantor is the owner of 100% of the issued and
outstanding stock of Seller;
WHEREAS, pursuant to Sections 9.1(b) and (c) of the Asset Purchase
Agreement, Seller is obligated to indemnify the Buyer Related Parties for
certain losses incurred by the Buyer Related Parties (as defined in the Asset
Purchase Agreement);
WHEREAS, Guarantor has agreed to guaranty Seller's indemnification
obligations under Sections 9.1(b) and (c) of the Asset Purchase Agreement;
WHEREAS, it is a condition precedent to the closing of the Asset
Purchase Agreement that Buyer, Guarantor, Seller and Agent enter into this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
agreements, provisions and covenants contained herein, the parties hereby agree
as follows:
1. Definitions. (a) Capitalized terms used herein without definition have the
respective meanings ascribed to them in the Asset Purchase Agreement.
(b) The following terms used in this Agreement shall have the
following meanings:
"Escrow Deposit" shall have the meaning set forth in the Net
Proceeds Escrow Agreement (as hereinafter defined).
"Net Proceeds Escrow Agreement" shall mean the Net Proceeds Escrow
Agreement dated the date hereof among Buyer, Seller and The Chase Manhattan Bank
as escrow agent.
"Net Proceeds Escrow Agreement" shall mean the Net Proceeds Escrow
Agreement dated the date hereof among Buyer, Seller and The Chase Manhattan Bank
as escrow agent.
"Obligations" shall mean the due, prompt and complete payment by
Seller of all amounts due to the Buyer Related Parties solely under Sections
9.1(b) and (c) (and (e) to the extent applicable) of the Asset Purchase
Agreement in respect of Excluded Liabilities, Claims of Environmental Liability
and Off-Site Claims of Environmental Liability, when and as the same shall
become due and payable, subject to and in accordance with the limitations and
other provisions (including provisions regarding defense of third-party claims)
of Article IX of the Asset Purchase Agreement. Without limiting the provisions
of Section 9.4 of the Asset Purchase Agreement, Obligations shall not include
any amounts referred to in the preceding sentence unless a notice of claim
(within the meaning of Section 9.4(c) of the Asset Purchase Agreement) with
respect to the matter to which such amount relates has been delivered to Seller
on or prior to the fourth anniversary of the Closing Date.
"Permitted Payment" shall have the meaning set forth in the Net
Proceeds Escrow Agreement.
"Termination Date" shall have the meaning set forth in the Net
Proceeds Escrow Agreement.
2. Guaranty. Guarantor unconditionally and irrevocably guarantees to
the Buyer Related Parties the due, prompt and complete payment and performance
by Seller of all of the Obligations.
This guaranty is a guaranty of payment, performance and compliance
and not of collectibility and is in no way conditioned or contingent upon any
attempt to collect from or enforce performance or compliance by Seller or upon
any other event or condition whatsoever. If for any reason whatsoever Seller
shall fail or be unable duly, punctually and fully to pay any Obligations as and
when the same shall become due and payable or to perform or comply with any
Obligation, Guarantor will forthwith, upon Buyer's written demand, pay or cause
to be paid the Obligation to Buyer (on behalf of itself and the other Buyer
Related Parties), in lawful money of the United States, or perform or comply
with such Obligation or cause such Obligation to be performed or complied with.
Notwithstanding anything herein to the contrary, prior to the
Termination Date, Guarantor's liability hereunder shall not exceed, and the
Buyer Related Parties' recourse against Guarantor shall be limited to, the
aggregate amount of dividends, distributions and other payments made by Seller
to Guarantor after the Closing Date only out of the Escrow Deposit (as defined
in the Net Proceeds Escrow Agreement) held under the Net Proceeds
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Escrow Agreement (excluding any dividends, distributions or other payments to
Guarantor which would qualify as Permitted Payments under paragraphs (c), (d)
and (f) of Section 3 of the Net Proceeds Escrow Agreement). On and after the
Termination Date, Guarantor's liability hereunder in respect of the Obligations
shall be unlimited.
3. Guarantor's Representations and Warranties. Guarantor hereby
represents and warrants to Buyer (for its own benefit and the benefit of the
other Buyer Related Parties) as follows:
(a) Organization, Good Standing, Etc. Guarantor is a corporation
duly organized and validly existing and in good standing under the laws of the
State of Delaware and has all requisite corporate power and authority to own and
operate its properties, to carry on its business as now conducted and as
proposed to be conducted, and to enter into and to carry out the terms of this
Agreement.
(b) Authorization and Enforceability. The execution and delivery by
Guarantor of this Agreement and all other agreements and documents to be
executed and delivered by it in connection herewith, the performance by
Guarantor of its obligations hereunder and thereunder, and the consummation of
the transactions contemplated hereby and thereby have been duly and validly
authorized by all requisite corporate acts and other proceedings of Guarantor.
This Agreement and all other agreements and documents to be executed and
delivered by Guarantor in connection herewith have been duly and validly
executed and delivered by Guarantor and, subject to claims or rights of
creditors and other third parties against Guarantor which may now or hereafter
be determined to exist, including, without limitation, in respect of Excluded
Liabilities ("Creditor Claims"), constitute legal, valid and binding obligations
of Guarantor, enforceable against it in accordance with their respective terms,
except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation, rearrangement, fraudulent transfers or conveyance,
conservatorship or other laws (including court decisions) affecting the
enforcement of creditors' rights generally.
(c) Relationship to Seller. Guarantor owns 100% of the issued and
outstanding shares of capital stock of Seller.
(d) Compliance with Other Instruments, Etc. The execution and
delivery by Guarantor of, and performance of the obligations of Guarantor under,
this Agreement will not result in any violation of or be in conflict with or
constitute a default under any term of any agreement or instrument to which it
is a party or by which it is bound or, except with respect to Creditor Claims,
any term of any applicable law, ordinance, rule or
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regulation of any governmental authority or, except with respect to Creditor
Claims, any term of any applicable order, judgment or decree of any court,
arbitrator or governmental authority or result in the creation of (or impose any
obligation on Guarantor to create) any lien upon any of the properties or assets
of Guarantor pursuant to any such term, which violation, conflict, default or
lien might have a material adverse effect on the business, operations, condition
(financial or physical), properties, net assets or liabilities of Guarantor or
upon the ability of Guarantor to perform its obligations under this Agreement.
(e) Governmental Consent. No Governmental Approval or Consent on the
part of Guarantor is required for the valid execution and delivery of this
Agreement and the due performance of the obligations of Guarantor under this
Agreement.
4. Guarantor's Obligations Unconditional. The obligations of
Guarantor under this Agreement shall remain in full force and effect without
regard to, and shall not be released, discharged or in any way affected by:
(a) any amendment of or change in, or termination or waiver of, any
of the Acquisition Documents;
(b) any furnishing, acceptance or release of, or any defect in any
security for, any of the Obligations;
(c) any failure, omission or delay on the part of Seller to conform
or comply with any term of any of the Acquisition Documents;
(d) any waiver of the payment, performance or observance of any of
the obligations, conditions, covenants or agreements contained in any
Acquisition Document, or any other waiver, consent, extension, indulgence,
compromise, settlement, release or other action or inaction under or in respect
of any of the Acquisition Documents;
(e) any failure, omission or delay on the part of Buyer or other
Buyer Related Party to enforce, assert or exercise any right, power or remedy
conferred on it in this Agreement;
(f) any voluntary or involuntary bankruptcy, insolvency,
reorganization, arrangement, readjustment, assignment for the benefit of
creditors, composition, receivership, conservatorship, custodianship,
liquidation, marshalling of assets and liabilities or similar proceedings with
respect to Seller or Guarantor or any action taken by any trustee or receiver or
by any court in any such proceeding;
(g) any merger or consolidation of Seller or Guarantor into or with
any other corporation, or any sale, lease or
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transfer of any of the assets of Seller or Guarantor to any other person; or
(h) any change in the ownership of any shares of capital stock of
Seller, or any change in the corporate relationship between Seller and
Guarantor, or any termination of such relationship.
5. Waiver. Guarantor unconditionally waives, to the extent permitted
by applicable law,(a) notice of any of the matters referred to in Section 4, (b)
notice to Guarantor of the incurrence of any of the Obligations, notice to
Guarantor or Seller of any breach or default by Seller 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 Buyer or any other Buyer Related
Party against Guarantor, (c) any right to the enforcement, assertion, exercise
or exhaustion by Buyer or any other Buyer Related Party of any right, power,
privilege or remedy conferred in the Asset Purchase Agreement or any other
Acquisition Document, in each case except as provided for therein, (d) any
requirement to mitigate the damages resulting from any default under any
Acquisition Document, (e) any notice of any sale, transfer or other disposition
of any right, title to or interest in any Acquisition Document, (f) any release
of Guarantor from its obligations hereunder resulting from any loss by it of its
rights of subrogation hereunder and (g) any other circumstance whatsoever which
might otherwise constitute a legal or equitable discharge or release of a
guarantor or surety; provided, however, that the foregoing waivers shall not
affect or limit (x) Guarantor's right to written demand pursuant to Section 2
hereof, (y) Guarantor's right to any other notice or demand provided for herein,
or (z) the obligation of Buyer or any other Buyer Related party to give any
other notice required by the Acquisition Documents; and provided, further that
neither the foregoing waivers nor any other provision hereof shall affect or
limit the right of Guarantor to assert against any Buyer Related Party any other
defense, counterclaim, setoff or other right, to the extent that Seller would
not be prohibited from asserting such defense, counterclaim, setoff or other
right under the Asset Purchase Agreement.
6. Subrogation. Until the earlier of (a) termination of this
Agreement or (b) the payment and performance in full of all Obligations,
Guarantor shall not seek to exercise any rights of subrogation, reimbursement or
indemnity arising from payments made by Guarantor pursuant to the provisions of
this Agreement.
7. Amendments, Etc. No amendment, modification, termination or
waiver or any provision of this Agreement, or consent to any departure by
Guarantor therefrom, shall in any event be effective unless the same shall be in
writing and signed by Guarantor and Buyer (on its own behalf and on behalf of
the
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other Buyer Related Parties), and then such amendment, modification, termination
or waiver shall be effective only in the specific instance and for the specific
purpose for which given.
8. 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 Buyer, at the address
set forth in Section 14.1 of the Asset Purchase Agreement, or at such other
address as Buyer shall from time to time designate in writing to Guarantor, and
(b) if to Guarantor, at 000 Xxxxxxxxxx Xxxxxx, Xxxxx Xxxxxx, XX 00000, or at
such other address as Guarantor shall from time to time designate in writing to
Buyer. Any notice so addressed shall be deemed to be given when so delivered or
sent or, if mailed, on the third Business Day after being so mailed.
9. Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective permitted assigns. This
Agreement shall not be assignable either party without the prior written consent
of the other. Guarantor shall be free to merge with or into Seller at any time,
subject to and in accordance with the terms of the other Acquisition Documents.
10. Submission to Jurisdiction. Each of the parties hereto, for
itself and its successors and assigns, hereby irrevocably (a) agrees that any
legal or equitable action, suit or proceeding against it arising out of or
relating to this Agreement or any transaction contemplated hereby or the subject
matter of any of the foregoing may be instituted in any state or federal court
in the State, City and County of New York, (b) waives any objection which it may
now or hereafter have to the venue of any action, suit or proceeding, (c)
irrevocably submits itself to the nonexclusive jurisdiction of any state or
federal court of competent jurisdiction in the State of New York for purposes of
any such action, suit or proceeding. Each such party waives personal service of
process and consents that service of process upon it may be made by certified or
registered mail, return receipt requested, at its address specified or
determined in accordance with the provisions of Section 8, provided service so
made shall be deemed completed only upon actual receipt. Nothing contained in
this Section 10 shall be deemed to affect the right of any party to serve
process in any other manner permitted by law or to commence legal proceedings or
otherwise proceed against any other party in any jurisdiction.
11. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LEGAL OR EQUITABLE
ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OF THE OTHER ACQUISITION
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DOCUMENTS OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY OR THE SUBJECT
MATTER OF ANY OF THE FOREGOING.
12. Miscellaneous. 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
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. The section and
paragraph headings in this Agreement 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 Agreement. This
Agreement shall in all respects be governed by, and construed in accordance
with, the laws of the State of New York, without giving effect to applicable
principles of conflicts of law.
IN WITNESS WHEREOF, the Parties and the Agent have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first above written.
XXXXXX BUILDING PRODUCTS, INC.
By:
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Name:
Title:
BMCA KEY ACQUISITION CORP., on its Own Behalf and on
Behalf of the Other Buyer Related Parties
By:
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Name:
Title:
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