EXECUTION COPY
Exhibit - 10.169 - Subsidiary Guaranty
SUBSIDIARY GUARANTY
THIS SUBSIDIARY GUARANTY, dated as of January 28, 1998, is executed by
each of the undersigned (each such entity and each entity which hereafter
executes and delivers a Subsidiary Joinder in substantially the form of
Attachment 1 hereto to be referred to herein as a "Guarantor"), in favor of
Teachers Insurance and Annuity Association of America, Midwestern United Life
Insurance Company, Security Life of Denver Insurance Company, Equitable Life
Insurance Company of Iowa, USG Annuity & Life Company and each of the other
holders from time to time of the 6.95% Senior Notes due January 28, 2005 (the
"Notes") issued by Kinro, Inc., Xxxxxxx Components, Inc. and Shoals Supply, Inc.
(the "Co-Issuers") (collectively, together with each future holder of Senior
Notes, the "Noteholders").
RECITALS
A. The Co-Issuers and the original Noteholders have entered into a Note
Purchase Agreement, dated as of the date hereof (as it may be amended, modified
and supplemented from time to time, the "Agreement"), pursuant to which
$40,000,000 in aggregate principal amount of the Notes were issued. Capitalized
terms used herein and not otherwise defined herein are used with the meanings
assigned thereto in the Agreement.
B. Each Guarantor is a direct or indirect Subsidiary of a Co-Issuer. Each
Guarantor acknowledges that the issuance of the Notes by the Co-Issuers pursuant
to the Agreement will benefit each such Guarantor by making funds available to
such Guarantor through the Co-Issuers and by enhancing the financial strength of
the consolidated group of which each Guarantor and the Co-Issuers are members.
C. The execution and delivery of this Subsidiary Guaranty by each existing
Subsidiary of the Co-Issuers is a condition precedent to the execution and
delivery by the original Noteholders of the Agreement and the Co-Issuers have
covenanted in the Agreement that Subsidiary Joinders shall be duly executed by
each future Subsidiary of the Co-Issuers.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, each Guarantor hereby agrees with the Noteholders as follows:
1. Definitions and Interpretation.
(a) Definitions. When used in this Subsidiary Guaranty, the following
terms shall have the following respective meanings:
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"Adjusted Net Worth" shall mean, with respect to a Guarantor at any
time, the remainder of (i) the fair value of the assets of such Guarantor
as of such date, minus (ii) the fair value of the liabilities of such
Guarantor as of such date (excluding, however, any liability of such
Guarantor hereunder), such assets and liabilities to be determined in
accordance with any state or federal fraudulent conveyance or transfer law
which is applicable to this Subsidiary Guaranty.
"Agreement" shall have the meaning given to that term in the Recital
A hereof.
"Aggregate Guaranty Payments" shall mean, with respect to any
Guarantor at any time, the aggregate net amount of all payments made by
such Guarantor under this Subsidiary Guaranty (including, without
limitation, under Paragraph 5 hereof) at or prior to such time.
"Co-Issuers" shall have the meaning given to that term in the
preamble hereof.
"Disallowed Post-Commencement Interest and Expenses" shall mean
interest computed at the rate provided in the Agreement and claims for
reimbursement, costs, expenses or indemnities under the terms of the
Agreement, the Subsidiary Guaranty or the Notes accruing or claimed at any
time after the commencement of any Insolvency Proceeding, if the claim for
such interest, reimbursement, costs, expenses or indemnities is not
allowable, allowed or enforceable against the Co-Issuers in such
Insolvency Proceeding.
"Fair Share" shall mean, with respect to any Guarantor at any time,
an amount equal to (i) a fraction, the numerator which is the Maximum
Guaranty Amount of such Guarantor and the denominator of which is the
aggregate Maximum Guaranty Amounts of all Guarantors, multiplied by (ii)
the aggregate amount paid by all Funding Guarantors under this Subsidiary
Guaranty at or prior to such time.
"Fair Share Shortfall" shall mean, with respect to any Guarantor at
any time, the amount, if any, by which the Fair Share of such Guarantor at
such time exceeds the Aggregate Guaranty Payments of such Guarantor at
such time.
"Funding Guarantor" shall have the meaning given to that term in
Paragraph 5 hereof.
"Guaranteed Obligations" shall mean all principal (including any
prepayments of principal), premium, if any, and all interest on the Notes,
and all other indebtedness and obligations of the Co-Issuers to the
Noteholders under the Agreement and the Notes, including, without
limitation, all fees, taxes, charges, expenses, attorneys' fees and
accountants' fees chargeable to the Co-Issuers or payable by the
Co-Issuers thereunder.
"Guarantor" shall have the meaning given to that term in the
preamble hereof.
"Insolvency Proceeding" shall mean any case or proceeding under the
United States Bankruptcy Code or any other similar law, rule or regulation
of the United States or any jurisdiction or any other action or proceeding
for the reorganization, liquidation, appointment of a receiver,
rearrangement of debts, marshalling of assets or similar action relating
to any Co-Issuer or any Guarantor, their respective creditors or any
substantial
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part of their respective assets, whether or not any such case, proceeding
or action is voluntary or involuntary.
"Maximum Guaranty Amount" shall mean, with respect to any Guarantor,
at any time, the greatest of (a) ninety-five percent (95%) of the Adjusted
Net Worth of such Guarantor at such time, (b) ninety-five percent (95%) of
the Adjusted Net Worth of such Guarantor on the date hereof and (c) the
value derived by such Guarantor from the Guaranteed Obligations incurred
at or prior to such time.
"Notes" shall have the meaning given to that term in the preamble
hereof.
"Noteholders" shall have the meaning given to that term in the
preamble hereof.
"Subsidiary Joinder" shall mean an instrument substantially in the
form of Attachment 1 hereto.
Unless otherwise indicated in this Subsidiary Guaranty, all accounting
terms used in this Subsidiary Guaranty shall be construed, and all accounting
and financial computations hereunder or thereunder shall be computed, in
accordance with GAAP.
2. Guaranty.
(a) Payment Guaranty. Each Guarantor unconditionally guarantees and
promises to pay and perform as and when due, whether at stated maturity, upon
acceleration or otherwise, any and all of the Guaranteed Obligations. If any
Insolvency Proceeding relating to any Co-Issuer is commenced, each Guarantor
further unconditionally guarantees and promises to pay and perform, upon the
demand of any Noteholder any Guaranteed Obligations allocable to such Noteholder
(including any related Disallowed Post-Commencement Interest and Expenses) in
accordance with the terms of the Agreement and the Notes, whether or not such
obligations are then due and payable by the Co-Issuers and whether or not such
obligations are modified, reduced or discharged in such Insolvency Proceeding.
This Subsidiary Guaranty is a guaranty of payment and not of collection.
(b) Continuing Guaranty. This Subsidiary Guaranty is an irrevocable
continuing guaranty of the Guaranteed Obligations which shall continue in effect
until all of the Guaranteed Obligations have been fully, finally and
indefeasibly paid. If any payment on any Guaranteed Obligation is set aside,
avoided or rescinded or otherwise recovered from any Noteholder, such recovered
payment shall constitute a Guaranteed Obligation hereunder and, if this
Subsidiary Guaranty was previously released or terminated, it automatically
shall be fully reinstated, as if such payment was never made.
(c) Independent Obligation. The liability of each Guarantor hereunder is
independent of the Guaranteed Obligations and of the obligations of each other
Guarantor hereunder, and a separate action or actions may be brought and
prosecuted against each Guarantor irrespective of whether action is brought
against any Co-Issuer, any other Guarantor or any other guarantor of the
Guaranteed Obligations or whether any Co-Issuer, any other Guarantor or any
other guarantor of the Guaranteed Obligations is joined in any such action or
actions.
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(d) Fraudulent Transfer Limitation. If, in any action to enforce this
Subsidiary Guaranty, any court of competent jurisdiction determines that
enforcement against any Guarantor for the full amount of the Guaranteed
Obligations is not lawful under or would be subject to avoidance under Xxxxxxx
000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code or any applicable provision of any
comparable law of any state or other jurisdiction, the liability of such
Guarantor under this Subsidiary Guaranty shall be limited to the maximum amount
lawful and not subject to such avoidance.
(e) Maximum Guaranty Amount. The liability of each Guarantor under this
Subsidiary Guaranty shall not at any time exceed such Guarantor's Maximum
Guaranty Amount; provided, however, that the Noteholders may permit the
Guaranteed Obligations to exceed the foregoing limitation without affecting each
Guarantor's liability hereunder.
(f) Each Guarantor agrees that it shall not make any payment on or in
respect of any guaranty securing the Note (as defined in the Revolving Credit
Agreement) unless concurrently therewith it shall make a payment hereunder to
the Noteholders on Guaranteed Obligations on a pari passu basis with respect to
such payment or in respect of any such guaranty securing the Note (as defined in
the Revolving Credit Agreement).
3. Authorizations, Waivers, Etc.
(a) Authorizations. Each Guarantor authorizes the Noteholders, in their
discretion, without notice to such Guarantor, irrespective of any change in the
financial condition of any of the Co-Issuers, such Guarantor, any other
Guarantor or any other guarantor of the Guaranteed Obligations since the date
hereof, and without affecting or impairing in any way the liability of such
Guarantor hereunder, from time to time to:
(i) renew, compromise, extend, accelerate or otherwise change the
time for payment or performance of, or otherwise amend or modify the
Agreement and the Notes or change the terms of the Guaranteed Obligations
or any part thereof, including increase or decrease of the rate of
interest thereon;
(ii) accept and hold security for the payment or performance of the
Guaranteed Obligations and exchange, enforce, waive or release any such
security; apply such security and direct the order or manner of sale
thereof; and purchase such security at public or private sale;
(iii) otherwise exercise any right or remedy they may have against
the Co-Issuers, such Guarantor, any other Guarantor, any other guarantor
of the Guaranteed Obligations;
(iv) settle, compromise with, release or substitute any one or more
makers, endorsers or guarantors of the Guaranteed Obligations; and
(v) assign the Guaranteed Obligations, this Subsidiary Guaranty, the
Agreement or the Notes in whole or in part to the extent provided herein
and in the Agreement and the Notes.
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(b) Waivers. Each Guarantor hereby waives:
(i) any right to require any Noteholder to (A) proceed against any
Co-Issuer, any other Guarantor or any other guarantor of the Guaranteed
Obligations, (B) proceed against or exhaust any security received from any
Co-Issuer, such Guarantor, any other Guarantor or any other guarantor of
the Guaranteed Obligations or otherwise xxxxxxxx the assets of any
Co-Issuer, such Guarantor, any other Guarantor or any other guarantor of
the Guaranteed Obligations or (C) pursue any other remedy in the
Noteholder's power whatsoever;
(ii) any defense arising by reason of the application by the
Co-Issuers of the proceeds of any borrowing;
(iii) any defense resulting from the absence, impairment or loss of
any right of reimbursement, subrogation, contribution or other right or
remedy of Guarantor against any Co-Issuer, any other Guarantor, any other
guarantor of the Guaranteed Obligations or any security, whether resulting
from an election by any Noteholder to foreclose upon security by
nonjudicial sale, or otherwise;
(iv) any setoff or counterclaim of any Co-Issuer or any defense
which results from any disability or other defense of such Co-Issuer or
the cessation or stay of enforcement from any cause whatsoever of the
liability of such Co-Issuer (including, without limitation, the lack of
validity or enforceability of any of the Subsidiary Guaranty, the
Agreement and the Notes);
(v) any defense based upon any law, rule or regulation which
provides that the obligation of a surety must not be greater or more
burdensome than the obligation of the principal;
(vi) all presentments, demands for performance, notices of
non-performance, notices delivered under the Agreement, the Subsidiary
Guaranty and the Notes, protests, notice of dishonor, and notices of
acceptance of this Subsidiary Guaranty and of the existence, creation or
incurring of new or additional Guaranteed Obligations and notices of any
public or private foreclosure sale;
(vii) the benefit of any statute of limitations to the extent
permitted by law;
(viii) any appraisement, valuation, stay, extension, moratorium
redemption or similar law or similar rights for marshalling;
(ix) any right to be informed by any Noteholder of the financial
condition of any Co-Issuer, any other Guarantor or any other guarantor of
the Guaranteed Obligations or any change therein or any other
circumstances bearing upon the risk of nonpayment or nonperformance of the
Guaranteed Obligations;
(x) until all of the Guaranteed Obligations have been fully, finally
and indefeasibly paid, any right to revoke this Subsidiary Guaranty;
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(xi) any defense arising from an election for the application of
Section 1111(b)(2) of the United States Bankruptcy Code which applies to
the Guaranteed Obligations;
(xii) any defense based upon any borrowing or grant of a security
interest under Section 364 of the United States Bankruptcy Code; and
(xiii) any right it may have to a fair value hearing to determine
the size of a deficiency judgment following any foreclosure on any
security for the Guaranteed Obligations.
(c) Financial Condition of the Co-Issuers, Etc. Each Guarantor is fully
aware of the financial condition and affairs of the Co-Issuers. Each Guarantor
has executed this Subsidiary Guaranty without reliance upon any representation,
warranty, statement or information concerning the Co-Issuers furnished to such
Guarantor by any Noteholder and has, independently and without reliance on any
Noteholder, and based on such documents and information as it has deemed
appropriate, made its own appraisal of the financial condition and affairs of
the Co-Issuers and of other circumstances affecting the risk of nonpayment or
nonperformance of the Guaranteed Obligations. Each Guarantor is in a position to
obtain, and assumes full responsibility for obtaining, any additional
information about the financial condition and affairs of the Co-Issuers and of
other circumstances affecting the risk of nonpayment or nonperformance of the
Guaranteed Obligations and will, independently and without reliance upon any
Noteholder, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own appraisals and decisions in
taking or not taking action in connection with this Subsidiary Guaranty.
4. No Subrogation.
Notwithstanding the satisfaction by the Guarantors of any liability
hereunder and notwithstanding any other term, provision or condition in the Note
Purchase Agreement, the Transaction Documents or the Other Agreements, until 370
days following the last payment or transfer by or on behalf of the Guarantors
with respect to the Guaranteed Obligations and other sums due under the Note
Purchase Agreement, other Transaction Documents and the Other Agreements (the
"Period"), none of the Guarantors shall have any right of subrogation,
contribution, reimbursement or indemnity whatsoever or any right of recourse to
or with respect to the assets or property of the Co-Issuers or to any collateral
for the Notes with respect to obligations owing to the Guarantors arising out of
their performance of their obligations under this Guaranty. In connection with
the foregoing during the Period, each Guarantor expressly waives any and all
rights of subrogation of the Noteholders against the Co-Issuers with respect to
obligations owing to such Guarantor arising out of its performance of its
obligations under this Guaranty, and each Guarantor hereby waives any rights to
enforce any remedy which the Noteholders may have against the Co-Issuers and any
right to participate in any collateral for the Notes with respect to obligations
owing to such Guarantor arising out of its performance of its obligations under
this Guaranty. In addition to and without in any way limiting the foregoing
during the Period, each Guarantor hereby subordinates any and all indebtedness
of the Co-Issuers now or hereafter owed to such Guarantor arising out of such
Guarantor's performance of its
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obligations under this Guaranty to all indebtedness of the Co-Issuers to the
Noteholders, and agrees with the Noteholders that such Guarantor shall not
demand or accept any payment of principal or interest from the Co-Issuers with
respect to such indebtedness, shall not claim any off-set or other reduction of
such Guarantor's obligations hereunder because of any such indebtedness and
shall not take any action to obtain any of the collateral from the Notes in
satisfaction of any such indebtedness. Further, each Guarantor shall not have
any right of recourse against the Noteholders by reason of any action the
Noteholders may take or omit to take under the provisions of this Subsidiary
Guaranty or under the provisions of any of the Transaction Documents, this
Agreement, the Other Agreements or the Notes.
5. Contribution among Guarantors.
The Guarantors desire to allocate among themselves, in a fair and
equitable manner, their rights of contribution from each other when any payment
is made by any Guarantor under this Subsidiary Guaranty. Accordingly, if any
payment is made by any Guarantor under this Subsidiary Guaranty (a "Funding
Guarantor") that exceeds its Fair Share, the Funding Guarantor shall be entitled
to a contribution from each other Guarantor in the amount of such other
Guarantor's Fair Share Shortfall, so that all such contributions shall cause
each Guarantor's Aggregate Guaranty Payments to equal its Fair Share. The
amounts payable as contributions hereunder shall be determined by the Funding
Guarantor as of the date on which the related payment or distribution is made by
the Funding Guarantor, and such determination shall be binding on the other
Guarantors absent manifest error. The allocation and right of contribution among
the Guarantors set forth in this Paragraph 5 shall not be construed to limit in
any way the liability of any Guarantor under this Subsidiary Guaranty or the
amount of the Guaranteed Obligations.
6. Indemnification by Guarantors.
Without limitation of any other obligations of Guarantors or remedies of
the Noteholders under this Guaranty, the Guarantors shall indemnify, defend and
save and hold harmless the Noteholders from and against, and shall pay on
demand, any and all losses, liabilities, damages, and reasonable costs and
expenses (including the reasonable fees and disbursements of the Noteholders'
legal counsel) suffered or incurred by any Noteholder as a result of any failure
of any of the Guaranteed Obligations to be the legal, valid and binding
obligations of the Co-Issuers, enforceable against the Co-Issuers in accordance
with their terms, except as enforcement may be limited by bankruptcy, insolvency
or other similar Laws affecting the rights of creditors generally.
7. Representations, Warranties and Covenants.
(a) Each Guarantor has examined the Agreement, including the exhibits and
schedules thereto and all of the representations and warranties set forth in the
Agreement, to the extent the same relate to such Guarantor, are true and
correct.
(b) Each Guarantor agrees to be bound by, and to comply with all of the
terms, covenants and provisions of the Agreement, to the extent the same impose
obligations in respect of or grants rights against it as a Guarantor or
otherwise.
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8. Miscellaneous.
(a) Notices. Except as otherwise provided herein, all notices, requests,
demands, consents, instructions or other communications to or upon any Guarantor
or any Noteholder under this Subsidiary Guaranty shall be in writing and faxed,
mailed or delivered, if to a Guarantor, at its respective facsimile number or
address set forth below or in the respective Subsidiary Joinder for such
Guarantor or, if to any Noteholder, at the address or facsimile number specified
beneath the heading "All other communications" under the name of such Noteholder
in Schedule 20 to the Agreement (or to such other facsimile number or address
for any party as indicated in any notice given by that party to the other
parties). All such notices and communications shall be effective (i) when sent
by overnight service of recognized standing, on the second Business Day
following the deposit with such service; (ii) when mailed, first class postage
prepaid and addressed as aforesaid through the United States Postal Service,
upon receipt; (iii) when delivered by hand, upon delivery; and (iv) when faxed,
upon confirmation of receipt.
Guarantors: Kinro Holding, Inc.
c/o Drew Industries, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Attention: President
Telephone (000) 000-0000
Facsimile: (000) 000-0000
Kinro Manufacturing, Inc.
c/o Drew Industries, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Attention: President
Telephone (000) 000-0000
Facsimile: (000) 000-0000
Kinro Texas Limited Partnership
c/o Drew Industries, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Attention: President
Telephone (000) 000-0000
Facsimile: (000) 000-0000
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Kinro Tennessee Limited Partnership
c/o Drew Industries, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Attention: President
Telephone (000) 000-0000
Facsimile: (000) 000-0000
Shoals Holding, Inc.
c/o Drew Industries, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Attention: President
Telephone (000) 000-0000
Facsimile: (000) 000-0000
Shoals Supply Texas Limited Partnership
c/o Drew Industries, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Attention: President
Telephone (000) 000-0000
Facsimile: (000) 000-0000
Shoals Supply Tennessee Limited Partnership
c/o Drew Industries, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Attention: President
Telephone (000) 000-0000
Facsimile: (000) 000-0000
with copies to: Drew Industries, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Attention: President
Telephone (000) 000-0000
Facsimile: (000) 000-0000
(b) Payments. Each Guarantor shall make all payments required hereunder to
any Noteholder in accordance with the payment information set forth on Schedule
20 to the Agreement on demand. If any amounts required to be paid by a Guarantor
under this Subsidiary Guaranty are not paid when due, such Guarantor shall pay
interest on the aggregate, outstanding
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balance of such amounts from the date due until those amounts are paid in full
at a rate equal to the Default Rate.
(c) Expenses. Each Guarantor shall pay on demand (i) all fees and
expenses, including attorneys' fees and expenses, incurred by the Noteholders in
connection with the preparation, execution and delivery of, and the exercise of
its duties under, this Subsidiary Guaranty and the preparation, execution and
delivery of amendments and waivers hereunder and (ii) all fees and expenses,
including attorneys' fees and expenses, incurred by the Noteholders in
connection with the enforcement or attempted enforcement of this Subsidiary
Guaranty or any of the Guaranteed Obligations or in preserving any of the
Noteholders' rights and remedies (including, without limitation, all such fees
and expenses incurred in connection with any "workout" or restructuring
affecting the Agreement, the Notes, the Subsidiary Guaranty or the Guaranteed
Obligations or any bankruptcy or similar proceeding involving Guarantor, any
other Guarantor, the Co-Issuers or any of their affiliates).
(d) Waivers; Amendments. This Subsidiary Guaranty may not be amended or
modified, nor may any of its terms be waived, except by written instruments
signed by each Guarantor and the Required Holders. Each waiver or consent under
any provision hereof shall be effective only in the specific instances for the
purpose for which given. No failure or delay on any Noteholder's part in
exercising any right hereunder shall operate as a waiver thereof or of any other
right nor shall any single or partial exercise of any such right preclude any
other further exercise thereof or of any other right.
(e) Assignments. This Subsidiary Guaranty shall be binding upon and inure
to the benefit of the Noteholders, the Guarantors and their respective
successors and assigns; provided, however, that no Guarantor may assign or
transfer any of its rights and obligations under this Subsidiary Guaranty
without the prior written consent of the Required Holders. All references in
this Subsidiary Guaranty to any Person shall be deemed to include all permitted
successors and assigns of such Person.
(f) Cumulative Rights, etc. The rights, powers and remedies of the
Noteholders under this Subsidiary Guaranty shall be in addition to all rights,
powers and remedies given to the Noteholders by virtue of any applicable law,
rule or regulation of any Governmental Authority, the Agreement, the Notes or
any other agreement, all of which rights, powers, and remedies shall be
cumulative and may be exercised successively or concurrently without impairing
any Noteholder's rights hereunder. Each Guarantor waives any right to require
any Noteholder to proceed against any Person or to pursue any remedy in such
Noteholder's power.
(g) Payments Free of Taxes, Etc. All payments made by each Guarantor under
this Subsidiary Guaranty shall be made by each Guarantor free and clear of and
without deduction for any and all present and future taxes, levies, charges,
deductions and withholdings. In addition, each Guarantor shall pay upon demand
any stamp or other taxes, levies or charges of any jurisdiction with respect to
the execution, delivery, registration, performance and enforcement of this
Subsidiary Guaranty. If any taxes, levies, charges or other amounts are required
to be withheld from any amounts payable to any Noteholder hereunder, the amounts
so payable to such Noteholder shall be increased to the extent necessary to
yield to such Noteholder (after payment
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of all such amounts) any such amounts payable hereunder in the amounts specified
in this Subsidiary Guaranty. Upon request by any Noteholder, each Guarantor
shall furnish evidence satisfactory to such Noteholder that all requisite
authorizations and approvals by, and notices to and filings with, governmental
authorities and regulatory bodies have been obtained and made and that all
requisite taxes, levies and charges have been paid.
(h) Partial Invalidity. If at any time any provision of this Subsidiary
Guaranty is or becomes illegal, invalid or unenforceable in any respect under
the law or any jurisdiction, neither the legality, validity or enforceability of
the remaining provisions of this Subsidiary Guaranty nor the legality, validity
or enforceability of such provision under the law of any other jurisdiction
shall in any way be affected or impaired thereby.
(i) Joint and Several Obligation. The obligations of the Guarantors under
this Subsidiary Guaranty are joint and several obligations of each Guarantor and
may be freely enforced against each Guarantor, for the full amount of the
Guaranteed Obligations, without regard to whether enforcement is sought or
available against any other Guarantor.
(j) Governing Law. THIS SUBSIDIARY GUARANTY SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE
TO CONFLICTS OF LAW RULES.
(k) Jury Trial. EACH GUARANTOR AND THE NOTEHOLDERS, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY AS TO ANY ISSUE RELATING HERETO IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS SUBSIDIARY GUARANTY.
(l) Consent to Jurisdiction. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT
TO THIS SUBSIDIARY GUARANTY MAY BE BROUGHT BY ANY NOTEHOLDER IN THE COURTS OF
THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS SUBSIDIARY GUARANTY
OR ITS RESPECTIVE SUBSIDIARY JOINDER, EACH GUARANTOR HEREBY ACCEPTS FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION
OF THE AFORESAID COURT. EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE BASED ON THE
GROUNDS OF FORUM NONCONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTION.
(m) Counterpart. This Subsidiary Guaranty may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original.
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IN WITNESS WHEREOF, each Guarantor has caused this Subsidiary Guaranty to
be executed as of the day and year first above written.
KINRO HOLDING, INC.
By:____________________________________
Name:
Title:
KINRO MANUFACTURING, INC.
By:____________________________________
Name:
Title:
SHOALS HOLDING, INC.
By:____________________________________
Name:
Title:
KINRO TEXAS LIMITED PARTNERSHIP
By: Kinro Manufacturing, Inc.,
its general partner
By:_______________________________
Name:
Title:
KINRO TENNESSEE LIMITED PARTNERSHIP
By: Kinro Manufacturing, Inc.,
its general partner
By:_______________________________
Name:
Title:
SHOALS SUPPLY TEXAS LIMITED PARTNERSHIP
By: Shoals Supply, Inc.,
its general partner
By:_______________________________
Name:
Title:
SHOALS SUPPLY TENNESSEE
LIMITED PARTNERSHIP
By: Shoals Supply, Inc.,
its general partner
By:_______________________________
Name:
Title:
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ATTACHMENT 1
SUBSIDIARY JOINDER
THIS SUBSIDIARY JOINDER (this "Joinder"), dated as of January 28, 1998, is
executed by [NEW SUBSIDIARY], a _________ [corporation] [partnership] [etc.]
(the "New Subsidiary") in favor of each of the holders from time to time of the
6.95% Senior Notes due January 28, 2005 (the "Notes") issued by Kinro, Inc.,
Xxxxxxx Components, Inc. and Shoals Supply, Inc. (the "Co-Issuers")
(collectively, together with each future holder of Senior Notes, the
"Noteholders").
RECITALS
A. The Co-Issuers and the original Noteholders have entered into a Note
Purchase Agreement, dated as of January 28, 1998 (as it may be amended from time
to time, the "Agreement"), pursuant to which $40,000,000 in aggregate principal
amount of the Notes were issued.
B. The New Subsidiary is a direct or indirect Subsidiary of a Co-Issuer
and acknowledges that the issuance of the Notes by the Co-Issuers pursuant to
the Agreement will benefit the New Subsidiary by making funds available to the
New Subsidiary through the Co-Issuers and by enhancing the financial strength of
the consolidated group of which the New Subsidiary and the Co-Issuers are
members.
C. The execution and delivery of the Subsidiary Guaranty by the then
existing Subsidiaries of the Co-Issuers was a condition precedent to the
execution and delivery by the original Noteholders of the Agreement and the
Co-Issuers have covenanted in the Agreement that Subsidiary Joinders shall be
duly executed by each future Subsidiary of the Co-Issuers.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the New Subsidiary hereby agrees with the Noteholders as follows:
1. Definitions and Interpretation. Unless otherwise defined herein, all
capitalized terms used herein and defined in the Subsidiary Guaranty shall have
the respective meanings given to those terms in the Subsidiary Guaranty.
2. Agreement to be Bound. The New Subsidiary agrees that, on and as of the
Effective Date, it shall become a Guarantor under the Subsidiary Guaranty and
shall be bound by all the provisions of the Subsidiary Guaranty to the same
extent as if the New Subsidiary had executed the Subsidiary Guaranty on the
Closing Date.
3. Waiver. Without limiting the generality of the waivers in the Subsidiary
Guaranty, the New Subsidiary specifically agrees to be bound by the Subsidiary
Guaranty and waives any right to notice of acceptance of its execution of this
Joinder and of its agreement to be bound by the Subsidiary Guaranty.
4. Governing Law. THIS JOINDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the New Subsidiary has caused this Joinder to be
executed by its duly authorized officer.
[NEW SUBSIDIARY]
By:________________________
Name:
Title:
Address:
[_________________________]
[_________________________]
[_________________________]
Attn: [___________________]
Telephone: [(___) ___-____]
Facsimile: [(___) ___-____]
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