Exhibit 10.18
GUARANTY AGREEMENT
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THIS GUARANTY AGREEMENT (this "Guaranty"), dated as of December 18,
1998, is made by XXXXXXX ENTERPRISES, INC., a Massachusetts corporation and
XXXXXX-AMERICAN COMPANY, INC., a North Carolina corporation, and XXXXXX-AMERICAN
COMPANY OF FLORIDA, INC., a Florida corporation (each individually a "Guarantor"
and individually and collectively, "Guarantors"), in favor of FIRST UNION
NATIONAL BANK, a national banking association, for itself and as agent ("Agent")
and the Lenders under the Credit Agreement described below (the "Lenders").
BACKGROUND
1. Agent and the Lenders have entered into a Credit Agreement dated
of even date herewith (as may be amended from time to time, the "Credit
Agreement") with Xxxxxxx American Corporation ("Borrower"), under which the
Lenders have agreed to extend certain credit facilities to the Borrower in
consideration of, inter alia, the covenants and obligations made and assumed by
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the Guarantors as herein set forth.
2. It is a condition precedent to the extension or continued
extension of certain credit facilities by the Lenders under the Credit Agreement
that each Guarantor shall have executed and delivered to the Lenders this
Guaranty.
3. Each Guarantor is a subsidiary of the Borrower, and each
Guarantor's directors have determined that it is in the best interest of such
Guarantor to execute this Guaranty and that such Guarantor will benefit directly
and indirectly from the execution of this Guaranty.
NOW, THEREFORE, in order to induce the Lenders to extend certain
credit facilities under the Credit Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound, each Guarantor does hereby covenant and agree
with the Lenders as follows:
1. Definitions and Construction. Reference is made to the Credit
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Agreement for a statement of the terms thereof. All terms used in this Guaranty
which are defined in the Credit Agreement and not defined herein shall have the
respective meanings ascribed to such terms in the Credit Agreement.
2. Guaranty. Each Guarantor, jointly and severally, absolutely and
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unconditionally, guarantees and becomes surety for the full, prompt and punctual
payment to Lenders, as and when due, whether at maturity, by acceleration or
otherwise, of any and all indebtedness, and performance of any and all
liabilities and obligations of Borrower to Lenders or any of them, including,
without limitation, reimbursement obligations under Letters of Credit, created
at any time under, or pursuant to, the terms of the Credit Agreement and the
other Loan Documents whether for principal, interest, premiums, fees, expenses
or otherwise,
any obligations under interest rate protection agreements, swaps, hedging
contracts or similar arrangements with any Lender (including without limitation,
any swap agreement as defined in 11 U.S.C. (S)101), and any obligations under or
pursuant to any other documents and agreements executed in connection with any
of the foregoing, including any future advances, whether obligatory or
voluntary, or refinancings, renewals or extensions of or substitutions for, any
existing or future debt (all such indebtedness, liabilities and obligations
collectively, the "Obligations"), together with any and all reasonable expenses,
including without limitation attorneys' fees, disbursements and the costs and
expenses of in-house counsel and legal support staff, which may be incurred by
the Lenders in collecting any or all of the Obligations or enforcing any and all
rights against either Guarantor under this Guaranty (the "Expenses"). Without
limiting either Guarantor's obligations hereunder and notwithstanding any
purported termination of this Guaranty, if any bankruptcy, insolvency,
reorganization, arrangement, readjustment, composition, liquidation,
dissolution, assignment for the benefit of creditors, or similar event with
respect to the Borrower or any endorser of all or any of the Obligations shall
occur, and such occurrence shall result in the return of (or in such event any
Lender shall be requested to return) any payment or performance of any of the
Obligations or Expenses, then (a) without further notice, demand or other
action, the obligations of each Guarantor hereunder shall be reinstated with
respect to (i) such payment or performance returned (or requested to be
returned) and (ii) with respect to all further obligations arising as a result
of such return or request, and (b) each Guarantor shall thereupon be liable
therefor, without any obligation on the part of the Lenders to contest or resist
any such return. If a party ceases to be a Lender, then any obligations under
interest rate protection agreements, swaps, hedging contracts or similar
arrangements(including without limitation, any swap agreement as defined in 11
U.S.C. (S)101), with that party prior to the date it ceases to be a Lender shall
continue to be Obligations guaranteed hereunder.
3. Nature and Term of Guaranty.
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(a) The obligations and liability of each Guarantor under this
Guaranty shall be joint and several, absolute, primary and direct, irrevocable
and unconditional, regardless of any non-perfection of any collateral security
for the Obligations; any lack of validity or enforceability of the Credit
Agreement, any other Loan Document or any of the Obligations or Expenses; the
voluntary or involuntary liquidation, dissolution, sale or other disposition of
all, or substantially all of the assets, marshalling of assets and liabilities,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition with creditors or readjustment of, or
other similar proceedings affecting Borrower, any Guarantor or any other
guarantor or endorser of, any or all of the Obligations and Expenses or any of
the assets of any of them, or any contest of the validity of this Guaranty in
any such proceeding; or any law, regulation or decree now or hereafter in effect
in any jurisdiction which might in any manner affect any of such terms or
provisions or any of the rights of the Lenders with respect thereto or which
might cause or permit the Borrower or any guarantor or endorser of the
Obligations and Expenses to invoke any defense to, or any alteration in the
time, amount or manner of payment of any or all of the Obligations and Expenses
or performance of this Guaranty.
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(b) This Guaranty is a continuing guaranty and shall remain in full
force and effect until the Obligations, the Expenses and any and all other
amounts payable hereunder shall have been paid in full in cash and no further
loans or advances are available and no Letters of Credit are outstanding under
the Credit Agreement and the period during which any payment by the Borrower or
either Guarantor is or may be subject to rescission, avoidance or refund under
the United States Bankruptcy Code (or any similar state or federal statute)
shall have expired.
4. Limitation on Amount Guarantied. Anything contained in this Guaranty
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to the contrary notwithstanding, the obligations of each Guarantor hereunder
shall be limited to the lesser of (i) the Obligations and Expenses, or (ii) a
maximum aggregate amount equal to the largest amount that would not render its
obligations hereunder subject to avoidance as a fraudulent transfer or
conveyance under Section 548 of Title 11 of the United States Code or any
applicable provisions of comparable state law (collectively, the "Fraudulent
Transfer Laws"), if and to the extent each Guarantor (or a trustee on its
behalf) has properly invoked the protections of the Fraudulent Transfer Laws, in
each case after giving effect to all other liabilities of such Guarantor,
contingent or otherwise, that are relevant under the Fraudulent Transfer Laws.
5. Payment in Accordance with Notes and Credit Agreement.
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(a) Each Guarantor hereby guaranties that the Obligations and Expenses
shall be paid and performed strictly in accordance with the terms of the Loan
Documents.
(i) If any Obligation or Expense is not paid or performed by the
Borrower punctually, subject to any applicable grace period, including without
limitation any Obligation due by acceleration of the maturity thereof, the
Guarantors will, upon Agent's demand (at the direction of Required Lenders, as
defined in the Credit Agreement), immediately pay or perform such Obligation or
Expense or cause the same to be paid or performed. Guarantors will pay to
Lenders, upon demand, all costs and expenses, including the Expenses, which may
be incurred by the Lenders in the collection or enforcement of either
Guarantor's obligations under this Guaranty.
6. Defaults; Rights and Remedies of Banks.
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(a) An event of default hereunder shall include each of the following:
(i) an Event of Default as defined under any of the Loan
Documents;
(ii) either Guarantor's failure to perform any of its obligations
or duties under this Guaranty; and
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(iii) either Guarantor's notice to any Lender that such Guarantor
does not intend to be liable for any future Obligations or Expenses or contests
the validity or enforceability of this Guaranty.
(b) Lenders, or Agent on behalf of Lenders, in their sole discretion,
may proceed to exercise any right or remedy which they may have under this
Guaranty (in accordance with the Credit Agreement) against any Guarantor without
first pursuing or exhausting any rights or remedies which they may have against
the Borrower or against any other person or entity or any collateral security,
and may proceed to exercise any right or remedy which they may have under this
Guaranty (in accordance with the Credit Agreement) without regard to any actions
or omissions of any other person or entity, in any manner or order, without any
obligation to marshal in favor of any Guarantor or other persons or entities and
without releasing any of Guarantors' obligations hereunder with respect to any
unpaid Obligations and Expenses. Upon the occurrence and continuance of an
Event of Default, each Guarantor shall immediately pay, comply with and perform
such of the Obligations and Expenses as Agent, on behalf of Lenders, shall
direct, irrespective of whether the Obligations and Expenses to be paid,
complied with and performed by such Guarantor are those which gave rise to the
Event of Default. No remedy herein conferred upon or reserved to the Lenders or
Agent is intended to be exclusive of any other available remedy or remedies, but
each and every such remedy shall be cumulative and shall be in addition to every
other remedy given under this Guaranty or now or hereafter existing at law or in
equity.
(c) If Borrower or any other person or entity defaults under the Loan
Documents and any Lender is prevented from accelerating payment thereunder,
either by operation of any bankruptcy laws, similar laws or any court order,
such Lender shall be entitled to receive from the Guarantors, upon demand by
Agent on behalf of such Lender (in accordance with the Credit Agreement), the
sums which would have otherwise been due and payable had such acceleration
occurred.
7. Actions by Lenders Not Affecting Guaranty. Lenders may, at any time
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or from time to time, in such manner and upon such terms as they may deem
proper, extend or change the time of payment or the manner or place of payment
of, or otherwise modify or waive any of the terms of, or release, exchange,
settle or compromise any or all of the Obligations and Expenses or any
collateral security therefor, or subordinate payment of the same, or any part
thereof, to the payment of any other indebtedness, liabilities or obligations of
the Borrower which may at any time be due or owing to the Lenders or anyone, or
elect not to enforce any of the Lenders' rights with respect to any or all of
the Obligations and Expenses or any collateral security therefor, all without
notice to, or further assent of any Guarantor and without releasing or affecting
any Guarantor's obligations hereunder.
8. Payments Under Guaranty. All payments by Guarantors hereunder shall
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be made in immediately available funds and in lawful money of the United States
of America to the Agent at the office of the Agent referred to in Paragraph 2.11
of the Credit Agreement or at such other location as the Agent shall specify by
notice to the Guarantors. All payments by
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any Guarantor under this Guaranty shall be made by such Guarantor solely from
such Guarantor's own funds and not from any funds of the Borrower.
9. Modifications and Waivers. No failure or delay on the part of any
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Lender or Agent in exercising any power or right under this Guaranty shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power preclude any other or further exercise thereof or the
exercise of any other right or power under this Guaranty. No modification or
waiver of any provision of this Guaranty nor consent to any departure therefrom
shall, in any event, be effective unless the same is in writing signed by the
Lenders (or Required Lenders to the extent applicable under the Credit
Agreement) and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. No notice to, or demand
on either Guarantor, in any case, shall entitle such Guarantor to any other or
further notice or demand in similar or other circumstances.
10. Guarantors' Waiver. Each Guarantor hereby waives the following:
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(a) promptness, diligence, presentment, demand, notice of acceptance
and any other notice with respect to any of the Obligations, the Expenses and
this Guaranty, except for such notice as may be expressly required under the
Loan Documents;
(b) any defense or circumstance which might otherwise constitute a
legal or equitable discharge of a Guarantor, including, without limitation, any
obligation of any Lender to proceed against Borrower prior to exercising any
rights hereunder;
(c) any and all right to terminate such Guarantor's obligations and
duties hereunder by delivery or written notice to any Lender or otherwise;
(d) all benefits under any present or future laws exempting any
property, real or personal, or any part of any proceeds thereof, from
attachment, levy or sale under execution, or providing for any stay of execution
to be issued on any judgment recovered under any of the Loan Documents or in any
replevin or foreclosure proceedings, or otherwise providing for any valuation,
appraisal or exemption;
(e) all rights to inquisition on any real estate, which real estate
may be levied upon pursuant to a judgment obtained under any of the Loan
Documents and sold upon any writ of execution issued thereon in whole or in
part, in any order desired by any Lender;
(f) any requirement for bonds, security or sureties required by any
statute, court rule or otherwise; and
(g) any and all procedural errors, defects and imperfections in any
action by Agent or Lenders in replevin, foreclosure or other court process or in
connection with any other action related to any of the Loan Documents or the
transactions contemplated therein.
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11. Subordination; Subrogation. Each Guarantor hereby expressly agrees
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that it shall not exercise, against any Borrower, other guarantor, maker,
endorser or person (a) any right which such Guarantor may now have or hereafter
acquire by way of subrogation under this Guaranty, by law or otherwise or by way
of reimbursement, indemnity, exoneration, or contribution; (b) any right to
assert defenses as the primary obligor of the Obligations; (c) any other claim
which it now has or may hereafter acquire against any Borrower or any other
person or against or with respect to Borrower's property (including, without
limitation, any property which has been pledged to secure the Obligations); or
(d) any right to enforce any remedy which any Lender may now have or hereafter
acquire against Borrower or any other guarantor, maker or endorser; in any case,
whether any of the foregoing claims, remedies and rights may arise in equity,
under contract, by payment, statute, common law or otherwise until all
Obligations and Expenses have been indefeasibly paid in full in cash. If in
violation of the foregoing any amount shall be paid to any Guarantor on account
of any such rights at any time, such amount shall be held in trust for the
benefit of the Lenders and shall forthwith be paid to the Lenders to be credited
and applied against the Obligations and Expenses, whether matured or unmatured,
in accordance with the terms of the Notes and the Credit Agreement.
12. No Setoff by Guarantors. No setoff, counterclaim, deduction,
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reduction, or diminution of any obligation, or any defense of any kind or nature
which either Guarantor has or may have against Borrower or any Lender shall be
available hereunder to either Guarantor.
13. Representations and Warranties. Guarantors hereby represent and
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warrant that the representations and warranties set forth in Article 3 of the
Credit Agreement are true and correct in all respects including as applied to
Guarantors.
14. Covenants. Guarantors covenant and agree that, so long as the
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Guaranty shall remain in effect, they shall comply in all respects with the
covenants and agreements set forth in the Credit Agreement to the extent such
covenants apply to them, including without limitation, the covenants and
agreements set forth in Articles 5 and 6 thereof.
15. Addresses for Notices. All requests, consents, notices and other
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communications required or permitted hereunder or in connection herewith shall
be deemed satisfactorily given if in writing and delivered personally or by
registered or certified mail, postage pre-paid, by reliable overnight courier,
or by telecopier to the parties at their respective addresses set forth below or
at such other address as may be given by any party to the other in writing in
accordance with this Section 16:
If to Guarantors:
c/x Xxxxxxx American Corporation
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention:
Telecopier:
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If to Borrower:
Xxxxxxx American Corporation
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention:
Telecopier:
If to Agent:
First Union National Bank
0000 Xxxxxxxx Xxxxxx
XX 4843
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Telecopier: (000) 000-0000
16. Continuing Guaranty; Transfer of Notes. This Guaranty is a continuing
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guaranty and shall (i) remain in full force and effect until the Obligations,
the Expenses and all other amounts payable under this Guaranty shall have been
paid in full and the period during which any payment Borrower or Guarantors is
or may be subject to avoidance or refund under the United States Bankruptcy Code
(or any similar statute) shall have expired, (ii) be binding upon each
Guarantor, successors and assigns of each Guarantor, and (iii) inure to the
benefit of, and be enforceable by the Lenders and Agent and their respective
successors, transferees and assigns in accordance with Paragraph 9.2 of the
Credit Agreement. Without limiting the generality of the foregoing clause
(iii), the Lenders may endorse, assign or otherwise transfer the Obligations to
any other person or entity in accordance with the provisions of the Credit
Agreement, and such other person or entity shall thereupon become vested with
all the rights in respect thereof granted to the Lenders herein or otherwise.
17. Entire Agreement. This Guaranty constitutes the entire agreement, and
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supersedes all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof.
18. Severability.
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(a) The invalidity or unenforceability of any one or more portions of
this Guaranty shall not affect the validity or enforceability of the remaining
portions of this Guaranty.
(b) The Guarantors and the Lenders agree that in an action or
proceeding involving any state or federal bankruptcy, insolvency or other law
affecting the rights of creditors generally:
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(i) If any clause or provision shall be held invalid or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction and shall not in any manner affect such clause or provision in
any other jurisdiction, or any other clause or provision in this Guaranty in any
jurisdiction, or any other clause or provision in this Guaranty in any
jurisdiction.
(ii) If the guaranty hereunder by either Guarantor would be
held or determined to be void, invalid or unenforceable on account of the amount
of its aggregate liability under this Guaranty, then, notwithstanding any other
provision of this Guaranty to the contrary, the aggregate amount of such
liability shall, without any further action by any of the Guarantors, the
Lenders or any other person, be automatically limited and reduced to the highest
amount which is valid and enforceable as determined in action or proceeding.
(iii) If any other guaranty by any one or more other Guarantor
is held or determined to be void, invalid or unenforceable, in whole or in part,
such holding or determination shall not impair or affect:
(A) the validity and enforceability of the guaranty
hereunder by either Guarantor, which shall continue in full force and effect in
accordance with its terms; or
(B) the validity and enforceability of any clause or
provision not so held to be void, invalid or unenforceable.
19. Counterparts. This Guaranty may be executed by Guarantors in several
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separate counterparts, each of which shall be an original and all of which taken
together shall constitute one and the same instrument.
20. Governing Law. This Guaranty shall be deemed to be a contract under
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the laws of the Commonwealth of Pennsylvania and for all purposes shall be
governed by and construed in accordance with such laws.
21. Consent to Jurisdiction and Service of Process. Each Guarantor
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irrevocably appoints each officer of Borrower and Guarantors as its attorney
upon whom may be served any notice, process or pleading in any action or
proceeding against it arising out of or in connection with this Guaranty, the
Loan Documents or any of the Collateral; each Guarantor hereby consents that any
action or proceeding against it be commenced and maintained in any court within
the Commonwealth of Pennsylvania or in the United States District Court for the
Eastern District of Pennsylvania by service of process on any officer of
Borrower or Guarantors; and each Guarantor agrees that the courts of the
Commonwealth of Pennsylvania and the United States District Court for the
Eastern District of Pennsylvania shall have jurisdiction with respect to the
subject matter hereof and the person of each Guarantor and the Collateral.
Notwithstanding the foregoing, Agent, in its absolute discretion, may also
initiate
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proceedings in the courts of any other jurisdiction in which either Guarantor
may be found or in which any of its properties or Collateral may be located.
22. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY KNOWINGLY,
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VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS GUARANTY OR OTHER LOAN DOCUMENTS OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF AGENT OR
LENDERS. THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDERS' ENTERING INTO
THIS AGREEMENT.
23. ACKNOWLEDGMENTS. GUARANTORS ACKNOWLEDGE THAT THEY HAVE HAD THE
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ASSISTANCE OF COUNSEL IN THE REVIEW AND EXECUTION OF THIS GUARANTY AND,
SPECIFICALLY, PARAGRAPH 22 HEREOF, AND FURTHER ACKNOWLEDGES THAT THE MEANING AND
EFFECT OF THE FOREGOING WAIVER OF JURY TRIAL HAVE BEEN FULLY EXPLAINED TO
GUARANTORS BY SUCH COUNSEL.
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IN WITNESS WHEREOF, the undersigned, by their duly authorized
officers, as applicable, have executed this Guaranty the day and year first
above written.
Attest: XXXXXXX ENTERPRISES, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx. By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxxx, Xx. Name: Xxxxxx X. Xxxxx
Title: Secretary Title: Treasurer
Attest: XXXXXX-AMERICAN COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx. By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxx, Xx. Name: Xxxxxxx X. Xxxxxxxx
Title: Secretary Title: President
Attest: XXXXXX-AMERICAN COMPANY OF
FLORIDA, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx. By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxx, Xx. Name: Xxxxxxx X. Xxxxxxxx
Title: Secretary Title: President
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