CONSENT, JOINDER AND SECOND AMENDMENT TO THE AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
Exhibit
99.3
CONSENT,
JOINDER AND SECOND AMENDMENT
TO
THE AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
CONSENT,
JOINDER AND SECOND AMENDMENT, dated as of April 1, 2010 (this "Amendment"), to the
Amended and Restated Loan and Security Agreement dated as of November 5, 2007
(as amended prior to the date hereof, the "Loan Agreement"), by and among
(i) LSB INDUSTRIES, INC., a Delaware corporation (the "Parent"),
THERMACLIME, INC., an Oklahoma corporation formerly known as ClimaChem, Inc.
("ThermaClime"), and
each of the Subsidiaries of ThermaClime identified on the signature pages
thereof (such Subsidiaries, together with ThermaClime, each a "Borrower", and
collectively, the "Borrowers"), (ii) the
lenders identified on the signature pages thereof (each a "Lender" and
collectively the "Lenders"), (iii)
XXXXX FARGO CAPITAL FINANCE, INC., a California corporation formerly known as
Xxxxx Fargo Foothill, Inc., as the arranger and administrative agent for the
Lenders (the "Agent") and (iv)
Consolidated Industries Corp., an Oklahoma corporation ("Consolidated
Industries").
WHEREAS,
the Parent and the Borrowers desire to realign their corporate structure for
various business and tax purposes (the "Realignment"), as
fully described in the documents attached hereto as Exhibit A (the "Realignment
Steps");
WHEREAS,
upon completion of the realignment described in the Realignment Steps,
Consolidated Industries will be either the direct or indirect parent of each
Borrower;
WHEREAS,
Consolidated Industries intends to and, upon the effectiveness of this
Amendment, will become a Guarantor and a Loan Party under the Loan
Agreement;
WHEREAS,
such realignment requires various amendments to the Loan Agreement and consents
or waivers by the Lenders;
WHEREAS,
the Borrowers, Consolidated Industries, the Parent, the Guarantors, the Lenders,
and the Agent desire to enter into this Amendment so as to amend the Loan
Agreement and other Loan Documents; and
WHEREAS,
the Lenders are willing to grant such limited consents and waivers set forth
herein subject to the terms and conditions hereof.
NOW
THEREFORE, in consideration of the premises and other good and valuable
consideration, the parties hereto hereby agree as follows:
1. Capitalized
Terms. All capitalized terms used in this Amendment
(including, without limitation, in the recitals hereto) and not otherwise
defined shall have their respective meanings set forth in the Loan
Agreement.
2. ThermaClime.
Effective upon the conversion of ThermaClime to a limited liability company, the
definition of "ThermaClime" in the introductory paragraph of the Loan Agreement
and of each other Loan Document wherein it appears is hereby amended and
restated in its entirety to read as follows:
"THERMACLIME, L.L.C., an Oklahoma
limited liability company ("ThermaClime")"
3. New
Definitions. Section 1.1 of the Loan Agreement is hereby
amended by adding the following defined terms in proper alphabetical
order:
""Consolidated
Industries" means Consolidated Industries Corp., an Oklahoma
corporation."
""Second Amendment"
means that certain Consent, Joinder and Second Amendment to the Amended and
Restated Loan and Security Agreement, dated as of April 1, 2010, among the
Parent, Consolidated Holdings, the Borrowers, the Lenders and the
Agent."
""Second Amendment Effective
Date" means the date that all of the conditions set forth in Section 18 of the Second Amendment shall be satisfied (or
waived by the Agent in its sole discretion)."
4. Amended
Definitions. The following definitions in Section 1.1 of the
Loan Agreement are hereby amended and restated in their entirely to read as
follows:
""Guaranties" means,
collectively, (i) the guaranties made by Parent and Consolidated Industries
contained in Section 18 hereof and (ii) those certain general continuing
guaranties executed and delivered by Guarantors (other than Parent and
Consolidated Industries) in favor of Agent, for the benefit of the Lender Group,
in form and substance satisfactory to Agent."
""Guarantors" means (i)
the Parent, (ii) Consolidated Industries, (iii) each of ThermaClime's
Subsidiaries extant as of the Closing Date (other than EDN, DSN, and their
respective Subsidiaries) that are not Borrowers, and (iv)
Cherokee."
5. Section
6.3(g). Section 6.3(g) of the Loan Agreement is hereby amended
and restated in its entirety to read as follows:
"(g) as
soon as available, but no later than Wednesday of each week, a report listing
(i) all cash distributions and advances made by EDN to any Borrower and
Guarantor (other than Parent, Consolidated Industries and Cherokee) during the
preceding week and (ii) all cash distributions and advances made by any
Borrower and Guarantor (other than Parent, Consolidated Industries and Cherokee)
to EDN during the preceding week, and"
6. Section
7.1(h). Section 7.1(h) of the Loan Agreement is hereby amended
and restated in its entirety to read as follows:
"(h) Indebtedness
owing by any Borrower to any Subsidiary of Parent that is not also a Subsidiary
of ThermaClime, provided that the aggregate principal amount of such
Indebtedness shall not exceed $500,000 at any time, except as set forth in
Section 7.1(f);"
2
7. Section
7.11(a). Section 7.11(a) of the Loan Agreement is hereby
amended and restated in its entirety to read as follows:
"(a) ThermaClime
may make distributions and pay dividends to Consolidated Industries or to
Parent, in repayment of the costs and expenses incurred by Parent that are
directly allocable to the Borrowers for Parent's provision of the Services (as
defined in the Services Agreement) on behalf of the Borrowers pursuant to the
Services Agreement;"
8. Section
7.11(b). Section 7.11(b) of the Loan Agreement is hereby
amended and restated in its entirety to read as follows:
"(b) each
Borrower may make distributions and pay dividends to any Guarantor (other than
Parent, Consolidated Industries and Cherokee), and each Guarantor may make
distributions and pay dividends to any Borrower or Guarantor (other than Parent,
Consolidated Industries and Cherokee);"
9. Section
7.11(c). Section 7.11(c) of the Loan Agreement is hereby
amended and restated in its entirety to read as follows:
"(c) so
long as no Default or Event of Default has occurred and is continuing or would
result therefrom, (i) ThermaClime may make distributions and pay dividends to
Consolidated Industries or to Parent, in respect of the management fees payable
by ThermaClime to Parent in accordance with the Management Agreement, provided
that the aggregate amount of all such payments made by Borrowers pursuant to
this clause (c)(i) shall not exceed $2,500,000 during any fiscal year of
ThermaClime or the maximum management fees payable to Parent each calendar
quarter under the Management Agreement, and (ii) ThermaClime may make
distributions and pay dividends to Consolidated Industries or to Parent, in an
aggregate amount not to exceed, during each fiscal year, the sum of (A) 50%
of the actual consolidated net income of the Borrowers for such fiscal year
determined in accordance with GAAP, plus (B) the amounts paid to Parent and
Consolidated Industries during such fiscal year in accordance with Section
7.11(d);"
10. Section
7.11(d). Section 7.11(d) of the Loan Agreement is hereby
amended and restated in its entirety to read as follows:
"(d) so
long as Agent has not exercised any of its rights or remedies following an Event
of Default, ThermaClime may make distributions and pay dividends to Consolidated
Industries or to Parent, in an aggregate amount not to exceed, during each
fiscal year, the consolidated income tax liability of the Borrowers for such
fiscal year calculated as if each of the Borrowers was a separate consolidated
taxpayer;"
11. Section
7.11(e). Section 7.11(e) of the Loan Agreement is hereby
amended and restated in its entirety to read as follows:
"(e) each
Borrower may make distributions and pay dividends to any Subsidiary of
Consolidated Industries that is not also a Subsidiary of ThermaClime, provided
that the aggregate amount of such distributions and dividends shall not exceed
$100,000 during each fiscal year; and "
3
12. Section
8.7. Section 8.7 of the Loan Agreement is hereby amended and
restated in its entirety to read as follows:
"8.7 If
a notice of Lien (other than (a) a Permitted Lien, (b) Liens on any property or
assets of the Parent or Consolidated Industries and (c) Liens on any property or
assets of Cherokee that are subordinate to the Agent's Liens), levy or
assessment securing or otherwise with respect to Indebtedness or an obligation
for the payment of money in an aggregate amount in excess of $100,000 is filed
of record with respect to any Borrower's, any Guarantor's or any of its
Subsidiaries' assets by the United States, or any department, agency, or
instrumentality thereof, or by any state, county, municipal, or governmental
agency, or if any taxes or debts owing at any time hereafter to any one or more
of such entities becomes a Lien (other than (a) a Permitted Lien, (b)
Liens on any property or assets of the Parent or Consolidated Industries and (c)
Liens on any property or assets of Cherokee that are subordinate to the Agent's
Liens), whether xxxxxx or otherwise, upon any Borrower's, any Guarantor's or any
of its Subsidiaries' assets and the same is not paid on the payment date
thereof;"
13. Section
8.8. Section 8.8 of the Loan Agreement is hereby amended and
restated in its entirety to read as follows:
"8.8 If
a judgment or other claim for an amount in excess of $100,000 becomes a Lien
(other than (a) Liens on any property or assets of the Parent or Consolidated
Industries and (b) Liens on any property or assets of Cherokee that are
subordinate to the Agent's Liens) or encumbrance upon any material portion of
any Borrower's, any Guarantor's or any of its Subsidiaries' properties or
assets;"
14. Section
8.9. Section 8.9 of the Loan Agreement is hereby amended and
restated in its entirety to read as follows:
"8.9 If
there is a default in any material agreement to which any Borrower, any
Guarantor (other than the Parent, Consolidated Industries and Cherokee) or any
of its Subsidiaries is a party and such default (a)(i) occurs at the final
maturity of the obligations thereunder, or (ii) results in a right by the other
party thereto, irrespective of whether exercised, to accelerate the maturity of
the applicable Borrower's, Guarantor's or its Subsidiaries' obligations
thereunder, to terminate such agreement, or to refuse to renew such agreement
pursuant to an automatic renewal right therein, and (b) involves
Indebtedness or an obligation for the payment of money in an aggregate amount in
excess of $100,000;"
15. Section
8.10. Section 8.10 of the Loan Agreement is hereby amended and
restated in its entirety to read as follows:
"8.10 If
any Borrower, any Guarantor (other than the Parent, Consolidated Industries and
Cherokee) or any of its Subsidiaries makes any payment on account of
Indebtedness that has been contractually subordinated in right of payment to the
payment of the Obligations, except to the extent such payment is permitted by
the terms of the subordination provisions applicable to such
Indebtedness;"
16. Guaranty. Section
18 of the Loan Agreement is hereby amended and restated in its entirety to read
as set forth in Schedule 2 to this Amendment.
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17. Consent to
Realignment.
(a) As of the
Second Amendment Effective Date, the Lenders and the Agent hereby consent to the
Realignment, provided that (i) the Realignment is consummated in accordance with
the steps set forth in the Realignment Steps, without any material deviation
therefrom, and (ii) within 5 Business Days after the consummation of the
Realignment, the Borrowers shall have delivered to the Agent the documents set
forth in Schedule 1 hereto, each in form and substance acceptable to the
Agent.
(b) The
consents and waivers in this Section 17 shall be
effective only in the specific instances and for the specific purposes set forth
herein and do not allow for any other or further departure from the terms and
conditions of the Loan Agreement or any other Loan Document, which terms and
conditions shall remain in full force and effect.
18. Conditions
Precedent. The effectiveness of this Amendment is subject to
the fulfillment, in a manner satisfactory to the Agent, of each of the following
conditions precedent (the first date upon which all such conditions shall have
been satisfied being herein called the "Second Amendment Effective
Date"):
(a) Representations
and Warranties; No Event of Default. The representations and
warranties contained herein, in Section 5 of the Loan Agreement and in each
other Loan Document and certificate or other writing delivered to the Agent or
any Lender pursuant hereto on or prior to the Second Amendment Effective Date
(as updated prior to the date hereof in accordance with the Loan Agreement)
shall be correct in all material respects on and as of the Second Amendment
Effective Date as though made on and as of such date, except to the extent that
such representations and warranties (or any schedules related thereto) expressly
relate solely to an earlier date (in which case such representations and
warranties shall be true and correct in all material respects on and as of such
date); and after giving effect to the amendments, consents and waivers set forth
herein, no Default or Event of Default shall have occurred and be continuing on
the Second Amendment Effective Date or would result from this Amendment becoming
effective in accordance with its terms.
(b) Delivery
of Documents. The Agent shall have received on or before the Second
Amendment Effective Date the following, each in form and substance satisfactory
to the Agent and, unless indicated otherwise, dated the Second Amendment
Effective Date:
(i) counterparts
of this Amendment duly executed by the Borrowers, the Agent and the Lenders;
and
(ii) such
other agreements, instruments, approvals, opinions and other documents as the
Agent may reasonably request from the Borrowers.
(c) Agent
shall have received, for the benefit of the Lenders, an amendment fee in the
amount of $10,000 in immediately available funds, which shall be fully earned
when payable and nonrefundable.
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19. Representations and
Warranties. Each Borrower, and only with respect to parts (b)
and (c) below, Parent and Consolidated Industries, hereby represents and
warrants to the Agent and the Lenders as follows:
(a) Representations
and Warranties; No Event of Default. The representations and
warranties herein, in Section 5 of the Loan Agreement (as updated prior to the
date hereof in accordance with the Loan Agreement) and in each other Loan
Document and certificate or other writing delivered to the Agent or any Lender
pursuant hereto on or prior to the Second Amendment Effective Date are correct
in all material respects on and as of the Second Amendment Effective Date as
though made on and as of such date, except to the extent that such
representations and warranties (or any schedules related thereto) expressly
relate solely to an earlier date (in which case such representations and
warranties are true and correct in all material respects on and as of such
date); and after giving effect to the amendments, consents and waivers set forth
herein, no Default or Event of Default has occurred and is continuing on the
Second Amendment Effective Date or would result from this Amendment becoming
effective in accordance with its terms.
(b) Organization,
Good Standing, Etc. Parent, Consolidated Industries and each Borrower
(i) is a corporation duly organized, validly existing and in good standing
under the laws of the state of its organization, (ii) has all requisite
power and authority to execute, deliver and perform this Amendment and the other
Loan Documents to which it is a party being executed in connection with this
Amendment, and to perform its respective obligations under the Loan Agreement,
as amended hereby, and (iii) is duly qualified to do business and is in
good standing in each jurisdiction in which the character of the properties
owned or leased by it or in which the transaction of its business makes such
qualification necessary except where the failure to be so qualified reasonably
could not be expected to have a Material Adverse Change.
(c) Authorization,
Etc. The execution, delivery and performance by each Borrower, Parent
and Consolidated Industries of this Amendment, and the performance by each
Borrower, Parent and Consolidated Industries of the Loan Agreement and the other
Loan Documents to which it is a party, each as amended hereby, (i) have
been duly authorized by all necessary action on the part of such Borrower,
Parent or Consolidated Industries, (ii) do not and will not contravene such
Borrower's, Parent's or Consolidated Industries' charter or by-laws, any
applicable law or any material contractual restriction binding on it or any of
its properties, (iii) do not and will not result in or require the creation
of any Lien (other than pursuant to any Loan Document) upon or with respect to
any of its properties, and (iv) do not and will not result in any
suspension, revocation, impairment, forfeiture or nonrenewal of any permit,
license, authorization or approval applicable to its operations or any of its
properties.
20. Joinder of Consolidated
Industries. By its execution of this Agreement, Consolidated
Industries hereby (i) confirms that, as of the Second Amendment Effective Date,
each representation and warranty made by it and contained in this Amendment or
in the Loan Agreement is true and correct in all material respects as they
relate to Consolidated Industries as of the effective date of this Amendment,
(ii) agrees that from and after the Second Amendment Effective Date it shall be
a "Guarantor" within the meaning of, and subject to, the Loan Agreement and each
other Loan Document as if it were a signatory thereto and shall be bound by
6
all of
the provisions thereof and (iii) agrees that it shall comply with and be subject
to all the terms, conditions, covenants, agreements and obligations set forth
therein. Consolidated Industries hereby agrees that each reference to
a "Guarantor" or "Guarantors" in the Loan Agreement or any other Loan Document
shall include Consolidated Industries, except as provided
therein. Consolidated Industries acknowledges that it has received a
copy of the Loan Agreement and the other Loan Documents and that it has read and
understands the terms thereof.
21. Reaffirmation, Confirmation,
and Acknowledgement. Except as expressly amended by this
Amendment, each of the Parent, Consolidated Industries, and each Borrower hereby
expressly confirms and agrees that the remaining terms, conditions, and
provisions of the Loan Agreement and the other Loan Documents shall be and
remain in full force and effect. Each of the Parent, Consolidated
Industries, and each Borrower hereby reaffirms and confirms its respective
obligations under the Loan Agreement and the other Loan Documents as amended by
this Amendment. Each of the Parent and Consolidated Industries hereby
expressly confirms and agrees that the Guaranty made by it under Section 18 of
the Loan Agreement as amended by this Amendment is, and shall continue to be, in
full force and effect, and is hereby ratified and confirmed in all
respects. The execution, delivery, and effectiveness of this
Amendment shall not, except as expressly provided herein, operate as a waiver of
any power, remedy, or right of the Agent or any Lender, or constitute a waiver
of any provision of, or any past or future noncompliance with, any of the Loan
Documents or any other documents, instruments, and agreements executed or
delivered in connection therewith, and shall not operate as a consent to any
further or other matter under the Loan Documents. Each of the Parent,
Consolidated Industries, and each Borrower expressly agrees and understands that
by entering into and performing its obligations hereunder, this Amendment,
including the amendment made to Section 18 of the Loan Agreement, shall not
constitute a novation, and shall in no way adversely affect or impair the
priority of Liens of the Agent on the Collateral or Parent's obligations under
Section 18.
22. Miscellaneous.
(a) Continued
Effectiveness of the Loan Agreement. Except as otherwise expressly
provided herein, the Loan Agreement and the other Loan Documents are, and shall
continue to be, in full force and effect and are hereby ratified and confirmed
in all respects, except that on and after the Second Amendment Effective Date
(i) all references in the Loan Agreement to "this Agreement", "hereto",
"hereof", "hereunder" or words of like import referring to the Loan Agreement
shall mean the Loan Agreement as amended by this Amendment, and (ii) all
references in the other Loan Documents to which any Borrower is a party to the
"Loan Agreement", "thereto", "thereof", "thereunder" or words of like import
referring to the Loan Agreement shall mean the Loan Agreement as amended by this
Amendment. Except as expressly provided herein, the execution,
delivery and effectiveness of this Amendment shall not operate as an amendment,
modification or waiver of any right, power or remedy of the Lender under the
Loan Agreement or any other Loan Document, nor constitute an amendment of any
provision of the Loan Agreement or any other Loan Document.
(b) Counterparts. This
Amendment may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which shall be
7
deemed to
be an original, but all of which taken together shall constitute one and the
same agreement.
(c) Headings. Section
headings herein are included for convenience of reference only and shall not
constitute a part of this Amendment for any other purpose.
(d) Governing
Law. This Amendment shall be governed by, and construed in accordance
with, the law of the State of New York.
(e) Costs and
Expenses. The Borrowers jointly and severally agree to pay on demand
all reasonable fees, costs and expenses of the Agent and each Lender in
connection with the preparation, execution and delivery of this Amendment and
the other related agreements, instruments and documents.
(f) Amendment
as Loan Document. Each Borrower hereby acknowledges and agrees that
this Amendment constitutes a "Loan Document" under the Loan
Agreement. Accordingly, it shall be an Event of Default under the
Loan Agreement (i) if any representation or warranty made by a Borrower under or
in connection with this Amendment shall have been untrue, false or misleading in
any material respect when made or (ii) if Borrowers fail to perform, keep, or
observe any term, provision, condition, covenant, or agreement contained in this
Amendment.
(g) Waiver of
Jury Trial. EACH BORROWER, THE AGENT AND THE LENDERS HEREBY
IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION BASED UPON OR ARISING OUT OF THIS AMENDMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.
[THE
REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
8
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
and delivered as of the date first above written.
Parent:
LSB
INDUSTRIES, INC.,
an
Delaware corporation
By: /s/ Xxxx X. Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
Vice President
Consolidated
Industries:
CONSOLIDATED INDUSTRIES CORP.,
an
Oklahoma corporation
By: /s/ Xxxx X. Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
Vice President
Borrowers:
THERMACLIME,
INC.,
an
Oklahoma corporation
By: /s/ Xxxx X. Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
Vice President
CHEROKEE NITROGEN COMPANY,
an
Oklahoma corporation
By: /s/ Xxxx X. Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
Vice President
CLIMATE
MASTER, INC.,
a
Delaware corporation
By: /s/ Xxxx X. Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
Vice President
CLIMATECRAFT,
INC.,
an
Oklahoma corporation
By: /s/ Xxxx X. Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
Vice President
CLIMACOOL,
CORP.,
an
Oklahoma corporation
By: /s/ Xxxx X. Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
Vice President
INTERNATIONAL ENVIRONMENTAL
CORPORATION, an Oklahoma corporation
By: /s/ Xxxx X. Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
Vice President
THERMACLIME
TECHNOLOGIES, INC.,
an
Oklahoma corporation
By: /s/ Xxxx X. Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
Vice President
KOAX CORP., an Oklahoma
corporation
By: /s/ Xxxx X. Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
Vice President
LSB
CHEMICAL CORP.,
an
Oklahoma corporation
By: /s/ Xxxx X. Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
Vice President
XPEDIAIR, INC., an Oklahoma
corporation.
By: s/ Xxxx X. Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
Vice President
EL
DORADO CHEMICAL COMPANY,
an
Oklahoma corporation
By: s/ Xxxx X. Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
Vice President
CHEMEX I CORP., an Oklahoma
corporation
By: s/ Xxxx X. Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
Vice President
TRISON
CONSTRUCTION, INC.,
an
Oklahoma corporation
By: /s/ Xxxx X. Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
Vice President
CHEMEX
II CORP.,
an
Oklahoma corporation
By: /s/ Xxxx X. Xxxxxx
Name:
Xxxx X. Xxxxxx
Title:
Vice President
Agent and
Lender:
XXXXX FARGO CAPITAL FINANCE, INC.,
a
California corporation, as Agent and Lender
By: /s/ Xxxx Xxxxxxxxx
Name:
Xxxx
Xxxxxxxxx
Title:
Vice
President
EXHIBIT
A
Realignment
Steps
SCHEDULE
1
Required
Documents
1. Certificates
of conversion of ThermaClime to a limited liability company.
2. Affirmation
of ThermaClime, L.L.C.
SCHEDULE
2
18. GUARANTY
18.1 Guaranty;
Limitation of Liability. Each of the Parent and Consolidated
Industries hereby, unconditionally and irrevocably, guarantees the punctual
payment when due, whether at stated maturity, by acceleration or otherwise, of
all Obligations of the Borrowers now or hereafter existing under any Loan
Document, whether for principal, interest (including, without limitation, all
interest that accrues after the commencement of any case, proceeding or other
action relating to bankruptcy, insolvency or reorganization of any Borrower),
fees, expenses or otherwise (such obligations, to the extent not paid by the
Borrowers, being the "Guaranteed Obligations"), and agrees to pay any and
all expenses (including reasonable counsel fees and expenses) incurred by the
Agents and the Lenders in enforcing any rights under the guaranty set forth in
this Section
18. Without limiting the generality of the foregoing, the
Parent's liability shall extend to all amounts that constitute part of the
Guaranteed Obligations and would be owed by the Borrowers to the Agents and the
Lenders under any Loan Document but for the fact that they are unenforceable or
not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving any Borrower.
18.2 Guaranty
Absolute. Each of the Parent and Consolidated Industries
guarantees that the Guaranteed Obligations will be paid strictly in accordance
with the terms of the Loan Documents, regardless of any law, regulation or order
now or hereafter in effect in any jurisdiction affecting any of such terms or
the rights of the Agents or the Lenders with respect thereto. The
obligations of the Parent and Consolidated Industries under this Section 18 are
independent of the Guaranteed Obligations, and a separate action or actions may
be brought and prosecuted against Parent and Consolidated Industries to enforce
such obligations, irrespective of whether any action is brought against the
Borrowers or whether the Borrowers are joined in any such action or
actions. The liability of the Parent and Consolidated Industries
under this Section
18 shall be irrevocable, absolute and unconditional irrespective of, and
each of Parent and Consolidated Industries hereby irrevocably waives any
defenses it may now or hereafter have in any way relating to, any or all of the
following:
(a) any
lack of validity or enforceability of any Loan Document or any agreement or
instrument relating thereto;
(b) any
change in the time, manner or place of payment of, or in any other term of, all
or any of the Guaranteed Obligations, or any other amendment or waiver of or any
consent to departure from any Loan Document, including, without limitation, any
increase in the Guaranteed Obligations resulting from the extension of
additional credit to the Borrowers or otherwise;
(c) any
taking, exchange, release or non-perfection of any Collateral, or any taking,
release or amendment or waiver of or consent to departure from any other
guaranty, for all or any of the Guaranteed Obligations;
(d) any
change, restructuring or termination of the corporate, limited liability company
or partnership structure or existence of any Borrower;
or
(e) any
other circumstance (including, without limitation, any statute of limitations)
or any existence of or reliance on any representation by the Agents or the
Lenders that might otherwise constitute a defense available to, or a discharge
of, Parent, Consolidated Industries, any Borrower or any other guarantor or
surety.
This
Section 18
shall continue to be effective or be reinstated, as the case may be, if at any
time any payment of any of the Guaranteed Obligations is rescinded or must
otherwise be returned by a Lender or any other Person upon the insolvency,
bankruptcy or reorganization of any Borrower or otherwise, all as though such
payment had not been made.
18.3. Waiver. Each
of Parent and Consolidated Industries hereby waives promptness, diligence,
notice of acceptance and any other notice with respect to any of the Guaranteed
Obligations and this Section 18 and any
requirement that the Agents or the Lenders exhaust any right or take any action
against the Borrowers or any other Person or any collateral. Each of
Parent and Consolidated Industries acknowledges that it will receive direct and
indirect benefits from the financing arrangements contemplated herein and that
the waiver set forth in this Section 18.3 is
knowingly made in contemplation of such benefits. Each of Parent and
Consolidated Industries hereby waives any right to revoke this Section 18, and
acknowledges that this Section 18 is
continuing in nature and applies to all Guaranteed Obligations, whether existing
now or in the future.
18.4. Continuing
Guaranty; Assignments. This Section 18 is a
continuing guaranty and shall (a) remain in full force and effect until the
later of (i) the cash payment in full of the Guaranteed Obligations (other than
indemnification obligations as to which no claim has been made) and all other
amounts payable under this Section 18 and (ii)
the Maturity Date, (b) be binding upon Parent and Consolidated Industries, and
their successors and assigns and (c) inure to the benefit of and be
enforceable by the Agents and the Lenders and their successors, pledgees,
transferees and assigns. Without limiting the generality of the
foregoing clause (c), any Lender may pledge, assign or otherwise transfer all or
any portion of its rights and obligations under this Agreement (including,
without limitation, all or any portion of its Commitments and the Advances owing
to it) to any other Person, and such other Person shall thereupon become vested
with all the benefits in respect thereof granted such Lender herein or
otherwise, in each case as provided in Section 14.1.
18.5. Subrogation. Neither
Parent nor Consolidated Industries will exercise any rights that they may now or
hereafter acquire against any Borrower or any other insider guarantor that arise
from the existence, payment, performance or enforcement of Parent's or
Consolidated Industries' obligations under this Section 18,
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution or indemnification and any right to participate in any
claim or remedy of the Agents and the Lenders against any Borrower or any other
insider guarantor or any collateral, whether or not such claim, remedy or right
arises in equity or under contract, statute or common law, including, without
limitation, the right to take or receive from any Borrower or any other insider
guarantor, directly or indirectly, in cash or other property or by set-off or in
any other manner, payment or security solely on account of
such
claim, remedy or right, unless and until all of the Guaranteed Obligations and
all other amounts payable under this Section 18 shall have
been paid in full in cash and the Maturity Date shall have
occurred. If any amount shall be paid to Parent or Consolidated
Industries in violation of the immediately preceding sentence at any time prior
to the later of the payment in full in cash of the Guaranteed Obligations and
all other amounts payable under this Section 18 and the
Maturity Date, such amount shall be held in trust for the benefit of the Agents
and the Lenders and shall forthwith be paid to the Agents and the Lenders to be
credited and applied to the Guaranteed Obligations and all other amounts payable
under this Section
18, whether matured or unmatured, in accordance with the terms of this
Agreement, or to be held as collateral for any Guaranteed Obligations or other
amounts payable under this Section 18 thereafter
arising. If (i) Parent or Consolidated Industries shall make
payment to the Agents and the Lenders of all or any part of the Guaranteed
Obligations, (ii) all of the Guaranteed Obligations and all other amounts
payable under this Section 18 shall be
paid in full in cash and (iii) the Maturity Date shall have occurred, the
Agents and the Lenders will, at Parent's or Consolidated Industries' request and
expense, execute and deliver to Parent or Consolidated Industries appropriate
documents, without recourse and without representation or warranty, necessary to
evidence the transfer by subrogation to Parent or Consolidated Industries of an
interest in the Guaranteed Obligations resulting from such payment by Parent or
Consolidated Industries.
