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Exhibit 10.23
FORM OF
GUARANTY OF PAYMENT OF OBLIGATIONS
1. Recitals.
HAWK CORPORATION, a Delaware corporation (together with its successors and
assigns, "Borrower"), the financial institutions listed on Annex I to the Credit
Agreement, as hereinafter defined (together with their respective successors and
assigns, collectively, "Lenders" and, individually, "Lender"), and KEYBANK
NATIONAL ASSOCIATION, as administrative agent for the Lenders ("Administrative
Agent"), are parties to the Credit Agreement. [ ],
[a corporation]("Guarantor"), desires that the Lenders
continue to grant the financial accommodations to Borrower and each Eligible
Subsidiary as described in the Credit Agreement.
Guarantor, a subsidiary of Borrower whose financing is provided by the
Loans, as hereinafter defined, and Letters of Credit, as hereinafter defined,
deems it to be in the direct pecuniary and business interests of Guarantor that
Borrower continue to obtain from the Lenders the Commitment, as defined in the
Credit Agreement, and the Loans and Letters of Credit provided for in the Credit
Agreement, and that Borrower and each Eligible Subsidiary continue to obtain
Alternative Currency Advances, as defined in the Credit Agreement.
Guarantor understands that the Lenders are willing to continue to grant
such financial accommodations under the Credit Agreement only upon certain terms
and conditions, one of which is that Guarantor guarantee the payment of the
Obligations, as hereinafter defined, and this Guaranty of Payment of Obligations
(as the same may from time to time be amended, restated or otherwise modified,
this "Agreement") is being executed and delivered in consideration of each
financial accommodation granted to Borrower and each Eligible Subsidiary and for
other valuable considerations.
2. Definitions. Except as specifically defined herein, capitalized terms
used herein that are defined in the Credit Agreement shall have their respective
meanings ascribed to them in the Credit Agreement. As used herein, the following
terms shall have the following meanings:
2.1. "Collateral" shall mean, collectively, all property, if any, securing
the Obligations or any part thereof at the time in question.
2.2. "Credit Agreement" shall mean the Credit Agreement, dated as of May
1, 1998, among Borrower, the Lenders and Administrative Agent, as amended and as
the same may from time to time be further amended, restated or otherwise
modified.
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2.3. "Letter of Credit" shall mean any Letter of Credit, as defined in the
Credit Agreement, issued pursuant to the Credit Agreement.
2.4. "Loan" shall mean any Loan, as defined in the Credit Agreement,
granted pursuant to the Credit Agreement.
2.5. "Obligations" shall mean, collectively, (a) all Loans and Letters of
Credit; (b) all other indebtedness now owing or hereafter incurred by Borrower
or any Eligible Subsidiary to Administrative Agent and the Lenders pursuant to
the Credit Agreement and the Notes executed in connection therewith; (c) each
renewal, extension, consolidation or refinancing of any of the foregoing, in
whole or in part; (d) all interest from time to time accruing on any of the
foregoing, and all fees and other amounts payable to Administrative Agent or any
of the Lenders pursuant to the Credit Agreement or any other Credit Document;
and (e) all Related Expenses.
2.6. "Obligor" shall mean any Person that, or any of whose property, is or
shall be obligated on the Obligations or any part thereof in any manner and
includes, without limiting the generality of the foregoing, Borrower or
Guarantor, and any other co-maker, endorser, guarantor of payment, subordinating
creditor, assignor, grantor of a security interest, pledgor, mortgagor or any
hypothecator of property, if any.
2.7. "Person" shall mean any individual, sole proprietorship, partnership,
joint venture, unincorporated organization, corporation, limited liability
company, institution, trust, estate, government or other agency or political
subdivision thereof or any other entity.
2.8. "Related Expenses" shall mean any and all reasonable costs,
liabilities and expenses (including, without limitation, losses, damages,
penalties, claims, actions, reasonable attorneys' fees, legal expenses,
judgments, suites and disbursements) (a) incurred by Administrative Agent, or
imposed upon or asserted against Administrative Agent or any Lender, in any
attempt by Administrative Agent and the Lenders to (i) obtain, preserve, perfect
or enforce any security interest evidenced by this Agreement, the Credit
Agreement, any Credit Document, or any other agreement, document or instrument
executed in connection with any of the foregoing; (ii) obtain payment,
performance or observance of any and all of the Obligations; or (iii) maintain,
insure, audit, collect, preserve, repossess or dispose of any of the Collateral
or any other collateral securing the Obligations, including, without limitation,
costs and expenses for appraisals, assessments and audits of Borrower of any
such collateral; or (b) incidental or related to (a) above, including without
limitation, interest thereupon from the date incurred, imposed or asserted until
paid.
3. Guaranty of Obligations. Guarantor hereby absolutely and
unconditionally guarantees the prompt payment in full of all of the Obligations
as and when the respective parts thereof become due and payable. If the
Obligations, or any part thereof, shall not be paid in full when due and
payable, Administrative Agent, on behalf of the Lenders, in each case, shall
have the right to proceed directly against Guarantor under this Agreement to
collect the payment in full of the Obligations, regardless of whether or not
Administrative Agent, on behalf of the Lenders, shall have theretofore proceeded
or shall then be proceeding against Borrower or any other Obligor or Collateral,
if any, or any of the foregoing, it being understood that
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Administrative Agent and the Required Lenders, in their sole discretion, may
proceed against any Obligor and any Collateral, and may exercise each right,
power or privilege that Administrative Agent or the Lenders may then have,
either simultaneously or separately, and, in any event, at such time or times
and as often and in such order as Administrative Agent and the Required Lenders,
in their sole discretion, may from time to time deem expedient to collect the
payment in full of the Obligations.
4. Payments Conditional. Whenever Administrative Agent or any Lender shall
credit any payment to the Obligations, or any part thereof, whatever the source
or form of payment, the credit shall be conditional as to Guarantor unless and
until the payment shall be final and valid as to all the world. Without limiting
the generality of the foregoing, Guarantor agrees that if any check or other
instrument so applied shall be dishonored by the drawer or any party thereto, or
if any proceeds of Collateral or payment so applied shall thereafter be
recovered by any trustee in bankruptcy or any other Person, each Lender, in each
case, may reverse any entry relating thereto on its books and Guarantor shall
remain liable therefor, even if such Lender may no longer have in its possession
any evidence of the Obligations to which the payment in question was applied.
5. Guarantor's Obligations Absolute and Unconditional. Regardless of the
duration of time, regardless of whether Borrower or any Eligible Subsidiary may
from time to time cease to be indebted to the Lenders and irrespective of any
act, omission or course of dealing whatever on the part of Administrative Agent
or any Lender, Guarantor's liabilities and other obligations under this
Agreement shall remain in full effect until the payment in full of the
Obligations and termination of the Credit Agreement. Without limiting the
generality of the foregoing:
5.1. Lenders Have No Duty To Make Advances. No Lender shall at any time be
under any duty to Guarantor to grant any financial accommodation to Borrower or
any Eligible Subsidiary, irrespective of any duty or commitment of any of the
Lenders to Borrower or such Eligible Subsidiary, or to follow or direct the
application of the proceeds of any such financial accommodation;
5.2. Guarantor's Waiver of Notice, Presentment, etc. Guarantor waives (a)
notice of the granting of any Loan to Borrower, the issuance of any Letter of
Credit or any Eligible Subsidiary or the incurring of any other indebtedness by
Borrower or any Eligible Subsidiary or the terms and conditions thereof, (b)
presentment, demand for payment and notice of dishonor of the Obligations or any
part thereof, or any other indebtedness incurred by Borrower or any Eligible
Subsidiary to any of the Lenders, (c) notice of any indulgence granted to any
Obligor, and (d) any other notice to which Guarantor might, but for this waiver,
be entitled;
5.3. Lenders' Rights Not Prejudiced by Action or Omission. Administrative
Agent and the Lenders, in their sole discretion, may, without any prejudice to
their rights under this Agreement, at any time or times, without notice to or
the consent of Guarantor, (a) grant Borrower or any Eligible Subsidiary whatever
financial accommodations that Administrative Agent and the Lenders may from time
to time deem advisable, even if Borrower or such Eligible Subsidiary might be in
default in any respect and even if those financial accommodations might not
constitute indebtedness the payment of which is guaranteed hereunder, (b) assent
to any
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renewal, extension, consolidation or refinancing of the Obligations, or any part
thereof, (c) forbear from demanding security, if Administrative Agent and the
Lenders shall have the right to do so, (d) release any Obligor or Collateral or
assent to any exchange of Collateral, if any, irrespective of the consideration,
if any, received therefor, (e) grant any waiver or consent or forbear from
exercising any right, power or privilege that Administrative Agent and the
Lenders may have or acquire, (f) assent to any amendment, deletion, addition,
supplement or other modification in, to or of any writing evidencing or securing
any Obligations or pursuant to which any Obligations are created, (g) grant any
other indulgence to any Obligor, (h) accept any Collateral for, or any other
Obligor upon, the Obligations or any part thereof, and (i) fail, neglect or omit
in any way to realize upon any Collateral or to protect the Obligations or any
part thereof or any Collateral therefor;
5.4. Liabilities Survive Guarantor's Dissolution. Guarantor's liabilities
and other obligations under this Agreement shall survive any dissolution of
Guarantor; and
5.5. Liabilities Absolute and Unconditional. Guarantor's liabilities and
other obligations under this Agreement shall be absolute and unconditional
irrespective of any lack of validity or enforceability of the Credit Agreement,
the Notes, any Credit Document or any other agreement, instrument or document
evidencing the Loans or Letters of Credit or related thereto, or any other
defense available to Guarantor in respect of this Agreement.
6. Representations and Warranties. Guarantor represents and warrants to
Administrative Agent and each of the Lenders that (a) Guarantor is a duly
organized and validly existing corporation, in good standing under the laws of
the state of its incorporation (as referenced in the first paragraph of this
Agreement), and is qualified to do business in each state where a failure to so
qualify would have a material adverse effect on Guarantor; (b) Guarantor has
legal power and right to execute and deliver this Agreement and to perform and
observe the provisions hereof; (c) the officers executing and delivering this
Agreement on behalf of Guarantor have been duly authorized to do so, and this
Agreement, when executed, is legal and binding upon Guarantor in every respect;
(d) except for matters described or referenced in the Credit Agreement or any
schedule thereto, no litigation or proceeding is pending or threatened against
Guarantor before any court or any administrative agency that, in Guarantor's
opinion, after consultation with Guarantor's counsel, is reasonably expected to
have a material adverse effect on Guarantor; (e) Guarantor has received
consideration that is the reasonable equivalent value of the obligations and
liabilities that Guarantor has incurred to Administrative Agent, for the benefit
of the Lenders; (f) Guarantor is not insolvent, as defined in any applicable
state or federal statute, nor will Guarantor be rendered insolvent by the
execution and delivery of this Agreement to Administrative Agent and the
Lenders; (g) Guarantor is not engaged or about to engage in any business or
transaction for which the assets retained by Guarantor are or will be an
unreasonably small amount of capital, taking into consideration the obligations
to the Lenders incurred hereunder; and (h) Guarantor does not intend to, nor
does Guarantor believe that Guarantor will, incur debts beyond Guarantor's
ability to pay such debts as they mature.
7. Disability of Obligor. Without limiting the generality of any of the
other provisions hereof, Guarantor specifically agrees that upon the dissolution
of any Obligor and/or the filing or other commencement of any bankruptcy or
insolvency proceedings by, for or against
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any Obligor, including without limitation, any assignment for the benefit of
creditors or other proceedings intended to liquidate or rehabilitate any
Obligor, Administrative Agent and the Required Lenders, in their sole
discretion, may declare the unpaid principal balance of and accrued interest on
the Obligations to be forthwith due and payable in full without notice. Upon the
occurrence of any of the events enumerated in the immediately preceding
sentence, Guarantor shall, upon the demand of Administrative Agent, on behalf of
the Lenders, whenever made, pay to Administrative Agent, for the benefit of the
Lenders, an amount equal to the then unpaid principal balance of and accrued
interest on the Obligations.
8. Waiver of Guarantor's Rights Against Borrower and Collateral. To the
extent permitted by law, Guarantor waives any claim or other right that
Guarantor might now have or hereafter acquire against Borrower, any Eligible
Subsidiary or any other Obligor that arises from the existence or performance of
Guarantor's liabilities or other obligations under this Agreement, including,
without limitation, any right of subrogation, reimbursement, exoneration,
contribution, indemnification, and any right to participate in any claim or
remedy of Administrative Agent or any Lender against Borrower, any Eligible
Subsidiary or any Collateral that Administrative Agent or any Lender now has or
hereafter acquires, whether or not such claim, remedy or right arises in equity,
or under contract, statute or common law.
9. Maximum Liability of Guarantor. Anything in this Agreement to the
contrary notwithstanding, in no event shall the amount of Guarantor's liability
hereunder exceed the maximum amount that (after giving effect to the incurring
of the obligations hereunder and to any rights to contribution of Guarantor from
other affiliates of Borrower) would not render the rights to payment of
Administrative Agent and the Lenders hereunder void, voidable or avoidable under
any applicable fraudulent transfer law.
10. Notice. Except as otherwise expressly provided herein, all notices and
other communications provided for hereunder shall be in writing (including
telegraphic, telex, facsimile transmission or cable communication) and mailed,
telegraphed, telexed, transmitted, cabled or delivered, if to Guarantor, at the
address specified on the signature page of this Agreement, if to any Lender, at
its address specified for such Lender on Annex I to the Credit Agreement, and if
to Administrative Agent, at the Notice Office, as defined in the Credit
Agreement; or at such other address as shall be designated by any party in a
written notice to the other parties hereto. All such notices and communications
shall be mailed, telegraphed, telexed, telecopied, or cabled or sent by
overnight courier, and shall be effective when received.
11. Miscellaneous. This Agreement shall bind Guarantor and Guarantor's
successors and assigns and shall inure to the benefit of Administrative Agent
and each Lender and their respective successors and assigns, including (without
limitation) each holder of any Note evidencing any Obligation. If, at any time,
one or more provisions of this Agreement is or becomes invalid, illegal or
unenforceable in whole or in part, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
This Agreement constitutes a final written expression of all of the terms of
this Agreement, is a complete and exclusive statement of those terms and
supersedes all oral representations, negotiations and prior writings, if any,
with respect to the subject matter hereof. The relationship between (a)
Guarantor and (b) Administrative Agent and the Lenders with respect to this
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Agreement is and shall be solely that of debtor and creditors, respectively, and
Administrative Agent and the Lenders shall have no fiduciary obligation toward
Guarantor with respect to this Agreement or the transactions contemplated
hereby. The captions herein are for convenience of reference only and shall be
ignored in interpreting the provisions of this Agreement.
12. Governing Law; Submission to Jurisdiction. The provisions of this
Agreement and the respective rights and duties of Guarantor, Administrative
Agent and the Lenders hereunder shall be governed by and construed in accordance
with Ohio law, without regard to principles of conflict of laws. Guarantor
hereby irrevocably submits to the non-exclusive jurisdiction of any Ohio state
or federal court sitting in Cleveland, Ohio, over any action or proceeding
arising out of or relating to this Agreement, the Credit Agreement, any Credit
Document or any other agreement, document or instrument executed in connection
with any of the foregoing, and Guarantor hereby irrevocably agrees that all
claims in respect of such action or proceeding may be heard and determined in
such court. Guarantor, on behalf of itself and its Subsidiaries, hereby
irrevocably waives, to the fullest extent permitted by law, any objection it may
now or hereafter have to the laying of venue in any action or proceeding in any
such Ohio state or federal court as well as any right it may now or hereafter
have to remove such action or proceeding, once commenced, to another court on
the grounds of FORUM NON CONVENIENS or otherwise. Guarantor agrees that a final,
non-appealable judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.
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13. JURY TRIAL WAIVER. GUARANTOR, ADMINISTRATIVE AGENT AND THE LENDERS, TO
THE EXTENT PERMITTED BY LAW, EACH WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, AMONG
ADMINISTRATIVE AGENT, ANY OF THE LENDERS, BORROWER AND/OR GUARANTOR ARISING OUT
OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED BETWEEN EACH OF THEM AND GUARANTOR IN CONNECTION WITH THIS AGREEMENT
OR ANY NOTE OR OTHER AGREEMENT, INSTRUMENT OR DOCUMENT EXECUTED OR DELIVERED IN
CONNECTION THEREWITH OR THE TRANSACTIONS RELATED THERETO.
Executed as of the day of August, 2001, at , Ohio.
Address:
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-------------------------------- By:
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Name:
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Title:
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