Exhibit 10(j)
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GUARANTY AGREEMENT
from
ALLETE INC.
Dated as of July 30, 2001
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TABLE OF CONTENTS
Page
SECTION 1. Guaranty.....................................................1
SECTION 2. Bankruptcy...................................................2
SECTION 3. Continuing Guaranty..........................................2
SECTION 4. Reinstatement................................................3
SECTION 5. Certain Actions..............................................3
SECTION 6. Application..................................................3
SECTION 7. Waiver.......................................................3
SECTION 8. Assignment...................................................5
SECTION 9. Subrogation..................................................5
SECTION 10. Miscellaneous................................................5
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT, dated as of July 30, 2001 (as amended or
otherwise modified from time to time, this "GUARANTY"), is made by ALLETE INC.,
a Minnesota corporation ("GUARANTOR").
W I T N E S S E T H:
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WHEREAS, ADESA Corporation, as a Guarantor, ADESA California, Inc. and
certain other Subsidiaries of ADESA Corporation that are or may become party
thereto, as Lessees, Atlantic Financial Group, Ltd., as Lessor, the financial
institutions party thereto, as Lenders, and SunTrust Bank, as Agent, have
entered into that certain Master Agreement, dated as of July 30, 2001 (as it may
be modified, amended or restated from time to time as and to the extent
permitted thereby, the "MASTER AGREEMENT"; and, unless otherwise defined herein,
terms which are defined or defined by reference in the Master Agreement
(including Appendix A thereto) shall have the same meanings when used herein as
such terms have therein); and
WHEREAS, it is a condition precedent to the Funding Parties
consummating the transactions to be consummated on the Initial Closing Date that
the Guarantor execute and deliver this Guaranty; and
WHEREAS, it is in the best interests of the Guarantor that the
transactions contemplated by the Master Agreement be consummated on the Initial
Closing Date; and
WHEREAS, this Guaranty, and the execution, delivery and performance
hereof, have been duly authorized by all necessary corporate action of
Guarantor; and
WHEREAS, this Guaranty is offered by the Guarantor as an inducement to
the Funding Parties to consummate the transactions contemplated in the Master
Agreement, which transactions, if consummated, will be of benefit to Guarantor;
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the Guarantor, the Guarantor hereby agrees as follows:
SECTION 1. GUARANTY. Guarantor hereby unconditionally guarantees to the
Agent and the Funding Parties the full and prompt payment when due, whether by
acceleration or otherwise, and at all times thereafter, and the full and prompt
performance, of all of the Liabilities (as hereinafter defined), including rent,
interest and Yield on any such Liabilities, whether accruing before or after any
bankruptcy or insolvency case or proceeding involving Guarantor, any Lessee or
any other Person and, if rent, interest or Yield on any portion of such
obligations ceases to accrue by operation of law by reason of the commencement
of such case or
proceeding, including such rent, interest and earnings as would have accrued on
any such portion of such obligations if such case or proceeding had not
commenced, and further agrees to pay all reasonable expenses (including
reasonable attorneys' fees and legal expenses) actually paid or incurred by each
of the Funding Parties in endeavoring to collect the Liabilities, or any part
thereof, and in enforcing this Guaranty. Notwithstanding the foregoing, during
the Construction Term for any Leased Property, only the Lessor shall be entitled
to make a claim under this Guaranty for Liabilities related to such Leased
Property. The term "LIABILITIES", as used herein, shall mean all of the
following, in each case howsoever created, arising or evidenced, whether direct
or indirect, joint or several, absolute or contingent, or now or hereafter
existing, or due or to become due: all amounts payable by the Lessees or the
Construction Agent to the Agent and the Funding Parties under the Lease
(including, without limitation, Basic Rent, Supplemental Rent and the Recourse
Deficiency Amount), the Master Agreement, the Construction Agency Agreement or
any other Operative Document; PROVIDED, HOWEVER, that the Guarantor will not be
obligated to pay to the Agent and Funding Parties under this Guaranty any
amounts greater than the Lessees and the Construction Agent would have had to
pay to the Agent and the Funding Parties under the Lease, the Master Agreement,
the Construction Agency Agreement and the other Operative Documents assuming
that such documents were enforced in accordance with their terms (and without
giving effect to any discharge or limitation thereon resulting or arising by
reason of the bankruptcy or insolvency of a Lessee), plus all actual and
reasonable costs of enforcing this Guaranty.
By way of extension but not in limitation of any of its other
obligations hereunder, Guarantor stipulates and agrees that if any foreclosure
proceedings are commenced with respect to any Leased Property and result in the
entering of a foreclosure judgment, any such foreclosure judgment, to the extent
related to the Liabilities and payable to any of the Funding Parties, shall be
treated as part of the Liabilities, and Guarantor unconditionally guarantees the
full and prompt payment of such judgment.
SECTION 2. BANKRUPTCY. Guarantor agrees that, in the event any
bankruptcy, reorganization or insolvency proceeding shall be instituted by or
against Guarantor and, if instituted against Guarantor, shall not be dismissed
or stayed for a period of ninety (90) days, and if such event shall occur at a
time when any of the Liabilities may not then be due and payable, Guarantor will
pay to the Funding Parties forthwith the full amount which would be payable
hereunder by Guarantor if all Liabilities were then due and payable.
SECTION 3. CONTINUING GUARANTY. THIS GUARANTY SHALL IN ALL RESPECTS BE
A CONTINUING, ABSOLUTE AND UNCONDITIONAL GUARANTY OF PROMPT AND COMPLETE PAYMENT
AND PERFORMANCE (AND NOT MERELY OF COLLECTION), AND SHALL REMAIN IN FULL FORCE
AND EFFECT (NOTWITHSTANDING, WITHOUT LIMITATION, THE DISSOLUTION OF GUARANTOR)
UNTIL THE TERMINATION OF THE COMMITMENTS AND THE FULL AND FINAL PAYMENT OF ALL
OF THE LIABILITIES.
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SECTION 4. REINSTATEMENT. Guarantor further agrees that, if at any time
all or any part of any payment theretofore applied to any of the Liabilities is
or must be rescinded or returned for any reason whatsoever (including, without
limitation, the insolvency, bankruptcy or reorganization of Guarantor or any
Lessee), such Liabilities shall, for the purposes of this Guaranty, to the
extent that such payment is or must be rescinded or returned, be deemed to have
continued in existence, notwithstanding such application, and this Guaranty
shall continue to be effective or be reinstated, as the case may be, as to such
Liabilities, all as though such application had not been made.
SECTION 5. CERTAIN ACTIONS. The Funding Parties may, from time to time
at their discretion and without notice to Guarantor (but subject to the terms of
the other Operative Documents), take any or all of the following actions without
impairing Guarantor's obligations hereunder: (a) retain or obtain (i) a security
interest in any Lessee's interests in the Lease or the Leased Property and (ii)
a lien or a security interest hereafter granted by any Person upon or in any
property, in each case to secure any of the Liabilities or any obligation
hereunder; (b) retain or obtain the primary or secondary obligation of any
obligor or obligors, in addition to the Guarantors, with respect to any of the
Liabilities; (c) extend or renew for one or more periods (regardless of whether
longer than the original period), or release or compromise any obligation of
Guarantor hereunder or any obligation of any nature of any other obligor
(including, without limitation, the Lessor and the Lessees) with respect to any
of the Liabilities; (d) release or fail to perfect its Lien upon or security
interest in, or impair, surrender, release or permit any substitution or
exchange for, all or any part of any property securing any of the Liabilities or
any obligation hereunder, or extend or renew for one or more periods (regardless
of whether longer than the original period) or release or compromise any
obligations of any nature of any obligor with respect to any such property; and
(e) resort to Guarantor for payment of any of the Liabilities, regardless of
whether the Agent or any other Person shall have resorted to any property
securing any of the Liabilities or any obligation hereunder or shall have
proceeded against any Lessee or any other obligor primarily or secondarily
obligated with respect to any of the Liabilities (all of the actions referred to
in this CLAUSE (e) being hereby expressly waived by Guarantor).
SECTION 6. APPLICATION. Any amounts received by any Funding Party from
whatever source on account of the Liabilities shall be applied by it toward the
payment of such of the Liabilities, and in such order of application, as is set
forth in the Operative Documents.
SECTION 7. WAIVER. Guarantor expressly waives: (a) any defense based
upon any legal disability or other defense of any Lessee, any other guarantor or
other person, or by reason of the cessation or limitation of the liability of
any Lessee from any cause other than full payment of all sums payable under the
Operative Documents; (b) any defense based upon any lack of authority of the
officers, directors, partners or agents acting or purporting to act on behalf of
any Lessee or any principal of any Lessee or any defect in the formation of any
Lessee or any principal of any Lessee; (c) any defense based upon the
application by any Lessee of the proceeds of the Advances for purposes other
than the purposes represented by the Lessees and/or the Construction Agent to
the Funding Parties or intended or understood by the Funding Parties
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or Guarantor; (d) any and all rights and defenses arising out of an election of
remedies by the Agent or any Funding Party, even though that election of
remedies may adversely affect Guarantor's rights of subrogation and
reimbursement against the principal; (e) any defense based upon a Funding
Party's or the Agent's failure to disclose to Guarantor any information
concerning any Lessee's financial condition or any other circumstances bearing
on any Lessee's ability to pay all sums payable under the Operative Documents;
(f) any defense based upon any statute or rule of law which provides that the
obligation of a surety must be neither larger in amount nor in any other
respects more burdensome than that of a principal; (g) any defense based upon
the Agent's or any Funding Party's election, in any proceeding instituted under
Bankruptcy Code (defined below), of the application of Section 1111(b)(2) of
Bankruptcy Code or any successor statute; (h) any defense based upon any
borrowing or any grant of a security interest under Section 364 of the
Bankruptcy Code; (i) any right of subrogation, any right to enforce any remedy
which the Agent or any Funding Party may have against any Lessee and any right
to participate in, or benefit from, any security for the Operative Documents now
or hereafter held by the Agent or any Funding Party (except as set forth in
SECTION 9); (j) presentment, demand, protest and notice of any kind; (k) the
benefit of any statute of limitations affecting the liability of Guarantor
hereunder or the enforcement hereof; (l) any right to require the Agent or any
Funding Party to institute suit or exhaust remedies against any Lessee or others
liable for any of such indebtedness, to enforce the Agent's or any Funding
Party's rights against any collateral which shall have been given to secure the
Liabilities, to enforce the Agent's or any Funding Party's rights against any
other guarantors of such indebtedness, to join any Lessee or any others liable
on such indebtedness in any action seeking to enforce this Guaranty, to resort
to any other means of obtaining payment of such indebtedness; (m) notices of
disbursement of Advance proceeds, acceptance hereof, proof of non-payment,
default under any Operative Document, notices and demands of any kind; and (n)
all diligence in collection of or realization upon the Liabilities or any
thereof. Guarantor further waives any and all rights and defenses that Guarantor
may have because any Lessee's debt is secured by real property; this means,
among other things, that: (1) the Agent and the Funding Parties may collect from
Guarantor without first foreclosing on any real or personal property collateral
pledged by any Lessee; (2) if the Agent or any Funding Party forecloses on any
real property collateral pledged by any Lessee, then (A) the amount of the debt
may be reduced only by the price for which that collateral is sold at the
foreclosure sale, even if the collateral is worth more than the sale price, and
(B) the Agent and the Funding Parties may collect from Guarantor even if the
Agent or any Funding Party, by foreclosing on the real property collateral, has
destroyed any right Guarantor may have to collect from any Lessee. The foregoing
sentence is an unconditional and irrevocable waiver of any rights and defenses
Guarantor may have because any Lessee's debt is secured by real property. These
rights and defenses being waived by Guarantor include, but are not limited to,
any rights or defenses based upon Section 580a, 580b, 580d or 726 of the
California Code of Civil Procedure. Without limiting the generality of the
foregoing or any other provision hereof, Guarantor further expressly waives to
the extent permitted by law any and all rights and defenses, including without
limitation any rights of subrogation, reimbursement, indemnification and
contribution, which might otherwise be available to Guarantor under California
Civil Code Sections 2787 to 2855, inclusive, 2899 and 3433, or under California
Code of Civil Procedure Sections 580a, 580b, 580d and 726, or any of such
sections. Finally, Guarantor agrees that the
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performance of any act or any payment which tolls any statute of limitations
applicable to any of the other Operative Documents shall similarly operate to
toll the statute of limitations applicable to Guarantor's liability hereunder.
SECTION 8. ASSIGNMENT. Subject to Section 6 of the Master Agreement,
each Funding Party may, from time to time, whether before or after any
discontinuance of this Guaranty, at its sole discretion and without notice to
Guarantor, assign or transfer any or all of its portion of the Liabilities or
any interest therein; and, notwithstanding any such assignment or transfer or
any subsequent assignment or transfer thereof, such Liabilities shall be and
remain Liabilities for the purposes of this Guaranty, and each and every such
immediate and successive assignee or transferee of any of the Liabilities or of
any interest therein shall, to the extent of such assignee's or transferee's
interest in the Liabilities, be entitled to the benefits of this Guaranty to the
same extent as if such assignee or transferee were such Funding Party.
SECTION 9. SUBROGATION. The undersigned shall be subrogated to the
rights of the Agent and the Funding Parties under the Liabilities and this
Guaranty in respect of the Liabilities and all other amounts paid or payable by
the undersigned under this Guaranty. The undersigned shall not exercise any
right of subrogation against, and shall not require the Agent and the Funding
Parties to xxxxxxxx any assets held as collateral security for, any Lessee or
any other party liable on the Liabilities unless and until all Liabilities
hereunder have been paid in full.
SECTION 10. MISCELLANEOUS. No delay in the exercise of any right or
remedy shall operate as a waiver thereof, and no single or partial exercise of
any right or remedy shall preclude other or further exercise thereof or the
exercise of any other right or remedy. No action permitted hereunder shall in
any way affect or impair any Funding Party's rights or Guarantor's obligations
under this Guaranty. For the purposes of this Guaranty, Liabilities shall
include all of the obligations described in the definition thereof,
notwithstanding any right or power of any Lessee or the Lessor or anyone else to
assert any claim or defense (other than final payment or full performance) as to
the invalidity or unenforceability of any such obligation, and no such claim or
defense shall affect or impair the obligations of Guarantor hereunder. Guarantor
hereby acknowledges that there are no conditions to the effectiveness of this
Guaranty.
This Guaranty shall be binding upon Guarantor and upon Guarantor's
successors and permitted assigns; and all references herein to Guarantor shall
be deemed to include any successor or successors thereof, whether immediate or
remote, to such Person; provided that Guarantor shall not assign its obligations
hereunder, in whole or in part, without the prior written consent of the Funding
Parties, except that if Guarantor is a party to an internal reorganization
pursuant to which all or substantially all of Guarantor's common stock is
exchanged for the common stock of an entity that becomes the parent of
Guarantor, the Guarantor may assign and delegate its rights and obligations
under this Guaranty to Guarantor's new parent so long as (i) such new parent is
at least of the same credit quality (as reasonably determined by the Funding
Parties) as Guarantor immediately prior to such reorganization and (ii) such new
parent executes and delivers to the Agent such assumption agreements,
certificates and opinions as the Agent reasonably requests. Upon any such
delegation and assumption of obligations in accordance
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with the previous sentence, Guarantor shall be relieved of and fully discharged
from all obligations hereunder, whether such obligations arose before or after
such delegation and assumption.
The Documentary Conventions shall apply to this Guaranty.
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IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be executed
and delivered as of the date first above written.
ALLETE, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Name Printed: Xxxxxx X. Xxxxxxxxx
Title: Vice President, General Counsel
and Secretary
S-1 GUARANTY