Exhibit 10.21
SUBSIDIARY GUARANTY
This SUBSIDIARY GUARANTY is entered into as of October 23, 1997
by THE UNDERSIGNED (each a "Guarantor" and collectively, "Guarantors") in
favor of and for the benefit of FIRST UNION NATIONAL BANK, as
administrative agent for and representative of (in such capacity herein
called "Guarantied Party") the financial institutions ("Lenders") party to
the Credit Agreement referred to below and any Interest Rate Exchangers (as
hereinafter defined), and, subject to subsection 3.12, for the benefit of
the other Beneficiaries (as hereinafter defined).
RECITALS
A. The Pantry, Inc., a Delaware corporation ("Company"), has
entered into that certain Credit Agreement dated as of October 23, 1997
with Guarantied Party, Syndication Agent and Lenders (said Credit
Agreement, as it may hereafter be amended, supplemented or otherwise
modified from time to time, being the "Credit Agreement"; capitalized terms
defined therein and not otherwise defined herein being used herein as
therein defined).
B. Company may from time to time enter, or may from time to time
have entered, into one or more Interest Rate Agreements (collectively, the
"Lender Interest Rate Agreements") with or one or more Lenders (in such
capacity, collectively, "Interest Rate Exchangers") in accordance with the
terms of the Credit Agreement, and it is desired that the obligations of
Company under the Lender Interest Rate Agreements, including the obligation
of Company to make payments thereunder in the event of early termination
thereof (all such obligations being the "Interest Rate Obligations"),
together with all obligations of Company under the Credit Agreement and the
other Loan Documents, be guarantied hereunder.
C. A portion of the proceeds of the Loans may be advanced to
Guarantors and thus the Guarantied Obligations (as hereinafter defined) are
being incurred for and will inure to the benefit of Guarantors (which
benefits are hereby acknowledged).
D. It is a condition precedent to the making of the initial
Loans under the Credit Agreement that Company's obligations thereunder be
guarantied by Guarantors.
E. Guarantors are willing irrevocably and unconditionally to
guaranty such obligations of Company.
NOW, THEREFORE, based upon the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and in order to induce Lenders and Guarantied Party to enter
into the Credit Agreement and to make Loans and other extensions of credit
thereunder and to induce Interest Rate
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Exchangers to enter into the Lender Interest Rate Agreements, Guarantors
hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Certain Defined Terms. As used in this Guaranty, the
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following terms shall have the following meanings unless the context
otherwise requires:
"Beneficiaries" means Guarantied Party, Syndication Agent,
Lenders and any Interest Rate Exchangers.
"Guarantied Obligations" has the meaning assigned to that term in
subsection 2.1.
"Guaranty" means this Subsidiary Guaranty dated as of October 23,
1997, as it may be amended, supplemented or otherwise modified from time to
time.
"payment in full", "paid in full" or any similar term means
payment in full of the Guarantied Obligations, including all principal,
interest, costs, fees and expenses (including reasonable legal fees and
expenses) of Beneficiaries as required under the Loan Documents and the
Lender Interest Rate Agreements.
1.2 Interpretation.
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(a) References to "Sections" and "subsections" shall be to
Sections and subsections, respectively, of this Guaranty unless otherwise
specifically provided.
(b) In the event of any conflict or inconsistency between the
terms, conditions and provisions of this Guaranty and the terms, conditions
and provisions of the Credit Agreement, the terms, conditions and
provisions of this Guaranty shall prevail.
SECTION 2. THE GUARANTY
2.1 Guaranty of the Guarantied Obligations. Subject to the
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provisions of subsection 2.2(a), Guarantors jointly and severally hereby
irrevocably and unconditionally guaranty the due and punctual payment in
full of all Guarantied Obligations when the same shall become due, whether
at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise (including amounts that would become due but for the
operation of the automatic stay under Section 362(a) of the Bankruptcy
Code, 11 U.S.C. (S) 362(a)). The term "Guarantied Obligations" is used
herein in its most comprehensive sense and includes:
(a) any and all Obligations of Company and any and all Interest
Rate Obligations, in each case now or hereafter made, incurred or created,
whether absolute or contingent, liquidated or unliquidated, whether due or
not due, and however arising under or in connection with the Credit
Agreement and the other Loan Documents and the Lender Interest Rate
Agreements, including those arising under successive borrowing
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transactions under the Credit Agreement which shall either continue the
Obligations of Company or from time to time renew them after they have been
satisfied and including interest which, but for the filing of a petition in
bankruptcy with respect to Company, would have accrued on any Guarantied
Obligations, whether or not a claim is allowed against Company for such
interest in the related bankruptcy proceeding; and
(b) those expenses set forth in subsection 2.8 hereof.
2.2 Limitation on Amount Guarantied; Contribution by Guarantors.
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(a) Anything contained in this Guaranty to the contrary notwithstanding, if
any Fraudulent Transfer Law (as hereinafter defined) is determined by a
court of competent jurisdiction to be applicable to the obligations of any
Guarantor under this Guaranty, such obligations of such Guarantor hereunder
shall be limited to 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"), in each case after giving
effect to all other liabilities of such Guarantor, contingent or otherwise,
that are relevant under the Fraudulent Transfer Laws (specifically
excluding, however, any liabilities of such Guarantor (x) in respect of
intercompany indebtedness to Company or other affiliates of Company to the
extent that such indebtedness would be discharged in an amount equal to the
amount paid by such Guarantor hereunder and (y) under any guaranty of
Subordinated Indebtedness which guaranty contains a limitation as to
maximum amount similar to that set forth in this subsection 2.2(a),
pursuant to which the liability of such Guarantor hereunder is included in
the liabilities taken into account in determining such maximum amount) and
after giving effect as assets to the value (as determined under the
applicable provisions of the Fraudulent Transfer Laws) of any rights to
subrogation, reimbursement, indemnification or contribution of such
Guarantor pursuant to applicable law or pursuant to the terms of any
agreement (including any such right of contribution under subsection
2.2(b).
(b) Guarantors under this Guaranty together desire to allocate
among themselves, in a fair and equitable manner, their obligations arising
under this Guaranty. Accordingly, in the event any payment or distribution
is made on any date by any Guarantor under this Guaranty (a "Funding
Guarantor") that exceeds its Fair Share (as defined below) as of such date,
that Funding Guarantor shall be entitled to a contribution from each of the
other Guarantors in the amount of such other Guarantor's Fair Share
Shortfall (as defined below) as of such date, with the result that all such
contributions will cause each Guarantor's Aggregate Payments (as defined
below) to equal its Fair Share as of such date. "Fair Share" means, with
respect to a Guarantor as of any date of determination, an amount equal to
(i) the ratio of (x) the Adjusted Maximum Amount (as defined below) with
respect to such Guarantor to (y) the aggregate of the Adjusted Maximum
Amounts with respect to all Guarantors multiplied by (ii) the aggregate
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amount paid or distributed on or before such date by all Funding Guarantors
under this Guaranty in respect of the obligations guarantied. "Fair Share
Shortfall" means, with respect to a Guarantor as of any date of
determination, the excess, if any, of the Fair
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Share of such Guarantor over the Aggregate Payments of such Guarantor.
"Adjusted Maximum Amount" means, with respect to a Guarantor as of any date
of determination, the maximum aggregate amount of the obligations of such
Guarantor under this Guaranty, determined as of such date in accordance
with subsection 2.2(a); provided that, solely for purposes of calculating
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the "Adjusted Maximum Amount" with respect to any Guarantor for purposes of
this subsection 2.2(b), any assets or liabilities of such Guarantor arising
by virtue of any rights to subrogation, reimbursement or indemnification or
any rights to or obligations of contribution hereunder shall not be
considered as assets or liabilities of such Guarantor. "Aggregate Payments"
means, with respect to a Guarantor as of any date of determination, an
amount equal to (i) the aggregate amount of all payments and distributions
made on or before such date by such Guarantor in respect of this Guaranty
(including in respect of this subsection 2.2(b)) minus (ii) the aggregate
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amount of all payments received on or before such date by such Guarantor
from the other Guarantors as contributions under this subsection 2.2(b).
The amounts payable as contributions hereunder shall be determined as of
the date on which the related payment or distribution is made by the
applicable Funding Guarantor. The allocation among Guarantors of their
obligations as set forth in this subsection 2.2(b) shall not be construed
in any way to limit the liability of any Guarantor hereunder.
2.3 Payment by Guarantors; Application of Payments. Subject to
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the provisions of subsection 2.2(a), Guarantors hereby jointly and
severally agree, in furtherance of the foregoing and not in limitation of
any other right which any Beneficiary may have at law or in equity against
any Guarantor by virtue hereof, that upon the failure of Company to pay any
of the Guarantied Obligations when and as the same shall become due,
whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including amounts that would become due
but for the operation of the automatic stay under Section 362(a) of the
Bankruptcy Code, 11 U.S.C. (S) 362(a)), Guarantors will upon demand pay,
or cause to be paid, in cash, to Guarantied Party for the ratable benefit
of Beneficiaries, an amount equal to the sum of the unpaid principal amount
of all Guarantied Obligations then due as aforesaid, accrued and unpaid
interest on such Guarantied Obligations (including interest which, but for
the filing of a petition in bankruptcy with respect to Company, would have
accrued on such Guarantied Obligations, whether or not a claim is allowed
against Company for such interest in the related bankruptcy proceeding) and
all other Guarantied Obligations then owed to Beneficiaries as aforesaid.
All such payments shall be applied promptly from time to time by Guarantied
Party as provided in subsection 2.4D of the Credit Agreement.
2.4 Liability of Guarantors Absolute. Each Guarantor agrees
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that its obligations hereunder are irrevocable, absolute, independent and
unconditional and shall not be affected by any circumstance which
constitutes a legal or equitable discharge of a guarantor or surety other
than payment in full of the Guarantied Obligations. In furtherance of the
foregoing and without limiting the generality thereof, each Guarantor
agrees as follows:
(a) This Guaranty is a guaranty of payment when due and not of
collectibility.
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(b) Guarantied Party may enforce this Guaranty upon the
occurrence of an Event of Default under the Credit Agreement
notwithstanding the existence of any dispute between Company and any
Beneficiary with respect to the existence of such Event of Default.
(c) The obligations of each Guarantor hereunder are independent
of the obligations of Company under the Loan Documents or the Lender
Interest Rate Agreements and the obligations of any other guarantor
(including any other Guarantor) of the obligations of Company under the
Loan Documents or the Lender Interest Rate Agreements, and a separate
action or actions may be brought and prosecuted against such Guarantor
whether or not any action is brought against Company or any of such other
guarantors and whether or not Company is joined in any such action or
actions.
(d) Payment by any Guarantor of a portion, but not all, of the
Guarantied Obligations shall in no way limit, affect, modify or abridge any
Guarantor's liability for any portion of the Guarantied Obligations which
has not been paid. Without limiting the generality of the foregoing, if
Guarantied Party is awarded a judgment in any suit brought to enforce any
Guarantor's covenant to pay a portion of the Guarantied Obligations, such
judgment shall not be deemed to release such Guarantor from its covenant to
pay the portion of the Guarantied Obligations that is not the subject of
such suit, and such judgment shall not, except to the extent satisfied by
such Guarantor, limit, affect, modify or abridge any other Guarantor's
liability hereunder in respect of the Guarantied Obligations.
(e) Any Beneficiary, upon such terms as it deems appropriate,
without notice or demand and without affecting the validity or
enforceability of this Guaranty or giving rise to any reduction,
limitation, impairment, discharge or termination of any Guarantor's
liability hereunder, from time to time may (i) renew, extend, accelerate,
increase the rate of interest on, or otherwise change the time, place,
manner or terms of payment of the Guarantied Obligations, (ii) settle,
compromise, release or discharge, or accept or refuse any offer of
performance with respect to, or substitutions for, the Guarantied
Obligations or any agreement relating thereto and/or subordinate the
payment of the same to the payment of any other obligations; (iii) request
and accept other guaranties of the Guarantied Obligations and take and hold
security for the payment of this Guaranty or the Guarantied Obligations;
(iv) release, surrender, exchange, substitute, compromise, settle, rescind,
waive, alter, subordinate or modify, with or without consideration, any
security for payment of the Guarantied Obligations, any other guaranties of
the Guarantied Obligations, or any other obligation of any Person
(including any other Guarantor) with respect to the Guarantied Obligations;
(v) enforce and apply any security now or hereafter held by or for the
benefit of such Beneficiary in respect of this Guaranty or the Guarantied
Obligations and direct the order or manner of sale thereof, or exercise any
other right or remedy that such Beneficiary may have against any such
security, in each case as such Beneficiary in its discretion may determine
consistent with the Credit Agreement or the applicable Lender Interest Rate
Agreement and any applicable security agreement, including foreclosure on
any such security pursuant to one or more judicial or nonjudicial sales,
whether or not every aspect of any
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such sale is commercially reasonable, and even though such action operates
to impair or extinguish any right of reimbursement or subrogation or other
right or remedy of any Guarantor against Company or any security for the
Guarantied Obligations; and (vi) exercise any other rights available to it
under the Loan Documents or the Lender Interest Rate Agreements.
(f) This Guaranty and the obligations of Guarantors hereunder
shall be valid and enforceable and shall not be subject to any reduction,
limitation, impairment, discharge or termination for any reason (other than
payment in full of the Guarantied Obligations), including the occurrence of
any of the following, whether or not any Guarantor shall have had notice or
knowledge of any of them: (i) any failure or omission to assert or enforce
or agreement or election not to assert or enforce, or the stay or
enjoining, by order of court, by operation of law or otherwise, of the
exercise or enforcement of, any claim or demand or any right, power or
remedy (whether arising under the Loan Documents or the Lender Interest
Rate Agreements, at law, in equity or otherwise) with respect to the
Guarantied Obligations or any agreement relating thereto, or with respect
to any other guaranty of or security for the payment of the Guarantied
Obligations; (ii) any rescission, waiver, amendment or modification of, or
any consent to departure from, any of the terms or provisions (including
provisions relating to events of default) of the Credit Agreement, any of
the other Loan Documents, any of the Lender Interest Rate Agreements or any
agreement or instrument executed pursuant thereto, or of any other guaranty
or security for the Guarantied Obligations, in each case whether or not in
accordance with the terms of the Credit Agreement or such Loan Document,
such Lender Interest Rate Agreement or any agreement relating to such other
guaranty or security; (iii) the Guarantied Obligations, or any agreement
relating thereto, at any time being found to be illegal, invalid or
unenforceable in any respect; (iv) the application of payments received
from any source (other than payments received pursuant to the other Loan
Documents or any of the Lender Interest Rate Agreements or from the
proceeds of any security for the Guarantied Obligations, except to the
extent such security also serves as collateral for indebtedness other than
the Guarantied Obligations) to the payment of indebtedness other than the
Guarantied Obligations, even though any Beneficiary might have elected to
apply such payment to any part or all of the Guarantied Obligations; (v)
any Beneficiary's consent to the change, reorganization or termination of
the corporate structure or existence of Company or any of its Subsidiaries
and to any corresponding restructuring of the Guarantied Obligations; (vi)
any failure to perfect or continue perfection of a security interest in any
collateral which secures any of the Guarantied Obligations; (vii) any
defenses, set-offs or counterclaims which Company may allege or assert
against any Beneficiary in respect of the Guarantied Obligations, including
failure of consideration, breach of warranty, payment, statute of frauds,
statute of limitations, accord and satisfaction and usury; and (viii) any
other act or thing or omission, or delay to do any other act or thing,
which may or might in any manner or to any extent vary the risk of any
Guarantor as an obligor in respect of the Guarantied Obligations.
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2.5 Waivers by Guarantors. Each Guarantor hereby waives, for
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the benefit of Beneficiaries:
(a) any right to require any Beneficiary, as a condition of
payment or performance by such Guarantor, to (i) proceed against Company,
any other guarantor (including any other Guarantor) of the Guarantied
Obligations or any other Person, (ii) proceed against or exhaust any
security held from Company, any such other guarantor or any other Person,
(iii) proceed against or have resort to any balance of any deposit account
or credit on the books of any Beneficiary in favor of Company or any other
Person, or (iv) pursue any other remedy in the power of any Beneficiary
whatsoever;
(b) any defense arising by reason of the incapacity, lack of
authority or any disability or other defense of Company including any
defense based on or arising out of the lack of validity or the
unenforceability of the Guarantied Obligations or any agreement or
instrument relating thereto or by reason of the cessation of the liability
of Company from any cause other than payment in full of the Guarantied
Obligations;
(c) 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 other respects more burdensome than that of the principal;
(d) any defense based upon any Beneficiary's errors or omissions
in the administration of the Guarantied Obligations, except behavior which
amounts to bad faith;
(e) (i) any principles or provisions of law, statutory or
otherwise, which are or might be in conflict with the terms of this
Guaranty and any legal or equitable discharge of such Guarantor's
obligations hereunder, (ii) the benefit of any statute of limitations
affecting such Guarantor's liability hereunder or the enforcement hereof,
(iii) any rights to set-offs, recoupments and counterclaims, and (iv)
promptness, diligence and any requirement that any Beneficiary protect,
secure, perfect or insure any security interest or lien or any property
subject thereto;
(f) notices, demands, presentments, protests, notices of protest,
notices of dishonor and notices of any action or inaction, including
acceptance of this Guaranty, notices of default under the Credit Agreement,
the Lender Interest Rate Agreements or any agreement or instrument related
thereto, notices of any renewal, extension or modification of the
Guarantied Obligations or any agreement related thereto, notices of any
extension of credit to Company and notices of any of the matters referred
to in subsection 2.4 and any right to consent to any thereof; and
(g) any defenses or benefits that may be derived from or afforded
by law which limit the liability of or exonerate guarantors or sureties, or
which may conflict with the terms of this Guaranty.
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2.6 Guarantors' Rights of Subrogation, Contribution, Etc. Each
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Guarantor hereby waives any claim, right or remedy, direct or indirect,
that such Guarantor now has or may hereafter have against Company or any of
its assets in connection with this Guaranty or the performance by such
Guarantor of its obligations hereunder, in each case whether such claim,
right or remedy arises in equity, under contract, by statute, under common
law or otherwise and including (a) any right of subrogation, reimbursement
or indemnification that such Guarantor now has or may hereafter have
against Company, (b) any right to enforce, or to participate in, any claim,
right or remedy that any Beneficiary now has or may hereafter have against
Company, and (c) any benefit of, and any right to participate in, any
collateral or security now or hereafter held by any Beneficiary. In
addition, until the Guarantied Obligations shall have been indefeasibly
paid in full and the Commitments shall have terminated and all Letters of
Credit shall have expired or been cancelled, each Guarantor shall withhold
exercise of any right of contribution such Guarantor may have against any
other guarantor (including any other Guarantor) of the Guarantied
Obligations (including any such right of contribution under subsection
2.2(b)). Each Guarantor further agrees that, to the extent the waiver or
agreement to withhold the exercise of its rights of subrogation,
reimbursement, indemnification and contribution as set forth herein is
found by a court of competent jurisdiction to be void or voidable for any
reason, any rights of subrogation, reimbursement or indemnification such
Guarantor may have against Company or against any collateral or security,
and any rights of contribution such Guarantor may have against any such
other guarantor, shall be junior and subordinate to any rights any
Beneficiary may have against Company, to all right, title and interest any
Beneficiary may have in any such collateral or security, and to any right
any Beneficiary may have against such other guarantor. If any amount shall
be paid to any Guarantor on account of any such subrogation, reimbursement,
indemnification or contribution rights at any time when all Guarantied
Obligations shall not have been paid in full, such amount shall be held in
trust for Guarantied Party on behalf of Beneficiaries and shall forthwith
be paid over to Guarantied Party for the benefit of Beneficiaries to be
credited and applied against the Guarantied Obligations, whether matured or
unmatured, in accordance with the terms hereof.
2.7 Subordination of Other Obligations. Any indebtedness of
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Company or any Guarantor now or hereafter held by any Guarantor (the
"Obligee Guarantor") is hereby subordinated in right of payment to the
Guarantied Obligations, and any such indebtedness collected or received by
the Obligee Guarantor after an Event of Default has occurred and is
continuing shall be held in trust for Guarantied Party on behalf of
Beneficiaries and shall forthwith be paid over to Guarantied Party for the
benefit of Beneficiaries to be credited and applied against the Guarantied
Obligations but without affecting, impairing or limiting in any manner the
liability of the Obligee Guarantor under any other provision of this
Guaranty.
2.8 Expenses. Guarantors jointly and severally agree to pay, or
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cause to be paid, on demand, and to save Beneficiaries harmless against
liability for, any and all costs and expenses (including fees and
disbursements of counsel and allocated costs of
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internal counsel) incurred or expended by any Beneficiary in connection
with the enforcement of or preservation of any rights under this Guaranty.
2.9 Continuing Guaranty. This Guaranty is a continuing
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guaranty and shall remain in effect until all of the Guarantied Obligations
shall have been paid in full and the Commitments shall have terminated and
all Letters of Credit shall have expired or been cancelled. Each Guarantor
hereby irrevocably waives any right to revoke this Guaranty as to future
transactions giving rise to any Guarantied Obligations.
2.10 Authority of Guarantors or Company. It is not necessary
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for any Beneficiary to inquire into the capacity or powers of any Guarantor
or Company or the officers, directors or any agents acting or purporting to
act on behalf of any of them.
2.11 Financial Condition of Company. Any Loans may be granted
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to Company or continued from time to time, and any Lender Interest Rate
Agreements may be entered into from time to time, in each case without
notice to or authorization from any Guarantor regardless of the financial
or other condition of Company at the time of any such grant or continuation
or at the time such Lender Interest Rate Agreement is entered into, as the
case may be. No Beneficiary shall have any obligation to disclose or
discuss with any Guarantor its assessment, or any Guarantor's assessment,
of the financial condition of Company. Each Guarantor has adequate means
to obtain information from Company on a continuing basis concerning the
financial condition of Company and its ability to perform its obligations
under the Loan Documents and the Lender Interest Rate Agreements, and each
Guarantor assumes the responsibility for being and keeping informed of the
financial condition of Company and of all circumstances bearing upon the
risk of nonpayment of the Guarantied Obligations. Each Guarantor hereby
waives and relinquishes any duty on the part of any Beneficiary to disclose
any matter, fact or thing relating to the business, operations or
conditions of Company now known or hereafter known by any Beneficiary.
2.12 Rights Cumulative. The rights, powers and remedies given
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to Beneficiaries by this Guaranty are cumulative and shall be in addition
to and independent of all rights, powers and remedies given to
Beneficiaries by virtue of any statute or rule of law or in any of the
other Loan Documents, any of the Lender Interest Rate Agreements or any
agreement between any Guarantor and any Beneficiary or Beneficiaries or
between Company and any Beneficiary or Beneficiaries. Any forbearance or
failure to exercise, and any delay by any Beneficiary in exercising, any
right, power or remedy hereunder shall not impair any such right, power or
remedy or be construed to be a waiver thereof, nor shall it preclude the
further exercise of any such right, power or remedy.
2.13 Bankruptcy; Post-Petition Interest; Reinstatement of
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Guaranty. (a) So long as any Guarantied Obligations remain outstanding, no
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Guarantor shall, without the prior written consent of Guarantied Party
acting pursuant to the instructions of Requisite Obligees (as defined in
subsection 3.14), commence or join with any other Person in commencing any
bankruptcy, reorganization or insolvency
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proceedings of or against Company. The obligations of Guarantors under this
Guaranty shall not be reduced, limited, impaired, discharged, deferred,
suspended or terminated by any proceeding, voluntary or involuntary,
involving the bankruptcy, insolvency, receivership, reorganization,
liquidation or arrangement of Company or by any defense which Company may
have by reason of the order, decree or decision of any court or
administrative body resulting from any such proceeding.
(b) Each Guarantor acknowledges and agrees that any interest on
any portion of the Guarantied Obligations which accrues after the
commencement of any proceeding referred to in clause (a) above (or, if
interest on any portion of the Guarantied Obligations ceases to accrue by
operation of law by reason of the commencement of said proceeding, such
interest as would have accrued on such portion of the Guarantied
Obligations if said proceedings had not been commenced) shall be included
in the Guarantied Obligations because it is the intention of Guarantors and
Beneficiaries that the Guarantied Obligations which are guarantied by
Guarantors pursuant to this Guaranty should be determined without regard to
any rule of law or order which may relieve Company of any portion of such
Guarantied Obligations. Guarantors will permit any trustee in bankruptcy,
receiver, debtor in possession, assignee for the benefit of creditors or
similar person to pay Guarantied Party, or allow the claim of Guarantied
Party in respect of, any such interest accruing after the date on which
such proceeding is commenced.
(c) In the event that all or any portion of the Guarantied
Obligations are paid by Company, the obligations of Guarantors hereunder
shall continue and remain in full force and effect or be reinstated, as the
case may be, in the event that all or any part of such payment(s) are
rescinded or recovered directly or indirectly from any Beneficiary as a
preference, fraudulent transfer or otherwise, and any such payments which
are so rescinded or recovered shall constitute Guarantied Obligations for
all purposes under this Guaranty.
2.14 Notice of Events. As soon as any Guarantor obtains
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knowledge thereof, such Guarantor shall give Guarantied Party written
notice of any condition or event which has resulted in (a) a material
adverse change in the financial condition of any Guarantor or Company or
(b) a breach of or noncompliance with any term, condition or covenant
contained herein or in the Credit Agreement, any other Loan Document, any
Lender Interest Rate Agreement or any other document delivered pursuant
hereto or thereto.
2.15 Set Off. In addition to any other rights any Beneficiary
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may have under law or in equity, if any amount shall at any time be due and
owing by any Guarantor to any Beneficiary under this Guaranty, such
Beneficiary is authorized at any time or from time to time, without notice
(any such notice being hereby expressly waived), to set off and to
appropriate and to apply any and all deposits (general or special,
including indebtedness evidenced by certificates of deposit, whether
matured or unmatured) and any other indebtedness of such Beneficiary owing
to such Guarantor and any other property of such Guarantor held by any
Beneficiary to or for the credit or the
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account of such Guarantor against and on account of the Guarantied
Obligations and liabilities of such Guarantor to any Beneficiary under this
Guaranty.
2.16 Discharge of Guaranty Upon Sale of Guarantor. If all of
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the stock of any Guarantor or any of its successors in interest under this
Guaranty shall be sold or otherwise disposed of (including by merger or
consolidation) in an Asset Sale not prohibited by subsection 7.7 of the
Credit Agreement or otherwise consented to by Requisite Lenders, the
Guaranty of such Guarantor or such successor in interest, as the case may
be, hereunder shall automatically be discharged and released without any
further action by any Beneficiary or any other Person effective as of the
time of such Asset Sale; provided that, as a condition precedent to such
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discharge and release, Guarantied Party shall have received evidence
satisfactory to it that arrangements satisfactory to it have been made for
delivery to Guarantied Party of the applicable Net Asset Sale Proceeds.
SECTION 3. MISCELLANEOUS
3.1 Survival of Warranties. All agreements, representations and
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warranties made herein shall survive the execution and delivery of this
Guaranty and the other Loan Documents and the Lender Interest Rate
Agreements and any increase in the Commitments under the Credit Agreement.
3.2 Notices. Any communications between Guarantied Party and
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any Guarantor and any notices or requests provided herein to be given may
be given by mailing the same, postage prepaid, or by telex, facsimile
transmission or cable to each such party at its address set forth in the
Credit Agreement, on the signature pages hereof or to such other addresses
as each such party may in writing hereafter indicate. Any notice, request
or demand to or upon Guarantied Party or any Guarantor shall not be
effective until received.
3.3 Severability. In case any provision in or obligation under
------------
this Guaranty shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
3.4 Amendments and Waivers. No amendment, modification,
----------------------
termination or waiver of any provision of this Guaranty, and no consent to
any departure by any Guarantor therefrom, shall in any event be effective
without the written concurrence of Guarantied Party and, in the case of any
such amendment or modification, each Guarantor against whom enforcement of
such amendment or modification is sought. Any such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which it was given.
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3.5 Headings. Section and subsection headings in this Guaranty
--------
are included herein for convenience of reference only and shall not
constitute a part of this Guaranty for any other purpose or be given any
substantive effect.
3.6 Applicable Law; Rules of Construction. THIS GUARANTY AND
-------------------------------------
THE RIGHTS AND OBLIGATIONS OF GUARANTORS AND BENEFICIARIES HEREUNDER SHALL
BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES. The rules of construction set forth in
subsection 1.3 of the Credit Agreement shall be applicable to this Guaranty
mutatis mutandis.
3.7 Successors and Assigns. This Guaranty is a continuing
----------------------
guaranty and shall be binding upon each Guarantor and its respective
successors and assigns. This Guaranty shall inure to the benefit of
Beneficiaries and their respective successors and assigns. No Guarantor
shall assign this Guaranty or any of the rights or obligations of such
Guarantor hereunder without the prior written consent of all Lenders. Any
Beneficiary may, without notice or consent, assign its interest in this
Guaranty in whole or in part. The terms and provisions of this Guaranty
shall inure to the benefit of any transferee or assignee of any Loan, and
in the event of such transfer or assignment the rights and privileges
herein conferred upon such Beneficiary shall automatically extend to and be
vested in such transferee or assignee, all subject to the terms and
conditions hereof.
3.8 Consent to Jurisdiction and Service of Process. ALL
----------------------------------------------
JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY GUARANTOR ARISING OUT OF OR
RELATING TO THIS GUARANTY, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN
ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN XXX XXXXX, XXXXXX
XXX XXXX XX XXX XXXX. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH
GUARANTOR, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN
ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO SUCH GUARANTOR AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SUBSECTION 3.2;
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(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH GUARANTOR IN ANY
SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE
AND BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT BENEFICIARIES RETAIN THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST SUCH
GUARANTOR IN THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 3.8 RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST
EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-
1402 OR OTHERWISE.
3.9 Waiver of Trial by Jury. EACH GUARANTOR AND, BY ITS
-----------------------
ACCEPTANCE OF THE BENEFITS HEREOF, EACH BENEFICIARY HEREBY AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS GUARANTY. The scope of this waiver is intended
to be all encompassing of any and all disputes that may be filed in any
court and that relate to the subject matter of this transaction, including
contract claims, tort claims, breach of duty claims and all other common
law and statutory claims. Each Guarantor and, by its acceptance of the
benefits hereof, each Beneficiary, each (i) acknowledges that this waiver
is a material inducement for such Guarantor and Beneficiaries to enter into
a business relationship, that such Guarantor and Beneficiaries have already
relied on this waiver in entering into this Guaranty or accepting the
benefits thereof, as the case may be, and that each will continue to rely
on this waiver in their related future dealings and (ii) further warrants
and represents that each has reviewed this waiver with its legal counsel,
and that each knowingly and voluntarily waives its jury trial rights
following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN
BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 3.9
AND EXECUTED BY GUARANTIED PARTY AND EACH GUARANTOR), AND THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS GUARANTY. In the event of litigation, this Guaranty may be filed
as a written consent to a trial by the court.
3.10 No Other Writing. This writing is intended by Guarantors
----------------
and Beneficiaries as the final expression of this Guaranty and is also
intended as a complete and exclusive statement of the terms of their
agreement with respect to the matters covered hereby. No course of
dealing, course of performance or trade usage, and no parol evidence of any
nature, shall be used to supplement or modify any terms of this Guaranty.
There are no conditions to the full effectiveness of this Guaranty.
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3.11 Further Assurances. At any time or from time to time, upon
------------------
the request of Guarantied Party, Guarantors shall execute and deliver such
further documents and do such other acts and things as Guarantied Party may
reasonably request in order to effect fully the purposes of this Guaranty.
3.12 Additional Guarantors. The initial Guarantors hereunder
---------------------
shall be such of the Restricted Subsidiaries of Company as are signatories
hereto on the date hereof. From time to time subsequent to the date
hereof, additional Restricted Subsidiaries of Company may become parties
hereto, as additional Guarantors (each an "Additional Guarantor"), by
executing a counterpart of this Guaranty. Upon delivery of any such
counterpart to Administrative Agent, notice of which is hereby waived by
Guarantors, each such Additional Guarantor shall be a Guarantor and shall
be as fully a party hereto as if such Additional Guarantor were an original
signatory hereof. Each Guarantor expressly agrees that its obligations
arising hereunder shall not be affected or diminished by the addition or
release of any other Guarantor hereunder, nor by any election of
Administrative Agent not to cause any Subsidiary of Company to become an
Additional Guarantor hereunder. This Guaranty shall be fully effective as
to any Guarantor that is or becomes a party hereto regardless of whether
any other Person becomes or fails to become or ceases to be a Guarantor
hereunder.
3.13 Counterparts; Effectiveness. This Guaranty may be executed
---------------------------
in any number of counterparts and by the different parties hereto in
separate counterparts, each of which when so executed and delivered shall
be deemed to be an original for all purposes; but all such counterparts
together shall constitute but one and the same instrument. This Guaranty
shall become effective as to each Guarantor upon the execution of a
counterpart hereof by such Guarantor (whether or not a counterpart hereof
shall have been executed by any other Guarantor) and receipt by Guarantied
Party of written or telephonic notification of such execution and
authorization of delivery thereof.
3.14 Guarantied Party as Administrative Agent.
----------------------------------------
(a) Guarantied Party has been appointed to act as Guarantied
Party hereunder by Lenders and, by their acceptance of the benefits hereof,
Interest Rate Exchangers. Guarantied Party shall be obligated, and shall
have the right hereunder, to make demands, to give notices, to exercise or
refrain from exercising any rights, and to take or refrain from taking any
action, solely in accordance with this Guaranty and the Credit Agreement;
provided that Guarantied Party shall exercise, or refrain from exercising,
--------
any remedies hereunder in accordance with the instructions of (i) Requisite
Lenders or (ii) after payment in full of all Obligations under the Credit
Agreement and the other Loan Documents, the holders of a majority of the
aggregate notional amount (or, with respect to any Lender Interest Rate
Agreement that has been terminated in accordance with its terms, the amount
then due and payable (exclusive of expenses and similar payments but
including any early termination payments then due) under such Lender
Interest Rate Agreement) under all Lender Interest Rate Agreements
(Requisite Lenders or, if applicable, such holders being referred to herein
as "Requisite Obligees"). In furtherance of the foregoing provisions of
this subsection 3.14, each Interest Rate
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Exchanger, by its acceptance of the benefits hereof, agrees that it shall
have no right individually to enforce this Guaranty, it being understood
and agreed by such Interest Rate Exchanger that all rights and remedies
hereunder may be exercised solely by Guarantied Party for the benefit of
Beneficiaries in accordance with the terms of this subsection 3.14.
(b) Guarantied Party shall at all times be the same Person that
is Administrative Agent under the Credit Agreement. Written notice of
resignation by Administrative Agent pursuant to subsection 9.5 of the
Credit Agreement shall also constitute notice of resignation as Guarantied
Party under this Guaranty; removal of Administrative Agent pursuant to
subsection 9.5 of the Credit Agreement shall also constitute removal as
Guarantied Party under this Guaranty; and appointment of a successor
Administrative Agent pursuant to subsection 9.5 of the Credit Agreement
shall also constitute appointment of a successor Guarantied Party under
this Guaranty. Upon the acceptance of any appointment as Administrative
Agent under subsection 9.5 of the Credit Agreement by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and
duties of the retiring or removed Guarantied Party under this Guaranty, and
the retiring or removed Guarantied Party under this Guaranty shall promptly
(i) transfer to such successor Guarantied Party all sums held hereunder,
together with all records and other documents necessary or appropriate in
connection with the performance of the duties of the successor Guarantied
Party under this Guaranty, and (ii) take such other actions as may be
necessary or appropriate in connection with the assignment to such
successor Guarantied Party of the rights created hereunder, whereupon such
retiring or removed Guarantied Party shall be discharged from its duties
and obligations under this Guaranty. After any retiring or removed
Guarantied Party's resignation or removal hereunder as Guarantied Party,
the provisions of this Guaranty shall inure to its benefit as to any
actions taken or omitted to be taken by it under this Guaranty while it was
Guarantied Party hereunder.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, each of the undersigned Guarantors has caused this
Guaranty to be duly executed and delivered by its officer thereunto duly
authorized as of the date first written above.
[LIST ALL RESTRICTED SUBSIDIARIES]
By
___________________________
Title
________________________
Address:
_____________________
_____________________
_____________________
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IN WITNESS WHEREOF, the undersigned Additional Guarantor has caused
this Guaranty to be duly executed and delivered by its officer thereunto duly
authorized as of ______________, 199_.
________________________________________
(Name of Additional Guarantor)
By ____________________________
Title _________________________
Address: ______________________
______________________
______________________
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