SUBSIDIARIES GUARANTEE
GUARANTEE dated as of December 30, 1997 made by the
undersigned parties hereto, (the "Subsidiaries" or the
"Guarantors"), in favor of THE CHASE MANHATTAN BANK, as agent
(the "Agent") for the lenders (the "Banks") parties to the
Amended and Restated Credit Agreement dated as of February 17,
1995 (the "Credit Agreement") among D 56, Inc., a Minnesota
corporation (the "Company"), the Agent, the Banks and the co-
agents named therein.
W I T N E S S E T H :
WHEREAS, pursuant to the Credit Agreement, the Banks
have severally agreed to make loans to, the Issuing Bank has
agreed to issue certain letters of credit for the account of, and
the Accepting Bank has agreed to create certain acceptances for,
the Company upon the terms and subject to the conditions set
forth therein; and
WHEREAS, it is a condition precedent to the
effectiveness of the Third Amendment dated as of December 16,
1997 (the "Third Amendment") to the Credit Agreement that each
Guarantor shall have executed and delivered this Guarantee to the
Agent for the ratable benefit of the Banks;
NOW, THEREFORE, in consideration of the premises and to
induce the Agent and the Banks to consent to the Third Amendment
and to induce the Banks to make their respective loans to, the
Issuing Bank to issue certain letters of credit for the account
of, and the Accepting Bank to create certain acceptances for, the
Company under the Credit Agreement, each Guarantor hereby agrees
with the Agent, for the ratable benefit of the Banks, as follows:
1. Defined Terms. Unless otherwise defined herein,
terms which are defined in the Credit Agreement and used herein
are so used as so defined and as used herein the following terms
shall have the following meanings:
"Guarantee": this Guarantee, as amended, supplemented
or otherwise modified from time to time.
"Material Adverse Effect": a material adverse effect
on the business, financial condition, assets, liabilities,
net assets, properties, results of operations, value or
prospects of Holding and its Subsidiaries taken as a whole
or the Company and its Subsidiaries taken as a whole.
"Obligations": the unpaid principal of and interest on
(including, without limitation, interest accruing after the
maturity of the Loans, the Acceptances and reimbursement
obligations in connection with the Letters of Credit, and
interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Company,
whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) the Notes, all
obligations and liabilities of the Company with respect to
the Letters of Credit, all Acceptance Obligations and all
other obligations and liabilities of the Company to the
Agent or the Banks, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter
incurred, which may arise under, out of, or in connection
with, this Agreement, the Notes, the other Credit Documents,
any Letter of Credit or L/C Application, any Acceptance, any
agreements between the Company and any Bank relating to
interest rate, currency or similar swap and hedging
arrangements or any other document made, delivered or given
in connection therewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities,
costs, expenses (including, without limitation, all fees and
disbursements of counsel to the Agent or any Bank) or
otherwise.
2. Guarantee. Each Guarantor hereby unconditionally
and irrevocably guarantees to the Agent, for the ratable benefit
of the Banks, the prompt and complete payment and performance by
the Company when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations. Such Guarantor
further agrees to pay any and all expenses (including, without
limitation, all fees and disbursements of counsel) which may be
paid or incurred by the Agent and the Banks in enforcing, or
obtaining advice of counsel in respect of, any of their rights
under this Guarantee. This Guarantee constitutes a guarantee of
payment when due and not of collection, and such Guarantor
specifically agrees that it shall not be necessary or required
that the Agent or any Bank exercise any right, assert any claim
or demand or enforce any remedy whatsoever against the Company
(or any other Person) before or as a condition to the obligations
of such Guarantor hereunder. This Guarantee shall remain in full
force and effect until the Obligations are paid in full, no
Letters of Credit or Acceptance Obligations are outstanding and
the Commitments are terminated, notwithstanding that from time to
time prior thereto the Company may be free from any Obligations.
Each Guarantor agrees that whenever, at any time, or
from time to time, it shall make any payment to the Agent or any
Bank on account of its liability hereunder, it will notify the
Agent or such Bank in writing that such payment is made under
this Guarantee for such purpose. No payment or payments made by
the Company or any other Person or received or collected by the
Agent or any Bank from the Company or any other Person by virtue
of any action or proceeding or any set-off or appropriation or
application, at any time or from time to time, in reduction of or
in payment of the Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of such Guarantor
hereunder which shall, notwithstanding any such payment or
payments, remain liable for the amount of the Obligations until
the Obligations are paid in full and the Commitments are
terminated.
Anything herein or in any of the Credit Documents to
the contrary notwithstanding, the maximum liability of each
Guarantor hereunder and under the other Credit Documents shall in
no event exceed the amount which can be guaranteed by such
Guarantor under applicable federal and state laws relating to the
insolvency of debtors.
3. Right of Setoff. Upon the occurrence and during
the continuance of any Event of Default specified in the Credit
Agreement, the Agent and each Bank are hereby irrevocably
authorized at any time and from time to time without notice to
each Guarantor, any such notice being hereby waived by such
Guarantor, to set off and appropriate and apply any and all
deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect,
absolute or contingent, matured or unmatured, at any time held or
owing by the Agent or such Bank to or for the credit or the
account of such Guarantor, or any part thereof in such amounts as
the Agent or such Bank may elect, on account of the liabilities
of such Guarantor hereunder and claims of every nature and
description of the Agent or such Bank against such Guarantor, in
any currency, whether arising hereunder, under the Credit
Agreement, the Notes, any other Credit Document, any Letter of
Credit, any Acceptance or otherwise, as the Agent or such Bank
may elect, whether or not the Agent or such Bank has made any
demand for payment and although such liabilities and claims may
be contingent or unmatured. The Agent and each Bank shall notify
such Guarantor against which setoff has been made promptly of any
such setoff made by it and the application made by it of the
proceeds thereof, provided that the failure to give such notice
shall not affect the validity of such setoff and application.
The rights of the Agent and each Bank under this paragraph are in
addition to other rights and remedies (including, without
limitation, other rights of setoff) which the Agent and such Bank
may have.
4. Subrogation, etc.. Notwithstanding any payment or
payments made by the Guarantor hereunder or any set-off or
application of funds of the Guarantor by any Bank, the Guarantor
shall not exercise any of the rights of the Agent or any Bank
which the Guarantor may acquire by way of subrogation, by any
payment made hereunder, by reason of such set-off or application
of funds or otherwise, against the Company or any collateral
security or guarantee or right of offset held by any Bank for the
payment of the Obligations, and the Guarantor shall not seek or
be entitled to seek any contribution or reimbursement from the
Company in respect of payments made by the Guarantor hereunder,
until all amounts owing to the Agent and the Banks by the Company
on account of the Obligations are paid in full, no Letters of
Credit are outstanding and the Commitments are terminated. If
any amount shall be paid to the Guarantor on account of such
subrogation rights at any time when all of the Obligations shall
not have been paid in full, any Letter of Credit shall be
outstanding or the Commitments shall not have been terminated,
such amount shall be held by the Guarantor in trust for the Agent
and the Banks, segregated from other funds of the Guarantor, and
shall, forthwith upon receipt by the Guarantor, be turned over to
the Agent in the exact form received by the Guarantor (duly
indorsed by the Guarantor to the Agent, if required), to be
applied against the Obligations, whether matured or unmatured, in
such order as required by the applicable Credit Documents.
5. Amendments, etc. with Respect to the Obligations.
Each Guarantor shall remain obligated hereunder notwithstanding
that, without any reservation of rights against such Guarantor,
and without notice to or further assent by such Guarantor, any
demand for payment of any of the Obligations made by the Agent or
any Bank may be rescinded by the Agent or such Bank, and any of
the Obligations continued, and the Obligations, or the liability
of any other Person upon or for any part thereof, or any
collateral security or guarantee therefor or right of offset with
respect thereto, may, from time to time, in whole or in part, be
renewed, extended, amended, modified, accelerated, compromised,
waived, surrendered or released by the Agent or any Bank, and the
Credit Agreement, any Note, any other Credit Document, any Letter
of Credit, any Acceptance and any other documents executed and
delivered in connection therewith may be amended, modified,
supplemented or terminated, in whole or in part, as the Banks (or
the Required Banks, as the case may be) may deem advisable from
time to time, and any collateral security, guarantee or right of
offset at any time held by the Agent or any Bank for the payment
of the Obligations may be sold, exchanged, waived, surrendered or
released. Neither the Agent nor any Bank shall have any
obligation to protect, secure, perfect or insure any Lien at any
time held by it as security for the Obligations or for this
Guarantee or any property subject thereto.
6. Guarantee Absolute and Unconditional. Each
Guarantor waives any and all notice of the creation, renewal,
extension or accrual of any of the Obligations and notice of or
proof of reliance by the Agent or any Bank upon this Guarantee or
acceptance of this Guarantee; the Obligations, and any of them,
shall conclusively be deemed to have been created, contracted or
incurred in reliance upon this Guarantee; and all dealings
between the Company or any Guarantor, on the one hand, and the
Agent or the Banks, on the other, shall likewise be conclusively
presumed to have been had or consummated in reliance upon this
Guarantee. Such Guarantor waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment
to or upon the Company or such Guarantor with respect to the
Obligations. This Guarantee shall be construed as a continuing,
absolute and unconditional guarantee of payment without regard to
(a) the validity or enforceability of the Credit Agreement, any
Note, any other Credit Document, any Letter of Credit, any
Acceptance, any of the Obligations or any collateral security
therefor or guarantee or right of offset with respect thereto at
any time or from time to time held by the Agent or any Bank, (b)
any defense, setoff or counterclaim (other than a defense of
payment or performance) which may at any time be available to or
be asserted by the Company against the Agent or any Bank, or (c)
any other circumstance whatsoever (with or without notice to or
knowledge of the Company or such Guarantor) which constitutes, or
might be construed to constitute, an equitable or legal discharge
of the Company for the Obligations, or of such Guarantor under
this Guarantee, in bankruptcy or in any other instance. When the
Agent is pursuing its rights and remedies hereunder against such
Guarantor, the Agent or any Bank may, but shall be under no
obligation to, pursue such rights and remedies as it may have
against the Company or any other Person or against any collateral
security or guarantee for the Obligations or any right of offset
with respect thereto, and any failure by the Agent or any Bank,
or any release of the Company or any such other Person or of any
such collateral security, guarantee or right of offset, shall not
relieve any such Guarantor of any liability hereunder, and shall
not impair or affect the rights and remedies, whether express,
implied or available as a matter of law, of the Agent and the
Banks against such Guarantor.
7. Reinstatement. This Guarantee shall continue to
be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Obligations is
rescinded or must otherwise be restored or returned by the Agent
or any Bank, upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Company or any Guarantor or
upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, the Company
or any Guarantor or any substantial part of its property, or
otherwise, all as though such payments had not been made.
8. Payments. Each Guarantor hereby agrees that the
Obligations will be paid to the Agent without setoff or
counterclaim in U.S. Dollars and immediately available funds at
the office of the Agent located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000.
9. Representations and Warranties. Each Guarantor
hereby represents and warrants that:
(a) it is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Minnesota and has the corporate power and authority and the
legal right to own and operate its property, to lease the
property it operates and to conduct the business in which it
is currently engaged, except to the extent that the failure
to possess such corporate power and authority and such legal
right would not, in the aggregate, have a Material Adverse
Effect;
(b) it has the corporate power and authority and the
legal right to execute and deliver, and to perform its
obligations under, this Guarantee and has taken all
necessary corporate action to authorize its execution,
delivery and performance of this Guarantee;
(c) this Guarantee constitutes a legal, valid and
binding obligation of such Guarantor enforceable in
accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general principles of
equity (regardless of whether enforcement is sought in a
proceeding in equity or at law);
(d) the execution, delivery and performance of this
Guarantee will not violate any provision of any Requirement
of Law or Contractual Obligation of such Guarantor and will
not result in or require the creation or imposition of any
Lien on any of the properties or revenues of such Guarantor
pursuant to any Requirement of Law or Contractual Obligation
of such Guarantor;
(e) no consent or authorization of, filing with, or
other act by or in respect of, any arbitrator or
Governmental Authority and no consent of any other Person
(including, without limitation, any stockholder or creditor
of such Guarantor) is required in connection with the
execution, delivery, performance, validity or enforceability
of this Guarantee;
(f) no litigation, investigation or proceeding of or
before any arbitrator or Governmental Authority is pending
or, to the knowledge of such Guarantor, threatened by or
against such Guarantor or against any of its properties or
revenues (i) with respect to this Guarantee or (ii) which
would have a Material Adverse Effect;
(g) it has good record and marketable title in fee
simple to or valid leasehold interests in all its material
real property, and good title to all its other material
property, and none of such property is subject to any Lien
of any nature whatsoever; and
(h) it has filed or caused to be filed or has timely
requested an extension to file or has received an approved
extension to file all tax returns required to be filed by
it, and has paid all taxes due on said returns or extension
requests or on any assessments made against it (other than
those being contested in good faith by appropriate
proceedings for which reserves in conformity with GAAP have
been provided on its books), except any such filings or
taxes, fees or other charges, the making or payment of
which, or the failure to make or pay, would not have a
Material Adverse Affect.
Each Guarantor agrees that the foregoing
representations and warranties shall be deemed to have been made
by it on each Borrowing Date by the Company under the Credit
Agreement on and as of such Borrowing Date as though made
hereunder on and as of such Borrowing Date.
10. Severability. Any provision of this Guarantee
which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
11. Paragraph Headings. The paragraph headings used
in this Guarantee are for convenience of reference only and are
not to affect the construction hereof or be taken into
consideration in the interpretation hereof.
12. No Waiver; Cumulative Remedies. Neither the Agent
nor any Bank shall by any act (except by a written instrument
pursuant to paragraph 13 hereof), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder
or to have acquiesced in any Default or Event of Default or in
any breach of any of the covenants, terms, or conditions hereof.
No failure to exercise, nor any delay in exercising, on the part
of the Agent or any Bank, any right, power or privilege hereunder
shall operate as a waiver thereof. No single or partial exercise
of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other
right, power or privilege. A waiver by the Agent or any Bank or
any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which the Agent or such
Bank would otherwise have on any future occasion. The rights and
remedies herein provided are cumulative, may be exercised singly
or concurrently and are not exclusive of any rights or remedies
provided by law.
13. Waivers and Amendments; Successors and Assigns;
Governing Law. None of the terms or provisions of this Guarantee
may be waived, amended, supplemented or otherwise modified except
by a written instrument executed by each Guarantor and the Agent,
provided that any provision of this Guarantee may be waived by
the Agent in a letter or agreement executed by the Agent or by
telex or facsimile transmission from the Agent. This Guarantee
shall be binding upon the successors and assigns of the such
Guarantor and shall inure to the benefit of the Agent and the
Bank and their successors and assigns. THIS GUARANTEE SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
14. Notices. All notices, requests and demands to or
upon any Guarantor or the Agent or any Bank to be effective shall
be in writing or by telecopy or telex and, unless otherwise
expressly provided herein, shall be deemed to have been duly
given or made when delivered by hand, or, in the case of mail,
three Business Days after deposit in the postal system, first
class postage prepaid, or, in the case of telecopy notice, when
sent, confirmation of receipt received, or, in the case of telex
or facsimile notices, when sent, answerback received, addressed,
in the case of the Agent or any Bank, at the address provided for
such party in subsection 11.2 of the Credit Agreement or, in the
case of such Guarantor, at the addresses provided on the
signature page hereto, as the case may be.
15. Authority of Agent. Each Guarantor acknowledges
that the rights and responsibilities of the Agent under this
Guarantee with respect to any action taken by the Agent or the
exercise or non-exercise by the Agent of any option, right,
request, judgment or other right or remedy provided for herein or
resulting or arising out of this Guarantee shall, as between the
Agent or the Banks, be governed by the Credit Agreement and by
such other agreements with respect thereto as may exist from time
to time among them, but, as between the Agent and such Guarantor,
the Agent shall be conclusively presumed to be acting as agent
for the Banks with full and valid authority so to act or refrain
from acting, and such Guarantor shall not be under any
obligation, or entitlement, to make any inquiry respecting such
authority.
16. Integration; Acknowledgements. Each Guarantor
hereby confirms its agreement with subsections 11.9 and 11.12 of
the Credit Agreement.
17. SUBMISSION TO JURISDICTION; WAIVERS. (a) EACH
GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(i) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS GUARANTEE AND EACH
OTHER CREDIT DOCUMENT TO WHICH IT IS A PARTY OR, OR FOR
RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT
THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED
STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND
APPELLATE COURTS FROM ANY THEREOF;
(ii) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY
BE BROUGHT IN SUCH COURTS, AND WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR
PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES
NOT TO PLEAD OR CLAIM THE SAME;
(iii) AGREES THAT SERVICE OR PROCESS IN ANY SUCH
ACTION OR PROCEEDING MAY BE AFFECTED BY MAILING A COPY
THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY
SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO
SUCH GUARANTOR AT ITS ADDRESS SET FORTH UNDER ITS SIGNATURE
BELOW OR AT SUCH OTHER ADDRESS OF WHICH THE AGENT SHALL HAVE
BEEN NOTIFIED PURSUANT TO PARAGRAPH 14; AND
(iv) AGREES THAT NOTHING HEREIN SHALL AFFECT THE
RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO XXX IN ANY
OTHER JURISDICTION.
(b) EACH OF THE AGENT, EACH BANK AND EACH GUARANTOR
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING REFERRED TO IN PARAGRAPH (a) ABOVE.
IN WITNESS WHEREOF, the undersigned has caused this
Guarantee to be duly executed and delivered as of the date first
above written.
DEPARTMENT 56 RETAIL, INC.
By: /s/ XXXXXXX X. XXXXXXX
Title: Vice President
Address:
0 Xxxxxxx Xxxxx
0000 Xxxx Xxxx Xxxxxxx
Xxxx Xxxxxxx, Xxxxxxxxx 00000
Attention: Chief Financial Officer
DEPARTMENT 56 SALES, INC.
By: /s/ XXXXXXX X. XXXXXXX
Title: Vice President
Address:
0 Xxxxxxx Xxxxx
0000 Xxxx Xxxx Xxxxxxx
Xxxx Xxxxxxx, Xxxxxxxxx 00000
Attention: Chief Financial Officer
