GUARANTY
THIS GUARANTY is executed as of December 29, 1996, by MAGNETEK FINANCIAL
SERVICES, INC. ("GUARANTOR"), for the benefit of NATIONSBANK OF TEXAS, N.A. (in
its capacity as Agent for the Lenders now or in the future party to the Credit
Agreement described below, "AGENT").
MAGNETEK, INC., a Delaware corporation ("BORROWER"), Agent, and Lenders
have executed the Credit Agreement (as renewed, extended, amended, or restated,
the "CREDIT AGREEMENT") dated as of March 31, 1995. Borrower owns all of the
issued and outstanding capital stock of Guarantor. The execution and delivery
of this guaranty are requirements to Agent's and Lenders' continued obligations
under the Credit Agreement and other Loan Documents, are integral to the
transactions contemplated by the Loan Documents, and are conditions precedent to
Lenders' obligations to extend further credit under the Credit Agreement.
ACCORDINGLY, for adequate and sufficient consideration, Guarantor
guarantees to Agent and Lenders the prompt payment of the Guaranteed Debt
(defined below) at -- and at all times after -- its maturity (by acceleration or
otherwise) as follows:
1. DEFINITIONS. Terms defined in the Credit Agreement have the same
meanings when used -- unless otherwise defined -- in this guaranty. As used in
this guaranty:
AGENT is defined in the preamble to this guaranty and includes its
successor appointed under SECTION 13 of the Credit Agreement and acting as AGENT
for Lenders under the Loan Documents.
BORROWER is defined in the recitals to this guaranty and includes, without
limitation, Borrower, Borrower as a debtor-in-possession, and any receiver,
trustee, liquidator, conservator, custodian, or similar party appointed for
Borrower or for all or substantially all of Borrower's assets under any Debtor
Law.
CREDIT AGREEMENT is defined in the recitals to this guaranty.
GUARANTEED DEBT means the Obligation, as defined in the Credit Agreement,
and all present and future costs, attorneys' fees, and expenses reasonably
incurred by Agent or any Lender to enforce Borrower's, Guarantor's, or any other
obligor's payment of any of the Obligation, including, without limitation, all
present and future amounts that would become due but for the operation of
Sections 502 or 506 or any other provision of TITLE 11 of the UNITED STATES CODE
and all present and future accrued and unpaid interest (including, without
limitation, all post-petition interest if Borrower or Guarantor voluntarily or
involuntarily becomes subject to any Debtor Law).
GUARANTOR is defined in the preamble to this guaranty.
SUBORDINATED DEBT means all present and future obligations of Borrower to
Guarantor, whether those obligations are (a) direct, indirect, fixed,
contingent, liquidated, unliquidated, joint, several, or joint and several, (b)
due or to become due to Guarantor, (c) held by or are to be held by Guarantor,
(d) created directly or acquired by assignment or otherwise, or (e) evidenced in
writing.
2. GUARANTY. This is an absolute, irrevocable, and continuing guaranty,
and the circumstance that at any time or from time to time the Guaranteed Debt
may be paid in full does not affect the
obligation of Guarantor with respect to the Guaranteed Debt incurred after that.
This guaranty remains in effect until the Guaranteed Debt is fully paid and
performed, each LC has expired or been cancelled, and all commitments to lend or
issue LCs under the Credit Agreement have terminated. Agent, in its own
discretion or at the direction of the Determining Lenders, shall have sole and
exclusive authority to enforce this guaranty. Guarantor may not rescind or
revoke its obligations with respect to the Guaranteed Debt. Notwithstanding any
contrary provision in this guaranty, however, Guarantor's maximum liability
under this guaranty is limited, to the extent, if any, required so that its
liability is not subject to avoidance under any Debtor Law.
3. CONSIDERATION. Guarantor represents and warrants that (a) the value
of the consideration received and to be received by it is reasonably worth at
least as much as its liability under this guaranty and (b) that liability may
reasonably be expected to directly or indirectly benefit it.
4. CUMULATIVE RIGHTS. If Guarantor becomes liable for any indebtedness
owing by Borrower to Agent or any Lender, OTHER THAN under this guaranty, that
liability may not be in any manner impaired or affected by this guaranty. The
Rights of Agent or Lenders under this guaranty are cumulative of any and all
other Rights that Agent or Lenders may ever have against Guarantor. The
exercise by Agent or Lenders of any Right under this guaranty or otherwise does
not preclude the concurrent or subsequent exercise of any other Right.
5. PAYMENT UPON DEMAND. If a Default exists, Guarantor shall -- on
demand and without further notice of dishonor and without any notice having been
given to Guarantor previous to that demand of either the acceptance by Agent or
Lenders of this guaranty or the creation or incurrence of any Guaranteed Debt --
pay the amount of the Guaranteed Debt then due and payable to Agent for Lenders.
It is not necessary for Agent or Lenders, in order to enforce that payment by
Guarantor, first or contemporaneously to institute suit or exhaust remedies
against Borrower or others liable on any Guaranteed Debt or to enforce Rights
against any collateral securing any Guaranteed Debt.
6. SUBORDINATION. The Subordinated Debt is expressly subordinated to the
full and final payment of the Guaranteed Debt. Guarantor agrees not to accept
any payment of any Subordinated Debt from Borrower if a Default or Potential
Default exists. If Guarantor receives any payment of any Subordinated Debt in
violation of the foregoing, Guarantor shall hold that payment in trust for Agent
and Lenders and promptly turn it over to Agent, in the form received (with any
necessary endorsements), to be applied to the Guaranteed Debt.
7. SUBROGATION AND CONTRIBUTION. Until no Lender is obligated to lend or
issue LCs under the Credit Agreement, all LCs have expired or been cancelled,
and the Guaranteed Debt has been fully paid and performed (the "DEFERMENT DATE")
(a) no Guarantor may assert, enforce, or otherwise exercise any Right of
subrogation to any of the Rights or Liens of Agent or Lenders or any other
beneficiary against Borrower or any other obligor on the Guaranteed Debt or any
collateral or other security or any Right of recourse, reimbursement,
subrogation, contribution, indemnification, or similar Right against Borrower or
any other obligor on any Guaranteed Debt or any guarantor of it, (b) Guarantor
defers all of the foregoing Rights (whether they arise in equity, under
contract, by statute, under common Law, or otherwise) until the Deferment Date,
and (c) Guarantor defers the benefit of, and any Right to participate in, any
collateral or other security given to Agent or Lenders or any other beneficiary
to secure payment of any Guaranteed Debt until the Deferment Date.
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8. NO RELEASE. Guarantor's obligations under this guaranty may not be
released, diminished, or affected by the occurrence of any one or more of the
following events: (a) Any taking or accepting of any other security or
assurance for any Guaranteed Debt; (b) any release, surrender, exchange,
subordination, impairment, or loss of any collateral securing any Guaranteed
Debt; (c) any full or partial release of the liability of any other obligor on
the Obligation; (d) the modification of, or waiver of compliance with, any terms
of any other Loan Document; (e) the insolvency, bankruptcy, or lack of corporate
or partnership power of any other obligor at any time liable for any Guaranteed
Debt, whether now existing or occurring in the future; (f) any renewal,
extension, or rearrangement of any Guaranteed Debt or any adjustment,
indulgence, forbearance, or compromise that may be granted or given by Agent or
any Lender to any other obligor on the Obligation; (g) any neglect, delay,
omission, failure, or refusal of Agent or any Lender to take or prosecute any
action in connection with the Guaranteed Debt; (h) any failure of Agent or any
Lender to notify Guarantor of any renewal, extension, or assignment of any
Guaranteed Debt, or the release of any security or of any other action taken or
refrained from being taken by Agent or any Lender against Borrower or any new
agreement between Agent, any Lender, and Borrower, it being understood that
neither Agent nor any Lender is required to give Guarantor any notice of any
kind under any circumstances whatsoever with respect to or in connection with
any Guaranteed Debt, OTHER THAN any notice required to be given to Guarantor by
Law or elsewhere in this guaranty; (i) the unenforceability of any Guaranteed
Debt against any other obligor because it exceeds the amount permitted by Law,
the act of creating it is ULTRA XXXXX, the officers creating it exceeded their
authority or violated their fiduciary duties in connection with it, or
otherwise; or (j) any payment of the Obligation to Agent or Lenders is held to
constitute a preference under any Debtor Law or for any other reason Agent or
any Lender is required to refund that payment or make payment to someone else
(and in each such instance this guaranty will be reinstated in an amount equal
to that payment).
9. WAIVERS. Guarantor waives (a) all defenses to the enforcement of
this guaranty (and Rights which may be asserted as defenses to the enforcement
of this guaranty), other than payment, including, but not limited to, (i) any
Right to revoke this Guaranty with respect to future indebtedness; (ii) any
Right to require Agent or Lenders to do any of the following before Guarantor is
obligated to pay the Guaranteed Debt or before Agent or Lenders may proceed
against Guarantor: (A) xxx or exhaust remedies against Borrower and other
guarantors or obligors, (B) xxx on an accrued right of action in respect of any
of the Guaranteed Debt or bring any other action, exercise any other right, or
exhaust all other remedies, or (C) enforce rights against Borrower's assets or
the collateral pledged by Borrower to secure the Guaranteed Debt; (iii) any
right relating to the timing, manner, or conduct of Agent's or Lenders'
enforcement of rights against Borrower's assets or the collateral pledged by
Borrower to secure the Guaranteed Debt; (iv) if Guarantor and Borrower (or a
third party) have each pledged assets to secure the Guaranteed Debt, any right
to require Agent and Lenders to proceed first against the other collateral
before proceeding against collateral pledged by Guarantor; (v) notice that this
Guaranty has been accepted by Agent and Lenders and notice of any indebtedness
to which this Guaranty may apply; (vi) any right of Guarantor to receive notice
from Agent or Lenders of changes which affect the creditworthiness of Borrower,
and (vii) except as required hereby, presentation, presentment, demand for
payment, protest, notice of protest, notice of dishonor or nonpayment of any
indebtedness, notice of intent to accelerate, notice of acceleration, notice of
any suit or other action by Lender against Borrower, Guarantor or any other
Person and any notice to any party liable for the obligation which is the
subject of the suit or action, and (b) each of the foregoing rights or defenses
regardless whether they arise under (i) Section 34.01 ET SEQ. of the Texas
Business and Commerce Code, as amended, (ii) Section 17.001 of the Texas Civil
Practice and Remedies Code, as amended, (iii) Rule 31 of the Texas Rules of
Civil Procedure, as amended, or (iv) common law, in equity, under contract, by
statute, or otherwise.
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10. CREDIT AGREEMENT PROVISIONS. Guarantor acknowledges that certain (a)
representations and warranties in the Credit Agreement are applicable to it and
confirms that each such representation and warranty is true and correct, (b)
covenants, agreements, and other provisions in the Credit Agreement (INCLUDING,
WITHOUT LIMITATION, INDEMNIFICATION AND RELATED PROVISIONS IN SECTION 8.12 OF
THE CREDIT AGREEMENT) are applicable to it or are imposed upon it and agrees to
promptly and properly comply with or be bound by each of them, AND (C) IT
IRREVOCABLY CONSENTS AND APPROVES TO THE VENUE, SERVICE OF PROCESS, AND WAIVER
OF JURY TRIAL PROVISIONS OF SECTION 14.11 OF THE CREDIT AGREEMENT.
11. RELIANCE AND DUTY TO REMAIN INFORMED. Guarantor confirms that it has
executed and delivered this guaranty after reviewing the terms and conditions of
the Loan Documents and such other information as it has deemed appropriate in
order to make its own credit analysis and decision to execute and deliver this
guaranty. Guarantor confirms that it has made its own independent investigation
with respect to Borrower's creditworthiness and is not executing and delivering
this guaranty in reliance on any representation or warranty by Agent or any
Lender as to that creditworthiness. Guarantor expressly assumes all
responsibilities to remain informed of the financial condition of Borrower and
any circumstances affecting Borrower's ability to perform under the Loan
Documents to which it is a party or any collateral securing any Guaranteed Debt.
12. NO REDUCTION. The Guaranteed Debt may not be reduced, discharged, or
released because or by reason of any existing or future offset, claim, or
defense (except for the defense of complete and final payment of the Guaranteed
Debt) of Borrower or any other obligor against Agent or Lenders or against
payment of the Guaranteed Debt, whether that offset, claim, or defense arises in
connection with the Guaranteed Debt or otherwise. Those claims and defenses
include, without limitation, failure of consideration, breach of warranty,
fraud, bankruptcy, incapacity/infancy, statute of limitations, lender liability,
accord and satisfaction, usury, forged signatures, mistake, impossibility,
frustration of purpose, and unconscionability.
13. LOAN DOCUMENT. This guaranty is a Loan Document and is subject to the
applicable provisions of SECTIONS 1 and 14 of the Credit Agreement, all of which
are incorporated into this guaranty by reference the same as if set forth in
this guaranty verbatim.
14. COMMUNICATIONS. For purposes of SECTION 14.2 of the Credit Agreement,
Guarantor's address and telecopy number are the same as Borrower's.
15. AMENDMENTS, ETC. No amendment, waiver, or discharge to or under this
guaranty is valid unless it is in writing and is signed by the party against
whom it is sought to be enforced and is otherwise in conformity with the
requirements of SECTION 14.8 of the Credit Agreement.
16. ENTIRETY. THIS GUARANTY AND THE OTHER LOAN DOCUMENTS TO WHICH
GUARANTOR IS A PARTY REPRESENT THE FINAL AGREEMENT BETWEEN GUARANTOR, AGENT, AND
LENDERS WITH RESPECT TO THE SUBJECT MATTER OF THIS GUARANTY AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
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17. AGENT AND LENDERS. Agent is the agent for each Lender under the
Credit Agreement. All Rights granted to Agent under or in connection with this
guaranty are for each Lender's ratable benefit. Agent may, without the joinder
of any Lender, exercise any Rights in Agent's or Lenders' favor under or in
connection with this guaranty. Agent's and each Lender's Rights and obligations
VIS-A-VIS each other may be subject to one or more separate agreements between
those parties. However, no Guarantor is required to inquire about any such
agreement or is subject to any terms of it. Therefore, neither Guarantor nor
its successors or assigns is entitled to any benefits or provisions of any such
separate agreement or is entitled to rely upon or raise as a defense any party's
failure or refusal to comply with the provisions of it.
18. PARTIES. This guaranty benefits Agent, Lenders, and their respective
successors and assigns and binds Guarantor and its successors and assigns. Upon
appointment of any successor Agent under the Credit Agreement, all of the Rights
of Agent under this guaranty automatically vests in that new Agent as successor
Agent on behalf of Lenders without any further act, deed, conveyance, or other
formality OTHER THAN that appointment. The Rights of Agent and Lenders under
this guaranty may be transferred with any assignment of the Guaranteed Debt.
The Credit Agreement contains provisions governing assignments of the Guaranteed
Debt and of Rights and obligations under this guaranty.
REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGES FOLLOW.
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EXECUTED as of the date first stated above.
MAGNETEK FINANCIAL SERVICES, INC.,
AS GUARANTOR
By
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Xxxxx X. Xxxxxxx, Assistant Secretary
Agent executes this guaranty in acknowledgement of PARAGRAPH 16 above.
NATIONSBANK OF TEXAS, N.A., AS AGENT
By
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Xxxx X. XxXxxxxx, Vice President
GUARANTY SIGNATURE PAGE
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