GUARANTY
This GUARANTY (together with all amendments, if any, from time to
time hereto, this "Guaranty") dated as of July 2, 2002 by and among THE
GUARANTORS IDENTIFIED AS SUCH ON THE SIGNATURE PAGE HEREOF AND EACH ADDITIONAL
PARTY WHICH BECOMES A GUARANTOR HERETO PURSUANT TO SECTION 10 HEREOF (each, a
"Guarantor" and collectively, "Guarantors"), and GENERAL ELECTRIC CAPITAL
CORPORATION, a Delaware corporation, individually and as Agent (in such
capacity, "Agent") for itself and the lenders from time to time party to the
Credit Agreement described below ("Lenders").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Credit Agreement dated as of
the date hereof among Xxxxx International Enterprises Corp., a New York
corporation ("Xxxxx") and Blue Ridge Textile Manufacturing Inc., a Georgia
corporation ("Blue Ridge") (Xxxxx and Blue Ridge are sometimes collectively
referred to herein as the "Borrowers" and individually as a "Borrower"); the
other Credit Parties signatory thereto; General Electric Capital Corporation, a
Delaware corporation, for itself, as Lender, and as Agent for Lenders, and the
other Lenders signatory thereto from time to time (including all annexes,
exhibits and schedules thereto, as from time to time amended, restated,
supplemented or otherwise modified, the "Credit Agreement"), Lenders have agreed
to make Loans to, and incur the Letter of Credit Obligations for the benefit of,
Borrowers;
WHEREAS, Guarantors directly or indirectly benefit from the
credit facilities made available to Borrowers under the Credit Agreement; and
WHEREAS, in order to induce Agent and Lenders to enter into the
Credit Agreement and other Loan Documents and to induce Lenders to make the
Loans and incur the Letter of Credit Obligations as provided for in the Credit
Agreement, each Guarantor has agreed to guarantee payment of the Obligations of
each other Credit Party;
NOW, THEREFORE, in consideration of the premises and the
covenants hereinafter contained, and to induce Lenders to provide the Loans,
Letter of Credit Obligations and other financial accommodations under the Credit
Agreement, it is agreed as follows:
1. DEFINITIONS. Capitalized terms used herein (including terms used in the
Recitals) shall have the meanings assigned to them in the Credit Agreement or in
Annex A thereto, unless otherwise defined herein.
References to this "Guaranty" shall mean this Guaranty, including
all amendments, modifications and supplements and any annexes, exhibits and
schedules to any of the foregoing, and shall refer to this Guaranty as the same
may be in effect at the time such reference becomes operative.
2. THE GUARANTY
2.1 Guaranty of Guaranteed Obligations of Credit Parties. Each
Guarantor hereby jointly and severally unconditionally guarantees to Agent and
Lenders, and their respective successors, endorsees, transferees and assigns,
the prompt payment (whether at stated maturity, by acceleration or otherwise)
and performance of the Obligations of Borrowers and the other Credit Parties
(other than such Guarantor) (hereinafter the "Guaranteed Obligations"). Each
Guarantor agrees that this Guaranty is a guaranty of payment and performance and
not of collection, and that its obligations under this Guaranty shall be
primary, absolute and unconditional, irrespective of, and unaffected by:
(a) the genuineness, validity, regularity, enforceability
or any future amendment of, or change in this Guaranty, any other Loan Document
or any other agreement, document or instrument to which any Credit Party
(including any Guarantor) is or may become a party;
(b) the absence of any action to enforce this Guaranty or
any other Loan Document or the waiver or consent by Agent and/or any Lender with
respect to any of the provisions thereof;
(c) the existence, value or condition of, or failure to
perfect its Lien against, any Collateral for the Guaranteed Obligations or any
action, or the absence of any action, by Agent or any Lender in respect thereof
(including, without limitation, the release of any such security); or
(d) the insolvency of any Credit Party; or
(e) any other action or circumstances which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor;
it being agreed by each Guarantor that its obligations under this Guaranty shall
not be discharged until the Termination Date. Each Guarantor shall be regarded,
and shall be in the same position, as principal debtor with respect to the
Guaranteed Obligations. Each Guarantor agrees that any notice or directive given
at any time to Agent or any Lender which is inconsistent with the waiver in the
immediately preceding sentence shall be null and void and may be ignored by
Agent and Lenders, and, in addition, may not be pleaded or introduced as
evidence in any litigation relating to this Guaranty for the reason that such
pleading or introduction would be at variance with the written terms of this
Guaranty, unless Agent and Lenders have specifically agreed otherwise in
writing. It is agreed among each Guarantor, Agent and Lenders that the foregoing
waivers are of the essence of the transaction contemplated by the Loan Documents
and that, but for this Guaranty and such waivers, Agent and Lenders would
decline to enter into the Credit Agreement.
2.2 Demand by Agent or Lenders. In addition to the terms of the
Guaranty set forth in Section 2.1 hereof, and in no manner imposing any
limitation on such terms, it is expressly understood and agreed that, if, at any
time, the outstanding principal amount of the Guaranteed Obligations (including
all accrued interest thereon) is declared to be immediately due and payable,
then Guarantors shall, without demand, pay to the holders of the Guaranteed
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Obligations the entire outstanding Guaranteed Obligations due and owing to such
holders. Payment by Guarantors shall be made to Agent in immediately available
Federal funds to an account designated by Agent or at the address set forth in
the Credit Agreement for the giving of notice to Agent or at any other address
that may be specified in writing from time to time by Agent, and shall be
credited and applied to the Guaranteed Obligations in accordance with the Credit
Agreement.
2.3 Enforcement of Guaranty. In no event shall Agent have any obligation
(although it is entitled, at its option) to proceed against any Borrower or any
other Credit Party or any Collateral pledged to secure Guaranteed Obligations
before seeking satisfaction from any or all of the Guarantors, and Agent may
proceed, prior or subsequent to, or simultaneously with, the enforcement of its
rights hereunder, to exercise any right or remedy which it may have against any
Collateral, as a result of any Lien it may have as security for all or any
portion of the Guaranteed Obligations.
2.4 Waiver. In addition to the waivers contained in Section 2.1 hereof,
to the extent permitted by law each Guarantor waives, and agrees that it shall
not at any time insist upon, plead or in any manner whatever claim or take the
benefit or advantage of, any appraisal, valuation, stay, extension, marshaling
of assets or redemption laws, or exemption, whether now or at any time hereafter
in force, which may delay, prevent or otherwise affect the performance by
Guarantors of the Guaranteed Obligations under, or the enforcement by Agent or
Lenders of, this Guaranty. Each Guarantor hereby waives diligence, presentment
and demand (whether for non-payment or protest or of acceptance, maturity,
extension of time, change in nature or form of the Guaranteed Obligations,
acceptance of further security, release of further security, composition or
agreement arrived at as to the amount of, or the terms of, the Guaranteed
Obligations, notice of adverse change in any Credit Party's financial condition
or any other fact which might increase the risk to Guarantors) with respect to
any of the Guaranteed Obligations or all other demands whatsoever and, to the
extent permitted by law, waives the benefit of all provisions of law which are
or might be in conflict with the terms of this Guaranty. Each Guarantor
represents, warrants and agrees, jointly and severally, that, as of the date of
this Guaranty, the obligations of Guarantors under this Guaranty are not subject
to any offsets or defenses against Agent or Lenders or any Credit Party of any
kind. Each Guarantor further jointly and severally agrees that the obligations
under this Guaranty shall not be subject to any counterclaims, offsets or
defenses against Agent or any Lender or against any Credit Party of any kind
which may arise in the future.
2.5 Benefit of Guaranty. The provisions of this Guaranty are for the
benefit of Agent and Lenders and their respective successors, transferees,
endorsees and assigns, and nothing herein contained shall impair, as between any
Credit Party and Agent or Lenders, the obligations of any Credit Party under the
Loan Documents. In the event all or any part of the Guaranteed Obligations are
transferred, indorsed or assigned by Agent or any Lender to any Person or
Persons, any reference to "Agent" or "Lender" herein shall be deemed to refer
equally to such Person or Persons.
2.6 Modification of Guaranteed Obligations, Etc. Each Guarantor hereby
acknowledges and agrees that Agent and Lenders may at any time or from time to
time, with or without the consent of, or notice to, Guarantors or any of them:
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(a) change or extend the manner, place or terms of payment
of, or renew or alter all or any portion of, the Guaranteed Obligations;
(b) take any action under or in respect of the Loan
Documents in the exercise of any remedy, power or privilege contained therein or
available to it at law, equity or otherwise, or waive or refrain from exercising
any such remedies, powers or privileges;
(c) amend or modify, in any manner whatsoever, the Loan
Documents;
(d) extend or waive the time for any Credit Party's
performance of, or compliance with, any term, covenant or agreement on its part
to be performed or observed under the Loan Documents, or waive such performance
or compliance or consent to a failure of, or departure from, such performance or
compliance;
(e) take and hold Collateral for the payment of the
Guaranteed Obligations guaranteed hereby or sell, exchange, release, dispose of,
or otherwise deal with, any property pledged, mortgaged or conveyed, or in which
Agent or Lenders have been granted a Lien, to secure any Guaranteed Obligations;
(f) release anyone who may be liable in any manner for the
payment of any amounts owed by any Guarantor or any Credit Party to Agent or any
Lender;
(g) modify or terminate the terms of any intercreditor or
subordination agreement pursuant to which claims of other creditors of any
Guarantor or other Credit Party are subordinated to the claims of Agent and
Lenders; and/or
(h) apply any sums by whomever paid or however realized to
any amounts owing by any Guarantor or any other Credit Party to Agent or any
Lender in such manner as Agent or any Lender shall determine in its discretion;
and Agent and Lenders shall not incur any liability to any Guarantor as a result
thereof, and no such action shall impair or release the Guaranteed Obligations
of Guarantors or any of them under this Guaranty.
2.7 Reinstatement. This Guaranty shall remain in full force and effect
and continue to be effective should any petition be filed by or against any
Credit Party or any Guarantor for liquidation or reorganization, should any
Credit Party or any Guarantor become insolvent or make an assignment for the
benefit of creditors or should a receiver or trustee be appointed for all or any
significant part of such Credit Party's or such Guarantor's assets, and shall
continue to be effective or be reinstated, as the case may be, if at any time
payment and performance of the Guaranteed Obligations, or any part thereof, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by Agent or any Lender, whether as a "voidable preference",
"fraudulent conveyance", or otherwise, all as though such payment or performance
had not been made. In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, the Guaranteed Obligations shall be
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.
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2.8 Deferral of Subrogation, Etc. Notwithstanding anything to the
contrary in this Guaranty, or in any other Loan Document, each Guarantor hereby:
(a) expressly and irrevocably waives, on behalf of itself
and its successors and assigns (including any surety) until the Termination
Date, any and all rights at law or in equity to subrogation, to reimbursement,
to exoneration, to contribution, to indemnification, to set off or to any other
rights that could accrue to a surety against a principal, to a guarantor against
a principal, to a guarantor against a maker or obligor, to an accommodation
party against the party accommodated, to a holder or transferee against a maker,
or to the holder of any claim against any Person, and which such Guarantor may
have or hereafter acquire against any Credit Party in connection with or as a
result of such Guarantor's execution, delivery and/or performance of this
Guaranty, or any other documents to which such Guarantor is a party or
otherwise; and
(b) acknowledges and agrees (i) that this waiver is
intended to benefit Agent and Lenders and shall not limit or otherwise effect
any Guarantor's liability hereunder or the enforceability of this Guaranty, and
(ii) that Agent, Lenders and their respective successors and assigns are
intended third party beneficiaries of the waivers and agreements set forth in
this Section 2.8 and their rights under this Section 2.8 shall survive payment
in full of the Guaranteed Obligations.
2.9 Election of Remedies. If Agent may, under applicable law, proceed
to realize benefits under any of the Loan Documents giving Agent and Lenders a
Lien upon any Collateral owned by any Credit Party, either by judicial
foreclosure or by non-judicial sale or enforcement, Agent may, at its sole
option, determine which of such remedies or rights it may pursue without
affecting any of such rights and remedies under this Guaranty. If, in the
exercise of any of its rights and remedies, Agent shall forfeit any of its
rights or remedies, including its right to enter a deficiency judgment against
any Credit Party, whether because of any applicable laws pertaining to "election
of remedies" or the like, each Guarantor hereby consents to such action by Agent
and waives any claim based upon such action, even if such action by Agent shall
result in a full or partial loss of any rights of subrogation which any
Guarantor might otherwise have had but for such action by Agent. Any election of
remedies which results in the denial or impairment of the right of Agent to seek
a deficiency judgment against any Credit Party shall not impair any Guarantor's
obligation to pay the full amount of the Guaranteed Obligations. In the event
Agent shall bid at any foreclosure or trustee's sale or at any private sale
permitted by law or the Loan Documents, Agent may bid all or less than the
amount of the Guaranteed Obligations and the amount of such bid need not be paid
by Agent but shall be credited against the Guaranteed Obligations. The amount of
the successful bid at any such sale shall be conclusively deemed to be the fair
market value of the collateral and the difference between such bid amount and
the remaining balance of the Guaranteed Obligations shall be conclusively deemed
to be the amount of the Guaranteed Obligations guaranteed under this Guaranty,
notwithstanding that any present or future law or court decision or ruling may
have the effect of reducing the amount of any deficiency claim to which Agent
and Lenders might otherwise be entitled but for such bidding at any such sale.
2.10 Funds Transfers. If any Guarantor shall engage in any transaction
as a result of which any Borrower is required to make a mandatory prepayment
with respect to the Guaranteed
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Obligations under the terms of the Credit Agreement (including any issuance or
sale of such Guarantor's Stock or any sale of its assets), such Guarantors shall
distribute to, or make a contribution to the capital of one or more of the
Borrowers an amount equal to the mandatory prepayment required under the terms
of the Credit Agreement.
2.11 Cumulative Liability. The liability of any Guarantor under this
Guaranty is in addition to and shall be cumulative with all liabilities of such
Guarantor to Agent and Lenders under the Credit Agreement and the other Loan
Documents to which such Guarantor is a party or in respect of any Obligations or
other obligation of any other Credit Party, without any limitation as to amount,
unless the instrument or agreement evidencing or creating such other liability
specifically provides to the contrary.
3. DELIVERIES. In a form satisfactory to Agent, Guarantors shall deliver to
Agent (with sufficient copies for Agent and each Lender), concurrently with the
execution of this Guaranty and the Credit Agreement, the Loan Documents and
other instruments, certificates and documents as are required to be delivered by
Guarantors to Agent under the Credit Agreement.
4. REPRESENTATIONS AND WARRANTIES. To induce Lenders to make the Loans and
incur Letter of Credit Obligations under the Credit Agreement, each Guarantor
jointly and severally makes the representations and warranties contained in the
Credit Agreement, each of which is incorporated herein by reference to Agent and
each Lender, each and all of which shall survive the execution and delivery of
this Guaranty. In addition, each Guarantor, jointly and severally, makes the
following representations and warranties each and all of which shall survive the
execution and delivery of this Guaranty:
4.1 Corporate Existence; Compliance with Law. Each Guarantor (i) is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation; (ii) is duly qualified to do business and
is in good standing under the laws of each jurisdiction where its ownership or
lease of property or the conduct of its business requires such qualification;
(iii) has the requisite corporate power and authority and the legal right to
own, pledge, mortgage and operate its properties, to lease the property it
operates under lease, and to conduct its business as now, heretofore and
proposed to be conducted; (iv) has all licenses, permits, consents or approvals
from or by, and has made all material filings with, and has given all notices
to, all Governmental Authorities having jurisdiction, to the extent required for
such ownership, operation and conduct; (v) is in compliance with its charter and
by-laws; and (vi) is in compliance with all applicable provisions of law, except
where the failure to comply, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
4.2 Corporate Power; Authorization; Enforceable Guaranteed Obligations.
The execution, delivery and performance of this Guaranty and all other Loan
Documents and all instruments and documents to be delivered by each Guarantor
hereunder and under the Credit Agreement are within such Guarantor's corporate
power, have been duly authorized by all necessary or proper corporate action,
including the consent of stockholders where required, are not in contravention
of any provision of such Guarantor's charter or by-laws, do not violate any law
or regulation, or any order or decree of any Governmental Authority, do not
conflict with or result in the breach of, or constitute a default under, or
accelerate or permit the acceleration of
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any performance required by, any indenture, mortgage, deed of trust, lease,
agreement or other instrument to which any Guarantor is a party or by which any
Guarantor or any of its property is bound, do not result in the creation or
imposition of any Lien upon any of the property of any Guarantor, other than
those in favor of Agent, for itself and the benefit of Lenders, and the same do
not require the consent or approval of any Governmental Authority or any other
Person except those referred to in Section 2.1(c) of the Credit Agreement, all
of which have been duly obtained, made or complied with prior to the Closing
Date. On or prior to the Closing Date, this Guaranty and each of the Loan
Documents to which any Guarantor is a party shall have been duly executed and
delivered for the benefit of or on behalf of such Guarantor, and each shall then
constitute a legal, valid and binding obligation of such Guarantor, enforceable
against such Guarantor in accordance with its terms.
5. FURTHER ASSURANCES. Each Guarantor executing this Guaranty agrees that it
shall and shall cause each other Guarantor to, at such Guarantor's expense and
upon request of Agent, duly execute and deliver, or cause to be duly executed
and delivered, to Agent such further instruments and do and cause to be done
such further acts as may be necessary or proper in the reasonable opinion of
Agent to carry out more effectively the provisions and purposes of this Guaranty
or any other Loan Document.
6. PAYMENTS FREE AND CLEAR OF TAXES. Any and all payments required to be made
by each Guarantor hereunder shall be made to Agent and Lenders free and clear
of, and without deduction for, any and all present and future Taxes. If any
Guarantor shall be required by law to deduct any Taxes from or in respect of any
sum payable hereunder, (a) the sum payable shall be increased as much as shall
be necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 6) Agent or Lenders, as
applicable, receive an amount equal to the sum they would have received had no
such deductions been made, (b) such Guarantor shall make such deductions, and
(c) such Guarantor shall pay the full amount deducted to the relevant taxing or
other authority in accordance with applicable law. Within thirty (30) days after
the date of any payment of Taxes, each applicable Guarantor shall furnish to
Agent the original or a certified copy of a receipt evidencing payment thereof.
Each Guarantor shall jointly and severally indemnify and, within ten (10) days
of demand therefor, pay Agent and each Lender for the full amount of Taxes
(including any Taxes imposed by any jurisdiction on amounts payable under this
Section 6) paid by Agent or such Lender, as appropriate, and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto, whether or not such Taxes were correctly or legally asserted.
7. OTHER TERMS.
7.1 Entire Agreement. This Guaranty and the other Loan Documents
constitute the complete agreement between the parties with respect to the
subject matter thereof. Any letter of interest, commitment letter, or fee letter
(other than the GE Capital Fee Letter and the Gladstone Fee Letter) or
confidentiality agreement, if any, between any Credit Party and Agent or any
Lender or any of their respective Affiliates, predating this Guaranty and the
other Loan Documents executed as of the date hereof and relating to a financing
of substantially similar form, purpose or effect shall be superseded by this
Guaranty and the other Loan Documents.
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7.2 Section Titles. The Section titles contained in this Guaranty are and
shall be without substantive meaning or content of any kind whatsoever and are
not a part of the agreement between the parties hereto.
7.3 Severability. Whenever possible, each provision of this Guaranty shall
be interpreted in such a manner to be effective and valid under applicable law,
but if any provision of this Guaranty shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Guaranty.
7.4 Notices. Whenever it is provided herein that any notice, demand,
request, consent, approval, declaration or other communication shall or may be
given to or served upon any of the parties by any other party, or whenever any
of the parties desires to give or serve upon another any such communication with
respect to this Guaranty, each such notice, demand, request, consent, approval,
declaration or other communication shall be in writing and shall be addressed to
the party to be notified at the address set forth in Annex I to the Credit
Agreement (or such other address as may be substituted by notice given in the
manner required by Section 11.10 of the Credit Agreement), and given in the
manner required by Section 11.10 of the Credit Agreement.
7.5 Successors and Assigns. This Guaranty and all obligations of
Guarantors hereunder shall be binding upon the successors and assigns of each
Guarantor (including a debtor-in-possession on behalf of such Guarantor) and
shall, together with the rights and remedies of Agent, for itself and for the
benefit of Lenders, hereunder, inure to the benefit of Agent and Lenders, all
future holders of any instrument evidencing any of the Obligations and their
respective successors and assigns. No sales of participations, other sales,
assignments, transfers or other dispositions of any agreement governing or
instrument evidencing the Obligations or any portion thereof or interest therein
shall in any manner affect the rights of Agent and Lenders hereunder. Guarantors
may not assign, sell, hypothecate or otherwise transfer any interest in or
obligation under this Guaranty.
7.6 No Waiver. Agent's or any Lender's failure, at any time or times, to
require strict performance by the Guarantors or Credit Parties of any provision
of this Guaranty or any other Loan Document shall not waive, affect or diminish
any right of Agent or such Lender thereafter to demand strict compliance and
performance herewith or therewith. Any suspension or waiver of an Event of
Default shall not suspend, waive or affect any other Event of Default whether
the same is prior or subsequent thereto and whether the same or of a different
type. Subject to the provisions of Section 11.2 of the Credit Agreement and
Section 7.8 hereto, none of the undertakings, agreements, warranties, covenants
and representations of any Guarantor contained in this Guaranty or any of the
other Loan Documents and no Default or Event of Default by any Guarantor shall
be deemed to have been suspended or waived by Agent or any Lender, unless such
waiver or suspension is by an instrument in writing signed by an officer of or
other authorized employee of Agent and the applicable required Lenders, and
directed to Borrowers specifying such suspension or waiver.
7.7 Cumulative Remedies. Agent's and Lenders' rights and remedies under
this Guaranty shall be cumulative and nonexclusive of any other rights and
remedies that Agent
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or any Lender may have under any other agreement, including the other Loan
Documents, by operation of law or otherwise. Recourse to the Collateral shall
not be required.
7.8 Amendments. None of the terms or provisions of this Guaranty may be
waived, altered, modified or amended except by an instrument in writing, duly
executed by Agent and Guarantors.
7.9 Termination. This Guaranty is a continuing Guaranty and shall remain
in full force and effect until the Termination Date.
7.10 Counterparts. This Guaranty may be executed in any number of separate
counterparts, each of which shall collectively and separately constitute one
agreement.
7.11 GOVERNING LAW; CONSENT TO JURISDICTION AND VENUE.
THIS AGREEMENT INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE, AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. EACH GUARANTOR HEREBY CONSENTS
AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK COUNTY, CITY OF
NEW YORK, NEW YORK, SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY
CLAIMS OR DISPUTES BETWEEN OR AMONG GUARANTORS, AGENT OR ANY LENDER PERTAINING
TO THIS GUARANTY OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS GUARANTY OR
ANY OF THE OTHER LOAN DOCUMENTS, PROVIDED, THAT AGENT AND GUARANTORS ACKNOWLEDGE
THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED
OUTSIDE OF NEW YORK COUNTY, AND, PROVIDED, FURTHER, THAT NOTHING IN THIS
GUARANTY SHALL BE DEEMED OR OPERATE TO PRECLUDE AGENT FROM BRINGING SUIT OR
TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE COLLATERAL
OR ANY OTHER SECURITY FOR THE GUARANTEED OBLIGATIONS, OR TO ENFORCE A JUDGMENT
OR OTHER COURT ORDER IN FAVOR OF AGENT, FOR THE BENEFIT OF AGENT AND LENDERS.
EACH GUARANTOR EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN
ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH GUARANTOR HEREBY WAIVES
ANY OBJECTION THAT SUCH GRANTOR MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENT TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH
COURT. EACH GUARANTOR HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT
AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF
SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL ADDRESSED TO SUCH GUARANTOR AT THE ADDRESSES SET FORTH IN ANNEX I
OF THE CREDIT AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED
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UPON THE EARLIER OF SUCH GUARANTOR'S ACTUAL RECEIPT THEREOF OR 3 DAYS AFTER
DEPOSIT IN THE UNITED STATES MAILS, PROPER POSTAGE PREPAID.
7.12 WAIVER OF JURY TRIAL.
BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL
TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND
EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY
(RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE
RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE
BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OR ARBITRATION, EACH
GUARANTOR AND AGENT WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT OR
PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT,
OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS GUARANTY AND THE
OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.
7.13 Limitation on Guaranteed Obligations. Notwithstanding any provision
herein contained to the contrary, each Guarantor's liability hereunder shall be
limited to an amount not to exceed as of any date of determination the greater
of:
(a) the net amount of all Loans and other extensions of credit
(including Letters of Credit) advanced under the Credit Agreement and directly
or indirectly re-loaned or otherwise transferred to, or incurred for the benefit
of, such Guarantor, plus interest thereon at the applicable rate specified in
the Credit Agreement; or
(b) the amount which could be claimed by the Agent and Lenders
from such Guarantor under this Guaranty without rendering such claim voidable or
avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or under any
applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance
Act or similar statute or common law after taking into account, among other
things, such Guarantor's right of contribution and indemnification from each
other Guarantor under Section 7.14 hereof.
7.14 Contribution with Respect to Guaranteed Obligations.
(a) To the extent that any Guarantor shall make a payment under
this Guaranty of all or any of the Guaranteed Obligations (a "Guarantor
Payment") which, taking into account all other Guarantor Payments then
previously or concurrently made by the other Guarantors, exceeds the amount
which such Guarantor would otherwise have paid if each Guarantor had paid the
aggregate Guaranteed Obligations satisfied by such Guarantor Payment in the same
proportion that such Guarantor's "Allocable Amount" (as defined below) (in
effect immediately prior to such Guarantor Payment) bore to the aggregate
Allocable Amounts of all of Guarantors in effect immediately prior to the making
of such Guarantor Payment, then, following indefeasible payment in full in cash
of the Obligations and termination of the
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Commitments, such Guarantor shall be entitled to receive contribution and
indemnification payments from, and be reimbursed by, each of the other
Guarantors for the amount of such excess, pro rata based upon their respective
Allocable Amounts in effect immediately prior to such Guarantor Payment.
(b) As of any date of determination, the "Allocable Amount" of
any Guarantor shall be equal to the maximum amount of the claim which could then
be recovered from such Guarantor under this Guaranty without rendering such
claim voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy
Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform
Fraudulent Conveyance Act or similar statute or common law.
(c) This Section 7.14 is intended only to define the relative
rights of Guarantors and nothing set forth in this Section 7.14 is intended to
or shall impair the obligations of Guarantors, jointly and severally, to pay any
amounts as and when the same shall become due and payable in accordance with the
terms of this Guaranty.
(d) The rights of the parties under this Section 7.14 shall be
exercisable upon the indefeasible payment of the Guaranteed Obligations and the
termination of the Credit Agreement and the other Loan Documents.
(e) The parties hereto acknowledge that the rights of
contribution and indemnification hereunder shall constitute assets of any
Guarantor to which such contribution and indemnification is owing.
7.15 Strict Construction. The parties hereto have participated jointly
in the negotiation and drafting of this Guaranty. In the event an ambiguity or
question of intent or interpretation arises, this Guaranty shall be construed as
if drafted jointly by the parties hereto and no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue of the authorship of any
provisions of this Guaranty.
7.16 Advice of Counsel. Each of the parties represents to each other
party hereto that it has discussed this Guaranty and, specifically, the
provisions of Section 7.11 and Section 7.12, with its counsel.
8. SECURITY. To secure payment of each Guarantor's obligations under this
Guaranty, concurrently with the execution of this Guaranty, each Guarantor has
entered into the Security Agreement pursuant to which each Guarantor has granted
to Agent, for the benefit of Lenders, a security interest in substantially all
of its personal property and has entered into a Pledge Agreement pursuant to
which each Guarantor has pledged (i) all of the Stock of each of its
Subsidiaries and (ii) all of the Indebtedness held by it to Agent for the
benefit of Lenders.
9. CREDIT AGREEMENT. Each Guarantor agrees to perform, comply with and be bound
by the covenants contained in Sections 4, 5 and 6 of the Credit Agreement (which
provisions are incorporated herein by reference) as if each Guarantor were a
Credit Party signatory to the Credit Agreement.
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10. ADDITIONAL GUARANTORS. From time to time subsequent to the date hereof,
additional direct and indirect Subsidiaries of any Credit Party may become
parties hereto, as additional Guarantors (each, an "Additional Guarantor"), by
executing a counterpart of this Guaranty substantially in the form of Exhibit A
attached hereto. Upon delivery of any such counterpart to Agent, notice of which
is hereby waived by Guarantors, each Additional Guarantor shall be a Guarantor
and shall be as fully a party hereto as if such Additional Guarantor were an
original signatory hereto. 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 Agent not to cause any
Subsidiary of any Credit Party 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.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Guaranty as of the date first above written.
OHIO GARMENT RENTAL, INC.
By: _____________________________________
Name:
Title:
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent
By: _____________________________________
Name:
Its: Duly Authorized Signatory
EXHIBIT A
TO
GUARANTY
COUNTERPART TO GUARANTY
This counterpart, dated _________, 200__, is delivered pursuant to Section 10 of
that certain Guaranty dated as of ___________ ___, 2002 (as from time to time
amended, modified or supplemented, the "Guaranty"; the terms defined therein and
not otherwise defined herein being used as therein defined), by and among the
Guarantors identified as such on the signature page thereof and each additional
party which becomes a Guarantor thereto pursuant to Section 10 thereof and
General Electric Capital Corporation, as Agent. The undersigned hereby agrees
(i) that this counterpart may be attached to the Guaranty, and (ii) that the
undersigned will comply with and be subject to, including representations and
warranties, all the terms and conditions of the Guaranty as if it were an
original signatory thereto.
[NAME OF ADDITIONAL GUARANTOR]
By: _____________________________________
Name:
Title:
SCHEDULE I
EXECUTIVE OFFICES AND PRINCIPAL PLACES OF BUSINESS OF
GUARANTORS
