EXHIBIT 10.4
GUARANTY
GUARANTY (this "Guaranty"), dated as of June 1, 2004, made by each of the
parties listed on the signature pages hereof (collectively, the "Guarantors",
and each, a "Guarantor"), in favor of the Guarantied Parties referred to below.
W I T N E S S E T H:
WHEREAS, Xxxxx of Xxxx L.P., a Texas limited partnership (the "Borrower"),
has entered into a Credit Agreement, dated as of June 1, 2004, among Xxxxx of
Xxxx Limited a Bermuda company ("Limited"), the Lenders party thereto, and Banc
of America Mezzanine Capital, LLC, as the Administrative Agent (hereinafter, the
"Administrative Agent") for the Lenders, (said Credit Agreement, as it may be
amended, supplemented or otherwise modified from time to time, being the "Credit
Agreement", and capitalized terms not defined herein but defined therein being
used herein as therein defined); and
WHEREAS, the Borrower and each of the Guarantors are members of the same
consolidated group of companies and are engaged in operations which require
financing on a basis in which credit can be made available from time to time to
the Borrower and the Guarantors, and the Guarantors will derive direct and
indirect economic benefit from the Term Loan under the Credit Agreement; and
WHEREAS, it is a condition precedent to the obligation of the Lenders to
make the Term Loan under the Credit Agreement that the Guarantors shall have
executed and delivered this Guaranty; and
WHEREAS, the Lenders, the Administrative Agent, any Lender or Affiliate of
any Lender entering into a Swap Contract (provided that such Lender was a Lender
at the time such Swap Contract was entered into) with the Borrower or any
Affiliate of the Borrower, and the beneficiaries of each indemnification
obligation undertaken by any Loan Party under any Loan Document are herein
referred to as the "Guarantied Parties";
NOW, THEREFORE, in consideration of the premises and to induce the Lenders
to make the Term Loan, the Guarantors hereby agree as follows:
SECTION 1. Guaranty. The Guarantors hereby jointly and severally
unconditionally and irrevocably guarantee the full and prompt payment when due,
whether at stated maturity, by acceleration or otherwise, of, and the
performance of, (a) the Obligations, whether now or hereafter existing and
whether for principal, interest, fees, expenses or otherwise, (b) all Swap
Obligations owed to any Lender or any Affiliate of a Lender (provided at the
time of execution of the Swap Contract related to such Swap Obligations such
Lender is a party to the Credit Agreement), (c) any and all reasonable
out-of-pocket expenses (including, without limitation, reasonable expenses and
reasonable counsel fees and expenses of the Administrative Agent and the
Lenders) incurred by any of the Guarantied Parties in enforcing any rights under
this Guaranty and (d) all present and future amounts that would become due but
for the operation of any provision of Debtor Relief Laws, and all present and
future accrued and unpaid interest, including, without limitation, all
post-petition interest if the Borrower or any Guarantor
voluntarily or involuntarily becomes subject to any Debtor Relief Laws
(the items set forth in clauses (a), (b), (c) and (d) immediately above being
herein referred to as the "Guarantied Obligations"). Upon failure of the
Borrower to pay any of the Guarantied Obligations when due after the giving by
the Administrative Agent and/or the Lenders of any notice and the expiration of
any applicable cure period in each case provided for in the Credit Agreement and
other Loan Documents (whether at stated maturity, by acceleration or otherwise),
the Guarantors hereby further jointly and severally agree to promptly pay the
same after the Guarantors' receipt of notice from the Administrative Agent of
the Borrower's failure to pay the same, without any other demand or notice
whatsoever, including without limitation, any notice having been given to any
Guarantor of either the acceptance by the Guarantied Parties of this Guaranty or
the creation or incurrence of any of the Guarantied Obligations. This Guaranty
is an absolute guaranty of payment and performance of the Guarantied Obligations
and not a guaranty of collection, meaning that it is not necessary for the
Guarantied Parties, in order to enforce payment by the Guarantors, first or
contemporaneously to accelerate payment of any of the Guarantied Obligations, to
institute suit or exhaust any rights against any Loan Party, or to enforce any
rights against any Collateral. Notwithstanding anything herein or in any other
Loan Document to the contrary, in any action or proceeding involving any state
corporate law, or any state or federal bankruptcy, insolvency, reorganization or
other law affecting the rights of creditors generally, if, as a result of
applicable law relating to fraudulent conveyance or fraudulent transfer,
including Section 548 of Bankruptcy Code or any applicable provisions of
comparable state law (collectively, "Fraudulent Transfer Laws"), the obligations
of any Guarantor under this Section 1 would otherwise, after giving effect to
(a) all other liabilities of such Guarantor, contingent or otherwise, that are
relevant under such Fraudulent Transfer Laws (specifically excluding, however,
any liabilities of such Guarantor in respect of intercompany Indebtedness to the
Borrower to the extent that such Indebtedness would be discharged in an amount
equal to the amount paid by such Guarantor hereunder) and (b) to the value as
assets of such Guarantor (as determined under the applicable provisions of such
Fraudulent Transfer Laws) of any rights of subrogation, contribution,
reimbursement, indemnity or similar rights held by such Guarantor pursuant to
(i) applicable requirements of Law, (ii) Section 10 hereof or (iii) any other
contractual obligations providing for an equitable allocation among such
Guarantor and other Subsidiaries or Affiliates of the Borrower of obligations
arising under this Guaranty or other guaranties of the Guarantied Obligations by
such parties, be held or determined to be void, invalid or unenforceable, or
subordinated to the claims of any other creditors, on account of the amount of
its liability under this Section 1, then the amount of such liability shall,
without any further action by such Guarantor, any Lender, the Administrative
Agent or any other Person, be automatically limited and reduced to the highest
amount that is valid and enforceable and not subordinated to the claims of other
creditors as determined in such action or proceeding.
SECTION 2. Guaranty Absolute. Each Guarantor guarantees that the
Guarantied Obligations will be paid strictly in accordance with the terms of the
Credit Agreement, the Term Loan Notes and the other Loan Documents, without
set-off or counterclaim, and regardless of any Applicable Law now or hereafter
in effect in any jurisdiction affecting any of such terms or the rights of the
Guarantied Parties with respect thereto. The liability of each Guarantor under
this Guaranty shall be absolute and unconditional irrespective of:
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(a) any lack of validity or enforceability of any provision of any other
Loan Document or any other agreement or instrument relating to any Loan
Document, or avoidance or subordination of any of the Guarantied Obligations;
(b) any change in the time, manner or place of payment of, or in any
other term of, or any increase in the amount of, all or any of the Guarantied
Obligations, or any other amendment or waiver of any term of, or any consent to
departure from any requirement of, the Credit Agreement, the Term Loan Notes or
any of the other Loan Documents;
(c) any exchange, release or non-perfection of any Lien on any
collateral for, or any release of any Loan Party or amendment or waiver of any
term of any other guaranty of, or any consent to departure from any requirement
of any other guaranty of, all or any of the Guarantied Obligations;
(d) the absence of any attempt to collect any of the Guarantied
Obligations from the Borrower or from any other Loan Party or any other action
to enforce the same or the election of any remedy by any of the Guarantied
Parties;
(e) any waiver, consent, extension, forbearance or granting of any
indulgence by any of the Guarantied Parties with respect to any provision of any
other Loan Document;
(f) the election by any of the Guarantied Parties in any proceeding
under any Debtor Relief Law;
(g) any borrowing or grant of a security interest by the Borrower, as
debtor-in-possession, under any Debtor Relief Law; or
(h) any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of the Borrower or any Guarantor other than
payment or performance of the Guarantied Obligations.
SECTION 3. Waiver.
(a) Each Guarantor hereby (i) waives (A) promptness, diligence, and,
except as otherwise provided herein, notice of acceptance and any and all other
notices, including, without limitation, notice of intent to accelerate and
notice of acceleration, with respect to any of the Guarantied Obligations or
this Guaranty, (B) any requirement that any of the Guarantied Parties protect,
secure, perfect or insure any security interest in or other Lien on any property
subject thereto or exhaust any right or take any action against the Borrower or
any other Person or any collateral, (C) the filing of any claim with a court in
the event of receivership or bankruptcy of the Borrower or any other Person, (D)
except as otherwise provided herein, protest or notice with respect to
nonpayment of all or any of the Guarantied Obligations, (E) the benefit of any
statute of limitation, (F) except as otherwise provided herein, all demands
whatsoever (and any requirement that demand be made on the Borrower or any other
Person as a condition precedent to such Guarantor's obligations hereunder), (G)
all rights by which any Guarantor might be entitled to require suit on an
accrued right of action in respect of any of the Guarantied Obligations or
require suit against the Borrower or any other Guarantor or Person, whether
arising pursuant to Section 34.02 of the Texas Business and Commerce Code, as
amended, Section 17.001 of the Texas Civil Practice and Remedies Code, as
amended, Rule 31 of the
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Texas Rules of Civil Procedure, as amended, or otherwise, (H) any defense based
upon an election of remedies by any Guarantied Party, or (I) notice of any
events or circumstances set forth in clauses (a) through (h) of Section 2
hereof; and (ii) covenants and agrees that, except as otherwise agreed by the
parties, this Guaranty will not be discharged except by complete payment and
performance of the Guarantied Obligations and any other obligations of such
Guarantor contained herein.
(b) If, in the exercise of any of its rights and remedies in accordance
with the provisions of Applicable Law, any of the Guarantied Parties shall
forfeit any of its rights or remedies, including, without limitation, its right
to enter a deficiency judgment against the Borrower or any other Person, whether
because of any Applicable Law pertaining to "election of remedies" or the like,
each Guarantor hereby consents to such action by such Guarantied Party and
waives any claim based upon such action. Any election of remedies which, by
reason of such election, results in the denial or impairment of the right of
such Guarantied Party to seek a deficiency judgment against the Borrower shall
not impair the obligation of such Guarantor to pay the full amount of the
Guarantied Obligations or any other obligation of such Guarantor contained
herein.
(c) In the event any of the Guarantied Parties shall bid at any
foreclosure or trustee's sale or at any private sale permitted by Law or under
any of the Loan Documents, to the extent not prohibited by Applicable Law, such
Guarantied Party may bid all or less than the amount of the Guarantied
Obligations and the amount of such bid, if successful, need not be paid by such
Guarantied Party but shall be credited against the Guarantied Obligations.
(d) Each Guarantor agrees that notwithstanding the foregoing and without
limiting the generality of the foregoing if, after the occurrence and during the
continuance of an Event of Default, the Guarantied Parties are prevented by
Applicable Law from exercising their respective rights to accelerate the
maturity of the Guarantied Obligations, to collect interest on the Guarantied
Obligations, or to enforce or exercise any other right or remedy with respect to
the Guarantied Obligations, or the Administrative Agent is prevented from taking
any action to realize on the Collateral, such Guarantor agrees to pay to the
Administrative Agent for the account of the Guarantied Parties, upon demand
therefor, for application to the Guarantied Obligations, the amount that would
otherwise have been due and payable had such rights and remedies been permitted
to be exercised by the Guarantied Parties.
(e) Each Guarantor hereby assumes responsibility for keeping itself
informed of the financial condition of the Borrower and of each other Loan
Party, and of all other circumstances bearing upon the risk of nonpayment of the
Guarantied Obligations or any part thereof, that diligent inquiry would reveal.
Each Guarantor hereby agrees that the Guarantied Parties shall have no duty to
advise any Guarantor of information known to any of the Guarantied Parties
regarding such condition or any such circumstance. In the event that any of the
Guarantied Parties in its sole discretion undertakes at any time or from time to
time to provide any such information to any Guarantor, such Guarantied Party
shall be under no obligation (i) to undertake any investigation not a part of
its regular business routine, (ii) to disclose any information which, pursuant
to accepted or reasonable banking or commercial finance practices, such
Guarantied Party wishes to maintain as confidential, or (iii) to make any other
or future disclosures of such information or any other information to such
Guarantor.
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(f) Each Guarantor consents and agrees that the Guarantied Parties shall
be under no obligation to marshal any assets in favor of any Guarantor or
otherwise in connection with obtaining payment of any or all of the Guarantied
Obligations from any Person or source.
SECTION 4. Representations and Warranties. Each Guarantor hereby
represents and warrants to the Guarantied Parties that the representations and
warranties set forth in Article V of the Credit Agreement as they relate to such
Guarantor or to the Loan Documents to which such Guarantor is a party are true
and correct in all material respects in the manner specified in the Credit
Agreement and the Guarantied Parties shall be entitled to rely on each of them
as if they were fully set forth herein.
SECTION 5. Amendments, Etc. No amendment or waiver of any provision of
this Guaranty nor consent to any departure by any Guarantor herefrom shall in
any event be effective unless the same shall be in writing, approved by the
Required Lenders (or by all the Lenders where the approval of each Lender is
required under the Credit Agreement) and signed by the Administrative Agent, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given.
SECTION 6. Addresses for Notices. All notices and other communications
provided for hereunder shall be effectuated in the manner provided for in
Section 10.02 of the Credit Agreement, provided that if a notice or
communication hereunder is sent to a Guarantor, said notice shall be addressed
to such Guarantor, in care of the Borrower at the Borrower's then current
address (or facsimile number) for notice under the Credit Agreement.
SECTION 7. No Waiver; Remedies.
(a) No failure on the part of any Guarantied Party to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
Applicable Law or any of the other Loan Documents.
(b) No waiver by the Guarantied Parties of any default shall operate as
a waiver of any other default or the same default on a future occasion, and no
action by any of the Guarantied Parties permitted hereunder shall in way affect
or impair any of the rights of the Guarantied Parties or the obligations of any
Guarantor under this Guaranty or under any of the other Loan Documents, except
as specifically set forth in any such waiver. Any determination by a court of
competent jurisdiction of the amount of any principal and/or interest or other
amount constituting any of the Guarantied Obligations shall be conclusive and
binding on each Guarantor irrespective of whether such Guarantor was a party to
the suit or action in which such determination was made.
SECTION 8. Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default under the Credit Agreement, each of the
Guarantied Parties is hereby authorized at any time and from time to time, to
the fullest extent permitted by Applicable Law, to set-off and apply any and all
deposits (general or special (except trust and escrow accounts), time or demand,
provisional or final) at any time held and other Indebtedness at any time owing
by such Guarantied Party to or for the credit or the account of each Guarantor
against any and all of the obligations of such Guarantor now or hereafter
existing under this Guaranty, irrespective
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of whether or not such Guarantied Party shall have made any demand under this
Guaranty; provided, however, such Guarantied Party shall promptly notify such
Guarantor and the Borrower after such set-off and the application made by such
Guarantied Party. The rights of each Guarantied Party under this Section 8 are
in addition to other rights and remedies (including, without limitation, other
rights of set-off) which such Guarantied Party may have.
SECTION 9. Continuing Guaranty; Transfer of Term Loan Notes. This Guaranty
(a)(i) is a continuing guaranty and shall remain in full force and effect until
the date that the Aggregate Commitments have been terminated and the Term Loan
and other Obligations have been paid in full (the "Release Date") and (ii)
binding upon each Guarantor, its permitted successors and assigns, and (b)
inures to the benefit of and be enforceable by the Guarantied Parties and their
respective successors, permitted transferees, and permitted assigns. Without
limiting the generality of the foregoing clause (b), each of the Guarantied
Parties may assign or otherwise transfer any Term Loan Note held by it or the
Guarantied Obligations owed to it to any other Person, and such other Person
shall thereupon become vested with all the rights in respect thereof granted to
such Guarantied Party herein or otherwise with respect to such of the Term Loan
Notes and the Guarantied Obligations so transferred or assigned, subject,
however, to compliance with the provisions of Section 10.07 of the Credit
Agreement in respect of assignments. Except as the result of the consummation of
a transaction permitted under Section 7.04 or 7.05 of the Credit Agreement, no
Guarantor may assign any of its obligations under this Guaranty without first
obtaining the written consent of the Lenders as set forth in the Credit
Agreement. If upon any merger, dissolution, liquidation or consolidation
permitted under Section 7.04 of the Credit Agreement or any Disposition
permitted by Section 7.05 of the Credit Agreement, a Guarantor no longer exists
or is no longer a Subsidiary of Limited, such Guarantor shall be released of its
obligations hereunder.
SECTION 10. Reimbursement. To the extent that any Guarantor shall be
required hereunder to pay a portion of the Guarantied Obligations exceeding the
greater of (a) the amount of the economic benefit actually received by such
Guarantor from the Loans and the Letters of Credit and (b) the amount such
Guarantor would otherwise have paid if such Guarantor had paid the aggregate
amount of the Guarantied Obligations (excluding the amount thereof repaid by the
Borrower) in the same proportion as such Guarantor's net worth at the date
enforcement is sought hereunder bears to the aggregate net worth of all the
Guarantors at the date enforcement is sought hereunder, then such Guarantor
shall be reimbursed by such other Guarantors for the amount of such excess, pro
rata, based on the respective net worths of such other Guarantors at the date
enforcement hereunder is sought. Notwithstanding anything to the contrary, each
Guarantor agrees that the Guarantied Obligations may at any time and from time
to time exceed the amount of the liability of such Guarantor hereunder without
impairing its guaranty herein or effecting the rights and remedies of the
Guarantied Parties hereunder. This Section 10 is intended only to define the
relative rights of the Guarantors, and nothing set forth in this Section 10 is
intended to or shall impair the obligations of the Guarantors, jointly and
severally, to pay to the Guarantied Parties the Guarantied Obligations as and
when the same shall become due and payable in accordance with the terms hereof.
SECTION 11. Reinstatement. This Guaranty shall remain in full force and
effect and continue to be effective should any petition be filed by or against
any Loan Party for liquidation or reorganization, should any Loan Party 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
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any Loan Party's assets, and shall, to the fullest extent permitted by
Applicable Law, continue to be effective or be reinstated, as the case may be,
if at any time payment and performance of the Guarantied Obligations, or any
part thereof, is, pursuant to Applicable Law, rescinded or reduced in amount, or
must otherwise be restored or returned by any obligees of the Guarantied
Obligations or such part thereof, whether as a "voidable preference,"
"fraudulent transfer," 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 Guarantied Obligations shall, to
the fullest extent permitted by law, be reinstated and deemed reduced only by
such amount paid and not so rescinded, reduced, restored or returned.
SECTION 12. GOVERNING LAW.
(a) THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF TEXAS APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT EACH PARTY SHALL RETAIN ALL
RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR ANY
OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS SITTING
IN DALLAS COUNTY, TEXAS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF TEXAS (DALLAS DIVISION), AND BY EXECUTION, DELIVERY AND ACCEPTANCE
OF THIS GUARANTY, EACH GUARANTOR, THE ADMINISTRATIVE AGENT AND EACH LENDER
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. EACH GUARANTOR, THE ADMINISTRATIVE AGENT AND EACH
LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING
OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION
IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO. EACH
GUARANTOR, THE ADMINISTRATIVE AGENT AND EACH LENDER WAIVES PERSONAL SERVICE OF
ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY THE LAW OF SUCH STATE.
SECTION 13. Waiver of Jury Trial. EACH GUARANTOR, THE ADMINISTRATIVE AGENT
AND EACH LENDER HEREBY (OR BY ACCEPTANCE HEREOF) EXPRESSLY WAIVES ANY RIGHT TO
TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY
LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF ANY ONE OR MORE OF EACH GUARANTOR, THE BORROWER, THE ADMINISTRATIVE
AGENT AND EACH LENDER WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS
RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH OF THE GUARANTORS,
THE ADMINISTRATIVE AGENT AND EACH LENDER HEREBY AGREES AND CONSENTS THAT ANY
SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
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WITHOUT A JURY, AND THAT ANY OF THE GUARANTORS, THE ADMINISTRATIVE AGENT AND
EACH LENDER MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH GUARANTOR, THE ADMINISTRATIVE
AGENT AND EACH LENDER TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
SECTION 14. 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 this Guaranty.
SECTION 15. Execution in Counterparts. This Guaranty may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute one and the same
Guaranty.
SECTION 16. Miscellaneous. All references herein to the Borrower or to any
Guarantor shall include their respective successors and assigns, including,
without limitation, a receiver, trustee or debtor-in-possession of or for the
Borrower or such Guarantor. All references to the singular shall be deemed to
include the plural where the context so requires.
SECTION 17. Subrogation and Subordination.
(a) Subrogation. Notwithstanding any reference to subrogation contained
herein to the contrary, until the Release Date, each Guarantor hereby
irrevocably waives any claim or other rights which it may have or hereafter
acquire against the Borrower that arise from the existence, payment, performance
or enforcement of such Guarantor's obligations under this Guaranty, including,
without limitation, any right of subrogation, reimbursement, exoneration,
contribution, indemnification, any right to participate in any claim or remedy
of any Lender against the Borrower or any collateral which any Lender now has or
hereafter acquires, whether or not such claim, remedy or right arises in equity,
or under contract, statutes or common law, including without limitation, the
right to take or receive from the Borrower, directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or security on
account of such claim or other rights. If any amount shall be paid to any
Guarantor in violation of the preceding sentence and the Guarantied Obligations
shall not have been paid in full, such amount shall be deemed to have been paid
to such Guarantor for the benefit of, and held in trust for the benefit of, the
Lenders, and shall forthwith be paid to the Administrative Agent to be credited
and applied upon the Guarantied Obligations, whether matured or unmatured, in
accordance with the terms of the Credit Agreement. Each Guarantor acknowledges
that it will receive direct and indirect benefits from the financing
arrangements contemplated by the Credit Agreement and that the waiver set forth
in this Section 17 is knowingly made in contemplation of such benefits.
(b) Subordination. All debt and other liabilities of the Borrower to any
Guarantor ("Borrower Debt") are expressly subordinate and junior to the
Guarantied Obligations and any instruments evidencing the Borrower Debt to the
extent provided below.
(i) Until the Release Date, each Guarantor agrees that it will not
request, demand, accept, or receive (by set-off or other manner) any
payment amount, credit or reduction of all or any part of the amounts
owing under the Borrower Debt or any security therefor, except as
specifically allowed pursuant to clause (ii) below;
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(ii) Notwithstanding the provisions of clause (i) above, the
Borrower may pay to the Guarantors and the Guarantors may request, demand,
accept and receive and retain from the Borrower payments, credits or
reductions of all or any part of the amounts owing under the Borrower Debt
or any security therefor on the Borrower Debt, provided that the
Borrower's right to pay and the Guarantors' right to receive any such
amount shall automatically and be immediately suspended and cease (A) upon
the occurrence and during the continuance of an Event of Default or (B)
if, after taking into account the effect of such payment, an Event of
Default would occur and be continuing. The Guarantors' right to receive
amounts under this clause (ii) (including any amounts which theretofore
may have been suspended) shall automatically be reinstated at such time as
the Event of Default which was the basis of such suspension has been cured
or waived (provided that no subsequent Event of Default has occurred) or
such earlier date, if any, as the Administrative Agent gives notice to the
Guarantors of reinstatement by the Required Lenders, in the Required
Lenders' sole discretion;
(iii) If any Guarantor receives any payment on the Borrower Debt in
violation of this Guaranty, such Guarantor will hold such payment in trust
for the Lenders and will immediately deliver such payment to the
Administrative Agent; and
(iv) In the event of the commencement or joinder of any suit,
action or proceeding of any type (judicial or otherwise) or proceeding
under any Debtor Relief Law against the Borrower (an "Insolvency
Proceeding") and subject to court orders issued pursuant to the Bankruptcy
Code, the Guarantied Obligations shall first be paid, discharged and
performed in full before any payment or performance is made upon the
Borrower Debt notwithstanding any other provisions which may be made in
such Insolvency Proceeding. In the event of any Insolvency Proceeding,
each Guarantor will at any time prior to the Release Date (A) file, at the
request of any Guarantied Party, any claim, proof of claim or similar
instrument necessary to enforce the Borrower's obligation to pay the
Borrower Debt, and (B) hold in trust for and pay to the Guarantied Parties
any and all monies, obligations, property, stock dividends or other assets
received in any such proceeding on account of the Borrower Debt in order
that the Guarantied Parties may apply such monies or the cash proceeds of
such other assets to the Obligations.
SECTION 18. Guarantor Insolvency. Should any Guarantor voluntarily
seek, consent to, or acquiesce in the benefits of any Debtor Relief Law or
become a party to or be made the subject of any proceeding provided for by any
Debtor Relief Law (other than as a creditor or claimant) that could suspend or
otherwise adversely affect the rights of any Guarantied Party granted hereunder,
then, the obligations of such Guarantor under this Guaranty shall be, as between
such Guarantor and such Guarantied Party, a fully-matured, due, and payable
obligation of such Guarantor to such Guarantied Party (without regard to whether
there is an Event of Default under the Credit Agreement or whether any part of
the Guarantied Obligations is then due and owing by the Borrower to such
Guarantied Party), payable in full by such Guarantor to such Guarantied Party
upon demand, which shall be the estimated amount owing in respect of the
contingent claim created hereunder.
SECTION 19. Rate Provision. It is not the intention of any Guarantied
Party to make an agreement violative of the laws of any applicable jurisdiction
relating to usury. Regardless of any provision in this Guaranty, no Guarantied
Party shall ever be entitled to contract, charge,
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receive, collect or apply, as interest on the Guarantied Obligations, any amount
in excess of the Highest Lawful Rate. In no event shall any Guarantor be
obligated to pay any amount in excess of the Highest Lawful Rate. If from any
circumstance the Administrative Agent or any Guarantied Party shall ever
receive, collect or apply anything of value deemed excess interest under
Applicable Law, an amount equal to such excess shall be applied to the reduction
of the principal amount of the outstanding Term Loan and any remainder shall be
promptly refunded to the payor. In determining whether or not interest paid or
payable with respect to the Guarantied Obligations, under any specified
contingency, exceeds the Highest Lawful Rate, the Guarantors and the Guarantied
Parties shall, to the maximum extent permitted by Applicable Law, (a)
characterize any non-principal payment as an expense, fee or premium rather than
as interest, (b) amortize, prorate, allocate and spread the total amount of
interest throughout the full term of such Guarantied Obligations so that the
interest paid on account of such Guarantied Obligations does not exceed the
Highest Lawful Rate and/or (c) allocate interest between portions of such
Guarantied Obligations; provided that if the Guarantied Obligations are paid and
performed in full prior to the end of the full contemplated term thereof, and if
the interest received for the actual period of existence thereof exceeds the
Highest Lawful Rate, the Guarantied Parties shall refund to the payor the amount
of such excess or credit the amount of such excess against the total principal
amount owing, and, in such event, no Guarantied Party shall be subject to any
penalties provided by any laws for contracting for, charging or receiving
interest in excess of the Highest Lawful Rate.
SECTION 20. Severability. Any provision of this Guaranty which is for any
reason prohibited or found or held invalid or unenforceable by any court or
governmental agency shall be ineffective to the extent of such prohibition or
invalidity or unenforceability, without invalidating the remaining provisions
hereof in such jurisdiction or affecting the validity or enforceability of such
provision in any other jurisdiction.
SECTION 21. Taxes.
(a) Any and all payments by or on account of any obligations of the
Guarantors hereunder shall be made free and clear of and without reduction or
withholding for any Indemnified Taxes or Other Taxes, provided that if any
Guarantor shall be required by Applicable Law to deduct any Indemnified Taxes
(including any Other Taxes) from such payments, then (i) the sum payable shall
be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the applicable Guarantied Party receives an amount equal to the sum it would
have received had no such deductions been made, (ii) such Guarantor shall make
such deductions and (iii) such Guarantor shall timely pay the full amount
deducted to the relevant Governmental Authority in accordance with Applicable
Law.
(b) Without limiting the provisions of subsection (a) above, the
Guarantors shall timely pay any Other Taxes to the relevant Governmental
Authority in accordance with Applicable Law.
(c) The Guarantors shall indemnify each Guarantied Party, within 10 days
after demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) paid by such Guarantied
Party and any penalties, interest and reasonable
10
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such
payment or liability delivered to the Guarantors by such Guarantied Party (with
a copy to the Administrative Agent), or by the Administrative Agent on its own
behalf or on behalf of any Guarantied Party shall be conclusive absent manifest
error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by any Guarantor to a Governmental Authority, such Guarantor shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) If any Guarantied Party determines, in its sole discretion, that it
has received a refund of any Taxes or Other Taxes as to which it has been
indemnified by any Guarantor or with respect to which any Guarantor has paid
additional amounts pursuant to this Section, it shall pay to such Guarantor an
amount equal to such refund (but only to the extent of indemnity payments made,
or additional amounts paid, by such Guarantor under this Section with respect to
the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of such Guarantied Party, and without interest (other than any interest
paid by the relevant Governmental Authority with respect to such refund),
provided that such Guarantor, upon the request of such Guarantied Party, agrees
to repay the amount paid over to such Guarantor (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to such Guarantied
Party in the event such Guarantied Party is required to repay such refund to
such Governmental Authority. This subsection shall not be construed to require
any Guarantied Party to make available its tax returns (or any other information
relating to its taxes that it deems confidential) to the Guarantors or any other
Person.
(f) The obligations of each Guarantor and Guarantied Party under this
Section 21 shall survive termination of the Credit Agreement and repayment of
all Guarantied Obligations.
SECTION 22. ENTIRE AGREEMENT. THIS GUARANTY AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES REGARDING THE SUBJECT MATTER
HEREIN AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS. OR
SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
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IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly
executed and delivered by its duly authorized officer on the date first above
written.
XXXXX OF XXXX LIMITED, a Bermuda company
By: /s/ XXXXXX X. XXXXX
------------------------------------
Xxxxxx X. Xxxxx
Chairman, CEO and President
XXXXX OF XXXX LIMITED, a Barbados corporation
By: /s/ XXXXXX X. XXXXX
------------------------------------
Xxxxxx X. Xxxxx
Chairman, CEO and President
HOT NEVADA, INC., a Nevada corporation
By: /s/ XXXX X. XXXXXXXXXX
------------------------------------
Xxxx X. Xxxxxxxxxx
President, Treasurer and Secretary
XXXXX OF XXXX NEVADA CORPORATION, a Nevada corporation
By: /s/ XXXXXX X. XXXXX
------------------------------------
Xxxxxx X. Xxxxx
Chairman, CEO and President
Exhibit M
XXXXX OF XXXX TEXAS CORPORATION, a Texas corporation
By: /s/ XXXXXX X. XXXXX
-------------------------------------------
Xxxxxx X. Xxxxx
Chairman, CEO and President
XXXXXX LABS LTD., a Texas limited partnership
By: XXXXX OF XXXX NEVADA
CORPORATION, a Nevada corporation,
By: /s/ XXXXXX X. XXXXX
-------------------------------------------
Xxxxxx X. Xxxxx
Chairman, CEO and President
OXO INTERNATIONAL LTD., a Texas limited partnership
By: XXXXX OF XXXX NEVADA CORPORATION, a Nevada
corporation, General Partner
By: /s/ XXXXXX X. XXXXX
-------------------------------------------
Xxxxxx X. Xxxxx
Chairman, CEO and President
