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EXHIBIT 10.25
PARENT GUARANTY
This PARENT GUARANTY (as amended, supplemented, amended and restated or
otherwise modified from time to time, this "Guaranty"), dated as of March 14,
1997, is made by PROSOURCE, INC., a Delaware corporation (the "Guarantor"), in
favor of THE BANK OF NOVA SCOTIA, as administrative agent (the "Administrative
Agent") for each of the Secured Parties (as defined below).
W I T N E S S E T H:
WHEREAS, pursuant to a Credit Agreement, dated as of March 14, 1997 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Credit Agreement"), among ProSource Services Corporation, a Delaware
corporation (the "Borrower"), the various financial institutions as are, or may
from time to time become, parties thereto (each, individually, a "Lender", and
collectively, the "Lenders") and the Administrative Agent, the Lenders and the
Issuer have extended Commitments to make Credit Extensions to the Borrower;
WHEREAS, as a condition precedent to the making of the Credit Extensions
(including the initial Credit Extension) under the Credit Agreement, the
Guarantor is required to execute and deliver this Guaranty;
WHEREAS, the Guarantor has duly authorized the execution, delivery and
performance of this Guaranty; and
WHEREAS, it is in the best interests of the Guarantor to execute this
Guaranty inasmuch as the Guarantor will derive substantial direct and indirect
benefits from the Credit Extensions made from time to time to the Borrower by
the Lenders and the Issuer pursuant to the Credit Agreement;
NOW THEREFORE, for good and valuable consideration the receipt of which is
hereby acknowledged, and in order to induce the Lenders and the Issuer to make
Credit Extensions (including the initial Credit Extension) to the Borrower
pursuant to the Credit Agreement, the Guarantor agrees, for the benefit of each
Secured Party, as follows:
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ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Guaranty, including its preamble and recitals,
shall have the following meanings (such definitions to be equally applicable to
the singular and plural forms thereof):
"Administrative Agent" is defined in the preamble.
"Borrower" is defined in the first recital.
"Credit Agreement" is defined in the first recital.
"Guarantor" is defined in the preamble.
"Guaranty" is defined in the preamble.
"Lender" and "Lenders" are defined in the first recital.
"Secured Party" means, as the context may require, the Lenders, the Issuer,
the Administrative Agent, each counterparty to a Rate Protection Agreement that
is (or at the time such Rate Protection Agreement is entered into, was) a Lender
or an Affiliate thereof and (in each case), each of their respective successors,
permitted transferees and permitted assigns.
SECTION 1.2. Credit Agreement Definitions. Unless otherwise defined herein
or the context otherwise requires, terms used in this Guaranty, including its
preamble and recitals, have the meanings provided in the Credit Agreement.
ARTICLE II
GUARANTY PROVISIONS
SECTION 2.1. Guaranty. The Guarantor hereby absolutely, unconditionally and
irrevocably
(a) guarantees the full and punctual payment when due, whether at
stated maturity, by required prepayment, declaration, acceleration, demand
or otherwise, of all
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Obligations of the Borrower and each other Obligor now or hereafter
existing, whether for principal, interest, fees, expenses or otherwise
(including all such amounts which would become due but for the operation of
the automatic stay under Section 362(a) of the United States Bankruptcy
Code, 11 U.S.C. ss.362(a), and the operation of Sections 502(b) and 506(b)
of the United States Bankruptcy Code, 11 U.S.C. ss.502(b) and ss.506(b)),
and
(b) indemnifies and holds harmless each Secured Party and each holder
of a Note for any and all reasonable costs and expenses (including
reasonable attorney's fees and expenses) incurred by such Secured Party or
such holder, as the case may be, in enforcing any rights under this
Guaranty.
This Guaranty constitutes a guaranty of payment when due and not of collection,
and the Guarantor specifically agrees that it shall not be necessary or required
that any Secured Party or any holder of any Note exercise any right, assert any
claim or demand or enforce any remedy whatsoever against the Borrower or any
other Obligor (or any other Person) before or as a condition to the obligations
of the Guarantor hereunder.
SECTION 2.2. Acceleration of Guaranty. The Guarantor agrees that, in the
event of any Event of Default described in Section 8.1.9 of the Credit
Agreement, and if such event shall occur at a time when any of the Obligations
of the Borrower and each other Obligor may not then be due and payable, the
Guarantor agrees that it will pay to the Lenders forthwith the full amount which
would be payable hereunder by the Guarantor if all such Obligations were then
due and payable.
SECTION 2.3. Guaranty Absolute, etc. This Guaranty shall in all respects be
a continuing, absolute, unconditional and irrevocable guaranty of payment, and
shall remain in full force and effect until all Obligations of the Borrower and
each other Obligor have been paid in full in cash, all obligations of the
Guarantor hereunder shall have been paid in full in cash, all Letters of Credit
have been terminated or expired, all Rate Protection Agreements have been
terminated and all Commitments shall have terminated. The liability of the
Guarantor under this Guaranty shall be absolute, unconditional and irrevocable
irrespective of:
(a) any lack of validity, legality or enforceability of the Credit
Agreement, any Note or any other Loan Document;
(b) the failure of any Secured Party or any holder of any Note
(i) to assert any claim or demand or to enforce any right or
remedy against the Borrower, any other Obligor or any other Person
(including any other guarantor (including the Guarantor)) under the
provisions of the Credit Agreement, any Note, any other Loan Document
or otherwise, or
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(ii) to exercise any right or remedy against any other guarantor
(including the Guarantor) of, or collateral securing, any Obligations
of the Borrower or any other Obligor;
(c) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations of the Borrower or any other
Obligor, or any other extension, compromise or renewal of any Obligation of
the Borrower or any other Obligor;
(d) any reduction, limitation, impairment or termination of any
Obligations of the Borrower or any other Obligor for any reason, including
any claim of waiver, release, surrender, alteration or compromise, and
shall not be subject to (and the Guarantor hereby waives any right to or
claim of) any defense or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality, nongenuineness,
irregularity, compromise, unenforceability of, or any other event or
occurrence affecting, any Obligations of the Borrower, any other Obligor or
otherwise;
(e) any amendment to, rescission, waiver, or other modification of, or
any consent to departure from, any of the terms of the Credit Agreement,
any Note or any other Loan Document;
(f) any addition, exchange, release, surrender or non-perfection of
any collateral, or any amendment to or waiver or release or addition of, or
consent to departure from, any other guaranty, held by any Secured Party or
any holder of any Note securing any of the Obligations of the Borrower or
any other Obligor; or
(g) any other circumstance which might otherwise constitute a defense
available to, or a legal or equitable discharge of, the Borrower, any other
Obligor, any surety or any guarantor.
SECTION 2.4. Reinstatement, etc. The Guarantor agrees that this Guaranty
shall continue to be effective or be reinstated, as the case may be, if at any
time any payment (in whole or in part) of any of the Obligations is rescinded or
must otherwise be restored by any Secured Party or any holder of any Note, upon
the insolvency, bankruptcy or reorganization of the Borrower, any other Obligor
or otherwise, all as though such payment had not been made.
SECTION 2.5. Waiver, etc. The Guarantor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Obligations of the Borrower or any other Obligor and this Guaranty and any
requirement that the Administrative Agent, any other Secured Party or any holder
of any Note protect, secure, perfect or insure any security interest or Lien, or
any property subject thereto, or exhaust any right or take any action against
the Borrower, any other Obligor or any other Person (including any other
guarantor) or entity or any collateral securing the Obligations of the Borrower
or any other Obligor, as the case may be.
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SECTION 2.6. Postponement of Subrogation, etc. The Guarantor agrees that it
will not exercise any rights which it may acquire by way of rights of
subrogation under this Guaranty, by any payment made hereunder or otherwise,
until the prior payment in full in immediately available funds of all
Obligations of the Borrower and each other Obligor, the termination or
expiration of all Letters of Credit, and the termination of all Commitments. Any
amount paid to the Guarantor on account of any such subrogation rights prior to
the payment in full in immediately available funds Borrower and each other
Obligor shall be held in trust for the benefit of the Secured Parties and each
holder of a Note and shall immediately be paid to the Administrative Agent for
the benefit of the Secured Parties and each holder of a Note and credited and
applied against the Obligations, whether matured or unmatured, in accordance
with the terms of the Credit Agreement; provided, however, that if
(a) the Guarantor has made payment to the Secured Parties and each
holder of a Note of all or any part of the Obligations of the Borrower or
any other Obligor, and
(b) all Obligations of the Borrower and each other Obligor have been
paid in full in immediately available funds, all Letters of Credit have
been terminated or expired, and all Commitments have been permanently
terminated,
each Secured Party and each holder of a Note agrees that, at the Guarantor's
request, the Administrative Agent, on behalf of the Secured Parties and the
holders of the Notes, will execute and deliver to the Guarantor appropriate
documents (without recourse and without representation or warranty) necessary to
evidence the transfer by subrogation to the Guarantor of an interest in the
Obligations of the Borrower and each other Obligor resulting from such payment
by the Guarantor. In furtherance of the foregoing, for so long as any
Obligations or Commitments remain outstanding, the Guarantor shall refrain from
taking any action or commencing any proceeding against the Borrower or any other
Obligor (or its successors or assigns, whether in connection with a bankruptcy
proceeding or otherwise) to recover any amounts in the respect of payments made
under this Guaranty to any Secured Party or any holder of a Note.
SECTION 2.7. Successors, Transferees and Assigns; Transfers of Notes, etc.
This Guaranty shall:
(a) be binding upon the Guarantor, and its successors, transferees and
assigns; and
(b) inure to the benefit of and be enforceable by the Administrative
Agent and each other Secured Party.
Without limiting the generality of the foregoing clause (b), any Lender may
assign or otherwise transfer (in whole or in part) any Note or Credit Extension
held by it to any other Person or entity, and such other Person or entity shall
thereupon become vested with all rights and benefits in respect thereof granted
to such Lender under any Loan Document (including this Guaranty) or
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otherwise, subject, however, to any contrary provisions in such assignment or
transfer, and to the provisions of Section 10.11 and Article IX of the Credit
Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders, the Issuer and the Administrative Agent to
enter into the Credit Agreement and make the Credit Extensions thereunder, and
the applicable Lender (or its Affiliate) to enter into Rate Protection
Agreements, the Guarantor represents and warrants to each of the Secured Parties
as set forth in this Article III.
SECTION 3.1. Organization, etc. The Guarantor is a corporation validly
organized and existing and in good standing under the laws of the state or
jurisdiction of its incorporation, is duly qualified to do business and is in
good standing as a foreign corporation in each jurisdiction where the nature of
its business requires such qualification, and has full power and authority and
holds all requisite governmental licenses, permits and other approvals to enter
into and perform its Obligations under this Guaranty and each other Loan
Document to which it is a party and, to own and hold under lease its property
and to conduct its business substantially as currently conducted by it except to
the extent same could not reasonably be expected to have a Material Adverse
Effect.
SECTION 3.2. Due Authorization, Non-Contravention, etc. The execution,
delivery and performance by the Guarantor of this Guaranty and each other Loan
Document to which it is a party are within the Guarantor's corporate powers,
have been duly authorized by all necessary corporate action, and do not
(a) contravene the Guarantor's Organic Documents;
(b) contravene any Contractual Obligation binding on or affecting the
Guarantor;
(c) contravene any Governmental Approval or Governmental Rule binding
on or affecting the Guarantor; or
(d) result in, or require the creation or imposition of, any Lien on
any of the Guarantor's properties (except as permitted under the Credit
Agreement).
SECTION 3.3. Government Approval, Regulation, etc. The Guarantor is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
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SECTION 3.4. Validity, etc. This Guaranty constitutes, and each other Loan
Document executed by the Guarantor will, on the due execution and delivery
thereof, constitute, the legal, valid and binding obligations of the Guarantor,
enforceable against the Guarantor in accordance with their respective terms
except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or other similar
laws generally affecting creditors rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law).
SECTION 3.5. Litigation, Labor Controversies, etc. There is no pending or,
to the knowledge of the Guarantor, threatened litigation, action, proceeding, or
labor controversy affecting the Guarantor, or any of its properties, businesses,
assets or revenues, which could reasonably be expected to (a) have a Material
Adverse Effect or (b) legality, validity or enforceability of this Guaranty, the
Credit Agreement, the Notes, any other Loan Document or the Receivables
Transaction Documents.
SECTION 3.6. Subsidiaries. The Guarantor has no direct Subsidiaries, except
the Borrower.
SECTION 3.7. Taxes. The Guarantor has filed all tax returns and reports
required by law to have been filed by it and has paid all taxes and governmental
charges thereby shown to be due and owing, except any such taxes or charges
which are being diligently contested in good faith by appropriate proceedings
and for which adequate reserves in accordance with GAAP shall have been set
aside on its books.
SECTION 3.8. Other Representations and Warranties. In addition to the
foregoing representations and warranties, the Guarantor also represents and
warrants to each Secured Party that the representations and warranties contained
in Article VI of the Credit Agreement, insofar as the representations and
warranties contained therein are applicable to the Guarantor and its properties,
are true and correct in all material respects, each such representation and
warranty set forth in such Article (insofar as applicable as aforesaid) and all
other terms of the Credit Agreement to which reference is made therein, together
with all related definitions and ancillary provisions, being hereby incorporated
into this Guaranty by reference as though specifically set forth in this
Article.
ARTICLE IV
COVENANTS, ETC.
The Guarantor covenants and agrees that, so long as any portion of the
Obligations shall remain unpaid, any Letters of Credit shall be outstanding, or
any Lender shall have any outstanding Commitment, the Guarantor will, unless the
Required Lenders shall otherwise consent in writing, perform the obligations set
forth in this Article IV.
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SECTION 4.1. Compliance with Laws, etc. The Guarantor will, and will cause
each of its Subsidiaries to, comply in all material respects with all applicable
Governmental Rules and Governmental Approvals of all Regulatory Authorities
except to the extent noncompliance therewith could not reasonably be expected to
have a Material Adverse Effect, such compliance to include:
(a) the maintenance and preservation of its corporate existence; and
(b) the payment, before the same become delinquent, of all taxes,
assessments and governmental charges imposed upon it or upon its property
except to the extent being contested in good faith by appropriate
proceedings and for which adequate reserves, if any, in accordance with
GAAP shall have been set aside on its books.
ARTICLE V
MISCELLANEOUS PROVISIONS
SECTION 5.1. Loan Document. This Guaranty is a Loan Document executed
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the terms and
provisions thereof, including Article X thereof.
SECTION 5.2. Binding on Successors, Transferees and Assigns; Assignment. In
addition to, and not in limitation of, Section 2.7, this Guaranty shall be
binding upon the Guarantor and its successors, transferees and assigns and shall
inure to the benefit of and be enforceable by each Secured Party and each holder
of a Note and their respective successors, transferees and assigns (to the full
extent provided pursuant to Section 2.7); provided, however, that the Guarantor
may not assign any of its obligations hereunder without the prior written
consent of all Lenders.
SECTION 5.3. Amendments, etc. No amendment to or waiver of any provision of
this Guaranty, nor consent to any departure by the Guarantor herefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Administrative Agent (on behalf of the Lenders or the Required Lenders, as the
case may be) and the Guarantor and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
SECTION 5.4. Notices. All notices and other communications provided for
hereunder shall be in writing (including telegraphic communication) and, mailed
or telecopied or delivered to the Guarantor, in care of the Borrower at the
address of the Borrower specified in the Credit Agreement. All such notices and
other communications, when mailed and properly addressed with postage prepaid or
if properly addressed and sent by pre-paid courier service, shall be
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deemed given when received; any such notice or communication, if transmitted by
telecopier, shall be deemed given when transmitted and electronically confirmed.
SECTION 5.5. No Waiver; Remedies. In addition to, and not in limitation of,
Section 2.3 and Section 2.5, no failure on the part of any Secured Party or any
holder of a Note 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 law.
SECTION 5.6. Captions. Section captions used in this Guaranty are for
convenience of reference only, and shall not affect the construction of this
Guaranty.
SECTION 5.7. Setoff. In addition to, and not in limitation of, any rights
of any Secured Party or any holder of a Note under applicable law, each Secured
Party and each such holder shall, upon the occurrence and during the continuance
of any Default described in any of clauses (a) through (d) of Section 8.1.9 of
the Credit Agreement or with the consent of the Required Lenders, any Event of
Default, have the right to appropriate and apply to the payment of the
obligations of the Guarantor owing to it hereunder, whether or not then due, and
the Guarantor hereby grants to each Secured Party and each such holder a
continuing security interest in, any and all balances, credits, deposits,
accounts or moneys of the Guarantor then or thereafter maintained with such
Secured Party, or such holder or any agent or bailee for such Secured Party or
such holder; provided, however, that any such appropriation and application
shall be subject to the provisions of Section 4.8 of the Credit Agreement.
SECTION 5.8. Severability. Wherever possible each provision of this
Guaranty shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.
SECTION 5.9. Governing Law, Entire Agreement, etc. THIS GUARANTY SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK). THIS GUARANTY AND THE OTHER
LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH
RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN
OR ORAL, WITH RESPECT THERETO.
SECTION 5.10. Forum Selection and Consent to Jurisdiction. ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
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THIS GUARANTY OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE SECURED PARTIES
OR THE GUARANTOR SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF
THE STATE OF NEW YORK, NEW YORK COUNTY OR IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY PROPERTY MAY BE BROUGHT, AT THE ADMINISTRATIVE AGENT'S
OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH PROPERTY MAY BE FOUND. THE
GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK, NEW YORK COUNTY AND OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. THE GUARANTOR FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. THE
GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE
LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO
ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. TO THE EXTENT THAT THE GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY
IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE GUARANTOR
HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
GUARANTY AND THE OTHER LOAN DOCUMENTS.
SECTION 5.11. Waiver of Jury Trial. THE GUARANTOR HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
THE SECURED PARTIES OR THE GUARANTOR. THE GUARANTOR ACKNOWLEDGES AND AGREES THAT
IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDERS ENTERING INTO THE CREDIT
AGREEMENT.
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SECTION 5.12. Counterparts. This Guaranty may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
PROSOURCE, INC.
By /s/ Xxxx X. Xxxxxx xx Xxxxxxx
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Name: Xxxx X. Xxxxxx xx Xxxxxxx
Title: Vice President, Secretary
and Treasurer
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