GUARANTEE
TO: THE CHASE MANHATTAN BANK (the "Agent"), as agent for and on behalf of the
lenders named in that certain credit agreement dated as of April 1, 1997
made among The Chase Manhattan Bank, in its own capacity as lender and in
its capacity as agent, the lenders named therein, in their capacity as
lenders and SLM International Inc., Maska U.S., Inc. and #1 Apparel, Inc.,
as borrowers (that credit agreement as it may be amended, supplemented,
extended or restated from time to time being referred to below as the
"Credit Agreement")
IN CONSIDERATION of the Agent and the lenders named in the Credit Agreement
(hereinafter collectively referred to as the "Lenders") extending credit to or
otherwise dealing with SLM International, Inc., Maska U.S., Inc. and #1 Apparel,
Inc. (hereinafter collectively referred to as the "Borrowers") and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the undersigned, SPORT MASKA INC. (hereinafter referred to as
the "Guarantor"), hereby unconditionally guarantees, as primary obligor and not
merely as surety, the due and punctual payment of the principal of and interest
on each of the Notes, when and as due, whether at maturity, by acceleration, by
notice of prepayment or otherwise and the due and punctual performance of all
other Obligations, together with all expenses (including legal fees on a
solicitor and client basis) incurred by the Agent and each of the Lenders, its
receiver or agent in the preparation, perfection and enforcement of this
Guarantee and related security or other agreements held by the Agent or any of
the Lenders in respect of the Credit Agreement and all other Obligations
(collectively, the "Indebtedness").
THE OBLIGATIONS OF THE GUARANTOR hereunder in respect of the Indebtedness
shall be for an unlimited amount.
AND IT IS FURTHER AGREED, SUBJECT TO THE FOREGOING, THAT:
(1) No change in the name, objects, capital stock or constitution of any of the
Borrowers shall in any way affect the liability of the Guarantor hereunder,
either with respect to transactions occurring before or after any such
change, and the Agent and the Lenders shall not be concerned to see or
inquire into the powers of the Borrowers or any of their directors or other
agents acting or purporting to act on their behalf, and moneys, advances,
renewals or credits in fact borrowed or obtained from the Agent and the
Lenders in connection with the Credit Agreement in professed exercise of
such powers shall be deemed to form part of the Indebtedness
notwithstanding that such borrowing or obtaining of moneys, advances,
renewals or credits shall be in excess of the powers of the Borrowers or of
their directors or other agents aforesaid, or be in any way irregular,
defective or informal.
(2) All monies received by the Agent and the Lenders in respect of the
Indebtedness may be applied on such part or parts of the Indebtedness as
the Agent and the Lenders may see fit, subject to and in accordance with
the relevant provisions, if any, of any written agreement between the Agent
and the Guarantor and the Agent and the Lenders shall at all times and from
time to time have the right to change any appropriation of any moneys
received by them and to reapply the same on any other part or parts of the
Indebtedness as the Agent and the Lenders may see fit, notwithstanding any
previous application by whomsoever made.
(3) All dividends, compositions and moneys received by the Agent and the
Lenders from the Borrowers or from any other person or estate capable of
being applied by the Agent and the Lenders in reduction of the Indebtedness
shall be regarded for all purposes as payments in gross, and the Agent and
the Lenders shall be entitled to prove against the estate of the Borrowers
upon any insolvency or winding-up in respect of the whole of the
Indebtedness, and upon payment by the Guarantor of any sums on account of
the Indebtedness, all rights of the Guarantor against the Borrowers arising
as a result thereof by way of right of subrogation or otherwise shall in
all respects be subordinated and junior in right of payment to the prior
indefeasible payment in full of all of the Indebtedness to the Agent and
the Lenders.
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(4) This Guarantee will not be diminished or affected on account of any act or
failure to act on the part of the Agent or the Lenders which would prevent
subrogation from operating in favour of the Guarantor. Without limiting the
generality of the foregoing and for greater certainty, the obligations of
the Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason (other than the indefeasible
payment of the Indebtedness in full), including, without limitation, any
claim of waiver, release, surrender, alteration or compromise and shall not
be subject to any defense or set-off, compensation, counterclaim,
recoupment or termination whatsoever by reason of the invalidity,
illegality or unenforceability of the Indebtedness or otherwise. To the
fullest extent permitted by applicable law, the Guarantor waives
presentment to, demand of payment from and protest to the Borrowers or the
Guarantor or both of any of the Indebtedness and also waives notice of
acceptance of this Guarantee and notice of protest for nonpayment. The
obligations of the Guarantor hereunder shall not be discharged or impaired
or otherwise affected by (a) the failure of the Agent or any of the Lenders
to assert any claim or demand or to enforce any right or remedy against any
of the Borrowers or the Guarantor under the provisions of this Guarantee,
the Credit Agreement, the Notes, any of the other Loan Documents or any
other agreement or otherwise or against any other guarantor of all or any
part of the Indebtedness; b) any rescission, waiver, amendment or
modification of any of the terms or provisions of this Guarantee, the
Credit Agreement, the Notes, any other Loan Documents or any other
agreement or otherwise; (c) the release or termination of any security or
any Loan Document held by the Agent or any of the Lenders with respect to
the Indebtedness or any part thereof; (d) the failure by the Agent or the
Lenders to exercise any right or remedy against any co-guarantor of the
Indebtedness or by any default, failure or delay, willful or otherwise in
the performance of the Obligations or other Indebtedness; or (e) any other
act or omission which may or might in any manner or to any extent vary the
risk of the Guarantor or otherwise operate as a discharge of the Guarantor
or any co-guarantor as a matter of law or equity unless the Indebtedness
has been indefeasibly paid in full and the Commitments have been
terminated.
(5) The Agent and the Lenders, without exonerating in whole or in part the
Guarantor, may grant time, renewals, extensions, indulgences, releases and
discharges to, may take securities from and give the same and any or all
existing securities up to, may abstain from taking securities from or from
perfecting, registering, renewing or realizing upon securities of, may
accept compositions from, and may otherwise deal with any of the Borrowers
and all other persons (including the Guarantor and any co-guarantor) and
securities as the Agent and the Lenders may see fit, without notice to or
further assent from the Guarantor, except as otherwise may be specifically
required by the Loan Documents.
(6) This Guarantee constitutes a guarantee of payment when due and not of
collection, and the Guarantor waives any right to require that any resort
be had by the Agent or any of the Lenders to any covenant or security
(including, without limitation, any Collateral) held for payment of the
Indebtedness or to any balance of any deposit account or credit on the
books of the Agent or any of the Lenders in favour of any of the Borrowers
or any other person.
(7) No invalidity, irregularity or unenforceability (by reason of any
bankruptcy or similar law, any law or order of any government or agency
thereof purporting to reduce, amend or otherwise affect the Indebtedness of
the Borrowers, or otherwise) of the Indebtedness of any of the Borrowers or
of any security therefor shall affect, impair or be a defence to this
Guarantee. If one or more of the provisions contained herein shall be
invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein shall not
in any way be affected or impaired thereby.
(8) The Guarantor hereby renounces the benefits of discussion and division. Any
request by the Guarantor to the Agent or any Lender for useful information
respecting the content or terms and conditions of the Indebtedness hereby
guaranteed or the progress made in their performance shall be made in
writing to the Agent. The Guarantor shall at all times and from time to
time do, execute, acknowledge and deliver or cause to be done, executed,
acknowledged and delivered all and singular every such further act, deed,
transfer, assignment, assurance, document and instrument as the Agent and
the Lenders may reasonably require for the better accomplishing and
effectuating of this
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Guarantee and the provisions contained herein, and every officer of the
Agent and the Lenders and each of them are irrevocably appointed attorneys
or attorney to execute in the name and on behalf of the Guarantor any
document or instrument for the said purpose if the Guarantor fails to
perform its further assurance obligations set out in this paragraph 8
promptly upon the Agent's request therefor.
(9) The obligations and undertakings of the Guarantor hereunder together with
the obligations and undertakings owing by the Borrowers towards the Agent
or any of the Lenders in respect of the Indebtedness shall be joint and
several (or for purposes of enforcement of this Guarantee in the courts of
Quebec such obligations and undertakings shall be solidary). The
obligations and undertakings of the Guarantor hereunder and the obligations
and undertakings of any other present or future guarantor of all or any
part of the Indebtedness shall be joint and several (or for purposes of
enforcement of this Guarantee in the courts of Quebec such obligations and
undertakings shall be solidary).
(10) This Guarantee shall be a continuing guarantee and shall cover and secure
any ultimate balance of the Indebtedness owing to the Agent and the Lenders
notwithstanding that any other security for the repayment of the
Indebtedness of the Borrowers to the Agent and the Lenders may no longer be
enforceable, and the Agent and the Lenders shall not be obliged to seek or
exhaust any recourse against any of the Borrowers or co-guarantors or other
persons or the securities they may hold before being entitled to payment
from the Guarantor of all of the Indebtedness.
(11) This Guarantee shall continue to be effective or be reinstated, as the case
may be, if at any time, payment, or any part thereof, of principal or
interest on any Indebtedness of the Borrowers to the Agent or the Lenders
is rescinded or must otherwise be returned by the Agent or any Lender upon
the insolvency, bankruptcy or reorganization of any of the Borrowers or
otherwise, all as though such payment to the Agent and the Lenders had not
been made.
(12) The Agent and the Lenders may, without the consent of the Guarantor,
assign, transfer and deliver to any transferee of the Indebtedness or any
part thereof, the liability of the Guarantor under this Guarantee and any
security, documents or instruments held by the Agent or the Lenders in
respect of the Guarantee provided that no such assignment, transfer or
delivery shall release the Guarantor from said liability and such assignees
or transferees shall have the full benefit of this Guarantee and all
security, documents or instruments held in connection therewith and such
assignees or transferees shall be vested with all powers and rights of the
Lender hereunder and under such security, documents or instruments to the
full extent of such assignment or transfer; and thereafter the Agent or the
Lenders shall be fully discharged from all responsibility with respect to
and to the extent of that portion of the Indebtedness and this Guarantee
and security, documents and instruments so assigned, transferred and/or
delivered but the Agent and the Lenders shall retain all rights and powers
with respect to any such security, documents or instruments not so
assigned, transferred or delivered.
(13) The Guarantor shall pay the reasonable expenses (including reasonable legal
fees on a solicitor and client basis) incurred by the Agent and the Lenders
in endeavouring to collect the Indebtedness, or any part thereof, and in
enforcing this Guarantee.
(14) The records of the Agent and the Lenders as to the balance of the
Indebtedness at any time and from time to time shall be prima facie proof
thereof, absent manifest error, without further or other proof. No
provision of this Guarantee may be amended, modified or waived without the
prior written consent of the Agent and the Lenders.
(15) This Guarantee shall be binding upon the Guarantor and its respective
trustees, executors, administrators, successors and assigns including any
successor by reason of amalgamation of or any other change in the Guarantor
and shall enure to the benefit of the Agent and the Lenders and their
successors and assigns.
(16) Without limiting the generality of Article VI of the Credit Agreement, the
Guarantor hereby agrees with and confirms to the Agent and the Lenders that
the financial reporting provisions set out in section 6.05 of the Credit
Agreement (the "Financial Reporting Requirements"), with all changes and
modifications as the context requires,
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are incorporated by reference herein and that the Guarantor shall strictly
comply with and be bound by such provisions, where applicable.
(17) The Guarantor hereby represents and warrants to the Agent and the Lenders
that the representations and warranties set out in Article IV of the Credit
Agreement, as they relate to the Guarantor are true and correct as of the
date hereof.
(18) With respect to any portion of the Indebtedness which is payable in a
currency other than Canadian currency (the "Foreign Currency Obligation"),
the following provisions shall apply:
(a) Payment hereunder with respect to the Foreign Currency Obligation
shall be made in immediately available funds in lawful money of the
currency of which the Foreign Currency Obligation is payable (the
"Foreign Currency") in such form as shall be customary at the time of
payment for settlement of international payments in New York, New York
without set-off, compensation or counterclaim.
(b) The Borrowers and the Guarantor shall indemnify and hold the Agent and
the Lenders harmless from any loss or deficiency incurred by the Agent
or the Lenders arising from any change in the value of Canadian
currency in relation to the Foreign Currency between the date the
Foreign Currency Obligation becomes due and the date of payment
thereof.
(c) In the event of a judgment or order being rendered by any court or
tribunal for the payment of any amounts owing to the Agent or the
Lenders under any obligation hereunder or for the payment of damages
in respect of any breach of any obligation hereunder or under or in
respect of a judgment or order of another court or tribunal for the
payment of such amounts or damages, such judgment or order being
expressed in a currency which is other than the currency in which such
amount is payable pursuant to such obligation (the "Agreed Currency"),
the Guarantor shall indemnify and hold the Agent and the Lenders
harmless from any loss or deficiency in terms of the Agreed Currency
in the amounts received by the Agent and the Lenders arising or
resulting from any variation as between (i) the rate of exchange at
which the Agreed Currency is converted into such other currency for
the purposes of such judgment or order, and (ii) the noon spot rate of
the Agent at its Domestic Lending Office at which it will purchase the
Agreed Currency on the date of receipt of such other currency with the
amount of the currency actually received by the Agent in respect of
such judgment or order.
(d) The indemnities contained in paragraphs (b) and (c) above shall
constitute separate and independent obligations of the Guarantor from
its other obligations hereunder and shall apply irrespective of any
indulgence granted by the Agent or the Lenders or any of them and no
proof or evidence of any actual loss shall be required by the
Guarantor, but the Agent or the Lender claiming such indemnity shall,
as soon as reasonably possible (but not as a condition precedent to
payment of the amount claimed), provide the Guarantor with a statement
as to the reason for and as to the amount and calculation of the claim
for indemnity. Absent manifest error, such statement shall be binding
and conclusive.
(19) The Guarantor hereby postpones all debts and liabilities of any of the
Borrowers to the Guarantor, both present and future, to the Indebtedness,
and all moneys received by the Guarantor thereon shall upon either: (a)
notice by the Agent to the Guarantor addressed to the Guarantor at the
address and in the manner provided for in paragraph 27 below; or, (b) the
occurrence and continuance of an Event of Default under the Credit
Agreement be received in trust for the Agent and the Lenders and shall be
paid over to the Agent and the Lenders.
(20) The Guarantor hereby grants to the Agent and the Lenders the right to set
off, upon the occurrence and continuance of an Event of Default, or
compensate against any and all accounts, credits or balances maintained by
it with the Agent or the Lenders, the
5.
aggregate amount of any and all liabilities of the Guarantor hereunder if
and when the same shall become due and payable.
(21) The Guarantor acknowledges that this Guarantee has been delivered free of
any conditions, except pursuant to the Credit Agreement, and that no
representations have been made to the Guarantor affecting the liability of
the Guarantor under this Guarantee save as may be specifically embodied
herein and agrees that this Guarantee is in addition to and not in
substitution for any other guarantee held or which may hereafter be held by
the Agent or the Lenders. The rights, remedies and benefits herein are
cumulative and not in substitution for or exclusive of any rights, remedies
or benefits which the Agent or the Lenders may otherwise have.
(22) All payments made hereunder shall be made to the Agent and the Lenders
without set-off, compensation or counterclaim and free and clear of and
without deduction for any and all present and future taxes, levies,
imposts, deductions or withholdings of any nature whatsoever now or
hereafter imposed (collectively, the "Taxes") (except only such as are
levied on the net income of the Agent and the Lenders or franchise or
capital taxes imposed upon them). Should any such payment be subject to any
such Taxes, the Guarantor shall pay to the Agent and the Lenders such
additional amounts as may be necessary to cause the Lenders to receive a
net amount equal to the amount they would have received had such payment
not been subject to such Taxes, provided that the Agent and each of the
Lenders shall return to the Guarantor an amount equal to any such Taxes
which are subsequently refunded to the Agent or such Lender (subject to the
right of the Agent and such Lender to reclaim from the Guarantor an amount
equal to any amount which the Agent or such Lender is required to repay,
together with any penalties, interest or other charges).
(23) This Guarantee shall be construed in accordance with and be governed by the
laws of the Province of New Brunswick and the federal laws of Canada
applicable therein, and for the purpose of legal proceedings this Guarantee
shall be deemed to have been made in the said Province of New Brunswick and
to be performed there, and the Courts of New Brunswick shall have
jurisdiction over all disputes which may arise under this Guarantee and the
Guarantor hereby irrevocably and unconditionally submits to the
non-exclusive jurisdiction of such Courts, provided always that nothing
herein contained shall prevent the Lenders from proceeding at their
election against the Guarantor in the Courts of any other province, state,
country or jurisdiction.
(24) In this Guarantee, unless otherwise defined herein, all words and phrases
used beginning with initially capitalized letters shall have the same
meanings herein as in the Credit Agreement.
(25) In this Guarantee, words importing the singular include the plural and vice
versa, and words importing gender shall include all genders.
(26) Subject to paragraph 11 above, this Guarantee shall terminate upon the full
and final payment in full of the Indebtedness and when the Lenders have no
further commitment to make any Loans under the Credit Agreement.
(27) All communications and notices hereunder shall be in writing and given as
provided in the Credit Agreement. All communications and notices hereunder
to the Guarantor shall be given to it at 0000 Xxxxx Xxxxxx Xxxxxxx, Xxxxx
000, Xx. Xxxxxxx, Xxxxxx, X0X 0X0, Xxxxxx (Telecopy No. 514-331-7061)
Attention: Xxxxxxx X. Xxxxx, Vice President, Finance, with a copy to
Xxxxxx, Xxxxx & Bockius, LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx,
00000-0000, Attention: Xxxxx X. Xxxxxx, Esq. (Telecopy No. 212-309-6273).
(28) The Guarantor hereby acknowledges having received and read an executed copy
of the Credit Agreement.
(29) It is the express wish of the parties that this Guarantee and any related
documents be drawn up and executed in English. Il est la volonte expresse
des parties que cette convention et tous les documents s'y rattachant
soient rediges et signes en anglais.
6.
IN WITNESS WHEREOF the undersigned has executed this Guarantee as of this 1st
day of April, 1997.
SPORT MASKA INC.
Per: /s/ D. Xxxxx Xxxxxxx c.s.
-------------------------------
Name: D. Xxxxx Xxxxxxx
Title: Secretary
