EXHIBIT 4.8
SUBSIDIARY GUARANTY
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GUARANTY, dated as of November 7, 1996 (as amended, modified or
supplemented from time to time, the "Guaranty"), made by each of the undersigned
(each a "Guarantor" and collectively, the "Guarantors"). Except as otherwise
defined herein, terms used herein and defined in the Credit Agreement (as
defined below) shall be used herein as therein defined.
W I T N E S S E T H :
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WHEREAS, Motors and Gears Industries, Inc. (the "Borrower"), various
financial institutions from time to time party thereto (the "Banks") and Bankers
Trust Company, as Agent (the "Agent"), have entered into a Credit Agreement,
dated as of November 7, 1996 (as amended, modified or supplemented from time to
time, the "Credit Agreement"), providing for the making of Loans to the Borrower
and the issuance of, and participation in, Letters of Credit for the account of
the Borrower, all as contemplated therein (the Banks, the Agent and the
Collateral Agent herein called the "Bank Creditors");
WHEREAS, the Borrower may from time to time enter into one or more (i)
interest rate protection agreements (including, without limitation, interest
rate swaps, caps, floors, collars and similar agreements), (ii) foreign exchange
contracts, currency swap agreements, commodity agreements or other similar
agreements or arrangements designed to protect against the fluctuations in
currency values and/or (iii) other types of hedging agreements from time to time
(each such agreement or arrangement with an Other Creditor (as hereinafter
defined), an "Interest Rate Protection Agreement or Other Hedging Agreement"),
with Bankers Trust Company in its individual capacity ("BTCo"), any Bank or a
syndicate of financial institutions organized by BTCo or any such Bank, or an
affiliate of BTCo or any such Bank (BTCo, any such Bank or Banks or affiliate or
affiliates of BTCo or such Bank or Banks (even if BTCo or any such Bank ceases
to be a Bank under the Credit Agreement for any reason) and any such institution
that participates in such Interest Rate Protection Agreements or Other Hedging
Agreements and their subsequent successors and assigns collectively, the "Other
Creditors", and together with the Bank Creditors, the "Creditors");
WHEREAS, each Guarantor is a direct or indirect Wholly-Owned Subsidiary of
the Borrower;
WHEREAS, it is a requirement under the Credit Agreement that upon its
establishment, creation or acquisition by the Borrower or any of its
Subsidiaries that each Guarantor shall have executed and delivered this
Guaranty; and
WHEREAS, each Guarantor will obtain benefits from the incurrence of Loans
by the Borrower and the issuance of, and participation in, Letters of Credit for
the account of the Borrower under the Credit Agreement and the entering into of
Interest Rate Protection Agreements or Other Hedging Agreements and,
accordingly, desires to execute this Guaranty in order to satisfy the conditions
described in the preceding paragraph and to induce the Banks to maintain and
make Loans to the Borrower and issue Letters of Credit for the account of the
Borrower and the Other Creditors to maintain and enter into Interest Rate
Protection Agreements or Other Hedging Agreements with the Borrower;
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to each Guarantor, the receipt and sufficiency of which are hereby
acknowledged, each Guarantor hereby makes the following representations and
warranties to the Creditors and hereby covenants and agrees with each Creditor
as follows:
1. Each Guarantor, jointly and severally, irrevocably and unconditionally
guarantees: (i) to the Bank Creditors the full and prompt payment when due
(whether at the stated maturity, by acceleration or otherwise) of (x) the
principal of and interest on the Notes issued by, and the Loans made to, the
Borrower under the Credit Agreement and all reimbursement obligations and Unpaid
Drawings with respect to Letters of Credit and (y) all other obligations
(including obligations which, but for any automatic stay under Section 362(a) of
the Bankruptcy Code, would become due) and liabilities owing by the Borrower to
the Bank Creditors (including, without limitation, indemnities, Fees and
interest thereon) now existing or hereafter incurred under, arising out of or in
connection with the Credit Agreement or any other Credit Document and the due
performance and compliance with the terms, conditions and agreements contained
in the Credit Documents by the Borrower (all such principal, interest,
liabilities and obligations being herein collectively called the "Credit
Document Obligations"); and (ii) to each Other Creditor the full and prompt
payment when due (whether at the stated maturity, by acceleration or otherwise)
of all obligations (including obligations which, but for any automatic stay
under Section 362(a) of the Bankruptcy Code, would become due) and liabilities
owing by the Borrower to the Other Creditors (including, without limitation,
indemnities, fees and interest thereon) under any Interest Rate Protection
Agreements or Other Hedging Agreements, whether now in existence or hereafter
arising, and the due performance and compliance by the Borrower with all terms,
conditions and agreements contained therein (all such obligations and
liabilities under this clause (ii) being herein collectively called the "Other
Obligations", and together with the Credit Document Obligations are herein
collectively called the "Guaranteed Obligations"). Each Guarantor understands,
agrees and confirms that the Creditors may enforce this Guaranty up to the full
amount of the Guaranteed Obligations
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against each Guarantor without proceeding against any other Guarantor, the
Borrower, against any security for the Guaranteed Obligations, or against any
other guarantor under any other guaranty covering all or a portion of the
Guaranteed Obligations. This Guaranty shall constitute a guaranty of payment and
not of collection. All payments by each Guarantor under this Guaranty shall be
made on the same basis as payments by the Borrower under Sections 4.03 and 4.04
of the Credit Agreement.
2. Additionally, each Guarantor, jointly and severally, unconditionally
and irrevocably, guarantees the payment of any and all Guaranteed Obligations to
the Creditors whether or not due or payable by the Borrower upon the occurrence
in respect of the Borrower of any of the events specified in Section 10.05 of
the Credit Agreement, and unconditionally and irrevocably, jointly and
severally, promises to pay such Guaranteed Obligations to the Creditors, or
order, on demand, in lawful money of the United States.
3. The liability of each Guarantor hereunder is exclusive and independent
of any security for or other guaranty of the Guaranteed Obligations whether
executed by such Guarantor, any other Guarantor, any other guarantor or by any
other party, and the liability of each Guarantor hereunder shall not be affected
or impaired by (i) any direction as to application of payment by the Borrower or
by any other party, (ii) any other continuing or other guaranty, undertaking or
maximum liability of a guarantor or of any other party as to the Guaranteed
Obligations, (iii) any payment on or in reduction of any such other guaranty or
undertaking, (iv) any dissolution, termination or increase, decrease or change
in personnel by the Borrower, (v) any payment made to any Creditor on the
Guaranteed Obligations which any Creditor repays the Borrower pursuant to court
order in any bankruptcy, reorganization, arrangement, moratorium or other debtor
relief proceeding, and each Guarantor waives any right to the deferral or
modification of its obligations hereunder by reason of any such proceeding, (vi)
any action or inaction by the Creditors as contemplated in Section 6 hereof or
(vii) any invalidity, irregularity or unenforceability of all or part of the
Guaranteed Obligations or of any security therefor.
4. The obligations of each Guarantor hereunder are independent of the
obligations of any other Guarantor, any other guarantor of the Borrower or the
Borrower, and a separate action or actions may be brought and prosecuted against
each Guarantor whether or not action is brought against any other Guarantor, any
other guarantor of the Borrower or the Borrower and whether or not any other
Guarantor, any other guarantor of the Borrower or the Borrower be joined in any
such action or actions. Each Guarantor waives, to the fullest extent permitted
by law, the benefit of any statute of limitations affecting its liability
hereunder or the enforcement thereof. Any payment by the Borrower or other
circumstance which operates to toll any statute of limitations as to the
Borrower shall operate to toll the statute of limitations as to each Guarantor.
5. Each Guarantor hereby waives notice of acceptance of this Guaranty and
notice of any liability to which it may apply, and waives promptness, diligence,
present-
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ment, demand of payment, protest, notice of dishonor or nonpayment of any
such liabilities, suit or taking of other action by the Agent or any other
Creditor against, and any other notice to, any party liable thereon (including
such Guarantor or any other guarantor of the Borrower).
6. Any Creditor may at any time and from time to time without the consent
of, or notice to, any Guarantor, without incurring responsibility to such
Guarantor, without impairing or releasing the obligations of such Guarantor
hereunder, upon or without any terms or conditions and in whole or in part:
(i) change the manner, place or terms of payment of, and/or change
or extend the time of payment of, renew or alter, any of the Guaranteed
Obligations, (including any increase or decrease in the rate of interest
thereon), any security therefor, or any liability incurred directly or
indirectly in respect thereof, and the guaranty herein made shall apply to
the Guaranteed Obligations as so changed, extended, renewed or altered;
(ii) take and hold security for the payment of the Guaranteed
Obligations and/or sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any of
those hereunder) incurred directly or indirectly in respect thereof or
hereof, and/or any offset thereagainst;
(iii) exercise or refrain from exercising any rights against the
Borrower, any Guarantor, any other guarantor of the Borrower or others or
otherwise act or refrain from acting;
(iv) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Borrower to creditors of the
Borrower;
(v) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Creditors regardless of
what liabilities of the Borrower remain unpaid;
(vi) release or substitute any one or more endorsers, guarantors,
Guarantors, the Borrower or other obligors;
(vii) consent to or waive any breach of, or any act, omission or
default under, the Interest Rate Protection Agreements or Other Hedging
Agreements, the
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Credit Documents or any of the instruments or agreements referred to
therein, or otherwise amend, modify or supplement any of the Interest Rate
Protection Agreements or Other Hedging Agreements, the Credit Documents or
any of such other instruments or agreements; and/or
(viii) act or fail to act in any manner referred to in this Guaranty
which may deprive such Guarantor of its right to subrogation against the
Borrower to recover full indemnity for any payments made pursuant to this
Guaranty.
7. No invalidity, irregularity or unenforceability of all or any part
of the Guaranteed Obligations or of any security therefor shall affect, impair
or be a defense to this Guaranty, and this Guaranty shall be primary, absolute
and unconditional notwithstanding the occurrence of any event or the existence
of any other circumstances which might constitute a legal or equitable discharge
of a surety or guarantor except payment in full of the Guaranteed Obligations.
8. This Guaranty is a continuing one and all liabilities to which it
applies or may apply under the terms hereof shall be conclusively presumed to
have been created in reliance hereon. No failure or delay on the part of any
Creditor in exercising any right, power or privilege hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
expressly specified are cumulative and not exclusive of any rights or remedies
which any Creditor would otherwise have. No notice to or demand on any
Guarantor in any case shall entitle such Guarantor to any other further notice
or demand in similar or other circumstances or constitute a waiver of the rights
of any Creditor to any other or further action in any circumstances without
notice or demand. It is not necessary for any Creditor to inquire into the
capacity or powers of the Borrower or any of its Subsidiaries or the officers,
directors, partners or agents acting or purporting to act on its behalf, and any
indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.
9. Any indebtedness of the Borrower now or hereafter held by any
Guarantor is hereby subordinated to the indebtedness of the Borrower to the
Creditors; and such indebtedness of the Borrower to any Guarantor, if the Agent,
after an Event of Default has occurred, so requests, shall be collected,
enforced and received by such Guarantor as trustee for the Creditors and be paid
over to the Creditors on account of the indebtedness of the Borrower to the
Creditors, but without affecting or impairing in any manner the liability of
such Guarantor under the other provisions of this Guaranty. Prior to the
transfer by any Guarantor of any note or negotiable instrument evidencing any
indebtedness of the Borrower to such Guarantor, such Guarantor shall xxxx such
note or negotiable instrument with a legend that the same is subject to this
subordination. Without limiting the generality of the foregoing, each Guarantor
hereby agrees with the Creditors that it will not exercise
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any right of subrogation which it may at any time otherwise have as a result of
this Guaranty (whether contractual, under Section 509 of the Bankruptcy Code or
otherwise) until all Guaranteed Obligations have been irrevocably paid in full
in cash.
10. (a) Each Guarantor waives any right (except as shall be required
by applicable statute and cannot be waived) to require the Creditors to: (i)
proceed against the Borrower, any other Guarantor, any other guarantor of the
Borrower or any other party; (ii) proceed against or exhaust any security held
from the Borrower, any other Guarantor, any other guarantor of the Borrower or
any other party; or (iii) pursue any other remedy in the Creditors' power
whatsoever. Each Guarantor waives any defense based on or arising out of any
defense of the Borrower, any other Guarantor, any other guarantor of the
Borrower or any other party other than payment in full of the Guaranteed
Obligations, including, without limitation, any defense based on or arising out
of the disability of the Borrower, any other Guarantor, any other guarantor of
the Borrower or any other party, or the unenforceability of the Guaranteed
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of the Borrower other than payment in full of the Guaranteed
Obligations. The Creditors may, at their election, foreclose on any security
held by the Agent, the Collateral Agent or the other Creditors by one or more
judicial or nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable (to the extent such sale is permitted by applicable
law), or exercise any other right or remedy the Creditors may have against the
Borrower or any other party, or any security, without affecting or impairing in
any way the liability of any Guarantor hereunder except to the extent the
Guaranteed Obligations have been paid in full. Each Guarantor waives any
defense arising out of any such election by the Creditors, even though such
election operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of such Guarantor against the Borrower or
any other party or any security.
(b) Each Guarantor waives all presentments, demands for performance,
protests and notices, including, without limitation, notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation or incurring of new or additional
indebtedness. Each Guarantor assumes all responsibility for being and keeping
itself informed of the Borrower's financial condition and assets, and of all
other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks which such Guarantor
assumes and incurs hereunder, and agrees that the Creditors shall have no duty
to advise any Guarantor of information known to them regarding such
circumstances or risks.
11. In order to induce the Banks to make Loans and issue Letters of
Credit pursuant to the Credit Agreement, and in order to induce the Other
Creditors to execute, deliver and perform the Interest Rate Protection
Agreements or Other Hedging Agreements, each Guarantor represents, warrants and
covenants that:
(a) Such Guarantor (i) is a duly organized and validly existing
corporation
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and is in good standing under the laws of the jurisdiction of its
organization, and has the corporate power and authority to own its property
and assets and to transact the business in which it is engaged and
presently proposes to engage and (ii) is duly qualified and is authorized
to do business and is in good standing in all jurisdictions where it is
required to be so qualified except where the failure to be so qualified
could reasonably be expected to have a material adverse effect on the
performance, business, operations, property, assets, nature of assets,
liabilities, condition (financial or otherwise) or prospects of such
Guarantor or such Guarantor and its Subsidiaries taken as a whole.
(b) Such Guarantor has the corporate power and authority to execute,
deliver and carry out the terms and provisions of this Guaranty and each
other Document to which it is a party and has taken all necessary corporate
action to authorize the execution, delivery and performance by it of each
such Document. Such Guarantor has duly executed and delivered this
Guaranty and each other Document to which it is a party, and each such
Document constitutes the legal, valid and binding obligation of such
Guarantor enforceable in accordance with its terms.
(c) Neither the execution, delivery or performance by such Guarantor
of this Guaranty or any other Document to which it is a party, nor
compliance by it with the terms and provisions hereof and thereof: (i)
will contravene any applicable provision of any law, statute, rule or
regulation, or any order, writ, injunction or decree of any court or
governmental instrumentality, (ii) will conflict or be inconsistent with or
result in any breach of, any of the terms, covenants, conditions or
provisions of, or constitute a default under, or (other than pursuant to
the Security Documents) result in the creation or imposition of (or the
obligation to create or impose) any Lien upon any of the property or assets
of such Guarantor or any of its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, credit agreement, loan agreement or any
other agreement or other instrument to which such Guarantor or any of its
Subsidiaries is a party or by which it or any of its property or assets is
bound or to which it may be subject or (iii) will violate any provision of
the certificate of incorporation or by-laws (or equivalent organizational
documents) of such Guarantor or any of its Subsidiaries.
(d) No order, consent, approval, license, authorization or validation
of, or filing, recording or registration with, or exemption by, any foreign
or domestic governmental or public body or authority, or any subdivision
thereof, is required to authorize, or is required in connection with, (i)
the execution, delivery and performance of this Guaranty or any other
Document to which such Guarantor is a party, or (ii) the legality,
validity, binding effect or enforceability of this Guaranty or any other
Document to which such Guarantor is a party.
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(e) There are no actions, suits or proceedings pending or threatened
(i) with respect to this Guaranty or any other Document to which such
Guarantor is a party, (ii) with respect to any Indebtedness of such
Guarantor or any of its Subsidiaries, (iii) that could reasonably be
expected to have a material adverse effect on the performance, business,
operations, property, assets, nature of assets, liabilities, condition
(financial or otherwise) or prospects of such Guarantor or such Guarantor
and its Subsidiaries taken as a whole or (iv) that could reasonably be
expected to have a material adverse effect on the rights or remedies of the
Creditors or on the ability of such Guarantor to perform its respective
obligations to the Creditors hereunder and under the other Credit Documents
to which it is a party.
12. Each Guarantor covenants and agrees that on and after the date
hereof and until the termination of the Total Commitment and all Interest Rate
Protection Agreements or Other Hedging Agreements and when no Note or Letter of
Credit remains outstanding and all other Guaranteed Obligations have been paid
in full, such Guarantor shall take, or will refrain from taking, as the case may
be, all actions that are necessary to be taken or not taken so that no violation
of any provision, covenant or agreement contained in Section 8 or 9 of the
Credit Agreement, and so that no Event of Default, is caused by the actions of
such Guarantor or any of its Subsidiaries.
13. The Guarantors hereby jointly and severally agree to pay all out-
of-pocket costs and expenses of each Creditor in connection with the enforcement
of this Guaranty and the protection of such Creditor's rights hereunder, and in
connection with any amendment, waiver or consent relating hereto (including,
without limitation, the fees and disbursements of counsel employed by the Agent
or any of the Creditors).
14. This Guaranty shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the Creditors and their
successors and assigns.
15. Neither this Guaranty nor any provision hereof may be changed,
waived, discharged or terminated in any manner whatsoever unless in writing duly
signed by the Agent (with the consent of (x) the Required Banks or, to the
extent required by Section 13.12 of the Credit Agreement, all of the Banks, at
all times prior to the time at which all Credit Document Obligations have been
paid in full, or (y) the holders of at least a majority of the outstanding Other
Obligations at all times after the time at which all Credit Document Obligations
have been paid in full) and each Guarantor directly affected thereby (it being
understood that the addition or release of any Guarantor hereunder shall not
constitute a change, waiver, discharge or termination affecting any Guarantor
other than the Guarantor so added or released); provided, that any change,
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waiver, modification or variance affecting the rights and benefits of a single
class (as defined below) of Creditors (and not all Creditors in a like or
similar manner) shall require the written consent of the Requisite Creditors (as
defined below) of such Class. For the purpose of this Guaranty, the term "Class"
shall mean each class of Creditors, i.e., whether (i) the Bank Creditors
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as holders of the Credit Document Obligations or (ii) the Other Creditors as
holders of the Other Obligations. For the purpose of this Guaranty, the term
"Requisite Creditors" of any Class shall mean each of (i) with respect to the
Credit Document Obligations, the Required Banks and (ii) with respect to the
Other Obligations, the holders of at least a majority of all obligations
outstanding from time to time under the Interest Rate Protection Agreements or
Other Hedging Agreements.
16. Each Guarantor acknowledges that an executed (or conformed) copy
of each of the Credit Documents and the Interest Rate Protection Agreements or
Other Hedging Agreements has been made available to its principal executive
officers and such officers are familiar with the contents thereof.
17. In addition to any rights now or hereafter granted under
applicable law (including, without limitation, Section 151 of the New York
Debtor and Creditor Law) and not by way of limitation of any such rights, upon
the occurrence and during the continuance of an Event of Default (such term to
mean and include any "Event of Default" as defined in the Credit Agreement or
any payment default under any Interest Rate Protection Agreement or Other
Hedging Agreement and shall in any event, include, without limitation, any
payment default on any of the Guaranteed Obligations continuing after any
applicable grace period), each Creditor is hereby authorized at any time or from
time to time, without notice to any Guarantor or to any other Person, any such
notice being expressly waived, to set off and to appropriate and apply any and
all deposits (general or special) and any other indebtedness at any time held or
owing by such Creditor to or for the credit or the account of such Guarantor,
against and on account of the obligations and liabilities of such Guarantor to
such Creditor under this Guaranty, irrespective of whether or not such Creditor
shall have made any demand hereunder and although said obligations, liabilities,
deposits or claims, or any of them, shall be contingent or unmatured. Each
Creditor acknowledges and agrees that the provisions of this Section 17 are
subject to the sharing provisions set forth in Section 13.06(b) of the Credit
Agreement.
18. All notices, requests, demands or other communications pursuant
hereto shall be deemed to have been duly given or made when delivered to the
Person to which such notice, request, demand or other communication is required
or permitted to be given or made under this Guaranty, addressed to such party at
(i) in the case of any Bank Creditor, as provided in the Credit Agreement, (ii)
in the case of any Guarantor, at its address set forth opposite its signature
below and (iii) in the case of any Other Creditor, at such address as such Other
Creditor shall have specified in writing to the Guarantor; or in any case at
such other address as any of the Persons listed above may hereafter notify the
others in writing.
19. If claim is ever made upon any Creditor for repayment or recovery
of any amount or amounts received in payment or on account of any of the
Guaranteed Obligations and any of the aforesaid payees repays all or part of
said amount by reason of (i) any
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judgment, decree or order of any court or administrative body having
jurisdiction over such payee or any of its property or (ii) any settlement or
compromise of any such claim effected by such payee with any such claimant
(including the Borrower), then and in such event each Guarantor agrees that any
such judgment, decree, order, settlement or compromise shall be binding upon
such Guarantor, notwithstanding any revocation hereof or the cancellation of any
Note or any Interest Rate Protection Agreement or Other Hedging Agreement or
other instrument evidencing any liability of the Borrower, and such Guarantor
shall be and remain liable to the aforesaid payees hereunder for the amount so
repaid or recovered to the same extent as if such amount had never originally
been received by any such payee.
20. (A) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE
CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
(B) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR
ANY OTHER CREDIT DOCUMENT TO WHICH ANY GUARANTOR IS A PARTY MAY BE BROUGHT IN
THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS GUARANTY,
EACH GUARANTOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS. EACH GUARANTOR HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS CT
CORPORATION SYSTEM, WITH OFFICES ON THE DATE HEREOF AT 0000 XXXXXXXX, XXX XXXX,
XXX XXXX 00000 AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, ACCEPT AND
ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF
ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN
ANY SUCH ACTION OR PROCEEDING. IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND
AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, EACH GUARANTOR AGREES TO
DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN NEW YORK CITY ON THE TERMS AND
FOR THE PURPOSES OF THIS PROVISION SATISFACTORY TO THE AGENT. EACH GUARANTOR
HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK
JURISDICTION OVER SUCH GUARANTOR, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR ANY OTHER CREDIT DOCUMENT
TO WHICH IT IS A PARTY BROUGHT IN ANY OF THE AFORESAID COURTS, THAT ANY SUCH
COURT LACKS JURISDICTION OVER SUCH GUARANTOR. EACH GUARANTOR FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO EACH GUARANTOR AT ITS ADDRESS
SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS
AFTER SUCH MAILING. EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO
SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER
CREDIT DOCUMENT TO WHICH SUCH GUARANTOR IS A PARTY THAT SERVICE OF PROCESS WAS
IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY
OF THE CREDITORS TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST EACH GUARANTOR IN ANY
OTHER JURISDICTION.
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(C) EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS
OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS GUARANTY OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (B) ABOVE AND HEREBY
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
(D) EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS GUARANTY, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
21. In the event that all of the capital stock of one or more
Guarantors is sold or otherwise disposed of or liquidated in compliance with the
requirements of Section 9.02 of the Credit Agreement (or such sale or other
disposition has been approved in writing by the Required Banks (or all Banks if
required by Section 13.12 of the Credit Agreement)) and the proceeds of such
sale, disposition or liquidation are applied in accordance with the provisions
of the Credit Agreement, to the extent applicable, such Guarantor shall be
released from this Guaranty and this Guaranty shall, as to each such Guarantor
or Guarantors, terminate, and have no further force or effect (it being
understood and agreed that the sale of one or more Persons that own, directly or
indirectly, all of the capital stock of any Guarantor shall be deemed to be a
sale of such Guarantor for the purposes of this Section 21).
22. All payments made by any Guarantor hereunder will be made without
setoff, counterclaim or other defense.
23. This Guaranty may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with the Borrower and the Agent.
24. It is understood and agreed that any Subsidiary of the Borrower
that is required to execute a counterpart of this Guaranty pursuant to the
Credit Agreement shall automatically become a Guarantor hereunder by executing a
counterpart hereof and delivering the same to the Agent.
25. At any time a payment in respect of the Guaranteed Obligations is
made under this Guaranty, the right of contribution of each Guarantor hereunder
against each other such Guarantor shall be determined as provided in the
immediately following sentence, with the right of contribution of each Guarantor
to be revised and restated as of each date on which a payment (a "Relevant
Payment") is made on the Guaranteed Obligations under this Guaranty. At any
time that a Relevant Payment is made by a
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Guarantor that results in the aggregate payments made by such Guarantor
hereunder in respect of the Guaranteed Obligations to and including the date of
the Relevant Payment exceeding such Guarantor's Contribution Percentage (as
defined below) of the aggregate payments made by all Guarantors hereunder in
respect of the Guaranteed Obligations to and including the date of the Relevant
Payment (such excess, the "Aggregate Excess Amount"), each such Guarantor shall
have a right of contribution against each other Guarantor who has made payments
hereunder in respect of the Guaranteed Obligations to and including the date of
the Relevant Payment in an aggregate amount less than such other Guarantor's
Contribution Percentage of the aggregate payments made to and including the date
of the Relevant Payment by all Guarantors hereunder in respect of the Guaranteed
Obligations (the aggregate amount of such deficit, the "Aggregate Deficit
Amount") in an amount equal to (x) a fraction the numerator of which is the
Aggregate Excess Amount of such Guarantor and the denominator of which is the
Aggregate Excess Amount of all Guarantors multiplied by (y) the Aggregate
Deficit Amount of such other Guarantor. A Guarantor's right of contribution
pursuant to the preceding sentences shall arise at the time of each computation,
subject to adjustment to the time of any subsequent computation; provided, that
--------
no Guarantor may take any action to enforce such right until the Guaranteed
Obligations have been paid in full and the Total Commitment has been terminated,
it being expressly recognized and agreed by all parties hereto that any
Guarantor's right of contribution arising pursuant to this Guaranty against any
other Guarantor shall be expressly junior and subordinate to such other
Guarantor's obligations and liabilities in respect of the Guaranteed Obligations
and any other obligations owing under this Guaranty. As used in this Section 25:
(i) each Guarantor's "Contribution Percentage" shall mean the percentage
obtained by dividing (x) the Adjusted Net Worth (as defined below) of such
Guarantor by (y) the aggregate Adjusted Net Worth of all Guarantors; (ii) the
"Adjusted Net Worth" of each Guarantor shall mean the greater of (x) the Net
Worth (as defined below) of such Guarantor and (y) zero; and (iii) the "Net
Worth" of each Guarantor shall mean the amount by which the fair salable value
of such Guarantor's assets on the date of any Relevant Payment exceeds its
existing debts and other liabilities (including contingent liabilities, but
without giving effect to any Guaranteed Obligations arising under this Guaranty)
on such date. All parties hereto recognize and agree that, except for any right
of contribution arising pursuant to this Section 25, each Guarantor who makes
any payment in respect of the Guaranteed Obligations shall have no right of
contribution or subrogation against any other Guarantor in respect of such
payment. Each of the Guarantors recognizes and acknowledges that the rights to
contribution arising hereunder shall constitute an asset in favor of the party
entitled to such contribution. In this connection, each Guarantor has the right
to waive its contribution right against any Guarantor to the extent that after
giving effect to such waiver such Guarantor would remain solvent, in the
determination of the Required Banks.
26. Each Guarantor hereby confirms that it is its intention that this
Guaranty not constitute a fraudulent transfer or conveyance for purposes of any
bankruptcy, insolvency or similar law, the Uniform Fraudulent Conveyance Act or
any similar Federal, state of foreign law. To effectuate the foregoing
intention, each Guarantor hereby irrevocably
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agrees that the Guaranteed Obligations shall be limited to the maximum amount as
will, after giving effect to such maximum amount and all other (contingent or
otherwise) liabilities of such Guarantor that are relevant under such laws,
result in the Guaranteed Obligations of such Guarantor in respect of such
maximum amount not constituting a fraudulent transfer or conveyance.
27. Notwithstanding anything else to the contrary in this Guaranty,
the Creditors agree that this Guaranty may be enforced only by the action of the
Agent or the Collateral Agent, in each case acting upon the instructions of the
Required Banks (or, after the date on which all Credit Document Obligations have
been paid in full, the holders of at least a majority of the outstanding Other
Obligations) and that no other Creditor shall have any right individually to
seek to enforce or to enforce this Guaranty or to realize upon the security to
be granted by the Security Documents, it being understood and agreed that such
rights and remedies may be exercised by the Agent or the Collateral Agent or the
holders of at least a majority of the outstanding Other Obligations, as the case
may be, for the benefit of the Creditors upon the terms of this Guaranty and the
Security Documents. The Creditors further agree that this Guaranty may not be
enforced against any director, officer, employee, or stockholder of any
Guarantor (except to the extent such stockholder is also a Guarantor hereunder).
It is understood that the agreement in this Section 27 is among and solely for
the benefit of the Banks and that if the Required Banks so agree (without
requiring the consent of any Guarantor), this Guaranty may be directly enforced
by any Creditor.
* * *
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IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
executed and delivered as of the date first above written.
Address:
0000 Xxxxxxxx Xxxxx XXXXXX-XXXXX INDUSTRIES, INC.
Xxx Xxxxxxx, XX 00000
By /s/ Xxxxxxxx X. Xxxxxxx
-------------------------------------
Title: Vice President
0000 Xxxxxxxx Xxxxx BCM HOLDINGS, INC.
Xxx Xxxxxxx, XX 00000
By /s/ Xxxxxxxx X. Xxxxxxx
-------------------------------------
Title: Vice President
00 Xxx Xxxxxx THE NEW IMPERIAL ELECTRIC
Xxxxx, XX 00000 COMPANY
By /s/ Xxxxxxxx X. Xxxxxxx
-------------------------------------
Title: Vice President
0000 XxXxxxx Xxxx THE NEW XXXXX MOTORS COMPANY
Xxxxxxxxxx, XX 00000
By /s/ Xxxxxxxx X. Xxxxxxx
-------------------------------------
Title: Vice President
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0000 Xxxxxxx Xxxxxx, X.X. NEW GEAR RESEARCH, INC.,
Xxxxx Xxxxxx, XX 00000
By /s/ Xxxxxxxx X. Xxxxxxx
-------------------------------------
Title: Vice President
Accepted and Agreed to:
BANKERS TRUST COMPANY,
as Agent for the Banks
By /s/ Xxxxxxxx Xxxxx
----------------------------
Title: Vice President
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