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Exhibit 10.8
EXECUTION VERSION
GUARANTY AND SURETYSHIP AGREEMENT
THIS GUARANTY AND SURETYSHIP AGREEMENT (this "Guaranty"), dated as of
August 6, 1998, between SYLVAN AMERICA, INC., a Pennsylvania corporation having
an office at Xxxx Xxxxx Xxxxxxxxxx Xxxx, Xxxxxxxxx, XX 00000 (the "Guarantor")
and MELLON BANK, N.A., a national banking association having an office at Xxx
Xxxxxx Xxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000, as agent (in such
capacity, "Agent") for the banks party to the Loan Agreement (as defined below)
from time to time (the "Banks") and the Issuing Bank.
RECITALS:
WHEREAS, Sylvan Inc. (the "Parent"), Sylvan Foods (Netherlands) B.V.
("SFNBV"), the Agent, the Banks and the Issuing Bank have entered into a
Revolving Credit Agreement dated as of the date hereof (the "Loan Agreement");
WHEREAS, the Parent and SFNBV are sometimes referred to collectively as
the "Borrowers" and individually as a "Borrower"; and
WHEREAS, it is a condition to the obligations of the Agent, the Banks
and the Issuing Bank under the Loan Agreement that the Guarantor shall have
executed and delivered this Guaranty to the Agent for the ratable benefit of the
Banks and the Issuing Bank.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound
hereby, the Guarantor covenants and agrees as follows:
1. CERTAIN DEFINITIONS. In addition to other words and terms defined
elsewhere in this Guaranty, the following words and terms shall have the
meanings set forth below, respectively, unless the context hereof clearly
otherwise requires. Capitalized terms not defined in this Guaranty shall have
the meanings assigned to such terms in the Loan Agreement.
"Debt" shall mean all obligations of the Borrowers to the Agent, the
Banks and the Issuing Bank arising under the Loan Agreement, the Notes, the
Security Documents or the Secured Hedge Agreements, including any extensions,
renewals, refundings, substitutions of or for such obligations in whole or in
part.
"Guaranteed Obligations" shall mean (i) the Debt, (ii) all other
amounts payable by the Borrowers or any other person affiliated with the Parent
to the Agent, the Banks and the Issuing Bank under the Loan Agreement, any or
all of the Notes, any other Security Document or any Secured Hedge Agreement,
(iii) all covenants, agreements and undertakings to be performed and discharged
by the Guarantors, the Borrowers or any other person affiliated with the Parent
under and pursuant to the Loan Agreement, the Notes, any other Security Document
or any Secured Hedge Agreement, (iv) all obligations of the Borrowers or any
other person affiliated with either of the Borrowers to the Agent, the Banks or
the Issuing Bank for reasonable fees and
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expenses arising in connection with the transactions contemplated by the Loan
Agreement, (v) all future advances made by the Agent, the Banks or the Issuing
Bank made pursuant to the Security Documents, whether at maturity or by
declaration, acceleration or otherwise, or if now due when payment thereof shall
be demanded by the Agent, the Banks or the Issuing Bank and (vi) any and all
reasonable out-of-pocket costs and expenses, including reasonable out-of-pocket
costs and expenses of collection, paid or incurred by the Agent, the Banks or
the Issuing Bank in connection with the collection of the amounts referred to in
the preceding clauses (i), (ii), (iv) and (v) or the enforcement of the
covenants, agreements and undertakings referred to in clause (iii), in each of
the foregoing clauses (i) through (vi) whether such obligations are direct or
indirect, otherwise secured or unsecured, joint or several, absolute or
contingent, due or to become due, whether for payment or performance, now
existing or hereafter arising.
"Loan Documents" shall mean, collectively, this Agreement, the Loan
Agreement, the Notes, the Security Documents and the Secured Hedge Agreements.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, operations, properties, assets or condition (financial or
otherwise) of the Guarantor and its Subsidiaries taken as a whole or (b) the
ability of the Guarantor to perform its obligations under this Guaranty.
2. GUARANTY AND SURETYSHIP. (a) The Guarantor hereby absolutely and
unconditionally guarantees to the Agent, the Banks and the Issuing Bank and to
their respective successors and assigns, and agrees to become a surety for, the
full, timely and faithful performance and discharge by the Borrowers or any
other person affiliated with the Parent of any and all Guaranteed Obligations
(including without limitation the due and punctual payment of the Guaranteed
Obligations and every part thereof as and when the Guaranteed Obligations shall
become due and payable in accordance with the terms thereof, at whatever time
and for whatever reasons) that shall not have been paid when due.
(b) Subject to the provisions of Paragraph 12 hereof, the obligations
of the Guarantor hereunder are absolute and unconditional and shall remain in
full force and effect until the Guarantor shall have fully and satisfactorily
discharged each of its obligations to the Agent, the Banks and the Issuing Bank
under this Guaranty, irrespective of the genuineness, validity, regularity or
enforceability of the Loan Agreement, the Notes, the Security Documents, the
Secured Hedge Agreements or of any assignment, modification or termination
thereof, and shall not be released, discharged or impaired in any way by reason
of (i) any failure of the Agent, the Banks or the Issuing Bank to retain or
preserve any rights against any person, (ii) the invalidity of any such rights
which the Agent, the Banks or the Issuing Bank may attempt to obtain, (iii) the
lack of prior enforcement by the Agent, the Banks or the Issuing Bank of any
rights against any person, (iv) the dissolution of any of the Banks or the
Issuing Bank, (v) the waiver, surrender, compromise, settlement, release or
termination of any of or all the obligations, covenants or agreements of the
Borrowers contained in the Notes, (vi) the failure to give notice to the
Guarantor of the occurrence of a breach of this Guaranty, (vii) the extension of
the time for payment of any amount owing or payable on the Loan Agreement, the
Notes, the Security
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Documents or any Secured Hedge Agreement, (viii) the taking or the omission of
any of the actions referred to in this Guaranty, (ix) any circumstances which
might give rise to any right of termination, release, rescission, discharge,
modification or suspension by the Guarantor of its obligations hereunder by
reason of any misstatement, breach of warranty or other act or omission by the
Agent, any of the Banks or the Issuing Bank, whether or not consented to by the
Guarantor, or (x) any other circumstance which might in the absence of this
Paragraph 2(b) constitute a legal or equitable release or discharge of the
Guarantor from the performance or observance of any obligation, covenant or
agreement contained in this Guaranty or limit the recourse of the Agent, the
Banks or the Issuing Bank to the Guarantor, nor shall the obligations of the
Guarantor hereunder be affected in any way by any bankruptcy, arrangement,
reorganization or similar proceeding for relief of debtors under federal or
state law or any similar law of any other jurisdiction hereinafter initiated by
or against the Borrowers or the Banks or the Issuing Bank. No setoff,
counterclaim, reduction or diminution of any obligation, or any defense of any
kind or nature (other than the performance by the Guarantor of its obligations
hereunder), shall be available hereunder to the Guarantor against the Agent, the
Banks or the Issuing Bank. The Agent, the Banks or the Issuing Bank need not
exhaust their remedies against the Borrowers before proceeding against the
Guarantor.
(c) For purposes of this Guaranty Agreement, the Guarantor hereby
unconditionally waives, as a condition precedent to the enforcement of its
obligations hereunder: (i) demand for payment, protest and notice of nonpayment
or dishonor, (ii) all other notices and demands (including without limitation
notice of the acceptance of this Guaranty or of the intention to act in reliance
hereon), (iii) any notice of any of the matters referred to in Paragraph 2(b)
above; (iv) all notices which may be required by statute, rule of law, or
otherwise to preserve any rights against the Guarantor hereunder, including
without limitation any demand, proof or notice of nonpayment of any sums payable
on the Notes, (v) any requirement of diligence, (vi) any requirement to mitigate
the damages resulting from any breach of the Loan Agreement, the Notes, the
Security Document or any Secured Hedge Agreement, and (vii) any right or claim
to reimbursement from the Banks or the Issuing Bank for monies paid by the
Guarantor pursuant to this Guaranty. The Guarantor also hereby waives any right
to require, and the benefit of all laws now or hereafter in effect giving the
Guarantor the right to require, any prior enforcement, and the Guarantor agrees
that any delay in enforcing or failure to enforce any such rights or in making
demand on the Guarantor for the performance of the obligations of the Guarantor
under this Guaranty shall not in any way affect the liability of the Guarantor
hereunder, even if any such rights are lost; and the Guarantor hereby waives, as
against the Agent, the Banks or the Issuing Bank and any person claiming under
any of them, all rights and benefits which might accrue to it by reason of any
of the aforesaid bankruptcy, arrangement, reorganization, or similar proceedings
and agrees that its liabilities hereunder shall not be affected by such an
arrangement, reorganization, or similar proceeding and agrees that its
liabilities hereunder shall not be affected by any modification, limitation or
discharge of the obligations of the Borrowers that may result from any such
proceedings.
3. COSTS AND EXPENSES. The Guarantor shall pay, in addition to all
other sums for which it is obligated under this Guaranty, the reasonable
out-of-pocket costs and
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expenses incurred by the Agent, the Banks or the Issuing Bank in connection with
all actions taken to enforce collection or performance of the Guaranteed
Obligations or any part thereof, whether by legal proceedings or otherwise,
including without limitation reasonable attorneys' fees and legal expenses to
the extent not reimbursed to the Agent, the Banks or the Issuing Bank by the
Borrowers.
4. RECOVERY OF PAYMENTS. The Guarantor agrees that in the event any
amounts are paid by it to the Agent, the Banks or the Issuing Bank pursuant to
this Guaranty, its liability hereunder shall continue and remain in full force
and effect in the event that all or any part of any such payment is thereafter
recovered as a preference or fraudulent transfer under any applicable bankruptcy
or insolvency law.
5. SUBROGATION. The Guarantor agrees that any and all rights of
subrogation or similar rights which the Guarantor may have against the Borrowers
at any time shall be subordinate in any and all events to any and all rights
which the Agent, the Banks or the Issuing Bank may have against the Borrowers in
respect of the Guaranteed Obligations, and the Guarantor will not enforce any
such right until this Guaranty has terminated pursuant to Paragraph 12 hereof.
6. SET OFF. If the Guarantor shall fail to make prompt payment of any
amount due from it to the Agent, the Banks and the Issuing Bank hereunder, the
Agent, the Banks and the Issuing Bank shall have the right, in addition to all
other rights and remedies available to them, to set off against the amount due
to the Agent, any of the Banks or the Issuing Bank pursuant hereto any debt
owing to the Guarantor by the Agent, such Bank or the Issuing Bank, including,
without limitation any funds in any deposit account (whether general, special or
otherwise) maintained by the Guarantor for its account with the Agent, such Bank
or the Issuing Bank.
7. REPRESENTATIONS AND WARRANTIES OF GUARANTOR. The Guarantor
represents and warrants to the Agent, the Banks and the Issuing Bank as follows:
(a) The Guarantor is duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation and is duly
qualified to do business as a foreign corporation and in good standing in all
jurisdictions in which the ownership of its properties or the nature of its
activities or both makes such qualification necessary, except to the extent that
failure to be so qualified could not reasonably be expected to have a Material
Adverse Effect.
(b) The Guarantor has corporate power and authority to execute, deliver
and perform its obligations under this Guaranty and all such action has been
duly authorized by corporate proceedings on its part.
(c) The making and performance by the Guarantor of this Guaranty will
not violate any provision of any law, rule, regulation, order, writ, judgment,
decree, determination or award presently in effect having applicability to the
Guarantor where such violation could
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reasonably be expected to have a Material Adverse Effect and will not conflict
with or result in a breach of or a default under the articles of incorporation
or by-laws of the Guarantor and will not result in a breach of any of the terms,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property of
the Guarantor pursuant to any agreement or other instrument to which the
Guarantor is a party or by which the Guarantor's properties may be bound or
affected, and the Guarantor is not in default under any such order, writ,
judgment, decree, determination, award, agreement or instrument, and all
consents or approvals under such agreements and instruments necessary to permit
the valid execution, delivery and performance by the Guarantor of this Guaranty
have been obtained.
(d) This Guaranty has been duly executed and delivered by the Guarantor
and is the legal, valid and binding obligation of the Guarantor enforceable
against the Guarantor in accordance with its terms except as the enforceability
of this Guaranty may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights and except as may be
limited by the exercise of judicial discretion in applying general principles of
equity regardless of whether considered in a proceeding in equity or law.
(e) No Event of Default, or event which upon the expiration of any
applicable any period or the giving of notice or both would constitute an Event
of Default, has occurred and is continuing.
(f) There is no pending or (to the Guarantor's knowledge) threatened
proceeding by or before any government or political subdivision or any agency,
authority, bureau, central bank, commission, department or instrumentality of
either, or any court, tribunal, grand jury or arbitrator, in each case whether
foreign or domestic ("Official Body") against or affecting the Guarantor, except
for (i) matters described in the financial statements of Guarantor previously
delivered to the Agent, and (ii) matters that, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.
(g) The Guarantor is not now nor will the incurrence by it of the
obligations under this Guaranty render it "insolvent". For purposes hereof, the
term "insolvent" means that the present fair market value of a person's assets
is less than the amount that will be required to pay the probable liability on
existing debts, and the term "debts" includes any legal liability, whether
matured or unmatured, liquidated or unliquidated, absolute, fixed or contingent.
By incurring the obligations under this Guaranty, the Guarantor does not incur
debts beyond its ability to pay as they mature. The incurrence by the Guarantor
of the obligations hereunder will not leave it with insufficient capital. The
Guarantor has not executed this Guaranty or made any transfer or incurred any
obligation hereunder with the intent to hinder, delay or defraud either present
or future creditors.
(h) No authorization, consent, approval, license, exemption or other
action by, and no registration, qualification, designation, declaration or
filing with, any Official Body is or will be necessary in connection with the
execution and delivery of this Guaranty, consummation
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of the transactions herein contemplated or performance of or compliance with the
terms and conditions hereof.
8. COVENANT OF THE GUARANTOR. So long as this Guaranty remains in
effect, the Guarantor shall maintain its corporate existence, rights and
franchises in full force and effect in its jurisdiction of incorporation.
9. EVENTS OF DEFAULT. If any of the following events (any such event
being an "Event of Default") shall occur and be continuing:
(a) The Guarantor shall fail to pay when due or perform when due any
Guaranteed Obligation; or
(b) Any representation and warranty made by the Guarantor in this
Guaranty shall prove to have been incorrect in any material respect when made;
or
(c) The Guarantor shall fall to perform or observe the covenant
contained in Paragraph 8 of this Guaranty; or
(d) The Guarantor shall become insolvent or generally fail to pay, or
admit in writing its inability to pay, its debts as they become due, or shall
voluntarily commence any proceeding or file any petition under any bankruptcy,
insolvency or similar law seeking dissolution or reorganization or the
appointment of a receiver, trustee, custodian or liquidator for itself or for a
substantial portion of its property, assets or business or to effect a plan or
other arrangement with its creditors, or shall file any answer admitting the
jurisdiction of the court and the material allegations of an involuntary
petition filed against it in any bankruptcy, insolvency or similar proceeding,
or shall be adjudicated bankrupt, or shall make a general assignment for the
benefit of creditors, or shall consent to, or acquiesce in the appointment of, a
receiver, trustee, custodian or liquidator for itself or a substantial portion
of its property, assets or business; or
(e) Involuntary proceedings or an involuntary petition shall be
commenced or filed against the Guarantor under any bankruptcy, insolvency or
similar law, or a receiver, trustee, or custodian shall have been appointed for
the Guarantor or a substantial part of the property, assets or business of the
Guarantor, or any writ, order, judgment, warrant of attachment, execution or
similar process (which writ, order, judgment, warrant of attachment, execution
or similar process exceeds $1,000,000 in the aggregate amount) shall be issued
or levied against a substantial part of the property, assets or business of the
Guarantor and such proceeding or petition shall not be dismissed, or such writ,
order, judgment, warrant of attachment, execution or similar process shall not
be released, vacated or fully bonded, within 30 days after commencement, filing
or levy, as the case may be; or
(f) The Guarantor shall fall to perform or observe any other term,
covenant or agreement contained herein and not mentioned in this Paragraph 9,
and such failure shall remain unremedied for 30 days after notice from the
Agent;
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then, and in any such event, the Agent may in its sole discretion, but shall not
be obligated to, by notice to the Guarantor, declare any of the Guaranteed
Obligations and all other obligations of the Guarantor hereunder (other than
obligations under or in connection with Secured Hedge Agreements) to be
forthwith due and payable, and the same shall thereupon become due and payable
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived; provided, however, that in the case of an event
specified in subparagraphs (d) and (e) of this Paragraph 9, the Guaranteed
Obligations (other than obligations under or in connection with Secured Hedge
Agreements) shall become automatically and immediately due and payable without
any notice to the Guarantor or any further action on the part of any person. In
addition to the remedies set forth in the preceding sentence and throughout this
Guaranty, the Guarantor acknowledges that upon breach by the Guarantor of the
Guaranteed Obligations relating to any covenant, agreement or undertaking of the
Borrowers other than for the payment of money, the Agent, the Banks and the
Issuing Bank shall be entitled to injunctive relief against the Guarantor, as a
remedy at law would be inadequate and insufficient. Nothing in this Guaranty
shall be construed as limiting the remedies of the Agent, the Banks and the
Issuing Bank in any way.
10. TAXES.
(a) All payments made by the Guarantor under this Agreement or any
other Loan Document shall be made free and clear of and without deduction for
any and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding (x) in the
case of each Bank and the Agent, net income taxes imposed on such Bank or the
Agent (as the case may be) by the United States, and net income taxes and
franchise taxes imposed on such Bank or the Agent (as the case may be) by the
jurisdiction under the laws of which such Bank or the Agent (as the case may be)
is organized or by any political subdivision thereof, and (y) in the case of
each Bank, net income taxes and franchise taxes imposed on such Bank by the
jurisdiction in which is located the Bank's lending office which makes or books
a particular extension of credit hereunder or any political subdivision thereof
(all such non-excluded taxes, levies, imposts, deduction, charges, withholdings
and liabilities being referred to as "Taxes"). If the Guarantor shall be
required by law to deduct any Taxes from or in respect of any sum payable under
this Agreement or any other Loan Document to any Bank or the Agent, (i) the sum
payable shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Paragraph 10) such Bank or the Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Guarantor shall make such deductions, and (iii) the Guarantor shall pay
the full amount deducted to the relevant taxation authority or other authority
in accordance with applicable law.
(b) In addition, the Guarantor agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made under this Agreement or any
other Loan Document or from the
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execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Document (hereinafter referred to as "Other Taxes").
(c) The Guarantor will indemnify each Bank and the Agent for the full
amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed by any jurisdiction on amounts payable under this Paragraph
10) paid by such Bank or the Agent (as the case may be) and any liability
(including, without limitation, penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. This indemnification shall be made within 30 days
from the date such Bank or the Agent (as the case may be) makes written demand
therefor. Guarantor shall have no obligation to make any payments pursuant to
the preceding sentence unless the Agent or such Bank has notified Guarantor of
the existence and amount of the liability for such Taxes or Other Taxes in
writing and in advance of payment to the relevant authority, it being understood
that Guarantor's payment obligation shall not be affected by the failure of
Agent or such Bank to notify Guarantor as specified herein unless as a
consequence of such failure Guarantor has been actually prejudiced.
(d) Within 30 days after the date of any payment of Taxes or Other
Taxes, the Guarantor will furnish to the Agent the original or a certified copy
of a receipt evidencing payment thereof. If no Taxes or Other Taxes are payable
in respect of any payment hereunder by the Guarantor through an account or
branch outside the United States or on behalf of the Guarantor by a payor that
is not a United States person, the Guarantor will furnish, or will cause such
payor to furnish, to the Agent a certificate from each appropriate taxing
authority or an opinion of counsel acceptable to the Agent, in either case
stating that such payment is exempt from or not subject to Taxes or Other Taxes.
For purposes of this Paragraph 10(d), the terms "United States" and "United
States person" shall have the meanings specified in Section 7701 of the Internal
Revenue Code.
(e) Without prejudice to the survival of any other agreement of the
Guarantor hereunder, the obligations of the Guarantor contained in this
Paragraph 10 shall survive the payment in full of all other obligations of the
Guarantor under this Agreement and the other Loan Documents, termination of all
commitments to extend credit under the Loan Documents, and all other events and
circumstances whatever. Nothing in this Paragraph 10 or otherwise in this
Agreement shall require the Agent or any Bank to disclose to the Guarantor any
of its tax returns (or any other information that it deems to be confidential or
proprietary).
(f) (i) Each Bank organized under the laws of a jurisdiction outside
the United States shall, on the date such Bank becomes party to the Loan
Agreement, and from time to time thereafter if requested in writing by the
Guarantor or the Agent, provide the Agent and the Guarantor with the forms
prescribed by the United States Internal Revenue Service certifying as to such
Bank's status for purposes of determining exemption from, or reduced rate
applicable to, United States withholding taxes with respect to payments to be
made to such Bank under this Agreement and the other Loan Documents; provided,
that a Bank shall not be obligated to
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provide any such form after the date such Bank becomes party to this Agreement
if such Bank is not legally able to do so.
(ii) The Guarantor shall not be required to indemnify any Bank, or to
pay any additional amounts to any Bank, in respect of United States withholding
taxes (or any withholding tax imposed by a state of the United States that
applies only when such United States withholding tax is imposed), pursuant to
Paragraphs 10(a) or 10(c), to the extent that: (A) the obligation to withhold
amounts with respect to United States withholding tax existed on the date such
Bank became a party to the Loan Agreement; provided, that this clause (A) shall
not apply to a Bank that became a Bank as a result of an assignment made or
other action taken at the request of a Borrower or the Guarantor, or (B) the
obligation to make such indemnification or to pay such additional amounts would
not have arisen but for a failure of such Bank to comply with the provisions of
Paragraph 10(f)(i).
(g) If a Bank or the Agent shall become aware that it is entitled to
claim a refund, credit or reduction in tax from a governmental agency or
authority in respect of Taxes or Other Taxes as to which it has been indemnified
by the Guarantor, or with respect to which the Guarantor has paid additional
amounts, pursuant to this Paragraph 10, it shall promptly notify the Guarantor
of the availability of such refund claim, credit or reduction in tax and shall,
within 30 days after receipt of a request by the Guarantor, make a claim to such
governmental agency or authority for such refund, credit or reduction in tax, at
the Guarantor's expense. If a Bank or the Agent receives a refund or realizes a
credit or reduction in tax in respect of any Taxes or Other Taxes as to which it
has been indemnified by the Guarantor, or with respect to which the Guarantor
has paid additional amounts, pursuant to this Paragraph 10, it shall promptly
after the date of such receipt pay over the amount of such refund or benefit of
such credit or reduction in tax to the Guarantor (but only to the extent of
indemnity payments made, or additional amounts paid, by the Guarantor under this
Paragraph 10 with respect to the Taxes or Other Taxes giving rise to such
refund, credit or reduction in tax and only to the extent that the Bank has
determined that the amount of any such refund, credit or reduction in tax is
directly attributable to payments made under this Agreement), net of all
reasonable expenses of the Bank or the Agent (including additional Taxes and
Other Taxes attributable to such refund, credit or reduction in tax, as
determined by the Bank) and without interest (other than interest, if any, paid
by the relevant governmental agency or authority with respect to such refund,
credit or reduction in tax). The Guarantor shall, upon demand, pay to such Bank
or Agent any amount paid over to the Guarantor by such Bank or Agent (plus
penalties, interest or other charges) in the event such Bank or the Agent is
required to repay any portion of such refund, credit or reduction in tax to such
governmental agency or authority.
11. PAYMENT; NO SET-OFF. The Guarantor hereby guarantees that the
Guaranteed Obligations for the payment of money will be paid to the Agent for
the benefit of the Agent, the Banks and the Issuing Bank without set-off,
counterclaim or other deduction of any nature, (a) with respect to Revolving
Credit Loans denominated in US Currency, in US Currency at the Agent's Domestic
Office and (b) with respect to Revolving Credit Loans denominated in
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any Other Currency, in such Other Currency at the Agent's London Office, in
either case in funds immediately available at such Office.
12. TERMINATION OF GUARANTY. This Guaranty shall terminate when all
Guaranteed Obligations have been paid in full, all commitments to extend credit
under the Loan Agreement have terminated, all Letters of Credit issued under the
Loan Agreement have terminated and all Secured Hedge Agreements have terminated.
13. FRAUDULENT CONVEYANCE/SOLVENCY. Anything to the contrary in this
Guaranty notwithstanding, at any time when the Guaranteed Obligations exceed the
Adjusted Net Worth of the Guarantor, the maximum liability of the Guarantor
hereunder shall not at any time exceed the greater of (a) the Adjusted Net Worth
of the Guarantor on the Closing Date or (b) the Adjusted Net Worth of the
Guarantor at the earlier of (x) the date of the commencement of a case under
Title 11 of the United States Code involving a Borrower or the Guarantor and (y)
the date enforcement hereunder is sought. "Adjusted Net Worth" of the Guarantor,
as of any date of determination thereof, means 95% of the excess of (x) the
aggregate fair saleable value of the assets of the Guarantor as of such date
determined in accordance with applicable federal and state laws governing
determination of the insolvency of debtors over (y) the amount of all
liabilities of such Guarantor, contingent or otherwise, as of such date,
determined on the basis provided in clause (x) above (but excluding all
potential liabilities under this Guaranty). At any time after the Guaranteed
Obligations are less than the Adjusted Net Worth of the Guarantor, the liability
of the Guarantor shall be limited to the lesser of (a) the amount of Guaranteed
obligations outstanding at such time or (b) the Adjusted Net Worth of the
Guarantor as of the Closing Date.
14. MISCELLANEOUS.
(a) No delay or failure on the part of the Agent, any of the Banks or
the Issuing Bank in exercising any right, remedy, power or privilege hereunder
shall affect such right, remedy, power or privilege, nor shall any single or
partial exercise thereof or any abandonment or discontinuance of steps to
enforce such right, remedy, power or privilege preclude any further exercise
thereof or any other right, remedy, power or privilege The rights and remedies
of the Agent, the Banks and the Is suing Bank hereunder are cumulative and not
exclusive of any rights or remedies which they would otherwise have. Any waiver,
permit, consent or approval of any kind or character on the part of the Agent,
the Banks or the Issuing Bank or of any breach or default under this Guaranty
must be in writing and shall be effective only to the extent in such writing
specifically set forth.
(b) Until such time as this Guaranty is terminated pursuant to
Paragraph 12 hereof, this Guaranty shall inure to the benefit of the Agent, the
Banks and the Issuing Bank and their respective successors and assigns and shall
bind the Guarantor and its successors or assigns. The Guarantor shall not assign
all or any part of this Guaranty without the prior written consent of the Agent.
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(c) If the Agent obtains a judgment against the Guarantor in any Other
Currency, the obligations of such Guarantor in respect of any sum adjudged to be
due to the Banks, the Agent or the Issuing Bank hereunder or under the Loan
Documents (the "Judgment Amount") shall be discharged only to the extent that,
on the Business Day following receipt by such Bank, the Agent or the Issuing
Bank of the Judgment Amount in such Other Currency, such Bank the Agent or the
Issuing Bank, in accordance with normal banking procedures, purchases Dollars
with the Judgment Amount in such Other Currency. If the amount of Dollars so
purchased is less than the amount of Dollars that could have been purchased with
the Judgment Amount on the date or dates the Judgment Amount (excluding the
portion of the Judgment Amount which has accrued as a result of the failure of
such Guarantor to pay the sum originally due hereunder or under the Notes when
it was originally due hereunder or under the Loan Documents) was originally due
and owing to the Banks, the Agent or the Issuing Bank hereunder or under the
Loan Documents (the "Original Due Date") (the "Loss"), the Guarantors agree,
jointly and severally, as a separate obligation and notwithstanding any such
judgment, to indemnify such Bank, the Agent or the Issuing Bank, as the case may
be, against the Loss, and if the amount of Dollars so purchased exceeds the
amount of Dollars that could have been purchased with the Judgment Amount on the
Original Due Date, such Bank, the Agent or the Issuing Bank agrees to remit such
excess to such Guarantor.
(d) This Guaranty shall be governed by and construed and enforced in
accordance with the laws of the Commonwealth of Pennsylvania.
(e) The paragraph headings in this Guaranty are for convenience of
reference only and shall not be deemed to alter or affect the meaning or
interpretation of any provision hereof.
(f) If any provision of this Guaranty shall for any reason be held
invalid or unenforceable, to the fullest extent permitted by law, such
invalidity or unenforceability shall not affect any other provision hereof, but
this Guaranty shall be construed as if such invalid or unenforceable provision
had never been contained herein.
(g) This Guaranty may be executed in one or more counterparts, all of
which shall constitute but one and the same instrument.
(h) All notices, requests, demands, directions and other communications
(collectively "notices") required or permitted hereunder shall be made in
accordance with Section 9.05 of the Credit Agreement. All notices shall be sent
to the applicable party at the address stated on the first page hereof or in
accordance with the last unrevoked written direction from such party to the
other parties hereto.
(i) This Guaranty is an amendment and restatement of (and not a
novation of) the Guaranty and Suretyship Agreement dated as of June 1, 1996 (as
amended, modified or supplemented from time to time, the "Original Agreement")
(without any discharge, release or satisfaction of the Original Agreement or any
indebtedness or obligations thereunder).
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IN WITNESS WHEREOF, the parties hereto have caused this Guaranty to
be duly executed and delivered on this 6th day of August 1998.
Attest: SYLVAN AMERICA, INC., as Guarantor
/s/ XXXXXX X. XXXXX By /s/ XXXX X. XXXXXXX
--------------------- ------------------------
Xxxxxx X. Xxxxx Name: Xxxx X. Xxxxxxx
Title: Secretary
[CORPORATE SEAL]
MELLON BANK, N.A., as Agent
By /s/ XXXX XXXXX-XXXXXXX
------------------------
Name: Xxxx Xxxxx-Xxxxxxx
Title: Assistant Vice President
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