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Exhibit 10(b)(v)
EXECUTION COPY
SUBSIDIARY GUARANTY
GUARANTY, dated December 30, 1997, made by THE EL-BEE CHARGIT
CORP., an Ohio corporation (the "Guarantor"), in favor of the Guarantied Parties
referred to below.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, THE XXXXX-XXXXXXX STORES CORP., an Ohio corporation
(the "Borrower"), has entered into a Credit Agreement, dated as of December 30,
1997, with the financial institutions party thereto and Citibank, N.A., as agent
for said financial institutions (said Agreement, as it may be amended or
otherwise modified from time to time, being the "Credit Agreement", and
capitalized terms not defined herein but defined therein being used herein as
therein defined); and
WHEREAS, the Borrower owns beneficially and of record 100% of
the capital stock of the Guarantor, and the Borrower and the Guarantor are
members of the same consolidated group of companies and are engaged in related
businesses, and the Guarantor will derive direct and indirect economic benefit
from the Loans and Letters of Credit; and
WHEREAS, it is a condition precedent under the Credit
Agreement to the making of Loans and the issuance of Letters of Credit that the
Guarantor shall have executed and delivered this Guaranty; and
WHEREAS, the Lenders, the Issuers, the Agent and Citibank, as
obligee of the Borrower on Interest Rate Contracts, are herein referred to
collectively as the "Guarantied Parties";
NOW, THEREFORE, in consideration of the premises and to induce
the Lenders to make Loans and the Issuer to issue Letters of Credit, the
Guarantor hereby agrees as follows:
SECTION 1. GUARANTY. The Guarantor hereby unconditionally and
irrevocably guarantees the full and prompt payment when due, whether at stated
maturity, by acceleration or otherwise, of, and the performance of, the
Obligations, whether now or hereafter existing and whether
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for principal, interest, fees, expenses or otherwise, and any and all expenses
(including, without limitation, counsel fees and expenses) incurred by any of
the Guarantied Parties in enforcing any rights under this Guaranty. This
Guaranty is an absolute guaranty of payment and performance and not a guaranty
of collection.
SECTION 2. GUARANTY ABSOLUTE. The Guarantor guaranties that
the Obligations will be paid strictly in accordance with the terms of the
Credit Agreement, the Notes and the other Loan Documents, regardless of any
law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Guarantied Parties with
respect thereto. The liability of the Guarantor under this Guaranty shall be
absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of any provision of
any other Loan Document or any other agreement or instrument relating to any
Loan Document, or avoidance or subordination of any of the Obligations;
(ii) any change in the time, manner or place of payment of, or
in any other term of, or any increase in the amount of, all or any of the
Obligations, or any other amendment or waiver of any term of, or any consent to
departure from any requirement of, the Credit Agreement, the Notes or any of the
other Loan Documents;
(iii) any exchange, release or non-perfection of any Lien on
any collateral for, or any release or amendment or waiver of any term of any
other guaranty of, or any consent to departure from any requirement of any other
guaranty of, all or any of the Obligations;
(iv) the absence of any attempt to collect any of the
Obligations from the Borrower or for any other guarantor or any other action to
enforce the same or the election of any remedy by any of the Guarantied Parties;
(v) any waiver, consent, extension, forbearance or granting of
any indulgence by any of the Guarantied Parties with respect to any provision of
any other Loan Document;
(vi) the election by any of the Guarantied Parties in any
proceeding under chapter 11 of the Bankruptcy Code of
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the application of section 1111(b)(2) of the Bankruptcy Code;
(vii) any borrowing or grant of a security interest by the
Borrower, as debtor-in-possession, under section 364 of the Bankruptcy Code;
(viii) the disallowance, under section 502 of the Bankruptcy
Code, of all or any portion of the claims of any of the Guarantied Parties for
payment of any of the Obligations; or
(ix) any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a borrower or a guarantor.
SECTION 3. WAIVER. (a) The Guarantor hereby (i) waives (A)
promptness, diligence, notice of acceptance and any and all other notices with
respect to any of the Obligations or this Guaranty, (B) any requirement that any
of the Guarantied Parties protect, secure, perfect or insure any security
interest in or other Lien on any property subject thereto or exhaust any right
or take any action against the Borrower or any other Person or any Collateral,
(C) the filing of any claim with a court in the event of receivership or
bankruptcy of the Borrower, (D) protest or notice with respect to nonpayment of
all or any of the Obligations, (E) the benefit of any statute of limitation, (F)
all demands whatsoever (and any requirement that the same be made on the
Borrower as a condition precedent to the Guarantor's obligations hereunder); and
(ii) covenants and agrees that this Guaranty will not be discharged except by
complete performance of the Obligations and any other obligations of the
Guarantor contained herein.
(b) If, in the exercise of any of its rights and remedies, any
of the Guarantied Parties shall forfeit any of its rights or remedies,
including, without limitation, its right to enter a deficiency judgment against
the Borrower or any other Person, whether because of any applicable law
pertaining to "election of remedies" or the like, the Guarantor hereby consents
to such action by such Guarantied Party and waives any claim based upon such
action. Any election of remedies which results in the denial or impairment of
the right of such Guarantied Party to seek a deficiency judgment against the
Borrower shall not impair the obligation of the Guarantor to pay the full amount
of
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the Obligations or any other obligation of the Guarantor contained herein.
(c) The Guarantor agrees that notwithstanding the foregoing
and without limiting the generality of the foregoing if, after the occurrence
and during the continuance of an Event of Default, the Guarantied Parties are
prevented by applicable law from exercising their respective rights to
accelerate the maturity of the Obligations, to collect interest on the
Obligations, or to enforce or exercise any other right or remedy with respect to
the Obligations, or the Agent is prevented from taking any action to realize on
the Collateral, the Guarantor agrees to pay to the Agent for the account of the
Guarantied Parties, upon demand therefor, the amount that would otherwise have
been due and payable had such rights and remedies been permitted to be exercised
by the Guarantied Parties.
(d) The Guarantor hereby assumes responsibility for keeping
itself informed of the financial condition of the Borrower and of each other
guarantor of all or any part of the Obligations, and of all other circumstances
bearing upon the risk of nonpayment of the Obligations or any part thereof, that
diligent inquiry would reveal. The Guarantor hereby agrees that the Guarantied
Parties shall have no duty to advise the Guarantor of information known to any
of the Guarantied Parties regarding such condition or any such circumstance. In
the event that any Guaranty Party in its sole discretion undertakes at any time
or from time to time to provide any such information to the Guarantor, such
Guarantied Party shall be under no obligation (i) to undertake any investigation
not a part of its regular business routine, (ii) to disclose any information
which, pursuant to accepted or reasonable banking or commercial finance
practices, such Guarantied Party wishes to maintain confidential or (iii) to
make any other or future disclosures of such information or any other
information to the Guarantor.
(e) The Guarantor consents and agrees that the Guarantied
Parties shall be under no obligation to xxxxxxxx any assets in favor of the
Guarantor or otherwise in connection with obtaining payment of any or all of the
Obligations from any Person or source.
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SECTION 4. DELAY OF SUBROGATION, ETC. The Guarantor agrees
that it will not exercise any rights which it may acquire by way of subrogation,
contribution or reimbursement by reason of this Guaranty or by any payment made
hereunder until the Obligations have been paid in full.
SECTION 5. REPRESENTATIONS AND WARRANTIES. The Guarantor
hereby represents and warrants to the Guarantied Parties as follows:
(a) The Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Ohio; (ii) is duly
qualified as a foreign corporation and in good standing under the laws of each
jurisdiction, except for failures which in the aggregate would have no Material
Adverse Effect; (iii) has all requisite corporate power and authority and the
legal right to own, pledge, mortgage and operate its properties, to lease the
property it operates under lease and to conduct its business as now or currently
proposed to be conducted; (iv) is in compliance with its certificate of
incorporation and by-laws; (v) is in compliance with all other applicable
Requirements of Law except for such noncompliances as in the aggregate would
have no Material Adverse Effect; and (vi) has all necessary licenses, permits,
consents or approvals from or by, has made all necessary filings with, and has
given all necessary notices to, each Governmental Authority having jurisdiction,
to the extent required for such ownership, operation and conduct, except for
licenses, permits, consents or approvals which can be obtained by the taking of
ministerial action to secure the grant or transfer thereof or failures which in
the aggregate would have no Material Adverse Effect.
(b) The execution, delivery and performance by the Guarantor
of this Guaranty and the other Loan Documents to which it is a party:
(i) are within its corporate powers;
(ii) have been duly authorized by all necessary corporate
action, including, without limitation, the consent of stockholders
where required; and
(iii) do not and will not (A) contravene its certificate of
incorporation or by-laws or other comparable governing documents, (B)
violate any other
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applicable Requirement of Law (including, without limitation,
Regulations G, T, U and X of the Board of Governors of the Federal
Reserve System), or any order or decree of any Governmental Authority
or arbitrator, (C) conflict with or result in the breach of, or
constitute a default under, or result in or permit the termination or
acceleration of, any of its Contractual Obligations, (D) result in the
creation or imposition of any Lien upon any of its property other than
those in favor of the Agent on behalf of and for the ratable benefit of
the Secured Parties, or (E) require the consent, authorization by, or
approval of, or notice to, or filing or registration with, any
Governmental Authority or any other Person, other than those which have
been obtained and copies of which have been delivered to the Agent
pursuant to Section 3.1 of the Credit Agreement, each of which is in
full force and effect.
(c) This Guaranty has been duly executed and delivered by the
Guarantor and is the legal, valid and binding obligation of the Guarantor
enforceable against it in accordance with its terms.
(d) There are no pending or, to the knowledge of the
Guarantor, threatened actions, investigations or proceedings affecting the
Guarantor or any of its subsidiaries before any Governmental Authority or
arbitrator other than those that in the aggregate could not reasonably be
expected to have a Material Adverse Effect. The performance by the Guarantor
under this Guaranty and under each of the other Loan Documents to which it is a
party is not restrained or enjoined (either temporarily, preliminarily or
permanently) and no conditions have been imposed by any Governmental Authority
or arbitrator that in the aggregate could reasonably be expected to have a
Material Adverse Effect.
SECTION 6. AMENDMENTS, ETC. No amendment or waiver of any
provision of this Guaranty nor consent to any departure by the Guarantor
herefrom shall in any event be effective unless the same shall be in writing,
approved by the Majority Lenders and signed by the Agent, and then such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given; PROVIDED, HOWEVER, that no amendment, waiver or consent
shall, unless in writing and signed by all the Guarantied
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Parties, limit the liability of the Guarantor (other than as expressly provided
herein) or postpone any date fixed for payment hereunder.
SECTION 7. ADDRESSES FOR NOTICES. All notices and other
communications provided for hereunder shall be in writing (including
telegraphic, telex, telecopy or cable communication) and mailed, telegraphed,
telexed, telecopied, cabled or delivered by hand, if to the Guarantor, addressed
to it at the address of such Guarantor specified on the signature pages hereof,
if to any Guarantied Party, addressed to it at the address of such Guarantied
Party specified in the Credit Agreement, or, as to each party, at such other
address as shall be designated by such party in a written notice to each other
party complying as to delivery with the terms of this Section. All such notices
and other communications shall, when mailed, telegraphed, telexed, telecopied,
cabled or delivered, be effective when deposited in the mails, delivered to the
telegraph company, confirmed by telex answerback, telecopied with confirmation
of receipt, delivered to the cable company or delivered by hand to the addressee
or its agent, respectively.
SECTION 8. NO WAIVER; REMEDIES. (a) No failure on the part of
any Guarantied Party to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law or any of the other Loan
Documents.
(b) Failure by any of the Guarantied Parties at any time or
times hereafter to require strict performance by the Borrower, the Guarantor or
any other Person of any of the provisions, warranties, terms or conditions
contained in any of the Loan Documents now or at any time or times hereafter
executed by the Borrower, the Guarantor or such other Person and delivered to
any of the Guarantied Parties shall not waive, affect or diminish any right of
any of the Guarantied Parties at any time or times hereafter to demand strict
performance thereof, and such right shall not be deemed to have been modified or
waived by any course of conduct or knowledge of any of the Guarantied Parties or
any agent, officer, employee of any of the Guarantied Parties.
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(c) No waiver by the Guarantied Parties of any default shall
operate as a waiver of any other default or the same default on a future
occasion, and no action by any of the Guarantied Parties permitted hereunder
shall in any way affect or impair any of the rights of the Guarantied Parties or
the obligations of the Guarantor under this Guaranty or under any of the other
Loan Documents. Any determination by a court of competent jurisdiction of the
amount of any principal and/or interest or other amount constituting any of the
Obligations shall be conclusive and binding on the Guarantor irrespective of
whether the Guarantor was a party to the suit or action in which such
determination was made.
SECTION 9. RIGHT OF SET-OFF. Upon the occurrence and during
the continuance of any Event of Default, each of the Guarantied Parties is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by such Guarantied Party to or for the credit or the account of
the Guarantor against any and all of the obligations of the Guarantor now or
hereafter existing under this Guaranty, irrespective of whether or not such
Guarantied Party shall have made any demand under this Guaranty and although
such obligations may be contingent and unmatured. Each of the Guarantied Parties
agrees promptly to notify the Guarantor after any such set-off and application
made by such Guarantied Party; PROVIDED, HOWEVER, that the failure to give such
notice shall not affect the validity of such set-off and application. The rights
of each Guarantied Party under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which such
Guarantied Party may have.
SECTION 10. CONTINUING GUARANTY; TRANSFER OF NOTES. This
Guaranty is a continuing guaranty and shall (i) remain in full force and effect
until indefeasible payment in full of the Obligations and all other amounts
payable under this Guaranty, (ii) be binding upon the Guarantor, its successors
and assigns, and (iii) inure to the benefit of and be enforceable by the
Guarantied Parties and their respective successors, transferees, and assigns.
Without limiting the generality of the foregoing clause (iii), any of the
Guarantied Parties may assign or otherwise transfer any Note held by it or
Obligation owing to it to any other
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Person, and such other Person shall thereupon become vested with all the rights
in respect thereof granted to such Guarantied Party herein or otherwise with
respect to such of the Notes and Obligations so transferred or assigned,
subject, however, to compliance with the provisions of Section 10.7 of the
Credit Agreement in respect of assignments.
SECTION 11. LIMITATION OF GUARANTY. Any term or provision of
this Guaranty or any other Loan Document to the contrary notwithstanding, the
maximum aggregate amount of the Obligations for which the Guarantor shall be
liable shall not exceed the maximum amount for which such Guaranty can be liable
without rendering this Guaranty or any other Loan Document, as it relates to
such Guarantor, voidable under applicable law relating to fraudulent conveyance
or fraudulent transfer.
SECTION 12. CONTRIBUTION. To the extent that any Guarantor
shall be required hereunder to pay a portion of the Obligations which shall
exceed the greater of (i) the amount of the economic benefit actually received
by such Guarantor from the Obligations and (ii) the amount which such Guarantor
would otherwise have paid if such Guarantor had paid the aggregate amount of the
Obligations (excluding the amount thereof repaid by the Borrower and the other
Guarantor) in the same proportion as such Guarantor's net worth at the date
enforcement hereunder is sought bears to the aggregate net worth of all the
Guarantors at the date enforcement hereunder is sought, then such Guarantor
shall be reimbursed by the other Guarantors for the amount of such excess, pro
rata based on the respective net worths of the other Guarantors at the date
enforcement hereunder is sought.
SECTION 13. REINSTATEMENT. This Guaranty shall remain in full
force and effect and continue to be effective should any petition be filed by or
against any Loan Party for liquidation or reorganization, should any Loan Party
become insolvent or make an assignment for the benefit of creditors or should a
receiver or trustee be appointed for all or any significant part of any Loan
Party's assets, and shall, to the fullest extent permitted by law, continue to
be effective or be reinstated, as the case may be, if at any time payment and
performance of the Obligations, or any part thereof, is, pursuant to applicable
law, rescinded or reduced in amount, or must otherwise be restored or returned
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by any obligee of the Obligations or such part thereof, whether as a "voidable
preference," "fraudulent transfer," or otherwise, all as though such payment or
performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Obligations shall, to
the fullest extent permitted by law, be reinstated and deemed reduced only by
such amount paid and not so rescinded, reduced, restored or returned.
SECTION 14. GOVERNING LAW. This Guaranty shall be governed by,
and be construed and interpreted in accordance with, the law of the State of New
York. Wherever possible, each provision of this Guaranty shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Guaranty shall be prohibited by or invalid under applicable
law, such provision shall be ineffective only to the extent of such prohibition
or invalidity and without invalidating the remaining provisions of this
Guaranty.
SECTION 15. SUBMISSION TO JURISDICTION; JURY TRIAL. (a) Any
legal action or proceeding with respect to this Guaranty or any document related
thereto may be brought in the courts of the State of New York or the United
States of America for the Southern District of New York, and, by execution and
delivery of this Guaranty, the Guarantor hereby accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction of the
aforesaid courts. The Guarantor hereby irrevocably waives any objection,
including, without limitation, any objection to the laying of venue or based on
the grounds of FORUM NON CONVENIENS, which it may now or hereafter have to the
bringing of any such action or proceeding in such respective jurisdictions and
consents to the granting of such legal or equitable relief as is deemed
appropriate by the court.
(b) The Guarantor irrevocably consents to the service of
process of any of the aforesaid courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
the Guarantor at its address provided herein, such service to become effective
30 days after such mailing.
(c) Nothing contained in this Section 15 shall affect the
right of any Guarantied Party to serve process in any other manner permitted by
law or commence legal
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proceedings or otherwise proceed against the Guarantor or any of the Guarantor's
property in any other jurisdiction.
(d) The guarantor waives any right it may have to trial by
jury in respect of any litigation based on, arising out of, under or in
connection with this Guaranty or any other loan document, or any course of
conduct, course of dealing, verbal or written statement or other action of any
loan party or any guarantied party.
SECTION 16. SECTION TITLES. The Section titles contained in
this Guaranty are and shall be without substantive meaning or content of any
kind whatsoever and are not a part of this Guaranty.
SECTION 17. EXECUTION IN COUNTERPARTS. This Guaranty may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
Guaranty.
SECTION 18. MISCELLANEOUS. All references herein to the
Borrower or to the Guarantor shall include their respective successors and
assigns, including, without limitation, a receiver, trustee or
debtor-in-possession of or for the Borrower or the Guarantor. All references to
the singular shall be deemed to include the plural where the context so
requires.
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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to
be duly executed and delivered by its duly authorized officer on the date first
above written.
THE EL-BEE CHARGIT CORP.
By:_________________________
Title: President
ADDRESS FOR NOTICES:
0000 Xx-Xxx Xxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx
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