EXHIBIT 10.5
GUARANTY
THIS GUARANTY (the "Guaranty"), dated as of January 31, 1997, is made by
NL INDUSTRIES, INC., a Delaware corporation (the "Guarantor"), in favor of
HYPOBANK INTERNATIONAL S.A. (the "Agent"), as agent for all the Banks listed on
Schedule 1 to the Loan Agreement (as hereinafter defined) and their successors
and assigns (collectively, with the Agent, the "Banks"). Capitalized terms used
herein, unless otherwise defined, shall have the meanings set forth in the Loan
Agreement.
W I T N E S S E T H:
WHEREAS, Kronos International, Inc., a Delaware corporation (the
"Borrower"), Kronos Titan-GmbH ("Kronos Titan"), the Agent and the Banks are,
concurrently herewith, entering into that certain Second Amended and Restated
Loan Agreement dated as of January 31, 1997 (as the same may be amended or
supplemented from time to time, the "Loan Agreement"), which Loan Agreement
amends and restates that certain Amended and Restated Loan Agreement dated as of
October 15, 1993, among the Borrower, the Agent, Banque Paribas, as Co-Agent
(the "Co-Agent"), and the Banks (or their predecessors in interest) (the "First
Restated Agreement"), which First Restated Agreement amends and restates that
certain Loan Agreement dated as of May 30, 1990, among the Borrower, the Agent,
the Co-Agent and the Banks (or their predecessors in interest) as amended by
that certain (i) First Amendment Agreement dated as of December 31, 1990, (ii)
Second Amendment Agreement dated as of March 22, 1991 and (iii) Third Amendment
Agreement dated as of June 15, 1992 (the "Original Agreement"), pursuant to
which the Banks (or their predecessors in interest) initially loaned to the
Borrower the principal amount of DM 1,600,000,000 (Deutsche Xxxx One Billion Six
Hundred Million) (the aggregate of any and all amounts advanced by the Banks or
their predecessors in interest under the Loan Agreement, the First Restated
Agreement and/or the Original Agreement and outstanding at any time, including
without limitation any and all amounts outstanding under the Term Portion or the
Revolving Portion (as such terms are defined in the Loan Agreement), is
hereinafter called the "Loans"); and
WHEREAS, in order to induce the Banks to amend and restate the First
Restated Agreement, the Guarantor is required to guarantee the prompt payment
when due of all principal, interest and other amounts that shall be at any time
payable by the Borrower or any of its Subsidiaries under the Loan Documents on
the terms and conditions set forth in this Guaranty;
NOW THEREFORE, for and in consideration of the above, and any and all
financial accommodations or extensions of credit (including, without limitation,
any loan or advance by renewal, refinancing or extension of the agreements
described herein) heretofore, now or hereafter made to or for the benefit of the
Borrower and/or Kronos Titan by the Banks, the Guarantor hereto covenants and
agrees as follows:
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ARTICLE I
The Guaranty
SECTION 1.1 The Guaranty. The Guarantor hereby unconditionally guarantees
to the Agent and the Banks and their respective successors and assigns the
punctual payment, as and when due (whether by acceleration or otherwise), of
(i) The principal amount of the Loans and all interest and
prepayment and other charges accruing thereunder;
(ii) All charges, payments, and other obligations of the Borrower
and/or Kronos Titan accruing under the Loan Agreement, the First Restated
Agreement and/or the Original Agreement; and
(iii) All charges, payments and other obligations of the Borrower,
Kronos Titan and/or any of the Subsidiaries of the Borrower accruing under this
Guaranty or any of the other Loan Documents (all of the foregoing, collectively,
the "Secured Indebtedness").
Upon failure by the Borrower, Kronos Titan and/or any of the Subsidiaries
of the Borrower to pay punctually any such amount, the Guarantor agrees that it
will forthwith on demand pay the amount not so paid at the place and in the
manner specified in the Loan Documents or as otherwise notified to the Guarantor
by the Agent.
SECTION 1.2 Guarantor's Obligation. The Guarantor agrees that its
liability hereunder shall be as a sole and primary obligor and not merely as
surety and that its liability is absolute and unconditional, and shall not be
subject to any right of set-off or counterclaim and shall remain in full force
and effect until the entire Secured Indebtedness shall have been paid in full.
SECTION 1.3 Waiver. The Guarantor hereby waives, to the fullest extent
permitted by law, notice of the acceptance hereof, diligence, presentment,
demand of payment or otherwise, and any right to require a proceeding first
against the Borrower, Kronos Titan and/or any other Person (including without
limitation any other Guarantor).
SECTION 1.4 No Effect or Impairment. The Guarantor hereby consents to and
agrees that its obligations under this Guaranty will not be discharged or
affected by: (i) any acceptance, forbearance or release in respect of the rights
of the Agent or the Banks or any subsequent holder under the Loan Agreement or
the Loan Documents, including, without limitation, any release of any of the
Collateral or any other guaranty of the Loans; (ii) any waiver or release of any
right or option of the Agent or the Banks or any subsequent holder under the
terms of the Loan Agreement or other Loan Documents, including, without
limitation, any release of any of the Collateral or any other guaranty of the
Loans; (iii) any modification, extension, renewal or amendment of the terms of
the Loan Agreement or other Loan Documents; (iv) the fact that the Loan
Agreement or any other Loan Documents shall be invalid, illegal or
unenforceable, in whole or in part, for any reason; (v) the receipt and
acceptance of notes, checks or other instruments for
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the payment of money by the Borrower, Kronos Titan and/or any Subsidiary and
extensions and renewals thereof; or (vi) except as otherwise provided herein,
any other act or omission of any kind by the Agent or the Banks or any
subsequent holder or the Borrower or Kronos Titan or any other circumstance
whatsoever which might constitute a legal or equitable discharge of the
Guarantor, including, without limitation, the bankruptcy of the Borrower, Kronos
Titan and/or any Subsidiary.
SECTION 1.5 Payments. All payments provided for herein shall be made in
immediately available funds in Deutsche Xxxx ("DM"); provided, however, that
payments provided for herein shall be made in immediately available funds in
U.S. Dollars if and to the extent that the payment provided for herein relates
to an amount payable by the Borrower and/or Kronos Titan in U.S. Dollars. The
obligation of the Guarantor to make payment in DM of any amounts due hereunder
to the Agent shall not be discharged or satisfied by any tender, or any recovery
pursuant to any judgment, which is expressed in or converted into any currency
other than DM, except to the extent that such tender or recovery shall result in
the actual receipt by the Agent of the full amount of DM expressed to be due and
owing in respect of the principal amount of and interest accrued on the Loans
and in regard to the other parts of the Secured Indebtedness expressed in DM.
The Guarantor agrees that the obligations to make payments in DM as aforesaid
shall be enforceable as an alternative or additional cause of action for the
purpose of recovery in DM of the amount (if any) by which such actual receipt
shall fall short of the full amount of DM expressed to be payable in respect of
any amount due hereunder, and shall not be affected by any judgment being
obtained for other sums in any other currency in enforcement of this Guaranty.
SECTION 1.6 Net Payments. All payments by the Guarantor under this
Agreement shall be made without setoff or counterclaim and free and clear of,
and without withholding or deduction for or on account of, any present or future
taxes (other than Excluded Taxes) now or hereafter imposed on the recipient of
such payment or its income, property, assets or franchises, except to the extent
that such withholding or deduction is required by applicable law or is permitted
under the Loan Agreement.
If any such withholding or deduction is required by applicable law or is
permitted under the Loan Agreement, the Guarantor will:
(i) pay to the relevant tax authorities the full amount so required
to be withheld or deducted when and as the same shall become due and payable to
such tax authorities;
(ii) promptly forward to the Agent and each of the affected Banks an
official receipt or other documentation satisfactory to the Agent evidencing
such payment to such tax authorities; and
(iii) except to the extent that such withholding or deduction is for
Excluded Taxes or, under the terms of the Loan Agreement, for additional amounts
which are not payable or have been waived, pay to the Agent for the account of
the relevant recipient such additional amount as is necessary to ensure that the
net amount actually received by each recipient will equal
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the full amount such recipient would have received had no such withholding or
deduction been required.
SECTION 1.7 Subrogation. The Guarantor shall not have any right to, and
will not, exercise any rights that it may acquire by way of subrogation under
this Guaranty (by any payment made hereunder or otherwise) until all the Secured
Indebtedness shall have been paid in full. If any amount shall be paid to the
Guarantor on account of such subrogation rights at any time when all the Secured
Indebtedness shall not have been paid in full, such amount shall be held in
trust for the benefit of the Agent and the Banks and shall forthwith be paid to
the Agent to be credited and applied to the payment of the Secured Indebtedness,
whether matured or unmatured, in accordance with the terms of the Loan
Agreement. If (i) all the Secured Indebtedness shall be paid in full, the Agent
and the Banks will, at the Guarantor's request, execute and deliver to the
Guarantor appropriate documents, without recourse and without representation or
warranty, necessary to evidence the transfer by subrogation to the Guarantor of
an interest in the Secured Indebtedness resulting from such payment by the
Guarantor.
SECTION 1.8 Revival of Obligation. If, after the Agent's or the other
Banks' receipt of any payment from the Borrower of all or any part of the
amounts paid under this Guaranty, or after the Agent's or the other Banks'
collection of the proceeds from the sale of any Collateral or from the payment
under any other guaranty, the Agent or the Banks are petitioned or compelled to
return any such payment or proceeds, because such payment or proceeds is
invalidated, declared fraudulent, set aside, determined to be void or voidable
as a preference, an impermissible setoff, or for any reason whatsoever, then the
Borrower's obligations (and Kronos Titan's obligations, if applicable) shall be
deemed to be revived and this Guaranty shall continue in full force as if such
payment or proceeds had not been received by the Agent or the Banks until
payment in full is made by the Guarantor. In addition, the Guarantor agrees to
indemnify and hold the Agent and the Banks harmless from and against and for any
and all damages, losses, costs or expenses (including without limitation,
reasonable attorneys' fees) incurred by them in connection with such surrender
or return.
ARTICLE II
Jurisdiction and Service
SECTION 2.1 Consent to Jurisdiction, Venue. The Guarantor represents and
warrants that it is not entitled to immunity from judicial proceedings and
agrees that, should the Agent bring any suit, action or proceeding in the
jurisdiction described below to enforce any obligation or liability of the
Guarantor under this Guaranty, no immunity from such suit, action or proceeding
will be claimed by or on behalf of the Guarantor or with respect to its assets
or property. The Guarantor irrevocably submits to the jurisdiction of any
federal or state court sitting in the City of New York, State of New York, or in
the City of Dallas, State of Texas, over any suit, action or proceeding arising
out of or relating to this Guaranty. The Guarantor irrevocably waives, to the
fullest extent permitted by law, any objection which it has or may hereafter
have to the laying of the venue of any such suit, action or proceeding brought
in such court and any claim that any such suit, action or proceeding brought in
such court has been
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brought in an inconvenient forum. The Guarantor agrees that final and
non-appealable judgment in any such suit, action or proceeding brought in such a
court shall be conclusive and binding upon the Guarantor and may be enforced in
any other courts to the jurisdiction of which the Guarantor is subject by a suit
upon such judgment, provided that service of process is effected upon the
Guarantor in one of the manners specified in Section 2.3 below or as otherwise
permitted by law.
SECTION 2.2 Appointment of Agent. The Guarantor hereby irrevocably
designates and appoints The Xxxxxxxx-Xxxx Corporation System, Inc., c/o
Corporation Service Company, 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000, as its
authorized agent to accept and acknowledge on its behalf service of any and all
process which may be served in any suit, action or proceeding of the nature
referred to in Section 2.1 in any court sitting in The City of New York, State
of New York. Said designation and appointment shall be irrevocable until the
Secured Indebtedness shall have been paid in full. If such agent for service
shall cease so to act, the Guarantor covenants and agrees that it shall
irrevocably designate and appoint without delay another such agent satisfactory
to the Agent and shall deliver promptly to the Agent evidence in writing of such
other agent's acceptance of such appointment.
SECTION 2.3 Service of Process. The Guarantor hereby consents to process
being served in any suit, action or proceeding of the nature referred to in
Section 2.1 either (a) by the mailing of a copy thereof by registered mail
(registered airmail if addressed to a location in a country other than the
country of mailing), postage prepaid, return receipt requested, to the address
for the Guarantor set forth on the signature page hereof or to any other address
of which the Guarantor shall have given written notice to Agent or such holder
or (b) by serving a copy thereof upon The Xxxxxxxx-Xxxx Corporation System,
Inc., c/o Corporation Service Company, 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxx
00000, as the Guarantor's agent for service of process (provided that, to the
extent lawful and possible, written notice of said service upon said agent of
the Guarantor shall be mailed by registered mail (registered airmail if
addressed to a location in a country other than the country of mailing), postage
prepaid, return receipt requested, to the Guarantor at its address specified
above or to any other address of which the Guarantor shall have given written
notice to the Agent. The Guarantor irrevocably waives, to the fullest extent
permitted by law, all claim of error by reason of any such service (but does not
waive any right to assert lack of subject matter jurisdiction) and agrees that
such service (i) shall be deemed in every respect effective service of process
upon the Guarantor in any such suit, action or proceeding and (ii) shall, to the
fullest extent permitted by law, be taken and held to be valid personal service
upon and personal delivery to the Guarantor.
SECTION 2.4 No Limitation on Service or Suit. Nothing in Sections 2.1, 2.2
or 2.3 above shall affect the right of the Agent to serve process in any manner
permitted by law or limit the right of the Agent or other holder to bring
proceedings against the Guarantor in the courts of any other jurisdiction.
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ARTICLE III
General Conditions
SECTION 3.1 Survival. All covenants, agreements, representations and
warranties made by the Guarantor in this Guaranty and in any certificates or
other documents delivered pursuant hereto shall survive and shall continue in
full force and effect until the Secured Indebtedness is paid in full.
SECTION 3.2 Assignment. The Agent may assign any and all rights it has
hereunder, either in whole or in part; the Guarantor may not assign any of its
rights or indebtedness, liabilities or obligations under this Guaranty except as
may be permitted in the Loan Agreement.
SECTION 3.3 Communications and Notices. All communications and notices
provided for in this Guaranty shall be in English, shall be in writing and shall
be in accord with Article 26 of the Loan Agreement.
SECTION 3.4 Stay of Acceleration. If acceleration of the time for payment
of any amount payable by the Borrower, Kronos Titan and/or any of the
Subsidiaries of the Borrower under the Loan Documents is stayed upon the
insolvency, bankruptcy or reorganization of the Borrower, Kronos Titan and/or
any such Subsidiary, all such amounts otherwise subject to acceleration under
the terms of the Loan Documents shall nonetheless be payable by the Guarantor
hereunder forthwith on demand by the Agent.
SECTION 3.5 Limitation on Guarantor's Obligations. The indebtedness,
liabilities and obligations of the Guarantor hereunder shall be limited to an
aggregate amount equal to the largest amount that would not render its
indebtedness, liabilities and obligations hereunder subject to avoidance under
Section 548 of the Bankruptcy Code or any applicable provisions of comparable
state law.
SECTION 3.6 Governing Law. This Guaranty shall be construed in accordance
with, and governed by the laws of, the State of New York.
SECTION 3.7 Headings of Articles and Sections. The headings of the
Articles and Sections of this Guaranty are inserted for convenience only and
shall not be deemed to constitute a part of this Guaranty.
SECTION 3.8 Severability. In case one or more of the provisions contained
in this Guaranty shall be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
SECTION 3.9 Execution in Counterparts. This Guaranty may be executed in
one or more counterparts, each of which when executed and delivered shall be an
original and all of which shall together constitute one and the same instrument.
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SECTION 3.10 Entire Agreement. This Guaranty embodies the entire agreement
and understanding between the Agent and the Guarantor relating to the subject
matter hereof and supersedes all prior agreements and understandings relating to
the subject matter hereof.
SECTION 3.11 No Waivers. No waiver by any party of any conditions, or of
any breach of any term, covenant, representation or warranty contained in the
instruments evidencing the Loans, the Loan Agreement, this Guaranty, or any of
the other Loan Documents in any one or more instances, shall be deemed to be or
construed as a further or continuing waiver of any such condition or breach or
waiver of any other condition or of any breach of any other term, covenant,
representation or warranty thereof; nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege.
SECTION 3.12 Changes, Waivers, Amendments and Modifications. Neither this
Guaranty nor any provision hereof may be modified or amended orally, but only by
a statement in writing entered into by the Guarantor and the Agent, provided
however, that no such agreement shall (i) affect the indebtedness, liabilities
and obligations of the Guarantor under Article I hereof or (ii) modify the
provisions of this Section 3.12, without the consent of the Banks in accordance
with the Loan Agreement.
SECTION 3.13 Definitions. Terms used but not defined herein shall have the
meanings provided for in the Loan Agreement unless otherwise expressly provided
or unless the context hereof otherwise requires.
SECTION 3.14 Costs and Expenses. The Guarantor covenants and agrees to
reimburse the Agent for all reasonable out-of-pocket costs and expenses,
including without limitation reasonable attorneys' fees and court costs,
incurred by the Agent in enforcing this Guaranty, and the Guarantor acknowledges
and agrees that all such sums to be so reimbursed by it to the Agent are part of
the Secured Indebtedness.
SECTION 3.15 Limitation of Special Damages. The Guarantor hereby releases
each of the Agent and all of the Banks from any liability for, and waives, and
agrees not to claim or xxx for any special, indirect or consequential damages,
suffered by the undersigned, in connection with any claim (whether sounding in
tort, contract or otherwise) in any way arising out of, related to, or connected
with the Loan Documents, whether such claim is asserted before or after
repayment in full of all of the Borrower's and/or Kronos Titan's indebtedness,
liabilities and obligations. This waiver shall inure to the benefit of the Agent
and the Banks and their respective successors and assigns and shall be binding
on the Guarantor and its successors and assigns.
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IN WITNESS WHEREOF, the parties hereto have caused this Guaranty to be
duly executed as of the date first stated above.
NL INDUSTRIES, INC.
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Vice President & Treasurr
Address: 00000 Xxxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
HYPOBANK INTERNATIONAL S.A.
By: /s/ Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx
Title: Charge de Service
Address: 0, xxx Xxxxxxxx Xxxxxxx
X-0000 Xxxxxxxxxx-Xxxxxxxxx
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