SUBSIDIARY GUARANTEE AGREEMENT dated as
of ______________, among each of the Persons
listed on Schedule I hereto (each such Person
individually, a "Subsidiary Guarantor" and
collectively, the "Subsidiary Guarantors")
Prospect Street NYC Discovery Fund, L.P.
("Prospect") and the Bank of New York, as
Trustee for the Employees Retirement Plan of
the Brooklyn Union Gas Company ("Bug") and any
other lender from time to time a party to the
Credit Agreement (defined below)
(collectively, the "Lenders").
Reference is made to the Senior Credit Agreement dated as of
December __, 1996 (as amended, modified or restated from time to time, the
"Credit Agreement"), among Skyline Multimedia Entertainment, Inc., New York
Skyline, Inc., Skyline Virtual Reality, Inc., Skyline Chicago, Inc., Skyline
Magic, Inc. and Skyline Las Vegas, Inc. (collectively, the "Borrowers"), and the
Lenders. Capitalized terms used herein and not defined herein shall have the
meanings assigned to such terms in the Credit Agreement.
The Lenders have agreed to make Loans to the Borrowers
pursuant to, and upon the terms and subject to the conditions specified in, the
Credit Agreement. Each of the Subsidiary Guarantors is a wholly owned Subsidiary
of the Borrower specified in Schedule 1 hereto and acknowledges that it will
derive substantial benefit from the making of the Loans by the Lenders. The
obligations of the Lenders to make Loans are conditioned on, among other things,
the agreement by the Borrowers to cause any of their respective subsidiaries
created subsequent to the date of the Credit Agreement to execute and deliver a
Subsidiary Guarantee Agreement in the form hereof. As consideration for Loans
previously made, and in order to induce the Lenders to make Additional Loans,
the Subsidiary Guarantors are willing to execute this Agreement.
Accordingly, the parties hereto agree as follows:
SECTION 1. Guarantee. Each Subsidiary Guarantor
unconditionally guarantees, jointly with the other Subsidiary Guarantors and
severally, as a primary obligor and not merely as a surety, (a) the due and
punctual payment of (i) the principal of and premium, if any, and interest
(including interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) on the Loans, when and as due, whether at
maturity, by acceleration, upon one or
more dates set for prepayment or otherwise, and (ii) other monetary obligations,
including fees, costs, expenses and indemnities, whether primary, secondary,
direct, contingent, fixed or otherwise (including monetary obligations incurred
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding), of
any Borrower to any Lender under the Credit Agreement and any Operative
Agreement and (b) the due and punctual performance of all covenants, agreements,
obligations and liabilities of each Borrower under or pursuant to the Credit
Agreement and any Operative Agreement (all the monetary and other obligations
referred to in the preceding clauses (a) and (b) being collectively called the
"Obligations"). Each Subsidiary Guarantor further agrees that the Obligations
may be extended or renewed, in whole or in part, without notice to or further
assent from it, and that it will remain bound upon its guarantee notwithstanding
any extension or renewal of any Obligation.
Anything contained in this Agreement to the contrary
notwithstanding, the obligations of each Subsidiary Guarantor hereunder shall be
limited to a maximum aggregate amount equal to the greatest amount that would
not render such Subsidiary Guarantor's obligations hereunder subject to
avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11
of the United States Code or any provisions of applicable state law
(collectively, the "Fraudulent Transfer Laws"), in each case after giving effect
to all other liabilities of such Subsidiary Guarantor, contingent or otherwise,
that are relevant under the Fraudulent Transfer Laws (specifically excluding,
however, the liabilities of such Subsidiary Guarantor (a) in respect of
intercompany indebtedness to any Borrower or Affiliate of any Borrower to the
extent that such indebtedness would be discharged in an amount equal to the
amount paid by such Subsidiary Guarantor hereunder and (b) under any guarantee
of indebtedness, which guarantee contains a limitation as to maximum amount
similar to that set forth in this paragraph, pursuant to which the liability of
such Subsidiary Guarantor hereunder is included in the liabilities taken into
account in determining such maximum amount) and after giving effect as assets to
the value (as determined under the applicable provisions of the Fraudulent
Transfer Laws) of any rights to subrogation, contribution, reimbursement,
indemnity or similar rights of such Subsidiary Guarantor pursuant to (i)
applicable law or (ii) any agreement providing for an equitable allocation among
such Subsidiary Guarantor and other Affiliates of any Borrower of obligations
arising under guarantees by such parties (including the Indemnity, Subrogation
and Contribution Agreement).
SECTION 2. Obligations Not Waived. To the fullest extent
permitted by applicable law, each Subsidiary Guarantor waives presentment to,
demand of payment from and protest to any Borrower of any of the Obligations,
and also waives notice of acceptance of its guarantee and notice of protest for
nonpayment. To the fullest extent permitted by applicable law, the obligations
of each Subsidiary Guarantor hereunder shall not be affected by (a) the failure
of any Lender to assert any claim or demand or to enforce or exercise any right
or remedy against any Borrower or any other Subsidiary Guarantor under the
provisions of the Credit Agreement or otherwise, (b) any rescission, waiver,
amendment or modification of, or any release from any of the terms or provisions
of this Agreement, any guarantee or any other
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agreement, including with respect to any other Subsidiary Guarantor under this
Agreement or (c) the failure of any Borrower or any Subsidiary to comply with
Section 19.
SECTION 3. Guarantee of Payment. Each Subsidiary Guarantor
further agrees that its guarantee constitutes a guarantee of payment when due
and not of collection, and waives any right to require that any
resort be had by any Lender to any balance of any deposit account or credit on
the books of any Lender in favor of any Borrower or any other Person.
SECTION 4. No Discharge or Diminishment of Guarantee. The
obligations of each Subsidiary Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason (other than the
indefeasible payment in full in cash of the Obligations), including any claim of
waiver, release, surrender, alteration or compromise of any of the Obligations,
and shall not be subject to any defense or setoff, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of each Subsidiary Guarantor
hereunder shall not be discharged or impaired or otherwise affected by the
failure of any Lender to assert any claim or demand or to enforce any remedy
under the Credit Agreement, any Operative Agreement or any other agreement, by
any waiver or modification of any provision of any thereof, by any default,
failure or delay, wilful or otherwise, in the performance of the Obligations, or
by any other act or omission that may or might in any manner or to any extent
vary the risk of any Subsidiary Guarantor or that would otherwise operate as a
discharge of any Subsidiary Guarantor as a matter of law or equity (other than
the indefeasible payment in full in cash of all the Obligations and the
termination of the Commitments).
SECTION 5. Defenses of the Borrowers Waived. To the fullest
extent permitted by applicable law, each of the Subsidiary Guarantors waives any
defense based on or arising out of any defense of any Borrower or the
unenforceability of the Obligations or any part thereof from any cause, or the
cessation from any cause of the liability of any Borrower, other than the final
and indefeasible payment in full in cash of the Obligations and the termination
of the Commitments. The Lenders may, at their election, foreclose on any
security held by one or more of them by one or more judicial or nonjudicial
sales, accept an assignment of any such security in lieu of foreclosure,
compromise or adjust any part of the Obligations, make any other accommodation
with any Borrower or any other guarantor or exercise any other right or remedy
available to them against any Borrower or any other Subsidiary Guarantor or
other guarantor, without affecting or impairing in any way the liability of any
Subsidiary Guarantor hereunder except to the extent the Obligations have been
fully and indefeasibly paid in cash and the Commitments have been terminated.
Pursuant to applicable law, each of the Subsidiary Guarantors waives any defense
arising out of any such election even though such election operates, pursuant to
applicable law, to impair or to extinguish any right of reimbursement or
subrogation or other right or remedy of such Subsidiary Guarantor against any
Borrower or any other Subsidiary Guarantor or other guarantor, as the case may
be, or any security.
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SECTION 6. Agreement to Pay; Subordination. In furtherance of
the foregoing and not in limitation of any other right that any Lender has at
law or in equity against any Subsidiary Guarantor by virtue hereof, upon the
failure of any Borrower to pay any Obligation when and as the same shall become
due, whether at maturity, by acceleration, after notice of prepayment or
otherwise, each Subsidiary Guarantor hereby promises to and will forthwith pay,
or cause to be paid, to the Lenders in cash the amount of such unpaid
Obligations. Upon payment by any Subsidiary Guarantor of any sums to any
Borrower or any Lender as provided above, all rights of such Subsidiary
Guarantor against any Borrower arising as a result thereof by way of right of
subrogation, contribution, reimbursement, indemnity or otherwise shall in all
respects be subordinate and junior in right of payment to the prior indefeasible
payment in full in cash of all the Obligations. In addition, any indebtedness
of any Borrower now or hereafter held by any Subsidiary Guarantor is hereby
subordinated in right of payment to the prior payment in full of the
Obligations. If any amount shall erroneously be paid to any Subsidiary
Guarantor on account of (i) such subrogation, contribution, reimbursement,
indemnity or similar right or (ii) any such Indebtedness of any Borrower, such
amount shall be held in trust for the benefit of the Lenders and shall forthwith
be paid to the Lenders to be credited against the payment of the Obligations,
whether matured or unmatured, in accordance with terms of the Credit Agreement.
SECTION 7. Information. Each of the Subsidiary Guarantors
assumes all responsibility for being and keeping itself informed of the
Borrowers' financial condition and assets, and of all other circumstances
bearing upon the risk of nonpayment of the Obligations and the nature, scope and
extent of the risks that such Subsidiary Guarantor assumes and incurs hereunder,
and agrees that no Lender will have any duty to advise any of the Subsidiary
Guarantors of information known to it or any of them regarding such
circumstances or risks.
SECTION 8. Representations and Warranties. Each of the
Subsidiary Guarantors represents and warrants as to itself that all
representations and warranties relating to it contained in the Credit Agreement
are true and correct in all material respects (if not qualified by materiality
or material adverse effect) and in all respects (if qualified by materiality or
material adverse effect) on and as of the date hereof. Each of the Subsidiary
Guarantors represents and warrants to the Lenders that this Agreement has been
duly authorized, executed and delivered by it and constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its terms.
SECTION 9. Termination. The Guarantees made hereunder (a)
shall terminate when all the Obligations have been indefeasibly paid in full and
the Commitments have been terminated and (b) shall continue to be effective or
be reinstated, as the case may be, if at any time payment, or any part thereof,
of any Obligation is rescinded or must otherwise be restored by any Lender or
any Subsidiary Guarantor upon the bankruptcy or reorganization of any Borrower,
any Subsidiary Guarantor or otherwise.
SECTION 10. Binding Agreement; Assignments. Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors
4
and assigns of such party; and all covenants, promises and agreements by or on
behalf of the Subsidiary Guarantors that are contained in this Agreement shall
bind and inure to the benefit of each party hereto and their respective
successors and assigns. This Agreement shall become effective as to any
Subsidiary Guarantor when a counterpart hereof executed on behalf of such
Subsidiary Guarantor shall have been delivered to the Lenders, and a counterpart
hereof shall have been executed on behalf of the Lenders, and thereafter shall
be binding upon such Subsidiary Guarantor and the Lenders and their respective
successors and assigns, and shall inure to the benefit of such Subsidiary
Guarantor and the Lenders, and their respective successors and assigns, except
that no Subsidiary Guarantor shall have the right to assign or transfer any of
its rights or obligations hereunder or any interest herein (and any such
attempted assignment or transfer shall be void) without the prior written
consent of the Required Lenders, except in connection with any transaction
permitted by Section 7.3 of the Credit Agreement.
SECTION 11. Waivers; Amendment. (a) No failure or delay of
any Lender in exercising any right, power or remedy hereunder shall operate as a
wavier thereof, nor shall any single or partial exercise of any such right,
power or remedy, or any abandonment or discontinuance of steps to enforce such
right, power or remedy, preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. The rights, powers and remedies
of any Lender hereunder and under the Credit Agreement are cumulative and are
not exclusive of any rights, powers or remedies provided by law or otherwise.
No waiver of any provision of this Agreement or consent to any departure by any
Subsidiary Guarantor therefrom shall in any event be effective unless the same
shall be permitted by paragraph (b) below, and then such waiver or consent shall
be effective only in the specific instance and for the purpose for which given.
No notice or demand on any Subsidiary Guarantor in any case shall entitle such
Subsidiary Guarantor to any other or further notice or demand in similar or
other circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to a written agreement entered into
between the Subsidiary Guarantors with respect to which such waiver, amendment
or modification relates and the Required Lenders.
SECTION 12. Governing Law. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE
(WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE
THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW
YORK.
SECTION 13. Notices. All communications and notices hereunder
shall be in writing and given as provided in Section 10.1 of the Credit
Agreement. All communications and notices hereunder to each Subsidiary
Guarantor shall be given to it in care of the Borrowers.
5
SECTION 14. Survival of Agreement; Severability. (a) All
covenants, agreements, representations and warranties made by the Subsidiary
Guarantors herein and in the certificates or other instruments prepared or
delivered in connection with or pursuant to this Agreement shall be considered
to have been relied upon by the Lenders and shall survive the making by the
Lenders of the Loans regardless of any investigation made by any of them or on
their behalf, and shall continue in full force and effect until the indefeasible
payment in full in cash of the Obligations and the termination of the
Commitments.
(b) If any provision of this Agreement is held to be illegal,
invalid or unenforceable under any present or future Law, and if the rights or
obligations of any party hereto under this Agreement will not be materially and
adversely affected thereby, (i) such provision will be fully severable, (ii)
this Agreement will be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof, (iii) the remaining
provisions of this Agreement will remain in full force and effect and will not
be affected by the illegal, invalid or unenforceable provision or by its
severance herefrom and (iv) in lieu of such illegal, invalid or unenforceable
provision, there will be added automatically as a part of this Agreement a
legal, valid and enforceable provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible.
SECTION 15. Counterparts. This Agreement may be executed in
any number of counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
SECTION 16. Rules of Interpretation. The rules of
interpretation specified in Section 1.1(b) of the Credit Agreement shall be
applicable to this Agreement.
SECTION 17. Consent to Jurisdiction and Service of Process.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY SUBSIDIARY GUARANTOR WITH RESPECT
TO THIS AGREEMENT, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEW YORK AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT EACH SUBSIDIARY GUARANTOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH
ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF
THE AFORESAID COURTS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. EACH SUBSIDIARY GUARANTOR
DESIGNATES AND APPOINTS THE CORPORATION TRUST COMPANY AND SUCH OTHER PERSONS AS
MAY HEREAFTER BE SELECTED BY ANY OF THEM IRREVOCABLY AGREEING IN WRITING TO
SERVE, AS ITS AGENT TO RECEIVE ON ITS BEHALF, SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY EACH OF
THEM TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. A COPY OF SUCH
PROCESS SO SERVED SHALL BE MAILED BY REGISTERED MAIL TO EACH SUBSIDIARY
GUARANTOR AT ITS ADDRESS
6
PROVIDED IN SCHEDULE I HERETO, EXCEPT THAT UNLESS OTHERWISE PROVIDED BY
APPLICABLE LAW, ANY FAILURE TO MAIL SUCH COPY SHALL NOT AFFECT THE VALIDITY OF
SERVICE OF PROCESS. IF ANY AGENT APPOINTED BY ANY SUBSIDIARY GUARANTOR REFUSES
TO ACCEPT SERVICE, SUCH SUBSIDIARY GUARANTOR HEREBY AGREES THAT SERVICE UPON IT
BY MAIL SHALL CONSTITUTE SUFFICIENT NOTICE. NOTHING HEREIN SHALL AFFECT THE
RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE
RIGHT OF ANY LENDER TO BRING PROCEEDINGS AGAINST ANY SUBSIDIARY GUARANTOR IN THE
COURTS OF ANY OTHER JURISDICTION.
SECTION 18. Waiver of Jury Trial. EACH SUBSIDIARY GUARANTOR
HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY
LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF
THIS AGREEMENT OR THE VALIDITY, PROTECTION, INTERPRETATION, COLLECTION OR
ENFORCEMENT THEREOF; AND EACH SUBSIDIARY GUARANTOR HEREBY WAIVES, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, THE RIGHT TO INTERPOSE ANY SET-OFF OR COUNTERCLAIM
OR CROSS-CLAIM IN CONNECTION WITH ANY SUCH LITIGATION, IRRESPECTIVE OF THE
NATURE OF SUCH SET-OFF, COUNTERCLAIM OR CROSS-CLAIM EXCEPT TO THE EXTENT THAT
THE FAILURE SO TO ASSERT ANY SUCH SET-OFF, COUNTERCLAIM OR CROSS-CLAIM WOULD
PERMANENTLY PRECLUDE THE PROSECUTION OF OR RECOVERY UPON SAME. NOTWITHSTANDING
ANYTHING CONTAINED IN THIS AGREEMENT TO THE CONTRARY, NO CLAIM MAY BE MADE BY
ANY SUBSIDIARY GUARANTOR AGAINST ANY LENDER FOR ANY LOST PROFITS OR ANY SPECIAL,
INDIRECT OR CONSEQUENTIAL DAMAGES IN RESPECT OF ANY BREACH OR WRONGFUL CONDUCT
(OTHER THAN WILLFUL MISCONDUCT CONSTITUTING ACTUAL FRAUD) IN CONNECTION WITH,
ARISING OUT OF OR IN ANY WAY RELATED TO THE TRANSACTIONS CONTEMPLATED HEREUNDER
OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH; EACH SUBSIDIARY
GUARANTOR HEREBY WAIVES, RELEASES AND AGREES NOT TO XXX UPON ANY SUCH CLAIM FOR
ANY SUCH DAMAGES. EACH SUBSIDIARY GUARANTOR AGREES THAT THIS SECTION IS A
SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT AND ACKNOWLEDGES THAT THE LENDERS
WOULD NOT EXTEND TO ANY BORROWER ANY LOAN UNDER THE CREDIT AGREEMENT IF THIS
SECTION WERE NOT PART OF THIS AGREEMENT.
SECTION 19. Additional Subsidiary Guarantors. Upon execution
and delivery after the date hereof by the Lenders and any Subsidiary of any
Borrower required to become a party to this Agreement pursuant to Section 6.10
of the Credit Agreement, of an instrument in the form of Annex 1, such
Subsidiary shall become a Subsidiary Guarantor hereunder with the same force and
effect as if originally named as a Subsidiary Guarantor herein. The execution
and delivery of any instrument adding an additional Subsidiary Guarantor as a
party to this Agreement shall not require the consent of any other Subsidiary
Guarantor hereunder. The rights
7
and obligations of each Subsidiary Guarantor hereunder shall remain in full
force and effect notwithstanding the addition of any new Subsidiary Guarantor as
a party to this Agreement.
SECTION 20. Right of Setoff. If an Event of Default shall
have occurred and be continuing, the Lenders are 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 any Lender
to or for the credit or the account of any Subsidiary Guarantor against any or
all the obligations of such Subsidiary Guarantor now or hereafter existing under
this Agreement held by such Lender, irrespective of whether or not such Lender
shall have made any demand under this Agreement and although such obligations
may be unmatured. The rights of each Lender under this Section are in addition
to other rights and remedies (including other rights of setoff) which such
Lender may have.
SECTION 21. Expenses. Each Subsidiary Guarantor agrees,
jointly and severally, to reimburse each Lender for its reasonable out-of-pocket
expenses in connection with this Agreement, including the fees, disbursements
and other charges of counsel for such Lender.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
EACH OF THE SUBSIDIARIES
LISTED ON SCHEDULE I HERETO,
By:_________________________________
Name:
Title:
PROSPECT STREET NYC DISCOVERY FUND, L.P.
By: Prospect Street Discovery Fund,
Inc., its General Partner
By:_________________________________
Name: Xxxxxx X. Xxxxxx
Title: Vice President
BANK OF NEW YORK, as Trustee for the
Employees Retirement Plan of the Brooklyn
Union Gas Company
By:_________________________________
Name:
Title:
[NAME OF NEW ADDITIONAL LENDER]
By:_________________________________
Name:
Title:
SCHEDULE I to the Subsidiary
Guarantee Agreement
Subsidiary Guarantors
---------------------
Name of Subsidiary Address of Subsidiary Name of Borrower
------------------ --------------------- ----------------
ANNEX 1 to the Subsidiary
Guarantee Agreement
SUPPLEMENT NO. ____ dated as of
__________, to the SUBSIDIARY GUARANTEE AGREEMENT
dated as of ________ __, ____, among each of the
Persons listed on Schedule I thereto (each such
subsidiary individually, a "Subsidiary Guarantor" and
collectively, the "Subsidiary Guarantors") Prospect
Street NYC Discovery Fund, L.P. ("Prospect") and the
Bank of New York, as Trustee for the Employees
Retirement Plan of the Brooklyn Union Gas Company
("Bug") and any other lender from time to time a
party to the Credit Agreement (as defined below)
(collectively, the "Lenders").
Reference is made to the Senior Credit Agreement dated as of
December __, 1996 (as amended, modified or restated from time to time, the
"Credit Agreement") among Skyline Multimedia Entertainment, Inc., New York
Skyline, Inc., Skyline Virtual Reality, Inc., Skyline Chicago, Inc., Skyline
Magic, Inc. and Skyline Las Vegas, Inc. (collectively, the Borrowers"), and the
Lenders. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Guarantee Agreement and the
Credit Agreement.
The Subsidiary Guarantors have entered into the Guarantee
Agreement in order to induce the Lenders to make Additional Loans and as
consideration for Loans previously made. Pursuant to Section 6.10 of the Credit
Agreement, each Subsidiary of any Borrower that was not in existence on the date
of the Credit Agreement is required to enter into the Guarantee Agreement as a
Subsidiary Guarantor upon becoming a Subsidiary. Section 19 of the Guarantee
Agreement provides that additional Subsidiaries of any Borrower may become
Subsidiary Guarantors under the Guarantee Agreement by execution and delivery of
an instrument in the form of this Supplement. The undersigned Subsidiary of the
Borrower (the "New Subsidiary Guarantor") is executing this Supplement in
accordance with the requirements of the Credit Agreement to become a Subsidiary
Guarantor under the Guarantee Agreement in order to induce the Lenders to make
Additional Loans and as consideration for Loans previously made.
Accordingly, the Lenders and the New Subsidiary Guarantor
agree as follows:
SECTION 1. Guarantee Agreement. In accordance with Section 19
of the Guarantee Agreement, the New Subsidiary Guarantor by its signature below
becomes a Subsidiary Guarantor under the Guarantee Agreement with the same force
and effect as if originally named therein as a Subsidiary Guarantor and the New
Subsidiary Guarantor hereby (a) agrees to all the terms and provisions of the
Guarantee Agreement applicable to it as a Subsidiary Guarantor thereunder and
(b) represents and warrants that the representations and warranties made by it
as a Subsidiary Guarantor thereunder are true and correct on and as of the date
hereof. Each reference to a "Subsidiary Guarantor" in the Guarantee Agreement
shall be deemed to
include the New Subsidiary Guarantor. The Guarantee Agreement is hereby
incorporated herein by reference.
SECTION 2. Representations and Warranties. The New Subsidiary
Guarantor represents and warrants to the Lenders that this Supplement has been
duly authorized, executed and delivered by it and constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its terms.
SECTION 3. Counterparts. This Supplement may be executed in
any number of counterparts, each of which will be deemed an original but all of
which together will constitute one and the same instrument. This Supplement
shall become effective when the Lenders shall have received counterparts of this
Supplement that, when taken together, bear the signatures of the New Subsidiary
Guarantor and the Lenders.
SECTION 4. Effect on Guarantee Agreement. Except as expressly
supplemented hereby, the Guarantee Agreement shall remain in full force and
effect.
SECTION 5. Governing Law. THIS SUPPLEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE
(WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE
THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW
YORK.
SECTION 6. Severability. If any provision of this Supplement
is held to be illegal, invalid or unenforceable under any present or future Law,
and if the rights or obligations of any party hereto under this Supplement will
not be materially and adversely affected thereby, (i) such provision will be
fully severable, (ii) this Supplement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
(iii) the remaining provisions of this Supplement will remain in full force and
effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom and (iv) in lieu of such illegal, invalid
or unenforceable provision, there will be added automatically as a part of this
Supplement a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible.
SECTION 7. Notices. All communications and notices hereunder
shall be in writing and given as provided in Section 13 of the Guarantee
Agreement.
SECTION 8. Expenses. The New Subsidiary Guarantor agrees to
reimburse each Lender for its reasonable out-of-pocket expenses in connection
with this Supplement, including the fees, disbursements and other charges of
counsel for such Lender.
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IN WITNESS WHEREOF, the New Subsidiary Guarantor and the
Lenders have duly executed this Supplement to the Guarantee Agreement as of the
day and year first above written.
[NAME OF NEW SUBSIDIARY GUARANTOR],
By_______________________________
Name:
Title:
Address:
------------------------
------------------------
------------------------
PROSPECT STREET NYC DISCOVERY FUND, L.P.
By: Prospect Street Discovery Fund,
Inc., its General Partner
By:________________________________
Name: Xxxxxx X. Xxxxxx
Title: Vice President
BANK OF NEW YORK, as Trustee for the
Employees Retirement Plan of the
Brooklyn Union Gas Company
By:________________________________
Name:
Title:
3
[NAME OF NEW ADDITIONAL LENDER]
By:________________________________
Name:
Title:
4
