EXHIBIT 10.3
SUBSIDIARIES GUARANTY
GUARANTY, dated as of April 12, 1999 (as amended, restated,
modified and/or supplemented from time to time, this "GUARANTY"), made by
each of the undersigned (each, a "GUARANTOR" and, together with any other
entity which becomes a party hereto pursuant to Section 24, collectively, the
"GUARANTORS"). Except as otherwise defined herein, terms used herein and
defined in the Credit Agreement (as defined below) shall be used herein as
therein defined.
W I T N E S S E T H :
WHEREAS, Tenneco Packaging, Inc. ("TPI"), various financial
institutions from time to time party thereto (the "LENDERS"), X.X. Xxxxxx
Securities Inc. and BT Xxxx. Xxxxx Incorporated, as Co-Lead Arrangers (the
"CO-LEAD ARRANGERS"), Bankers Trust Company, as Syndication Agent (the
"SYNDICATION AGENT"), and Xxxxxx Guaranty Trust Company of New York, as
Administrative Agent (the "ADMINISTRATIVE AGENT"), have entered into a Credit
Agreement, dated as of April 12, 1999 (as amended, restated, modified and/or
supplemented from time to time, the "CREDIT AGREEMENT"), providing for the
making of Loans to TPI, all as contemplated therein (with the Lenders, each
Issuing Bank, the Co-Lead Arrangers, the Syndication Agent, the
Administrative Agent and the Collateral Agent being herein called the "LENDER
CREDITORS");
WHEREAS, TPI and Packaging Corporation of America ("PCA" or the
"BORROWER") have entered into (i) the Contribution Agreement pursuant to
which (x) TPI will contribute the Containerboard Business to PCA and (y) PCA
will acquire the Containerboard Business and (ii) the Bank Credit Agreement
Assignment and Assumption Agreement pursuant to which (x) TPI will assign
(without recourse, representation or warranty) all of its rights, interests
and obligations under the Credit Agreement and the Notes to PCA and (y) PCA
will assume all of the rights, interests and obligations of TPI under the
Credit Agreement and the Notes, all as contemplated therein;
WHEREAS, upon the Contribution Effective Time, PCA will become the
"Borrower" for all purposes of the Credit Agreement, this Guaranty and the
other Credit Documents;
WHEREAS, PCA may from time to time enter into one or more (i)
interest rate protection agreements (including, without limitation, interest
rate swaps, caps, floors, collars and similar agreements), (ii) foreign
exchange contracts, currency swap agreements, commodity agreements or other
similar agreements or arrangements designed to protect against the
fluctuations in currency values and/or (iii) other types of hedging
agreements from time to time (each such agreement or arrangement with an
Other Creditor (as hereinafter defined), an "INTEREST RATE PROTECTION
AGREEMENT OR OTHER HEDGING AGREEMENT"), with Xxxxxx Guaranty Trust Company of
New York in its individual capacity ("XXXXXX GUARANTY"), any Lender or a
syndicate of financial institutions organized by Xxxxxx Xxxxxxxx or any such
Lender, or an
affiliate of Xxxxxx Guaranty or any such Lender (Xxxxxx Guaranty, any such
Lender or Lenders or affiliate or affiliates of Xxxxxx Guaranty or such
Lender or Lenders (even if Xxxxxx Guaranty or any such Lender ceases to be a
Lender under the Credit Agreement for any reason) and any such institution
that participates in such Interest Rate Protection Agreements or Other
Hedging Agreements and their subsequent successors and assigns, collectively,
the "OTHER CREDITORS", and together with the Lender Creditors, the
"CREDITORS");
WHEREAS, each Guarantor is a direct or indirect Subsidiary of PCA;
WHEREAS, it is a condition to the making of Loans to TPI and PCA
and the issuance of, and participation in, Letters of Credit for the account
of PCA under the Credit Agreement and to the Other Creditors entering into
the Interest Rate Protection Agreements or Other Hedging Agreements that each
Guarantor shall have executed and delivered this Guaranty; and
WHEREAS, each Guarantor will obtain benefits from the assumption
and/or incurrence of Loans by PCA and the issuance of, and participation in,
Letters of Credit for the account of PCA under the Credit Agreement and the
entering into of Interest Rate Protection Agreements or Other Hedging
Agreements and, accordingly, desires to execute this Guaranty in order to
satisfy the conditions described in the preceding paragraph and to induce the
Lenders to maintain and make Loans to TPI and PCA and issue Letters of
Credit for the account of PCA and the Other Creditors to maintain and/or
enter into Interest Rate Protection Agreements or Other Hedging Agreements
with PCA;
NOW, THEREFORE, in consideration of the foregoing and other
benefits accruing to each Guarantor, the receipt and sufficiency of which are
hereby acknowledged, each Guarantor hereby makes the following
representations and warranties to the Creditors and hereby covenants and
agrees with each Creditor as follows:
1. Each Guarantor, jointly and severally, irrevocably and
unconditionally guarantees: (i) to the Lender Creditors the full and prompt
payment when due (whether at the stated maturity, by acceleration or
otherwise) of (x) the principal of and interest on the Notes issued by, and
the Loans made to, the Borrower under the Credit Agreement and all
reimbursement obligations and Unpaid Drawings with respect to Letters of
Credit and (y) all other obligations (including obligations which, but for
any automatic stay under Section 362(a) of the Bankruptcy Code, would become
due) and liabilities owing by the Borrower to the Lender Creditors
(including, without limitation, indemnities, Fees and interest thereon) now
existing or hereafter incurred under, arising out of or in connection with
the Credit Agreement or any other Credit Document and the due performance and
compliance with the terms, conditions and agreements contained in the Credit
Documents by the Borrower (all such principal, interest, liabilities and
obligations being herein collectively called the "CREDIT DOCUMENT
OBLIGATIONS"); and (ii) to each Other Creditor the full and prompt payment
when due (whether at the stated maturity, by acceleration or otherwise) of
all obligations (including obligations which, but for any automatic stay
under Section 362(a) of the Bankruptcy Code, would become due) and
liabilities owing by the Borrower to the Other Creditors (including, without
limitation,
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indemnities, fees and interest thereon) under any Interest Rate Protection
Agreements or Other Hedging Agreements, whether now in existence or hereafter
arising, and the due performance and compliance by the Borrower with all
terms, conditions and agreements contained therein (all such obligations and
liabilities under this clause (ii) being herein collectively called the
"OTHER OBLIGATIONS", and together with the Credit Document Obligations are
herein collectively called the "GUARANTEED OBLIGATIONS"). Each Guarantor
understands, agrees and confirms that the Creditors may enforce this Guaranty
up to the full amount of the Guaranteed Obligations against each Guarantor
without proceeding against any other Guarantor, the Borrower, against any
security for the Guaranteed Obligations, or against any other guarantor under
any other guaranty covering all or a portion of the Guaranteed Obligations.
This Guaranty shall constitute a guaranty of payment and not of collection.
All payments by each Guarantor under this Guaranty shall be made on the same
basis as payments by the Borrower under Sections 4.03 and 4.04 of the Credit
Agreement.
2. Additionally, each Guarantor, jointly and severally,
unconditionally and irrevocably, guarantees the payment of any and all
Guaranteed Obligations to the Creditors whether or not due or payable by the
Borrower upon the occurrence in respect of the Borrower of any of the events
specified in Section 10.05 of the Credit Agreement, and unconditionally and
irrevocably, jointly and severally, promises to pay such Guaranteed
Obligations to the Creditors, or order, on demand, in lawful money of the
United States of America.
3. The liability of each Guarantor hereunder is exclusive and
independent of any security for or other guaranty of the Guaranteed Obligations
whether executed by such Guarantor, any other Guarantor, any other guarantor or
by any other person, and the liability of each Guarantor hereunder shall not be
affected or impaired by (i) any direction as to application of payment by the
Borrower or by any other person, (ii) any other continuing or other guaranty,
undertaking or maximum liability of a guarantor or of any other person as to the
Guaranteed Obligations, (iii) any payment on or in reduction of any such other
guaranty or undertaking, (iv) any dissolution, termination or increase, decrease
or change in personnel by the Borrower, (v) any payment made to any Creditor on
the Guaranteed Obligations which any Creditor repays the Borrower pursuant to
court order in any bankruptcy, reorganization, arrangement, moratorium or other
debtor relief proceeding, and each Guarantor waives any right to the deferral or
modification of its obligations hereunder by reason of any such proceeding, (vi)
any action or inaction by the Creditors as contemplated in Section 6 hereof or
(vii) any invalidity, irregularity or unenforceability of all or part of the
Guaranteed Obligations or of any security therefor.
4. The obligations of each Guarantor hereunder are independent of
the obligations of any other Guarantor, any other guarantor of the Borrower
or the Borrower, and a separate action or actions may be brought and
prosecuted against each Guarantor whether or not action is brought against
any other Guarantor, any other guarantor of the Borrower or the Borrower and
whether or not any other Guarantor, any other guarantor of the Borrower or
the Borrower be joined in any such action or actions. Each Guarantor waives,
to the fullest extent permitted by law, the benefit of any statute of
limitations affecting its liability hereunder or the enforcement thereof.
Any payment by the Borrower or other circumstance which operates to toll
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any statute of limitations as to the Borrower shall operate to toll the
statute of limitations as to each Guarantor.
5. Each Guarantor hereby waives notice of acceptance of this Guaranty
and notice of any liability to which it may apply, and waives promptness,
diligence, presentment, demand of payment, protest, notice of dishonor or
nonpayment of any such liabilities, suit or taking of other action by the
Administrative Agent or any other Creditor against, and any other notice to, any
party liable thereon (including such Guarantor or any other guarantor of the
Borrower).
6. Any Creditor may at any time and from time to time without the
consent of, or notice to, any Guarantor, without incurring responsibility to
such Guarantor, without impairing or releasing the obligations of such Guarantor
hereunder, upon or without any terms or conditions and in whole or in part:
(i) change the manner, place or terms of payment of, and/or change
or extend the time of payment of, renew or alter, any of the Guaranteed
Obligations, (including any increase or decrease in the rate of interest
thereon), any security therefor, or any liability incurred directly or
indirectly in respect thereof, and the guaranty herein made shall apply to
the Guaranteed Obligations as so changed, extended, renewed or altered;
(ii) take and hold security for the payment of the Guaranteed
Obligations and/or sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any of
those hereunder) incurred directly or indirectly in respect thereof or
hereof, and/or any offset thereagainst;
(iii) exercise or refrain from exercising any rights against the
Borrower, any Guarantor, any other guarantor of the Borrower or others or
otherwise act or refrain from acting;
(iv) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Borrower to creditors of the
Borrower;
(v) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Creditors regardless of
what liabilities of the Borrower remain unpaid;
(vi) release or substitute any one or more endorsers, guarantors,
Guarantors, the Borrower or other obligors;
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(vii) consent to or waive any breach of, or any act, omission or
default under, the Interest Rate Protection Agreements or Other Hedging
Agreements, the Credit Documents or any of the instruments or agreements
referred to therein, or otherwise amend, modify or supplement any of the
Interest Rate Protection Agreements or Other Hedging Agreements, the Credit
Documents or any of such other instruments or agreements; and/or
(viii) act or fail to act in any manner referred to in this
Guaranty which may deprive such Guarantor of its right to subrogation
against the Borrower to recover full indemnity for any payments made
pursuant to this Guaranty.
7. No invalidity, irregularity or unenforceability of all or any part
of the Guaranteed Obligations or of any security therefor shall affect, impair
or be a defense to this Guaranty, and this Guaranty shall be primary, absolute
and unconditional notwithstanding the occurrence of any event or the existence
of any other circumstances which might constitute a legal or equitable discharge
of a surety or guarantor except payment in full of the Guaranteed Obligations.
8. This Guaranty is a continuing one and all liabilities to which it
applies or may apply under the terms hereof shall be conclusively presumed to
have been created in reliance hereon. No failure or delay on the part of any
Creditor in exercising any right, power or privilege hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
expressly specified are cumulative and not exclusive of any rights or remedies
which any Creditor would otherwise have. No notice to or demand on any
Guarantor in any case shall entitle such Guarantor to any other further notice
or demand in similar or other circumstances or constitute a waiver of the rights
of any Creditor to any other or further action in any circumstances without
notice or demand. It is not necessary for any Creditor to inquire into the
capacity or powers of the Borrower or any of its Subsidiaries or the officers,
directors, partners or agents acting or purporting to act on its behalf, and any
indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.
9. Any indebtedness of the Borrower now or hereafter held by any
Guarantor is hereby subordinated to the indebtedness of the Borrower to the
Creditors; and such indebtedness of the Borrower to any Guarantor, if the
Administrative Agent, after an Event of Default has occurred, so requests, shall
be collected, enforced and received by such Guarantor as trustee for the
Creditors and be paid over to the Creditors on account of the indebtedness of
the Borrower to the Creditors, but without affecting or impairing in any manner
the liability of such Guarantor under the other provisions of this Guaranty.
Prior to the transfer by any Guarantor of any note or negotiable instrument
evidencing any indebtedness of the Borrower to such Guarantor, such Guarantor
shall mark such note or negotiable instrument with a legend that the same is
subject to this subordination. Without limiting the generality of the
foregoing, each Guarantor hereby agrees with the Creditors that it will not
exercise any right of subrogation which it may at any time otherwise have as a
result of this Guaranty (whether contractual, under Section 509 of the
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Bankruptcy Code or otherwise) until all Guaranteed Obligations have been
irrevocably paid in full in cash.
10. (a) Each Guarantor waives any right (except as shall be
required by applicable statute and cannot be waived) to require the Creditors
to: (i) proceed against the Borrower, any other Guarantor, any other
guarantor of the Borrower or any other person; (ii) proceed against or
exhaust any security held from the Borrower, any other Guarantor, any other
guarantor of the Borrower or any other person; or (iii) pursue any other
remedy in the Creditors' power whatsoever. Each Guarantor waives any defense
based on or arising out of any defense of the Borrower, any other Guarantor,
any other guarantor of the Borrower or any other person other than payment in
full in cash of the Guaranteed Obligations, including, without limitation,
any defense based on or arising out of the disability of the Borrower, any
other Guarantor, any other guarantor of the Borrower or any other person, or
the unenforceability of the Guaranteed Obligations or any part thereof from
any cause, or the cessation from any cause of the liability of the Borrower
other than payment in full of the Guaranteed Obligations in cash. The
Creditors may, at their election, foreclose on any security held by the
Administrative Agent, the Collateral Agent or the other Creditors by one or
more judicial or nonjudicial sales, whether or not every aspect of any such
sale is commercially reasonable (to the extent such sale is permitted by
applicable law), or exercise any other right or remedy the Creditors may have
against the Borrower or any other person, or any security, without affecting
or impairing in any way the liability of any Guarantor hereunder except to
the extent the Guaranteed Obligations have been paid in full in cash. Each
Guarantor waives any defense arising out of any such election by the
Creditors, even though such election operates to impair or extinguish any
right of reimbursement or subrogation or other right or remedy of such
Guarantor against the Borrower or any other person or any security.
(b) Each Guarantor waives all presentments, demands for performance,
protests and notices, including, without limitation, notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation or incurring of new or additional
indebtedness. Each Guarantor assumes all responsibility for being and keeping
itself informed of the Borrower's financial condition and assets, and of all
other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks which such Guarantor
assumes and incurs hereunder, and agrees that the Creditors shall have no duty
to advise any Guarantor of information known to them regarding such
circumstances or risks.
(c) Until such time as the Guaranteed Obligations have been paid in
full in cash, each Guarantor hereby waives all contractual, statutory or common
law rights of reimbursement, contribution or indemnity from the Borrower or any
other Guarantor which it may at any time otherwise have as a result of this
Guaranty.
11. In order to induce the Lenders to make Loans and issue Letters
of Credit pursuant to the Credit Agreement, and in order to induce the Other
Creditors to execute, deliver and perform the Interest Rate Protection
Agreements or Other Hedging Agreements, each Guarantor represents, warrants
and covenants that:
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(a) Such Guarantor (i) is a duly organized and validly existing
corporation and is in good standing under the laws of the jurisdiction of
its organization, and has the corporate power and authority to own its
property and assets and to transact the business in which it is engaged and
presently proposes to engage and (ii) is duly qualified and is authorized
to do business and is in good standing in all jurisdictions where it is
required to be so qualified except where the failure to be so qualified
would reasonably be expected to have a Material Adverse Effect.
(b) Such Guarantor has the corporate power and authority to execute,
deliver and carry out the terms and provisions of this Guaranty and each
other Document (for purposes of this Guaranty, such term to mean and
include each Document (as defined in the Credit Agreement) and each
Interest Rate Protection Agreement or Other Hedging Agreement) to which it
is a party and has taken all necessary corporate action to authorize the
execution, delivery and performance by it of each such Document. Such
Guarantor has duly executed and delivered this Guaranty and each other
Document to which it is a party, and each such Document constitutes the
legal, valid and binding obligation of such Guarantor enforceable in
accordance with its terms, except to the extent that the enforceability
thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws generally affecting creditors'
rights and by equitable principles (regardless of whether enforcement is
sought in equity or law) and principles of good faith and fair dealing.
(c) Neither the execution, delivery or performance by such Guarantor
of this Guaranty or any other Document to which it is a party, nor
compliance by it with the terms and provisions hereof and thereof: (i)
will contravene any applicable material provision of any law, statute, rule
or regulation, or any order, writ, injunction or decree of any court or
governmental instrumentality, (ii) will conflict or be inconsistent with or
result in any breach of, any of the terms, covenants, conditions or
provisions of, or constitute a default under, or (other than pursuant to
the Security Documents) result in the creation or imposition of (or the
obligation to create or impose) any Lien upon any of the property or assets
of such Guarantor or any of its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, credit agreement, loan agreement or any
other agreement or other instrument to which such Guarantor or any of its
Subsidiaries is a party or by which it or any of its property or assets is
bound or to which it may be subject or (iii) will violate any provision of
the certificate of incorporation or by-laws (or equivalent organizational
documents) of such Guarantor or any of its Subsidiaries.
(d) No order, consent, approval, license, authorization or validation
of, or filing, recording or registration with, or exemption by, any foreign
or domestic governmental or public body or authority, or any subdivision
thereof, is required to authorize, or is required in connection with, (i)
the execution, delivery and performance of this Guaranty or any other
Document to which such Guarantor is a party, or (ii) the legality,
validity, binding effect or enforceability of this Guaranty or any other
Document to which such Guarantor is a party.
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12. Each Guarantor covenants and agrees that on and after the date
hereof and until the termination of the Total Commitments and all Interest
Rate Protection Agreements or Other Hedging Agreements and when no Note or
Letter of Credit remains outstanding and all other Guaranteed Obligations
have been paid in full (other than those arising from indemnities for which
no request has been made), such Guarantor shall take, or will refrain from
taking, as the case may be, all actions that are necessary to be taken or not
taken so that no violation of any provision, covenant or agreement contained
in Section 8 or 9 of the Credit Agreement, and so that no Event of Default,
is caused by the actions of such Guarantor or any of its Subsidiaries.
13. The Guarantors hereby jointly and severally agree to pay all
out-of-pocket costs and expenses of each Creditor in connection with the
enforcement of this Guaranty and the protection of such Creditor's rights
hereunder, and in connection with any amendment, waiver or consent relating
hereto (including, without limitation, the fees and disbursements of counsel
employed by the Administrative Agent or any of the other Creditors).
14. This Guaranty shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the Creditors and
their successors and assigns.
15. Neither this Guaranty nor any provision hereof may be changed,
waived, discharged or terminated in any manner whatsoever unless in writing duly
signed by the Administrative Agent (with the consent of (x) the Required Lenders
or, to the extent required by Section 13.12 of the Credit Agreement, all of the
Lenders, at all times prior to the time at which all Credit Document Obligations
have been paid in full, or (y) the holders of at least a majority of the
outstanding Other Obligations at all times after the time at which all Credit
Document Obligations have been paid in full) and each Guarantor directly
affected thereby (it being understood that the addition or release of any
Guarantor hereunder shall not constitute a change, waiver, discharge or
termination affecting any Guarantor other than the Guarantor so added or
released); PROVIDED, that any change, waiver, modification or variance affecting
the rights and benefits of a single Class (as defined below) of Creditors (and
not all Creditors in a like or similar manner) shall require the written consent
of the Requisite Creditors (as defined below) of such Class. For the purpose of
this Guaranty, the term "Class" shall mean each class of Creditors, I.E.,
whether (i) the Lender Creditors as holders of the Credit Document Obligations
or (ii) the Other Creditors as holders of the Other Obligations. For the
purpose of this Guaranty, the term "Requisite Creditors" of any Class shall mean
each of (i) with respect to the Credit Document Obligations, the Required
Lenders and (ii) with respect to the Other Obligations, the holders of at least
a majority of all obligations outstanding from time to time under the Interest
Rate Protection Agreements or Other Hedging Agreements.
16. Each Guarantor acknowledges that an executed (or conformed) copy
of each of the Credit Documents and the Interest Rate Protection Agreements or
Other Hedging Agreements has been made available to its principal executive
officers and such officers are familiar with the contents thereof.
17. In addition to any rights now or hereafter granted under
applicable law (including, without limitation, Section 151 of the New York
Debtor and Creditor Law) and not
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by way of limitation of any such rights, upon the occurrence and during the
continuance of an Event of Default (such term to mean and include any "Event
of Default" as defined in the Credit Agreement or any payment default under
any Interest Rate Protection Agreement or Other Hedging Agreement and shall
in any event, include, without limitation, any payment default on any of the
Guaranteed Obligations continuing after any applicable grace period), each
Creditor is hereby authorized at any time or from time to time, without
notice to any Guarantor or to any other Person, any such notice being
expressly waived, to set off and to appropriate and apply any and all
deposits (general or special) and any other indebtedness at any time held or
owing by such Creditor to or for the credit or the account of such Guarantor,
against and on account of the obligations and liabilities of such Guarantor
to such Creditor under this Guaranty, irrespective of whether or not such
Creditor shall have made any demand hereunder and although said obligations,
liabilities, deposits or claims, or any of them, shall be contingent or
unmatured. Each Creditor acknowledges and agrees that the provisions of this
Section 17 are subject to the sharing provisions set forth in Section
13.06(b) of the Credit Agreement.
18. All notices, requests, demands or other communications pursuant
hereto shall be deemed to have been duly given or made when delivered to the
Person to which such notice, request, demand or other communication is required
or permitted to be given or made under this Guaranty, addressed to such party at
(i) in the case of any Lender Creditor, as provided in the Credit Agreement,
(ii) in the case of any Guarantor, at:
c/o Packaging Corporation of America
0000 Xxxx Xxxxx Xxxxx
Xxxx Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
and (iii) in the case of any Other Creditor, at such address as such Other
Creditor shall have specified in writing to the Guarantor; or in any case at
such other address as any of the foregoing Persons may hereafter notify the
others in writing.
19. If claim is ever made upon any Creditor for repayment or
recovery of any amount or amounts received in payment or on account of any of
the Guaranteed Obligations and any of said Creditors repays all or part of
said amount by reason of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over such Creditor or any of its
property or (ii) any settlement or compromise of any such claim effected by
such Creditor with any such claimant (including the Borrower), then and in
such event each Guarantor agrees that any such judgment, decree, order,
settlement or compromise shall be binding upon such Guarantor,
notwithstanding any revocation hereof or the cancellation of any Note or any
Interest Rate Protection Agreement or Other Hedging Agreement or other
instrument evidencing any liability of the Borrower, and such Guarantor shall
be and remain liable to such Creditor hereunder for the amount so repaid or
recovered to the same extent as if such amount had never originally been
received by any such Creditor.
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20. (A) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE
CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
(B) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY
OR ANY OTHER CREDIT DOCUMENT TO WHICH ANY GUARANTOR IS A PARTY MAY BE BROUGHT
IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR
THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS
GUARANTY, EACH GUARANTOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT
OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. EACH GUARANTOR HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND
EMPOWERS CT CORPORATION SYSTEM, WITH OFFICES ON THE DATE HEREOF AT 0000
XXXXXXXX, XXX XXXX, XXX XXXX 00000 AS ITS DESIGNEE, APPOINTEE AND AGENT TO
RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS
PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND
DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. IF FOR ANY
REASON SUCH DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT
AS SUCH, EACH GUARANTOR AGREES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND
AGENT IN NEW YORK CITY ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION
SATISFACTORY TO THE ADMINISTRATIVE AGENT. EACH GUARANTOR HEREBY FURTHER
IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK JURISDICTION OVER SUCH
GUARANTOR, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS GUARANTY OR ANY OTHER CREDIT DOCUMENT TO
WHICH IT IS A PARTY BROUGHT IN ANY OF THE AFORESAID COURTS, THAT ANY SUCH
COURT LACKS JURISDICTION OVER SUCH GUARANTOR. EACH GUARANTOR FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO EACH
GUARANTOR AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE
TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH GUARANTOR HEREBY
IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER
IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR
PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT TO WHICH
SUCH GUARANTOR IS A PARTY THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR
INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY OF THE CREDITORS TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR
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OTHERWISE PROCEED AGAINST EACH GUARANTOR IN ANY OTHER JURISDICTION.
(C) EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID
ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS GUARANTY OR
ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (B)
ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM
IN ANY SUCH COURT THAT SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(D) EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING
TO THIS GUARANTY, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
21. In the event that all of the capital stock or other equity
interests of one or more Guarantors is sold or otherwise disposed of (to a
Person other than the Borrower or a Subsidiary thereof) or liquidated in
compliance with the requirements of Section 9.02 of the Credit Agreement (or
such sale, disposition or liquidation has been approved in writing by the
Required Lenders (or all Lenders if required by Section 13.12 of the Credit
Agreement)) and the proceeds of such sale, disposition or liquidation are
applied in accordance with the provisions of the Credit Agreement, to the
extent applicable, such Guarantor shall be released from this Guaranty and
this Guaranty shall, as to each such Guarantor or Guarantors, terminate, and
have no further force or effect (it being understood and agreed that the sale
of one or more Persons that own, directly or indirectly, all of the capital
stock of any Guarantor shall be deemed to be a sale of such Guarantor for the
purposes of this Section 21).
22. All payments made by any Guarantor hereunder will be made
without setoff, counterclaim or other defense.
23. This Guaranty may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with the Borrower and the Administrative
Agent.
24. It is understood and agreed that any Subsidiary of the Borrower
that is required to execute a counterpart of this Guaranty pursuant to the
Credit Agreement shall automatically become a Guarantor hereunder by executing a
counterpart hereof and delivering the same to the Administrative Agent.
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25. Notwithstanding anything else to the contrary in this
Guaranty, the Creditors agree that this Guaranty may be enforced only by the
action of the Administrative Agent or the Collateral Agent, in each case
acting upon the instructions of the Required Lenders (or, after the date on
which all Credit Document Obligations have been paid in full, the holders of
at least a majority of the outstanding Other Obligations), and that no other
Creditor shall have any right individually to seek to enforce or to enforce
this Guaranty or to realize upon the security to be granted by the Security
Documents, it being understood and agreed that such rights and remedies may
be exercised by the Administrative Agent or the Collateral Agent or the
holders of at least a majority of the outstanding Other Obligations, as the
case may be, for the benefit of the Creditors upon the terms of this Guaranty
and the Security Documents. The Creditors further agree that this Guaranty
may not be enforced against any director, officer, employee, or stockholder
of any Guarantor (except to the extent such stockholder is also a Guarantor
hereunder). It is understood that the agreement in this Section 25 is among
and solely for the benefit of the Lenders and that if the Required Lenders so
agree (without requiring the consent of any Guarantor), this Guaranty may be
directly enforced by any Creditor.
26. At any time a payment in respect of the Guaranteed
Obligations is made under this Guaranty, the right of contribution of each
Guarantor hereunder against each other such Guarantor shall be determined as
provided in the immediately following sentence, with the right of
contribution of each Guarantor to be revised and restated as of each date on
which a payment (a "RELEVANT PAYMENT") is made on the Guaranteed Obligations
under this Guaranty. At any time that a Relevant Payment is made by a
Guarantor that results in the aggregate payments made by such Guarantor
hereunder in respect of the Guaranteed Obligations to and including the date
of the Relevant Payment exceeding such Guarantor's Contribution Percentage
(as defined below) of the aggregate payments made by all Guarantors hereunder
in respect of the Guaranteed Obligations to and including the date of the
Relevant Payment (such excess, the "AGGREGATE EXCESS AMOUNT"), each such
Guarantor shall have a right of contribution against each other Guarantor who
has made payments hereunder in respect of the Guaranteed Obligations to and
including the date of the Relevant Payment in an aggregate amount less than
such other Guarantor's Contribution Percentage of the aggregate payments made
to and including the date of the Relevant Payment by all Guarantors hereunder
in respect of the Guaranteed Obligations (the aggregate amount of such
deficit, the "AGGREGATE DEFICIT AMOUNT") in an amount equal to (x) a fraction
the numerator of which is the Aggregate Excess Amount of such Guarantor and
the denominator of which is the Aggregate Excess Amount of all Guarantors
multiplied by (y) the Aggregate Deficit Amount of such other Guarantor. A
Guarantor's right of contribution pursuant to the preceding sentences shall
arise at the time of each computation, subject to adjustment to the time of
any subsequent computation; PROVIDED, that no Guarantor may take any action
to enforce such right until the Guaranteed Obligations have been paid in full
and the Total Commitments have been terminated, it being expressly recognized
and agreed by all parties hereto that any Guarantor's right of contribution
arising pursuant to this Guaranty against any other Guarantor shall be
expressly junior and subordinate to such other Guarantor's obligations and
liabilities in respect of the Guaranteed Obligations and any other
obligations owing under this Guaranty. As used in this Section 26: (i) each
Guarantor's "CONTRIBUTION PERCENTAGE" shall mean the percentage obtained by
dividing (x) the Adjusted Net Worth (as defined below) of such Guarantor by
(y) the aggregate Adjusted Net Worth of all Guarantors; (ii) the "ADJUSTED
NET
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WORTH" of each Guarantor shall mean the greater of (x) the Net Worth (as
defined below) of such Guarantor and (y) zero; and (iii) the "NET WORTH" of
each Guarantor shall mean the amount by which the fair salable value of such
Guarantor's assets on the date of any Relevant Payment exceeds its existing
debts and other liabilities (including contingent liabilities, but without
giving effect to any Guaranteed Obligations arising under this Guaranty) on
such date. All parties hereto recognize and agree that, except for any right
of contribution arising pursuant to this Section 26, each Guarantor who makes
any payment in respect of the Guaranteed Obligations shall have no right of
contribution or subrogation against any other Guarantor in respect of such
payment. Each of the Guarantors recognizes and acknowledges that the rights
to contribution arising hereunder shall constitute an asset in favor of the
party entitled to such contribution. In this connection, each Guarantor has
the right to waive its contribution right against any Guarantor to the extent
that after giving effect to such waiver such Guarantor would remain solvent,
in the determination of the Required Lenders.
27. Each Guarantor hereby confirms that it is its intention that
this Guaranty not constitute a fraudulent transfer or conveyance for purposes
of any bankruptcy, insolvency or similar law, the Uniform Fraudulent
Conveyance Act or any similar Federal, state of foreign law. To effectuate
the foregoing intention, each Guarantor hereby irrevocably agrees that the
Guaranteed Obligations shall be limited to the maximum amount as will, after
giving effect to such maximum amount and all other (contingent or otherwise)
liabilities of such Guarantor that are relevant under such laws, result in
the Guaranteed Obligations of such Guarantor in respect of such maximum
amount not constituting a fraudulent transfer or conveyance.
28. EACH GUARANTOR UNDERSTANDS THAT UPON DEFAULT ON THE
OBLIGATIONS, AMONG OTHER REMEDIES SET OUT IN THE CREDIT AGREEMENT AND THE
OTHER CREDIT DOCUMENTS, THE COLLATERAL AGENT MAY FORECLOSE UPON ANY MORTGAGED
PROPERTY SECURING THE OBLIGATION AND REDRESS A DEFICIENCY JUDGMENT PURSUANT
TO SOUTH CAROLINA LAW. EACH GUARANTOR HEREBY EXPRESSLY WAIVES AND
RELINQUISHES ANY APPRAISAL RIGHTS WHICH SUCH GUARANTOR MAY HAVE UNDER SECTION
29-3-680 THROUGH SECTION 29-3-770, SOUTH CAROLINA CODE OF LAWS (1976) AS SUCH
MAY BE AMENDED, AND UNDERSTANDS AND AGREES THAT A DEFICIENCY JUDGMENT, IF
PROPOSED BY THE COLLATERAL AGENT, SHALL BE DETERMINED BY THE HIGHEST PRICE
BID AT THE JUDICIAL SALE OF THE RELEVANT MORTGAGED PROPERTY.
29. (A) EACH GUARANTOR HEREBY ACKNOWLEDGES AND AFFIRMS THAT IT
UNDERSTANDS THAT TO THE EXTENT THE OBLIGATIONS ARE SECURED BY REAL PROPERTY
LOCATED IN THE STATE OF CALIFORNIA, SUCH GUARANTOR SHALL BE LIABLE FOR THE
FULL AMOUNT OF THE LIABILITY HEREUNDER NOTWITHSTANDING FORECLOSURE ON SUCH
REAL PROPERTY BY TRUSTEE SALE OR ANY OTHER REASON IMPAIRING SUCH GUARANTOR'S,
THE COLLATERAL AGENT'S OR ANY SECURED CREDITORS'
13
RIGHT TO PROCEED AGAINST THE BORROWER OR ANY OTHER GUARANTOR OF THE
OBLIGATIONS.
(B) EACH GUARANTOR HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ALL RIGHTS AND BENEFITS UNDER SECTIONS 580A, 580B, 580D AND
726 OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. EACH GUARANTOR HEREBY FURTHER
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING OR ANY OTHER PROVISION HEREOF, ALL RIGHTS AND
BENEFITS WHICH MIGHT OTHERWISE BE AVAILABLE TO SUCH GUARANTOR UNDER SECTIONS
2809, 2810, 2815, 2819, 2821, 2839, 2845, 2848, 2849, 2850, 2899 AND 3433 OF THE
CALIFORNIA CIVIL CODE.
(C) EACH GUARANTOR WAIVES ITS RIGHTS OF SUBROGATION AND
REIMBURSEMENT AND ANY OTHER RIGHTS AND DEFENSES AVAILABLE TO SUCH GUARANTOR
BY REASON OF SECTIONS 2787 TO 2855, INCLUSIVE, OF THE CALIFORNIA CIVIL CODE,
INCLUDING, WITHOUT LIMITATION, (1) ANY DEFENSES SUCH GUARANTOR MAY HAVE TO
THIS GUARANTY BY REASON OF AN ELECTION OF REMEDIES BY THE COLLATERAL AGENT OR
THE SECURED CREDITORS AND (2) ANY RIGHTS OR DEFENSES SUCH GUARANTOR MAY HAVE
BY REASON OF PROTECTION AFFORDED TO THE BORROWER PURSUANT TO THE
ANTIDEFICIENCY OR OTHER LAWS OF CALIFORNIA LIMITING OR DISCHARGING THE
BORROWER'S INDEBTEDNESS, INCLUDING, WITHOUT LIMITATION, SECTION 580A, 580B,
580D OR 726 OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. IN FURTHERANCE OF
SUCH PROVISIONS, EACH GUARANTOR HEREBY WAIVES ALL RIGHTS AND DEFENSES ARISING
OUT OF AN ELECTION OF REMEDIES BY THE COLLATERAL AGENT OR THE SECURED
CREDITORS, EVEN THOUGH THAT ELECTION OR REMEDIES, SUCH AS A NONJUDICIAL
FORECLOSURE DESTROYS SUCH GUARANTOR'S RIGHTS OF SUBROGATION AND REIMBURSEMENT
AGAINST THE BORROWER BY THE OPERATION OF SECTION 580D OF THE CALIFORNIA CODE
OF CIVIL PROCEDURE OR OTHERWISE.
(D) EACH GUARANTOR WARRANTS AND AGREES THAT EACH OF THE WAIVERS
SET FORTH ABOVE IS MADE WITH FULL KNOWLEDGE OF ITS SIGNIFICANCE AND
CONSEQUENCES AND THAT IF ANY OF SUCH WAIVERS ARE DETERMINED TO BE CONTRARY TO
ANY APPLICABLE LAW OR PUBLIC POLICY, SUCH WAIVERS SHALL BE EFFECTIVE ONLY TO
THE MAXIMUM EXTENT PERMITTED BY LAW.
30. This guaranty, including, without limitation, the
representations, warranties and covenants contained herein, shall become
effective when (i) the Contribution Effective Time shall have occurred and
(ii) the collateral agent, PCA and each subsidiary of PCA whose name appears
on the signature pages hereto shall have signed a counterpart hereof (whether
the same or different counterparts) and shall have delivered (including by
way of facsimile transmission) the same to the administrative agent at its
notice office or the offices of its counsel.
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IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
executed and delivered as of the date first above written.
DAHLONEGA PACKAGING CORPORATION, as a
Guarantor
By /s/ Xxxx X. Xxxxxx
----------------------------------
Title: Chief Executive Officer
XXXXX CONTAINER CORPORATION,
as a Guarantor
By /s/ Xxxx X. Xxxxxx
----------------------------------
Title: Chief Executive Officer
PCA HYDRO, INC., as a Guarantor
By /s/ Xxxx X. Xxxxxx
----------------------------------
Title: Chief Executive Officer
PCA TOMAHAWK CORPORATION,
as a Guarantor
By /s/ Xxxx X. Xxxxxx
----------------------------------
Title: Chief Executive Officer
PCA VALDOSTA CORPORATION, as a
Guarantor
By /s/ Xxxx X. Xxxxxx
----------------------------------
Title: Chief Executive Officer
Accepted and Agreed to:
XXXXXX GUARANTY TRUST COMPANY OF
NEW YORK, as Administrative Agent for the Lenders
By /s/ Xxx Xxxxxxx
------------------------------
Title: Vice President
