EXHIBIT 10.5
UK GUARANTY
Dated as of February 7, 2005
From
THE UK GUARANTORS NAMED HEREIN
and
THE ADDITIONAL UK GUARANTORS REFERRED TO HEREIN
as UK Guarantors
in favor of
THE LENDERS REFERRED TO IN
THE CREDIT AGREEMENT REFERRED TO HEREIN
T A B L E O F C O N T E N T S
Section Page
Section 1. Guaranty; Limitation of Liability...............................1
Section 2. Guaranty Absolute...............................................2
Section 3. Waivers and Acknowledgments.....................................3
Section 4. Subrogation.....................................................4
Section 5. Payments Free and Clear of Taxes, Etc...........................5
Section 6. Representations and Warranties..................................5
Section 7. Covenants.......................................................5
Section 8. Amendments, UK Guaranty Supplements, Etc........................5
Section 9. No Waiver; Remedies.............................................6
Section 10. Subordination..................................................6
Section 11. Continuing Guaranty; Assignments under the Credit Agreement....7
Section 12. Execution in Counterparts......................................7
Section 13. Governing Law; Jurisdiction; Waiver of Jury Trial, Etc.........7
Exhibit A - UK Guaranty Supplement
UK GUARANTY
UK GUARANTY dated as of February 7, 2005 made by the Persons listed on
the signature pages hereof under the caption "UK Guarantors" and the Additional
UK Guarantors (as defined in Section 8(b)) (such Persons so listed and the
Additional UK Guarantors being, collectively, the "UK Guarantors" and,
individually, each a "UK Guarantor") in favor of the Lenders (as defined in the
Credit Agreement referred to below).
PRELIMINARY STATEMENT. Rayovac Corporation, a Wisconsin corporation
(the "U.S. Borrower"), Varta Consumer BatteriesGmbH & Co. UK, a German
partnership limited by shares (the "Euro Borrower") and Rayovac Europe Limited,
a limited liability company (the "UK Borrower" and, together with the U.S.
Borrower and the Euro Borrower, each a "Borrower" and collectively the
"Borrowers") are party to a Fourth Amended and Restated Credit Agreement dated
as of February 7, 2005 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"; the capitalized
terms defined therein and not otherwise defined herein being used herein as
therein defined) with certain Lenders party thereto, and Bank of America, N.A.,
as Administrative Agent for such Lenders. Each UK Guarantor will derive
substantial direct and indirect benefits from the transactions contemplated by
the Credit Agreement. It is a condition precedent to the making of Loans by the
Lenders and the issuance of Letters of Credit by the L/C Issuer under the
Credit Agreement from time to time that each UK Guarantor shall have executed
and delivered this UK Guaranty.
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to make Loans and the L/C Issuer to issue Letters of Credit
under the Credit Agreement from time to time, each UK Guarantor, jointly and
severally with each other UK Guarantor, hereby agrees as follows:
Section 1. Guaranty; Limitation of Liability. (a) Each UK Guarantor
hereby absolutely, unconditionally and irrevocably guarantees the punctual
payment when due, whether at scheduled maturity or on any date of a required
prepayment or by acceleration, demand or otherwise, of all Obligations of the
UK Borrower now or hereafter existing under or in respect of the Loan Documents
(including, without limitation, any extensions, modifications, substitutions,
amendments or renewals of any or all of the foregoing Obligations) (such
Obligations being the "UK Guaranteed Obligations"); provided, however, that for
purposes of this UK Guaranty, the term "Loan Documents" shall not include (i)
any agreement evidencing or Guaranteeing a Qualified Foreign Credit Facility or
(ii) any Secured Hedge Agreement. Without limiting the generality of the
foregoing, each UK Guarantor's liability shall extend to all amounts that
constitute part of the UK Guaranteed Obligations and would be owed by the UK
Borrower to any Lender under or in respect of the Loan Documents but for the
fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving such other Loan
Party.
(b) Each UK Guarantor, and by its acceptance of this UK Guaranty, the
Administrative Agent and each other Lender, hereby confirms that it is the
intention of all such Persons that this UK Guaranty and the Obligations of each
UK Guarantor hereunder not constitute a fraudulent transfer or conveyance for
purposes of any Bankruptcy Law (as
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hereinafter defined), the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar foreign, federal or state Law to the
extent applicable to this UK Guaranty and the Obligations of each UK Guarantor
hereunder. To effectuate the foregoing intention, the Administrative Agent, the
other Lenders and the UK Guarantors hereby irrevocably agree that the
Obligations of each UK Guarantor under this UK Guaranty at any time shall be
limited to the maximum amount as will result in the Obligations of such UK
Guarantor under this UK Guaranty not constituting a fraudulent transfer or
conveyance. For purposes hereof, "Bankruptcy Law" means any proceeding of the
type referred to in Section 8.01(f) of the Credit Agreement or Title 11, U.S.
Code, or any similar foreign, federal or state Law for the relief of debtors.
Section 2. Guaranty Absolute. Each UK Guarantor guarantees that the UK
Guaranteed Obligations will be paid in accordance with the terms of the Loan
Documents, regardless of any Law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of any
Lender with respect thereto to the fullest extent permitted by applicable Law.
The Obligations of each UK Guarantor under or in respect of this UK Guaranty
are independent of the UK Guaranteed Obligations or any other Obligations of
any other Loan Party under or in respect of the Loan Documents, and a separate
action or actions may be brought and prosecuted against each UK Guarantor to
enforce this UK Guaranty, irrespective of whether any action is brought against
the UK Borrower or any other Loan Party or whether the UK Borrower or any other
Loan Party is joined in any such action or actions. The liability of each UK
Guarantor under this UK Guaranty shall be irrevocable, absolute and
unconditional irrespective of, and each UK Guarantor hereby irrevocably waives
to the fullest extent permitted by applicable Law any defenses it may now have
or hereafter acquire in any way relating to, any or all of the following:
(a) any lack of validity or enforceability of any Loan Document or any
agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the UK Guaranteed Obligations or any other
Obligations of any other Loan Party under or in respect of the Loan
Documents, or any other amendment or waiver of or any consent to departure
from any Loan Document, including, without limitation, any increase in the
UK Guaranteed Obligations resulting from the extension of additional
credit to any Loan Party or any of its Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of any Collateral
or any other collateral, or any taking, release or amendment or waiver of,
or consent to departure from, any other guaranty, for all or any of the UK
Guaranteed Obligations or any other Obligations of any other Loan Party
under or in respect of the Loan Documents;
(d) any manner of application of Collateral or any other collateral,
or proceeds thereof, to all or any of the UK Guaranteed Obligations or any
other Obligations of any other Loan Party under or in respect of the Loan
Documents, or any manner of sale or other disposition of any Collateral or
any other collateral for all or any of the UK Guaranteed Obligations or
any other Obligations of any Loan Party under the Loan Documents or any
other assets of any Loan Party or any of its Subsidiaries;
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(e) any change, restructuring or termination of the corporate
structure or existence of any Loan Party or any of its Subsidiaries;
(f) any failure of any Lender to disclose to any Loan Party any
information relating to the business, condition (financial or otherwise),
operations, performance, properties or prospects of any other Loan Party
now or hereafter known to such Lender (each UK Guarantor waiving any duty
on the part of the Lenders to disclose such information);
(g) the failure of any other Person to execute or deliver this UK
Guaranty, any UK Guaranty Supplement (as hereinafter defined) or any other
guaranty or agreement or the release or reduction of liability of any UK
Guarantor or other guarantor or surety with respect to the UK Guaranteed
Obligations (other than in connection with the termination of this UK
Guaranty in accordance with the provisions of Section 11); or
(h) any other circumstance (including, without limitation, any statute
of limitations) or any existence of or reliance on any representation by
any Lender that might otherwise constitute a defense available to, or a
discharge of, any Loan Party or any other guarantor or surety.
This UK Guaranty shall continue to be effective or be reinstated, as the case
may be, if at any time any payment of any of the UK Guaranteed Obligations is
rescinded or must otherwise be returned by any Lender or any other Person (but
only to the extent that such Person has a claim against a Lender, or a Lender
is liable to such Person, as a result of such rescission or return) upon the
insolvency, bankruptcy or reorganization of the UK Borrower or any other Loan
Party or otherwise, all as though such payment had not been made.
Section 3. Waivers and Acknowledgments. (a) Each UK Guarantor hereby
unconditionally and irrevocably waives promptness, diligence, notice of
acceptance, presentment, demand for performance, notice of nonperformance,
default, acceleration, protest or dishonor and any other notice with respect to
any of the UK Guaranteed Obligations and this UK Guaranty and any requirement
that any Lender protect, secure, perfect or insure any Lien or any property
subject thereto or exhaust any right or take any action against any Loan Party
or any other Person or any Collateral.
(b) Each UK Guarantor hereby unconditionally and irrevocably waives
any right to revoke this UK Guaranty and acknowledges that this UK Guaranty is
continuing in nature and applies to all UK Guaranteed Obligations, whether
existing now or in the future.
(c) Each UK Guarantor hereby unconditionally and irrevocably waives
(i) any defense arising by reason of any claim or defense based upon an
election of remedies by any Lender that in any manner impairs, reduces,
releases or otherwise adversely affects the subrogation, reimbursement,
exoneration, contribution or indemnification rights of such UK Guarantor or
other rights of such UK Guarantor to proceed against any of the other Loan
Parties, any other guarantor or any other Person or any Collateral and (ii) any
defense based on any right of set-off or counterclaim against or in respect of
the Obligations of such UK Guarantor hereunder.
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(d) Each UK Guarantor acknowledges that the Administrative Agent may,
without notice to or demand upon such UK Guarantor and without affecting the
liability of such UK Guarantor under this UK Guaranty, foreclose under any
mortgage by nonjudicial sale, and each UK Guarantor hereby waives any defense
to the recovery by the Administrative Agent and the other Lenders against such
UK Guarantor of any deficiency after such nonjudicial sale and any defense or
benefits that may be afforded by applicable Law.
(e) Each UK Guarantor hereby unconditionally and irrevocably waives
any duty on the part of any Lender to disclose to such UK Guarantor any matter,
fact or thing relating to the business, condition (financial or otherwise),
operations, performance, properties or prospects of any other Loan Party or any
of its Subsidiaries now or hereafter known by such Lender.
(f) Each UK Guarantor acknowledges that it will receive substantial
direct and indirect benefits from the financing arrangements contemplated by
the Loan Documents and that the waivers set forth in Section 2 and this Section
3 are knowingly made in contemplation of such benefits.
Section 4. Subrogation. Each UK Guarantor hereby unconditionally and
irrevocably agrees not to exercise any rights that it may now have or hereafter
acquire against the UK Borrower or any other Loan Party that arise from the
existence, payment, performance or enforcement of such UK Guarantor's
Obligations under or in respect of this UK Guaranty or any other Loan Document,
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution or indemnification and any right to participate in
any claim or remedy of any Lender against the UK Borrower or any other Loan
Party or any Collateral, whether or not such claim, remedy or right arises in
equity or under contract, statute or common Law, including, without limitation,
the right to take or receive from the Subsidiary Borrower or any other Loan
Party, directly or indirectly, in cash or other property or by set-off or in
any other manner, payment or security on account of such claim, remedy or
right, unless and until (a) all of the UK Guaranteed Obligations shall have
been paid in full in cash (other than L/C Obligations), (b) all Letters of
Credit shall have expired or been terminated or Cash Collateralized and (c) the
Commitments shall have expired or been terminated (the first date on which all
of the foregoing conditions have been met being the "Termination Date");
provided, however, that in the case of the termination or expiration of all
Letters of Credit, as described in clause (b) above (and not in the case of a
Cash Collateralization as described in clause (b) above), the Termination Date
shall not occur until (i) all L/C Obligations, to the extent such Obligations
constitute UK Guaranteed Obligations, shall have been paid in full in cash and
(ii) all of the other conditions in clauses (a) through (c) have been met. If
any amount shall be paid to any UK Guarantor in violation of the immediately
preceding sentence at any time prior to the Termination Date, such amount shall
be received and held in trust for the benefit of the Lenders, shall be
segregated from other property and funds of such UK Guarantor and shall
forthwith be paid or delivered to the Administrative Agent in the same form as
so received (with any necessary endorsement or assignment) to be credited and
applied to the UK Guaranteed Obligations, whether matured or unmatured, in
accordance with the terms of the Loan Documents, or to be held as Collateral
for any UK Guaranteed Obligations thereafter arising. If any UK Guarantor shall
make payment to any Lender of all or any part of the UK Guaranteed Obligations
and the Termination Date shall have occurred, the Lenders will, at such UK
Guarantor's request and expense, execute and deliver to
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such UK Guarantor appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by subrogation
to such UK Guarantor of an interest in the UK Guaranteed Obligations resulting
from such payment made by such UK Guarantor pursuant to this UK Guaranty.
Section 5. Payments Free and Clear of Taxes, Etc. Any and all payments
by or on account of any Obligation of any UK Guarantor hereunder shall be made
free and clear of and without reduction or withholding for any Indemnified
Taxes or Other Taxes on the same terms and to the same extent that payments by
the Borrowers are required to be made free and clear of Indemnified Taxes and
Other Taxes pursuant to the terms of Section 3.01 of the Credit Agreement.
Section 6. Representations and Warranties. Each UK Guarantor hereby
makes each representation and warranty made in the Loan Documents by the
Borrowers with respect to such UK Guarantor and each UK Guarantor hereby
further represents and warrants as follows:
(a) There are no conditions precedent to the effectiveness of this UK
Guaranty that have not been satisfied or waived.
(b) Such UK Guarantor has, independently and without reliance upon any
Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
UK Guaranty and each other Loan Document to which it is or is to be a
party, and such UK Guarantor has established adequate means of obtaining
from each other Loan Party on a continuing basis information pertaining
to, and is now and on a continuing basis will be completely familiar with,
the business, condition (financial or otherwise), operations, performance,
properties and prospects of such other Loan Party.
Section 7. Covenants. Each UK Guarantor covenants and agrees that, so
long as the Termination Date shall not have occurred, such UK Guarantor will
perform and observe, and cause each of its Subsidiaries to perform and observe,
all of the terms, covenants and agreements set forth in the Loan Documents on
its or their part to be performed or observed or that the Borrowers have agreed
to cause such UK Guarantor or such Subsidiaries to perform or observe.
Section 8. Amendments, UK Guaranty Supplements, Etc. (a) No amendment
or waiver of any provision of this UK Guaranty and no consent to any departure
by any UK Guarantor therefrom shall in any event be effective unless the same
shall be in writing and signed as required by Section 10.01 of the Credit
Agreement and signed by the UK Guarantors, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given. Upon the sale or dissolution of a UK Guarantor or in the event
that any UK Guarantor is designated a Dormant Subsidiary, in each case, to the
extent permitted in accordance with the terms of the Loan Documents, such UK
Guarantor shall be automatically released from the UK Guaranty.
(b) Upon the execution and delivery by any Person of a guaranty
supplement in substantially the form of Exhibit A hereto (each, a "UK Guaranty
Supplement"), (i) such Person shall be referred to as an "Additional UK
Guarantor" and shall become and be a UK
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Guarantor hereunder, and each reference in this UK Guaranty to a "UK Guarantor"
shall also mean and be a reference to such Additional UK Guarantor, and each
reference in any other Loan Document to a "UK Guarantor" or a "Guarantor" shall
also mean and be a reference to such Additional UK Guarantor, and (ii) each
reference herein to "this UK Guaranty", "hereunder", "hereof" or words of like
import referring to this UK Guaranty, and each reference in any other Loan
Document to the "UK Guaranty", "thereunder", "thereof" or words of like import
referring to this UK Guaranty, shall mean and be a reference to this UK
Guaranty as supplemented by such UK Guaranty Supplement.
Section 9. No Waiver; Remedies. No failure on the part of any Lender
to exercise, and no delay in exercising, any right or remedy hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right or remedy hereunder preclude any other or further exercise thereof or the
exercise of any other right or remedy. The rights and remedies herein provided
are cumulative and not exclusive of any rights or remedies provided by Law.
Section 10. Subordination. Each UK Guarantor hereby subordinates any
and all debts, liabilities and other obligations owed to such UK Guarantor by
each other Loan Party (the "Subordinated Obligations") to the UK Guaranteed
Obligations to the extent and in the manner hereinafter set forth in this
Section 10:
(a) Prohibited Payments, Etc. Except during the continuance of an
Event of Default (including the commencement and continuation of any
proceeding under any Bankruptcy Law relating to any other Loan Party),
each UK Guarantor may receive regularly scheduled payments from any other
Loan Party on account of the Subordinated Obligations. After the
occurrence and during the continuance of any Event of Default (including
the commencement and continuation of any proceeding under any Bankruptcy
Law relating to any other Loan Party) that has not been waived in
accordance with Section 10.01 of the Credit Agreement, no UK Guarantor
shall demand, accept or take any action to collect any payment on account
of the Subordinated Obligations.
(b) Prior Payment of UK Guaranteed Obligations. In any proceeding
under any Bankruptcy Law relating to any other Loan Party, each UK
Guarantor consents to the Lenders receiving payment in full in cash of all
UK Guaranteed Obligations (including all interest and expenses accruing
after the commencement of a proceeding under any Bankruptcy Law, whether
or not constituting an allowed claim in such proceeding ("Post Petition
Interest")) before such UK Guarantor receives payment of any Subordinated
Obligations.
(c) Turn-Over. After the occurrence and during the continuance of an
Event of Default (including the commencement and continuation of any
proceeding under any Bankruptcy Law relating to any other Loan Party),
each UK Guarantor shall, if the Administrative Agent so requests, collect,
enforce and receive payments on account of the Subordinated Obligations as
trustee for the Lenders and deliver such payments to the Administrative
Agent on account of the UK Guaranteed Obligations (including all Post
Petition Interest), together with any necessary endorsements or other
instruments of
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transfer, but without reducing or affecting in any manner the liability of
such UK Guarantor under the other provisions of this UK Guaranty.
(d) Administrative Agent Authorization. After the occurrence and
during the continuance of an Event of Default (including the commencement
and continuation of any proceeding under any Bankruptcy Law relating to
any other Loan Party), the Administrative Agent is authorized and
empowered (but without any obligation to so do), in its discretion, (i) in
the name of each UK Guarantor, to collect and enforce, and to submit
claims in respect of, Subordinated Obligations and to apply any amounts
received thereon to the UK Guaranteed Obligations (including any and all
Post Petition Interest), and (ii) to require each UK Guarantor (A) to
collect and enforce, and to submit claims in respect of, Subordinated
Obligations and (B) to pay any amounts received on such obligations to the
Administrative Agent for application to the UK Guaranteed Obligations
(including any and all Post Petition Interest).
Section 11. Continuing Guaranty; Assignments under the Credit
Agreement. This UK Guaranty is a continuing guaranty and shall (a) remain in
full force and effect until the Termination Date, (b) be binding upon each UK
Guarantor, its successors and assigns and (c) inure to the benefit of and be
enforceable by the Lenders and their successors, transferees and assigns.
Without limiting the generality of clause (c) of the immediately preceding
sentence, any Lender may assign or otherwise transfer all or any portion of its
rights and obligations under the Credit Agreement (including, without
limitation, all or any portion of its Commitments, the Loans owing to it and
any Note or Notes held by it) to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to
such Lender herein or otherwise, in each case as and to the extent provided in
Section 10.06 of the Credit Agreement. No UK Guarantor shall have the right to
assign its rights hereunder or any interest herein without the prior written
consent of the Lenders.
Section 12. Execution in Counterparts. This UK Guaranty and each
amendment, waiver and consent with respect hereto may be executed in any number
of counterparts and by different parties thereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this UK Guaranty by telecopy or by
an electronically mailed scanned copy shall be effective as delivery of an
original executed counterpart of this UK Guaranty.
Section 13. Governing Law; Jurisdiction; Waiver of Jury Trial, Etc.
(a) This UK Guaranty shall be governed by, and construed in accordance with,
the Laws of the State of New York.
(b) Each UK Guarantor hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of any New York
State court or federal court of the United States of America sitting in New
York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this UK Guaranty or any of the other
Loan Documents to which it is or is to be a party, or for recognition or
enforcement of any judgment, and each UK Guarantor hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in any such New York
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State court or, to the extent permitted by Law, in such federal court. Each UK
Guarantor agrees that a final judgment in any such action or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by Law. Nothing in this UK Guaranty or
any other Loan Document shall affect any right that any party may otherwise
have to bring any action or proceeding relating to this UK Guaranty or any
other Loan Document in the courts of any jurisdiction.
(c) Each UK Guarantor irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this UK Guaranty or any of the other Loan
Documents to which it is or is to be a party in any New York State or federal
court. Each UK Guarantor hereby irrevocably waives, to the fullest extent
permitted by Law, the defense of an inconvenient forum to the maintenance of
such suit, action or proceeding in any such court.
(d) EACH UK GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT
OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE
LOANS OR THE ACTIONS OF ANY LENDER IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.
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IN WITNESS WHEREOF, each UK Guarantor has caused this UK
Guaranty to be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.
RAYOVAC CORPORATION
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President, Secretary
and General Counsel
ROV INTERNATIONAL FINANCE COMPANY
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Secretary and Treasurer
RAYOVAC EUROPE GmbH
By /s/ Andreas Rouve
--------------------------------------
Name: Andreas Rouve
Title: Chief Financial Officer
By /s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Chief Executive Officer
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EXHIBIT A
UK GUARANTY SUPPLEMENT
[Omitted. A supplemental copy of this exhibit will be
furnished to the SEC upon request.]
