REAFFIRMATION OF GUARANTEE AND SECURITY AGREEMENT
July 2, 1998
Congress Financial Corporation (Southwest),
individually and as Agent
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Pamida, Inc. ("Pamida") and Seaway Importing Company ("Seaway", and
together with Pamida, and their respective successors and assigns, collectively,
"Borrowers") have entered into financing arrangements with Congress Financial
Corporation (Southwest), in its capacity as agent pursuant to the Loan Agreement
(as hereinafter defined) acting for and on behalf of the financial institutions
which are parties to the Loan Agreement as lenders (together with its successors
and assigns, in such capacity, "Agent"), and the financial institutions which
are parties to the Loan Agreement as lenders (together with their successors and
assigns, collectively, "Lenders") as set forth in the Loan and Security
Agreement, dated as of March 30, 1993, among Borrowers, Agent and Lenders (as
the same now exists or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced, the "Existing Agreement").
In connection with such financing arrangements, Pamida Holdings Corporation
(together with its successors and assigns, "Guarantor") has absolutely and
unconditionally guaranteed all of the obligations of Borrowers to Agent and
Lenders, as set forth in the Guarantee, dated as of March 30, 1993, by Guarantor
in favor of Agent and Lenders (as the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced, the
"Guarantee") and has granted to Agent, for itself and the benefit of Lenders, a
security interest in and lien upon certain of its assets and properties as set
forth in the Security Agreement, dated March 30, 1993, by Guarantor in favor of
Agent and Lenders (as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced, the "Security Agreement")
and the Pledge and Security Agreement, dated March 30, 1993, by Guarantor in
favor of Agent and Lenders (as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewal, restated or replaced, the "Pledge
Agreement", and together with the Security Agreement, collectively, the
"Security Agreements").
Borrowers and Guarantors have requested that Agent and Lenders extend,
modify and restate the financing arrangements provided by Agent and Lenders to
Borrowers, (including, INTER ALIA, an increase in the maximum amount of the
loans and other financial accommodations available to Borrowers to
$125,000,000), and Agent and Lenders are willing to so extend, modify, and
restate the financing arrangements as set forth in the Amended and Restated Loan
and Security Agreement, dated of even date herewith, by and among Borrowers,
Agent and Lenders (as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced, the "Loan Agreement").
All capitalized terms used herein shall have the meaning assigned thereto in the
Loan Agreement, unless otherwise defined herein.
In consideration of the foregoing and the agreements and covenants
contained herein, the undersigned agrees as follows:
1. Guarantor hereby acknowledges, confirms and agrees that (a) the
Guarantee and the Security Agreements are in full force and effect and the
obligations of Guarantor thereunder are valid, binding and enforceable against
Guarantor in accordance with the terms thereof as of the date hereof and (b)
each of Agent and Lenders has and shall continue to have a security interest in
and lien upon the assets and properties of Guarantor heretofore granted to each
of Agent and Lenders pursuant to the Security Agreements to secure the
Obligations.
2. Guarantor's obligations under the Guarantee and the Security
Agreement are unconditionally owing to Agent and Lenders, without offset,
defense or counterclaim of any kind, nature or description whatsoever and the
extension, modification and restatement of the Existing Agreement pursuant to
the Loan Agreement shall not, in any manner, be construed or constitute payment
of or impair, limit, cancel or extinguish the obligations, liabilities or
indebtedness evidenced by or arising under the Guarantee or constitute a
novation with respect thereto and the liens and security interests securing such
obligations, liabilities or indebtedness shall not in any manner be impaired,
limited, terminated, waived or released. Guarantor hereby acknowledges and
consents to the extension, modification and restatement of the Existing
Agreement pursuant to the Loan Agreement and acknowledges and agrees that the
Guaranteed Obligations (as such term is defined in the Guarantee) shall extend
and apply to all Obligations arising under or pursuant to the Loan Agreement.
3. Except as modified pursuant hereto, no other changes or
modifications to the Guarantee or Security Agreements are intended or implied
and in all other respects the Guarantee and Security Agreements are hereby
specifically ratified, restated and confirmed by Guarantor as of the date
hereof.
4. The validity, interpretation and enforcement of this Reaffirmation
and any dispute arising out of the relationship between the parties hereto in
connection with this Reaffirmation, whether in contract, tort, equity or
otherwise, shall be governed by the internal laws of the State of New York
(without giving effect to principles of conflicts of law).
5. This Reaffirmation shall be binding upon Guarantor and its
successors and assigns and inure to the benefit of each of Agent and the Lenders
and their respective successors and assigns.
The undersigned has caused this Reaffirmation to be duly executed and
delivered by its authorized officer as of the day and year first above written.
Very truly yours,
PAMIDA HOLDINGS CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President and Chief
Financial Officer
GUARANTEE
March 30, 1993
Congress Financial Corporation
(Southwest), as agent for itself and
BA Business Credit Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Re: Pamida, Inc. and Seaway Importing Company
(individually and collectively, "Borrowers")
Gentlemen:
Congress Financial Corporation (Southwest), in its individual capacity and
BA Business Credit Inc., (individually and collectively, "Lenders"), with
Congress Financial Corporation (Southwest), as agent for Lenders (in such
capacity, "Agent") are contemporaneously herewith entering into certain
financing arrangements with Borrowers pursuant to which Agent may make loans and
advances and provide other financial accommodations on behalf of Lenders to
Borrower as set forth in the Loan and Security Agreement, dated of even date
herewith, by and among Borrowers, Agent and Lenders (as the same now exists or
may hereafter be amended, modified, supplemented, extended, renewed or replaced,
the "Loan Agreement"), and other agreements, documents and instruments referred
to therein or at any time executed and/or delivered in connection therewith or
related thereto, including, but not limited to, this Guarantee (all of the
foregoing, together with the Loan Agreement, as the same now exist or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced, being collectively referred to herein as the "Financing Agreements").
Due to the close business and financial relationships between Borrowers and
the undersigned ("Guarantor"), in consideration of the benefits which will
accrue to Guarantor and as an inducement for and in consideration of Agent
making loans and advances and providing other financial accommodations on behalf
of Lenders to Borrowers pursuant to the Financing Agreements, Guarantor hereby
absolutely and unconditionally, (a) guarantees and agrees to be liable for the
full and indefeasible payment and performance when due of all obligations,
liabilities and indebtedness of any kind, nature and description owing by
Borrowers to Agent and/or either or both of Lenders, including principal,
interest, charges, fees, premiums, indemnities, costs and expenses, however
evidenced, whether as principal, surety, endorser, guarantor or otherwise,
whether arising under the other Financing Agreements or otherwise, whether now
existing or hereafter arising, whether arising before, during or after the
initial or any renewal term of the Loan Agreement and the other Financing
Agreements or after the commencement of any case with respect to Borrowers under
the U.S. Bankruptcy Code or any similar statute (and including, without
limitation, any principal, interest, fees, costs, expenses and other amounts,
whether or not such amounts are allowable either in whole or in part, in any
such case or similar proceeding), whether direct or indirect, absolute or
contingent, joint or several, due or not due, primary or secondary, liquidated
or unliquidated, secured or unsecured, original, renewed or extended and whether
arising directly or however acquired by Agent or Lenders, including from any
other person outright, conditionally or as collateral security, by assignment,
merger with any other person, participations or interests of Agent or Lenders in
the obligations of Borrowers to others, assumption, operation of law,
subrogation or otherwise and (b) agrees to pay to Lenders on demand the amount
of all expenses (including, without limitation, attorneys' fees and expenses)
incurred by Agent or Lenders in connection with the preparation, execution,
delivery, recording, administration, collection, liquidation, enforcement and
defense of Borrowers' obligations, liabilities and indebtedness as aforesaid to
Agent and Lenders, the rights of Agent and Lenders in any collateral or under
this Guarantee and all other Financing Agreements or in any way involving claims
by or against Agent or Lenders directly or indirectly arising out of or related
to the relationships between Borrowers, Agent and Lenders, Guarantor, Agent and
Lenders, or any other Obligor (as hereinafter defined), Agent and Lenders,
whether such expenses are incurred before, during or after the initial or any
renewal term of the Loan Agreement and the other Financing Agreements or after
the commencement of any case with respect to either of Borrowers or Guarantor
under the U.S. Bankruptcy Code or any similar statute (all of which being
collectively referred to herein as the "Guaranteed Obligations").
Notice of acceptance of this Guarantee, the making of loans and extension
of credit to Borrowers and presentment, demand, protest, notice of protest,
notice of nonpayment and all other notices to which Borrowers or Guarantor are
entitled are hereby waived. Guarantor also waives notice of and hereby consents
to, (i) any amendment, modification, supplement, renewal, restatement or
extensions of time of payment of or increase or decrease in the amount of any of
the Guaranteed Obligations or to the other Financing Agreements and any
collateral, and the guarantee made herein shall apply to the Guaranteed
Obligations as so amended, modified, supplemented, renewed, restated or
extended, increased or decreased, (ii) the taking, exchange, surrender and
releasing of collateral or guarantees now or at any time held by or available to
Agent or Lenders for the obligations of Borrowers or any other party at any time
liable for or in respect of the Guaranteed Obligations (individually, an
"Obligor" and collectively, the "Obligors"), (iii) the exercise of, or
refraining from the exercise of any rights against Borrowers, Guarantor or any
other Obligor or any collateral, and (iv) the settlement, compromise or release
of, or the waiver of any default with respect to, any Guaranteed Obligations.
Guarantor agrees that the amount of the Guaranteed Obligations shall not be
diminished and the liability of Guarantor hereunder shall not be otherwise
impaired or affected by any of the foregoing.
This Guarantee is a guaranty of payment and not of collection. Guarantor
agrees that Agent and Lenders need not attempt to collect any Guaranteed
Obligations from Borrowers or other Obligors or to realize upon any collateral,
but may require Guarantor to make immediate payment of Guaranteed Obligations to
Lenders when due, whether by maturity, acceleration or otherwise, or at any time
thereafter. Agent and Lenders may apply any amounts received in respect of the
Guaranteed Obligations to any of the Guaranteed Obligations, in whole or in part
(including attorneys' fees and legal expenses incurred by Agent or Lenders with
respect thereto or otherwise chargeable to Borrowers or Guarantor) and in such
order as Agent or Lenders may elect, whether or not then due.
No invalidity, irregularity or unenforceability of all or any part of the
Guaranteed Obligations shall affect, impair or be a defense to this Guarantee,
nor shall any other circumstance which might otherwise constitute a defense
available to or legal or equitable discharge of Borrowers in respect of any of
the Guaranteed Obligations or Guarantor in respect of this Guarantee affect,
impair or be a defense to this Guarantee. Without limitation of the foregoing,
the liability of Guarantor hereunder shall not be discharged or impaired in any
respect by reason of any failure by Agent or Lenders to perfect or continue
perfection of any lien or security interest in any collateral for the Guaranteed
Obligations or any delay by Agent or Lenders in perfecting any such lien or
security interest. As to interest, fees and expenses, whether arising before or
after the commencement of any case with respect to Borrowers under the U.S.
Bankruptcy Code or any similar statute, Guarantor shall be liable therefor, even
if Borrowers' liability for such amounts does not, or ceases to, exist by
operation of law.
This Guarantee is absolute, unconditional and continuing. Payment by
Guarantor shall be made to Agent at the office of Agent from time to time on
demand as Guaranteed Obligations become due. One or more successive or
concurrent actions may be brought hereon against Guarantor either in the same
action in which Borrowers are sued or in separate actions. In the event any
claim or action, or action on any judgment, based on this Guarantee is brought
against Guarantor, Guarantor agrees not to deduct, set-off, or seek any
counterclaim for or recoup any amounts which are or may be owed by Agent or
Lenders to Guarantor.
Payment of all amounts now or hereafter owed to Guarantor by Borrowers or
any other Obligor is hereby subordinated in right of payment to the indefeasible
payment in full to Agent and Lenders of the Guaranteed Obligations and is hereby
assigned to Agent and Lenders as security therefor. Guarantor hereby irrevocably
and unconditionally waives and relinquishes all statutory, contractual, common
law, equitable and all other claims against Borrowers, any collateral for the
Guaranteed Obligations or other assets of Borrowers or any other Obligor, for
subordination, reimbursement, exoneration, contribution, indemnification, setoff
or other recourse in respect to sums paid or payable to Agent and Lenders by
Guarantor hereunder and Guarantor hereby further irrevocably and unconditionally
waives and relinquishes any and all other benefits which Guarantor might
otherwise directly or indirectly receive or be entitled to receive by reason of
any amounts paid by or collected or due from Guarantor, Borrowers or any other
Obligor upon the Guaranteed Obligations or realized from their property.
In case proceedings be instituted by or against Borrowers, Guarantor or any
other Obligor, in bankruptcy or insolvency, or for reorganization, arrangement,
receivership, or the like, or if Borrowers, Guarantors or any other Obligor
calls a meeting of creditors or makes any assignment for the benefit of
creditors, or upon the occurrence of any event which constitutes a default or
event of default under the other Financing Agreements, the liability of
Guarantor for the entire Guaranteed Obligations shall mature, even if the
liability of Borrowers or any other Obligor therefor does not.
Guarantor shall continue to be liable hereunder until one of Agent's
officers actually receives a written termination notice by certified mail; but
the giving of such notice shall not relieve Guarantor from liability for any
Guaranteed Obligations incurred before termination or for post-termination
collection expenses and interest pertaining to any Guaranteed Obligations
arising before termination.
The books and records of Agent showing the account between Agent and
Borrowers shall be admissible in evidence in any action or proceeding as PRIMA
FACIE proof of the items therein set forth, and the monthly statements of Agent
rendered to Borrowers, to the extent to which no written objection is made
within thirty (30) days from the date of sending thereof to Borrowers, shall be
deemed conclusively correct and constitute an account stated between Agent,
Lenders and Borrowers and be binding on Guarantor.
No delay on the part of Agent or Lenders in exercising any rights hereunder
or failure to exercise the same shall constitute a waiver of such rights. No
notice or demand on Guarantor shall be deemed to be a waiver of the obligation
of Guarantor to take further action without notice or demand as provided herein.
No waiver of any of the rights hereunder, and no modification or amendment of
this Guarantee, shall be deemed to be made by Agent or Lenders unless the same
shall be in writing duly signed on its or their behalf and each such waiver, if
any, shall apply only with respect to the specific instance involved and shall
in no way impair Agent's or Lenders' rights or the obligations of Guarantor to
Agent or Lenders in any other respect at any other time.
GUARANTOR HEREBY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF ANY
KIND WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THIS GUARANTEE, THE
OTHER FINANCING AGREEMENTS, THE GUARANTEED OBLIGATIONS, ANY COLLATERAL THEREFOR
OR ANY INSTRUMENT, DOCUMENT OR OTHER GUARANTEE DELIVERED PURSUANT TO ANY OF THE
FOREGOING, OR THE VALIDITY, PROTECTION, INTERPRETATION, ADMINISTRATION,
COLLECTION OR ENFORCEMENT HEREOF OR THEREOF OR PURSUANT TO THE OTHER FINANCING
AGREEMENTS, OR ANY OTHER CLAIM OR DISPUTE HOWSOEVER ARISING BETWEEN GUARANTOR
AND AGENT OR GUARANTOR AND LENDERS.
GUARANTOR HEREBY WAIVES ALL RIGHTS OF SETOFF AND RIGHTS TO IMPOSE
COUNTERCLAIMS IN THE EVENT OF ANY LITIGATION WITH RESPECT TO ANY MATTER
CONNECTED WITH THIS GUARANTEE, THE OTHER FINANCING AGREEMENTS, THE OBLIGATIONS,
ANY COLLATERAL THEREFOR, OR ANY TRANSACTION BETWEEN THE PARTIES HERETO, AND
IRREVOCABLY CONSENTS AND SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE SUPREME
COURT OF THE STATE OF NEW YORK IN NEW YORK CITY AND THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND THE DISTRICT COURT OF THE STATE
OF TEXAS AND THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS
AND THE COURTS OF ANY STATE IN WHICH ANY OF THE COLLATERAL IS LOCATED AND OF ANY
FEDERAL COURT LOCATED IN SUCH STATES IN CONNECTION WITH ANY ACTION, PROCEEDING
OR CLAIM ARISING OUT OF OR RELATING TO THIS GUARANTEE, THE OTHER FINANCING
AGREEMENTS, THE OBLIGATIONS, ANY COLLATERAL THEREFOR OR ANY DOCUMENT, INSTRUMENT
OR GUARANTEE DELIVERED PURSUANT TO ANY OF THE FOREGOING. IN ANY SUCH LITIGATION,
GUARANTOR WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS AND
AGREES THAT THE SERVICE THEREOF MAY BE MADE BY CERTIFIED OR REGISTERED MAIL,
RETURN RECEIPT REQUESTED AND BY TELECOPIER, DIRECTED TO IT AT ITS CHIEF
EXECUTIVE OFFICE SET FORTH HEREIN, OR DESIGNATED IN WRITING PURSUANT TO THIS
GUARANTEE, OR IN ANY OTHER MANNER PERMITTED BY THE RULES OF SAID COURTS. WITHIN
THIRTY (30) DAYS AFTER SERVICE, GUARANTOR SHALL APPEAR TO ANSWER SUCH SUMMONS,
COMPLAINT OR OTHER PROCESS, FAILING WHICH GUARANTOR SHALL BE DEEMED IN DEFAULT
AND JUDGMENT MAY BE ENTERED BY AGENT AND LENDERS AGAINST GUARANTOR FOR THE
AMOUNT OF THE CLAIM AND OTHER RELIEF REQUESTED THEREIN.
If after receipt of any payment of, or proceeds applied to the payment of,
all or any part of the Guaranteed Obligations, Agent or Lenders are for any
reason required to surrender such payment or proceeds to any person or entity,
because such payment or proceeds is invalidated, declared fraudulent, set aside,
determined to be void or voidable as a preference, or a diversion of trust
funds, or for any other reason, then the Guaranteed Obligations or any part
thereof intended to be satisfied shall be revived and continue and this
Guarantee shall continue in full force as if such payment or proceeds had not
been received by Agent or Lenders and Guarantor shall be liable to pay to Agent
or Lenders, and hereby does indemnify Agent and Lenders and hold them harmless
for the amount of such payment or proceeds surrendered. The provisions of this
paragraph shall be and remain effective notwithstanding any contrary action
which may have been taken by Agent or Lenders in reliance upon such payment or
proceeds, and any such contrary action so taken shall be without prejudice to
Agent's or Lenders' rights under this Guarantee and shall be deemed to have been
conditioned upon such payment or proceeds having become final and irrevocable.
The provisions of this paragraph shall survive the termination of this Guarantee
and the other Financing Agreements and the repayment of the Obligations.
This Guarantee shall be binding upon Guarantor and its successors and
assigns and shall inure to the benefit of Agent and Lenders and their respective
successors, endorsers, transferees and assigns. All references to the term
"Guarantor" wherever used herein shall mean Guarantor and its successors and
assigns. All references to the term "Borrowers" wherever used herein shall mean
both and each of them and their respective successors and assigns, jointly and
severally, individually and collectively. All references to the term "Lenders"
wherever used herein shall mean both and each of them and their respective
successors and assigns, individually and collectively. All references to the
term "Agent" shall be deemed to include its successors and assigns.
IN WITNESS WHEREOF, Guarantor has executed and delivered this Guarantee as
of the day and year first above written.
PAMIDA HOLDINGS CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
Chief Executive Office:
8800 "F" Street
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On this 30th day of March, 1993, before me personally came ▇▇▇▇▇▇▇ ▇. ▇▇▇▇,
to me known, who stated that he is the Executive Vice President, of PAMIDA
HOLDINGS CORPORATION, the corporation described in and which executed the
foregoing instrument; and that he signed his name thereto by order of the Board
of Directors of said corporation.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
Notary Public
Commission expires: August 11, 1993