GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT (the "Agreement") is made this 28th day of
January, 1995 (the "Agreement"), by and among Culligan International Company
("Culligan") and Astrum International Corp. ("Astrum") (together, the
"Guarantors") and Anvil Knitwear, Inc. ("Buyer").
W I T N E S S E T H:
WHEREAS, the Buyer has entered into an Asset Purchase Agreement,
dated December 29, 1994, as amended as January 28, 1995 (the "Purchase
Agreement"), among ▇▇▇▇▇▇▇▇ Corporation and ▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc. (together, the
"Sellers") and the Buyer;
WHEREAS, in consideration of the guaranty provided by Culligan
herein, the Sellers have paid to Culligan the sum of $9,000,000;
WHEREAS, the Sellers are direct and indirect wholly-owned
subsidiaries of Astrum; and
WHEREAS, pursuant to Article 9 of the Purchase Agreement the Sellers
have granted the Buyer certain indemnification rights.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Buyer and the Guarantors agree
as follows:
1. The Guaranty. Subject to the limitations expressly set forth
herein, each of Culligan and Astrum hereby jointly and severally unconditionally
guarantee for the benefit of the Buyer, the prompt payment and performance in
full when due by the Sellers of all of the Sellers' obligations of any kind or
nature under Article 9 of the Purchase Agreement, subject to all of the
conditions and limitations applicable to the Sellers set forth therein;
provided, however, that (a) the Buyer shall have first notified the Sellers that
such payment and performance from the Sellers is due and owing pursuant to the
terms of the Purchase Agreement; and (b) Astrum shall have no obligations or
liability under this Section 1 unless and until either (x) Culligan's
Shareholders' Equity (as defined below) shall be less than $70,000,000 for the
twelve-month period ending on the month ending immediately prior to the date of
determination, or (y) if Culligan asserts or claims at any time that Culligan's
obligations under this Section 1 is unenforceable against it (or any similar
assertion or claim) or that Culligan does not have the financial capability to
perform its obligations under this Section 1 in a timely manner (or any similar
assertion or claim); provided, further, upon the occurrence of any event
referred to in clauses (x) and (y) above, Astrum shall thereafter be
unconditionally obligated to guarantee the obligations of the Sellers to the
extent set forth in this Section 1 (without the benefit of subparagraph (b) of
this Section 1). "Shareholders' Equity" means
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for the applicable period, the difference between (i) the product of (x) the net
income of Culligan plus any and all interest, taxes, depreciation and
amortization which were deducted in determining the amount of such net income
and (y) 6.5 and (ii) the aggregate amount of indebtedness for money borrowed
(including any and all capitalized lease obligations), all as determined in
accordance with generally accepted accounting principles consistently applied;
provided that if the stock of Culligan is publicly traded, the Shareholders
Equity shall mean the product of multiplying the number of outstanding common
shares of Culligan on the date of determination by the average closing trading
price on the thirty trading days preceding the date of determination.
2. Organization and Good Standing of Guarantors. Each of the
Guarantors is a corporation duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its organization and (b) is
qualified to do business and is in good standing in all jurisdictions where it
is required to be qualified as a foreign corporation except for such failures to
be so qualified as have not had, and would not be reasonably expected to have, a
material adverse effect on (x) the business, operations, assets, liabilities,
operating results or financial condition of either Guarantor or (y) the ability
of either Guarantor to perform its obligations hereunder (a "Guarantor Material
Adverse Effect").
3. Authority, Approvals and Consents. Each of the Guarantors has the
corporate power and authority to enter, execute, deliver and perform this
Agreement. The execution, delivery and performance of this Agreement have been
duly authorized and approved by the Executive Committee of the Board of
Directors of each Guarantor and no other corporate proceedings on the part of
either Guarantor are necessary to authorize and approve this Agreement. This
Agreement has been duly executed and delivered by each Guarantor and constitutes
a valid and binding obligation of such Guarantor, enforceable against such
Guarantor in accordance with its terms. The execution, delivery and performance
of this Agreement by each Guarantor do not and will not:
(a) contravene or otherwise violate any provisions of the
Certificates of Incorporation or By-laws of either Guarantor;
(b) (after notice or lapse of time or both) conflict with, result
in a breach of any provision of, constitute a default under,
result in the modification or cancellation of, or give rise to
any right of termination in respect of, any contract,
agreement, commitment, understanding or arrangement of any
kind to which either Guarantor is a party except for such
conflicts, breaches, defaults, modifications, cancellations or
terminations as have not had, and would not be reasonably
expected to have, a Guarantor Material Adverse Effect;
(c) violate or conflict with any constitutions, treaties,
statutes, laws, ordinances, codes, rules, regulations,
standards, judgments, decrees, writs, rulings, injunctions,
orders, decisions, injunctions and other legal requirements of
any
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governmental authority applicable to either Guarantor, except
for such violations or conflicts as have had, or would be
reasonably expected to have, a Guarantor Material Adverse
Effect; or
(d) require the approval of any governmental authority the absence
of which would be reasonably expected to have a Guarantor
Material Adverse Effect.
4. Headings. The section headings herein are for convenience of
reference only, do not constitute part of this Agreement and will not be deemed
to limit or otherwise affect any of the provisions hereof. References to
Sections, unless otherwise indicated, are references to Sections of this
Agreement.
5. Notices. All notices to be given pursuant to this Agreement to
any party must be in writing and will be deemed to have been validly given:
(a) if delivered by hand to an officer or agent of such party at
its address given below;
(b) if delivered by overnight commercial courier (such as Federal
Express); or
(c) if delivered by telecopier transmission, to such party at its
address given below.
The address of each party for the purposes of this Agreement is as
follows:
If to the Guarantors:
Astrum International Corp. and
Culligan International Corp.
c/o Astrum Management Corp.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
Senior Vice President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Willkie, ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
One Citicorp Center
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Buyer:
Anvil Knitwear, Inc.
c/o Vestar Capital Partners
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Managing Director
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esquire
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Each party shall by notice to the other change its address for
notice whenever its existing address or facsimile number for notice changes.
6. Assignment. This Agreement and all provision hereof will be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns; provided, however, that neither this Agreement
nor any right, interest, or obligation hereunder may be assigned by any party
hereto without the prior written consent of the other party except that Buyer
may, without the consent of the Sellers, assign Buyer's rights and interest
under this Agreement in connection with acquisition financing necessary to
affect the transactions contemplated under the Purchase Agreement, provided
further that no party hereto or successor or assignee has the ability to
subrogate any other Person to any right or obligation under this Agreement.
7. Amendment; Waiver.
(a) This Agreement may only be amended or modified in writing
signed by the party against whom enforcement of any such
amendment or modification is sought.
(b) Any party hereto may, by an instrument in writing, waive
compliance with any term or provision of this Agreement on the
part of such other party hereto.
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The waiver by any party hereto of a breach of any term or
provision of this Agreement will not be construed as a waiver
of any subsequent breach.
8. Obligations Unconditional. Subject to the limitations set forth
in Section 1, the obligations of the Guarantors under this Agreement are joint
and several, absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of the Purchase Agreement, or any other
agreement or instrument referred to therein, or any substitution, release or
exchange of any other guarantee of or security for any of the obligations
hereunder and, to the fullest extent permitted by applicable law, irrespective
of any other circumstances whatsoever which might otherwise constitute a legal
or equitable discharge or defense of a surety or guarantor, it being the intent
of this Section 8 that the obligations of the Guarantors hereunder shall be
absolute and unconditional under any and all circumstances. Without limiting the
generality of the foregoing, it is agreed that the occurrence of any one or more
of the following shall not alter or impair the liability of any Guarantor
hereunder which shall remain absolute and unconditional as described above:
(i) at any time or from time to time, without notice to any
Guarantor, the time for any performance of or compliance with any of
the obligations hereunder shall be extended, or such performance or
compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of the
Purchase Agreement or any other agreement or instrument referred
therein shall be done or omitted;
(iii) any of the obligations hereunder shall be modified,
supplemented or amended in any respect, or any right under the
Purchase Agreement or any other agreement or instrument referred to
therein shall be waived or any other guarantee of any of the
obligations hereunder or any security therefor shall be released or
exchanged in whole or in part or otherwise dealt with; or
(iv) any of the obligations shall be determined to be void or
voidable (including, without limitation, for the benefit of any
creditor or any Guarantor) or shall be subordinated to the claims of
any person (including, without limitation, any creditor or any
Guarantor).
Subject to the limitations set forth in Section 1, with respect to its
obligations hereunder, each Guarantor hereby expressly waives diligence,
presentment, demand of payment, protest and all notices whatsoever, and any
requirement that the Buyer exhaust any right, power or remedy or proceed against
any person under the Purchase Agreement or any other agreement or instrument
referred to therein, or against any other Person under any other guarantee of,
or security for, any of the obligations hereunder.
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9. Reinstatement. The obligations of the Guarantors under this
Section 9 shall be automatically reinstated if and to the extent that, for any
reason any payment by or on behalf of any person in respect of the obligations
hereunder is rescinded or must be otherwise restored by any holder of any of the
obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Buyer on demand for all reasonable costs and expenses (including, without
limitation, reasonable fees of counsel) incurred by the Buyer in connection with
such rescission or restoration, including any such costs and expenses incurred
in defending against any claim alleging that such payment constituted a
preference, fraudulent transfer or similar payment under any bankruptcy,
insolvency or similar law.
10. Certain Additional Waivers. Each Guarantor further agrees that
it shall have no right of subrogation, reimbursement or indemnity, nor any right
of recourse to security, if any, for the obligations hereunder, so long as any
amounts payable to the Buyer in respect of the obligations hereunder shall
remain outstanding.
11. Continuing Guaranty. The guarantees in this Agreement is a
continuing guaranty, and shall apply to all obligations hereunder whenever
arising.
12. Counterparts. This Agreement may be executed in two or more
counterparts, all of which will be considered one and the same agreement and
each of which will be deemed an original.
13. Governing Law. This Agreement will be governed by the laws of
the State of New York and the laws of the United States applicable therein
(regardless of the laws that might be applicable under principles of conflicts
of law) as to all matters, including but not limited to matters of validity,
construction, effect and performance.
14. Severability. If any one or more of the provisions of this
Agreement is held to be invalid, illegal or unenforceable, the validity,
legality or enforceability or the remaining provisions of this Agreement will
not be affected thereby, and the Guarantors and Buyer will use their reasonable
efforts to substitute one or more valid, legal and enforceable provisions which
insofar as practicable implement the purposes and intent hereof. To the extent
permitted by applicable law, each party waives any provision of law which
renders any provision of this Agreement invalid, illegal or unenforceable in any
respect.
15. Consent to Jurisdiction. Buyer and each Guarantor hereby submit
to the exclusive jurisdiction of the courts of the State of New York solely in
respect of the interpretation and enforcement of the provisions of this
Agreement and any related agreement and hereby waive, and agree not to assert,
as a defense in any action, suit or proceeding for the interpretation or
enforcement of this Agreement any related agreement, that they are not subject
thereto or that such action, suit or proceeding may not be brought or is not
maintainable in such courts or that this Agreement may not be enforced in or by
such courts or that their property is exempt or immune from
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execution, that the suit, action or proceeding is brought in an inconvenient
forum, or that the venue of the suit, action or proceeding is improper. Service
of process with respect thereto may be made upon the Buyer or the Guarantors by
mailing a copy thereof by registered or certified mail, postage prepaid, to such
party at its address as provided in Section 5 hereof.
16. Third Party Beneficiaries. This Agreement is not intended to
confer upon any other Person any rights or remedies hereunder.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
ASTRUM INTERNATIONAL CORP.
By:
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Name:
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Title:
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CULLIGAN INTERNATIONAL COMPANY
By:
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Name:
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Title:
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ANVIL KNITWEAR, INC.
By:
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Name:
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Title:
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