Exhibit 10.5
CONTINUING GUARANTY
AGREEMENT
This CONTINUING GUARANTY AGREEMENT
(the “ Guaranty ”) is made and entered
into as of the 28th day of August, 2009, by the undersigned
Guarantor (whether one or more the “ Guarantor
”, and if more than one jointly and severally), in favor of
U.S. BANK, NATIONAL ASSOCIATION , in its capacity as
collateral agent (together with its permitted successors and
assigns, the “ Collateral Agent ”)
pursuant to the Intercreditor Agreement (as hereafter defined), for
the benefit of the Secured Parties (as defined in the Intercreditor
Agreement). Unless otherwise indicated herein, all terms used with
their initial letter capitalized are used herein with their meaning
as defined in the Intercreditor Agreement.
RECITALS:
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A.
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The Guarantor is an Affiliate of Allied
Capital Corporation, a Maryland corporation (the “
Borrower ”).
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B.
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The Borrower has entered into the Bank Credit
Agreement and the Note Agreement, and pursuant to the requirements
of such documents, (i) the Borrower and certain of its
subsidiaries have granted (or concurrently herewith are granting)
liens and security interests on certain of their respective assets
to secure the Senior Secured Obligations and (ii) the Borrower
is required to cause the Guarantor to execute and deliver this
Guaranty to the Collateral Agent (for the ratable benefit of the
Secured Parties).
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C.
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Pursuant to and subject to the terms of that
certain Intercreditor and Collateral Agency Agreement dated as of
August 28, 2009 (as the same may be amended, modified,
supplemented, or restated from time to time, the “
Intercreditor Agreement ”) among Collateral
Agent, the Administrative Agent (on behalf of itself and each of
the Lenders), and the Noteholders, and acknowledged by the
Borrower, the Guarantor, and the other guarantors of the Senior
Secured Obligations, the Secured Parties (i) appointed
Collateral Agent to act as agent for the benefit of the Secured
Parties with respect to this Guaranty and the collateral pledged by
the Borrower and certain of its subsidiaries and (ii) authorized
and directed Collateral Agent to execute this Guaranty and perform
the duties and obligations delegated to it pursuant to the terms of
the Intercreditor Agreement.
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D.
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The Borrower understands that the execution
and delivery of this Guaranty is a requirement of the Bank Credit
Agreement and the Note Agreement.
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E.
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In the Guarantor’s judgment, the value
of the consideration received under the Financing Documents,
together with its contribution rights from the Borrower and any
other guarantor of the Guaranteed Obligations (as hereafter
defined), is reasonably worth at least as much as its liabilities
and obligations under this Guaranty, and such liability and
obligation may reasonably be expected to benefit the Guarantor
directly or indirectly.
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NOW, THEREFORE,
FOR VALUE RECEIVED, the sufficiency of which is hereby
acknowledged, and in consideration of credit and/or financial
accommodation heretofore or hereafter from time to time made or
granted to the Borrower under the Financing Documents, the
Guarantor hereby furnishes its guaranty of the Guaranteed
Obligations in favor of Collateral Agent (for the benefit of the
Secured Parties), as follows:
1. Guaranty. The
Guarantor hereby absolutely and unconditionally guarantees, as a
guaranty of payment and performance and not merely as a guaranty of
collection, prompt payment when due, whether at stated maturity, by
required prepayment, upon acceleration, demand, or otherwise, and
at all times thereafter, of any and all of the Senior Secured
Obligations, whether now existing or hereafter arising of every
kind, nature and character, direct or indirect, absolute or
contingent, liquidated or unliquidated, voluntary or involuntary
and whether for principal, interest, premiums, fees, indemnities,
damages, costs, expenses, or otherwise (including all renewals,
extensions, amendments, refinancings and other modifications
thereof and all costs, attorneys’ fees and expenses incurred
by the Secured Parties in connection with the collection or
enforcement thereof), and whether recovery upon such indebtedness
and liabilities may be or hereafter become unenforceable or shall
be an allowed or disallowed claim under any proceeding or case
commenced by or against the Guarantor or the Borrower under the
Bankruptcy Code (Title 11, United States Code), any successor
statute or any other liquidation, conservatorship, bankruptcy,
assignment for the benefit of creditors, moratorium, rearrangement,
receivership, insolvency, reorganization, or similar debtor relief
laws of the United States or other applicable jurisdictions from
time to time in effect and affecting the rights of creditors
generally (collectively, “ Debtor Relief Laws
”), and including interest that accrues after the
commencement by or against the Borrower of any proceeding under any
Debtor Relief Laws (collectively, the “ Guaranteed
Obligations ”). The Collateral Agent’s and each
of the other Secured Party’s books and records showing the
amount of the Guaranteed Obligations shall be admissible in
evidence in any action or proceeding, and shall be binding upon the
Guarantor and conclusive for the purpose of establishing the amount
of the Guaranteed Obligations, absent manifest error. This Guaranty
shall not be affected by the genuineness, validity, regularity, or
enforceability of the Guaranteed Obligations or any instrument or
agreement evidencing any Guaranteed Obligations, or by the
existence, validity, enforceability, perfection, non-perfection, or
extent of any collateral therefor, or by any fact or circumstance
relating to the Guaranteed Obligations which might otherwise
constitute a defense to the obligations of the Guarantor under this
Guaranty, and the Guarantor hereby irrevocably waives any defenses
it may now have or hereafter acquire in any way relating to any or
all of the foregoing. Anything contained herein to the contrary
notwithstanding, the obligations of the Guarantor hereunder at any
time shall be limited to an aggregate amount equal to the largest
amount that would not render its obligations hereunder subject to
avoidance as a fraudulent transfer or conveyance under
Section 548 of the Bankruptcy Code (Title 11, United States
Code) or any comparable provisions of any similar federal or state
law.
2. No Setoff or Deductions;
Taxes; Payments. The Guarantor represents and warrants that it
is organized and resident in the United States of America. The
Guarantor shall make all payments hereunder without setoff or
counterclaim and free and clear of and without deduction for any
taxes, levies, imposts, duties, charges, fees, deductions,
withholdings, compulsory loans, restrictions, or conditions of any
nature now or hereafter imposed or levied by any jurisdiction or
any political subdivision thereof or taxing or other authority
therein unless the Guarantor is compelled by law to make such
deduction or withholding. If any such obligation (other than one
arising with respect to franchises taxes or taxes based on or
measured by the income or profits of the Secured Parties) is
imposed upon the Guarantor with respect to any amount payable by it
hereunder, the Guarantor will pay to the Collateral Agent (for the
benefit of the Secured Parties), on the date on which such amount
is due and payable hereunder, such additional amount in U.S.
dollars as shall be necessary to enable the Secured Parties to
receive the same net amount which the Secured Parties would have
received on such due date had no such obligation been imposed upon
the Guarantor. The Guarantor will deliver promptly to the
Collateral Agent certificates or other valid vouchers for all taxes
or other charges deducted from or paid with respect to payments
made by the Guarantor hereunder. The obligations of the Guarantor
under this paragraph shall survive the payment in full of the
Guaranteed Obligations and termination of this Guaranty.
3. Rights of Collateral
Agent. The Guarantor consents and agrees that the Collateral
Agent, or the Secured Parties may, at any time and from time to
time, without notice (except as provided in Section 4 below)
or demand, and without affecting the enforceability or continuing
effectiveness hereof: (a) amend, extend, renew, compromise,
discharge, accelerate or otherwise change the time for payment or
the terms of the Guaranteed Obligations or any part thereof;
(b) take, hold, exchange, enforce, waive, release, fail to
perfect, sell, or otherwise dispose of any security for the payment
of this Guaranty or any Guaranteed Obligations; (c) apply such
security and direct the order or manner of sale thereof as the
Collateral Agent and Secured Parties may determine; and (d) release
or substitute one or more of any endorsers or other guarantors of
any of the Senior Secured Obligations. Without limiting the
generality of the foregoing but subject to any applicable
provisions of the other Financing Documents, the Guarantor consents
to the taking of, or failure to take, any action which might in any
manner or to any extent vary the risks of the Guarantor under this
Guaranty or which, but for this provision, might operate as a
discharge of the Guarantor.
4. Certain Waivers. The
Guarantor waives (a) any defense arising by reason of any
disability or other defense (other than the defense that the Senior
Secured Obligations shall have been fully and finally performed and
paid in full in cash, to the extent of any such payment) of the
Borrower, any subsidiary of the Borrower, or any other guarantor of
any of the Senior Secured Obligations, or the cessation from any
cause whatsoever (including any act or omission of any Secured
Party) of the liability of the Borrower; (b) any defense based
on any claim that the Guarantor’s obligations exceed or are
more burdensome than those of the Borrower; (c) the benefit of
any statute of limitations affecting the Guarantor’s
liability hereunder; (d) any right to require the Collateral
Agent to proceed against the Borrower, proceed against or exhaust
any security for the Guaranteed Obligations, or pursue any other
remedy in the Collateral Agent’s power whatsoever;
(e) any benefit of and any right to participate in any
security now or hereafter held by the Collateral Agent on behalf of
the Secured Parties; and (f) to the fullest extent permitted
by law, any and all other defenses or benefits that may be derived
from or afforded by applicable law limiting the liability of or
exonerating guarantors or sureties. The Guarantor expressly waives
all setoffs and counterclaims and all presentments, demands for
payment or performance, notices of nonpayment or nonperformance,
protests, notices of protest, notices of dishonor, and all other
notices or demands of any kind or nature whatsoever with respect to
the Guaranteed Obligations, and all notices of acceptance of this
Guaranty or of the existence, creation, or incurrence of new or
additional Guaranteed Obligations. Notwithstanding the foregoing,
nothing set forth herein shall alter or modify such
Guarantor’s right to receive notice of any matter under any
of the other Financing Documents.
5. Obligations
Independent. The obligations of the Guarantor hereunder are
those of primary obligor, and not merely as surety, and are
independent of the Guaranteed Obligations and the obligations of
any other guarantor, and a separate action may be brought against
the Guarantor to enforce this Guaranty whether or not the Borrower
or any other guarantor or any other person or entity is joined as a
party. The Guarantor