This GUARANTY
AGREEMENT (as the same may hereafter be amended, supplemented
or otherwise modified, this “ Guaranty ”), dated
as of November 6, 2008, is by THE FOLGERS COFFEE
COMPANY , a Delaware corporation (together with its successors
and assigns, the “ Guarantor ,”) in favor of the
Noteholders (defined below).
WHEREAS ,
the J.M. Smucker Company, an Ohio corporation (together with its
successors and assigns, the “ Company ”) has
entered into that certain Note Purchase Agreement, dated as of
May 27, 2004 (as amended by that certain First Amendment to
Note Purchase Agreement, dated as of May 31, 2007, that
certain Second Amendment to Note Purchase Agreement, dated as of
October 23, 2008, and that certain Third Amendment to Note
Purchase Agreement, dated as of November 6, 2008, and as may
be amended, modified, restated or replaced from time to time, the
“ Note Purchase Agreement ”), with each of the
purchasers listed on Schedule A attached thereto
(collectively, the “ Purchasers ,” and together
with their successors and assigns including, without limitation,
future holders of the Notes (defined below), herein collectively
referred to as the “ Noteholders ”), pursuant to
which the Company, among other things, issued to the Purchasers its
4.78% Senior Notes due June 1, 2014, in the aggregate
principal amount of $100,000,000 (as may be amended or modified,
from time to time, the “ Notes ”);
WHEREAS ,
the Guarantor has become a Wholly-Owned Subsidiary of the Company;
and
WHEREAS ,
the Company and the Guarantor are members of a group of related
corporations, the success of any one of which is dependent in part
on the success of the other members of such group; and
WHEREAS ,
the Guarantor wishes to guaranty the Company’s obligations to
the Noteholders under or in respect of the Note Purchase Agreement
as provided herein.
NOW
THEREFORE , in consideration of the foregoing, and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Guarantor hereby agrees as
follows:
All capitalized
terms used herein and not defined herein have the respective
meanings given them in the Note Purchase Agreement.
2.1.
Guaranteed Obligations.
The Guarantor, in
consideration of the execution and delivery of the Note Purchase
Agreement and the purchase of the Notes by the Purchasers, hereby
irrevocably, unconditionally and absolutely guarantees, on a
continuing basis, to each Noteholder as and for the
Guarantor’s
own debt, until
final and indefeasible payment of the amounts referred to in clause
(a) below has been made:
(a) the due and
punctual payment by the Company of the principal of, and the
Make-Whole Amount (if any) and interest on, the Notes at any time
outstanding and the due and punctual payment of all other amounts
payable, and all other Indebtedness owing, by the Company to the
Noteholders under the Note Purchase Agreement and the Notes
(including, without limitation, any monetary obligations incurred
during the pendency of any bankruptcy, insolvency, winding-up,
receivership or other similar proceeding regardless of whether
allowed or allowable in such proceeding including, without
limitation, interest accrued on the Notes during any such
proceeding), in each case when and as the same shall become due and
payable, whether at maturity, pursuant to mandatory or optional
prepayment, by acceleration or otherwise, all in accordance with
the terms and provisions hereof and thereof; it being the intent of
the Guarantor that the guarantee set forth herein shall be a
continuing guarantee of payment and not a guarantee of collection;
and
(b) the punctual
and faithful performance, keeping, observance, and fulfillment by
the Company of all duties, agreements, covenants and obligations of
the Company contained in the Note Purchase Agreement and the
Notes.
All of the
obligations set forth in clause (a) and clause (b) of
this Section 2.1 are referred to herein as the “
Guaranteed Obligations. ”
2.2. Payments
and Performance.
In the event that
the Company fails to make, on or before the due date thereof, any
payment to be made in respect of the Guaranteed Obligations or if
the Company shall fail to perform, keep, observe, or fulfill any
other obligation referred to in clause 2.1(a) or clause 2.1(b) of
Section 2.1 in the manner provided in the Note Purchase Agreement
and the Notes, the Guarantor shall cause forthwith to be paid the
moneys, or to be performed, kept, observed, or fulfilled each of
such obligations, in respect of which such failure has occurred in
accordance with the terms and provisions of the Note Purchase
Agreement and the Notes. In furtherance of the foregoing, if an
Event of Default shall exist under paragraph (g) or
(h) of Section 11 of the Note Purchase Agreement, all of
the Guaranteed Obligations shall forthwith become due and payable
without notice, regardless of whether the acceleration of the Notes
shall be stayed, enjoined, delayed or otherwise
prevented.
Nothing shall
discharge or satisfy the obligations of the Guarantor hereunder
except the full and final performance and indefeasible payment of
the Guaranteed Obligations.
The Guarantor
consents and agrees that, without any notice whatsoever to or by
the Guarantor and without impairing, releasing, abating, deferring,
suspending, reducing, terminating or otherwise affecting the
obligations of the Guarantor hereunder, each Noteholder, by action
or inaction, may:
(a) compromise or
settle, renew or extend the period of duration or the time for the
payment, or discharge the performance of, or may refuse to, or
otherwise not,
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enforce, or
may, by action or inaction, release all or any one or more parties
to, any one or more of the Note Purchase Agreement, the Notes, or
any other guaranty or agreement or instrument related thereto or
hereto;
(b) assign, sell
or transfer, or otherwise dispose of, any one or more of the
Notes;
(c) grant waivers,
extensions, consents and other indulgences of any kind whatsoever
to the Company, the Guarantor or any other Person liable in any
manner in respect of all or any part of the Guaranteed
Obligations;
(d) amend, modify
or supplement in any manner whatsoever and at any time (or from
time to time) any one or more of the Note Purchase Agreement, the
Notes, any other guaranty or any agreement or instrument related
thereto or hereto;
(e) release or
substitute any one of more of the endorsers or any other guarantors
of the Guaranteed Obligations whether parties hereto or not;
and
(f) sell,
exchange, release, accept, surrender or enforce rights in, or fail
to obtain or perfect or to maintain, or cause to be obtained,
perfected or maintained, the perfection of any Lien or other
security interest or charge on, by action or inaction, any property
at any time pledged or granted as security in respect of the
Guaranteed Obligations, whether so pledged or granted by the
Company, the Guarantor or any other Person.
The Guarantor
hereby ratifies and confirms any such action specified in this
Section 2.3 and agrees that the same shall be binding upon the
Guarantor, whether or not the Guarantor shall have consented
thereto or received notice thereof. The Guarantor hereby waives any
and all defenses, counterclaims or offsets which the Guarantor
might or could have by reason thereof.
To the fullest
extent permitted by law, the Guarantor hereby waives:
(a) notice of
acceptance of this Guaranty;
(b) notice of any
purchase or acceptance of the Notes under the Note Purchase
Agreement, or the creation, existence or acquisition of any of the
Guaranteed Obligations, subject to the Guarantor’s right to
make inquiry of each Noteholder to ascertain the amount of the
Guaranteed Obligations at any reasonable time;
(c) notice of the
amount of the Guaranteed Obligations, subject to the
Guarantor’s right to make inquiry of each Noteholder to
ascertain the amount of the Guaranteed Obligations at any
reasonable time;
(d) notice of
adverse change in the financial condition of the Company or any
other guarantor or any other fact that might increase the
Guarantor’s risk hereunder;
(e) notice of
presentment for payment, demand, protest, and notice thereof as to
the Notes or any other instrument;
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(f) notice of any
Default or Event of Default;
(g) all other
notices and demands to which the Guarantor might otherwise be
entitled (except if such notice or demand is specifically otherwise
required to be given to the Guarantor under this
Guaranty);
(h) the right by
statute or otherwise to require any or each Noteholder to institute
suit against the Company, the Guarantor or any other guarantor or
to exhaust the rights and remedies of any or each Noteholder
against the Company, the Guarantor, or any other guarantor, the
Guarantor being bound to the payment of each and all Guaranteed
Obligations, whether now existing or hereafter accruing, as fully
as if such Guaranteed Obligations were directly owing to each
Noteholder by the Guarantor;
(i) any defense
arising by reason of any disability or other defense (other than
the defense that the Guaranteed Obligations shall have been fully
and finally performed and indefeasibly paid) of the Company or by
reason of the cessation from any cause whatsoever of the liability
of the Company in respect thereof;
(j) any stay
(except in connection with a pending appeal), valuation, appraisal,
redemption or extension law now or at any time hereafter in force
that, but for this waiver, might be applicable to any sale of
property of the Guarantor made under any judgment, order or decree
based on the Note Purchase Agreement, the Notes or this Guaranty,
and the Guarantor covenants that it will not at any time insist
upon or plead, or in any manner claim or take the benefit or
advantage of, any such law; and
(k) at all times
prior to the full and final performance and indefeasible payment of
the Guaranteed Obligations, any claim of any nature arising out of
any right of indemnity, contribution, reimbursement,
indemnification or any similar right or any claim of subrogation
(whether such right or claim arises under contract, common law or
statutory or civil law) arising in respect of any payment made
under this Guaranty or in connection with this Guaranty, against
the Company or the Guarantor or the estate of the Company
(including Liens on the property of the Company or the estate of
the Company or the Guarantor), in each case whether or not the
Company or the Guarantor at any time shall be the subject of any
proceeding brought under any bankruptcy law, and the Guarantor
further agrees that it will not file any claims against the Company
or the Guarantor or the estate of the Company or the Guarantor in
the course of any such proceeding or otherwise, and further agrees
that each Noteholder may specifically enforce the provisions of
this clause (k).
2.5.
Marshaling; Invalid Payments.
The Guarantor
consents and agrees:
(a) that each
Noteholder, and each Person acting for the benefit of one or more
of the Noteholders, shall be under no obligation to marshal any
assets in favor of the Guarantor or against or in payment of any or
all of the Guaranteed Obligations; and
(b) that, to the
extent that the Company or the Guarantor makes a payment or
payments to any Noteholder, which payment or payments or any part
thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required,
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for any of the
foregoing reasons or for any other reason, to be repaid or paid
over to a custodian, trustee, receiver, administrative receiver,
administrator or any other party or officer under any bankruptcy
law, insolvency, reorganization, recapitalization or other debtor
relief law, other common or civil law, or equitable cause or
judgment, order or decision thereunder, then, to the extent of such
payment or repayment, the obligation or part thereof intended to be
satisfied thereby shall be revived and continued in full force and
effect as if such payment or payments had not been made and the
Guarantor shall be primarily liable for such obligation.
2.6. Immediate
Liability.
The Guarantor
agrees that the liability of the Guarantor in respect of this
Guaranty shall be immediate and shall not be contingent upon the
exercise or enforcement by any Noteholder or any other Person of
whatever remedies such Noteholder or other Person may have against
the Company, the Guarantor or any other guarantor or the
enforcement of any Lien or realization upon any security such
Noteholder or other Person may at any time possess.
2.7. Primary
Obligations.
This Guaranty is a
primary and original obligation of the Guarantor and is an
absolute, unconditional, continuing and irrevocable guaranty of
payment and performance and shall remain in full force and effect
regardless of any action by any Noteholder specified in
Sections 2.3 or 2.8 hereof or any future changes in
conditions, including, without limitation, change of law or any
invalidity or irregularity with respect to the issuance or
assumption of any obligations (including, without limitation, the
Notes) of or by the Company, the Guarantor or any other guarantor,
or with respect to the execution and delivery of any agreement
(including, without limitation, the Notes and the Note Purchase
Agreement) of the Company or any other Person.
2.8. No
Reduction or Defense.
The obligations of
the Guarantor under this Guaranty, and the rights of any Noteholder
to enforce such obligations by any proceedings
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