Exhibit 10.3
U.S.
GUARANTY
Dated as of May
20, 2008
From
THE GUARANTORS
NAMED HEREIN
and
THE ADDITIONAL
GUARANTORS REFERRED TO HEREIN
as
Guarantors
in favor
of
THE SECURED
PARTIES 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
5. Payments Free and Clear of Taxes, Etc.
|
4
|
Section
6. Representations and Warranties
|
4
|
Section
8. Amendments, Guaranty Supplements, Etc.
|
5
|
Section
10. No Waiver; Remedies
|
6
|
Section
11. Right of Set-off
|
6
|
Section
12. Indemnification
|
6
|
Section
13. Subordination
|
7
|
Section
14. Continuing Guaranty; Assignments under the Credit
Agreement
|
7
|
Section
15. Execution in Counterparts
|
8
|
Section
16. Governing Law; Jurisdiction; Waiver of Jury Trial,
Etc.
|
8
|
Exhibit A -
Guaranty Supplement
U.S.
GUARANTY
U.S. GUARANTY
dated as of May 20, 2008 made by Nortek, Inc. (the “
Specified U.S. Borrower ”), the Persons listed
on the signature pages hereof under the caption “U.S.
Subsidiary Guarantors” and the Additional Guarantors (as
defined in Section 8(b)) (the Specified U.S. Borrower, such Persons
so listed and the Additional Guarantors being, collectively, the
“ Guarantors ” and, individually, each a
“ Guarantor ”) in favor of the Secured
Parties (as defined in the Credit Agreement referred to
below).
PRELIMINARY
STATEMENT. Nortek, Inc. and the other Loan Parties party
thereto are parties to a Credit Agreement
dated as of May 20, 2008 (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 Guarantor may receive, directly or
indirectly, a portion of the proceeds of the Loans under the Credit
Agreement and 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 Lenders and the issuance of Letters of Credit by the L/C
Issuers under the Credit Agreement, the entry by the Hedge Banks
into Secured Hedge Agreements and the entry by the Cash Management
Banks into Secured Cash Management Agreements from time to time,
that each Guarantor shall have executed and delivered this
Guaranty.
NOW, THEREFORE,
in consideration of the premises and in order to induce the Lenders
to make Loans and the L/C Issuers to issue Letters of Credit under
the Credit Agreement, the Hedge Banks to enter into Secured Hedge
Agreements and the Cash Management Banks to enter into
Secured Cash Management Agreements from time to time, each
Guarantor, jointly and severally with each other Guarantor, hereby
agrees as follows:
Section
1.
Guaranty;
Limitation of Liability . (a) Each
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 each other
Loan Party 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), whether direct or indirect, absolute
or contingent, and whether for principal, interest, premiums, fees,
indemnities, contract causes of action, costs, expenses or
otherwise (such Obligations being the “ Guaranteed
Obligations ”), and agrees to pay any and all
reasonable expenses (including, without limitation, reasonable fees
and expenses of counsel) incurred by the Administrative Agent or
any other Secured Party in enforcing any rights under this Guaranty
or any other Loan Document. Without limiting the
generality of the foregoing, each Guarantor’s liability shall
extend to all amounts that constitute part of the Guaranteed
Obligations and would be owed by any other Loan Party to any
Secured Party 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 Guarantor,
and by its acceptance of this Guaranty, the Administrative Agent
and each other Secured Party, hereby confirms that it is the
intention of all such Persons that this Guaranty and the
Obligations of each Guarantor hereunder not constitute a fraudulent
transfer or conveyance for purposes of Debtor Relief Laws, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer
Act or any similar foreign, federal or state law to the extent
applicable to this Guaranty and the Obligations of each Guarantor
hereunder. To effectuate the foregoing intention, the
Administrative Agent, the other Secured Parties and the Guarantors
hereby irrevocably agree that the Obligations of each Guarantor
under this Guaranty at any time shall be limited to the maximum
amount as will result in the Obligations of such Guarantor under
this Guaranty not constituting a fraudulent transfer or
conveyance.
(c)
Each Guarantor
hereby unconditionally and irrevocably agrees that in the event any
payment shall be required to be made to any Secured Party under
this Guaranty or any other guaranty, such Guarantor will
contribute, to the maximum extent permitted by law, such amounts to
each other Guarantor and each other guarantor so as to maximize the
aggregate amount paid to the Secured Parties under or in respect of
the Loan Documents.
Section
2.
Guaranty
Absolute . Each
Guarantor guarantees that the Guaranteed Obligations will be paid
strictly 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 Secured Party with respect thereto. The
Obligations of each Guarantor under or in respect of this Guaranty
are independent of the 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 Guarantor to enforce this Guaranty,
irrespective of whether any action is brought against the Borrowers
or any other Loan Party or whether any Borrower or any other Loan
Party is joined in any such action or actions. The
liability of each Guarantor under this Guaranty shall be
irrevocable, absolute and unconditional irrespective of, and each
Guarantor hereby irrevocably waives 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 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 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 Guaranteed Obligations;
(d)
any manner of
application of Collateral or any other collateral, or proceeds
thereof, to all or any of the Guaranteed Obligations, or any manner
of sale or other disposition of any Collateral or any other
collateral for all or any of the 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;
(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 Secured Party 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 Secured Party (each Guarantor
waiving any duty on the part of the Secured Parties to disclose
such information);
(g)
the failure of
any other Person to execute or deliver this Guaranty, any Guaranty
Supplement (as hereinafter defined) or any other guaranty or
agreement or the release or reduction of liability of any Guarantor
or other guarantor or surety with respect to the Guaranteed
Obligations; or
(h)
any other
circumstance (including, without limitation, any statute of
limitations) or any existence of or reliance on any representation
by any Secured Party that might otherwise constitute a defense
available to, or a discharge of, any Loan Party or any other
guarantor or surety.
This Guaranty
shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations
is rescinded or must otherwise be returned by any Secured Party or
any other Person upon the insolvency, bankruptcy or reorganization
of any Borrower or any other Loan Party or otherwise, all as though
such payment had not been made.
Section
3.
Waivers and
Acknowledgments . (a) Each
Guarantor hereby unconditionally and irrevocably waives, to the
fullest extent permitted by law, 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 Guaranteed Obligations and
this Guaranty and any requirement that any Secured Party 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 Guarantor
hereby unconditionally and irrevocably waives, to the fullest
extent permitted by law, any right to revoke this Guaranty and
acknowledges that this Guaranty is continuing in nature and applies
to all Guaranteed Obligations, whether existing now or in the
future.
(c)
Each Guarantor
hereby unconditionally and irrevocably waives, to the fullest
extent permitted by law, (i) any defense arising by reason of
any claim or defense based upon an election of remedies by any
Secured Party that in any manner impairs, reduces, releases or
otherwise adversely affects the subrogation, reimbursement,
exoneration, contribution or indemnification rights of such
Guarantor or other rights of such 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 Guarantor hereunder.
(d)
Each Guarantor
acknowledges that the Administrative Agent may, in accordance with
the terms of the Loan Documents, without notice to or demand upon
such Guarantor and without affecting the liability of such
Guarantor under this Guaranty, foreclose under any mortgage by
nonjudicial sale, and each Guarantor hereby waives, to the fullest
extent permitted by law, any defense to the recovery by the
Administrative Agent and the other Secured Parties against such
Guarantor of any deficiency after such nonjudicial sale and any
defense or benefits that may be afforded by applicable
Law.
(e)
Each Guarantor
hereby unconditionally and irrevocably waives, to the fullest
extent permitted by law, any duty on the part of any Secured Party
to disclose to such 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 Secured
Party.
(f)
Each 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
Guarantor hereby unconditionally and irrevocably agrees not to
exercise any rights that it may now have or hereafter acquire
against the Borrowers, any other Loan Party or any other insider
guarantor that arise from the existence, payment, performance or
enforcement of such Guarantor’s Obligations under or in
respect of this 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 Secured Party against the
Borrowers, any other Loan Party or any other insider guarantor 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
Borrowers, any other Loan Party or any other insider guarantor,
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 all of the Guaranteed Obligations
and all other amounts payable under this Guaranty shall have been
paid in full in cash, all Letters of Credit, all Secured Hedge
Agreements and all Secured Cash Management Agreements shall have
expired or been terminated and the Commitments shall have expired
or been terminated. If any amount shall be paid to any
Guarantor in violation of the immediately preceding sentence at any
time prior to the termination of the Aggregate Commitments and
payment in full of all Obligations (other than (A) contingent
indemnification obligations and (B) obligations and liabilities
under Secured Cash Management Agreements and Secured Hedge
Agreements as to which arrangements reasonably satisfactory to the
applicable Cash Management Bank or Hedge Bank shall have been made)
and the expiration or termination of all Letters of Credit (other
than Letters of Credit as to which other arrangements reasonably
satisfactory to the Administrative Agent and the applicable L/C
Issuer shall have been made, such amount shall be received and held
in trust for the benefit of the Secured Parties, shall be
segregated from other property and funds of such 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 Guaranteed
Obligations and all other amounts payable under this Guaranty,
whether matured or unmatured, in accordance with the terms of the
Loan Documents, or to be held as Collateral for any Guaranteed
Obligations or other amounts payable under this Guaranty thereafter
arising. If (i) any Guarantor shall make payment to
any Secured Party of all or any part of the Guaranteed Obligations,
(ii) the Aggregate Commitments shall have been terminated and
all Obligations shall have been paid in full (other than (A)
contingent indemnification obligations and (B) obligations and
liabilities under Secured Cash Management Agreements and Secured
Hedge Agreements as to which arrangements reasonably satisfactory
to the applicable Cash Management Bank or Hedge Bank shall have
been made) and (iii) all Letters of Credit shall have terminated or
expired (other than Letters of Credit as to which other
arrangements satisfactory to the Administrative Agent and the
applicable L/C Issuer shall have been made, the Secured Parties
will, at such Guarantor’s request and expense, execute and
deliver to such Guarantor appropriate documents, without recourse
and without representation or warranty, necessary to evidence the
transfer by subrogation to such Guarantor of an interest in the
Guaranteed Obligations resulting from such payment made by such
Guarantor pursuant to this Guaranty.
Section
5.
Payments Free
and Clear of Taxes, Etc .
Any
and all payments made by any Guarantor under or in respect of this
Guaranty or any other Loan Document shall be made in accordance
with Sections 2.12 and 3.01 of the Credit Agreement, and such
Guarantor shall make such payments free and clear of and without
deduction for any and all present or future Taxes and shall
indemnify each Secured Pa
