EXECUTION COPY
EXHIBIT 10.5
SECOND SPT GUARANTY
This SECOND GUARANTY (this "GUARANTY") is entered into as of October 14,
2005 by AMALGAMATED COLLATERAL TRUST, a Delaware business trust ("GUARANTOR"),
in favor of and for the benefit of SNAKE RIVER SUGAR COMPANY, an Oregon
cooperative ("GUARANTIED PARTY").
WHEREAS, Valhi, Inc., a Delaware corporation ("VALHI") and the indirect
holder of 100% of the outstanding stock of ASC Holdings, Inc. ("ASC"), a Utah
Corporation and the sole owner of the Certificate of Beneficial Interest issued
by Guarantor, has issued to Guarantied Party that certain Limited Recourse
Promissory Note dated January 3, 1997 in aggregate principal amount of
$212,500,000 (the "LIMITED RECOURSE PROMISSORY NOTE") and that certain
Subordinated Promissory Note dated January 3, 1997 in aggregate principal amount
of $37,500,000 (the "SUBORDINATED PROMISSORY NOTE," and, together with the
Limited Recourse Promissory Note, as they may hereafter be amended, supplemented
or otherwise modified from time to time, being the "NOTES").
WHEREAS, The Notes were issued in connection with the acquisition by ASC of
a membership interest (the "AGM INTEREST") in The Amalgamated Sugar Company LLC,
a Delaware limited liability company ("LLC"), and ASC pledged the AGM Interest
to Guarantied Party to secure the Notes pursuant to a Pledge Agreement and a
Limited Recourse Pledge Agreement, each dated January 3, 1997, which Pledge
Agreement and Limited Recourse Pledge Agreement were amended, restated and
combined as of May 14, 1997 as The Amended and Restated Pledge Agreement between
ASC and Guarantied Party (the "ASC FIRST AMENDED AND RESTATED PLEDGE
AGREEMENT").
WHEREAS, ASC transferred and assigned the AGM Interest to Guarantor, and in
consideration of such transfer and assignment, (i) Guarantor guaranteed the
obligations of Valhi under the Limited Recourse Promissory Note and in certain
circumstances the obligations of Valhi under the Subordinated Promissory Note
pursuant to the Guaranty (SPT) dated as of May 14, 1997 (the "ORIGINAL SPT
GUARANTY") issued by Guarantor, and (ii) Guarantor issued to Secured Party a
security interest in the AGM Interest pursuant to the Pledge Agreement (SPT)
dated as of May 14, 1997 between Guarantor and Guarantied Party (the "ORIGINAL
SPT PLEDGE AGREEMENT").
WHEREAS, ASC has amended and restated the ASC First Amended and Restated
Pledge Agreement as the Second Amended and Restated Pledge Agreement, dated as
of October 14, 2005 between ASC and Guarantied Party (the "ASC SECOND AMENDED
AND RESTATED PLEDGE AGREEMENT"), and Guarantor has amended and restated the
Original SPT Pledge Agreement as the Second Pledge Agreement (SPT) dated as of
October 14, 2005 between Guarantor and Guarantied Party (the "SECOND SPT PLEDGE
AGREEMENT").
WHEREAS, Guarantor has and is willing to continue to irrevocably and
unconditionally guaranty the obligations of Valhi pursuant to the Notes.
WHEREAS, Guarantor and Guarantied Party desire to amend and restate the
Original SPT Guarantee, as reflected herein, and therefore this Guaranty shall
supersede the Original SPT Guaranty.
NOW, THEREFORE, based upon the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Guarantor hereby agrees as follows:
SECTION 1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS. As used in this Guaranty, the following terms
shall have the following meanings unless the context otherwise requires:
"BENEFICIARIES" means Guarantied Party and, upon the assignment of
Guarantied Party's rights hereunder to the Agent pursuant to Section 4.12
hereof, the Noteholders.
"DEPOSIT TRUST AGREEMENT" means the Deposit Trust Agreement relating to
Guarantor dated as of May 14, 1997 between ASC, as Certificateholder and Company
Trustee (each as therein defined), and Wilmington Trust Company, as Resident
Trustee (as therein defined), as the same may be amended, supplemented or
otherwise modified from time to time.
"GUARANTIED OBLIGATIONS" has the meaning assigned to that term in
subsection 2.1.
"GUARANTY" means this Guaranty dated as of October 14, 2005, as it may be
amended, supplemented or otherwise modified from time to time.
"LOAN DOCUMENTS" means the Notes, the ASC Second Amended and Restated
Pledge Agreement and the Second SPT Pledge Agreement, together with all
agreements and instruments entered into in connection therewith, as the same may
be amended, supplemented or otherwise modified from time to time.
"PAYMENT IN FULL", "PAID IN FULL" or any similar term means payment in full
of the Guarantied Obligations, including without limitation all principal,
interest, costs, fees and expenses (including, without limitation, reasonable
legal fees and expenses) of Beneficiaries as required under the Loan Documents.
"PERSON" means and includes natural persons, corporations, limited
liability companies, limited partnerships, general partnerships, joint stock
companies, joint ventures, associations, companies, trusts, banks and other
organizations, whether or not legal entities, and governments and agencies and
political subdivisions thereof.
"SUBSIDIARY" or "SUBSIDIARIES" means as to any Person (a) any
corporation(s) organized under the laws of any state of the United States of
which such Person or another Subsidiary of such Person, as the case may be,
beneficially owns or controls, either directly or indirectly, 100% of the
outstanding capital stock, and (b) any partnership(s) or other entities
organized under the laws of any state of the United States in which such Person
or another Subsidiary of such Person, as the case may be, holds a 100% equity
interest and controls the management of such entity, and (c) in the context of a
Subsidiary of Guarantied Party, LLC.
1.2 INTERPRETATION. References to "Sections" and "subsections" shall be to
Sections and subsections, respectively, of this Guaranty unless otherwise
specifically provided.
SECTION 2. THE GUARANTY
2.1 GUARANTY OF THE GUARANTIED OBLIGATIONS. Guarantor hereby irrevocably
and unconditionally guaranties, as primary obligor and not merely as surety, the
due and punctual payment in full of all Guarantied Obligations when the same
shall become due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise (including amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code, 11 U.S.C. Section 362(a)). The term "GUARANTIED
OBLIGATIONS" is used herein in its most comprehensive sense and includes:
(a) any and all obligations of Valhi in respect of advances, borrowings,
loans, debts, interest, fees, costs, expenses (including, without limitation,
legal fees and expenses of counsel and allocated costs of internal counsel),
indemnities and liabilities of whatsoever nature now or hereafter made, incurred
or created, whether absolute or contingent, liquidated or unliquidated, whether
due or not due, and however arising under or in connection with the Limited
Recourse Promissory Note and in connection with the Subordinated Promissory Note
(but only to the extent the Subordinated Promissory Note is, pursuant to its
terms, non-recourse to Valhi) and any instruments or agreements entered into in
connection therewith, including those arising under successive transactions
under the Notes which shall either continue such obligations of Valhi or from
time to time renew them after they have been satisfied and including interest
which, but for the filing of a petition in bankruptcy with respect to Valhi,
would have accrued on any Guarantied Obligations, whether or not a claim is
allowed against Valhi for such interest in the related bankruptcy proceeding;
and
(b) those expenses set forth in subsection 2.7 hereof.
2.2 PAYMENT BY GUARANTOR; APPLICATION OF PAYMENTS. Guarantor hereby agrees,
in furtherance of the foregoing and not in limitation of any other right which
Guarantied Party or any Beneficiary may have at law or in equity against
Guarantor by virtue hereof, that upon the failure of Valhi to pay any of the
Guarantied Obligations when and as the same shall become due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand or otherwise
(including amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a)),
Guarantor will upon demand pay, or cause to be paid, in cash, to Guarantied
Party for the ratable benefit of Beneficiaries, an amount equal to the sum of
the unpaid principal amount of all Guarantied Obligations then due as aforesaid,
accrued and unpaid interest on such Guarantied Obligations (including, without
limitation, interest which, but for the filing of a petition in bankruptcy with
respect to Valhi, would have accrued on such Guarantied Obligations, whether or
not a claim is allowed against Valhi for such interest in the related bankruptcy
proceeding) and all other Guarantied Obligations then owed to Beneficiaries as
aforesaid. All such payments shall be applied promptly from time to time by
Guarantied Party:
First, to the payment of the costs and expenses of any collection or
realization under this Guaranty, including reasonable compensation to Guarantied
Party and its agents and counsel, and all expenses, liabilities and advances
made or incurred by Guarantied Party in connection therewith;
Second, to the payment of all other Guarantied Obligations in such order as
Guarantied Party shall elect; and
Third, after payment in full of all Guarantied Obligations, to the payment
to Guarantor, or its successors or assigns, or to whomsoever may be lawfully
entitled to receive the same or as a court of competent jurisdiction may direct,
of any surplus then remaining from such payments.
2.3 LIABILITY OF GUARANTOR ABSOLUTE. Guarantor agrees that its obligations
hereunder are irrevocable, absolute, independent and unconditional and shall not
be affected by any circumstance which constitutes a legal or equitable discharge
of a guarantor or surety other than payment in full of the Guarantied
Obligations. In furtherance of the foregoing and without limiting the generality
thereof, Guarantor agrees as follows:
(a) This Guaranty is a guaranty of payment when due and not of collectibility.
(b) Guarantied Party may enforce this Guaranty upon the occurrence of a default
under the Notes permitting or resulting in acceleration thereof notwithstanding
the existence of any dispute between Valhi and any Beneficiary with respect to
the existence of such default.
(c) The obligations of Guarantor hereunder are independent of the obligations of
Valhi under the Loan Documents and the obligations of any other guarantor of the
obligations of Valhi under the Loan Documents, and a separate action or actions
may be brought and prosecuted against Guarantor whether or not any action is
brought against Valhi or any of such other guarantors and whether or not Valhi
is joined in any such action or actions.
(d) Guarantor's payment of a portion, but not all, of the Guarantied Obligations
shall in no way limit, affect, modify or abridge Guarantor's liability for any
portion of the Guarantied Obligations which has not been paid. Without limiting
the generality of the foregoing, if Guarantied Party is awarded a judgment in
any suit brought to enforce Guarantor's covenant to pay a portion of the
Guarantied Obligations, such judgment shall not be deemed to release Guarantor
from its covenant to pay the portion of the Guarantied Obligations that is not
the subject of such suit.
(e) Any Beneficiary, upon such terms as it deems appropriate, without notice or
demand and without affecting the validity or enforceability of this Guaranty or
giving rise to any reduction, limitation, impairment, discharge or termination
of Guarantor's liability hereunder, from time to time may (i) renew, extend,
accelerate, increase the rate of interest on, or otherwise change the time,
place, manner or terms of payment of the Guarantied Obligations, (ii) settle,
compromise, release or discharge, or accept or refuse any offer of performance
with respect to, or substitutions for, the Guarantied Obligations or any
agreement relating thereto and/or subordinate the payment of the same to the
payment of any other obligations, (iii) request and accept other guaranties of
the Guarantied Obligations and take and hold security for the payment of this
Guaranty or the Guarantied Obligations, (iv) release, surrender, exchange,
substitute, compromise, settle, rescind, waive, alter, subordinate or modify,
with or without consideration, any security for payment of the Guarantied
Obligations, any other guaranties of the Guarantied Obligations, or any other
obligation of any Person with respect to the Guarantied Obligations, (v) enforce
and apply any security now or hereafter held by or for the benefit of such
Beneficiary in respect of this Guaranty or the Guarantied Obligations and direct
the order or manner of sale thereof, or exercise any other right or remedy that
such Beneficiary may have against any such security, in each case as such
Beneficiary in its discretion may determine consistent with the Loan Documents
and any applicable security agreement, including foreclosure on any such
security pursuant to one or more judicial or nonjudicial sales, whether or not
every aspect of any such sale is commercially reasonable, and even though such
action operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of Guarantor against Valhi or any security
for the Guarantied Obligations and (vi) exercise any other rights available to
it under the Loan Documents.
(f) This Guaranty and the obligations of Guarantor hereunder shall be valid and
enforceable and shall not be subject to any reduction, limitation, impairment,
discharge or termination for any reason (other than payment in full of the
Guarantied Obligations), including without limitation the occurrence of any of
the following, whether or not Guarantor shall have had notice or knowledge of
any of them: (i) any failure or omission to assert or enforce or agreement or
election not to assert or enforce, or the stay or enjoining, by order of court,
by operation of law or otherwise, of the exercise or enforcement of, any claim
or demand or any right, power or remedy (whether arising under the Loan
Documents, at law, in equity or otherwise) with respect to the Guarantied
Obligations or any agreement relating thereto, or with respect to any other
guaranty of or security for the payment of the Guarantied Obligations; (ii) any
rescission, waiver, amendment or modification of, or any consent to departure
from, any of the terms or provisions (including without limitation provisions
relating to events of default) of the Loan Documents or any agreement or
instrument executed pursuant thereto, or of any other guaranty or security for
the Guarantied Obligations, in each case whether or not in accordance with the
terms of such Loan Document or any agreement relating to such other guaranty or
security; (iii) the Guarantied Obligations, or any agreement relating thereto,
at any time being found to be illegal, invalid or unenforceable in any respect;
(iv) any Beneficiary's consent to the change, reorganization or termination of
the corporate structure or existence of Valhi or any of its Subsidiaries and to
any corresponding restructuring of the Guarantied Obligations; (v) any failure
to perfect or continue perfection of a security interest in any collateral which
secures any of the Guarantied Obligations; (vi) any defenses, set- offs or
counterclaims which Valhi may allege or assert against any Beneficiary in
respect of the Guarantied Obligations, including but not limited to failure of
consideration, breach of warranty, payment, statute of frauds, statute of
limitations, accord and satisfaction and usury; and (vii) any other act or thing
or omission, or delay to do any other act or thing, which may or might in any
manner or to any extent vary the risk of Guarantor as an obligor in respect of
the Guarantied Obligations.
2.4 WAIVERS BY GUARANTOR. Guarantor hereby waives, for the benefit of
Beneficiaries:
(a) any right to require Guarantied Party or any Beneficiary, as a
condition of payment or performance by Guarantor, to (i) proceed against Valhi,
any other guarantor of the Guarantied Obligations or any other Person, (ii)
proceed against or exhaust any security held from Valhi, any such other
guarantor or any other Person, (iii) proceed against or have resort to any
balance of any deposit account or credit on the books of any Beneficiary in
favor of Valhi or any other Person, or (iv) pursue any other remedy in the power
of Guarantied Party or any Beneficiary whatsoever;
(b) any defense arising by reason of the incapacity, lack of authority or
any disability or other defense of Valhi including, without limitation, any
defense based on or arising out of the lack of validity or the unenforceability
of the Guarantied Obligations or any agreement or instrument relating thereto or
by reason of the cessation of the liability of Valhi from any cause other than
payment in full of the Guarantied Obligations;
(c) any defense based upon any statute or rule of law which provides that
the obligation of a surety must be neither larger in amount nor in other
respects more burdensome than that of the principal;
(d) any defense based upon Guarantied Party's or any Beneficiary's errors
or omissions in the administration of the Guarantied Obligations, except
behavior which amounts to bad faith;
(e) (i) any principles or provisions of law, statutory or otherwise, which
are or might be in conflict with the terms of this Guaranty and any legal or
equitable discharge of Guarantor's obligations hereunder, (ii) the benefit of
any statute of limitations affecting Guarantor's liability hereunder or the
enforcement hereof, (iii) any rights to set-offs, recoupments and counterclaims,
and (iv) promptness, diligence and any requirement that any Beneficiary protect,
secure, perfect or insure any security interest or lien or any property subject
thereto;
(f) notices, demands, presentments, protests, notices of protest, notices
of dishonor and notices of any action or inaction, including acceptance of this
Guaranty, notices of default under the Loan Documents or any agreement or
instrument related thereto, notices of any renewal, extension or modification of
the Guarantied Obligations or any agreement related thereto, notices of any
extension of credit to Valhi and notices of any of the matters referred to in
subsection 2.3 and any right to consent to any thereof; and
(g) any defenses or benefits that may be derived from or afforded by law
which limit the liability of or exonerate guarantors or sureties, or which may
conflict with the terms of this Guaranty.
2.5 GUARANTOR'S RIGHTS OF SUBROGATION, CONTRIBUTION, ETC. Guarantor hereby
waives any claim, right or remedy, direct or indirect, that Guarantor now has or
may hereafter have against Valhi or any of its assets in connection with this
Guaranty or the performance by Guarantor of its obligations hereunder, in each
case whether such claim, right or remedy arises in equity, under contract, by
statute, under common law or otherwise and including without limitation (a) any
right of subrogation, reimbursement or indemnification that Guarantor now has or
may hereafter have against Valhi, (b) any right to enforce, or to participate
in, any claim, right or remedy that any Beneficiary now has or may hereafter
have against Valhi, and (c) any benefit of, and any right to participate in, any
collateral or security now or hereafter held by any Beneficiary. In addition,
until the Guarantied Obligations shall have been indefeasibly paid in full,
Guarantor shall withhold exercise of any right of contribution Guarantor may
have against any other guarantor of the Guarantied Obligations. Guarantor
further agrees that, to the extent the waiver or agreement to withhold the
exercise of its rights of subrogation, reimbursement, indemnification and
contribution as set forth herein is found by a court of competent jurisdiction
to be void or voidable for any reason, any rights of subrogation, reimbursement
or indemnification Guarantor may have against Valhi or against any collateral or
security, and any rights of contribution Guarantor may have against any such
other guarantor, shall be junior and subordinate to any rights any Beneficiary
may have against Valhi, to all right, title and interest any Beneficiary may
have in any such collateral or security, and to any right any Beneficiary may
have against such other guarantor. If any amount shall be paid to Guarantor on
account of any such subrogation, reimbursement, indemnification or contribution
rights at any time when all Guarantied Obligations shall not have been paid in
full, such amount shall be held in trust for Guarantied Party on behalf of
Beneficiaries and shall forthwith be paid over to Guarantied Party for the
benefit of Beneficiaries to be credited and applied against the Guarantied
Obligations, whether matured or unmatured, in accordance with the terms hereof.
2.6 SUBORDINATION OF OTHER OBLIGATIONS. Any indebtedness of Valhi now or
hereafter held by Guarantor is hereby subordinated in right of payment to the
Guarantied Obligations, and any such indebtedness of Valhi to Guarantor
collected or received by Guarantor after a default on the Notes has occurred and
is continuing shall be held in trust for Guarantied Party on behalf of
Beneficiaries and shall forthwith be paid over to Guarantied Party for the
benefit of Beneficiaries to be credited and applied against the Guarantied
Obligations but without affecting, impairing or limiting in any manner the
liability of Guarantor under any other provision of this Guaranty.
2.7 EXPENSES. Guarantor agrees to pay, or cause to be paid, on demand, and
to save Beneficiaries harmless against liability for, any and all costs and
expenses (including fees and disbursements of counsel and allocated costs of
internal counsel) incurred or expended by Guarantied Party or any Beneficiary in
connection with the enforcement of or preservation of any rights under this
Guaranty.
2.8 CONTINUING GUARANTY; TERMINATION OF GUARANTY. This Guaranty is a
continuing guaranty and shall remain in effect until all of the Guarantied
Obligations shall have been paid in full. Guarantor hereby irrevocably waives
any right to revoke this Guaranty as to future transactions giving rise to any
Guarantied Obligations.
2.9 AUTHORITY OF GUARANTOR OR VALHI. It is not necessary for any
Beneficiary to inquire into the capacity or powers of Guarantor or Valhi or the
officers, directors or any agents acting or purporting to act on behalf of any
of them.
2.10 RIGHTS CUMULATIVE. The rights, powers and remedies given to Guarantied
Party and Beneficiaries by this Guaranty are cumulative and shall be in addition
to and independent of all rights, powers and remedies given to Guarantied Party
and Beneficiaries by virtue of any statute or rule of law or in any of the Loan
Documents or any agreement between Guarantor and Guarantied Party or any
Beneficiary or Beneficiaries or between Valhi and Guarantied Party or any
Beneficiary or Beneficiaries or among Beneficiaries. Any forbearance or failure
to exercise, and any delay by any Beneficiary in exercising, any right, power or
remedy hereunder shall not impair any such right, power or remedy or be
construed to be a waiver thereof, nor shall it preclude the further exercise of
any such right, power or remedy.
2.11 BANKRUPTCY; POST-PETITION INTEREST; REINSTATEMENT OF GUARANTY.
(a) So long as any Guarantied Obligations remain outstanding, Guarantor shall
not, without the prior written consent of Guarantied Party in accordance with
the terms of the Loan Documents, commence or join with any other Person in
commencing any bankruptcy, reorganization or insolvency proceedings of or
against Valhi. The obligations of Guarantor under this Guaranty shall not be
reduced, limited, impaired, discharged, deferred, suspended or terminated by any
proceeding, voluntary or involuntary, involving the bankruptcy, insolvency,
receivership, reorganization, liquidation or arrangement of Valhi or by any
defense which Valhi may have by reason of the order, decree or decision of any
court or administrative body resulting from any such proceeding.
(b) Guarantor acknowledges and agrees that any interest on any portion of the
Guarantied Obligations which accrues after the commencement of any proceeding
referred to in clause (a) above (or, if interest on any portion of the
Guarantied Obligations ceases to accrue by operation of law by reason of the
commencement of said proceeding, such interest as would have accrued on such
portion of the Guarantied Obligations if said proceedings had not been
commenced) shall be included in the Guarantied Obligations because it is the
intention of Guarantor and Beneficiaries that the Guarantied Obligations which
are guarantied by Guarantor pursuant to this Guaranty should be determined
without regard to any rule of law or order which may relieve Valhi of any
portion of such Guarantied Obligations. Guarantor will permit any trustee in
bankruptcy, receiver, debtor in possession, assignee for the benefit of
creditors or similar Person to pay Guarantied Party, or allow the claim of
Guarantied Party in respect of, any such interest accruing after the date on
which such proceeding is commenced.
(c) In the event that all or any portion of the Guarantied Obligations are paid
by Valhi, the obligations of Guarantor hereunder shall continue and remain in
full force and effect or be reinstated, as the case may be, in the event that
all or any part of such payment(s) are rescinded or recovered directly or
indirectly from any Beneficiary as a preference, fraudulent transfer or
otherwise, and any such payments which are so rescinded or recovered shall
constitute Guarantied Obligations for all purposes under this Guaranty.
2.12 NOTICE OF EVENTS. As soon as Guarantor obtains knowledge thereof,
Guarantor shall give Guarantied Party written notice of any condition or event
which has resulted in (a) a material adverse change in the financial condition
of Guarantor or Valhi or (b) a breach of or noncompliance with any term,
condition or covenant contained herein or in the Loan Documents or any other
document delivered pursuant hereto or thereto.
2.13 SET OFF. In addition to any other rights any Beneficiary may have
under law or in equity, if any amount shall at any time be due and owing by
Guarantor to any Beneficiary under this Guaranty, such Beneficiary is authorized
at any time or from time to time, without notice (any such notice being hereby
expressly waived), to set off and to appropriate and to apply any and all
deposits (general or special, including but not limited to indebtedness
evidenced by certificates of deposit, whether matured or unmatured) and any
other indebtedness of such Beneficiary owing to Guarantor and any other property
of Guarantor held by any Beneficiary to or for the credit or the account of
Guarantor against and on account of the Guarantied Obligations and liabilities
of Guarantor to any Beneficiary under this Guaranty.
SECTION 3. REPRESENTATIONS AND WARRANTIES
In order to induce Guarantied Party and Beneficiaries to accept this Guaranty
and to enter into the Loan Documents, Guarantor hereby represents and warrants
to Beneficiaries that the following statements are true and correct:
3.1 TRUST EXISTENCE. Guarantor is duly formed, validly existing and in good
standing under the laws of the State of Delaware and has the trust power to own
its assets and to transact the business in which it is now engaged.
3.2 TRUST POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Guarantor has the
trust power, authority and legal right to execute, deliver and perform this
Guaranty and all obligations required hereunder and has taken all necessary
trust action to authorize its Guaranty hereunder on the terms and conditions
hereof and its execution, delivery and performance of this Guaranty and all
obligations required hereunder. No consent of any other Person including,
without limitation, certificateholders and creditors of Guarantor, and no
license, permit, approval or authorization of, exemption by, notice or report
to, or registration, filing or declaration with, any governmental authority is
required by Guarantor in connection with this Guaranty or the execution,
delivery, performance, validity or enforceability of this Guaranty and all
obligations required hereunder. This Guaranty has been, and each instrument or
document required hereunder will be, executed and delivered by a duly authorized
trustee of Guarantor, and this Guaranty constitutes, and each instrument or
document required hereunder when executed and delivered hereunder will
constitute, the legally valid and binding obligation of Guarantor, enforceable
against Guarantor in accordance with its terms, except as enforcement may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws or equitable principles relating to or limiting creditors'
rights generally.
3.3 NO LEGAL BAR TO THIS GUARANTY. The execution, delivery and performance
of this Guaranty and the documents or instruments required hereunder will not
violate any provision of any existing law or regulation binding on Guarantor, or
any order, judgment, award or decree of any court, arbitrator or governmental
authority binding on Guarantor, or the Deposit Trust Agreement of Guarantor or
any securities issued by Guarantor, or any mortgage, indenture, lease, contract
or other agreement, instrument or undertaking to which Guarantor is a party or
by which Guarantor or any of its assets may be bound, the violation of which
would have a material adverse effect on the business, operations, assets or
financial condition of Guarantor and its Subsidiaries, taken as a whole, and
will not result in, or require, the creation or imposition of any lien on any of
its property, assets or revenues pursuant to the provisions of any such
mortgage, indenture, lease, contract or other agreement, instrument or
undertaking.
3.4 BENEFIT TO ASC. To the best of Guarantor's knowledge, the issuance of
this Guaranty hereunder to with respect to the Guarantied Obligations will
benefit ASC, as the sole owner of the Certificate Of Beneficial Interest issued
by Guarantor, because, among other reasons, (a) ASC, as an indirectly,
wholly-owned subsidiary of Valhi, may from time to time receive capital
contributions from Valhi to support its operations, and (b) Valhi has
centralized certain management, financial, accounting, administrative, income
tax, legal and risk management functions in one central office, and Valhi
directly and indirectly provides such services to ASC, from which ASC derives
benefit.
SECTION 4. MISCELLANEOUS
4.1 SURVIVAL OF WARRANTIES. All agreements, representations and warranties
made herein shall survive the execution and delivery of this Guaranty and the
Loan Documents.
4.2 NOTICES. Any communications between Guarantied Party and Guarantor and
any notices or requests provided herein to be given may be given by mailing the
same, postage prepaid, or by facsimile transmission to each such party at its
address set forth in the Loan Documents or to such other addresses as each such
party may in writing hereafter indicate. Any notice, request or demand to or
upon Guarantied Party or Guarantor shall not be effective until received.
4.3 SEVERABILITY. In case any provision in or obligation under this
Guaranty shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
4.4 AMENDMENTS AND WAIVERS. No amendment, modification, termination or
waiver of any provision of this Guaranty, and no consent to any departure by
Guarantor therefrom, shall in any event be effective without the written
concurrence of Guarantied Party and, in the case of any such amendment or
modification, Guarantor. Any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which it was given.
4.5 HEADINGS. Section and subsection headings in this Guaranty are included
herein for convenience of reference only and shall not constitute a part of this
Guaranty for any other purpose or be given any substantive effect.
4.6 APPLICABLE LAW. THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF
GUARANTOR AND BENEFICIARIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
WASHINGTON, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
4.7 SUCCESSORS AND ASSIGNS. This Guaranty is a continuing guaranty and
shall be binding upon Guarantor and its successors and assigns. This Guaranty
shall inure to the benefit of Beneficiaries and their respective successors and
assigns. Guarantor shall not assign this Guaranty or any of the rights or
obligations of Guarantor hereunder without the prior written consent of
Guarantied Party. Any Beneficiary may, without notice or consent, assign its
interest in this Guaranty in whole or in part. The terms and provisions of this
Guaranty shall inure to the benefit of any transferee or assignee of the Notes,
and in the event of such transfer or assignment the rights and privileges herein
conferred upon such Beneficiary shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions hereof.
4.8 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST GUARANTOR ARISING OUT OF OR RELATING TO THIS
GUARANTY, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL
COURT OF COMPETENT JURISDICTION IN THE STATE OF WASHINGTON. BY EXECUTING AND
DELIVERING THIS AGREEMENT, GUARANTOR, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND
VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH
COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO
GUARANTOR AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SUBSECTION 4.2;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS SUFFICIENT TO
CONFER PERSONAL JURISDICTION OVER GUARANTOR IN ANY SUCH PROCEEDING IN ANY SUCH
COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT;
AND
(V) AGREES THAT BENEFICIARIES RETAIN THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST GUARANTOR IN THE
COURTS OF ANY OTHER JURISDICTION.
4.9 WAIVER OF TRIAL BY JURY. GUARANTOR AND, BY ITS ACCEPTANCE OF THE
BENEFITS HEREOF, EACH BENEFICIARY EACH HEREBY AGREES TO WAIVE ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS GUARANTY. The scope of this waiver is intended to be all-encompassing of
any and all disputes that may be filed in any court and that relate to the
subject matter of this transaction, including without limitation contract
claims, tort claims, breach of duty claims and all other common law and
statutory claims. Guarantor and, by its acceptance of the benefits hereof, each
Beneficiary each (i) acknowledges that this waiver is a material inducement for
Guarantor and Beneficiaries to enter into a business relationship, that
Guarantor and Beneficiaries have already relied on this waiver in entering into
this Guaranty or accepting the benefits thereof, as the case may be, and that
each will continue to rely on this waiver in their related future dealings and
(ii) further warrants and represents that each has reviewed this waiver with its
legal counsel, and that each knowingly and voluntarily waives its jury trial
rights following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A
MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 4.9 AND EXECUTED
BY GUARANTIED PARTY AND GUARANTOR), AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS GUARANTY.
In the event of litigation, this Guaranty may be filed as a written consent to a
trial by the court.
4.10 NO OTHER WRITING. This writing is intended by Guarantor and
Beneficiaries as the final expression of this Guaranty and is also intended as a
complete and exclusive statement of the terms of their agreement with respect to
the matters covered hereby. No course of dealing, course of performance or trade
usage, and no parol evidence of any nature, shall be used to supplement or
modify any terms of this Guaranty. There are no conditions to the full
effectiveness of this Guaranty.
4.11 FURTHER ASSURANCES. At any time or from time to time, upon the request
of Guarantied Party, Guarantor shall execute and deliver such further documents
and do such other acts and things as Guarantied Party may reasonably request in
order to effect fully the purposes of this Guaranty.
4.12 ACKNOWLEDGEMENT. Guarantor hereby acknowledges and agrees that
Guarantied Party will assign and grant a security interest in all of Guarantied
Party's rights in, to and under this Guaranty to Northwest Farm Credit Services,
FLCA, as agent (the " AGENT") for the benefit of the holders (the "NOTEHOLDERS")
of the 7.61% Senior Notes due September 30, 2012 (the "SENIOR NOTES") issued by
Guarantied Party pursuant to the Note Purchase Agreement, dated October 17,
2005, among Guarantied Party, Agent and the purchasers referred to therein (the
"NOTE PURCHASE AGREEMENT"), as the same may be amended, supplemented or
otherwise modified from time to time, as security for Guarantied Party's
obligations under the Senior Notes and the Note Purchase Agreement, and
thereafter the Agent shall have all of the rights granted to Guarantied Party
hereunder. So long as the Agent has any security interest in this Guaranty, the
term "GUARANTIED PARTY" shall include the Agent for all purposes under this
Agreement.
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IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly executed and
delivered by its trustee thereunto duly authorized as of the date first written
above.
AMALGAMATED COLLATERAL TRUST
By: ASC Holdings, Inc., as Company Trustee
By: /s/Gregory M. Swalwell
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Gregory M. Swalwell
Vice President
SNAKE RIVER SUGAR COMPANY
By: /s/Dave Budge
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Dave Budge
Vice President