Exhibit 10(c)
GUARANTY AGREEMENT
GUARANTY AGREEMENT dated as of June 30, 2003,
among ADESA CORPORATION, an Indiana corporation, and
ALLETE, INC., a Minnesota corporation (each
individually, a "GUARANTOR" and collectively, the
"GUARANTORS") of ADESA CALIFORNIA, INC., a California
corporation (the "BORROWER"), and SUNTRUST BANK, a
Georgia banking corporation as administrative agent
(the "ADMINISTRATIVE AGENT") for the Lenders (as
defined in the Credit Agreement referred to below).
Reference is made to the Term Loan Agreement dated as of June 30,
2003 (as amended, supplemented or otherwise modified from time to time, the
"CREDIT AGREEMENT"), among the Borrower, the lenders from time to time party
thereto (the "LENDERS") and SunTrust Bank, as administrative agent for the
Lenders (in such capacity, the "ADMINISTRATIVE AGENT"), joined by the
Guarantors. Capitalized terms used herein and not defined herein shall have the
meanings assigned to such terms in the Credit Agreement.
The Lenders have agreed to make Term Loans to the Borrower
pursuant to, and upon the terms and subject to the conditions specified in, the
Credit Agreement. The Borrower is the direct wholly-owned Subsidiary of ADESA
Corporation ("ADESA") which, in turn, is an indirect Subsidiary of ALLETE, Inc.
("ALLETE"), and accordingly, each of the Guarantors acknowledges that it will
derive substantial benefit from the making of the Term Loans by the Lenders. The
obligations of the Lenders to make the Term Loans are conditioned on, among
other things, the execution and delivery by the Guarantors of a Guaranty
Agreement in the form hereof. As consideration therefor and in order to induce
the Lenders to make the Term Loans, the Guarantors are willing to execute this
Guaranty Agreement.
Accordingly, the parties hereto agree as follows:
SECTION 1. GUARANTEE. Each Guarantor unconditionally guarantees,
jointly with the other Guarantors and severally, as a primary obligor and not
merely as a surety, (a) the due and punctual payment of (i) the principal of and
premium, if any, and interest (including interest accruing during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding) on the Term
Loans, when and as due, whether at maturity, by acceleration, upon one or more
dates set for prepayment or otherwise, and (ii) all other monetary obligations,
including fees, costs, expenses and indemnities, whether primary, secondary,
direct, contingent, fixed or otherwise (including monetary obligations incurred
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding), of
the Loan Parties to the Administrative Agent and the Lenders under the Credit
Agreement and the other Loan Documents, (b) the due and punctual performance of
all covenants, agreements, obligations and liabilities of the Loan Parties under
or pursuant to the Credit Agreement and the other Loan Documents; and (c) the
due and punctual payment and performance of all obligations of the Borrower,
monetary or otherwise, under each Hedging Agreement entered into with a
counterparty that was a Lender or an Affiliate of a Lender at the time such
Hedging Agreement was entered into (all the monetary and other obligations
referred to in the preceding clauses (a) through (c) being collectively called
the "OBLIGATIONS"). Each Guarantor further agrees that the Obligations may be
extended or renewed, in whole or in part (but the principal amount of the Notes
may not be increased), without notice to or further assent from it, and that it
will remain bound upon its guarantee notwithstanding any extension or renewal of
any Obligation.
SECTION 2. OBLIGATIONS NOT WAIVED. To the fullest extent
permitted by applicable law, each Guarantor waives presentment to, demand of
payment from and protest to the Borrower of any of the Obligations, and also
waives notice of acceptance of its guarantee and notice of protest for
nonpayment. To the fullest extent permitted by applicable law, the obligations
of each Guarantor hereunder shall not be affected by (a) the failure of the
Administrative Agent or any Lender to assert any claim or demand or to enforce
or exercise any right or remedy against the Borrower or any other Guarantor
under the provisions of the Credit Agreement, any other Loan Document or
otherwise, (b) any rescission, waiver, amendment or modification of, or any
release from any of the terms or provisions of, this Agreement, any other Loan
Document or any other agreement, including with respect to any other Guarantor
under this Agreement, or (c) the failure to perfect any security interest in, or
the release of, any of the security held by or on behalf of the Administrative
Agent or any Lender.
SECTION 3. SECURITY. Each of the Guarantors authorizes the
Administrative Agent and each of the Lenders, from time to time at their
discretion and without notice to Guarantors (but subject to the terms of the
other Loan Documents), to take any or all of the following actions without
impairing the Guarantors' obligations hereunder: (a) retain or obtain a lien on
or security interest in any property to secure any of the Obligations or any
liability or obligation hereunder; (b) retain or obtain the primary or secondary
obligation of any obligor or obligors, in addition to the Guarantors, with
respect to any of the Obligations; (c) extend or renew for one or more periods
(regardless of whether longer than the original period), or release or
compromise any obligation of the Guarantors hereunder or any obligation of any
nature of any other obligor (including, without limitation, the Borrower) with
respect to any of the Obligations: (d) release or fail to perfect its lien on or
security interest in, or impair, surrender, release or permit any substitution
or exchange for, all or any part of any property securing any of the Obligations
or any liability or obligation hereunder, or extend or renew for one or more
periods (regardless of whether longer than the original period) or release or
compromise any obligations of any nature of any obligor with respect to any such
property, or apply any such property and direct the order or manner of sale
thereof as they, in their sole discretion, may determine; (e) release or
substitute any one or more endorsees, other guarantors of other obligors; and
(f) resort to the Guarantors, or either of them, for payment of any the
Obligations, regardless of whether the Administrative Agent or any other Person
shall have resorted to any property securing any of the Obligations or any
liability or obligation hereunder or shall have proceeded against the Borrower
or any other obligator primarily or secondarily obligated with respect to any of
the Obligations (all of the actions referred to in this clause (f) being hereby
expressly waived by the Guarantors).
SECTION 4. GUARANTEE OF PAYMENT. Each Guarantor further agrees
that its guaranty constitutes a guarantee of payment when due and not of
collection, and waives any right to require that any resort be had by the
Administrative Agent or any Lender to any of the security held for payment of
the Obligations or to any balance of any deposit account or credit on the books
of the Administrative Agent or any Lender in favor of the Borrower or any other
Person.
SECTION 5. NO DISCHARGE OR DIMINISHMENT OF GUARANTEE. The
obligations of each Guarantor hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason (other than the
indefeasible payment in full in cash of the Obligations), including any claim of
waiver, release, surrender, alteration or compromise of any of the Obligations,
and shall not be subject to any defense or setoff, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of each Guarantor hereunder shall
not be discharged or impaired or otherwise affected by the failure of the
Administrative Agent or any Lender to assert any claim or demand or to enforce
any remedy under the Credit Agreement, any other Loan Document or any other
agreement, by any waiver or modification of any provision of any thereof, by any
default, failure or delay, willful or otherwise, in the performance of the
Obligations, or by any other act or omission that may or might in any manner or
to the extent vary the risk of any Guarantor or that would otherwise operate as
a discharge of each Guarantor as a matter of law or equity (other than the
indefeasible payment in full in cash of all the Obligations).
SECTION 6. DEFENSES OF BORROWER WAIVED. To the fullest extent
permitted by applicable law, each Guarantor waives any defense based on or
arising out of any defense of the Borrower or the unenforceability of the
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of the Borrower, other than the final and indefeasible payment
in full in cash of the Obligations. The Administrative Agent and the Lenders
may, at their election, foreclose on any security held by one or more of them by
one or more judicial or nonjudicial sales, accept an assignment of any such
security in lieu of foreclosure, compromise or adjust any part of the
Obligations, make any other accommodation with the Borrower or any other
guarantor, without affecting or impairing in any way the liability of any
Guarantor hereunder except to the extent the Obligations have been fully,
finally and indefeasibly paid in cash. Pursuant to applicable law, each
Guarantor waives any defense arising out of any such election even though such
election operates, pursuant to applicable law, to impair or to extinguish any
right of reimbursement or subrogation or other right or remedy of such Guarantor
against the Borrower or any other Guarantor or guarantor, as the case may be, or
any security.
SECTION 7. AGREEMENT TO PAY; SUBORDINATION. In furtherance of the
foregoing and not in limitation of any other right that the Administrative Agent
or any Lender has at law or in equity against any Guarantor by virtue hereof,
upon the failure of the Borrower or any other Loan Party to pay any Obligation
when
and as the same shall become due, whether at maturity, by acceleration, after
notice of prepayment or otherwise, each Guarantor hereby promises to and will
forthwith pay, or cause to be paid, to the Administrative Agent for the benefit
of the Lenders in cash the amount of such unpaid Obligations. Upon payment by
any Guarantor of any sums to the Administrative Agent, all rights of such
Guarantor against the Borrower arising as a result thereof by way of right of
subrogation, contribution, reimbursement, indemnity or otherwise shall in all
respects be subordinate and junior in right of payment to the prior indefeasible
payment in full in cash of all the Obligations. In addition, any indebtedness of
the Borrower now or hereafter held by any Guarantor is hereby subordinated in
right of payment to the prior payment in full in cash of the Obligations. If any
amount shall erroneously be paid to any Guarantor on account of (i) such
subrogation, contribution, reimbursement, indemnity or similar right or (ii) any
such indebtedness of the Borrower, such amount shall be held in trust for the
benefit of the Administrative Agent and the Lenders and shall forthwith be paid
to the Administrative Agent to be credited against the payment of the
Obligations, whether matured or unmatured, in accordance with the terms of the
Loan Documents.
SECTION 8. INFORMATION. Each Guarantor assumes all responsibility
for being and keeping itself informed of the Borrower's financial condition and
assets, and of all other circumstances bearing upon the risk of nonpayment of
the Obligations and the nature, scope and extent of the risks that such
Guarantor assumes and incurs hereunder, and agrees that none of the
Administrative Agent or the Lenders will have any duty to advise any of the
Guarantors of information known to it or any of them regarding such
circumstances or risks.
SECTION 9. REPRESENTATIONS AND WARRANTIES. Each Guarantor
represents and warrants as to itself that all representations and warranties
relating to it contained in the Credit Agreement are true and correct.
SECTION 10. TERMINATION. The guarantees made hereunder (a) shall
terminate when all the Obligations have been paid in full in cash and satisfied
and (b) shall continue to be effective or be reinstated, as the case may be, if
at any time payment, or any part thereof, of any Obligation is rescinded or must
otherwise be restored by any Lender or any Guarantor upon the bankruptcy or
reorganization of the Borrower, any Guarantor or otherwise. In connection with
the foregoing, the Administrative Agent shall execute and deliver to such
Guarantor or Guarantor's designee, at such Guarantor's expense, any documents or
instruments which such Guarantor shall reasonably request from time to time to
evidence such termination and release.
SECTION 11. BINDING EFFECT; SEVERAL AGREEMENT; ASSIGNMENTS.
Whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns of such party;
and all covenants, promises and agreements by or on behalf of the Guarantors
that are contained in this Agreement shall bind and inure to the benefit of each
party hereto and their respective successors and assigns. This Agreement shall
become effective as to any Guarantor when a counterpart hereof executed on
behalf of such Guarantor shall have been delivered to the Administrative Agent,
and a counterpart hereof shall have been executed on behalf of the
Administrative Agent, and thereafter shall be binding upon such Guarantor and
the Administrative Agent and their respective successors and assigns, and shall
inure to the benefit of such Guarantor, the Administrative Agent and the
Lenders, and their respective successors and assigns, except that no Guarantor
shall have the right to assign its rights or obligations hereunder or any
interest herein (and any such attempted assignment shall be void); PROVIDED,
HOWEVER, that if ALLETE is a party to an internal reorganization pursuant to
which all or substantially all of ALLETE'S common stock is exchanged for the
common stock of an entity that becomes ALLETE'S parent, ALLETE may assign and
delegate its rights and obligations under this Guaranty to its new parent so
long as (a) such new parent is at least of the same credit quality (as
reasonably determined by the Lenders) as ALLETE immediately prior to such
reorganization and (b) such new parent executes and delivers to the
Administrative Agent such assumption agreements, certificates and opinions as
the Administrative Agent reasonably requests. Upon any such delegation and
assumption of obligations in accordance with the previous sentence, ALLETE, but
not ADESA, shall be relieved of and fully discharged from all obligations
hereunder, whether such obligations arose before or after such delegation and
assumption. This Agreement shall be construed as a separate agreement with
respect to each Guarantor and may be amended, modified, supplemented, waived or
released with respect to any Guarantor without the approval of any other
Guarantor and without affecting the obligations of any other Guarantor
hereunder.
SECTION 12. WAIVERS; AMENDMENT.
(a) No failure or delay of the Administrative Agent of any in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and of the Administrative Agent hereunder and of the
Lenders under the other Loan Documents are cumulative and are not exclusive of
any rights or remedies that they would otherwise have. No waiver of any
provision of this Agreement or consent to any departure by any Guarantor
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) below, and then such waiver and consent shall be effective only in
the specific instance and for the purpose for which given. No notice or demand
on any Guarantor in any case shall entitle such Guarantor to any other or
further notice in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to a written agreement entered into
between the Guarantors with respect to which such waiver, amendment or
modification relates and the Administrative Agent, with the prior written
consent of the Required Lenders (except as otherwise provided in the Credit
Agreement).
SECTION 13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA.
SECTION 14. NOTICES. All communications and notices hereunder
shall be in writing and given as provided in Section 10.1 of the Credit
Agreement. All communications and notices hereunder to each Guarantor shall be
given to it at its address set forth in Section 10.1 of the Credit Agreement.
SECTION 15. SURVIVAL OF AGREEMENT; SEVERABILITY.
(a) All covenants, agreements representations and warranties
made by the Guarantors herein and in the certificates or other instruments
prepared or delivered in connection with or pursuant to this Agreement or the
other Loan Document shall be considered to have been relied upon by the
Administrative Agent and the Lenders and shall survive the making by the Lenders
of the Term Loans regardless of any investigation made by any of them or on
their behalf, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Term Loan or any other fee or amount
payable under this Agreement or any other Loan Document is outstanding and
unpaid.
(b) In the event one or more of the provisions contained in
this Agreement or in any other Loan Document should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby (it being understood that the invalidity of a
particular provision in a particular jurisdiction shall not in and of itself
affect the validity of such provision in any other jurisdiction). The parties
shall endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 16. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute a single contract (subject to Section 11), and
shall become effective as provided in Section 11. Delivery of an executed
signature page to this Agreement by facsimile transmission shall be as effective
as delivery of a manually executed counterpart of this Agreement.
SECTION 17. RULES OF INTERPRETATION. The rules of interpretation
specified in Section 1.03 of the Credit Agreement shall be applicable to this
Agreement.
SECTION 18. JURISDICTION; CONSENT TO SERVICE OF PROCESS.
(a) Each Guarantor hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
Florida state court or Federal court of the United States of America
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sitting in Orlando, Florida, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Agreement or the other
Loan Documents, or for recognition or enforcement of any judgment, and each of
the parties hereto hereby irrevocably and unconditionally agrees that all claims
in respect of any such action or proceeding may be heard and determined in such
Florida state court or, to the extent permitted by law, in such Federal court.
Each of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that the Administrative Agent or any Lender may
otherwise have to bring any action or proceeding relating to this Agreement or
the other Loan Documents against any Guarantor or its properties in the courts
of any jurisdiction.
(b) Each Guarantor hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the other
Loan Documents in any Florida state or Federal court. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 14. Nothing in
this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 19. WAIVER OF JURY TRIAL. EACH PARTY HERETO HERBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 19.
SECTION 20. RIGHT OF SETOFF. If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other Indebtedness at any time owing by such Lender to or
for the credit or the account of any Guarantor against any or all the
obligations of such Guarantor now or hereafter existing under this Agreement and
the other Loan Documents held by such Lender, irrespective of whether or not
such Person shall have made any demand under this Agreement or any other Loan
Document and although such obligations may be unmatured. The rights of each
Lender under this Section 20 are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
ADESA CORPORATION
By: /s/ James P. Hallett
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Name: James P. Hallett
Title: President and CEO
ALLETE, INC.
By: /s/ Steven W. Tyacke
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Name: Steven W. Tyacke
Title: Assistant General Counsel
SUNTRUST BANK,
as Administrative Agent
By: /s/ Chris Aguilar
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Name: Chris Aguilar
Title: Managing Director