EXHIBIT 10.1(M)
CONTINUING GUARANTEE
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The undersigned:
I. COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.,
established at Amsterdam, the Netherlands,
hereinafter referred to as: Rabobank Nederland;
DE NATIONALE INVESTERINGSBANK N.V.,
established at Den Haag, the Netherlands,
hereinafter referred to as: DNIB,
Rabobank Nederland and DNIB, hereinafter jointly as well as severally also
referred to as: the Banks
II. VARITY CORPORATION,
a Delaware corporation, having its offices at 672 Delaware Avenue, Buffalo,
New York 14209, USA,
hereinafter referred to as: the Guarantor
WHEREAS:
- - - Rabobank Nederland will grant to Heerlen ABS Manufacturing C.V.,
hereinafter referred to as: the Debtor, an overdraft facility up to a
maximum amount of NLG 14,400,000.-- (fourteen million four hundred thousand
Netherlands Guilders), and
- - - Rabobank Nederland will grant to the Debtor a loan facility up to a maximum
amount of NLG 23,000,000.-- (twenty three million Netherlands Guilders),
and
- - - DNIB will grant to the Debtor a loan facility up to a maximum amount of NLG
25,000,000.-- (twenty five million Netherlands Guilders), the aforesaid
overdraft facility and loan facilities collectively as well as separately
referred to as: the Facilities;
- - - It is a condition precedent for the availability of the Facilities that the
Guarantor has issued an unconditional and irrevocable guarantee in favour
of Rabobank Nederland and DNIB, to pay on first demand and without further
proof of indebtedness (as defined in article 1 of this Agreement), in the
same currency as the indebtedness of Debtor, any and all indebtedness of
Debtor under the respective terms and conditions of the Facilities;
- - - The Guarantor indirectly owns 100% of the share capital of Kelsey-Hayes
Netherlands Inc. and Kelsey-Hayes Heerlen Inc., being the general partners
of the Debtor and will benefit from the availability of the Facilities to
the Debtor.
HAVE AGREED AS FOLLOWS:
1. The Guarantor, as if it were itself the principal debtor, hereby
unconditionally and irrevocably guarantees and promises to pay to the
Banks, on first demand and without further proof of indebtedness by the
Banks, in the same currency, any and all outstanding indebtedness of Debtor
under the respective terms and conditions of the Facilities or as they may
be modified or amended from time to time, as such indebtedness becomes due
and payable thereunder.
The word "indebtedness" is used herein in its most comprehensive sense and
includes any and all advances, interest, costs or other charges, debts,
obligations and liabilities of Debtor, heretofore, now, or hereafter made,
direct, incurred or created, whether voluntary or involuntary and however
arising, now or at any time in the future, and whether recovery upon such
indebtedness may be or hereafter become barred by any statute of
limitations, or whether such indebtedness may be or hereafter become
otherwise unenforceable.
The accounts of the Banks shall be prima facie evidence of any amount which
the Debtor may owe to the Banks pursuant to the Facilities.
2. This is a continuing guaranty relating to any indebtedness under the
Facilities, including that arising under successive transactions which
shall either continue or succeed the indebtedness or from time to time
renew it after it has been satisfied.
3. The obligations hereunder are independent of the obligations of Debtor and
a separate action or actions may be brought and prosecuted against
Guarantor whether action is brought against the Debtor or whether Debtor be
joined in any such action or actions, it being understood that the Banks
may collect on the same obligation only once.
4. (1) The Guarantor hereby waives all rights, pleas, privileges and
benefits of any statute of limitations affecting its liability
hereunder or the enforcement hereof.
(2) The Guarantor waives any right to require Banks to
a. proceed against Debtor;
b. proceed against or exhaust any security held from Debtor;
c. pursue any other remedy in Banks's power whatsoever.
(3) The Guarantor waives any defense arising by reason of any disability
or other defense of Debtor or by reason of the cessation from any
cause whatsoever of the liability of Debtor (other than by reason of
payment).
As long as any indebtedness exists, the Guarantor shall have no right
of subrogation, and waives any right to enforce any remedy which Banks
now has or may hereafter have against Debtor, and waives any benefit
of, and any right to participate in any security now or hereafter held
by Banks.
(4) The Guarantor waives all presentments, demands for performance,
notices of nonperformances, protests, notices of protest, notices of
dishonour, and notices of acceptance of this Guarantee and of the
existence, creation, or incurrence of new or additional indebtedness.
(5) The Guarantor agrees that its obligations hereunder shall be binding
and remain in force and effect, irrespective of the validity,
regularity and enforceability of the Facilities, the absence of any
action to enforce the same, the recovery of any judgement against
Debtor or any action to enforce the same, or any other circumstance
that might otherwise constitute a legal or equitable discharge or
defence to the Guarantor.
5. The Guarantor agrees that each of the Banks may, without notice or demand
and without affecting its liability hereunder, agree with the Borrower from
time to time to:
a. renew, compromise, extend, accelerate or otherwise change the time of
payment of the indebtedness, including increase or decrease of the
rate of the interest thereon;
b. take and hold security for the payment of the indebtedness guaranteed,
and exchange, enforce, waive and release any such security;
c. apply such security and direct the order or manner of sale thereof as
Banks in their discretion may determine.
6. All payments made hereunder shall be made free, without set-off, and clear
of, and without deduction for or on account of any present or future stamp
or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings of any nature now or hereafter applicable.
In the event that the Guarantor is prohibited by law from making such
payments free of such deductions or withholdings, the Guarantor shall pay
such additional amounts to the Banks as may be necessary in order that the
actual amount received by the Banks after all deductions or withholdings
(and after payment of such additional amounts) shall equal the amount that
would have been received by the Banks if no deduction or withholding were
required.
7. Guarantor represents and warrants that:
(1) It is a corporation duly organized and validly existing under the laws
of the state of Delaware and has full power to issue this Guarantee
and it has all requisite corporate power to issue this Guarantee and
to perform its obligations hereunder. The issuance of this Guarantee
by the Guarantor and performance of its obligations hereunder have
been authorised by appropriate corporate action.
The execution, delivery and performance of this Guarantee do not and
will not violate or contravene any provision of law, will not conflict
with the articles of incorporation or by-laws or other corporate
documents, if any, of the Guarantor and do not and will not conflict
with or result in the breach of any provision of any agreement to
which the Guarantor or any of its subsidiaries is a party.
(2) Its obligations hereunder constitute direct and general obligations,
legally valid and binding and enforceable against the Guarantor
according to its terms which, now and at any time in the future, shall
at least rank pari passu with all other unsubordinated obligations of
the Guarantor, present and future.
(3) There is no withholding, income or other tax or charge of the state of
Delaware or the USA or any political subdivision or taxing authority
thereof or therein or of any taxing authority, federation or
association of which the state of Delaware or the USA is a member,
applicable to any payment to be made by the Guarantor pursuant to the
terms of this Guarantee or any document provided for hereunder or to
be imposed on or by virtue of the execution, delivery, performance or
enforcement of this Guarantee or any document provided for hereunder.
(4) The audited financial statements (including the notes thereto) of the
Guarantor for the period ending January 31, 1993 which have been
delivered to the Banks are complete and correct and fairly present the
financial position and the results of operations of the Guarantor and
each of its subsidiaries at the date thereof and for the period then
ended in conformity with generally accepted accounting principles in
the state of Delaware or the USA, as the case may be, consistently
applied.
Since the date of such financial statements there has been no material
adverse change in the financial position, results of or operations of
the Guarantor or any of its subsidiaries.
(5) The representations and warranties set out in this Article 7 shall
survive the execution of this Guarantee and shall be deemed to be
repeated at the time of each drawdown by the Debtor under the
Facilities. This Guarantee shall immediately be enforceable if any
representation or warranty made in this Guarantee shall at any time
prove to be incorrect in any material respect.
8. This Guarantee shall remain in force and not be discharged until all
amounts due under the Facilities have been paid in full in accordance with
respective terms and conditions thereof.
9. The Guarantor undertakes to provide the Banks with its annual financial
statements, audited by an independent auditor, as soon as they have become
available and in any event no later than six months after closing the
accounts for the relevant year and furthermore the Guarantor shall provide
the Banks with its quaterly reports on FORM 10Q, filed with the United
States Securities and Exchange Commission for the relevant quarter as soon
as they have become available.
10. Each of the Banks shall have the right to set-off or to apply amounts on
deposit or account with it or any of its affiliates in reduction of amounts
due hereunder, regardless of the currency of such amounts. The Guarantor
hereby authorizes the Banks in the name of the Guarantor to perform all
such acts and to execute all such documents and instruments as may be
necessary or expedient to effect any such set-off or application.
11. All notices, requests, demands or other communications to or upon Guarantor
shall be deemed to have been duly given when sent by Banks to the following
address:
Varity Corporation
672 Delaware Avenue
Buffalo, New York 14209, U.S.A.
for the attention of the Treasurer
with copy by fax to
Mr. Henry T. Pollock
- Assistant Treasurer -
Telefax (1) 716-888\8010
12. In respect of this Guarantee and its implementation, Guarantor irrevocably
waives any claim it may now or at any time have to immunity of any kind as
to court or arbitration proceedings and the enforcement of any awards,
sentences, judgements, injunctions, decrees or court orders legally given
or made in connection with such proceedings.
13. This Guarantee and the interpretation thereof shall be governed by and
construed in accordance with the laws of the Netherlands.
14. (a) Any suit, action or proceeding against Guarantor with respect to this
Guarantee may be brought in the courts of the Netherlands, the United
States District Court for the Southern District of New York, or such
other courts as the Banks in their sole discretion may decide and
Guarantor hereby submits to the non-exclusive jurisdiction of such
courts for the purpose of any suit, action or proceeding and by
execution and delivery of this Guarantee, the Guarantor hereby submits
to and accepts with regard to any such action or proceeding for itself
and in respect of its property, generally and unconditionally, the
jurisdiction of the aforesaid courts.
(b) The Guarantor hereby irrevocably agrees not to present any objection
which it may now or hereafter have to the laying of the venue of any
suit, action or proceeding arising out of or relating to this
Guarantee in the Netherlands and hereby further irrevocably agrees not
to claim that the Netherlands is an inconvenient forum for any such
suit, action or proceeding.
15. For the purpose of this Guarantee, also in respect of juridical execution,
the parties hereto choose domicile, as far as the Banks are concerned at
Utrecht, 18 Croeselaan, The Netherlands and as far as the Guarantor is
concerned at the following address:
Heerlen ABS Manufacturing B.V.
Postbus 1637
6201 BP Maastricht
(All communications copy by telefax to faxno. 043-821599)
IN WITNESS WHEREOF the parties hereto, acting through their duly authorized
representatives, have executed this Guarantee.
I. COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.
/s/ K. Wever /s/ J.W. Slooten
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date: 21 January 1994
DE NATIONALE INVESTERINGSBANK N.V.
/s/ E. Ven Der Berg /s/ A. Waaijen
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II. VARITY CORPORATION
/s/ F.J. Chapman /s/ H.T. Pollock
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date: 21 January 1994