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Exhibit 10(jj)
GUARANTY
GUARANTY, dated December 30, 1999 made by ELDER-BEERMAN HOLDINGS, INC.,
an Ohio corporation ("Holdings"), ELDER-BEERMAN OPERATIONS, LLC, an Ohio limited
liability company ("Operations"), and ELDER-BEERMAN INDIANA, L.P., an Indiana
limited liability partnership ("EBI") (each a "Guarantor" and collectively the
"Guarantors"), in favor of the Guarantied Parties referred to below.
WITNESSETH:
WHEREAS, THE ELDER-BEERMAN STORES CORP., an Ohio corporation (the
"Borrower"), has entered into an Amended and Restated Credit Agreement, dated as
of July 27, 1998, with the financial institutions party thereto (the "Lenders"),
Citibank, N.A., as issuer (the "Issuer"), and CITICORP USA, INC. ("CUSA"), as
Agent for the Lenders, the Issuer and the Swing Loan Bank (in such capacity, the
"Agent") (said Agreement, as it may be amended or otherwise modified from time
to time, being the "Credit Agreement", and capitalized terms not defined herein
but defined therein being used herein as therein defined); and
WHEREAS, the Borrower owns beneficially and of record 100% of the
capital stock of Holdings, the Borrower and Holdings together own beneficially
and of record 100% of the membership interests of Operations, and the Borrower
and Holdings together own beneficially and of record 100% of the partnership
interests of EBI, and the Borrower and the Guarantors are members of the same
consolidated group of companies and are engaged in related businesses, and the
Guarantor will derive direct and indirect economic benefit from the Loans and
Letters of Credit;and
WHEREAS, it is a condition precedent to the effectiveness of the
Lenders' consent granted under Section 3 of Amendment No. 3 and Consent, dated
as of December ___, 1999 ("Amendment No. 3"), to the Credit Agreement that the
Guarantors shall have executed and delivered this Guaranty;and
WHEREAS, the Lenders, the Issuer, the Agent and Citibank, as obligee of
the Borrower on Interest Rate Contracts, are herein referred to collectively as
the "Guaranteed Parties",
NOW, THEREFORE, in consideration of the premises and to induce the
Lenders to make Loans and the Issuer to issue Letters of Credit, the Guarantors
hereby agree as follows:
SECTION 1. GUARANTY. Each Guarantor hereby, jointly and severally,
unconditionally and irrevocably guarantees the full and prompt payment when due,
whether at stated maturity, by acceleration or otherwise, of, and the
performance of, the Obligations, whether now or hereafter existing and whether
for principal, interest, fees, expenses or otherwise, and any and all expenses
(including, without limitation, counsel
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fees and expenses) incurred by any of the Guarantied Parties in enforcing any
rights under this Guaranty. This Guaranty is an absolute guaranty of payment
and performance and not a guaranty of collection.
SECTION 2. GUARANTY ABSOLUTE. Each Guarantor, jointly and severally,
guaranties that the Obligations will be paid strictly in accordance with the
terms of the Credit Agreement, the Notes and the other 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 the Guarantied Parties
with respect thereto. The liability of each Guarantor under this Guaranty shall
be absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of any provision of any
other Loan Document or any other agreement or instrument relating to any Loan
Document, or avoidance or subordination of any of the Obligations;
(ii) any change in the time, manner or place of payment of, or in any
other term of, or any increase in the amount of, all or any of the Obligations,
or any other amendment or waiver of any term of, or any consent to departure
from any requirement of, the Credit Agreement, the Notes or any of the other
Loan Documents;
(iii) an exchange, release or non-perfection of any Lien on any
collateral for, or any release or amendment or waiver of any term of any other
guaranty of, or any consent to departure from any requirement of any other
guaranty of, all or any of the Obligations;
(iv) the absence of any attempt to collect any of the Obligations from
the Borrower or for any other guarantor or any other action to enforce the same
or the election of any remedy by any of the Guarantied Parties;
(v) any waiver, consent, extension, forbearance or granting of any
indulgency by any of the Guarantied Parties with respect to any provision of
any other Loan Document;
(vi) the election by any of the Guarantied Parties in any proceeding
under chapter 11 of the Bankruptcy Code of the application of section
1111(b)(2) of the Bankruptcy Code;
(vii) any borrowing or grant of a security interest by the Borrower, as
debtor-in-possession, under section 364 of the Bankruptcy Code;
(viii) the disallowance, under section 502 of the Bankruptcy Code, of
all or any portion of the claims of any of the Guarantied Parties for payment of
any of the Obligations;or
(ix) any other circumstances which might otherwise constitute a legal
or equitable discharge or defense of a borrower or a guarantor.
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SECTION 3. WAIVER. (a) Each Guarantor hereby (i) waives (A) promptness,
diligence, notice of acceptance and any and all other notices with respect to
any of the Obligations or this Guaranty, (B) any requirement that any of the
Guarantied Parties protect, secure, perfect or insure any security interest in
or other Lien on any property subject thereto or exhaust any right or take any
action against the Borrower or any other Person or any Collateral, (C) the
filing of any claim with a court in the event of receivership or bankruptcy of
the Borrower, (D) protest or notice with respect to nonpayment of all or any of
the Obligations, (E) the benefit of any statute of limitation, (F) all demands
whatsoever (and any requirement that the same be made on the Borrower as a
condition precedent to each Guarantor's obligations hereunder); and (ii)
covenants and agrees that this Guaranty will not be discharged except by
complete performance of the Obligations and any other obligations of the
Guarantors contained herein.
(b) If, in the exercise of any of its rights and remedies, any of the
Guarantied Parties shall forfeit any of its rights or remedies, including,
without limitation, its right to enter a deficiency judgment against the
Borrower or any other Person, whether because of any applicable law pertaining
to "election of remedies" or the like, the Guarantor hereby consents to such
action by such Guarantied Party and waives any claim based upon such action.
Any election of remedies which results in the denial or impairment of the right
of such Guarantied Party to seek a deficiency judgment against the Borrower
shall not impair the obligation of the Guarantors to pay the full amount of the
Obligations or any other obligation of the Guarantors contained herein.
(c) Each Guarantor agrees that notwithstanding the foregoing and
without limiting the generality of the foregoing if, after the occurrence and
during the continuance of an Event of Default, the Guarantied Parties are
prevented by applicable law from exercising their respective rights to
accelerate the maturity of the Obligations, to collect interest on the
Obligations,or to enforce or exercise any other right or remedy with respect to
the Obligations, or the Agent is prevented from taking any action to realize on
the Collateral, each Guarantor agrees to pay to the Agent for the account of
the Guarantied Parties, upon demand therefor, the amount that would otherwise
have been due and payable had such rights and remedies been permitted to be
exercised by the Guarantied Parties.
(d) Each Guarantor hereby assumes responsibility for keeping itself
informed of the financial condition of the Borrower and of each other guarantor
of all or any part of the Obligations, and of all other circumstances bearing
upon the risk of nonpayment of the Obligations or any part thereof, that
diligent inquiry would reveal. The Guarantor hereby agrees that the Guarantied
Parties shall have no duty to advise the Guarantor of information known to any
of the Guarantied Parties regarding such condition or any such circumstance. In
the event that any Guarantied Party in its sole discretion undertakes at any
time or from time to time to provide any such information to the Guarantors,
such Guarantied Party shall be under no obligation (i) to undertake any
investigation not a part of its regular business routine, (ii) to disclose any
information which, pursuant to accepted or reasonable banking or commercial
finance practices, such Guarantied Party wishes to maintain confidential or
(iii) to make any other or future disclosures of such information or any other
information to the Guarantors.
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(e) Each Guarantor consents and agrees that the Guarantied Parties
shall be under no obligation to marshall any assets in favor of the Guarantors
or otherwise in connection with obtaining payment of any or all of the
Obligations from any Person or source.
SECTION 4. DELAY OF SUBROGATION, ETC. Each Guarantor agrees that it
will not exercise any rights which it may acquire by way of subrogation,
contribution or reimbursement by reason of this Guaranty or by any payment made
hereunder until the Obligations have been paid in full.
SECTION 5. REPRESENTATIONS AND WARRANTIES. Each Guarantor hereby
represents and warrants to the Guarantied Parties as follows:
(a) Such Guarantor (i) is a corporation duly organized, validly
existing and in good standing under its jurisdiction of organization, (ii) is
duly qualified as a foreign corporation, partnership or limited liability
company, as the case may be, and in good standing under the laws of each
jurisdiction, except for failures which in the aggregate would have no Material
Adverse Effect, (iii) has all requisite corporate, partnership or limited
liability company power and authority, as the case may be, and the legal right
to own, pledge, mortgage and operate its properties, to lease the property it
operates under lease and to conduct its business as now or currently proposed to
be conducted, (iv) is in compliance with its certificate of incorporation,
by-laws, partnership agreement, operating agreement or other comparable
governing documents (v) is in compliance with all other applicable Requirements
of Law except for such noncompliances as in the aggregate would have no Material
Adverse Effect, and (vi) has all necessary licenses, permits, consents or
approvals from or by, has made all necessary filings with, and has given all
necessary notices to, each Governmental Authority having jurisdiction, to the
extent required for such ownership, operation and conduct, except for licenses,
permits, consents or approvals which can be obtained by the taking of
ministerial action to secure the grant or transfer thereof or failures which in
the aggregate would have no Material Adverse Effect.
(b) The execution, delivery and performance by such Guarantor of this
Guaranty and the other Loan Documents to which it is party:
(i) are within its corporate, partnership or limited liability company
powers, as the case may be;
(ii) have been duly authorized by all necessary corporate, partnership
or limited liability company action, as the case may be, including, without
limitation, the consent of stockholders, partners or members, as the case may
be, where required; and
(iii) do not and will not (A) contravene its certificate of
incorporation or by-laws, partnership agreement, operating agreement or other
comparable governing documents, (B) violate any other applicable Requirement of
Law (including, without limitation, Regulations T, U and X of the Board of
Governors
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of the Federal Reserve System), or any order or decree of any Governmental
Authority or arbitrator, (C) conflict with or result in the breach of, or
constitute a default under, or result in or perrmit the termination or
acceleration of, any of its Contractual Obligations, (D) result in the
creation or imposition of any Lien upon any of its property other than
those in favor of the Agent on behalf of and for the ratable benefit of the
Secured Parties, or (E) require the consent, authorization by, or approval
of, or notice to, or filing or registration with, any Governmental
Authority or any other Person, other than those which have been obtained
and copies of which have been delivered to the Agent pursuant to
Amendment No. 3, each of which is in full force and effect.
(c) This Guaranty has been duly executed and delivered by such Guarantor
and is the legal, valid and binding obligation of such Guarantor enforceable
against it in accordance with its terms.
(d) There are no pending or, to the knowledge of such Guarantor,
threatened actions, investigations or proceedings affecting such Guarantor or
any of its subsidiaries before any Governmental Authority or arbitrator other
than those that in the aggregate could not reasonably be expected to have a
Material Adverse Effect. The performance by such Guarantor under this Guaranty
and under each of the other Loan Documents to which it is a party is not
restrained or enjoined (either temporarily, preliminarily or permanently) and
no conditions have been imposed by any Governmental Authority or arbitrator
that in the aggregate could reasonably be expected to have a Material Adverse
Effect.
SECTION 6. AMENDMENTS, ETC. No amendment or waiver of any provision of this
Guaranty nor consent to any departure by any Guarantor herefrom shall in any
event be effective unless the same shall be in writing, approved by the Majority
Lenders and signed by the Agent, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; PROVIDED HOWEVER, that no amendment, waiver or consent shall, unless in
writing and signed by all the Guarantied Parties, limit the liability of the
Guarantors (other than as expressly provided herein) or postpone any date fixed
for payment hereunder.
SECTION 7. ADDRESSES FOR NOTICES. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telex,
telecopy or cable communication) and mailed, telegraphed, telexed, telecopied,
cabled or delivered by hand, if to a Guarantor, addressed to it at the address
of such Guarantor specified on the signature pages hereof, if to any Guarantied
Party, addressed to it at the address of such Guarantied Party specified in the
Credit Agreement, or, as to each party, at such other address as shall be
designated by such party in a written notice to each other party complying as
to delivery with the terms of this Section. All such notices and other
communications shall, when mailed, telegraphed, telexed, telecopied, cabled or
delivered, be effective when deposited in the mails, delivered to the telegraph
company, confirmed by telex answerback, telecopied with confirmation of receipt,
delivered to the cable company or delivered by hand to the addressee or its
agent, respectively.
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SECTION 8. NO WAIVER: REMEDIES. (a) No failure on the part of any
Guarantied Party to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise
of any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law or any of the other Loan
Documents.
(b) Failure by any of the Guarantied Parties at any time or times
hereafter to require strict performance by the Borrower, any Guarantor or any
other Person of any of the provisions, warranties, terms or conditions contained
in any of the Loan Documents now or at any time or times hereafter executed by
the Borrower, any Guarantor or such other Person and delivered to any of the
Guarantied Parties shall not waive, affect or diminish any right of any of the
Guarantied Parties at any time or times hereafter to demand strict performance
thereof, and such right shall not be deemed to have been modified or waived by
any course of conduct or knowledge of any of the Guarantied Parties or any
agent, officer, employee of any of the Guaranteed Parties.
(c) No waiver by the Guarantied Parties of any default shall operate as a
waiver of any other default or the same default on a future occasion, and no
action by any of the Guarantied Parties permitted hereunder shall in any way
affect or impair any of the rights of the Guarantied Parties or the obligations
of any Guarantor under this Guaranty or under any of the other Loan Documents.
Any determination by a court of competent jurisdiction of the amount of any
principal and/or interest or other amount constituting any of the Obligations
shall be conclusive and binding on the Guarantors irrespective of whether the
Guarantors were a party to the suit or action in which such determination was
made.
SECTION 9. RIGHT OF SET-OFF. Upon the occurrence and during the continuance
of any Event of Default, each of the Guarantied Parties 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 Guarantied Party to or for the credit or the account of a Guarantor
against any and all of the obligations of such Guarantor now or hereafter
existing under this Guaranty, irrespective of whether or not such Guarantied
Party shall have made any demand under this Guaranty and although such
obligations may be contingent and unmatured. Each of the Guarantied Parties
agrees promptly to notify such Guarantor after any such set-off and application
made by such Guarantied Party; PROVIDED HOWEVER, that the failure to give such
notice shall not affect the validity of such set-off and application. The
rights of each Guarantied Party under this Section are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
which such Guarantied Party may have.
SECTION 10. CONTINUING GUARANTY; TRANSFER OF NOTES. This Guaranty is a
continuing guaranty and shall (i) remain in full force and effect until
indefeasible payment in full of the Obligations and all other amounts payable
under this Guaranty, (ii) be binding upon the Guarantors, their respective
successors and assigns, and (iii) inure to the benefit of and be enforceable
by the Guarantied Parties and their respective
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successors, transferees, and assigns. Without limiting the generality of the
foregoing clause (iii), any of the Guarantied Parties may assign or otherwise
transfer any Note held by it or Obligation owing to it to any other Person, and
such other Person shall thereupon become vested with all the rights in respect
thereof granted to such Guarantied Party herein or otherwise with respect to
such of the Notes and Obligations so transferred or assigned, subject, however,
to compliance with the provisions of Section 10.7 of the Credit Agreement in
respect of assignments; PROVIDED HOWEVER, that in the event of a sale by the
Borrower of all of the stock of a Guarantor approved by the Majority Lenders,
the Guarantor's obligations hereunder shall terminate upon the consummation of
such sale and the application of the proceeds in accordance with the terms of
the Amended and Restated Credit Agreement.
SECTION 11. LIMITATION OF GUARANTY. Any term or provision of this Guaranty
or any other Loan Document to the contrary notwithstanding, the maximum
aggregate amount of the Obligations for which a Guarantor shall be liable shall
not exceed the maximum amount for which such Guaranty can be liable without
rendering this Guaranty or any other Loan Document, as it related to such
Guarantor, voidable under applicable law relating to fraudulent conveyance or
fraudulent transfer.
SECTION 12. CONTRIBUTION. To the extent that any Guarantor shall be
required hereunder to pay a portion of the Obligations which shall exceed the
greater of (i) the amount of the economic benefit actually received by such
Guarantor from the Obligations and (ii) the amount which such Guarantor would
otherwise have paid if such Guarantor had paid the aggregate amount of the
Obligations (excluding the amount thereof repaid by the Borrower and the other
Guarantor) in the same proportion as such Guarantor's net worth at the date
enforcement hereunder is sought bears to the aggregate net worth of all the
Guarantors at the date enforcement hereunder is sought, then such Guarantor
shall be reimbursed by the other Guarantors for the amount of such excess, pro
rata based on the respective net worths of the other Guarantors at the date
enforcement hereunder is sought.
SECTION 13. REINSTATEMENT. This Guaranty shall remain in full force and
effect and continue to be effective should any petition be filed by or against
any Loan Party for liquidation or reorganization, should any Loan Party become
insolvent or make an assignment for the benefit of creditors or should a
receiver or trustee be appointed for all or any significant part of any Loan
Party's assets, and shall, to the fullest extent permitted by law, continue
to be effective or be reinstated, as the case may be, if at any time payment
and performance of the Obligations, or any part thereof, is, pursuant to
applicable law, rescinded or reduced in amount, or must otherwise be restored
or returned by any obligee of the Obligations or such part thereof, whether as
a "voidable preference," "fraudulent transfer," or otherwise, all as though such
payment or performance had not been made. In the event that any payment, or any
part thereof, is rescinded, reduced, restored or returned, the Obligations
shall, to the fullest extent permitted by law, be reinstated and deemed reduced
only by such amount paid and not so rescinded, reduced, restored or returned.
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SECTION 14. GOVERNING LAW. This Guaranty shall be governed by, and be
construed and interpreted in accordance with, the law of the State of New York.
Wherever possible, each provision of this Guaranty shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Guaranty shall be prohibited by or invalid under applicable
law, such provision shall be ineffective only to the extent of such prohibition
or invalidity and without invalidating the remaining provisions of this
Guaranty.
SECTION 15. SUBMISSION TO JURISDICTION; JURY TRIAL. (a) Any legal action or
proceeding with respect to this Guaranty or any document related thereto may be
brought in the courts of the State of New York or the United States of America
for the Southern District of New York, and, by execution and delivery of this
Guaranty, each Guarantor hereby accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of the aforesaid
courts. Each Guarantor hereby irrevocably waives any objection, including,
without limitation, any objection to the laying of venue or based on the grounds
of FORUM NON CONVENIENS, which it may now or hereafter have to the bringing of
any such action or proceeding in such respective jurisdictions and consents to
the granting of such legal or equitable relief as is deemed appropriate by
the court.
(b) Each Guarantor irrevocably consents to the service of process of any
of the aforesaid courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to such
Guarantor at its address provided herein, such service to become effective 30
days after such mailing.
(c) Nothing contained in this Section 15 shall affect the right of any
Guarantied Party to serve process in any other manner permitted by law or
commence legal proceedings or otherwise proceed against a Guarantor or any of
such Guarantor's property in any other jurisdiction.
(d) Each Guarantor waives any right it may have to trial by jury in
respect of any litigation based on, arising out of, under or in connection
with this Guaranty or any other loan document, or any course of conduct,
course of dealing, verbal or written statement or other action of any Loan
Party or any Guarantied Party.
SECTION 16. SECTION TITLES. The Section titles contained in this Guaranty
are and shall be without substantive meaning or content of any kind whatsoever
and are not a part of this Guaranty.
SECTION 17. EXECUTION IN COUNTERPARTS. This Guaranty may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same Guaranty.
SECTION 18. MISCELLANEOUS. All references herein to the Borrower or to
the Guarantors shall include their respective successors and assigns, including,
without limitation, a receiver, trustee or debtor-in-possession of or for the
Borrower or any of the
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Guarantors. All references to the singular shall be deemed to include the plural
where the context so requires.
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IN WITNESS WHEREOF, the Guarantors have caused this Guaranty to be duly
executed and delivered by its duly authorized officer on the date first above
written.
ELDER-BEERMAN HOLDINGS, INC.
By: /s/ Steven D. Lipton
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Name: Steven D. Lipton
Title: Vice President, Controller
Address for Notices:
Elder-Beerman Holdings, Inc.
3155 El-Bee Road
Dayton, OH 45439
Attention: General Counsel
Fax No.: (937) 296-4625
ELDER-BEERMAN OPERATIONS, LLC
By: The Elder-Beerman Stores Corp.,
as its Managing Member
By: /s/ Steven D. Lipton
----------------------------------------
Name: Steven D. Lipton
Title: Vice President, Controller
Address for Notices:
Elder-Beerman Operations, LLC
3155 El-Bee Road
Dayton, OH 45439
Attention: General Counsel
Fax No.: (937) 296-4625
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ELDER-BEERMAN INDIANA, L.P.
By: /s/ Steven D. Lipton
-------------------------------
Name: Steven D. Lipton
Title: Vice President, Controller
Address for Notices:
Elder-Beerman Indiana, L.P.
3155 El-Bee Road
Dayton, OH 45439
Attention: General Counsel
Fax No.: (937) 296-4625
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