Exhibit 10.22

SUBSIDIARY GUARANTY AGREEMENT, dated as of November 2, 2004, made by certain
Domestic Subsidiaries (collectively, the “Subsidiary Guarantors”, each, a
“Subsidiary Guarantor”) of SCP POOL CORPORATION, a Delaware corporation (the “US
Borrower”), in favor of WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative
Agent (in such capacity, the “Administrative Agent”) for the ratable benefit of
itself, and the financial institutions (the “Lenders”) from time to time parties
to the Credit Agreement, dated of even date herewith (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
by and among the US Borrower, SCP DISTRIBUTORS INC., a company organized under
the laws of Ontario (the “Canadian Borrower” and together with the US Borrower,
the “Borrowers”), the Lenders, and the Administrative Agent.

STATEMENT OF PURPOSE

Pursuant to the terms of the Credit Agreement, the Lenders have agreed to make
Extensions of Credit to the Borrowers upon the terms and subject to the
conditions set forth therein.

The Borrowers and the Subsidiary Guarantors, though separate legal entities,
comprise one integrated financial enterprise, and all Extensions of Credit to
the Borrowers will inure, directly or indirectly, to the benefit of each of the
Subsidiary Guarantors.

It is a condition precedent to the obligation of the Lenders to make their
respective Extensions of Credit to the Borrowers under the Credit Agreement that
the Subsidiary Guarantors shall have executed and delivered this Guaranty to the
Administrative Agent, for the ratable benefit of itself and the Lenders.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by the parties hereto, and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective Extensions of Credit to the
Borrowers thereunder, each Subsidiary Guarantor hereby agrees with the
Administrative Agent, for the ratable benefit of itself and the Lenders, as
follows:

ARTICLE I

DEFINED TERMS

SECTION 1.1  Definitions. The following terms when used in this Guaranty shall
have the meanings assigned to them below:

“Applicable Insolvency Laws” means all Applicable Laws governing bankruptcy,
reorganization, arrangement, adjustment of debts, relief of debtors,
dissolution, insolvency, fraudulent transfers or conveyances or other similar
laws (including, without limitation, 11 U.S.C. Sections 544, 547, 548 and 550
and other “avoidance” provisions of Title 11 of the United States Code, as
amended or supplemented).

“Guaranteed Obligations” has the meaning set forth in Section 2.1.

“Guaranty” means this Subsidiary Guaranty Agreement, as amended, restated,
supplemented or otherwise modified from time to time.

SECTION 1.2Other Definitional Provisions. Capitalized terms used and not
otherwise defined in this Guaranty including the preambles and recitals hereof
shall have the meanings ascribed to them in the Credit Agreement. In the event
of a conflict between capitalized terms defined herein and in the Credit
Agreement, the Credit Agreement shall control. The words “hereof,” “herein”,
“hereto” and “hereunder” and words of similar import when used in this Guaranty
shall refer to this Guaranty as a whole and not to any particular provision of
this Guaranty, and Section references are to this Guaranty unless otherwise
specified. The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.

 

 

 

2272622.05

 

LIB: CHARLOTTE

 

 

ARTICLE II

 

GUARANTY

SECTION 2.1  Guaranty. Each Subsidiary Guarantor hereby, jointly and severally
with the other Subsidiary Guarantors, unconditionally guarantees to the
Administrative Agent for the ratable benefit of itself and the Lenders, and
their respective permitted successors, endorsees, transferees and assigns, the
prompt payment and performance of all Obligations of the Borrowers, whether
primary or secondary (whether by way of endorsement or otherwise), whether now
existing or hereafter arising, whether or not from time to time reduced or
extinguished (except by payment thereof) or hereafter increased or incurred,
whether or not recovery may be or hereafter becomes barred by the statute of
limitations, whether enforceable or unenforceable as against such Borrower,
whether or not discharged, stayed or otherwise affected by any Applicable
Insolvency Law or proceeding thereunder, whether created directly with the
Administrative Agent or any Lender or acquired by the Administrative Agent or
any Lender through assignment, endorsement or otherwise, whether matured or
unmatured, whether joint or several, as and when the same become due and payable
(whether at maturity or earlier, by reason of acceleration, mandatory repayment
or otherwise), in accordance with the terms of any such instruments evidencing
any such obligations, including all renewals, extensions or modifications
thereof (all Obligations of the Borrowers, including all of the foregoing being
hereafter collectively referred to as the “Guaranteed Obligations”).

SECTION 2.2  Bankruptcy Limitations on each Guarantor. Notwithstanding anything
to the contrary contained in Section 2.1, it is the intention of each Subsidiary
Guarantor, the Administrative Agent and the Lenders that, in any proceeding
involving the bankruptcy, reorganization, arrangement, adjustment of debts,
relief of debtors, dissolution or insolvency or any similar proceeding with
respect to any Subsidiary Guarantor or its assets, the amount of such Subsidiary
Guarantor’s obligations with respect to the Guaranteed Obligations shall be
equal to, but not in excess of, the maximum amount thereof not subject to
avoidance or recovery by operation of Applicable Insolvency Laws after giving
effect to Section 2.3. To that end, but only in the event and to the extent that
after giving effect to Section 2.3 such Subsidiary Guarantor’s obligations with
respect to the Guaranteed Obligations or any payment made pursuant to such
Guaranteed Obligations would, but for the operation of the first sentence of
this Section 2.2, be subject to avoidance or recovery in any such proceeding
under Applicable Insolvency Laws after giving effect to Section 2.3, the amount
of each Subsidiary Guarantor’s obligations with respect to the Guaranteed
Obligations shall be limited to the largest amount which, after giving effect
thereto, would not, under Applicable Insolvency Laws, render such Subsidiary
Guarantor’s obligations with respect to the Guaranteed Obligations unenforceable
or avoidable or otherwise subject to recovery under Applicable Insolvency Laws.
To the extent any payment actually made pursuant to the Guaranteed Obligations
exceeds the limitation of the first sentence of this Section 2.2 and is
otherwise subject to avoidance and recovery in any such proceeding under
Applicable Insolvency Laws, the amount subject to avoidance shall in all events
be limited to the amount by which such actual payment exceeds such limitation
and the Guaranteed Obligations as limited by the first sentence of this Section
2.2 shall in all events remain in full force and effect and be fully enforceable
against each Subsidiary Guarantor. The first sentence of this Section 2.2 is
intended solely to preserve the rights of the Administrative Agent and the
Lenders hereunder against each Subsidiary Guarantor in such proceeding to the
maximum extent permitted by Applicable Insolvency Laws and neither such
Subsidiary Guarantor, any Borrower, any other Subsidiary Guarantor nor any other
Person shall have any right or claim under such sentence that would not
otherwise be available under Applicable Insolvency Laws in such proceeding.

SECTION 2.3

Agreements for Contribution.

(a)To the extent any Subsidiary Guarantor is required, by reason of its
obligations hereunder, to pay to the Administrative Agent or any Lender an
amount greater than the amount of value (as determined in accordance with
Applicable Insolvency Laws) actually made available to or for the benefit of
such Subsidiary Guarantor on account of the Credit Agreement, this Guaranty or
any other Loan Document, such Subsidiary Guarantor shall have an enforceable
right of contribution against the Borrowers and the remaining Subsidiary
Guarantors, and the Borrowers and the remaining Subsidiary Guarantors shall be
jointly and severally liable for repayment of the full amount of such excess
payment. Subject only to the subordination provided in Section 2.3(d), such
Subsidiary Guarantor further shall be subrogated to any and all rights of the
Lenders against the Borrowers and the remaining Subsidiary Guarantors to the
extent of such excess payment.

(b)To the extent that any Subsidiary Guarantor would, but for the operation of
this Section 2.3 and by reason of its obligations hereunder or its obligations
to other Subsidiary Guarantors under this Section 2.3, be rendered insolvent for
any purpose under Applicable Insolvency Laws, each of the Subsidiary Guarantors
hereby agrees to indemnify such Subsidiary Guarantor and commits to make a
contribution to such Subsidiary Guarantor’s capital in

 

2

 

2272622.05

 

LIB: CHARLOTTE

 

 

an amount at least equal to the amount necessary to prevent such Subsidiary
Guarantor from having been rendered insolvent by reason of the incurrence of any
such obligations.

(c)To the extent that any Subsidiary Guarantor would, but for the operation of
this Section 2.3, be rendered insolvent under any Applicable Insolvency Law by
reason of its incurring of obligations to any other Subsidiary Guarantor under
the foregoing Sections 2.3(a) and (b), such Subsidiary Guarantor shall, in turn,
have rights of contribution and indemnity, to the full extent provided in the
foregoing Sections 2.3(a) and (b), against the Borrowers and the remaining
Subsidiary Guarantors, such that all obligations of all of the Subsidiary
Guarantors hereunder and under this Section 2.3 shall be allocated in a manner
such that no Subsidiary Guarantor shall be rendered insolvent for any purpose
under Applicable Insolvency Law by reason of its incurrence of such obligations.

(d)Notwithstanding any payment or payments by any of the Subsidiary Guarantors
hereunder, or any set-off or application of funds of any of the Subsidiary
Guarantors by the Administrative Agent or any Lender, or the receipt of any
amounts by the Administrative Agent or any Lender with respect to any of the
Guaranteed Obligations, none of the Subsidiary Guarantors shall be entitled to
be subrogated to any of the rights of the Administrative Agent or any Lender
against the Borrowers or the other Subsidiary Guarantors or against any
collateral security held by the Administrative Agent or any Lender for the
payment of the Guaranteed Obligations nor shall any of the Subsidiary Guarantors
seek any reimbursement from the Borrowers or any of the other Subsidiary
Guarantors in respect of payments made by such Subsidiary Guarantor in
connection with the Guaranteed Obligations, until all amounts owing to the
Administrative Agent and the Lenders on account of the Guaranteed Obligations
are paid in full and the Commitments are terminated. If any amount shall be paid
to any Subsidiary Guarantor on account of such subrogation rights at any time
when all of the Guaranteed Obligations shall not have been paid in full or the
Commitments shall not have been terminated, such amount shall be held by such
Subsidiary Guarantor in trust for the Administrative Agent, segregated from
other funds of such Subsidiary Guarantor, and shall, forthwith upon receipt by
such Subsidiary Guarantor, be turned over to the Administrative Agent in the
exact form received by such Subsidiary Guarantor (duly endorsed by such
Subsidiary Guarantor to the Administrative Agent, if required) to be applied
against the Guaranteed Obligations, whether matured or unmatured, in such order
as set forth in the Credit Agreement.

SECTION 2.4

Nature of Guaranty.

(a)Each Subsidiary Guarantor agrees that this Guaranty is a continuing,
unconditional guaranty of payment and performance and not of collection, and
that its obligations under this Guaranty shall be primary, absolute and
unconditional, irrespective of, and unaffected by:

 

(i)

the genuineness, validity, regularity, enforceability or any future amendment
of, or change in, the Credit Agreement or any other Loan Document or any other
agreement, document or instrument to which any Borrower, any Subsidiary
Guarantor or any of their respective Subsidiaries or Affiliates is or may become
a party;

 

(ii)

the absence of any action to enforce this Guaranty, the Credit Agreement or any
other Loan Document or the waiver or consent by the Administrative Agent or any
Lender with respect to any of the provisions of this Guaranty, the Credit
Agreement or any other Loan Document;

 

(iii)

the existence, value or condition of, or failure to perfect its Lien against,
any security for or other guaranty of the Guaranteed Obligations or any action,
or the absence of any action, by the Administrative Agent or any Lender in
respect of such security or guaranty (including, without limitation, the release
of any such security or guaranty);

(iv)

any structural change in, restructuring of or similar change of any Borrower,
any Subsidiary Guarantor or any of their respective Subsidiaries; or

 

(v)

any other action or circumstances which might otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor;

it being agreed by each Subsidiary Guarantor that, subject to the first sentence
of Section 2.2, its obligations under this Guaranty shall not be discharged
until the final indefeasible payment and performance, in full, of the Guaranteed
Obligations and the termination of the Commitments; provided that a Subsidiary
Guarantor may be released from the Guaranteed Obligations pursuant to Section
4.16 of this Guaranty.

(b)Each Subsidiary Guarantor represents, warrants and agrees that its
obligations under this Guaranty are not and shall not be subject to any
counterclaims, offsets or defenses of any kind against the Administrative Agent
the Lenders or the Borrowers whether now existing or which may arise in the
future.

 

3

 

2272622.05

 

LIB: CHARLOTTE

 

 

(c)Each Subsidiary Guarantor hereby agrees and acknowledges that the Guaranteed
Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance
upon this Guaranty, and all dealings between any Borrower and any Subsidiary
Guarantor, on the one hand, and the Administrative Agent and the Lenders, on the
other hand, likewise shall be conclusively presumed to have been had or
consummated in reliance upon this Guaranty.

SECTION 2.5  Waivers. To the extent permitted by law, each Subsidiary Guarantor
expressly waives all of the following rights and defenses (and agrees not to
take advantage of or assert any such right or defense):

(a)any rights it may now or in the future have under any statute (including,
without limitation, North Carolina General Statutes Section 26-7, et seq. or
similar law), or at law or in equity, or otherwise, to compel the Administrative
Agent or any Lender to proceed in respect of the Obligations against any
Borrower or any other Person or against any security for or other guaranty of
the payment and performance of the Guaranteed Obligations before proceeding
against, or as a condition to proceeding against, such Subsidiary Guarantor;

(b)any defense based upon the failure of the Administrative Agent or any Lender
to commence an action in respect of the Guaranteed Obligations against any
Borrower, any Subsidiary Guarantor or any other Person or any security for the
payment and performance of the Guaranteed Obligations;

(c)any right to insist upon, plead or in any manner whatever claim or take the
benefit or advantage of, any appraisal, valuation, stay, extension, marshalling
of assets or redemption laws, or exemption, whether now or at any time hereafter
in force, which may delay, prevent or otherwise affect the performance by such
Subsidiary Guarantor of its obligations under, or the enforcement by the
Administrative Agent or the Lenders of this Guaranty;

(d)any right of diligence, presentment, demand, protest and notice (except as
specifically required herein) of whatever kind or nature with respect to any of
the Guaranteed Obligations and waives, to the extent permitted by Applicable
Law, the benefit of all provisions of law which are or might be in conflict with
the terms of this Guaranty; and

(e)any and all right to notice of the creation, renewal, extension or accrual of
any of the Obligations and notice of or proof of reliance by the Administrative
Agent or any Lender upon, or acceptance of, this Guaranty.

Each Subsidiary Guarantor agrees that any notice or directive given at any time
to the Administrative Agent or any Lender which is inconsistent with any of the
foregoing waivers shall be null and void and may be ignored by the
Administrative Agent or such Lender, and, in addition, may not be pleaded or
introduced as evidence in any litigation relating to this Guaranty for the
reason that such pleading or introduction would be at variance with the written
terms of this Guaranty, unless the Administrative Agent and the Required Lenders
have specifically agreed otherwise in writing. The foregoing waivers are of the
essence of the transaction contemplated by the Credit Agreement and the other
Loan Documents and, but for this Guaranty and such waivers, the Administrative
Agent and the Lenders would decline to enter into the Credit Agreement and the
other Loan Documents.

SECTION 2.6  Modification of Loan Documents, etc. Neither the Administrative
Agent nor any Lender shall incur any liability to any Subsidiary Guarantor as a
result of any of the following, and none of the following shall impair or
release this Guaranty or any of the obligations of any Subsidiary Guarantor
under this Guaranty:

(a)any change or extension of the manner, place or terms of payment of, or
renewal or alteration of all or any portion of, the Guaranteed Obligations;

(b)any action under or in respect of the Credit Agreement or the other Loan
Documents in the exercise of any remedy, power or privilege contained therein or
available to any of them at law, in equity or otherwise, or waiver or refrain
from exercising any such remedies, powers or privileges;

(c)any amendment or modification, in any manner whatsoever, of the Credit
Agreement or any other Loan Document;

(d)any extension or waiver of the time for performance by any Borrower, any
Subsidiary Guarantor or any other Person of, or compliance with, any term,
covenant or agreement on its part to be performed or observed under the Credit
Agreement or any other Loan Document, or waive such performance or compliance or
consent to a failure of, or departure from, such performance or compliance;

(e)any taking and holding of security or collateral for the payment of the
Obligations or the sale, exchange, release, disposal of, or other dealing with,
any property pledged, mortgaged or conveyed, or in which the Administrative
Agent or the Lenders have been granted a Lien, to secure any Indebtedness of any
Borrower, any Subsidiary Guarantor or any other Person to the Administrative
Agent or the Lenders;

 

4

 

2272622.05

 

LIB: CHARLOTTE

 

 

(f)any release of anyone who may be liable in any manner for the payment of any
amounts owed by any Borrower, any Subsidiary Guarantor or any other Person to
the Administrative Agent or any Lender;

(g)any modification or termination of the terms of any intercreditor or
subordination agreement pursuant to which claims of other creditors of any
Borrower, any Subsidiary Guarantor or any other Person are subordinated to the
claims of the Administrative Agent or any Lender; or

(h)any application of any sums by whomever paid or however realized to any
Obligations owing by any Borrower, any Subsidiary Guarantor or any other Person
to the Administrative Agent or any Lender in such manner as the Administrative
Agent or any Lender shall determine in its reasonable discretion.

SECTION 2.7  Demand by the Administrative Agent. In addition to the terms set
forth in this Article II and in no manner imposing any limitation on such terms,
if all or any portion of the then outstanding Guaranteed Obligations under the
Credit Agreement are declared to be immediately due and payable, then the
Subsidiary Guarantors shall, upon demand in writing therefor by the
Administrative Agent to the Subsidiary Guarantors, pay all or such portion of
the outstanding Guaranteed Obligations due hereunder then declared due and
payable. Notwithstanding the foregoing, each Subsidiary Guarantor agrees that,
in the event of the dissolution or insolvency of any Borrower or any Subsidiary
Guarantor, or the inability or failure of any Borrower or any Subsidiary
Guarantor to pay debts as they become due, or an assignment by any Borrower or
any Subsidiary Guarantor for the benefit of creditors, or the commencement of
any case or proceeding in respect of any Borrower or any Subsidiary Guarantor
under bankruptcy, insolvency or similar laws, and if such event shall occur at a
time when any of the Guaranteed Obligations may not then be due and payable,
each Subsidiary Guarantor will pay to the Administrative Agent, for the ratable
benefit of the Lenders and their respective successors, indorsees, transferees
and assigns, forthwith the full amount which would be payable hereunder by each
Subsidiary Guarantor if all such Guaranteed Obligations were then due and
payable.

SECTION 2.8

Remedies.

Upon the occurrence and during the continuance of any Event of Default, with the
consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, enforce against
the Subsidiary Guarantors their respective obligations and liabilities hereunder
and exercise such other rights and remedies as may be available to the
Administrative Agent hereunder, under the Credit Agreement or the other Loan
Documents or otherwise.

SECTION 2.9  Benefits of Guaranty. The provisions of this Guaranty are for the
benefit of the Administrative Agent and the Lenders and their respective
permitted successors, transferees, endorsees and assigns, and nothing herein
contained shall impair, as between any Borrower, the Administrative Agent and
the Lenders, the obligations of any Borrower under the Credit Agreement and the
other Loan Documents. In the event all or any part of the Obligations are
transferred, endorsed or assigned by the Administrative Agent or any Lender to
any Person or Persons as permitted under the Credit Agreement, any reference to
an “Administrative Agent” or “Lender” herein shall be deemed to refer equally to
such Person or Persons.

SECTION 2.10

Termination; Reinstatement.

(a)Subject to subsection (c) below, this Guaranty shall remain in full force and
effect until all the Guaranteed Obligations and all the obligations of the
Subsidiary Guarantors shall have been paid in full and the Commitments
terminated.

(b)No payment made by any Borrower, any Subsidiary Guarantor, or any other
Person received or collected by the Administrative Agent or any Lender from any
Borrower, any Subsidiary Guarantor, or any other Person by virtue of any action
or proceeding or any set-off or appropriation or application at any time or from
time to time in reduction of or in payment of the Guaranteed Obligations shall
be deemed to modify, reduce, release or otherwise affect the liability of any
Subsidiary Guarantor hereunder which shall, notwithstanding any such payment
(other than any payment made by such Subsidiary Guarantor in respect of the
obligations of the Subsidiary Guarantors or any payment received or collected
from such Subsidiary Guarantor in respect of the obligations of the Subsidiary
Guarantors), remain liable for the obligations of the Subsidiary Guarantors up
to the maximum liability of such Subsidiary Guarantor hereunder until the
Guaranteed Obligations and all the obligations of the Subsidiary Guarantors
shall have been paid in full and the Commitments terminated.

(c)Each Subsidiary Guarantor agrees that, if any payment made by any Borrower or
any other Person applied to the Guaranteed Obligations is at any time annulled,
set aside, rescinded, invalidated, declared to be fraudulent or preferential or
otherwise required to be refunded or repaid or the proceeds of any Collateral
are required to be refunded by the Administrative Agent or any Lender to any
Borrower, its estate, trustee, receiver or any other

 

5

 

2272622.05

 

LIB: CHARLOTTE

 

 

Person, including, without limitation, any Subsidiary Guarantor, under any
Applicable Law or equitable cause, then, to the extent of such payment or
repayment, each Subsidiary Guarantor’s liability hereunder (and any Lien or
Collateral securing such liability) shall be and remain in full force and
effect, as fully as if such payment had never been made, and, if prior thereto,
this Guaranty shall have been canceled or surrendered (and if any Lien or
Collateral securing such Subsidiary Guarantor’s liability hereunder shall have
been released or terminated by virtue of such cancellation or surrender), this
Guaranty (and such Lien or Collateral) shall be reinstated in full force and
effect, and such prior cancellation or surrender shall not diminish, release,
discharge, impair or otherwise affect the obligations of such Subsidiary
Guarantor in respect of the amount of such payment (or any Lien or Collateral
securing such obligation).

SECTION 2.11 Payments. Payments by the Subsidiary Guarantors shall be made to
the Administrative Agent to be credited and applied to the Guaranteed
Obligations in accordance with Sections 4.4 and 12.4 of the Credit Agreement, in
immediately available Dollars or Canadian Dollars, as the case may be, to an
account designated by the Administrative Agent or at the Administrative Agent’s
Office or at any other address that may be specified in writing from time to
time by the Administrative Agent.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

To induce the Administrative Agent and the Lenders to make any Extensions of
Credit each Subsidiary Guarantor hereby represents and warrants that:

SECTION 3.1  Existence. Such Subsidiary Guarantor is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or formation, has the power and authority to own its properties
and to carry on its business as now being and hereafter proposed to be conducted
and is duly qualified and authorized to do business in each jurisdiction in
which the character of its properties or the nature of its business requires
such qualification and authorization, except where the failure to be qualified
or authorized, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect. The jurisdictions in which such
Subsidiary Guarantor is organized and qualified to do business as of the Closing
Date are described on Schedule 6.1(a) to the Credit Agreement.

SECTION 3.2  Authorization of Agreement; Enforceability. Such Subsidiary
Guarantor has the right, power and authority and has taken all necessary
corporate or other action to authorize the execution, delivery and performance
of this Guaranty in accordance with its terms. This Guaranty has been duly
executed and delivered by the duly authorized officers of such Subsidiary
Guarantor and this Guaranty constitutes the legal, valid and binding obligation
of such Subsidiary Guarantor, enforceable in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar state or federal debtor relief laws from time to time in
effect which affect the enforcement of creditors’ rights in general and the
availability of equitable remedies.

SECTION 3.3  No Conflict; Consents. The execution, delivery and performance by
such Subsidiary Guarantor of this Guaranty, in accordance with its terms, and
the transactions contemplated hereby do not and will not, by the passage of
time, the giving of notice or otherwise, (i) require any Governmental Approval
or violate any Applicable Law relating to such Subsidiary Guarantor; (ii)
conflict with, result in a breach of or constitute a default under the articles
of incorporation, bylaws or other organizational documents of such Subsidiary
Guarantor or any indenture, agreement or other instrument to which such Person
is a party or by which any of its properties may be bound or any Governmental
Approval relating to such Person, (iii) result in or require the creation or
imposition of any Lien upon or with respect to any property now owned or
hereafter acquired by such Subsidiary Guarantor other than Liens arising under
the Loan Documents or (iv) require any consent or authorization of, filing with,
or other act in respect of, an arbitrator or Governmental Authority and no
consent of any other Person is required in connection with the execution,
delivery, performance, validity or enforceability of this Guaranty.

SECTION 3.4  Litigation. Except for matters existing on the Closing Date and set
forth on Schedule 6.1(u) to the Credit Agreement, there are no actions, suits or
proceedings pending nor, to the knowledge of such Subsidiary Guarantor,
threatened against or in any way relating adversely to or affecting such
Subsidiary Guarantor or any its properties in any court or before any arbitrator
of any kind or before or by any Governmental Authority that (a) purport to
affect or pertain to this Guaranty or any of the transactions contemplated
hereby, or (b) either individually or in the aggregate, if determined adversely,
could reasonably be expected to have a Material Adverse Effect.

 

6

 

2272622.05

 

LIB: CHARLOTTE

 

 

SECTION 3.5  Title to Properties; Liens. Such Subsidiary Guarantor has such
title to the real property owned or leased by it as is necessary or desirable to
the conduct of its business and valid and legal title to all of its personal
property and assets, including, but not limited to, those reflected on the
balance sheets of the US Borrower and its Subsidiaries delivered pursuant to the
Credit Agreement, except those which have been disposed of by such Subsidiary
Guarantor subsequent to the date of such balance sheets pursuant to dispositions
in the ordinary course of business or as otherwise expressly permitted under the
Credit Agreement. None of the properties and assets of such Subsidiary Guarantor
is subject to any Lien, except Permitted Liens. No financing statement under the
Uniform Commercial Code of any state which names such Subsidiary Guarantor or
any of its trade names or divisions as debtor and which has not been terminated,
has been filed in any state or other jurisdiction nor has such Subsidiary
Guarantor signed any such financing statement or any security agreement
authorizing any secured party thereunder to file any such financing statement,
except to perfect Permitted Liens.

SECTION 3.6  Solvency. Subject in each case to the first sentence of Section
2.2, as of the Closing Date (or such later date upon which such Subsidiary
Guarantor became a party hereto), and after giving effect to the transactions
contemplated hereby, such Subsidiary Guarantor will be Solvent.

SECTION 3.7  Compliance with the Credit Agreement. Until the Guaranteed
Obligations shall have been paid in full and the Commitments terminated, such
Subsidiary Guarantor shall comply with the provisions of Articles VIII, IX and X
of the Credit Agreement as if a party thereto.

ARTICLE IV

MISCELLANEOUS

SECTION 4.1  Amendments, Waivers and Consents. None of the terms, covenants,
agreements or conditions of this Guaranty may be amended, supplemented or
otherwise modified, nor may they be waived, nor may any consent be given, except
in accordance with Section 14.2 of the Credit Agreement.

SECTION 4.2  Notices. All notices and communications hereunder shall be given to
the addresses and otherwise made in accordance with Section 14.1 of the Credit
Agreement; provided that notices and communications to the Subsidiary Guarantors
shall be directed to the Subsidiary Guarantors at the address of the US Borrower
set forth in Section 14.1(b) of the Credit Agreement.

SECTION 4.3

Enforcement Expenses, Indemnification.

(a)Each Subsidiary Guarantor agrees to pay or reimburse each Lender and the
Administrative Agent for all its costs and expenses incurred in connection with
enforcing or preserving any rights under this Guaranty and the other Loan
Documents to which such Subsidiary Guarantor is a party, including, without
limitation, in connection with any workout, restructuring, bankruptcy or other
similar proceeding. Such costs and expenses shall include, without limitation,
the reasonable fees and disbursements of counsel to each Lender, of counsel to
the Canadian Dollar Lender and of counsel to the Administrative Agent. All such
costs and expenses shall be additional Guaranteed Obligations.

(b)Each Subsidiary Guarantor agrees to pay, and to save the Administrative Agent
and the Lenders harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamp, excise, sales or other
taxes which may be payable or determined to be payable or in connection with any
of the transactions contemplated by this Guaranty.

(c)Each Subsidiary Guarantor agrees to pay, and to save the Administrative Agent
and the Lenders harmless from, any and all liabilities, obligations, losses,
damages, penalties, costs and expenses in connection with actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of this Guaranty to the extent the Borrowers would be required to do so pursuant
to Section 14.3 of the Credit Agreement.

(d)The agreements in this Section 4.3 shall survive termination of the
Commitments and repayment of the Obligations and all other amounts payable under
the Credit Agreement and the other Loan Documents.

SECTION 4.4  Governing Law. This Guaranty, unless otherwise expressly set forth
herein, shall be governed by, construed and enforced in accordance with the laws
of the State of North Carolina, without reference to the conflicts or choice of
law principles thereof.

SECTION 4.5

Jurisdiction and Venue.

 

 

7

 

2272622.05

 

LIB: CHARLOTTE

 

 

(a)Jurisdiction. Each Subsidiary Guarantor hereby irrevocably consents to the
personal jurisdiction of the state and federal courts located in Mecklenburg
County, North Carolina (and any courts from which an appeal from any of such
courts must or may be taken), in any action, claim or other proceeding arising
out of any dispute in connection with this Guaranty, any rights or obligations
hereunder, or the performance of such rights and obligations. Each Subsidiary
Guarantor hereby irrevocably consents to the service of a summons and complaint
and other process in any action, claim or proceeding brought by the
Administrative Agent or any Lender in connection with this Guaranty, any rights
or obligations hereunder, or the performance of such rights and obligations, on
behalf of itself or its property, in the manner specified in Section 4.1.
Nothing in this Section 4.5 shall affect the right of the Administrative Agent
or any Lender to serve legal process in any other manner permitted by Applicable
Law or affect the right of the Administrative Agent or any Lender to bring any
action or proceeding against any Subsidiary Guarantor or its properties in the
courts of any other jurisdictions.

(b)Venue. Each Subsidiary Guarantor hereby irrevocably waives any objection it
may have now or in the future to the laying of venue in the aforesaid
jurisdiction in any action, claim or other proceeding arising out of or in
connection with this Guaranty or the rights and obligations of the parties
hereunder. Each Subsidiary Guarantor irrevocably waives, in connection with such
action, claim or proceeding, any plea or claim that the action, claim or
proceeding has been brought in an inconvenient forum.

.

SECTION 4.6

Binding Arbitration; Waiver of Jury Trial.

(a)Binding Arbitration. Upon demand of any party, whether made before or after
institution of any judicial proceeding, any dispute, claim or controversy
arising out of, connected with or relating to this Guaranty or any other Loan
Document between or among parties hereto and to the other Loan Documents shall
be resolved by binding arbitration as provided herein. Institution of a judicial
proceeding by a party does not waive the right of that party to demand
arbitration hereunder. Disputes may include, without limitation, tort claims,
counterclaims, claims brought as class actions, claims arising from Loan
Documents executed in the future, disputes as to whether a matter is subject to
arbitration, or claims concerning any aspect of the past, present or future
relationships arising out of or connected with the Loan Documents. Arbitration
shall be conducted under and governed by the Commercial Financial Disputes
Arbitration Rules (the “Arbitration Rules”) of the American Arbitration
Association (the “AAA”) and the Federal Arbitration Act. All arbitration
hearings shall be conducted in Charlotte, North Carolina. The expedited
procedures set forth in Rule 51, et seq. of the Arbitration Rules shall be
applicable to claims of less than $1,000,000. All applicable statutes of
limitations shall apply to any Dispute. A judgment upon the award may be entered
in any court having jurisdiction. Notwithstanding anything foregoing to the
contrary, any arbitration proceeding demanded hereunder shall begin within
ninety (90) days after such demand thereof and shall be concluded within one
hundred twenty (120) days after such demand. These time limitations may not be
extended unless a party hereto shows cause for extension and then such extension
shall not exceed a total of sixty (60) days. The panel from which all
arbitrators are selected shall be comprised of licensed attorneys selected from
the Commercial Financial Dispute Arbitration Panel of the AAA. The single
arbitrator selected for expedited procedure shall be a retired judge from the
highest court of general jurisdiction, state or federal, of the state where the
hearing will be conducted. The parties hereto do not waive any applicable
Federal or state substantive law except as provided herein. Notwithstanding the
foregoing, this subsection shall not apply to any Hedging Agreement.

(b)Jury Trial. THE ADMINISTRATIVE AGENT, EACH LENDER AND EACH SUBSIDIARY
GUARANTOR HEREBY ACKNOWLEDGES THAT BY AGREEING TO BINDING ARBITRATION THEY HAVE
IRREVOCABLY WAIVED THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY
ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION WITH
THIS GUARANTY OR THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER
OR THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.

(c)Preservation of Certain Remedies. Notwithstanding the preceding binding
arbitration provisions, the parties hereto and the other Loan Documents
preserve, without diminution, certain remedies that such Persons may employ or
exercise freely, either alone, in conjunction with or during a Dispute. Each
such Person shall have and hereby reserves the right to proceed in any court of
proper jurisdiction or by self help to exercise or prosecute the following
remedies, as applicable: (i) all rights to foreclose against any real or
personal property or other security by exercising a power of sale granted in the
Loan Documents or under Applicable Law or by judicial foreclosure and sale,
including a proceeding to confirm the sale, (ii) all rights of self help
including peaceful occupation of property and collection of rents, set off, and
peaceful possession of property, (iii) obtaining provisional or ancillary
remedies

 

8

 

2272622.05

 

LIB: CHARLOTTE

 

 

including injunctive relief, sequestration, garnishment, attachment, appointment
of receiver and in filing an involuntary bankruptcy proceeding, and (iv) when
applicable, a judgment by confession of judgment. Preservation of these remedies
does not limit the power of an arbitrator to grant similar remedies that may be
requested by a party in a Dispute.

SECTION 4.7

Injunctive Relief; Punitive Damages.

(a)Each Subsidiary Guarantor recognizes that, in the event such Subsidiary
Guarantor fails to perform, observe or discharge any of its obligations or
liabilities under this Guaranty, any remedy of law may prove to be inadequate
relief to the Administrative Agent and the Lenders. Therefore, each Subsidiary
Guarantor agrees that the Administrative Agent and the Lenders, at the
Administrative Agent’s option or the Required Lenders’ option, shall be entitled
to temporary and permanent injunctive relief in any such case without the
necessity of proving actual damages.

(b)The Administrative Agent and each Subsidiary Guarantor hereby agree that no
such Person shall have a remedy of punitive or exemplary damages against any
other party to this Guaranty and each such Person hereby waives any right or
claim to punitive or exemplary damages that they may now have or may arise in
the future in connection with any Dispute, whether such Dispute is resolved
through arbitration or judicially.

SECTION 4.8  No Waiver by Course of Conduct, Cumulative Remedies. Neither the
Administrative Agent nor any Lender shall by any act (except by a written
instrument pursuant to Section 4.1), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in any
Default or Event of Default. No delay or failure to take action on the part of
the Administrative Agent or any Lender in exercising any right, power or
privilege shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or privilege preclude any other or further
exercise thereof or the exercise of any other right, power or privilege or shall
be construed to be a waiver of any Event of Default. No course of dealing
between any Subsidiary Guarantor, the Administrative Agent and any Lenders or
their respective agents or employees shall be effective to change, modify or
discharge any provision of this Guaranty or to constitute a waiver of any Event
of Default. The enumeration of the rights and remedies of the Administrative
Agent and the Lenders set forth in this Guaranty is not intended to be
exhaustive and the exercise by the Administrative Agent and the Lenders of any
right or remedy shall not preclude the exercise of any other rights or remedies,
all of which shall be cumulative, and shall be in addition to any other right or
remedy given hereunder or under the other Loan Documents or that may now or
hereafter exist at law or in equity or by suit or otherwise.

SECTION 4.9  Successors and Assigns. This Guaranty shall be binding upon and
inure to the benefit of each of the parties hereto and its permitted successors
and assigns (and shall bind all Persons who become bound as a Subsidiary
Guarantor under this Guaranty), except that no Subsidiary Guarantor may assign
or otherwise transfer any of its rights or obligations hereunder without the
prior written consent of the Administrative Agent and each Lender (given in
accordance with Section 4.1).

SECTION 4.10 Severability. Any provision of this Guaranty which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
only to the extent of such prohibition or unenforceability without invalidating
the remainder of such provision or the remaining provisions hereof or thereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.

SECTION 4.11 Titles and Captions. Titles and captions of Articles, Sections and
subsections in, and the table of contents of, this Guaranty are for convenience
only, and neither limit nor amplify the provisions of this Guaranty.

SECTION 4.12 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 shall be binding
upon all parties, their successors and assigns, and all of which taken together
shall constitute one and the same agreement.

SECTION 4.13 Set-Off. If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by Applicable Law,
to set off and apply any and all deposits (general or special, time or demand,
provisional or final, in whatever currency) at any time held and other
obligations (in whatever currency) at any time owing by such Lender or any such
Affiliate to or for the credit or the account of the applicable Subsidiary
Guarantor against any and all of the obligations of the such Subsidiary
Guarantor now or hereafter existing under this Guaranty or any other Loan
Document to such Lender, irrespective of whether or not such Lender shall have
made any demand under this Guaranty or any other Loan Document and although such
obligations of such Subsidiary Guarantor may be contingent or unmatured or are
owed to a branch or office of such Lender different from the branch or office
holding such deposit or obligated on such indebtedness. The rights of each
Lender and its Affiliates under this Section are in

 

9

 

2272622.05

 

LIB: CHARLOTTE

 

 

addition to other rights and remedies (including other rights of setoff) that
such Lender or its Affiliates may have. Each Lender agrees to notify the
applicable Subsidiary Guarantor and the Administrative Agent promptly after any
such setoff and application; provided that the failure to give such notice shall
not affect the validity of such setoff and application.

SECTION 4.14 Integration. This Guaranty, together with the other Loan Documents
comprises the complete and integrated agreement of the parties on the subject
matter hereof and thereof and supersedes all prior agreements, written or oral,
on such subject matter.

SECTION 4.15

Acknowledgements Each Subsidiary Guarantor hereby acknowledges that:

(a)it has been advised by counsel in the negotiation, execution and delivery of
this Guaranty and the other Loan Documents to which it is a party;

(b)neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to any Subsidiary Guarantor arising out of or in
connection with this Guaranty or any of the other Loan Documents, and the
relationship between the Subsidiary Guarantors, on the one hand, and the
Administrative Agent and Lenders, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and

(c)no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among the Subsidiary Guarantors and the Lenders.

SECTION 4.16 Releases. At such time as (a) the Guaranteed Obligations shall have
been paid in full and the Commitments have been terminated, this Guaranty and
all obligations (other than those expressly stated to survive such termination)
of the Administrative Agent and each Subsidiary Guarantor hereunder shall
terminate, all without delivery of any instrument or performance of any act by
any party, or (b) a Subsidiary Guarantor ceases to be a Subsidiary of a Borrower
in connection with a transaction expressly permitted under the terms and
conditions of the Credit Agreement, such Subsidiary Guarantor shall be released
from the Guaranteed Obligations.

SECTION 4.17 Additional Subsidiary Guarantors. Each Domestic Subsidiary of a
Borrower that is required to become a party to this Guaranty pursuant to Section
8.11 of the Credit Agreement shall become a Subsidiary Guarantor for all
purposes of this Guaranty upon execution and delivery by such Subsidiary of a
supplement in form and substance satisfactory to the Administrative Agent.

SECTION 4.18           Powers Coupled with an Interest. All powers of attorney
and other authorizations granted to the Lenders, the Administrative Agent and
any Persons designated by the Administrative Agent or any Lender pursuant to any
provisions of this Guaranty or any of the other Loan Documents shall be deemed
coupled with an interest and shall be irrevocable so long as any of the
Guaranteed Obligations remain unpaid or unsatisfied, any of the Commitments
remain in effect or the Credit Facility has not been terminated.

[Signature Pages to Follow]

 

10

 

2272622.05

 

LIB: CHARLOTTE

 

 

 

IN WITNESS WHEREOF, each of the Subsidiary Guarantors has executed and delivered
this Guaranty under seal by their duly authorized officers, all as of the day
and year first above written.

SCP DISTRIBUTORS LLC, as Subsidiary Guarantor

By: /s/ Manuel Perez de la Mesa

 

Name:

Manuel Perez de la Mesa

Title: President & CEO

 

ALLIANCE TRADING, INC., as Subsidiary Guarantor

 

By: /s/ Shaleen Lee

 

 

Name: Shaleen Lee

 

 

Title:

Secterary

 

CYPRESS, INC., as Subsidiary Guarantor

 

 

By: /s/ Ernest Vierra

 

Name: Ernest Vierra

 

 

Title: President

 

 

[Signature Pages Continue]

 

[SCP – Subsidiary Guaranty Agreement]

 

 

 

SCP NORTHPARK LLC, as Subsidiary Guarantor

 

By: /s/ Manuel Perez de la Mesa

 

 

Name:

Manuel Perez de la Mesa

 

Title: President & CEO

 

SUPERIOR POOL PRODUCTS LLC,

 

as Subsidiary Guarantor

 

 

By: /s/ Manuel Perez de la Mesa

 

 

Name:

Manuel Perez de la Mesa

 

Title: President & CEO

 

SCP ACQUISITION CO. LLC, as Subsidiary Guarantor

By: /s/ Manuel Perez de la Mesa

 

Name:

Manuel Perez de la Mesa

Title: President & CEO

 

SCP INTERNATIONAL, INC., as Subsidiary

Guarantor

By: /s/ Manuel Perez de la Mesa

 

Name:

Manuel Perez de la Mesa

Title: President & CEO

 

[Signature Pages Continue]

 

[SCP – Subsidiary Guaranty Agreement]

 

 

 

POOL DEVELOPMENT LLC, as Subsidiary

Guarantor

By: /s/ Manuel Perez de la Mesa

 

Name:

Manuel Perez de la Mesa

Title: President & CEO

 

SCP SERVICES LP, as Subsidiary Guarantor

By:

SCP DISTRIBUTORS LLC, its General Partner

 

 

By: /s/ Manuel Perez de la Mesa

 

 

Name:

Manuel Perez de la Mesa

 

Title: President & CEO

 

FORT WAYNE POOLS, INC., as Subsidiary

Guarantor

By: /s/ Manuel Perez de la Mesa

 

Name:

Manuel Perez de la Mesa

Title: President & CEO

 

[Signature Pages Continue]

 

[SCP – Subsidiary Guaranty Agreement]

 

 

 

WACHOVIA BANK, NATIONAL

ASSOCIATION, as Administrative Agent

By: /s/ Kira Deter

 

Name: Kira Deter

Title: Officer 

 

[SCP – Subsidiary Guaranty Agreement]

 

 

 

 

 

i

2272622.04

LIB: CH