GUARANTY BY LIMITED LIABILITY COMPANY
Brooklyn, New York
May 12, 2000
This Guaranty, dated effective as of May 12, 2000, is made by Liberty Food
Group, LLC, a Delaware limited liability company (the "Guarantor"), for the
benefit of F&A Dairy Products, Inc., a Wisconsin corporation (with its
successors and assigns, the "Lender").
Ferro Foods Corporation, a New York corporation (the "Borrower"), has executed
and delivered a certain Term Note effective as of April 1, 2000 in the original
principal amount of $1,063,123.09 and payable to the order of the Lender (the
"Note").
As a condition to accepting the Note, the Lender has required the execution and
delivery of this Guaranty.
ACCORDINGLY, the Guarantor, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, hereby agrees as follows:
1. Indebtedness Guaranteed. The Guarantor hereby absolutely and unconditionally
guarantees to the Lender the full and prompt payment when due, whether at
maturity or earlier by reason of acceleration or otherwise, of the obligations
of the Borrower under and pursuant to the Note (all of said obligations being
hereinafter called the "Indebtedness").
2. Guarantor's Representations and Warranties. The Guarantor represents and
warrants to the Lender that (i) the Guarantor is a limited liability company,
duly organized and existing in good standing and has full power and authority to
make and deliver this Guaranty; (ii) the execution, delivery and performance of
this Guaranty by the Guarantor have been duly authorized by all necessary action
of its governors and members and do not and will not violate the provisions of,
or constitute a default under, any presently applicable law or its articles of
organization or operating agreement or any member control or other agreement
presently binding on it; (iii) this Guaranty has been duly executed and
delivered by the authorized managers or officers of the Guarantor and
constitutes its lawful, binding and legally enforceable obligation; and (iv) the
authorization, execution, delivery and performance of this Guaranty do not
require notification to, registration with, or consent or approval by, any
federal, state or local regulatory body or administrative agency. The Guarantor
represents and warrants to the Lender that the Guarantor has a direct and
substantial economic interest in the Borrower's affairs and that this Guaranty
is given for a company purpose. The Lender may rely conclusively on a continuing
warranty, hereby made, that the Guarantor continues to be benefited by this
Guaranty and the Lender shall have no duty to inquire into or confirm the
receipt of any such benefits, and this Guaranty shall be effective and
enforceable by the Lender without regard to the receipt, nature or value of any
such benefits.
3. Unconditional Nature. No act or thing need occur to establish the Guarantor's
liability hereunder, and no act or thing, except full payment and discharge of
all of the Indebtedness, shall in any way exonerate the Guarantor hereunder or
modify, reduce, limit or release the Guarantor's liability hereunder. This is an
absolute, unconditional and continuing guaranty of payment of the Indebtedness
and shall continue to be in force and be binding upon the Guarantor, whether or
not all of the Indebtedness is paid in full, until this Guaranty is revoked
prospectively as to future transactions, by written notice actually received by
the Lender, and such revocation shall not be effective as to the amount of
Indebtedness existing or committed for at the time of actual receipt of such
notice by the Lender, or as to any renewals, extensions, refinancings or
refundings thereof.
4. Dissolution or Insolvency of Guarantor. The dissolution or adjudication of
bankruptcy of the Guarantor shall not revoke this Guaranty, except upon actual
receipt of written notice thereof by the Lender and only prospectively, as to
future transactions, as herein set forth. If the Guarantor shall be dissolved or
shall be or become insolvent (however defined), then the Lender shall have the
right to declare immediately due and payable, and the Guarantor will forthwith
pay to the Lender, the full amount of all of the Indebtedness whether due and
payable or unmatured. If the Guarantor voluntarily commences or there is
commenced involuntarily against the Guarantor a case under the United States
Bankruptcy Code, the full amount of all Indebtedness, whether due and payable or
unmatured, shall be immediately due and payable without demand or notice
thereof.
5. Limited Guaranty. Notwithstanding the aggregate amount of the Indebtedness
which may from time to time be outstanding, the Guarantor's liability hereunder
shall be limited to a principal amount equal to the principal amount of the
Note, as reduced by the payments described in the last sentence of Section 3 of
the Note, plus accrued interest thereon and all attorneys' fees, collection
costs and enforcement expenses referable thereto. The Indebtedness may
thereafter be created and continued in any amount, whether or not in excess of
such principal amount, without affecting or impairing the Guarantor's liability
hereunder, and the Lender may pay (or allow for the payment of) the excess out
of any sums received by or available to the Lender on account of the
Indebtedness from the Borrower or any other person (except the Guarantor), from
their properties, out of any collateral security or from any other source, and
such payment (or allowance) shall not reduce, affect or impair the Guarantor's
liability hereunder.
6. Subrogation. The Guarantor will not exercise or enforce any right of
contribution, reimbursement, recourse or subrogation available to the Guarantor
as to any of the Indebtedness, or against any person liable therefor, or as to
any collateral security therefor, unless and until all of the Indebtedness shall
have been fully paid and discharged.
7. Enforcement Expenses. The Guarantor will pay or reimburse the Lender for all
costs, expenses and reasonable attorneys' fees paid or incurred by the Lender in
endeavoring to collect and enforce the Indebtedness and in enforcing this
Guaranty.
8. Lender's Rights. The Lender shall not be obligated by reason of its
acceptance of this Guaranty to engage in any transactions with or for the
Borrower. Whether or not any existing relationship between the Guarantor and the
Borrower has been changed or ended and whether or not this Guaranty has been
revoked, the Lender may enter into transactions resulting in the creation or
continuance of the Indebtedness and may otherwise agree, consent to or suffer
the creation or continuance of any of the Indebtedness, without any consent or
approval by the Guarantor and without any prior or subsequent notice to the
Guarantor. The Guarantor's liability shall not be affected or impaired by any of
the following acts or things (which the Lender is expressly authorized to do,
omit or suffer from time to time, both before and after revocation of this
Guaranty, without consent or approval by or notice to the Guarantor): (i) any
acceptance of collateral security, guarantors, accommodation parties or sureties
for any or all of the Indebtedness; (ii) one or more extensions or renewals of
the Indebtedness (whether or not for longer than the original period) or any
modification of the maturities, if any, or other contractual terms applicable to
any of the Indebtedness or any amendment or modification of any of the terms or
provisions of any loan agreement or other agreement under which the Indebtedness
or any part thereof arose; (iii) any waiver or indulgence granted to the
Borrower, any delay or lack of diligence in the enforcement of the Indebtedness
or any failure to institute proceedings, file a claim, give any required notices
or otherwise protect any of the Indebtedness; (iv) any full or partial release
of, compromise or settlement with, or agreement not to xxx, the Borrower or any
guarantor or other person liable in respect of any of the Indebtedness; (v) any
release, surrender, cancellation or other discharge of any evidence of the
Indebtedness or the acceptance of any instrument in renewal or substitution
therefor; (vi) any failure to obtain collateral security (including rights of
setoff) for the Indebtedness, or to see to the proper or sufficient creation and
perfection thereof, or to establish the priority thereof, or to preserve,
protect, insure, care for, exercise or enforce any collateral security; or any
modification, alteration, substitution, exchange, surrender, cancellation,
termination, release or other change, impairment, limitation, loss or discharge
of any collateral security; (vii) any collection, sale, lease or disposition of,
or any other foreclosure or enforcement of or realization on, any collateral
security; (viii) any assignment, pledge or other transfer of any of the
Indebtedness or any evidence thereof; (ix) any manner, order or method of
application of any payments or credits upon the Indebtedness; and (x) any
election by the Lender under Section 1111(b) of the United States Bankruptcy
Code. The Guarantor waives any and all defenses and discharges available to a
surety, guarantor or accommodation co-obligor.
9. Waivers by Guarantor. The Guarantor waives any and all defenses, claims,
setoffs and discharges of the Borrower, or any other obligor, pertaining to the
Indebtedness, except the defense of discharge by payment in full. Without
limiting the generality of the foregoing, the Guarantor will not assert, plead
or enforce against the Lender any defense of waiver, release, discharge or
disallowance in bankruptcy, statute of limitations, res judicata, statute of
frauds, anti-deficiency statute, fraud, incapacity, minority, usury, illegality
or unenforceability which may be available to the Borrower or any other person
liable in respect of any of the Indebtedness, or any setoff available against
the Lender to the Borrower or any other such person, whether or not on account
of a related transaction. The Guarantor expressly agrees that the Guarantor
shall be and remain liable for any deficiency remaining after foreclosure of any
mortgage or security interest securing the Indebtedness, whether or not the
liability of the Borrower or any other obligor for such deficiency is discharged
pursuant to statute or judicial decision. The liability of the Guarantor shall
not be affected or impaired by any voluntary or involuntary liquidation,
dissolution, sale or other disposition of all or substantially all of the
assets, marshalling of assets and liabilities, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition or readjustment of, or other similar event or
proceeding affecting, the Borrower or any of its assets. The Guarantor will not
assert, plead or enforce against the Lender any claim, defense or setoff
available to the Guarantor against the Borrower. The Guarantor waives
presentment, demand for payment, notice of dishonor or nonpayment and protest of
any instrument evidencing the Indebtedness. The Lender shall not be required
first to resort for payment of the Indebtedness to the Borrower or other
persons, or their properties, or first to enforce, realize upon or exhaust any
collateral security for the Indebtedness, before enforcing this Guaranty.
Nothing herein shall constitute a waiver of any defense or claim available to
the Guarantor against the Lender pursuant to that certain Settlement Agreement
of even date herewith by and among the Lender, the Borrower, the Guarantor,
Xxxxx Xxxxxxx and Xxxxx Xxxxx, Xx. (the "Settlement Agreement") or that certain
Label Repurchase Agreement of even date herewith by and between the Lender and
the Borrower (the "Repurchase Agreement").
10. If Payments Set Aside, etc. If any payment applied by the Lender to the
Indebtedness is thereafter set aside, recovered, rescinded or required to be
returned for any reason (including, without limitation, the bankruptcy,
insolvency or reorganization of the Borrower or any other obligor), the
Indebtedness to which such payment was applied shall for the purpose of this
Guaranty be deemed to have continued in existence, notwithstanding such
application, and this Guaranty shall be enforceable as to such Indebtedness as
fully as if such application had never been made.
11. Additional Obligation of Guarantor. The Guarantor's liability under this
Guaranty is in addition to and shall be cumulative with all other liabilities of
the Guarantor to the Lender as guarantor, surety, endorser, accommodation
co-obligor or otherwise of any of the Indebtedness or obligation of the
Borrower, without any limitation as to amount, unless the instrument or
agreement evidencing or creating such other liability specifically provides to
the contrary.
12. No Duties Owed by Lender. The Guarantor acknowledges and agrees that the
Lender (i) has not made any representations or warranties with respect to, (ii)
does not assume any responsibility to the Guarantor for, and (iii) has no duty
to provide information to the Guarantor regarding, the enforceability of any of
the Indebtedness or the financial condition of the Borrower or any guarantor.
The Guarantor has independently determined the creditworthiness of the Borrower
and the enforceability of the Indebtedness and until the Indebtedness is paid in
full will independently and without reliance on the Lender continue to make such
determinations.
13. Miscellaneous. This Guaranty shall be effective upon delivery to the Lender,
without further act, condition or acceptance by the Lender, shall be binding
upon the Guarantor and the successors and assigns of the Guarantor and shall
inure to the benefit of the Lender and its successors and assigns. Any
invalidity or unenforceability of any provision or application of this Guaranty
shall not affect other lawful provisions and application thereof, and to this
end the provisions of this Guaranty are declared to be severable. This Guaranty
may not be waived, modified, amended, terminated, released or otherwise changed
except by a writing signed by the Guarantor and the Lender. This Guaranty shall
be governed by and construed in accordance with the substantive laws (other than
conflict laws) of the State of Minnesota. The Guarantor hereby (i) consents to
the personal jurisdiction of the state and federal courts located in the State
of Minnesota in connection with any controversy related to this Guaranty; (ii)
waives any argument that venue in any such forum is not convenient, (iii) agrees
that any litigation initiated by the Lender or the Guarantor in connection with
this Guaranty shall be venued in either the District Court of Hennepin County,
Minnesota, or the United States District Court, District of Minnesota, Fourth
Division; and (iv) agrees that a final judgment in any such suit, 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.
14. Waiver of Jury Trial. THE GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF, BASED ON
OR PERTAINING TO THIS GUARANTY.
IN WITNESS WHEREOF, this Guaranty has been duly executed by the Guarantor the
date first written above.
LIBERTY FOOD GROUP, LLC
By /s/
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Its
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Address:
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STATE OF __________ )
)
COUNTY OF _________ )
The foregoing instrument was acknowledged before me this ____ day of April, 2000
by _____________ _____________________, the _______________________ of Liberty
Food Group, LLC, a ______________ limited liability company, on behalf of the
limited liability company.
__________________________
Notary Public
MPL1: 333776-4
