CONTINUING CORPORATE GUARANTY
FOR VALUE RECEIVED, and in consideration of any loan or other
financial accommodation heretofore or hereafter at any time made or granted to
Golden State Vintners, a California corporation ("Borrower"), by the purchaser
of the First Mortgage Notes Due April 1, 2005 issued by Borrower (together with
any successors and assigns, "Purchaser"), the undersigned, Golden State
Acquisition Corp., a Delaware corporation ("Guarantor"), hereby agrees as
follows:
1. GUARANTY OF OBLIGATIONS. Guarantor unconditionally, absolutely
and irrevocably guarantees the full and prompt payment and performance when due,
whether by acceleration or otherwise, and at all times thereafter, of all
obligations of Borrower to Purchaser, howsoever created, arising or evidenced,
whether direct or indirect, absolute or contingent, or now or hereafter existing
or due or to become due, including, without limitation, under or in connection
with that certain Securities Purchase Agreement dated as of the date hereof,
among Borrower, Guarantor and Purchaser (the "Securities Purchase Agreement")
and each of the documents, instruments and agreements executed and delivered in
connection therewith, as each may be modified, amended, supplemented or replaced
from time to time (all such obligations are herein referred to, collectively, as
the "Liabilities," and all documents evidencing or securing any of the
Liabilities are herein referred to, collectively, as the "Loan Documents").
This Continuing Corporate Guaranty (this "Continuing Guaranty") is a guaranty of
payment and performance when due and not of collection.
In the event of any default by Xxxxxxxx in making payment of, or
default by Borrower in performance of, any of the Liabilities, Guarantor agrees
on demand by Purchaser to pay and perform all of the Liabilities as are then or
thereafter become due and owing or are to be performed under the terms of the
Loan Documents. Guarantor further agrees to pay all expenses (including
reasonable attorneys' fees and expenses) paid or incurred by Purchaser in
endeavoring to collect the Liabilities, or any part thereof, and in enforcing
this Continuing Guaranty.
2. CONTINUING NATURE OF GUARANTY AND LIABILITIES. This Continuing
Guaranty shall be continuing and shall not be discharged, impaired or affected
by:
a. the insolvency of Xxxxxxxx;
b. the power or authority or lack thereof of Borrower to incur
the Liabilities;
c. the validity or invalidity of any of the Loan Documents or
the documents securing the same;
d. the existence or non-existence of Borrower as a legal
entity;
e. any transfer by Borrower of all or any part of any
collateral in which Purchaser has been granted a lien or security interest
pursuant to the Loan Documents;
f. any statute of limitations affecting the liability of
Guarantor under this Continuing Guaranty or the Loan Documents or the
ability of Purchaser to enforce this Continuing Guaranty or any provision
of the Loan Documents; or
g. any right of offset, counterclaim or defense of Guarantor,
including, without limitation, those which have been waived by Guarantor
pursuant to Paragraph 9 hereof.
3. INSOLVENCY OF BORROWER OR GUARANTOR. Without limiting the
generality of any other provision hereof, Xxxxxxxxx agrees that, in the event of
the dissolution or insolvency of Borrower or Guarantor or the inability of
Borrower or Guarantor to pay their respective debts as they mature, or an
assignment by Borrower or Guarantor for the benefit of creditors, or the
institution of any proceeding by or against Borrower or Guarantor alleging that
Borrower or Guarantor is insolvent or unable to pay its respective debts as they
mature which has not been dismissed within sixty (60) days of the date of
filing, Guarantor will pay to Purchaser forthwith the full amount which would be
payable hereunder by Guarantor if all of the Liabilities were then due and
payable, whether or not such event occurs at a time when any of the Liabilities
are otherwise due and payable.
4. PAYMENT OF THE LIABILITIES. Any amounts received by Purchaser
from whatever source on account of the Liabilities may be applied by Purchaser
toward the payment of such of the Liabilities, and in such order of application,
as Purchaser may from time to time elect, and notwithstanding any payments made
by or for the account of Guarantor pursuant to this Continuing Guaranty.
Guarantor agrees that, if at any time all or any part of any payment
theretofore applied by Purchaser to any of the Liabilities is or must be
rescinded or returned by Purchaser for any reason whatsoever (including, without
limitation, the insolvency, bankruptcy or reorganization of Borrower), such
Liabilities shall, for the purposes of this Continuing Guaranty and to the
extent that such payment is or must be rescinded or returned, be deemed to have
continued in existence notwithstanding such application by Purchaser, and this
Continuing Guaranty shall continue to be effective or be reinstated, as the case
may be, as to such Liabilities, all as though such application by Purchaser had
not been made.
5. PERMITTED ACTIONS OF PURCHASER. Purchaser may from time to time,
in its sole discretion and without notice to Guarantor, take any or all of the
following actions:
a. retain or obtain a security interest in any assets of
Borrower or any third party to secure any of the Liabilities or any
obligations of Guarantor hereunder;
b. retain or obtain the primary or secondary obligation of any
obligor or obligors, in addition to Guarantor, with respect to any of the
Liabilities;
c. extend or renew for one or more periods (whether or not
longer than the original period), alter or exchange any of the Liabilities;
x. xxxxx, ignore or forbear from taking action or otherwise
exercising any of its default rights or remedies with respect to any
default by Borrower under the Loan Documents;
e. release, waive or compromise any obligation of Guarantor
hereunder or any obligation of any nature of any other obligor primarily or
secondarily obligated with respect to any of the Liabilities;
f. release its security interest in, or surrender, release or
permit any substitution or exchange for, all or any part of any collateral
now or hereafter securing any of the Liabilities or any obligation
hereunder, or extend or renew for one or more periods (whether or not
longer than the original period) or release, waive, compromise, alter or
exchange any obligations of any nature of any obligor with respect to any
such property; and
g. demand payment or performance of any of the Liabilities from
Guarantor at any time or from time to time, whether or not Purchaser shall
have exercised any of its rights or remedies with respect to any property
securing any of the Liabilities or any obligation hereunder, or proceeded
against any other obligor primarily or secondarily liable for payment or
performance of any of the Liabilities.
6. SPECIFIC WAIVERS. Without limiting the generality of any other
provision of this Continuing Guaranty, Guarantor hereby expressly waives:
a. notice of the acceptance by Purchaser of this Continuing
Guaranty;
b. notice of the existence, creation, payment, nonpayment,
performance or nonperformance of all or any of the Liabilities;
c. presentment, demand, notice of dishonor, protest, notice of
protest and all other notices whatsoever with respect to the payment or
performance of the Liabilities or the amount thereof or any payment or
performance by Guarantor hereunder;
d. all diligence in collection or protection of or realization
upon the Liabilities or any thereof, any obligation hereunder or any
security for or guaranty of any of the foregoing;
e. any right to direct or affect the manner or timing of
Purchaser's enforcement of its rights or remedies;
f. any and all defenses which would otherwise arise upon the
occurrence of any event or contingency described in Paragraph 1 hereof or
upon the taking of any action by Xxxxxxxxx permitted hereunder;
g. any defense, right of set-off, claim or counterclaim
whatsoever and any and all other rights, benefits, protections and other
defenses available to Guarantor now or at any time hereafter, including,
without limitation, under California Civil Code Sections 2787 to 2855,
inclusive, and California Code of Civil Procedure Sections 580a, 580b, 580d
or 726, and all successor sections; and
h. all other principles or provisions of law, if any, that
conflict with the terms of this Continuing Guaranty, including, without
limitation, the effect of any circumstances that may or might constitute a
legal or equitable discharge of a guarantor or surety.
7. IRREVOCABILITY. Guarantor hereby further waives all rights to
revoke this Continuing Guaranty at any time, and all rights to revoke any
agreement executed by Guarantor at any time to secure the payment and
performance of Guarantor's obligations under this Continuing Guaranty.
8. STATUTORY WAIVER OF RIGHTS AND DEFENSES REGARDING ELECTION OF
REMEDIES. Guarantor waives all rights and defenses arising out of an election of
remedies by Xxxxxxxxx, even though that election of remedies, such as a
nonjudicial foreclosure with respect to security for a guaranteed obligation,
has destroyed Guarantor's rights of subrogation and reimbursement against
Borrower by the operation of Section 580d of the California Code of Civil
Procedure or otherwise.
9. SUBORDINATION. Guarantor hereby subordinates any and all
indebtedness of Borrower to Guarantor to the full and prompt payment and
performance of all of the Liabilities. Guarantor agrees that Xxxxxxxxx shall be
entitled to receive payment of all Liabilities prior to Guarantor's receipt of
payment of any amount of any indebtedness of Borrower to Guarantor. Any
payments on such indebtedness to Guarantor, if Purchaser so requests, shall be
collected, enforced and received by Guarantor, in trust, as trustee for
Purchaser and shall be paid over to Purchaser on account of the Liabilities, but
without reducing or affecting in any manner the liability of Guarantor under the
other provisions of this Guaranty. Purchaser is authorized and empowered, but
not obligated, in its discretion, (a) in the name of Guarantor, to collect and
enforce, and to submit claims in respect of, indebtedness of Borrower to
Guarantor and to apply any amounts received thereon to the Liabilities, and
(b) to require Guarantor (i) to collect and enforce, and to submit claims in
respect of, any indebtedness of Borrower to Guarantor, and (ii) to pay any
amounts received on such indebtedness to Purchaser for application to the
Liabilities.
10. SUBROGATION. Guarantor will not exercise any rights which it may
acquire by way of subrogation under this Continuing Guaranty, by any payment
hereunder or otherwise, until all of the Liabilities have been paid in full, in
cash, and Purchaser shall have no further obligations to Borrowers under the
Loan Documents or otherwise. If any amount shall be paid to Guarantor on
account of such subrogation rights at any other time, such amount shall be held
in trust for the benefit of Purchaser and shall be forthwith paid to Purchaser
to be credited and applied to the Liabilities, whether matured or unmatured, in
such manner as Purchaser shall determine in its sole discretion.
11. ASSIGNMENT OF PURCHASER'S RIGHTS. Purchaser may, from time to
time, without notice to Guarantor, assign or transfer any or all of the
Liabilities or any interest therein and, notwithstanding any such assignment or
transfer of the Liabilities or any subsequent assignment or transfer thereof,
the Liabilities shall be and remain the Liabilities for the purpose of this
Continuing Guaranty. Each and every immediate and successive assignee or
transferee of any of the Liabilities or of any interest therein shall, to the
extent of such party's interest in the Liabilities, be entitled to the benefits
of this Continuing Guaranty to the same extent as if such assignee or transferee
were Purchaser; PROVIDED, HOWEVER, that unless Purchaser shall otherwise consent
in writing, Purchaser shall have an unimpaired right, prior and superior to that
of any such assignee or transferee, to enforce this Continuing Guaranty for its
own benefit as to those of the Liabilities which Purchaser has not assigned or
transferred.
12. INDULGENCES NOT WAIVERS. No delay in the exercise of any right
or remedy shall operate as a waiver thereof, and no single or partial exercise
by Purchaser of any right or remedy shall preclude other or further exercise
thereof or the exercise of any other right or remedy; nor shall any modification
or waiver of any of the provisions of this Continuing Guaranty be binding upon
Purchaser, except as expressly set forth in a writing duly signed and delivered
by Purchaser. No action of Purchaser permitted hereunder shall in any way
affect or impair the rights of Purchaser or the obligations of Guarantor under
this Continuing Guaranty.
13. FINANCIAL CONDITION OF BORROWER. Guarantor represents and
warrants that it is fully aware of the financial condition of Xxxxxxxx, and
Guarantor delivers this Continuing Guaranty based solely upon its own
independent investigation of Xxxxxxxx's financial condition and in no part upon
any representation or statement of Purchaser with respect thereto. Guarantor
further represents and warrants that it is in a position to and hereby does
assume full responsibility for obtaining such additional information concerning
Xxxxxxxx's financial condition as Guarantor may deem material to its obligations
hereunder, and Guarantor is not relying upon, nor expecting Purchaser to furnish
it any information in Purchaser's possession concerning Xxxxxxxx's financial
condition or concerning any circumstances bearing on the existence or creation,
or the risk of nonpayment or nonperformance of the Liabilities.
Guarantor hereby waives any duty on the part of Purchaser to disclose
to Guarantor any facts it may now or hereafter know about Borrower, regardless
of whether Purchaser has reason to believe that any such facts materially
increase the risk beyond that
which Guarantor intends to assume, or has reason to believe that such facts are
unknown to Guarantor.
Guarantor hereby knowingly accepts the full range of risk encompassed
within a contract of "Continuing Guaranty" which includes, without limitation,
the possibility that Borrower will contract for additional indebtedness for
which Guarantor may be liable hereunder after Xxxxxxxx's financial condition or
ability to pay its lawful debts when they fall due has deteriorated.
14. REPRESENTATIONS AND WARRANTIES. Guarantor represents and
warrants to Purchaser that each of the following statements is accurate and
complete as of the date of this Continuing Guaranty:
a. Guarantor is a corporation duly organized, validly, existing
and in good standing under the laws of its state of incorporation and is
duly qualified and in good standing in each jurisdiction where the nature
of its business or properties requires such qualification, except where the
failure to qualify could not have a material adverse effect on the
condition (financial or otherwise), business, operations, properties or
prospects of Guarantor (a "Material Adverse Effect");
b. the execution, delivery and performance by Guarantor of this
Continuing Guaranty are within the power of Guarantor and have been duly
authorized by all necessary actions on the part of Guarantor or its
shareholders;
c. this Continuing Guaranty has been duly executed and
delivered by Guarantor and constitutes a legal, valid and binding
obligation of Guarantor, enforceable against Guarantor in accordance with
its terms, except as limited by applicable bankruptcy, insolvency and
similar laws regarding debtor/creditor relationships and the effect of
general principles of equity;
d. the execution, delivery and performance of this Continuing
Guaranty do not (i) violate any provisions of law or any order of any court
or other agency of government (each, a "Requirement of Law"),
(ii) contravene any provision of Guarantor's Certificate of Incorporation,
Bylaws or any material contract or agreement to which Guarantor is a party
or by which Guarantor or Guarantor's assets are bound (each, a "Contractual
Obligation"), or (iii) result in the creation or imposition of any lien,
charge or encumbrance of any nature upon any property, asset or revenue of
Guarantor;
e. all consents, approvals, orders and authorizations of, and
registrations, declarations and filings with, any governmental agency or
authority or other person or entity (including, without limitation, the
shareholders or partners of any entity), if any, which are required to be
obtained in connection with the execution and delivery of this Continuing
Guaranty or the performance of Guarantor's obligations hereunder have been
obtained, and each is in full force and effect;
f. Guarantor has paid all taxes and other charges imposed by
any governmental agency or authority due and payable by Guarantor other
than those which are being challenged in good faith by appropriate
proceedings and for which adequate reserves have been established;
g. Guarantor is not in violation of any Requirement of Law or
Contractual Obligation other than any violation the consequences of which
could not have a Material Adverse Effect;
h. Guarantor is neither an investment company (as defined in
the Investment Company Act of 1940) nor controlled by an investment
company; and
i. no action, proceeding, investigation or litigation is
pending or, to the knowledge of Guarantor, overtly threatened against
Guarantor which, if adversely determined, could have a Material Adverse
Effect.
15. GUARANTOR FINANCIAL INFORMATION. Guarantor will provide
Purchaser in writing such financial and other information with respect to
Guarantor's assets and liabilities as Purchaser shall reasonably request from
time to time, in form satisfactory to Purchaser.
16. BINDING UPON SUCCESSORS. This Continuing Guaranty shall be
binding upon Guarantor and Guarantor's successors and assigns and shall inure to
the benefit of Purchaser and its successors and assigns. All references herein
to Borrower shall be deemed to include its successors and assigns, and all
references herein to Guarantor shall be deemed to include Guarantor and
Guarantor's successors and assigns.
In addition and notwithstanding anything to the contrary contained in
this Continuing Guaranty or in any other document, instrument or agreement
between or among any of Purchaser, Borrower, Guarantor or any third party, the
obligations of Guarantor with respect to the Liabilities shall be joint and
several with any other person or entity that now or hereafter executes a
guaranty of any of the Liabilities separate from this Continuing Guaranty.
17. NOTICES. All notices required or permitted to be given hereunder
shall be given in accordance with the terms of the Securities Purchase
Agreement.
18. GOVERNING LAW; ADDITIONAL WAIVERS. This Continuing Guaranty has
been delivered and shall be governed by and construed in accordance with the
internal laws (as opposed to the conflicts of law provisions) of the State of
California.
GUARANTOR HEREBY
(i) WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION TO ENFORCE OR
DEFEND ANY MATTER ARISING FROM OR RELATED TO THIS CONTINUING GUARANTY, AND
ACKNOWLEDGES THAT PURCHASER ALSO WAIVES SUCH RIGHT;
(ii) IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY STATE OR FEDERAL
COURT LOCATED IN THE STATE OF CALIFORNIA, OVER ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY MATTER ARISING FROM OR RELATED TO THIS CONTINUING
GUARANTY;
(iii) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT GUARANTOR MAY
EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE
OF ANY SUCH ACTION OR PROCEEDING;
(iv) agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in any other jurisdictions by suit
on the judgment or in any other manner provided by law; and
(v) agrees not to institute any legal action or proceeding against
Purchaser or any of Purchaser's directors, officers, employees, agents or
property concerning any matter arising out of or relating to this
Continuing Guaranty in any court other than one located in the State of
California.
Nothing herein shall affect or impair Purchaser's right to serve legal
process in any manner permitted by law or Purchaser's right to bring any action
or proceeding against Guarantor or its property in the courts of any other
jurisdiction. Wherever possible each provision of this Continuing Guaranty
shall be interpreted as to be effective and valid under applicable law, but if
any provision of this Continuing Guaranty shall be prohibited by or invalid
under such law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Continuing Guaranty.
19. ADVICE OF COUNSEL. GUARANTOR ACKNOWLEDGES THAT IT HAS EITHER
OBTAINED THE ADVICE OF COUNSEL OR HAS HAD THE OPPORTUNITY TO OBTAIN SUCH ADVICE
IN CONNECTION WITH THE TERMS AND PROVISIONS OF THIS CONTINUING GUARANTY.
20. ENTIRE AGREEMENT. This Continuing Guaranty contains the complete
understanding of the parties hereto with respect to the subject matter herein.
Guarantor acknowledges that it is not relying upon any statements or
representations of Purchaser not contained in this Continuing Guaranty and that
such statements or representations, if any, are of no force or effect and are
fully superseded by this Continuing Guaranty. This Continuing Guaranty may only
be modified by a writing executed by Xxxxxxxxx and Purchaser.
IN WITNESS WHEREOF, Xxxxxxxxx has caused this Continuing Guaranty to
be duly executed this ____ day of April, 1995.
"Guarantor"
GOLDEN STATE ACQUISITION CORP.
-----------------------------------
By:
--------------------------------
Title:
-------------------------
