GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT (this "Guaranty Agreement") dated as of
November __, 2000, is made by THE QUIZNO'S CORPORATION, a Colorado corporation
(the "Guarantor"), in favor of Xxxxxx Xxxxxxx Incorporated, a Massachusetts
corporation (the "Beneficiary").
R E C I T A L S
WHEREAS, pursuant to the terms of that certain Margin Account Agreement
and ancillary documents thereto (the "Margin Agreement") dated as of the date
hereof, by and between Xxxxxxx X. Xxxxxxx, a [Colorado] resident (the "Maker")
and the Guarantor, the Maker has made and delivered to the Beneficiary a
promissory note to the order of the Beneficiary in the principal amount of Two
Million Dollars ($2,000,000.00) (the "Promissory Note");
WHEREAS, the guaranties provided in this Guaranty Agreement are
reasonably expected to benefit, directly or indirectly, the Guarantor and it is
in the best interest of the Guarantor to provide the guaranties set forth
hereunder, and such guaranties are necessary or convenient to the conduct,
promotion, or attainment of the business of the Guarantor; and
WHEREAS, it is a condition to the agreement of the Beneficiary to enter
into the Margin Agreement that this Guaranty Agreement shall have been executed
and delivered by the Guarantor and shall be in full force and effect.
AGREEMENT
NOW, THEREFORE, in order to induce, and in consideration of, the
execution and delivery of the Margin Agreement by the Beneficiary, the Guarantor
hereby covenants and agrees with, and represents and warrants to, the
Beneficiary as follows:
1. DEFINED TERMS. Capitalized terms used herein but not defined herein
shall have the meaning given them in the Margin Agreement.
2. THE GUARANTY. The Guarantor hereby irrevocably and unconditionally
guarantees to the Beneficiary the full and timely performance, payment and
discharge by the Maker of all obligations and liabilities of Maker now existing
or hereafter arising under the Promissory Note and/or the Margin Agreement,
including, but not limited to, payment related to a margin call or a demand for
payment related to the account(s) of Maker (or his successors or assigns) (the
"Guaranteed Obligations") and hereby agrees that if the Maker shall fail to pay
any amount when and as the same shall be due and payable by the Maker to the
Beneficiary or timely to perform and discharge in full any obligation or
liability in accordance with the terms of the Guaranteed Obligations, the
Guarantor will forthwith upon demand pay to the Beneficiary an amount equal to
any such amount or perform and discharge any such obligation or liability, as
the case may be, as such payment or performance and discharge is required
pursuant to the terms of the Guaranteed Obligations to be made or done by the
Maker, and will further pay any and all
damages that may be payable by the Maker in consequence thereof and all
reasonable expenses, including attorneys' fees, that may be incurred by the
Beneficiary in enforcing such obligations and liabilities of the Maker and
enforcing the covenants and agreements of the Guarantor herein. The guaranty in
the preceding sentence is an absolute, present and continuing guaranty of
payment and of performance of obligations and not of collectibility and is in no
way conditional or contingent upon any attempt to collect from the Maker or upon
any other action, occurrence or circumstance whatsoever. It shall not be
necessary for the Beneficiary, in order to enforce such payment or performance
by the Guarantor, first to institute suit or exhaust its remedies against the
Maker or any other Person liable with respect to the Guaranteed Obligations.
Notwithstanding anything to the contrary contained in this Guaranty Agreement,
the Guarantor shall, have the benefit of and the right to assert any defenses
against the claims of the Beneficiary which are available to the Maker and which
would have also been available to the Guarantor if Guarantor had been in the
same contractual position as the Maker under the Promissory Note, other than
defenses arising from the bankruptcy or insolvency of the Maker.
3. OBLIGATIONS ABSOLUTE. The obligations of the Guarantor hereunder
shall be absolute, continuing and unconditional and shall not be released,
discharged or in any way affected by, any of the following:
(a) any amendment, modification of or supplement to any of the
Guaranteed Obligations or any other instrument referred to therein or
any assignment or transfer of any rights or obligations thereunder;
(b) any release or waiver, by operation of law or otherwise,
of the performance or observance by the Maker or any other person of
any express or implied agreement, covenant, term, obligation or
condition under any of the Guaranteed Obligations;
(c) any extension of the time for the payment of all or any
portion of any sums payable under any of the Guaranteed Obligations or
the extension of time for the performance of any obligations under,
arising out of or in connection with, any of the Guaranteed
Obligations;
(d) any failure, omission, delay or lack of diligence on the
part of the Beneficiary, or any other person, to enforce, assert or
exercise, or any waiver of, any right, privilege, power or remedy
conferred on the Beneficiary or any other person by any of the
Guaranteed Obligations, or any action on the part of the Beneficiary or
such other person granting indulgence or extension of any kind;
(e) any bankruptcy, insolvency, readjustment, composition,
liquidation, dissolution or similar proceeding with respect to the
Maker;
(f) any merger, amalgamation or consolidation of the Guarantor
or of the Maker into or with any other corporation or partnership or
any sale, lease or transfer of any or all of the assets of the
Guarantor or of the Maker to any person;
2
(g) any failure on the part of the Maker for any reason to
comply with or perform any of the terms of any other agreement with the
Guarantor;
(h) the settlement or compromise of any Guaranteed
Obligations; or
(i) any other circumstance that might otherwise constitute a
legal or equitable discharge of a guarantor.
4. WAIVER. Except to the extent required pursuant to the terms of the
Guaranteed Obligations, the Guarantor unconditionally waives, to the fullest
extent permitted by law: (a) notice of acceptance hereof, of any action taken or
omitted in reliance hereon and of any defaults by the Maker in the payment or
performance of any Guaranteed Obligations, and of any of the matters referred to
in paragraph 3 hereof; (b) all notices that may otherwise be required by
statute, rule of law or otherwise to preserve any of the rights of the
Beneficiary against the Guarantor, including, without limitation, presentment to
or demand for payment from the Maker, notice to the Maker or to the Guarantor of
default or protest for nonpayment or dishonor, and the filing of claims with a
court in the event of the bankruptcy of the Maker; (c) any right to the
enforcement, assertion or exercise by the Beneficiary of any right, power or
remedy conferred in this Guaranty Agreement or the Guaranteed Obligations; (d)
any requirement of diligence on the part of the Beneficiary; and (e) any other
act or omission (including any delay by the Beneficiary or any other person in
the taking of any action) that might in any manner or to any extent vary the
risk of the Guarantor or that might otherwise operate as a discharge of the
Guarantor.
5. SUBROGATION. The Guarantor will not exercise any rights that it may
have acquired by way of subrogation under this Guaranty Agreement, by any
payment made hereunder or otherwise, or accept any payment on account of such
subrogation rights, or any rights of reimbursement or indemnity or any rights or
recourse to any security for this Guaranty Agreement, unless and until all of
the obligations, undertakings and conditions to be performed or observed by the
Maker pursuant to the Promissory Note at the time of the Guarantor's exercise of
any such right shall have been performed, observed or paid in full.
6. REINSTATEMENT OF GUARANTY. This Guaranty Agreement shall continue to
be effective, or be reinstated, as the case may be, if and to the extent at any
time any payment, in whole or in part, made by the Maker or the Guarantor to the
Beneficiary in respect of the Guaranteed Obligations is rescinded or must
otherwise be restored or returned by the Beneficiary upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Maker, or upon or
as a result of the appointment of a custodian, receiver, trustee or other
officer with similar powers with respect to the Maker or any substantial part of
its property, or otherwise, all as though such payments had not been made. The
Beneficiary shall not be required to litigate or otherwise dispute its
obligation to make such repayments if the Beneficiary, in good faith, believes
that such obligation exists.
7. REPRESENTATIONS AND WARRANTIES OF GUARANTOR. The Guarantor
represents and warrants as follows:
3
(a) Organization, Good Standing and Power. The Guarantor is
(i) a corporation duly organized, validly existing and in good standing
under the laws of the State of Colorado, and (ii) has all requisite
corporate power and authority to enter into and perform its obligations
under this Guaranty Agreement.
(b) Approval and Enforceability of Guaranty Agreement. The
execution, delivery and performance of this Guaranty Agreement have
been duly authorized by all necessary corporate action on the part of
the Guarantor. This Guaranty Agreement has been duly and validly
executed and delivered and constitutes the legal, valid and binding
obligation of the Guarantor.
(c) Availability of Liquidity Amount. Issuer hereby represents
and warrants that, at the time of the execution of this Guaranty,
Issuer has available, at a minimum, an amount of available funds equal
to the Amount, either in the form of cash and cash equivalents,
marketable short-term investments, amounts available under the Issuer's
credit agreements, or any combination thereof (the "Liquidity Amount").
8. COVENANT OF GUARANTOR. Issuer hereby covenants that, as long as this
Guaranty is outstanding, Issuer shall maintain such Liquidity Amount.
9. NOTICES. All notices, consents, directions, approvals, instructions,
requests and other communications required or permitted to be given hereunder
shall be in writing and delivered personally, or by facsimile transmission or
mailed first class, postage prepaid, registered or certified mail, and any such
communication shall become effective when received, addressed as follows:
(a) if to the Guarantor, to:
The Quizno's Corporation
0000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: President and CEO
Facsimile Number: (000) 000-0000
With a copy to:
Xxxx Xxxxx X'Xxxxx Xxxxxxxx & Xxxxxxx LLP
0000 00xx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attn: Xxxx Xxxx
Facsimile Number: (000) 000-0000
4
(b) if to the Beneficiary, to:
Xxxxxx Xxxxxxx Capital Markets
0000 Xxxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxx, XX 00000
Attn: CEO
Facsimile Number: (000) 000-0000
With a copy to:
Xxxxxx X. Xxxxxx , XX
Xxxxx Xxxxxx & Xxxxxx LLP
Suite 500
0000 Xxxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile Number: (000) 000-0000
provided, however, that any such addressee may change its address for
communications by notice given as aforesaid to the other parties hereto.
10. CONSTRUCTION. The section and subsection headings in this Guaranty
Agreement are for convenience of reference only and shall neither be deemed to
be a part of this Guaranty Agreement nor modify, define, expand or limit any of
the terms or provisions hereof. All references herein to numbered sections,
unless otherwise indicated, are to sections of this Guaranty Agreement. Words
and definitions in the singular shall be read and construed as though in the
plural and vice versa, and words in the masculine, neuter or feminine gender
shall be read and construed as though in either of the other genders where the
context so requires.
11. SEVERABILITY. If any provision of this Guaranty Agreement, or the
application thereof to any Person or circumstances, shall, for any reason or to
any extent, be invalid or unenforceable, such invalidity or unenforceability
shall not in any manner affect or render invalid or unenforceable the remainder
of this Guaranty Agreement, and the application of that provision to other
Persons or circumstances shall not be affected but, rather, shall be enforced to
the extent permitted by applicable law.
12. ENTIRE AGREEMENT; AMENDMENT. This Guaranty Agreement expresses the
entire understanding of the subject matter hereof; and all other understandings,
written or oral, are hereby merged herein and superseded. No amendment of or
supplement to this Guaranty Agreement, or waiver or modification of, or consent
under, the terms hereof shall be effective unless in writing and signed by the
party to be bound thereby.
13. TERM OF GUARANTY AGREEMENT. This Guaranty Agreement and all
guarantees, covenants and agreements of Guarantor contained herein shall
continue in full force and effect and shall not be discharged until such time as
all of the Guaranteed Obligations shall have
5
terminated, expired or shall have been indefeasibly paid or otherwise performed
and discharged in full.
14. GOVERNING LAW. THIS GUARANTY AGREEMENT HAS BEEN EXECUTED AND
DELIVERED IN THE STATE OF COLORADO AND SHALL BE GOVERNED BY, CONSTRUED AND
ENFORCED IN ALL RESPECTS IN ACCORDANCE WITH THE LAW OF THE STATE OF COLORADO
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY THEREIN, WITHOUT
REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
6
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty Agreement to
be duly executed and delivered as of the date and year first above written.
THE QUIZNO"S CORPORATION,
a Colorado corporation
By:
--------------------------------------
Name:
------------------------------
Title:
-----------------------------
7
