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Exhibit: 10.51FT
FIRST AMENDMENT TO FINANCING AGREEMENT
THIS FIRST AMENDMENT TO FINANCING AGREEMENT (this "Amendment"), made
and entered into as of July 29, 1998, is by and between FUTECH INTERACTIVE
PRODUCTS, INC., an Arizona corporation (the "Borrower") and U.S. BANCORP
REPUBLIC COMMERCIAL FINANCE, INC., a Minnesota corporation (the "Lender").
RECITALS
1. The Lender and the Borrower entered into a Financing
Agreement dated as of March 31, 1998 (the "Financing Agreement"); and
2. The Borrower desires to amend certain provisions of the
Agreement, and the Lender has agreed to make such amendments, subject to the
terms and conditions set forth in this Amendment.
3. The Borrower has purchased substantially all of the assets
and assumed certain liabilities of XYZ Group Inc. a Wisconsin corporation.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto hereby
covenant and agree to be bound as follows:
SECTION 1. CAPITALIZED TERMS. Capitalized terms used herein
and not otherwise defined herein shall have the meanings assigned to them in the
Financing Agreement, unless the context shall otherwise require.
SECTION 2. AMENDMENTS. The Financing Agreement is hereby
amended as follows:
2.1 DEFINITIONS. The definitions of "Advance" contained in
Section 1. 1 of the Financing Agreement are amended in their entirety as
follows:
"Advance(s)": An Accounts Advance, an Inventory Advance, an
Over Advance, and/or an Additional Over Advance, as the context may
require.
Section 1. 1 of the Financing Agreement is further amended by
adding the definitions of "Eligible Inventory," "Inventory Advance,"
"Over Advance," and "Additional Over Advance" in correct alphabetical
order:
"Additional Over Advance": As defined in Section 2.1 (d).
"Eligible Inventory": Inventory of the Borrower which the
Lender, in its sole and absolute discretion, deems eligible for
Advances, but which meets the following minimum requirements: (a) it is
owned by the Borrower, is subject to a first priority perfected
security interest in favor of the Lender, and is not subject to any
assignment, claim or Lien other than (i) a Lien in favor of the Lender
and (ii) Liens consented to by the Lender in writing; (b) it consists
of raw materials or finished product (not including work in process and
supplies); (c) if held for sale or lease or furnishing under contracts
of service, it is (except as the Lender may otherwise consent in
writing) new and unused; (d) except as the Lender may otherwise
consent, it is not stored with a bailee, warehouseman or similar
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party; if so stored with the Lender's consent, such bailee,
warehouseman or similar party has issued and delivered to the Lender,
in form and substance acceptable to the Lender, such documents and
agreements as the Lender may require, including without limitation,
warehouse receipts therefor in the Lender's name; (e) it is not goods
in transit, except for goods in transit shipped ocean freight, which
goods may be subject to normal and customary liens that attach in favor
of the carrier of such goods; (f) the Lender has determined, in its
sole and absolute discretion, that it is not unacceptable due to age,
type, category, quality and/or quantity; (g) it is not held by the
Borrower on consignment and is not subject to any other repurchase or
return agreement; (h) it is not held by a customer of the Borrower or
any other Person on consignment; (i) it complies with all standards
imposed by any governmental agency having regulatory authority over
such goods and/or their use, manufacture or sale; and (j) the
warranties, representations and covenants contained in any security
agreement or other agreement of the Borrower with or given to the
Lender relating directly or indirectly to the Borrower's Inventory are
applicable to it without exception.
"Inventory Advance": As defined in Section 2.1 (b).
"Over Advance": As defined in Section 2.1(c).
2.2 THE ADVANCES. Section 2.1 of the Financing Agreement is
amended in its entirety as follows:
Section 2.1 The Advances. On the terms and subject to the
conditions hereof, at the Borrower's request, the Lender, in its
absolute and sole discretion and without any commitment to do so, may
make the following Advances available to the Borrower:
2.1(a) up to seventy-five percent (75%) of the net amount of
Eligible Accounts which are listed in the Borrower's most current
Borrowing Base Certificate and which are deemed eligible for advances
by the Lender, or such greater or lesser percentage at the Lender's
sole and absolute discretion, not to exceed a maximum amount of
$12,000,000 (the "Accounts Advances");
2.1(b) up to fifty percent (50%) of the net of Eligible
Inventory which is listed in the Borrower's most current Borrowing Base
Certificate and which is deemed eligible for advances by the Lender, or
such greater or lesser percentage at the Lender's sole and absolute
discretion, not to exceed a maximum amount of $5,000,000 (the Inventory
Advances"), provided that the aggregate outstanding amount of Accounts
Advances and Inventory Advances shall not exceed $12,000,000.
2.1(c) from July 22, 1998 through December 31, 1998 up to
$2,000,000, or such greater or lesser amount at Lender's sole and
absolute discretion (the "Over Advances").
2.1(d) from July 22, 1998 until December 31, 1998, up to
$2,000,000, or such greater or lesser amount at Lender's sole and
absolute discretion (the "Additional Over Advance).
Loans for additional sums requested by the Borrower may be made at the
Lender's sole discretion based upon the Lender's valuation of the
Borrower's collateral or other factors. The Borrower acknowledges and
agrees that the Lender may from time to time, for the
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Lender's convenience, segregate or apportion the Borrower's collateral
for purposes of determining the amounts and maximum amounts of Advances
which may be made hereunder. Nevertheless, the Lender's security
interest in all such collateral, and any other collateral rights,
interests and properties which may now or hereafter be available to the
Lender, shall secure and may be applied to the payment of any and all
Advances and other indebtedness secured by the Lender's security
interest, in any order or manner of application and without regard to
the method by which the Lender determines to make Advances hereunder.
2.3 INTEREST RATES AND INTEREST PAYMENTS Section 2.3 of the
Financing Agreement is amended in its entirety as follows:
Section 2.3 Interest Rates and Interest Payments. Interest
shall accrue on the unpaid balance of the Advances at a floating rate
per annum equal to the sum of the Reference Rate plus 2.5% (the
"Applicable Rate") and shall be due and payable monthly in arrears on
the last day of each calendar month; and provided further that upon the
occurrence and during the continuance of any failure by the Borrower to
comply with any agreement or covenant of the Borrower under any Loan
Document, the unpaid balance of the Advances shall thereafter bear
interest at a floating rate equal to the sum of (a) the Applicable
Rate, plus (b) 2% and shall be due and payable on demand; and provided
further that the minimum amount of interest payable per annum shall not
be less than (i) $100,000 on the Accounts Advances and Inventory
Advances; plus (ii) $20,000 on the Over Advances until repayment of the
Over Advances occurs due to the occurrence of the Private Placement;
plus (iii) $20,000 on the Additional Over Advances until repayment of
the Over Advances occurs due to the occurrence of the Private
Placement.
2.4 ANNUAL FEE. Section 2.6 of the Financing Agreement is
amended in its entirety as follows:
2.6 Annual Fee. The Borrower shall pay to the Lender an annual
fee in an amount equal to twenty-one hundreds of one percent (.21%) of
the maximum aggregate amount of the Accounts Advances (the "Annual
Fee"). The Annual Fee shall be payable in advance on the Closing Date
and on each anniversary of the date of this Agreement.
2.5 SUCCESS FEE. Section 2.7 of the Financing Agreement is
deleted.
2.6 ARTICLE VII. Article VII of the Financing Agreement is
amended in its entirety as follows:
ARTICLE VII
TERMINATION BY BORROWER
This agreement shall continue in effect until terminated upon
not less than 30 days' prior written notice delivered by the Borrower
certified mail to Lender by certified mail. Termination shall not
impair or affect the Lender's fights existing as of the time notice of
Termination is given. Borrowers obligations with respect to payment of
any Termination fee shall be fixed and owing as of date such notice is
given and not when such notice becomes effective.
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In the event that the Borrower gives notice to the Lender of
the termination of this Agreement under Section VII hereof at any time
prior to March 31, 2000, the Borrower will pay to the Lender a
prepayment charge, as additional compensation for the Lender's costs of
entering into this Agreement, in the amount of (a) 1% of the maximum
aggregate amount of the Advances if the notice of termination occurs
prior to December 31, 1998 (unless the Over Advances and Additional
Over Advances are paid out in full by the Private Placement in which
event the prepayment charge shall be equal to 1% of the maximum
aggregate amount of the Accounts Advances); or (b) 1% of the maximum
aggregate amount of the Accounts Advances if the notice of termination
occurs after December 31, 1998, but before March 31, 2000, unless the
outstanding amount of Borrower's obligations hereunder are refinanced
in full by an affiliate of U.S. Bancorp.
SECTION 3. EFFECTIVENESS OF AMENDMENTS. The amendments
contained in this Amendment shall become effective upon delivery by the Borrower
of, and compliance by the Borrower with, the following:
3.1 This Amendment, duly executed by the Borrower.
3.2 A copy of the resolutions of the Board of Directors of the
Borrower authorizing the execution, delivery and performance of this
Amendment certified as true and accurate by its Secretary or Assistant
Secretary, along with a certification by such Secretary or Assistant
Secretary (i) certifying that there has been no amendment to the
Articles of Incorporation or Bylaws of the Borrower since true and
accurate copies of the same were delivered to the Lender with a
certificate of the Secretary of the Borrower dated March 31, 1998, and
(ii) identifying each officer of the Borrower authorized to execute
this Amendment and any other instrument or agreement executed by the
Borrower in connection with this Amendment, and certifying as to
specimens of such officer's signature and such officer's incumbency in
such offices as such officer holds.
3.3 Certified copies of all documents evidencing any necessary
corporate action or consent with respect to this Amendment.
3.4 A Guaranty duly executed by the Guarantor which shall
replace and supersede the existing Guaranty of Guarantor.
3.5 The Borrower shall have paid a Closing fee of $25,000.
3.6 The Borrower shall have satisfied such other conditions as
specified by the Lender or counsel to the Lender, including payment of
all unpaid legal fees and expenses incurred by the Lender through the
date of this Amendment in connection with the Financing Agreement.
SECTION 4. REPRESENTATIONS; ACKNOWLEDGMENTS. The Borrower
hereby represents that on and as of the date hereof and after giving effect to
this Amendment (a) all of the representations and warranties contained in the
Financing Agreement, and in any and all other Loan Documents of the Borrower,
are true, correct and complete in all respects as of the date hereof as though
made on and as of such date, except for changes permitted by the terms of the
Financing Agreement, and (b) the Borrower is in compliance with all covenants
and agreements of the Borrower as set forth in the Financing Agreement and in
any and all other Loan Documents of the Borrower. The Borrower represents and
warrants that the Borrower has the power and legal right and authority to enter
into this Amendment and has duly authorized as appropriate the execution
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and delivery of this Amendment and other agreements and documents executed and
delivered by the Borrower in connection herewith or therewith by proper
corporate action. The Borrower acknowledges and agrees that its obligations to
the Lender under the Financing Agreement exist and are owing without offset,
defense or counterclaim assertable by the Borrower against the Lender. The
Borrower further acknowledges and agrees that its obligations to the Lender
under the Financing Agreement, as amended, constitute "Obligations" within the
meaning of the Security Agreement and are secured by the Security Agreement, as
amended.
SECTION 5. AFFIRMATION, FURTHER REFERENCES. Except as
expressly modified under this Amendment, all of the terms, conditions,
provisions, agreements, requirements, promises, obligations, duties, covenants
and representations of the Borrower under the Financing Agreement, the Security
Agreement, and any and all other Loan Documents entered into with respect to the
obligations under the Financing Agreement are incorporated herein by reference
and are hereby ratified and affirmed in all respects by the Borrower. All
references in the Financing Agreement to "this Agreement," "herein," "hereof,"
and similar references, and all references in the other Loan Documents to the
"Agreement," shall be deemed to refer to the Agreement, as amended by this
Amendment.
SECTION 6. MERGER AND INTEGRATION, SUPERSEDING EFFECT. This
Amendment, from and after the date hereof, embodies the entire agreement and
understanding between the parties hereto and supersedes and has merged into it
all prior oral and written agreements on the same subjects by and between the
parties hereto with the effect that this Amendment, shall control with respect
to the specific subjects hereof and thereof.
SECTION 7. SEVERABILITY. Whenever possible, each provision of
this Amendment and any other statement, instrument or transaction contemplated
hereby or thereby or relating hereto or thereto shall be interpreted in such
manner as to be effective, valid and enforceable under the applicable law of any
jurisdiction, but, if any provision of this Amendment or any other statement,
instrument or transaction contemplated hereby or thereby or relating hereto or
thereto shall be held to be prohibited, invalid or unenforceable under the
applicable law, such provision shall be ineffective in such jurisdiction only to
the extent of such prohibition, invalidity or unenforceability, without
invalidating or rendering unenforceable the remainder of such provision or the
remaining provisions of this Amendment or any other statement, instrument or
transaction contemplated hereby or thereby or relating hereto or thereto in such
jurisdiction, or affecting the effectiveness, validity or enforceability of such
provision in any other jurisdiction.
SECTION 8. SUCCESSORS. This Amendment shall be binding upon
the Borrower and the Lender and their respective successors and assigns, and
shall inure to the benefit of the Borrower and the Lender and the successors and
assigns of the Lender.
SECTION 9. LEGAL EXPENSES. The Borrower agrees to reimburse
the Lender, upon execution of this Amendment, for all reasonable out-of-pocket
expenses (including attorneys' fees and legal expenses of Xxxxxx & Xxxxxxx,
counsel for the Lender) incurred in connection with the Financing Agreement,
including in connection with the negotiation, preparation and execution of this
Amendment and all other documents negotiated, prepared and executed in
connection with this Amendment, and in enforcing the obligations of the Borrower
under the Financing Agreement, as amended by this Amendment, which obligations
of the Borrower shall survive any termination of the Financing Agreement.
SECTION 10. HEADINGS. The headings of various sections of this
Amendment have been inserted for reference only and shall not be deemed to be a
part of this Amendment.
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SECTION 11. COUNTERPARTS. This Amendment may be executed in
several counterparts as deemed necessary or convenient, each of which, when so
executed, shall be deemed an original, provided that all such counterparts shall
be regarded as one and the same document, and either party to this Amendment may
execute any such agreement by executing a counterpart of such agreement.
SECTION 12. GOVERNING LAW. The Amendment Documents shall be
governed by the internal laws of the State of Minnesota, without giving effect
to conflict of law principles thereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed as of the date and year first above written.
FUTECH INTERACTIVE PRODUCTS, INC.
By /s/ Xxxxxxx X. Xxxxx
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Title C.E.O.
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U.S. BANCORP REPUBLIC COMMERCIAL
FINANCE, INC.
By
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Title
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GUARANTY
THIS GUARANTY, dated as of July 29, 1998 is made and given by
XXXXXXX X. XXXXX (the "Guarantor"), in favor of U.S. BANCORP REPUBLIC COMMERCIAL
FINANCE, INC., a Minnesota corporation ("Lender").
RECITALS
A. Lender has extended and/or may from time to time hereafter
extend credit accommodations to Futech Interactive Products, Inc. (the
"Borrower").
B. In connection with those credit accommodations Lender has
required that this Guaranty be executed and delivered by the Guarantor.
C. Guarantor is the chairman of the Borrower and owns
approximately 26% of the outstanding common stock of Borrower.
D. Guarantor previously entered in to a Guaranty of the
obligations of Borrower, which is to be replaced by this Guaranty.
E. The Guarantor expects to derive benefits from the extension
of credit accommodations to the Borrower by Lender and finds it advantageous,
desirable and in their best interests to execute and deliver this Guaranty to
Lender.
NOW, THEREFORE, In consideration of the credit accommodations
to be extended to the Borrower and for other good and valuable consideration,
the Guarantor hereby covenants and agrees with Lender as follows:
Section 1. Defined Terms. As used in this Guaranty, the
following terms shall have the meaning indicated:
"Borrower" shall have the meaning indicated in Recital A.
"Guarantor" shall have the meaning indicated in the opening
paragraph hereof.
"Obligations" shall mean any and all liabilities and
obligations of the Borrower to Lender for or relating to the Over Advances or
Additional Over Advances under the Financing Agreement between Borrower and
Lender dated March 31, 1998 as amended by that First Amendment to Financing
Agreement dated as of July 22, 1998 and as may be further amended (the
"Financing Agreement"), of every kind, nature and description whether due or to
become due, and whether now existing or hereafter arising or incurred.
"Person" shall mean any individual, corporation, partnership,
limited partnership, limited liability company, joint venture, firm,
association, trust, unincorporated organization, government or governmental
agency or political subdivision or any other entity, whether acting in an
individual, fiduciary or other capacity.
"Lender" shall have the meaning indicated in the opening
paragraph hereof.
Section 2. The Guaranty. The Guarantor hereby absolutely and
unconditionally guarantees to Lender the payment when due (whether by demand, at
a scheduled due date, or otherwise) and performance of the Obligations.
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Section 3. Maximum Liabilities. The maximum liability of the
Guarantors under this Guaranty shall not exceed at any time the lesser of (a)
$4,000,000 or (b) all obligations of the Borrower for or relating to the Over
Advances or Additional Over Advances; and in either event plus all interest
thereon, plus all of Lender's costs, expenses and attorneys' fees incurred in
connection with or relating to (a) the collection of the obligations; (b) the
collection and sale of any collateral for the Obligation or this Guaranty, or
(c) the enforcement of this Guaranty, attorneys' fees whether or not there is a
lawsuit, and if there is a lawsuit, any fees and costs for trial and appeals.
Section 4. Continuing Guaranty. This Guaranty is an absolute,
unconditional and continuing guaranty of payment and performance of the
Obligations, and the obligations of the Guarantor hereunder shall not be
released, in whole or in part, by any action or thing which might, but for this
provision of this Guaranty, be deemed a legal or equitable discharge of a surety
or guarantor, other than irrevocable payment and performance in full of the
Obligations. No notice of the Obligations to which this Guaranty may apply, or
of any renewal or extension thereof need be given to the Guarantor and none of
the foregoing acts shall release the Guarantor from liability hereunder. The
Guarantor hereby expressly waives (a) demand of payment, presentment, protest,
notice of dishonor, nonpayment or nonperformance on any and all forms of the
obligations; (b) notice of acceptance of this Guaranty and notice of any
liability to which it may apply; (c) all other notices and demands of any kind
and description relating to the Obligations now or hereafter provided for by any
agreement, statute, law, rule or regulation; and (d) any and all defenses of the
Borrower pertaining to the Obligations except for the defense of discharge by
payment. The Guarantor shall not be exonerated with respect to the Guarantor's
liabilities under this Guaranty by any act or thing except irrevocable payment
and performance of the Obligations, it being the purpose and intent of this
Guaranty that the Obligations constitute the direct and primary obligations of
the Guarantor and that the covenants, agreements and all obligations of the
Guarantor hereunder be absolute, unconditional and irrevocable. The Guarantor
shall be and remain liable for any deficiency remaining after foreclosure of any
mortgage, deed of trust or security agreement securing all or any part of the
Obligations, whether or not the liability of the Borrower or any other Person
for such deficiency is discharged pursuant to statute, judicial decision or
otherwise. The acceptance of this Guaranty by Lender is not intended and does
not release any liability previously existing of any guarantor or surety of any
indebtedness of the Borrower to Lender.
Section 5. Other Transactions. Lender is expressly authorized
(a) to exchange, surrender or release with or without consideration any or all
collateral and security which may at any time be placed with it by the Borrower
or by any other Person, or to forward or deliver any or all such collateral and
security directly to the Borrower for collection and remittance or for credit,
or to collect the same in any other manner without notice to the Guarantor; and
(b) to amend, modify, extend or supplement any note or other instrument
evidencing the Obligations or any part thereof and any other agreement with
respect to the Obligations, waive compliance by the Borrower or any other Person
with the respective terms thereof and settle or compromise any of the
Obligations without notice to the Guarantor and without in any manner affecting
the absolute liabilities of the Guarantor hereunder. No invalidity, irregularity
or unenforceability of all or any part of the Obligations or of any security
therefor or other recourse with respect thereto shall affect, impair or be a
defense to this Guaranty. The liabilities of the Guarantor hereunder shall not
be affected or impaired by any failure, delay, neglect or omission on the part
of Lender to realize upon any of the Obligations of the Borrower to Lender, or
upon any collateral or security for any or all of the Obligations, nor by the
taking by Lender of (or the failure to take) any other guaranty or guaranties to
secure the Obligations, nor by the taking by Lender of (or the failure to take
or the failure to perfect its security interest in or other lien on) collateral
or security of any kind. No act or
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omission of Lender, whether or not such action or failure to act varies or
increases the risk of, or affects the rights or remedies of the Guarantor, shall
affect or impair the obligations of the Guarantor hereunder. The Guarantor
acknowledges that this Guaranty is in effect and binding without reference to
whether this Guaranty is signed by any other Person or Persons, that possession
of this Guaranty by Lender shall be conclusive evidence of due delivery hereof
by the Guarantor and that this Guaranty shall continue in full force and effect,
both as to the Obligations then existing and/or thereafter created,
notwithstanding the release of or extension of time to any other guarantor of
the Obligations or any part thereof.
Section 6. Actions Not Required. The Guarantor hereby waives
any and all right to cause a marshalling of the assets of the Borrower or any
other action by any court or other governmental body with respect thereto or to
cause Lender to proceed against any security for the Obligations or any other
recourse which Lender may have with respect thereto and further waives any and
all requirements that Lender institute any action or proceeding at law or in
equity, or obtain any judgment, against the Borrower or any other Person, or
with respect to any collateral security for the Obligations, as a condition
precedent to making demand on or bringing an action or obtaining and/or
enforcing a judgment against, the Guarantor upon this Guaranty. The Guarantor
further acknowledges that time is of the essence with respect to the Guarantor's
obligations under this Guaranty. Any remedy or right hereby granted which shall
be found to be unenforceable as to any Person or under any circumstance, for any
reason, shall in no way limit or prevent the enforcement of such remedy or right
as to any other Person or circumstance, nor shall such unenforceability limit or
prevent enforcement of any other remedy or right hereby granted.
Section 7. No Subrogation. Notwithstanding any payment or
payments made by the Guarantor hereunder, the Guarantor waives all rights of
subrogation to any of the rights of Lender against the Borrower or any other
Person liable for payment of any of the Obligations or any collateral security
or guaranty or right of offset held by Lender for the payment of the
Obligations, and the Guarantor waives all rights to seek any recourse to or
contribution or reimbursement from the Borrower or any other Person liable for
payment of any of the Obligations in respect of payments made by the Guarantor
hereunder, until such time that the Obligations are irrevocably paid in full.
Section 8. Application of Payments. Any and all payments upon
the Obligations made by the Guarantor or by any other Person, and/or the
proceeds of any or all collateral or security for any of the Obligations, may be
applied by Lender on such items of the Obligations as Lender may elect.
Section 9. Recovery of Payment. If any payment received by
Lender and applied to the Obligations is subsequently 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 Obligations to which such payment was applied shall for the
purposes of this Guaranty be deemed to have continued in existence,
notwithstanding such application, and this Guaranty shall be enforceable as to
such Obligations as fully as if such application had never been made. References
in this Guaranty to amounts "irrevocably paid" or to "irrevocable payment" refer
to payments that cannot be set aside, recovered, rescinded or required to be
returned for any reason.
Section 10. Borrower's Financial Condition. The Guarantor is
familiar with the financial condition of the Borrower, and the Guarantor has
executed and delivered this Guaranty based on the Guarantor's own judgment and
not in reliance upon any statement or representation of Lender. Lender shall
have no obligation to provide the Guarantor with any advice whatsoever or
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to inform the Guarantor at any time of Lender's actions, evaluations or
conclusions on the financial condition or any other matter concerning the
Borrower.
Section 11. Remedies. All remedies afforded to Lender by
reason of this Guaranty are separate and cumulative remedies and it is agreed
that no one of such remedies, whether or not exercised by Lender, shall be
deemed to be in exclusion of any of the other remedies available to Lender and
no one of such remedies shall in any way limit or prejudice any other legal or
equitable remedy which Lender may have hereunder and with respect to the
Obligations. Mere delay or failure to act shall not preclude the exercise or
enforcement of any rights and remedies available to Lender.
Section 12. Bankruptcy of the Borrower. The Guarantor
expressly agrees that the liabilities and obligations of the Guarantor under
this Guaranty shall not in any way be impaired or otherwise affected by the
institution by or against the Borrower or any other Person of any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or any other
similar proceedings for relief under any bankruptcy law or similar law for the
relief of debtors and that any discharge of any of the Obligations pursuant to
any such bankruptcy or similar law or other law shall not diminish, discharge or
otherwise affect in any way the obligations of the Guarantor under this
Guaranty, and that upon the institution of any of the above actions, such
obligations shall be enforceable against the Guarantor.
Section 13. Costs and Expenses. The Guarantor will pay or
reimburse Lender on demand for all out-of-pocket expenses (including in each
case all reasonable fees and expenses of counsel) incurred by Lender arising out
of or in connection with the enforcement of this Guaranty against the Guarantor
or arising out of or in connection with any failure of the Guarantor to fully
and timely perform the obligations of the Guarantor hereunder.
Section 14. Waivers and Amendments. This Guaranty can be
waived, modified, amended, terminated or discharged only explicitly in a writing
signed by Lender. A waiver so signed shall be effective only in the specific
instance and for the specific purpose given.
Section 15. Notices. Any notice or other communication to any
party in connection with this Guaranty shall be in writing and shall be sent by
manual delivery, telegram, telex, facsimile transmission, overnight courier or
United States mail (postage prepaid) addressed to such party at the address
specified on the signature page hereof, or at such other address as such party
shall have specified to the other party hereto in writing. All periods of notice
shall be measured from the date of delivery thereof if manually delivered, from
the date of sending thereof if sent by telegram, telex or facsimile
transmission, from the first business day after the date of sending if sent by
overnight courier, or from four days after the date of mailing if mailed.
Section 16. Guarantor Acknowledgements. The Guarantor hereby
acknowledges that (a) counsel has advised the Guarantor in the negotiation,
execution and delivery of this Guaranty, (b) Lender has no fiduciary
relationship to the Guarantor, the relationship being solely that of debtor and
creditor, and (c) no joint venture exists between the Guarantor and Lender.
Section 17. Continuing Guaranty. This Guaranty shall (a)
remain in full force and effect until irrevocable payment in full of the
Obligations and the expiration of the obligations, if any, of Lender to extend
credit accommodations to the Borrower, (b) be binding upon the Guarantor, its
successors and assigns and (c) inure to the benefit of, and be enforceable by,
Lender and its successors, transferees, and assigns.
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Section 18. Reaffirmation. The Guarantor agrees that when so
requested by Lender from time to time it will promptly execute and deliver to
Lender a written reaffirmation of this Guaranty in such form as Lender may
require.
Section 19. Financial Statements. Tax Returns. The Guarantor
agrees that it will deliver to Lender copies of all state and federal tax
returns filed by the Guarantor, together with an updated personal financial
statement of the Guarantor in form and substance satisfactory to the Lender, as
may be required of the Borrower by Lender or as may otherwise be requested of
the Guarantor by Lender.
Section 20. Revocation. Notwithstanding any other provision
hereof, the Guarantor may revoke this Guaranty prospectively as to future
transactions by written notice to that effect actually received by Lender. No
such revocation shall release, impair or affect in any manner any liability
hereunder with respect to Obligations created, contracted, assumed or incurred
prior to receipt by Lender of written notice of revocation, or Obligations
created, contracted, assumed or incurred after receipt of such notice pursuant
to any contract entered into by Lender prior to receipt of such notice, or any
renewals or extensions thereof, theretofore or thereafter made, or all other
costs, expenses and attorneys' fees arising from such Obligations.
Section 21. Governing Law and Construction. THE VALIDITY,
CONSTRUCTION AND ENFORCEABILITY OF THIS GUARANTY SHALL BE GOVERNED BY THE LAWS
OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES
THEREOF. Whenever possible, each provision of this Guaranty and any other
statement, instrument or transaction contemplated hereby or relating hereto
shall be interpreted in such manner as to be effective and valid under such
applicable law, but, if any provision of this Guaranty or any other statement,
instrument or transaction contemplated hereby or relating hereto shall be held
to be prohibited or invalid under such applicable 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
Guaranty or any other statement, instrument or transaction contemplated hereby
or relating hereto.
Section 22. Consent to Jurisdiction. AT THE OPTION OF LENDER,
THIS GUARANTY MAY BE ENFORCED IN ANY FEDERAL COURT OR MINNESOTA STATE COURT
SITTING IN HENNEPIN COUNTY, MINNESOTA, MINNESOTA; AND THE GUARANTOR CONSENTS TO
THE JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT THAT VENUE
IN SUCH FORUMS IS NOT CONVENIENT. IN THE EVENT THE GUARANTOR COMMENCES ANY
ACTION IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY
ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS GUARANTY,
LENDER AT ITS OPTION SHALL BE ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF
THE JURISDICTIONS AND VENUES ABOVE-DESCRIBED, OR IF SUCH TRANSFER CANNOT BE
ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT
PREJUDICE.
Section 23. Waiver of Jury Trial. EACH OF THE GUARANTOR AND
LENDER, BY ITS ACCEPTANCE OF THIS GUARANTY, IRREVOCABLY WAIVES ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL
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PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
Section 24. Counterparts. This Guaranty may be executed in any
number of counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument.
Section 25. General. All representations and warranties
contained in this Guaranty or in any other agreement between the Guarantor and
Lender shall survive the execution, delivery and performance of this Guaranty
and the creation and payment of the Obligations. Captions in this Guaranty are
for reference and convenience only and shall not affect the interpretation or
meaning of any provision of this Guaranty.
IN WITNESS WHEREOF, the Guarantor has executed this Guaranty
as of the date first above written.
/s/ Xxxxxxx X. Xxxxx
-----------------------------------
XXXXXXX X.XXXXX
Address:
0000 Xxxxx 00xx Xxxxxx
Xxxxxxxx Xxxxxx, XX 00000
Address for Lender:
U.S. BANCORP REPUBLIC COMMERCIAL FINANCE, INC.
0000 Xxxxxxx Xxxxxx XX, Xxxxx 000
Xxxxxxxxxxx, XX 00000
Fax: (000) 000-0000
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