EXHIBIT 10(xiv)
FORM OF
CONTINUING GUARANTY
For value received and specifically in consideration of the benefits the
shareholders of Daisy Manufacturing Company (collectively, the "Guarantors" and
each a "Guarantor") expect to receive as a result of the initial public offering
of the capital stock of Brass Eagle Inc. ("Brass Eagle"), the Guarantors do
hereby severally and separately according to their pro rata ownership of the
outstanding common stock of Daisy Manufacturing Company ("Daisy"), and not
jointly and severally, agree for themselves, their heirs, successors, executors,
and administrators with and unto Brass Eagle as follows:
1. Guarantee of Payment. In order to provide additional security for the
--------------------
performance of all of Xxxxx's obligations pursuant to that certain
Assignment, Assumption and Indemnification Agreement by and between
Daisy, as Assignee/Indemnifying Party, and Brass Eagle, as
Assignor/Indemnified Party, dated _______________, 1997 (the
"Indemnification Agreement"), Guarantors, separately and severally,
hereby unconditionally guarantee the payment of Xxxxx's obligations
pursuant to the Indemnification Agreement for up to Five Million Dollars
($5,000,000) for two years following the spin-off of the Daisy common
stock to the Guarantors from Brass Eagle (the "Spin-Off") and up to
Three Million Dollars ($3,000,000) for the following two years. The
obligation of each Guarantor as to any claim for indemnification is
limited to the Guarantor's pro rata ownership of the outstanding Daisy
common stock as of the Effective Date hereof.
2. Termination of Guaranty. This guaranty by the Guarantors will expire
-----------------------
upon the earlier of (a) four years from the date of the Spin-Off or (b)
the date one of the nation's six largest independent accounting firms
renders a determination that Daisy alone may satisfy its obligations
under the Indemnification Agreement; provided, however, the obligations
of the Guarantors shall survive such termination with respect to claims
made prior to the fourth anniversary of the Effective Date.
3. Waivers of Notice and Additional Authority. The Guarantors waive notice
------------------------------------------
to them or any of them of any default by Xxxxx upon its obligations
under the Indemnification Agreement. Brass Eagle shall not be permitted
to recover under this Guaranty with respect to any claim until thirty
(30) days after Brass Eagle shall have submitted a Claim Notice to Daisy
(as defined in the Indemnification Agreement) with respect to such
claim. Brass Eagle may, without notice to Guarantors, deal with Xxxxx
from time to time with respect to the Indemnification Agreement in any
manner whatsoever, and Guarantors hereby specifically waive each and
every defense predicated upon such dealing except the defense of actual
payment in cash on the obligation.
4. Waiver of Acceptance. The Guarantors further waive notice of the
--------------------
acceptance of this Guaranty by Brass Eagle and further waive
presentment, demand, notice of nonpayment and protest of any or all
obligations under the Indemnification Agreement.
5. Binding Effect of Agreement. In the event of the death of any one of the
---------------------------
undersigned, the obligations herein of each of the undersigned are
independent and several and shall be binding upon their respective
heirs, personal representatives, and estates. The failure of any person
to sign this Guaranty and indemnity shall not affect the liability
hereunder of any signer hereof. The death or release from liability
hereunder of any of the undersigned shall not relieve the others from
liability hereunder.
6. Governing Law. The substantive law of the State of Arkansas shall govern
-------------
this Agreement and the rights and obligations of the parties.
7. Effective Date. This Guaranty shall be effective as of the date of the
--------------
Spin-Off.
8. Continuing Guaranty. This instrument shall be deemed to be a continuing
-------------------
guaranty and Brass Eagle shall be entitled to enforce its rights
hereunder in one or multiple actions, and subject to the dollar
limitations and termination provisions hereof, no prior action or
recovery by Brass Eagle hereunder shall preclude or affect any
subsequent action or recovery.
IN WITNESS WHEREOF, the undersigned Guarantors have hereunto set their hand
and seals as of the dates set opposite their respective names.
GUARANTORS:
-------------------------- --------------------------
Guarantor Guarantor
Date:_______ 1997 Date:_______ 1997
-------------------------- --------------------------
Guarantor Guarantor
Date:_______ 1997 Date:_______ 1997
-------------------------- --------------------------
Guarantor Guarantor
Date:_______ 1997 Date:_______ 1997
