Exhibit 10.27
GUARANTY
This GUARANTY, dated as of March ___, 2002 is given by Xxxxx & Wesson
Corp., a Delaware corporation having a principal place of business at 0000
Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxxxxxx (the "Guarantor") in favor of
Banknorth, N.A. f/k/a First Massachusetts Bank, N.A., located at 0000 Xxxx
Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxxxxxx (the "Lender"), to induce Lender to give, in
its discretion, time, credit or other banking facilities or accommodations to
Xxxxx & Wesson Holding Corporation (the "Borrower"). In consideration of the
foregoing, Guarantor agrees as follows:
1. Guaranty of Payment and Performance. Guarantor hereby (jointly and
severally with all other guarantors, if any) guarantees to Lender the full and
punctual payment when due (whether at maturity, by acceleration or otherwise),
and the performance, of all liabilities, agreements and other obligations of
Borrower to Lender of every kind, nature and description (whether by way of
discount, letters of credit, lease, loan, overdraft or otherwise), whether now
existing or hereafter arising, direct or indirect, absolute or contingent, due
or to become due, secured or unsecured, and including, without limitation, all
costs and expenses incurred by Lender in attempting to collect or enforce any of
the foregoing, (collectively the "Obligations"). This Guaranty is an absolute,
unconditional and continuing guaranty of the full and punctual payment and
performance of the Obligations and not of their collectibility only and is in no
way conditioned upon any requirement that Lender first attempt to collect any of
the Obligations from Borrower or resort to any security or other means of
obtaining their payment. Guarantor agrees that the Obligations will be paid and
performed strictly in accordance with their respective terms (as amended from
time-to-time) regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of Lender
with respect thereto. Should Borrower default in the payment or performance of
any of the Obligations, the liabilities and obligations of Guarantor hereunder
shall become immediately due and payable to Lender, without demand or notice of
any nature, all of which are expressly waived by Guarantor. Payment and
performance by Guarantor hereunder may be required by Lender on any number of
occasions.
2. Guarantor's Further Agreement to Pay. Guarantor further agrees, as
the principal obligor and not as a guarantor only, to pay to Lender, on demand,
all costs and expenses (including, without limitation, court costs and
reasonable attorneys' fees) incurred or expended by Lender in connection with
the Obligations, this Guaranty and the enforcement thereof, together with
interest on all amounts recoverable under this Guaranty, from the time such
amounts become due until payment, at the rate per annum equal to the highest
rate of interest charged with respect to any of the Obligations.
3. General Waivers. Guarantor waives: (a) notice of acceptance hereof
by Lender; (b) presentment, demand and protest with respect to the Obligations
and this Guaranty; (c) notice of Obligations incurred or default upon any of the
Obligations, and all other notices of any kind; (d) all defenses which may be
available by virtue of any statute of limitations, valuation, stay,
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moratorium law or other similar law now or hereafter in effect; (e) any right to
require the marshalling of assets of Borrower; (f) all homestead rights,
protections and exemptions; and (g) all suretyship defenses generally.
4. Lender's Freedom to Act. Lender may, without giving notice to or
obtaining the assent of Guarantor and without relieving Guarantor of any
liability hereunder, deal with Borrower or any other party now or hereafter
liable upon any of the Obligations, in such manner as Lender in its sole
discretion deems appropriate, and in this regard, Guarantor agrees that the
obligations of Guarantor hereunder shall not be released or discharged, in whole
or in part, or otherwise affected by (a) the failure of Lender to assert any
claim or demand or to enforce any right or remedy against Borrower, (b) any
extensions or renewals of any of the Obligations, (c) any rescissions, waivers,
amendments or modifications of any of the terms or provisions of any agreement
evidencing, securing or otherwise executed in connection with any of the
Obligations, (d) the substitution or release of any party primarily or
secondarily liable for any of the Obligations, (e) the adequacy of any rights
Lender may have against any collateral or other means of obtaining repayment of
the Obligations, (f) the impairment of any collateral securing any of the
Obligations, including, without limitation, the failure to perfect or preserve
any rights Lender might have in such collateral or the substitution, exchange,
surrender, release, loss or destruction of any such collateral, or (g) any other
act or omission which might in any manner or to any extent vary the risk of
Guarantor or otherwise operate as a release or discharge of Guarantor, all of
which may be done without notice to or assent from Guarantor.
5. Unenforceability Of Obligations Against Borrower. If for any reason
Borrower has no legal existence or is under no legal obligation to discharge any
of the Obligations, or if any of the Obligations have become irrecoverable from
Borrower by operation of law or for any other reason, this Guaranty shall
nevertheless be binding on Guarantor to the same extent as if Guarantor at all
times had been the principal obligor on all such Obligations. In the event that
acceleration of the time for payment of any of the Obligations is stayed upon
the insolvency, bankruptcy or reorganization of Borrower, or for any other
reason, all such amounts otherwise subject to acceleration under the terms of
any agreement evidencing, securing or otherwise executed in connection with any
of the Obligations shall be immediately due and payable by Guarantor.
6. Subrogation. Guarantor also waives any and all rights of
subrogation, reimbursement, indemnity, contribution or the like which Guarantor
might at any time have against Borrower as a result of any payment by Guarantor
to Lender hereunder; unless Lender otherwise agrees, such waiver by Guarantor
shall not be effective to the extent that, by virtue of such waiver, Guarantor's
liability to Lender hereunder is rendered invalid, voidable or unenforceable
under any applicable federal or state laws dealing with the recovery or
avoidance of so called "fraudulent conveyances", or otherwise. Until the payment
and performance in full of the Obligations and any and all obligations of
Borrower to any affiliate of Lender, Guarantor will not claim any set-off or
counterclaim against Borrower in respect of any liability of Guarantor to
Borrower, and Guarantor waives any recourse against any collateral which may be
held by Lender or any such affiliate.
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7. Debt Subordination. The payment of any amounts due with respect to
any indebtedness of Borrower now or hereafter held by Guarantor is hereby
subordinated to the prior payment in full of the Obligations, and Guarantor
agrees that, in the absence of Lender's prior written consent, Guarantor will
not demand, accept or xxx for any payment upon, or otherwise attempt to collect,
any such indebtedness of Borrower to Guarantor until the Obligations shall have
been paid in full. If, notwithstanding the foregoing, Guarantor shall, without
Lender's prior written consent, collect, enforce or receive any amounts in
respect of such indebtedness, such amounts shall be collected, enforced and
received by Guarantor as trustee for Lender and be paid over to Lender on
account of the Obligations without affecting in any manner the liability of
Guarantor under the other provisions of this Guaranty.
8. Security; Set-Off. Any and all deposits or other sums at any time
credited by, or due to Guarantor from Lender under any loan arrangement between
Lender and Guarantor, and any cash, instruments, securities or any other
property of Guarantor, now or hereafter in the possession of Lender, any loan
arrangement between Lender and Guarantor, whether for safe-keeping or otherwise,
shall at all times constitute security (and hereby remain subject to a pledge
and grant of security interest by Guarantor) for the payment of this Guaranty
and all other obligations, whether now existing or hereafter arising, of
Guarantor to Lender and may be applied or set-off against any of such
obligations, upon the occurrence of an Event of Default which is continuing in
accordance with in the Loan Agreement between the Borrower and the Lender,
whether or not then due.
9. Collateral. The following described property from Guarantor, in
addition to all other collateral now or hereafter provided by Guarantor to
Lender, shall secure all obligations of Guarantor upon this Guaranty and all
other present and future obligations of Guarantor to Lender: First security
interest in all of Guarantor's right, title and interest in and to, all
investment property and general intangibles consisting of annuity contracts,
Securities, stocks, bonds, United States government securities, commercial paper
and all income therefrom, increases therein and proceeds thereof maintained at
and/or by: (1) PRIME VEST FINANCIAL SERVICES, INC., ACCOUNT NO. 00000000,(the
"Account"); (2) Pacific Life Insurance Company Annuity - $1,000,000 - Contract
No. SP01001834; (3) Pacific Life Insurance Company Annuity - $500,000 - Contract
No. VR01050237; (4) Pacific Life Insurance Company Annuity - $9,000,000 -
Contract No. SP01001732; (5) Keyport Insurance Trust I Annuity - $950,000 -
Contract No. 0212493926-01; and (6) MFS Regatta Insurance Trust Annuity -
$2,000,000 - Contract No. 00-0000-000000, together with products and proceeds
thereof and all accessions and additions thereto and all replacements and
substitutions therefore (hereinafter called the "Collateral"). The term
"proceeds" shall include, without limitation, all types of classifications of
non-cash proceeds acquired with cash proceeds.
The Guarantor shall at all times maintain Collateral having an
aggregate market value (on a discounted basis subject to the Discount Factors
set forth in the definition of Available Amount) of not less than the sum of any
applicable surrender charges, prepayment fees, early withdrawal fees and/or
similar charges required in connection with any of the Annuities and/or
Securities, and the Obligations of the Guarantor to the Lender hereunder.
Additional units or shares of investment securities (or other unrestricted,
registered securities publicly traded on a nationally recognized stock exchange,
or other additional collateral acceptable to the Lender)
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may from time to time be required by the Lender to be transferred to the
Account, and the Guarantor agrees to do so within three (3) business days of
notice and request from the Lender stating that the then aggregate market value
of Collateral is less than the sum of any applicable surrender charges,
prepayment fees, early withdrawal fees and/or similar charges required in
connection with any of the Annuities and/or Securities, and the Obligations of
the Guarantor to the Lender hereunder. Failure by the Guarantor to provide
additional collateral having an aggregate market value (on a discounted basis
subject to the Discount Factors set forth in the definition of Available Amount)
equal to the difference between (i) the sum of any applicable surrender charges,
prepayment fees, early withdrawal fees and/or similar charges required in
connection with any of the Annuities and/or Securities, and (ii) the Obligations
and the then aggregate market value of the Collateral shall constitute an Event
of Default, and the Lender shall be entitled to liquidate the Collateral for
application to the Obligations without further notice to the Guarantor, as more
fully described in a Loan and Security Agreement dated July 12, 2001, as
modified by a First Modification to Loan and Security Agreement and Revolving
Line of Credit Note dated March ___, 2002 (the "Loan Agreement"). Defined terms
in the Loan Agreement shall have their defined meanings applied herein.
10. Term; Reinstatement. The obligations of Guarantor hereunder shall
continue until full payment is made of all of the Obligations and of all
obligations and liabilities of Guarantor hereunder. This Guaranty shall continue
to be effective or reinstated, notwithstanding any return by Lender to Guarantor
of the original of this Guaranty, if at any time any payment made or value
received with respect to any of the Obligations or any of the obligations of
Guarantor upon this Guaranty is rescinded or must otherwise be returned by
Lender upon the insolvency, bankruptcy or reorganization of Borrower or
Guarantor, or otherwise, all as though such payment had not been made or such
value not received.
11. Governing Law; Successors and Assigns. This Guaranty is intended to
take effect as a sealed instrument, shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Massachusetts, shall be binding
upon Guarantor and Guarantor's successors and assigns, shall inure to the
benefit of Lender and Lender's successors and assigns, and shall apply to all
Obligations of Borrower and any successor to Borrower, including any successor
by operation of law.
12. Amendments and Waivers. No amendment or waiver of any provision of
this Guaranty nor consent to any departure by Guarantor therefrom shall be
effective unless the same shall be in writing and signed by Lender. No failure
on the part of Lender to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right.
13. CONSENT TO JURISDICTION; JURY WAIVER. GUARANTOR HEREBY EXPRESSLY
WAIVES ALL RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING
OUT OF ANY DISPUTE RELATING, DIRECTLY OR INDIRECTLY, TO ANY OF THE OBLIGATIONS
AND/OR THIS GUARANTY. GUARANTOR HEREBY SUBMITS TO THE JURISDICTION OF THE COURTS
OF THE COMMONWEALTH OF MASSACHUSETTS (AND THE FEDERAL COURTS SITUATED
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THEREIN) WITH RESPECT TO ALL CLAIMS CONCERNING THIS GUARANTY AND/OR ANY
COLLATERAL SECURING GUARANTOR'S LIABILITIES TO LENDER.
14. Miscellaneous. This Guaranty constitutes the entire agreement of
Guarantor with respect to the matters set forth herein. The rights and remedies
herein provided are cumulative and not exclusive of any remedies provided by law
or any other agreement, and this Guaranty shall be in addition to, and not in
substitution of, any other guaranty or security for the Obligations. The
invalidity or unenforceability of any one or more sections of this Guaranty
shall not affect the validity or enforceability of its remaining provisions.
Captions are for the ease of reference only and shall not affect the meaning of
the relevant provision. The meaning of all defined terms used in this Guaranty
shall be equally applicable to the singular and plural forms of the terms
defined.
Executed under seal and delivered as of the date first above written.
XXXXX & WESSON CORP.
By:
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Witness Its duly authorized
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