Exhibit 10.19
GUARANTEE BY BARNEYS NEW YORK, INC.
THIS GUARANTEE (the "GUARANTEE") dated as of January 28, 1999 is made by
BARNEYS NEW YORK, INC., (the "GUARANTOR"), a Delaware corporation having its
office at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, in favor of ISETAN OF
AMERICA INC. ("ISETAN").
W I T N E S S E T H:
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WHEREAS, Barney's, Inc. (the "COMPANY") issued that certain Subordinated
Note dated January 28, 1999 in the amount of TWENTY TWO MILLION FIVE HUNDRED
THOUSAND DOLLARS ($22,500,000.00) in favor of Isetan (the "NOTE") in accordance
with the terms of the Second Amended Joint Plan of Reorganization of the Company
(the "Plan") dated November 13, 1998, as amended, and filed with the United
States Bankruptcy Court for the Southern District of New York (the "BANKRUPTCY
COURT"); and
WHEREAS, the Guarantor owns all of the shares of stock of the Company
and will derive indirect benefit from the Note;
WHEREAS, to induce Isetan to accept the Plan, the Guarantor has agreed
to guarantee to Isetan the payment and performance of the terms and provisions
of the Note;
NOW, THEREFORE, the Guarantor does agree with, and for the benefit of,
Isetan as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITIONS. Unless otherwise defined herein, all
capitalized terms shall have the meaning ascribed to them in the Note.
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ARTICLE II
GUARANTEE
SECTION 2.1. GUARANTEE OF NOTE PAYMENTS. The Guarantor hereby
unconditionally and irrevocably guarantees the due and punctual payment to
Holder, and its successors, endorsees, transferees and assigns, of the full
amount of the principal, interest and all other sums due under the Note without
right of any setoff or counterclaim. The obligations guaranteed by this Section
2.1 are herein called the "PAYMENT OBLIGATIONS."
SECTION 2.2. PAYMENT OF ENFORCEMENT COSTS. The Guarantor also hereby
agrees to pay on demand to Holder as and when incurred all reasonable costs and
expenses of enforcing this Guarantee, including but not limited to court costs
and reasonable attorneys' fees and disbursements. The obligations under this
Section 2.2 are hereinafter referred to as the "ENFORCEMENT COST OBLIGATIONS".
SECTION 2.3. NON-IMPAIRMENT OF GUARANTEE. The obligations, covenants,
agreements and duties of the Guarantor under this Guarantee shall in no way be
released, diminished, reduced, affected or impaired by reason of the happening
from time to time of any of the following events, any of which may be done or
occur without the necessity of any notice to or further consent of the Guarantor
(all of which are hereby expressly waived by the Guarantor):
(a) The release or waiver, by operation of law or otherwise, of the
performance or observance by, to the fullest extent permitted by law, the
Company or by any other party to the Note or any other guarantor, surety,
endorser, letter of credit bank or other obligor of any of the Payment
Obligations or any agreement, covenant, term or condition in the Note to be
performed or observed by such party;
(b) The extension of the time for the payment of all or any portion of
the Payment Obligations or the extension of time for the performance of any
Payment Obligations or any other obligation under the Note;
(c) The renewal, supplementation, modification, rearrangement or
amendment (whether material or otherwise) of any of the Note or any of the
obligations of the Company or any other party to the Note;
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(d) Any failure, omission, delay, neglect, refusal or lack of diligence
on the part of Holder to enforce, assert or exercise any right, privilege, power
or remedy conferred on Holder in the Note or any action on the part of Holder
granting indulgence, adjustment, forbearance or extension of any kind;
(e) The release, surrender, exchange, subordination or loss of any
security under the Note or the release, modification, amendment, waiver or
failure or refusal to enforce any pledge, security device, letter of credit,
insurance agreement, bond or similar agreement or any guarantee, surety or
indemnity agreement whatsoever;
(f) The release, modification, waiver or failure to enforce any right,
benefit, privilege or interest under any contract or agreement of any kind under
which the rights of the Company have been collaterally or absolutely transferred
or assigned, or a security interest in which has been granted, to Holder as
direct or indirect security for payment of any of the Payment Obligations or for
performance of any obligations to Holder pursuant to the Note;
(g) The death, legal incapacity, disability, voluntary or involuntary
liquidation, dissolution, sale of any collateral, marshaling of assets and
liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Company, the Guarantor, or their
respective affiliates, any other surety for Company or any of the assets of
Company or Guarantor;
(h) Any invalidity of, or defect or deficiency in, the Note or any
related papers, to the fullest extent permitted by law, including without
limitation the unenforceability of any or all of the provisions of any of the
Note or any related papers, or any failure to acquire, perfect or maintain
perfection of any lien on or security interest in any collateral securing
payment of the Payment Obligations, or any portion thereof, or performance of
the Company's obligations thereunder;
(i) The settlement or compromise of any obligation guaranteed hereby or
hereby incurred;
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(j) The taking or accepting of any other security or guarantee for the
payment or performance of any of the Note, the Payment Obligations, the
Enforcement Cost Obligations, or any of the other obligations of the Company
under the Note;
(k) Any failure of Holder to notify Guarantor of any renewal, extension
or assignment of the Note or any part thereof, or the release of any security,
or of any other action taken or refrained from being taken by Holder against the
Company, or of any new agreement between Holder and the Company, it being
understood that Holder shall not be required to give Guarantor any notice of any
kind under any circumstances whatsoever with respect to or in connection with
the Note; or
(l) any other event, action or circumstance that would, in the absence
of this subparagraph (l), result in the release or discharge of the Guarantor
from the performance or observance of any obligation, covenant or agreement
contained in this Guarantee.
SECTION 2.4. WAIVERS BY GUARANTOR. The Guarantor hereby waives
marshaling of assets and liabilities, any requirement that assets be sold in any
particular order, notice of acceptance of this Guarantee and of any liability to
which it applies or may apply, presentment, demand for payment, protest, notice
of nonpayment, notice of dishonor, notice of the taking of any other action by
Holder and all other notices and demands.
SECTION 2.5. GUARANTEE OF PAYMENT AND PERFORMANCE. This is a guarantee
of payment and performance of the Payment Obligations and not merely a guarantee
of collection, and the Guarantor waives any right to require that any action be
brought against the Company or that Holder be required to exhaust any of its
rights, benefits or privileges under the Note; PROVIDED, HOWEVER, that nothing
contained herein shall be construed to prevent Holder from exercising and
enforcing any right, benefit or privilege which Holder may have under this
Guarantee or the Note from time to time, and at any time, it being agreed that
the Guarantor's obligations hereunder are, and shall be, absolute, independent
and unconditional under any and all circumstances. Should Holder seek to enforce
the obligations of the Guarantor by action in any court, the Guarantor waives
any necessity, substantive or procedural, that a judgment previously be rendered
against the Company
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or that the Company or any other person or entity be joined in such action or
that a separate action be brought against the Company or any other person or
entity. The obligations of the Guarantor hereunder are several from those of the
Company or any other person or entity, and are primary obligations concerning
which the Guarantor is the principal obligor. All waivers herein contained shall
be without prejudice to the right of Holder at its option to proceed against the
Company or any other person, whether by separate action or by joinder. The
Guarantor agrees that this Guarantee shall not be discharged except by payment
in full of all Payment Obligations and all Enforcement Cost Obligations.
SECTION 2.6. RELIANCE UPON GUARANTEE. All extensions of credit and
financial accommodations heretofore or hereafter made by Holder to the Company
under the Note shall be conclusively presumed to have been made in reliance upon
the giving of this Guarantee.
SECTION 2.7. REINSTATEMENT. This Guarantee shall continue to be
effective, or shall be reinstated, if at any time payment, or any part thereof,
of any of the Payment Obligations is rescinded or must otherwise be returned by
Holder for any reason whatsoever (including, but not limited to, the bankruptcy,
insolvency, dissolution, liquidation or reorganization of the Company or any
other person), all as though such payment had not been received by Holder.
SECTION 2.8. LIMITS ON SUBROGATION. No payment by the Guarantor pursuant
to any provision of this Guarantee or other satisfaction of the Guarantor's
liability under this Guarantee shall entitle the Guarantor, by subrogation or
otherwise, to any right or remedy against the Company until after the payment in
full of the Payment Obligations and the Enforcement Cost Obligations.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Guarantor hereby represents and warrants as follows:
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SECTION 3.1. The Guarantor is duly organized, validly existing and in
good standing under the laws of the State of Delaware, having full power and
authority to conduct its business in each jurisdiction where it presently
conducts any material part of its business.
SECTION 3.2. The execution, delivery and performance by the Guarantor of
this Guarantee are within the powers of the Guarantor, have been duly authorized
by all necessary action, have received all necessary governmental approvals, and
do not contravene its organizational documents, or any law, regulation or
contractual restriction binding on the Guarantor.
SECTION 3.3. This Guarantee is the legal, valid and binding obligation
of the Guarantor and is enforceable against the Guarantor in accordance with it
terms.
SECTION 3.4. No event has occurred and no condition exists which, upon
or at the time of execution and delivery of the Guarantee would constitute an
Event of Default or would, with the giving of notice or lapse of time, or both,
constitute an Event of Default.
SECTION 3.5. The execution, delivery and performance by the Guarantor of
this Guarantee does not and will not require (a) any consent of any other person
or entity or (b) any consent, license, permit, authorization or other approval
of, any giving of notice to, any exemption by, any registration, declaration or
filing with, or any taking of any other action in respect of, any court,
arbitrator, administrative agency or other governmental authority, the failure
of which would materially and adversely affect the Guarantor's performance of
its obligations hereunder, other than the approval of the Bankruptcy Court and
other consents which have been obtained.
ARTICLE IV
COVENANTS
The Guarantor hereby covenants and agrees that it will comply
with all covenants which, under the terms of the Note, are applicable to it.
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ARTICLE V
MISCELLANEOUS
SECTION 5.1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; TERMINATION OF
GUARANTEE. The representations, covenants and agreements herein set forth shall
continue and survive until termination of this Guarantee. Upon the maturity date
of the Note, or upon payment in full of all Payment Obligations and all
Enforcement Cost Obligations, if later, this Guarantee shall terminate and be of
no further force and effect.
SECTION 5.2. SUCCESSOR AND ASSIGNS. This Guarantee shall inure to the
benefit of Isetan, any other Holder and their respective successors, endorsees,
transferees and assigns. Isetan and any other Holder may assign to any party all
or any part of, or any interest (undivided or divided) in its rights and
benefits herein, and to the extent of that assignment such assignee shall have
the same rights and benefits against the Guarantor as it would have had if such
assignee were Isetan. This Guarantee and the provisions hereof are binding upon
successors of the Guarantor. Neither this Guarantee nor any obligation hereunder
shall be assigned by the Guarantor to any person or entity and any attempted
assignment shall be null and void.
SECTION 5.3. NOTICES. Except as otherwise provided herein, any notice,
demand, request, consent, approval, declaration, delivery or other communication
hereunder to be made pursuant to the provisions of this Guarantee shall be
sufficiently given or made if in writing and either delivered in person with
receipt acknowledged, or sent by registered or certified mail, return receipt
requested, postage prepaid, or by telecopy and confirmed by telecopy answerback,
addressed as follows:
(i) If to Isetan at
Isetan of America Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx Xxxxxxxx
Telecopy No: (000) 000-0000
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with a copy to:
Xxxxxx Xxxxxxx & Xxxx LLP
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxxx, Esq.
Telecopy No: (000) 000-0000
(ii) If to Company at
Barney's, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration, delivery or other communication hereunder shall
be deemed to have been duly given or served on the date on which personally
delivered, with receipt acknowledged, or telecopied and confirmed by telecopy
answerback, or three (3) business days after the same shall have been deposited
in the United States mail. Failure or delay in delivering copies of any notice,
demand, request, consent, approval, declaration, delivery or other communication
to the persons designated above to receive copies shall in no way adversely
affect the effectiveness of such notice, demand, request, consent, approval,
declaration, delivery or other communication.
SECTION 5.4. EXPENSES. The Guarantor agrees to pay any and all
reasonable expenses (including reasonable legal fees and expenses) incurred by
Holder in connection with the enforcement of this Guarantee or the collection of
any sums due to Holder hereunder.
SECTION 5.5. PARTIAL INVALIDITY. Holder and the Guarantor intend this
Guarantee to comply with all applicable laws and to be a binding, legal and
enforceable contract which shall be liberally construed so as to carry out their
intent as expressed in this Guarantee. Without limiting the generality of the
immediately preceding sentence, if any provision of this Guarantee is held to be
illegal, invalid or unenforceable under present or future
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laws effective during the term of this Guarantee, the legality, validity and
enforceability of the other provisions of this Guarantee shall not be affected
thereby.
SECTION 5.6. WAIVERS AND AMENDMENTS; CUMULATIVE REMEDIES. Holder shall
not be obligated to exercise any right, power or privilege under this Guarantee,
and no failure to exercise and no delay in exercising, on the part of Holder,
any such right, power or privilege under this Guarantee shall operate as a
waiver thereof, nor shall any single or partial exercise thereof preclude any
other or further exercise or the exercise of any other right, power or
privilege. No notice to or demand on the Guarantor shall be deemed to be a
waiver of Holder's right to take further action without notice or demand as
provided herein. No waiver shall be applicable except in the specific instance
for which given or shall in any way impair Holder's rights or the Guarantor's
liability in any other respect or at any other time, nor in any event shall any
modification or waiver of any provision of this Guarantee be effective unless in
writing and signed on behalf of Holder and, as to any modification, Guarantor.
The rights and remedies provided in this Guarantee are cumulative and are not
exclusive of any other right or remedy provided by law, in equity or under any
other agreement or instrument.
SECTION 5.7. GOVERNING LAW. THIS GUARANTEE SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE WHOLLY PERFORMED IN SUCH STATE WITHOUT
GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
SECTION 5.8. SUBMISSION TO JURISDICTION. The Guarantor hereby
irrevocably submits to the jurisdiction of any New York State or Federal court
sitting in New York, and the Guarantor hereby irrevocably agrees that any action
may be heard and determined in such New York State court or in such Federal
court. The Guarantor hereby irrevocably waives, to the fullest extent it may
effectively do so, the defense of an inconvenient forum to the maintenance of
such action in any jurisdiction. The Guarantor hereby irrevocably agrees that
the summons and complaint or any other process in any action in any jurisdiction
may be served by mailing in accordance with the provision set forth in Section
5.3. The Guarantor may also be served in any other manner permitted by law, in
which event its time to respond shall be the time provided by law.
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SECTION 5.9. SUBORDINATION. The obligations of the Guarantor under this
Guarantee shall be subordinated to the prior payment in full of all Senior Debt
as and to the extent such Senior Debt is guaranteed by the Guarantor, to the
same extent as the payments of the principal of and interest on the Note are
subordinated as provided in Section 3 of the Note.
SECTION 5.10. JURY WAIVER. GUARANTOR AND, BY ITS ACCEPTANCE HEREOF,
HOLDER, EACH IRREVOCABLY WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO ANY OBLIGATIONS UNDER
THIS GUARANTEE.
[signature page follows]
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IN WITNESS WHEREOF, the Guarantor has executed this Guarantee as of the
day and year first above written.
BARNEYS NEW YORK, INC.
By: /s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
Executive Vice President
and Chief Financial Officer
