EX-99.10
UNCONDITIONAL REIMBURSEMENT AND INDEMNIFICATION AGREEMENT
March ___, 2002
Xxxxxx Tree Construction, Inc. (which
may become known as Nutritionary, Inc.)
0000 Xxxxxxxx Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
(Individually and collectively, "Nutritionary")
American Health and Diet Centers, Inc.
000 Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
(Individually and collectively, "AHDC" and
together with Nutritionary, "Obligor")
Xxxxxx Xxxxx
000 X. Xxxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
(Hereinafter referred to as "SIMON")
To induce SIMON to continue his guaranty (the "HUBCO Agreement") of certain debt
of AHDC to Xxxxxx United Bank for a limited period of time pursuant to the terms
of the Stock Purchase Agreement (as hereinafter defined), Obligor hereby
absolutely, irrevocably and unconditionally guarantees to SIMON and his
successors, assigns and affiliates the timely payment and performance of all
liabilities and obligations of AHDC to Xxxxxx United Bank, and Obligor hereby
agrees to indemnify and hold SIMON harmless from and against any and all
liability under the HUBCO Agreement, and agrees that in the event, for any
reason, SIMON is required to make any payments to Xxxxxx United Bank under the
HUBCO Agreement, Obligor shall immediately reimburse SIMON for such payments,
together with any and all costs and expenses incurred in connection with such
payments (collectively, the "Guaranteed Obligations"). This Unconditional
Reimbursement and Indemnification Agreement (the "Agreement") is being delivered
pursuant to that certain Stock Purchase Agreement dated as of March __, 2002
among Nutritionary, SIMON and Xxxxx Xxxxxxx (as the same may be amended from
time to time, the "Stock Purchase Agreement"), the terms of which are
incorporated herein. Terms used but not otherwise defined herein shall have the
meanings ascribed to such terms in the Stock Purchase Agreement. Notwithstanding
anything in this Agreement to the contrary, in no event shall AHDC be relieved
of its primary and direct responsibility for the payment of any and all
indebtedness owning to Xxxxxx United Bank.
Obligor further covenants and agrees:
GUARANTOR'S LIABILITY. This Agreement is a continuing and unconditional guaranty
of payment and performance and not of collection. The parties to this Agreement
are jointly and severally obligated hereunder. This Agreement does not impose
any obligation on SIMON to extend or continue to extend credit or otherwise deal
with the Obligor at any subsequent time. This Agreement shall continue to be
effective or be reinstated, as the case may be, if at any time any payment of
the Guaranteed Obligations is rescinded, avoided or for any other reason must be
returned by SIMON, and the returned payment shall remain payable as part of the
Guaranteed Obligations, all as though such payment had not been made. Except to
the extent the provisions of this Agreement give SIMON additional rights, this
Agreement shall not be deemed to supersede or replace any other guaranties given
to SIMON by Obligor or any other obligations of Obligor to SIMON; and the
obligations guaranteed hereby shall be in addition to any other obligations
guaranteed by Obligor pursuant to any other agreement of guaranty given to SIMON
and other guaranties of the Guaranteed Obligations and/or any other obligations
of Obligor to SIMON.
NO MODIFICATIONS. Obligor agrees that in no event will any modifications occur
with respect to the debt owing from AHDC to Xxxxxx United Bank.
WAIVERS AND ACKNOWLEDGMENTS. Obligor waives and releases the following rights,
demands, and defenses Obligor may have with respect to SIMON and collection of
the Guaranteed Obligations: (a) promptness and diligence in collection of any of
the Guaranteed Obligations from any person liable thereon, and in foreclosure of
any security interest and sale of any property serving as collateral for the
Guaranteed Obligations; (b) any law or statute that requires that SIMON make
demand upon, assert claims against, or collect from any persons or entities,
foreclose any security interest, sell collateral, exhaust any remedies, or take
any other action against any persons or entities prior to making demand upon,
collecting from or taking action against Obligor with respect to the Guaranteed
Obligations, including any such rights Obligor might otherwise have had under
any applicable law; (c) any law or statute that requires that any person be
joined in, notified of or made part of any action against Obligor; (d) that
SIMON preserve, insure or perfect any security interest in collateral or sell or
dispose of collateral in a particular manner or at a particular time, provided
that SIMON's obligation to dispose of Collateral in a commercially reasonable
manner is not waived hereby; (e) notice of extensions, modifications, renewals,
or novations of the Guaranteed Obligations, of any new transactions or other
relationships between SIMON, Obligor and/or any guarantor, and of changes in the
financial condition of, ownership of, or business structure of Obligor or any
other guarantor; (f) presentment, protest, notice of dishonor, notice of
default, demand for payment, notice of intention to accelerate maturity, notice
of acceleration of maturity, notice of sale, and all other notices of any kind
whatsoever; (g) the right to assert against SIMON any defense (legal or
equitable), set-off, counterclaim, or claim that Obligor may have at any time
against any party liable to SIMON; (h) all defenses relating to invalidity,
insufficiency, unenforceability, enforcement, release or impairment of XXXXX'x
xxxx on any collateral, or the Transaction Documents, or of any other guaranties
held by SIMON; (i) any claim or defense that acceleration of maturity of the
Guaranteed Obligations is stayed against Obligor because of the stay of
assertion or of acceleration of claims against any other person or entity for
any reason including the bankruptcy or insolvency of that person or entity; and
(j) the benefit of any exemption claimed by Obligor. Obligor acknowledges and
represents that Obligor has relied upon Obligor's own due diligence in making an
independent appraisal of AHDC, AHDC's business affairs and financial condition,
and any collateral; and Obligor will continue to be responsible for making an
independent appraisal of such matters.
FINANCIAL CONDITION. Obligor warrants, represents and covenants to SIMON that on
the date hereof: (a) the fair saleable value of Obligor's assets exceeds its
liabilities, Obligor is meeting its current liabilities as they mature, and
Obligor is and shall remain solvent; (b) all financial statements of Obligor
furnished to SIMON are correct and accurately reflect the financial condition of
Obligor as of the respective dates thereof; (c) since the date of such financial
statements, there has not occurred a material adverse change in the financial
condition of Obligor; and (d) there are not now pending any court or
administrative proceedings or undischarged judgments against Obligor, no federal
or state tax liens have been filed or threatened against Obligor, and Obligor is
not in default or claimed default under any agreement.
APPLICATION OF PAYMENTS. Monies received from any source by SIMON for
application toward payment of the Guaranteed Obligations may be applied to such
Guaranteed Obligations in any manner or order deemed appropriate by SIMON.
DEFAULT. If any of the following events occur, an event of default ("Event of
Default") under this Agreement shall exist: (a) failure of timely payment or
performance of the Guaranteed Obligations or a default under any Transaction
Document; (b) a breach of any agreement or representation contained or referred
to in the Agreement, or any of the Transaction Documents, or contained in any
other contract or agreement of Obligor with SIMON or his affiliates, whether now
existing or hereafter arising; (c) at SIMON's option, any default in payment or
performance of any obligation under any of the Transaction Documents or any
other loans, contracts or agreements of Obligor, any Subsidiary or Affiliate of
Obligor, any general partner of or the holder(s) of the majority ownership
interests of Obligor with SIMON or his affiliates and/or any default under the
guaranties of Obligor in favor of Xxxxx Xxxxxxx and/or any other
documents executed and/or delivered in connection therewith ("Affiliate" shall
have the meaning as defined in 11 U.S.C. ss. 101, except that the term "Obligor"
shall be substituted for the term "Debtor" therein; "Subsidiary" shall mean any
business in which Obligor holds, directly or indirectly, a controlling
interest); (d) the death of, appointment of a guardian for, dissolution of,
termination of existence of, loss of good standing status by, appointment of a
receiver for, assignment for the benefit of creditors of, or the commencement of
any insolvency or bankruptcy proceeding by or against Obligor, its Subsidiaries
or Affiliates, if any, or any general partner of or the holder(s) of the
majority ownership interests of Obligor; (e) without prior written consent of
SIMON, (i) a material alteration in the kind or type of Obligor's business or
that of Obligor's Subsidiaries or Affiliates, if any; (ii) the sale of
substantially all of the business or assets of Obligor, any of Obligor's
Subsidiaries or Affiliates or any guarantor, or a material portion (10% or more)
of such business or assets if such a sale is outside the ordinary course of
business of Obligor, or any of Obligor's Subsidiaries or Affiliates or any
guarantor; (iii) any transfer of any of the outstanding stock or voting power of
AHDC or any transfer of more than 50% of the outstanding stock or voting power
of Nutritionary, or any other Affiliate or Subsidiary (other than AHDC) in a
single transaction or a series of transactions; (iv) the acquisition of
substantially all of the business or assets or more than 50% of the outstanding
stock or voting power of any other entity; or (v) should any of Obligor or any
of Obligor's Subsidiaries or Affiliates or any guarantor enter into any merger
or consolidation; (f) any representation or warranty given by Obligor in this
Agreement, the Transaction Documents or any documents executed or provided in
connection therewith or otherwise furnished by Obligor proves materially false
or, if of a continuing nature becomes materially false; and/or (g) a failure to
comply with any of the terms of this Guaranty or any other Transaction Document.
If an Event of Default occurs, the Guaranteed Obligations shall be due
immediately and payable without notice, and, XXXXX xxx exercise any rights and
remedies as provided in this Agreement and other Transaction Documents, or as
provided at law or equity. Obligor shall pay interest on the Guaranteed
Obligations from such Event of Default at the highest rate of interest charged
on any of the Guaranteed Obligations.
ATTORNEYS' FEES AND OTHER COSTS OF COLLECTION. Obligor shall pay all of SIMON'S
reasonable expenses incurred to enforce or collect any of the Guaranteed
Obligations, including, without limitation, reasonable arbitration, paralegals',
attorneys' and experts' fees and expenses, whether incurred without the
commencement of a suit, in any suit, arbitration, or administrative proceeding,
or in any appellate or bankruptcy proceeding.
SUBORDINATION OF OTHER DEBTS. Obligor agrees: (a) to subordinate the obligations
now or hereafter owed by either Obligor to the other ("Subordinated Debt") to
any and all obligations of AHDC and/or Nutritionary to SIMON now or hereafter
existing while this Agreement is in effect; (b) Obligor will either place a
legend indicating such subordination on every note, ledger page or other
document evidencing any part of the Subordinated Debt or deliver such documents
to SIMON; and (c) except as permitted by this paragraph, Obligor will not
request or accept payment of or any security for any part of the Subordinated
Debt, and any proceeds of the Subordinated Debt paid to Obligor, through error
or otherwise, shall immediately be forwarded to SIMON by Obligor, properly
endorsed to the order of SIMON, to apply to the Guaranteed Obligations.
MISCELLANEOUS. ASSIGNMENT. This Agreement and other Transaction Documents shall
inure to the benefit of and be binding upon the parties and their respective
heirs, legal representatives, successors and assigns. SIMON's interests in and
rights under this Agreement and other Transaction Documents are freely
assignable, in whole or in part, by SIMON. Obligor shall not assign its rights
and interest hereunder without the prior written consent of SIMON, and any
attempt by Obligor to assign without SIMON's prior written consent is null and
void. Any assignment shall not release Obligor from the Guaranteed Obligations.
APPLICABLE LAW; CONFLICT BETWEEN Documents. This Agreement shall be governed by
and construed under the laws of the state of New Jersey without regard to that
state's conflict of laws principles. JURISDICTION. Obligor irrevocably agrees to
non-exclusive personal jurisdiction in the state of New Jersey. SEVERABILITY. If
any provision of this Agreement or of the other Transaction
Documents shall be prohibited or invalid under applicable law, such provision
shall be ineffective but only to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Agreement or other Transaction Documents. NOTICES. Any notices to
Obligor shall be sufficiently given if in writing and mailed or delivered to
Obligor's address shown above or such other address as provided hereunder, and
to SIMON, if in writing and mailed or delivered to SIMON's office address shown
above or such other address as XXXXX xxx specify in writing from time to time.
In the event that Obligor changes Obligor's address at any time prior to the
date the Guaranteed Obligations are paid in full, Obligor agrees to promptly
give written notice of said change of address to SIMON by registered or
certified mail, return receipt requested, all charges prepaid. PLURAL; CAPTIONS.
All references in the Transaction Documents to borrower, guarantor, person,
document or other nouns of reference mean both the singular and plural form, as
the case may be, and the term "person" shall mean any individual person or
entity. The captions contained in the Transaction Documents are inserted for
convenience only and shall not affect the meaning or interpretation of the
Transaction Documents. AMENDMENTS, WAIVERS AND REMEDIES. No waivers, amendments
or modifications of this Agreement and other Transaction Documents shall be
valid unless in writing and signed by SIMON. No waiver by SIMON of any Event of
Default shall operate as a waiver of any other Event of Default or the same
Event of Default on a future occasion. Neither the failure nor any delay on the
part of SIMON in exercising any right, power, or privilege granted pursuant to
this Agreement and other Transaction Documents shall operate as a waiver
thereof, nor shall a single or partial exercise thereof preclude any other or
further exercise or the exercise of any other right, power or privilege. All
remedies available to SIMON with respect to this Agreement and other Transaction
Documents and remedies available at law or in equity shall be cumulative and may
be pursued concurrently or successively. TRANSACTION DOCUMENTS. The term
"Transaction Documents" refers to the $1,500,000 note dated of even date
herewith given by Nutritionary in favor of SIMON, the guaranty of dated of even
date herewith given by AHDC in favor of SIMON, the security agreement(s) dated
of even date herewith given by Nutritionary and AHDC to SIMON, the pledge
agreement dated of even date herewith given by Nutritionary to SIMON, the Stock
Purchase Agreement, the reimbursement and indemnification agreement dated of
even date herewith given by Obligor in favor of SIMON, and all documents
executed in connection with or related to such documents or the Guaranteed
Obligations and may include, without limitation, other guaranty agreements,
security agreements, instruments, financing statements, mortgages, deeds of
trust, deeds to secure debt, letters of credit and any amendments or supplements
(excluding swap agreements as defined in 11 U.S. Code ss. 101).
IN WITNESS WHEREOF, Obligor, on the day and year first written above, has caused
this Unconditional Reimbursement and Indemnification Agreement to be executed
under seal.
XXXXXX TREE CONSTRUCTION, INC.
Taxpayer Identification Number: _____________
By: ____________________________________(SEAL)
AMERICAN HEALTH AND DIET CENTERS, INC.
Taxpayer Identification Number: _____________
By: ____________________________________(SEAL)
