GUARANTEE
September 24, 1998
Congress Financial Corporation (New England)
One Post Office Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Re: NORTHEAST ONE STOP, INC. ("BORROWER")
Gentlemen:
Congress Financial Corporation (New England) ("Lender") and Borrower
have entered into certain financing arrangements pursuant to which Lender may
make loans and advances and provide other financial accommodations to Borrower
as set forth in the Loan and Security Agreement, dated April 20, 1995, as
amended, by and between Borrower and Lender (as the same now exists or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced, the "Loan Agreement"), and other agreements, documents and instruments
referred to therein or at any time executed and/or delivered in connection
therewith or related thereto, including, but not limited to, this Guarantee (all
of the foregoing, together with the Loan Agreement, as the same now exist or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced, being collectively referred to herein as the "Financing Agreements").
Due to the close business and financial relationships between Xxxxxxxx
and the undersigned ("Guarantor"), in consideration of the benefits which will
accrue to Guarantor and as an inducement for and in consideration of Lender
making loans and advances and providing other financial accommodations to
Borrower pursuant to the Loan Agreement and the other Financing Agreements,
Guarantor hereby agrees in favor of Xxxxxx as follows:
1. GUARANTEE.
(a) Guarantor absolutely and unconditionally guarantees and
agrees to be liable for the full and indefeasible payment and performance when
due of the following (all of which are collectively referred to herein as the
"Guaranteed Obligations"): (i) all obligations, liabilities and indebtedness of
any kind, nature and description of Borrower to Lender and/or its affiliates,
including principal, interest, charges, fees, costs and expenses, however
evidenced, whether as principal, surety, endorser, guarantor or otherwise,
whether
arising under the Loan Agreement, the other Financing Agreements or otherwise,
whether now existing or hereafter arising, whether arising before, during or
after the initial or any renewal term of the Loan Agreement or after the
commencement of any case with respect to Borrower under the United States
Bankruptcy Code or any similar statute (including, without limitation, the
payment of interest and other amounts, which would accrue and become due but for
the commencement of such case, whether or not such amounts are allowed or
allowable in whole or in part in any such case and including loans, interest,
fees, charges and expenses related thereto and all other obligations of Borrower
or its successors to Lender arising after the commencement of such case),
whether direct or indirect, absolute or contingent, joint or several, due or not
due, primary or secondary, liquidated or unliquidated, secured or unsecured, and
however acquired by Lender and (ii) all expenses (including, without limitation,
attorneys' fees and legal expenses) incurred by Lender in connection with the
preparation, execution, delivery, recording, administration, collection,
liquidation, enforcement and defense of Borrower's obligations, liabilities and
indebtedness as aforesaid to Lender, the rights of Lender in any collateral or
under this Guarantee and all other Financing Agreements or in any way involving
claims by or against Lender directly or indirectly arising out of or related to
the relationships between Borrower, Guarantor or any other Obligor (as
hereinafter defined) and Lender, whether such expenses are incurred before,
during or after the initial or any renewal term of the Loan Agreement and the
other Financing Agreements or after the commencement of any case with respect to
Borrower or Guarantor under the United States Bankruptcy Code or any similar
statute.
(b) This Guarantee is a guaranty of payment and not of
collection. Xxxxxxxxx agrees that Xxxxxx need not attempt to collect any
Guaranteed Obligations from Borrower, Guarantor or any other Obligor or to
realize upon any collateral, but may require Guarantor to make immediate payment
of all of the Guaranteed Obligations to Lender when due, whether by maturity,
acceleration or otherwise, or at any time thereafter. Lender may apply any
amounts received in respect of the Guaranteed Obligations to any of the
Guaranteed Obligations, in whole or in part (including attorneys' fees and legal
expenses incurred by Lender with respect thereto or otherwise chargeable to
Borrower or Guarantor) and in such order as Lender may elect.
(c) Payment by Guarantor shall be made to Lender at the office
of Lender from time to time on demand as Guaranteed Obligations become due.
Guarantor shall make all payments to Lender on the Guaranteed Obligations free
and clear of, and without deduction or withholding for or on account of, any
setoff, counterclaim, defense, duties, taxes, levies, imposts, fees, deductions,
withholding, restrictions or conditions of any kind. One or more successive or
concurrent actions may be brought hereon against Guarantor either in the same
action in which Borrower or any other Obligor is sued or in separate actions. In
the event any claim or action, or action on any judgment, based on this
Guarantee is brought against Guarantor, Guarantor agrees not to deduct, set-off,
or seek any counterclaim for or recoup any amounts which are or may be owed by
Lender to Guarantor.
2. WAIVERS AND CONSENTS.
(a) Notice of acceptance of this Guarantee, the making of
loans and advances and providing other financial accommodations to Borrower and
presentment, demand, protest, notice of protest, notice of nonpayment or default
and all other notices to which Borrower or Guarantor is entitled are hereby
waived by Guarantor. Guarantor also waives notice of and hereby consents to, (i)
any amendment, modification, supplement, extension, renewal, or restatement of
the Loan Agreement and any of the other Financing Agreements, including, without
limitation, extensions of time of payment of or increase or decrease in the
amount of any of the Guaranteed Obligations, the interest rate, fees, other
charges, or any collateral, and the guarantee made herein shall apply to the
Loan Agreement and the other Financing Agreements and the Guaranteed Obligations
as so amended, modified, supplemented, renewed, restated or extended, increased
or decreased, (ii) the taking, exchange, surrender and releasing of collateral
or guarantees now or at any time held by or available to Lender for the
obligations of Borrower or any other party at any time liable on or in respect
of the Guaranteed Obligations or who is the owner of any property which is
security for the Guaranteed Obligations (individually, an "Obligor" and
collectively, the "Obligors"), (iii) the exercise of, or refraining from the
exercise of any rights against Borrower or any other Obligor or any collateral,
(iv) the settlement, compromise or release of, or the waiver of any default with
respect to, any of the Guaranteed Obligations and (v) any financing by Lender of
Borrower under Section 364 of the United States Bankruptcy Code or consent to
the use of cash collateral by Lender under Section 363 of the United States
Bankruptcy Code. Guarantor agrees that the amount of the Guaranteed Obligations
shall not be diminished and the liability of Guarantor hereunder shall not be
otherwise impaired or affected by any of the foregoing.
(b) No invalidity, irregularity or unenforceability of all or
any part of the Guaranteed Obligations shall affect, impair or be a defense to
this Guarantee, nor shall any other circumstance which might otherwise
constitute a defense available to or legal or equitable discharge of Borrower in
respect of any of the Guaranteed Obligations, or Guarantor in respect of this
Guarantee, affect, impair or be a defense to this Guarantee. Without limitation
of the foregoing, the liability of Guarantor hereunder shall not be discharged
or impaired in any respect by reason of any failure by Lender to perfect or
continue perfection of any lien or security interest in any collateral or any
delay by Lender in perfecting any such lien or security interest. As to
interest, fees and expenses, whether arising before or after the commencement of
any case with respect to Borrower under the United States Bankruptcy Code or any
similar statute, Guarantor shall be liable therefor, even if Borrower's
liability for such amounts does not, or ceases to, exist by operation of law.
Guarantor acknowledges that Xxxxxx has not made any representations to Guarantor
with respect to Borrower, any other Obligor or otherwise in connection with the
execution and delivery by Guarantor of this Guarantee and Guarantor is not in
any respect relying upon Lender or any statements by Lender in connection with
this Guarantee.
(c) Until such time as the Guaranteed Obligations are
indefeasibly paid in full, Guarantor hereby irrevocably and unconditionally
waives and relinquishes all statutory, contractual, common law, equitable and
all other claims against Borrower, any
collateral for the Guaranteed Obligations or other assets of Borrower or any
other Obligor, for subrogation, reimbursement, exoneration, contribution,
indemnification, setoff or other recourse in respect to sums paid or payable to
Lender by Guarantor hereunder and Guarantor hereby further irrevocably and
unconditionally waives and relinquishes any and all other benefits which
Guarantor might otherwise directly or indirectly receive or be entitled to
receive by reason of any amounts paid by or collected or due from Guarantor,
Borrower or any other Obligor upon the Guaranteed Obligations or realized from
their property.
3. SUBORDINATION. Payment of all amounts now or hereafter owed to
Guarantor by Borrower or any other Obligor is hereby subordinated in right of
payment to the indefeasible payment in full to Lender of the Guaranteed
Obligations and all such amounts and any security and guarantees therefor are
hereby assigned to Lender as security for the Guaranteed Obligations.
4. ACCELERATION. Notwithstanding anything to the contrary
contained herein or any of the terms of any of the other Financing Agreements,
the liability of Guarantor for the entire Guaranteed Obligations shall mature
and become immediately due and payable, even if the liability of Borrower or any
other Obligor therefor does not, upon the occurrence of any act, condition or
event which constitutes an Event of Default as such term is defined in the Loan
Agreement.
5. ACCOUNT STATED. The books and records of Lender showing the
account between Xxxxxx and Xxxxxxxx shall be admissible in evidence in any
action or proceeding against or involving Guarantor as PRIMA FACIE proof of the
items therein set forth, and the monthly statements of Lender rendered to
Borrower, to the extent to which no written objection is made within thirty (30)
days from the date of sending thereof to Borrower, shall be deemed conclusively
correct and constitute an account stated between Xxxxxx and Xxxxxxxx and be
binding on Guarantor.
6. TERMINATION. This Guarantee is continuing, unlimited, absolute
and unconditional. All Guaranteed Obligations shall be conclusively presumed to
have been created in reliance on this Guarantee. Guarantor shall continue to be
liable hereunder until one of Xxxxxx's officers actually receives a written
termination notice from Guarantor sent to Lender at its address set forth above
by certified mail, return receipt requested and thereafter as set forth below.
Revocation or termination hereof by Guarantor shall not affect, in any manner,
the rights of Lender or any obligations or duties of Guarantor under this
Guarantee with respect to (a) Guaranteed Obligations which have been created,
contracted, assumed or incurred prior to the receipt by Lender of such written
notice of revocation or termination as provided herein, including, without
limitation, (i) all amendments, extensions, renewals and modifications of such
Guaranteed Obligations (whether or not evidenced by new or additional
agreements, documents or instruments executed on or after such notice of
revocation or termination), (ii) all interest, fees and similar charges accruing
or due on and after revocation or termination, and (iii) all attorneys'
fees and legal expenses, costs and other expenses paid or incurred on or after
such notice of revocation or termination in attempting to collect or enforce any
of the Guaranteed Obligations against Borrower, Guarantor or any other Obligor
(whether or not suit be brought), or (b) Guaranteed Obligations which have been
created, contracted, assumed or incurred after the receipt by Lender of such
written notice of revocation or termination as provided herein pursuant to any
contract entered into by Xxxxxx prior to receipt of such notice. The sole effect
of such revocation or termination by Guarantor shall be to exclude from this
Guarantee the liability of Guarantor for those Guaranteed Obligations arising
after the date of receipt by Xxxxxx of such written notice which are unrelated
to Guaranteed Obligations arising or transactions entered into prior to such
date. Without limiting the foregoing, this Guarantee may not be terminated and
shall continue so long as the Loan Agreement shall be in effect (whether during
its original term or any renewal, substitution or extension thereof).
7. REINSTATEMENT. If after receipt of any payment of, or proceeds
of collateral applied to the payment of, any of the Guaranteed Obligations,
Lender is required to surrender or return such payment or proceeds to any Person
for any reason, then the Guaranteed Obligations intended to be satisfied by such
payment or proceeds shall be reinstated and continue and this Guarantee shall
continue in full force and effect as if such payment or proceeds had not been
received by Lender. Guarantor shall be liable to pay to Lender, and does
indemnify and hold Lender harmless for the amount of any payments or proceeds
surrendered or returned. This Section 7 shall remain effective notwithstanding
any contrary action which may be taken by Xxxxxx in reliance upon such payment
or proceeds. This Section 7 shall survive the termination or revocation of this
Guarantee.
8. AMENDMENTS AND WAIVERS. Neither this Guarantee nor any
provision hereof shall be amended, modified, waived or discharged orally or by
course of conduct, but only by a written agreement signed by an authorized
officer of Lender. Lender shall not by any act, delay, omission or otherwise be
deemed to have expressly or impliedly waived any of its rights, powers and/or
remedies unless such waiver shall be in writing and signed by an authorized
officer of Lender. Any such waiver shall be enforceable only to the extent
specifically set forth therein. A waiver by Lender of any right, power and/or
remedy on any one occasion shall not be construed as a bar to or waiver of any
such right, power and/or remedy which Lender would otherwise have on any future
occasion, whether similar in kind or otherwise.
9. CORPORATE EXISTENCE, POWER AND AUTHORITY. Guarantor is a
corporation duly organized and in good standing under the laws of its state or
other jurisdiction of incorporation and is duly qualified as a foreign
corporation and in good standing in all states or other jurisdictions where the
nature and extent of the business transacted by it or the ownership of assets
makes such qualification necessary, except for those jurisdictions in which the
failure to so qualify would not have a materia adverse effect on the financial
condition, results of operation or businesses of Guarantor or the rights of
Lender hereunder or under any of the other Financing Agreements. The execution,
delivery and performance
of this Guarantee is within the corporate powers of Guarantor, have been duly
authorized and are not in contravention of law or the terms of the certificates
of incorporation, by-laws, or other organizational documentation of Guarantor,
or any indenture, agreement or undertaking to which Guarantor is a party or by
which Guarantor or its property are bound. This Guarantee constitutes the legal,
valid and binding obligation of Guarantor enforceable in accordance with its
terms.
10. GOVERNING LAW; CHOICE OF FORUM; SERVICE OF PROCESS; JURY TRIAL
WAIVER.
(a) The validity, interpretation and enforcement of this
Guarantee and any dispute arising out of the relationship between Guarantor and
Lender, whether in contract, tort, equity or otherwise, shall be governed by the
internal laws of the Commonwealth of Massachusetts (without giving effect to
principles of conflicts of law).
(b) Guarantor hereby irrevocably consents and submits to
the non-exclusive jurisdiction of the Suffolk County Superior Court of the
Commonwealth of Massachusetts and the United States District Court for the
District of Massachusetts and waives any objection based on venue or FORUM NON
CONVENIENS with respect to any action instituted therein arising under this
Guarantee or any of the other Financing Agreements or in any way connected with
or related or incidental to the dealings of Guarantor and Lender in respect of
this Guarantee or any of the other Financing Agreements or the transactions
related hereto or thereto, in each case whether now existing or hereafter
arising and whether in contract, tort, equity or otherwise, and agrees that any
dispute arising out of the relationship between Guarantor or Borrower and Lender
or the conduct of any such persons in connection with this Guarantee, the other
Financing Agreements or otherwise shall be heard only in the courts described
above (except that Lender shall have the right to bring any action or proceeding
against Guarantor or its property in the courts of any other jurisdiction which
Lender deems necessary or appropriate in order to realize on any collateral at
any time granted by Borrower or Guarantor to Lender or to otherwise enforce its
rights against Guarantor or its property).
(d) Guarantor hereby waives personal service of any and
all process upon it and consents that all such service of process may be made by
certified mail (return receipt requested) directed to its address set forth on
the signature pages hereof and service so made shall be deemed to be completed
five (5) days after the same shall have been so deposited in the U.S. mails, or,
at Lender's option, by service upon Guarantor in any other manner provided under
the rules of any such courts. Within thirty (30) days after such service,
Guarantor shall appear in answer to such process, failing which Guarantor shall
be deemed in default and judgment may be entered by Lender against Guarantor for
the amount of the claim and other relief requested.
(d) GUARANTOR HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF
ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS GUARANTEE OR
ANY OF THE OTHER FINANCING AGREEMENTS
OR (ii) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF
GUARANTOR AND LENDER IN RESPECT OF THIS GUARANTEE OR ANY OF THE OTHER FINANCING
AGREEMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER
NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR
OTHERWISE. GUARANTOR HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND
THAT GUARANTOR OR LENDER MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS
AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF XXXXXXXXX AND
XXXXXX TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(e) Lender shall not have any liability to Guarantor
(whether in tort, contract, equity or otherwise) for losses suffered by
Guarantor in connection with, arising out of, or in any way related to the
transactions or relationships contemplated by this Guarantee, or any act,
omission or event occurring in connection herewith, unless it is determined by a
final and non-appealable judgment or court order binding on Lender that the
losses were the result of acts or omissions constituting gross negligence or
willful misconduct. In any such litigation, Xxxxxx shall be entitled to the
benefit of the rebuttable presumption that it acted in good faith and with the
exercise of ordinary care in the performance by it of the terms of the Loan
Agreement and the other Financing Agreements.
11. NOTICES. All notices, requests and demands hereunder shall be
in writing and (a) made to Lender at its address set forth above and to
Guarantor at its chief executive office set forth below, or to such other
address as either party may designate by written notice to the other in
accordance with this provision, and (b) deemed to have been given or made: if
delivered in person, immediately upon delivery; if by telex, telegram or
facsimile transmission, immediately upon sending and upon confirmation of
receipt; if by nationally recognized overnight courier service with instructions
to deliver the next business day, one (1) business day after sending; and if by
certified mail, return receipt requested, five (5) days after mailing.
12. PARTIAL INVALIDITY. If any provision of this Guarantee is held
to be invalid or unenforceable, such invalidity or unenforceability shall not
invalidate this Guarantee as a whole, but this Guarantee shall be construed as
though it did not contain the particular provision held to be invalid or
unenforceable and the rights and obligations of the parties shall be construed
and enforced only to such extent as shall be permitted by applicable law.
13. ENTIRE AGREEMENT. This Guarantee represents the entire
agreement and understanding of this parties concerning the subject matter
hereof, and supersedes all other prior agreements, understandings, negotiations
and discussions, representations, warranties, commitments, proposals, offers and
contracts concerning the subject matter hereof, whether oral or written.
14. SUCCESSORS AND ASSIGNS. This Guarantee shall be binding upon
Guarantor and its successors and assigns and shall inure to the benefit of
Lender and its successors, endorsees, transferees and assigns. The liquidation,
dissolution or termination of Guarantor shall not terminate this Guarantee as to
such entity or as to Guarantor.
15. CONSTRUCTION. All references to the term "Guarantor" wherever
used herein shall mean Guarantor and its successors and assigns (including,
without limitation, any receiver, trustee or custodian for Guarantor or any of
its assets or Guarantor in its capacity as debtor or debtor-in-possession under
the United States Bankruptcy Code). All references to the term "Lender" wherever
used herein shall mean Lender and its successors and assigns and all references
to the term "Borrower" wherever used herein shall mean Borrower and its
successors and assigns (including, without limitation, any receiver, trustee or
custodian for Borrower or any of its assets or Borrower in its capacity as
debtor or debtor-in-possession under the United States Bankruptcy Code). All
references to the term "Person" or "person" wherever used herein shall mean any
individual, sole proprietorship, partnership, corporation (including, without
limitation, any corporation which elects subchapter S status under the Internal
Revenue Code of 1986, as amended), limited liability company, limited liability
partnership, business trust, unincorporated association, joint stock
corporation, trust, joint venture or other entity or any government or any
agency or instrumentality or political subdivision thereof. All references to
the plural shall also mean the singular and to the singular shall also mean the
plural.
IN WITNESS WHEREOF, Xxxxxxxxx has executed and delivered this Guarantee
as an instrument under seal as of the day and year first above written.
ATTEST: PLANET ENTERTAINMENT
CORPORATION
By:
------------------------ ------------------------------
Secretary/Clerk
Title:
---------------------------
[CORPORATE SEAL]
CHIEF EXECUTIVE OFFICE
000 Xxxxxxx 00, X.X. Box 4085
Middletown, NJ 07748
STATE OF )
) ss.:
COUNTY OF )
On this ____ day of September, 1998, before me personally came
_________________ _____________________, to me known, who stated that he is the
____________________ of Planet Entertainment Corporation, the corporation
described in and which executed the foregoing instrument; and that he signed his
name thereto by order of the Board of Directors of said corporation.
__________________________ , Notary
Public
My Commission Expires:
