1
EXHIBIT 10.3.4
GUARANTY
(FM Precision Golf Sales Corp.)
THIS GUARANTY ("Guaranty"), made by FM PRECISION GOLF SALES CORP., a
Delaware corporation ("Guarantor"), to, and for the benefit of, STAR BANK,
NATIONAL ASSOCIATION, a national banking association ("Lender"), is as follows:
1. GUARANTY.
1.1 GUARANTY. For value received and in consideration of any loan,
advance or financial accommodation of any kind whatsoever heretofore, now or
hereafter made, given or granted by Lender to FM Precision Golf Manufacturing
Corp. ("Borrower"), Guarantor unconditionally guarantees to Lender the full and
prompt payment when due of the principal of, all interest on, and all fees in
respect of, all of the Loans (as defined in the Financing Agreement defined
below) and the full and prompt payment and performance of any and all other
Obligations (as defined in the Financing Agreement) which are outstanding from
time to time under the Loan Documents (as defined in the Financing Agreement)
(all of the foregoing described indebtedness, liabilities and obligations which
are outstanding from time to time being hereinafter referred to as the
"Guaranteed Obligations"), whether all or any portion of the Guaranteed
Obligations are now or hereafter existing, direct or indirect, related or
unrelated, joint or several, or absolute or contingent, should all or any
portion of the Guaranteed Obligations not be paid when due under the terms of
the Loan Documents, including, without limitation, on the occurrence of an Event
of Default (as defined in the Financing Agreement), by reason of the maturity or
acceleration of any of the Loans, on the occurrence of a default under the terms
of this Guaranty, or otherwise, and at any times after the date when due. The
"Financing Agreement" means the Financing Agreement of even date herewith
between Lender, Guarantor and Borrower. Should there be any conflict between the
terms of this Guaranty (i.e., the terms in SECTION 2 and SECTION 5 of this
Guaranty) and the terms of the Financing Agreement, the conflict shall be
controlled by the terms of the Financing Agreement.
1.2 SECURED OBLIGATIONS. The obligations of Guarantor under this
Guaranty constitute part of the Obligations (as defined in the Financing
Agreement), and, as such, are secured by the Loan Collateral (as defined in the
Financing Agreement).
2. NATURE OF THE GUARANTY.
2.1 ABSOLUTE OBLIGATIONS. The obligations of Guarantor under this
Guaranty are absolute, unconditional, and will be continuing and remain in full
force and effect subject to SECTION 2.2 below. This is a continuing guaranty of
payment and not of collection. Guarantor's obligations under this Guaranty will
not be released, discharged, affected, modified or impaired by any event,
including, without limitation, any of the following events:
(i) the compromise, settlement, release, discharge or
termination of any or all of the obligations of Borrower to Lender by operation
of law or otherwise, except as may result from the full and prompt performance
and payment of the Guaranteed Obligations;
2
(ii) the extension of the time for payment of any obligation
under the Financing Agreement or any of the other Loan Documents, or the waiver,
modification or amendment (whether material or otherwise) of any obligation
under the Financing Agreement or any of the other Loan Documents or the
acceptance of partial payments of the Guaranteed Obligations;
(iii) the taking or failure to take any action under the
Financing Agreement, any of the other Loan Documents or this Guaranty;
(iv) the invalidity or unenforceability of any provision of
the Financing Agreement, any of the other Loan Documents, or this Guaranty;
(v) any (a) failure by Lender to take any steps to perfect,
maintain, or enforce its Liens (as defined in the Financing Agreement) on the
Loan Collateral (as defined in the Financing Agreement) or (b) loss, release,
substitution of, or other dealing with, any collateral or other security given
to Lender with respect to the Guaranteed Obligations;
(vi) the voluntary or involuntary liquidation, dissolution,
sale or other disposition of all or substantially all of the assets, the
marshalling of assets and liabilities, receivership, insolvency, bankruptcy,
assignment, composition with creditors or readjustment of, or other similar
proceedings affecting Borrower, Guarantor or any other guarantor of the
Obligations;
(vii) any allegation of invalidity or contest of the validity
of this Guaranty in any of the proceedings described in clause (vi) of this
SECTION 2.1;
(viii) any act, election or remedy, or other election,
occurrence or circumstance of any nature, whether or not under Lender's control,
that may affect or impair any subrogation right of Guarantor or the
effectiveness or value thereof;
(ix) the default or failure of Guarantor to perform fully any
of its obligations set forth in this Guaranty;
(x) Lender's election, in any proceeding instituted under
Chapter 11 of Title 11 of the United States Code (11 U.S.C. Section 101 ET SEQ.)
(the "Bankruptcy Code"), of the application of Section 1111(b)(2) of the
Bankruptcy Code;
(xi) any borrowing or grant of a security interest by
Borrower, as debtor-in-possession, under Section 364 of the Bankruptcy Code;
(xii) the disallowance of all or any portion of Lender's
claim(s) for repayment of the Guaranteed Obligations under Section 502 of the
Bankruptcy Code; or
(xiii) any other circumstance which might otherwise constitute
a legal or equitable discharge or defense of a guarantor.
2
3
2.2 REVIVAL OF GUARANTY. If (i) any demand is made at any time on
Lender for the repayment of any amount received by it or as proceeds of any
collateral or security which have been applied in payment of any of the
Guaranteed Obligations, and (ii) Lender makes any repayment by reason of any
judgment, decree or order of any court or administrative body or by reason of
any settlement or compromise of such demand, Guarantor will be liable under this
Guaranty for all amounts so repaid to the same extent as if such amounts had
never been received originally by Lender.
2.3 WAIVERS BY GUARANTOR. Guarantor hereby covenants that this Guaranty
will not be discharged except by complete performance of the obligations
contained in this Guaranty. Guarantor waives all setoffs and counterclaims and
all presentments, demands for performance, notices of nonperformance, protests,
notices of protest, notices of dishonor, notices of acceptance of, and reliance
on this Guaranty. Guarantor further waives all (i) notices of the existence,
creation or incurring of new or additional indebtedness, arising either from
additional loans extended to Borrower or otherwise, (ii) notices that the
principal amount, or any portion thereof (and any interest thereon), of the
Loans or any of the other Guaranteed Obligations is due, (iii) notices of any
and all proceedings to collect from Borrower, any indorser or any other
guarantor of all or any part of the Guaranteed Obligations, or from anyone else,
and (iv), to the extent permitted by law, notices of exchange, sale, surrender
or other handling of any security or collateral given to Lender to secure
payment of all or any part of the Guaranteed Obligations.
2.4 APPLICATION OF PROCEEDS BY LENDER. Lender will have the exclusive
right to determine in its discretion the application of payments from, and
credits to, if any, Guarantor, Borrower or from any other Person (as defined in
the Financing Agreement) on account of the Guaranteed Obligations or of any
other liability of Guarantor to Lender.
2.5 RESPONSIBILITY OF GUARANTOR. Guarantor hereby assumes
responsibility for keeping itself informed of the financial condition of
Borrower, and any and all indorsers and other guarantors of any instrument or
document evidencing all or any part of the Guaranteed Obligations and of all
other circumstances bearing on the risk of nonpayment of the Guaranteed
Obligations or any part thereof that diligent inquiry would reveal. Lender will
have no duty to advise Guarantor of information known to Lender regarding such
condition or any such circumstances.
3. REPRESENTATIONS AND WARRANTIES. To induce Lender to extend the Guaranteed
Obligations, and for other good and valuable consideration, Guarantor hereby
represents and warrants to Lender that: (i) this Guaranty is the legal, valid
and binding obligation of Guarantor, enforceable in accordance with its terms;
(ii) the execution, delivery, and performance of this Guaranty does not and will
not violate or contravene (a) any authority having the force of law, (b) any
provision of Guarantor's Certificate of Incorporation or By-Laws, or (c) any
"Applicable Agreement" (as defined in the Financing Agreement) to which
Guarantor is a party or by which Guarantor or any of its properties is or may be
bound; and (iii) there is no action or proceeding pending before any court or
governmental instrumentality or agency which materially, adversely affects the
condition (financial or otherwise) of Guarantor or any of its properties.
3
4
4. EXPENSES. Guarantor will pay all of the reasonable costs, expenses and fees,
including, without limitation, all reasonable attorneys' fees, incurred by
Lender in enforcing or attempting to enforce this Guaranty following any default
on the part of Guarantor, whether the same is enforced by suit or otherwise, and
all amounts recoverable by law, including, without limitation, interest on any
unpaid amounts due under this Guaranty.
5. DEFAULT; SUBROGATION AND CONTRIBUTION RIGHTS; SUBORDINATION.
5.1 PAYMENT OF GUARANTEED OBLIGATIONS. At any time after all or any
portion of the Guaranteed Obligations are due and payable, whether on maturity,
after the acceleration of any of the Loans, on the occurrence of an Event of
Default (as defined in the Financing Agreement), on the occurrence of any
default under this Guaranty, or otherwise: (i) Lender will have the right (a) to
proceed directly against Guarantor under this Guaranty without first exhausting
any other remedy it may have and without resorting to any security or guaranty
held by it and (b) to compromise, settle, release, discharge or terminate any of
the obligations of any other guarantor(s) of the Guaranteed Obligations as
Lender, in its sole discretion, determines without thereby in any way affecting,
limiting or diminishing its rights thereafter to enforce the obligations of
Guarantor under this Guaranty; (ii) Guarantor will, on the demand of Lender,
immediately deposit with Lender in U.S. dollars the total amount of the
Guaranteed Obligations; (iii) Lender will have the right to sell, collect, or
otherwise dispose of and to apply the proceeds of any collateral or other
security given to Lender with respect to the Guaranteed Obligations in
satisfaction of the Guaranteed Obligations; and (iv) Lender will have the right
to exercise all of Lender's other powers, rights and remedies under the Loan
Documents and under applicable law. Lender will have no obligation to xxxxxxxx
any assets in favor of Guarantor or against or in payment of any or all of the
Guaranteed Obligations.
5.2 SUBROGATION; CONTRIBUTION. Each of Guarantor, Borrower and FM
Precision Golf Corp., a Delaware corporation ("Parent Company"), is guaranteeing
the full and prompt payment and performance of the Guaranteed Obligations under
a separate guaranty. It is the intent of Guarantor, Borrower and Parent Company
(each of Guarantor, Borrower and Parent Company being sometimes called an
"Obligor") that this Guaranty and the guaranty of each other Obligor (this
Guaranty and the guaranty of each other Obligor being called, collectively, the
"Guaranties") not be subject to challenge on any basis. Accordingly, as of the
date of this Guaranty, the probable liability of Guarantor under this Guaranty,
together with all of its other liabilities to all Persons as of the date of this
Guaranty and as of any other date on which a transfer is deemed to occur by
virtue of the Loan Documents, calculated in amount sufficient to pay its
probable net liabilities on its existing debts as the same become absolute and
matured ("GUARANTOR'S DATED LIABILITIES") is, and is to be, less than the amount
of the aggregate of the present fair salable value of its property, and, if
different, at a fair valuation thereof, as of such corresponding date
("GUARANTOR'S DATED ASSETS"). To this end, Guarantor (i) grants to and
recognizes in each Obligor ratably rights of subrogation and contribution in the
amount, if any, by which Guarantor's Dated Assets, but for the aggregate of
subrogation and contribution rights in its favor recognized in all the
Guaranties, would exceed Guarantor's Dated Liabilities or, as the case may be,
(ii) acknowledges receipt of and recognizes rights of subrogation and
contribution ratably from each Obligor in the amount, if any, by which
Guarantor's Dated
4
5
Liabilities, but for the aggregate of subrogation and contribution rights in its
favor granted and recognized in all the Guaranties, would exceed Guarantor's
Dated Assets. In recognizing the value of Guarantor's Dated Assets and
Guarantor's Dated Liabilities, it is understood that each Obligor will
recognize, to at least the same extent of its aggregate recognition of
liabilities under its respective Guaranty, its rights (including Lender's
obligations) under the Loan Documents and its rights to subrogation and
contribution under the Guaranties. It is expressly recognized and agreed to by
Guarantor that Guarantor's rights of contribution and subrogation against
Borrower is expressly junior and subordinate to the prior payment and
performance in full of the Obligations. It is a material objective of this
SECTION 5.2 that each Obligor recognize rights of subrogation and contribution
rather than be deemed to be insolvent (or in contemplation thereof) by reason of
an arbitrary interpretation of any of the Guaranties or any of the Loan
Documents.
5.3 SUBORDINATION. Until the Guaranteed Obligations have been fully
paid, performed and satisfied, (i) any and all claims of Guarantor against
Borrower, any indorser or any other guarantor of all or any part of the
Guaranteed Obligations, or against any of their respective properties are, by
signing this Guaranty, made subordinate and subject in right of payment to the
prior payment to Lender in full of all Obligations (as defined in the Financing
Agreement); and (ii) Guarantor may not exercise any right to enforce any remedy
which Guarantor now has or may in the future have against Borrower, any indorser
or any other guarantor of all or any part of the Guaranteed Obligations.
6. GENERAL.
6.1 CUMULATIVE REMEDIES. No waiver by Lender of any default under this
Guaranty will operate as a waiver of any other default or of the same default on
a future occasion. No failure or delay on the part of Lender in the exercise of
any power, remedy or right will operate as a waiver thereof nor will any single
or partial exercise of any power, remedy or right or the exercise of any other
power, remedy or right operate as a waiver thereof. Lender may assert any of its
powers, rights or remedies successively, concurrently, independently or
cumulatively. The powers, remedies and rights of Lender provided for in this
Guaranty are not intended to be Lender's sole powers, remedies and rights.
6.2 NO IMPLIED WAIVER BY LENDER; AMENDMENTS. A waiver, amendment,
release or modification of this Guaranty will not be established by conduct,
custom or course of dealing and will occur solely by an instrument in writing
duly executed by Lender.
6.3 ENTIRE AGREEMENT. This Guaranty constitutes the entire agreement
between the parties with respect to the subject matter of this Guaranty, and
supersedes all prior written and oral agreements and understandings.
6.4 COUNTERPARTS; CONSTRUCTION. This Guaranty may be executed in
several counterparts, each of which will be regarded as an original instrument.
The captions in this Guaranty are for reference purposes only and will not
relate to the interpretation of any provision of this Guaranty. Any and all
references in this Guaranty to any other document or documents will be
references to the other document or documents as they may, from time to time, be
modified, amended, renewed, consolidated, extended or replaced.
5
6
6.5 SEPARATE INSTRUMENT. This Guaranty constitutes a separate
instrument, enforceable in accordance with its terms, and neither this Guaranty
nor the obligations of Guarantor under this Guaranty will, under any
circumstance or in any legal proceeding, be deemed to have merged into any other
agreement or obligation of Guarantor.
6.6 SEVERABILITY. If any term of this Guaranty is found invalid under
Ohio law (or laws of mandatory application) by a court with jurisdiction, the
invalid term will be considered excluded from this Guaranty and will not
invalidate the remaining terms of this Guaranty.
6.7 OHIO LAW. This Guaranty will be governed by and construed in
accordance with the internal laws of the State of Ohio (without regard to Ohio
conflicts of law principles).
6.8 CHOICE OF FORUM. AS A SPECIFICALLY BARGAINED INDUCEMENT FOR LENDER
TO ACCEPT THIS GUARANTY AND TO EXTEND CREDIT TO GUARANTOR AND BORROWER,
GUARANTOR AGREES THAT ANY ACTION, SUIT OR PROCEEDING IN RESPECT OF OR ARISING
OUT OF THIS GUARANTY, ITS VALIDITY OR PERFORMANCE, AT THE SOLE OPTION OF LENDER,
ITS SUCCESSORS AND ASSIGNS, AND WITHOUT LIMITATION ON THE ABILITY OF LENDER, ITS
SUCCESSORS AND ASSIGNS, TO INITIATE AND PROSECUTE IN ANY APPLICABLE JURISDICTION
ACTIONS RELATED TO REPAYMENT OF THE GUARANTEED OBLIGATIONS, WILL BE INITIATED
AND PROSECUTED AS TO ALL PARTIES AND THEIR SUCCESSORS AND ASSIGNS AT CINCINNATI,
OHIO. LENDER AND GUARANTOR EACH CONSENTS TO AND SUBMITS TO THE EXERCISE OF
JURISDICTION OVER THEIR PERSON BY ANY COURT SITUATED AT CINCINNATI, OHIO HAVING
JURISDICTION OVER THE SUBJECT MATTER, WAIVES PERSONAL SERVICE OF ANY AND ALL
PROCESS ON THEM AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY
REGISTERED MAIL DIRECTED TO GUARANTOR AND LENDER AT THEIR RESPECTIVE ADDRESSES
AS SET FORTH IN SECTION 15.9 OF THE FINANCING AGREEMENT (OR SUCH OTHER ADDRESS
AS A PARTY MAY FROM TIME TO TIME DESIGNATE FOR ITSELF BY NOTICE TO THE OTHER
PARTY) OR AS OTHERWISE PROVIDED UNDER THE LAWS OF THE STATE OF OHIO. GUARANTOR
AND LENDER EACH WAIVES TRIAL BY JURY, AND GUARANTOR WAIVES ANY OBJECTION BASED
ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED
UNDER THIS GUARANTY.
6.9 SUCCESSORS AND ASSIGNS. This Guaranty will inure to the benefit of
Lender, its successors and assigns and be binding on the successors and assigns
of Guarantor.
6.10 NOTICES. Any notice or notification required, permitted or
contemplated hereunder shall be in writing, shall be addressed and given to the
party to be notified at the address set forth in, and in the manner required by,
SECTION 15.9 of the Financing Agreement.
6.11 SEPARATE ACTION. Each default in payment of any amount due under
this Guaranty will, at Lender's sole option, give rise to a separate cause of
action under this Guaranty, and
6
7
separate suits, at Lender's sole option, may be brought under this Guaranty as
each cause of action arises.
Guarantor has signed this Guaranty as of May 31, 1996.
FM PRECISION GOLF
SALES CORP.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxx
----------------------------
Its: Vice-President
-----------------------------
Accepted in Cincinnati, Ohio as of May 31, 1996.
STAR BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxx X. Xxxxx
-----------------------------------------------
Xxxxx X. Xxxxx , Vice President
------------------------- ------------------------
(Name) (Title)
7
