Exhibit 10 (x)
LIMITED GUARANTY
March 11, 2002
Congress Financial Corporation
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
RE: BONTEX, INC. ( "BORROWER")
Ladies and Gentlemen:
Congress Financial Corporation ("Lender") and Borrower 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 January 26, 2000, by and among 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 Guaranty (all of the foregoing, together
with the Loan Agreement and the Forbearance Agreement (as hereinafter defined
and referred to), 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").
All Obligations under the Financing Agreements become due and payable,
without further notice or demand, on the date hereof. Borrower has informed
Lender that Borrower will be unable to repay the Obligations, and therefore
Borrower is in default under the terms of the Financing Agreements. Borrower has
requested Lender to forbear from exercising its rights under the Financing
Agreements in order to permit Borrower to obtain financing from other financing
sources in order to pay the Obligations. Lender is willing to forbear pursuant
to the terms of a Loan Modification, Reaffirmation and Forbearance Agreement, of
even date herewith (the "Forbearance Agreement"), which terms include, among
other things, the execution and delivery of this Guaranty.
Due to the close business and financial relationships between Borrower
and the undersigned ("Guarantor"), in consideration of the benefits which will
accrue to Guarantor, and as an inducement for and in consideration of Lender
entering into the Forbearance Agreement, and for 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 Lender as follows:
1. Guaranty.
(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
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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 U.S. Bankruptcy Code or any similar statute (including, without
limitation, the payment of interest and other amounts that 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 Guaranty 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 among
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
U.S. Bankruptcy Code or any similar statute.
(b) This Guaranty is a guaranty of payment and not of
collection. Guarantor agrees that Lender 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, action, or action on any judgment, based on this Guaranty
is brought against Guarantor, Guarantor agrees not to deduct, set off, or seek
any counterclaim for or recoup any amounts that are or may be owed by Lender to
Guarantor.
2. Waivers and Consents.
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(a) Notice of acceptance of this Guaranty, 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 guaranty made herein shall apply
to the Loan Agreement, the other Financing Agreements, and the Guaranteed
Obligations as so amended, modified, supplemented, renewed, restated or
extended, or increased or decreased; (ii) the taking, exchange, surrender and
releasing of collateral or guaranties 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
that is security for the Guaranteed Obligations (individually, an "Obligor" and
collectively, "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 of, compromise or release of, or 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 U.S. Bankruptcy Code or consent to the use of
cash collateral by Lender under Section 363 of the U.S. 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 Guaranty, nor shall any other circumstance that might otherwise constitute
a defense available to, or a legal or equitable discharge of, Borrower in
respect of any of the Guaranteed Obligations, or Guarantor in respect of this
Guaranty, affect, impair, or be a defense to this Guaranty. 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 U.S. Bankruptcy Code or any
similar statute, Guarantor shall be liable therefor, even if Borrower' liability
for such amounts does not, or ceases to, exist by operation of law. Guarantor
acknowledges that Lender 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 Guaranty and Guarantor is not in any
respect relying upon Lender or any statements by Lender in connection with this
Guaranty.
(c) Until full final and indefeasible payment of the
Guaranteed Obligations, 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 that Guarantor might otherwise directly or indirectly
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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 guaranties 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 that 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 Lender and Borrower 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 Lender and Borrower and be binding on
Guarantor.
6. Termination. This Guaranty is continuing, absolute, and
unconditional. All Guaranteed Obligations shall be conclusively presumed to have
been created in reliance on this Guaranty. Guarantor shall continue to be liable
hereunder until one of Lender'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 Guaranty with
respect to (a) Guaranteed Obligations that 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 that 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 Lender prior to receipt of such notice. The sole effect
of such revocation or termination by Guarantor shall be to exclude from this
Guaranty the liability of Guarantor for those Guaranteed Obligations arising
after the date of receipt by Lender of such written notice that are unrelated to
Guaranteed Obligations arising or transactions entered into prior to
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such date. Without limiting the foregoing, this Guaranty 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 Guaranty 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 that may be taken by Lender in reliance upon such payment or
proceeds. This Section 7 shall survive the termination, cancellation, or
revocation of this Guaranty.
8. Amendments and Waivers. Neither this Guaranty 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 and by Guarantor. 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 that Lender would otherwise have on any
future occasion, whether similar in kind or otherwise.
9. Governing Law; Choice of Forum; Service of Process; Jury
Trial Waiver.
(a) The validity, interpretation, and enforcement of this
Guaranty 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 State of New York (without giving effect to principles
of conflicts of law).
(b) Guarantor hereby irrevocably consents and submits to the
nonexclusive jurisdiction of the U.S. District Court for the Southern District
of New York and waives any objection based on venue or forum non conveniens with
respect to any action instituted therein arising under this Guaranty 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 Guaranty,
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 his property in the courts of any other jurisdiction that Lender deems
necessary or appropriate in order to realize on any collateral at any time
granted by Borrower or Guarantor to Lender or otherwise to enforce its rights
against Guarantor or his property).
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(c) Guarantor hereby waives personal service of any and all
process upon Guarantor and consents that all such service of process may be made
by certified mail, return receipt requested, directed to his address set forth
on the signature page 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 court of competent jurisdiction. 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 GUARANTY 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
GUARANTY, 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 GUARANTOR AND LENDER HERETO TO THE WAIVER OF THEIR
RIGHTS 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 Guaranty, or any act, omission, or event
occurring in connection herewith, unless it is determined by a final and
nonappealable 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, Lender 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.
10. 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 his address 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 (i) if delivered in person, immediately
upon delivery; (ii) if by telex, telegram, or facsimile transmission,
immediately upon sending and upon confirmation of receipt; (iii) if by
nationally recognized overnight courier service with instructions to deliver the
next business day, one (1) business day after sending; (iv) and if by certified
mail, return receipt requested, five (5) days after mailing.
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11. Partial Invalidity. If any provision of this Guaranty is held to be
invalid or unenforceable, such invalidity or unenforceability shall not
invalidate this Guaranty as a whole, but this Guaranty 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.
12. Entire Agreement. This Guaranty 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.
13. Successors and Assigns. This Guaranty shall be binding upon
Guarantor and his heirs, executors, administrators, successors, and assigns and
shall inure to the benefit of Lender and its successors, endorsees, transferees,
and assigns.
14. Construction. All references to the term "Guarantor" wherever used
herein shall mean Guarantor and his heirs, executors, administrators,
successors, and assigns (including, without limitation, any receiver, trustee,
or custodian for Guarantor or any of his assets or Guarantor in his capacity as
debtor or debtor-in-possession under the U.S. 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 U.S. 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 where appropriate.
15. Limitation. Notwithstanding anything to the contrary contained in
this Guaranty, the Guarantor's liability for the Guaranteed Obligations shall
not exceed the amount of Two Hundred Fifty Thousand Dollars ($250,000) at any
time outstanding, plus interest thereon and costs, expenses, and other charges
related thereto (including, but not limited to, attorneys' fees and legal
expenses), and said amount shall not be reduced or extinguished by reason of
repayments by Borrower or disposition of collateral until such time as the
Guaranteed Obligations are fully, finally, and indefeasibly paid.
{SIGNATURE ON FOLLOWING PAGE.}
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IN WITNESS WHEREOF, Guarantor has executed and delivered this Guaranty
as of the day and year first above written.
s/ Xxxxx X. Xxxxxxxx (SEAL)
Xxxxx X. Xxxxxxxx
Address: Xxx Xxxxxx Xx.
Xxxxx Xxxxx, XX 00000
Facsimile: 000-000-0000
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STATE OF VIRGINIA )
) ss.:
CITY OF BUENA VISTA )
On this 11th day of March, 2002, before me personally came Xxxxx X.
Xxxxxxxx, to me known to be the individual described in and which executed the
foregoing instrument.
s/ Xxxxx X. Xxxxx
Notary Public
My Commission Expires July 31, 2004
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