Exhibit 10.2
GUARANTY
GUARANTY, dated as of December 23, 1999, by XXXXXXXXX XXXXX HOLDING,
INC., a Delaware corporation ("CRH"), XXXXXXXXX XXXXX MERCHANDISING, INC., a
California corporation, and certain other Subsidiaries of the Borrower (as
hereinafter defined) which may become parties hereto (each a "Guarantor", and,
collectively, the "Guarantors") in favor of (a) BANKBOSTON, N.A., a national
banking association, as agent (hereinafter, in such capacity, the "Agent") for
itself and the other lending institutions (hereinafter, collectively, the
"Banks") which are or may become parties to that certain Revolving Credit
Agreement, dated as of December 23, 1999 (as may be amended and in effect from
time to time, the "Credit Agreement"), by and among Xxxxxxxxx Xxxxx, Inc. (the
"Borrower"), CRH, the Banks and the Agent and (b) each of the Banks.
WHEREAS, the Borrower and the Guarantors are members of a group of
related corporations, the success of any one of which is dependent in part on
the success of the other members of such group;
WHEREAS, each of the Guarantors expects to receive substantial direct
and indirect benefits from the extensions of credit to the Borrower by the Banks
pursuant to the Credit Agreement (which benefits are hereby acknowledged);
WHEREAS, it is a condition precedent to the Banks making any loans or
otherwise extending credit to the Borrower under the Credit Agreement that each
of the Guarantors execute and deliver to the Agent, for the benefit of the Banks
and the Agent, a guaranty substantially in the form hereof; and
WHEREAS, each of the Guarantors wishes to guaranty the Borrower's
obligations to the Banks under or in respect of the Credit Agreement as provided
herein;
NOW, THEREFORE, in consideration of these premises (the foregoing
recitals being part of this Guaranty), each of the Guarantors hereby jointly and
severally agrees with the Banks and the Agent as follows:
1. DEFINITIONS. The term "Obligations" and all other capitalized terms
used herein without definition shall have the respective meanings provided
therefor in the Credit Agreement.
2. GUARANTY OF PAYMENT AND PERFORMANCE. Each of the Guarantors hereby
jointly and severally guarantees to the Banks and the Agent the full and
punctual payment when due (whether at stated maturity, by required pre-payment,
by acceleration or otherwise), as well as the performance, of all of the
Obligations including all such which would become due but for the operation of
the automatic stay pursuant to Section 362(a) of the Federal Bankruptcy Code and
the operation of Section 502(b) and 506(b) of the Federal Bankruptcy Code. This
Guaranty is an absolute, unconditional and continuing guaranty of the full and
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punctual payment and performance of all of the Obligations and not of their
collectibility only and is in no way conditioned upon any requirement that the
Agent or any Bank first attempt to collect any of the Obligations from the
Borrower or resort to any collateral security or other means of obtaining
payment. Should the Borrower default in the payment or performance of any of the
Obligations, the joint and several obligations of the Guarantors hereunder with
respect to such Obligations in default shall become immediately due and payable
to the Agent, for the benefit of the Banks and the Agent, without demand or
notice of any nature, all of which are expressly waived by each of the
Guarantors. Payments by the Guarantors hereunder may be required by the Agent on
any number of occasions.
3. GUARANTORS' AGREEMENT TO PAY ENFORCEMENT COSTS, ETC. Each of the
Guarantors further agrees, as the principal obligor and not as a guarantor only,
to pay to the Agent, on demand, all costs and expenses (including court costs
and reasonable legal expenses) incurred or expended by the Agent in connection
with the Obligations, this Guaranty and the enforcement thereof, together with
interest on amounts recoverable under this Section 3 from the time when such
amounts become due until payment, whether before or after judgment, at the rate
of interest for overdue principal set forth in the Credit Agreement, PROVIDED
that if such interest exceeds the maximum amount permitted to be paid under
applicable law, then such interest shall be reduced to such maximum permitted
amount.
4. WAIVERS BY GUARANTORS; BANK'S FREEDOM TO ACT. Each of the Guarantors
agrees that the Obligations will be paid and performed strictly in accordance
with their respective terms, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Agent or any Bank with respect thereto. To the fullest extent
permitted by law, each of the Guarantors waives promptness, diligences,
presentment, demand, protest, notice of acceptance, notice of any Obligations
incurred and all other notices of any kind, all defenses which may be available
by virtue of any valuation, stay, moratorium law or other similar law now or
hereafter in effect, any right to require the marshalling of assets of the
Borrower or any other entity or other person primarily or secondarily liable
with respect to any of the Obligations, and all suretyship defenses generally.
Without limiting the generality of the foregoing, each of the Guarantors agrees
to the provisions of any instrument evidencing, securing or otherwise executed
in connection with any Obligation and agrees that the obligations of each of the
Guarantors hereunder shall not be released or discharged, in whole or in part,
or otherwise affected by (i) the failure of the Agent or any Bank to assert any
claim or demand or to enforce any right or remedy against the Borrower or any
other entity or other person primarily or secondarily liable with respect to any
of the Obligations; (ii) any extensions, compromise, refinancing, consolidation
or renewals of any Obligation; (iii) any change in the time, place or manner of
payment of any of the Obligations or any rescissions, waivers, compromise,
refinancing, consolidation, or other amendments or modifications of any of the
terms or provisions of the Credit Agreement, the Notes, the other Loan Documents
or any other agreement evidencing, securing or otherwise executed
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in connection with any of the Obligations; (iv) the addition, substitution or
release of any entity or other person primarily or secondarily liable for any
Obligation, (v) the adequacy of any rights which the Agent or any Bank may have
against any collateral security or other means of obtaining repayment of any of
the Obligations; (vi) the impairment of any collateral securing any of the
Obligations, including without limitation the failure to perfect or preserve any
rights which the Agent or any Bank might have in such collateral security or the
substitution, exchange, surrender, release, loss or destruction of any such
collateral security; or (vii) to the fullest extent permitted by law, any other
act or omission which might in any manner or to any extent vary the risk of any
of the Guarantors or otherwise operate as a release or discharge of any of the
Guarantors, all of which may be done without notice to the Guarantors. To the
fullest extent permitted by law, each of the Guarantors hereby expressly waives
any and all rights or defenses arising by reason of (A) any "one action" or
"anti-deficiency" law which would otherwise prevent the Agent or any Bank from
bringing any action, including any claim for a deficiency, or exercising any
other right or remedy (including any right of set-off), against any of the
Guarantors before or after the Agent's or such Bank's commencement or completion
of any foreclosure action, whether judicially, by exercise of power of sale or
otherwise, or (B) any other law which in any other way would otherwise require
any election of remedies by the Agent or any Bank.
5. UNENFORCEABILITY OF OBLIGATIONS AGAINST BORROWER. If for any reason
the Borrower has no legal existence or is under no legal obligation to discharge
any of the Obligations, or if any of the Obligations have become irrecoverable
from the Borrower by reason of the Borrower's insolvency, bankruptcy or
reorganization or by other operation of law or for any other reason, this
Guaranty shall nevertheless be binding on each of the Guarantors to the same
extent as if each of the Guarantors at all times had been the principal obligor
on all such Obligations. In the event that acceleration of the time for payment
of any of the Obligations is stayed upon the insolvency, bankruptcy or
reorganization of the Borrower, or for any other reason, all such amounts
otherwise subject to acceleration under the terms of the Credit Agreement, the
Notes, the other Loan Documents or any other agreement evidencing, securing or
otherwise executed in connection with any Obligation shall be immediately due
and payable by each of the Guarantors.
6. SUBROGATION; SUBORDINATION.
6.1. WAIVER OF RIGHTS AGAINST BORROWER. Until the final
payment and performance in full of all of the Obligations and any and
all other obligations of the Borrower to the Agent or any Bank or any
affiliate of the Agent or such Bank, none of the Guarantors shall
exercise any rights against the Borrower arising as a result of payment
by such Guarantor hereunder, by way of subrogation, reimbursement,
restitution, contribution or otherwise, and will not prove any claim in
competition with the Agent or any Bank or such affiliate in respect of
any payment hereunder in any bankruptcy, insolvency or reorganization
case or proceedings of any nature; none of the Guarantors will claim
any
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setoff, recoupment or counterclaim against the Borrower in respect of
any liability of such Guarantor to the Borrower; and each of the
Guarantors waives any benefit of and any right to participate in any
collateral security which may be held by the Agent or any Bank or any
such affiliate.
6.2. SUBORDINATION. The payment of any amounts due with
respect to any indebtedness of the Borrower now or hereafter owed to
any of the Guarantors is hereby subordinated to the prior payment in
full of all of the Obligations and any and all other obligations of the
Borrower to the Agent or any Bank or any affiliate of the Agent or any
Bank. Each of the Guarantors agrees that, after the occurrence of any
default in the payment or performance of any of the Obligations, such
Guarantor will not demand, xxx for or otherwise attempt to collect any
such indebtedness of the Borrower to such Guarantor until all of the
Obligations shall have been paid in full. If, notwithstanding the
foregoing sentence, any Guarantor shall collect, enforce or receive any
amounts in respect of such indebtedness, such amounts shall be
collected, enforced and received by such Guarantor as trustee for the
Banks and the Agent and be paid over to the Agent, for the benefit of
the Banks, on account of the Obligations without affecting in any
manner the liability of the Guarantor under the other provisions of
this Guaranty.
6.3. PROVISIONS SUPPLEMENTAL. The provisions of this Section 6
shall be supplemental to and not in derogation of any rights and
remedies of the Agent or any Bank or any affiliate of the Agent or any
Bank under any separate subordination agreement which the Agent or any
Bank or such affiliate may at any time and from time to time enter into
with any Guarantor.
7. SECURITY; SETOFF. Each of the Guarantors grants to the Agent, for
the benefit of the Banks, as security for the full and punctual payment and
performance of all of such Guarantor's obligations hereunder, a continuing lien
on and security interest in all securities or other property belonging to such
Guarantor now or hereafter held by the Banks and the Agent and in all deposits
(general or special, time or demand, provisional or final) and other sums
credited by or due from the Banks and the Agent to such Guarantor or subject to
withdrawal by such Guarantor. Regardless of the adequacy of any collateral
security or other means of obtaining payment of any of the Obligations, the
Agent is hereby authorized at any time and from time to time, when an Event of
Default has occurred and is continuing without notice to any of the Guarantors
(any such notice being expressly waived by each of the Guarantors) and to the
fullest extent permitted by law, to set off and apply such deposits and other
sums against the obligations of each of the Guarantors under this Guaranty,
whether or not the Agent shall have made any demand under this Guaranty and
although such obligations may be contingent or unmatured.
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8. FURTHER ASSURANCES. Each of the Guarantors also agrees to do all
such things and execute all such documents as the Agent may consider necessary
or desirable to give full effect to this Guaranty and to perfect and preserve
the rights and powers of the Banks and the Agent hereunder. Each of the
Guarantors acknowledges and confirms that such Guarantor itself has established
its own adequate means of obtaining from the Borrower on a continuing basis all
information desired by such Guarantor concerning the financial condition of the
Borrower and that such Guarantor will look to the Borrower and not to the Agent
or any Bank in order for such Guarantor to keep adequately informed of changes
in the Borrower's financial condition.
9. REINSTATEMENT. After the termination of this Guaranty, this Guaranty
shall continue to be effective or be reinstated if at any time any payment made
or value received with respect to any Obligation is rescinded or must otherwise
be returned by the Agent or any Bank upon the insolvency, bankruptcy or
reorganization of the Borrower, or otherwise, all as though such payment had not
been made or value received.
10. SUCCESSORS AND ASSIGNS. This Guaranty shall be binding upon each of
the Guarantors, their successors and assigns, and shall inure to the benefit of
and be enforceable by the Agent and the Banks and their successors, transferees
and assigns. Without limiting the generality of the foregoing sentence and
except as limited by the Credit Agreement, the Agent or any Bank may assign or
otherwise transfer the Credit Agreement, the Notes, the other Loan Documents or
any other agreement or note held by it evidencing, securing or otherwise
executed in connection with the Obligations, or sell participations in any
interest therein, to any other entity or other person, and such other entity or
other person shall thereupon become vested, to the extent set forth in the
agreement evidencing such assignment, transfer or participation, with all the
rights in respect thereof granted to the Agent or such Bank herein.
11. AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of
this Guaranty nor consent to any departure by any of the Guarantors therefrom
shall be effective unless the same shall be in writing and signed by the Agent.
No failure on the part of the Agent or any Bank to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right.
12. NOTICES. All notices and other communications called for hereunder
shall be made in writing and, unless otherwise specifically provided herein,
shall be deemed to have been duly made or given when delivered by hand or mailed
by United States registered or certified first class, postage prepaid, or, sent
by overnight courier, or if sent by telecopy or telefax, when such telecopy or
telefax is transmitted to the appropriate telecopy or telefax number and
telephonic confirmation of receipt thereof is obtained, addressed as follows: if
to a Guarantor, at the address set forth beneath its signature hereto, and if to
the Banks, at the address for notices to the Agent set forth in Section 20 of
the Credit
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Agreement, or at such address as either party may designate in writing to the
other.
13. JOINT AND SEVERAL LIABILITIES. (a) Each of the Guarantors is
accepting unlimited joint and several liability hereunder and in consideration
of the financial accommodations to be provided by the Agent and the Banks under
the Loan Documents, for the mutual benefit, directly and indirectly, of each of
the Guarantors and in consideration of the undertakings of each other Guarantor
to accept joint and several liability for the Obligations.
(b) Each of the Guarantors, jointly and severally, hereby irrevocably
and unconditionally accepts, not merely as a surety but also as a co-debtor,
joint and several liability with the other Guarantors, with respect to the
payment and performance of all of the Obligations arising under this Guaranty
(including, without limitation, any Obligations arising under this Section 13),
it being the intention of the parties hereto that all such Obligations shall be
joint and several Obligations of each of the Guarantors without preferences or
distinction among them.
(c) If and to the extent that any of the Guarantors shall fail to make
any payment with respect to such Guarantor's Obligations as and when due or to
perform such Guarantor's Obligations in accordance with the terms thereof, then
in each such event the other Guarantors will make such payment with respect to,
or perform, such Obligation.
(d) The Obligations of each of the Guarantors under the provisions of
this Section 13 constitute full recourse Obligations of each of the Guarantors,
enforceable against each such Guarantor to the full extent of its properties and
assets, irrespective of the validity, regularity or enforceability of this
Guaranty or any other circumstance whatsoever.
(e) Except as otherwise expressly provided in this Guaranty, each of
the Guarantors hereby waives notice of acceptance of its joint and several
liability, notice of any Loans made under the Agreement, notice of the
occurrence of any default, notice of any action at any time taken or omitted by
the Agent or the Banks under or in respect of any of the Obligations, any
requirement of diligence or mitigation of damages and, generally, to the extent
permitted by applicable law, all demands, notices and other formalities of every
kind in connection with this Guaranty. Each of the Guarantors hereby assents to,
and waives notice of, any extension or postponement of the time for the payment
of any of the Obligations, the acceptance of any partial payment thereon, any
waiver, consent or other action or acquiescence by the Agent or any Bank at any
time or times in respect of any default by any of the Guarantors in the
performance or satisfaction of any term, covenant, condition or provision of
this Guaranty, any and all other indulgences whatsoever by the Agent or any Bank
in respect of any of the Obligations, and the taking, addition, substitution or
release, in whole or in part, at any time or times, of any security for any of
the Obligations or the addition, substitution or release, in whole or in part,
of any of the Guarantors. Without limiting the generality of the foregoing,
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each of the Guarantors assents to any other action or delay in acting or failing
to act on the part of the Agent or any Bank with respect to the failure by any
of the Guarantors to comply with any of its respective Obligations, including,
without limitation, any failure strictly or diligently to assert any right or to
pursue any remedy or to comply fully with applicable laws or regulations
thereunder, which might, but for the provisions of this Section 13, afford
grounds for terminating, discharging or relieving any of the Guarantors, in
whole or in part, from any of its Obligations under this Section 13, it being
the intention of each of the Guarantors that, so long as any of the Obligations
hereunder remain unsatisfied, the Obligations of the Guarantors under this
Section 13 shall not be discharged except by performance and then only to the
extent of such performance. The Obligations of each of the Guarantors under this
Section 13 shall not be diminished or rendered unenforceable by any winding up,
reorganization, arrangement, liquidation, reconstruction or similar proceeding
with respect to any of the Guarantors or the Agent or any Bank. The joint and
several liability of each Guarantor hereunder shall continue in full force and
effect notwithstanding any absorption, merger, amalgamation or any other change
whatsoever in the name, membership, constitution or place of formation of any
Guarantor or the Agent or any Bank. Each of the Guarantors hereby waives any and
all defenses based on suretyship and any and all defenses that might be
available under applicable law.
(f) The provisions of this Section 13 are made for the benefit of the
Agent, the Banks and their respective successors and assigns, and may be
enforced by any of them from time to time against any or all of the Guarantors
as often as occasion therefor may arise and without requirement on the part of
the Agent or any Bank first to xxxxxxxx any of its claims or to exercise any of
its rights against any other Guarantor or to exhaust any remedies available to
it against any other Guarantor or to resort to any other source or means of
obtaining payment of any of the Obligations hereunder or to elect any other
remedy. The provisions of this Section 13 shall remain in effect until all of
the Company's obligations under the Loan Documents shall have been finally paid
in full or otherwise fully satisfied. If at any time, any payment, or any part
thereof, made in respect of any of the Obligations, is rescinded or must
otherwise be restored or returned by the Agent or any Bank upon the insolvency,
bankruptcy or reorganization of any of the Guarantors, or otherwise, the
provisions of this Section 13 will forthwith be reinstated and in effect, as
though such payment has not been made.
(g) Each Guarantor hereby agrees that it will not enforce any of its
rights of contribution or subrogation against any other Guarantor with respect
to any liability incurred by it hereunder or under any of the other Loan
Documents, any payments made by it to the Agent or any Bank with respect to any
of the Obligations or any collateral security therefor until such time as all
Obligations have been paid in full. If any payment shall be made to a Guarantor
on account of its rights under this Section 13 at any time when the Obligations
shall not have been paid in full, each and every amount so paid will forthwith
be paid over to the Agent for the ratable benefit of the Banks to be credited
and applied to the Obligations.
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14. GOVERNING LAW; CONSENT TO JURISDICTION. THIS GUARANTY IS INTENDED
TO TAKE EFFECT AS A SEALED INSTRUMENT AND SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS. Each of the
Guarantors agrees that any suit for the enforcement of this Guaranty may be
brought in the courts of the Commonwealth of Massachusetts or any federal court
sitting therein and consents to the nonexclusive jurisdiction of such court and
to service of process in any such suit being made upon such Guarantor by mail at
the address specified by reference in Section 12. Each of the Guarantors hereby
waives any objection that it may now or hereafter have to the venue of any such
suit or any such court or that such suit was brought in an inconvenient court.
15. WAIVER OF JURY TRIAL. EACH OF THE GUARANTORS HEREBY WAIVES ITS
RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY
DISPUTE IN CONNECTION WITH THIS GUARANTY, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR
THE PERFORMANCE OF ANY OF SUCH RIGHTS OR OBLIGATIONS. Except as prohibited by
law, each of the Guarantors hereby waives any right which it may have to claim
or recover in any litigation referred to in the preceding sentence any special,
exemplary, punitive or consequential damages or any damages other than, or in
addition to, actual damages. Each of the Guarantors (i) certifies that neither
the Agent or any Bank nor any representative, agent or attorney of the Agent or
such Bank has represented, expressly or otherwise, that the Agent or such Bank
would not, in the event of litigation, seek to enforce the foregoing waivers and
(ii) acknowledges that, in entering into the Credit Agreement and the other Loan
Documents to which the Banks and the Agent are parties, the Banks and the Agent
are relying upon, among other things, the waivers and certifications contained
in this ss.15.
16. MISCELLANEOUS. This Guaranty constitutes the entire agreement of
each of the Guarantors with respect to the matters set forth herein. The rights
and remedies herein provided are cumulative and not exclusive of any remedies
provided by law or any other agreement, and this Guaranty shall be in addition
to any other guaranty of or collateral security for any of the Obligations. The
invalidity or unenforceability of any one or more sections of this Guaranty
shall not affect the validity or enforceability of its remaining provisions.
Captions are for the ease of reference only and shall not affect the meaning of
the relevant provisions. The meanings of all defined terms used in this Guaranty
shall be equally applicable to the singular and plural forms of the terms
defined.
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IN WITNESS WHEREOF, each of the Guarantors has caused this Guaranty to
be executed and delivered as of the date first above written.
XXXXXXXXX XXXXX HOLDING, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Executive V.P. and Chief Financial Officer
Address: 0000 Xxxxxx Xxxxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Telecopy: 000-000-0000
XXXXXXXXX XXXXX MERCHANDISING, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
Address: 0000 Xxxxxx Xxxxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Telecopy: 000-000-0000
