EXHIBIT 10.4
GUARANTY BY TRUST
Phoenix, Arizona
April 10, 2002
This Guaranty, dated as of April 10, 2002, is made by Xxxxxxx Xxxxxxxx and
Xxxxx Xxxxxxxx, as Trustees of the Xxxxxxxx Family Living Trust created by
instrument dated April 11, 1994 as restated on June 29, 1995 (the "Guarantor"),
for the benefit of Xxxxx Fargo Business Credit, Inc., a Minnesota corporation
(with its participants, successors and assigns, the "Lender").
The Lender and FM Precision Golf Manufacturing Corp., a Delaware
corporation and FM Precision Golf Sale Corp., a Delaware corporation
(collectively the "Borrower"), are parties to a Credit and Security Agreement
dated October 9, 1998, as amended from time to time (as the same may be further
amended, supplemented or restated from time to time, the "Credit Agreement")
pursuant to which the Lender may make advances and extend other financial
accommodations to the Borrower.
As a condition to extending such credit to the Borrower, the Lender has
required the execution and delivery of this Guaranty.
ACCORDINGLY, the Guarantor, in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, hereby agrees as follows:
1. DEFINITIONS. All terms defined in the Credit Agreement that are not
otherwise defined herein shall have the meanings given them in the Credit
Agreement.
2. INDEBTEDNESS GUARANTEED. The Guarantor hereby absolutely and
unconditionally guarantees to the Lender the full and prompt payment on October
1, 2002 of the amount of the Revolving Advances applicable to the 2001
Overadvance Limit (as such terms are defined in the Credit Agreement) up to a
maximum of $400,000.00, plus accrued interest thereon and all reasonable
attorney's fees, collection costs and enforcement expenses referable thereto,
whether arising directly in a transaction or event involving the Lender or
acquired by the Lender from another by purchase or assignment or as collateral
security, whether owed by the Borrower as drawer, maker, endorser, accommodation
party, guarantor, principal, surety or as a member of any partnership,
syndicate, association or group or in any other capacity, whether absolute or
contingent, direct or indirect, primary or secondary, sole, joint, several or
joint and several, secured or unsecured, due or not due, contractual, tortious
or statutory, liquidated or unliquidated, arising by agreement or imposed by law
or otherwise (all of said sums being hereinafter called the "Indebtedness").
3. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. The Guarantor represents and
warrants to the Lender that (i) the Guarantor is a trust, duly organized and
existing in good standing and has full power and authority to make and deliver
this Guaranty; (ii) the execution, delivery and performance of this Guaranty by
the Guarantor have been duly authorized by all necessary action and do not and
will not violate the provisions of, or constitute a default under, any presently
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applicable law or its trust agreement or any agreement presently binding on it;
(iii) this Guaranty has been duly executed and delivered by the trustees of the
Guarantor and constitutes its lawful, binding and legally enforceable
obligation; and (iv) the authorization, execution, delivery and performance of
this Guaranty do not require notification to, registration with, or consent or
approval by, any federal, state or local regulatory body or administrative
agency. The Guarantor represents and warrants to the Lender that the Guarantor
has a direct and substantial economic interest in the Borrower and expects to
derive substantial benefits therefrom and from any loans, credit transactions,
financial accommodations, discounts, purchases of property and other
transactions and events resulting in the creation of the Indebtedness guarantied
hereby, and that this Guaranty is given for a trust purpose. The Guarantor
agrees to rely exclusively on the right to revoke this Guaranty prospectively as
to future transactions, in accordance with paragraph 4, if at any time, in the
opinion of the trustees, the benefits then being received by the Guarantor in
connection with this Guaranty are not sufficient to warrant the continuance of
this Guaranty as to the future Indebtedness of the Borrower. Accordingly, so
long as this Guaranty is not revoked prospectively in accordance with paragraph
4, the Lender may rely conclusively on a continuing warranty, hereby made, that
the Guarantor continues to be benefited by this Guaranty and the Lender shall
have no duty to inquire into or confirm the receipt of any such benefits, and
this Guaranty shall be effective and enforceable by the Lender without regard to
the receipt, nature or value of any such benefits.
4. UNCONDITIONAL NATURE. No act or thing need occur to establish the
Guarantor's liability hereunder, and no act or thing, except full payment and
discharge of all of the Indebtedness, shall in any way exonerate the Guarantor
hereunder or modify, reduce, limit or release the Guarantor's liability
hereunder. This is an absolute, unconditional and continuing guaranty of payment
of the Indebtedness and shall continue to be in force and be binding upon the
Guarantor, whether or not all of the Indebtedness is paid in full, until this
Guaranty is revoked prospectively as to future transactions, by written notice
actually received by the Lender, and such revocation shall not be effective as
to the amount of Indebtedness existing or committed for at the time of actual
receipt of such notice by the Lender, or as to any renewals, extensions,
refinancings or refundings thereof.
5. DISSOLUTION OR INSOLVENCY OF GUARANTOR. The dissolution or adjudication
of bankruptcy of the Guarantor shall not revoke this Guaranty, except upon
actual receipt of written notice thereof by the Lender and only prospectively,
as to future transactions, as herein set forth. If the Guarantor shall be
dissolved, revoked or shall be or become insolvent (however defined), then the
Lender shall have the right to declare immediately due and payable, and the
Guarantor will forthwith pay to the Lender, the full amount of all of the
Indebtedness whether due and payable or unmatured. If the Guarantor voluntarily
commences or there is commenced involuntarily against the Guarantor a case under
the United States Bankruptcy Code, the full amount of all Indebtedness, whether
due and payable or unmatured, shall be immediately due and payable without
demand or notice thereof.
6. NO IMPAIRMENT. The Indebtedness may be created and continued in any
amount, whether or not in excess of such principal amount, without affecting or
impairing the Guarantor's liability hereunder, and the Lender may pay (or allow
for the payment of) the excess out of any sums received by or available to the
Lender on account of the Indebtedness from the Borrower or any other person
(except the Guarantor), from their properties, out of any collateral security or
from any other source, and such payment (or allowance) shall not reduce, affect
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or impair the Guarantor's liability hereunder; provided that payments received
by Lender shall first be used to reduce the Overadvance Limit before being used
to reduce other indebtedness due to Lender not then due. Any payment made by the
Guarantor under this Guaranty shall be effective to reduce or discharge such
liability only if accompanied by a written transmittal document, received by the
Lender, advising the Lender that such payment is made under this Guaranty for
such purpose.
7. SUBROGATION. The Guarantor will not exercise or enforce any right of
contribution, reimbursement, recourse or subrogation available to the Guarantor
as to any of the Indebtedness, or against any person liable therefor, or as to
any collateral security therefor, unless and until all of the Indebtedness shall
have been fully paid and discharged.
8. ENFORCEMENT EXPENSES. The Guarantor will pay or reimburse the Lender for
all costs, expenses and attorneys' fees paid or incurred by the Lender in
endeavoring to collect and enforce the Indebtedness and in enforcing this
Guaranty.
9. LENDER'S RIGHTS. The Lender shall not be obligated by reason of its
acceptance of this Guaranty to engage in any transactions with or for the
Borrower. Whether or not any existing relationship between the Guarantor and the
Borrower has been changed or ended and whether or not this Guaranty has been
revoked, the Lender may enter into transactions resulting in the creation or
continuance of the Indebtedness and may otherwise agree, consent to or suffer
the creation or continuance of any of the Indebtedness, without any consent or
approval by the Guarantor and without any prior or subsequent notice to the
Guarantor. The Guarantor's liability shall not be affected or impaired by any of
the following acts or things (which the Lender is expressly authorized to do,
omit or suffer from time to time, both before and after revocation of this
Guaranty, without consent or approval by or notice to the Guarantor): (i) any
acceptance of collateral security, guarantors, accommodation parties or sureties
for any or all of the Indebtedness; (ii) one or more extensions or renewals of
the Indebtedness (whether or not for longer than the original period) or any
modification of the interest rates, maturities, if any, or other contractual
terms applicable to any of the Indebtedness or any amendment or modification of
any of the terms or provisions of any loan agreement or other agreement under
which the Indebtedness or any part thereof arose; (iii) any waiver or indulgence
granted to the Borrower, any delay or lack of diligence in the enforcement of
the Indebtedness or any failure to institute proceedings, file a claim, give any
required notices or otherwise protect any of the Indebtedness; (iv) any full or
partial release of, compromise or settlement with, or agreement not to xxx, the
Borrower or any guarantor or other person liable in respect of any of the
Indebtedness; (v) any release, surrender, cancellation or other discharge of any
evidence of the Indebtedness or the acceptance of any instrument in renewal or
substitution therefor; (vi) any failure to obtain collateral security (including
rights of setoff) for the Indebtedness, or to see to the proper or sufficient
creation and perfection thereof, or to establish the priority thereof, or to
preserve, protect, insure, care for, exercise or enforce any collateral
security; or any modification, alteration, substitution, exchange, surrender,
cancellation, termination, release or other change, impairment, limitation, loss
or discharge of any collateral security; (vii) any collection, sale, lease or
disposition of, or any other foreclosure or enforcement of or realization on,
any collateral security; (viii) any assignment, pledge or other transfer of any
of the Indebtedness or any evidence thereof; (ix) any manner, order or method of
application of any payments or credits upon the Indebtedness; and (x) any
election by the Lender under Section 1111(b) of the United States Bankruptcy
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Code. The Guarantor waives any and all defenses and discharges available to a
surety, guarantor or accommodation co-obligor.
10. WAIVERS BY GUARANTOR. The Guarantor waives any and all defenses,
claims, setoffs and discharges of the Borrower, or any other obligor, pertaining
to the Indebtedness, except the defense of discharge by payment in full. Without
limiting the generality of the foregoing, the Guarantor will not assert, plead
or enforce against the Lender any defense of waiver, release, discharge or
disallowance in bankruptcy, statute of limitations, res judicata, statute of
frauds, anti-deficiency statute, fraud, incapacity, minority, usury, illegality
or unenforceability which may be available to the Borrower or any other person
liable in respect of any of the Indebtedness, or any setoff available against
the Lender to the Borrower or any other such person, whether or not on account
of a related transaction. The Guarantor expressly agrees that the Guarantor
shall be and remain liable for any deficiency remaining after foreclosure of any
mortgage or security interest securing the Indebtedness, whether or not the
liability of the Borrower or any other obligor for such deficiency is discharged
pursuant to statute or judicial decision. The liability of the Guarantor shall
not be affected or impaired by any voluntary or involuntary liquidation,
dissolution, sale or other disposition of all or substantially all of the
assets, marshalling of assets and liabilities, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition or readjustment of, or other similar event or
proceeding affecting, the Borrower or any of its assets. The Guarantor will not
assert, plead or enforce against the Lender any claim, defense or setoff
available to the Guarantor against the Borrower. The Guarantor waives
presentment, demand for payment, notice of dishonor or nonpayment and protest of
any instrument evidencing the Indebtedness. The Lender shall not be required
first to resort for payment of the Indebtedness to the Borrower or other
persons, or their properties, or first to enforce, realize upon or exhaust any
collateral security for the Indebtedness, before enforcing this Guaranty.
Guarantor waives the benefits of Arizona Revised Statutes Sections 12-1641,
12-1642, 33-814 and 12-1566.
11. IF PAYMENTS SET ASIDE, ETC. If any payment applied by the Lender to the
Indebtedness is thereafter set aside, recovered, rescinded or required to be
returned for any reason (including, without limitation, the bankruptcy,
insolvency or reorganization of the Borrower or any other obligor), the
Indebtedness to which such payment was applied shall for the purpose of this
Guaranty be deemed to have continued in existence, notwithstanding such
application, and this Guaranty shall be enforceable as to such Indebtedness as
fully as if such application had never been made.
12. ADDITIONAL OBLIGATION OF GUARANTOR. The Guarantor's liability under
this Guaranty is in addition to and shall be cumulative with all other
liabilities of the Guarantor to the Lender as guarantor, surety, endorser,
accommodation co-obligor or otherwise of any of the Indebtedness or obligation
of the Borrower, without any limitation as to amount, unless the instrument or
agreement evidencing or creating such other liability specifically provides to
the contrary.
13. FINANCIAL INFORMATION. The Guarantor will deliver to the Lender all
financial information concerning the Guarantor required to be delivered under
the Credit Agreement.
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14. NO DUTIES OWED BY LENDER. The Guarantor acknowledges and agrees that
the Lender (i) has not made any representations or warranties with respect to,
(ii) does not assume any responsibility to the Guarantor for, and (iii) has no
duty to provide information to the Guarantor regarding, the enforceability of
any of the Indebtedness or the financial condition of the Borrower or any
guarantor. The Guarantor has independently determined the creditworthiness of
the Borrower and the enforceability of the Indebtedness and until the
Indebtedness is paid in full will independently and without reliance on the
Lender continue to make such determinations.
15. MISCELLANEOUS. This Guaranty shall be effective upon delivery to the
Lender, without further act, condition or acceptance by the Lender, shall be
binding upon the Guarantor and the successors and assigns of the Guarantor and
shall inure to the benefit of the Lender and its participants, successors and
assigns. Any invalidity or unenforceability of any provision or application of
this Guaranty shall not affect other lawful provisions and application thereof,
and to this end the provisions of this Guaranty are declared to be severable.
This Guaranty may not be waived, modified, amended, terminated, released or
otherwise changed except by a writing signed by the Guarantor and the Lender.
This Guaranty shall be governed by and construed in accordance with the
substantive laws (other than conflict laws) of the State of Arizona. The
Guarantor hereby (i) consents to the personal jurisdiction of the state and
federal courts located in the State of Arizona in connection with any
controversy related to this Guaranty; (ii) waives any argument that venue in any
such forum is not convenient, (iii) agrees that any litigation initiated by the
Lender or the Guarantor in connection with this Guaranty may be venued in either
the state or federal courts located in Maricopa County, Arizona; and (iv) agrees
that a final judgment in any such suit, action or proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law. Guarantor acknowledges and agrees the Lender shall
have recourse against any and all assets of Guarantor for purposes of satisfying
Guarantor's obligations hereunder.
16. WAIVER OF JURY TRIAL. THE GUARANTOR HEREBY IRREVOCABLY WAIVES ALL
RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF, BASED ON OR PERTAINING TO THIS GUARANTY.
IN WITNESS WHEREOF, this Guaranty has been duly executed by the Guarantor
the date first written above.
THE XXXXXXXX FAMILY LIVING TRUST CREATED
BY INSTRUMENT DATED APRIL 11, 1994 AS
RESTATED ON JUNE 29, 1995
/s/ Xxxxxxx X. Xxxxxxxx, Trustee
----------------------------------------
Xxxxxxx Xxxxxxxx, as Trustee
/s/ Xxxxx X. Xxxxxxxx, Trustee
----------------------------------------
Xxxxx Xxxxxxxx, as Trustee
Address: 0000 Xxxx Xxxx Xxxxxx Xxxxx
Xxxxxx, XX 00000
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Consented and Agreed:
/s/ Xxxxxxx X. Xxxxxxxx, Trustmaker
-----------------------------------
Xxxxxxx Xxxxxxxx, Trustmaker
/s/ Xxxxx X. Xxxxxxxx, Trustmaker
-----------------------------------
Xxxxx Xxxxxxxx, Trustmaker
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State of Arizona
County of Pima
The foregoing instrument was acknowledged before me this 10th day of April,
2002, by Xxxxxxx Xxxxxxxx, as Trustee of the Xxxxxxxx Family Living Trust
created by instrument dated April 11, 1994 as Restated on June 29, 1995.
(Seal and Expiration Date)
Official Seal
Xxxxxxxxx X. Xxxxx /s/ Xxxxxxxxx X. Xxxxx
------------------------------
Notary Public - State of Arizona Notary Public
Pima County
My Commission Expires Sept. 14, 2004
State of Arizona
County of Pima
The foregoing instrument was acknowledged before me this 10th day of April,
2002, by Xxxxx Xxxxxxxx, as Trustee of the Xxxxxxxx Family Living Trust created
by instrument dated April 11, 1994 as Restated on June 29, 1995.
(Seal and Expiration Date)
Official Seal
Xxxxxxxxx X. Xxxxx /s/ Xxxxxxxxx X. Xxxxx
------------------------------
Notary Public - State of Arizona Notary Public
Pima County
My Commission Expires Sept. 14, 2004
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