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EXHIBIT 2.5
GUARANTY
This GUARANTY, dated as of May 11, 2001 (this "GUARANTY"), between
Saf-T-Hammer Corporation, a company organized under the laws of the State of
Nevada (the "GUARANTOR") and Xxxxxxx Corporation, a company organized under the
laws of the State of Delaware ("XXXXXXX").
RECITALS
WHEREAS, the Guarantor and Xxxxxxx are party to the Stock Purchase
Agreement, dated as of the date of this Guaranty, relating to the sale of the
Company by Xxxxxxx to the Guarantor;
WHEREAS, Xxxxxxx holds a promissory note, issued and payable by the
Company, in the amount of $73,830,000, due 30 April 2004 (the "NOTE");
WHEREAS, the Guarantor is obligated under the Stock Purchase
Agreement to provide a guaranty to Xxxxxxx of the obligations of Xxxxx & Wesson
Corporation, a company organized under the laws of the State of Delaware
("COMPANY") under the Note;
NOW THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements contained herein, and
intending to be legally bound hereby, the parties hereto agree as follows:
1.1 Guaranty. The Guarantor hereby irrevocably and unconditionally
guaranties to Xxxxxxx the due and punctual payment in full of all obligations of
the Company under the Note when the same shall become due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand or otherwise
(including amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section 362(a))
(collectively, the "GUARANTEED OBLIGATIONS").
1.2 Payment on Demand. The Guarantor hereby agrees, in furtherance
of the foregoing and not in limitation of any other right which Xxxxxxx may have
at law or in equity against the Guarantor by virtue hereof, that upon the
failure of the Company to pay any of the Guaranteed Obligations when and as the
same shall become due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise (including amounts that would
become due
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but for the operation of the automatic stay under Section 362(a) of the
Bankruptcy Code, 11 U.S.C. Section 362(a)), the Guarantor will upon demand pay,
or CAUSE to be paid, in immediately available funds to Xxxxxxx, an amount equal
to the sum of the unpaid amount of the Guaranteed Obligations then due as
aforesaid, accrued and unpaid interest on such portion of the Guaranteed
Obligations (including interest which, but for the Company becoming the subject
of a case under the Bankruptcy Code, would have accrued on such portion of the
Guaranteed Obligations, whether or not a claim is allowed against the Company
for such interest in the relevant bankruptcy case) and all other Guaranteed
Obligations then due and owing to Xxxxxxx as aforesaid.
1.3 Nature of Obligations. The Guarantor hereby agrees that its
obligations hereunder as guarantor are irrevocable, independent and
unconditional and shall not be affected by any circumstance which constitutes a
legal or equitable discharge of a guarantor or surety other than payment in full
of the Guaranteed Obligations.
1.4 Waiver. The Guarantor hereby waives, for the benefit of Xxxxxxx:
(a) any right to require Xxxxxxx, as a condition of payment or
performance by the Guarantor of the Guaranteed Obligations, to proceed against
the Company or any other Person, proceed against or exhaust any security held
from the Company or any other Person, or pursue any other remedy in the power of
Xxxxxxx whatsoever;
(b) any defense arising by reason of the incapacity, lack of
authority or any disability or other defense of the Company, including any
defense based on or arising out of the lack of validity or the unenforceability
of the Guaranteed Obligations or any agreement or instrument relating thereto or
by reason of the cessation of the liability of the Company from any cause other
than payment in full of the Guaranteed Obligations;
(c) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in amount nor in
other respects more burdensome than that of the principal;
(d) any defense based upon any errors or omissions in the
administration of the Guaranteed Obligations, except behavior which amounts to
bad faith or willful misconduct;
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(e) any principles or provisions of law, statutory or otherwise,
which are or might be in conflict with the terms hereof and any legal or
equitable discharge of the Guarantor's obligations hereunder (other than the
payment in full of the Guaranteed Obligations), the benefit of any statute of
limitations affecting the Guarantor's liability hereunder or the enforcement
hereof, and any rights to set-offs, recoupments and counterclaims;
(f) promptness, diligence and any requirement that Xxxxxxx
protect, secure, perfect or insure any security interest or Lien on any property
subject thereto;
(g) notices, demands, presentments, protests, notices of protest,
notices of dishonor and notices of default hereunder, notices of any renewal,
extension or modification of the Guaranteed Obligations or any agreement related
thereto; and
(h) any defenses or benefits that may be derived from or afforded
by law which limit the liability of or exonerate guarantors or sureties, or
which conflict with the terms hereof.
1.5 Waiver of Rights against the Company. Until the Guaranteed
Obligations shall have been indefeasibly paid in full, the Guarantor hereby
waives:
(a) any claim, right or remedy, direct or indirect, that the
Guarantor now has or may have hereafter against the Company or any of the
Company's assets in connection with this Guaranty or the performance by the
Guarantor of its obligations hereunder, in each case whether such claim, right
or remedy arises in equity, under contract, by statute, under common law or
otherwise and including, but not limited to, any right of subrogation,
reimbursement or indemnification that the Guarantor now has or may hereafter
have against the Company with respect to the Guaranteed Obligations; and
(b) any right to enforce, or to participate in, any claim, right
or remedy that the Guarantor now has or may hereafter have against the Company,
and any benefit of, and any right to participate in, any collateral or security
now or hereafter held by the Guarantor.
1.6 Subordination. The Guarantor further agrees that, to the extent
the waiver or agreement to withhold the exercise of its rights of subrogation,
reimbursement and indemnification set out above is found by a court of competent
jurisdiction to be void, voidable, or otherwise unenforceable, for any reason,
any
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rights of subrogation, reimbursement or indemnification the Guarantor may have
against the Company or against any collateral or security shall be junior and
subordinate to any rights Xxxxxxx may have against the Company and to all right,
title and interest of Xxxxxxx in any such collateral or security.
1.7 Amounts to be Credited. If any amount is paid to and received by
the Guarantor on account of any such subrogation, reimbursement or
indemnification rights at any time when all Guaranteed Obligations have not been
finally and indefeasibly paid in full, such amount shall be held in trust by the
Guarantor for Xxxxxxx and immediately paid to Xxxxxxx, to be credited and
applied against the Guaranteed Obligations, whether mature or unmatured, in
accordance with the terms hereof.
1.8 Continuing Guaranty. This Guaranty by the Guarantor is a
continuing guaranty and shall remain in effect until all of the Guaranteed
Obligations have been paid in full.
1.9 No Action. So long as any Guaranteed Obligations remain
outstanding, the Guarantor shall not, and shall not cause or permit the Company
to, without the prior written consent of Xxxxxxx, commence, or join with any
other Person in commencing, any bankruptcy, reorganization or insolvency case or
proceeding of or against the Company. The obligations of the Guarantor hereunder
shall not be reduced, limited, impaired, discharged, deferred, suspended or
terminated by any case or proceeding, voluntary or involuntary, involving the
bankruptcy, insolvency, receivership, reorganization, liquidation or arrangement
of the Company or by any defense which the Company may have by reason of the
order, decree or decision of any Governmental Entity.
1.10 Recovery of Payments Made. In the event that all or any portion
of the Guaranteed Obligations are paid by the Company, the obligations of the
Guarantor hereunder shall remain in full force and effect or be reinstated, as
the case may be, in the event that all or any part of such payment(s) are
rescinded or recovered directly or indirectly from Xxxxxxx as a preference,
fraudulent transfer or otherwise, and any such payments which are so rescinded
or recovered shall constitute Guaranteed Obligations for all purposes hereunder.
1.11 Entire Agreement. This Guaranty constitutes the entire
agreement of the parties relating to the subject matter hereof and supersedes
any other prior agreements and understandings between the parties, both oral and
written, regarding such subject matter.
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1.12 Severability. Any provision of this Guaranty that is held by a
court of competent jurisdiction to violate any applicable law shall be limited
or nullified only to the extent necessary to bring the Guaranty within the
requirements of such law.
1.13 Notices. Any notice required or permitted by this Guaranty must
be in writing and must be sent by facsimile, by nationally recognized commercial
overnight courier, or mailed by United States registered or certified mail,
addressed to the other party at the address below or to such other address for
notice (or facsimile number, in the case of a notice by facsimile) as a party
gives the other party written notice of in accordance with this Section 1.13.
Any such notice will be effective as of the date of receipt:
(a) if to Xxxxxxx, to
Xxxxxxx Corporation
0000 Xxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx Xxxxxxxxxx, Esq.
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
0 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxx Xxx, Esq.
(b) if to the Guarantor, to
SAF-T-HAMMER Corporation
00000 X. Xxxxxxxxxx Xxxx. Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Mr Xxx Xxxxx
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with a copy to:
Xxxxxxx & Xxxxxxx, PLC
0 X. Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxxxx, Esq.
1.14 Governing Law. This Guaranty shall be governed by, enforced
under and construed in accordance with the laws of the State of Delaware,
without giving effect to any choice or conflict of law provision or rule
thereof.
1.15 Venue. Each of the parties:
(a) consents to submit to the exclusive jurisdiction of any court
of the United States located in the State of Delaware for any litigation arising
out of or relating to this Guaranty and the transactions contemplated hereby;
(b) agrees not to commence any litigation relating thereto except
in such courts;
(c) agrees that service of any process, summons, notice or
document by U.S. registered mail to its respective address set forth in Section
1.13 (or to such other address for notice that such party has given the other
party written notice of in accordance with Section 1.13) shall be effective
service of process for any litigation brought against it in any such court;
(d) waives any objection to the laying of venue of any litigation
arising out of this Guaranty or the transactions contemplated hereby in the
courts of the State of Delaware; and
(e) agrees not to plead or claim in any such court that any
litigation brought in any such court has been brought in an inconvenient forum.
1.16 Counterparts. This Guaranty may be signed in counterparts which
together shall constitute one original of this Guaranty. This Guaranty shall
become effective when each party hereto has received counterparts thereof signed
by the other party hereto.
1.17 Assignment. Xxxxxxx shall not have the right to assign this
Guaranty without the consent of the Guarantor.
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1.18 Fees and Expenses. Each of the parties hereto shall bear its
own costs and expenses (including legal and financial advisory fees and
expenses) incurred in connection with, or in anticipation of, this Guaranty and
the transactions contemplated hereby.
1.19 No Third-Party. Except as expressly provided in this Guaranty,
this Guaranty shall not benefit or create any right or cause of action in or on
behalf of any person other than the parties hereto; provided, however, that this
Guaranty will be binding upon, inure to the benefit of, and be enforceable by,
the parties and their respective successors and permitted assigns.
IN WITNESS WHEREOF, each of the undersigned has caused this Guaranty
to be duly signed as of the date first above written.
XXXXXXX CORPORATION
By:_________________________________
Name:
Title:
SAF-T-HAMMER CORPORATION
By:_________________________________
Name:
Title:
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