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Exhibit 10.5
GUARANTY
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To: FLEET BUSINESS CREDIT CORPORATION
Xxx Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Franchise Finance Division, Credit Manager
1. GUARANTY OF PAYMENT. For value received and in consideration of any
loan or other financial accommodation heretofore, now or hereafter at any time
made or granted to WM LIMITED PARTNERSHIP-1998, a Michigan limited partnership
("BORROWER") by FLEET BUSINESS CREDIT CORPORATION (together with its successors
and assigns, "LENDER"), Xxx Xxxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, the
undersigned ("GUARANTOR") hereby unconditionally guarantees the full and prompt
payment when due, whether by acceleration or otherwise, and at all times
thereafter, of all obligations of Borrower to Lender, including, without
limitation, all amounts, agreements and matters arising under that certain Loan
and Security Agreement of even date herewith, by and between Lender and Borrower
(the "LOAN AGREEMENT"; all capitalized terms not defined herein shall have the
respective meanings set forth in the Loan Agreement), howsoever created, arising
or evidenced, whether direct or indirect, absolute or contingent, or now or
hereafter existing, or due or to become due, including, without limitation, all
covenants and indemnities relating to environmental matters, (all such
obligations of Borrower being hereinafter collectively called the
"Obligations"), and Guarantor further agrees to (i) pay all expenses and
attorneys' fees, including the allocated cost of in-house counsel, paid or
incurred by Lender in endeavoring to collect the Obligations, or any part
thereof, and in enforcing this Guaranty; and (ii) cooperate with Borrower in
Borrower's performance of Borrower's covenants and agreements.
2. LIMITATION. Notwithstanding anything contained herein to the
contrary, from and after the Conversion Date the right of recovery against
Guarantor under this Guaranty is limited to the sum of: (i) the principal amount
of $378,377.40; plus (ii) interest on such amount in accordance with the Loan
Agreement; plus (iii) all other amounts which constitute Obligations other than
principal and interest, including, without limitation, all amounts due on
account of environmental and other indemnities. The creation or existence from
time to time of Obligations in excess of the amount to which the right of
recovery under this Guaranty is limited is hereby authorized, without notice to
Guarantor, and will in no way affect or impair the rights of Lender and the
Obligations of Guarantor under this Guaranty. Notwithstanding anything contained
herein to the contrary, except as set forth in the proviso at the end of this
sentence, this Guaranty shall terminate and be of no further force and effect
if, and only if, as of the third (3rd) anniversary of the Conversion Date or any
date thereafter: (a) No Event of Default shall have previously occurred (whether
or not since cured); and (b) the Debt Service Coverage Before Distributions
Ratio for the store located at the Project Location shall be greater than
1.25:1, measured for the twelve month period immediately preceding the
measurement date; provided, however, that this Guaranty shall remain in full
force and effect, and Guarantor shall continue and remain liable, with respect
to all Obligations relating to indemnities relating to
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environmental matters. Debt Service Coverage Before Distributions Ratio is
defined as the ratio of (i) Adjusted EBITDA minus cash income taxes paid, to
(ii) Debt Service.
3. CONTINUING GUARANTY. This Guaranty is a continuing, absolute and
unconditional Guaranty, and will remain in full force and effect
(notwithstanding, without limitation, the death, incompetency or dissolution of
Guarantor or that at any time or from time to time all Obligations may have been
paid in full).
4. RESCISSION OR RETURN OF PAYMENT ON OBLIGATIONS. Guarantor further
agrees that, if at any time all or any part of any payment theretofore applied
by Lender to any of the Obligations is or must be rescinded or returned by
Lender for any reason whatsoever (including, without limitation, the insolvency,
bankruptcy or reorganization of Borrower), such Obligations are, for the
purposes of this Guaranty, to the extent that such payment is or must be
rescinded or returned, deemed to have continued in existence, notwithstanding
such application by Lender, and this Guaranty will continue to be effective or
be reinstated, as the case may be, as to such Obligations, all as though such
application by Lender had not been made.
5. LENDER PERMITTED TO TAKE CERTAIN ACTIONS. Lender may, from time to
time (but is not obligated to), at its sole discretion and without notice to
Guarantor, take any or all of the following actions: (a) receive a security
interest in any property to secure any of the Obligations or any obligation
hereunder; (b) retain or obtain the primary or secondary obligation of any
obligor or obligors, in addition to Guarantor, with respect to any of the
Obligations; (c) extend or renew for one or more periods (whether or not longer
than the original period), alter or exchange any of the Obligations, or release
or compromise any obligation of Guarantor hereunder or any obligation of any
nature of any other obligor with respect to any of the Obligations; (d) release
its security interest in, or surrender, release or permit any substitution or
exchange for, all or any part of any property securing any of the Obligations or
any obligation hereunder, or extend or renew for one or more periods (whether or
not longer than the original period) or release, compromise, alter or exchange
any obligations of any nature of any obligor with respect to any such property;
and (e) resort to Guarantor for payment of any of the Obligations, whether or
not Lender (i) has resorted to any property securing any of the Obligations or
any obligation hereunder or (ii) has proceeded against any other obligor
primarily or secondarily obligated with respect to any of the Obligations (all
of the actions referred to in preceding clauses (i) and (ii) being hereby
expressly waived by Guarantor).
6. APPLICATION OF PAYMENTS. Any amounts received by Lender from
whatsoever source on account of the Obligations may be applied by it toward the
payment of such of the Obligations, and in such order of application, as Lender
may from time to time elect.
7. SUBROGATION. Until such time as this Guaranty has been discontinued
and Lender has received payment of the full amount of all Obligations and of all
obligations of Guarantor hereunder, no payment made by or for the account of
Guarantor pursuant to this Guaranty entitles Guarantor by subrogation or
otherwise to any payment by Borrower or from or out of any property of Borrower,
and Guarantor will not exercise any right or remedy against Borrower or any
property of Borrower by reason of any performance by Guarantor of this Guaranty.
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8. WAIVER OF NOTICE AND OTHER MATTERS. Guarantor hereby expressly
waives: (a) notice of the acceptance by Lender of this Guaranty; (b) notice of
the existence or creation or non-payment of all or any of the Obligations; (c)
presentment, demand, notice of dishonor, protest, and all other notices
whatsoever; and (d) all diligence in collection or protection of or realization
upon the Obligations or any thereof, any obligation hereunder, or any security
for or guaranty of any of the foregoing.
9. ASSIGNMENT OF OBLIGATIONS. Lender may, from time to time, whether
before or after any discontinuance of this Guaranty, without notice to
Guarantor, assign or transfer any or all of the Obligations or any interest
therein; and, notwithstanding any such assignment or transfer or any subsequent
assignment or transfer thereof, such Obligations will remain Obligations for the
purposes of this Guaranty, and each and every immediate and successive assignee
or transferee of any of the Obligations or of any interest therein will, to the
extent of the interest of such assignee or transferee in the Obligations, be
entitled to the benefits of this Guaranty to the same extent as if such assignee
or transferee were Lender; provided, however, that, unless Lender otherwise
consents in writing, Lender has an unimpaired right, prior and superior to that
of any such assignee or transferee, to enforce this Guaranty, for the benefit of
Lender, as to those of the Obligations which Lender has not assigned or
transferred.
10. WAIVER AND MODIFICATIONS. No delay on the part of Lender in the
exercise of any right or remedy will operate as a waiver thereof, and no single
or partial exercise by Lender of any right or remedy will preclude other or
further exercise thereof or the exercise of any other right or remedy; nor will
any modification or waiver of any of the provisions of this Guaranty be binding
upon Lender except as expressly set forth in a writing duly signed and delivered
on behalf of Lender.
11. OBLIGATIONS UNDER GUARANTY. No action of Lender permitted hereunder
will in any way affect or impair the rights of Lender and the obligations of
Guarantor under this Guaranty. For the purposes of this Guaranty, Obligations
include all obligations of Borrower to Lender, notwithstanding any right or
power of Borrower or anyone else to assert any claim or defense as to the
invalidity or unenforceability of any such obligation, and no such claim or
defense will affect or impair the obligations of Guarantor hereunder. The
obligations of Guarantor under this Guaranty are absolute and unconditional
irrespective of any circumstance whatsoever which might constitute a legal or
equitable discharge or defense of Guarantor. Guarantor hereby acknowledges that
there are no conditions to the effectiveness of this Guaranty.
12. JOINT AND SEVERAL LIABILITY. If more than one Guarantor is signing
this Guaranty, the obligations of Guarantors under this Guaranty are joint and
several. As to any Guarantor that is a partnership, the obligations of such
Guarantor under this Guaranty are the joint and several obligations of each
general partner of such partnership. Any married person signing this Guaranty as
a Guarantor agrees that recourse may be had against the community property
assets and against his or her separate property for the satisfaction of all
obligations of such Guarantor under this Agreement.
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13. SUCCESSORS. This Guaranty is binding upon Guarantor, and upon the
heirs, legal representatives, successors and assigns of Guarantor; and to the
extent that Borrower or Guarantor is either a partnership or a corporation, all
references herein to Borrower and to Guarantor, respectively, are deemed to
include any successor or successors, whether immediate or remote, to such
partnership or corporation.
14. LAW. This Guaranty has been delivered in Chicago, Illinois, and
will be construed in accordance with and governed by the internal laws of the
State of Illinois.
15. SEVERABILITY. Wherever possible, each provision of this Guaranty
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Guaranty is prohibited by or invalid under
such law, such provision will be ineffective to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Guaranty.
16. CAPTIONS. Section captions used in this Guaranty are for
convenience only, and do not affect the construction of this Guaranty.
17. CONSENT TO JURISDICTION. To induce Lender to accept this Guaranty,
Guarantor irrevocably agrees that, subject to Lender's sole and absolute
election, ALL ACTIONS OR PROCEEDINGS IN ANY WAY ARISING OUT OF, FROM OR RELATED
TO THIS GUARANTY WILL BE LITIGATED IN COURTS HAVING SITUS WITHIN CHICAGO,
ILLINOIS. GUARANTOR HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY COURT
LOCATED WITHIN XXXX COUNTY, ILLINOIS, WAIVES PERSONAL SERVICE OF PROCESS UPON
GUARANTOR, AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED
MAIL DIRECTED TO GUARANTOR AT THE ADDRESS STATED ON THE SIGNATURE PAGE HEREOF
AND SERVICE SO MADE WILL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT.
18. WAIVERS. GUARANTOR HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS
GUARANTY OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR
WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION WITH THIS GUARANTY. GUARANTOR
AGREES THAT GUARANTOR WILL NOT ASSERT ANY CLAIM AGAINST LENDER ON ANY THEORY OF
LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES.
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The undersigned has SIGNED AND DELIVERED this Guaranty as of the 24th
day of May, 1999.
GUARANTOR
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Address: 00 Xxxxx Xxxxxx, X.X., Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Fax No.: (000) 000-0000
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Address: 00 Xxxxx Xxxxxx, X.X., Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Fax No.: (000) 000-0000
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