GUARANTY
Exhibit
10.5
This GUARANTY (this “Guaranty”) is executed as of the 9th day of March,
2009 (the “Effective Date”) by D. Xxxxxxx Xxxxxxxx (“Guarantor”) for the benefit of
Temporary Placement Service, Inc., a Georgia corporation (“Lender”).
WHEREAS, on the Effective Date, Eastern Staffing, LLC, a California limited liability company
(the “Company”), delivered to Lender (a) a promissory note in the original principal amount
of $250,000 (the “$250,000 Note”) and (b) a promissory note in the original principal
amount of $700,000 (the “$700,000 Note” and together with the $250,000 Note, the
“Notes”) to evidence amounts due to Lender by the Company in connection with and pursuant
to the Asset Purchase and Sale Agreement, dated as of March 9, 2009 by and between Lender, the
Company and Global Employment Holdings, Inc., as Delaware corporation (the “Purchase
Agreement”);
WHEREAS, Guarantor is a Manager of the Company; and
WHEREAS, in order to induce Lender to accept the Notes as a payment of the portion of the
purchase price under the Purchase Agreement, Guarantor has agreed to personally guaranty the full
and punctual payment of: (a) all amounts due under the Notes, when and as due, whether at maturity,
by acceleration, or otherwise; and (b) all other obligations of the Company to Lender under the
Notes, together with the full and prompt payment of any and all costs and expenses of and
incidental to the collection of the Guaranteed Obligations (as defined below) or the enforcement of
this Guaranty, including, without limitation, reasonable attorneys’ fees and the allocated cost of
in-house legal services.
NOW, THEREFORE, as an inducement to Lender to accept the Notes as a payment of the portion of
the purchase price under the Purchase Agreement, and for other good and valuable consideration, the
receipt and legal sufficiency of which are hereby acknowledged, the parties do hereby agree as
follows:
ARTICLE I
NATURE AND SCOPE OF GUARANTY
1.1 Guaranty of Obligation. Guarantor hereby irrevocably and unconditionally
guarantees the payment and performance of the Notes as and when the same shall be due and payable
(the “Guaranteed Obligations”). Guarantor hereby irrevocably and unconditionally covenants
and agrees that he is liable for the Guaranteed Obligations as a primary obligor.
6
1.2 Nature of Guaranty. This Guaranty is an irrevocable, absolute, continuing
guaranty of payment and performance and not a guaranty of collection. This Guaranty may
not be revoked by Guarantor and shall continue to be effective with respect to any Guaranteed
Obligations arising or created after any attempted revocation by Guarantor and after Guarantor’s
death (in which event this Guaranty shall be binding upon Guarantor’s estate and Guarantor’s legal
representatives and heirs). The fact that at any time or from time to time the Guaranteed
Obligations may be increased or reduced shall not release or discharge the obligation of Guarantor
to Lender with respect to the Guaranteed Obligations. This Guaranty may be enforced by Lender and
any successor in interest to Lender and shall not be discharged by the assignment of Lender’s
interest, rights, obligations and liabilities under the Notes.
1.3 Payment By Guarantor. If all or any part of the Guaranteed Obligations shall not
be punctually performed or paid when due, whether at demand, maturity, acceleration or otherwise,
Guarantor shall, immediately upon demand by Lender, and without presentment, protest, notice of
protest, notice of non-payment, notice of intention to accelerate the maturity, notice of
acceleration of the maturity, or any other notice whatsoever, pay in lawful money of the United
States of America, the amount due on the Guaranteed Obligations to Lender at Lender’ address as set
forth in the Notes. Such demand(s) may be made at any time coincident with or after the time for
payment of all or part of the Guaranteed Obligations, and may be made from time to time with
respect to the same or different items of Guaranteed Obligations. Such demand shall be deemed
made, given and received in accordance with the notice provisions hereof.
1.4 Waivers. Guarantor hereby waives (a) all notice of acceptance hereof, protest,
demand and dishonor, presentment, and demands of any kind now or hereafter provided for by any
statute or rule of law, (b) any right to require Lender to proceed against the Company or to pursue
any rights or remedies with respect to the Guaranteed Obligations including any other remedy
whatsoever in Lender’s power, (c) any defense arising by reason of any bankruptcy, reorganization,
discharge by the filing of bankruptcy, or discharge in bankruptcy of the Company or of the
Guaranteed Obligations, (d) any defense arising by insolvency, lack of authority or power, or
dissolution of the Company (even though rendering the Guaranteed Obligations void, unenforceable,
or otherwise uncollectible), it being understood that Guarantor shall remain liable hereunder,
regardless of whether the Company or any such other party be found not liable thereon for any of
the foregoing reasons or otherwise.
1.5 Payment of Expenses. In the event that Guarantor should breach or fail to timely
perform any provisions of this Guaranty, Guarantor shall, immediately upon demand by Lender, pay
Lender all reasonable out-of-pocket costs and expenses (including court costs and reasonable
attorneys’ fees) incurred by Lender in the enforcement hereof or the preservation of Lender’s
rights hereunder.
2
1.6 Effect of Bankruptcy. In the event that, pursuant to any insolvency, bankruptcy,
reorganization, receivership or other debtor relief law, or any judgment, order or decision
thereunder, Lender must rescind or restore any payment, or any part thereof, received by Lender in
satisfaction of the Guaranteed Obligations, as set forth herein, any
prior release or discharge from the terms of this Guaranty given to Guarantor by Lender shall
be without effect, and this Guaranty shall remain in full force and effect. It is the intention of
Lender, the Company and Guarantor that Guarantor’s obligations hereunder shall not be discharged
except by Guarantor’s performance of such obligations and then only to the extent of such
performance.
1.7 Waiver of Subrogation, Reimbursement and Contribution. Until such time as the
Guaranteed Obligations are satisfied in full, notwithstanding anything to the contrary contained in
this Guaranty, Guarantor hereby unconditionally and irrevocably waives, releases and abrogates any
and all rights it may now or hereafter have under any agreement, at law or in equity (including,
without limitation, any law subrogating the Guarantor to the rights of Lender), to assert any claim
against or seek contribution, indemnification or any other form of reimbursement from any other
party liable for payment of any or all of the Guaranteed Obligations for any payment made by
Guarantor under or in connection with this Guaranty or otherwise.
1.8 Events and Circumstances Not Reducing or Discharging Guarantor’s Obligations.
Guarantor hereby agrees that (a) the sums due under the Guaranteed Obligations may be modified,
amended, extended, or terminated, (b) any party that may become personally liable under the Notes
may hereafter be released from such party’s liability thereunder, or (c) Lender may take or delay
in taking or refuse to take any and all action with reference to the Guaranteed Obligations and
this Guaranty (regardless of whether any such action might vary the risk or alter the rights,
remedies, or recourses of the Guarantor), including, without limitation, settling or compromising
any amount allegedly due hereunder or thereunder, all without notice to, consideration to, or the
consent of Guarantor, and no such acts shall in any way release, diminish, or affect the absolute
nature of the Guarantor’s obligations and liabilities hereunder.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Guarantor represents and warrants to Lender as of the Effective date as follows:
2.1 Authority and Validity. Guarantor has the requisite power, authority and capacity
to execute and deliver, to perform his obligations under, and to consummate the transactions
contemplated by, this Guaranty. This Guaranty is the valid and binding obligations of Guarantor,
enforceable against Guarantor in accordance with its terms, except insofar as enforceability may be
affected by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws now or
hereafter in effect affecting creditors’ rights generally or by principles governing the
availability of equitable remedies.
2.2 Noncontravention. The execution, delivery and performance by Guarantor of this
Guaranty will not (a) require any consent, approval or authorization of, or any filing with
or notice to, any person, entity or agency, except for such consents, approvals,
authorizations, filings and notices as have been obtained, made or given or (b) violate any law to
which Guarantor is subject.
3
2.3 Litigation. There are no actions pending or, to the knowledge of Guarantor,
threatened, against Guarantor that have resulted or could reasonably be expected to result in a
material adverse effect on Guarantor or its assets, or that question the validity of this Guaranty
or of any action taken or to be taken pursuant to or in connection with the provisions of this
Guaranty.
2.4 Net Worth. Guarantor has and, at the time payment is due, will have sufficient
funds available to timely fund his obligations under this Guaranty.
ARTICLE III
MISCELLANEOUS
3.1 Waiver. No failure to exercise, and no delay in exercising, on the part of
Lender, any right hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise of any other right.
The rights of Lender hereunder shall be in addition to all other rights provided by law. No
modification or waiver of any provision of this Guaranty, nor consent to departure therefrom, shall
be effective unless in writing and no such consent or waiver shall extend beyond the particular
case and purpose involved. No notice or demand given in any case shall constitute a waiver of the
right to take other action in the same, similar or other instances without such notice or demand.
3.2 Notices. Any notice, request or other communication required or permitted
hereunder shall be in writing and shall be delivered personally or by facsimile (receipt confirmed
electronically) or shall be sent by a reputable express delivery service or by certified mail,
postage prepaid with return receipt requested, addressed as follows:
if to Guarantor, to:
D. Xxxxxxx Xxxxxxxx
0000 Xxxxx Xxxxxx
Xxxxx Xxxxxxx, XX 00000
Attention: D. Xxxxxxx Xxxxxxxx
Facsimile: (000) 000-0000
0000 Xxxxx Xxxxxx
Xxxxx Xxxxxxx, XX 00000
Attention: D. Xxxxxxx Xxxxxxxx
Facsimile: (000) 000-0000
4
with a copy to:
Xxxxxxx Xxxxxxxxx
0000 Xxxxx Xxxxxx_
Xxxxx Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Xxxxx Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
if to the Lender, to:
Global Employment Holdings, Inc.
00000 Xxxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxx
Facsimile: (000) 000-0000
00000 Xxxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxxxxx Xxxxx Xxxxxx Xxxxxxx, LLP
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxx
Facsimile: (000) 000-0000
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxx
Facsimile: (000) 000-0000
Either party hereto may change the above specified recipient or mailing address by notice to the
other party given in the manner herein prescribed. All notices shall be deemed given on the day
when actually delivered as provided above (if delivered personally or by facsimile, provided that
any such facsimile is received during regular business hours at the recipient’s location) or on the
day shown on the return receipt (if delivered by mail or delivery service).
3.3 Governing Law. This Guaranty shall be governed by and construed in accordance
with the laws of the State of California without giving effect to any choice of law or conflict of
law provision or rule (whether of the State of California or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State of California.
3.4 Invalid Provisions. If any provision of this Guaranty is held to be illegal,
invalid, or unenforceable under present or future laws effective during the term of this Guaranty,
such provision shall be fully severable and this Guaranty shall be construed and enforced as if
such illegal, invalid or unenforceable provision had never comprised a part of this Guaranty, and
the remaining provisions of this Guaranty shall remain in full force and effect and shall not be
affected by the illegal, invalid or unenforceable provision or by its severance from this Guaranty,
unless such continued effectiveness of this Guaranty, as
modified, would be contrary to the basic understandings and intentions of the parties as
expressed herein.
5
3.5 Amendments. This Guaranty may be amended only by an instrument in writing
executed by the party or an authorized representative of the party against whom such amendment is
sought to be enforced.
3.6 Binding Agreement; Assignments. This Guaranty, and the terms, covenants and
conditions hereof, shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, administrators, successors and assigns, except that without the written consent
of Lender, Guarantor shall not be permitted to assign this Guaranty or any interest herein, or
otherwise transfer, pledge, encumber or grant any option with respect to the Collateral or any part
thereof.
3.7 Headings. Section headings used herein are for convenience of reference only, are
not part of this Guaranty and are not to affect the construction of, or to be taken into
consideration in interpreting, this Guaranty.
3.8 Recitals. The recital and introductory paragraphs hereof are a part hereof, form
a basis for this Guaranty and shall be considered prima facie evidence of the facts and documents
referred to therein.
3.9 Rights and Remedies. If Guarantor becomes liable for any indebtedness owing by
the Company, by endorsement or otherwise, other than under this Guaranty, such liability shall not
be in any manner impaired or affected hereby and the rights of Lender hereunder shall be cumulative
of any and all other rights that Lender may ever have against Guarantor. The exercise by Lender of
any right or remedy hereunder or under any other instrument, or at law or in equity, shall not
preclude the concurrent or subsequent exercise of any other right or remedy.
3.10 Counterparts. This Guaranty may be executed in separate counterparts each of
which will be an original and all of which taken together will constitute one and the same
agreement.
6
3.11 Facsimile. This Guaranty may be executed using facsimiles of signatures, and a
facsimile of a signature shall be deemed to be the same, and equally enforceable, as an original of
such signature.
3.12 Entirety. This Guaranty embodies the final, entire agreement of Guarantor and
Lender with respect to Guarantor’s guaranty of the Guaranteed Obligations and supersedes any and
all prior commitments, agreements, representations, and understandings, whether written or oral,
relating to the subject matter hereof. This Guaranty is intended by Guarantor and Lender as a
final and complete expression of the terms of the guaranty, and no course of dealing between
Guarantor and Lender, no course of performance, no trade
practices, and no evidence of prior, contemporaneous or subsequent oral agreements or
discussions or other extrinsic evidence of any nature shall be used to contradict, vary, supplement
or modify any term of this Guaranty. There are no oral agreements between Guarantor and Lender.
[Remainder of Page Intentionally Left Blank]
7
IN WITNESS WHEREOF, Guarantor and Lender have caused this Guaranty to be duly executed as of
the Effective Date.
| GUARANTOR: |
||||
| /s/ D. Xxxxxxx Xxxxxxxx | ||||
| D. Xxxxxxx Xxxxxxxx | ||||
LENDER: TEMPORARY PLACEMENT SERVICE, INC., a Georgia corporation |
||||
| /s/ Xxx Xxxxxxxxxx | ||||
| Xxx Xxxxxxxxxx | ||||
| Executive Vice President | ||||
8
