AMENDED AND RESTATED GUARANTY
AMENDED AND RESTATED GUARANTY dated as of May 12, 1997, by Tortoni
Manufacturing Corp., a Delaware corporation, (the "Guarantor"), in favor of The
CIT Group/Commercial Services, Inc., a Delaware corporation, as agent ("Agent")
for the Lender named in the Amended and Restated Financing and Security
Agreement dated of even date herewith, among The CIT Group/Commercial Services,
Inc. ("CIT") and the lender party thereto (the "Lender"), the Agent and Andover
Togs, Inc. (the "Borrower"), as Borrower (as the same may from time to time be
amended, modified or supplemented, the "Financing Agreement"); capitalized terms
used herein and not otherwise defined herein shall have the meanings attributed
thereto in the Financing Agreement.
WHEREAS, Andover Togs, Inc. (the "Borrower") and the Guarantor filed
a voluntary petition for relief under chapter 11, title 11, of the United States
Code (the "Bankruptcy Code") with the United States Bankruptcy Court for the
Southern District of New York (the "Court").
WHEREAS, the Borrower and CIT have heretofore entered into that
certain Replacement DIP Financing and Security Agreement dated as of September
19, 1996 (as amended, the "Original Financing Agreement").
WHEREAS, Tortoni Manufacturing Corp., a debtor in possession (the
"Original Guarantor") has heretofore executed and delivered to CIT that certain
Guaranty dated September 19, 1996 (the "Original Guaranty") under the Original
Guarantor agreed to guaranty the obligations of the Borrower in favor of CIT.
WHEREAS, pursuant to the Plan of Reorganization of Andover Togs,
Inc. and certain affiliates including the Guarantor (the "Plan of
Reorganization") and under chapter 11 of the Bankruptcy Code, the Original
Guarantor will reorganize its business and operations, which Plan of
Reorganization was confirmed by order of the Court entered on April 10, 1997.
WHEREAS, in conjunction with the consummation of the Plan of
Reorganization, the Borrower and CIT have entered into that certain Amended and
Restated Financing and Security Agreement (as amended, modified or supplemented
from time to time, the "Financing Agreement") dated as of the date hereof,
amending and restating, in its entirety, the Original Financing Agreement and
Tortoni Manufacturing Corp., has entered into that certain amended and Restated
Guaranty (the "Guaranty") of the date hereof, amending and restating, in its
entirety, the Original Guaranty.
WHEREAS, pursuant to the Financing Agreement, CIT has agreed to
renew, modify and extend the loan facilities provided in the Original Financing
Agreement (the maximum amount of the loans has been lowered as specified in the
Financing Agreement) subject to the conditions and provisions set out in the
Financing Agreement.
WHEREAS, it is a condition precedent to the consummation of the
transactions contemplated by the Financing Agreement that Tortoni Manufacturing
Corp., confirms and assures by its execution and delivery of this Guaranty that
it remains liable in its capacity as Guarantor for the obligations of the
Borrower that the Collateral (as hereinafter defined) is and remains collateral
security for the Guaranteed Obligations (as such term is defined in the Guaranty
Agreement) and for all other credit from time to time extended by CIT to the
Borrower under the Financing Agreement and for all other obligations thereunder.
The Agent and the Lender have agreed to extend Loans and certain
other financial accommodations, including, without limitation, assisting in the
issuance of the Letters of Credit to the Borrower pursuant to, and subject to
the terms and conditions of, the Financing Agreement. The obligations of the
Lenders under the Financing Agreement to extend such Loans and other financial
accommodations and to assist the Borrower in obtaining Letters of Credit are
conditioned on the execution and delivery by the Guarantor of a guaranty in the
form hereof of the Obligations (such Obligations to include, without limitation,
the due and punctual payment and performance of (a) the obligation of the
Borrower to pay the principal of and interest on the Loans, when and as due,
whether at maturity, by acceleration, upon one or
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more dates set for prepayment or otherwise, (b) Indebtedness of the Borrower at
any time and from time to time under any Letters of Credit and (c) all other
obligations of the Borrower at any time and from time to time under the
Financing Agreement and the other Loan Documents.
Accordingly, in consideration of the premises and in order to induce
the Agent and the Lender to make Loans and extend other financial accommodations
under the Financing Agreement, the Guarantor hereby agrees as follows:
Section 1. Guaranty. The Guarantor hereby irrevocably and
unconditionally guarantees the punctual payment when due, whether at stated
maturity, by acceleration or otherwise, and the punctual performance, of all
present and future Obligations of the Borrower (including, without limitation,
obligations under the Financing Agreement)(the foregoing being herein referred
to as the "Guaranteed Obligations"); provided, however, that anything to the
contrary notwithstanding, the maximum liability of the Guarantor hereunder and
under the other Loan Documents shall not exceed an amount equal to the largest
amount that would not render the Guarantor's obligations hereunder subject to
avoidance under Section 548 of the United States Bankruptcy Code or any
equivalent provision of the law of any state.
Section 2. Waiver. The Guarantor hereby absolutely, unconditionally
and irrevocably waives, to the fullest extent permitted by law, (i) promptness,
diligence, notice of acceptance and any other notice with respect to this
Guaranty, (ii) presentment, demand of payment, protest, notice of dishonor or
nonpayment and any other notice with respect to the Guaranteed Obligations,
(iii) any requirement that the Agent or Lender protect, secure, perfect or
insure any security interest or Lien or any property subject thereto or exhaust
any right or take any action against the Borrower or any other person or any
Collateral, and (iv) any other action, event or precondition to the enforcement
of this Guaranty or the performance by the Guarantor of the obligations
hereunder.
Section 3. Guaranty Absolute. (a) The Guarantor guarantees that, to
the fullest extent permitted by law, the Guaranteed Obligations will be paid or
performed strictly in
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accordance with their 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 Lender with respect thereto.
(b) No invalidity, irregularity, voidability, voidness or
unenforceability of the Financing Agreement, the Note(s), or any other Loan
Document or any other agreement or instrument relating thereto, or of all or any
part of the Guaranteed Obligations or of any security therefor shall affect,
impair or be a defense to this Guaranty.
(c) This Guaranty is one of payment and performance and not
collection and the obligations of the Guarantor under this Guaranty are
independent of the Obligations of the Borrower, and a separate action or actions
may be brought and prosecuted against the Guarantor to enforce this Guaranty,
irrespective of whether any action is brought against the Borrower or whether
the Borrower is joined in any such action or actions.
(d) The liability of the Guarantor under this Guaranty shall be
absolute and unconditional irrespective of:
(i) any change in the manner, place or terms of payment or
performance, and/or any change or extension of the time of payment or
performance of, renewal or alteration of, any Obligation, any security
therefor, or any liability incurred directly or indirectly in respect
thereof, or any other amendment or waiver of or any consent to departure
from the Financing Agreement or the Notes or any other Loan Document,
including any increase in the Guaranteed Obligations resulting from the
extension of additional credit to the Borrower or any of its subsidiaries
or otherwise;
(ii) any sale, exchange, release, surrender, realization upon
any property by whomsoever at any time pledged or mortgaged to secure, or
howsoever securing, all or any of the Guaranteed Obligations, and/or any
offset thereagainst, or failure to perfect, or continue the perfection of,
any Lien in any such property, or delay in the perfection of any such
Lien, or any amendment or waiver
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of or consent to departure from any other guaranty for all or any of the
Guaranteed Obligations;
(iii) any exercise or failure to exercise any rights against
the Borrower or others (including the Guarantor);
(iv) any settlement or compromise of any security for any
Obligation, or any liability (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and any subordination
of the payment of all or any part thereof to the payment of any Obligation
(whether due or not) of the Borrower to creditors of the Borrower other
than the Guarantor;
(v) any manner of application of Collateral, or proceeds
thereof, to all or any of the Guaranteed Obligations, or any manner of
sale or other disposition of any Collateral for all or any of the
Guaranteed Obligations or any other assets of the Borrower or any of its
subsidiaries;
(vi) any change, restructuring or termination of the existence
of the Borrower or any of its subsidiaries; or
(vii) any other agreements or circumstance of any nature
whatsoever which might otherwise constitute a defense available to, or a
discharge of, this Guaranty and/or obligations of the Guarantor hereunder,
or a defense to, or discharge of, the Borrower or any other person or
party relating to this Guaranty or the obligations of the Guarantor
hereunder or otherwise with respect to the Loans, Letters of Credit or
other financial accommodations to the Borrower.
(e) The Agent may at any time and from time to time (whether or not
after revocation or termination of this Guaranty) without the consent of, or
notice (except as shall be required by applicable statute and cannot be waived)
to, the Guarantor, and without incurring responsibility to the Guarantor or
impairing or releasing the obligations of the Guarantor hereunder, apply any
sums by whomsoever paid or howsoever realized to any Guaranteed
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Obligation regardless of what Guaranteed Obligations remain unpaid.
(f) This Guaranty shall continue to be effective or be reinstated,
as the case may be, if claim is ever made upon the Agent or any Lender for
repayment or recovery of any amount or amounts received by the Agent or such
Lender in payment or on account of any of the Guaranteed Obligations and the
Agent or such Lender repays all or part of said amount by reason of any
judgment, decree or order of any court or administrative body having
jurisdiction over the Agent or such Lender or the respective property of each,
or any settlement or compromise of any such claim effected by the Agent or such
Lender with any such claimant (including the Borrower), then and in such event
the Guarantor agrees that any such judgment, decree, order, settlement or
compromise shall be binding upon the Guarantor, notwithstanding any revocation
hereof or the cancellation of any note (including the Notes) or other instrument
evidencing any Obligation, and the Guarantor shall be and remain liable to the
Agent and/or such Lender hereunder for the amount so repaid or recovered to the
same extent as if such amount had never originally been received by the Agent or
such Lender.
Section 4. Continuing Guaranty. This Guaranty is a continuing one
and shall (i) remain in full force and effect until the indefeasible payment and
satisfaction in full of the Guaranteed Obligations, (ii) be binding upon the
Guarantor, its successors and assigns, and (iii) inure to the benefit of, and be
enforceable by, the Agent and its successors, transferees and assigns. All
obligations to which this Guaranty applies or may apply under the terms hereof
shall be conclusively presumed to have been created in reliance hereon.
Section 5. Representations, Warranties and Covenants. The Guarantor
hereby represents, warrants and covenants to and with the Agent that:
(a) The Guarantor has the corporate power to execute and deliver
this Guaranty and to incur and perform its obligations hereunder;
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(b) The Guarantor has duly taken all necessary corporate action to
authorize the execution, delivery and performance of this Guaranty and to
incur and perform its obligations hereunder;
(c) Other than the entry by the Bankruptcy Court of the Confirmation
Order, no consent, approval, authorization or other action by, and no
notice to or of, or declaration or filing with, any governmental or other
public body, or any other Person, is required for the due authorization,
execution, delivery and performance by the Guarantor of this Guaranty or
the consummation of the transactions contemplated hereby;
(d) The execution, delivery and performance by the Guarantor of this
Guaranty do not and will not violate or otherwise conflict with any term
or provision of any material agreement, instrument, judgment, decree,
order or any statute, rule or governmental regulation applicable to the
Guarantor or result in the creation of any Lien upon any of its properties
or assets pursuant thereto;
(e) This Guaranty has been duly authorized, executed and delivered
by the Guarantor and constitutes the legal, valid and binding obligation
of the Guarantor, and is enforceable against the Guarantor in accordance
with its terms, except as enforcement thereof may be subject to the effect
of any applicable bankruptcy, insolvency, reorganization, moratorium or
similar law affecting creditors' rights generally, and general principles
of equity (regardless of whether such enforcement is sought in a
proceeding in equity or at law); and
(f) No proceeding referred to in paragraph (e) or (f) of Section
12.01 the Financing Agreement is pending against the Guarantor and no
other event referred to in such Section 12.01 has occurred and is
continuing, and the property of the Guarantor is not subject to any
assignment for the benefit of creditors.
Section 6. Expenses. The Guarantor will upon demand reimburse the
Agent for any sums, costs, and expenses which the
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Agent may reasonably pay or incur pursuant to the provisions of this Guaranty or
in negotiating, executing, perfecting, defending, protecting or enforcing this
Guaranty or in enforcing payment of the Guaranteed Obligations or otherwise in
connection with the provisions hereof, including court costs, collection
charges, travel expenses, and reasonable attorneys' fees, together with interest
thereon as specified in Section 12 hereof. The Guarantor shall not be required
to pay any such sums if such sums have been paid by the Borrower under the
Financing Agreement.
Section 7. Terms. (a) All terms defined in the UCC and used herein
shall have the meanings as defined in the UCC, unless the context otherwise
requires.
(b) The words "include," "includes" and "including" shall be deemed
to be followed by the phrase "without limitation".
(c) All references herein to Sections and subsections shall be
deemed to be references to Sections and subsections of this Guaranty unless the
context shall otherwise require.
Section 8. Amendments and Modification. No provision hereof shall be
modified, altered or limited except by written instrument expressly referring to
this Guaranty and to such provision, and executed by the party to be charged.
Section 9. Subrogation. The Guarantor will not exercise any rights
which it may acquire by way of subrogation hereunder, by any payment made by it
hereunder or otherwise, until the Financing Agreement is terminated and all of
the Obligations and all other expenses to be paid by the Guarantor pursuant
hereto shall have been satisfied in full. If any amount shall be paid to the
Guarantor on account of such subrogation rights at any time when all of the
Obligations and all such other expenses shall not have been paid in full or the
Financing Agreement is not terminated, such amount shall be held in trust for
the benefit of the Agent, shall be segregated from the other funds of the
Guarantor and shall forthwith be paid over to the Agent to be applied in whole
or in part by the Agent against the
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Obligations, whether matured or unmatured, and all such other expenses in
accordance with the terms of the Financing Agreement.
Section 10. Remedies Upon Default; Right of Set-Off. (a) Upon the
occurrence and during the continuance of any Event of Default, the Agent may,
without notice to or demand upon the Borrower or the Guarantor, declare any
Guaranteed Obligations immediately due and payable, and shall be entitled to
enforce the obligations of the Guarantor hereunder.
(b) Upon such declaration by the Agent, the Agent and any Lender is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by the Agent or any Lender to or for the credit or the account of
the Guarantor against any and all of the obligations of the Guarantor now or
hereafter existing under this Guaranty, whether or not the Agent or such Lender
shall have made any demand under this Guaranty and although such obligations may
be contingent and unmatured. The Agent agrees promptly to notify the Guarantor
after any such set-off and application, provided that the failure to give such
notice shall not affect the validity of such set-off and application. The rights
of the Agent and Lender under this Section 10 are in addition to other rights
and remedies (including other rights of set-off) which the Agent and Lender may
have.
Section 11. Statute of Limitations. Any acknowledgment or new
promise, whether by payment of principal or interest or otherwise and whether by
the Borrower or others (including the Guarantor), with respect to any of the
Guaranteed Obligations shall, if the statute of limitations in favor of the
Guarantor against the Agent or Lender shall have commenced to run, toll the
running of such statute of limitations and, if the period of such statute of
limitations shall have expired, prevent the operation of such statute of
limitations.
Section 12. Interest. All amounts payable from time to time by the
Guarantor pursuant to Section 6 hereunder shall bear interest at the Default
Rate of Interest.
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Section 13. Rights and Remedies Not Waived. No act, omission or
delay by the Agent shall constitute a waiver of its rights and remedies
hereunder or otherwise. No single or partial waiver by the Agent of any default
hereunder or right or remedy which it may have shall operate as a waiver of any
other default, right or remedy or of the same default, right or remedy on a
future occasion.
Section 14. Admissibility of Guaranty. The Guarantor agrees that any
copy of this Guaranty signed by the Guarantor and transmitted by telecopier for
delivery to the Agent shall be admissible in evidence as the original itself in
any judicial or administrative proceeding, whether or not the original is in
existence.
Section 15. Notices. All notices, requests and demands to or upon
the Agent or the Guarantor under this Agreement shall be in writing and given as
provided in the Financing Agreement, provided that in the case of the Guarantor,
notice shall be given to the Borrower.
Section 16. Counterparts. This Guaranty may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original
and all of which shall together constitute one and the same agreement.
Section 17. CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL; ETC. (a)
In any litigation in any court with respect to, in connection with, or arising
out of this Guaranty or any instrument or document delivered pursuant to this
Guaranty, or the validity, protection, interpretation, collection or enforcement
thereof, or any other claim or dispute howsoever arising, between the Guarantor
on the one hand and the Agent and the Lender on the other hand, the Guarantor,
to the fullest extent it may effectively do so, (i) waives the right to
interpose any setoff, recoupment, counterclaim or cross-claim in connection with
any such litigation, irrespective of the nature of such setoff, recoupment,
counterclaim or cross-claim, unless such setoff, recoupment, counterclaim or
cross-claim could not, by reason of any applicable Federal or State procedural
laws, be interposed, pleaded or alleged in any other action and
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(ii) WAIVES TRIAL BY JURY IN CONNECTION WITH ANY SUCH LITIGATION AND ANY RIGHT
IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO,
ACTUAL DAMAGES. THE GUARANTOR AGREES THAT THIS SECTION 17(a) IS A SPECIFIC AND
MATERIAL ASPECT OF THIS GUARANTY AND ACKNOWLEDGES THAT THE LENDER WOULD NOT
EXTEND TO THE BORROWER ANY FINANCIAL ACCOMMODATIONS UNDER THE FINANCING
AGREEMENT IF THIS SECTION 17(a) WERE NOT PART OF THIS GUARANTY.
(b) The Guarantor hereby irrevocably consents to the non-exclusive
jurisdiction of the courts of the State of New York and of any Federal Court
located in the City of New York in connection with any action or proceeding
arising out of or relating to this Guaranty or any document or instrument
delivered pursuant to this Guaranty. In any such litigation, the Guarantor
waives, to the fullest extent it may effectively do so, personal service of any
summons, complaint or other process and agrees that the service thereof may be
made by certified or registered mail directed to the Guarantor at its address
for notice determined in accordance with Section 15 hereof. The Guarantor hereby
waives, to the fullest extent it may effectively do so, the defenses of forum
non conveniens and improper venue.
(c) The Guarantor hereby waives presentment, notice of dishonor and
protests of all instruments included in or evidencing any of the Guaranteed
Obligations, and any and all other notices and demands whatsoever (except as
expressly provided herein).
Section 18. GOVERNING LAW. THIS GUARANTY AND THE GUARANTEED
OBLIGATIONS SHALL BE GOVERNED IN ALL RESPECTS BY THE LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS EXECUTED AND TO BE PERFORMED IN SUCH STATE, WITHOUT
GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
Section 19. Captions; Separability. (a) The captions of the Sections
and subsections of this Guaranty have been inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Guaranty.
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(b) If any term of this Guaranty shall be held to be invalid,
illegal or unenforceable, the validity of all other terms hereof shall in no way
be affected thereby.
Section 20. Acknowledgment of Receipt. The Guarantor acknowledges
receipt of a copy of this Guaranty and each of the Loan Documents.
Section 21. Confirmation and Restatement of the Guaranties. The
Original Guarantor hereby confirms its guaranty of the Guaranteed Obligations
and all other obligations under this Guaranty and by the execution and delivery
of this Guaranty by each Original Guarantor, each Original Guarantor
acknowledges and agrees that the terms of the Original Guaranty are hereby
superseded and restated in their entirety by this Guaranty without thereby
cancelling, satisfying or discharging the obligations of each Original Guarantor
thereunder.
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IN WITNESS WHEREOF, the Guarantor has duly executed or caused this
Guaranty to be duly executed in the State of New York as of the date first above
set forth.
TORTONI MANUFACTURING CORP.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
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