GUARANTEE
GUARANTEE, dated as of May 12, 2000 (as amended, supplemented
or otherwise modified from time to time, the "Guarantee"), made by XXXXXX
AMERICAN CORP. (together with its successors and assigns permitted herein,
"Xxxxxx American"), in favor of XXXXXX AMERICAN RECEIVABLES, LLC (the
"Purchaser").
W I T N E S S E T H :
WHEREAS, pursuant to the Receivables Transfer Agreement, dated
as of May 12, 2000 (as amended, supplemented or otherwise modified from time to
time, the "Transfer Agreement"), between Great American Knitting Xxxxx, Inc.
("Great American"), as seller and servicer ("Great American"), and the
Purchaser, the Purchaser has agreed to purchase certain Receivables (as defined
therein) on the Purchase Dates referred to therein;
WHEREAS, pursuant to Sections 2.6, 2.7 and 6.2(a)(vi) of the
Transfer Agreement, Great American shall have, under certain circumstances,
certain repurchase and indemnification obligations with respect to the Purchased
Receivables (as defined therein); and
WHEREAS, Great American is a wholly-owned subsidiary of Xxxxxx
American and it is to the advantage of Xxxxxx American that the Purchaser
purchase certain Receivables from Great American;
NOW THEREFORE, in consideration of the premises and to induce
the Purchaser to enter into the Transfer Agreement and to induce the Purchaser
to make the purchases from Great American under the Transfer Agreement, Xxxxxx
American hereby agrees with the Purchaser as follows:
1. Defined Terms. Terms defined in the preamble hereof and
the recitals hereto and terms defined in the Transfer Agreement and used herein
without definition shall have their defined meanings when used herein.
2. Xxxxxx American Indemnification Obligation. Xxxxxx American
hereby unconditionally guarantees to the Purchaser the performance by Great
American when due of its obligations under Sections 2.6, 2.7 and 6.2(a)(vi)
of the Transfer
Agreement.
3. No Subrogation, Contribution, Reimbursement or Indemnity.
Notwithstanding anything to the contrary in this Guarantee, Xxxxxx American
hereby irrevocably waives all rights which may have arisen in connection with
this Guarantee to be subrogated to any of the rights (whether contractual, under
Title 11 of the United States Code, including Section 509 thereof, under common
law or otherwise) of the Purchaser against Great American or against any right
of offset of the Purchaser with respect to Great American's obligations under
Section 6.2(a)(vi) the Transfer Agreement. Xxxxxx American hereby further
irrevocably waives all contractual, common law, statutory or other rights of
reimbursement, contribution, exoneration or indemnity (or any similar right)
from or against Great American or any other Person which may have arisen in
connection with this Guarantee. The provisions of this paragraph shall survive
the termination of the Transfer Agreement and the Guarantee; provided that the
foregoing waiver shall be of no force and effect 370 days following the
termination of the Transfer Agreement and the Guarantee but only if during such
370-day period Great American shall not have commenced or have commenced against
it a bankruptcy proceeding under Title 11 of the United States Code.
4. Amendments, etc. with respect to the Purchased Receivables.
Xxxxxx American shall remain obligated hereunder notwithstanding that, without
any reservation of rights against Xxxxxx American, and without notice to or
further assent by Xxxxxx American, any demand for payment of any of the
Purchased Receivables made by the Purchaser may be rescinded by such Purchaser,
and the liability of any Obligor upon or for any part of the Purchased
Receivables, or any collateral security or guarantee therefor or right of offset
with respect thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived, surrendered or
released by the Purchaser, and the Transfer Agreement or any other documents
executed and delivered in connection therewith may be amended, modified,
supplemented or terminated, in whole or in part, as the Purchaser may deem
advisable from time to time, and any collateral security, guarantee or right of
offset at any time held by the Purchaser for the payment of the Purchased
Receivables may be sold, exchanged, waived, surrendered or released. The
Purchaser shall not have any obligation to protect, secure, perfect or insure
any Lien at any time held by it as security for the Purchased Receivables or for
this Guarantee or any property subject thereto.
5. Guarantee Absolute and Unconditional. Xxxxxx American
waives any and all notice of the creation, renewal, extension or accrual of any
of the Purchased Receivables and notice of or proof of reliance by the Purchaser
upon this Guarantee or acceptance of this Guarantee; the Transfer Agreement
shall conclusively be deemed to have been created, contracted or incurred in
reliance upon this Guarantee; and all dealings between Great American or Xxxxxx
American, on the one hand, and the Purchaser, on the other, shall likewise be
conclusively presumed to have been had or consummated in reliance upon this
Guarantee. Xxxxxx American waives diligence, presentment, protest, demand for
payment and notice of default or nonpayment to or upon Great American or Xxxxxx
American with respect to the Purchased Receivables. This Guarantee shall be
construed as a continuing, absolute and unconditional Guarantee without regard
to (a) the validity or enforceability of the Transfer Agreement, the Guarantee,
the Assignments or any other document or instrument executed in connection with
any of the foregoing documents, any of the Purchased Receivables or any
collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Purchaser, (b) any defense
which relates, directly or indirectly, to the matters covered by the
representations and warranties set forth in the Transfer Agreement or set-off
which in either case may at any time be available to or be asserted by Great
American against the Purchaser, or (c) any other circumstance whatsoever (with
or without notice to or knowledge of Great American or Xxxxxx American) which
constitutes, or might be construed to constitute, an equitable or legal
discharge of Great American, any Obligor for the Purchased Receivables, or of
Xxxxxx American under this Guarantee, in bankruptcy or in any other instance;
provided that this clause (c) shall not prevent Xxxxxx American from being
discharged from its obligations under this Guarantee pursuant to confirmation of
a plan of reorganization under Chapter 11 of the United States Code in a case in
which Xxxxxx American is the debtor. When the Purchaser is pursuing its rights
and remedies hereunder against Xxxxxx American, the Purchaser may, but shall be
under no obligation to, pursue such rights and remedies as it may have against
Great American, the Obligor on any Purchased Receivable or any other Person or
against any collateral security or guarantee for the Purchased Receivables or
any right of offset with respect thereto, and any failure by the Purchaser to
pursue such other rights or remedies or to collect any payments from Great
American, any such Obligor or any such other Person or to realize upon any such
collateral security or guarantee or to exercise any such right of offset, or any
release of Great American, any such Obligor or any such other Person or of any
such collateral security, guarantee or right of offset, shall not relieve Xxxxxx
American of any liability hereunder, and shall not impair or affect the rights
and remedies, whether express, implied or available as a matter of law, of the
Purchaser against Xxxxxx American.
6. Reinstatement. This Guarantee shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any of the Purchased Receivables is rescinded or must otherwise
be restored or returned by the Purchaser upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of Great American or any Obligor or
upon or as a result of the appointment of a receiver, intervenor or conservator
of, or trustee or similar officer for, Great American or any Obligor or any
substantial part of its property, or otherwise, all as though such payments had
not been made.
7. Payments. Xxxxxx American hereby agrees that payments
required to be made by it hereunder will be paid to the Purchaser in immediately
available funds without set-off in U.S. Dollars at the office of the Purchaser
at the address specified in subsection 6.8 of the Transfer Agreement.
8. Severability. Any provision of this Guarantee which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9. Section Headings. The section headings used in this
Guarantee are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
10. No Waiver; Cumulative Remedies. The Purchaser shall not by
any act (except by a written instrument pursuant to Section 11 hereof), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any default or breach of any of the terms and
conditions hereof. No failure to exercise, nor any delay in exercising, on the
part of the Purchaser, any right, power or privilege hereunder shall operate as
a waiver thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Purchaser of any right
or remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Purchaser would otherwise have on any future occasion.
The rights and remedies herein provided are cumulative, may be exercised singly
or concurrently and are not exclusive of any rights or remedies provided by law.
11. Waivers and Amendments; Successors and Assigns. None of
the terms or provisions of this Guarantee may be waived, amended, supplemented
or otherwise modified except by a written instrument executed by Xxxxxx American
and the Purchaser. This Guarantee shall be binding upon the successors and
permitted assigns of Xxxxxx American and shall inure to the benefit of the
Purchaser and its successors and assigns; provided, however, that the Purchaser
shall not assign this Guarantee to any Person except in accordance with the
Transfer Agreement; and provided further, that the Company agrees that it will
not assign or transfer all or any portion of its rights or delegate any of its
obligations hereunder without the prior written consent of the Purchaser.
Xxxxxx American acknowledges that the Purchaser will, concurrently
herewith, assign to the Unaffiliated Purchaser all of the Purchaser's right,
title and interest in, to and under (but none of the Purchaser's obligations
under), whether now or hereafter owned, existing or arising, this Guarantee.
Xxxxxx American consents to such assignment and agrees that the Unaffiliated
Purchaser, to the extent provided in the Receivables Purchase Agreement, shall
be entitled to enforce the terms of this Guarantee and the rights (including,
without limitation, the right to grant or withhold any consent or waiver) of the
Purchaser directly against Xxxxxx American. Xxxxxx American hereby consents to
all of the terms of the Receivables Purchase Agreement.
12. GOVERNING LAW. THIS GUARANTEE AND THE OBLIGATIONS OF
XXXXXX AMERICAN HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
13. Notices. All notices by the Purchaser to Xxxxxx American
hereunder to be effective shall be in writing (including by telecopy or telex),
and shall be deemed to have been duly given or made (d) when delivered by hand,
(e) in the case of mail, three Business Days after deposit in the mail, postage
prepaid, (f) in the case of telecopy notice, when received, or (g) in the case
of telex notice, when sent, answer back received, addressed to Xxxxxx American
at its address or transmission number set forth under its signature below.
Xxxxxx American may change its address and transmission numbers by written
notice to the Purchaser.
14. Waiver. The Purchaser hereby irrevocably and
unconditionally waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding relating to
this Guarantee any special, exemplary, punitive or consequential damages;
provided that the waiver contained in this Section 14 shall not extend to any
right to claim or recover from Xxxxxx American any special, exemplary, punitive
or consequential damages for which the Purchaser is liable to any Person (other
than an affiliate of such Purchaser).
15. Acknowledgments. Xxxxxx American hereby acknowledges
with respect to the transactions contemplated by the Transfer Agreement that:
(h) it has been advised by counsel in the negotiation,
execution and delivery of this Guarantee;
(i) the Purchaser has no fiduciary relationship to Xxxxxx
American or Great American and the relationship between the Purchaser,
on the one hand, and Xxxxxx American or Great American, on the other
hand, is solely that of debtor and creditor; and
(j) no joint venture exists between Great American and the
Purchaser or between Xxxxxx American and the Purchaser.
16. WAIVERS OF JURY TRIAL. EACH OF XXXXXX AMERICAN AND THE
PURCHASER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE AND FOR ANY COUNTERCLAIM
THEREIN.
IN WITNESS WHEREOF, Xxxxxx American has caused this Guarantee to be
duly executed and delivered in New York, New York by its proper and duly
authorized officer as of the day and year first above written.
XXXXXX AMERICAN CORP.
By:
Name:
Title:
Address for Notices:
Xxxxxx American Corp.
00 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: General Counsel
Acknowledged By:
XXXXXX AMERICAN RECEIVABLES, LLC
By:
Name:
Title:
