EXHIBIT 10.25
[EXECUTION]
GUARANTEE
March 22, 2002
Congress Financial Corporation (Florida)
000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Gentlemen:
LS Holding, Inc. ("Holding"), L.S. Wholesale, Inc. ("Wholesale") and L.S.
Holding (Florida), Inc. ("Florida", and together with Holding and Wholesale,
each individually a "Borrower" and collectively, "Borrowers") have entered into
certain financing arrangements with Congress Financial Corporation (Florida)
("Lender") pursuant to which Lender may make loans and advances and provide
other financial accommodations to Borrowers as set forth in the Loan and
Security Agreement, dated of even date herewith by and among Borrowers, Little
Switzerland, Inc. and Lender (as the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced, the
"Loan Agreement"), and other agreements, documents and instruments referred to
therein or at any time executed and/or delivered in connection therewith or
related thereto, including, but not limited to, this Guarantee (all of the
foregoing, together with the Loan Agreement, as the same now exist or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced, being collectively referred to herein as the "Financing Agreements").
Due to the close business and financial relationships between Holding and
each and all of the undersigned (individually and collectively, "Guarantors"),
in consideration of the benefits which will accrue to Guarantors and as an
inducement for and in consideration of Lender making loans and advances and
providing other financial accommodations to Holding pursuant to the Loan
Agreement and the other Financing Agreements, each of Guarantors hereby jointly
and severally agrees in favor of Xxxxxx as follows:
1. GUARANTEE.
(a) Each of Guarantors absolutely and unconditionally, jointly and
severally, guarantees and agrees to be liable for the full and indefeasible
payment and performance when due of the following (all of which are collectively
referred to herein as the "Guaranteed Obligations"): (i) all obligations,
liabilities and indebtedness of any kind, nature and description of Holding to
Lender and/or its affiliates, including principal, interest, charges, fees,
costs and expenses, however evidenced, whether as principal, surety, endorser,
guarantor or otherwise, whether arising under the Loan Agreement, the other
Financing Agreements or
otherwise, whether now existing or hereafter arising, whether arising before,
during or after the initial or any renewal term of the Loan Agreement or after
the commencement of any case with respect to Holding under the United States
Bankruptcy Code or any similar statute or under any insolvency, reorganization,
receivership, readjustment of debt, dissolution or liquidation law or statute of
any jurisdiction now or hereafter in effect, whether at law or in equity
(including, without limitation, the payment of interest and other amounts, which
would accrue and become due but for the commencement of such case, whether or
not such amounts are allowed or allowable in whole or in part in any such case
and including loans, interest, fees, charges and expenses related thereto and
all other obligations of Holding or its successors to Lender arising after the
commencement of such case), whether direct or indirect, absolute or contingent,
joint or several, due or not due, primary or secondary, liquidated or
unliquidated, secured or unsecured, and however acquired by Lender and (ii) all
expenses (including, without limitation, reasonable attorneys' fees and legal
expenses) incurred by Lender in connection with the preparation, execution,
delivery, recording, administration, collection, liquidation, enforcement and
defense of Holding's obligations, liabilities and indebtedness as aforesaid to
Lender, the rights of Lender in any collateral or under this Guarantee and all
other Financing Agreements or in any way involving claims by or against Lender
directly or indirectly arising out of or related to the relationships between
Holding, any of Guarantors or any other Obligor (as hereinafter defined) and
Lender, whether such expenses are incurred before, during or after the initial
or any renewal term of the Loan Agreement and the other Financing Agreements or
after the commencement of any case with respect to Holding or any of Guarantors
under the United States Bankruptcy Code or any similar statute or under any
insolvency, reorganization, receivership, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction now or hereafter in effect,
whether at law or in equity.
(b) This Guarantee is a guaranty of payment and not of collection.
Each of Guarantors agrees that Lender need not attempt to collect any Guaranteed
Obligations from Holding, any one of Guarantors or any other Obligor or to
realize upon any collateral, but may require any one of Guarantors to make
immediate payment of all of the Guaranteed Obligations to Lender when due,
whether by maturity, acceleration or otherwise, or at any time thereafter.
Lender may apply any amounts received in respect of the Guaranteed Obligations
to any of the Guaranteed Obligations, in whole or in part (including reasonable
attorneys' fees and legal expenses incurred by Lender with respect thereto or
otherwise chargeable to Holding or Guarantors) and in such order as Lender may
elect.
(c) Payment by Guarantors shall be made to Lender at the office of
Lender from time to time on demand as Guaranteed Obligations become due.
Guarantors shall make all payments to Lender on the Guaranteed Obligations free
and clear of, and without deduction or withholding for or on account of, any
setoff, counterclaim, defense, duties, taxes, levies, imposts, fees, deductions,
withholding, restrictions or conditions of any kind. One or more successive or
concurrent actions may be brought hereon against any of Guarantors either in the
same action in which Holding or any of the other Guarantors or any other Obligor
is sued or in separate actions. In the event any claim or action, or action on
any judgment, based on this Guarantee is brought against any of Guarantors, each
of Guarantors agrees not to deduct, set-off, or seek any counterclaim for or
recoup any amounts which are or may be owed by Xxxxxx to any of Guarantors
hereunder.
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2. WAIVERS AND CONSENTS.
(a) Notice of acceptance of this Guarantee, the making of loans and
advances and providing other financial accommodations to Holding and
presentment, demand, protest, notice of protest, notice of nonpayment or default
and all other notices to which Holding or any of Guarantors are entitled are
hereby waived by each of Guarantors. Each of Guarantors also waives notice of
and hereby consents to, (i) any amendment, modification, supplement, extension,
renewal, or restatement of the Loan Agreement and any of the other Financing
Agreements, including, without limitation, extensions of time of payment of or
increase or decrease in the amount of any of the Guaranteed Obligations, the
interest rate, fees, other charges, or any collateral, and the guarantee made
herein shall apply to the Loan Agreement and the other Financing Agreements and
the Guaranteed Obligations as so amended, modified, supplemented, renewed,
restated or extended, increased or decreased, (ii) the taking, exchange,
surrender and releasing of collateral or guarantees now or at any time held by
or available to Lender for the obligations of Holding or any other party at any
time liable on or in respect of the Guaranteed Obligations or who is the owner
of any property which is security for the Guaranteed Obligations (individually,
an "Obligor" and collectively, the "Obligors"), including, without limitation,
the surrender or release by Xxxxxx of any one of Guarantors hereunder, (iii) the
exercise of, or refraining from the exercise of any rights against Holding, any
of Guarantors or any other Obligor or any collateral, (iv) the settlement,
compromise or release of, or the waiver of any default with respect to, any of
the Guaranteed Obligations and (v) any financing by Lender of Holding under
Section 364 of the United States Bankruptcy Code or consent to the use of cash
collateral by Lender under Section 363 of the United States Bankruptcy Code.
Each of Guarantors agrees that the amount of the Guaranteed Obligations shall
not be diminished and the liability of Guarantors hereunder shall not be
otherwise impaired or affected by any of the foregoing.
(b) No invalidity, irregularity or unenforceability of all or any part
of the Guaranteed Obligations shall affect, impair or be a defense to this
Guarantee, nor shall any other circumstance which might otherwise constitute a
defense available to or legal or equitable discharge of Holding in respect of
any of the Guaranteed Obligations, or any one of Guarantors in respect of this
Guarantee, affect, impair or be a defense to this Guarantee (other than the
defense of final indefeasible payment of the Guaranteed Obligations). Without
limitation of the foregoing, the liability of Guarantors hereunder shall not be
discharged or impaired in any respect by reason of any failure by Lender to
perfect or continue perfection of any lien or security interest in any
collateral or any delay by Lender in perfecting any such lien or security
interest. As to interest, fees and expenses, whether arising before or after the
commencement of any case with respect to Holding under the United States
Bankruptcy Code or any similar statute, Guarantors shall be liable therefor,
even if Holding's liability for such amounts does not, or ceases to, exist by
operation of law. Each of Guarantors acknowledges that Lender has not made any
representations to any of Guarantors with respect to Holding, any other Obligor
or otherwise in connection with the execution and delivery by Guarantors of this
Guarantee and Guarantors are not in any respect relying upon Lender or any
statements by Lender in connection with this Guarantee.
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(c) Each of Guarantors hereby irrevocably and unconditionally waives
and relinquishes all statutory, contractual, common law, equitable and all other
claims against Holding, any collateral for the Guaranteed Obligations or other
assets of Holding or any other Obligor, for subrogation, reimbursement,
exoneration, contribution, indemnification, setoff or other recourse in respect
to sums paid or payable to Lender by each of Guarantors hereunder and each of
Guarantors hereby further irrevocably and unconditionally waives and
relinquishes any and all other benefits which Guarantors might otherwise
directly or indirectly receive or be entitled to receive by reason of any
amounts paid by or collected or due from Guarantors, Holding or any other
Obligor upon the Guaranteed Obligations or realized from their property until
all of the Guaranteed Obligations have been paid in full and the Financing
Agreements have been terminated and are no longer in full force and effect.
3. SUBORDINATION. Payment of all amounts now or hereafter owed to
Guarantors by Holding or any other Obligor is hereby subordinated in right of
payment to the indefeasible payment in full to Lender of the Guaranteed
Obligations and all such amounts and any security and guarantees therefor are
hereby assigned to Lender as security for the Guaranteed Obligations.
4. ACCELERATION. Notwithstanding anything to the contrary contained
herein or any of the terms of any of the other Financing Agreements, the
liability of Guarantors for the entire Guaranteed Obligations shall mature and
become immediately due and payable, even if the liability of Holding or any
other Obligor therefor does not, upon the occurrence of any act, condition or
event which constitutes an Event of Default as such term is defined in the Loan
Agreement.
5. ACCOUNT STATED. The books and records of Lender showing the account
between Lender and Holding shall be admissible in evidence in any action or
proceeding against or involving Guarantors as PRIMA FACIE proof of the items
therein set forth, and the monthly statements of Lender rendered to Holding, to
the extent to which no written objection is made within thirty (30) days from
the date of sending thereof to Holding, shall be deemed conclusively correct and
constitute an account stated between Lender and Holding and be binding on
Guarantors.
6. TERMINATION. This Guarantee is continuing, unlimited, absolute and
unconditional. All Guaranteed Obligations shall be conclusively presumed to have
been created in reliance on this Guarantee. Each of Guarantors shall continue to
be liable hereunder until one of Xxxxxx's officers actually receives a written
termination notice from a Guarantor sent to Lender at its address set forth
above by certified mail, return receipt requested and thereafter as set forth
below. Such notice received by Lender from any one of Guarantors shall not
constitute a revocation or termination of this Guarantee as to any of the other
Guarantors. Revocation or termination hereof by any of Guarantors shall not
affect, in any manner, the rights of Lender or any obligations or duties of any
of Guarantors (including the Guarantor which may have sent such notice) under
this Guarantee with respect to (a) Guaranteed Obligations which have been
created, contracted, assumed or incurred prior to the receipt by Lender of such
written notice of revocation or termination as provided herein, including,
without limitation, (i) all amendments, extensions, renewals and modifications
of such Guaranteed Obligations (whether or not
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evidenced by new or additional agreements, documents or instruments executed
on or after such notice of revocation or termination), (ii) all interest, fees
and similar charges accruing or due on and after revocation or termination, and
(iii) all reasonable attorneys' fees and legal expenses, costs and other
expenses paid or incurred on or after such notice of revocation or termination
in attempting to collect or enforce any of the Guaranteed Obligations against
Holding, Guarantors or any other Obligor (whether or not suit be brought), or
(b) Guaranteed Obligations which have been created, contracted, assumed or
incurred after the receipt by Lender of such written notice of revocation or
termination as provided herein pursuant to any contract entered into by Lender
prior to receipt of such notice. The sole effect of such revocation or
termination by any of Guarantors shall be to exclude from this Guarantee the
liability of such Guarantor for those Guaranteed Obligations arising after the
date of receipt by Lender of such written notice which are unrelated to
Guaranteed Obligations arising or transactions entered into prior to such date.
Without limiting the foregoing, this Guarantee may not be terminated and shall
continue so long as the Loan Agreement shall be in effect (whether during its
original term or any renewal, substitution or extension thereof).
7. REINSTATEMENT. If after receipt of any payment of, or proceeds of
collateral applied to the payment of, any of the Guaranteed Obligations, Lender
is required to surrender or return such payment or proceeds to any Person for
any reason, then the Guaranteed Obligations intended to be satisfied by such
payment or proceeds shall be reinstated and continue and this Guarantee shall
continue in full force and effect as if such payment or proceeds had not been
received by Lender. Each of Guarantors shall be liable to pay to Lender, and
does indemnify and hold Lender harmless for the amount of any payments or
proceeds surrendered or returned. This Section 7 shall remain effective
notwithstanding any contrary action which may be taken by Xxxxxx in reliance
upon such payment or proceeds. This Section 7 shall survive the termination or
revocation of this Guarantee.
8. AMENDMENTS AND WAIVERS. Neither this Guarantee nor any provision
hereof shall be amended, modified, waived or discharged orally or by course of
conduct, but only by a written agreement signed by an authorized officer of
Lender. Lender shall not by any act, delay, omission or otherwise be deemed to
have expressly or impliedly waived any of its rights, powers and/or remedies
unless such waiver shall be in writing and signed by an authorized officer of
Lender. Any such waiver shall be enforceable only to the extent specifically set
forth therein. A waiver by Lender of any right, power and/or remedy on any one
occasion shall not be construed as a bar to or waiver of any such right, power
and/or remedy which Lender would otherwise have on any future occasion, whether
similar in kind or otherwise.
9. CORPORATE EXISTENCE, POWER AND AUTHORITY. Each of Guarantors is a
corporation duly organized and in good standing under the laws of its state or
other jurisdiction of incorporation and is duly qualified as a foreign
corporation and in good standing in all states or other jurisdictions where the
nature and extent of the business transacted by it or the ownership of assets
makes such qualification necessary, except for those jurisdictions in which the
failure to so qualify would not have a material adverse effect on the financial
condition, results of operation or businesses of any of Guarantors or the rights
of Lender hereunder or under any of the other Financing Agreements. The
execution, delivery and performance of this Guarantee is within the corporate
powers of each of Guarantors, have been duly authorized and are not in
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contravention of law or the terms of the certificates of incorporation, by-laws,
or other organizational documentation of each of Guarantors, or any indenture,
agreement or undertaking to which any of Guarantors is a party or by which any
of Guarantors or its property are bound. This Guarantee constitutes the legal,
valid and binding obligation of each of Guarantors enforceable in accordance
with its terms. Any one of Guarantors signing this Guarantee shall be bound
hereby whether or not any of the other Guarantors or any other person signs this
Guarantee at any time.
10. GOVERNING LAW; CHOICE OF FORUM; SERVICE OF PROCESS; JURY TRIAL WAIVER.
(a) The validity, interpretation and enforcement of this Guarantee and
any dispute arising out of the relationship between any of Guarantors and
Lender, whether in contract, tort, equity or otherwise, shall be governed by the
internal laws of the State of Florida (without giving effect to principles of
conflicts of law).
(b) Each of Guarantors hereby irrevocably consents and submits to the
non-exclusive jurisdiction of the Circuit Court of Miami-Dade County, Florida
and the United States District Court for the Southern District of Florida, as
Lender may elect, and waives any objection based on venue or FORUM NON
CONVENIENS with respect to any action instituted therein arising under this
Guarantee or any of the other Financing Agreements or in any way connected with
or related or incidental to the dealings of any of Guarantors and Lender in
respect of this Guarantee or any of the other Financing Agreements or the
transactions related hereto or thereto, in each case whether now existing or
hereafter arising and whether in contract, tort, equity or otherwise, and agrees
that any dispute arising out of the relationship between any of Guarantors or
Holding and Lender or the conduct of any such persons in connection with this
Guarantee, the other Financing Agreements or otherwise shall be heard only in
the courts described above (except that Lender shall have the right to bring any
action or proceeding against any of Guarantors or its property in the courts of
any other jurisdiction which Lender deems necessary or appropriate in order to
realize on collateral at any time granted by Holding or any of Guarantors to
Lender or to otherwise enforce its rights against any of Guarantors or its
property).
(c) Each of Guarantors hereby waives personal service of any and all
process upon it and consents that all such service of process may be made by
certified mail (return receipt requested) directed to its address set forth on
the signature pages hereof and service so made shall be deemed to be completed
five (5) days after the same shall have been so deposited in the U.S. mails, or,
at Lender's option, by service upon any of Guarantors in any other manner
provided under the rules of any such courts. Within thirty (30) days after such
service, any of Guarantors so served shall appear in answer to such process,
failing which such Guarantors shall be deemed in default and judgment may be
entered by Lender against Guarantors for the amount of the claim and other
relief requested.
(d) EACH OF GUARANTORS HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS GUARANTEE OR ANY
OF THE OTHER FINANCING AGREEMENTS OR (ii) IN ANY WAY CONNECTED WITH OR RELATED
OR INCIDENTAL TO THE
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DEALINGS OF ANY OF GUARANTORS AND LENDER IN RESPECT OF THIS GUARANTEE OR ANY OF
THE OTHER FINANCING AGREEMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO IN
EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT,
TORT, EQUITY OR OTHERWISE. EACH OF GUARANTORS HEREBY AGREES AND CONSENTS THAT
ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY AND THAT ANY OF GUARANTORS OR LENDER MAY FILE AN ORIGINAL
COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF
THE CONSENT OF GUARANTORS AND LENDER TO THE WAIVER OF THEIR RIGHT TO TRIAL BY
JURY.
(e) Lender shall not have any liability to Guarantors (whether in
tort, contract, equity or otherwise) for losses suffered by Guarantors in
connection with, arising out of, or in any way related to the transactions or
relationships contemplated by this Guarantee, or any act, omission or event
occurring in connection herewith, unless it is determined by a final and
non-appealable judgment or court order binding on Lender that the losses were
the result of acts or omissions constituting gross negligence or willful
misconduct. In any such litigation, Xxxxxx shall be entitled to the benefit of
the rebuttable presumption that it acted in good faith and with the exercise of
ordinary care in the performance by it of the terms of the Loan Agreement and
the other Financing Agreements.
11. NOTICES. All notices, requests and demands hereunder shall be in
writing and (a) made to Lender at its address set forth above and to each of
Guarantors at its chief executive office set forth below, or to such other
address as either party may designate by written notice to the other in
accordance with this provision, and (b) deemed to have been given or made: if
delivered in person, immediately upon delivery; if by telex, telegram or
facsimile transmission, immediately upon sending and upon confirmation of
receipt; if by nationally recognized overnight courier service with instructions
to deliver the next business day, two (2) business days after sending; and if by
certified mail, return receipt requested, five (5) days after mailing.
12. PARTIAL INVALIDITY. If any provision of this Guarantee is held to be
invalid or unenforceable, such invalidity or unenforceability shall not
invalidate this Guarantee as a whole, but this Guarantee shall be construed as
though it did not contain the particular provision held to be invalid or
unenforceable and the rights and obligations of the parties shall be construed
and enforced only to such extent as shall be permitted by applicable law.
13. ENTIRE AGREEMENT. This Guarantee represents the entire agreement and
understanding of this parties concerning the subject matter hereof, and
supersedes all other prior agreements, understandings, negotiations and
discussions, representations, warranties, commitments, proposals, offers and
contracts concerning the subject matter hereof, whether oral or written.
14. SUCCESSORS AND ASSIGNS. This Guarantee shall be binding upon
Guarantors and their respective successors and assigns and shall inure to the
benefit of Xxxxxx and its successors, endorsees, transferees and assigns. The
liquidation, dissolution or termination of any of
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Guarantors shall not terminate this Guarantee as to such entity or as to any of
the other Guarantors.
15. CONSTRUCTION. All references to the term "Guarantors" wherever used
herein shall mean each and all of Guarantors and their respective successors and
assigns, individually and collectively, jointly and severally (including,
without limitation, any receiver, trustee or custodian for any of Guarantors or
any of their respective assets or any of Guarantors in its capacity as debtor or
debtor-in-possession under the United States Bankruptcy Code). All references to
the term "Lender" wherever used herein shall mean Lender and its successors and
assigns and all references to the term "Holding" wherever used herein shall mean
Holding and its successors and assigns (including, without limitation, any
receiver, trustee or custodian for Holding or any of its assets or Holding in
its capacity as debtor or debtor-in-possession under the United States
Bankruptcy Code). All references to the term "Person" or "person" wherever used
herein shall mean any individual, sole proprietorship, partnership, corporation
(including, without limitation, any corporation which elects subchapter S status
under the Internal Revenue Code of 1986, as amended), limited liability company,
limited liability partnership, business trust, unincorporated association, joint
stock corporation, trust, joint venture or other entity or any government or any
agency or instrumentality of political subdivision thereof. All references to
the plural shall also mean the singular and to the singular shall also mean the
plural.
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IN WITNESS WHEREOF, each of Guarantors has executed and delivered this
Guarantee as of the day and year first above written.
L.S. WHOLESALE, INC.
By:
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Title: Chief Financial Officer
CHIEF EXECUTIVE OFFICE
000-X Xxxxx Xxx
Xx. Xxxxxx, XXXX 00000
L.S. HOLDING (FLORIDA), INC.
By:
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Title: Chief Financial Officer
CHIEF EXECUTIVE OFFICE
000-X Xxxxx Xxx
Xx. Xxxxxx, XXXX 00000
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