GUARANTY
This GUARANTY (as amended, supplemented or modified from time
to time, this "Guaranty") is made as of September 3, 1995 by XXXXXXX X. MULES
(the "Guarantor"), for the benefit of DUTTERER'S OF MANCHESTER CORPORATION, a
Maryland corporation (the "Seller").
RECITALS
Value Added Food Services, Inc., a Maryland corporation (the
"Buyer"), and the Seller propose to enter into certain agreements including,
without limitation, a Xxxx of Sale, an Assumption of Liabilities and
Obligations, a Term Note payable to the order of the Seller in the original
principal amount of $1,077,821.00 (the "Note"), and a Closing Agreement, each
dated the date hereof (as the same may be amended, supplemented or modified
from time to time and including any agreement extending the maturity of,
financing or otherwise structuring all or any portion of the obligations
under such agreements or any successor agreement, collectively, the
"Transaction Documents"). To induce the Seller to enter into the Transaction
Documents and to secure the Buyer's obligations under the Note and the other
Transaction Documents, the Guarantor hereby agrees with the Seller as
follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. Terms used herein and not defined
which are defined in the Transaction Documents have for the purposes hereof
the meanings set forth therein.
ARTICLE II
GUARANTY
Section 2.1. The Guaranty. The Guarantor hereby
unconditionally guarantees to the Seller, for its benefit and for the benefit
of its successors, indorsees, transferees and assigns, the full and punctual
payment when due (whether at stated maturity, by acceleration or otherwise)
of (i) all amounts now or hereafter payable by the Buyer to the Seller on the
Note and (ii) all other obligations, responsibilities or liabilities now or
hereafter payable by the Buyer under, arising out of, or in connection with
the Transaction Documents (all such indebtedness, obligations,
responsibilities and liabilities being herein called the "Obligations"), and
the Guarantor further agrees to pay any and all reasonable expenses which may
be paid or incurred by the Seller in collecting any or all of the Obligations
and/or enforcing any rights under this Guaranty or under the Obligations,
provided, however, that Guarantor's liability for such expenses shall not
exceed an amount equal to ten percent (10%) of the Obligations. If the Buyer
shall fail to pay or perform any Obligation when due in accordance with its
terms (whether at stated maturity, by acceleration or otherwise), the
Guarantor shall forthwith on demand of the Seller pay the Seller the amount
of or perform such Obligation.
Section 2.2. Guaranty Unconditional. This is a guaranty of
payment and not of collection, and the obligations of the Guarantor hereunder
are unconditional and absolute and, without limiting the generality of the
foregoing, shall not be released, discharged or otherwise affected by:
(i) any extension, renewal, settlement, compromise,
waiver or release in respect of any obligation of the Buyer under the
Transaction Documents, the Note or any other document evidencing any
Obligation, by operation of law or otherwise;
(ii) any modification or amendment or supplement to the
Transaction Documents, the Note or any other document evidencing any
Obligation;
(iii) any release, non-perfection or invalidity of any
direct or indirect security for any Obligation or any release of any other
guarantor of any Obligation;
(iv) any change in the existence, structure or ownership
of the Buyer, or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting the Buyer or its assets or any resulting disallowance,
release or discharge of all or any portion of any Obligation;
(v) the existence of any claim, set-off or other right
which the Guarantor may have at any time against the Buyer, the Seller or any
other corporation or person, whether in connection herewith or any unrelated
transaction; provided, however, that nothing herein shall prevent the
assertion of any such claim by separate suit or compulsory counterclaim;
(vi) any invalidity or unenforceability of any
Obligation, or any provision of applicable law or regulation purporting to
prohibit the payment by the Buyer of any Obligation;
(vii) any failure by the Seller (A) to file or enforce a
claim against the Buyer or its estate (in a bankruptcy or other proceeding),
(B) to give notice of the existence, creation or incurring by the Buyer of
any new or additional indebtedness or obligation under or with respect to any
Obligation, (C) to commence any action against the Buyer, (D) to disclose to
the Guarantor any facts which the Seller may now or hereafter know with
regard to the Buyer or (E) to proceed with due diligence in the collection,
protection or realization upon any collateral securing any Obligation; or
(viii) any other act or omission to act or delay of any
kind by the Buyer or the Seller or any other corporation or person or any
other circumstance whatsoever which might, but for the provisions of this
clause, constitute a legal or equitable discharge of the Guarantor's
obligations hereunder.
Section 2.3. Discharge; Reinstatement in Certain
Circumstances. The Guarantor's obligations hereunder shall remain in full
force and effect until payment in full of the Obligations. No payment or
payments made by the Buyer, the Guarantor, any other guarantor or any other
person or received or collected by the Seller from the Buyer, the
Guarantor, any other guarantor or any other person by virtue of any action or
proceeding or any set-off or appropriation or application at any time or from
time to time in reduction of or in payment of the Obligations shall be deemed
to modify, reduce, release or otherwise affect the liability of the Guarantor
hereunder which shall, notwithstanding any such payment or payments, remain
liable for the Obligations until the Obligations are paid in full. If at any
time any payment by the Buyer of any Obligation is rescinded or must
otherwise be restored or returned upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Buyer or upon or as a
result of the appointment of a receiver, intervener or conservator of, or
trustee or similar officer for, the Buyer or any substantial part of its
property or otherwise, the Guarantor's obligations hereunder with respect to
such payment shall be reinstated as though such payment had been due but not
made at such time. The Guarantor agrees that payment or performance of any
of the Obligations or other acts which toll any statute of limitations
applicable to the Obligations shall also toll the statute of limitations
applicable to the Guarantor's liability hereunder.
Section 2.4. Waiver by the Guarantor. The Guarantor waives
any and all notice of the creation, renewal, extension or accrual of any of
the Obligations and notice of or proof of reliance by the Seller upon this
Guaranty or acceptance of this Guaranty, and the Obligations shall
conclusively be deemed to have been created, contracted or incurred in
reliance upon this Guaranty, and all dealings between the Buyer or the
Guarantor and the Seller shall likewise be conclusively presumed to have
taken place or been consummated in reliance upon this Guaranty. The
Guarantor irrevocably waives (i) acceptance hereof, diligence, presentment,
demand, protest and any notice not provided for herein, including,
without limitation, any notice when the Seller exercises rights against the
Buyer to accelerate the unpaid principal amount of any Obligation or to hold,
sell, lease or otherwise dispose of Collateral, (ii) the benefit of any act
or omission by the Seller which directly or indirectly results in or aids the
discharge of the Buyer or the Buyer's payment and performance of any
of the Obligations, (iii) any requirement that at any time any action be
taken by any corporation or person against the Buyer or any other corporation
or person or that resort be had to any security for, or other guaranty of,
any Obligation, (iv) any defense that may arise by reason of lack of
authority of the Guarantor or the lack of authority, death or disability of
any other person or entity, (v) any right that the Guarantor may now or
hereafter have under Section 3-606 of the UCC or otherwise to unimpaired
Collateral, (vi) the defense of commercial unreasonableness with respect to
the Seller's exercise of any rights or remedies against any Collateral or
other direct or indirect security for the Obligations or (vii) any
defense based upon any fact or condition set forth in clauses (i) through
(viii) of Section 2.2.
Section 2.5. Subrogation. Upon making any payment
hereunder, the Guarantor shall be subrogated to the rights of the payee
against the Buyer with respect to such payment; provided, however, that the
Guarantor shall not enforce any payment by way of subrogation until all
amounts of principal of, and interest on, the Note and all other amounts
payable with respect to the Obligations have been paid in full.
Section 2.6. Stay of Acceleration. If acceleration of the
time for payment of any amount payable by the Buyer under or with respect to
the Obligations is stayed upon the insolvency or bankruptcy of the Buyer, all
such amounts otherwise subject to acceleration under the terms of the Note
and the Transaction Documents or any other instrument governing such
Obligations shall nonetheless be payable by the Guarantor hereunder forthwith
on demand by the Seller.
Section 2.7. No Set-Off. No act or omission of any kind or
at any time on the part of the Seller in respect of any matter whatsoever
shall in any way affect or impair the rights of the Seller to enforce any
right, power or benefit under this Guaranty, and no set-off, claim, reduction
or diminution of any obligation or any defense of any kind or nature which
the Guarantor has or may have against the Seller shall be available against
the Seller in any suit or action brought by the Seller to enforce any right,
power or benefit provided for by this Guaranty; provided, however, that
nothing herein shall prevent the assertion by the Guarantor of any such claim
by separate suit or compulsory counterclaim. Nothing in this Guaranty shall
be construed as a waiver by the Guarantor of any rights or claims which
he/she may have against the Seller hereunder or otherwise, but any recovery
upon such rights and claims shall be had from the Seller separately, it being
the intent of this Guaranty that the Guarantor shall be unconditionally and
absolutely obligated to perform fully all his/her obligations, covenants and
agreements hereunder for the benefit of the Seller.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Guarantor represents and warrants that:
Section 3.1. Contravention. The execution, delivery and
performance by the Guarantor of this Guaranty require no action by or in
respect of, or filing with, any governmental body, agency or official and do
not contravene, or constitute (with or without the giving of notice or lapse
of time or both) a default under, any provision of applicable law
or of any agreement, judgment, injunction, order, decree or other instrument
binding upon or affecting the Guarantor.
Section 3.2. Binding Effect. This Guaranty constitutes a
valid and binding agreement of the Guarantor enforceable against the
Guarantor in accordance with its terms, except as (i) the enforceability
hereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability.
Section 3.3. Litigation. There is no action, suit or
proceeding pending against, or to the knowledge of the Guarantor threatened
against or affecting, the Guarantor before any federal, state or local
government, authority, agency, court or other body, officer or entity, or
before any arbitrator with authority to bind a party at law, in which there
is a reasonable possibility of a decision which could materially adversely
affect the financial condition of the Guarantor or which in any manner draws
into question the validity of this Guaranty and there is no basis known to
the Guarantor for any such action, suit or proceeding.
Section 3.4. No Defaults. The Guarantor is not in default
in the payment of the principal of or interest on any indebtedness and is not
in default under any instrument under and subject to which any such
indebtedness has been incurred, and no event has occurred and is continuing
under the provisions of any such agreement which, with the lapse of time or
the giving of notice, or both, would constitute an event of default
thereunder or permit the acceleration of the indebtedness represented
thereby.
ARTICLE IV
COVENANTS
Section 4.1. Financial Statements. The Guarantor will, at
the request of the Seller, prepare and furnish in a timely fashion such
financial statements and other information as are in form satisfactory to the
Seller, and shall provide such other financial information at such other
times as may be reasonably requested by the Seller.
ARTICLE V
SET-OFF
Section 5.1. Right of Set-Off. Upon the occurrence and
during the continuance of an Event of Default, the Seller 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 indebtedness at any time owing by
the Seller to or for the credit or the account of the Guarantor against
any and all of the obligations now or hereafter existing under this Guaranty,
irrespective of whether or not the Seller shall have made any demand
hereunder and although such obligation may be unmatured. The rights of the
Seller under this Section 5.1 are in addition to any other rights and
remedies (including, without limitation, other rights of set-off) which
the Seller may have. The Seller agrees to notify the Guarantor promptly
after it exercises any such right of set-off.
ARTICLE VI
MISCELLANEOUS
Section 6.1. Notices. All notices, requests and other
communications to a party hereunder shall be in writing and shall be given to
such party at its or his/her address set forth on the signature page hereof
or such other address as such party may hereafter specify for that purpose by
notice to the other. Each such notice, request or other communication shall
be effective when delivered by overnight courier at the address specified in
this Section 6.1.
Section 6.2. No Waivers. No failure or delay by the Seller
in exercising any right, power or privilege 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, power
or privilege. The rights and remedies herein provided shall be cumulative
and not exclusive of any rights or remedies provided by law.
Section 6.3. Expenses. The Guarantor shall pay (i) all
out-of-pocket expenses of the Seller, including the reasonable fees and
disbursements of its counsel, in connection with the preparation and
administration of this Guaranty, any waiver or consent hereunder or any
amendment hereof and (ii) if an Event of Default occurs, all out-of-pocket
expenses incurred by the Seller, including the reasonable fees and
disbursements of its counsel, in connection with such Event of Default and
any collection and other enforcement proceedings resulting therefrom.
Section 6.4. Amendments and Waivers. Any provision of this
Guaranty may be amended or waived if, but only if, such amendment or waiver
is in writing and is signed by the Guarantor and the Seller.
Section 6.5. Successors and Assigns. The provisions of this
Guaranty shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that the Guarantor may
not assign or otherwise transfer any of her rights under this Guaranty
without the prior written consent of the Seller.
Section 6.6. Governing Law. This Guaranty shall be governed
by and construed in accordance with the laws of the State of Maryland, except
as otherwise provided herein.
Section 6.7. Counterparts; Effectiveness. This Guaranty may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the
same instrument. This Guaranty shall become effective when the Seller shall
have received counterparts hereof signed by both parties.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Guaranty or caused this Guaranty to be duly executed by an authorized officer
as of the day and year first written above.
XXXXXXX X. MULES (SEAL)
(Signature)
0 Xxxx'x Xxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
DUTTERER'S OF MANCHESTER CORP.,
a Maryland corporation
By: Xxxxxx X. Xxxxxx (SEAL)
Authorized Agent
(Signature)
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
