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Exhibit 10.3C
ONE BANK GUARANTY
This Guaranty is entered into as of June 1, 1997, by
XXXXXXXX-SONOMA STORES, INC. (the "Guarantor"), in favor of Bank of America
National Trust and Savings Association (the "Bank").
Recitals
X. Xxxxxxxx-Sonoma, Inc. (the "Company") and the Bank entered
into a Letter of Credit Agreement dated as of June 1, 1997. The Letter of
Credit Agreement as now in effect or hereafter extended, renewed, modified,
supplemented, amended or restated is hereinafter called the "Credit Agreement".
B. The Bank is willing to issue letters of credit for the
account of the Company as provided in the Credit Agreement on the condition
(among others) that the Guarantor enter into this Guaranty.
C. The Guarantor as a Subsidiary of the Company will derive
substantial and direct benefits (which benefits are hereby acknowledged by the
Guarantor) from the letters of credit to be issued for the account of the
Company under the Credit Agreement.
D. In order to induce the Bank to make such letters of credit
available to the Company as provided in the Credit Agreement, and for other
valuable consideration, the Guarantor issues this Guaranty.
1. Definitions. Unless otherwise defined herein, capitalized
terms used in this Guaranty have the meanings given to them from time to time
in the Credit Agreement, or, as applicable, in the Syndicated Credit Agreement
(as defined in the Credit Agreement).
2. Guaranty.
2.1 Guaranty. The Guarantor hereby irrevocably, absolutely
and unconditionally guarantees the full and punctual payment or performance
when due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise, of all of the obligations of the Company to
the Bank
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under the Credit Agreement and under the letters of credit issued pursuant to
the Credit Agreement (the "Obligations"). This Guaranty constitutes a guaranty
of payment and performance when due and not of collection, and the Guarantor
specifically agrees that it shall not be necessary or required that the Bank
exercise any right, assert any claim or demand or enforce any remedy whatsoever
against the Company (or any other Person) before or as a condition to the
obligations of the Guarantor hereunder. The Bank may permit the indebtedness
of the Company to the Bank to include indebtedness other than the Obligations,
and may apply any amounts received from any source, other than from the
Guarantor, to that portion of Company's indebtedness to the Bank which is not a
part of the Obligations.
2.2 Obligations Independent. The obligations hereunder are
independent of the obligations of the Company, and a separate action or actions
may be brought and prosecuted against the Guarantor whether action is brought
against the Company or whether the Company be joined in any such action or
actions.
2.3 Authorization of Renewals, Etc. The Guarantor authorizes
the Bank, without notice or demand and without affecting its liability
hereunder, from time to time:
(a) to renew, compromise, extend, accelerate or
otherwise change the time for payment, or otherwise change the terms, of the
Obligations, including increase or decrease of the rate of interest thereon, or
otherwise change the terms of the Credit Agreement or any letter of credit;
(b) to receive and hold security for the payment of
this Guaranty or the Obligations and exchange, enforce, waive, release, fail to
perfect, sell, or otherwise dispose of any such security;
(c) to apply such security and direct the order or
manner of sale thereof as the Bank in its discretion may determine; and
(d) to release or substitute any one or more of any
endorsers or guarantors of the Obligations.
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The Guarantor further agrees the performance or occurrence of any of the acts
or events described in clauses (a), (b), (c), and (d) above with respect to
indebtedness or other obligations of the Company, other than the Obligations,
to the Bank, shall not affect the liability of the Guarantor hereunder.
2.4 Waiver of Certain Rights. The Guarantor waives any right
to require the Bank:
(a) to proceed against the Company or any other
Person;
(b) to proceed against or exhaust any security for
the Obligations or any other indebtedness of the Company to the Bank; or
(c) to pursue any other remedy in the Bank's power
whatsoever.
2.5 Waiver of Certain Defenses. The Guarantor waives any
defense arising by reason of any claim that the Guarantor's obligations exceed
or are more burdensome than those of the Company. The Guarantor waives all
rights and defenses arising out of an election of remedies by the Bank, even
though that election of remedies, such as a nonjudicial foreclosure with
respect to security for the Obligations, has destroyed the Guarantor's rights
of subrogation and reimbursement against the Company by operation of Section
580d of the California Code of Civil Procedure (if applicable) or otherwise.
The Guarantor waives any benefit of, and any right to participate in, any
security or other guaranty now or hereafter held by the Bank securing the
Obligations.
2.6 Waiver of Presentments, Etc. The Guarantor waives all
presentments, demands for performance, notices of nonperformance, protests,
notices of protest, notices of dishonor and notices of acceptance of this
Guaranty and of the existence, creation, or incurring of new or additional
Obligations or any other indebtedness of Company to the Bank.
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2.7 Information Relating to Company. The Guarantor
acknowledges and agrees that it shall have the sole responsibility for
obtaining from the Company such information concerning the Company's financial
condition or business operations as the Guarantor may require, and that the
Bank does not have any duty at any time to disclose to the Guarantor any
information relating to the business operations or financial condition of the
Company.
2.8 Right of Setoff. In addition to any rights and remedies
of the Bank provided by law, if Guarantor has failed to make any payment due
hereunder upon demand, the Bank is authorized at any time and from time to
time, without prior notice to the Guarantor, any such notice being waived by
the Guarantor 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 Bank to or for
the credit or the account of the Guarantor against any and all obligations of
the Guarantor now or hereafter existing under this Guaranty, irrespective of
whether or not the Bank shall have made demand under this Guaranty and although
such obligations may be contingent or unmatured. The Bank agrees promptly to
notify the Guarantor after any such set-off and application made by the Bank;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of the Bank under this
Section 2.8 are in addition to the other rights and remedies (including,
without limitation, other rights of set-off) which the Bank may have.
2.9 Subordination. Any obligations of the Company to the
Guarantor, now or hereafter existing, including, but not limited to,
obligations to the Guarantor as subrogee of the Bank or resulting from the
Guarantor's performance under this Guaranty, are hereby fully subordinated in
priority of payment to the Obligations and all other indebtedness of the
Company to the Bank.
2.10 Reinstatement of Guaranty. If any payment or transfer
of any interest in property by the Company to the Bank in fulfillment of any
Obligation is rescinded or must at any time (including after the return or
cancellation of this Guaranty) be
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returned, in whole or in part, by the Bank to the Company or any other Person,
upon the insolvency, bankruptcy or reorganization of the Company or otherwise,
this Guaranty shall be reinstated with respect to any such payment or transfer,
regardless of any such prior return or cancellation.
2.11 Powers. It is not necessary for the Bank to inquire
into the powers of the Company or of the officers, directors, partners or
agents acting or purporting to act on its behalf, and any Obligations made or
created in reliance upon the professed exercise of such powers shall be
guaranteed hereunder.
2.12 Taxes. (a) Subject to compliance with Section 9.10 of
the Syndicated Credit Agreement, any and all payments by the Guarantor to the
Bank under this Guaranty shall be made free and clear of, and without deduction
or withholding for, any Taxes, Other Taxes or Further Taxes. In addition, the
Guarantor shall pay all Other Taxes.
(b) If the Guarantor shall be required by law to
deduct or withhold any Taxes, Other Taxes or Further Taxes from or in respect
of any sum payable hereunder to the Bank, then:
(i) the sum payable shall be increased as
necessary so that, after making all required deductions and
withholdings (including deductions and withholdings applicable to
additional sums payable under this Section), the Bank receives and
retains an amount equal to the sum it would have received and retained
had no such deductions or withholdings been made;
(ii) the Guarantor shall make such
deductions and withholdings;
(iii) the Guarantor shall pay the full
amount deducted or withheld to the relevant taxing authority or other
authority in accordance with applicable law; and
(iv) the Guarantor shall also pay to the
Bank, at the time interest is paid, Further Taxes in the amount that
the Bank specifies as necessary to preserve the
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after-tax yield the Bank would have received if such Taxes, Other
Taxes or Further Taxes had not been imposed.
(c) The Guarantor agrees to indemnify and hold
harmless the Bank for the full amount of (i) Taxes, (ii) Other Taxes, and (iii)
Further Taxes in the amount that the respective Bank specifies as necessary to
preserve the after-tax yield the Bank would have received if such Taxes, Other
Taxes or Further Taxes had not been imposed, and any liability (including
penalties, interest, additions to tax and expenses) arising therefrom or with
respect thereto, whether or not such Taxes, Other Taxes or Further Taxes were
correctly or legally asserted. Payment under this indemnification shall be
made within 30 days after the date the Bank makes written demand therefor.
(d) Within 30 days after the date of any payment
by the Guarantor of Taxes, Other Taxes or Further Taxes, the Guarantor shall
furnish to the Bank the original or a certified copy of a receipt evidencing
payment thereof, or other evidence of payment satisfactory to the Bank.
(e) For purposes of this Section, (i) "Taxes" means
any and all present or future taxes, levies, assessments, imposts, duties,
deductions, fees, withholdings or similar charges, and all liabilities with
respect thereto, excluding, in the case of the Bank, taxes imposed on or
measured by its net income by the jurisdiction (or any political subdivision
thereof) under the laws of which the Bank is organized or maintains a lending
office; (ii) "Other Taxes" means any present or future stamp, court or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or from the execution,
delivery, performance, enforcement or registration of, or otherwise with
respect to, this Guaranty; and (iii) "Further Taxes" means any and all present
or future taxes, levies, assessments, imposts, duties, deductions, fees,
withholdings or similar charges (including, without limitation, net income
taxes and franchise taxes), and all liabilities with respect thereto, imposed
by any jurisdiction on account of amounts payable or paid pursuant to this
Section.
3. Representations and Warranties. The Guarantor represents and
warrants to the Bank as follows:
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3.1 Corporate Existence and Power. The Guarantor (a) is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation; (b) has the power and authority
and all governmental licenses, authorizations, consents and approvals to own
its assets, carry on its business and to execute, deliver, and perform its
obligations under, this Guaranty; (c) is duly qualified as a foreign
corporation, and licensed and in good standing, under the laws of each
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires such qualification or license; and (d) is in
compliance with all Requirements of Law; except, in each case, to the extent
that the failure to do so could not reasonably be expected to have a Material
Adverse Effect. "Material Adverse Effect" means (a) a material adverse change
in, or a material adverse effect upon, the operations, business, properties,
condition (financial or otherwise) or prospects of the Guarantor, its parent
and affiliates, taken as a whole; (b) a material impairment of the ability of
the Guarantor to perform its obligations under this Guaranty; or (c) a material
adverse effect upon the legality, validity, binding effect or enforceability
against the Guarantor of this Guaranty.
3.2 Corporate Authorization; No Contravention. The
execution, delivery and performance by the Guarantor of this Guaranty have been
duly authorized by all necessary corporate action, and do not and will not (a)
contravene the terms of any of the Guarantor's Organization Documents; (b)
violate or result in any breach or contravention of, or the creation of any
lien under, any document evidencing any Contractual Obligation to which the
Guarantor is a party or any order, injunction, writ or decree of any
Governmental Authority to which the Guarantor or its property is subject; or
(c) violate any Requirement of Law.
3.3 Governmental Authorization. No approval, consent,
exemption, authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, the Guarantor of
this Guaranty.
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3.4 Binding Effect. This Guaranty constitutes the legal,
valid and binding obligation of the Guarantor, enforceable against the
Guarantor in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, or similar laws affecting the enforcement
of creditors' rights generally or by equitable principles relating to
enforceability.
3.5 Regulated Entities. None of the Guarantor, any Person
controlling the Guarantor or any Subsidiary of the Guarantor is (a) an
"Investment Company" within the meaning of the Investment Company Act of 1940;
or (b) subject to regulation under the Public Utility Holding Company Act of
1935, the Federal Power Act, the Interstate Commerce Act, any state public
utilities code, or any other Federal or state statute or regulation limiting
its ability to incur or guarantee Indebtedness.
4. Miscellaneous
4.1 Application of Payments on Guaranty. All payments
required to be made by the Guarantor hereunder shall, unless otherwise
expressly provided herein, be made to the Bank at the Bank's office. Payments
received from the Guarantor shall, unless otherwise expressly provided herein,
be applied to interest, principal, costs, fees, or other expenses due under the
Credit Agreement in such order as the Bank shall determine.
4.2 Assignments, Participations, Confidentiality. The Bank
may from time to time, without notice to the Guarantor and without affecting
the Guarantor's obligations hereunder, transfer its interest in the Obligations
to participants and assignees as provided in the Credit Agreement. The
Guarantor agrees that each such transfer will give rise to a direct obligation
of the Guarantor to each such participant and assignee and that each such
participant and assignee shall have the same rights and benefits under this
Guaranty as it would have if it were a Bank party to the Credit Agreement and
this Guaranty. The Guarantor and the Bank agree that the provisions of Section
10.09 of the Syndicated Credit Agreement shall apply to all information
identified as "confidential" or "secret" by the Guarantor and provided to the
Bank by the Guarantor or any Subsidiary of the
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Guarantor under this Guaranty or any other Loan Document to which the Guarantor
is a party.
4.3 Loan Document. This Guaranty is executed and delivered pursuant
to the Credit Agreement and shall (unless otherwise expressly indicated herein)
be construed, administered and applied in accordance with the terms and
provisions thereof. Without limiting the generality of the foregoing, the
provisions of Sections 1.02 and 1.03 of the Syndicated Credit Agreement shall
apply to the interpretation and administration of this Guaranty as if such
provisions were incorporated herein, with all references to the "Agreement" in
such Sections being deemed to be references to this Guaranty.
4.4 Waivers; Writing Required. No delay or omission by the Bank to
exercise any right under this Guaranty shall impair any such right, nor shall
it be construed to be a waiver thereof. No waiver of any single breach or
default under this Guaranty shall be deemed a waiver of any other breach or
default. Any amendment or waiver of any provision of this Guaranty must be in
writing and signed by the Guarantor and the Bank.
4.5 Remedies. All rights and remedies provided in this Guaranty and
any instrument or agreement referred to herein are cumulative and are not
exclusive of any rights or remedies otherwise provided by law. Any single or
partial exercise of any right or remedy shall not preclude the further exercise
thereof or the exercise of any other right or remedy.
4.6 Costs and Expenses. The Guarantor agrees to pay or reimburse the
Bank within five Business Days after demand for all costs and expenses
(including Attorney Costs) incurred by them in connection with the enforcement,
attempted enforcement, or preservation of any rights or remedies under this
Guaranty (including in connection with any "workout" or restructuring regarding
amounts due under this Guaranty, and including in any Insolvency Proceeding or
appellate proceeding).
4.7 Severability. The illegality or unenforceability of any
provision of this Guaranty or any instrument or agreement referred to herein
shall not in any way affect or impair the
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legality or enforceability of the remaining provisions of this Guaranty or any
instrument or agreement referred to herein.
4.8 Governing Law and Jurisdiction. (a) THIS GUARANTY SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
CALIFORNIA; PROVIDED THAT THE GUARANTOR AND THE BANK SHALL RETAIN ALL RIGHTS
ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
GUARANTY MAY BE BROUGHT IN THE COURTS OF THE STATE OF CALIFORNIA OR OF THE
UNITED STATES FOR THE NORTHERN DISTRICT OF CALIFORNIA, AND BY EXECUTION AND
DELIVERY OF THIS GUARANTY, EACH OF THE GUARANTOR AND THE BANK CONSENTS, FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF
THOSE COURTS. EACH OF THE GUARANTOR AND THE BANK IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN
RESPECT OF THIS GUARANTY OR ANY DOCUMENT RELATED HERETO. THE GUARANTOR AND THE
BANK EACH WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS,
WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY CALIFORNIA LAW.
4.9 Waiver of Jury Trial. THE GUARANTOR AND THE BANK EACH WAIVES
THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF OR RELATED TO THIS GUARANTY OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION
OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES,
WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE
GUARANTOR AND THE BANK EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL
BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE
PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED
BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY
OF THIS GUARANTY OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS GUARANTY.
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4.10 Entire Agreement. This Guaranty (a) integrates all the terms
and conditions mentioned herein or incidental hereto, (b) supersedes all oral
negotiations and prior writings with respect to the subject matter hereof, and
(c) is intended by the parties as the final expression of the agreement with
respect to the terms and conditions set forth in this Guaranty and any such
instrument, agreement and document and as the complete and exclusive statement
of the terms agreed to by the parties.
IN WITNESS WHEREOF, the Guarantor has executed this Guaranty
by its duly authorized officers as of the day and year first above written.
XXXXXXXX-SONOMA STORES, INC.
By /s/ Xxxxx X. X. Xxxxxxx
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Name: Xxxxx X. X. Xxxxxxx
Title: Assistant Secretary
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