X-000
Xxxxxxx Xx. 00
Xxxx 0-X
Xxxxxxx Corporate Resources, Inc.
SEC File No. 0-23170
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT (this "Guaranty Agreement" or this
"Guaranty"), dated as of March 19, 1998, is made by EACH OF THE
UNDERSIGNED (each a "Guarantor", and collectively, the
"Guarantors") to the Trustee for the benefit of EACH HOLDER OF
THE NOTES (collectively the "Guaranty Parties") issued pursuant
to the Note Indenture (as defined below). All capitalized terms
used but not otherwise defined herein shall have the respective
meanings assigned thereto in the Note Indenture.
W I T N E S S E T H:
WHEREAS, the Guaranty Parties have agreed to acquire from
Headway Corporate Resources, Inc., a Delaware corporation (the
"Company"), those certain Increasing Rate Senior Subordinated
Notes (the "Notes") pursuant to the Indenture dated as of March
19, 1998 between the Company and State Street Bank and Trust
Company, N.A. as trustee ("Trustee") (as from time to time
amended, revised, modified, supplemented or amended and restated,
the "Note Indenture"); and
WHEREAS, each Guarantor is a Subsidiary of the Company and
will materially benefit from the proceeds of Notes issued
pursuant the Note Indenture and the other transactions to be
consummated concurrently therewith, and each Guarantor is willing
to enter into this Guaranty Agreement to provide an inducement
for the Guaranty Parties to acquire such Notes issued pursuant
to, and governed by the provisions of, the Note Indenture;
NOW, THEREFORE, in order to induce the Guaranty Parties to
acquire the Notes pursuant to the Note Indenture and the other
Financing Documents and in consideration of the premises and the
mutual covenants contained herein, the parties hereto agree as
follows:
1. Guaranty. Each Guarantor hereby jointly and
severally, unconditionally, absolutely, continually and
irrevocably guarantees to the Guaranty Parties the payment and
performance in full of the Company's Liabilities (as defined
below). For all purposes of this Guaranty Agreement, "Company's
Liabilities" means: (a) the Company's prompt payment in full,
when due or declared due and at all such times, of all
Obligations and all other amounts pursuant to the terms of Note
Indenture, the Notes, and all other documents executed in
connection with the Note Indenture heretofore, now or at any time
or times hereafter owing, arising, due or payable from the
Company to any one or more of the Guaranty Parties, including
without limitation principal, interest, premium or fee
(including, but not limited to, trustee's fees and attorneys'
fees and expenses); and (b) the Company's prompt, full and
faithful performance, observance and discharge of each and every
agreement, undertaking, covenant and provision to be performed,
observed or discharged by the Company under the Note Indenture
and all other documents executed in connection therewith. Each
Guarantor's obligations to the under this Guaranty Agreement are
hereinafter collectively referred to as the "Guarantors'
Obligations"; provided, however, that the liability of each
Guarantor individually with respect to the Guarantors'
Obligations shall be limited to an aggregate amount equal to the
largest amount that would not render its obligations hereunder
subject to avoidance under Section 548 of the United States
Bankruptcy Code or any comparable provisions of any applicable
state law.
Each Guarantor agrees that it is jointly and severally,
directly and primarily liable for the Company's Liabilities.
2. Payment. If the Company shall default in payment or
performance of any Company's Liabilities when and as the same
shall become due, whether according to the terms of the Note
Indenture, by acceleration, or otherwise, or upon the occurrence
of any other Event of Default under the Note Indenture that has
not been cured or waived, then each Guarantor, upon demand
thereof by the Trustee or its successors or assigns, or by the
Required Holders (as defined in the Note Indenture) will, as of
the date of such demand, fully pay to the Trustee, for the
benefit of the Guaranty Parties, subject to any restriction set
forth in Section 1 hereof, an amount equal to all Guarantor's
Obligations then due and owing.
3. Unconditional Obligations. This is a guaranty of
payment and not of collection. The Guarantors' Obligations under
this Guaranty Agreement shall be joint and several, absolute and
unconditional irrespective of the validity, legality or
enforceability of the Note Indenture, the Notes or any other
Financing Document or any other guaranty of the Company's
Liabilities, and shall not be affected by any action taken under
the Note Indenture, the Notes or any other Financing Document,
any other guaranty of the Company's Liabilities, or any other
agreement between any Guaranty Party and the Company or any other
person, in the exercise of any right or power therein conferred,
or by any failure or omission to enforce any right conferred
thereby, or by any waiver of any covenant or condition therein
provided, or by any acceleration of the maturity of any of the
Company's Liabilities, or by the dissolution of the Company or
the combination or consolidation of the Company into or with
another entity or any transfer or disposition of any assets of
the Company or by any extension or renewal of the Note Indenture,
any of the Notes or any other Financing Document, in whole or in
part, or by any modification, alteration, amendment or addition
of or to the Note Indenture, any of the Notes or any other
Financing Document, any other guaranty of the Company's
Liabilities, or any other agreement between any Guaranty Party
and the Company or any other Person, or by any other circumstance
whatsoever (with or without notice to or knowledge of any
Guarantor) which may or might in any manner or to any extent vary
the risks of any Guarantor, or might otherwise constitute a legal
or equitable discharge of a surety or guarantor; it being the
purpose and intent of the parties hereto that this Guaranty
Agreement and the Guarantors' Obligations hereunder shall be
absolute and unconditional under any and all circumstances and
shall not be discharged except by payment as herein provided.
4. Currency and Funds of Payment. Each Guarantor hereby
guarantees that the Guarantors' Obligations will be paid in
lawful currency of the United States of America and in
immediately available funds, regardless of any law, regulation or
decree now or hereafter in effect that might in any manner affect
the Company's Liabilities, or the rights of any Guaranty Party
with respect thereto as against the Company, or cause or permit
to be invoked any alteration in the time, amount or manner of
payment by the Company of any or all of the Company's
Liabilities.
5. Events of Default. In the event that (a) any
Guarantor shall file a petition to take advantage of any
insolvency statute; (b) any Guarantor shall commence or suffer to
exist a proceeding for the appointment of a receiver, trustee,
liquidator or conservator of itself or of the whole or
substantially all of its property; (c) any Guarantor shall file a
petition or answer seeking reorganization or arrangement or
similar relief under the Federal bankruptcy laws or any other
applicable law or statute of the United States of America or any
state or similar law of any other country; (d) a court of
competent jurisdiction shall enter an order, judgment or decree
appointing a custodian, receiver, trustee, liquidator or
conservator of any Guarantor or of the whole or substantially all
of its properties, or approve a petition filed against any
Guarantor seeking reorganization or arrangement or similar relief
under the Federal bankruptcy laws or any other applicable law or
statute of the United States of America or any state or similar
law of any other country, or if, under the provisions of any
other law for the relief or aid of debtors, a court of competent
jurisdiction shall assume custody or control of any Guarantor or
of the whole or substantially all of its properties and such
order, judgment, decree, approval or assumption remains unstayed
or undismissed for a period of sixty (60) consecutive days; (e)
there is commenced against any Guarantor any proceeding or
petition seeking reorganization, arrangement or similar relief
under the Federal bankruptcy laws or any other applicable law or
statute of the United States of America or any state, which
proceeding or petition remains unstayed or undismissed for a
period of sixty (60) consecutive days; (f) there shall occur and
be continuing an Event of Default under the Note Indenture; (g)
any default shall occur in the payment of amounts due hereunder;
or (h) any other default in compliance with the terms hereof
shall occur which remains uncured or unwaived for a period of
thirty (30) days after the earlier of the date notice of such
default is received by an officer of such Guarantor or the date
an officer of such Guarantor otherwise has knowledge of such
default (each of the foregoing an "Event of Default" hereunder),
then and without notice thereof or demand therefor, so long as
such Event of Default shall be continuing, the Guarantors'
Obligations shall immediately become due and payable.
6. Suits. Each Guarantor from time to time shall pay to
the Trustee for the benefit of the Guaranty Parties, on demand,
as set forth in the Note Indenture, the Guarantors' Obligations
as they become or are declared due, and in the event such payment
is not made forthwith, the Trustee or the Holders or any of them
may proceed to suit against any one or more or all of the
Guarantors. At the Holders' election, one or more and successive
or concurrent suits may be brought hereon by the Trustee or
Holders against any one or more or all of the Guarantors, whether
or not suit has been commenced against the Company, any other
guarantor of the Company's Liabilities, or any other Person and
whether or not the Trustee or any Holder has taken or failed to
take any other action to collect all or any portion of the
Company's Liabilities.
7. Set-Off and Waiver. Each Guarantor waives any right
to assert against the Trustee or any Holder as a defense,
counterclaim, set-off or cross claim, any defense (legal or
equitable) or other claim which such Guarantor may now or at any
time hereafter have against the Company, the Trustee or the
Holders, without waiving any additional defenses, set-offs,
counterclaims or other claims otherwise available to such
Guarantor. If at any time hereafter the Trustee or any Holder
employs counsel for advice or other representation to enforce the
Guarantors' Obligations that arise out of an Event of Default,
then, in any of the foregoing events, all of the reasonable
attorneys' fees arising from such services and all expenses,
costs and charges in any way or respect arising in connection
therewith or relating thereto shall be jointly and severally paid
by the Guarantors to the Trustee, for the benefit of the Guaranty
Parties, on demand.
8. Waiver; Subrogation.
(a) Each Guarantor hereby waives notice of the
following events or occurrences: (i) the Trustee's acceptance of
this Guaranty Agreement; (ii) the Holders' heretofore, now or
from time to time hereafter loaning monies or giving or extending
credit to or for the benefit of the Company, whether pursuant to
the Note Indenture or the Notes or any amendments, modifications,
or supplements thereto, or replacements or extensions thereof;
(iii) the Trustee, the Holders or the Company heretofore, now or
at any time hereafter, obtaining, amending, substituting for,
releasing, waiving or modifying the Note Indenture, the Notes or
any other Financing Documents; (iv) presentment, demand, notices
of default, non-payment, partial payment and protest; (v) the
Trustee or the Holders heretofore, now or at any time hereafter
granting to the Company (or any other party liable to the Holders
on account of the Company's Liabilities) any indulgence or
extensions of time of payment of the Company's Liabilities; and
(vi) the Trustee or the Holders heretofore, now or at any time
hereafter accepting from the Company or any other person, any
partial payment or payments on account of the Company's
Liabilities or any collateral securing the payment thereof or the
Trustee settling, subordinating, compromising, discharging or
releasing the same. Each Guarantor agrees that the Trustee and
each Holder may heretofore, now or at any time hereafter do any
or all of the foregoing in such manner, upon such terms and at
such times as the Trustee or any Holder, in its sole and absolute
discretion, deems advisable, without in any way or respect
impairing, affecting, reducing or releasing such Guarantor from
the Guarantors' Obligations, and each Guarantor hereby consents
to each and all of the foregoing events or occurrences.
(b) Each Guarantor hereby agrees that payment or
performance by such Guarantor of the Guarantors' Obligations
under this Guaranty Agreement may be enforced by the Trustee on
behalf of the Guaranty Parties upon demand by the Trustee or by
the Required Holders, to such Guarantor without such person being
required, each Guarantor expressly waiving any right it may have
to require such person, to prosecute collection or seek to
enforce or resort to any remedies against the Company or any
other Guarantor or any other guarantor of the Company's
Liabilities, it being expressly understood, acknowledged and
agreed to by each Guarantor that demand under this Guaranty
Agreement may be made by the Trustee, or by the Required Holders,
and the provisions hereof enforced by such person, effective as
of the first date any Event of Default occurs and is continuing
under the Note Indenture. The Guarantors' Obligations shall in
no way be impaired, affected, reduced, or released by reason of
the Trustee's or any Holder's failure or delay to do or take any
of the acts, actions or things described in this Guaranty
Agreement including, without limiting the generality of the
foregoing, those acts, actions and things described in this
Section 8.
(c) Each Guarantor further agrees with respect to this
Guaranty Agreement that it shall have no right of subrogation,
reimbursement or indemnity, nor any right of recourse to security
for the Company's Liabilities. This waiver is expressly intended
to prevent the existence of any claim in respect to such
reimbursement by the Guarantor against the estate of Company
within the meaning of Section 101 of the Bankruptcy Code, and to
prevent the Guarantor from constituting a creditor of Company in
respect of such reimbursement within the meaning of Section
547(b) of the Bankruptcy Code in the event of a subsequent case
involving the Company.
9. Effectiveness; Enforceability. This Guaranty
Agreement shall be effective as of the date hereof and shall
continue in full force and effect until terminated in accordance
with Section 17 hereof. The Trustee shall give each Guarantor
written notice of such termination at each Guarantor's address
set forth herein. This Guaranty Agreement shall be binding upon
and inure to the benefit of each Guarantor, the Trustee and the
Holders and their respective successors and assigns. Any claim
or claims that the Trustee and the Holders may at any time
hereafter have against any Guarantor under this Guaranty
Agreement may be asserted by the Trustee or any Holder by written
notice directed to any one or more or all of the Guarantors at
the address specified in the Securities Purchase Agreement.
10. Representations and Warranties. Each Guarantor
represents and warrants to the Trustee for the benefit of the
Guaranty Parties that it is duly authorized to execute, deliver
and perform this Guaranty Agreement, that this Guaranty Agreement
is legal, valid, binding and enforceable against such Guarantor
in accordance with its terms except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles; and that such
Guarantor's execution, delivery and performance of this Guaranty
Agreement does not violate or constitute a breach of its
certificate of incorporation or other documents of corporate
governance or any agreement to which such Guarantor is a party,
or any applicable laws, in each case, which violation or breach
could reasonably be expected to have a Material Adverse Effect
with respect to such Guarantor.
11. Subordination. The Guarantors' Obligations to the
Guaranty Parties shall be subordinated and junior in right of
payment to the prior payment in full of the Senior Indebtedness,
including, without limitation, payment by any or all of the
Guarantors pursuant to the Guaranty Agreement, to the extent and
in the manner set forth in Article X of the Note Indenture.
12. Expenses. Each Guarantor agrees to be jointly and
severally liable for the payment of all reasonable fees and
expenses, including attorney's fees, incurred by the Trustee or
any Holder in connection with the enforcement of this Guaranty
Agreement.
13. Reinstatement. Each Guarantor agrees that this
Guaranty Agreement shall continue to be effective or be
reinstated, as the case may be, at any time payment received by
the Trustee under the Note Indenture or this Guaranty Agreement
is rescinded or must be restored for any reason.
14. Counterparts. This Guaranty Agreement may be executed
in any number of counterparts, each of which shall be deemed to
be an original as against any party whose signature appears
thereon, and all of which shall constitute one and the same
instrument.
15. Reliance. Each Guarantor represents and warrants to
the Trustee, for the benefit of the Holders, that: (a) such
Guarantor has adequate means to obtain from Company, on a
continuing basis, information concerning Company and Company's
financial condition and affairs and has full and complete access
to Company's books and records; (b) such Guarantor is not relying
on the Trustee or any Holder, its or their employees, Trustees or
other representatives, to provide such information, now or in the
future; (c) such Guarantor is executing this Guaranty Agreement
freely and deliberately, and understands the obligations and
financial risk undertaken by providing this Guaranty; (d) such
Guarantor has relied solely on the Guarantor's own independent
investigation, appraisal and analysis of Company and Company's
financial condition and affairs in deciding to provide this
Guaranty and is fully aware of the same; and (e) such Guarantor
has not depended or relied on the Trustee or any Holder, its or
their employees, Trustees or representatives, for any information
whatsoever concerning the Company or the Company's financial
condition and affairs or other matters material to such
Guarantor's decision to provide this Guaranty or for any
counseling, guidance, or special consideration or any promise
therefor with respect to such decision. Each Guarantor agrees
that neither the Trustee nor any Holder has any duty or
responsibility whatsoever, now or in the future, to provide to
any Guarantor any information concerning Company or Company's
financial condition and affairs, other than as expressly provided
herein, and that, if such Guarantor receives any such information
from the Trustee or any Holder, its or their employees, Trustees
or other representatives, such Guarantor will independently
verify the information and will not rely on the Trustee or any
Holder, its or their employees, Trustees or other
representatives, with respect to such information.
16. Notices. Any notice shall be conclusively deemed to
have been received by any party hereto and be effective (i) on
the day on which delivered (including hand delivery by commercial
courier service) to such party (against receipt therefor), (ii)
on the date of receipt at such address or telefacsimile number as
may from time to time be specified by such party in written
notice to the other parties hereto or otherwise received), in the
case of notice by telegram or telefacsimile, respectively (where
the receipt of such message is verified by return), or (iii) on
the fifth Business Day after the day on which mailed, if sent
prepaid by certified or registered mail, return receipt
requested, in each case delivered, transmitted or mailed, as the
case may be, to the address or telefacsimile number, as
appropriate, set forth below or such other address or number as
such party shall specify by notice hereunder:
(a) if to any Guarantor:
Headway Corporate Resources, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx
President and Chief Executive Officer
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
with a copy to:
Xxxxxxx & Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
(b) if to the Trustee:
State Street Bank and Trust Company, N.A.
00 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Division
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
with a copy to:
Xxxxxx, Xxxxxxx & Xxxxxxx
0 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx, Esq.
Telephone: (000) 000-0000
Telefacsimile: (000) 000-0000
17. Termination. This Guaranty Agreement and all
obligations of the Guarantors hereunder shall terminate without
delivery of any instrument or performance of any act by any party
on the satisfaction on full of the Company's Obligations set
forth in the Notes and the Note Indenture.
18. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the heirs, legal
representatives, successors and assigns of the respective parties
hereto.
19. Governing Law; Waivers of Trial by Jury, Etc.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED,
IN SUCH STATE NOTWITHSTANDING ITS EXECUTION AND DELIVERY
OUTSIDE SUCH STATE.
(b) EACH GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY
AGREES AND CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREIN MAY BE INSTITUTED IN ANY
STATE OR FEDERAL COURT SITTING IN THE XXXXXX XX XXX XXXX,
XXXXX XX XXX XXXX, XXXXXX XXXXXX OF AMERICA AND, BY THE
EXECUTION AND DELIVERY OF THIS AGREEMENT, EXPRESSLY WAIVES
ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE IN, OR TO THE EXERCISE OF JURISDICTION
OVER IT AND ITS PROPERTY BY, ANY SUCH COURT IN ANY SUCH
SUIT, ACTION OR PROCEEDING, AND IRREVOCABLY SUBMITS
GENERALLY AND UNCONDITIONALLY TO THE JURISDICTION OF ANY
SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.
(c) EACH GUARANTOR AGREES THAT SERVICE OF PROCESS MAY
BE MADE BY PERSONAL SERVICE OF A COPY OF THE SUMMONS AND
COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR
PROCEEDING, OR BY REGISTERED OR CERTIFIED MAIL (POSTAGE
PREPAID) TO THE ADDRESS OF SUCH PARTY PROVIDED IN SECTION 16
HEREOF OR BY ANY OTHER METHOD OF SERVICE PROVIDED FOR UNDER
THE APPLICABLE LAWS IN EFFECT IN THE STATE OF NEW YORK.
(d) NOTHING CONTAINED IN SUBSECTIONS (b) OR (c) HEREOF
SHALL PRECLUDE ANY GUARANTY PARTY FROM BRINGING ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER FINANCING DOCUMENT IN THE COURTS OF
ANY JURISDICTION WHERE ANY GUARANTOR OR ANY OF SUCH PARTY'S
PROPERTY OR ASSETS MAY BE FOUND OR LOCATED. TO THE EXTENT
PERMITTED BY THE APPLICABLE LAWS OF ANY SUCH JURISDICTION,
EACH GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY SUCH COURT AND EXPRESSLY WAIVES, IN
RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING OBJECTION TO
THE EXERCISE OF JURISDICTION OVER IT AND ITS PROPERTY BY ANY
OTHER COURT OR COURTS WHICH NOW OR HEREAFTER MAY BE
AVAILABLE UNDER APPLICABLE LAW.
(e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND
ANY RIGHTS OR REMEDIES UNDER OR RELATED TO THIS AGREEMENT OR
ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED
OR THAT MAY IN THE FUTURE BE DELIVERED IN CONNECTION WITH
THE FOREGOING, EACH GUARANTOR AND THE TRUSTEE ON BEHALF OF
THE GUARANTY PARTIES HEREBY AGREE, TO THE EXTENT PERMITTED
BY APPLICABLE LAW, THAT ANY SUCH ACTION OR PROCEEDING SHALL
BE TRIED BEFORE A COURT AND NOT BEFORE A JURY AND HEREBY
WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT
ANY SUCH PERSON MAY HAVE TO TRIAL BY JURY IN ANY SUCH ACTION
OR PROCEEDING.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement on the day and year first written above.
GUARANTORS:
HEADWAY CORPORATE STAFFING
SERVICES, INC.
CERTIFIED TECHNICAL STAFFING, INC.
CORPORATE STAFFING
ALTERNATIVES, INC.
HEADWAY CORPORATE STAFFING SERVICES
OF NEW YORK, INC.
HEADWAY PERSONNEL, INC.
HEADWAY CORPORATE STAFFING SERVICES
OF NORTH CAROLINA, INC.
HEADWAY CORPORATE STAFFING SERVICES
OF CONNECTICUT, INC.
ASA PERSONNEL SERVICES, L.L.C.
E.D.R. ASSOCIATES, INC.
WHITNEY PARTNERS, L.L.C.
HCSS HOLDINGS, INC.
HCSS EAST, INC.
HCSS WEST, INC.
XXXXXX ASSOCIATES, L.L.C.
By: (Signature)
TRUSTEE:
STATE STREET BANK AND TRUST
COMPANY, N.A.
Trustee for the Holders
By: (Signature)
