EXHIBIT 7.7
Exhibit F
GUARANTY
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THIS GUARANTY (the "Guaranty") is made this 31st day of July, 2002, by
Xxxxxx X. Xxxxxxx, a resident of the State of Indiana ("Guarantor") in favor of
Xxxxxx X. Xxxxxxxx.
1. Subject Matter of Guaranty.
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(a) Kingston Sales Corporation, an Indiana corporation (the
"Company"), Xxxxxx X. Xxxxxxxx ("Seller") and Fortune Diversified
Industries, Inc., a Delaware corporation ("Buyer"), entered into a Stock
Purchase Agreement dated of even date herewith (the "Purchase Agreement"),
providing for the sale by Seller to Buyer of all of the issued and
outstanding shares of Company's capital stock.
(b) Buyer is required to cause Guarantor to execute and deliver this
Guaranty under the Purchase Agreement.
(c) Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Purchase Agreement.
2. Guaranteed Obligations. In consideration of Seller entering into the
Purchase Agreement and agreeing to close the transactions contemplated therein
(which Guarantor acknowledges and agrees provide direct and personal benefits to
Guarantor by virtue of Guarantor's ownership of Buyer), and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Guarantor unconditionally, absolutely and irrevocably guarantees
Buyer's payment and performance of its obligations arising under and with
respect to the Put Option, including, without limitation, all such obligations
specified in Section 2.3 of the Purchase Agreement (the "Guaranteed
Obligations").
3. Absolute Guaranty. Except as explicitly provided herein, this Guaranty
is absolute and unconditional and the obligations hereunder shall be primary and
not secondary obligations. The liability hereunder of Guarantor shall not be
affected or limited in any way by the absence of any attempt to collect or
enforce the Guaranteed Obligations against Buyer, any other guarantor, any other
person, or any assets of Buyer or any other person.
4. Waivers; No Obligation to Proceed Against Buyer. Guarantor waives, to
the extent permitted by applicable law, (a) notice of acceptance of this
Guaranty and (b) all notices or demands of any kind with respect to Buyer's
performance of the Guaranteed Obligations. Upon Buyer's default in the payment
of any portion of, or upon any failure by Buyer to perform, in full or in part,
any Guaranteed Obligation, Guarantor agrees that Seller at Seller's election may
proceed directly and at once, without notice, against Guarantor to collect
payment or to secure performance of the Guaranteed Obligations without first
proceeding against Buyer, any other guarantor, any other person, or any assets
of Buyer or any other person.
5. Seller's Right to Deal With Guaranteed Obligations. Seller is hereby
authorized, without notice or demand and without affecting or impairing the
obligations hereunder of Guarantor, from time to time to (a) renew, extend or
otherwise change the period or time of performance of, or refuse to enforce, or
release all or any parties to, any or all of the Guaranteed Obligations; (b)
modify, amend or change the terms of the Purchase Agreement or any other
agreement, instrument or document now or hereafter executed and delivered by
Buyer to Seller respecting the Guaranteed Obligations; and (c) settle, release,
compromise, collect or otherwise liquidate the Guaranteed Obligations in any
manner.
6. Reinstatement. Guarantor agrees that to the extent Buyer makes a payment
or payments for Guaranteed Obligations, which payment or payments or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside or required to be repaid to Buyer, Buyer's estate, trustee, receiver
or any other party under any bankruptcy law, state or federal law, common law or
equitable cause, then to the extent of such payment or repayment, the Guaranteed
Obligations or part thereof intended to be satisfied shall be reinstated and
continued in full force and effect as if such payment had not been made. Any
indebtedness of Buyer to Guarantor now or hereafter existing is hereby
subordinated to the Guaranteed Obligations.
7. No Implied Waivers. No delay on the part of Seller in exercising any of
Seller's rights hereunder shall constitute a waiver thereof. No waiver of any of
Seller's rights hereunder or modification or amendment of this Guaranty shall be
binding upon Seller unless expressly set forth in writing and duly signed by
Seller. Each such waiver shall operate only with respect to the specific matter
involved and shall in no way impair Seller's rights or the obligations hereunder
of Guarantor to Seller in any other respect at any other time.
8. Representations and Warranties of Guarantor. Guarantor represents and
warrants that:
(a) State of Residence. Guarantor is an individual and resident of the
State of Indiana.
(b) Binding Effect of Guaranty. This Guaranty has been duly executed
and delivered by Guarantor. This Guaranty constitutes the legal and valid
obligation of Guarantor enforceable against Guarantor in accordance with
its terms except as the same may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other laws affecting
the enforcement of creditor's rights in general and except that
enforceability is subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or
law).
(c) Absence of Conflicts. Guarantor's execution and delivery of, and
the performance of Guarantor's obligations under, this Guaranty:
(i) Do not violate, or result in the creation of any claim, lien,
charge or encumbrance on any of the assets or properties of Guarantor
under, any provision of law, rule or regulation or any order,
judgment, injunction, decree or ruling applicable to Guarantor or his
assets, business, operation, financial condition or results of
operations; and
(ii) Do not (with or without the giving of notice or the passage
of time or both) violate, conflict with or result in a breach or
termination of, or constitute a default or give rise to a right of
termination or acceleration under, any lease, agreement, commitment or
other instrument which Guarantor is a party to or bound by or by which
any of his assets or properties may be bound, or result in the
creation of any lien with respect to any of the properties or assets
of Guarantor.
(d) Governmental Consents and Consents of Third Parties. Guarantor's
execution and delivery of, and the performance of Guarantor's obligations
under, this Guaranty do not require the consent, waiver, approval, permit,
license, clearance or authorization of, or any declaration or filing with,
any court or public agency or other authority, or the consent of any person
under any agreement, arrangement or commitment of any nature to which
Guarantor is a party or bound by, that has not been obtained.
9. Governing Law; Submission to Jurisdiction. This Guaranty shall be
governed by, and construed in accordance with, the laws of the State of Indiana,
without regard to conflicts of law principles.
10. Acknowledgment. Guarantor acknowledges that duly authorized and
competent agents or representatives of Guarantor have read, and understand, the
Purchase Agreement and that Guarantor has been advised by competent counsel that
Seller's obligations thereunder are significant.
11. Prevailing Party Attorneys' Fees. A prevailing party shall be entitled
to receive from the other non-prevailing party to any lawsuit reasonable costs
and attorneys' fees incurred in a suit brought to enforce the provisions of this
Guaranty (including costs and attorneys' fees incurred in respect of a suit to
enforce this provision).
12. Termination of Guaranty. This Guaranty shall be a continuing guarantee;
provided, however, that this Guaranty shall terminate on the earlier to occur of
(a) the expiration of the Put Option, or (b) upon the payment in full and
performance of all Guaranteed Obligations.
13. Severability. If any provision of this Guaranty shall be held invalid,
illegal or unenforceable in any jurisdiction, such provision shall be
ineffective to the extent of such invalidity, illegality or unenforceability,
the validity, legality or enforceability of the other provisions hereof shall
not be affected thereby, and there shall be deemed substituted for the provision
at issue a valid and enforceable provision as similar as possible to the
provision at issue, all without affecting the validity, legality or
enforceability of such provision in any other jurisdictions.
EXECUTED on the day and year first written above.
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Xxxxxx X. Xxxxxxx, Individually
"Guarantor"
ACCEPTED:
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Xxxxxx X. Xxxxxxxx, Individually
"Seller"
[Signature Page of Guaranty]
