EXHIBIT 4
UNCONDITIONAL GUARANTY
THIS UNCONDITIONAL GUARANTY, dated as of February 17, 1994
(the "Guaranty"), is given, jointly and severally, by Xxxxxx X.
Xxxxxxxxxx, Xxxxxx X. Xxxxxxx and Xxxx X. Love (collectively
referred to as the "Guarantors") and extended to Klaussner
Furniture Industries, Inc. (the "Lender") for the benefit of
Xxxxxxxx-New York, Inc. (the "Borrower").
WHEREAS, the Borrower is a subsidiary of Xxxx Enterprises,
Inc. ("Xxxx");
WHEREAS, the Guarantors own all of the issued and
outstanding capital stock of Xxxx;
WHEREAS, the Lender has agreed to extend the due date of
certain advances in the aggregate amount of $2,300,000 previously
made by the Lender to the Borrower and to extend the due date of
certain accounts payable by the Borrower to the Lender in the
aggregate amount of $1,200,000 (collectively, the "Extensions");
WHEREAS, without this Guaranty, the Lender would be
unwilling to grant the Extensions to the Borrower;
WHEREAS, because of the benefit to the Guarantors from the
Lender's Extensions to the Borrower, the Guarantors agree to
guarantee to the Lender the obligations of the Borrower as set
forth herein;
NOW THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged by the Guarantors:
1 . The Guarantors, jointly and severally, unconditionally
guarantee the payment when due, upon maturity, acceleration or
otherwise, of any and all indebtedness of the Borrower to the
Lender. If any or all indebtedness of the Borrower to the Lender
becomes due and payable hereunder, the Guarantors, jointly and
severally, unconditionally promise to pay such indebtedness to
the Lender, or order, on demand, in lawful money of the United
States. The word "indebtedness" is used herein in its most
comprehensive sense and includes any and all advances, debts,
obligations and liabilities of the Borrower to the Lender
heretofore, now, or hereafter made, incurred or created, whether
voluntary or involuntary and however arising, absolute or
contingent, liquidated or unliquidated, determined or
undetermined, whether or not such indebtedness is from time to
time reduced, or extinguished, and thereafter increased or
incurred, whether the Borrower may be liable individually or
jointly with others, whether or not recovery upon such
indebtedness may be or hereafter become barred by any statute of
limitations, and whether or not such indebtedness may be or
hereafter become otherwise
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unenforceable, including without limitation, the obligations of
the Borrower under that Promissory Note of even date herewith
executed by the Borrower in favor or the Lender in the original
principal amount of $3,500,000.00.
2 . The Guarantors, jointly and severally, unconditionally
guarantee the payment of any and all indebtedness of the Borrower
to the Lender whether or not then due or payable by the Borrower
upon (a) the death, dissolution, insolvency, or business failure
of, or any assignment for benefit of creditors by, or
commencement of any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceedings by or against, the
Borrower or any of the Guarantors, or (b) the appointment of a
receiver for, or the attachment, restraint of, or making or
levying of any order of court or legal process affecting, the
property of the Borrower or any of the Guarantors, and jointly
and severally unconditionally promise to pay such indebtedness to
the Lender, or order, on demand, in lawful money of the United
States upon the occurrence of any such event.
3 . This Guaranty may be terminated as to future
transactions only upon written notice of termination thereof to
the Lender, and such notice shall be deemed to be effective as of
noon of the next succeeding business day following receipt
thereof by the Lender. No such notice shall release the
Guarantors from any liability as to any indebtedness which may be
owing to or held by the Lender or in which the Lender may have
any interest or for which the Guarantors or Borrower may be
obligated at the time of receiving such notice, or from
extensions and renewals thereof.
4 . The liability of the Guarantors hereunder is exclusive
and independent of any security for or other guaranty of the
indebtedness of the Borrower, whether executed by the Guarantors
or by any other party, and the liability of the Guarantors
hereunder is not affected or impaired by (a) any direction of
application of payment by the Borrower or by any other party, (b)
any other continuing or other guaranty or undertaking of the
Guarantors or of any other party as to the indebtedness of the
Borrower, (c) any payment on or in reduction of any such other
guaranty or undertaking, (d) any notice of termination hereof as
to future transactions given by, or by the death or termination,
revocation, or release of any obligations hereunder of, any other
of the Guarantors or (e) any payment made to the Lender on the
indebtedness which the Lender repays to the Borrower pursuant to
court order in any bankruptcy, reorganization, arrangement,
moratorium, or other debtor relief proceeding, and the
Guarantors, jointly and severally, waive any right to the
deferral or modification of their obligations hereunder by reason
of any such proceedings.
5 . The obligations of the Guarantors hereunder are joint
and several, and independent of the obligations of the Borrower,
and a separate action or actions may be brought and prosecuted
against any of the Guarantors whether or not action is brought
against the Borrower or the other Guarantors and whether or not
the Borrower or the other Guarantors be joined in any such action
or actions. The Guarantors waive, to the fullest extent
permitted by law, the
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benefit of any statute of limitations affecting their liability
hereunder or the enforcement thereof.
6. The Guarantors authorize the Lender (whether or not
after revocation or termination of this Guaranty) , without
notice or demand (except as shall be required by applicable
statue and cannot be waived), and without affecting or impairing
their liability hereunder, from time to time to (a) renew,
compromise, extend, increase, accelerate, or otherwise change the
time for payment of, or otherwise change the terms of any
indebtedness or any part thereof, including an increase or
decrease of the rate of interest thereon, (b) take and hold
security for the payment of this Guaranty or any indebtedness and
exchange, enforce, waive, and release any such security, (c)
apply such security and direct the order or manner of sale
thereof as the Lender in its discretion may determine, and (d)
release or substitute any one or more endorsers, guarantors,
borrowers, or other obligors. The Lender may not assign this
Guaranty, in whole or in part, without the consent of the
Guarantors.
7 . It is not necessary for the Lender to inquire into the
capacity or powers of the Borrower or the officer, directors,
partners, or agents acting or purporting to act on its behalf,
and any indebtedness made or created in reliance upon the
professed exercise of such powers shall be guaranteed hereunder.
8. Any indebtedness of the Borrower now or hereafter held
by any of the Guarantors is hereby subordinated to the
indebtedness of the Borrower to the Lender; and such indebtedness
of the Borrower to any of the Guarantors, if the Lender so
requests, shall be collected, enforced, and received by the
Guarantor as trustee for the Lender and be paid over to the
Lender on account of the indebtedness of the Borrower to the
Lender but without affecting or impairing in any manner the
liability of any Guarantors under the other provisions of this
Guaranty. Any instruments now or hereafter evidencing any
indebtedness of the Borrower to any of the Guarantors shall be
marked with a legend that the same are subject to this Guaranty
and, if the Lender so requests, shall be delivered to the Lender.
9 . The Guarantors waive any right to require the Lender to
(a) proceed against the Borrower or any other party, (b) proceed
against or exhaust any security held from the Borrower, or (c)
pursue any other remedy in the Lender's power whatsoever. The
Guarantors expressly waive any right conferred upon the
Guarantors under N.C. Gen. Stat. 26-7, et seq. The Guarantors
waive any defense based on or arising out of any defense of the
Borrower other than payment in full of the indebtedness,
including without limitation any defense based on or arising out
of the unenforceability of the indebtedness or any part thereof
from any cause, or the cessation from any cause of the liability
of the Borrower other than payment in full of the indebtedness.
The Lender may, at its election, foreclose on any security held
by the Lender by one or more judicial or nonjudicial sales or
exercise any other right or remedy the Lender may have against
the Borrower, or any security, without affecting or impairing in
any way the liability of the Guarantors hereunder except to the
extent the indebtedness has been paid. The Guarantors waive any
defense arising out of any such
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election by the Lender, even though such election operates to
impair or extinguish any right of reimbursement or subrogation or
other right or remedy of the Guarantors against the Borrower or
any security. The Guarantors shall have no right of subrogation,
reimbursement, contribution, exoneration or indemnity whatsoever
against the Borrower and waive any right to enforce any remedy
which the Lender now has or may hereafter have against the
Borrower, and waive any benefit of, and any right to participate
in any security now or hereafter held by the Lender. This waiver
is expressly intended to prevent the existence of any claim (as
defined in the Bankruptcy Code) in respect of such rights by the
Guarantors against the estate of the Borrower and to prevent the
Guarantors from being creditors of the Borrower due to such
rights. The Guarantors waive all presentments, demands for
performance, protests and notices, including without limitation
notices of nonperformance, notices of protest, notices of
dishonor, notices of acceptance of this Guaranty, and notices of
the existence, creation or incurring of new or additional
indebtedness. The Guarantors assume all responsibility for being
and keeping themselves informed of the Borrower's financial
condition and assets, and of all other circumstances bearing upon
the risk of nonpayment of the indebtedness and the nature, scope
and extent of the risks which the Guarantors assume and incur
hereunder, and agree that the Lender shall have no duty to advise
the Guarantors of information known to it regarding such
circumstances or risks.
10. In addition to the amounts guaranteed hereunder, the
Guarantors jointly and severally agree to pay reasonable
attorneys' fees and all other costs and expenses incurred by the
Lender in enforcing this Guaranty or in any action or proceeding
arising out of, or relating to, this Guaranty. The word
"Guarantors" shall mean all and any one or more of the parties to
this Guaranty. This Guaranty and the liability and obligations
of the Guarantors hereunder are binding upon the Guarantors and
their respective heirs, executors, administrators, successors,
and assigns, and inures to the benefit of and is enforceable by
the Lender and its successors, transferees, and assigns.
11. No right or power of the Lender hereunder shall he
deemed to have been waived by any act or conduct on the part of
the Lender, or by any neglect to exercise such right or power, or
by any delay in so doing; and every right or power shall continue
in full force and effect until specifically waived or released by
an instrument in writing executed by the Lender.
12. This Guaranty shall be deemed to be made under and
shall be governed by the internal laws of the State of North
Carolina in all respects, including matters of construction,
validity, and performance, without regard to conflict of laws
principles. The terms and provisions hereof may not be waived,
altered, modified, or amended except in writing duly signed by an
authorized officer of the Lender and by the Guarantors. The
Guarantors and the Lender agree that any dispute arising out of
this Guaranty shall be subject to the jurisdiction of both the
state and federal courts in North Carolina. For that purpose the
Guarantors each hereby submit to the jurisdiction of the state
and federal courts in North Carolina. The Guarantors each
further agree to accept service of process in any such dispute by
registered or certified mail addressed to the Guarantor.
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13 . If any of the provisions of this Guaranty shall
contravene or be held invalid under the laws of the State of
North Carolina, this Guaranty shall be construed as if not
containing those provisions and the rights and obligations of the
parties hereto shall be construed and enforced accordingly.
14. This Guaranty is in addition to the Continuing Guaranty
Agreement dated February 26, 1993, among the Guarantors and the
Lender, which continues in full force and effect.
IN WITNESS WHEREOF, the undersigned Guarantors have executed
this Guaranty as of the date first above written.
/S/Xxxxxx X. Xxxxxxxxxx (SEAL)
Xxxxxx X. Xxxxxxxxxx
/S/Xxxxxx X. Xxxxxxx (SEAL)
Xxxxxx X. Xxxxxxx
/S/Xxxx X. Love (SEAL)
Xxxx X. Love
ACCEPTED:
KLAUSSNER FURNITURE INDUSTRIES, INC.
P. O. Drawer 220
Xxxxxxxx, XX 00000
By: /S/Xxxxxx X. Xxxxxxxx
Its: Vice President
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AMENDMENT TO UNCONDITIONAL GUARANTY
Reference is made to the Unconditional Guaranty (the
"Unconditional Guaranty") dated as of February 17, 1994, made and
given, jointly and severally, by Xxxxxx X. Xxxxxxxxxx, Xxxxxx X.
Xxxxxxx and Xxxx X. Love (collectively referred to as the
"Guarantors") and extended to Klaussner Furniture Industries,
Inc. (the "Lender") for the benefit of Xxxxxxxx-New York, Inc.
(the "Borrower"). Unless otherwise defined herein, terms in the
Unconditional Guaranty shall have their defined meanings herein.
WHEREAS, by letter agreement dated November 7, 1994, the
Guarantors confirmed their joint and several obligations to the
Lender under the Unconditional Guaranty, notwithstanding the
transactions referred to in said letter agreement; and
WHEREAS, in connection with the execution and delivery of
this Amendment, the Promissory Note referred to in the
Unconditional Guaranty is being amended and restated at the
request of the Borrower and the Guarantors; and
WHEREAS, the Guarantors have consented to the amendment and
restatement and have agreed to amend the Unconditional Guaranty
to refer to the Amended and Restated Promissory Note of Borrower
dated as of January 1, 1995, a copy of which is attached hereto
as Exhibit A and incorporated herein by reference;
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereby agree that the
Unconditional Guaranty shall be amended by deleting paragraph 1
in its entirety and inserting in lieu thereof the following:
"1. The Guarantors, jointly and severally,
unconditionally guarantee the payment when due,
upon maturity, acceleration or otherwise, of any
and all indebtedness of the Borrower to the Lender.
If any or all indebtedness of the Borrower to the
Lender becomes due and payable, the Guarantors,
jointly and severally, unconditionally promise to
pay such indebtedness to the Lender, or order, on
demand, in lawful money of the
United States. The word "indebtedness" is used
herein in its most comprehensive sense and includes
any and all advances, debts, obligations and
liabilities of the Borrower to the Lender heretofore,
now, or hereafter made, incurred or created, whether
voluntary or involuntary and however arising, absolute
or contingent, liquidated or unliquidated, determined
or undetermined, whether or not such indebtedness
is from time to time reduced, or extinguished, and
thereafter increased or incurred, whether the
Borrower may be liable individually or jointly with
others, whether or not recovery upon such
indebtedness may be or hereafter become barred by
any statute of limitations, and whether or not such
indebtedness may be or hereafter become otherwise
unenforceable. Accordingly, the indebtedness
guaranteed hereby includes, without limitation, the
obligations of the Borrower under that Promissory
Note dated as of February 17, 1994, executed by the
Borrower in favor of the Lender in the original
principal amount of $3,500,000, as amended and
restated by Amended and Restated Promissory Note
dated as of January 1, 1995, in the original
principal amount of $3,500,000."
Except as expressly amended hereby, the Unconditional
Guaranty shall remain in full force and effect, and each of the
Guarantors hereby confirms that his joint and several liability
thereunder continues to be absolute and unconditional and that
the rights and remedies of Lender thereunder continue unaffected
and unimpaired.
IN WITNESS WHEREOF, the undersigned have executed this
Amendment as of January 1, 1995.
/S/Xxxxxx X. Xxxxxxxxxx
Xxxxxx X. Xxxxxxxxxx
/S/Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
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/S/Xxxx X. Love
Xxxx X. Love
ACCEPTED:
KLAUSSNER FURNITURE INDUSTRIES, INC.
P. O. Drawer 220
Xxxxxxxx, XX 00000
By: /S/Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
Senior Vice President
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AMENDMENT TO UNCONDITIONAL GUARANTY
Reference is made to the Unconditional Guaranty (the
"Unconditional Guaranty") dated as of February 17, 1994, made and
given, jointly and severally, by Xxxxxx X. Xxxxxxxxxx, Xxxxxx X.
Xxxxxxx and Xxxx X. Love (collectively referred to as the
"Guarantors") and extended to Klaussner Furniture Industries,
Inc. (the "Lender") for the benefit of Xxxxxxxx-New York, Inc.
(the "Borrower"). Unless otherwise defined herein, terms in the
Unconditional Guaranty shall have their defined meanings herein.
WHEREAS, by letter agreement dated November 7, 1994, the
Guarantors confirmed their joint and several obligations to the
Lender under the Unconditional Guaranty, notwithstanding the
transactions referred to in said letter agreement; and
WHEREAS, by Amendment dated as of January 1, 1995, the
Unconditional Guaranty was amended to refer to the Borrower's
Amended and Restated Promissory Note dated as of January 1, 1995;
and
WHEREAS, in connection with the execution and delivery of
this Amendment, the Amended and Restated Promissory Note dated as
of January 1, 1995 is being amended and restated at the request
of the Borrower and the Guarantors; and
WHEREAS, the Guarantors have consented to the amendment and
restatement and have agreed to amend the Unconditional Guaranty
to refer to the Amended and Restated Promissory Note of Borrower
dated as of March 1, 1996, a copy of which is attached hereto as
Exhibit A and incorporated herein by reference;
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereby agree that the
Unconditional Guaranty, as heretofore amended, shall be further
amended by deleting paragraph 1 in its entirety and inserting in
lieu thereof the following:
"1. The Guarantors, jointly and severally,
unconditionally guarantee the payment when due, upon
maturity, acceleration or otherwise, of any and all
indebtedness of the Borrower to the Lender. If any
or all indebtedness of the Borrower to the Lender
becomes due and payable, the Guarantors, jointly and
severally, unconditionally promise to pay such
indebtedness to the Lender, or order, on demand, in
lawful money of the United States. The word
"indebtedness" is used herein in its most comprehensive
sense and includes any and all advances, debts,
obligations and liabilities of the Borrower to the
Lender heretofore, now, or hereafter made, incurred or
created, whether voluntary or involuntary and however
arising, absolute or contingent, liquidated or
unliquidated, determined or undetermined, whether or not
such indebtedness is from time to time reduced,
or extinguished, and thereafter increased or incurred,
whether the Borrower may be liable individually or
jointly with others, whether or not recovery upon such
indebtedness may be or hereafter become barred by any
statute of limitations, and whether or not such
indebtedness may be or hereafter become otherwise
unenforceable. Accordingly, the indebtedness guaranteed
hereby includes, without limitation, the obligations of
the Borrower under that Promissory Note dated as of
February 17, 1994, executed by the Borrower in favor of
the Lender in the original principal amount of
$3,500,000, as amended and restated by Amended and
Restated Promissory Note dated as of January 1, 1995,
in the original principal amount of $3,500,000, and as
amended and restated by Amended and Restated Promissory
Note dated as of March 1, 1996, in the original principal
amount of $2,800,000."
Except as expressly amended hereby, the Unconditional
Guaranty shall remain in full force and effect, and each of the
Guarantors hereby confirms that his joint and several liability
thereunder continues to be absolute and unconditional and that
the rights and remedies of Lender thereunder continue unaffected
and unimpaired.
IN WITNESS WHEREOF, the undersigned have executed this
Amendment as of March 1, 1996.
/S/Xxxxxx X. Xxxxxxxxxx
Xxxxxx X. Xxxxxxxxxx
/S/Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
/S/Xxxx X. Love
Xxxx X. Love
ACCEPTED:
KLAUSSNER FURNITURE INDUSTRIES, INC.
P. O. Drawer 220
Xxxxxxxx, XX 00000
By: /S/Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
Senior Vice President
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