EXHIBIT 10.11
LEASE GUARANTY
FOR VALUE RECEIVED, and in consideration of, CHARLES MCANSIN
ASSOCIATES, a LIMITED PARTNERSHIP ("Landlord") having executed a certain Lease
(the "Lease") dated December ___, 2004, between Landlord and QUAKER FABRIC
CORPORATION OF FALL RIVER ("Tenant"), covering certain premises in Landlord's
building known as 81 Commerce Drive, Fall River, Massachusetts, the undersigned
(hereinafter referred to as "Guarantor") hereby guarantees unto Landlord (i) the
full and prompt payment of the Rent and all other sums and charges payable by
Tenant, and (ii) the full and timely performance and observance of all the
covenants, terms, conditions and agreements therein provided to be performed and
observed by Tenant [the rental, other sums and charges and other obligations,
liabilities and duties described in the foregoing clauses (i) and (ii) being
hereafter collectively referred to as the "Obligations"]. Guarantor hereby
covenants that if and Event of Default shall have occurred with respect to
Tenant's payment or performance of any of the Obligations, Guarantor shall pay
the amount due to Landlord and perform all of the other Obligations with respect
to which and Event of Default has occurred. Guarantor further covenants to pay
to Landlord all damages, costs and expenses that may arise in consequence of any
Event of Default by Tenant or that are incurred in enforcing this Guaranty,
including, without limitation, reasonable attorneys' fees.
This Guaranty is an absolute and unconditional guaranty of payment and
of performance. It shall be enforceable against Guarantor without the necessity
of (i) any suit instigated by Landlord against Tenant, (ii) the exhaustion of
Landlord's remedies with respect to Tenant under the Lease, or (iii) the
enforcement of Landlord's rights with respect to any security which has ever
been given to secure the payment and performance of the Obligations. This
Guaranty shall also be enforceable without the necessity of any notice of
Tenant's nonpayment or nonperformance, notice of acceptance of this Guaranty or
any other notice or demand to which Guarantor might otherwise be entitled, all
of which Guarantor hereby expressly waives.
The Obligations of Guarantor shall be irrevocable and unconditional,
irrespective of the genuineness, validity, regularity or enforceability of the
Lease or any security given for the Obligations or any circumstances which might
otherwise constitute a legal or equitable discharge of a surety or guarantor,
and Guarantor waives the benefit of all principles or provisions of law,
statutory or otherwise, which are or might be in conflict with the terms of this
Guaranty, and agrees that the Obligations of Guarantor shall not be affected by
any circumstances, whether or not referred to in this Guaranty, which might
otherwise constitute a legal or equitable discharge of a surety or guarantor.
Without limiting the generality of the foregoing, Guarantor agrees that the
occurrence of the following events, whether they occur with or without notice or
consent by Guarantor, will in no way release or impair any liability or
obligation of Guarantor hereunder: (i) Landlord, in Landlord's discretion,
waives compliance by Tenant with any of Tenant's Obligations or covenants under
the Lease or waives any Event of Default thereunder, or grants any indulgence
with respect to the Lease; (ii) Landlord modifies, amends or changes any
provision of the Lease; (iii) Landlord grants extensions or renewals of the
Lease or the Obligations; (iv) Landlord transfers Landlord's interest in the
premises covered by the Lease, provided that Landlord has complied with
1
the terms of Section 2.02 of the Lease; (v) Landlord transfers Landlord's rights
under this guaranty; (vi) Landlord consents to the assignment by Tenant of
Tenant's rights under the Lease; (vii) Landlord deals in any respect with Tenant
and the Obligations as if this Guaranty were not in effect; (viii) Tenant is
released or discharged in any creditor's proceedings, receivership, bankruptcy
or other proceeding; (ix) the liability of Tenant or Landlord's claim against
the estate of Tenant in bankruptcy is impaired, limited or modified or any
remedy for the enforcement of Tenant's said liability under the Lease, resulting
from the operation of any present or future provision of the federal Bankruptcy
Reform Act of 1978, as amended, or other statute or from the decision in any
court, is impaired, limited or modified; or (x) the Lease is rejected or
disaffirmed in any such proceedings, or the Lease is assumed or assumed and
assigned in any such bankruptcy proceedings. If, as a result of such
proceedings, Landlord is forced to refund any payment made by Tenant to Landlord
because it is found to be a preference or for any other reason, Guarantor hereby
covenants to pay such amount to Landlord upon demand.
All of Landlord's rights and remedies under the Lease or under this
Guaranty are intended to be distinct, separate and cumulative, and no such right
and remedy therein mentioned is intended to be in exclusion of or a waiver of
any of the others. Specifically, the Obligations of Guarantor hereunder shall
not be released by Landlord's receipt, application or release of security given
for performance and observance of covenants and conditions required to be
performed and observed by Tenant under the Lease.
Until the Obligations have been paid in full, Guarantor shall not have
any right of subrogation unless such right is expressly granted in writing by
Landlord. Any indebtedness of Tenant held by Guarantor is hereby subordinated to
this Guaranty; and such indebtedness of Tenant to Guarantor, if Landlord so
requests, shall be collected, enforced and received by Guarantor as trustee for
Landlord and shall be paid over to Landlord in order to satisfy the Obligations
guaranteed hereunder.
Landlord, in Landlord's sole discretion, may apply all payments
received by Landlord from Tenant, Guarantor or any other guarantor under any
other instrument, or realized by Landlord from any security in such manner and
order or priority as Landlord sees fit, to any of the Obligations of Tenant due
at the time of such application.
This Guaranty and all the Obligations thereunder shall be binding on
the undersigned and its successors and assigns. The word "person", as used
herein, includes natural persons and entities of all kinds. Suit may be brought
and maintained against Guarantor without the joinder of Tenant or any other
person.
This instrument may not be changed, modified, discharged or terminated
orally or in any manner other than by an agreement in writing signed by
Guarantor and Landlord.
As used herein, the term "Tenant" shall include any successor or
assignee of Tenant; the term "Landlord" shall include any successor or assignee
of Landlord; and the term "Lease" shall include any amendment, extension in
accordance with the Lease or renewal of the Lease.
2
THIS LEASE GUARANTY shall be construed in accordance with and governed
by the laws of the Commonwealth of Massachusetts. The undersigned submits to the
jurisdiction of the courts of the Commonwealth of Massachusetts for all matters
in connection herewith.
EXECUTED as of December ___, 2004.
GUARANTOR:
QUAKER FABRIC CORPORATION
By: _______/s/_________________________
COMMONWEATLH OF MASSACHUSETTS )
) ss.
COUNTY OF BRISTOL )
On this ______ day of ________________, 2004 before me personally
appeared ____________________ who, being by me duly sworn, did say that (s)he is
______________________________ of Quaker Fabric Corporation a ___________
corporation and that (s)he is duly authorized to execute the foregoing on behalf
of said corporation by authority of its Board of Directors and its stockholders,
and said ________________ acknowledged said instrument to be the free act and
deed of said corporation.
__________/s/________________
Notary Public
My Commission expires: