1
EXHIBIT 10.6I
CONTINUING GUARANTY FROM THE CHAMBERS CATALOG COMPANY, INC. TO BANK OF
AMERICA NT&SA
2
CONTINUING GUARANTY
BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION
BORROWERS: WILLIAMS-SONOMA, INC.
GUARANTORS: CHAMBERS CATALOG COMPANY, INC.
(1) For valuable consideration, the undersigned ("Guarantors") jointly and
severally unconditionally guarantee and promise to pay to Bank of America
National Trust and Savings Association ("Bank"), or order, on demand, in lawful
money of the United States, any and all indebtedness of Williams-Sonoma, Inc.
("Borrowers") to Bank. The word "indebtedness" is used herein in its most
comprehensive sense and includes any and all advances, debts, obligations and
liabilities of Borrowers or any one or more of them to Bank, heretofore, now, or
hereafter made, incurred or created, whether voluntary or involuntary and
however arising, whether direct or acquired by Bank by assignment or succession,
whether due or not due, absolute or contingent, liquidated or unliquidated,
determined or undetermined, and whether Borrowers may be liable individually or
jointly with others, or whether recovery upon such indebtedness may be or
hereafter become barred by any statute of limitations, or whether such
indebtedness may be or hereafter become otherwise unenforceable.
(2) The liability of Guarantors under this Guaranty (exclusive of liability
under any other guaranties executed by Guarantors) shall not exceed at any one
time the total of (a) One Hundred Twenty Million Dollars ($120,000,000), for the
principal amount of the indebtedness and (b) all interest, fees, and other costs
and expenses relating to or arising out of the indebtedness or such part of the
indebtedness as shall not exceed the foregoing limitation. Bank may permit the
indebtedness to exceed Guarantors' liability, and may apply any amounts received
from any source, other than from Guarantors, to the unguaranteed portion of the
indebtedness. This is a continuing guaranty relating to any indebtedness,
including that arising under successive transactions which shall either continue
the indebtedness or from time to time renew it after it has been satisfied. Any
payment by Guarantors shall not reduce their maximum obligation hereunder,
unless written notice to that effect be actually received by Bank at or prior to
the time of such payment.
(3) If any Borrower is a partnership and any Guarantor is a general partner
of that partnership, then such Guarantor shall not be liable under this Guaranty
for any indebtedness of such Borrower which is secured by real property;
provided, however, that such Guarantor shall remain liable under partnership law
for all the indebtedness of such Borrower.
(4) The obligations hereunder are joint and several, and independent of the
obligations of Borrowers, and a separate action or actions may be brought and
prosecuted against Guarantors whether action is brought against Borrowers or
whether Borrowers be joined in any such action or actions; and Guarantors waive
the benefit of any statute of limitations affecting their liability hereunder.
(5) Guarantors authorize Bank, without notice or demand and without
affecting their liability hereunder, from time to time, either before or after
revocation hereof, to (a) renew, compromise, extend, accelerate or otherwise
change the time for payment of, or otherwise change the terms of the
indebtedness or any part thereof, including increase or decrease of the rate of
interest thereon; (b) receive and hold security for the payment of this Guaranty
or any of the indebtedness, and exchange, enforce, waive, release, fail to
perfect, sell, or otherwise dispose of any such security; (c) apply such
security and direct the order or manner of sale thereof as Bank in its
discretion may determine; and (d) release or substitute any one or more of the
endorsers or guarantors.
(6) Guarantors waive any right to require Bank to (a) proceed against
Borrowers; (b) proceed against or exhaust any security held from Borrowers; or
(c) pursue any other remedy in Bank's power whatsoever. Guarantors waive any
defense arising by reason of any disability or other defense of Borrowers, or
the cessation from any cause whatsoever of the liability of Borrowers, or any
claim that Guarantors' obligations exceed or are more burdensome than those of
Borrowers. Until the indebtedness shall have been paid in full, even though the
indebtedness is in excess of Guarantors' liability hereunder, Guarantors waive
any right of
1
3
subrogation, reimbursement, indemnification, and contribution (contractual,
statutory or otherwise), including without limitation, any claim or right of
subrogation under the Bankruptcy Code (Title 11 of the U.S. Code) or any
successor statute, arising from the existence or performance of this Guaranty
and Guarantors waive any right to enforce any remedy which Bank now has or may
hereafter have against Borrowers, and waive any benefit of, and any right to
participate in, any security now or hereafter held by Bank. Guarantors waive 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
indebtedness.
(7) (a) Guarantors understand and acknowledge that if Bank forecloses,
either by judicial foreclosure or by exercise of power of sale, any deed of
trust securing the indebtedness, that foreclosure could impair or destroy any
ability that Guarantors may have to seek reimbursement, contribution, or
indemnification from Borrowers or others based on any right Guarantors may have
of subrogation, reimbursement, contribution, or indemnification for any amounts
paid by Guarantors under this Guaranty. Guarantors further understand and
acknowledge that in the absence of this paragraph, such potential impairment or
destruction of Guarantors' rights, if any, may entitle Guarantors to assert a
defense to this Guaranty based on Section 580d of the California Code of Civil
Procedure as interpreted in Union Bank v. Gradsky, 265 Cal. App. 2d. 40 (1968).
By executing this Guaranty, Guarantors freely, irrevocably, and unconditionally:
(i) waive and relinquish that defense and agree that Guarantors will be fully
liable under this Guaranty even though Bank may foreclose, either by judicial
foreclosure or by exercise of power of sale, any deed of trust securing the
indebtedness; (ii) agree that Guarantors will not assert that defense in any
action or proceeding which Bank may commence to enforce this Guaranty; (iii)
acknowledge and agree that the rights and defenses waived by Guarantors in this
Guaranty include any right or defense that Guarantors may have or be entitled to
assert based upon or arising out of any one or more of Sections 580a, 580b,
580d, or 726 of the California Code of Civil Procedure or Section 2848 of the
California Civil Code; and (iv) acknowledge and agree that Bank is relying on
this waiver in creating the indebtedness, and that this waiver is a material
part of the consideration which Bank is receiving for creating the indebtedness.
(b) Guarantors waive any rights and defenses available to Guarantors
by reason of Sections 2787 to 2855, inclusive, of the California Civil Code
including, without limitation, (1) any defenses Guarantors may have to
their obligations under this Guaranty by reason of an election of remedies
by Bank and (2) any rights or defenses Guarantors may have by reason or
protection afforded to Borrowers with respect to any of the indebtedness
pursuant to the antideficiency or other laws of California limiting or
discharging any of the indebtedness, including, without limitation,
Sections 580a, 580b, 580d, or 726 of the California Code of Civil
Procedure.
(c) Guarantors waive all rights and defenses arising out of an
election of remedies by Bank, even though that election of remedies, such
as a nonjudicial foreclosure with respect to security for a guaranteed
obligation, has destroyed Guarantors' rights of subrogation and
reimbursement against Borrowers by the operation of Section 580d of the
California Code of Civil Procedure or otherwise.
(d) No provision or waiver in this Guaranty shall be construed as
limiting the generality of any other waiver contained in this Guaranty.
(8) Guarantors acknowledge and agree that they shall have the sole
responsibility for obtaining from Borrowers such information concerning
Borrowers' financial conditions or business operations as Guarantors may
require, and that Bank has no duty at any time to disclose to Guarantors any
information relating to the business operations or financial conditions of
Borrowers.
(9) To secure all of Guarantors' obligations hereunder, Guarantors assign
and grant to Bank a security interest in all moneys, securities and other
property of Guarantors now or hereafter in the possession of Bank, and all
deposit accounts of Guarantors maintained with Bank, and all proceeds thereof.
Upon default or breach of any of Guarantors' obligations to Bank, Bank may apply
any deposit account to reduce the indebtedness, and may foreclose any collateral
as provided in the Uniform Commercial Code and in any security agreements
between Bank and Guarantors.
2
4
(10) Any obligations of Borrowers to Guarantors, now or hereafter existing,
including but not limited to any obligations to Guarantors as subrogees of Bank
or resulting from Guarantors' performance under this Guaranty, are hereby
subordinated to the indebtedness. Such obligations of Borrowers to Guarantors if
Bank so requests shall be enforced and performance received by Guarantors as
trustees for Bank and the proceeds thereof shall be paid over to Bank on account
of the indebtedness, but without reducing or affecting in any manner the
liability of Guarantors under the provisions of this Guaranty.
(11) This Guaranty may be revoked at any time by Guarantors in respect to
future transactions, unless there is a continuing consideration as to such
transactions which Guarantors do not renounce. Such revocation shall be
effective upon actual receipt by Bank at the address shown below of written
notice of revocation. Revocation shall not affect any of Guarantors' obligations
or Bank's rights with respect to transactions which precede Bank's receipt of
such notice, regardless of whether or not the indebtedness related to such
transactions, before or after revocation, has been renewed, compromised,
extended, accelerated, or otherwise changed as to any of its terms, including
time for payment or increase or decrease of the rate of interest thereon, and
regardless of any other act or omission of Bank authorized hereunder. Revocation
by any one or more of Guarantors shall not affect any obligations of any
nonrevoking Guarantors. If this Guaranty is revoked, returned, or canceled, and
subsequently any payment or transfer of any interest in property by Borrowers to
Bank is rescinded or must be returned by Bank to Borrowers, this Guaranty shall
be reinstated with respect to any such payment or transfer, regardless of any
such prior revocation, return, or cancellation.
(12) Where any one or more of Borrowers are corporations or partnerships it
is not necessary for Bank to inquire into the powers of Borrowers or of the
officers, directors, partners or agents acting or purporting to act on their
behalf, and any indebtedness made or created in reliance upon the professed
exercise of such powers shall be guaranteed hereunder.
(13) Bank may, without notice to Guarantors and without affecting
Guarantors' obligations hereunder, assign the indebtedness and this Guaranty, in
whole or in part. Guarantors agree that Bank may disclose to any assignee or
purchaser or any prospective assignee or purchaser, of all or part of the
indebtedness any and all information in Bank's possession concerning Guarantors,
this Guaranty, and any security for this Guaranty.
(14) Guarantors agree to pay all reasonable attorneys' fees, including
allocated costs of Bank's in-house counsel, and all other costs and expenses
which may be incurred by Bank in the enforcement of this Guaranty.
(15) Any married person who signs this Guaranty hereby expressly agrees
that recourse may be had against such person's separate property for all
obligations under this Guaranty.
(16) Where there is but a single Borrower, or where a single Guarantor
executes this Guaranty, then all words used herein in the plural shall be deemed
to have been used in the singular where the context and construction so require;
and when there is more than one Borrower named herein, or when this Guaranty is
executed by more than one Guarantor, the words "Borrowers" and "Guarantors"
respectively shall mean all and any one or more of them.
(17) This Guaranty shall be governed by and construed according to the laws
of the State of California, to the jurisdiction of which the parties hereto
submit.
(18) (a) Any controversy or claim between or among the parties, including
but not limited to those arising out of or relating to this Guaranty or any
agreements or instruments relating hereto or delivered in connection herewith
and any claim based on or arising from an alleged tort, shall at the request of
any party be determined by arbitration. The arbitration shall be conducted in
accordance with the United States Arbitration Act (Title 9, U.S. Code),
notwithstanding any choice of law provision in this Guaranty, and under the
Commercial Rules of the American Arbitration Association ("AAA"). The
arbitrator(s) shall give effect to statutes of limitation in determining any
claim. Any controversy concerning whether an issue is arbitrable shall be
determined by the arbitrator(s). Judgment upon the arbitration award may be
entered in any court having jurisdiction. The institution and maintenance of an
action for judicial relief or pursuit of a provisional or ancillary remedy shall
not constitute a waiver of the right of any party, including the plaintiff, to
submit the controversy or claim to arbitration if any other party contests such
action for judicial relief.
3
5
(b) Notwithstanding the provisions of subparagraph (a), no controversy
or claim shall be submitted to arbitration without the consent of all
parties if, at the time of the proposed submission, such controversy or
claim arises from or relates to an obligation to Bank which is secured by
real property collateral located in California. If all parties do not
consent to submission of such a controversy or claim to arbitration, the
controversy or claim shall be determined as provided in subparagraph (c).
(c) A controversy or claim which is not submitted to arbitration as
provided and limited in subparagraphs (a) and (b) shall, at the request of
any party, be determined by a reference in accordance with California Code
of Civil Procedure Section 638 et seq. If such an election is made, the
parties shall designate to the court a referee or referees selected under
the auspices of the AAA in the same manner as arbitrators are selected in
AAA-sponsored proceedings. The presiding referee of the panel, or the
referee if there is a single referee, shall be an active attorney or
retired judge. Judgment upon the award rendered by such referee or referees
shall be entered in the court in which such proceeding was commenced in
accordance with California Code of Civil Procedure Sections 644 and 645.
(d) No provision of this paragraph shall limit the right of any party
to this Guaranty to exercise self-help remedies such as setoff, to
foreclose against or sell any real or personal property collateral or
security, or to obtain provisional or ancillary remedies from a court of
competent jurisdiction before, after, or during the pendency of any
arbitration or other proceeding. The exercise of a remedy does not waive
the right of either party to resort to arbitration or reference. At Bank's
option, foreclosure under a deed of trust or mortgage may be accomplished
either by exercise of power of sale under the deed of trust or mortgage or
by judicial foreclosure.
Executed this 7th day of August, 1995.
WITNESSED Chambers Catalog Company, Inc.
/s/ ALI PARODI /s/ PAT CONNOLLY
--------------------------------------------------- ---------------------------------
Witness By: Patrick Connolly, President
/s/ RUSSELL SOLT
3250 Van Ness Avenue, San Francisco, CA ---------------------------------
--------------------------------------------------- By: Russell Solt, Secretary
Address 100 North Point Street,
x San Francisco, CA 94133
---------------------------------------------------
Witness
---------------------------------------------------
Address
Address for notices to Bank:
BANK OF AMERICA N.T. & S.A.
San Francisco Commercial Banking Office #01499
345 Montgomery St.
P.O. Box 37001
San Francisco, CA 94137
4