Exhibit 10.7
GUARANTY AND SURETYSHIP AGREEMENT
1. FOR VALUE RECEIVED, the undersigned hereby absolutely and
unconditionally guarantees, and becomes surety for, the prompt
and punctual payment at maturity, whether by acceleration or
otherwise, of the principal of, interest on, and other sums
payable in connection with, all indebtedness and obligations of
LADD FURNITURE, INC. ("Borrower") to PNC BANK, NATIONAL
ASSOCIATION, ("Bank"), pursuant to the Letter Agreement dated
February 28, 1994 and $15,000,000 Line of Credit Note dated on or
about that date (hereinafter such indebtedness and obligations
are referred to as "Indebtedness").
2. This is a guaranty of performance or payment and not merely
of collection and Bank shall not be required, as a condition of
the liability of the undersigned, to make any demand upon, or to
pursue any of its rights against, Borrower, or to pursue any
rights which may be available to it with respect to any other
person who may be liable for the payment of the Indebtedness and
this Agreement shall survive and continue in full force
notwithstanding the dissolution or liquidation of, or the
insolvency or bankruptcy of, or any corporate change or other
occurrence whatsoever affecting Borrower or the obligations and
liabilities of Borrower, including without limitation any
amendment to, renewal of or waiver of default under the
Indebtedness, regardless of when any obligations or liabilities
to Bank may accrue or be deemed to accrue.
3. The undersigned hereby unconditionally and irrevocably
waives, to the extent permitted by applicable law: (a) notice of
acceptance of this Agreement and any notice regarding the
performance or non-performance of the Borrower with respect to
the Indebtedness; (b) presentment for payment, notice of non-
payment or non-performance, demand, protest, notice of protest
and notice of dishonor or default to anyone; (c) defenses to
payment or performance based upon the Indebtedness not being a
valid and binding obligation of the Borrower enforceable in
accordance with its terms for any reason whatsoever; (d) all
other notices to which the undersigned may be entitled but which
may be legally waived; (e) any disability of Borrower or defense
available to Borrower (other than payment in full) including
absence or cessation of liability for any reason whatsoever; and
(f) any defense or circumstance which might otherwise constitute
a legal or equitable discharge of a guarantor or surety.
4. Without notice to the undersigned, Bank shall have the right,
at any time and from time to time, to: (a) deal in any manner it
shall see fit with the Indebtedness and with any security for the
Indebtedness; (b) accept partial payments on account of the
Indebtedness; (c) grant extensions or renewals of all or any part
of the Indebtedness; (d) demand or receive additional security
for the Indebtedness; and (e) accept substitutes for, or release,
all or any security which it holds or may hold for the
Indebtedness.
5. If Borrower shall at any time fail to pay to Bank (a) the
principal of, interest on, or other sums payable in connection
with, the Indebtedness, when the same shall be due; and (b) all
amounts that would be due under (a) if effect were not given to
the bankruptcy, insolvency or other similar laws of general
application relating to the enforcement of creditors' rights or
to general principles of equity, the undersigned promises to pay
such amount to Bank forthwith.
6. The undersigned hereby agrees to reimburse Bank for all cost
and expense, including reasonable attorney's fees and expenses
incurred in connection with the enforcement of Bank's rights
hereunder or which would otherwise not have been incurred but for
the Indebtedness.
7. This Agreement shall continue in force in any event for so
long as Borrower shall be indebted to Bank pursuant to the
Indebtedness, and thereafter until Bank shall have actually
received written notice of the termination hereof from the
undersigned, it being contemplated that Borrower may borrow,
repay and subsequently borrow money from, or become indebted to,
Bank from time to time pursuant to the Indebtedness, and the
undersigned, not having given notice of the termination hereof,
as herein provided for, shall be deemed to have permitted this
Agreement to remain in full force and effect for the purpose of
inducing Bank to make further loans to Borrower pursuant to the
Indebtedness, provided, however, no notice of termination of this
Agreement shall affect in any manner the rights of Bank arising
under this Agreement with respect to indebtedness incurred by
Borrower prior to receipt by Bank of written notice of
termination or indebtedness incurred after receipt of such
written notice pursuant to an agreement entered into by Bank
prior to receipt of such notice; provided, further, however, that
if at any time all or any part of any payment previously applied
by Bank to the Indebtedness or the proceeds of any enforcement of
any security interest of Bank or any exercise of the right of
set-off by Bank is invalidated, declared to be fraudulent or
preferential, set aside, recovered from, disgorged by, or, is or
must be rescinded or returned by Bank for any reason whatsoever
(including, without limitation, the insolvency, bankruptcy or
reorganization of Borrower) the Indebtedness shall be deemed to
have continued in existence for the purpose of this Agreement,
and to the extent that such payment is or must be rescinded or
returned, this Agreement shall continue in force or be
reinstated, as the case may be, as though such application by
Bank had not been made.
8. Without notice to the undersigned, and without prejudice to
this Agreement, Bank may release and discharge from liability to
it any of the undersigned, or any other guarantor of, or surety
for, the payment of the Indebtedness, any of the undersigned not
so discharged agreeing to remain bound hereby notwithstanding.
9. THE UNDERSIGNED HEREBY EXPRESSLY AND IRREVOCABLY WAIVES ANY
AND ALL RIGHTS WHICH THE UNDERSIGNED MAY HAVE AT ANY TIME
(WHETHER ARISING DIRECTLY OR INDIRECTLY, BY OPERATION OF LAW, BY
CONTRACT OR OTHERWISE) TO (1) ASSERT ANY CLAIM AGAINST THE
BORROWER ON ACCOUNT OF PAYMENTS MADE UNDER THIS AGREEMENT,
INCLUDING BUT NOT LIMITED TO ANY AND ALL RIGHTS OF SUBROGATION,
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REIMBURSEMENT, EXONERATION, CONTRIBUTION OR INDEMNITY, AND (2)
ANY REALIZATION ON ANY PROPERTY OF THE BORROWER, INCLUDING
PARTICIPATION IN ANY MARSHALLING OF ASSETS OF THE BORROWER.
10. The undersigned hereby makes the following representations
and warranties for the benefit of the Bank and covenants with the
Bank as follows:
(a) It is a corporation duly incorporated and validly
existing under the laws of the place of its incorporation and has
the corporate power and authority to own its property and assets
and carry on its business as it is now being conducted.
(b) It has the power to make and carry out the terms of this
Agreement and has taken all necessary corporate action to
authorize the execution, delivery and performance of this
Agreement.
(c) This Agreement constitutes the legally binding
obligation of the undersigned enforceable in accordance with its
terms except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or similar laws or equitable principles relating to or
affecting the rights of creditors generally.
(d) The making and performance of this Agreement does not
and will not violate in any respect any provision of (i) any
federal, state or local law or regulation or any order or decree
of any federal, state or local governmental authority, agency or
court, or (ii) the organizational documents of the undersigned or
of any of its subsidiaries, or (iii) any mortgage, contract or
other undertaking to which the undersigned is a party or which is
binding upon the undersigned or any of its subsidiaries or any of
their respective assets, and does not and will not result in the
creation or imposition of any security interest, lien, charge or
other encumbrance on any of their respective assets pursuant to
the provisions of any such mortgage, contract or other
undertaking.
(e) It has received or obtained every consent of, license
from or exemption by any governmental or administrative body or
authority required to authorize or required in connection with
the performance, validity or enforceability of this Agreement and
the payments by it in accordance with the provisions of this
Agreement and the same are valid and subsisting.
(f) It is not in default under any agreement to which it is
a party or by which it may be bound, and no litigation or
administrative proceeding is presently pending or, to its
knowledge threatened, which default, litigation or proceeding
would have a material adverse effect on its business, assets or
financial condition.
11. All demands, communications and notices to be served
hereunder by the Bank shall be effective when received and shall
be addressed to the undersigned at the address shown on
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the
signature pages or at such other address as shall be designated
by the undersigned in a written notice to the Bank.
12. No postponement or delay on the part of Bank in the
enforcement of any right hereunder shall constitute a waiver of
such right.
13. This Agreement is fully assignable and transferable by Bank;
however, the duties and obligations of the undersigned may not be
delegated or transferred by the undersigned without the prior
written consent of Bank, the rights and privileges of Bank
hereunder shall inure to the benefit of Bank's successors and
assigns and the duties and obligations of the undersigned shall
bind the undersigned's successors and assigns.
14. No invalidity, irregularity or unenforceability of all or
any part of the Indebtedness hereby guaranteed or of any security
therefor shall affect, impair, or be a defense to this Agreement,
and this Agreement is a primary obligation of the undersigned.
Any provisions of this Agreement which are held to be invalid or
unenforceable by any court will not affect the validity or
enforceability of any other provision thereof or hereof.
15. This Agreement constitutes the entire agreement by the
undersigned and supersedes all previous agreements and
negotiations, written or oral, respecting the obligations of the
undersigned set forth herein. The undersigned warrants that no
representations, promises or understandings, except as are
contained herein, have been made to the undersigned in connection
herewith.
16. This Agreement has been executed, delivered and accepted at
and shall be deemed to have been made at Pittsburgh, Pennsylvania
and shall be interpreted, and the rights and liabilities of the
parties hereto determined in accordance with the laws of the
Commonwealth of Pennsylvania without application of any statute
relating to conflicts of law. The undersigned hereby agrees to
the jurisdiction of any state or federal court located within
Allegheny County, Pennsylvania, or such other venue as shall be
selected by Bank, and the undersigned further agrees that all
service of process may be made by certified mail directed to the
undersigned at its address set forth on Bank's records and
service so made will be deemed to be completed five (5) business
days after the same has been deposited in U.S. mails, postage
prepaid; provided that nothing contained herein will prevent Bank
from bringing any action or exercising any rights against any
security or against the undersigned individually, or against the
property of the undersigned within any other state or nation to
enforce any award or judgment obtained in the federal or state
court located within Allegheny County, Pennsylvania, or such
other venue as shall be selected by Bank. The undersigned waives
any objection based on forum non conveniens and any objection to
venue of any action instituted hereunder.
17. As used herein "undersigned", if there are more than one,
shall mean, "all of the undersigned, or each or any of them," and
in such case they are jointly and severally bound, and "Bank"
shall mean "Bank, its successors and assigns".
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18. THE UNDERSIGNED WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, ANY DOCUMENTS
EXECUTED IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED IN ANY SUCH AGREEMENTS; IN EACH CASE WHETHER
SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND THE UNDERSIGNED
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY,
AND THAT BANK MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
UNDERSIGNED TO THE WAIVER OF THE RIGHT TO TRIAL BY JURY. THE
UNDERSIGNED AGREES THAT THE FOREGOING WAIVER IS KNOWING AND
VOLUNTARY.
WITNESS the due execution and sealing hereof with the intent of
being legally bound this 28th day of February, 1994.
PENNSYLVANIA HOUSE, INC.
By___________________________________
Title_________________________________
BROWN JORDAN COMPANY
By_____________________________________
Title________________________________
CLAYTON-MARCUS COMPANY, INC.
By___________________________________
Title________________________________
LADD CONTRACT SALES CORPORATION
By__________________________________
Title________________________________
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FOURNIER FURNITURE, INC.
By____________________________________
Title_________________________________
BARCLAY FURNITURE CO.
By___________________________________
Title_________________________________
AMERICAN FURNITURE COMPANY,
INCORPORATED
By___________________________________
Title_________________________________
PILLIOD FURNITURE, INC.
By____________________________________
Title_________________________________
LEA INDUSTRIES, INC. (a North Carolina
corporation)
By:____________________________________
Title:_________________________________
Address for all Guarantors:
c/o LADD Furniture, Inc.
One Plaza Center - Box HP3
High Point, NC 27261-1500
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