EXHIBIT 5
CONTINUING GUARANTY AGREEMENT
Continuing Guaranty Agreement, dated February 26, 1993, made
by Xxxx Enterprises, Inc. ("Xxxx") and Convertible Enterprises,
Inc. ("Convertible"), both New York corporations (collectively, the
"Guarantors"), for the benefit of KLAUSSNER FURNITURE INDUSTRIES,
INC., a North Carolina corporation ("Lender"):
WHEREAS, Xxxxxxxx - New York, Inc. ("Debtor") is indebted to
Lender; and
WHEREAS, Debtor and Convertible are wholly-owned subsidiaries
of Xxxx; and
WHEREAS, Debtor and each Guarantor have a direct financial
interest in maintaining the supply of merchandise from Lender to
Debtor;
NOW, THEREFORE, the parties agree as follows:
1. Guaranty.
(a) Guarantors, to induce Lender to continue to supply
merchandise to Guarantors and to continue to grant special credits
against current accounts payable at the rate of $50,000 per new
store, hereby jointly and severally guarantee the payment to Lender
of any and all Indebtedness (as hereinafter defined) of Debtor to
Lender.
(b) As used in this Guaranty, 'Indebtedness" shall mean
all loans payable of Debtor to Lender from time to time, whether
now existing or hereafter arising, of up to $2,400,000 arising out
of the sale of merchandise by Lender to Debtor and the granting of
special credits against current accounts receivable at the rate of
$50,000 per new store.
2 . Lender's Costs and Expenses.
Guarantors agree to pay all Costs and Expenses of every
kind incurred by Lender in enforcing this Guaranty. "Costs and
Expenses' as used in the preceding sentence shall include, without
limitation, the reasonable attorneys' fees incurred by Lender in
retaining counsel for advice, suit, appeal, any insolvency or other
proceedings under the Federal Bankruptcy Code or otherwise, or for
any purpose specified in the preceding sentence.
3. Continuing Guaranty.
This Guaranty is and is intended to be a continuing
guaranty of payment and not of collection of the Indebtedness
(irrespective of the aggregate amount thereof), independent of
and in addition to any other guaranty, endorsement, collateral or
other agreement held by Lender therefor or with respect thereto,
whether or not furnished by Guarantors.
4. Certain Rights and Obligations.
(a) Guarantors authorize Lender, without notice, demand
or any reservation of rights against Guarantors, and Lender and
Debtor may, without affecting Guarantors' obligations hereunder,
from time to time: (i) to renew, extend, increase, accelerate or
otherwise change the time for payment of, the
terms of or the interest on the Indebtedness or any part thereof;
(ii) to accept from any person or entity and hold collateral for
the payment of the Indebtedness or any part thereof, and to
exchange, enforce or refrain from enforcing, or release such
collateral or any part thereof; (iii) to accept and hold any
endorsement or guaranty of payment of the Indebtedness or any part
thereof, and to discharge, release or substitute any such
obligation of any such indorser or guarantor, or any person or
entity who has given any security interest in any collateral as
security for the payment of the Indebtedness or any part thereof,
or any other person or entity in any way obligated to pay the
Indebtedness or any part thereof, and to enforce or refrain from
enforcing, or compromise or modify, the terms of any obligation of
any such indorser, guarantor, person orentity; (iv) to dispose of
any and all collateral securing the Indebtedness in any manner as
Lender, in its sole discretion, may deem appropriate, and to direct
the order or manner of such disposition and the enforcement of any
and all endorsements and guaranties relating to the Indebtedness or
any part thereof as Lender, in its sole discretion, may determine;
and (v) to determine the manner, amount and time of application of
payments and credits, if any, to be made on all or any part of any
component or components of the Indebtedness (whether principal,
interest, costs and expenses, or otherwise).
(b) Guarantors' obligation hereunder shall not be
affected by any of the following, all of which Guarantors hereby
waive: (i) any failure to perfect or continue the perfection of any
security interest in or other lien on any collateral securing
payment of any Indebtedness or Guarantors' obligation hereunder;
(ii) the invalidity, unenforceability, propriety of manner of
enforcement of, or loss or change in priority of any such security
interest or other lien; (iii) any failure to protect, preserve or
insure any such collateral; (iv) failure of Guarantors to receive
notice of any intended disposition of such collateral; (v) any
defense arising by reason of the cessation from any cause
whatsoever of liability of the Debtor including, without
limitation, any failure, negligence or omission by Lender in
enforcing its claims against the Debtor; (vi) any release,
settlement or compromise of any obligation of Debtor; (vii) the
invalidity or unenforceability of any of the Indebtedness; or
(viii) presentment and demand for payment of the Indebtedness.
5. Termination.
This Guaranty shall remain in full force and effect as to
each Guarantor until all Indebtedness, together with any interest
accruing thereon, shall be finally and irrevocably paid in ful1.
Payment of all of the Indebtedness from time to time shall not
operate as a discontinuance of this Guaranty.
6. Miscellaneous.
(a) No course of dealing between Debtor or any Guarantor
and Lender and no act, delay or omission by Lender in exercising
any right or remedy hereunder or with respect to any Indebtedness
shall operate as a waiver thereof or of any other right or remedy,
and no single or partial exercise thereof shall preclude any other
or further exercise thereof or the exercise of any other right or
remedy. Lender may remedy any default by Debtor under any
agreement with Debtor or with respect to any Indebtedness in any
reasonable manner without waiving the default remedied and without
waiving any other prior or subsequent default by Debtor. All
rights and remedies of Lender hereunder are cumulative.
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(b) No party may assign its rights or obligations
hereunder without the written consent of all parties.
(c) Captions of the sections of this Guaranty are
solely for the convenience of Lender and Guarantors, and are not
an aid in the interpretation of this Guaranty.
(d) If any provision of this Guaranty is unenforceable
in whole or in part for any reason, the remaining provisions
shall continue to be effective.
(e) This Guaranty and the transactions evidenced hereby
shall be construed under the laws of the State of North Carolina.
(f) Any notice to be given hereunder shall be duly
given if delivered or mailed as follows:
To Xxxx Enterprises, Inc. or
Convertible Enterprises, Inc.: c/o Xxxxxxxx Convertibles
Warehouse
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
To Lender: Klaussner Furniture
Industries, Inc.
X.X. Xxxxxx 000
Xxxxxxxx, XX 00000
Notice shall be deemed given when received.
(g) This Agreement shall be binding upon the parties
hereto and their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have duly executed this
agreement as of the date first above written.
XXXX ENTERPRISES, INC.
BY: /S/Xxxx X. Love
Xxxx X. Love
CONVERTIBLE ENTERPRISES, INC.
By: /S/Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
KLAUSSNER FURNITURE INDUSTRIES, INC.
By: /S/Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
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Amendment to Continuing Guaranty Agreement
Reference is made to the Continuing Guaranty Agreement (the
"Guaranty Agreement"), dated February 26, 1993, made by Xxxx
Enterprises, Inc. ("Xxxx"), and Convertible Enterprises, Inc.
("Convertible") for the benefit of Klaussner Furniture
Industries, Inc. (the "Lender"). Unless otherwise defined
herein, terms in the Guaranty Agreement shall have their defined
meanings herein.
WHEREAS, the Indebtedness to be guaranteed by the Guarantors
pursuant to the Guaranty Agreement has been modified.
WHEREAS, the parties desire to modify the Guaranty Agreement
to substitute such new indebtedness.
NOW THEREFORE, the parties hereby agree as follows:
Notwithstanding anything to the contrary contained in the
Guaranty Agreement the term "Indebtedness" as defined in Section
I(b) of the Guaranty Agreement shall mean the promissory note in
the original principal amount of $3,500,000 dated as of February
17, 1994 and executed by Xxxxxxxx-New York, Inc. in favor of the
Lender.
Except as expressly amended hereby, the Agreement shall
remain in full force and effect.
IN WITNESS WHEREOF, the undersigned have executed this
Amendment as of February 17, 1994.
XXXX ENTERPRISES, INC.
By: /S/Xxxx Xxxx
Name: Xxxx Xxxx
Title: President
CONVERTIBLE ENTERPRISES, INC.
By: /S/Xxxx Xxxx
Name: Xxxx Xxxx
Title: President
KLAUSSNER FURNITURE INDUSTRIES, INC.
By: /S/Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
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Amendment to Continuing Guaranty Agreement
Reference is made to the Continuing Guaranty Agreement dated
February 26, 1993, made by Xxxx Enterprises, Inc. ("Xxxx") and
Convertible Enterprises, Inc. ("Convertible") for the benefit of
Klaussner Furniture Industries, Inc. (the "Lender"), as amended
by amendment dated as of February 17, 1994 (the "Guaranty
Agreement"), pursuant to which Xxxx and Convertible have
guaranteed payment of certain indebtedness of Xxxxxxxx-New York,
Inc. ("JNY") . Unless otherwise defined herein, terms in the
Guaranty Agreement shall have their defined meanings herein.
WHEREAS, in connection with the execution and delivery of
this Amendment, the Indebtedness guaranteed by the Guarantors
pursuant to the Guaranty Agreement is being amended and restated
at the request of JNY, Xxxx, and Convertible; and
WHEREAS, Xxxx and Convertible have consented to the
amendment and restatement and have agreed to amend the Guaranty
Agreement to refer to the Amended and Restated Promissory Note of
JNY 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
Section l(b) of the Guaranty Agreement will be amended in its
entirety to read as follows:
"(b) As used in this Guaranty, "Indebtedness"
shall mean the obligations of Debtor to Lender under
the Promissory Note in the original principal amount
of $3,500,000 dated as of February 17, 1994 and
executed by Debtor in favor of the Lender, as amended
and restated by the 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 Guaranty Agreement
shall remain in full force and effect, and Xxxx and Convertible
each hereby confirms that its 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.
XXXX ENTERPRISES, INC.
By: /S/Xxxx X. Love
Xxxx X. Love, President
CONVERTIBLE ENTERPRISES, INC.
By: /S/Xxxx X. Love
Xxxx X. Love, President
KLAUSSNER FURNITURE INDUSTRIES, INC.
By: /S/Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
Senior Vice President
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AMENDMENT TO CONTINUING GUARANTY AGREEMENT
Reference is made to the Continuing Guaranty Agreement dated
February 26, 1993, made by Xxxx Enterprises, Inc. ("Xxxx") and
Convertible Enterprises, Inc. ("Convertible") for the benefit of
Klaussner Furniture Industries, Inc. (the "Lender"), as amended
by amendments dated as of February 17, 1994 and as of January 1,
1995 (the "Guaranty Agreement"), pursuant to which Xxxx and
Convertible have guaranteed payment of certain indebtedness of
Xxxxxxxx-New York, Inc. ("JNY"). Unless otherwise defined
herein, terms in the Guaranty Agreement shall have their defined
meanings herein.
WHEREAS, in connection with the execution and delivery of
this Amendment, the Indebtedness guaranteed by the Guarantors
pursuant to the Guaranty Agreement is being amended and restated
at the request of JNY, Xxxx, and Convertible; and
WHEREAS, to induce the Lender to agree to the amendment and
restatement, Bright Star Enterprises, Inc. ("Bright Star") and
Xxxxxxxx Advertising, Inc. ("Advertising"), wholly owned
subsidiaries of Xxxx and affiliates of JNY and Convertible, have
agreed to join in the Guaranty Agreement and to guarantee,
jointly and severally, the Indebtedness (as amended and
restated); and
WHEREAS, Xxxx and Convertible have consented to the
amendment and restatement and have agreed to amend the Guaranty
Agreement to refer to the Amended and Restated Promissory Note of
JNY dated as of March 1, 1996, a copy of which is attached hereto
as Exhibit A and incorporated herein by reference, and to add
Bright Star and Advertising as guarantors;
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
term "Guarantors" shall henceforth mean Xxxx, Convertible, Bright
Star and Advertising and that Sections 1(a) and 1(b) of the
Guaranty Agreement (as heretofore amended) will be amended in
their entirety to read as follows:
"(a) Guarantors hereby jointly and severally
guarantee the payment to Lender of any and all
Indebtedness (as hereinafter defined) of Debtor to
Lender.
(b) As used in this Guaranty, "Indebtedness"
shall mean the obligations of Debtor to Lender
under the Promissory Note in the original principal
amount of $3,500,000 dated as of February 17, 1994
and executed by Debtor in favor of the Lender, as
amended and restated by the Amended and Restated
Promissory Note dated as of January 1, 1995 in the
original principal amount of $3,500,000, and by the
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 Guaranty Agreement
shall remain in full force and effect, and Xxxx and Convertible
each hereby confirms that its 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.
XXXX ENTERPRISES, INC.
By: /S/Xxxx X. Love
Xxxx X. Love, President
CONVERTIBLE ENTERPRISES, INC.
By: /S/Xxxx X. Love
Xxxx X. Love, President
BRIGHT STAR ENTERPRISES, INC.
By: /S/Xxxx X. Love
Xxxx X. Love, President
XXXXXXXX ADVERTISING, INC.
By: /S/Xxxx X. Love
Xxxx X. Love, President
KLAUSSNER FURNITURE INDUSTRIES, INC.
By: /S/Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
Senior Vice President
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