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CONTINUING GUARANTY
BORROWER: SMALL WORLD TOYS
GUARANTOR: SMALL WORLD KIDS, INC.
DATE: DECEMBER 15, 2004
THIS CONTINUING GUARANTY is executed by the above-named guarantor(s)
(jointly and severally, the "Guarantor"), as of the above date, in favor of PNC
BANK, NATIONAL ASSOCIATION ("PNC"), with an address at ▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as agent ("Agent") for itself and the
other Lenders (PNC, the other Lenders and Agent shall be referred to
collectively and individually, as "Bank") under the Revolving Credit and
Security Agreement (the "Loan Agreement") among Bank and the above-named
borrower ("Borrower"), with respect to the Indebtedness of Borrower.
1. CONTINUING GUARANTY. Guarantor hereby unconditionally guarantees and
promises to pay on demand to Agent, for the benefit of Bank, at the address
indicated above, or at such other address as Agent may direct, in lawful money
of the United States, and to perform for the benefit of Bank, all Indebtedness
of Borrower now or hereafter owing to or held by PNC, and all Indebtedness of
Borrower now or hereafter owing to or held by Bank pursuant to or in connection
with the Loan Agreement. As used herein, the term "Indebtedness" is used in its
most comprehensive sense and shall mean and include without limitation: (a) any
and all debts, duties, obligations, liabilities, representations, warranties and
guaranties of Borrower or any one or more of them, heretofore, now, or hereafter
made, incurred, or created, whether directly or acquired by assignment or
otherwise, or held on behalf of others, however arising, whether voluntary or
involuntary, due or not due, absolute or contingent, liquidated or unliquidated,
certain or uncertain, determined or undetermined, monetary or nonmonetary,
written or oral, and whether Borrower may be liable individually or jointly with
others, and regardless of whether recovery thereon may be or hereafter become
barred by any statute of limitations, discharged or uncollectible in any
bankruptcy, insolvency or other proceeding, or otherwise unenforceable; and (b)
any and all amendments, modifications, renewals and extensions of any or all of
the foregoing, including without limitation amendments, modifications, renewals
and extensions which are evidenced by any new or additional instrument, document
or agreement; and (c) any and all attorneys' fees, court costs, and collection
charges incurred in endeavoring to collect or enforce any of the foregoing
against Borrower, Guarantor, or any other person liable thereon (whether or not
suit be brought) and any other expenses of, for or incidental to collection
thereof. As used herein, the term "Borrower" shall include any successor to the
business and assets of Borrower, and shall also include Borrower in its capacity
as a debtor or debtor in possession under the federal Bankruptcy Code, and any
trustee, custodian or receiver for Borrower or any of its assets, should
Borrower hereafter become the subject of any bankruptcy or insolvency
proceeding, voluntary or involuntary; and all indebtedness, liabilities and
obligations incurred by any such person shall be included in the Indebtedness
guaranteed hereby. This Guaranty is given in consideration for credit and other
financial accommodations which may, from time to time, be given by Bank to
Borrower in Bank's sole discretion, but Guarantor acknowledges and agrees that
acceptance by Bank of this Guaranty shall not constitute a commitment of any
kind by Bank to extend such credit or other financial accommodation to Borrower
or to permit Borrower to incur Indebtedness to Bank. All sums due under this
Guaranty shall bear interest from the date due until the date paid at the
highest rate charged with respect to any of the Indebtedness.
2. WAIVERS. Guarantor hereby waives: (a) presentment for payment, notice
of dishonor, demand, protest, and notice thereof as to any instrument, and all
other notices and demands to which Guarantor might be entitled, including
without limitation notice of all of the following: the acceptance hereof; the
creation, existence, or acquisition of any Indebtedness; the amount of the
Indebtedness from time to time outstanding; any foreclosure sale or other
disposition of any property which secures any or all of the Indebtedness or
which secures the obligations of any other guarantor of any or all of the
Indebtedness; any adverse change in Borrower's financial position; any other
fact which might increase Guarantor's risk; any default, partial payment or
non-payment of all or any part of the Indebtedness; the occurrence of any other
Event of Default (as hereinafter defined); any and all agreements and
arrangements between Bank and Borrower and any changes, modifications, or
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extensions thereof, and any revocation, modification or release of any guaranty
of any or all of the Indebtedness by any person (including without limitation
any other person signing this Guaranty); (b) any right to require Bank to
institute suit against, or to exhaust its rights and remedies against, Borrower
or any other person, or to proceed against any property of any kind which
secures all or any part of the Indebtedness, or to exercise any right of offset
or other right with respect to any reserves, credits or deposit accounts held by
or maintained with Bank or any indebtedness of Bank to Borrower, or to exercise
any other right or power, or pursue any other remedy Bank may have, and any
rights or defenses by reason of any election of remedies by Bank; (c) any
defense arising by reason of any disability or other defense of Borrower or any
other guarantor or any endorser, co-maker or other person, or by reason of the
cessation from any cause whatsoever of any liability of Borrower or any other
guarantor or any endorser, co-maker or other person, with respect to all or any
part of the Indebtedness, or by reason of any act or omission of Bank or others
which directly or indirectly results in the discharge or release of Borrower or
any other guarantor or any other person or any Indebtedness or any security
therefor, whether by operation of law or otherwise; (d) any defense arising by
reason of any failure of Bank to obtain, perfect, maintain or keep in force any
security interest in, or lien or encumbrance upon, any property of Borrower or
any other person; (e) any defense based upon any failure of Bank to give
Guarantor notice of any sale or other disposition of any property securing any
or all of the Indebtedness, or any defects in any such notice that may be given,
or any failure of Bank to comply with any provision of applicable law in
enforcing any security interest in or lien upon any property securing any or all
of the Indebtedness including, but not limited to, any failure by Bank to
dispose of any property securing any or all of the Indebtedness in a
commercially reasonable manner; (f) any defense based upon or arising out of any
bankruptcy, insolvency, reorganization, arrangement, readjustment of debt,
liquidation or dissolution proceeding commenced by or against Borrower or any
other guarantor or any endorser, co-maker or other person, including without
limitation any discharge of, or bar against collecting, any of the Indebtedness
(including without limitation any interest thereon), in or as a result of any
such proceeding; and (g) the benefit of any and all statutes of limitation with
respect to any action based upon, arising out of or related to this Guaranty.
Until all of the Indebtedness has been paid, performed, and discharged in full,
nothing shall discharge or satisfy the liability of Guarantor hereunder except
the full performance and payment of all of the Indebtedness. If any claim is
ever made upon Bank for repayment or recovery of any amount or amounts received
by Bank in payment of or on account of any of the Indebtedness, because of any
claim that any such payment constituted a preferential transfer or fraudulent
conveyance, or for any other reason whatsoever, and Bank repays all or part of
said amount by reason of any judgment, decree or order of any court or
administrative body having jurisdiction over Bank or any of its property, or by
reason of any settlement or compromise of any such claim effected by Bank with
any such claimant (including without limitation the Borrower), then and in any
such event, Guarantor agrees that any such judgment, decree, order, settlement
and compromise shall be binding upon Guarantor, notwithstanding any revocation
or release of this Guaranty or the cancellation of any note or other instrument
evidencing any of the Indebtedness, or any release of any of the Indebtedness,
and the Guarantor shall be and remain liable to Bank under this Guaranty for the
amount so repaid or recovered, to the same extent as if such amount had never
originally been received by Bank, and the provisions of this sentence shall
survive, and continue in effect, notwithstanding any revocation or release of
this Guaranty. Guarantor hereby expressly and unconditionally waives (i) until
all of the Indebtedness has been irrevocably paid and performed in full, all
rights of subrogation, reimbursement, indemnity and contribution of every kind
against Borrower, and all rights of recourse to any assets or property of
Borrower, and all rights to any collateral or security held for the payment and
performance of any Indebtedness, including (but not limited to) any of the
foregoing rights which Guarantor may have under any present or future document
or agreement with any Borrower or other person, and including (but not limited
to) any of the foregoing rights which Guarantor may have under any equitable
doctrine of subrogation, implied contract, or unjust enrichment, or any other
equitable or legal doctrine, and (ii) any other rights and defenses that are or
may become available to the Guarantor by reason of Sections 2787 to 2855,
inclusive, of the California Civil Code. Neither Bank, nor any of its directors,
officers, employees, agents, attorneys or any other person affiliated with or
representing Bank shall be liable for any claims, demands, losses or damages, of
any kind whatsoever, made, claimed, incurred or suffered by Guarantor or any
other party through the ordinary negligence of Bank, or any of its directors,
officers, employees, agents, attorneys or any other person affiliated with or
representing Bank.
3. CONSENTS. Guarantor hereby consents and agrees that, without notice to
or by Guarantor and without affecting or impairing in any way the obligations or
liability of Guarantor hereunder, Bank may, from time to time, before or after
revocation of this Guaranty, do any one or more of the following in Bank's sole
and absolute discretion: (a) accelerate, accept partial payments of, compromise
or settle, renew, extend the time for the payment, discharge, or performance of,
refuse to enforce, and release all or any parties to, any or all of the
Indebtedness; (b) grant any other indulgence to Borrower or any other person in
respect of any or all of the Indebtedness or any other matter; (c) accept,
release, waive, surrender, enforce, exchange, modify, impair, or extend the time
for the performance, discharge, or payment of, any and all property of any kind
securing any or all of the Indebtedness or any guaranty of any or all of the
Indebtedness, or on which Bank at any time may have a lien, or refuse to enforce
its rights or make any compromise or settlement or agreement therefor in respect
of any or all of such property; (d) substitute or add, or take any action or
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omit to take any action which results in the release of, any one or more
endorsers or guarantors of all or any part of the Indebtedness, including,
without limitation one or more parties to this Guaranty, regardless of any
destruction or impairment of any right of contribution or other right of
Guarantor; (e) amend, alter or change in any respect whatsoever any term or
provision relating to any or all of the Indebtedness, including the rate of
interest thereon; (f) apply any sums received from Borrower, any other
guarantor, endorser, or co-signer, or from the disposition of any collateral or
security, to any indebtedness whatsoever owing from such person or secured by
such collateral or security, in such manner and order as Bank determines in its
sole discretion, and regardless of whether such indebtedness is part of the
Indebtedness, is secured, or is due and payable; (g) apply any sums received
from Guarantor or from the disposition of any collateral or security securing
the obligations of Guarantor, to any of the Indebtedness in such manner and
order as Bank determines in its sole discretion, regardless of whether or not
such Indebtedness is secured or is due and payable. Guarantor consents and
agrees that Bank shall be under no obligation to marshal any assets in favor of
Guarantor, or against or in payment of any or all of the Indebtedness. Guarantor
further consents and agrees that Bank shall have no duties or responsibilities
whatsoever with respect to any property securing any or all of the Indebtedness.
Without limiting the generality of the foregoing, Bank shall have no obligation
to monitor, verify, audit, examine, or obtain or maintain any insurance with
respect to, any property securing any or all of the Indebtedness.
4. ACCOUNT STATED. Bank's books and records showing the account between it
and the Borrower shall be admissible in evidence in any action or proceeding as
prima facie proof of the items therein set forth. Bank's monthly statements
rendered to the Borrower shall be binding upon the Guarantor (whether or not the
Guarantor receives copies thereof), and shall constitute an account stated
between Bank and the Borrower, unless Bank receives a written statement of the
Borrower's exceptions within 30 days after the statement was mailed to the
Borrower. The Guarantor assumes full responsibility for obtaining copies of such
monthly statements from the Borrower, if the Guarantor desires such copies.
5. EXERCISE OF RIGHTS AND REMEDIES; FORECLOSURE OF TRUST DEEDS. Guarantor
consents and agrees that, without notice to or by Guarantor and without
affecting or impairing in any way the obligations or liability of Guarantor
hereunder, Agent may, on behalf of Bank, from time to time, before or after
revocation of this Guaranty, exercise any right or remedy it may have with
respect to any or all of the Indebtedness or any property securing any or all of
the Indebtedness or any guaranty thereof, including without limitation judicial
foreclosure, nonjudicial foreclosure, exercise of a power of sale, and taking a
deed, assignment or transfer in lieu of foreclosure as to any such property, and
Guarantor expressly waives any defense based upon the exercise of any such right
or remedy, notwithstanding the effect thereof upon any of Guarantor's rights,
including without limitation, any destruction of Guarantor's right of
subrogation against Borrower and any destruction of Guarantor's right of
contribution or other right against any other guarantor of any or all of the
Indebtedness or against any other person, whether by operation of Sections 580a,
580d or 726 of the California Code of Civil Procedure, or any comparable
provisions of the laws of any other jurisdiction, or any other statutes or rules
of law now or hereafter in effect, or otherwise. Without limiting the generality
of the foregoing, (a) The guarantor waives all rights and defenses that the
Guarantor may have because the Indebtedness is secured by real property. This
means, among other things: (1) Agent may collect from the Guarantor without
first foreclosing on any real or personal property collateral pledged by the
Borrower. (2) If Agent forecloses on any real property collateral pledged by the
Borrower: (A) The amount of the Indebtedness may be reduced only by the price
for which that collateral is sold at the foreclosure sale, even if the
collateral is worth more than the sale price. (B) Agent may collect from the
Guarantor even if Agent, by foreclosing on the real property collateral, has
destroyed any right the Guarantor may have to collect from the Borrower. This is
an unconditional and irrevocable waiver of any rights and defenses the Guarantor
may have because the Indebtedness is secured by real property. These rights and
defenses include, but are not limited to, any rights or defenses based upon
Section 580a, 580b, 580d, or 726 of the Code of Civil Procedure. (b) The
Guarantor waives all rights and defenses that the Guarantor may have because the
guaranty of another guarantor is secured by real property. This means, among
other things: (1) Agent may collect from the Guarantor without first foreclosing
on any real or personal property collateral pledged by the other guarantor. (2)
If Agent forecloses on any real property collateral pledged by the other
guarantor: (A) The amount of the Indebtedness may be reduced only by the price
for which that collateral is sold at the foreclosure sale, even if the
collateral is worth more than the sale price. (B) Agent may collect from the
Guarantor even if Agent, by foreclosing on the real property collateral, has
destroyed any right the Guarantor may have to obtain contribution from the other
guarantor. This is an unconditional and irrevocable waiver of any rights and
defenses the Guarantor may have because the obligations of the other guarantor
are secured by real property. These rights and defenses include, but are not
limited to, any rights or defenses based upon Section 580a, 580b, 580d, or 726
of the Code of Civil Procedure.
6. ACCELERATION. Notwithstanding the terms of all or any part of the
Indebtedness, the obligations of the Guarantor hereunder to pay and perform all
of the Indebtedness shall, immediately upon the occurrence of an event described
in "g" below, and immediately at the option of Agent upon the occurrence of any
other of the following events, become due and payable, without notice, and
without regard to the expressed maturity of any of the Indebtedness: (a) any
warranty, representation, statement, report, or certificate
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made or delivered to Bank by Guarantor, or any of its officers, partners,
employees, or agents, is incorrect, false, untrue, or misleading when given in
any material respect; or (b) an event of default shall occur under any of
Borrower's agreements with Lender, or Guarantor shall fail to pay or perform
when due all or any part of the Indebtedness; or (c) Guarantor shall fail to pay
or perform when due any indebtedness or obligation of Guarantor to Bank or to
any parent, subsidiary or corporate affiliate of Bank, whether under this
Guaranty or any other instrument, document, or agreement heretofore or hereafter
entered into; or (d) any event shall occur which may or does result in the
acceleration of the maturity of any indebtedness of Guarantor to others
(regardless of any requirement of notice, opportunity to cure or other condition
prior to the exercise of any right of acceleration); or (e) Guarantor shall fail
promptly to perform or comply with any term or condition of any agreement with
any third party which does or may result in a material adverse effect on the
business of Guarantor; or (f) there shall be made or exist any levy, assessment,
attachment, seizure, lien, or encumbrance for any cause or reason whatsoever
upon all or any part of the property of Guarantor (unless discharged by payment,
release or bond not more than ten days after such event has occurred); or (g)
Guarantor shall (i) apply for, consent to or suffer the appointment of, or the
taking of possession by, a receiver, custodian, trustee, liquidator or similar
fiduciary of itself or of all or a substantial part of its property, (ii) make a
general assignment for the benefit of creditors, (iii) commence a voluntary case
under any state or federal bankruptcy laws (as now or hereafter in effect), (iv)
be adjudicated a bankrupt or insolvent, (v) file a petition seeking to take
advantage of any other law providing for the relief of debtors, (vi) acquiesce
to, or fail to have dismissed, within thirty (30) days, any petition filed
against it in any involuntary case under such bankruptcy laws, or (vii) take any
action for the purpose of effecting any of the foregoing; or (h) there shall
occur the dissolution or termination of existence of Guarantor; or (i) Guarantor
shall be deceased or declared incompetent by any court or a guardian or
conservator shall be appointed for Guarantor or for any of its property; or (j)
Guarantor shall generally not pay its debts as they become due or shall enter
into any agreement (whether written or oral), or offer to enter into any such
agreement, with all or a significant number of its creditors regarding any
moratorium or other indulgence with respect to its debts or the participation of
such creditors or their representatives in the supervision, management, or
control of its business; or (k) Guarantor shall conceal, remove or permit to be
concealed or removed any part of its property, with intent to hinder, delay or
defraud its creditors, or make or suffer any transfer of any of its property
which may be fraudulent under any bankruptcy, fraudulent conveyance or similar
law, or shall make any transfer of its property to or for the benefit of any
creditor at a time when other creditors similarly situated have not been paid;
or (l) the board of directors or shareholders of Guarantor shall adopt any
resolution or plan for its dissolution or the liquidation of all or
substantially all of its assets; or (m) Guarantor shall revoke this Guaranty or
contest or deny liability under this Guaranty. All of the foregoing are
hereinafter referred to as "Events of Default".
7. RIGHT TO ATTACHMENT REMEDY. Guarantor agrees that, notwithstanding the
existence of any property securing any or all of the Indebtedness, Agent, on
behalf of Bank, shall have all of the rights of an unsecured creditor of
Guarantor, including without limitation the right to obtain a temporary
protective order and writ of attachment against Guarantor with respect to any
sums due under this Guaranty. Guarantor further agrees that in the event any
property secures the obligations of Guarantor under this Guaranty, to the extent
that Agent, in its sole and absolute discretion, determines prior to the
disposition of such property that the amount to be realized by Agent therefrom
may be less than the indebtedness of the Guarantor under this Guaranty, Agent,
on behalf of Bank, shall have all the rights of an unsecured creditor against
Guarantor, including without limitation the right of Agent, prior to the
disposition of said property, to obtain a temporary protective order and writ of
attachment against Guarantor. Guarantor waives the benefit of Section 483.010(b)
of the California Code of Civil Procedure and of any and all other statutes and
rules of law now or hereafter in effect requiring Agent to first resort to or
exhaust all such collateral before seeking or obtaining any attachment remedy
against Guarantor. Bank shall have no liability to Guarantor as a result
thereof, whether or not the actual deficiency realized by Bank is less than the
anticipated deficiency on the basis of which Agent obtains a temporary
protective order or writ of attachment.
8. INDEMNITY. Guarantor hereby agrees to indemnify Bank and hold Bank
harmless from and against any and all claims, debts, liabilities, demands,
obligations, actions, causes of action, penalties, costs and expenses (including
without limitation attorneys' fees), of every nature, character and description,
which Bank may sustain or incur based upon or arising out of any of the
Indebtedness, any actual or alleged failure to collect and pay over any
withholding or other tax relating to Borrower or its employees, any relationship
or agreement between Bank and Borrower, any actual or alleged failure of Bank to
comply with any writ of attachment or other legal process relating to Borrower
or any of its property, or any other matter, cause or thing whatsoever occurred,
done, omitted or suffered to be done by Bank relating in any way to Borrower or
the Indebtedness (except any such amounts sustained or incurred as the result of
the gross negligence or willful misconduct of Bank or any of its directors,
officers, employees, agents, attorneys, or any other person affiliated with or
representing Bank). Notwithstanding any provision in this Guaranty to the
contrary, the indemnity agreement set forth in this Section shall survive any
termination or revocation of this Guaranty and shall for all purposes continue
in full force and effect.
9. SUBORDINATION. Any and all rights of Guarantor under any and all debts,
liabilities and obligations owing from Borrower to Guarantor, including any
security for and guaranties of any such obligations, whether now existing or
hereafter arising, are hereby subordinated in right of payment
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to the prior payment in full of all of the Indebtedness. No payment in respect
of any such subordinated obligations shall at any time be made to or accepted by
Guarantor if at the time of such payment any Indebtedness is outstanding. If any
Event of Default has occurred, Borrower and any assignee, trustee in bankruptcy,
receiver, or any other person having custody or control over any or all of
Borrower's property are hereby authorized and directed to pay to Agent the
entire unpaid balance of the Indebtedness before making any payments whatsoever
to Guarantor, whether as a creditor, shareholder, or otherwise; and insofar as
may be necessary for that purpose, Guarantor hereby assigns and transfers to
Agent, for the benefit of Bank, all rights to any and all debts, liabilities and
obligations owing from Borrower to Guarantor, including any security for and
guaranties of any such obligations, whether now existing or hereafter arising,
including without limitation any payments, dividends or distributions out of the
business or assets of Borrower. Any amounts received by Guarantor in violation
of the foregoing provisions shall be received and held as trustee for the
benefit of Bank and shall forthwith be paid over to Agent to be applied to the
Indebtedness in such order and sequence as Agent shall in its sole discretion
determine, without limiting or affecting any other right or remedy which Bank
may have hereunder or otherwise and without otherwise affecting the liability of
Guarantor hereunder. Guarantor hereby expressly waives any right to set-off or
assert any counterclaim against Borrower.
10. REVOCATION. This is a Continuing Guaranty relating to all of the
Indebtedness, including Indebtedness arising under successive transactions which
from time to time continue the Indebtedness or renew it after it has been
satisfied. Guarantor waives all benefits of California Civil Code Section 2815,
and agrees that the obligations of Guarantor hereunder may not be terminated or
revoked in any manner except by giving 90 days' advance written notice of
revocation to Agent at its address above by registered first-class U.S. mail,
postage prepaid, return receipt requested, and only as to new loans made by Bank
to Borrower more than 90 days after actual receipt of such written notice by
Agent. No termination or revocation of this Guaranty shall be effective until 90
days following the date of actual receipt of said written notice of revocation
by Agent. Notwithstanding such written notice of revocation or any other act of
Guarantor or any other event or circumstance, Guarantor agrees that this
Guaranty and all consents, waivers and other provisions hereof shall continue in
full force and effect as to any and all Indebtedness which is outstanding on or
before the 90th day following actual receipt of said written notice of
revocation by Agent, and all extensions, renewals and modifications of said
Indebtedness (including without limitation amendments, extensions, renewals and
modifications which are evidenced by new or additional instruments, documents or
agreements executed before or after expiration of said 90-day period), and all
interest thereon, accruing before or after expiration of said 90-day period, and
all attorneys' fees, court costs and collection charges, incurred before or
after expiration of said 90-day period, in endeavoring to collect or enforce any
of the foregoing against Borrower, Guarantor or any other person liable thereon
(whether or not suit be brought) and any other expenses of, for or incidental to
collection thereof.
11. INDEPENDENT LIABILITY. Guarantor hereby agrees that one or more
successive or concurrent actions may be brought hereon against Guarantor, in the
same action in which Borrower may be sued or in separate actions, as often as
deemed advisable by Agent. The liability of Guarantor hereunder is exclusive and
independent of any other guaranty of any or all of the Indebtedness whether
executed by Guarantor or by any other guarantor (including without limitation
any other persons signing this Guaranty). The liability of Guarantor hereunder
shall not be affected, revoked, impaired, or reduced by any one or more of the
following: (a) the fact that the Indebtedness exceeds the maximum amount of
Guarantor's liability, if any, specified herein or elsewhere (and no agreement
specifying a maximum amount of Guarantor's liability shall be enforceable unless
set forth in a writing signed by Agent or set forth in this Guaranty); or (b)
any direction as to the application of payment by Borrower or by any other
party; or (c) any other continuing or restrictive guaranty or undertaking or any
limitation on the liability of any other guarantor (whether under this Guaranty
or under any other agreement); or (d) any payment on or reduction of any such
other guaranty or undertaking; or (e) any revocation, amendment, modification or
release of any such other guaranty or undertaking; or (f) any dissolution or
termination of, or increase, decrease, or change in membership of any Guarantor
which is a partnership. Guarantor hereby expressly represents that he was not
induced to give this Guaranty by the fact that there are or may be other
guarantors either under this Guaranty or otherwise, and Guarantor agrees that
any release of any one or more of such other guarantors shall not release
Guarantor from his obligations hereunder either in full or to any lesser extent.
If Guarantor is a married person, Guarantor hereby expressly agrees that
recourse may be had against his or her separate property for all of his or her
obligations hereunder.
12. FINANCIAL CONDITION OF BORROWER. Guarantor is fully aware of the
financial condition of Borrower and is executing and delivering this Guaranty at
Borrower's request and based solely upon his own independent investigation of
all matters pertinent hereto, and Guarantor is not relying in any manner upon
any representation or statement of Bank with respect thereto. Guarantor
represents and warrants that he is in a position to obtain, and Guarantor hereby
assumes full responsibility for obtaining, any additional information concerning
Borrower's financial condition and any other matter pertinent hereto as
Guarantor may desire, and Guarantor is not relying upon or expecting Bank to
furnish to him any information now or hereafter in Bank's possession concerning
the same or any other matter. By executing this Guaranty, Guarantor knowingly
accepts the full range of risks encompassed within a contract of continuing
guaranty, which risks Guarantor acknowledges include without limitation the
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possibility that Borrower will incur additional Indebtedness for which Guarantor
will be liable hereunder after Borrower's financial condition or ability to pay
such Indebtedness has deteriorated and/or after bankruptcy or insolvency
proceedings have been commenced by or against Borrower. Guarantor shall have no
right to require Bank to obtain or disclose any information with respect to the
Indebtedness, the financial condition or character of Borrower, the existence of
any collateral or security for any or all of the Indebtedness, the filing by or
against Borrower of any bankruptcy or insolvency proceeding, the existence of
any other guaranties of all or any part of the Indebtedness, any action or
non-action on the part of Bank, Borrower, or any other person, or any other
matter, fact, or occurrence.
13. REPORTS AND FINANCIAL STATEMENTS OF GUARANTOR. Guarantor shall, at its
sole cost and expense, at any time and from time to time, prepare or cause to be
prepared, and provide to Bank upon Agent's request (i) such financial statements
and reports concerning Guarantor for such periods of time as Agent may
designate, (ii) any other information concerning Guarantor's business, financial
condition or affairs as Agent may request, and (iii) copies of any and all
foreign, federal, state and local tax returns and reports of or relating to
Guarantor as Agent may from time to time request. Guarantor hereby intentionally
and knowingly waives any and all rights and privileges it may have not to
divulge or deliver said tax returns, reports and other information which are
requested by Agent hereunder or in any litigation in which Bank may be involved
relating directly or indirectly to Borrower or to Guarantor. Guarantor further
agrees immediately to give written notice to Agent of any adverse change in
Guarantor's financial condition and of any condition or event which constitutes
an Event of Default under this Guaranty. All reports and information furnished
to Bank hereunder shall be complete, accurate and correct in all respects.
Whenever requested by Agent, Guarantor shall further deliver to Agent a
certificate signed by Guarantor (and, if Guarantor is a partnership, by all
general partners of Guarantor, in their individual capacities, and, if Guarantor
is a corporation, by the president and secretary of Guarantor, in their
individual capacities) warranting and representing that all reports, financial
statements and other documents and information delivered or caused to be
delivered to Bank under this Guaranty, are complete, correct and thoroughly and
accurately present the financial condition of Guarantor, and that there exists
on the date of delivery of said certificate to Agent no condition or event which
constitutes an Event of Default under this Guaranty.
14. REPRESENTATIONS AND WARRANTIES. Guarantor hereby represents and
warrants that (i) it is in Guarantor's direct interest to assist Borrower in
procuring credit, because Borrower is an affiliate of Guarantor, furnishes goods
or services to Guarantor, purchases or acquires goods or services from
Guarantor, and/or otherwise has a direct or indirect corporate or business
relationship with Guarantor, (ii) this Guaranty has been duly and validly
authorized, executed and delivered and constitutes the valid and binding
obligation of Guarantor, enforceable in accordance with its terms, and (iii) the
execution and delivery of this Guaranty does not violate or constitute a default
under (with or without the giving of notice, the passage of time, or both) any
order, judgment, decree, instrument or agreement to which Guarantor is a party
or by which it or its assets are affected or bound.
15. COSTS. Whether or not suit be instituted, Guarantor agrees to
reimburse Bank on demand for all reasonable attorneys' fees and all other
reasonable costs and expenses incurred by Bank in enforcing this Guaranty, or
arising out of or relating in any way to this Guaranty, or in enforcing any of
the Indebtedness against Borrower, Guarantor, or any other person, or in
connection with any property of any kind securing all or any part of the
Indebtedness, including, without limitation, any and all allocated costs of
in-house counsel. Without limiting the generality of the foregoing, and in
addition thereto, Guarantor shall reimburse Bank on demand for all reasonable
attorneys' fees and costs (including, without limitation, any and all allocated
costs of in-house counsel) Bank incurs in any way relating to Guarantor,
Borrower or the Indebtedness, in order to: obtain legal advice; enforce or seek
to enforce any of its rights; commence, intervene in, respond to, or defend any
action or proceeding; file, prosecute or defend any claim or cause of action in
any action or proceeding (including without limitation any probate claim,
bankruptcy claim, third-party claim, secured creditor claim, reclamation
complaint, and complaint for relief from any stay under the Bankruptcy Code or
otherwise); protect, obtain possession of, sell, lease, dispose of or otherwise
enforce any security interest in or lien on any property of any kind securing
any or all of the Indebtedness; or represent Bank in any litigation with respect
to Borrower's or Guarantor's affairs. In the event either Bank or Guarantor
files any lawsuit against the other predicated on a breach of this Guaranty, the
prevailing party in such action shall be entitled to recover its attorneys' fees
and costs of suit from the non-prevailing party.
16. NOTICES. Any notice which a party shall be required or shall desire to
give to the other hereunder (except for notice of revocation, which shall be
governed by Section 10 of this Guaranty) shall be given by personal delivery or
by telecopier or by depositing the same in the United States mail, first class
postage pre-paid, addressed to Agent at its address set forth in the heading of
this Guaranty and to Guarantor at his address set forth under his signature
hereon, and such notices shall be deemed duly given on the date of personal
delivery or one day after the date telecopied or 3 business days after the date
of mailing as aforesaid. Agent and Guarantor may change their address for
purposes of receiving notices hereunder by giving written notice thereof to the
other party in accordance herewith. Guarantor shall give Agent immediate written
notice of any change in his address.
17. CLAIMS. Guarantor agrees that any claim or cause of action by
Guarantor against Bank, or any of Bank's directors, officers, employees, agents,
accountants or attorneys, based
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upon, arising from, or relating to this Guaranty, or any other transaction
contemplated hereby or relating hereto, occurred, done, omitted or suffered to
be done by Bank, or by Bank's directors, officers, employees, agents,
accountants or attorneys, whether sounding in contract or in tort or otherwise,
shall be barred unless asserted by Guarantor by the commencement of an action or
proceeding in a court of competent jurisdiction within the County of New York,
New York, by the filing of a complaint within one year after the first act,
occurrence or omission upon which such claim or cause of action, or any part
thereof, is based and service of a summons and complaint on an officer of Bank
or any other person authorized to accept service of process on behalf of Bank,
within 30 days thereafter. Guarantor agrees that such one year period is a
reasonable and sufficient time for Guarantor to investigate and act upon any
such claim or cause of action. The one year period provided herein shall not be
waived, tolled, or extended except by a specific written agreement of Bank. This
provision shall survive any termination of this Guaranty or any other agreement.
18. RIGHT OF SETOFF. In addition to all liens upon and rights of setoff
against the Guarantor's money, securities or other property given to the Bank by
law, Bank shall have, with respect to the Guarantor's obligations to Bank
hereunder and to the extent permitted by law, a contractual possessory security
interest in and a contractual right of setoff against, and the Guarantor hereby
assigns, conveys, delivers, pledges and transfers to Bank all of the Guarantor's
right, title and interest in and to, all of the Guarantor's deposits, moneys,
securities and other property now or hereafter in the possession of or on
deposit with, or in transit to, Bank including without limitation any direct or
indirect subsidiary of The PNC Financial Services Group, Inc., whether held in a
general or special account or deposit, whether held jointly with someone else,
or whether held for safekeeping or otherwise, excluding, however, all ▇▇▇,
▇▇▇▇▇, and trust accounts. Every such security interest and right of setoff may
be exercised without demand upon or notice to the Guarantor.
19. EQUAL CREDIT OPPORTUNITY ACT. If the Guarantor is not an "applicant
for credit" under Section 202.2 (e) of the Equal Credit Opportunity Act of 1974
("ECOA"), the Guarantor acknowledges that (i) this Guaranty has been executed to
provide credit support for the Obligations, and (ii) the Guarantor was not
required to execute this Guaranty in violation of Section 202.7(d) of the ECOA.
20. CONSTRUCTION; SEVERABILITY. If more than one person has executed this
Guaranty, the term "Guarantor" as used herein shall be deemed to refer to all
and any one or more such persons and their obligations hereunder shall be joint
and several. Without limiting the generality of the foregoing, if more than one
person has executed this Guaranty, this Guaranty shall in all respects be
interpreted as though each person signing this Guaranty had signed a separate
Guaranty, and references herein to "other guarantors" or words of similar effect
shall include without limitation other persons signing this Guaranty. As used in
this Guaranty, the term "property" is used in its most comprehensive sense and
shall mean all property of every kind and nature whatsoever, including without
limitation real property, personal property, mixed property, tangible property
and intangible property. Words used herein in the masculine gender shall include
the neuter and feminine gender, words used herein in the neuter gender shall
include the masculine and feminine, words used herein in the singular shall
include the plural and words used in the plural shall include the singular,
wherever the context so reasonably requires. If any provision of this Guaranty
or the application thereof to any party or circumstance is held invalid, void,
inoperative or unenforceable, the remainder of this Guaranty and the application
of such provision to other parties or circumstances shall not be affected
thereby, the provisions of this Guaranty being severable in any such instance.
21. GENERAL PROVISIONS. Agent, on behalf of Bank, shall have the right to
seek recourse against Guarantor to the full extent provided for herein and in
any other instrument or agreement evidencing obligations of Guarantor to Bank,
and against Borrower to the full extent of the Indebtedness. No election in one
form of action or proceeding, or against any party, or on any obligation, shall
constitute a waiver of Bank's right to proceed in any other form of action or
proceeding or against any other party. The failure of Bank to enforce any of the
provisions of this Guaranty at any time or for any period of time shall not be
construed to be a waiver of any such provision or the right thereafter to
enforce the same. All remedies hereunder shall be cumulative and shall be in
addition to all rights, powers and remedies given to Bank by law or under any
other instrument or agreement. Time is of the essence in the performance by
Guarantor of each and every obligation under this Guaranty. If Borrower is a
corporation, partnership or other entity, Guarantor hereby agrees that Bank
shall have no obligation to inquire into the power or authority of Borrower or
any of its officers, 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 any such power or authority shall be included in the
Indebtedness guaranteed hereby. This Guaranty is the entire and only agreement
between Guarantor and Bank with respect to the guaranty of the Indebtedness of
Borrower by Guarantor, and all representations, warranties, agreements, or
undertakings heretofore or contemporaneously made, which are not set forth
herein, are superseded hereby. No course of dealings between the parties, no
usage of the trade, and no parol or extrinsic evidence of any nature shall be
used or be relevant to supplement or explain or modify any term or provision of
this Guaranty. There are no conditions to the full effectiveness of this
Guaranty. The terms and provisions hereof may not be waived, altered, modified,
or amended except in a writing executed by Guarantor and a duly authorized
officer of Agent. All rights, benefits and privileges hereunder shall inure to
the benefit of Bank and its successors and assigns and shall be binding upon
Guarantor and his heirs, executors, administrators, personal representatives,
successors and assigns. Neither the death of
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Guarantor nor notice thereof to Bank shall terminate this Guaranty as to his
estate, and, notwithstanding the death of Guarantor or notice thereof to Bank,
this Guaranty shall continue in full force and effect with respect to all
Indebtedness, including without limitation Indebtedness incurred or created
after the death of Guarantor and notice thereof to Bank. Section headings are
used herein for convenience only. Guarantor acknowledges that the same may not
describe completely the subject matter of the applicable Section, and the same
shall not be used in any manner to construe, limit, define or interpret any term
or provision hereof.
22. GOVERNING LAW; VENUE AND JURISDICTION. This instrument and all acts
and transactions pursuant or relating hereto and all rights and obligations of
the parties hereto shall be governed, construed, and interpreted in accordance
with the internal laws of the State of New York. Any judicial proceeding brought
by or against Guarantor with respect to any of the Indebtedness, this Guaranty,
or any related agreement may be brought in any court of competent jurisdiction
in the State of New York, United States of America, and, by execution and
delivery of this Guaranty, Guarantor accepts for itself and in connection with
its properties, generally and unconditionally, the non-exclusive jurisdiction of
the aforesaid courts, and irrevocably agrees to be bound by any judgment
rendered thereby in connection with this Guaranty. Guarantor hereby waives
personal service of any and all process upon it and consents that all such
service of process may be made by registered mail (return receipt requested)
directed to Guarantor and service so made shall be deemed completed five (5)
days after the same shall have been so deposited in the mails of the United
States of America. Nothing herein shall affect the right to serve process in any
manner permitted by law or shall limit the right of Bank to bring proceedings
against Guarantor in the courts of any other jurisdiction. Guarantor waives any
objection to jurisdiction and venue of any action instituted hereunder and shall
not assert any defense based on lack of jurisdiction or venue or based upon
forum non conveniens. Guarantor waives the right to remove any judicial
proceeding brought against Guarantor in any state court to any federal court.
Any judicial proceeding by Guarantor against Bank involving, directly or
indirectly, any matter or claim in any way arising out of, related to or
connected with this Guaranty or any related agreement, shall be brought only in
a federal or state court located in the County of New York, State of New York.
23. MUTUAL WAIVER OF RIGHT TO JURY TRIAL. BANK AND GUARANTOR HEREBY WAIVE
THE RIGHT TO TRIAL BY JURY IN ANY ACTION, CLAIM, LAWSUIT OR PROCEEDING BASED
UPON, ARISING OUT OF, OR IN ANY WAY RELATING TO: (I) THIS GUARANTEE OR ANY
SUPPLEMENT OR AMENDMENT THERETO; OR (II) ANY OTHER PRESENT OR FUTURE INSTRUMENT
OR AGREEMENT BETWEEN BANK AND GUARANTOR; OR (III) ANY BREACH, CONDUCT, ACTS OR
OMISSIONS OF BANK OR GUARANTOR OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSON AFFILIATED WITH OR REPRESENTING
BANK OR GUARANTOR; IN EACH OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT
OR TORT OR OTHERWISE.
24. RECEIPT OF COPY. Guarantor acknowledges receipt of a copy of this
Guaranty.
SMALL WORLD KIDS, INC.
By:
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Title:
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Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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