Exhibit 10.2
VALIDITY GUARANTY
Dated as of December ___, 2002
GREENFIELD COMMERCIAL CREDIT, L.L.C. ("Greenfield")
THIS VALIDITY GUARANTY ("Guaranty"), effective as of the above date, sets
forth the terms and conditions upon which the undersigned (whether one or more
in number, referred to herein as "we," "us" or "our" and whom, if two or more in
number, shall be jointly and severally bound) agrees to guaranty certain
agreements entered into by you:
1. Underlying Facts.
(a) You have agreed to enter into a certain Loan and Security Agreement
of even date herewith (the "Agreement") with DIVERSIFIED CORPORATE RESOURCES,
INC., a Texas corporation ("Borrower") and its subsidiaries (each a "Credit
Party" and, collectively, the "Credit Parties"), pursuant to which you will make
loans against and be granted a security interest in various accounts receivable
of the Credit Parties ("Financed Accounts Receivable").
(b) Borrower has executed and delivered to you the Agreement and other
documents executed in connection therewith (the "Loan Documents").
(c) You require as a condition of entering into the Agreement that we
execute and deliver this Guaranty.
2. Amount of Guaranty. In order to induce you to enter into the Agreement
with the Credit Parties, we absolutely and unconditionally guarantee to you the
due and prompt payment and performance of any and all indebtedness, liabilities
and obligations of any Credit Party to you which arise out of, and to the extent
of: (a) the failure of any Credit Party to remit funds it receives on any
Financed Accounts Receivable during the period of time prior to ten (10) days
from the date that you receive written notice from the Borrower that J. ▇▇▇▇▇▇▇
▇▇▇▇▇ ("▇▇▇▇▇") is no longer an officer of the Borrower, and/or (b) any loss on
any Financed Accounts Receivable that is incurred due to the fraud or
misrepresentation of any Credit Party or any officers, directors, agents,
employees or representatives of any Credit Party (collectively, the
"Obligations"). In addition, we shall pay you all costs incurred, including
reasonable attorneys' fees, in enforcing payment and performance of this
Guaranty.
3. Your Authority. You may from time to time without notice to us and/or
without our consent and upon such terms and conditions as you may deem advisable
without affecting this Guaranty:
(a) release any Credit Party, any maker, guarantor, surety or other
person liable for payment of all or any part of the Obligations;
(b) make any agreement extending or otherwise altering the time for or
the terms of payment of all or any part of the Obligations;
(c) modify, waive, forbear, compromise, release, subordinate, resort to,
exercise or refrain from exercising any right you may have hereunder, or under
any of the Loan Documents;
(d) accept or decline additional security or guarantees of any kind;
(e) endorse, transfer or assign the Note or any other security to any
other party;
(f) accept partial payment or payments on account of the Obligations;
(g) make loans or give or extend further or additional credit to or for
the benefit of any Credit Party;
(h) release, settle or compromise any of your claims against any Credit
Party or any other person, firm, corporation, guarantor, or account debtor whose
obligation is held by you as collateral security for the Obligations;
(i) release or substitute collateral, guaranties or guarantors; and/or
(j) amend the Agreement whether or not such amendment increases the
likelihood of our liability under this Guaranty.
4. Our Waivers. We unconditionally and absolutely waive:
(a) any obligation you may have to protect, secure or insure any of the
collateral given to secure the payment of the Obligations or to ensure any
Credit Party's compliance with any such obligation imposed on any Credit Party
under the Loan Documents;
(b) any right to participate in any of the collateral given as security
for the payment under the terms of the Agreement;
(c) notice of your acceptance of this Guaranty;
(d) any right to notice of presentment, notice of demand for payment,
notice of non-performance, protest, notice of protest and notice of dishonor,
notice of non-payment and notice of partial payment;
(e) any right to notice of any default under any of the Loan Documents
or in the performance of any of the covenants and agreements contained therein
or in any instrument given as security for the transactions contemplated in the
Agreement;
(f) any defense, offset or claim any Credit Party may have against you;
(g) any limitation or exculpation of liability on the part of any Credit
Party whether contained in the Loan Documents or otherwise;
(h) the right to notice and the right to consent or object to the
transfer or sale by any Credit Party of any collateral or any diminution in
value of any collateral or any release of any collateral;
(i) any defense, offset or claim of lack of commercial reasonableness in
the method, manner, time, place and terms of the disposition of collateral given
as security for the Obligations;
(j) any failure, neglect or omission on your part to realize upon or
protect the Obligations or any collateral given as security therefor;
(k) any right to insist that you prosecute collection of the Obligations
or resort to any collateral given as security for the Obligations or to proceed
against any Credit Party or against any other guarantor or surety prior to
enforcing this Guaranty; provided, however, in your sole discretion you may,
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either in a separate action or in an action pursuant to this Guaranty, pursue
your remedies against any Credit Party or any other guarantor or surety, without
affecting your rights under this Guaranty;
(l) any right to participate in or direct such action or proceeding in
(k) above;
(m) any right to notice of advances made to any Credit Party under the
Loan Documents;
(n) any right relating to notice or any order, method or manner of
application of any payments on the Obligations; and/or
(o) any right to insist that you disburse the full principal amount due
under the Loan Documents to any Credit Party or the order, method, manner or
amounts disbursed pursuant to the Loan Documents.
5. Our Revocation. This Guaranty shall remain in full force and effect and
be binding upon us and shall inure to your benefit until thirty (30) days after
the date this Guaranty is expressly terminated by notice in writing delivered
personally to or received by registered mail by you at ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other address you specify in writing to us;
provided, however, that this Guaranty shall remain in full force and effect
regardless of such termination with respect to all Obligations in existence on
the date of such termination (including any subsequent extension, renewal,
modification, amendment or compromise thereof and all subsequently accruing
interest and other charges thereon) until all such Obligations are fully
satisfied and paid to you. In the absence of any termination of this Guaranty in
accordance with the provisions of this Section 5, we agree that until all
Obligations and our obligations under this Guaranty are satisfied, this Guaranty
shall remain in full force and effect notwithstanding that from time to time any
Credit Party may be free from all Obligations.
6. Additional Waivers. We will not assert against you and do hereby
unconditionally and absolutely waive all defenses of any Credit Party and any
defenses we may have against you, including, but not limited to, defenses of
waiver, release, discharge, bankruptcy, statute of limitations, res judicata,
statute of frauds, anti-deficiency statute, fraud, fraudulent conveyance,
insolvency, lack of consideration, merger of claims under this Guaranty with the
Obligations, ultra ▇▇▇▇▇ acts, usury, illegality or unenforceability, any
defense which, under principles of guaranty, suretyship or other applicable law,
would operate to impair or diminish our liability under this Guaranty, any
set-off available against you by any Credit Party whether or not on account of a
related transaction, and we shall be and remain liable for any deficiency
remaining after foreclosure of any mortgage or any security interest securing
the Obligations notwithstanding any provisions of law that may prevent you from
enforcing such deficiency against any Credit Party.
7. Effect of Bankruptcy. Our liability shall not be affected nor impaired
by any voluntary or involuntary dissolution, sale or other disposition of all or
substantially all of the collateral or assets of any Credit Party, receivership,
insolvency proceeding, bankruptcy, assignment for the benefit of creditors,
reorganization proceeding, arrangement, composition or readjustment of, or other
similar event or proceeding affecting any Credit Party or any of its assets and
that upon the institution of any of the above actions, at your sole discretion
and without notice thereof or demand therefor, our obligations hereunder shall
become due and payable and enforceable against us, whether or not the
Obligations are then due and payable.
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8. Marshalling of Assets. We waive any defense or claim relating to any
obligation you may have to marshal the collateral or other assets of any Credit
Party for our benefit, and we agree that you shall be under no duty to marshal
the assets of any Credit Party for our benefit or any third party.
9. Absolute and Unconditional. No act or thing, except for payment in
full, which but for this provision might or could in law or in equity act as a
release of our liabilities, shall in any way affect or impair this Guaranty.
This shall be a continuing, absolute and unconditional Guaranty, and our
liability on this Guaranty shall be immediate. To the extent of my obligation
heeunder, you may have immediate recourse against us for full and immediate
payment and performance of the Obligations, or any part thereof, at any time
after the Obligations have not been paid or performed when due (whether by
acceleration or otherwise). Subject to Section 5 hereof, this Guaranty shall
remain in full force and effect until the Obligations have been paid in full
notwithstanding any change or modification of our relationship with any Credit
Party which exists as of the date hereof.
10. Subordination. Except as herein otherwise provided, all indebtedness
and liability now or at any time or times hereafter owing to us by any Credit
Party is hereby subordinated to the Obligations and any payment of indebtedness
or liabilities of any Credit Party to us shall be held by us in trust for you,
segregated from other funds, and shall, immediately upon our receipt, be turned
over to you in the exact form received by us (duly endorsed to you, if
required), to be applied against the Obligations, whether matured or unmatured,
in such order as you may determine. This provision shall not be applicable to
the following: salary, bonuses, other forms of compensation or expense reports
earned by me or payable to me by the Borrower for any period of time prior to
the date that Lender gives the Borrwoer written notice that the Borrower is in
default under the Agreement.
11. Subrogation. We waive any claim or other right which we may now have or
may hereafter acquire against any Credit Party or any other person that is
primarily or contingently liable on the obligations that arise from the
existence or performance of our obligations under this Guaranty, including,
without limitation, any right of subrogation, reimbursement, exoneration,
contribution, indemnification, any right to participate in any claim or remedy
you may have against any Credit Party or any collateral security therefor, which
you now have or hereafter acquire, whether or not such claim, remedy or right
arises in equity, or under contract, statute or common law. If any amount shall
be paid to us contrary to the terms of this Section 11, such amount shall be
held by us in trust for you, segregated from our other funds, and shall,
immediately upon receipt by us, be turned over to you in the exact form received
by us (duly endorsed to you, if required), to be applied against the
Obligations, whether matured or unmatured, in such order as you may determine.
12. Set-Off. Upon the occurrence and continuation of a Default (as defined
in the Agreement) under the Loan Documents, and to the extent of my actual
liability under the terms of this Guaranty, we hereby authorize you at any time
and from time to time to set off and apply any deposit held and any other
indebtedness at any time owing by you to us or for our account against our
Obligations and liabilities to you.
13. Reinstatement. This Guaranty shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of all or any part of
the Obligations is rescinded or must otherwise be returned by you upon the
insolvency, bankruptcy, reorganization, liquidation or dissolution of any Credit
Party or otherwise, all as if such payment had not been made. If and to the
extent we have any obligations actually payable under this Guaranty, we hereby
indemnify and hold you harmless from and against all costs and expenses you may
incur, including reasonable attorneys' fees, in connection with the defense of a
bankruptcy preference action, fraudulent conveyance action, lien avoidance
action, or other action relating to your right to retain amounts previously paid
to you in respect of the Obligations, and for all costs and expenses you may
incur relating to the Obligations or the security therefor during any
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applicable redemption period following the foreclosure of any mortgage or
security interest in any collateral, including but not limited to, taxes and
insurance costs in respect of such collateral, whether or not any Credit Party
would be liable to you for such costs and expenses.
14. Your Reliance. We acknowledge that this Guaranty is executed in order
to induce you to enter into the Agreement and disburse the amounts due under the
Loan Documents with the intent that you will rely upon it in entering into the
Agreement and disbursing such amounts with the knowledge that you would not
enter into the Agreement or disburse such amounts but for execution of this
Guaranty. Disbursement of any part of the amounts due under the Loan Documents,
without any further action or notice, shall constitute conclusive evidence of
your reliance hereon.
15. Representations and Covenants. Each of the undersigned hereby
represents and agrees as follows:
(a) We are fully aware of the financial condition of each Credit Party
and deliver this Guaranty based solely upon our own independent investigation
and in no part upon any representation or statement made by you with respect
thereto. We are in a position to and hereby assume full responsibility for
obtaining any additional information concerning each Credit Party's financial
condition as we may deem material to our obligations hereunder. We are not
relying upon nor expecting you to furnish us any information in your possession
concerning each Credit Party's financial condition.
(b) Other than proceeds paid to any Credit Party pursuant to the Loan
Documents which may be used by such Credit Party to pay us salary, bonuses or
dividends, none of those amounts will be used for (i) our personal, family or
household purposes, or (ii) to purchase or otherwise obtain title to residential
property which is security for our obligations under this Guaranty.
16. Security. The performance of our obligations under this Guaranty is
unsecured, other than for such rights of set-off which you may have by virtue of
your holding our property.
17. Miscellaneous.
(a) No right or remedy conferred upon or reserved to you under this
Guaranty is intended to be exclusive of any other available remedy or remedies
but each and every remedy shall be cumulative and shall be in addition to every
other remedy given under this Guaranty, or the Loan Documents, or as may now or
hereafter exist at law or in equity. No waiver, amendment, release or
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modification of this Guaranty shall be established by conduct, custom or course
of dealing, but only by an instrument in writing duly executed by you.
(b) Whenever the context requires or permits the singular shall include
the plural, the plural shall include the singular and the masculine, feminine
and neuter shall be freely interchangeable.
(c) This Guaranty is delivered in and made in, is executed with respect
to and shall in all respects be construed pursuant to and governed by the laws
of the State of Michigan.
(d) This Guaranty and each and every part hereof, shall be binding on
us and our heirs, administrators, representatives and executors and shall inure
to your benefit, and your successors and assigns, including each and every
holder of the Note.
(e) This Guaranty may be executed by one or more of the parties hereto
on any number of separate counterparts and all of the counterparts taken
together shall constitute one and the same instrument.
(f) This Guaranty constitutes the joint and several obligation of each
guarantor of the Obligations, including the undersigned, and shall be fully
binding upon and enforceable against any or all of such parties or persons and
their sole and separate estates. Neither the death nor release of any guarantor
of the Obligations shall affect or release the joint and several liability of
any other person or party. You may at your option enforce this Guaranty against
one or more or all of the guarantors of the Obligations; provided you shall not
be required to resort to enforcement against each and every guarantor of the
Obligations and the failure to proceed against or join each and every of the
guarantors of the Obligations shall not affect the joint and several liability
of each of the guarantors of the Obligations.
(g) This Guaranty is intended by us as a final expression of our
agreement and is intended as a complete statement of the terms and conditions to
which we are bound.
18. Waiver of Jury Trial.
Our legal counsel has advised us that (a) there may be a constitutional
right to a jury trial in connection with any claim, dispute or lawsuit arising
out of this Guaranty, and (b) such constitutional right may be waived. After
consultation with our counsel (which has included our counsel's review of this
Guaranty), we believe that it is in our best interest in this commercial
transaction to waive such right. Accordingly, we hereby waive our right to a
jury trial and further agree that the best forum for hearing any claim, dispute
or lawsuit, if any, arising in connection with this Guaranty or our relationship
with you, shall be a court of competent jurisdiction sitting without a jury.
WE GIVE THIS GUARANTY FREELY AND VOLUNTARILY TO YOU WITHOUT ANY DURESS OR
COERCION. WE HAVE CONSULTED WITH COUNSEL AND WE HAVE CAREFULLY AND COMPLETELY
READ ALL OF THE TERMS AND PROVISIONS OF THIS GUARANTY.
WITNESS:
______________________ ____________________________
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇
______________________
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