Exhibit 10.2

 

GUARANTY

 

GUARANTY (this “Guaranty”), dated as of April 22, 2015, by each of HF
ENTERPRISES, INC., a Delaware corporation and HF RESOURCES, INC., a Delaware
corporation (each such Person, individually, a “Guarantor” and, collectively,
the “Guarantors”) in favor of (a) WELLS FARGO BANK, NATIONAL ASSOCIATION, as
administrative agent (in such capacity, the “Administrative Agent”) for its own
benefit and the benefit of the other Credit Parties (as defined in the Credit
Agreement referred to below), (b) WELLS FARGO BANK, NATIONAL ASSOCIATION, as
collateral agent (in such capacity, the “Collateral Agent”) for its own benefit
and the benefit of the other Credit Parties, and (c) the Credit Parties.

 

W I T N E S S E T H

 

WHEREAS, reference is made to that certain Credit Agreement, dated as of April
22, 2015 (as amended, modified, supplemented or restated hereafter, the “Credit
Agreement”), by and between, among others, (i) Hancock Fabrics, Inc., a Delaware
corporation (the “Lead Borrower”), (ii) the other Borrowers party thereto, (iii)
the Administrative Agent, (iv) the Collateral Agent, (v) GACP Finance Co., LLC,
as the Term Agent and (vi) the lenders party thereto (the “Lenders”).
Capitalized terms used herein and not defined herein shall have the meanings
assigned to such terms in the Credit Agreement.

 

WHEREAS, the Lenders have agreed to make Loans to the Borrowers, and the Issuing
Bank has agreed to issue Letters of Credit for the account of the Borrowers,
pursuant to, and upon the terms and subject to the conditions specified in, the
Credit Agreement.

 

WHEREAS, each Guarantor acknowledges that it is an integral part of a
consolidated enterprise and that it will receive direct and indirect benefits
from the availability of the credit facility provided for in the Credit
Agreement, from the making of the Loans by the Lenders, and the issuance of the
Letters of Credit by the Issuing Bank.

 

WHEREAS, the obligations of the Lenders to make Loans and of the Issuing Bank to
issue Letters of Credit are each conditioned upon, among other things, the
execution and delivery by the Guarantors of a guaranty in the form hereof. As
consideration therefor, and in order to induce the Lenders to make Loans and the
Issuing Bank to issue Letters of Credit, the Guarantors are willing to execute
this Guaranty.

 

Accordingly, each Guarantor hereby agrees as follows:

 

SECTION 1.     Guaranty. Each Guarantor irrevocably and unconditionally
guaranties, jointly with the other Guarantors and severally, as a primary
obligor and not merely as a surety, the due and punctual payment when due
(whether at the stated maturity, by required prepayment, by acceleration or
otherwise) and performance by the Borrowers of all Obligations (collectively,
the “Guaranteed Obligations”), including all such Guaranteed Obligations which
shall or may become due but for the operation of the Bankruptcy Code. Each
Guarantor further agrees that the Guaranteed Obligations may be extended or
renewed or amended or restated, in whole or in part, without notice to or
further assent from it, and that it will remain bound upon this Guaranty
notwithstanding any extension or renewal or amendment or restatement of any
Guaranteed Obligation.

 

 
 

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SECTION 2.     Guaranteed Obligations Not Affected. To the fullest extent
permitted by applicable Law, each Guarantor waives presentment to, demand of
payment from, and protest to, any Loan Party of any of the Guaranteed
Obligations, and also waives notice of acceptance of this Guaranty, notice of
protest for nonpayment and all other notices of any kind. To the fullest extent
permitted by applicable Law, the obligations of each Guarantor hereunder shall
not be affected by (a) the failure of any Agent or any other Credit Party to
assert any claim or demand or to enforce or exercise any right or remedy against
any Loan Party under the provisions of the Credit Agreement, any other Loan
Document or otherwise or against any other party with respect to any of the
Guaranteed Obligations, (b) any rescission, waiver, amendment or modification
of, or any release from, any of the terms or provisions of this Guaranty, any
other Loan Document or any other agreement, with respect to any Loan Party, any
other Person or with respect to the Guaranteed Obligations, (c) the failure to
perfect any security interest in, or the release of, any of the Collateral held
by or on behalf of the Collateral Agent or any other Credit Party, or (d) the
lack of legal existence of any Loan Party or legal obligation to discharge any
of the Guaranteed Obligations by any Loan Party for any reason whatsoever,
including, without limitation, in any insolvency, bankruptcy or reorganization
of any Loan Party.

 

SECTION 3.     Security. Each of the Guarantors hereby acknowledges and agrees
that the Collateral Agent and each of the other Credit Parties may (a) take and
hold security for the payment of this Guaranty and the Guaranteed Obligations
and exchange, enforce, waive and release any such security, (b) apply such
security and direct the order or manner of sale thereof as they in their sole
discretion may determine, and (c) release or substitute any one or more
endorsees, the Borrowers, other Guarantors or other obligors, in each case
without affecting or impairing in any way the liability of any Guarantor
hereunder.

 

SECTION 4.     Guaranty of Payment. Each of the Guarantors further agrees that
this Guaranty constitutes a guaranty of payment and performance when due of all
Guaranteed Obligations and not of collection and, to the fullest extent
permitted by applicable Law, waives any right to require that any resort be had
by the Collateral Agent or any other Credit Party to any of the Collateral or
other security held for payment of the Guaranteed Obligations or to any balance
of any deposit account or credit on the books of any Agent or any other Credit
Party in favor of any Loan Party or any other Person or to any other guarantor
of all or part of the Guaranteed Obligations. Any payment required to be made by
the Guarantors hereunder may be required by any Agent or any other Credit Party
on any number of occasions and shall be payable to the Administrative Agent, for
the benefit of the Agent and the other Credit Parties, in the manner provided in
the Credit Agreement.

 

 
 

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SECTION 5.     Indemnification. Without limiting any of their indemnification
obligations under the Credit Agreement or the other Loan Documents, and without
duplication of any indemnification provided for under the Credit Agreement or
the other Loan Documents, each of the Guarantors, jointly and severally, shall
indemnify the Credit Parties and each of their Subsidiaries and Affiliates, and
each of their respective stockholders, directors, officers, employees, agents,
attorneys, and advisors (each such Person being called an “Indemnitee”),
against, and hold each Indemnitee harmless from, any and all damages, actual
out-of-pocket losses, claims, actions, causes of action, settlement payments,
obligations, liabilities and related expenses, including the reasonable fees,
charges and disbursements of any counsel for any Indemnitee, incurred, suffered,
sustained or required to be paid by, or asserted against, any Indemnitee arising
out of, in any way connected with, or as a result of, (i) the execution or
delivery of this Guaranty, the Credit Agreement or any other Loan Document or
any other agreement or instrument contemplated hereby, the performance by the
Guarantors of their respective obligations thereunder, or the consummation of
the transactions contemplated by the Credit Agreement and the other Loan
Documents or any other transactions contemplated hereby or thereby, or (ii) any
actual or prospective claim, litigation, investigation or proceeding relating to
or arising from any of the foregoing, whether based on contract, tort or any
other theory and regardless of whether any Indemnitee is a party thereto;
provided, however, such indemnity shall not, as to any Indemnitee, be available
to the extent that such losses, claims, damages, liabilities or related expenses
(x) are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee or (y) result from a claim brought by a Borrower
or any other Loan Party against an Indemnitee for breach in bad faith of such
Indemnitee's obligations hereunder or under any other Loan Document, if the
Borrowers or such Loan Party has obtained a final and nonappealable judgment in
its favor on such claim as determined by a court of competent jurisdiction. In
connection with any indemnified claim hereunder, the Indemnitee shall be
entitled to select its own counsel and the Guarantors shall promptly pay the
reasonable fees and expenses of such counsel.

 

SECTION 6.     No Discharge or Diminishment of Guaranty. The obligations of each
Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason (other than the indefeasible payment in
full in cash of the Guaranteed Obligations), including any claim of waiver,
release, surrender, alteration or compromise of any of the Guaranteed
Obligations, and shall not be subject to any defense or set-off, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Guaranteed Obligations or otherwise. Without limiting
the generality of the foregoing, the Guaranteed Obligations of each Guarantor
hereunder shall not be discharged or impaired or otherwise affected by the
failure of any Agent or any other Credit Party to assert any claim or demand or
to enforce any remedy under this Guaranty, the Credit Agreement, any other Loan
Document or any other agreement, by any waiver or modification of any provision
of any thereof, by any default, failure or delay, willful or otherwise, in the
performance of the Guaranteed Obligations, or by any other act or omission that
may or might in any manner or to any extent vary the risk of any Guarantor or
that would otherwise operate as a discharge of any Guarantor as a matter of law
or equity (other than the indefeasible payment in full in cash of the Guaranteed
Obligations).

 

SECTION 7.     Defenses of Loan Parties Waived. To the fullest extent permitted
by applicable Law, each of the Guarantors waives any defense based on or arising
out of any defense of any Loan Party or the unenforceability of the Guaranteed
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of any Loan Party, other than the indefeasible payment in full
in cash of the Guaranteed Obligations. Each Guarantor hereby acknowledges that
the Agent and the other Credit Parties may, at their election, foreclose on any
security held by one or more of them by one or more judicial or nonjudicial
sales, accept an assignment of any such security in lieu of foreclosure,
compromise or adjust any part of the Guaranteed Obligations, make any other
accommodation with any Loan Party, or exercise any other right or remedy
available to them against any Loan Party, without affecting or impairing in any
way the liability of any Guarantor hereunder except to the extent that the
Guaranteed Obligations have been indefeasibly paid in full in cash. Pursuant to,
and to the extent permitted by, applicable Law, each of the Guarantors waives
any defense arising out of any such election and waives any benefit of and right
to participate in any such foreclosure action, even though such election
operates, pursuant to applicable Law, to impair or to extinguish any right of
reimbursement or subrogation or other right or remedy of such Guarantor against
any Loan Party, as the case may be, or any security. Each Guarantor agrees that
it shall not assert any claim in competition with any Agent or any other Credit
Party in respect of any payment made hereunder in any bankruptcy, insolvency,
reorganization, or any other proceeding.

 

 
 

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SECTION 8.     Agreement to Pay; Subordination. In furtherance of the foregoing
and not in limitation of any other right that the Agent or any other Credit
Party has at law or in equity against any Guarantor by virtue hereof, upon the
failure of any Loan Party to pay any Guaranteed Obligation when and as the same
shall become due, whether at maturity, by acceleration, after notice of
prepayment or otherwise, each of the Guarantors hereby promises to and will
forthwith pay, or cause to be paid, to the Agent or such other Credit Party as
designated thereby in cash the amount of such unpaid Guaranteed Obligations.
Upon payment by any Guarantor of any sums to any Agent or any other Credit Party
as provided above, all rights of such Guarantor against any Loan Party arising
as a result thereof by way of right of subrogation, contribution, reimbursement,
indemnity or otherwise shall in all respects be subordinate and junior in right
of payment to the prior indefeasible payment in full in cash of all the
Guaranteed Obligations. In addition, any indebtedness of the Borrowers or any
other Loan Party now or hereafter held by any Guarantor is hereby subordinated
in right of payment to the prior indefeasible payment in full in cash of all of
the Guaranteed Obligations. Notwithstanding the foregoing, prior to the
occurrence of an Event of Default, the Borrowers or any other Loan Party may
make payments to any Guarantor on account of any such indebtedness. After the
occurrence and during the continuance of an Event of Default, none of the
Guarantors will demand, sue for, or otherwise attempt to collect any such
indebtedness until the indefeasible payment in full in cash of the Guaranteed
Obligations, termination or expiration of the Commitments, and termination of
the Issuing Bank’s obligation to issue Letters of Credit under the Credit
Agreement. If any amount shall erroneously be paid to any Guarantor on account
of (a) such subrogation, contribution, reimbursement, indemnity or similar right
or (b) any such indebtedness of any Loan Party, such amount shall be held in
trust for the benefit of the Agent and the other Credit Parties and shall
forthwith be paid to the Administrative Agent to be credited against the payment
of the Guaranteed Obligations, whether matured or unmatured, in accordance with
the terms of the Credit Agreement.

 

SECTION 9.     Limitation on Guaranty of Guaranteed Obligations. In any action
or proceeding with respect to any Guarantor involving any state corporate law,
the Bankruptcy Code or any other state or federal bankruptcy, insolvency,
reorganization or other law affecting the rights of creditors generally, if the
obligations of such Guarantor under SECTION 1 hereof would otherwise be held or
determined to be void, invalid or unenforceable, or subordinated to the claims
of any other creditors, on account of the amount of its liability under said
SECTION 1, then, notwithstanding any other provision hereof to the contrary, the
amount of such liability shall, without any further action by such Guarantor,
any Credit Party, any Agent or any other Person, be automatically limited and
reduced to the highest amount which is valid and enforceable and not
subordinated to the claims of other creditors as determined in such action or
proceeding.

 

SECTION 10.     Information. Each of the Guarantors assumes all responsibility
for being and keeping itself informed of each Loan Party’s financial condition
and assets, and of all other circumstances bearing upon the risk of nonpayment
of the Guaranteed Obligations and the nature, scope and extent of the risks that
such Guarantor assumes and incurs hereunder, and agrees that none of the Agent
or the other Credit Parties will have any duty to advise any of the Guarantors
of information known to it or any of them regarding such circumstances or risks.

 

 
 

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SECTION 11.     Termination. This Guaranty (a) shall terminate when (i) the
Commitments shall have expired or been terminated, (ii) the principal of and
interest on each Loan and all fees and other Guaranteed Obligations shall have
been paid in full, (iii) all Letters of Credit shall have expired or terminated
or been cash collateralized or backstopped by a letter of credit reasonably
acceptable to the Administrative Agent and the Issuing Bank to the extent
provided in the Credit Agreement, and (iv) all Letter of Credit Obligations
shall have been paid in full, and (b) shall continue to be effective or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any Guaranteed Obligation is rescinded or must otherwise be restored by any
Credit Party or any Guarantor upon the bankruptcy or reorganization of any Loan
Party or otherwise.

 

SECTION 12.     Costs of Enforcement. Without limiting any of their obligations
under the Credit Agreement or the other Loan Documents, and without duplication
of any fees or expenses provided for under the Credit Agreement or the other
Loan Documents, the Guarantors, jointly and severally, agree to pay on demand
all Credit Party Expenses in connection with (i) the administration,
negotiation, documentation or amendment of this Guaranty, and (ii) the Agent’s
and any other Credit Party’s efforts to collect and/or to enforce any of the
Guaranteed Obligations of the Guarantors hereunder and/or to enforce any of the
rights, remedies, or powers of any Agent or any other Credit Party against or in
respect of the Guarantors (whether or not suit is instituted by or against any
Agent or any other Credit Party).

 

SECTION 13.     Binding Effect; Several Agreement; Assignments. Whenever in this
Guaranty any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party, and all covenants,
promises and agreements by or on behalf of the Guarantors that are contained in
this Guaranty shall bind and inure to the benefit of each of the Guarantors and
its respective successors and assigns. This Guaranty shall be binding upon each
of the Guarantors and their respective successors and assigns, and shall inure
to the benefit of the Agent and the other Credit Parties, and their respective
successors and assigns, except that no Guarantor shall have the right to assign
or transfer its rights or obligations hereunder or any interest herein (and any
such attempted assignment or transfer shall be void), except as expressly
permitted by this Guaranty or the Credit Agreement. This Guaranty shall be
construed as a separate agreement with respect to each Guarantor and may be
amended, modified, supplemented, waived or released with respect to any
Guarantor without the approval of any other Guarantor and without affecting the
obligations of any other Guarantor hereunder.

 

 
 

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SECTION 14.     Waivers; Amendment.

 

(a)     The rights, remedies, powers, privileges, and discretions of the Agent
or any other Credit Party hereunder and under applicable Law (herein, the
“Agents’ Rights and Remedies”) shall be cumulative and not exclusive of any
rights or remedies which they would otherwise have. No delay or omission by the
Agent or any other Credit Party in exercising or enforcing any of the Agents’
Rights and Remedies shall operate as, or constitute, a waiver thereof. No waiver
by the Agent or any other Credit Party of any Event of Default or of any default
under any other agreement shall operate as a waiver of any other default
hereunder or under any other agreement. No single or partial exercise of any of
the Agents’ Rights or Remedies, and no express or implied agreement or
transaction of whatever nature entered into between the Agent or any other
Credit Party and any Person, at any time, shall preclude the other or further
exercise of the Agents’ Rights and Remedies. No waiver by the Agent or any other
Credit Party of any of the Agents’ Rights and Remedies on any one occasion shall
be deemed a waiver on any subsequent occasion, nor shall it be deemed a
continuing waiver. The Agents’ Rights and Remedies may be exercised at such time
or times and in such order of preference as the Agent or any other Credit Party
may determine. The Agents’ Rights and Remedies may be exercised without resort
or regard to any other source of satisfaction of the Guaranteed Obligations. No
waiver of any provisions of this Guaranty or any other Loan Document or consent
to any departure by any Guarantor therefrom shall in any event be effective
unless the same shall be permitted by paragraph (b) below, and then such waiver
or consent shall be effective only in the specific instance and for the purpose
for which given. No notice to or demand on any Guarantor in any case shall
entitle such Guarantor or any other Guarantor to any other or further notice or
demand in the same, similar or other circumstances.

 

(b)     Neither this Guaranty nor any provision hereof may be waived, amended or
modified except pursuant to a written agreement entered into between the Agent
or any other Credit Party and the Guarantor or Guarantors with respect to whom
such waiver, amendment or modification is to apply, subject to any consent
required in accordance with Section 10.01 of the Credit Agreement.

 

SECTION 15.     Copies and Facsimiles. This instrument and all documents which
have been or may be hereinafter furnished by the Guarantors to the Agent or any
other Credit Party may be reproduced by the Agent or any other Credit Party by
any photographic, microfilm, xerographic, digital imaging, or other process. Any
such reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made in the regular course of
business). Any facsimile or other electronic transmission which bears proof of
transmission shall be binding on the party which or on whose behalf such
transmission was initiated and likewise so admissible in evidence as if the
original of such facsimile or other electronic transmission had been delivered
to the party which or on whose behalf such transmission was received.

 

SECTION 16.     Governing Law. THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES THEREOF, BUT INCLUDING SECTION 5-1401 OF THE NEW
YORK GENERAL OBLIGATIONS LAW.

 

 
 

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SECTION 17.     Notices. All communications and notices hereunder shall (except
as otherwise expressly permitted herein) be in writing and given as provided in
Section 10.02 of the Credit Agreement, provided that communications and notices
to the Guarantors may be delivered to the Lead Borrower on behalf of each of the
Guarantors.

 

SECTION 18.     Survival of Agreement; Severability.

 

(a)     All covenants, agreements, indemnities, representations and warranties
made by the Guarantors herein and in the certificates or other instruments
delivered in connection with or pursuant to this Guaranty, the Credit Agreement
or any other Loan Document shall be considered to have been relied upon by the
Agent and the other Credit Parties and shall survive the execution and delivery
of this Guaranty, the Credit Agreement and the other Loan Documents and the
making of any Loans by the Lenders and the issuance of any Letters of Credit by
the Issuing Bank, regardless of any investigation made by any Agent or any other
Credit Party or on their behalf and notwithstanding that the Administrative
Agent or other Credit Party may have had notice or knowledge of any Default or
Event of Default or incorrect representation or warranty at the time any credit
is extended, and shall continue in full force and effect until terminated as
provided in SECTION 11 hereof. The provisions of SECTION 5 and SECTION 12 hereof
shall survive and remain in full force and effect regardless of the repayment of
the Guaranteed Obligations, the expiration or termination of the Letters of
Credit and the Commitments or the termination of this Guaranty or any provision
hereof.

 

(b)     Any provision of this Guaranty held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity, illegality or unenforceability without
affecting the validity, legality and enforceability of the remaining provisions
hereof, and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.

 

SECTION 19.     Counterparts. This Guaranty may be executed in counterparts,
each of which shall constitute an original but all of which, when taken
together, shall constitute a single contract. Delivery of an executed
counterpart of a signature page to this Guaranty by facsimile transmission shall
be as effective as delivery of a manually executed counterpart of this Guaranty.

 

SECTION 20.     Rules of Interpretation. The rules of interpretation specified
in Sections 1.02 through 1.05 of the Credit Agreement shall be applicable to
this Guaranty.

 

 
 

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SECTION 21.     Jurisdiction; Consent to Service of Process. 

 

(a)     Each of the Guarantors agrees that any suit for the enforcement of this
Guaranty or any other Loan Document may be brought in the courts of the State of
New York sitting in New York County or any federal court sitting therein, as the
Agent may elect in its sole discretion, and consent to the non-exclusive
jurisdiction of such courts. Each party to this Guaranty hereby waives any
objection which it may now or hereafter have to the venue of any such suit or
any such court or that such suit is brought in an inconvenient forum. Each
Guarantor irrevocably and unconditionally submits, for itself and its property,
to the nonexclusive jurisdiction of the courts of the State of New York sitting
in New York County and of the United States District Court of the Southern
District of New York, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Guaranty or any other Loan
Document, or for recognition or enforcement of any judgment, and each Guarantor
hereto irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York state
court or, to the fullest extent permitted by applicable law, in such federal
court. Each Guarantor hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by Law. Nothing in this
Guaranty or in any other Loan Document shall affect any right that the Agent or
any other Credit Party may otherwise have to bring any action or proceeding
relating to this Guaranty or any other Loan Document against any Guarantor or
its properties in the courts of any jurisdiction.

 

(b)     Each of the Guarantors agrees that any action commenced by any Guarantor
asserting any claim or counterclaim arising under or in connection with this
Guaranty or any other Loan Document shall be brought solely in a court of the
State of New York sitting in New York County or any federal court sitting
therein, as the Agent may elect in its sole discretion, and consent to the
exclusive jurisdiction of such courts with respect to any such action.

 

(c)     Each party to this Guaranty irrevocably consents to service of process
in the manner provided for notices in SECTION 17. Nothing in this Guaranty or
any other Loan Document will affect the right of any party to this Guaranty to
serve process in any other manner permitted by law.

 

SECTION 22.     Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS GUARANTY, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY) AND WAIVES THE
RIGHT TO ASSERT ANY SETOFF, COUNTERCLAIM OR CROSS-CLAIM IN RESPECT OF, AND ALL
STATUTES OF LIMITATIONS WHICH MAY BE RELEVANT TO, SUCH ACTION OR PROCEEDING; AND
WAIVES DUE DILIGENCE, DEMAND, PRESENTMENT AND PROTEST AND ANY NOTICES THEREOF AS
WELL AS NOTICE OF NONPAYMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVERS, AND (B) ACKNOWLEDGES THAT THE AGENT AND THE
OTHER CREDIT PARTIES HAVE BEEN INDUCED TO ENTER INTO THE LOAN DOCUMENTS BY,
AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS IN THIS SECTION 22.

 

[SIGNATURE PAGE FOLLOWS]

 

 
 

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IN WITNESS WHEREOF, the Guarantors have duly executed this Guaranty as of the
day and year first above written.

 

GUARANTORS:

HF ENTERPRISES, INC.

 

   

 

 

 

By:  

/s/ James B. Brown

 

 

Name:

James B. Brown

 

 

Title:

Vice President

 

 

   

 

 

 

   

 

 

 

HF RESOURCES, INC.

 

   

 

 

 

By:  

/s/ James B. Brown

    Name: James B. Brown     Title: Vice President  

                    

 

 

[Signature Page to Guaranty]