Exhibit 10.2
EXECUTION COPY
LIMITED GUARANTY
This Limited Guaranty, dated as of October 3, 2011 (the “Guaranty”), is hereby
made and delivered by SBAR’S, Inc., a New Jersey corporation (the “Guarantor”),
to A.C. Moore Arts & Crafts, Inc., a Pennsylvania corporation (the “Company”),
in favor of, and for the benefit of, the Guaranteed Parties (as defined below).
WHEREAS, Nicole Crafts, LLC, a Delaware limited liability company (“Parent”),
Sbar’s Acquisition Corp., a Pennsylvania corporation (“Merger Sub”), and the
Company are parties to an Agreement and Plan of Merger, dated as of October 3,
2011 (as it may be amended or modified from time to time, the “Merger
Agreement”); and
WHEREAS, all capitalized terms used herein but not otherwise defined herein
shall have the meanings ascribed thereto in the Merger Agreement; and
WHEREAS, pursuant to Section 7.9 of the Merger Agreement, the Surviving
Corporation has agreed to indemnify, defend and hold harmless the Guaranteed
Parties to the extent set forth therein; and
WHEREAS, the undersigned desires to irrevocably and unconditionally guarantee to
the Indemnified Parties (the “Guaranteed Parties”) the performance and discharge
of any and all liabilities and obligations of the Surviving Corporation under
such Section 7.9 of the Merger Agreement, subject to the limitations set forth
herein.
NOW, THEREFORE, to induce the Company to enter into the Merger Agreement and in
consideration of the consummation of the transactions contemplated by the Merger
Agreement and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Guarantor, intending to be legally bound
as primary obligor and not merely as surety, hereby agrees as follows:
1. Limited Guaranty. Subject to the limitations set forth herein, the Guarantor
hereby irrevocably and unconditionally guarantees to the Guaranteed Parties the
due and punctual payment, performance and discharge of any and all liabilities
and obligations of the Surviving Corporation under and pursuant to Section 7.9
of the Merger Agreement, subject to the limitations described in such
Section 7.9 (all of the foregoing, including all collection costs incurred
hereunder being hereinafter called, collectively, the “Guaranteed Obligations”),
if, and only to the extent, any portion of the Guaranteed Obligations remains
unpaid thirty (30) days following written demand for payment made to the
Surviving Corporation. Notwithstanding any other terms of this Guaranty, it is
expressly agreed that the Guarantor shall only be liable, and the Company or the
Guaranteed Parties shall only be entitled to make any claim, under this Guaranty
at any time that (i) the real property (the “Property”) of A.C. Moore Urban
Renewal, LLC (“Urban Renewal”) located in Berlin, New Jersey is not free and
clear of any Lien or Liens, other than Liens up to a maximum aggregate amount of
$500,000; or (ii) there has been consummated any direct or indirect transfer of
the Property to a Person, other than to a wholly-owned Subsidiary of the
Surviving Corporation, including, but not limited to, the sale of the Property
subject to an understanding or agreement (contingent or otherwise) to repurchase
such Property. All payments hereunder shall be made in lawful money of the
United States, in immediately available funds.

 

 

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2. Terms of Guaranty.
(a) This Guaranty is one of payment and performance, not of collection, and a
separate action or actions may be brought and prosecuted against the Guarantor
to enforce this Guaranty, regardless of whether an action is brought against
Parent, Merger Sub or the Surviving Corporation.
(b) Except as otherwise provided herein and without amending or limiting the
other provisions of this Guaranty, the liability of the Guarantor under this
Guaranty shall, to the fullest extent permitted under applicable Law, be
absolute, irrevocable and unconditional irrespective of:
(i) any change in the corporate existence, structure or ownership of Parent,
Merger Sub, the Surviving Corporation or the Guarantor, or any insolvency,
bankruptcy, reorganization, moratorium or other similar proceeding affecting
Parent, Merger Sub, the Surviving Corporation or the Guarantor or any of their
respective assets;
(ii) the existence of any claim, set-off or other right that (x) the Guarantor
may have at any time against Parent, Merger Sub, the Surviving Corporation, the
Guaranteed Parties or the Company or (y) Parent or Merger Sub may have at any
time against the Company or the Guaranteed Parties, in each case, whether in
connection with any Guaranteed Obligations or otherwise; or
(iii) the addition, substitution or release of any Person now or hereafter
liable with respect to the Guaranteed Obligations or otherwise interested in the
transactions contemplated by the Merger Agreement.
(c) The Guarantor hereby waives any and all notice of the creation, renewal,
extension or accrual of any of the Guaranteed Obligations and notice of or proof
of reliance by the Company or the Guaranteed Parties upon this Guaranty or
acceptance of this Guaranty. The Guaranteed Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred in reliance
upon this Guaranty, and all dealings between Parent, Merger Sub or the
Guarantor, on the one hand, and the Company, on the other, shall likewise be
conclusively presumed to have been had or consummated in reliance upon this
Guaranty.
(d) The Guaranteed Parties shall not be obligated to file any claim relating to
any Guaranteed Obligations in the event that the Surviving Corporation becomes
subject to a bankruptcy, reorganization or similar proceeding, and the failure
of the Guaranteed Parties to so file shall not affect the Guarantor’s
obligations hereunder. In the event that any payment to the Guaranteed Parties
in respect of any Guaranteed Obligation is rescinded or must otherwise be
returned for any reason whatsoever, the Guarantor shall remain liable hereunder
with respect to the Guaranteed Obligations as if such payment had not been made.

 

 

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(e) The Guarantor will not exercise any rights of subrogation or contribution
against the Surviving Corporation, whether arising by contract or operation of
law (including, without limitation, any such right arising under bankruptcy or
insolvency Laws) or otherwise, by reason of any payment by it pursuant to the
provisions of this Guaranty unless and until the Guaranteed Obligations have
been indefeasibly paid in full.
(f) Subject to the terms of Section 1 herein above, if the Surviving Corporation
fails to discharge its Guaranteed Obligations when due in accordance with the
applicable terms of the Merger Agreement, then the Guaranteed Parties may at any
time and from time to time, in their sole discretion, and so long as the
Surviving Corporation has failed to discharge the Guaranteed Obligations, take
any and all actions available hereunder or under applicable Law to collect any
of the Guarantor’s liabilities hereunder in respect of the Guaranteed
Obligations. The Guarantor shall pay, or cause to be paid, to the Guaranteed
Parties not later than the third (3rd) day following receipt of a written notice
by the Guaranteed Parties of the failure of the Surviving Corporation to pay any
or all of the Guaranteed Obligations in accordance with the Merger Agreement,
the full amount then due and payable by the Surviving Corporation under the
Merger Agreement in cash by wire transfer to the account set forth in such
notice.
(g) No delay or failure on the part of the Guaranteed Parties in the exercise of
any right or remedy shall operate as a waiver thereof, and no single or partial
exercise by the Guaranteed Parties of any right or remedy shall preclude other
or further exercise thereof or the exercise of any other right or remedy.
(h) The Guarantor agrees, in the event that this Guaranty is enforced or
collected by law or through an attorney at law, to pay all costs of collection
incurred by the Guaranteed Parties, including, without limitation, reasonable
attorneys’ fees.
3. Waiver of Acceptance, Presentment; Etc. The Guarantor expressly and
irrevocably waives defenses on the basis of promptness, diligence, notice of
acceptance hereof, presentment, demand for payment, notice of non-performance,
default, dishonor, protest and any notice of any kind (other than notices to be
provided in accordance with the Merger Agreement), all defenses which may be
available by virtue of any valuation, stay, moratorium or other similar Law now
or hereafter in effect, any right to require the marshalling of assets of the
Surviving Corporation, or any other Person liable with respect to any of the
Guaranteed Obligations, and all suretyship defenses generally. The Guarantor
acknowledges that it will receive substantial direct and indirect benefits from
the transactions contemplated by the Merger Agreement and that the waivers set
forth in this Guaranty are knowingly made in contemplation of such benefits and
after the advice of counsel.
4. Continuing Guaranty; Certain Waivers.
(a) This Guaranty is a continuing one and shall remain in full force and effect
until the indefeasible payment and satisfaction in full of the Guaranteed
Obligations, shall be binding upon the Guarantor, its successors and permitted
assigns, and shall inure to the benefit of, and be enforceable by, the
Guaranteed Parties and their respective heirs, executors, administrators,
successors and permitted transferees and assigns. All obligations to which this
Guaranty applies or may apply under the terms hereof shall be conclusively
presumed to have been created in reliance hereon.

 

 

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(b) The Guarantor agrees that the obligations of the Guarantor hereunder shall
not be released or discharged, in whole or in part, or otherwise affected by:
(a) the failure of the Guaranteed Parties to assert any claim or demand or to
enforce any right or remedy against the Surviving Corporation; (b) any change in
the time, place or manner of payment of any of the Guaranteed Obligations or any
rescission, waiver, compromise, consolidation or other amendment or modification
of any of the terms or provisions of the Merger Agreement or any other agreement
evidencing, securing or otherwise executed in connection with any of the
Guaranteed Obligations (provided that any such change, rescission, waiver,
compromise, consolidation or other amendment or modification shall be subject to
the prior written consent of the Surviving Corporation to the extent expressly
required by the Merger Agreement); (c) the addition, substitution or release of
any Person interested in the transactions contemplated by the Merger Agreement
(provided, that any such addition, substitution or release shall be subject to
the prior written consent of the Surviving Corporation to the extent expressly
required under the Merger Agreement); (d) any change in the corporate existence,
structure or ownership of the Surviving Corporation or any other Person liable
with respect to any of the Guaranteed Obligations; (e) any insolvency,
bankruptcy, reorganization or other similar proceeding affecting the Surviving
Corporation or any other Person liable with respect to any of the Guaranteed
Obligations; (f) any lack of validity or enforceability of the Guaranteed
Obligations, the Merger Agreement or any agreement or instrument relating
thereto; (g) the existence of any claim, set-off or other rights which the
Guarantor may have at any time against the Surviving Corporation (other than
defenses under the Merger Agreement), whether in connection with the Guaranteed
Obligations or otherwise; or (h) the adequacy of any other means the Company or
the Guaranteed Parties may have of obtaining repayment of any of the Guaranteed
Obligations.
5. Representations and Warranties. The Guarantor hereby represents and warrants
to the Guaranteed Parties with respect to itself that: (a) it is duly organized
and validly existing under the Laws of its jurisdiction of organization; (b) it
has all corporate power and authority to execute, deliver and perform this
Guaranty; (c) the execution, delivery and performance of this Guaranty by the
Guarantor has been duly and validly authorized and approved by all necessary
corporate action, and no other proceedings or actions on the part of the
Guarantor are necessary therefor; (d) this Guaranty has been duly and validly
executed and delivered by it and constitutes a valid and legally binding
obligation of it, enforceable against the Guarantor in accordance with its
terms; (e) the execution, delivery and performance by the undersigned of this
Guaranty do not and will not (i) violate the organizational documents of the
Guarantor, (ii) violate any applicable Law or judgment, or (iii) result in any
violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancelation or acceleration of
any obligation, any contract to which the Guarantor is a party, in any case, for
which the violation, default or right would be reasonably likely to prevent or
materially impede, interfere with, hinder or delay the consummation by the
Guarantor of the transactions contemplated by this Guaranty on a timely basis;
and (f) the Guarantor has the financial capacity to pay and perform all of its
obligations under this Guaranty, and all funds necessary to fulfill the
Guaranteed Obligations under this Guaranty shall be available to the Guarantor
for as long as this Guaranty shall remain in effect. The Guarantor acknowledges
that the Company and the Guaranteed Parties have specifically relied on the
accuracy of the representations and warranties contained in this Section 5 and
in the event of any breach hereof, the Guaranteed Parties (or, prior to the
earlier of the closing of the Offer or the Merger, the Company) shall have a
right to seek appropriate damages and any such damages shall be a “Guaranteed
Obligation” for purposes of this Guaranty.

 

 

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6. Entire Agreement. This Guaranty, together with the Merger Agreement and the
Confidentiality Agreement, constitutes the entire agreement with respect to the
subject matter hereof and supersedes any and all prior agreements and
understandings with respect to the subject matter hereof, whether written or
oral, among Parent, Merger Sub and the Guarantor, on the one hand, and the
Company and the Guaranteed Parties, on the other hand. Furthermore, no course of
dealing between the parties, no usage of trade, and no parol or extrinsic
evidence shall be used to supplement or modify any terms of this Guaranty; nor
are there any conditions to the complete effectiveness of this Guaranty.
7. Amendments and Waivers. No amendment or waiver of any provision of this
Guaranty will be valid and binding unless it is in writing and signed, in the
case of an amendment, by the Guarantor and (i) the Company, prior to the earlier
to occur of the closing of the Offer or the Merger, or (ii) the Guaranteed
Parties Representative, following the earlier to occur of the closing of the
Offer or the Merger, or in the case of waiver, by the party against whom the
waiver is to be effective. No waiver by any party of any breach or violation of,
or default under, this Guaranty, whether intentional or not, will be deemed to
extend to any prior or subsequent breach, violation or default hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence. No delay or omission on the part of any party in exercising any
right, power or remedy under this Guaranty will operate as a waiver thereof.
8. Third Party Beneficiaries. The Guarantor hereby agrees that its
representations, warranties and covenants set forth herein are specifically
intended for the benefit of the Company, prior to the earlier to occur of the
closing of the Offer or the Merger, and the Guaranteed Parties, in accordance
with and subject to the terms of this Guaranty. Other than the Guaranteed
Parties, the Company and their respective heirs, legal representatives,
successors and permitted assigns hereunder, this Guaranty is not intended to,
and does not, confer upon any person any rights or remedies hereunder, including
the right to rely upon the representations and warranties set forth herein.
9. Counterparts; Facsimile and Electronic Signatures. This Guaranty may be
executed in one or more counterparts, all of which shall be considered one and
the same agreement and shall become effective when one or more counterparts have
been signed by each of the parties and delivered to the other parties. This
Guaranty or any counterpart may be executed and delivered by facsimile copies or
delivered by electronic communications by portable document format (.pdf), each
of which shall be deemed an original.

 

 

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10. Notices. Unless otherwise set forth herein, any notice, request, instruction
or other document to be given hereunder shall be in writing and shall be deemed
duly given (i) upon delivery, when delivered personally, (ii) one (1) Business
Day after being sent by overnight courier or when sent by facsimile transmission
(with a confirming copy sent by overnight courier) and (iii) three (3) Business
Days after being sent by registered or certified mail, postage prepaid, as
follows:
If to the Company:
A.C. Moore Arts & Crafts, Inc.
130 A.C. Moore Drive
Berlin, NJ 08009
Attention: Amy Rhoades
Facsimile: (856) 753-7057
If to the Guaranteed Parties:
c/o Guaranteed Parties Representative
Michael J. Joyce
XXXXX
XXXXX
Facsimile: XXXXX
With a copy to (which shall not constitute notice):
Blank Rome LLP
One Logan Square
130 North 18th Street
Philadelphia, PA 19103-6998
Attn: Alan H. Lieblich
Facsimile: (215) 569-5555
If to the Guarantor:
Nicole Crafts LLC
14 Sbar Blvd.
Moorestown, NJ 08057
Attention: Adolph Piperno
Facsimile: (856) 234-9159
With a copy to (which shall not constitute notice):
Bryan Cave LLP
1201 W. Peachtree Street, N.W.
One Atlantic Center, Fourteenth Floor
Atlanta, GA 30309-3488
Attn: Todd Wade
Facsimile: (404) 420-0694
or to such other Persons or addresses as may be designated in writing by the
party to receive such notice.

 

 

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11. Governing Law. This Guaranty shall be governed by and construed in
accordance with the laws and decisions of the State of Delaware applicable to
guaranties or other agreements made to be performed entirely in such
jurisdiction, regardless of the laws that might otherwise govern under
applicable principles of conflicts of laws (whether of the State of Delaware or
any other jurisdiction) that would cause the application of the laws of any
state other than the State of Delaware, except to the extent that provisions of
the Pennsylvania Business Corporation Law are applicable hereto.
12. Jurisdiction; Venue; Service of Process.
(a) Each of the parties hereto irrevocably agrees that any legal action or
proceeding arising out of or relating to this Guaranty, including, without
limitation, its negotiation, terms, performance, or the transactions
contemplated hereby (except for enforcement of any judgment against said
parties), shall be brought and determined exclusively in the state or federal
courts located within the Commonwealth of Pennsylvania. The parties hereby
irrevocably consent to personal jurisdiction in said courts and agree that, in
the event of the filing of a legal action or proceeding, they shall not raise as
defense that any such court (a) lacks personal jurisdiction; or (b) is an
inconvenient forum. The parties further agree, to the extent permitted by Law,
that service of process or other legal papers commencing any such action may be
effected in the manner provided in Section 10, and the parties hereby
irrevocably agree that if service is so made, the parties shall not assert as a
defense that service was ineffective.
(b) EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY SUIT, ACTION OR OTHER PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF, OR RELATING TO, THIS GUARANTY OR THE TRANSACTIONS
CONTEMPLATED HEREBY. EACH PARTY HERETO CERTIFIES AND ACKNOWLEDGES THAT (i) NO
REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT,
IN THE EVENT OF ANY ACTION, SUIT OR PROCEEDING, SUCH OTHER PARTY WOULD NOT SEEK
TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED
THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY
AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS GUARANTY BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
(c) The Guarantor acknowledges that, in the event that any of the provisions of
this Guaranty were not performed in accordance with its specific terms or were
otherwise breached, irreparable damage would occur and the Guaranteed Parties
would not have any adequate remedy at law. The Guarantor further hereby waives
any defense, in the event that any action for injunction, specific performance
or other equitable relief, that a remedy at law would be adequate. It is
accordingly agreed that the Guaranteed Parties shall be entitled to an
injunction or injunctions to prevent breaches or threatened breaches of this
Guaranty and to enforce specifically the terms and provisions of this Guaranty
in addition to any and all other rights and remedies at law or in equity, and
all such rights and remedies shall be cumulative. To the extent permitted by
Law, any requirements for the securing or posting of any bond with such remedy
are waived.

 

 

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13. No Assignment. Neither this Guaranty nor any rights, interests or
obligations hereunder may be assigned by any party to any other person (except
by operation of law) (i) in the case of a purported assignment by the Guarantor,
without the written consent of the Guaranteed Parties, and (ii) in the case of a
purported assignment by a Guaranteed Party, without the written consent of the
Guarantor. The Guarantor shall require and cause any successor entity by
operation of law to all or substantially all of the business and/or assets of
the Guarantor, by written agreement in form and substance satisfactory to the
Guaranteed Parties, to expressly assume and agree to perform this Guaranty in
the same manner and to the same extent that the Guarantor would be required to
perform this Guaranty as if no succession had taken place.
14. Severability. If any term or other provision of this Guaranty is invalid,
illegal or incapable of being enforced by any rule of law or public policy, all
other conditions and provisions of this Guaranty shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any party hereto. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties shall
negotiate in good faith to modify this Guaranty so as to effect the original
intent of the parties as closely as possible to the fullest extent permitted by
applicable Law in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the extent possible.
15. Headings. The headings contained in this Guaranty are for convenience
purposes only and will not in any way affect the meaning or interpretation
hereof.
16. Appointment of Guaranteed Parties Representative. The Company, by its
acknowledgement of this Guaranty, hereby irrevocably appoints Michael J. Joyce
as the agent and attorney-in-fact to represent the interests of the Guaranteed
Parties for all purposes under this Guaranty from and after the earlier to occur
of the closing of the Offer or the Merger (the “Guaranteed Parties
Representative”), and consents to the taking by the Guaranteed Parties
Representative of any and all actions and the making of any decisions required
or permitted to be taken by the Guaranteed Parties hereunder. By his execution
below, Michael J. Joyce hereby accepts his appointment as Guaranteed Parties
Representative hereunder. From and after the earlier to occur of the closing of
the Offer or the Merger, the Guarantor shall be entitled to deal exclusively
with the Guaranteed Parties Representative on all matters relating to this
Guaranty and shall be entitled to rely conclusively (without further evidence of
any kind whatsoever) on any document executed or purported to be executed on
behalf of an Indemnified Party by the Guaranteed Parties Representative, and on
any other action taken or purported to be taken on behalf of a Guaranteed Party
by the Guaranteed Parties Representative, as fully binding upon such Guaranteed
Party.
[Signatures on following page]

 

 

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IN WITNESS WHEREOF, the undersigned have executed and delivered this Guaranty as
of the date first written above.

            GUARANTOR:

SBAR’S, Inc.
      By:   /s/ Adolph Piperno         Name:   Adolph Piperno        Title:  
President   

ACKNOWLEDGED BY:
THE COMPANY
A.C. Moore Arts & Crafts, Inc.

         
By:
  /s/ Michael J. Joyce
 
Name: Michael J. Joyce    
 
  Title: Chairman of the Board of Directors    
 
        GUARANTEED PARTIES REPRESENTATIVE    
 
       
By:
  /s/ Michael J. Joyce
 
Name: Michael J. Joyce