Exhibit 10.6
GUARANTY
THIS GUARANTY (this "Guaranty"), dated as of February 18, 2003, is made
by ENTERTAINMENT TECHNOLOGY CORPORATION, a Pennsylvania corporation and ETC
Delaware, Inc. (collectively, the "Guarantors"), in favor of PNC BANK, NATIONAL
ASSOCIATION (the "Bank").
W I T N E S S E T H :
WHEREAS, Environmental Tectonics Corporation (the "Borrower") and the
Bank are parties to a Credit Agreement, dated as of the date hereof (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement");
WHEREAS, the Credit Agreement provides that, as a condition precedent
to the making of the initial Loans thereunder, the Guarantors must execute a
guaranty in favor of the Bank; and
WHEREAS, the Guarantors will derive substantial benefits from the
Credit Agreement and the Loans made and the letters of credit issued thereunder.
NOW, THEREFORE, in consideration of the premises and to induce the Bank
to continue to extend credit under the Credit Agreement, the Guarantors,
intending to be legally bound, hereby agree with the Bank as follows:
1. Defined Terms. Unless otherwise defined herein, terms, which are
defined in the Credit Agreement and used herein, are so used as so defined. As
used herein, "Obligations" shall mean the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity of the
Loans and interest accruing after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding, relating
to the Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) the Loans, and all other obligations and
liabilities of the Borrower to the Bank whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with, the Credit Agreement, the
Revolving Credit Note, the Letters of Credit, the Bond Letter of Credit, any
Interest Hedge Agreement, the other Loan Documents and any other document made,
delivered or given in connection therewith or herewith, whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including, without limitation, all fees and disbursements of counsel
to the Bank that are required to be paid by the Borrower pursuant to the terms
of the Credit Agreement or any other Loan Document) or otherwise.
2. Guaranty. The Guarantors hereby unconditionally and irrevocably
guaranties to the Bank, the prompt and complete payment and performance by the
Borrower when due (whether at the stated maturity, by acceleration or otherwise)
of the Obligations. The Guarantors further agree to pay any and all reasonable
expenses (including, without limitation, all reasonable fees and disbursements
of counsel), which may be paid or incurred by the Bank in enforcing, or
obtaining advice of counsel in respect of, any of its rights under this
Guaranty. This Guaranty shall remain in full force and effect until the
Obligations are paid in full, the Commitments are terminated and neither any
Letter of Credit nor the Bond Letter of Credit is outstanding, notwithstanding
that from time to time prior thereto the Borrower may be free from any
Obligations.
The Guarantors agree that whenever, at any time or from time to time,
it shall make any payment to the Bank on account of its liability hereunder, it
will notify the Bank in writing that such payment is made under this Guaranty
for such purpose. No payment or payments made by the Borrower or any other
Person or received or collected by the Bank from the Borrower or any other
Person by virtue of any action or proceeding or any set-off or appropriation or
application, at any time or from time to time, in reduction of or in payment of
the Obligations shall be deemed to modify, reduce, release or otherwise affect
the liability of the Guarantors hereunder which liability shall, notwithstanding
any such payment or payments, remain in full force and effect until the
Obligations are paid in full, the Commitments are terminated and no Letter of
Credit is outstanding.
3. Right of Set-off. Upon the occurrence and during the continuance of
any Event of Default, the Bank is hereby irrevocably authorized at any time and
from time to time, without notice to the Guarantors, any such notice being
hereby waived by the Guarantors, to set off and appropriate and apply any and
all deposits (general or special, time or demand, provisional or final), and any
other credits, indebtedness or claims, in each case whether direct or indirect,
absolute or contingent, matured or unmatured, at any time held or owing by the
Bank to or for the credit or the account of the Guarantors, in such amounts as
the Bank may elect, on account of the liabilities of the Guarantors hereunder
and claims of every nature and description of the Bank against the Guarantors,
whether arising hereunder, under the Credit Agreement, the Revolving Credit
Note, any Letter of Credit, the Bond Letter of Credit or otherwise, as the Bank
may elect, whether or not the Bank has made any demand for payment and although
such liabilities and claims may be contingent or unmatured. The Bank shall
notify the Guarantors promptly of any such set-off made by it and the
application made by it of the proceeds thereof, provided that the failure to
give such notice shall not affect the validity of such set-off and application.
The rights of the Bank under this paragraph are in addition to other rights and
remedies (including, without limitation, other rights of set-off), which the
Bank may have.
4. No Subrogation. Notwithstanding any payment or payments made by the
Guarantors hereunder, or any set-off or application of funds of the Guarantors
by the Bank, the Guarantors shall not be entitled to be subrogated to any of the
rights of the Bank against the Borrower or against any collateral security or
guaranty or right of offset held by the Bank for the payment of the Obligations,
nor shall the Guarantors seek any reimbursement or indemnification from the
Borrower in respect of payments made by the Guarantors hereunder, until all
amounts owing to the Bank by the Borrower on account of the Obligations are paid
in full, the Commitments are terminated and no Letter of Credit is outstanding.
If any amount shall be paid to the Guarantors on account of such subrogation or
other rights at any time when all of the Obligations shall not have been paid in
full, such amount shall be held by the Guarantors in trust for the Bank
segregated from other assets of the Guarantors, and shall forthwith upon receipt
by the Guarantors, be turned over to the Bank in the exact form received by the
Guarantors (duly indorsed by the Guarantors to the Bank, if required), to be
applied against the Obligations, whether matured or unmatured, in such order as
the Bank may determine.
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5. Waivers; Amendments, etc. with respect to the Obligations. Each
Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against each Guarantor, and without notice to or further
assent by each Guarantor, any demand for payment of any of the Obligations made
by the Bank may be rescinded by the Bank, and any of the Obligations continued,
and the Obligations, or the liability of any other party upon or for any part
thereof, or any collateral security or guaranty therefor or right of offset with
respect thereto may from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived, surrendered or
released by the Bank, and the Credit Agreement, the Revolving Credit Note, the
other Loan Documents and any other documents executed and delivered in
connection therewith may be amended, modified, supplemented or terminated, in
whole or in part, as the Bank may deem advisable from time to time, and any
collateral security, guaranty or right of offset at any time held by the Bank
for the payment of the Obligations may, be sold, exchanged, waived, surrendered
or released. The Bank shall not have any obligation to protect, secure, perfect
or insure any lien at any time held by it as security for the Obligations or for
this Guaranty or any property subject thereto.
6. Guaranty Absolute and Unconditional. Each Guarantor waives any and
all notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by the Bank upon this Guaranty or
acceptance of this Guaranty; the 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 the Borrower or the Guarantor, on
the one hand, and the Bank, on the other, shall likewise be conclusively
presumed to have been had or consummated in reliance upon this Guaranty. Each
Guarantor waives notice of acceptance of this Guaranty, notice of extensions of
credit to the Borrower from time to time, notice of default, diligence,
presentment, notice of dishonor, protest and demand for payment. This Guaranty
shall be construed as a continuing, absolute and unconditional Guaranty of
payment without regard to (a) the validity or enforceability of the Credit
Agreement, the Revolving Credit Note, any of the other Loan Documents, any of
the Obligations or any collateral security therefor or guaranty or right of
offset with respect thereto at any time or from time to time held by or for the
benefit of the Bank, (b) any defense, set-off or counterclaim (other than a
defense of payment or performance) which may at any time be available to or be
asserted by the Borrower against the Bank, or (c) any other circumstance
whatsoever (with or without notice to or knowledge of the Borrower or the
Guarantors) which constitutes, or might be construed to constitute, an equitable
or legal discharge of the Borrower for the Obligations, or of the Guarantors
under this Guaranty, in bankruptcy or in any other instance. When the Bank is
pursuing its rights and remedies hereunder against the Guarantors, the Bank may,
but shall be under no obligation to, pursue such rights and remedies as it may
have against the Borrower or any other Person or against any collateral security
or guaranty for the Obligations or any right of offset with respect thereto, and
any failure by the Bank to pursue such other rights or remedies or to collect
any payments from the Borrower or any such other Person or to realize upon such
collateral security or guaranty or to exercise any such right of offset, or any
release of the Borrower or any such other Person or of any such collateral
security, Guaranty or right of offset, shall not relieve the Guarantors of any
joint and several liability hereunder, and shall not impair or affect the rights
and remedies, whether express, implied or available as a matter of law, of the
Bank against the Guarantors.
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7. Reinstatement. This Guaranty shall continue to be effective, or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any of the Obligations is rescinded or must otherwise be restored or returned by
the Bank upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Borrower or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for the
Borrower or any substantial part of its property, or otherwise, all as though
such payments had not been made.
8. Payments. Each Guarantor hereby agrees that the Obligations will be
paid to the order of the Bank without set-off or counterclaim in Dollars in
immediately available funds at the office of the Bank set forth in Section 14
hereof.
9. Power to Confess Judgment. Each Guarantor hereby empowers any
attorney of any court of record, after the occurrence of any Event of Default
hereunder, to appear for each Guarantor and, with or without complaint filed,
confess judgment, or a series of judgments, against each Guarantor in favor of
the Bank for the amount of the Obligations and an attorney's commission of the
greater of three percent (3%) of such principal and interest or $5,000 added as
a reasonable attorneys' fee (but in no event shall such attorney's fee exceed
those fees actually and reasonably incurred notwithstanding the amount
confessed) and for doing so this Guaranty or a copy verified by affidavit shall
be a sufficient warrant. Each Guarantor hereby forever waives and releases all
procedural errors in said proceedings and all rights of appeal and all relief
from any and all appraisement, stay or exemption laws of any state now in force
or hereafter enacted with respect to such judgment or judgments.
No single exercise of the foregoing power to confess judgment, or a
series of judgments, shall be deemed to exhaust the power, whether or not any
such exercise shall be held by any court to be invalid, voidable, or void, but
the power shall continue undiminished and it may be exercised from time to time
as often as the Bank shall elect until such time as the Bank shall have received
payment in full of the Obligations and costs.
10. Severability. Any provision of this Guaranty which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
11. Paragraph Headings. The paragraph headings used in this Guaranty
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
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12. No Waiver; Cumulative Remedies. The Bank shall not by any act
(except by a written instrument pursuant to paragraph 13 hereof), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any Default or Event of Default or in any
breach of any of the terms and conditions hereof. No failure to exercise, nor
any delay in exercising, on the part of the Bank, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A
waiver by the Bank of any right or remedy hereunder on any one occasion shall
not be construed as a bar to any right or remedy which the Bank would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of any
rights or remedies provided by law.
13. Waivers and Amendments; Successors and Assigns; Additional
Guarantors; Governing Law. None of the terms or provisions of this Guaranty may
be waived, amended, supplemented or otherwise modified except by a written
instrument executed by the Guarantors and the Bank. This Guaranty shall be
binding upon the successors and assigns of the Guarantors and shall inure to the
benefit of the Bank and its successors and assigns. If at any time subsequent to
the date hereof any new Subsidiary of the Borrower becomes a party to this
Guaranty (an "Additional Guarantor") as provided in Section 5.14 of the Credit
Agreement by executing a joinder hereto, the obligations of such Additional
Guarantor and any other Guarantor hereunder shall be joint and several and all
references herein to the Guarantor shall include such Additional Guarantor. THIS
GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,
THE SUBSTANTIVE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA.
14. Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered by hand, or three days after being
deposited in the mail, postage prepaid, or, in the case of facsimile notice,
when sent during normal business hours with electronic confirmation or otherwise
when received, addressed as set forth below for the Bank and as set forth on the
signature page hereto for each Guarantor:
Bank: PNC Bank, National Association
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
15. Submission to Jurisdiction; Waivers.
(a) Each Guarantor hereby irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Guaranty or the other Loan Documents, or for
recognition and enforcement of any judgment in respect thereof to the
non-exclusive general jurisdiction of the courts of the Commonwealth of
Pennsylvania, the courts of the United States of America for the Eastern
District of Pennsylvania, and appellate courts from any thereof;
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(ii) consents that any such action or proceeding may be brought in
such courts, and waives to the extent permitted by applicable law any
objection that it may now or hereafter have to the venue of any such action
or proceeding in any such court or that such action or proceeding was
brought in an inconvenient court and agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to it at its address set forth on the signature page hereto or at
such other address of which the Bank shall have been notified;
(iv) waives and hereby acknowledges that it is estopped from
raising any objection based on forum non conveniens, any claim that any of
the above-referenced courts lack proper venue or any objection that any of
such courts lack personal jurisdiction over it so as to prohibit such
courts from adjudicating any issues raised in a complaint filed with such
courts against such Guarantor concerning this Guaranty or the other Loan
Documents;
(v) acknowledges and agrees that the choice of forum contained in
this paragraph 15 shall not be deemed to preclude the enforcement of any
judgment obtained in any forum or the taking of any action under this
Guaranty or any other Loan Documents to enforce the same in any appropriate
jurisdiction;
(vi) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding referred
to in this subsection any special, exemplary, punitive or consequential
damages; and
(vii) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to xxx in any other jurisdiction.
(b) Each Guarantor hereby unconditionally waives trial by jury in any
legal action or proceeding relating to this Guaranty or any other Loan Document
and for any mandatory counterclaim therein, including without limitation any
action or proceeding referred to in paragraph (a) above.
Each Guarantor acknowledges that it has read and understood all the
provisions of this Guaranty, including the waiver of jury trial and confession
of judgment, and has been advised by counsel as necessary or appropriate.
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IN WITNESS WHEREOF, the undersigned has caused this Guaranty to be duly
executed and delivered as of the date first above written.
ENTERTAINMENT TECHNOLOGY
CORPORATION
By: /s/ Xxxxx Xxxxxx
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Title: Secretary
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Address: 000 Xxxxx Xxx
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Xxxxxxxxxxx, XX 00000
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ETC DELAWARE, INC.
By: /s/ Xxxxx Xxxxxx
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Title: Treasurer
----------------------------
Address: 000 Xxxxx Xxx
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Xxxxxxxxxxx, XX 00000
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