EXHIBIT 10.40
ADDENDUM TO THE
THIRD AND FOURTH AMENDED AND RESTATED
GUARANTY AGREEMENTS
This Addendum to the Fourth Amended and Restated Guaranty Agreement is
made and entered into as of the 19th day of March, 2004, by and between
AmerAlia, Inc., a Utah corporation whose address is 00000 Xxxx Xxxxx Xxxx Xx,
Xxxxxxxxxx, XX 00000 (Telephone: (000) 000 0000; Facsimile: (000) 000 0000 )
("AmerAlia") and Xxxxxxxxxx X. Mars, as Trustee of the Xxxxxxxxxx Xxxxxx Mars
Trust dated February 5, 1975, as amended, whose address is Stone Hill Farms,
0000 Xxxxxxxx Xxxx, Xxx Xxxxxx, Xxxxxxxx 00000, (the "Trust").
RECITALS
A. AmerAlia and the Trust are parties to that Third Amended and Restated
Guaranty Agreement dated November 29, 2001 (the "Third Guaranty") and that
Fourth Amended and Restated Guaranty Agreement dated April 1, 2002 (the "Fourth
Guaranty" and, collectively with the Third Guaranty, the "Guaranty").
B. AmerAlia has a promissory note due to the Bank of America ("BofA") for
$9,921,583 due December 31, 2005 (the "BofA Loan") which amount the Trust has
previously guaranteed pursuant to the Guaranty.
C. The Trust is willing to facilitate AmerAlia's obtaining long term
financing of its operations by agreeing to the additional terms hereof.
Guaranty
Page 1
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and for other good and valuable consideration the receipt and
sufficiency whereof is hereby acknowledged, AmerAlia and the Trust: (A) agree
that this Addendum to the Third Guaranty and Fourth Guaranty is in addition to
and not in replacement of the Third Guaranty and the Fourth Guaranty which
remain in effect in accordance with their terms except as provided herein; and
(B) further agree as follows:
1. Effective November 1, 2002, AmerAlia will have no further obligation to
pay the guaranty fee contained in Section 4 of the Fourth Guaranty.
2. Section 3(4) of the Fourth Guaranty will be deleted in its entirety.
3. Pursuant to the Series C Pledge Agreement dated as of the date hereof
(the "Pledge Agreement"), AmerAlia will pledge to the Trust, a Series C
Debenture, and all principal and interest payment thereunder issued by
Natural Soda Holdings, Inc., a Colorado corporation ("NSHI") with a
principal amount of $9,921,583.00 (the "Series C Debenture").
4. AmerAlia agrees that if it shall receive any cash and/or other property
in respect of Interest or Contingent Interest (both as defined in the
Series C Debenture) on the Series C Debenture for the periods after the
date hereof or principal on the Series C Debenture, it shall pay such
amounts to the Trust as set forth in the Pledge Agreement. The Trust
agrees to use any payments to pay any outstanding interest or principal
under the BofA Loan and to reduce the amounts owed by AmerAlia to the
Trust.
5. AmerAlia agrees that if the Interest and the Contingent Interest
received by the Trust exceeds amounts paid by the Trust to BofA, the
Trust may keep such monies and/or other property as consideration for
providing the Guaranty.
6. The Trust hereby releases its security interest in all of the assets of
AmerAlia, NSHI and Natural Soda, Inc. (not including the Series C
Debenture, which when delivered, will be the only security interest in
any asset retained by the Trust) as described in the Third Guaranty and
the Fourth Guaranty.
7. Section 4(2) of the Third Guaranty will be deleted in its entirety.
8. Section 3(2) of the Fourth Guaranty will be deleted in its entirety.
9. The Trust agrees to use any interest it receives from the Series C
Debentures to pay outstanding interest to BofA and to repay itself for
any BofA interest which it previously paid. The Trust shall notify
AmerAlia of any interest it pays to BofA and shall notify AmerAlia of
the portion paid using Series C Debenture interest. If the amount of
interest paid to BofA by the Trust exceeds the amount of interest
received by the Trust from the Series C Debentures, the Trust agrees,
that upon written notice from AmerAlia that AmerAlia cannot pay the
current interest owed to BofA, that the Trust shall pay up to the
following amounts:
Addendum to Fourth Guaranty
(a) 65% of the total amount of the interest due to BofA under
the BofA Loan during calendar year 2004; and
(b) 50% of the total amount of the interest due to BofA under
the BofA Loan during calendar year 2005.
Such interest paid pursuant to (a) and (b) above, by the Trust using
its own funds shall become an obligation owed to the Trust by AmerAlia
and such interest obligations shall be evidenced by a Promissory Note
with substantially the same terms set forth in the form of promissory
note attached hereto as Exhibit A (the "Promissory Notes"). To the
extent that the Series C Debenture interest received by the Trust
exceeds the BofA interest payments, the Trust shall use such funds to
first allow AmerAlia to reduce the outstanding interest and principal
due under the Promissory Notes, and second, to allow AmerAlia to reduce
the outstanding principal and interest under the promissory note issued
to the Trust as of the date hereof in the principal amount of $469,628
(the "Note"). After all of the outstanding interest and principal due
under the Promissory Notes and the Note has been paid, any excess
Series C Debenture interest shall be considered excess for purposes of
Section 5.
10. AmerAlia and the Trust agree that this Addendum to the Third Guaranty
and Fourth Guaranty, together with the Third Guaranty and Fourth
Guaranty, as modified by this Addendum, and the BofA Loan represent all
the agreements and understandings between the Trust and AmerAlia
regarding the BofA Loan. Further, this Addendum to the Third Guaranty
and Fourth Guaranty, together with the Third Guaranty and Fourth
Guaranty, as modified by this Addendum, and the BofA Loan supercede all
prior agreements and understandings, whether written or oral, between
the Trust and AmerAlia.
11. General Provisions
(1) Notices. All notices provided for herein shall be in writing, and shall
be served in one of the following ways:
(a) by personal service (which service shall be considered
effectuated when actual delivery is made upon the addressee,
if delivery is made during normal business hours (and on the
day after personal delivery, if delivery is made after normal
business hours)); or
(b) by certified mail, return receipt requested, with postage
prepaid (which service shall be considered effectuated when
there has been delivered to the forwarding party the receipt
executed by the party to whom it was addressed or a notice
from the postal authorities that the person to whom it was
addressed has failed to accept delivery); or
(c) a recognized overnight delivery service (which service
shall be considered effectuated when there has been delivered
to the forwarding party a notice that the delivery was made).
Addendum to Fourth Guaranty
All notices shall be addressed, as set forth in the first paragraph
above, or at such other address as shall be designated by any party
hereto in a written notice served on the other party pursuant to this
Section 9(1).
(2) Governing Law; Interpretation. This Agreement shall be
governed by the laws of the State of Colorado. Wherever
possible each provision of this Agreement shall be interpreted
in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement shall be
prohibited by or invalid under such law, such provision shall
be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
(3) No Waiver. Neither this Agreement nor any provision hereof may
be amended, modified, waived, discharged or terminated orally
except by an instrument in writing duly signed by or on behalf
of the parties.
(4) Integration. This Agreement, the Third Guaranty, the Fourth
Guaranty and the Pledge Agreement contain the entire
understanding of the parties with respect to the guaranty of
the BofA Loan, and shall not be amended or modified except by
an agreement in writing signed by the parties hereto.
(5) Miscellaneous. The Section headings used herein are for
convenience of reference only and shall not define or limit
the provisions of this Agreement. As used in this Agreement,
the singular shall include the plural and the plural shall
include the singular, and masculine, feminine and neuter
pronouns shall be fully interchangeable, where the context so
requires.
Each party acknowledges that it has read and understands this Agreement and
agrees to be bound by its terms.
AmerAlia, Inc. XXXXXXXXXX X. MARS, AS TRUSTEE OF THE
XXXXXXXXXX XXXXXX MARS TRUST, DATED
FEBRUARY 5, 1975, AS AMENDED
By: /s/ Xxxx X Xxxx /s/ Xxxx X. Xxxxxx
----------------------------- -------------------------
Xxxx X. Xxxx, President Xxxx X. Xxxxxx Attorney in Fact for
Xxxxxxxxxx X. Mars, as Trustee of the
Xxxxxxxxxx Xxxxxx Mars Trust
Addendum to Fourth Guaranty
