Exhibit 10.37
GUARANTY OF PAYMENT AND PERFORMANCE
THIS GUARANTY OF PAYMENT AND PERFORMANCE dated as of October 1, 1997
(the "Guaranty") from XXXXXXXX INDUSTRIES, INC., a Virginia corporation with an
office at 0000 Xxxxxxx Xxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxxx 00000 (the "Guarantor")
to KEYBANK NATIONAL ASSOCIATION, a national banking association with an office
for the transaction of business located at 00 Xxxxx Xxxxx Xxxxxx, Xxxxxx, Xxx
Xxxx 00000 (the "Bank").
W I T N E S S E T H:
WHEREAS, the County of Saratoga Industrial Development Agency, a public
benefit corporation duly organized and existing under the laws of the State of
New York (the "Issuer"), intends to issue its Multi-Mode Variable Rate
Industrial Development Revenue Bonds (Xxxxxxxx Adhesives, Inc. Project), Series
1997A in the aggregate principal amount of $6,000,000 (the "Bonds'); and
WHEREAS, the Bonds are to be issued under and pursuant to a Trust
Indenture, dated as of October 1, 1997 (the "Indenture") by and between the
Issuer and Star Bank, N.A., as Trustee (the "Trustee"); and
WHEREAS, the proceeds of the Bonds are to be advanced to Xxxxxxxx
Adhesives, Inc. (the "Applicant") to assist in the financing of the Project (as
defined in the Indenture); and
WHEREAS, to provide security for the Bonds, the Bank is about to issue
its irrevocable transferable direct pay letter of credit (the "Letter of
Credit") in favor of the Trustee; and
WHEREAS, in connection with the Letter of Credit, the Bank and the
Applicant have or are about to enter into the Letter of Credit Reimbursement
Agreement dated as of October 1, 1997 (the "Reimbursement Agreement"); and
WHEREAS, to provide additional financing for the Project, the Bank will
make a $1,500,000 term loan (the "Term Loan") to the Applicant, which Term Loan
will be evidenced by a $1,500,000 Promissory Note (the "Term Loan Note") from
the Applicant to the Bank; and
WHEREAS, the Bank is unwilling to issue the Letter of Credit or make
the Term Loan unless it receives this Guaranty; and
WHEREAS, the Guarantor is willing to enter into this Guaranty in order
to induce the Bank to issue the Letter of Credit and make the Term Loan and the
Guarantor has approved the form and substance of (i) any documents executed or
delivered by Applicant in connection with the Bonds and the Reimbursement
Agreement (the "Financing Documents") and (ii) any documents executed or
delivered by Applicant in connection with the Term Loan (the "Term Loan
Documents").
NOW, THEREFORE, in order to induce the Bank to (i) issue the Letter of
Credit and (ii) make the Term Loan and in consideration of the premises and of
other good and valuable consideration, the Guarantor intends to guarantee
absolutely and unconditionally to the Bank, the punctual payment of all amounts
payable by the Applicant under (y) the Reimbursement Agreement and the other
Financing Documents and (z) the Term Loan Note and the other Term Loan Documents
and such further payment and performance as may be set forth in Article 2
hereof.
ARTICLE 1
REPRESENTATIONS AND WARRANTIES OF THE GUARANTOR
The Guarantor hereby represents and warrants to Bank that:
Section 1.1 Capacity of the Guarantor. The Guarantor:
(A) is a corporation duly organized, validly existing and
in good standing under the laws of the state of its
formation, without limitation on the duration of its
existence;
(B) has the power and authority to own its properties and
assets and to carry on its business as now being
conducted; and
(C) has the power and authority to execute, deliver and
perform this Guaranty as required hereunder and to
guarantee the payments to be made by the Applicant
under (i) the Reimbursement Agreement with regard to
the principal of, redemption premium, if any, and
interest on the Bonds pursuant to the provisions hereof
and (ii) the Term Loan Note; and this Guaranty is the
legal, valid and binding obligation of the Guarantor
enforceable in accordance with its terms;
Section 1.2 No Violation of Restrictions. Neither the execution and
delivery of this Guaranty, the consummation of the transactions contemplated
hereby nor the fulfillment of or compliance with the provisions of this Guaranty
will conflict with or result in a breach of the Guarantor's certificate of
incorporation or by-laws or, in any material respect, any of the terms,
covenants, conditions or provisions of any agreement, judgment or order to which
the Guarantor is a party or by which the Guarantor is bound, or will constitute
a default under any of the foregoing, or result in the creation or imposition of
any lien of any nature whatsoever.
Section 1.3 Compliance with Law. The Guarantor (A) is not in
violation of any law, ordinance, governmental rule, regulation, order or
judgment to which the Guarantor may be subject or which would materially affect
the business of the Guarantor and (B) has not failed to obtain any license,
permit, franchise or other governmental authorization necessary to the conduct
of its present business.
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Section 1.4 Financial Statements. The financial statements
submitted by the Guarantor, including balance sheets, statement of income,
retained earnings and other related schedules, to the Bank fairly represent the
financial condition of the Guarantor as of and for the period ending on the date
of each statement and there has been no material adverse change in the financial
conditions of the Guarantor since the most recent date of the statements
submitted to Bank.
Section 1.5 Solvency of Guarantor and Applicant. The Guarantor is
solvent and has made an appropriate financial investigation of the Applicant and
has determined that the Applicant is solvent at the time of execution of this
Guaranty.
ARTICLE 2
COVENANTS AND AGREEMENTS
Section 2.1 Guaranty of Payment. The Guarantor irrevocably,
absolutely and unconditionally guarantees to the Bank:
(A) (1)(a) The full and prompt payment by the Applicant of each and
every draw made by the Trustee under the Letter of Credit, such payment to be
made in accordance with the terms of the Reimbursement Agreement (together with
all interest accrued thereon, and fees and expenses of the Bank thereunder and
as more particularly set forth in Section 3 and 4 of the Reimbursement
Agreement), as such relate to the principal of the Bonds and the indebtedness
represented thereby, and the redemption premium, if any, on the Bonds when and
as the same shall become due and payable, whether at the stated maturity
thereof, by acceleration, call for redemption, or if tendered for purchase and
not remarketed, or otherwise; (b) the full and prompt payment of interest on the
Bonds when and as the same shall become due and payable; (c) the full and prompt
payment of an amount equal to each and all of the payments and any other sums
when and as the same shall become due, required to be paid by the Applicant
under the terms of the Installment Sale Agreement (as defined in the Indenture);
and (d) the full and prompt payment of all principal, interest and other sums
when and as the same shall become due and payable under the Term Loan Note and
the other Term Loan Documents (the preceding hereinafter collectively the
"Indebtedness"); and (2) the full and prompt performance and observance by the
Applicant of all of the obligations, covenants and agreements required to be
performed and observed by the Applicant under the terms of the Reimbursement
Agreement, the Term Loan Note, the other Financing Documents and the other Term
Loan Documents.
The Guarantor hereby irrevocably and unconditionally agrees that upon
any default by the Issuer in the payment, when due, of the Indebtedness, upon
demand of the Bank, the Guarantor shall promptly pay the same. The Guarantor
further hereby irrevocably and unconditionally agrees that (i) upon any default
by the Applicant in the payment of the Indebtedness, the Guarantor will promptly
pay the same, and (ii) upon any default by the Applicant in any of the
obligations, covenants and agreements required to be performed and observed by
the Applicant under the Installment Sale Agreement, the Building Loan Agreement,
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the Mortgage, the Term Loan Note, the other Financing Documents and the other
Term Loan Documents, the Guarantor will effect the observance of such
obligations, covenants and agreements. All payments by the Guarantor shall be
paid in lawful money of the United States of America. Each and every default in
the payment of the Indebtedness, or in the prompt performance and observance by
the Applicant of all of the obligations, covenants and agreements required to be
performed and observed by the Applicant under the terms of the Reimbursement
Agreement, the Term Loan Note, the other Financing Documents or the other Term
Loan Documents, shall give rise to a separate cause of action hereunder, and
separate suits may be brought hereunder as each cause of action arises.
(B) The Guarantor further agrees that this Guaranty constitutes an
absolute, unconditional, present and continuing guarantee of payment and not of
collection, and waives any right to require that any resort be had by the Bank
to (1) any security held by or for the benefit of the Bank for payment of the
Indebtedness, (2) the Bank's rights against any other person, or (3) any other
right or remedy available to the Bank by contract, applicable law or otherwise.
The obligations of the Guarantor under this Guaranty are direct, unconditional
and completely independent of the obligations of any other person or entity, and
a separate cause of action or separate causes of action may be brought and
prosecuted against the Guarantor without the necessity of joining the Issuer,
the Trustee or any other party or previously proceeding with or exhausting any
other remedy against any other person who might have become liable for the
Indebtedness or of realizing upon any security held by or for the benefit of the
Bank. The Guarantor further waives any benefits of any credit for the fair
market value of the Project Facility in any action for foreclosure or for a
deficiency judgment (including any credit under Section 1371 of the New York
Real Property Actions and Proceedings Law).
Section 2.2 Obligations Unconditional. The obligations of the
Guarantor under this Guaranty shall be absolute and unconditional, and shall
remain in full force and effect until the entire Indebtedness, and all payments,
obligations, covenants and agreements of the Applicant under the Reimbursement
Agreement, the Term Loan Note, the other Financing Documents or the other Term
Loan Documents, shall have been paid in full or provided for, and all costs,
Bank's fees and commissions and expenses, if any, referred to in the Financing
Documents and the Term Loan Documents shall have been paid in full and, to the
extent permitted by law, such obligations shall not be affected, modified or
impaired by any state of facts or the happening from time to time of any event,
including, without limitation, any of the following, whether or not with notice
to or the consent of the Guarantor:
(A) The invalidity, irregularity, illegality or
unenforceability of , or any defect in, the Reimbursement Agreement,
the Term Loan Note, any Financing Document or any Term Loan Document of
any collateral security for any thereof (the "Collateral").
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(B) Any present or future law of order of any government
(de jeure or de facto) or of any agency thereof purporting to reduce,
amend or otherwise affect the Bonds, the Reimbursement Agreement, the
Term Loan Note, any other Financing Document or any other Term Loan
Document or any other obligation of the Issuer, the Applicant or any
other obligor or to any other terms of payment.
(C) The waiver, compromise, settlement, release or
termination of any or all of the obligations, covenants or agreements
of any obligor under the Reimbursement Agreement, the Term Loan Note or
any other Financing Document or Term Loan Document.
(D) The failure to give notice to the Guarantor of the
occurrence of any event of default under the Reimbursement Agreement,
the Term Loan Note or any other Financing Document or Term Loan
Document.
(E) The loss, release, sale, exchange, surrender or other
change in any Collateral.
(F) The extension of the time for payment of the
Indebtedness or any amounts that are due or may become due under the
Reimbursement Agreement, the Term Loan Note or any of the other
Financing Documents or Term Loan Documents or of the time for
performance of any other obligations, covenants or agreements under or
arising out of the Reimbursement Agreement, the Term Loan Note or any
other Financing Document or Term Loan Document or any extension or the
renewal of any thereof.
(G) The modification or amendment (whether material or
otherwise) of any obligation, covenant or agreement set forth in the
Reimbursement Agreement, the Term Loan Note or any other Financing
Document or Term Loan Document.
(H) The taking of, or the omission to take, any of the
actions referred to in the Reimbursement Agreement, the Term Loan Note
or any other Financing Document or Term Loan Document.
(I) Any failure, omission or delay on the part of the Bank
to enforce, assert or exercise any right, power or remedy conferred on
the Bank in the Reimbursement Agreement, the Term Loan Note or any
other Financing Document or Term Loan Document.
(J) The voluntary or involuntary liquidation, dissolution,
sale or other disposition of all or substantially all the assets,
marshalling of assets and liabilities, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition with creditors or readjustment of, or other
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similar proceedings affecting the Guarantor, the Applicant or the
Issuer or any of their assets, or any allegation or contest of the
validity of the Reimbursement Agreement, the Term Loan Note or any
other Financing Document or Term Loan Document.
(K) The default or failure of the Guarantor to fully
perform any obligations set forth in this Guaranty.
(L) Any event or action that would, in the absence of this
paragraph, result in the release or discharge of the Guarantor from the
performance or observance of any obligation, covenant or agreement
contained in this Guaranty.
(M) Any other circumstances which might otherwise
constitute a legal or equitable discharge or defense of a surety or a
guarantor.
Section 2.3 Waiver by Guarantor. The Guarantor hereby waives:
(A) Notice of acceptance of this Guaranty.
(B) Diligence, presentment and demand for payment of the
Bonds and/or the Indebtedness and/or any other obligation under the
Reimbursement Agreement, the Term Loan Note or any other Financing
Document or Term Loan Document.
(C) Protest and notice or protest, dishonor or default to
the Guarantor or to any other party with respect to the Bonds, the
Reimbursement Agreement, the Term Loan Note or any other Financing
Document or Term Loan Document.
(D) Any and all notice to which the Guarantor might
otherwise be entitled.
(E) Any demand for payment under this Guaranty, except as
expressly provided herein.
(F) Any and all defenses to payment including, without
limitation, any defenses and counterclaims of the Guarantor or the
Applicant based upon fraud, negligence or the failure of any condition
precedent or claims of offset or defenses involving the invalidity,
irregularity or unenforceability of all or any part of the liabilities
herein guaranteed or any defense otherwise available to the Guarantor
or the Applicant.
(G) Any and all rights of subrogation, reimbursement,
indemnity, exoneration, contribution or any other claim which the
Guarantor may now or hereafter have against the Applicant or any other
person directly or contingency liable for the Indebtedness guaranteed
hereunder, or against or with respect to the Applicant's property
(including,
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without limitation, property collateralizing the Bonds, the
Reimbursement Agreement and/or the Term Loan Note), arising from the
existence or performance of this Guaranty and whether or not such
claim, right or remedy arises in equity, under contract, by statute,
under common law or otherwise.
Section 2.4 Nature of Guaranty. This Guaranty is a guaranty of
payment and not of collections and the Guarantor hereby waives the right to
require that any action be brought first against the Applicant or any security,
or to require that resort be made to any security or to any balance of any
deposit account on credit on the books of the Bank in favor of the Applicant or
of any Guarantor.
Section 2.5 Continuation of Guaranty. The Guarantor further agrees
that the obligations hereunder shall continue to be effective or reinstated, as
the case may be, if at any time payment or any part thereof of the Indebtedness
is rescinded or must otherwise be restored by the Bank upon the bankruptcy or
reorganization of the Applicant, the Guarantor, the Issuer or otherwise.
Section 2.6 Subordination of Debt. The Guarantor hereby
subordinates any and all indebtedness of Applicant now or hereafter owed to
Guarantor to all Indebtedness of Applicant to Bank and agrees with Bank that
Guarantor shall not demand or accept any payment from Applicant after an Event
of Default, shall not claim any offset or other reduction of Guarantor's
obligations hereunder because of any such indebtedness and shall not take any
action to obtain any interest in any of the security described in and encumbered
by the Financing Documents and/or the Term Loan Documents; provided, however,
that, if Bank so requests, such indebtedness shall be collected, enforced and
received by Guarantor as trustee for Bank and paid over the Bank on account of
the indebtedness of Applicant to Bank, but without reducing or affecting in any
manner the liability of Guarantor under the other provisions of this Guaranty
except to the extent the principal amount of such outstanding indebtedness shall
have been reduced by such payment.
Section 2.7 Financial Information. Guarantor will advise Bank in
writing if Guarantor operates on other than a calendar year basis. The Guarantor
will provide audit level fiscal year end financial statements within 120 days of
the end of its fiscal year. Guarantor also agrees to deliver to Bank, from time
to time at the request of Bank, such other financial information with respect to
Guarantor as Bank may reasonably request.
Section 2.8 Transfer of Interest. Guarantor agrees not to make or
permit to be made, by a voluntary or involuntary means, any transfer of the
interest of Guarantor in the Applicant, without first obtaining the prior
written consent of Bank.
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ARTICLE 3
EVENTS OF DEFAULT
Section 3.1 Events of Default Defined. An "Event of Default" shall
exist if any of the following occurs:
(A) The Guarantor fails to perform or observe any payment
covenant contained herein.
(B) The Guarantor shall fail to perform any other covenant
contained herein, for thirty (30) days after the Bank has given written
notice of such failure to the Guarantor.
(C) Any warranty, representation or other statement by or
on behalf of the Guarantor contained in this Guaranty is false or
misleading in any material respect when made.
(D) A receiver, liquidator or trustee of the Guarantor or
any of its property is appointed by court order, or the Guarantor is
adjudicated bankrupt or insolvent or any of its property is sequestered
by court order and such order remains in effect for more than ninety
(90) days, or a petition is filed against the Guarantor under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution or liquidation law of any jurisdiction, whether now
or hereafter in effect, and is not dismissed within ninety (90) days of
such filing.
(E) The Guarantor files a petition in voluntary bankruptcy
or seeks relief under any provision of any reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation law of any
jurisdiction, whether now or hereafter in effect, or consents to the
filing of any petition against it under any such law.
(F) The Guarantor makes an assignment for the benefit of
creditors or admits in writing inability to pay debts generally as they
become due, or consents to the appointment of a receiver, trustee or
liquidator of all or any part of his or its property.
(G) The occurrence of an event of default under the
Reimbursement Agreement or any other Financing Document or Bank
Document.
Section 3.2 Remedies on Default. If an Event of Default exists,
Bank may proceed to enforce the provisions hereof and to exercise any other
rights, powers and remedies available to the Bank.
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Section 3.3 Waiver and Notice.
(A) No remedy herein conferred upon or reserved to the Bank
is intended to be exclusive of any other available remedy or remedies,
but each and every such remedy shall be cumulative and shall be in
addition to every other remedy given under this Guaranty now or
hereafter existing at law or in equity or by statute.
(B) No delay or omission to exercise any right or power
accruing upon the occurrence of any Event of Default shall impair any
such right or power or shall be construed to be a waiver thereof, but
any such right or power may be exercised from time to time and as often
as may be deemed expedient.
(C) In order to entitle the Bank to exercise any remedy
reserved to it in this Guaranty, it shall not be necessary to give any
notice, other than such notice as may be expressly required in this
Guaranty.
(D) No waiver, amendment, release or modification of this
Guaranty shall be established by conduct, custom or course of dealing.
ARTICLE 4
MISCELLANEOUS
Section 4.1 Governing Law. This Guaranty shall be governed by and
construed in accordance with the laws of the State of New York.
Section 4.2 Submission to Jurisdiction. The Guarantor hereby
irrevocably and unconditionally agrees that any suit, action or proceeding
arising out of or relating to this Guaranty may be brought in the state courts
of the State of New York or federal district court for Northern District of New
York and waives any right to object to jurisdiction within either of the
foregoing forums by Bank. Nothing contained herein shall prevent Bank from
bringing any suit, action or proceeding or exercising any rights against any
security and against any Guarantor personally, and against any property of any
Guarantor, within any other jurisdiction and the initiation of such suite,
action or proceeding or taking of such action in any such other jurisdiction
shall in no event constitute a waiver of the agreements contained herein with
respect to the laws of the State of New York governing the rights and
obligations of the parties hereto or the agreement of the Guarantor to submit to
personal jurisdiction within the State of New York.
Section 4.3 Waiver of Jury Trial. The Guarantor and Bank agree that
any suit, action or proceeding arising under or in connection with this Guaranty
shall be before a court without a jury.
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Section 4.4 Successors and Assigns. This Guaranty shall inure to
the benefit of and be binding upon the successors and assigns of each of the
parties hereto.
Section 4.5 Notices. Any notices required or permitted to be given
hereunder shall be (i) personally delivered or (ii) given by registered or
certified mail, postage prepaid, return receipt requested, or (iii) forwarded by
overnight courier service, in each instance addressed to the addresses set forth
at the head of this Guaranty, or such other addresses as the parties may for
themselves designate in writing as provided herein for the purpose of receiving
notices hereunder. All notices shall be in writing and shall be deemed given, in
the case of notice by personal delivery, upon actual delivery, and in the case
of appropriate mail or courier service, upon deposit with the U.S. Postal
Service or delivery to the courier service.
Section 4.6 Entire Agreement. This Guaranty, the Reimbursement
Agreement, the Term Loan Note, the other Financing Documents and the other Term
Loan Documents constitute the entire understanding between Applicant, the
Guarantor and the Bank and the extent that any writings not signed by the Bank
or oral statements of conversations at any time made or had are inconsistent
with the provisions of this Guaranty, the same shall be null and void.
Section 4.8 Amendments. No amendment, change, modification,
alteration or termination of this Guaranty shall be made except upon the written
consent of the Bank.
Section 4.9 Assignment. This Guaranty is assignable by Bank in
whole or in part in conjunction with an assignment of the Reimbursement
Agreement and/or the Term Loan Note and any assignment hereof or any transfer or
assignment of the Reimbursement Agreement and/or the Term Loan Note or portions
thereof shall operate to vest in any such assignee the rights and powers, in
whole or in part, as appropriate, herein conferred upon and granted to Bank.
Section 4.10 Partial Invalidity. The invalidity or unenforceability
of any one or more phrases, sentences, clauses or sections in this Guaranty
shall not affect the validity or enforceability of the remaining portions of the
Guaranty or any part thereof.
IN WITNESS WHEREOF, the Guarantor has executed this Guaranty as of the
day and year first above written.
XXXXXXXX INDUSTRIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxx,
Authorized Officer
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STATE OF NEW YORK )
) ss.:
COUNTY OF SARATOGA )
On this 9th day of October, 1997, before me personally came Xxxxxxx X.
Xxxxxxx, to me known, who being by me duly sworn, did depose and say that he
resides at 00000 Xxxxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxx; that he is a Exec Vice
President of Xxxxxxxx Industries, Inc., the corporation described in, and which
executed the above instrument; and that he signed his name thereto by order of
the board of directors of said corporation.
/s/ Xxxxx X. Xxxxxx
---------------------------------
NOTARY PUBLIC
Xxxxx X. Xxxxxx
Notary Public, State of New York
Qualified in Albany County
Commission Expires 10/31/97
01294\guaranty
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