EXHIBIT 10.17
LIMITED GUARANTY
THIS GUARANTY is executed as of April 27, 1998 by American Pharmed Labs, Inc., a
Delaware corporation ("Guarantor"), for the benefit of IKB Nachrangkapital GmbH,
a company with limited liability organized under the laws of Germany ("Lender"),
with reference to the following facts:
A. Lender has agreed to lend up to Ten Million Deutsche Marks (DM
10,000,000) in two tranches (collectively, the "Loan") to Pharmed Labs GmbH, a
German company with limited liability, which is wholly owned by the Guarantor
("Borrower"). The Loan is evidenced by a letter of acceptance dated April 13,
1998 relating to Lender's letter dated March 31, 1998 offering to make the Loan
and setting forth the terms thereof (such two letters being, collectively, the
"Letter Agreement").
B. As a condition to the making of disbursements under the Loan, Lender
has required that Guarantor guarantee the obligations of Borrower in accordance
with the terms of this Guaranty.
NOW, THEREFORE, in consideration of Lender's agreement to make the Loan
and as an inducement to Lender to advance funds under the Letter Agreement and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, Guarantor covenants and agrees with Lender, for the
benefit of Lender, as follows:
ARTICLE 1 - AGREEMENTS
1.1 Guaranty. Guarantor hereby unconditionally and irrevocably guarantees
(a) the punctual payment when due of all amounts due or to become due (whether
at scheduled maturity or upon acceleration or demand or otherwise) under or with
respect to the Loan and the Letter Agreement (and all renewals, extensions,
modifications and rearrangements thereof); and (b) the full and faithful
performance of all of the terms, covenants, conditions and agreements contained
in the Letter Agreement (and all renewals, extensions, modifications and
rearrangements thereof) (collectively, the "Guaranteed Obligations"); provided,
however, that the total amount of Guaranteed Obligations recoverable under this
Guaranty shall be limited to Ten Million Deutsche Marks (DM 10,000,000) with
respect to the principal amount of the Loan, plus any and all amounts related to
unpaid interest and fees on or with respect to the Loan, and, as set forth more
fully in Section 3.1 below, any and all costs and expenses arising out of the
enforcement of the Loan, the Letter Agreement and this Guaranty. This is a
guaranty of payment and performance and not of collection only and the
obligations hereunder shall be absolute, independent and unconditional under any
and all circumstances. Lender need not inquire into the power of Borrower or the
authority of its officers, directors, representatives or agents acting or
purporting to act on its behalf.
1.2 Obligations Absolute. The obligations of Guarantor hereunder shall
remain in full force and effect without regard to, and shall not be affected or
impaired by
the following any of which may be taken without the consent of, or notice to,
Guarantor, nor shall any of the following give Guarantor any recourse or right
of action against Lender:
(a) Any express or implied amendment, modification, renewal,
addition, supplement, extension, rearrangement or acceleration of or to, or any
consent to departure from, the Loan or the Letter Agreement (including, without
limitation, extensions beyond the original term or any change in time, place or
manner of payment, or any increase in the amount of the loan);
(b) Any exercise or non-exercise by Lender of any right or privilege
under this Guaranty, the Loan or the Letter Agreement;
(c) Any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to
Guarantor or Borrower, or any guarantor (which term shall include any other
party at any time directly or contingently liable for any of the Borrower's
obligations under the Loan or the Letter Agreement) or any affiliate of
Borrower, or any action taken with respect to this Guaranty by any trustee,
conservator, custodian, Konkursvenwalter, or receiver, or by any court, in any
such proceeding, whether or not Guarantor shall have had notice or knowledge of
any of the foregoing;
(d) Any release or discharge of Borrower from its liability under
the Loan or the Letter Agreement or any release or discharge of any endorser or
guarantor or of any other party at any time directly or contingently liable for
the Guaranteed Obligations or any other obligations of the Borrower to the
Lender;
(e) Any assignment or other transfer of this Guaranty, the Loan or
the Letter Agreement in whole or in part;
(f) Any change in the ownership of Borrower or in the legal form in
which it is organized, and any change in or restructuring or termination of the
structure or existence of the Borrower;
(g) Any acceptance of partial performance of the Guaranteed
Obligations;
(h) Any taking, exchange, release or non-perfection of any
collateral for all or any of the Guaranteed Obligations or any other obligations
of the Borrower to the Lender;
(i) any manner of application of collateral, or proceeds thereof, to
all or any of the Guaranteed Obligations or any other obligations of the
Borrower to the Lender, or any manner of sale or other disposition of any
collateral for all or any of the Guaranteed Obligations or any other obligations
of the Borrower to the Lender or any other assets of the Borrower; or
2
(j) Any other circumstance (including without limitation, the
existence of or reliance on any representation by the Lender) which might
otherwise constitute a defense available to, or a discharge of, the Borrower or
a guarantor.
Without limiting the terms of clause (c) above and Section 1.6 below, and any
other provision of this Guaranty to the contrary notwithstanding, Guarantor
acknowledges and agrees that, subject to the limit set forth in Section 1.1,
Guarantor is obligated under this Guaranty to pay amounts that have not been
repaid to Lender under the Loan and the Letter Agreement even if (i) an
insolvency or bankruptcy proceeding has been initiated with respect to Borrower
and its assets and (ii) Borrower is not required to pay Lender some or all of
the amounts not repaid because Borrower's obligations to Lender under the Loan
and the Letter Agreement are subordinated pursuant to the Letter Agreement to
Borrower's obligations to other creditors.
1.3 Waivers. Guarantor unconditionally waives any defense to the
enforcement of this Guaranty, including, without limitation:
(a) All presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, and notices
of acceptance of this Guaranty;
(b) Any right to require Lender to proceed against Borrower or any
guarantor at any time, or to proceed against or exhaust any security held by
Lender at any time, or to pursue any other remedy whatsoever at any time;
(c) The defense of any statute of limitations affecting the
liability of Guarantor hereunder, the liability of Borrower or any guarantor
under the Loan or the Letter Agreement, or the enforcement hereof, to the extent
permitted by law;
(d) Any defense arising by reason of any provisions of law that
conflict with the terms of the Loan or the Letter Agreement, or any invalidity
or unenforceability of the Loan or the Letter Agreement or any provision
thereof, or any disability of Borrower or any guarantor or of any manner in
which Lender has exercised its rights and remedies under the Loan or the Letter
Agreement, or by any cessation from any cause whatsoever of the liability of
Borrower or any guarantor;
(e) Any defense based upon exhaustion of or an election of remedies
by Lender which destroys or otherwise impairs the subrogation rights of
Guarantor or the rights of Guarantor to proceed against Borrower or any
guarantor for reimbursement, or both;
(f) Any duty of Lender to advise Guarantor of any facts or
information known to Lender regarding the financial condition of Borrower and
all other facts and circumstances in any way affecting Borrower's ability to
perform its obligations to Lender, it being agreed that Guarantor assumes the
responsibility for being and keeping informed regarding such condition or any
such facts or circumstances; and
3
(g) Any rights of subrogation, reimbursement, exoneration,
contribution and indemnity, and any rights or claims of any kind or nature
against Borrower which arise out of or are caused by this Guaranty, and any
rights to enforce any remedy which Lender now has or may hereafter have against
Borrower, and any benefit of, and any right to participate in, any security now
or hereafter held by Lender.
1.4 Subrorration. Guarantor understands and acknowledges that the exercise
by Lender of certain rights and remedies may affect or eliminate Guarantor's
right of subrogation against Borrower or any guarantor and that Guarantor may
therefore incur partially or totally nonreimbursable liability hereunder.
Nevertheless, Guarantor hereby authorizes and empowers Lender, its successors,
endorsees and/or assigns, to exercise in its or their sole discretion, any
rights and remedies, or any combination thereof, which may then be available, it
being the purpose and intent of Guarantor that the obligations hereunder shall
be absolute, continuing, independent and unconditional under any and all
circumstances. Notwithstanding any other provision of this Guaranty to the
contrary, Guarantor hereby waives any claim or other rights which Guarantor may
now have or hereafter acquire against Borrower or any other guarantor of all or
any of the obligations of Guarantor hereunder that arise from the existence or
performance of Guarantors obligations under this Guaranty, the Loan or the
Letter Agreement, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification, any right to
participate in any claim or remedy of Lender against Borrower or any collateral
which Lender hereafter acquires, whether or not such claim, remedy or right
arises in equity or under contract, statute, regulation, common law or other
generally accepted source of law, by any payment made hereunder or otherwise,
including, without limitation, the right to take or receive from Borrower,
directly or indirectly, in cash or other property or by setoff or in any other
manner, payment or security on account of such claim or other rights.
1.5 Independent and Separate Obligations. The obligation of Guarantor
hereunder is independent of the obligation of Borrower or of any other guarantor
and, in the event of any default hereunder, a separate action or actions may be
brought and prosecuted against Guarantor whether or not Guarantor is the alter
ego of Borrower or against any other guarantor, and whether or not Borrower or
of any other guarantor is joined therein or a separate action or actions are
brought against Borrower or of any other guarantor. Lender's rights hereunder
shall not be exhausted until all of the Guaranteed Obligations, as limited in
amount by Section 1.1 hereof, have been fully paid and performed.
1.6 Bankruptcy No Discharge; Repayments. So long as any of the obligations
guaranteed hereunder shall be owing to Lender, Guarantor shall not, without the
prior written consent of Lender, commence or join with any other party in
commencing any bankruptcy, insolvency, reorganization or liquidation proceedings
of or against Borrower. Guarantor understands and acknowledges that by virtue of
this Guaranty, Guarantor has specifically assumed any and all risks of a
bankruptcy, reorganization, insolvency or liquidation case or proceeding with
respect to Borrower. As an example and not in any way of limitation, a
subsequent modification of the Loan, the Letter Agreement or the
4
Guaranteed Obligations in any bankruptcy, reorganization, insolvency,
liquidation or similar case or proceeding concerning Borrower shall not affect
the obligation of Guarantor to pay and perform the Guaranteed Obligations in
accordance with their respective original terms. If a claim is ever made upon
Lender for repayment of any amount or amounts received by Lender in payment of
the obligations under the Loan or the Letter Agreement or hereunder (whether or
not all or any part of such payment is subsequently invalidated, declared to be
fraudulent or preferential, set aside, or required to be repaid by Lender) and
Lender repays all or any part of said amount, then, notwithstanding any
revocation or termination of this Guaranty or the cancellation of the Loan or
the Letter Agreement, Guarantor shall be and remain liable to Lender for the
amount so repaid to the same extent as if such amount had never originally been
received by Lender.
1.7 Setoff. Lender shall have a right of setoff against, and Guarantor
hereby grants a security interest in, all moneys, securities and other property
of Guarantor now or hereafter in the possession of, or on deposit with Lender,
whether held in a general or special account or deposit, or for safekeeping or
otherwise. Such right is in addition to any right of setoff Lender may have by
law. All rights of setoff may be exercised without notice or demand to
Guarantor. No right of setoff shall be deemed to have been waived by any act or
conduct on the part of Lender, or by any neglect to exercise such right of
setoff, or by any delay in doing so. Every right of setoff shall continue in
full force and effect until specifically waived or released by an instrument in
writing executed by Lender.
1.8 Subordination. In the event any default or event which, upon the
giving of notice or the lapse of time or both, could become a default, shall
exist in the performance under the Loan or the Letter Agreement, any
indebtedness of Borrower now or hereafter held by Guarantor is hereby
subordinated to the obligations of Borrower under the Guaranteed Obligations. If
requested by Lender, such indebtedness shall be collected, enforced and received
by Guarantor as trustee for Lender and paid over to Lender on account of the
Loan and the Letter Agreement. However, no such payment shall reduce or affect
in any manner the absolute, unconditional and independent liability of Guarantor
hereunder, except to the extent such payment is applied against the Loan.
1.9 Payments. It is understood that the obligations of Borrower to Lender
may at any time and from time to time exceed the aggregate liability of
Guarantor hereunder without impairing this Guaranty. Guarantor shall not be
credited for payment of any of the Guaranteed Obligations hereunder unless such
payment is received by Lender in immediately available funds and is made by
Guarantor after a demand made by Lender pursuant to this Guaranty. Guarantor
agrees that whenever Guarantor shall make any payment to Lender hereunder on
account of the liability hereunder, Guarantor will deliver such payment to
Lender at the address provided in Paragraph 3.7 below and notify Lender in
writing that such payment is made under this Guaranty for such purpose. It is
understood that Lender, without impairing this Guaranty, may apply payments from
Borrower to the Guaranteed Obligations or to such other obligations owed by
Borrower to Lender, in such amounts and in such order as Lender in its complete
discretion
5
determines. No payment made hereunder by Guarantor to Lender shall constitute
Guarantor as a creditor of Lender.
1.10 Payments Free and Clear of Taxes, Etc. (a) Any and all payments made
by Guarantor hereunder shall be made free and clear of and without deduction for
any present or future taxes, levies, imposts, deductions, charges, or
withholdings, and all liabilities with respect thereto, excluding taxes imposed
on net income and all income and franchise taxes of Germany and any political
subdivisions thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "Taxes").
If Guarantor shall be required by law to deduct any Taxes from or in respect of
any sum payable hereunder, (i) the sum payable shall be increased as may be
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Paragraph 1.10) Lender receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) Guarantor shall make such deductions, and (iii) Guarantor shall pay
the full amount deducted to the relevant taxation authority or other authority
in accordance with applicable law.
(b) In addition, Guarantor agrees to pay any present or future stamp
or documentary taxes, or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Guaranty
(hereinafter referred to as "Other Taxes').
(c) Guarantor will indemnify Lender for the full amount of Taxes or
Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by
any jurisdiction on amounts payable under this Paragraph 1.10) paid by Lender
and any liability (including penalties, interest and expenses) arising therefrom
or with respect thereto, whether or not such Taxes or Other Taxes were correctly
or legally asserted. This indemnification shall be made within 30 days from the
date Lender makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, Guarantor
will furnish to Lender, at its address referred to in Paragraph 3.7, the
original or a certified copy of a receipt evidencing payment thereof. If no
Taxes are payable in respect of any payment, Guarantor will furnish to Lender a
certificate from each appropriate taxing authority, or an opinion of counsel
acceptable to Lender, in either case stating that such payment is exempt from or
not subject to Taxes.
1.11 Judgement. (a) If, for the purposes of obtaining judgment in any
court, it is necessary to convert a sum due hereunder in Deutsche Marks into
another currency, the parties hereto agree, to the fullest extent permitted by
law, that the rate of exchange used shall be that at which in accordance with
normal banking procedures Lender could purchase Deutsche Marks with such other
currency on the business day preceding that on which final judgment is given.
6
(b) The obligation of Guarantor in respect of any sum due from it to
the Lender hereunder shall, notwithstanding any judgment in a currency other
than Deutsche Marks, be discharged only to the extent that on the business day
following receipt by Lender of any sum adjudged to be so due in such other
currency Lender may in accordance with normal banking procedures purchase
Deutsche Marks with such other currency; if the Deutsche Marks so purchased are
less than the sum originally due to Lender in Deutsche Marks, Guarantor agrees,
as a separate obligation and notwithstanding any such judgment, to indemnify
Lender against such loss, and if the Deutsche Marks so purchased exceed the sum
originally due to Lender in Deutsche Marks, Lender agrees to remit to Guarantor
such excess.
ARTICLE 2 - REPRESENTATIONS AND WARRANTIES
Guarantor makes the following representations and warranties to
Lender, which shall be continuing representations and warranties until this
Guaranty expires in accordance with Paragraph 3.6 of this Guaranty:
2.1 Status of Guarantor. Guarantor is a corporation duly organized,
existing and in good standing under the laws of the State of Delaware authorized
to carry on the business being conducted by it, with the requisite corporate
power to own and operate its properties and assets.
2.2 Guaranty Authorized and Binding. The execution, delivery and
performance of this Guaranty are duly authorized and do not require the consent
or approval of any third party or any governmental body or other regulatory
authority and are not in contravention of, or in conflict with, any law or
regulation. This Guaranty is a valid and legally binding obligation of Guarantor
enforceable in accordance with its terms.
2.3 No Conflict. The execution and delivery of this Guaranty are not, and
the performance of this Guaranty will not be, in contravention of, or in
conflict with, the Guarantor's articles of incorporation or by-laws, or any
agreement, indenture or undertaking to which Guarantor is a party or by which
Guarantor is or may be bound or affected.
2.4 Litigation. There is no litigation or other proceeding pending or
threatened against, or affecting, Guarantor which, if determined adversely
against Guarantor, would have a materially adverse effect on the financial
condition, properties, businesses or operations of Guarantor, or which prevents
or interferes with (or would prevent or interfere with) or adversely affects (or
would adversely affect) Guarantor's entering into this Guaranty or the validity
of this Guaranty or the carrying out of the terms hereof Guarantor is not in
default with respect to any order, writ, injunction, decree or demand of any
court or other governmental or regulatory authority.
7
ARTICLE 3 - MISCELLANEOUS
3.1 Expenses. Guarantor agrees to pay all costs and expenses, including
reasonable attorneys' fees, which Lender is entitled to receive and collect from
Borrower under the Loan or the Letter Agreement and/or which may be incurred by
Lender in any effort to collect or enforce the Loan or the Letter Agreement or
the obligations of Guarantor hereunder, whether or not any lawsuit is filed,
including, without limitation, all expenses, costs and attorneys' fees incurred
by Lender in any bankruptcy, insolvency, reorganization, liquidation or similar
proceeding including, without limitation, any action for relief from the
automatic stay of any bankruptcy proceeding. Such amounts shall bear interest
until paid at the rate often percent (10%) per annum.
3.2 Amendments; Successors. Neither this Guaranty nor any term hereof may
be changed, waived, discharged or terminated orally, but only by an instrument
in writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. All of the terms of this Guaranty shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns. The term "Borrower" shall mean both the named Borrower
and any other person or entity at any time assuming or otherwise becoming
primarily liable for all or any part of the obligations set forth in the Loan or
the Letter Agreement. No delay or failure by Lender to exercise any remedy
against Borrower or Guarantor will be construed as a waiver of that right or
remedy. All remedies of Lender are cumulative. In the event that the provisions
of this Guaranty are claimed or held to be inconsistent with any other
instrument evidencing or securing the Loan or the obligations of Guarantor, the
terms of this Guaranty shall remain fully valid and effective. When the context
in which the words are used in this Guaranty indicates that such is the intent,
words in the singular number shall include the plural and vice versa. In the
event any term or provision of this Guaranty shall, for any reason, be held to
any extent to be invalid, void, illegal or unenforceable in any respect by a
court of competent jurisdiction, or in the event that the application of any
term or provision of this Guaranty to any person or circumstance shall, for any
reason, be held to any extent to be invalid, illegal, void or unenforceable in
any respect by a court of competent jurisdiction, such invalidity, illegality,
voidability or unenforceability shall not affect any other terms or provisions
of this Guaranty, and this Guaranty shall be construed and enforced as if such
invalid, void, illegal or unenforceable terms or provisions had never been a
part of this Guaranty. Guarantor shall not have the right to assign any of
Guarantor's rights or obligations under this Guaranty.
3.3 Governing Law. This Guaranty shall be governed by and construed in
accordance with the laws of the State of New Jersey.
3.4 Assignability by Lender. Lender may at any time and from time to time,
without notice to or consent of Guarantor, assign, conditionally or otherwise,
all or any of the rights of Lender under the Loan, the Letter Agreement and this
Guaranty to any affiliate of the Lender or of IKB Deutsche Industriebank,
whereupon such assignee shall succeed to all rights of lender hereunder to the
extent that such rights may be assigned to it. Lender, or each successor
assignee of Lender's rights may give written notice to
8
Guarantor of any such assignment, but any failure to give, or delay in giving
such notice shall not affect the validity or enforceability of any such
assignment. In addition, Lender may, with the consent of Guarantor, which
consent shall not be unreasonably withheld, transfer its rights under the Loan,
the Letter Agreement and this Guaranty to any other person or entity.
3.5 Demands. Any demand by Lender for performance or payment hereunder, if
made, shall be in writing and shall be made in the manner set forth in Paragraph
3.7 below. A dated statement signed by an officer of Lender setting forth the
amount of indebtedness at the time owing to Lender by Borrower under the Loan or
the Letter Agreement shall be conclusive evidence thereof as between Guarantor
and Lender in any legal proceedings against Guarantor in connection with this
Guaranty. Lender shall give Guarantor a thirty (30) day notice in the manner set
forth in Paragraph 3.7 below before Lender commences any action or proceeding
against Guarantor to enforce any of Lender's rights wider this Guaranty.
3.6 Term. The obligations of Guarantor under this Guaranty shall continue
in full force and effect until the earlier of: (a) the obligations under the
Loan or the Letter Agreement shall have been fully paid and performed, Lender is
under no further obligation to make funds available to Borrower, and the period
of time has expired during which any payment by Borrower or Guarantor to Lender
may be deemed to be a preferential payment under the United States Bankruptcy
Code or other similar applicable laws, whether foreign or domestic, or (b)
Guarantor has paid the maximum amount of the Guaranteed Obligations and other
amounts payable hereunder in accordance with the terms of this Guaranty and the
period of time has expired during which any payment made by Borrower or
Guarantor may be determined to be a preferential payment under the United States
Bankruptcy Code or other similar applicable laws whether foreign or domestic.
3.7 Notices. Al notices hereunder to the parties hereto shall be in
writing and sent (i) by certified or registered mail, return receipt requested,
postage prepaid, (ii) by air mail, postage prepaid, (iii) by DHL, Federal
Express, or other recognized international courier or express delivery services,
or (iv) by telegram or telecopier, addressed to the respective parties at the
following addresses:
To Guarantor: American Pharmed Labs, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxxx Xxxxxx, Xxx Xxxxxx
Attention: Xx. Xxxxxx X. Xxxxxxx
Telecopier:
9
With a copy to: Xxxxx X. Xxxxxx, esq.
Xxxxxx Plaza
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxx, Xxx Xxxxxx 00000
Telecopier: 000-000-0000
To Lender: IKB Nachrangkapital GmbH
Xxxxxxx-Xxxxxxx-Xxxxxx 0
00000 Xxxxxxxxxx
Xxxxxxx
Attention: Waiter Zickenrott
or
Postfach 101118
40002 Dusseldorf
Germany
Attention: Waiter Zickenrott
Telecopier: 00-000-0000-0000
With a copy to: IKB Xxxxxxxx Xxxxxxxxxxxxx
X.X. Xxx 000000
00000 Xxxxxxxxxx
Xxxxxxx
Attention: Xxxxxxx Xxxxxxxxxx
Telecopier: 00-000-0000-0000
With a copy to: Xxxxxx X. Xxxxxxxx, xx.
LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Any party, by written notice complying with the requirements of this Paragraph
3.7, may specify another or a different person or address for the purpose of
notification hereunder. All notices hereunder shall be deemed to have been given
and received on the next day following the sending of such telegram or telecopy,
on the second business day following or the sending of such notice via DHL,
Federal Express or other permitted courier or express delivery service, and, if
mailed, on the seventh business day following such mailing.
10
3.8 Complete Agreement. This Guaranty supersedes any prior negotiations,
discussions or communications between Guarantor and Lender with respect to the
Guaranteed Obligations and constitutes the entire agreement between Lender and
Guarantor with respect to the Guaranteed Obligations.
3.9 Counterparts. This Guaranty may be executed in one or more
counterparts, each of which taken together shall constitute one and the same
instrument.
3.10 Waiver; Jurisdiction. Guarantor hereby waives any right to trial by
jury. Guarantor hereby waives any right to make a counterclaim against Lender
except for any matter which constitutes an affirmative defense. The parties
hereto consent to the jurisdiction of the courts of the State of New Jersey and
to any federal courts located therein.
IN WITNESS WHEREOF, the undersigned has executed this Guaranty as of
the date first above written.
AMERICAN PHARMED LABS, INC.
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx
------------------------
Xx. Xxxxxx X. Xxxxxxx
Chairman
/s/ Xxxxx Xxxxxxx
------------------------
Xxxxx Xxxxxxx
EVP, Operations
/s/ Xxxxxx Xxxx
------------------------
Xxxxxx Xxxx
EVP, Administration
11
GENERAL CONDITIONS OF THE
IKB NACHRANGKAPITAL GMBH
1. The latest trade register excerpts for the recipient must be submitted to
the IKB Nachrangkapital GmbH (NA).
2. The recipient, of his own accord, must inform the INA of all facts
significant to the business relationship. In particular, he is obliged to
indicate changes of his name, his control and his address immediately and
in writing, to continuously submit his annual balance sheet with profit
and loss statement together with information regarding annual sales, to
give the required information and explanations, to make available all
documents required, upon request to allow access to the books and
inspection of the operation, with book review and inspection also possibly
being performed by a third party (expert or trustee). If preparation of
the closing of accounts is delayed, the recipient will initially submit
his preliminary figures to the INA In addition, he must supply the INA
with information deemed significant by the INA for the evaluation of the
current business, the actual economic situation and the future development
of the recipient until the total repayment of the participation.
3. Payments received will be offset against the claims due according to INA's
stipulations; Sections 366 and 367 BGB are not applicable.
4. The INA can demand participations back effective immediately for important
reasons, particularly
(1) if the recipient does not satisfactorily prove to the INA the proper
utilization of the funds or if mistakes are found in his information
or the documents submitted by him, on which the granting of the
participation is based;
(2) if the operation of the recipient is being disposed of, leased,
liquidated or shut down as a whole or to a large extent or if the
recipient eliminates parts of his company, particularly through the
establishment of new companies;
(3) if the existing property, participation, or partner situation has
changed for the recipient or one of the co-recipients;
(4) if the recipient is in arrears, completely or in part for longer
than 1 month with a payment due;
12
(5) if the recipient does not fulfill one of his obligations from Item 2
or other obligations resulting from the participation agreement or
an additional participation agreement after request by the INA
within a suitable time period.
5. Satisfaction of the INA through deposit is excluded. Claims against the
INA can only be offset by the recipient with liabilities in the same
currency and only insofar as his claims are uncontested or legally
determined.
6. For the business relationship between the recipient and the INA German law
is applicable. If the recipient is a full trader, not belonging to minor
traders, and if the disputed business relationship is attributed to the
operation of his trade, the INA can xxx this recipient at a court in the
jurisdiction of the INA or another authorized court; the same applies for
a legal entity of public law and for public separate property. The INA can
only be sued by this loan recipient at the court in its jurisdiction.
7. The above stipulations apply as supplement of separately reached
agreements.
--------------------------------------------------------------------------------
This document represents a true translation of the German original additions or
modification.
Xxxxxx Xxxxxxx
Translator - ATA No.211346 /s/ Xxxxxx Xxxxxxx
--------------------------------------------------------------------------------
13
EXCERPT OF THE "GENERAL REGULATIONS FOR
THE ACCEPTANCE OF GUARANTEES FOR
PARTICIPATION THROUGH THE KREDITANSTALT
FUR WIEDERAUFBAU"
1. UTILIZATION OF FUNDS
The funds maybe used only for the financing of the project for which the
participation was approved. The grantor must be immediately informed if the
investment project or its financing changes.
The recipient of the participation, of his own accord and immediately after the
finalization of the investments, must furnish proof to the grantor regarding the
utilization of the participation funds as well as the fulfillment of possible
conditions.
2. RESERVATION TO REDUCTION
The grantor is entitled to reduce the participation amount proportionately if
the extent of the overall expenditures estimated in the investment plan are
reduced. If the reduction concerns amounts already paid, the reduction amounts
must be immediately repaid to the grantor by the recipient.
3. SECURITY
In addition to the guarantee by KfW, The grantor, with the approval of KfW, is
entitled to request guarantees or comparable security furnished by the partners
of the recipient or his family members, for the correction of asset shifts or
limitation of liability from the company structure of the recipient.
4. INFORMATION DUTY
The recipient will immediately inform the KfW via the grantor of all significant
events in his company, particularly changes concerning
- the partner and participation situation as well as
- significant worsening of the economic situation.
The same applies for the acceptance of and disposal of participation to other
companies as well as for finalization, termination and modifications of partner
agreements, for the disposal of the recipient as a whole or of parts thereof.
5. RIGHT TO AUDIT
The KfW and the grantor reserve the right to audit business documents and books
of the recipient related to the participation and to be informed of the
financial situation of the
14
recipient. The KfW and the grantor are entitled to authorize a CPA to perform
their audit on the recipient at the expense of the recipient.
6. TERMINATION FOR IMPORTANT REASONS
The participation can be terminated for important reasons at any time for
immediate repayment, particularly if
(1) the recipient grossly violates his obligations resulting from the
participation agreement;
(2) the guarantee of KfW was obtained fraudulently;
(3) the conditions for the guarantee acceptance or granting of the
participation were not given or the funds from the participation were not
used for their intended purpose;
(4) the conditions of the guarantee acceptance resp. granting of the
participation have changed or are no longer applicable (e.g. through
disposal of the operation or a portion thereof of the recipient, change of
property or participation situation or the management of the recipient, so
that a continued operation of the business according to proper commercial
or technical principles no longer appears to be assured).
As far as the participation funds have not been paid or not yet been paid in
full, the grantor is released from his obligation to pay.
7. INFORMATION
The grantor is entitled to give unrestricted information to KfW and to grant
access to his documents.
15
