Exhibit 10.9(a)
AGREEMENT made this 30th day of May, 1997 by and between Horphag
Research Limited, having a registered office at 0 Xx Xxxxxxxx Xxxxxx,
Xx-Xxxxx Xxxx, Xxxxxxxx, Xxxxxxx Xxxxxxx ("Horphag") and Kaire International,
Inc. having its principal office at 000 Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx
("Kaire").
WHEREAS Kaire has caused to be organized Kaire Korea Ltd., a
corporation dedicated to distributing food supplement products in the
Republic of Korea according to Kaire's multi-level system; and
WHEREAS Kaire wishing to set up an office for Kaire Korea Ltd. ("Kaire
Korea") in Seoul and to begin distribution operations as rapidly as possible,
has requested a loan from Horphag; and
WHEREAS Horphag is willing to make such loan on the following terms and
conditions:.
NOW THEREFORE the parties hereto agree as follows:
1. Kaire hereby warrants and represents to Horphag:
a) Kaire is the legal and beneficial owner of all the
capital stock of Kaire Korea and any outstanding shares
of Kaire Korea are or will be upon issuance free and
clear of all liens and encumbrances.
b) The principal sales effort of Kaire Korea will be
devoted to Maritime Pine, a Kaire product containing
Pycnogenol-Registered Trademark-.
c) Kaire will use its best efforts to see that the
trademark Pycnogenol is registered in Korea as a food
supplement as promptly as possible and expects
this to be achieved by July 31, 1997. The bulk
Pycnogenol-Registered Trademark- necessary for
meeting the Korean quarantine requirements
will have been imported in time to permit sales of
products containing Pycnogenol-Registered Trademark-
by July 31, 1997.
d) Any of the thirty nutritional supplements to be
distributed by Kaire in Korea, including that containing
Pycnogenol-Registered Trademark-, will be sold to associates
who will pay Kaire Korea by bank wire in advance of receiving
any products.
2. In reliance of the forgoing representations and warranties
by Kaire, Horphag agrees to lend to Kaire International $500,000 on
the following terms and conditions:
a) Kaire will issue a demand promissory note in the form
attached hereto.
b) Kaire will issue a guarantee of the note in the form
attached hereto and its officers, Messrs. Mangeris and Xxxxxx
Xxxxxxxx, will issue personal guarantees in the form attached
hereto.
c) Promptly upon receipt of the funds from Horphag, Kaire will
transfer them to the Korea Exchange Bank to hold the funds
temporarily in a floating account with the following
instructions:
1) Upon instructions from Jac Hong Ahn or Xxxx
Xxx Song, attorneys-in-fact for Kaire International, Inc.,
(Company), please credit an amount equivalent to 444 million
Won to the share subscription account of Kaire Korea, Ltd.
opened at the Korea Exchange Bank, Naeja Branch, as a share
subscription payment against issuance to the Company of 88,000
shares of Kaire Korea, Ltd. at a price of 5,000 Won per share.
2
2) Any excess funds are to be credited to our account.
d) Kaire International will issue to Horphag or its assignees
an option to acquire 15% of the capital stock of Kaire Korea
at the par value thereof, which option can be exercised any
time up to 36 months from the date of issuance. Kaire Korea
will be given notice fifteen days in advance of any proposed
assignment by Horphag during which Kaire will have a right,
which it will not exercise unreasonably, to object to the
proposed transferee.
e) To secure the obligations of the Guarantor under such
Option Agreement, Guarantor shall deliver, or cause to be
delivered, to lender a Pledge Agreement constituting a pledge
on 15% of the outstanding shares of Kaire Korea and shall
execute and deliver to Lender such other documents as Lender
may reasonably require from Guarantor in order for Lender to
perfect a first priority security interest in such shares.
f) Kaire Korea will pay the principal of the note plus accrued
interest in installments of $25,000 payable on August 31,
1997, $125,000 payable on September 30, 1997, $175,000 payable
on October 31, 1997, and $175,000 payable on November 30,
1997. If any of these installments is not paid to Horphag
within three days of each of the above dates, Horphag or its
assignees will accrue an option to purchase an additional 2%
of the capital stock of Kaire Korea on the same terms. If the
entire promissory note is not repaid within six (6) months of
3
the date thereof Kaire will issue to Horphag or its assignees
an option to acquire the cumulative number of shares accrued
through the foregoing specified defaults and a further 5% of
capital stock of Kaire Korea on the same terms and conditions.
If the entire loan is not repaid within a period of seven (7)
months, then for each 30 day period in additional thereto that
it is outstanding, Kaire Korea will issue a further such
option on the same terms and conditions to Horphag or its
assignees for an additional 5% of Kaire Korea capital stock,
until such time as Horphag has an option on 3/4 of the capital
stock of Kaire Korea. If the loan continues to be outstanding
after such options granted to Horphag shall accumulate to 75%
of Kaire Korea's capital stock, then Kaire itself will issue
to Horphag or its assignees an option to acquire within a 36
month period 10% of the capital stock of Kaire International,
Inc. at the par value thereof; if such option cannot for any
reason be issued by Kaire, it will be issued by the personal
guarantors, Messrs. Mangeris and Xxxxxxxx, jointly and
severally with respect to shares of Kaire held by them.
3. On the closing date, which shall be June 1, 1997 or such
other date which is agreed upon by the parties, the parties will
perform the following actions:
a) Horphag will transfer to Kaire Korea the amount of $500,000
which Kaire Korea will transfer to the Korea Exchange Bank,
Naeja-Dong Branch in Seoul, Korea to be converted to Won and
placed in the Won Bank Account of Kaire Korea Ltd.
4
b) Kaire Korea Ltd., Kaire International, Inc. and Messrs. Mangeris
and Xxxxxxxx will deliver to Messrs. Fox & Xxxxx at 0 Xxxxxxxx,
Xxx Xxxx, Xxx Xxxx the documents specified in paragraph 2 above.
4. Messrs. Xxx & Xxxxx a law firm located in the Seyang Building at
000 Xxxxx-Xxxx Xxxxxxx-Xx, Xxxxx, Xxxxx will execute and deliver to Messrs.
Fox & Xxxxx an opinion stating as follows:
(i) Kaire Korea is duly organized and existing under the laws of
Korea and has no shareholder other than Kaire.
(ii) Neither the shares nor the assets of Kaire Korea are subject
to liens or encumbrances.
(iii) the options granted by Kaire relating to its shares in Kaire
Korea in accordance with this agreement, when duly executed
and delivered will be enforceable by Horphag in Korea in
accordance with their terms.
5. All invoices issued by Kaire Korea to its associates and all monies
paid for products sold by Kaire Korea to its associates or other persons will
be paid into a bank account duly identified and disclosed to Horphag subject
to the following restrictions:
a) Kaire Korea shall submit to Horphag by the tenth day of each
month hereunder a list of fixed and estimated variable expenses,
together with a list of revenues estimated for the following
month, which lists shall be verified by Kaire.
b) Funds received in the escrow account will be retained by Kaire
Korea up to the amount of its verified expenses;
5
the balance of funds in the account will be kept in escrow until
it can be remitted to Kaire International. Kaire International
will segregate the funds received from Kaire Korea until the
amounts due to Horphag have been paid in full.
c) Kaire will use its best efforts to repay the funds lent by
Horphag, together with interest thereon at the rate of 9.5%
annually, as soon as possible. In any event, Kaire obligates
itself to meet the payment schedule provided in the promissory
note.
6. This agreement is governed by the laws of the State of New York. Any
disagreement arising thereunder which cannot be settled amicably between the
parties will be submitted to arbitration in New York under the Commercial
Arbitration rules of the American Arbitration Association, whose decision
shall be binding on the parties, their successors and assignees and which may
be enforced by any court having jurisdiction over any party whom compliance
is sought thereby.
6
IN WITNESS WHEREOF the parties hereto have caused their duly authorized
officers to execute this agreement as of the 30th of May 1997.
KAIRE KOREA LTD. KAIRE INTERNATIONAL, INC.
By: By:
------------------------ ----------------------------
Xxxxxx X. Xxxxxxxx Xxxxxx X. Xxxxxxxx
HORPHAG RESEARCH LIMITED
By:
------------------------
Xxxx xx Xxxxxx
APPROVED AND AGREED TO
By:
------------------------
Xxxx X. Xxxxxxxx
By:
------------------------
Xxxxxx X. Xxxxxxxx
7
PLEDGE AGREEMENT
PLEDGE AGREEMENT dated as of May 30, 1997 between HORPHAG RESEARCH
LIMITED, having a registered office at 0 Xx Xxxxxxxx Xxxxxx, Xx. Xxxxx Port,
Guernsey, Channel Islands ("Horphag"), KAIRE INTERNATIONAL, INC., having
its principal office at 000 Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx (the
"Shareholder"), and KAIRE KOREA LTD., having its principal office in Seoul,
Korea LTD., having its principal office in Seoul, Korea (the "Company").
W I T N E S S E T H
WHEREAS, the Shareholder is the owner of all the issued and outstanding
shares of the Company;
WHEREAS, Horphag has agreed to make a loan to the Company in the amount
of US$500,000 pursuant to the terms and conditions of that certain Agreement
between the Shareholder and Horphag dated May 30, 1997 and the promissory
note of the Company delivered in connection therewith (the "Agreement");
WHEREAS, to secure the payment and performance of the Company under the
Agreement, the Shareholder has agreed pursuant to the terms of the Agreement
to grant an option to Horphag to purchase up to a certain percentage of
shares of the Company;
WHEREAS, Shareholder has agreed to pledge fifteen percent (15%) of the
Capital Stock of the Company (the "Shares") for the benefit of Horphag until
all amounts owing the Company under the Agreement (the "Payment Obligations")
are paid in full;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements hereinafter set forth, the parties hereto agree as follows:
SECTION 1. PLEDGE AND SECURITY INTERESTS. In order to secure the full and
punctual payment by the Company of the Payment Obligations in accordance with
the terms of the Agreement, and to secure the performance of obligations of
the Shareholder and the Company:
(A) Shareholder hereby assigns, transfers and pledges to Horphag, and
hereby grants to Horphag a security interest in the Shares, and the
certificates representing the Shares, and all of its rights and privileges
with respect to such Shares, except that the parties hereto acknowledge that
Shareholder's grant of such security interest in the Shares shall not be
interpreted to affect its right to vote such Shares or to receive dividends
or distributions.
(B) Shareholder hereby expressly and irrevocably instructs the Company
to register on this same date in the
Company's corporate stock ledger book, the existence of this pledge of the
Shares through the insertion in such book of the legend: "These shares have
been pledged in favor of Horphag Research Limited, pursuant to a Pledge
Agreement dated as of May 30, 1997, a copy of which is available at the
offices of the Company."
(C) Upon execution of this Agreement, Shareholder shall deliver to
Horphag all stock certificates representing the Shares. Such certificates
shall be in suitable form for transfer by delivery and shall be accompanied
by duly executed instruments of transfer or assignments in blank, all in a
form and substance satisfactory to Horphag.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER.
Shareholder represents and warrants as follows:
(A) It is the sole record and beneficial owner of the Shares. All of the
Shares are fully paid and non-assessable and subject to no options to sell or
purchase or any similar rights relating to the transfer thereof, other than
Horphag's rights under this Agreement. It shall not become a party to any
agreement which restricts in any manner any of the rights of any current or
future holder of the Shares, without the express prior written agreement of
Horphag.
(B) Upon the recording of the security interest in the Shares in
accordance with Section 1(B) of this Agreement, Horphag will have a valid and
perfected security interest in the Shares. No registration, recordation or
filing with any governmental body, agency or official is required in
connection with the execution or delivery of this Agreement, or necessary for
its validity or enforceability, or for the perfection or enforcement of
Horphag's security interest in its shares pledged hereunder.
SECTION 3. FINANCING STATEMENT. The Shareholder expressly authorizes
Horphag to file one or more financing statements in the United States or in
any applicable jurisdiction naming the Company as debtor and Horphag as
secured party and indicating or describing thereon the Shares and the
Shareholder hereby agrees to execute at the request of Horphag any such
statement or statements and all other documents as Horphag may from time to
time reasonably request for the continued perfection of its respective
security interest in the Shares. To the extent permitted by applicable law,
Shareholder hereby authorizes and empowers Horphag to execute on its behalf
any financing statement and other documents evidencing this Agreement.
2
SECTION 4. REMEDIES. If the Shareholder or the Company fails to comply with
the terms of the Agreement, and such non-compliance continues for thirty
(30) days, Horphag shall have all the rights and remedies with respect to the
Shares of a secured party under the Uniform Commercial Code (whether or not
said Code is in effect where such rights and remedies are asserted) in
addition to all other rights and remedies provided by law.
SECTION 5. TERMINATION. This Pledge Agreement shall terminate and the
security interest created hereby shall be released upon payment in full of
the Payment Obligations.
SECTION 6. NOTICES. Any notice, request, instruction or other documents to
be given hereunder by any party to any other party shall be in writing and
addressed to each party at the address provided herein and shall be valid
upon receipt.
SECTION 7. GOVERNING LAW. This Pledge Agreement shall be governed by and
construed in accordance with the law of New York.
SECTION 8. ENTIRE AGREEMENT. This Pledge Agreement contains the entire
agreement among the parties hereto with respect to the subject matter hereof
and supersedes all previous understandings and agreements whether oral or
written, among any of the parties hereto with respect to the subject matter.
SECTION 9. AMENDMENT AND WAIVER. This Pledge Agreement may be amended,
modified and supplemented only by written agreement of the parties signed by
their authorized representatives. The failure or refusal by any of the
parties to enforce any of the terms or conditions of this Pledge Agreement or
to exercise any right hereunder shall not be construed as a waiver or
relinquishment of such provision or right presently or in the future.
SECTION 10. THIRD PARTY RIGHTS. The provisions of this Pledge Agreement are
inserted for the sole benefit of the parties hereto and shall not inure to
the benefit of any other person (other than permitted assigns of the parties)
either as a third party beneficiary or otherwise.
SECTION 11. COUNTERPARTS AND HEADINGS. This Pledge Agreement may be
executed in two or more counterparts, each of which shall be deemed an
original and all of which together shall constitute one and the same
instrument. All headings in this Pledge Agreement are inserted for
convenience of reference only and shall not affect its meaning or
interpretation.
SECTION 12. SEVERABILITY. If and to the extent that any court of competent
jurisdiction holds any provision (or any part thereof) of this Pledge
Agreement to be invalid or unenforceable, such holding shall not in any way
affect the validity of this Pledge Agreement.
3
IN WITNESS WHEREOF, the parties hereto have caused this
Pledge Agreement to be executed by their respective duly
authorized officers as of the date first above written.
HORPHAG RESEARCH LIMITED KAIRE INTERNATIONAL, INC.
By: By:
---------------------- ------------------------
Name: Xxxx xx Xxxxxx Name: Xxxxxx X. Xxxxxxxx
Title: Attorney-in-fact Title: CEO
KAIRE KOREA LTD.
By:
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
4
EXHIBIT A
Stock Certificate number __, issued to Shareholder representing 15% of
the shares of the common stock of the company.
5
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT is made as of this 30th day of May, 1997, by
and between HORPHAG RESEARCH LIMITED, having a registered office at 0 Xx
Xxxxxxxx Xxxxxx, Xx-Xxxxx Xxxx, Xxxxxxxx, Xxxxxxx Xxxxxxx ("Horphag"), KAIRE
INTERNATIONAL, INC., having its principal office at 000 Xxxxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxx (the "Shareholder"), KAIRE KOREA, LTD., having its
principal office in Seoul, Korea (the "Company"), and XXXX X. XXXXXXXX and
XXXXXX X. XXXXXXXX, both with a business address at 000 Xxxxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxx (the "Guarantors").
WITNESSETH:
WHEREAS, the Shareholder is the owner of all the issued and outstanding
shares of the Company;
WHEREAS, Horphag has agreed to make a loan to the Company in the amount
of US$500,000 pursuant to the terms and conditions of that certain Agreement
between the Shareholder and Horphag dated May 30, 1997 and the promissory
note of the Company delivered in connection therewith (the "Agreement");
WHEREAS, the Agreement provides that the loan be repaid by the Company to
Horphag in certain installment payments (the "Installments") according to a
schedule provided therein (the "Payment Schedule");
WHEREAS, to secure the payment and performance of the Company under the
Agreement, the Shareholder has agreed pursuant to the terms of the Agreement
to grant an option to Horphag to purchase up to a certain percentage of
shares of the Company and the Shareholder;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements hereinafter set forth, the parties hereto agree as follows:
1. Grant of Option. The Shareholder hereby grants to Horphag the option
to purchase fifteen percent (15%) of the capital stock of the Company (the
"Company Shares") at a price of 5,000 Won per share, subject to the terms and
conditions of this Agreement (the "Initial Option").
2. Additional Options. (a) If the Company fails to pay any Installment
within three days of its respective due date according to the Payment
Schedule, Horphag will automatically accrue an option to purchase an
additional two percent of the Company Shares on the same terms as the Initial
Option.
(b) In addition to the options issued pursuant to Section 2(a), in the
event that the entire amount due under the Agreement is not repaid within six
(6) months from the date hereof, Horphag will automatically accrue an option
to purchase an additional five percent (5%) of the Company Shares on the same
terms and conditions as the Initial Option.
(c) In addition to the options issued pursuant to Section 2(a) and (b), in
the event the entire amount due under the Agreement is not repaid within
seven (7) months from the date hereof, then for each additional thirty (30)
day period for which any amount under the Agreement remains outstanding, the
Shareholder will issue an option to Horphag to purchase an additional five
(5%) of the Company Shares on the same terms and conditions as the Initial
Option, until such time as Horphag holds options to purchase a total of
seventy-five percent (75%) of all the issued and outstanding Company Shares.
(d) Any and all options issued by the Company to Horphag to purchase
Company Shares, including the Initial Option shall hereinafter be referred to
as the ("Company Option").
(e) In the event Horphag holds options to purchase seventy-five percent
(75%) of the Company Shares and the loan continues to be outstanding and
unpaid, then after thirty (30) days Shareholder shall issue to Horphag or to
its designated assignee, an option to subscribe to the number of shares of
its common stock which would constitute ten percent (10%) of the issued
outstanding shares of its capital stock (the "Kaire Shares" and together with
the Company Shares, the "Shares") for a purchase price per share equal to the
par value of such shares (the "Kaire Option" and together with the Company
Option, the "Options"). If the Shareholder is unable to issue the Kaire
Option for any reason whatsoever, an option with the same terms and
conditions as are described in this Section 2(d) shall be issued to Horphag
by the Guarantors.
3. Term. The term of the Options shall be for a period of three (3) years,
beginning on the date hereof and ending midnight on May 30, 2000, unless
terminated pursuant to the provisions of this Agreement (the "Term").
Notwithstanding any other provision of this Agreement, the Options may not be
exercised by any person or entity after the expiration of said term.
4. Exercise of Options. Subject to the provisions of this Agreement,
Horphag may exercise the Options at any time and from time to time during
the Term. Horphag may, in its sole discretion exercise the Options for all of
the relevant Shares or a portion thereof.
Horphag shall in no event be under any obligation whatsoever or at any
time to exercise either or both of the Options provided
2
for hereunder, in whole or in part, and Horphag specifically
disclaims any expression regarding its intention to exercise, or
not to exercise, the Options.
5. Method of Exercise. (a) The Options may be exercised
only by delivery to Shareholder or the Guarantor, as the case may
be, of a completed Option Exercise Form, to be substantially in
the form attached hereto as Exhibit A (the ""Option Exercise
Form"). Such delivery shall be accompanied by payment in cash or
cash equivalent of the full price of the Shares being purchased.
(b) Each certificate representing the Shares for which
either of the Options is exercised shall from the date hereof
contain a legend referring to any restrictions on full rights of
ownership or disposition imposed by law and any restrictions
imposed by this Agreement.
6. Rights Prior to Exercise. Horphag shall have no rights
or privileges as a shareholder of either the Company or the
Shareholder or have any voting, dividend or liquidation or
dissolution rights with request to the Shares, unless and until
the Options have been exercised, in whole or in part, by delivery
of the completed Option Exercise Form and payment of the full
Option Price for the Shares being purchased.
7. Deposit in Escrow. Concurrently with the execution of
this Agreement, Shareholder and the Company shall execute and
deliver a Pledge Agreement with regards to the Company Shares
subject to the Initial Option.
8. Severability. If and to the extent that any court of
competent jurisdiction holds any provision (or any part thereof)
of this Stock Option to be invalid or unenforceable, such holding
shall not in any way affect the validity of this Stock Option.
9. Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective
successors and assigns provided however, that Horphag may not
assign this Agreement without the prior written consent of
Shareholder. Horphag shall provide the Company with fifteen (15)
days notice of its intention to assign its rights under this
Agreement. The Shareholder shall have the right to reasonably
object to any such assignment. If Shareholder fails to object it
shall be deemed to have consented to such assignment. Any
purported assignment of this Agreement without compliance with
this section shall be void.
3
10. Notices. Any notices required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been duly given or
delivered when delivered personally or when mailed by registered or certified
mail, return receipt requested, with the first class postage prepaid to the
parties at the addresses provided herein.
11. Waiver of Breach. The failure of any party to insist, in any one or
more instances, upon the performance of any of the terms or conditions of
this Agreement shall not be construed as a waiver or a relinquishment of any
right granted hereunder, including but not limited to the right to insist
upon future performance of any such term, covenant or condition.
12. Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of New York.
13. Entire Agreement and Amendment. This Agreement represents the entire
understanding of the parties with respect to the subject matter hereof and
supersedes all prior understandings, written or oral, with respect thereto.
This Agreement may only be modified or amended by a writing signed by the
party against whom enforcement is sought and no oral waiver, modification or
amendment shall be effective.
4
IN WITNESS WHEREOF, each of the parties hereto if individuals, have duly
executed, and if otherwise, have caused their respective duly authorized
officer to execute, this Stock Option Agreement as of the day and year first
above written.
---------------------------- -----------------------------
Xxxx X. Xxxxxxxx Xxxxxx X. Xxxxxxxx
HORPHAG RESEARCH LIMITED KAIRE INTERNATIONAL INC.
By:------------------------ By:--------------------------
Name: Xxxx xx Xxxxxx Name: Xxxxxx X. Xxxxxxxx
Title: Attorney-in-fact Title: CEO
KAIRE KOREA LTD.
By:-------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
5
EXHIBIT A to
STOCK OPTION AGREEMENT
OPTION EXERCISE FORM
(To be executed upon exercise of Options)
The undersigned hereby irrevocably elects to exercise the right,
as granted by the Stock Option Agreement by and betweeen Kaire International,
Inc. (the "Shareholder"), Kaire Korea Ltd. (the "Company"), Xxxx X. Xxxxxxxx,
Xxxxxx X. Xxxxxxxx, and the undersigned, dated as of May 30, 1997 (the "Stock
Option Agreement"), to purchase _____ Shares of the common stock, par value
[$_____] per share (the "Shares") of [the Shareholder/the Company] and
herewith tenders payment for such Shares to the order of the Shareholders in
the amount of specified in the Stock Option Agreement and in accordance with
the terms thereof. The undersigned requests that a certificate be issued in
the name of the undersigned, whose address is ____________________ and that
such certificate be delivered to ___________________ whose address is
____________________________________________________. If said number of
Shares is less than all of the Shares purchasable hereunder, the undersigned
hereby reserves the right to purchase the remaining balance of the Shares in
accordance with the Stock Option Agreement.
IN WITNESS WHEREOF, the undersigned has signed this Option
Exercise Form as of the ___ day of __________, _____.
HORPHAG RESEARCH LIMITED
By:
------------------------------------
6
GUARANTY
1. FOR VALUE RECEIVED, and in consideration of any loan, credit, draft, or
other financial accommodation now or hereafter at any time made or given to
KAIRE INTERNATIONAL, INC. ("Borrower") by HORPHAG RESEARCH LIMITED
("Lender"), the undersigned (hereinafter "Guarantors") hereby jointly and
severally, absolutely and unconditionally guarantee on demand, in lawful
money of the United States the prompt and complete payment, whether at
maturity, by acceleration, demand, or otherwise, and at any and all times
thereafter, of all indebtedness and other obligations of every kind and
nature from Borrower to Lender, direct or indirect, absolute or contingent,
due or to become due, now or hereafter existing, including, but not limited
to, any amounts now or hereafter owing under that certain Agreement dated
May 30, 1997 between Lender and Borrower and the promissory note delivered
in connection therewith; and in addition, Guarantors agree to pay all
reasonable costs and expenses (including, but not limited to, court costs and
reasonable attorneys' fees) paid or incurred by the Lender in endeavoring to
collect or enforce performance of any of such obligations, or in enforcing
this Guaranty.
2. Guarantors' obligations hereunder shall be unconditional and absolute,
as principal debtors and co-obligors, and without limiting the generality of
the foregoing, shall not be released, discharged or otherwise affected by any
extension, renewal, settlement, compromise or waiver in respect of any
obligation or liability of Borrower; any modification or amendment of or
supplement to any agreement of Borrower with regard to any obligation or
liability of Borrower; any release, exchange, non-perfection or invalidity of
any direct or indirect security for any obligation or liability of Borrower;
any change in the corporate structure or ownership of Borrower, or any
insolvency, bankruptcy, reorganization or other similar proceeding affecting
Borrower or Borrower's assets; the exsitence of any claim, set-off or other
rights which the Guarnators may have at any time against Borrower, Lender or
any other corporation or person; any invalidity or unenforceability for any
reason of any agreement by Borrower relating to any obligation or liability
of Borrower or any provision of applicable law or regulation purporting to
prohibit payment by Borrower of any principal, interest or other amount
payable in regard to any obligation or liability of Borrower; or any other
act or omission to act or delay of any kind by Borrower, Lender or any other
corporation or person or any other circumstance whatsoever which might but
for the provisions of this paragraph, constitute a legal or equitable
discharge of Guarantor's obligations hereunder.
3. The obligations of Guarantors hereunder are independent of any security
for or other guaranty of the indebtedness hereby guaranteed, whether executed
by the Guarantors or by any other party, and the liability of the Guarantors
is not affected by (a) any other continuing or other guaranty, undertaking or
liability of the undersigned or of any other party as to the indebtedness of
the Borrower, or (b) any payment on, or in reduction of, any such other
guaranty or undertaking; and a separate action or actions may be brought and
prosecuted against any of the Guarantors whether any action is brought
against the Borrower or whether the Borrower be joined in any such action or
actions. The Guarantors waive the benefit of any statute of limitations
affecting their liability hereunder.
4. The Guarantors hereby waive all requirements as to due diligence,
presentment, demand of payment, protest and notice of any kind with respect
to this Guaranty. If acceleration of the time for payment of any amount
payable by Borrower to Lender is stayed upon the insolvency, bankruptcy or
reorganization of Borrower, such amount otherwise subject to acceleration
shall nonetheless be payable by Guarantors hereunder on Lender's demand.
5. This Guaranty shall be binding upon the Guarantors and their heirs,
successors and personal representatives and shall inure to the benefit of the
Lender and its successors and assigns.
6. No modification or waiver of any of the provisions of this Guaranty shall
be effective unless in writing and signed by the Guarantors and an officer of
the Lender.
8. This Guaranty shall be governed by and construed in accordance with the
laws of the State of New York without regard to its conflict of laws.
Wherever possible, each provision of this Guaranty shall be interpreted in a
manner as to be effective and valid under applicable law, but if any
provision of this Guaranty shall be prohibited by or invalid under such law,
such provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Guaranty.
9. THE PARTIES ACKNOWLEDGE AND AGREE THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS GUARANTY OR THE RELATIONSHIP ESTABLISHED HEREBY WOULD BE BASED
UPON DIFFICULT AND COMPLEX ISSUES. ACCORDINGLY, IN AN EFFORT TO EXPEDITE THE
RESOLUTION OF ANY SUCH CONTROVERSY AND AVOID ADDITIONAL EXPENSE AND DELAY,
THE PARTIES AGREE THAT ANY LAWSUIT ARISING OUT OF ANY SUCH CONTROVERSY IN ANY
JURISDICTION SHALL BE RESOLVED BY A JUDGE SITTING WITHOUT A JURY.
IN WITNESS WHEREOF, the Guarantors have executed this Guaranty on the 30th
day of May, 1997.
----------------------------- ------------------------------
Xxxx X. Xxxxxxxx Xxxxxx X. Xxxxxxxx
STATE OF COLORADO )
)ss.:
COUNTY OF )
The foregoing instrument was acknowledged before me this ____ day of
May, 1997, by Xxxx X. Xxxxxxxx. Wintess my hand and official seal.
-----------------------------
Title of Officer
My commission expires:
-------------------------
STATE OF COLORADO )
) ss.:
COUNTY OF )
The foregoing instrument was acknowledged before me this ____ day of
May, 1997, by Xxxxxx X. Xxxxxxxx. Witness my hand and official seal.
-----------------------------
Title of Officer
My commission expires:
-------------------------
