Exhibit 10.5
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GUARANTY
GUARANTY AGREEMENT made May 30, 1997 by TOUCHSTONE APPLIED
SCIENCE ASSOCIATES, INC., a Delaware corporation with a principal
place of business at Fields Lane, Brewster, New York 10509 (the
"Guarantor"), in favor of PROGRAMS FOR EDUCATION, INC., a New
Jersey corporation with its principal place of business at Building
#6 Cane Farm, Rosemont, New Jersey (the "Corporation") and XXXXXXX
X. XXXXXXX ("Xxxxxxx"), an individual with an address at 000
Xxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxxxxx 00000 (Corporation and
Xxxxxxx collectively, "Seller").
W I T N E S S E T H:
WHEREAS, the Corporation is a party to an Asset Purchase
Agreement dated as of May 30, 1997 relating to the sale of
substantially all of the assets of the Corporation to Modern
Learning Press, Inc., a Delaware corporation ("Purchaser") (the
"Asset Purchase Agreement"); and
WHEREAS, it is a condition to the Asset Purchase Agreement
that Guarantor shall have executed and delivered to Seller this
Guaranty Agreement.
NOW, THEREFORE, in consideration of the premises and the
agreements herein and in order to induce Seller to execute the
Asset Purchase Agreement, Guarantor, hereby agrees with Seller as
follows:
Section 1. Incorporation of Agreements and Definitions. The
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premises set forth above are incorporated into this Guaranty
Agreement by this reference thereto and are made a part hereof.
All terms used in this Guaranty Agreement not otherwise defined
herein are used as defined in the Asset Purchase Agreement.
Section 2. Guaranty. Guarantor, hereby irrevocably,
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absolutely and unconditionally, guarantees the due and punctual
payment of all liabilities and obligations owing to Seller from the
Purchaser (all such obligations being hereinafter referred to as
the "Secured Obligations"), pursuant to the Asset Purchase
Agreement and the documents executed in connection therewith,
including the Note, Non-Competition Agreement, Consulting Agreement
and Royalty Agreement (collectively, the "Other Documents").
Section 3. Guarantor's Obligations Unconditional. The
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liability of the Guarantor hereunder shall be absolute and
unconditional. This Agreement is a continuing guaranty and shall
remain in full force and effect until the satisfaction in full of
the Secured Obligations and the payment of the other expenses to be
paid by Guarantor pursuant hereto; and shall continue to be
effective or shall be reinstated, as the case may be, if at any
time any payment of any of the Secured Obligations is rescinded or
must otherwise be returned by Seller upon the insolvency,
bankruptcy or reorganization of the Purchaser or otherwise, all as
though such payments have not been made.
Section 4. Guaranty Not Affected. Without limiting the
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generality of the prior paragraphs, the Guarantor hereby consents
and agrees that, at any time, and from time to time, without notice
to Guarantor:
(a) the time, manner, place and terms of payment of any
of the Secured Obligations may be renewed, extended or modified;
(b) any collateral, or any other guaranty, for any of
the Secured Obligations may be exchanged, released, surrendered or
otherwise disposed of;
(c) any action may be taken under or in respect of any
Other Document in the exercise of any remedy, power or privilege
therein contained or otherwise with respect thereto, or such
remedy, power or privilege may be waived, omitted, or not enforced;
(d) the time for performance by Purchaser or compliance
with any term, covenant or agreement on the part of Purchaser to be
performed or observed under any Other Document may be extended, or
such performance or compliance waived, or failure in or departure
from such performance or compliance consented to;
(e) any Other Document, or any term thereof, may be
amended or modified in any respect (including, without limitation,
with respect to interest rates); and
(f) the liability of Purchaser or any other guarantor to
pay any Secured Obligation may be settled or compromised;
Any or all of the foregoing may be done in such manner and
upon such terms as Seller determines, without notice to or further
assent from the Guarantor, and without affecting this Guaranty or
the obligations of the Guarantor hereunder, which shall continue in
full force and effect until the Secured Obligations and all
obligations of the Guarantor hereunder shall have been fully paid
and performed and the Seller has determined not to extend further
credit to Purchaser.
Section 5. Waivers. Except as specifically required by this
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Agreement, Guarantor hereby waives presentment, demand for payment,
protest and notice of any kind whatsoever with respect to the
Secured Obligations, including without limitation, notice of
acceptance of the guaranty, notice of default and any requirement
that Seller exhaust any right to take any action against the
Purchaser any other person including any other guarantor.
Section 6. Representations and Warranties. Guarantor hereby
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represents and warrants as follows:
(a) Guarantor is a corporation duly organized and
existing and in good standing under the laws of the State of
Delaware and is in the process of applying for qualification in the
Commonwealth of Pennsylvania and State of New Jersey. Guarantor
has full power and authority to carry out and perform undertakings
and obligations as provided herein. The execution and delivery by
Guarantor of this Guaranty and the consummation of the transactions
contemplated in this Guaranty have been duly authorized by all
proper or requisite corporate proceedings and will not conflict
with or breach any provision of any agreement to which Guarantor is
a party or by which it may be bound, the Articles of Incorporation
or By-Laws of Guarantor.
(b) The execution, delivery and performance by Guarantor
of this Guaranty Agreement do not and will not contravene any
contractual restriction or, any law binding on or effecting
Guarantor or any of its properties.
(c) No consent or approval is required for the due
execution, delivery and performance by Guarantor of this Guaranty
Agreement.
(d) This Guaranty Agreement is a legal, valid and
binding obligation of Guarantor, enforceable against Guarantor in
accordance with its terms, except as may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect affecting the enforcement of
creditor's rights generally and (ii) general principals of equity
(regardless of whether considered in a proceeding in equity or in
law).
(e) There is no action, suit or proceeding pending, or
to the best of Guarantor's knowledge, threatened against or
otherwise affecting Guarantor or any guarantor before any court or
any government body or any arbitrator which may materially
adversely affect Guarantor's or any guarantor's ability to perform
its obligations hereunder.
(f) All representations and warranties herein shall
survive the execution and delivery by Guarantor of this Guaranty
Agreement and any Other Document in connection with the Asset
Purchase Agreement to which it is a party and the closing of the
transaction described herein or therein or related thereto until
all Secured Obligations are paid in full.
Section 7. Covenants. So long as any of the Secured
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Obligations shall remain outstanding, Guarantor agrees:
(a) Promptly to pay and perform all of Guarantor's
obligations hereunder; and
(b) Promptly notify Seller of any material adverse
changes in the financial condition of Guarantor and Purchaser.
Section 8. Expenses. Guarantor will pay to Seller the amount
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of any and all reasonable costs and expenses, including the
reasonable fees and disbursements of his counsel, which Seller
incurs in connection with the enforcement of this Guaranty
Agreement.
Section 9. Modifications, Waivers, Extensions and Releases.
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No modification or amendment of or waiver with respect to any
provision of this Guaranty Agreement, shall in any event be
effective unless it shall be in writing and signed by the parties
hereto.
Section 10. Entire Agreement. This Guaranty Agreement and
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documents executed in connection therewith contains the entire
agreement and understanding between the Purchaser, Seller and
Guarantor and supersedes all prior agreements and understanding
related to the subject matter hereof.
Section 11. Remedies Cumulative. Each and every right
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granted to Seller or allowed by law or equity, shall be cumulative
and may be exercised from time to time. No failure on part of
Seller to exercise any right shall operate as a waiver thereof.
Section 12. Severability. Any provision of this Agreement
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that is prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining
provisions hereof.
Section 13. Notices. All notices and other communications
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shall be in writing, sent by facsimile or certified mail, return
receipt requested, postage prepaid, addressed as follows (or to
such other address as the recipient shall have previously notified
the sender of in writing):
If to Guarantor: Touchstone Applied Science Associates, Inc.
Att: Xx. Xxxxxx X. Xxxxx
Xxxxxx Xxxx
Xxxxxxxx, XX 00000
Fax: (000) 000-0000
with a copy to: Rider, Weiner, Xxxxxxx & Calhelha, P.C.
Att: Xxxxxxx Crush, Esq.
000 Xxxxxx Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
Fax: (000) 000-0000
If to Seller: Xxxxxxx X. Xxxxxxx
000 Xxxxxxxx Xxxx
Xxxxxxxxxxx, XX 00000
Fax: (000) 000-0000
with a copy to: Pluese, Lihotz, Xxxxxxxxxx & Leone
Att: Xxxxxx Xxxxx, Esq.
00 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Fax: (000) 000-0000
Any notice or communication hereunder shall be deemed to have been
given 3 business days after the day on which it is deposited in the
United States mails, or if sent by facsimile when sent with
evidence of successful transmission.
Section 14. Governing Law. This Guaranty Agreement and the
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rights of the parties hereto shall be construed and enforced in
accordance with the laws of the State of New Jersey.
Section 15. Waiver of Jury Trial. EXCEPT AS PROHIBITED BY
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STATUTE, GUARANTOR SHALL AND DOES HEREBY IRREVOCABLY WAIVE TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY XXXXXXX
AGAINST ANY GUARANTOR ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN
ANY WAY CONNECTED WITH THIS GUARANTY AGREEMENT, OR THE RELATIONSHIP
CREATED HEREBY AND WITH RESPECT TO ANY MATTER FOR WHICH A JURY
TRIAL CANNOT BE WAIVED, GUARANTOR AGREES NOT TO ASSERT ANY SUCH
CLAIM AS A COUNTERCLAIM IN OR MOVE TO CONSOLIDATE SAME WITH ANY
ACTION OR PROCEEDING IN WHICH A JURY TRIAL IS WAIVED.
Section 16. Binding Effect. This Agreement shall be binding
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upon and inure to the benefit of the parties hereto, their
successors and assigns.
IN WITNESS WHEREOF, Guarantor has caused this Guaranty
Agreement to be duly executed to be effective as of the date first
above written.
TOUCHSTONE APPLIED SCIENCE ASSOCIATES, INC.
By: /s/ XXXXXX X. XXXXX
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Xxxxxx X. Xxxxx, President
STATE OF NEW YORK )
) SS.:
COUNTY OF ORANGE )
On the 30th day of May, 1997, before me personally came Xxxxxx
X. Xxxxx, to me known, who, by me duly sworn, did depose and say
that deponent resides at 0000 Xxxxxxxxxxx Xxxx, Xxxxxxxx Xxxxxxx,
XX 00000 that deponent is the President of Touchstone Applied
Science Associates, Inc. the corporation described in, and which
executed the foregoing instrument by order of the board of
directors of the corporation; and that deponent signed deponent's
name by like order.
/s/ XXXXXXX CRUSH
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Notary Public
Xxxxxxx Crush
Notary Public, State of New York
No. 4892935
Qualified in Xxxxxx County
Commission Expires 4/13/99
