Exhibit 2
GUARANTY
GUARANTY, dated as of February 10, 2004, made by Vitalstate Canada Ltd., a
Canadian corporation, and Vitalstate US, Inc., a Florida corporation, (each a
"Guarantor" and collectively the "Guarantors"), in favor of Scepter Holdings
Inc. ("Scepter")
W I T N E S S E T H:
WHEREAS, pursuant to a Loan Agreement (the "Loan Agreement"), of even date
herewith, Scepter has agreed to loan up to $2,000,000 to Vitalstate, Inc. (the
"Borrower");
WHEREAS, the Guarantors are subsidiaries of the Borrower; and
WHEREAS, pursuant to Section 3.3 of the Loan Agreement, the Guarantors are
required to execute and deliver this Guaranty in favor of Scepter.
NOW, THEREFORE, in order for Scepter to enter into the Loan Agreement and
to make the loans contemplated thereby and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the Guarantors, the Guarantors hereby agree on a joint and several basis with
Scepter as follows:
1. Definitions. As used in this Guaranty, the following terms shall
have the following meanings:
"Bankruptcy Code" means the U.S. federal bankruptcy code or any similar
statute (whether under the laws of Canada or any province thereof or
otherwise), as the same shall be in effect at the time.
"Borrower" has the meaning set forth in the first WHEREAS clause.
"Guarantor" and "Guarantors" have the meanings set forth in the
preamble to this Guaranty.
"Loan Agreement" has the meaning set forth in the first WHEREAS clause.
"Notes" has the meaning assigned to such term in the Loan Agreement.
"Obligations" means (i) all of the obligations of the Borrower to
Scepter pursuant to the Loan Agreement and the Notes executed and delivered
by the Borrower to Scepter pursuant to the Loan Agreement (and any and all
restatements, extensions, renewals, refinancings, refundings and/or
substitutions thereof), whether for the payment of principal, interest,
fees, expenses or otherwise, and whether arising by operation of law or
otherwise, and (ii) any and all indebtedness, liabilities and obligations
of the Borrower under the Loan Agreement, including, without limitation,
Section 7 thereof, and (iii) all
costs and expenses (including costs and expenses of counsel) paid or
incurred by Scepter in connection with the collection of the amounts
referred to in clauses (i) and (ii) above.
2. Guaranty. The Guarantors, on a joint and several basis, hereby
unconditionally, absolutely and irrevocably guarantee the punctual, full and
prompt payment when due, and the performance of, the Obligations. This Guaranty
is an absolute guaranty of payment and performance, and not a guaranty of
collection.
3. Guaranty Absolute. The Guarantors guarantee that the Obligations
guaranteed hereunder will be paid strictly in accordance with the terms thereof,
regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of Scepter with respect
thereto, and if any of the Obligations are not satisfied when due, the
Guarantors will, upon request of Scepter, forthwith satisfy such Obligations on
a joint and several basis, or if Scepter shall request payment of all of the
Obligations, the Guarantors will forthwith satisfy all of the Obligations on a
joint and several basis. No such satisfaction shall discharge the liability of
the Guarantors until all Obligations shall have been satisfied in full. The
liability of the Guarantors under this Guaranty shall be absolute and
unconditional irrespective of:
(i) any lack of validity or enforceability of the Obligations or
any avoidance or subordination of any of the Obligations or any other
obligation under any agreement or instrument pertaining to any or all of
the Obligations;
(ii) any change in the time, manner or place of payment of, or in
any other term of, or any increase in the amount of, all or any of the
Obligations, or any other amendment or waiver of any term of, or any
consent to departure from any requirement of, any or all of the
Obligations;
(iii) the release of the Borrower from, or any release or
amendment or waiver of any term of any other guaranty of, or any consent to
departure from any requirement of any other guaranty of, all or any of the
Obligations;
(iv) the absence of any attempt to collect any of the Obligations
from the Borrower or, any other action to enforce the same, or the election
of any remedy by Scepter;
(v) any waiver, consent, extension, forbearance or granting of any
indulgence by Scepter with respect to any provision of any of the
Obligations;
(vi) the disallowance under any Bankruptcy Code of all or any
portion of the claims of Scepter for repayment of any of the Obligations;
or
(vii) any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a borrower or guarantor.
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4. Waiver.
(a) The Guarantors hereby waive (i) promptness, diligence, notice of
acceptance and any and all other notices with respect to any of the Obligations
or this Guaranty, (ii) any requirement that Scepter protect, secure, perfect or
insure any security interest in or other lien on any property subject thereto or
exhaust any right or take any action against the Borrower or any other person,
(iii) the filing of any claim with a court in the event of receivership or
bankruptcy of the Borrower or of either Guarantor, (iv) protest or notice with
respect to nonpayment of any or all of the Obligations, (v) the benefit of any
statute of limitations, and (vi) all demands whatsoever (and any requirement
that the same be made on the Borrower or the Guarantors as a condition precedent
to the Guarantors' obligations hereunder).
(b) If, in the exercise of any of its rights and remedies, Scepter
shall forfeit any of its rights or remedies, including, without limitations, its
right to enter a deficiency judgment against the Borrower or any other person,
whether because of any applicable law pertaining to "election of remedies" or
the like, the Guarantors hereby consent to such action by Scepter and waives any
claim based upon such action.
(c) The Guarantors agree that, notwithstanding the foregoing and
without limiting the generality of the foregoing, if Scepter is prevented by
applicable law from exercising its right to demand payment of the Obligations,
to collect interest on the Obligations or to enforce or exercise any other right
or remedy with respect to the Obligations, the Guarantors agree to pay to
Scepter, upon demand therefor, the full amount of the Obligations that would
otherwise have been due and payable had such rights and remedies been permitted
to have been exercised by Scepter.
(d) The Guarantors hereby assume responsibility for keeping
themselves informed of the financial condition of the Borrower and of all or any
part of the Obligations, and of all other circumstances bearing upon the risk of
nonpayment of such Obligations or any part thereof. The Guarantors hereby agree
that Scepter shall have no duty to advise either Guarantors of information known
to them regarding such condition or any such circumstance. In the event that
Scepter, in its sole discretion, undertakes, at any time or from time to time,
to provide any such information to the Guarantors, it shall be under no
obligation to make any other or future disclosures of such information or any
other information to the Guarantors.
(e) The Guarantors consent and agree that Scepter shall be under no
obligation to marshal any assets in favor of the Guarantors or otherwise in
connection with obtaining payment of any or all of the Obligations guaranteed
hereunder from any person or source.
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5. No Subrogation. Each Guarantor irrevocably waives any right which it
may have or acquire by way of subrogation, contribution or reimbursement against
the Borrower by reason of this Guaranty until all of the Obligations to be paid
by such Guarantor pursuant hereto shall have been indefeasibly satisfied in
full.
6. Representations and Warranties. Each Guarantor hereby represents and
warrants to Scepter, which representations and warranties shall survive the
execution and delivery of this Guaranty, as follows:
(a) The Guarantor is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of incorporation and has
the legal and corporate power and authority to conduct all of the activities
conducted by it and to own or lease all of the assets owned or leased by it.
(b) The Guarantor has the requisite power to execute and deliver
this Guaranty and to perform its obligations hereunder. The execution, delivery
and performance of this Guaranty have been duly authorized by all necessary
corporate action on the part of the Guarantor. The Guarantor is not in default
under any judgment, order or decree of any court or governmental instrumentality
or under any agreement, instrument or other undertaking in any respect that
could be expected to have a material adverse effect on the Guarantor's business,
operations, assets, results of operations or financial condition or otherwise
effect the Guarantor's ability to pay and perform this Guaranty in accordance
with its terms.
(c) The execution, delivery and performance of this Guaranty (i)
will not violate any law or regulation or any judgment, order or decree of any
court or governmental instrumentality, (ii) will not conflict with or result in
the breach of, or constitute a default under, the Guarantor's certificate of
incorporation or by-laws, or any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or arrangement
to which the Guarantor is a party, and (iii) does not require the consent or
approval of any governmental body, agency or agency or any other person or
entity. This Guaranty has been duly executed and delivered by the Guarantor and
constitutes a valid and binding obligation of the Guarantor, enforceable against
the Guarantor in accordance with its terms.
7. Amendments, etc. No amendment or waiver of any provision of this
Guaranty nor consent to any departure by Scepter herefrom shall in any event be
effective unless the same shall be in writing and signed by Scepter and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
8. No Waiver; Remedies.
(a) No failure on the part of Scepter to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law and by
any agreement or instrument relating to any or all of the Obligations.
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(b) Failure by Scepter at any time or times hereafter to require
strict performance by the Borrower or the Guarantors or any other person of any
of the provisions of the Obligations shall not waive, affect or diminish any
right of Scepter at any time or times hereafter to demand strict performance
thereof, and such right shall not be deemed to have been modified or waived by
any such act or knowledge of Scepter.
(c) No waiver by Scepter of any default shall operate as a waiver of
any other default or the same default on a future occasion, and no action by
them permitted hereunder shall in any way affect or impair any of its rights or
the obligations of the Guarantors under this Guaranty. Any determination by a
court of competent jurisdiction or an arbitrator or a mediator appointed in the
manner set forth in the Loan Agreement or the Notes of the amount of any
principal and/or interest or other amount constituting any of the Obligations
shall be conclusive and binding upon each Guarantor, irrespective of whether
such Guarantor was a party to the suit or action in which such determination was
made.
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9. Continuing Guaranty; Transfer of Obligations. This Guaranty is a
continuing guaranty and shall (i) remain in full force and effect until
indefeasible payment in full of the Obligations guaranteed hereunder and the
fulfillment of all other obligations under this Guaranty, (ii) be binding upon
each Guarantor, its successors and assigns, and (iii) inure to the benefit of,
and be enforceable by, Scepter and its transferees and assignees. Without
limiting the generality of the foregoing clause (iii), Scepter may assign or
otherwise transfer any of the Obligations to any other person or entity, and
such other person or entity shall thereupon become vested with all the rights in
respect thereof granted to them under the Guaranty or otherwise with respect to
such of the Obligations so transferred or assigned.
10. Reinstatement. This Guaranty shall remain in full force and effect
and continue to be effective should any petition be filed by or against the
Borrower for liquidation or reorganization, should the Borrower become insolvent
or make an assignment for the benefit of creditors or should a receiver or
trustee be appointed for all or any significant part of the Borrower's assets,
and shall, to the fullest extent permitted by law, continue to be effective or
be reinstated, as the case may be, if at any time payment and performance of the
Obligations guaranteed hereunder, or any part thereof, is, pursuant to
applicable law, rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee of such Obligations or such part thereof, whether as a
"voidable preference," "fraudulent transfer," or otherwise, all as though such
payment or preference had not been made. In the event that any payment, or any
part thereof, is rescinded, reduced, restored or returned, the Obligations
guaranteed hereunder shall, to the fullest extent permitted by law, be
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.
11. Severability. If any provision hereof is held to be invalid or
unenforceable in any jurisdiction, the other provisions hereof shall remain in
full force and effect in such jurisdiction and the invalid or unenforceable
provision shall, to the extent permissible, be construed and enforced in favor
of Scepter. The invalidity or unenforceability of any provision of this Guaranty
in any jurisdiction shall not affect the validity or enforceability of any such
provision in any other jurisdiction.
12. Termination. Subject to the provisions of Section 10 hereof, this
Guaranty shall terminate upon the satisfaction in full of all of the
Obligations.
13. Governing Law, Consent to Jurisdiction, Etc. The parties hereto
acknowledge that the transactions contemplated by this Guaranty bear a
reasonable relation to the State of New York. This Guaranty shall be enforced in
accordance with, and all questions regarding the construction, validity,
interpretation and purpose of this agreement shall be governed by, the internal
laws of the State of New York, without giving effect to provisions thereof
regarding conflict of laws. Any action to enforce the terms of this Guaranty
shall be brought exclusively in the state and/or federal courts situate in the
County and State of New York. Service of process in any action by Scepter to
enforce the terms of this Guaranty may be made by serving a copy of the summons
and complaint, in addition to any other relevant documents, in the manner set
forth in Section 9.6 of the Loan Agreement.
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14. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made (and
shall be deemed to have been duly given or made upon receipt) by delivery in
hand, by courier service or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties in the manner set forth in
Section 9.6 of the Loan Agreement (or at such other address for a party as shall
be specified in a notice given in accordance with this Section 14).
15. Miscellaneous. This Guaranty (i) sets forth the entire agreement of
Scepter and Guarantors with respect to the subject matter hereof and supercedes
all prior agreements and understandings of said parties, oral or written, with
respect to the subject matter hereof, (ii) may only be modified, supplemented,
discharged or abandoned prior to its termination by a written instrument
executed by Guarantors and Scepter, and (iii) shall be governed by, and
construed in accordance with, the laws of the State of New York applicable to
contracts made and to be wholly performed therein. The captions herein contained
are for the sole purpose of convenience of reference, and shall not in any way
affect or limit the meaning or interpretation of any of the provisions hereof.
IN WITNESS WHEREOF, the Guarantors have caused this Guaranty to be duly
executed and delivered by it as of the date first above written.
VITALSTATE CANADA LTD.
By: : /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: CFO
VITALSTATE US, INC.
By: : /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: CFO
Agreed to and Accepted
as of the date above written:
SCEPTER HOLDINGS INC.
/s/ Xxxxxx Xxxxxxxx
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By: Xxxxxx Xxxxxxxx
Title: President
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