EXHIBIT 10.8
SUBSIDIARY GUARANTEE
GUARANTEE, dated as of September 24, 2002 ("GUARANTEE"), is being made
by each of the undersigned wholly-owned subsidiaries of U.S. Plastic Lumber
Corp. (each, a "GUARANTOR") in connection with the Exchange and Repurchase
Agreement, dated as of September 24, 2002 (the "EXCHANGE AGREEMENT"), by and
between U.S. Plastic Lumber Corp. (the "COMPANY") and Halifax Fund, L.P. (the
"HOLDER"). Capitalized terms used herein and not otherwise defined shall have
the respective meanings set forth in the Exchange Agreement.
WHEREAS, subject to the terms and conditions of the Exchange Agreement,
the Holder has agreed to enter into the exchange and repurchase transactions
described therein, pursuant to which the Holder will tender for exchange and
repurchase the securities of the Company then held by the Holder (the "EXISTING
SECURITIES"), and following which the Holder will hold the Company's (i) 10%
Convertible Subordinated Debenture due March 24, 2006 (the "SUBORDINATED
DEBENTURE") and (ii) 10% Subordinated Note due March 24, 2006 (the "SUBORDINATED
NOTE" and, together with the Subordinated Debenture, the "EXCHANGE SECURITIES");
WHEREAS, the Company owns, directly or indirectly, all of the issued
and outstanding capital stock of each Guarantor;
WHEREAS, each Guarantor derived substantial direct and/or indirect
benefits from the funding made in connection with the issuance of the Existing
Securities, and will derive similar benefits from the restructuring of the
Company's obligations pursuant to the Exchange Agreement; and
WHEREAS, it is a condition precedent to the obligations of the Holder
under the Exchange Agreement that the Guarantors shall have executed and
delivered this Guarantee to the Holder.
NOW, THEREFORE, in order to induce the Holder to enter into the
Exchange Agreement, each Guarantor hereby agrees with the Holder as follows:
1. DEFINITIONS.
1.1 CERTAIN DEFINITIONS. When used herein, the following terms
shall have the respective meanings indicated:
"OBLIGATIONS" means all of the obligations and liabilities of
the Company to the Holder relating to the payment of money (including, without
limitation, all of the interest that accrues on the Exchange Securities after
the Exchange Securities become due and payable and all interest that accrues on
the Exchange Securities after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or similar proceeding, relating
to the Company whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding), whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter incurred, that may
arise under, with respect to, or in connection with the Exchange Agreement, any
of the other Transaction Documents or any other document, agreement or
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instrument made, delivered or given in connection with the Exchange Agreement or
any other Transaction Document, whether on account of principal, interest, fees,
indemnities, costs, expenses or otherwise (including, without limitation, all
fees and expenses of counsel to the Holder that are required to be paid by the
Company pursuant to the terms of the Exchange Agreement, any of the other
Transaction Documents or any other document, agreement or instrument made,
delivered or given in connection with the Exchange Agreement or any other
Transaction Document).
"TERMINATION DATE" means the first date on which all of the
Obligations have been finally paid in cash; PROVIDED, HOWEVER, that the
Termination Date shall be deemed extended if the Company enters into any
bankruptcy or similar proceeding at a time when any amount paid to the Holder
could be ordered to be repaid as a preference or pursuant to a similar theory,
and shall not be deemed to occur until the date on which it is finally
determined that no such repayment can be ordered.
1.2 OTHER DEFINITIONAL PROVISIONS. Unless otherwise specified
in this Guarantee, the words "hereof," "herein" and "hereunder" and words of
similar import when used in this Guarantee shall refer to this Guarantee as a
whole and not to any particular provision of this Guarantee. The meanings given
to terms defined in this Guarantee shall be equally applicable to both the
singular and plural forms of such terms.
2. GUARANTEE.
2.1 UNCONDITIONAL GUARANTEE. Subject to the provisions of
SECTION 2.2 of this Guarantee, each Guarantor, jointly and severally,
unconditionally and irrevocably guarantees to the Holder the punctual and
complete payment and performance by the Company of each of the Obligations as
and when such Obligation becomes due (whether at stated maturity, by
acceleration or otherwise).
2.2 APPLICABLE LAW. Notwithstanding anything in this Guarantee
to the contrary, the maximum liability of each Guarantor under this Guarantee
shall in no event exceed the amount that can be guaranteed by such Guarantor
under applicable federal and state laws (including, without limitation, laws
relating to the insolvency of debtors). Each Guarantor agrees that the aggregate
amount of the Obligations may at any time exceed the maximum amount of such
Guarantor's liability under this Guarantee without affecting this Guarantee or
in any way impairing the rights and remedies of the Holder against any of the
Guarantors under this Guarantee.
2.3 COSTS OF COLLECTION. Each Guarantor jointly and severally
agrees to pay all of the fees, expenses and costs (including, without
limitation, all reasonable fees and expenses of counsel) that may be paid or
incurred by the Holder in enforcing or obtaining advice of counsel regarding any
rights with respect to, or collecting, any of the Obligations or enforcing any
rights with respect to, or collecting against, the Guarantors under this
Guarantee.
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3. SUBROGATION OF RIGHTS.
Notwithstanding any payment by any Guarantor under this
Guarantee to the Holder or any set-off or application of any Guarantor's funds
by the Holder, no Guarantor shall be entitled to exercise any right of
subrogation that such Guarantor may have as a result of this Guarantee (whether
contractual, under any provision of the bankruptcy code or any other law, or
otherwise), until after the Termination Date. If any amount is paid to a
Guarantor on account of any subrogation right at any time prior to the
Termination Date, such Guarantor shall promptly (but in no event later than one
(1) Business Day after receipt of any such amount) turn over such amount in full
(in the exact form received by such Guarantor and duly indorsed by such
Guarantor to the Holder if necessary) to the Holder; PROVIDED, HOWEVER, that
until such amount has been turned over to the Holder, (i) the Guarantor shall
hold such amount in trust for the Holder, and (ii) such amount shall be
segregated from all other assets and property of the Guarantor.
4. AMENDMENT OF TRANSACTION DOCUMENTS; RELEASE OF COLLATERAL.
4.1 TRANSACTION DOCUMENTS; COLLATERAL. The Holder may (except
as shall be required by applicable law) at any time and from time to time
without the consent of, or notice to, any Guarantor, without incurring any
liability or responsibility to any Guarantor, and without impairing or releasing
the obligations of any Guarantor under this Guarantee:
(i) change the manner, place or terms of payment of,
and/or change or extend the time of payment of, renew, increase, accelerate or
alter, any of the Obligations, any security therefor, or any liability incurred
directly or indirectly in respect of the Obligations, and the guaranty made
pursuant to this Guarantee shall apply to the Obligations as so changed,
extended, renewed or altered;
(ii) sell, exchange, release, surrender, realize upon
or otherwise deal with in any manner and in any order any property pledged or
mortgaged to secure the Obligations or any liabilities incurred directly or
indirectly in respect of the Obligations or this Guarantee;
(iii) exercise or refrain from exercising any rights
or remedies against the Company or any other Person (including any Guarantor) or
otherwise act or refrain from acting with respect to the Company or other Person
(including without limitation, any Guarantor);
(iv) settle or compromise any of the Obligations, any
security therefor or any liability (including any of those under this Guarantee)
incurred directly or indirectly in respect of the Obligations, or subordinate
the payment of all or any part of the Obligations to the payment of any other
liability (whether due or not) of the Company;
(v) apply any sums by whomsoever paid or howsoever
realized to any liability or liabilities of the Company to the Holder regardless
of what liabilities of the Company remain unpaid;
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(vi) consent to or waive any breach of, or any act,
omission or default under, any of the Transaction Documents or any of the
documents, instruments or agreements made, delivered or given in connection with
the Transaction Documents, or otherwise amend, modify, supplement, cancel or
terminate any of the Transaction Documents or any of the instruments, documents,
or agreements made, delivered or given in connection with the Transaction
Documents;
(vii) act or fail to act in any manner referred to in
this Guarantee which may deprive any Guarantor of its right to subrogation
against the Company or any other Person (including any other Guarantor) to
recover full indemnity for any payments made by such Guarantor pursuant to this
Guaranty; and/or
(viii) release or substitute the Company or any
endorser, guarantor or other obligor.
4.2 HOLDER ACTION. The Holder shall not have any obligation at
any time to take any action, or expend any funds, to (i) secure or perfect any
Lien that is required to be granted by the Company as collateral security for
the Obligations, or (ii) insure or otherwise protect any assets or property that
is subject to a Lien granted by the Company as collateral security for the
Obligations.
5. OBLIGATIONS OF GUARANTORS.
5.1 GUARANTEE ABSOLUTE AND UNCONDITIONAL. (a) Each Guarantor
hereby waives any and all notice of the creation, renewal, extension or accrual
of any of the Obligations and notice or proof of reliance by the Holder upon
this Guarantee or acceptance of this Guarantee; each Obligation shall
conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived in reliance upon this Guarantee; and all dealings
between the Company and the Guarantors, on the one hand, and the Holder, on the
other hand, shall be conclusively presumed to have been consummated in reliance
upon this Guarantee. Each Guarantor understands and agrees that this Guarantee
shall be construed as a continuing, absolute and unconditional guarantee of
payment without regard to (i) the validity or enforceability of (1) the Exchange
Agreement, the Exchange Securities, any of the other Transaction Documents or
any document, instrument or agreement made, delivered or given in connection
with the Exchange Agreement, the Exchange Securities or any other Transaction
Document, (2) any Lien securing the Obligations, (3) any of the collateral
security for, or any guarantee of, the Obligations, or (4) any right of offset
with respect to the Obligations, (ii) any defense, set-off or counterclaim that
may at any time be available to, or be asserted by, the Company against the
Holder, or (iii) any other circumstance whatsoever (including, without
limitation, insolvency or bankruptcy of the Company or any other Person) that
constitutes (or might be construed to constitute) an equitable or legal
discharge of the Obligations or the obligations and liabilities of the
Guarantors under this Guarantee, regardless of whether any Guarantor has notice
or knowledge of any such circumstance.
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5.2 OBLIGATIONS NOT AFFECTED. None of the obligations and
liabilities of any of the Guarantors under this Guarantee shall be relieved or
reduced, and none of the rights and remedies of the Holder against the
Guarantors shall be impaired or adversely affected, as a result of (i) any
demand by the Holder for payment of any of the Obligations being subsequently
rescinded, (ii) any amendment, modification, supplement or termination of the
Exchange Agreement, the Exchange Securities, any other Transaction Document or
any document, agreement or instrument made, delivered or given in connection
with the Exchange Agreement, the Exchange Securities or any other Transaction
Document, or (iii) any or all of the collateral security for, or any other
guarantee of, the Obligations or any right of offset with respect to the
Obligations being renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released, in whole or in part, by the Holder
at any time.
5.3 WAIVER OF NOTICE. Each Guarantor hereby waives (to the
fullest extent permitted by applicable law) notice of (i) acceptance of this
Guarantee and notice of any liability to which it may apply, (ii) promptness,
diligence, presentment, demand of payment or performance, protest, notice of
dishonor, nonpayment or nonperformance of any of the Obligations, and (iii) any
suit or taking of other action by the Holder against, and any other notice to,
any Person liable on or with respect to the Obligations (including such
Guarantor or any other guarantor of the Company). When pursuing any of its
rights and remedies against the Guarantors, the Holder may, but shall be under
no obligation to, pursue any other rights and remedies that it may have against
the Company or any other Person (including any other Guarantor) or against any
collateral security for, or any guarantee of, the Obligations or any right of
offset that it may have with respect to the Obligations; PROVIDED, HOWEVER, that
none of the obligations and liabilities of the Guarantors under this Guarantee
will be relieved or reduced, and none of the rights of the Holder will be
impaired or adversely affected, as a result of any failure by the Holder to (i)
pursue any rights or remedies that it may have against the Company or any other
Person (including any other Guarantor), (ii) collect any amounts that are due
any payable with respect to the Obligations from the Company or any other Person
(including any other Guarantor), or (iii) realize upon any collateral security
or guarantee or exercise any right of offset. Each Guarantor waives any right
(to the fullest extent permitted by applicable law) to require the Holder to:
(i) proceed against the Company, any other Guarantor, any other guarantor of the
Company or any other Person; (ii) proceed against or exhaust any security held
from the Company, any other Guarantor, any other guarantor of the Company or any
other Person; or (iii) pursue any other remedy against the Company, any other
Guarantor, any other guarantor of the Company or any other Person. Each
Guarantor waives (to the fullest extent permitted by applicable law) any defense
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based on or arising out of any defense of the Company, any other Guarantor, any
other guarantor of the Company or any other Person other than payment in full of
the Obligations, including, without limitation, any defense based on or arising
out of the disability of the Company, any other Guarantor, any other guarantor
of the Company or any other Person, or the unenforceability of the Obligations
or any part thereof from any cause, or the cessation from any cause of the
liability of the Company other than payment in full of the Obligations. The
Holder may, at its election, foreclose on any security held by the Holder by one
or more judicial or nonjudicial sales, or exercise any other right or remedy the
Holder may have against the Company or any other Person, or any security,
without affecting or impairing in any way the liability of any Guarantor under
this Guarantee except to the extent the Obligations have been paid in full. Each
Guarantor waives any defense arising out of any such election by the Holder,
even though such election operates to impair or extinguish any right or
reimbursement or subrogation or other right or remedy of such Guarantor against
the Company or any other Person or any security (to the extent permitted by
applicable law).
5.4 NO IMPAIRMENT. The liability of each Guarantor under this
Guarantee is exclusive and independent of any security for or other guaranty of
the Obligations, whether executed by such Guarantor, any other Guarantor, any
other guarantor or by any other Person, and the liability of each Guarantor
under this Guarantee shall not be affected or impaired by (a) any direction as
to application of payment by the Company or by any other Person, (b) any other
continuing or other guaranty, undertaking or maximum liability of a guarantor of
the Company or of any other Person as to the Obligations, (c) any payment on or
in reduction of any such other guaranty or undertaking, (d) any dissolution,
termination or increase, decrease or change in personnel by the Company, (e) any
payment made to the Holder which is repaid to the Company pursuant to a court
order in any bankruptcy, reorganization, arrangement, moratorium or other debtor
relief proceeding, and each Guarantor waives any right to the deferral or
modification to its obligations hereunder by reason of any of such proceeding,
(f) any action or inaction by the Holder, or (g) any invalidity, irregularity or
unenforceability of all or part of the Obligations or of any security therefor.
5.5 SEVERABILITY OF OBLIGATIONS; STATUTE OF LIMITATIONS. The
obligations of each Guarantor under this Guarantee are independent of the
obligations of any other Guarantor, any other guarantor of the Company, or any
other Person, and a separate action or actions may be brought and prosecuted
against each Guarantor whether or not action is brought against any other
Guarantor, any other guarantor of the Company or any other Person and whether or
not any other Guarantor, any other guarantor of the Company or any Person be
joined in any such action or actions. Each Guarantor waives, to the fullest
extent permitted by law, the benefit of any statute of limitations affecting its
liability under this Guarantee or the enforcement of any such statute of
limitations. Any payment by the Company or other circumstance that operates to
toll any statute of limitations as to the Company shall operate to toll the
statute of limitations as to each Guarantor.
5.6 SUBORDINATION. Any indebtedness of the Company now or
hereafter held by the Guarantors is hereby subordinated in all respects to all
of the Obligations; and if requested by the Holder after an Event of Default
under either or both of the Exchange Securities has occurred and is continuing,
and the obligations of the Company thereunder have been accelerated, the
indebtedness of the Company to any Guarantor shall be collected, enforced and
received by such Guarantor as trustee for the Holder and such Guarantor shall
promptly (but in no event later than one (1) Business Day after receipt of any
such amounts) turn over such amounts to the Holder; PROVIDED, HOWEVER, that no
such collection or enforcement shall in any way affect or impair the liability
of such Guarantor under any of the provisions of this Guarantee. Prior to the
transfer by any Guarantor of any note or negotiable instrument evidencing any
indebtedness of the Company to such Guarantor, such Guarantor shall xxxx such
note or negotiable instrument with a legend that it is subordinated in all
respects to all of the Obligations.
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5.7 AUTHORITY. It shall not be necessary for the Holder to
inquire into the authority, capacity or powers of the Company or any of its
Subsidiaries or the officers, directors, partners or agents acting or purporting
to act on its behalf, and any indebtedness made or created in reliance upon the
professed exercise of such powers shall be guaranteed under this Guarantee.
5.8 REINSTATEMENT. Notwithstanding any other provision of this
Guarantee to the contrary, if any payment with respect to the Obligations is
rescinded or required to be restored or returned by the Holder for any reason
whatsoever (including, without limitation, as a result of the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Company or the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Company or any of its assets or properties), this Guarantee
shall continue to be effective, and shall be reinstated if previously
terminated, as though such payment had not been made.
5.9 PAYMENTS. Each Guarantor hereby covenants and agrees that
all amounts due and payable by such Guarantor under this Guarantee shall be paid
to the Holder without set-off or counterclaim by wire transfer of immediately
available United States dollar funds to such account as the Holder may designate
in writing to such Guarantor from time to time.
6. REPRESENTATIONS AND WARRANTIES.
6.1 REPRESENTATIONS AND WARRANTIES. Each Guarantor hereby
makes the following representations and warranties to the Holder and agrees with
the Holder that, as of the date of this Agreement and, if different, as of the
Closing Date:
(a) such Guarantor (i) is a duly organized and
validly existing corporation in good standing under the laws of the jurisdiction
of its incorporation, (ii) has the corporate power and authority to own its
property and assets and to transact the business in which it is engaged and
presently proposes to engage, and (iii) is duly qualified and is authorized to
do business and is in good standing in each jurisdiction where the conduct of
its business requires such qualification except for failures to be qualified
which, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect;
(b) such Guarantor has (i) the corporate power and
authority to execute, deliver and perform the terms and provisions of this
Guarantee and each other Transaction Document to which it is a party and has
taken all necessary corporate action to authorize the execution, delivery and
performance by it of this Guarantee and each Transaction Document to which it is
a party and (ii) has duly executed and delivered this Guarantee and each other
Transaction Document to which it is a party, and this Guarantee and each such
Transaction Document constitutes the legal, valid and binding obligation of such
Guarantor, enforceable against such Guarantor in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to,
or affecting generally the enforcement of creditors' rights and remedies or by
other equitable principles of general application;
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(c) neither the execution, delivery or performance by
such Guarantor of this Guarantee or any other Transaction Document to which it
is a party, nor the compliance by it with the terms and provisions hereof and
thereof, (i) will contravene any provision of any applicable law, statute, rule
or regulation, or any applicable order, writ, injunction or decree of any court
or governmental instrumentality, (ii) will conflict with or result in any breach
of any of the terms, covenants, conditions or provisions of, or constitute a
default under, or result in the creation or imposition of (or the obligation to
create or impose) any Lien upon any of the property or assets of such Guarantor
pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement,
or any other material agreement or other instrument to which such Guarantor is a
party or by which it or any of its property or assets are bound or to which it
may be subject or (iii) will violate any provision of the charter or bylaws of
such Guarantor;
(d) no order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except as have been obtained or made), or exemption by, any governmental or
public body or authority, or any subdivision thereof, is required to authorize,
or is required in connection with, (i) the execution, delivery and performance
of this Guarantee or any other Transaction Document to which such Guarantor is a
party, or (ii) the legality, validity, binding effect or enforceability of this
Guarantee or any other Transaction Document to which such Guarantor is a party;
(e) there are no actions, suits or proceedings
(private or governmental) pending or threatened (i) with respect to this
Guarantee or any Transaction Documents to which such Guarantor is a party, or
(ii) with respect to such Guarantor that could reasonably be expected to have a
Material Adverse Effect;
(f) [intentionally omitted]
and
(g) all of the representations and warranties of the
Company in the Exchange Agreement that relate to such Guarantor will be true and
correct in all material respects on the Closing Date (except that any such
representation and warranty that is expressly stated as being made only as of a
specified date shall be true and correct in all material respects as of such
specified date).
6.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties made by each Guarantor in this Guarantee and the
other Transaction Documents and all of the documents, agreements, and
instruments made, delivered or given in connection with this Guarantee and the
other Transaction Documents shall survive the execution, delivery and
performance of this Guarantee and the other Transaction Documents.
7. MISCELLANEOUS.
7.1 NOTICES. Any notice, demand or request required or
permitted to be given by the Company, any Guarantor or the Holder pursuant to
the terms of this Agreement shall be in writing and shall be deemed delivered
(i) when delivered personally or by verifiable facsimile transmission, unless
such delivery is made prior to 5 p.m. (eastern time) or on a day that is not a
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Business Day, in which case such delivery will be deemed to be made on the next
succeeding Business Day, (ii) on the next Business Day after timely delivery to
an overnight courier and (iii) on the Business Day actually received if
deposited in the U.S. mail (certified or registered mail, return receipt
requested, postage prepaid), addressed as follows:
(a) if to the Company or the Holder, at the address or
transmission number at which notices are sent to them pursuant to SECTION 8.8 of
the Exchange Agreement, and
(b) if to any Guarantor, at the address for notices set forth
under its signature to this Guarantee.
A party may from time to time change its address for notices
by giving at least 10 days' written notice of such changed address to the other
parties hereto.
7.2 SEVERABILITY. Any provision of this Guarantee 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 of this Guarantee, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
7.3 INTEGRATION. This Guarantee, the other Transaction
Documents to which each Guarantor is a party and the other documents, agreements
and instruments made, delivered or given by any Guarantor in connection with
this Agreement or any other Transaction Document represents the entire agreement
of each Guarantor and the Holder with respect to the subject matter expressed in
this Guarantee, the other Transaction Documents and such other documents,
agreements and instruments, and there are no promises, undertakings,
representations or warranties by each Guarantor, the Holder relative to such
subject matter, the other Transaction Documents or such other documents,
agreements and instruments. Any previous agreement between the Guarantors, and
the Holder with respect to the subject matter of this Guarantee, the other
Transaction Documents to which each Guarantor is a party and the other
documents, agreements and instruments made, delivered or given by any Guarantor
in connection with this Agreement or any other Transaction Document is
superseded by this Guarantee, the other Transaction Documents and such other
documents, agreements and instruments.
7.4 AMENDMENTS, WAIVERS, ETC. IN WRITING. None of the terms or
provisions of this Guarantee may be waived, amended, supplemented or otherwise
modified except pursuant to a written instrument executed by each Guarantor and
the Holder.
7.5 NO WAIVER. The Holder shall not by any act (except as
provided in SECTION 7.4 above), any failure to act or any delay in acting be
deemed to have (i) waived any right or remedy under this Guarantee, any other
Transaction Document or any document, agreement or instrument made, delivered or
given in connection with this Agreement or the other Transaction Documents, or
(ii) acquiesced in any Event of Default or in any breach of any of the terms and
conditions of this Guarantee, any other Transaction Document or any document,
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agreement or instrument made, delivered or given in connection with this
Agreement or the other Transaction Documents. No failure to exercise, nor any
delay in exercising, any right, power or privilege of the Holder under this
Guarantee, any other Transaction Document or any document, agreement or
instrument made, delivered or given in connection with this Agreement or the
other Transaction Documents shall operate as a waiver of any such right, power
or privilege. No single or partial exercise of any right, power or privilege
under this Guarantee, any other Transaction Document or any document, agreement
or instrument made, delivered or given in connection with this Agreement or the
other Transaction Documents shall preclude any other or further exercise of any
other right, power or privilege. A waiver by the Holder of any right or remedy
under this Guarantee, any other Transaction Document or any other document or
instrument made, delivered or given in connection with this Agreement or the
other Transaction Documents on any one occasion shall not be construed as a bar
to any right or remedy that the Holder would otherwise have on any future
occasion.
7.6 CUMULATIVE REMEDIES. The rights and remedies provided in
this Guarantee are cumulative, may be exercised singly or concurrently, and are
not exclusive of any other rights or remedies provided by law.
7.7 SECTION HEADINGS. The section headings used in this
Guarantee are for convenience of reference only and are not to affect the
construction of this Guarantee or be taken into consideration in the
interpretation of this Guarantee.
7.8 INDEMNIFICATION. Each Guarantor agrees to jointly and
severally indemnify and hold harmless the Holder and each of its directors,
officers, employees, advisors and agents (each, an "INDEMNIFIED PERSON") from
and against, and shall pay each Indemnified Person as and when incurred, all
claims, damages, losses, liabilities, costs and expenses of any kind whatsoever,
including reasonable fees and expenses of attorneys and paralegals, that such
Indemnified Person may incur as a result of third party claims (or that may be
claimed against such Indemnified Person by any Person), together with all costs
and expenses resulting from the compromise or defense of any claims or
liabilities, by reason of or in connection with (i) the preparation, execution,
delivery, validity, enforceability or performance of this Guarantee, the other
Transaction Documents to which such Guarantor is a party and the other
documents, agreements and instruments made, delivered or given by such Guarantor
in connection with this Agreement or any of the other Transaction Documents,
(ii) any action taken by any Indemnified Person pursuant to, or in connection
with, this Guarantee, any of the other Transaction Documents to which such
Guarantor is a party or any other document, agreement or instrument made,
delivered or given by such Guarantor in connection with this Agreement or any of
the other Transaction Documents, (iii) any breach by such Guarantor of any
warranty, covenant, term or condition in, or the occurrence of any default
under, this Guarantee, any of the other Transaction Documents to which such
Guarantor is a party or any other document, agreement or instrument made,
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delivered or given by such Guarantor in connection with this Agreement or any of
the other Transaction Documents, and (iv) any inquiry, investigation,
litigation, proceeding or other action related to or arising out of this
Guarantee, any of the other Transaction Documents to which such Guarantor is a
party or any other document, agreement or instrument made, delivered or given by
such Guarantor in connection with this Agreement or any of the other Transaction
Documents (whether or not such Indemnified Party is a party to such
investigation, litigation, proceeding or other action and whether any such
investigation, litigation or proceeding or other action is brought by the
Company, such Guarantor, any shareholder or creditor of the Company or such
Guarantor or any other Person); PROVIDED, HOWEVER, that such Guarantor shall not
be required to indemnify an Indemnified Person for any claims, damages, losses,
liabilities, costs or expenses to the extent, but only to the extent, caused
solely by the gross negligence or willful misconduct of such Indemnified Person
(as determined in a final, non-appealable judgment in a court of competent
jurisdiction). In case any action or proceeding is brought against an
Indemnified Person in respect of which indemnity may be sought under this
Guarantee, such Indemnified Person shall promptly give notice of any such action
or proceeding to each Guarantor and may require each Guarantor, upon such
notice, to assume the defense of the action or proceeding, PROVIDED that the
failure of an Indemnified Person to give such notice shall not relieve any
Guarantor of its obligations under this SECTION 7.8. Upon receipt of notice from
an Indemnified Person requesting that the Guarantors assume the defense of any
action or proceeding, each Guarantor shall resist and defend such action or
proceeding at its sole cost and expense. The obligations of the Guarantors under
this SECTION 7.8 shall survive the termination of this Guarantee.
7.9 SUCCESSORS AND ASSIGNS. This Guarantee shall be binding
upon each Guarantor and its successors and assigns and this Guarantee shall
inure to the benefit of the Holder and its successors, indorsees, transferees
and assigns. No Guarantor may assign any of its rights under, or delegate any of
its duties or obligations under, this Guarantee without the prior written
consent of the Holder.
7.10 SETOFF AND ADJUSTMENTS. In addition to any right now or
hereafter granted under applicable law, upon the occurrence and during the
continuance of an Event of Default under the Exchange Securities, the Holder is
hereby authorized at any time or from time to time, without notice to any
Guarantor or to any other Person (any such notice being expressly waived by all
of the Guarantors) to setoff and to appropriate and apply any and all deposits
(general or special) and any other indebtedness at any time held or owing by the
Holder to or for the credit or the account of such Guarantor, against and on
account of the obligations and liabilities of such Guarantor to the Holder under
this Guaranty, irrespective of whether or not (i) the Holder shall have made any
demand under this Guarantee, or (ii) such obligations and liabilities are
contingent or unmatured.
7.11 GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of New York applicable to contracts made
and to be performed entirely within the State of New York.
7.12 SUBMISSION TO JURISDICTION; WAIVERS. Each Guarantor
hereby irrevocably and unconditionally:
(a) submits itself and its property to any legal
action or proceeding relating to this Guarantee, any of the other Transaction
Documents or any document, agreement or instrument made, delivered or given in
connection with this Agreement or the other Transaction Documents, or for
recognition and enforcement of any judgment in respect of this Guarantee, any of
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the other Transaction Documents or any such other document, agreement or
instrument, to the non-exclusive general jurisdiction of the courts of the State
of New York, the courts of the United States of America for the Southern
District of New York, and the appellate courts for such state and federal
courts;
(b) consents that any such action or proceeding may
be brought in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action
or proceeding may be effected by registered or certified mail (or any
substantially similar form of mail), postage prepaid to such Guarantor at its
address set below its signature to this Guarantee or at such other address as
such Guarantor shall have notified the Holder pursuant to the terms of this
Guarantee;
(d) agrees that nothing in this Guarantee shall
affect the right of the Holder to effect service of process in any other manner
permitted by law or shall limit the right of the Holder to xxx in any other
jurisdiction; and
(e) waives, to the fullest extent permitted by law,
any right any Guarantor may have to claim or recover any special exemplary,
punitive or consequential damages in any legal action or proceeding that relates
to, or that arises from, this Guarantee, any of the other Transaction Documents
or any other document, agreement or instrument made, delivered or given in
connection with this Guarantee or any of the other Transaction Documents.
7.13 WAIVERS OF JURY TRIAL. Each Guarantor hereby irrevocably
and unconditionally waives trial by jury in any legal action or proceeding
relating to this Guarantee or any other Transaction Document to which it is a
party and for any counterclaim therein.
7.14 COMPLIANCE WITH EXCHANGE AGREEMENT. Each Guarantor
covenants and agrees that on and after the date hereof and until all Obligations
have been paid in full, such Guarantor shall take, or will refrain from taking,
all actions that are necessary to be taken or not taken so that no violation of
any covenant or agreement of the Company contained in the Exchange Agreement is
caused by the actions of such Guarantor or any of its Subsidiaries. The
Guarantors hereby jointly and severally agree to pay all reasonable
out-of-pocket costs and expenses of the Holder in connection with the
enforcement of this Guarantee and any amendment, waiver or consent relating
hereto (including, without limitation, reasonable legal fees and disbursements).
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, each of the undersigned has caused this
Guarantee to be duly executed and delivered by its duly authorized officer as of
the date first above written.
U.S. PLASTIC LUMBER LTD.
0000 X. Xxxxxx Xxxx, Xxxxx 00000
Xxxx Xxxxx, Xxxxxxx 00000
By: /s/ Xxxxx Xxxxxxx
-----------------------------------------------
Name: Xxxxx Xxxxxxx
Title: Secretary
THE EAGLEBROOK GROUP, INC.
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxxxx, XX 00000
By: /s/ Xxxxx Xxxxxxx
-----------------------------------------------
Name: Xxxxx Xxxxxxx
Title: Secretary
U.S. PLASTIC LUMBER FINANCE CORPORATION
0000 X. Xxxxxx Xxxx, Xxxxx 000X
Xxxx Xxxxx, XX 00000
By: /s/ Xxxxx Xxxxxxx
-----------------------------------------------
Name: Xxxxx Xxxxxxx
Title: Secretary
U.S. PLASTIC LUMBER IP CORPORATION
0000 X. Xxxxxx Xxxx, Xxxxx 000X
Xxxx Xxxxx, XX 00000
By: /s/ Xxxxx Xxxxxxx
-----------------------------------------------
Name: Xxxxx Xxxxxxx
Title: Secretary
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