GUARANTY
THIS GUARANTY, made as of June 11, 2001, by US ENERGY
SYSTEMS INC., a Delaware corporation ("Guarantor"), in favor of TRIGEN-CANADA
COMPANY LLC, a Delaware limited liability company and the Seller Indemnitees as
defined in the Agreement hereinafter defined ("OBLIGEES").
WHEREAS, USE Canada Acquisition Corp., a Canadian federal corporation
("USE Sub"), and Trigen-Canada Company LLC have entered, or contemporaneously
are entering, into a Stock Purchase Agreement (the "Agreement") under which USE
Sub has agreed to perform certain obligations relating to the purchase of the
stock of Trigen Energy Canada Company by USE Sub; and
WHEREAS, in consideration of Trigen-Canda Company LLC entering into the
Agreement, Guarantor is willing to execute and deliver a guaranty of the
performance, when due, of certain of USE Sub's obligations to OBLIGEES under the
Agreement,
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Guarantor agrees as follows:
1. Guaranty. Guarantor hereby unconditionally guarantees, and promises to and
for the benefit of OBLIGEES, the full, prompt and complete performance by USE
Sub, as and when due, of every duty, undertaking, obligation and covenant of USE
Sub now or hereafter arising under or by reason of the Agreement, except for the
obligation of USE Sub to pay that portion of the purchase consideration
represented by the promissory note provided for in Section 2.2 of the Agreement
(collectively, the "Guaranteed Obligations").
2. Nature of Guaranty. This Guaranty is an original and independent obligation
of Guarantor, separate and distinct from the Guaranteed Obligations. A separate
action may be brought or prosecuted against Guarantor, regardless whether such
an action is brought or prosecuted against USE Sub and regardless whether Trigen
Sub is joined in the action. Guarantor hereby waives any and all rights or legal
requirements that OBLIGEES institute any action or proceeding, or exhaust any
remedies, against USE Sub or anyone else in respect of the Guaranteed
Obligations, as a condition precedent to bringing an action against Guarantor
pursuant to this Guaranty.
3. Bankruptcy No Discharge. Notwithstanding anything to the contrary herein
contained, this Guaranty shall continue to be effective or shall be reinstated,
as the case may be, if at any time performance of all or any part of the
Guaranteed Obligations is rescinded, or must otherwise be restored or returned
by OBLIGEES, upon the insolvency, bankruptcy or reorganization of USE Sub or
otherwise, all as though such performance had not been made.
Notwithstanding any modification, discharge or extension of the
Guaranteed Obligations or any amendment, modification, stay or cure of OBLIGEEs'
rights which may occur in any bankruptcy or reorganization case or proceeding
concerning USE Sub, whether permanent or temporary, and whether or not assented
to by OBLIGEES, Guarantor shall be obligated hereunder to perform the Guaranteed
Obligations and this Guaranty as they were in effect on the date hereof.
4. Waiver of Defenses. Guarantor hereby waives any defense arising by reason of
any disability of USE Sub except as herein provided. Guarantor shall be liable
and remain liable for the performance of the Guaranteed Obligations to the full
extent provided herein notwithstanding (a) any previous discharge (partial or
total) of USE Sub from any further liability; (b) any bar (temporary, partial or
total) to the pursuit by Guarantor of any right or claim for indemnification
from USE Sub; (c) loss of any right or claim by Guarantor to be subrogated to
the rights or claims of OBLIGEES against USE Sub; (d) any action or inaction or
delay in acting by OBLIGEES; or (e) OBLIGEES' failure to enforce, or delay in
enforcing, any of its right under the Agreements or otherwise. Notwithstanding
any other provision of this Section 4, Guarantor shall, however, be entitled to
the same defenses as are available to USE Sub under the Agreement.
5. Amendments to Documents. Guarantor authorizes OBLIGEES, without notice,
demand or consideration and without affecting Guarantor's liability hereunder,
from time to time, to (a) amend, change, release or cancel any of the provisions
of any of the Agreements, by further agreement between OBLIGEES and USE Sub at
any time, or by course of conduct, or by operation of law, or otherwise, without
the consent of or notice to Guarantor, and (b) release any other person or
entity liable for the Guaranteed Obligations.
6. Waiver of Reimbursement and Subrogation Rights. To the fullest extent
permitted by law, Guarantor hereby releases and waives all common law and
statutory rights of reimbursement, indemnification and exoneration against USE
Sub arising from this Guaranty, and all common law and statutory rights of
subrogation to the rights or collateral of OBLIGEES against USE Sub. Guarantor
waives the right to enforce any remedies that OBLIGEES now has, or may later
have, against USE Sub, and Guarantor waives any right to participate in any
security now or hereafter held by OBLIGEES.
7. Waiver of Acceptance, Presentments and Notices. Guarantor waives notice of
acceptance of this Guaranty, and Guarantor waives all notices of the creation,
existence, or incurring of new or additional obligations by USE Sub.
8. Attorneys Fees. Guarantor agrees to pay all expenses, including without
limitation reasonable attorney fees and costs, paid or incurred by OBLIGEES (a)
to secure performance of the Guaranteed Obligations, or any part thereof or (b)
in any successful action to enforce, interpret or defend this Guaranty, whether
or not any lawsuit is filed, and, if one is, both at trial and on appeal.
9. Rights and Remedies Cumulative. All of OBLIGEES' rights and remedies herein
specified are intended to be cumulative and not in substitution for any right or
remedy otherwise available to OBLIGEE.
10. Representations and Warranties of Guarantor. The Guarantor hereby
covenants, represents and warrants to the OBLIGEES as follows:
The Guarantor is a corporation duly incorporated, validly existing and
in good standing under the laws of its jurisdiction of incorporation, with full
corporate power to enter into this Guaranty and to perform its obligations
hereunder.
The execution, delivery and performance by the Guarantor of this
Guaranty are within the corporate power of the Guarantor and have been duly
authorized by all necessary corporate action of the Guarantor.
The execution, delivery and performance by the Guarantor of this
Guaranty does not and will not conflict with or violate any law, judgment, order
or decree binding on the Guarantor or the Articles of Incorporation or By Laws
of the Guarantor or any contract or agreement to which the Guarantor is a party
or by which it is bound.
No additional consent of any person, and no notice to, filing or
registration with, or authorization, consent or approval of, any governmental,
regulatory or self-regulatory agency is necessary or required to be made or
obtained by the Guarantor in connection with the execution and delivery by the
Guarantor of this Guaranty or the performance by the Guarantor of its
obligations hereunder.
This Guaranty constitutes a valid and binding obligation of the
Guarantor, enforceable against the Guarantor in accordance with its terms.
There is no litigation, arbitration proceeding, governmental
investigation, citation or action of any kind pending or, to the knowledge of
the Guarantor, proposed or threatened against the Guarantor or relating to the
business, assets or properties of the Guarantor which, if adversely determined,
would materially and adversely affect the ability of the Guarantor to perform
its obligations hereunder.
11. Miscellaneous Provisions.
(a) This Guaranty shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York.
(b) This Guaranty shall be binding upon the party hereto and its successors and
assigns. This Guaranty is intended for and shall inure to the benefit of
OBLIGEES and their successors and assigns with respect to the Guaranteed
Obligations. Every reference in this Guaranty to "OBLIGEES" shall also include
and refer to OBLIGEES and every transferee of all or any part of OBLIGEES' said
rights.
US ENERGY SYSTEMS INC.
By: /S/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: President
