EXHIBIT 10.4.4
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BORROWER: SEPARATION AND RECOVERY
SYSTEMS, INC.
GUARANTOR: AMERICAN ECO CORPORATION
CONTINUING GUARANTEE
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TO: BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION
WHEREAS the undersigned ("Guarantor") holds 100% of the issued
and outstanding shares of SEPARATION AND RECOVERY SYSTEMS, INC.
("Borrower"), a Nevada corporation;
AND WHEREAS BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION ("Bank") has agreed to extend credit to Borrower under a
Business Loan Agreement dated as of February 7, 1996 between the Bank, as
lender, and the Borrower, as borrower (as the same may be amended, varied,
renewed, replaced or restated from time to time, the "Loan Agreement");
AND WHEREAS as a condition to the extension of credit to Borrower
by Bank and to induce Bank to continue to extend credit to Borrower,
Guarantor has agreed to guarantee payment of Borrower's indebtedness,
liabilities and obligations to Bank on the terms and subject to the
conditions hereinafter set forth;
AND WHEREAS it is in the best interests of Guarantor to execute
and deliver this Guarantee, in that Guarantor will derive substantial
direct and indirect benefits from the extension of credit to Borrower by
Bank;
(1) For valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, Guarantor unconditionally guarantees and
promises to pay, to the maximum amount permitted by applicable law, to
Bank, or order, on demand, without deduction or offset, in lawful money of
the United States, any and all indebtedness of Borrower to Bank up to a
maximum principal amount of U.S. $5,750,000 plus all interest, costs and
related fees. The word "indebtedness" is used herein in its most
comprehensive sense and includes any and all advances, debts, obligations
and liabilities of Borrower or any one or more of them, heretofore, now, or
hereafter made, incurred or created, whether voluntary or involuntary and
however arising, whether due or not due, absolute or contingent, liquidated
or unliquidated, determined or undetermined, and whether Borrower may be
liable individually or jointly with others, or whether recovery upon such
indebtedness may be or hereafter become barred by any statute of
limitations, or whether such indebtedness may be or hereafter become
otherwise unenforceable.
(2) The obligations hereunder are joint and several, and
independent of the obligations of Borrower, and a separate action or
actions may be brought and prosecuted against Guarantor whether action is
brought against Borrower or whether Borrower be joined in any such action
or actions; and Guarantor waives the benefit of any statute of limitations
affecting its liability hereunder.
(3) Guarantor authorizes Bank, without notice or demand and
without affecting its liability hereunder, from time to time, either before
or after revocation hereof, to (a) renew, compromise, extend, accelerate or
otherwise change the time for payment of, or otherwise change the terms of
the indebtedness or any part thereof, including increase or decrease of the
rate of interest thereon; (b) take and hold security for the payment of
this Continuing Guarantee or the indebtedness guaranteed, and exchange,
enforce, waive, release, fail to perfect, sell, or otherwise dispose of any
such security; (c) apply such security and direct the order or manner of
sale thereof as Bank in its discretion may determine; and (d) release or
substitute any one or more of the endorsers or guarantors. Bank may,
without notice to Guarantor and without affecting Guarantor's obligations
hereunder, assign the indebtedness and this Continuing Guarantee, in whole
or in part.
(4) Guarantor waives any right to require Bank to (a) proceed
against Borrower; (b) proceed against or exhaust any security held from
Borrower; (c) proceed against any person or entity jointly and severally
liable with Borrower; or (d) pursue any other remedy in Bank's power
whatsoever. Guarantor waives any defense arising by reason of any
disability or other defense of Borrower, or the cessation from any cause
whatsoever of the liability of Borrower, or any claim that Guarantor's
obligations exceed or are more burdensome than those of Borrower. Until
all indebtedness of Borrower to Bank shall have been paid in full guarantor
shall have no right of subrogation, and waives any right to enforce any
remedy which Bank now has or may hereafter have against Borrower, and
waives any benefit of and any right to participate in any security now or
hereafter held by Bank. Bank may foreclose, either by judicial foreclosure
or by exercise of power of sale, any deed of trust securing the
indebtedness, and, even though the foreclosure may destroy or diminish
Guarantor's rights against Borrower, Guarantor shall be liable to Bank for
any part of the indebtedness remaining unpaid after the foreclosure.
Guarantor waives all presentments, demands for performance, notices of non-
performance, protests, notices of protest, notices of dishonor, and notices
of acceptance of this Continuing Guarantee and of the existence, creation,
or incurring of new or additional indebtedness.
(5) Guarantor acknowledges and agrees that it shall have the
sole responsibility for obtaining from Borrower such information concerning
Borrower's financial conditions or business operations as Guarantor may
require, and that Bank has no duty at any time to disclose to Guarantor any
information relating to the business operations or financial conditions of
Borrower.
(6) Guarantor represents and warrants to Bank that (a) its
synopsis of its consolidating balance sheet as of April 30, 1996, and all
other financial information that has been or will be supplied to Bank by
Guarantor, is sufficiently complete to give Bank accurate knowledge of
Guarantor's financial condition, and (b) since the date of such balance
sheet, there has been no material adverse change in the assets or the
financial condition of Guarantor. If this warranty is breached at any
time, such breach shall be a default under this Guaranty and under any
agreement then in effect between Bank and Borrower that evidences or
relates to Borrower's indebtedness to Bank.
(7) To secure all of Guarantor's obligations hereunder,
Guarantor assigns and grants to Bank a security interest in all moneys,
securities and other property of Guarantor now or hereafter in the
possession of Bank, and all proceeds thereof. Upon default or breach of
any of Guarantor's obligations to Bank, Bank may apply any deposit account
to reduce the indebtedness, and may foreclose any collateral as provided in
the Personal Property Security Act (Ontario) and in any security agreements
between Bank and Guarantor.
(8) This Continuing Guarantee may be revoked at any time by
Guarantor in respect to future transactions, unless there is a continuing
consideration as to such transactions which Guarantor does not renounce.
Such revocation shall be effective upon actual receipt by Bank at the
address shown below of written notice of revocation. Revocation shall not
affect any of Guarantor's obligations or Bank's rights with respect to
transactions which precede Bank's receipt of such notice, regardless of
whether or not the indebtedness related to such transactions, before or
after revocation, has been renewed, compromised, extended, accelerated, or
otherwise changed as to any of its terms, including time for payment or
increase or decrease of the rate of interest thereon. If this Continuing
Guarantee is revoked, returned, or canceled, and subsequently any payment
or transfer of any interest in property by Borrower to Bank is rescinded or
must be returned by Bank to Borrower, this Continuing Guarantee shall be
reinstated with respect to any such payment or transfer, regardless of any
such prior revocation, return, or cancellation.
(9) Where Borrower is a corporation or partnership it is not
necessary for Bank to inquire into the powers of Borrower or of 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 hereunder.
(10) Guarantor agrees that Bank may disclose to any prospective
purchaser and any purchaser of all part of the indebtedness and any and all
information in Bank's possession concerning Guarantor, this Continuing
Guarantee and any security for this Continuing Guarantee.
(11) Guarantor agrees to pay to Bank, on demand, all out-of-
pocket expenses and legal fees (including allocated costs for in-house
legal services) incurred by Bank prior to the commencement of any legal
action or arbitration proceeding in connection with the enforcement of this
Continuing Guarantee and any instrument or agreement required under this
Continuing Guarantee. In the event of a legal action or arbitration
proceeding, the prevailing party shall be entitled to reasonable legal fees
(including allocated costs for in-house legal services), costs and
necessary disbursements incurred in connection with such action or
proceeding, as determined by the court or arbitrator.
(12) Each payment to be made by Guarantor hereunder or in
connection herewith to Bank shall be made free and clear of and without
deduction for or on account of any withholding or like or similar taxes
unless Guarantor is required to make such a payment subject to the
deduction or withholding of such tax, in which case the sum payable by
Guarantor in respect of which such deduction of withholding is required to
be made shall be increased to the extent necessary to ensure that, after
the making of such deduction or withholding, Bank receives and retains
(free from any liability in respect of any such deduction or withholding) a
net sum equal to the sum which it would have received and so retained had
no such deduction or withholding been made.
(13) (a) If for the purpose of obtaining judgment in any court,
it is necessary to convert any amount due hereunder in the currency in
which it is due (the "Original Currency") into another currency (the
"Second Currency"), the rate of exchange applied shall be that at which, in
accordance with normal banking procedures, Bank could purchase, in the San
Francisco foreign exchange market, the Original Currency with the Second
Currency on the date 2 business days preceding that on which judgment is
given. Guarantor agrees that its obligation in respect of any Original
Currency due from it to Bank hereunder shall, notwithstanding any judgment
or payment in such other currency, be discharged only to the extent that,
on the Business Day following the date Bank receives payment of any sum
adjudged to be due hereunder in the Second Currency Bank may, in accordance
with normal banking procedure, purchase, in the San Francisco foreign
exchange market, the Original Currency with the amount of the Second
Currency so paid; and if the amount of the Original Currency so purchased
or which could have been so purchased is less than the amount originally
due in the Original Currency, Guarantor agrees as a separate obligation and
notwithstanding any such payment or judgment to indemnify Bank against such
loss.
(b) The term "rate of exchange" in this paragraph 13 means
the spot rate at which Bank in accordance with normal practices is able on
the relevant date to purchase the Original Currency with the Second
Currency and includes any premium and costs of exchange payable in
connection with such purchase.
(14) (a) This instrument shall be construed in accordance with
the laws of the Province of Ontario, Canada.
(b) Guarantor hereby irrevocably submits to and
acknowledges the competence of the jurisdiction of the courts of Ontario,
Canada, and any other courts having jurisdiction in
the Province of Ontario, Canada in any action or proceeding arising out
of or relating to this Continuing Guarantee, and hereby irrevocably
agrees that all claims in respect of such action or proceeding may be
heard and determined in such court.
(c) Nothing in this paragraph 14 shall affect the right of
Bank to serve legal process in any other manner permitted by law or affect
the right of Bank to bring any action or proceeding against Guarantor or
its property in the courts of any other jurisdiction.
(15) Guarantor acknowledges and agrees that all calculations of
interest under this Guarantee and the Loan Agreement are made on the basis
of the interest rate stated therein and not on the basis of the effective
yearly rates or on any other basis which gives effect to the principal of
deemed reinvestment. The yearly rates of interest for any day, to which
the interest rate is equivalent, is the rate so determined multiplied by
the actual number of days in that year and divided by 365 or 366, as the
case may be.
(16) The recitals to this Continuing Guarantee are true and
correct in all respects and form an integral part hereof.
Executed as of this 3rd day of July, 1996.
GUARANTOR:
AMERICAN ECO CORPORATION
By: /s/ Xxxxxxx X. XxXxxxxx
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Xxxxxxx X. XxXxxxxx
President & CEO
And:
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CORPORATE RESOLUTION TO SIGN GUARANTY
RESOLVED, that American Eco Corporation, an Ontario, Canada
corporation, guarantee payment of the debts of Separation and Recovery
Systems (the Borrower) to Bank of America National Trust and Savings
Association (the Bank).
RESOLVED, that this corporation will receive a business benefit
from the Borrower's financial arrangements with the Bank and therefore will
benefit from guaranteeing the debt.
1. DEBT
RESOLVED that at any one time the total guaranty authorized by
this resolution is limited to the principal amount of $5,750,000 United
States dollars, plus any interest and fees. This amount is in addition to
any other debt of the Borrower guaranteed under the authorization of
separate resolutions.
2. AUTHORIZATION
RESOLVED that any 1 of the officers named below (and their
successors in office) are authorized to:
(a) sign the guaranty for the corporation;
(b) grant a security interest in any property owned or
controlled by the corporation as security for the guaranty; and
(c) sign and deliver to the Bank any additional documents
the Bank may require and the officers approve.
The authorized officers are:
1. Xxxxxxx X. XxXxxxxx, President & CEO
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Name Title
2.
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3.
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4.
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3. REVOCATION
RESOLVED that the Bank is authorized to act on this
resolution until notified in writing of its revocation.
4. SECRETARY'S CERTIFICATION
I, Xxxx X. Xxxxx, the corporate secretary of the corporation
named above, certify that this is an accurate copy of a resolution of its
board of directors. The board adopted it as required by law and the
corporation's constating documents on July 3, 1996 by the unanimous consent
in writing of all directors of the corporation and such resolution remains
in full force and effect, and has not been amended or revoked as of the
date hereof.
I also certify that the signatures below are those of the
officers authorized to sign for this corporation by this resolution.
This certification is dated July 3rd, 1996.
5. SIGNATURES
Authorized Signatures:
/s/ Xxxxxxx X. XxXxxxxx Xxxxxxx X. XxXxxxxx President & CEO
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Signature Print name Title
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Signature Print name Title
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Signature Print name Title
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Signature Print name Title
Affix corporate seal here
[seal affixed]
/s/ Xxxx X. Xxxxx Xxxx X. Xxxxx
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Secretary's signature Print name
NOTE: THE ATTACHED SIGNATURE OF XXXXXXX XXXXXXXX HAS BEEN REVIEWED AND
DEEMED ACCEPTABLE BY THE SECRETARY OF THE CORPORATION.
