Exhibit 7(c)(5)
Continuing Guaranty Agreement
CONTINUING GUARANTY AGREEMENT
SUPERIOR DIECUTTING, INC.
THIS CONTINUING GUARANTY AGREEMENT (this "Guaranty") is made this ____ day
of October, 2002, by SUPERIOR DIECUTTING, INC., a corporation organized under
the laws of the State of Kentucky (hereinafter referred to as "Guarantor"), in
favor of FLEET CAPITAL CORPORATION, a Rhode Island corporation (hereinafter
referred to as "Lender").
Preamble:
FLANDERS CORPORATION, a North Carolina corporation, FLANDERS/PRECISIONAIRE
CORP., a North Carolina corporation, FLANDERS FILTERS, INC., a North Carolina
corporation, FLANDERS/CSC CORPORATION, a North Carolina corporation,
PRECISIONAIRE OF UTAH, INC., a Utah corporation, PRECISIONAIRE, INC., a Florida
corporation, ECO-AIR PRODUCTS, INC., a California corporation, AIR SEAL FILTER
HOUSINGS, INC., a Texas corporation, and FLANDERS REALTY CORP., a North Carolina
corporation, (each hereinafter referred to as a "Debtor" and collectively as
"Debtors") and Lender are parties to a Loan and Security Agreement dated the
date hereof (as at any time amended, modified, renewed or extended, the "Loan
Agreement"), pursuant to which Lender has agreed to make loans and
other extensions of credit to or for the benefit of Debtors on the terms and
subject to all of the conditions set forth in the Loan Agreement. Capitalized
terms used in this Guaranty, unless otherwise defined herein, shall have the
meaning ascribed to them in the Loan Agreement.
A condition to any extension of any credit by Lender to Debtors under
the terms of the Loan Agreement is the execution and delivery of this Guaranty
by Guarantor. To induce Lender to extend credit to Debtors under the Loan
Agreement in accordance with the terms thereof, Guarantor has agreed to execute
and deliver this Guaranty.
NOW, THEREFORE, for Ten Dollars ($10.00) in hand paid and to induce Lender
to make loans or otherwise extend credit to Debtors from time to time as set
forth in the Loan Agreement, and for other good and valuable consideration,
Guarantor hereby unconditionally and absolutely guarantees to Lender the due and
punctual payment, performance and discharge (whether upon stated maturity,
demand, acceleration or otherwise in accordance with the terms thereof) of all
such loans and extensions of credit and all other debts, liabilities and
obligations of Debtors to or held by Lender (including any portion of any such
debts, obligations or liabilities nominally held by Lender on behalf of others
who have participations or interests therein granted or created by Lender),
whether direct or indirect, absolute or contingent, secured or unsecured, due or
to become due, joint or several, primary or secondary, liquidated or
unliquidated, now existing or hereafter arising, whether created directly to or
acquired by assignment or otherwise by Lender, and whether any Debtor may be
liable individually or jointly with others, and regardless of whether recovery
upon any of such loans or extensions of credit or other debts, liabilities and
obligations becomes barred
by any statute of limitations, is void or voidable under any law relating to
fraudulent obligations or otherwise or is or becomes invalid or unenforceable
for any other reason (all such loans, extensions of credit and other debts,
liabilities and obligations being hereinafter referred to collectively as the
"Guaranteed Obligations"). Without limiting the generality of the foregoing,
the term "Guaranteed Obligations" as used herein shall include all debts,
liabilities and obligations incurred by Debtors to Lender in any bankruptcy of
Debtors and any interest, fees or other charges accrued in any such bankruptcy
whether or not recoverable from any Debtor or any Debtor's estate under 11
U.S.C. '506.
GUARANTOR DOES HEREBY WAIVE: notice of Lender's acceptance hereof; notice of
the extension of credit from time to time by Lender to Debtors and the creation,
existence or acquisition of any Guaranteed Obligations hereby guaranteed; notice
of the amount of Guaranteed Obligations of Debtors to Lender from time to time,
subject, however, to Guarantor's right to make inquiry of Lender to ascertain
the amount of Guaranteed Obligations at any reasonable time; notice of any
adverse change in any Debtor's financial condition or of any other fact which
might increase Guarantor's risk; notice of presentment for payment, demand,
protest and notice thereof as to any instrument; notice of default or
acceleration; all other notices and demands to which Guarantor might otherwise
be entitled; any defense that a Debtor may at any time assert based upon the
statute of limitations, the statute of frauds, failure of consideration, fraud,
bankruptcy, lack of legal capacity, usury, or accord and satisfaction; and any
right to contest the commercial reasonableness of the disposition of any or all
collateral. Guarantor further waives any right Guarantor may have, by statute
or otherwise, to require Lender to institute suit against a Debtor after notice
or demand from Guarantor or to seek recourse first against a Debtor or any other
Obligor, or to realize upon any security for any of the Guaranteed Obligations,
as a condition to enforcing Guarantor's liability and obligations hereunder; any
defense or claim that any Person purporting to bind a Debtor to the payment of
any Guaranteed Obligations did not have actual or apparent authority to do so;
and any right to appraisement, valuation, stay of execution, or notice of
election to declare due the amount of any Obligations of Debtors with regard to
Lender's enforcement of any Lien or other interest Lender may hold in any real
or personal property of Debtors. To the fullest extent permitted by Applicable
Law, Guarantor hereby also expressly waives any and all rights or defenses
arising by reason of (i) any "one action" or "anti-deficiency" law which would
otherwise prevent Lender from bringing any action, including any claim for a
deficiency, or exercising any other right or remedy (including any right of
setoff) against Guarantor before or after Lender's commencement or completion of
any foreclosure action, whether by judicial action, by exercise of power of sale
or otherwise, or (ii) any other law which in any other manner would otherwise
require any election of remedies by Lender. Except as otherwise prohibited by
Applicable Law, Guarantor hereby waives any right that it may have to claim or
recover in any litigation respecting this Guaranty any special, exemplary,
punitive or consequential damages or any damages other than, or in addition to,
actual damages. Guarantor shall make all payments to Lender on the Guaranteed
Obligations free and clear of, and without deduction or withholding for or on
account of, any setoff, counterclaim, defense, duties, taxes, levies, imposts,
fees, deductions, restrictions or conditions of any kind.
If any Debtor should fail to pay any Guaranteed Obligations on the due date
thereof (whether due on demand, at stated maturity, upon acceleration or
otherwise) or any other Event of Default
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under the Loan Agreement occurs or exists, then, whether or not any of the
Guaranteed Obligations is then due and payable or the maturity thereof has been
accelerated or demand for payment thereof from Debtors or any other Obligor has
been made, Lender may without notice to Guarantor make the Guaranteed
Obligations immediately due and payable hereunder as to Guarantor and Lender
shall be entitled to enforce the obligations of Guarantor hereunder. Guarantor
agrees to pay all expenses incurred by Lender in connection with enforcement of
Lender's right under the Guaranty, including, but not limited to, court costs,
collection charges and reasonable attorneys' fees and disbursements.
Lender shall have a Lien upon and right of set-off to any and all credits
and any and all other property of Guarantor, now or at any time whatsoever with
or in the possession of Lender or anyone holding for Lender as security for any
and all obligations of Guarantor to Lender or to any company which may now or at
any time be its subsidiary or affiliate, no matter how or when arising and
whether under this or any other instrument or agreement or otherwise.
Guarantor consents and agrees that, without notice to or by Guarantor and
without affecting or impairing the liability or obligations of Guarantor
hereunder, Lender may: compromise or settle, extend the period of duration or
the time for the payment, discharge or performance of any of the Guaranteed
Obligations or increase the amount of the Guaranteed Obligations; refuse to
enforce, or release all or any Person liable for payment of, any of the
Guaranteed Obligations; increase, decrease or otherwise alter the rate of
interest payable with respect to the Guaranteed Obligations or grant other
indulgences to Debtors in respect thereof; amend or modify in any manner or
terminate or release, any of the Loan Documents or any other agreements
evidencing, securing or otherwise relating to the Guaranteed Obligations (other
than this Guaranty); release, surrender, exchange, modify or impair any and all
collateral, deposits or other property at any time securing (directly or
indirectly) any of the Guaranteed Obligations or on which Lender at any time may
have a lien; extend the time of payment of any collateral consisting of
accounts, notes, chattel paper or other rights to the payment of money; refuse
to enforce its rights, or make any comprise or settlement or agreement therefor,
in respect of any and all of such collateral, deposits and property, or with any
party to the Guaranteed Obligations, or with any other Person whatsoever; or
release or substitute any one or more of the endorsers or guarantors of the
Guaranteed Obligations, whether parties to this instrument or not.
Lender shall be under no obligation to marshal any assets in favor of
Guarantor or against or in payment of any of the Guaranteed Obligations. If and
to the extent Lender receives any payment on account of any of the Guaranteed
Obligations (whether from Debtors or any other Obligor or from the sale or other
disposition of any collateral) and such payment or any part thereof is
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other Person in any
Insolvency Proceeding or under any Applicable Law, then the part of the
Guaranteed Obligations intended to be satisfied shall be revived and continued
in full force and effect as if said payment had not been made. The foregoing
provisions of this paragraph shall survive any termination or revocation of this
Guaranty.
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Any and all present and future debts and obligations of Debtors to Guarantor
are hereby waived and postponed in favor of and subordinated to the full and
final payment of the Guaranteed Obligations by Debtors to Lender. The
provisions of this Guaranty shall be supplemental to and not in derogation of
any rights and remedies of Lender or any affiliate of Lender under any separate
subordination agreement that Lender or such affiliate may at any time or from
time to time enter into with Guarantor.
Guarantor represents, warrants and covenants to Lender, as an inducement to
Lender to grant credit to Debtors, that, as of the date of this Guaranty, the
fair saleable value of Guarantor's assets exceeds its liabilities; Guarantor is
meeting current liabilities as they mature; the financial statements of
Guarantor furnished to Lender are true and correct and include in the footnotes
thereto all contingent liabilities of Guarantor to the extent required by GAAP;
since the date of said financial statements there has been no material adverse
change in the financial condition of Guarantor; there are not now pending any
material court or administrative proceedings or undischarged judgments against
Guarantor and no federal or state tax liens have been filed or, to Guarantor's
knowledge, threatened against Guarantor nor is Guarantor in default or, to
Guarantor's knowledge, claimed default under any agreement for borrowed money;
Guarantor shall immediately give Lender written notice of any material adverse
change in Guarantor's financial condition, including litigation commenced, tax
liens filed, defaults claimed under its indebtedness for borrowed money or
Insolvency Proceedings commenced by or against Guarantor; Guarantor shall at
such reasonable times as Lender requests furnish its current financial
statements to Lender and permit Lender or its representatives to inspect
Guarantor's financial records and properties and make extractions therefrom in
order to evaluate the financial condition of Guarantor. Guarantor shall not
create, incur assume or suffer to exist any indebtedness or any lien on its
assets except as consented to in writing by Lender, shall not assume, endorse or
be or become liable for, or guarantee, directly or indirectly, any indebtedness
or obligation of any other Person (other than this guarantee of the Guaranteed
Obligations) and shall not make or commit to, directly or indirectly, any
advance, loan, extension of credit or capital contribution to, or purchase any
capital stock, bonds, notes or other securities of, or make any investment in,
any Person, except to the extent otherwise permitted under the Loan Agreement.
Guarantor shall not consolidate or merge with or enter into a share exchange
with, any Person and shall not liquidate or dissolve, except to the extent
otherwise permitted under Section 9.2.1 of the Loan Agreement.
This Guaranty is a primary, immediate and original obligation of Guarantor
and is an absolute, unconditional, continuing and irrevocable guaranty of
payment of the Guaranteed Obligations and not of their collectibility only, is
not contingent upon the exercise or enforcement by Lender of whatever remedies
Lender may have against Debtors or otherwise or the enforcement of any Lien or
realization upon any security Lender may at any time possess, and shall remain
in full force and effect without regard to future changes in conditions,
including change of law or any invalidity or unenforceability of any of the
Guaranteed Obligations or agreements evidencing same. This Guaranty shall be in
addition to any other present or future guaranty or other security for any of
the Guaranteed Obligations, shall not be prejudiced or unenforceable by the
invalidity of any such
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other guaranty or security and is not conditioned upon or subject to the
execution by any other Person of this Guaranty or any other guaranty or
suretyship agreement.
Lender shall have the right to seek recourse against Guarantor to the full
extent provided for herein and in any other document or instrument evidencing
the obligations of Guarantor to Lender, and against Debtors to the full extent
provided for in any of the Loan Documents. No election to proceed in one form
of action or proceeding, or against any party, or on any obligation, shall
constitute a waiver of Lender's right to proceed in any other form of action or
proceeding against other parties unless Lender has expressly waived such right
in writing. Specifically, but without limiting the generality of the foregoing,
no action or proceeding by Lender against Debtors or any other Obligor under any
Loan Document shall serve to diminish the liability of Guarantor except to the
extent Lender realized payment by such action or proceeding.
Guarantor is fully aware of the financial condition of Debtors. Guarantor
delivers this Guaranty based solely upon its own independent investigation and
in no part upon any representation or statement of Lender with respect thereto.
Guarantor is in a position to and hereby assumes full responsibility for
obtaining any additional information concerning Debtors' financial condition as
Guarantor may deem material to Guarantor's obligations hereunder and Guarantor
is not relying upon, nor expecting Lender to furnish Guarantor any information
in Lender's possession concerning, Debtors' financial condition. Guarantor
hereby knowingly accepts the full range of risks encompassed within a contract
of "Guaranty," which risks include, without limitation, the possibility that
Debtors will contract additional Guaranteed Obligations for which Guarantor may
be liable hereunder after Debtors' financial condition or ability to pay their
lawful debts when they fall due has deteriorated.
The books and records of Lender showing the account among Lender and Debtors
shall be admissible in evidence in any action or proceeding against or involving
Guarantor as prima facie proof of the items therein set forth, and the monthly
statements of Lender rendered to Debtors, to the extent to which no written
objection is made within 30 days from the date of sending thereof to Debtors,
shall be deemed conclusively correct and shall constitute an account stated
among Lender and Debtors and shall be binding on Guarantor.
Guarantor agrees that this Guaranty shall continue in full force and effect
until all of the Guaranteed Obligations have been fully paid and discharged and
all financing agreements between Lender and Debtors have been terminated. If
for any reason a Debtor has no legal existence or is under no legal obligation
to discharge any of the Guaranteed Obligations, or if any of the Guaranteed
Obligations have become unrecoverable from a Debtor by reason of any Insolvency
Proceeding or by other operation of law or for any other reason, this Guaranty
shall nevertheless be binding on Guarantor to the same extent as if Guarantor
had at all times been the principal obligor on all such Guaranteed Obligations.
In the event that acceleration of the time for payment of any of the Guaranteed
Obligations is stayed as a result of any Insolvency Proceeding or for any other
reason, all such amounts otherwise subject to acceleration under the terms of
any instrument or agreement
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evidencing or securing the payment of the Obligations or otherwise executed in
connection therewith shall be immediately due and payable by Guarantor.
To the fullest extent permitted by Applicable Law, Guarantor waives any
right that Guarantor may have to terminate or revoke this Guaranty. If and
notwithstanding the foregoing waiver, Guarantor shall have any right under
Applicable Law to terminate or revoke this Guaranty, which right cannot be
waived by Guarantor, Guarantor agrees that such termination or revocation,
specifically referring to this Guaranty and signed by Guarantor, shall not be
effective until actually received by an officer of Lender who is familiar with
Debtors' account with Lender and this Guaranty; but any such termination or
revocation shall not affect the obligation of Guarantor or Guarantor's
successors or assigns with respect to any of the Guaranteed Obligations owing to
Lender and existing at the time of the receipt by Lender of such revocation or
to arise out of or in connection with any transactions theretofore entered into
by Lender with or for the account of Debtors. If Lender grants loans or other
extensions of credit to or for the benefit of Debtors or takes other action
after the termination or revocation by Guarantor, then the rights of Lender with
respect thereto shall be the same as if such termination or revocation had not
occurred.
All rights, benefits and privileges herein and hereby conferred upon Lender
shall vest in and be enforceable by Lender and its successors and assigns.
Guarantor further agrees that this Guaranty shall be binding upon Guarantor and
upon its successors and assigns.
To the extent any performance of this Guaranty would violate any applicable
usury statute or other Applicable Law, the obligation to be fulfilled shall be
reduced to the limit legally permitted, so that this Guaranty shall not require
any performance in excess of the limit legally permitted, but such obligations
shall be fulfilled to the limit of the legal validity. The provisions of this
paragraph shall control every other provision of this Guaranty.
This Guaranty, all acts and transactions hereunder and the rights and
obligations of the parties hereto shall be governed, construed and interpreted
according to the internal laws of the State of Georgia. As part of the
consideration for Lender's granting credit to Debtors, Guarantor hereby agrees
that all actions, suits or proceedings arising directly or indirectly hereunder
may, at the option of Lender, be litigated in courts having situs within the
State of Georgia, and Guarantor hereby expressly consents to the jurisdiction of
any state or federal court located within said state, and consents that any
service of process in which action or proceedings may be made by personal
service upon Guarantor wherever Guarantor may be then located, or by certified
or registered mail directed to Guarantor at Guarantor's last known address.
This Guaranty expresses the entire understanding of the parties hereto with
respect to the subject matter hereof and may not be changed orally, and no
obligations of Guarantor can be released or waived by Lender or any officer or
agent of Lender, except by a writing signed by a duly authorized officer of
Lender.
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Until all of the Guaranteed Obligations have been paid in full and the Loan
Agreement has been terminated, Guarantor shall have no claim, right or remedy
(whether or not arising in equity, by contract or Applicable Law) against any
Debtor or any other Person by reason of Guarantor's payment or other performance
hereunder. Without limiting the generality of the foregoing, Guarantor hereby
subordinates to the full and final payment of the Guaranteed Obligations any and
all legal or equitable rights or claims that Guarantor may have to
reimbursement, subrogation, indemnity and exoneration and agrees that until all
of the Guaranteed Obligations have been paid in full and the Loan Agreement has
been terminated, Guarantor shall have no recourse to any assets or property of
any Debtor (including any assets securing any of the Guaranteed Obligations) and
no right of recourse against or contribution from any other Person in any way
directly or contingently liable for any of the Guaranteed Obligations, whether
any of such rights arise under contract, in equity or under Applicable Law.
As used herein, all references to the term "Guarantor" shall mean Guarantor
and its successors and assigns (including any receiver, trustee or custodian for
Guarantor or any of its assets or Guarantor in its capacity as debtor or debtor-
in-possession under the United States Bankruptcy Code); all references to the
term "Lender" shall mean Lender and its successors and assigns and all
references to the terms "Debtor" or "Debtors" shall mean each Debtor and its
successors and assigns (including any receiver, trustee or custodian for any
Debtor or any of its assets or any Debtor in its capacity as debtor or debtor-
in-possession under the United States Bankruptcy Code); all references to the
term "Person" wherever used herein shall mean any individual, sole
proprietorship, partnership, corporation, business trust, individual, limited
liability company, unincorporated association, joint stock corporation, trust,
joint venture or other form of business entity or any government or any agency
or instrumentality or political subdivision thereof; and all references to the
plural shall also mean the singular, and all references to the singular shall
also mean the plural. All references to "including" shall mean "including,
without limitation." If this Guaranty is signed by more than one Guarantor,
then the term "Guarantor" shall be considered to be in the plural and each such
Guarantor shall be jointly and severally liable for all of the Guaranteed
Obligations and bound by all terms of this Guaranty.
This Guaranty is intended to take effect as a sealed instrument under the
laws of the State of Georgia.
Guarantor and Lender each hereby waives the right to a jury trial in any
action, suit, proceeding or counterclaim arising out of or related to this
Guaranty and Guarantor further waives any rights arising under applicable
statutes or otherwise to require Lender to institute suit against any Debtor or
to exhaust Lender's rights and remedies against any Debtor, Guarantor being
bound to the payment of any and all Obligations of Debtors to Lender, whether
now existing or hereafter accruing as fully as if such Obligations were directly
owing to Lender by Guarantor.
[Signatures on following page]
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IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be signed, sealed
and delivered by its duly authorized officers, this ____ day of October, 2002.
ATTEST: SUPERIOR DIECUTTING, INC.
("Guarantor")
________________________________ By:____________________________________
Xxxxxxxx X. Xxxxx, Secretary Xxxxxx X. Xxxxx, Chief Financial
Officer and Treasurer
[CORPORATE SEAL]
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