GUARANTY AGREEMENT
GUARANTY AGREEMENT (this "Agreement"), dated as of October 25, 2006, by
GREENSHIFT CORPORATION, a Delaware corporation, GS AGRIFUELS CORPORATION, a
Delaware corporation, GS ENERGY CORPORATION, a Delaware corporation and GS
CLEANTECH CORPORATION, a Delaware corporation (each a "Guarantor" and
collectively, the "Guarantors") in favor or THE STILLWATER ASSET-BACKED FUND LP,
a Delaware limited partnership (the "Lender"). The Lender and NextGen
Acquisition Inc., a Delaware corporation (the "Borrower") are parties to a
Credit Agreement, dated as of the date hereof, (as modified and supplemented and
in effect from time to time, the "Credit Agreement"), providing, subject to the
terms and conditions thereof, for extensions of credit (by the making of a Term
Loan) to be made by the Lender to the Borrower in the principal amount of
$6,000,000.
To induce the Lender to enter into the Credit Agreement and to extend
credit thereunder, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Guarantor have agreed,
subject to the terms and conditions of the Intercreditor Agreement, to jointly
and severally guarantee the Guaranteed Obligations (as hereinafter defined) on
the terms and conditions set forth in this Agreement. Accordingly, the parties
hereto hereby agree as follows:
Section 1. Definitions. All capitalized terms used herein but not defined
herein shall have the meanings set forth in the Credit Agreement. As used
herein, the following terms shall have the following meanings:
"Costs" shall have the meaning ascribed thereto in Section 2.01
hereof.
"Guaranteed Obligations" shall mean the obligations described in
Section 2.01 hereof.
Section 2. The Guarantee.
2.01 The Guarantee. (a) Each Guarantor, hereby absolutely, unconditionally and
irrevocably guarantees to the Lender, the full and prompt payment when due,
whether at maturity or earlier, by reason of acceleration, mandatory
prepayment or otherwise, and at all times thereafter, the principal owing
by the Borrower to the Lender on the Loans, and all fees, costs and
expenses under the Credit Agreement or any other Financing Agreements.
(b) Each Guarantor further agrees to pay, upon demand, all costs and
expenses ("Costs"), including, without limitation, all court costs and
reasonable attorneys' fees and expenses, paid or incurred by the
Lender (a) in endeavoring to collect all or any part of the
Obligations from, or in prosecuting any action against, such Guarantor
or (b) in endeavoring to realize upon (whether by judicial,
nonjudicial or other proceedings) any collateral securing any of such
Guarantor's liabilities under this Guaranty ("Guarantor Collateral").
2.02 Obligations Unconditional. The obligations of each Guarantor under Section
2.01 hereof are absolute and unconditional, irrespective of the value,
genuineness, validity, regularity or enforceability of the Credit
Agreement, the Note or any other agreement or instrument (including,
without limitation, any other Financing Agreements) referred to herein or
therein, or any substitution, release or exchange of any other Financing
Agreements of or security for any of the Guaranteed Obligations or for the
obligations of such Guarantor hereunder, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance
whatsoever which might otherwise constitute a legal or equitable discharge
or defense of a surety or guarantor, it being the intent of this Section
2.02 that the obligations of such Guarantor hereunder shall be absolute and
unconditional, under any and all circumstances. Without limiting the
generality of the foregoing, it is agreed that the occurrence of any one or
more of the following shall not alter or impair the liability of each
Guarantor hereunder which shall remain absolute and unconditional as
described above:
(i) at any time or from time to time, without notice to such Guarantor,
the time for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such performance or
compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of the Credit
Agreement or the Note or any other agreement or instrument referred to
herein or therein (including, without limitation, any other Financing
Agreements) shall be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under the Credit
Agreement or the Note or any other agreement or instrument referred to
herein or therein (including, without limitation, any other Financing
Agreements) shall be waived or any other guarantee of any of the
Guaranteed Obligations or any security therefor shall be released or
exchanged in whole or in part or otherwise dealt with; or
(iv) any lien granted to, or in favor of the Lender as security for any of
the Guaranteed Obligations shall be released, exchanged, enforced or
shall fail to be perfected.
Except as expressly provided in this Agreement, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Lender exhaust any right, power or
remedy to proceed against the Borrower under the Credit Agreement or the Note or
any other agreement or instrument referred to herein or therein (including,
without limitation, any other Financing Agreements), or against any other person
under any other guarantee of, or security for, any of the Guaranteed Obligations
or any of the obligations of such Guarantor hereunder.
2.03 Reinstatement. The obligations of each Guarantor under this Section 2 shall
be automatically reinstated if and to the extent that for any reason any
payment by or on behalf of the Borrower in respect of the Guaranteed
Obligations is rescinded or must be otherwise restored by any holder of any
of the Guaranteed Obligations, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise, and such Guarantor agrees that
it will indemnify the Lender on demand for all reasonable costs and
expenses (including, without limitation, reasonable fees of counsel)
incurred by the Lender in connection with any such rescission or
restoration, including any such costs and expenses incurred in defending
against any claim alleging that such payment constituted a preference,
fraudulent transfer or similar payment under any bankruptcy, insolvency or
similar law. The provisions of this Section 2.03 shall survive the
termination of this Agreement.
2.04 Subrogation. Each Guarantor hereby waives all rights of subrogation or
contribution, whether arising by contract or operation of law (including,
without limitation, any such right arising under the Federal Bankruptcy
Code) or otherwise by reason of any payment by such Guarantor pursuant to
the provisions of this Section 2 and further agrees with the Borrower for
the benefit of such Guarantor's creditors that any such payment by such
Guarantor shall constitute a contribution of capital by such Guarantor to
the Borrower.
2.05 Remedies. Each Guarantor agrees that, as between such Guarantor and the
Lender, the obligations of the Borrower under the Credit Agreement and the
Note may be declared to be forthwith due and payable as provided in the
Credit Agreement (and shall be deemed to have become automatically due and
payable in the circumstances provided therein) for purposes of Section 2.01
hereof notwithstanding any stay, injunction or other prohibition preventing
such declaration (or such obligations from becoming automatically due and
payable) as against the Borrower and that, in the event of such declaration
(or such obligations being deemed to have become automatically due and
payable), such obligations (whether or not due and payable by the Borrower)
shall forthwith become due and payable by such Guarantor for purposes of
said Section 2.01.
2.06 Continuing Guarantee. The guarantee in this Section 2 is a continuing
guarantee, and shall apply to all Guaranteed Obligations whenever arising.
2.07 Interest on Defaulted Guaranteed Obligations. If any Guarantor fails to pay
any amount when due pursuant to Section 2.01 hereof, such Guarantor agrees
to pay interest on the amount of such payment not so paid from said due
date until such payment shall be paid in full at a rate per annum equal to
the rate set forth in Section 2.3 of the Credit Agreement, payable on
demand of the Lender.
2.08 Application of Payments. Cash at the time held by the Lender shall be
applied by the Lender:
First, to the payment of the out-of-pocket costs and expenses of the
Lender and the reasonable fees and expenses of its counsel, and all
expenses incurred and advances made by the Lender in connection with
the administration of this Agreement, the Credit Agreement or any
other Financing Agreements;
Next, in payment of the remaining Guaranteed Obligations; and
Finally, after all amounts required to be paid pursuant to Section
2.01 hereof have been paid in full, to the payment to the Guarantors
or their successors or assigns, or as a court of competent
jurisdiction may direct, of any surplus then remaining.
2.09 Further Assurances. Each Guarantor agrees that, from time to time upon the
written request of the Lender, to execute and deliver such further
documents and do such other acts and things as the Lender may reasonably
request in order fully to affect the purposes of this Agreement.
Section 3. Representations and Warranties. Each Guarantor represents and
warrants to the Lender that:
3.01 Financial Condition. Its financial statement as at June 31, 2006,
heretofore furnished to the Lender, fairly presents the financial condition
of such Guarantor as at the date of such statement. On said date, such
Guarantor had no material contingent liabilities, liabilities for taxes,
unusual forward or long-term commitments or unrealized or anticipated
losses from any unfavorable commitments, except as referred to or reflected
or provided for in said statement.
3.02 Indebtedness. Except as otherwise reflected on the financial statement of
such Guarantor referred to in Section 3.01 hereof, set forth on Schedule I
hereto is a complete and correct list of all Indebtedness of such Guarantor
outstanding exceeding $500 for any one item or $2,000 in the aggregate, and
all guarantees and security presently in effect relating to any such
Indebtedness, of such Guarantor.
3.03 No Breach. None of the execution and delivery of this Agreement, the
consummation of the transactions herein contemplated or compliance with the
terms and provisions hereof will conflict with or result in a breach of, or
require any consent under, any applicable law or regulation, or any order,
writ, injunction or decree of any court or governmental authority or
agency, or any agreement or instrument to which the Guarantor is a party or
by which the Guarantor is bound or to which the Guarantor is subject, or
constitute a default under any such agreement or instrument, or result in
the creation or imposition of any lien upon the Guarantor's earnings or
assets pursuant to the terms of any such agreement or instrument.
3.04 Binding Obligation. This Agreement has been duly and validly executed and
delivered by the Guarantor and constitutes its legal, valid and binding
obligation, enforceable in accordance with its terms.
3.05 Approvals. No authorizations, approvals or consents of, and no filings or
registrations with, any governmental or regulatory authority or agency are
necessary for the execution, delivery or performance by the Guarantor of
this Agreement or for the validity or enforceability hereof.
3.06 Taxes. The Guarantor has filed all federal income tax returns and all other
material tax returns which are required to be filed by such Guarantor and
has paid all taxes due and payable by such Guarantor except for any such
taxes the payment of which is being contested in good faith and by proper
proceedings and against which adequate reserves are being maintained.
Section 4. Covenants. The Guarantor agrees that, until the payment and
satisfaction in full of the Guaranteed Obligations and the termination of the
Commitment under the Credit Agreement:
4.01 Reports, Etc. The Guarantor shall deliver to the Lender no later than 90
days after the end of each calendar year, a personal financial statement as
of December 31 of the immediately preceding calendar year, prepared on the
same basis and in at least such detail as the financial statement referred
to in Section 3.01 hereof, on such form as the Lender may prescribe and
certified by the Guarantor as fairly presenting the financial condition of
such Guarantor as at the date of such statement.
4.02 Taxes. The Guarantor will pay and discharge when due all taxes, assessments
and governmental charges or levies imposed on it, its earnings, or assets.
4.03 Litigation and Other Notices. The Guarantor will promptly give the Lender
notice of (i) all legal or arbitral proceedings, and of all proceedings by
or before any governmental or regulatory authority or agency, affecting
such Guarantor, and (ii) any material adverse change in such Guarantor's
assets or liabilities (contingent or otherwise).
Section 5. Miscellaneous.
5.01 No Waiver. No failure on the part of the Lender to exercise, and no delay
in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy by the Lender preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. All remedies
hereunder are cumulative and are not exclusive of any other remedies
provided by law. The Lender shall not be deemed to have waived any rights
hereunder or under any other agreement or instrument unless such waiver
shall be in writing and signed by such parties.
5.02 Applicable Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of New York (other than the conflicts of
laws principles thereof).
5.03 Submission to Jurisdiction.
(a) Any legal action or proceeding with respect to this Agreement may be
brought in the courts of the State of New York (located in New York
County) or of the United States of America for the Southern District
of New York, and, by execution and delivery of this Agreement, each
Guarantor hereby accepts for himself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid
courts.
(b) Each Guarantor hereby irrevocably waives, in connection with any such
action or proceeding, any objection, including, without limitation,
any objection to the laying of venue or based on the grounds of forum
non conveniens, which he may now or hereafter have to the bringing of
any such action or proceeding in such respective jurisdictions.
(c) Each Guarantor hereby irrevocably consents to the service of process
of any of the aforementioned courts in any such action or proceeding
by the mailing of copies thereof by registered or certified mail,
postage prepaid, to it, as the case may be, at the address set forth
in Section 5.05 hereof.
(d) Nothing herein shall affect the right of the Lender to serve process
in any other manner permitted by law or to commence legal proceedings
or otherwise proceed against any Guarantor in any other jurisdiction
which the Lender deems necessary or appropriate in order to realize on
the Guarantor Collateral or to otherwise enforce its rights against
any Guarantor or its property.
5.04 Entire Agreement; Waiver of Jury Trial, etc.
(a) This Agreement and the other Financing Agreements constitute the
entire contract between the parties hereto relative to the subject
matter hereof. Except as expressly provided herein or in the other
Financing Agreements, nothing in this Agreement or in the other
Financing Agreements, expressed or implied, is intended to confer upon
any party, other than the parties hereto, any rights, remedies,
obligations or liabilities under or by reason of this Agreement or the
other Financing Agreements.
(b) EXCEPT AS PROHIBITED BY LAW, EACH PARTY HERETO HEREBY WAIVES ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY
OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT AND THE OTHER FINANCING AGREEMENTS.
(c) Except as prohibited by law, each party hereto hereby waives any right
it may have to claim or recover in any litigation referred to in
paragraph (b) of this Section 5.04 any special, exemplary, punitive or
consequential damages or any damages other than, or in addition to,
actual damages.
(d) Each party hereto (i) certifies that no representative, agent or
attorney of the Lender has represented, expressly or otherwise, that
the Lender would not, in the event of litigation, seek to enforce the
foregoing waivers and (ii) acknowledges that it has been induced to
enter into this Agreement or the other Financing Agreements, as
applicable, by, among other things, the mutual waivers and
certifications herein.
5.05 Notices. Notices, consents, approvals and other communications provided for
herein shall be in writing and shall be delivered or mailed (or in the case
of facsimile communication, delivered by graphic scanning, telecopier or
other telecommunications equipment, with receipt confirmed) addressed,
(a) if to the Lender, The Stillwater Asset-Backed Fund LP, 00 Xxxxxxx
Xxxxxx Xxx Xxxx, Xxx Xxxx 00000; Attention: Xx. Xxxxxxx Xxxx, with
copies to (i) The Oxbridge Group LLC, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Xx. Xxxxxxxxx Xxxxxxxxx; and (ii) Xxxxxxx
Xxxxxxxx Xxxxx Xxxxxxxxxxx & Kuh, LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Xxxxxxxx Xxxxxx, Esq.; and
(b) if to any Guarantor, c/o GreenShift Corporation, Xxx Xxxx Xxxxx, Xxxxx
0000, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx Xxxxxxxx. .
All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to
have been given on the date of receipt if hand delivered or three days
after being sent by registered or certified mail, postage prepaid,
return receipt requested, if by mail, or upon receipt if by any
facsimile or other telecommunications equipment, in each case
addressed to such party as provided in this Section 5.05 or in
accordance with the latest unrevoked direction from such party.
5.06 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the respective successors and assigns of the Guarantors and
the Lender.
5.07 Waivers, Amendments, etc. The provisions contained herein are for the
benefit of the Lender and their respective successors and assigns and may
not be rescinded or canceled or modified in any way, nor, unless otherwise
expressly provided for herein, may any provision of this Agreement be
waived or changed without the express prior written consent thereto of the
Lender.
5.08 Further Assurances. Each Guarantor agrees to do such further acts and
things, and to execute and deliver such additional conveyances,
assignments, agreements and instruments, as the Lender may at any time
reasonably request in connection with the administration and enforcement of
this Agreement or in order better to assure and confirm unto the Lender its
rights and remedies hereunder.
5.09 Survival. All covenants, agreements, representations and warranties made by
each Guarantor herein and in the certificates or other instruments prepared
or delivered in connection with this Agreement shall be considered to have
been relied upon by the Lender and shall survive the making by the Lender
of the Loan and the execution and delivery to the Lender of the Note.
5.10 Counterparts; Facsimile Signatures. This Agreement may be executed in
counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one contract, and shall become
effective when copies hereof which, when taken together, bear the
signatures of each of the parties hereto shall be delivered to the Lender.
Delivery of an executed counterpart of a signature page to this Agreement
by telecopier shall be effective as delivery of a manually executed
signature page hereto.
5.11 Severability. In case any one or more of the provisions contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
remaining provisions contained herein shall not in any way be affected or
impaired.
5.12 Section Headings. Section headings used herein are for convenience of
reference only and are not to affect the construction of, or to be taken
into consideration in interpreting, this Agreement.
IN WITNESS WHEREOF, this Guaranty has been duly executed and delivered by
each Guarantor as of the day and year first above written.
GREENSHIFT CORPORATION
By:/s/ Xxxxx Xxxxxxxx
--------------------------
Name: Xxxxx Xxxxxxxx
Title: Chairman and Chief Executive Officer
GS AGRIFUELS CORPORATION
By:/s/ Xxxxx Xxxxxxxx
--------------------------
Name: Xxxxx Xxxxxxxx
Title: Chairman and Chief Executive Officer
GS ENERGY CORPORATION
By:/s/ Xxxxx Xxxxxxxx
---------------------------
Name: Xxxxx Xxxxxxxx
Title: Chairman and Chief Executive Officer
GS CLEANTECH CORPORATION
By:/s/ Xxxxx Xxxxxxxx
---------------------------
Name: Xxxxx Xxxxxxxx
Title: Chairman and Chief Executive Officer
