PERSONAL GUARANTY
THIS PERSONAL GUARANTY (this "GUARANTY") is entered into this 18th day
of March, 1998 by and among XXXXXX XXXXXXX, an individual having his principal
place of business at 0000 Xxxx Xxxxx Xxxxxx, Xx Xxxxxxx, Xxxxxxxxxx 00000,
XXXXXXX XXXXX, an individual having a principal residence at
(Xxxxxx Xxxxxxx and Xxxxxxx Xxxxx referred to herein each
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individually as a "GUARANTOR" and collectively as "GUARANTORS"), and DYNAMIC
MATERIALS CORPORATION, a Delaware corporation ("LENDER"), having its principal
place of business at 000 Xxxxx Xxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000.
RECITALS
A. Lender, Xxxxxx Xxxxxxx and Spin Forge, LLC, a California limited
liability company ("BORROWER") are parties to a certain Asset Purchase Agreement
(the "PURCHASE AGREEMENT"), dated as of an even date herewith, whereby Lender is
acquiring certain assets from Borrower.
B. As part of the transactions contemplated by the Purchase Agreement,
Guarantors have requested Lender to make advances to Borrower in accordance with
the terms of a certain Loan Agreement (the "LOAN AGREEMENT"), dated as of an
even date herewith, by and between Borrower and Lender. Capitalized terms not
otherwise defined herein shall have the meanings ascribed to such terms in the
Loan Agreement.
C. Xxxxxx Xxxxxxx is President, manager and owner of a fifty percent
(50%) membership interest in Borrower. Xxxxxxx Xxxxx is manager and owner of a
fifty percent (50) membership interest in Borrower.
D. Lender has conditioned its agreement to enter into the Loan
Agreement upon Guarantors' execution and delivery of this Guaranty.
AGREEMENT
NOW, THEREFORE, in order to induce Lender to enter into the Loan
Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. GUARANTY.
1.1 UNCONDITIONAL GUARANTY OF PAYMENT. Guarantors, jointly and
severally, hereby irrevocably, absolutely and unconditionally guarantee to
Lender the punctual and complete payment and performance when due (whether by
stated maturity, acceleration or otherwise) of all indebtedness of Borrower to
Lender created under the Loan Agreement, whether prior or subsequent
to the date hereof (all such indebtedness being the "LIABILITIES"), together
with the prompt payment of all expenses, including reasonable attorneys' fees,
incidental to the collection of the Liabilities. The term "indebtedness" is used
herein in its most comprehensive sense and includes any and all advances, debts,
obligations and liabilities heretofore, now or hereafter made, incurred or
created, whether voluntary or involuntary and whether due or not due, absolute
or contingent, liquidated or unliquidated, determined or undetermined, and
whether recovery upon such indebtedness may be or hereafter become
unenforceable. The Liabilities and all other obligations and covenants to be
performed by Guarantors under this Guaranty shall hereinafter from time to time
be collectively referred to as the "GUARANTY OBLIGATIONS." Guarantors, jointly
and severally, hereby unconditionally and irrevocably agree that if the Borrower
shall fail for any reason to pay to Lender any amount payable when due,
Guarantors shall thereupon immediately pay to Lender the full amount then due.
The obligations of Guarantors hereunder shall be absolute, unconditional and
continuing so long as there shall remain any Liabilities due and payable, or to
become due and payable, by Borrower to Lender.
1.2 EXPENSES. Guarantors, jointly and severally, hereby agree
to pay all expenses incurred by Lender in connection with the enforcement of
Lender's rights under this Guaranty including, without limitation, reasonable
attorneys' fees and legal expenses.
2. PAYMENTS. All payments to be made by Guarantors to Lender hereunder
shall be paid in immediately available funds addressed to Lender at the address
first set forth above.
3. ABSOLUTE GUARANTY. Guarantors agree that the liability hereunder
shall be the immediate, direct and primary obligation of Guarantors and shall
not be contingent upon Lender's exercise or enforcement of any remedy that
Lender may have against Borrower or any other Person, or against any collateral
or any security for the Guaranty Obligations. Without limiting the generality of
the foregoing, the Guaranty Obligations shall remain in full force and effect
without regard to and shall not be impaired by, nor shall Guarantors be
released, exonerated or discharged by, any of the following events:
(a) insolvency, bankruptcy, reorganization, arrangement,
adjustment, composition, assignment for the benefit
of creditors, death, liquidation, winding up or
dissolution of death of Borrower, Guarantors or any
other guarantor of the Liabilities;
(b) any limitation, discharge or cessation of the
liability of Borrower, Guarantors or any other
guarantor for the Liabilities due to any statute,
regulation or rule of law or any invalidity or
unenforceability in whole or in part of the Loan
Agreement or any other guaranty of the Liabilities;
(c) any merger, acquisition, consolidation or change in
structure of Borrower or any other guarantor of the
Liabilities; or any sale, lease, transfer or other
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disposition of any or all of the assets or membership
interests of Borrower, Guarantors or any other
guarantor of the Liabilities;
(d) any assignment or other transfer, in whole or in
part, of Lender's interests in and rights under the
Loan Agreement and this Guaranty including, without
limitation, Lender's right to receive payment of the
Liabilities and the Guaranty Obligations;
(e) any claim, defense, counterclaim or setoff, other
than that of prior performance, that Borrower,
Guarantors or any other guarantor of the Liabilities
may have or assert including, but not limited to, any
defense of incapacity or lack of corporate or other
authority to execute any documents relating to the
Liabilities, the Guaranty Obligations or any other
guaranty obligations;
(f) any cancellation, renunciation or surrender of any
debt instrument evidencing the Liabilities;
(g) Lender's amendment, modification, renewal or
extension of any documents or agreements relating to
the Loan Agreement, the Liabilities, or the Guaranty
Obligations;
(h) the exercise or nonexercise of any power, right or
remedy with respect to the Liabilities or the
Guaranty Obligations by Lender including, but not
limited to, compromise, release, settlement or waiver
with or of Borrower or Guarantors;
(i) Lender's vote, claim, distribution, election,
acceptance, action or inaction in any bankruptcy case
related to the Liabilities or the Guaranty
Obligations; and
(j) any impairment or invalidity of any collateral
securing the Guaranty Obligations or any failure to
perfect any of Lender's liens thereon or security
interests therein.
4. REPRESENTATIONS AND WARRANTIES. Guarantors, jointly and severally,
hereby represent and warrant to Lender that:
(a) Each Guarantor is legally competent to execute,
deliver and perform this Guaranty,
(b) The execution, delivery and performance by Guarantors
of this Guaranty does not require any authorization
or approval or other action by, or any notice to
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or filing with, any governmental authority or any
other party except such as have been obtained or made
and do not, except as contemplated by the Loan
Agreement or this Guaranty, result in the
imposition or creation of any lien, security interest
or other encumbrance.
(c) The execution, delivery and performance of this
Guaranty will not violate any law or regulation, or
any order or decree of any court or governmental
instrumentality, will not conflict with or result in
the breach of, or constitute a default under any
indenture, mortgage, deed of trust, lease, agreement
or other instrument to which either Guarantor is a
party or by which either Guarantor or any of their
property is bound, will not result in the creation
or imposition of any Lien upon any of the property
of either Guarantor and the same do not require the
consent or approval of any governmental body, agency,
authority or any other Person except those already
obtained.
(d) This Guaranty constitutes the legal, valid and
binding obligation of each of the Guarantors,
enforceable in accordance with its terms, except as
the enforceability thereof may be subject to or
limited by bankruptcy, insolvency, reorganization,
arrangement, moratorium or other similar laws
relating to ro affecting the rights of creditors
generally.
(e) There is no action, suit or proceeding affecting
either of the Guarantors pending or threatened before
any court, arbitrator or governmental authority which
may have an adverse effect on the ability of either
of the Guarantors to perform its obligations under
this Guaranty.
(f) The Guaranty Obligations are not subject to any
offset or defense against Lender or Borrower of any
kind.
(g) Each of the Guarantors covenant, warrant and
represent to Lender that all representations and
warranties contained in this Guaranty shall be true
at the time of Guarantors' execution of this Guaranty
and shall continue to be true until the Liabilities
have been paid or otherwise satisfied in full.
5. THE BORROWER. Each Guarantor acknowledges that its obligations
hereunder will not be affected by (a) Lender's failure properly to create a
security interest in any collateral, (b) Lender's failure to create or maintain
a priority with respect to the security interest purported to be created in any
collateral, or (c) any act or omission of Lender (whether negligent or
otherwise) which adversely affects the value of any collateral or Lender's
security interest therein or lien thereon or the priority of such security
interest. Each Guarantor acknowledges that, to date, Lender has obtained no
collateral or other security from the Borrower relating to the Liabilities
except for Borrower's pledge of 50,000 shares of Lender's Common Stock owned by
Borrower (subject to certain vesting
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restrictions as set forth in that certain Stock Agreement dated as of an even
date herewith) according to the terms of that certain Stock Pledge Agreement
dated as of an even date herewith.
6. WAIVER. Each Guarantor hereby expressly waives (a) diligence,
presentment, demand for payment, protest, benefit of any statute of limitations
affecting Borrower's liability under the Loan Agreement or the enforcement of
this Guaranty; (b) discharge due to any disability of Borrower; (c) any defenses
of Borrower to obligations under the Loan Agreement not arising under the
express terms of the Loan Agreement or from material breach thereof by Lender
which under the law has the effect of discharging Borrower from the Liabilities
as to which this Guaranty is sought to be enforced; (d) the benefit of any act
or omission by Lender which directly or indirectly results in or aids the
discharge of Borrower from any of the Liabilities by operation of law or
otherwise; (e) all notices whatsoever, including, without limitation, notice of
acceptance of this Guaranty and the incurring of the Liabilities; and (f) any
requirement that Lender exhaust any right, power or remedy or proceed against
Borrower or any other security for, or any other guarantor of, or any other
party liable for, any of the Liabilities or any portion thereof. Each Guarantor
specifically agrees that it shall not be necessary or required, and neither
Guarantor shall be entitled to require, that Lender (i) file suit or proceed to
assert or obtain a claim for personal judgment against Borrower, for the
Liabilities; (ii) make any effort at collection or enforcement of Liabilities
from the Borrower; (iii) foreclose against or seek to realize upon any
collateral or any other security now or hereafter existing for the Liabilities;
(iv) file suit or proceed to obtain or assert a claim for personal judgment
against Guarantor or any other guarantor or other party liable for the
Liabilities; (v) make any effort at collection of the Liabilities from any such
party; (vi) exercise or assert any other right or remedy to which Lender is or
may be entitled in connection with the Liabilities or any security or guaranty
relating thereto; or (vii) file any claim against assets of Borrower before or
as a condition of enforcing the liability of either Guarantor under this
Guaranty. Notwithstanding anything to the contrary set forth in this Section 6,
Lender agrees that it shall not assert any demand or claim against Guarantors
until it shall first have delivered to Borrower a written demand for payment in
full of the outstanding Liabilities.
No election to proceed in one form of action 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 against either Guarantor or any other Person, or
diminish the liability of either Guarantor, or affect the right of Lender to
proceed against either Guarantor for any deficiency, except to the extent Lender
realizes payment by such action, notwithstanding the effect of such action upon
either Guarantor's rights of subrogation, reimbursement or indemnity, if any,
against any Person.
7. TOLLING OF STATUTE OF LIMITATIONS. Each Guarantor agrees that any
payment or performance of any of the Liabilities or other acts which tolls any
statute of limitations applicable to the Liabilities shall also toll the statute
of limitations applicable to such Guarantor's liability under this Guaranty.
8. CERTAIN RIGHTS. Lender may pursue its rights and remedies under this
Guaranty against both Guarantors, jointly and severally, and shall be entitled
to payment hereunder
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notwithstanding (a) any action taken by Lender to enforce any of its rights or
remedies under any security agreement, stock pledge, deed of trust or other
security document or guaranty or (b) any payment received under any security
agreement, stock pledge, deed of trust or other security document or guaranty.
In pursuing its rights under this Guaranty, Lender need not join either or both
Guarantors in any suit against Borrower or join Borrower in any suit against
either or both Guarantors.
9. CONTINUING GUARANTY. This Guaranty shall be a continuing guaranty
and shall remain in full force and effect until the Guaranty Obligations,
whether already incurred or incurred hereafter, have been paid or otherwise
satisfied in full. Any other guarantors of all or a portion of the Liabilities
may be released without affecting the liability of Guarantors hereunder.
10. SUBROGATION. Each Guarantor hereby waives any right of subrogation
which such Guarantor has or may have as against Borrower with respect to such
Guarantor's obligations to Lender hereunder. In addition, each Guarantor hereby
waives any right to proceed against Borrower, now or hereafter, for
contribution, indemnity, reimbursement, and any other suretyship rights and
claims, whether direct or indirect, liquidated or contingent, which the
undersigned may now have or hereafter have as against Borrower with respect to
such Guarantor's obligations to Lender hereunder. Each Guarantor also hereby
waives any rights of recourse to or with respect to any asset of Borrower. The
undersigned Guarantors agree that in light of the foregoing waivers, the
execution of this Guaranty shall not be deemed to make the Guarantors
"creditors" of Borrower, and that, for purposes of Sections 547 and 550 of the
United States Bankruptcy Code, Guarantors shall not be deemed "creditors" of
Borrower.
11. REINSTATEMENT. This Guaranty shall remain in full force and effect
and continue to be effective if at any time payment and performance of the
Liabilities or any part thereof, whether by or on account of Borrower or
Guarantors, is, pursuant to applicable law, avoided, rescinded or reduced in
amount or must otherwise be restored or returned by any obligee of the
Liabilities, including Lender, whether as a "voidable preference", "fraudulent
conveyance" or otherwise, all as though such payment or performance had not been
made. In the event that any payment or part thereof is avoided, rescinded,
reduced, restored or returned, the Liabilities shall be reinstated and deemed
reduced only by such amount paid and not so avoided, rescinded, reduced,
restored or returned.
12. EVENTS OF DEFAULT.
12.1 EVENT OF DEFAULT. The occurrence of any one or more of
the following events shall constitute an "Event of Default":
(a) the occurrence of an Event of Default under or as
defined in the Loan Agreement; or
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(b) either Guarantor fails to perform or pay in full any
of the Guaranty Obligations as and when due and
payable under this Guaranty or when declared to be
due and payable by Lender, whichever is earlier; or
(c) either Guarantor fails or neglects to perform, keep
or observe any other term, provision, condition,
covenant, warranty or representation contained in
this Guaranty that is required to be performed,
kept or observed by such Guarantor; provided,
however, that if such condition is capable of being
cured, such Event of Default shall cease to
exist if such condition is cured to Lender's
reasonable satisfaction before the expiration of
ten (10) business days after Lender gives notice
thereof to Guarantors; or
(d) any representation or warranty made by either
Guarantor to Lender in this Guaranty or in any
statement, report, financial statement or certificate
delivered by either Guarantor to Lender is not true
and correct or is misleading, in any material
respect, when made or delivered; or
(e) the commencement by either Guarantor of a voluntary
case under the federal bankruptcy laws as now
constituted or hereafter amended or any other
applicable federal or state bankruptcy, insolvency
or similar law; or the consent by either Guarantor
to the appointment of a receiver, liquidator,
assignee, trustee, custodian, sequestrator, agent or
other similar official for such Guarantor for any
substantial part of its properties; or the making by
either Guarantor of any assignment for the benefit
of creditors; or the taking of any action by or on
behalf of either Guarantor in furtherance of any of
the foregoing; or
(f) the filing of a petition with a court having
jurisdiction over either Guarantor to commence an
involuntary case for such Guarantor under the federal
bankruptcy laws as now constituted or hereafter
amended or any other applicable federal or state
bankruptcy, insolvency or similar law, or the
appointment of a receiver, liquidator, assignee,
trustee, custodian, sequestrator, agent or other
similar official for such Guarantor for any
substantial part of its property; or any substantial
part of either Guarantor's property is subject to
any levy, execution, attachment, garnishment or
temporary protective order and the failure to obtain
the dismissal of such petition or appointment or the
continuance of such decree or order unstayed and in
effect for or within a period of sixty (60) days
from the date of such filing, appointment or entry
of such order of decree.
12.2 ACCELERATION OF THE LIABILITIES. Upon and after an Event
of Default hereunder, then and in either such event all or any portion of the
Guaranty Obligations may, at the option of
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Lender and without demand, notice or legal process of any kind, be declared and
immediately shall become due and payable.
13. NO WAIVER; AMENDMENTS. No failure on the part of Lender to
exercise, no delay in exercising and no course of dealing with respect to, any
right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law. This Guaranty may
not be amended or modified except by written agreement among Guarantors and
Lender and no consent or waiver hereunder shall be valid unless in writing and
signed by Lender.
14. BUSINESS DEBT. Each Guarantor hereby represents and agrees that
none of the Liabilities of Borrower to Lender and none of the Guaranty
Obligations is consumer debt or was or shall be incurred by Borrower or
Guarantors respectively, primarily for personal, family or household purposes.
Each Guarantor further agrees and represents that the Liabilities are and shall
be incurred by Borrower and the Guaranty Obligations are and shall be incurred
by Guarantors for business and commercial purposes only.
15. NOTICE. Lender shall provide Guarantors with a copy of any notice
of default to Borrower as provided under the Loan Agreement; provided, however,
that the failure of Lender to provide such notice to Guarantors will not
exonerate either Guarantor of any obligations under this Guaranty. Except as
otherwise provided herein, any notice or other communication herein required or
permitted to be given shall be in writing and may be delivered in person, with
receipt acknowledged, or sent by telex, telecopy, facsimile or by Unites States
mail as the case may be, registered or certified, return receipt requested,
postage prepaid and addressed as follows:
If to Lender Dynamic Materials Corporation
000 Xxxxx Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx Santa, Chief Financial Officer
Telephone: 303/000-0000
Fax: 303/000-0000
With a copy to: Xxxxx, Xxxxxx & Xxxxxx LLP
Suite 4700
000 Xxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxxxx, Esq.
Telephone: 303/000-0000
Fax: 303/000-0000
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If to Guarantors: Xxxxxx Xxxxxxx and Xxxxxxx Xxxxx
0000 Xxxx Xxxxx Xxxxxx
Xx Xxxxxxx, Xxxxxxxxxx 00000
Telephone: 000-000-0000
Fax: 000-000-0000
With a copy to: Wolf, Xxxxxx & Xxxxxxx, LLP
00000 Xxxx Xxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx Xxxxx, Esq.
Telephone: 000-000-0000
Fax: 000-000-0000
Or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration or other communication hereunder shall be deemed
to have been duly given or served on the date on which personally delivered,
with receipt acknowledged, or three (3) business days after the same shall have
been deposited in the United States mail.
16. ENTIRE AGREEMENT. This Guaranty constitutes and contains the entire
agreement of the parties and supersedes any and all prior and contemporaneous
agreements, negotiations, correspondence, understandings and communications
between the parties, whether written or oral, respecting the subject matter
hereof.
17. SEVERABILITY. If any provision of this Guaranty is held to be
unenforceable for any reason, it shall be adjusted, if possible, rather than
voided in order to achieve the intent of the parties to the extent possible. In
any event, all other provisions of this Guaranty shall be deemed valid and
enforceable to the full extent possible.
18. SUBORDINATION OF INDEBTEDNESS. Any indebtedness or other obligation
of Borrower now or hereafter held by or owing to Guarantors is hereby
subordinated in time and right of payment of all Liabilities of Borrower to
Lender.
19. GOVERNING LAW AND VENUE. This Guaranty shall be binding upon and
inure to the benefit of Guarantors and Lender and their respective successors
and assigns, except that neither Guarantor shall have the right to assign its
rights or delegate its duties hereunder or otherwise assign any interest herein
without the prior written consent of Lender. This Guaranty shall be governed by
and construed in accordance with the laws of the State of Colorado, without
regard to its choice-of or conflicts-of-laws, rules and venue for any action to
enforce or interpret this Guaranty shall be in a court of competent jurisdiction
located in the State of Colorado and each of the parties consents
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to the jurisdiction of such court in any such action or proceeding and waives
any objection to venue laid therein.
20. COUNTERPARTS. This Guaranty may be executed in any number of
counterparts, each of which when so delivered shall be deemed an original, but
all such counterparts shall constitute but one and the same instrument.
21. DISCHARGE. This Guaranty shall terminate and the Guarantors shall
be released and discharged from all liability under this Guaranty from the date
on which all the Guaranty Obligations have been finally paid and satisfied to
Lender in full.
IN WITNESS WHEREOF, the parties have executed and delivered this
Guaranty as of the date first written above.
GUARANTORS:
/s/Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
/s/Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx
LENDER:
DYNAMIC MATERIALS CORPORATION
By: /s/Xxxxxxx Santa
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Title: Vice President & CFO
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