Letter of Guarantee
Exhibit 10.1
This Letter of Guarantee (this “Guarantee”) dated as of May 19, 2006 (the “Effective
Date”), is made and entered into by and between Noveon Inc., a Delaware corporation having its
principal place of business at 0000 Xxxxxxxxxxx Xxxx, Xxxxxxxxx, Xxxx 00000 (“Guarantor”), and SK
Corporation, a Korean company with offices at 00 Xxxxxx-xxxx, Xxxxxx-xx, Xxxxx, Xxxxx.
WITNESSETH:
On May 1, 2006, Guarantor and certain of its affiliates sold their Specialty Polymer and
Antioxidant and Accelerator businesses (the “Businesses”) to SPM Group Holdings, LLC (“SPM”) (now
known as Emerald Performance Materials, LLC) (the “Sale”). The Sale included the business conducted
by Noveon Kalama, Inc. (“Noveon Kalama”).
As a result of the Sale, SPM became responsible, and entitled to receive the benefits, under
certain contracts relating to the Businesses, including the Toluene Sale and Purchase Agreement by
and between SK Corporation (“SK”) and Noveon Kalama, dated December 6, 2005 (the “Agreement”).
On April, 19, 2006, Guarantor notified SK that the Agreement, together with Noveon’s and Noveon
Kalama’s rights and obligations thereunder, were being assigned to, and assumed by, SPM.
Notwithstanding the assignment and assumption, Guarantor desires to guarantee to SK the timely
performance of SPM’s payment obligations under the Agreement for Product purchases made pursuant
thereto.
When used herein, the term “Product” shall have the meaning attributed thereto in the Agreement.
Guarantor hereby agrees to the following in favor of SK:
1. GUARANTEE. Subject to the provisions hereof, Guarantor hereby guarantees
to SK the timely performance of SPM’s payment obligations under the Agreement for Product purchases
made pursuant thereto (the “Obligations”). This Guarantee constitutes a guarantee of collection and
not a guarantee of payment. The liability of Guarantor under this Guarantee shall be subject to,
without limitation, applicable law and the following limitations:
(a) Guarantor’s liability hereunder shall be in accordance with, and subject to the
terms of, the Agreement in effect on the date hereof, and in no event shall Guarantor be subject
hereunder or thereunder to consequential, exemplary, equitable, loss of profits, punitive, tort, or
any other damages.
This Guarantee may be terminated by Guarantor upon sixty (60) days prior written notice to SK.
Termination of this Guarantee shall not affect the validity or enforceability of this Guarantee
with respect to any guaranteed obligation incurred or arising prior to the termination of this
Guarantee.
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2. DEMANDS AND NOTICE. If SPM fails or refuses to satisfy any Obligations,
SK shall immediately notify Guarantor of such failure or refusal, and shall use commercially
reasonable efforts to: (i) cause SPM to satisfy all such Obligations; or (ii) collect from SPM all
amounts due to SK from SPM in connection with such Obligations. If, notwithstanding the use of
commercially reasonable efforts by SK, SK is unable to: (i) cause SPM to satisfy all such
Obligations; or (ii) collect from SPM all amounts due to SK from SPM in connection with such
Obligations, then, SK may make a demand upon Guarantor (hereinafter referred to as a “Payment
Demand”). Each Payment Demand shall be in writing and shall reasonably specify in what manner and
what Obligations SPM has failed or refused to satisfy. In addition, each Payment Demand shall be
accompanied by information reasonably sufficient to demonstrate that SK fulfilled its obligations
set forth in this Section 2. A Payment Demand satisfying the foregoing requirements shall be deemed
sufficient notice to Guarantor that it shall satisfy the applicable Obligation within a reasonable
period of time thereafter. A single written Payment Demand shall be effective only as to any
specific default and during the continuance of such default, until SPM or Guarantor has cured such
default, and additional written demands concerning such default shall not be required until such
default is cured.
3. REPRESENTATIONS
AND WARRANTIES. Guarantor represents and
warrants that:
(a) it is a corporation duly organized and validly existing under the laws of the State
of Delaware, and has the corporate power and corporate authority to execute, deliver and carry out
the terms and provisions of this Guarantee;
(b) no authorization, approval, consent or order of, or registration or filing with, any
court or other governmental body having jurisdiction over Guarantor is required on the part of
Guarantor for the execution and delivery of this Guarantee; and
(c) this Guarantee constitutes a valid and legally binding agreement of Guarantor,
except as the
enforceability of this Guarantee may be limited by the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by
general principles of equity.
4. AMENDMENT
OF GUARANTEE. No term or provision of this Guarantee shall be
amended, modified, altered, waived, or supplemented except in a writing signed by the parties
hereto.
5. NOTICE. Any Payment Demand, notice, request, instruction, correspondence or
other document to be given hereunder by any party to another (herein collectively called “Notice”)
shall be in writing and delivered personally or mailed by certified mail, postage prepaid and
return receipt requested, or by facsimile (“Fax”), as follows:
To Guarantor:
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To SK: | |||
Noveon, Inc.
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SK Corporation | |||
0000 Xxxxxxxxxxx Xxxx,
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00 Xxxxxx-xxxx, Xxxxxx-xx, Xxxxx, Xxxxx | |||
Xxxxxxxxx, Xxxx 00000
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Attention: Xxxxxx Xxx | |||
Attention: Xxxx Xxxxx, General Counsel
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Telephone: x00-0-0000-0000 | |||
Telephone: 000-000-0000
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Fax: x00-0-0000-0000 | |||
Fax: 000-000-0000 |
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Notice given by personal delivery or mail shall be effective upon actual receipt. Notice given by
Fax shall be effective upon actual receipt if received during the recipient’s normal business
hours, or at the beginning of the recipient’s next business day after receipt if not received
during the recipient’s normal business hours. All Notices by Fax shall be confirmed promptly after
transmission in writing by certified mail or personal delivery. Any party may change any address to
which Notice is to be given to it by giving notice as provided above of such change of address.
6. TERMINATION. This Guarantee is effective on the Effective Date and will
continue in full force and effect until: (i) the end of the Initial Term of the Agreement; (ii)
there exists a reasonable basis (including the payment history of SPM or its affiliates pursuant to
the Agreement) for SK to conclude that this guaranty is no longer
necessary; or (ii) this Guarantee
is terminated pursuant to Section 1, whichever occurs first. The “Initial Term” when used herein
shall have the meaning attributed thereto in the Agreement. Termination of this Guarantee shall not
affect the validity or enforceability of this Guarantee with respect to any guaranteed obligation
incurred or arising prior to the termination of this Guarantee.
7. PRIOR
GUARANTEES. This Guarantee supersedes any guarantees which may have
previously been issued by Guarantor or its affiliates which secured any obligations relating to the
Agreement and any such guarantees are hereby terminated.
8. MISCELLANEOUS. THIS GUARANTEE SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS. This Guarantee shall be binding upon Guarantor, its successors and permitted assigns and
inure to the benefit of and be enforceable by SK, its successors and permitted assigns. SK shall
not assign this Guarantee without the prior written consent of Guarantor, and any assignment or
attempted assignment of this Guarantee without the prior written consent Guarantor shall be void
and of no effect. This Guarantee shall not inure to the benefit of SPM’s successors or assigns.
The Guarantee embodies the entire agreement and understanding between Guarantor and SK with
regard to the subject matter hereof, and supersedes all prior agreements and understandings
relating to the subject matter hereof. The headings in this Guarantee are for purposes of reference
only, and shall not affect the meaning hereof. This Guarantee may be executed in any number of
counterparts, each of which shall be an original, but all of which together shall constitute one
instrument.
EXECUTED as of the day and year first above written.
| (Guarantor) | ||||||
| By: Name: |
/s/ Xxxxxxx X. Xxxxxx
|
|||||
| Title: | SVP & CFO | |||||
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| (SK Corporation) | ||||||
| By: Name: |
/s/ Xxxx Xxxx Xxx
|
|||||
| Title: | SVP | |||||
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