UNLIMITED GUARANTY (AROTECH CORPORATION)
Exhibit
4.3
(AROTECH
CORPORATION)
THIS
UNLIMITED GUARANTY (“Guaranty”) made
as of
December _____, 2007, by AROTECH CORPORATION, a Delaware corporation (”Guarantor”), to and
for the benefit of KEYBANK NATIONAL ASSOCIATION, a national banking association,
its successors and assigns (“Lender”).
RECITALS
A.
On or about the date hereof, FAAC Incorporated, a Michigan corporation (the
“Borrower”)
along with Related Parties and Lender entered into a certain Loan Agreement
(the
“Loan
Agreement”) whereby Lender agreed to provide and continue to provide a
loan (the “Loan”) available
to
Borrower in the maximum aggregate amount at any time outstanding not to exceed
the sum of Seven Million Five Hundred Thousand Dollars
($7,500,000). Capitalized terms used and not otherwise defined herein
shall have the meanings given to them in the Loan Agreement.
B.
In connection with the Loan, Borrower has executed and delivered a promissory
note (the “Note”) in favor
of
Lender of even date herewith in the amount of the Loan, payment of which
is
secured by various security agreements made by Borrower, Guarantor and other
Related Parties in favor of Lender including any other Related Loan
Documents.
C.
Guarantor will derive material financial benefit from the Loans evidenced
and
secured by the Note, security agreements, and the other Related Loan
Documents.
D.
Lender has relied on the statements and agreements contained herein in agreeing
to make the Loans. The execution and delivery of this Guaranty by Guarantor
is a
condition precedent to the making of the Loans by Lender.
AGREEMENTS
NOW,
THEREFORE, intending to be legally bound, Guarantor, in consideration of
the
matters described in the foregoing Recitals, which Recitals are incorporated
herein and made a part hereof, and for other good and valuable consideration
the
receipt and sufficiency of which are acknowledged, hereby covenants and agrees
for the benefit of Lender and its respective successors, indorsees, transferees,
participants and assigns as follows:
1. Guarantor
absolutely, unconditionally and irrevocably guarantees:
(a) the
full
and prompt payment of the principal and interest on the Note when due, whether
at stated maturity, upon acceleration or otherwise, and at all times thereafter,
and the full and prompt payment of all sums which may now be or may hereafter
become due and owing under the Note, the Loan Agreement and the other Related
Loan Documents;
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(b) the
prompt, full and complete performance of all of Borrower’s obligations under
each and every covenant contained in the Related Loan Documents;
and
(c) all
other
indebtedness and obligations of Borrower to Lender, whether such indebtedness
and obligations are now existing or hereafter arising without limitation
as to
amount or nature; and
(d) the
full
and prompt payment of any Enforcement Costs (as hereinafter defined in Section 7
hereof).
All
amounts due, debts, liabilities and payment obligations described in subsections
(a) through (c) of this Section 1 shall
be hereinafter collectively referred to as the “Indebtedness.”
2. In
the
event of any default by Borrower in the payment of the Indebtedness, after
the
expiration of any applicable cure or grace period, Guarantor agrees, on demand
by Lender or the holder of the Note, to pay the Indebtedness regardless of
any
defense, right of set-off or claims which Borrower or Guarantor may have
against
Lender or the holder of the Note.
All
of
the remedies set forth herein and/or provided for in any of the Related Loan
Documents or at law or equity shall be equally available to Lender, and the
choice by Lender of one such alternative over another shall not be subject
to
question or challenge by Guarantor or any other person, nor shall any such
choice be asserted as a defense, setoff, or failure to mitigate damages in
any
action, proceeding, or counteraction by Lender to recover or seeking any
other
remedy under this Guaranty, nor shall such choice preclude Lender from
subsequently electing to exercise a different remedy. The parties
have agreed to the alternative remedies provided herein in part because they
recognize that the choice of remedies in the event of a default hereunder
will
necessarily be and should properly be a matter of good faith business judgment,
which the passage of time and events may or may not prove to have been the
best
choice to maximize recovery by Lender at the lowest cost to Borrower and/or
Guarantor. It is the intention of the parties that such good faith
choice by Lender be given conclusive effect regardless of such subsequent
developments.
3. Guarantor
does hereby (a) waive notice of acceptance of this Guaranty by Lender and
any and all notices and demands of every kind which may be required to be
given
by any statute, rule or law, (b) waive any and all rights Guarantor may
have under any anti-deficiency statute or other similar protections,
(c) waive presentment for payment, demand for payment, notice of nonpayment
or dishonor, protest and notice of protest, diligence in collection and any
and
all formalities which otherwise might be legally required to charge Guarantor
with liability, and (d) waive any failure by Lender to inform Guarantor of
any facts Lender may now or hereafter know about Borrower, the Collateral,
the
Loans, or the transactions contemplated by the Loan Agreement, it being
understood and agreed that Lender has no duty so to inform and that Guarantor
is
fully responsible for being and remaining informed by Borrower of all
circumstances bearing on the risk of nonperformance of Borrower’s
obligations. Credit may be granted or continued from time to time by
Lender to Borrower without notice to or authorization from Guarantor, regardless
of the financial or other condition of Borrower at the time of any such grant
or
continuation. Lender shall have no obligation to disclose or discuss
with Guarantor its assessment of the financial condition of
Borrower. Guarantor acknowledges that no representations of any kind
whatsoever have been made by Lender. No modification or
waiver
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of
any of
the provisions of this Guaranty shall be binding upon Lender except as expressly
set forth in a writing duly signed and delivered by Lender.
4. Guarantor
further agrees that Guarantor’s liability as guarantor shall not be impaired or
affected by any renewals or extensions which may be made from time to time,
with
or without the knowledge or consent of Guarantor of the time for payment
of
interest or principal under the Note or by any forbearance or delay in
collecting interest or principal under the Note, or by any waiver by Lender
under the Loan Agreement or any other Related Loan Documents, or by Lender’s
failure or election not to pursue any other remedies it may have against
Borrower or Guarantor, or by any change or modification in the Note, Loan
Agreement or any other Related Loan Document, or by the acceptance by Lender
of
any additional security or any increase, substitution or change therein,
or by
the release by Lender of any security or any withdrawal thereof or decrease
therein, or by the application of payments received from any source to the
payment of any obligation other than the Indebtedness even though Lender
might
lawfully have elected to apply such payments to any part or all of the
Indebtedness, it being the intent hereof that, subject to Lender’s compliance
with the terms of this Guaranty, Guarantor shall remain liable for the payment
of the Indebtedness, until the Indebtedness has been paid in full,
notwithstanding any act or thing which might otherwise operate as a legal
or
equitable discharge of a surety. Guarantor further understands and
agrees that Lender may at any time enter into agreements with Borrower to
amend
and modify the Note, Loan Agreement or other Related Loan Documents, and
may
waive or release any provision or provisions of the Note, Loan Agreement
and
other Related Loan Documents, and, with reference to such instruments, may
make
and enter into any such agreement or agreements as Lender and Borrower may
deem
proper and desirable, without in any manner impairing or affecting this Guaranty
or any of Lender’s rights hereunder or Guarantor’s obligations
hereunder.
5. This
is
an absolute, present and continuing guaranty of payment and not of
collection. Guarantor agrees that this Guaranty may be enforced by
Lender without the necessity at any time of resorting to or exhausting any
other
security or collateral given in connection herewith or with the Note, Loan
Agreement or any of the other Related Loan Documents through foreclosure
or sale
proceedings, as the case may be, or resorting to any other guaranties, and
Guarantor hereby waives any right to require Lender to join Borrower in any
action brought hereunder or to commence any action against or obtain any
judgment against Borrower or to pursue any other remedy or enforce any other
right. Guarantor further agrees that nothing contained herein or
otherwise shall prevent Lender from pursuing concurrently or successively
all
rights and remedies available to it at law and/or in equity or under the
Note,
Loan Agreement or any other Related Loan Documents, and the exercise of any
of
its rights or the completion of any of its remedies shall not constitute
a
discharge of Guarantor’s obligations hereunder, it being the purpose and intent
of Guarantor that the obligations of Guarantor hereunder shall be absolute,
independent and unconditional under any and all circumstances
whatsoever. None of Guarantor’s obligations under this Guaranty or
any remedy for the enforcement thereof shall be impaired, modified, changed
or
released in any manner whatsoever by any impairment, modification, change,
release or limitation of the liability of Borrower under the Note, Loan
Agreement or other Related Loan Documents or by reason of the bankruptcy
of
Borrower or by reason of any creditor or bankruptcy proceeding instituted
by or
against Borrower. This Guaranty shall continue to be effective or be
reinstated (as the case may be) if at any time payment of all or any part
of any
sum payable pursuant to the Note, Loan Agreement or any other Related Loan
Document is rescinded or otherwise required to be returned by Lender upon
the
insolvency, bankruptcy, dissolution, liquidation, or reorganization of Borrower,
or upon or as a result of the appointment of a receiver, intervenor, custodian
or conservator of or trustee or
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similar
officer for, Borrower or any substantial part of its Collateral, or otherwise,
all as though such payment to Lender had not been made, regardless of whether
Lender contested the order requiring the return of such payment. In
the event of foreclosure of any security interest and of a deficiency, Guarantor
hereby promises and agrees forthwith to pay the amount of such deficiency
notwithstanding the fact that recovery of said deficiency against Borrower
would
not be allowed by applicable law; however, the foregoing shall not be deemed
to
require that Lender institute foreclosure proceedings or otherwise resort
to or
exhaust any other collateral or security prior to or concurrently with enforcing
this Guaranty.
6. In
the
event Lender or any holder of the Note shall assign the Note to any lender
or
other entity to secure a loan from such lender or other entity to Lender
or such
holder for an amount not in excess of the amount which will be due, from
time to
time, from Borrower to Lender under the Note with interest not in excess
of the
rate of interest which is payable by Borrower to Lender under the Note,
Guarantor will accord full recognition thereto and agree that all rights
and
remedies of Lender or such holder hereunder shall be enforceable against
Guarantor by such Lender or other entity with the same force and effect and
to
the same extent as would have been enforceable by Lender or such holder but
for
such assignment; provided, however, that unless Lender shall otherwise consent
in writing, Lender shall have an unimpaired right, prior and superior to
that of
its assignee or transferee, to enforce this Guaranty for Lender’s benefit to the
extent any portion of the Indebtedness or any interest therein is not assigned
or transferred.
7. If: (a) this
Guaranty is placed in the hands of an attorney for collection or is collected
through any legal proceeding; (b) an attorney is retained to represent
Lender in any bankruptcy, reorganization, receivership, or other proceedings
affecting creditors’ rights and involving a claim under this Guaranty;
(c) an attorney is retained to provide advice or other representation with
respect to this Guaranty; or (d) an attorney is retained to represent
Lender in any proceedings whatsoever in connection with this Guaranty and
Lender
prevails in any such proceedings, then Guarantor shall pay to Lender upon
demand
all reasonable attorney’s fees, costs and expenses incurred in connection
therewith (all of which are referred to herein as “Enforcement Costs”),
in addition to all other amounts due hereunder, regardless of whether all
or a
portion of such Enforcement Costs are incurred in a single proceeding brought
to
enforce this Guaranty as well as the other Related Loan Documents.
8. The
parties hereto intend and believe that each provision in this Guaranty comports
with all applicable local, state and federal laws and judicial
decisions. However, if any provision or provisions, or if any portion
of any provision or provisions, in this Guaranty is found by a court of law
to
be in violation of any applicable local, state or federal ordinance, statute,
law, administrative or judicial decision, or public policy, and if such court
should declare such portion, provision or provisions of this Guaranty to
be
illegal, invalid, unlawful, void or unenforceable as written, then it is
the
intent of all parties hereto that such portion, provision or provisions shall
be
given force to the fullest possible extent that they are legal, valid and
enforceable, that the remainder of this Guaranty shall be construed as if
such
illegal, invalid, unlawful, void or unenforceable portion, provision or
provisions were not contained therein, and that the rights, obligations and
interest of Lender or the holder of the Note under the remainder of this
Guaranty shall continue in full force and effect.
9. TO
THE GREATEST EXTENT PERMITTED BY LAW, GUARANTOR HEREBY WAIVES ANY AND ALL
RIGHTS
TO REQUIRE MARSHALLING OF ASSETS BY LENDER. WITH RESPECT TO ANY SUIT,
ACTION OR PROCEEDINGS
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RELATING
TO THIS GUARANTY (EACH, A “PROCEEDING”), LENDER
AND GUARANTOR IRREVOCABLY (A) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF
THE
STATE AND FEDERAL COURTS HAVING JURISDICTION IN THE CITY OF XXX ARBOR AND
STATE
OF MICHIGAN, AND (B) WAIVES ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO
THE LAYING OF VENUE OF ANY PROCEEDING BROUGHT IN ANY SUCH COURT, WAIVES ANY
CLAIM THAT ANY PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM AND FURTHER
WAIVES THE RIGHT TO OBJECT, WITH RESPECT TO SUCH PROCEEDING, THAT SUCH COURT
DOES NOT HAVE JURISDICTION OVER SUCH PARTY. NOTHING IN THIS GUARANTY
SHALL PRECLUDE LENDER FROM BRINGING A PROCEEDING IN ANY OTHER JURISDICTION
NOR
WILL THE BRINGING OF A PROCEEDING IN ANY ONE OR MORE JURISDICTIONS PRECLUDE
THE
BRINGING OF A PROCEEDING IN ANY OTHER JURISDICTION. LENDER AND
GUARANTOR FURTHER AGREE AND CONSENT THAT, IN ADDITION TO ANY METHODS OF SERVICE
OF PROCESS PROVIDED FOR UNDER APPLICABLE LAW, ALL SERVICE OF PROCESS IN ANY
PROCEEDING IN ANY MICHIGAN STATE OR UNITED STATES COURT SITTING IN THE CITY
OF
XXX ARBOR AND MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT
REQUESTED, DIRECTED TO THE APPLICABLE PARTY AT THE ADDRESS INDICATED BELOW,
AND
SERVICE SO MADE SHALL BE COMPLETE UPON RECEIPT; EXCEPT THAT IF
SUCH
PARTY SHALL REFUSE TO ACCEPT DELIVERY, SERVICE SHALL BE DEEMED COMPLETE FIVE
(5)
DAYS AFTER THE SAME SHALL HAVE BEEN SO MAILED.
10. Any
indebtedness of Borrower to Guarantor now or hereafter existing is hereby
subordinated to the payment of the Indebtedness. Guarantor agrees
that, until the entire Indebtedness has been paid in full, Guarantor will
not
seek, accept, or retain for Guarantor’s own account, any payment from Borrower
on account of such subordinated debt. Any payments to Guarantor on
account of such subordinated debt shall be collected and received by Guarantor
in trust for Lender and shall be paid over to Lender on account of the
Indebtedness without impairing or releasing the obligations of Guarantor
hereunder.
11. Any
amounts received by Lender from any source on account of the Loans may be
utilized by Lender for the payment of the Indebtedness and any other obligations
of Borrower to Lender in such order as Lender may from time to time
elect.
12. GUARANTOR
AND LENDER (BY ITS ACCEPTANCE HEREOF) HEREBY WAIVE ANY RIGHT TO A TRIAL BY
JURY
IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHT UNDER THIS GUARANTY
OR ANY OTHER RELATED LOAN DOCUMENTS OR RELATING THERETO OR ARISING FROM THE
LENDING RELATIONSHIP WHICH IS THE SUBJECT OF THIS GUARANTY AND AGREE THAT
ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A
JURY.
13. Any
notice, demand, request or other communication which any party hereto may
be
required or may desire to give hereunder shall be in writing and shall be
deemed
to have been properly given (a) if hand delivered, when delivered; (b) if
mailed
by United States Certified Mail (postage prepaid, return receipt requested),
three Business Days after mailing (c) if by Federal Express or other reliable
overnight courier service, on the next Business Day after
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delivered
to such courier service or (d) if by telecopier on the day of transmission
so
long as copy is sent on the same day by overnight courier as set forth
below:
|
|
Guarantor:
|
Arotech
Corporation
|
|
|
0000
Xxx Xxxxxx Xxxxx
|
|
|
Xxx
Xxxxx, Xxxxxxxx 00000
|
|
|
Attn.
Xxxxxx Har-Oz
|
|
|
FAX
No: 000-000-0-000-0000
|
If
to the
Bank: KeyBank
National Association
00000
Xxxxx Xxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxx,
Xxxxxxxx 00000
ATTN: Xxxxx
Xxxxxx
FAX
No:
(000) 000-0000
|
|
With
a copy to:
|
Xxxxx
X. Xxxxxxx
|
Xxxxxx,
XxXxxxxx & Xxxxxxxxx, P.C.
000
X.
Xxxx Xxxxxx, Xxxxx 000
Xxx
Xxxxx, Xxxxxxxx 00000
FAX
No.
(000) 000-0000
or
at
such other address as the party to be served with notice may have furnished
in
writing to the party seeking or desiring to serve notice as a place for the
service of notice.
14. In
order
to induce Lender to make the Loans, Guarantor makes the following
representations and warranties to Lender set forth in this
Section. Guarantor acknowledges that but for the truth and accuracy
of the matters covered by the following representations and warranties, Lender
would not have agreed to make the Loans.
(a) Any
and
all balance sheets, net worth statements, and other financial data with respect
to Guarantor which have heretofore been given to Lender by or on behalf of
Guarantor fairly and accurately present the financial condition of Guarantor
as
of the respective dates thereof.
(b) The
execution, delivery, and performance by Guarantor of this Guaranty does not
and
will not contravene or conflict with (i) any laws, order, rule, regulation,
writ, injunction or decree now in effect of any Government Authority, or
court
having jurisdiction over Guarantor, (ii) any contractual restriction
binding on or affecting Guarantor or Guarantor’s Collateral or material assets
which may adversely affect Guarantor’s ability to fulfill Guarantor’s
obligations under this Guaranty, or (iii) the instruments creating any trust
holding title to any material assets included in Guarantor’s financial
statements.
(c)
This Guaranty creates legal, valid, and binding obligations of Guarantor
enforceable in accordance with its terms except (i) as such enforceability
may
be limited by bankruptcy, insolvency, reorganization or similar laws affecting
creditors’ rights generally, (ii) as such enforceability may be limited by the
application of general principles of equity and similar principles, including,
without limitation, concepts of materiality, reasonableness, unconscionability,
good faith and fair dealing, (iii) that waivers of jury trial may be limited
under public policy, and (iv) that the remedy of
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specific
performance and injunctive and other forms of equitable relief may be subject
to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(d)
Except as disclosed in writing to Lender, there is no action, proceeding,
or
investigation pending or, to the knowledge of Guarantor, threatened or affecting
Guarantor, which may adversely affect Guarantor’s ability to fulfill his
obligations under this Guaranty. There are no judgments rendered
against Guarantor which have been undischarged for a period of ten (10)
days. Guarantor is not in default under any agreements which may
adversely affect Guarantor’s ability to fulfill its obligations under this
Guaranty.
(e)
All statements set forth in the Recitals are true and correct in all material
aspects.
All
of
the foregoing representations and warranties shall be deemed remade on the
date
of the first disbursement of Loan proceeds, on the date of each advance of
Loan
proceeds, and upon any extension of the Loans pursuant to the Loan
Agreement. Guarantor hereby agrees to indemnify and hold Lender
harmless from and against all loss, cost, liability, damage, and expense,
including attorney’s fees and costs, which Lender may sustain by reason of the
inaccuracy or breach of any of the foregoing representations and warranties
as
of the date the foregoing representations and warranties are made and are
remade.
15. Guarantor
shall deliver or cause to be delivered to Lender in the manner provided in
the
Loan Agreement all of the Guarantor financial statements to be delivered
in
accordance with the terms of the Loan Agreement.
16. This
Guaranty shall be binding upon the heirs, executors, legal and personal
representatives, successors and assigns of Guarantor and shall not be discharged
in whole or in part by the death of Guarantor. If more than one party
executes this Guaranty, the liability of all such parties shall be joint
and
several.
17. THIS
GUARANTY, THE NOTE, AND ALL OTHER INSTRUMENTS EVIDENCING AND SECURING THE
LOANS
SECURED HEREBY WERE NEGOTIATED IN THE STATE OF MICHIGAN, AND DELIVERED BY
GUARANTOR OR BORROWER, AS APPLICABLE, AND ACCEPTED BY LENDER IN THE STATE
OF
MICHIGAN, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO
THE
PARTIES AND THE UNDERLYING TRANSACTIONS EMBODIED HEREBY. IN ALL
RESPECTS, INCLUDING, WITHOUT LIMITATION, MATTERS OF CONSTRUCTION OF THE
IMPROVEMENTS AND PERFORMANCE OF THIS GUARANTY AND THE OBLIGATIONS ARISING
HEREUNDER, THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH,
THE INTERNAL LAWS OF THE STATE OF MICHIGAN APPLICABLE TO CONTRACTS MADE AND
TO
BE PERFORMED ENTIRELY IN SUCH STATE AND ANY APPLICABLE LAWS OF THE UNITED
STATES
OF AMERICA.
18. Lender
shall be entitled to honor any request for Loan proceeds made by Borrower
and
shall have no obligation to see to the proper disposition of such
advances. Guarantor agrees that his obligations hereunder shall not
be released or affected by reason of any improper disposition by Borrower
of
such Loan proceeds.
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19. This
Guaranty may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be
deemed
to be an original and all of which taken together shall constitute one and
the
same instrument.
IN
WITNESS WHEREOF, Guarantor has delivered this Guaranty in the State of Michigan
as of the date first written above.
GUARANTOR:
AROTECH
CORPORATION,
A
Delaware Corporation
By:_________________________________
Its:______________________________
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