GUARANTEE
GUARANTEE, dated as of December 8, 1998, made by CONMAT TECHNOLOGIES,
INC. (the "Guarantor"), in favor of GENERAL ELECTRIC CAPITAL CORPORATION, as
Lender (the "Lender") under the Loan Agreement referred to below.
W I T N E S S E T H:
WHEREAS, pursuant to the Loan and Security Agreement dated as of even
date herewith (as the same may be amended, supplemented or otherwise modified
from time to time, the "Loan Agreement") between Polychem Corporation (the
"Borrower") and Lender, the Lender has agreed to make extensions of credit to
the Borrower upon the terms and subject to the conditions set forth therein;
WHEREAS, it is a condition precedent to the effectiveness of the Loan
Agreement and the Waiver and Amendment Agreement dated as of December 8, 1998
among the Lender, the Guarantor, The Eastwind Group, Inc. and the Borrower (the
"Waiver and Amendment") that the Guarantor guarantee payment and performance of
the Borrower's obligations under the Loan Agreement and the other Loan
Documents;
WHEREAS, the Guarantor owns directly or indirectly all or substantially
all of the issued and outstanding stock of the Borrower.
NOW, THEREFORE, to induce the Lender to enter into the Loan Agreement
and the Waiver and Amendment and to induce the Lender to make its extensions of
credit to the Borrower under the Loan Agreement and for other consideration the
receipt and sufficiency of which is hereby acknowledged, the Guarantor hereby
agrees with the Lender as follows:
1. Defined Terms. (a) Unless otherwise defined herein, terms defined in
the Loan Agreement and used herein shall have the meanings given to them in the
Loan Agreement.
(b) As used herein, "Obligations" shall mean all loans, advances,
debts, expense reimbursement, fees, liabilities, and obligations, for the
performance of covenants, tasks or duties or for payment of monetary amounts
(whether or not such performance is then required or contingent, or amounts are
liquidated or determinable) owing by Borrower and any other Credit Party to
Lender, of any kind or nature, present or future, whether or not evidenced by
any note, agreement or other instrument, whether arising under any of the Loan
Documents or under any other agreement between Borrower, such Credit Party and
Lender, and all covenants and duties regarding such amounts. This term includes
all principal, interest (including interest accruing at the then applicable rate
provided in the Loan Agreement after the maturity of the Loans and interest
accruing at the then applicable rate provided in the Loan Agreement after the
filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding), Fees, Charges, expenses,
attorneys' fees and any other sum chargeable to Borrower under any of the Loan
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Documents, and all principal and interest due in respect of the Loans and all
obligations and liabilities of the Guarantor under this Guarantee.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Guarantee shall refer to this Guarantee as a whole and
not to any particular provision of this Guarantee, and section and paragraph
references are to this Guarantee unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
2. Guarantee. (a) The Guarantor hereby unconditionally and irrevocably
guarantees to the Lender and its successors, indorsees, transferees and assigns,
the prompt and complete payment and performance by the Borrower when due
(whether at the stated maturity, by acceleration or otherwise) of the
Obligations.
(b) The Guarantor further agrees to pay any and all expenses
(including, without limitation, all fees and disbursements of counsel) which may
be paid or incurred by the Lender in enforcing, or obtaining advice of counsel
in respect of, any rights with respect to, or collecting, any or all of the
Obligations and/or enforcing any rights with respect to, or collecting against,
the Guarantor under this Guarantee.
(c) The Guarantor agrees that the Obligations may at any time and from
time to time exceed the amount of the liability of the Guarantor hereunder
without impairing this Guarantee or affecting the rights and remedies of the
Lender hereunder.
(d) No payment or payments made by the Borrower, any other guarantor or
any other Person or received or collected by the Lender from the Borrower, any
other guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of the Guarantor hereunder which
shall, notwithstanding any such payment or payments, other than payments made by
the Guarantor in respect of the Obligations or payments received or collected
from the Guarantor in respect of the Obligations, remain liable for the
Obligations hereunder until the Obligations are indefeasibly paid in full.
(e) The Guarantor agrees that whenever, at any time, or from time to
time, it shall make any payment to the Lender on account of its liability
hereunder, it will notify the Lender in writing that such payment is made under
this Guarantee for such purpose.
3. No Subrogation. Notwithstanding any payment or payments made by the
Guarantor hereunder or any set-off or application of funds of the Guarantor by
the Lender, the Guarantor shall not be entitled to be subrogated to any of the
rights of the Lender against the Borrower or any other guarantor or any
collateral security or guarantee or right of offset held by the Lender for the
payment of the Obligations, nor shall the Guarantor seek or be entitled to seek
any contribution or reimbursement from the Borrower or any other Person in
respect of payments made by the Guarantor hereunder until all amounts owing to
the Lender by the Borrower on account of the Obligations are
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indefeasibly paid in full. If any amount shall be paid to the Guarantor on
account of such subrogation rights at any time when all of the Obligations shall
not have been indefeasibly paid in full, such amount shall be held by the
Guarantor in trust for the Lender, segregated from other funds of the Guarantor
and shall forthwith upon receipt by the Guarantor, be turned over to the Lender
in the exact form received by the Guarantor (duly indorsed by the Guarantor to
the Lender, if required), to be applied against the Obligations, whether matured
or unmatured, in such order as the Lender may elect.
4. Amendments, etc. with respect to the Obligations; Waiver of Rights.
The Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against the Guarantor and without notice to or further
assent by the Guarantor, any demand for payment of any of the Obligations made
by the Lender may be rescinded and any of the Obligations continued, and the
Obligations, or the liability of any other party upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
the Lender, and the Loan Agreement and the other Loan Documents and any other
documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in whole or in part, as the Lender) may
deem advisable from time to time, and any collateral security, guarantee or
right of offset at any time held by the Lender for the payment of the
Obligations may be sold, exchanged, waived, surrendered or released. The Lender
shall not have any obligation to protect, secure, perfect or insure any Lien at
any time held by it as security for the Obligations or for this Guarantee or any
property subject thereto. When making any demand hereunder against the
Guarantor, the Lender may, but shall be under no obligation to, make a similar
demand on the Borrower or any other guarantor, and any failure by the Lender to
make any such demand or to collect any payments from the Borrower or any such
other guarantor or any release of the Borrower or such other or guarantor shall
not relieve the Guarantor of the obligations or liabilities hereunder, and shall
not impair or affect the rights and remedies, express or implied, or as a matter
of law, of the Lender against the Guarantor. For the purposes hereof "demand"
shall include the commencement and continuance of any legal proceedings.
5. Guarantee Absolute and Unconditional. The Guarantor waives any and
all notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by the Lender upon this Guarantee
or acceptance of this Guarantee, and the Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived, in reliance upon this Guarantee; and all dealings
between the Borrower and the Guarantor, on the one hand, and the Lender on the
other hand, likewise shall be conclusively presumed to have been had or
consummated in reliance upon this Guarantee. The Guarantor waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Borrower or the Guarantor with respect to the Obligations. The
Guarantor understands and agrees that this Guarantee shall be construed as a
continuing, absolute and unconditional guarantee of payment without regard to
(a) the validity, regularity or enforceability of the Loan Agreement, or any
other Loan Document, any of the Obligations or any other collateral security
therefor or guarantee or right of offset with respect thereto at any time or
from time to time held by the Lender (b) any defense, set-off or counterclaim
(other than a defense of payment or performance) which may at any time be
available to or be asserted by the Borrower
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against the Lender, or (c) any other circumstance whatsoever (with or without
notice to or knowledge of the Borrower or the Guarantor) which constitutes, or
might be construed to constitute, an equitable or legal discharge of the
Borrower for the Obligations, or of the Guarantor under this Guarantee, in
bankruptcy or in any other instance. When pursuing its rights and remedies
hereunder against any Guarantor, the Lender may, but shall be under no
obligation to, pursue such rights and remedies as it may have against the
Borrower or any other Person or against any collateral security or guarantee for
the Obligations or any right of offset with respect thereto, and any failure by
the Lender to pursue such other rights or remedies or to collect any payments
from the Borrower or any such other Person or to realize upon any such
collateral security or guarantee or to exercise any such right of offset, or any
release of the Borrower or any such other Person or any such collateral
security, guarantee or right of offset, shall not relieve the Guarantor of any
liability hereunder, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of law, of the Lender against
the Guarantor. This Guarantee shall remain in full force and effect and be
binding in accordance with and to the extent of its terms upon the Guarantor and
the successors and assigns thereof, and shall inure to the benefit of the
Lender, and its successors, indorsees, transferees and assigns, until all the
Obligations and the obligations of the Guarantor under this Guarantee shall have
been satisfied by indefeasible payment in full in cash.
6. Reinstatement. This Guarantee shall continue to be effective, or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any of the Obligations is rescinded or must otherwise be restored or returned by
the Lender upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Borrower or the Guarantor, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Borrower or the Guarantor or any substantial part of its
property, or otherwise, all as though such payments had not been made.
7. Payments. The Guarantor hereby guarantees that payments hereunder
will be paid to the Lender without set-off or counterclaim in U.S. Dollars at
the office of the Lender located at 000 Xxxx Xxxxx Xxxx, Xxxxxxxx, XX 00000.
8. Representations and Warranties. The Guarantor hereby represents and
warrants that:
(a) (i) it is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation and has
the corporate power and authority and the legal right to own and operate its
property, to lease the property it operates and to conduct the business in which
it is currently engaged, (ii) it has the power and authority and the legal right
and capacity to execute and deliver, and to perform its obligations under, this
Guarantee and has taken all necessary action to authorize its execution,
delivery and performance of this Guarantee;
(b) this Guarantee constitutes a legal, valid and binding obligation of
the Guarantor enforceable in accordance with its terms, except as affected by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting the enforcement of creditors' rights
generally, general equitable principles and an implied covenant of good faith
and fair dealing;
(c) the execution, delivery and performance of this Guarantee will not
violate any
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provision of any Requirement of Law or Contractual Obligation of the Guarantor
and will not result in or require the creation or imposition of any Lien on any
of the properties or revenues of the Guarantor pursuant to any Requirement of
Law or Contractual Obligation of the Guarantor;
(d) no consent or authorization of, filing with, or other act by or in
respect of, any arbitrator or Governmental Authority and no consent of any other
Person (including, any shareholder or creditor of the Guarantor) is required in
connection with the execution, delivery, performance, validity or enforceability
of this Guarantee;
(e) no litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the knowledge of the
Guarantor, threatened by or against the Guarantor or against any of its
properties or revenues (1) with respect to this Guarantee or any of the
transactions contemplated hereby, (2) which could have a material adverse effect
on the business, property, or financial or other condition of the Guarantor;
(f) the statements concerning the financial condition and net worth of
Guarantor previously provided to the Lender are true and correct; there is no
event, fact, circumstance or condition known to Guarantor which is inconsistent
with such statements or is required to be disclosed in order to cause such
statements not to be misleading.
The Guarantor agrees that the foregoing representations and warranties
shall be deemed to have been made by the Guarantor on the date of each borrowing
by the Borrower under the Loan Agreement on and as of such date of borrowing as
though made hereunder on and as of such date.
9. Notices. All notices, requests and demands to or upon the Lender or
the Guarantor to be effective shall be in writing (or by telex, fax or similar
electronic transfer) and shall be deemed to have been duly given or made (1)
when delivered by hand or (2) if given by mail, when deposited in the mails by
certified mail, return receipt requested, or (3) if by telex, fax or similar
electronic transfer, when sent and receipt has been confirmed, addressed as
follows:
(a) if to the Lender, at its address or transmission number for notices
provided in the Loan Agreement; and
(b) if to the Guarantor, at its address or transmission number for
notices set forth under its signature below.
The Lender, and the Guarantor may change their respective addresses and
transmission numbers for notices by notice in the manner provided in this
Section.
10. Severabilility. Any provision of this Guarantee which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11. Integration. This Guarantee represents the agreement of the
Guarantor with respect to the subject matter hereof and there are no promises or
representations by the Lender relative to the subject matter hereof not
reflected herein.
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12. Amendments in Writing; No Waiver; Cumulative Remedies. (a) None of
the terms or provisions of this Guarantee may be waived, amended, supplemented
or otherwise modified except by a written instrument executed by the Guarantor
and the Lender, provided that any provision of this Guarantee may be waived by
the Lender in a letter or agreement executed by the Lender or by telex or
facsimile transmission from the Lender.
(b) The Lender shall not by any act (except by a written instrument
pursuant to paragraph 12(a) hereof), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in any
Default or Event of Default or in any breach of any of the terms and conditions
hereof. No failure to exercise, nor any delay in exercising, on the part of the
Lender, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Lender of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Lender would otherwise have on any future occasion.
(c) The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
13. Negative Covenants. Guarantor covenants and agrees that, without
Lender's prior written consent, from the Closing Date until the Termination
Date, Guarantor shall not, directly or indirectly, by operation of law or
otherwise:
(a) merge with, consolidate with, acquire all or substantially all of
the assets or capital stock of, or otherwise combine with, any Person or form
any Subsidiary;
(b) make any changes in any of its business objectives, purposes, or
operations which could reasonably be expected to adversely affect repayment of
the Obligations or could reasonably be expected to have a Material Adverse
Effect or engage in any business other than that presently engaged in; or
(c) sell, transfer, issue, convey, assign or otherwise dispose of any
material portion of its assets or properties, including its Accounts or any
shares of its Stock or engage in any sale-leaseback, synthetic lease or similar
transaction (provided, that the foregoing shall not prohibit the sale of
Inventory or obsolete or unnecessary Equipment in the ordinary course of its
business).
14. Section Headings. The section headings used in this Guarantee are
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.
15. Successors and Assigns. This Guarantee shall be binding upon the
successors and assigns of the Guarantor and shall inure to the benefit of the
Lender and its successors and assigns.
16. GOVERNING LAW. THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
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17. Submission to Jurisdiction; Waivers. The Guarantor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Guarantee or any other Loan Document to which it is
a party, or for recognition and enforcement of any judgment in respect thereof,
to the non-exclusive general jurisdiction of the courts of the State of New
York, the courts of the United States of America located in the state of New
York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives trial by jury and any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding may
be effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Guarantor at its
address set forth under its signature below or at such other address of which
the Lender shall have been notified pursuant to Section 9; and
(d) agrees that nothing herein shall affect the right to effect service
of process in any other manner permitted by law or shall limit the right to xxx
in any other jurisdiction.
IN WITNESS WHEREOF, the undersigned has caused this Guarantee to be
duly executed and delivered as of the day and year first above written.
CONMAT TECHNOLOGIES, INC.
By: /s/ Xxxx X. XxXxxxxx
----------------------------------------
Name: Xxxx X. XxXxxxxx
Title: Chairman and Chief Executive Officer
Address for Notices:
ConMat Technologies
Xxxxxxxx Xxxxxx xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Chairman
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