EXHIBIT 10.9
GUARANTY AGREEMENT
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This GUARANTY AGREEMENT (this "Guaranty") is made and entered into as of
January 2, 1998, by AEI HOLDING COMPANY, INC., a Delaware corporation
("Guarantor"), for the benefit of XXXXXXXXX ENTERPRISES, INC., a Kentucky
corporation ("AEI"). Capitalized terms not otherwise defined herein shall have
the meaning given to such terms in the Agreement (as defined below).
RECITALS
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A. Guarantor owns 100% of the issued and outstanding stock of Mining
Technologies, Inc., a Kentucky corporation ("MTI").
B. AEI and MTI entered into an Asset Purchase Agreement, dated December
18, 1997 (the "Agreement"), whereby MTI purchased certain assets of AEI.
C. AEI, as a condition to consummating the transactions contemplated in
the Agreement and the Other Agreements, required that Guarantor execute and
deliver this Guaranty to AEI.
NOW, THEREFORE, in consideration of, and in order to induce AEI to enter
into, the Agreement and the Other Agreements, and as security for the
performance of the obligations of MTI under the Agreement and the Other
Agreements, Guarantor covenants and agrees as follows:
TERMS AND CONDITIONS
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1. Guarantee. Guarantor, intending to be bound as an accommodation party
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for MTI, absolutely and unconditionally guarantees to AEI, its successors,
transferees and assigns the following obligations and liabilities of MTI
(collectively, the "Guaranteed Obligations"): (a) the assumption of the Assumed
Liabilities at the Closing as contemplated by Section 2.4 of the Agreement; (b)
the payment of the sales and other transfer Taxes, as contemplated by Sections
2.5 and 2.6 of the Agreement; (c) the indemnity obligations contained in Section
10.3 of the Agreement; and (d) the due and punctual performance and observance
by MTI of all other terms, covenants and conditions of the Agreement and the
Other Agreements.
2. Guaranty of Payment. This is a guaranty of payment and performance,
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and not of collection, and the terms, covenants and conditions of this Guaranty
and the obligations of Guarantor hereunder shall be continuing, absolute and
unconditional under any and all circumstances and shall be performed by
Guarantor without regard to (a) the validity, regularity or enforceability of
the Agreement and the Other Agreements or rights of offset with respect thereto
at any time or from time to time held by AEI, (b) any defense, offset or
counterclaim that may at any time be available to or be asserted by MTI against
AEI and which constitutes or might be construed to constitute, an
equitable or legal discharge of MTI from the Agreement or the Other Agreements
or Guarantor under this Guaranty, in bankruptcy or in any other instance, (c)
any law, regulation or decree, now existing or hereafter in effect, that might
in any manner affect any of the terms, covenants and conditions of the Agreement
or the Other Agreements or the rights, powers or remedies of AEI hereunder or
thereunder as against MTI or that might cause or permit to be invoked any
alteration in the time, amount or manner of payment or performance of the
Agreement, or (d) the election of AEI to proceed hereunder by separate legal
action with respect to each default by MTI. It being the purpose and intent that
the terms, covenants and conditions of this Guaranty and the obligations and
liabilities of Guarantor hereunder shall be continuing, absolute and
unconditional under any and all circumstances, and shall not be discharged
except by payment and performance as provided herein. Guarantor expressly
acknowledges that AEI is relying on the guarantee by Guarantor embodied in this
Guaranty in incurring obligations from MTI, and Guarantor acknowledges and
agrees that said guarantee and the obligations of Guarantor under this Guaranty
shall continue in full force and effect and shall in no way be impaired by any
transfer by MTI of any interest in the Agreement or the Other Agreements which
may be permitted under the Agreement or the Other Agreements.
3. Incorporation of the Agreement and the Other Agreements. The
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Agreement and the Other Agreements are made a part of this Guaranty by this
reference thereto with the same force and effect as if they were each fully set
forth herein.
4. Consent of Guarantor. Guarantor agrees that the terms, covenants and
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conditions contained in the Agreement and the Other Agreements may be altered,
extended, changed, modified or released by the Parties to the Agreement without
in any manner affecting this Guaranty or releasing Guarantor herefrom.
5. Cumulative Remedies. All remedies afforded to AEI by reason of this
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Guaranty (a) are separate and cumulative remedies and no one of such remedies
shall be deemed to be exclusive of any one of the other remedies available to
AEI, and (b) shall in no way limit or prejudice any other legal or equitable
remedies which AEI may possess.
6. Guarantor Not Released. Until each and every term, covenant and
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condition of this Guaranty is fully performed, Guarantor shall not be released
by (i) any act or thing which might, but for this Paragraph 6, be deemed a legal
or equitable discharge of the surety, (ii) reason of any waiver, extension,
modification, forbearance or delay of AEI, (iii) AEI's failure to proceed
promptly or otherwise, or (iv) reason of any further obligation or agreement
between MTI and AEI relating to the Agreement or the Other Agreements or to any
of the terms, covenants and conditions contained therein. Guarantor expressly
waives and surrenders any defense based upon any of the foregoing acts,
extensions, modifications, agreements, waivers or any of them.
7. Waivers and Agreements. Guarantor hereby unconditionally:
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(a) Waives any requirement that AEI first seek to enforce remedies
against MTI or any other Person before seeking to enforce this Guaranty against
Guarantor;
(b) Agrees that AEI, in AEI's sole discretion, may enforce remedies
against
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Guarantor pursuant to this Guaranty and not enforce similar remedies against any
other guarantor with respect to the Guaranteed Obligations or vice versa.
Guarantor further acknowledges that the enforcement of remedies against
Guarantor in lieu of enforcing remedies against any other guarantor, or vice
versa, shall not affect the validity or enforceability of AEI's rights and/or
remedies under this Guaranty or any other guaranty agreement guarantying any of
the Guaranteed Obligations;
(c) Waives any requirement that AEI enforce its rights in any
particular order before demanding payment from, or seeking to enforce this
Guaranty against, Guarantor;
(d) Agrees that this Guaranty shall remain in full force and effect
without regard to, and shall not be affected or impaired by any invalidity,
irregularity or unenforceability in whole or in part of the Agreement or the
Other Agreements, or any limitation of the liability of MTI thereunder, or any
limitation on the method or terms of payment thereunder which may now or
hereafter be caused or imposed in any manner whatsoever;
(e) Waives any obligation that AEI might otherwise have to marshal
assets or to proceed against any particular Person or assets in any particular
order; and
(f) Waives any defenses Guarantor may have arising out of or in any
way related to any or all of the following:
(i) Any lack of diligence in connection with, or failure to
foreclose or realize upon, any property, whether real or personal, tangible or
intangible, now or hereafter granted to AEI as collateral security for any of
(a) the liabilities or obligations of MTI, or (b) Guarantor's liabilities or
obligations hereunder, or (c) any other guarantor's liabilities or obligations
under any other guaranty agreement relating to all or any part of the Guaranteed
Obligations;
(ii) The voluntary or involuntary discharge or release of any
of the Guaranteed Obligations, or of any co-maker, accommodation party, surety
or any other Person, including but not limited to, any other guarantor, whether
voluntarily or by reason of bankruptcy, insolvency, or other laws affecting the
rights of creditors generally or otherwise;
(iii) The receipt by AEI of any provisional, invalid or
refundable payment if such payment is thereafter revoked or if such payment is
returned by AEI to or for the benefit of MTI, Guarantor or any other guarantor
or their respective creditors;
(iv) Any right of setoff or counterclaim against AEI which
would otherwise impair AEI's rights against Guarantor or any other guarantor;
and
(v) Any change in the composition, ownership or business of
MTI, Guarantor or any other guarantor.
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8. Indebtedness of MTI to Guarantor.
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(a) Guarantor Cannot Collect. Until all of the obligations of MTI
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under the Agreement and the Other Agreements are fully paid and complied with,
Guarantor agrees that at all times from and after the date Guarantor receives
any notice either of a default by MTI under the Agreement or the Other
Agreements, or of any condition or event which, with notice and the passage of
time, would become a default by MTI under the Agreement or the Other Agreements,
then Guarantor shall not ask, demand, xxx for, take or receive from MTI, by set-
off or in any other manner, all or any part of any monies, principal or
interest, now or hereafter owing by MTI to Guarantor, nor any security therefor
unless and until Guarantor receives notice from AEI that such default, or event
or condition which could result in a default is waived or cured.
(b) Distributions to Guarantor. Guarantor further agrees that: (i)
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in the event of any distribution, division or application, partial or complete,
voluntary or involuntary, by operation of law or otherwise, of all or any part
of the assets of MTI or the proceeds thereof to creditors of MTI or upon any
indebtedness of MTI, by reason of the liquidation, dissolution or other winding
up of MTI or their respective businesses; or (ii) in the event of any sale,
receivership, insolvency or bankruptcy proceeding, or any assignment for the
benefit of its creditors, or any proceeding by or against MTI for any relief
under any bankruptcy or insolvency laws relating to the relief of debtors,
readjustment of indebtedness, reorganization, composition or extension; then and
in any such event, any payment or distribution of any kind or character, either
in cash, securities or other property, which shall be payable or deliverable
upon or with respect to any or all indebtedness of MTI to Guarantor, shall be
paid or delivered directly to AEI for application on the indebtedness evidenced
by the Agreement, due or not due, until such indebtedness is fully paid and
satisfied or secured. In either such event, Guarantor irrevocably authorizes and
empowers AEI to demand, xxx for, collect and receive every such payment or
distribution and give acquittance therefor and to file claims and take such
other actions, in the name of Guarantor, AEI or otherwise, as AEI may deem
necessary or advisable for the enforcement of this Guaranty.
(c) Security to AEI. Guarantor shall execute and deliver to AEI such
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powers of attorney, assignment or other instruments as may be requested by AEI
in order to enable AEI to enforce any and all claims upon or with respect to any
or all indebtedness of MTI to Guarantor, and to collect and receive all
payments or distributions which may be payable or deliverable at any time upon
or with respect to any such indebtedness of MTI to Guarantor. Should any
payment or distribution of security or proceeds thereof be received by Guarantor
upon or with respect to any indebtedness of MTI to Guarantor after the date
Guarantor receives notice of a default by MTI pursuant to the Agreement or the
Other Agreements, or of an event or condition which, with notice and the passage
of time, would become a default pursuant to the Agreement or the Other
Agreements, then Guarantor shall forthwith deliver the same to AEI in precisely
the form received (except for endorsement or assignment where necessary), for
application on the indebtedness evidenced by the Agreement, and, until so
delivered, the same shall be held in trust by Guarantor as property of AEI. In
the event of the failure of Guarantor to make any such endorsement or
assignment, then AEI, its officers or employees on behalf of Guarantor, are
irrevocably authorized to make the same.
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(d) Restriction on Assignment. Guarantor shall not assign or
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transfer, voluntarily or by operation of law, to others any claim Guarantor
possesses or may possess against MTI while any of the obligations under the
Agreement or the Other Agreements remain unpaid, unless such assignment or
transfer is made expressly subject to this Guaranty. All notes or other
evidences of indebtedness accepted by Guarantor from MTI shall contain a
specific statement therein that the indebtedness evidenced thereby is subject to
this Guaranty. The subordination recited herein refers to all obligations of MTI
to Guarantor.
9. Subordination of Guarantor's Advances. In the event that (a)
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Guarantor shall advance or become obligated to pay any obligation of MTI under
the Agreement, or (b) for any reason MTI is now or shall hereafter become
indebted to Guarantor, then such amount and the amount of such indebtedness
shall at all times be subordinate as to lien, time of payment and in all other
respects, to the amount owing to AEI under the Agreement or the Other Agreements
or any right to participate in any way therein, or in the right, title or
interest of AEI in the Agreement or the Other Agreements, notwithstanding any
payments made by Guarantor under this Guaranty, all rights of subrogation and
participation being expressly waived and released.
10. Benefit and Binding Effect. This Guaranty shall (a) inure to the
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benefit of AEI, its legal representatives, successors and assigns, and (b) be
binding upon Guarantor and Guarantor's legal representatives, successors and
assigns.
11. Joint and Several Liability. In the event that more than one
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individual, firm, corporation, partnership or other entity executes this
Guaranty on behalf of Guarantor, then the terms, covenants and conditions
contained herein shall be applicable to and binding upon each signatory, jointly
and severally.
12. Governing Law. This Guaranty shall be governed by, and construed in
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accordance with, the laws of the Commonwealth of Kentucky, without regard to its
conflict of laws rules.
13. Miscellaneous.
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(a) AEI may enforce this Guaranty with respect to one or more
breaches either separately or cumulatively.
(b) This Guaranty constitutes the entire agreement of the parties
with respect to the subject matter hereof and supersedes all prior written and
oral agreements regarding the subject matter hereof. No change, modification,
addition or termination of this Guaranty shall be enforceable unless in writing
and signed by the party against whom enforcement is sought.
(c) If any part, term or provision of this Guaranty is unenforceable
or prohibited by any law applicable to this Guaranty, the rights and obligations
of the parties shall be construed and enforced with that part, term or provision
limited so as to make it enforceable to the greatest extent allowed by law, or
if it is totally unenforceable, as if this Guaranty did not contain that
particular part, term or provision. A determination in one jurisdiction that any
part, term or provision
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of this Guaranty is unenforceable or prohibited by law does not affect the
validity of such part, term or provision in any other jurisdiction.
(d) The headings in this Guaranty have been included for ease of
reference only, and shall not be considered in the construction or
interpretation of this Guaranty.
(e) This Guaranty may be signed by each party hereto upon a separate
copy, and in such case one counterpart of this Guaranty shall consist of enough
of such copies to reflect the signature of each party.
(f) This Guaranty may be executed by each party in multiple
counterparts, each of which shall be deemed an original. It shall not be
necessary in making proof of this Guaranty or its terms to account for more than
one such counterpart.
(g) GUARANTOR CONSENTS TO ONE OR MORE ACTIONS BEING INSTITUTED AND
MAINTAINED IN THE FAYETTE COUNTY, KENTUCKY, CIRCUIT COURT AND/OR THE UNITED
STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF KENTUCKY (AT AEI'S DISCRETION)
TO ENFORCE THIS GUARANTY AND/OR THE AGREEMENT OR THE OTHER AGREEMENTS, AND
WAIVES ANY OBJECTION TO ANY SUCH ACTION BASED UPON LACK OF PERSONAL OR SUBJECT
MATTER JURISDICTION OR IMPROPER VENUE. GUARANTOR AGREES THAT ANY PROCESS OR
OTHER LEGAL SUMMONS IN CONNECTION WITH ANY SUCH ACTION OR PROCEEDING MAY BE
SERVED BY MAILING A COPY THEREOF BY CERTIFIED MAIL, OR ANY SUBSTANTIALLY SIMILAR
FORM OF MAIL, ADDRESSED TO GUARANTOR AS PROVIDED IN SECTION 13(I) BELOW OR MTI
AS PROVIDED IN SECTION 12.1 OF THE AGREEMENT. GUARANTOR ALSO AGREES THAT IT
SHALL NOT COMMENCE OR MAINTAIN ANY ACTION IN ANY COURT, ADMINISTRATIVE AGENCY OR
OTHER TRIBUNAL OTHER THAN THE FAYETTE COUNTY, KENTUCKY, CIRCUIT COURT OR THE
UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF KENTUCKY WITH RESPECT
TO THIS GUARANTY, THE AGREEMENT OR THE OTHER AGREEMENTS, ANY OF THE TRANSACTIONS
PROVIDED FOR OR CONTEMPLATED IN THE AGREEMENT OR THE OTHER AGREEMENTS, OR ANY
CAUSE OF ACTION OR ALLEGED CAUSE OF ACTION ARISING OUT OF OR IN CONNECTION WITH
ANY DEBTOR AND CREDITOR RELATIONSHIP BETWEEN OR AMONG GUARANTOR, MTI AND/OR AEI
THAT MAY EXIST FROM TIME TO TIME.
(h) Any requirement of the Uniform Commercial Code or other
applicable law of reasonable notice shall be met if such notice is given at
least ten (10) days before the time of sale, disposition or other event or thing
giving rise to the requirement of notice.
(i) All notices under this Guaranty ("Notices") shall be given (i) by
personal delivery; (ii) by facsimile transmission; (iii) by registered or
certified mail, postage prepaid, return receipt requested; or (iv) by nationally
recognized overnight or other express courier services. All Notices shall be
effective and shall be deemed delivered (i) if by personal delivery, on the date
of
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delivery if delivered during normal business hours of the recipient, and if not
delivered during such normal business hours, on the next Business Day following
delivery; (ii) if by facsimile transmission or nationally-recognized overnight
courier service on the next Business Day following dispatch of such facsimile or
such overnight courier package; and (iii) if by mail, on the third (3rd)
Business Day after dispatch thereof. Either party may change its address by
Notice to the other party. All Notices under this Agreement shall be sent to the
following addresses or to such substituted address as any of the parties has
given to the others in writing in accordance with this Section 13(i):
(i) If to AEI:
Xxxxxxxxx Enterprises, Inc.
0000 Xxxxx Xxx Xxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
(ii) If to Guarantor:
AEI Holding Company, Inc.
0000 Xxxxx Xxx Xxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
(j) GUARANTOR ACKNOWLEDGES THAT GUARANTOR HAS RECEIVED A COPY OF THE
AGREEMENT AND THE OTHER AGREEMENTS, AS FULLY EXECUTED BY THE PARTIES THERETO.
GUARANTOR REPRESENTS AND WARRANTS THAT GUARANTOR (A) HAS READ THE AGREEMENT AND
THE OTHER AGREEMENTS OR HAS CAUSED SUCH DOCUMENTS TO BE EXAMINED BY GUARANTOR'S
REPRESENTATIVES OR ADVISORS; (B) IS THOROUGHLY FAMILIAR WITH THE TRANSACTIONS
CONTEMPLATED IN THE AGREEMENT AND THE OTHER AGREEMENTS; AND (C), TOGETHER WITH
GUARANTOR'S REPRESENTATIVES OR ADVISORS, IF ANY, HAS HAD THE OPPORTUNITY TO ASK
SUCH QUESTIONS TO REPRESENTATIVES OF MTI AND AEI, RESPECTIVELY, AND RECEIVE
ANSWERS THERETO, CONCERNING THE TERMS AND CONDITIONS OF THE TRANSACTIONS
CONTEMPLATED IN THE AGREEMENT AND THE OTHER AGREEMENTS AS GUARANTOR DEEMS
NECESSARY IN CONNECTION WITH GUARANTOR'S DECISION TO ENTER INTO THIS GUARANTY.
IN WITNESS WHEREOF, the parties have executed this Guaranty as of the date
first above written.
AEI HOLDING COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Title: President
XXXXXXXXX ENTERPRISES, INC.
By: /s/ Xxx Xxxxx
Name: Xxx Xxxxx
Title CFO
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