CIT FINANCIAL LTD.
Exhibit
10.5
June
22,
2007
CIT
FINANCIAL LTD.
000
Xxxxx’x Xxxx Xxxx
Xxxxxxx,
Xxxxxxx X0X 0X0
Re: INTERNATIONAL
CONDUITS LTD
(the
"Client")
Reference
is made to the Credit Agreement, dated as of June 22, 2007 among the Client,
as
borrower, the undersigned, as guarantors, and CIT Financial Ltd, as lender
(“CIT”), and to the other documents or agreements entered into in connection
with the Credit Agreement (herein collectively the "Agreements") between CIT
and
the Client. Each of the undersigned hereby unconditionally guarantees and agrees
to be liable for the full and indefeasible payment and performance when due
of
all now existing and future indebtedness, obligations or liabilities of the
Client to CIT, howsoever arising, whether direct or indirect, absolute or
contingent, secured or unsecured, arising under any of the Agreements as now
written or as amended or supplemented hereafter. Further, each of the
undersigned agree to pay to CIT on demand the amount of all expenses (including
reasonable attorney's fees) incurred by CIT in collecting or attempting to
collect any of the Client's obligations to CIT, whether from the Client, or
from
any other obligor, or from the undersigned, or in realizing upon any collateral;
and agrees to pay any interest at the highest lawful rate on all amounts payable
to CIT hereunder, even if such amount cannot be collected from the Client.
(All
of
the aforementioned obligations, liabilities, expenses and interest are
hereinafter collectively called the "Obligations"). To the extent CIT receives
payment on account of the Obligations guaranteed hereby, which payment is
thereafter set aside or required to be repaid by CIT in whole or in part, then,
to the extent of any sum not finally retained by CIT (regardless of whether
such
sum is recovered from CIT by the Client, its trustee, or any other party acting
for, on behalf of or through the Client or its representative), each of the
undersigned's obligation to CIT under this Guaranty, as amended, modified or
supplemented, shall remain in full force and effect (or be reinstated) until
the
undersigned has made payment to CIT therefor, which payment shall be due upon
demand.
This
Guaranty is executed as an inducement to CIT to make loans or advances to the
Client or otherwise to extend credit or financial accommodations to the Client,
or to enter into or continue a factoring or financing arrangement with the
Client, and is executed in consideration of CIT’s doing or having done any of
the foregoing. Each of the undersigned agrees that any of the foregoing shall
be
done or extended by CIT in CIT’s sole discretion, and shall be deemed to have
been done or extended by CIT in consideration of and in reliance upon the
execution of this Guaranty, but that nothing herein shall obligate CIT to do
any
of the foregoing.
Notice
of
acceptance of this Guaranty, the making of loans or advances, or the extension
of credit to the Client, the purchase or acquisition of receivables from the
Client, the amendment, execution or termination of any of the Agreements or
any
other agreements between CIT and the Client, and presentment, demand, protest,
notice of protest, notice of non-payment and all other notices to which the
Client or any of the undersigned may be entitled, and CIT’s reliance on this
Guaranty are hereby waived. Each of the undersigned also waive notice of changes
in terms or extensions of time of payment, the taking and releasing of
collateral or guarantees (including the release of any of undersigned) and
the
settlement, compromise or release of any Obligations, and agrees that, as to
the
undersigned, the amount of the Obligations shall not be diminished by any of
the
foregoing. Each of the undersigned also agree that CIT need not attempt to
collect any Obligations from the Client or other obligors or to realize upon
any
collateral, but may require the undersigned to make immediate payment of
Obligations to CIT when due or at any time thereafter. CIT shall not be liable
for failure to collect Obligations or to realize upon any collateral or security
therefor, or any part thereof, or for any delay in so doing, nor shall CIT
be
under any obligation to take any action whatsoever with regard
thereto.
This
Guaranty is absolute, unconditional and continuing, regardless of the validity,
regularity or enforceability of any of the Obligations or the fact that a
security interest or lien in any collateral or security therefor may not be
enforceable by CIT or may otherwise be subject to equities or defenses or prior
claims in favor of others or may be invalid or defective in any way and for
any
reason, including any action, or failure to act, on CIT’s part. Payment by the
undersigned shall be made to CIT at CIT’s office from time to time on demand as
Obligations become due, and one or more successive or concurrent actions may
be
brought hereon against any of the undersigned either in the same action in
which
the Client is sued or in separate actions. In the event any claim or action,
or
action on any judgment, based on this Guaranty, is made or brought against
any
of the undersigned, each of the undersigned agrees not to assert against CIT
any
setoff or counterclaim which the Client may have, and further each of the
undersigned agrees not to deduct, setoff, or seek to counterclaim for or recoup,
any amounts which are or may be owed by CIT to the undersigned, or for any
loss
of contribution from any other guarantor. Furthermore, in any litigation based
on this Guaranty in which any of the undersigned shall be adverse parties,
each
of the undersigned hereby waives the right to interpose any defense based upon
any statute of limitations or any claim of laches and waives the performance
of
each and every condition precedent to which the undersigned might otherwise
be
entitled by law. Each of the undersigned hereby consents to the in personam
jurisdiction of the courts of New York. In the event that CIT brings any action
or suit in any court of record of the state of New York or the Federal
Government to enforce any or all liabilities of any of the undersigned
hereunder, service of process may be made on the undersigned by mailing a copy
of the summons to any of the undersigned at the addresses below set
forth.
All
sums
at any time attributable to the credit of the undersigned and any property
of
any of the undersigned on which CIT, or CIT’s affiliate, The CIT
Group/Commercial Services, Inc., a New York corporation, (“CIT/CMS) at any time
has a lien or security interest, or of which CIT or CIT/CMS at any time has
possession, shall secure payment and performance of all Obligations and any
and
all other obligations of any of the undersigned to CIT or CIT/CMS however
arising. Neither of the undersigned shall have any right of subrogation,
indemnification or recourse to any Obligations or collateral or guarantees
therefor, or to any assets of the Client.
In
the
event of any breach of, default under or termination of any of the Agreements
between CIT and the Client, or in the event that any of the undersigned shall
fail to observe or perform any agreements, warranties, or covenants contained
herein, or should any of the undersigned dissolve or cease its business, call
a
meeting of its creditors, fail to meet its debts as they mature, commit an
act
of bankruptcy, have commenced by or against any of the undersigned any
bankruptcy, insolvency, arrangement, reorganization, receivership or similar
proceeding under any federal or state law, then the liability of both of the
undersigned for the entire Obligations shall mature even if the liability of
the
Client therefor does not.
This
Guaranty may be terminated as to either of the undersigned only upon actual
receipt by one of CIT’s officers of at least ninety (90) days prior written
notice of termination sent by registered or certified mail; provided however,
that the undersigned so terminating this Guaranty shall remain bound hereunder,
and this Guaranty shall continue in full force and effect, with respect to
any
and all Obligations created or arising prior to the effective date of such
termination and with respect to any and all extensions, renewals or
modifications of said pre-existing Obligations. Termination by either of the
undersigned shall not affect the obligations of the undersigned with respect
to
liability for any post termination collection expenses or interest. This is
a
continuing Guaranty and written notice as above provided shall be the only
means
of termination, notwithstanding the fact that for certain periods of time there
may be no Obligations owing to CIT by the Client.
CIT’s
books and records showing the account between CIT and the Client shall be
admissible in evidence in any action or proceeding as prima facie proof of
the
items therein set forth. CIT’s monthly statements rendered to the Client shall
be binding upon both of the undersigned (whether or not the undersigned received
copies thereof) and, shall constitute an account stated between CIT and the
Client, unless CIT shall have received a written statement of the Client's
exceptions within thirty (30) days after the statement was mailed to the
Client.
This
Guaranty embodies the whole agreement of the parties and may not be modified
except in writing, and no course of dealing between CIT and either or both
of
the undersigned shall be effective to change or modify this Guaranty. CIT’s
failure to exercise any right hereunder shall not be construed as a waiver
of
the right to exercise the same or any other right at any other time and from
time to time thereafter, and such rights shall be considered as cumulative
rather than alternative. No knowledge of any breach or other nonobservance
by
the undersigned of the terms and provisions of this Guaranty shall constitute
a
waiver thereof, nor a waiver of any obligations to be performed by the any
of
undersigned hereunder.
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This
Guaranty is executed and given in addition to, and not in substitution,
reduction, replacement or satisfaction of any other endorsements or guarantees
of the Obligations, now existing or hereafter executed, by either of the
undersigned, or others in CIT’s favor.
When
used
in this Guaranty all pronouns shall, wherever applicable, be deemed to include
the plural as well as the singular. This Guaranty shall inure to the benefit
of
CIT, CIT/CMS and its successors and assigns and any parent, subsidiary or
affiliate of CIT or CIT/CMS as well as to any concern which CIT may now or
hereafter factor or finance; shall be binding jointly and severally upon the
undersigned and upon the respective heirs, executors, administrators, successors
and assigns of each of the undersigned; and shall pertain to the Client and
its
successors and assigns. This Guaranty may be executed in any number of
counterparts, each of which when so executed shall be deemed an original and
such counterparts shall, together, constitute but one and the same
document.
TO
THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE UNDERSIGNED HEREBY WAIVES
ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING DIRECTLY OR
INDIRECTLY OUT OF THIS GUARANTY OR ANY OTHER AGREEMENT OR TRANSACTION BETWEEN
CIT, CIT/CMS OR TO WHICH ANY OF US ARE PARTIES.
This
Guaranty shall be governed by and construed in accordance with the laws of
the
State of New York.
IN
WITNESS WHEREOF, each of the undersigned has executed and delivered this
Guaranty effective as of the date above set forth.
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UNIVERSAL
SECURITY INSTRUMENTS, INC
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By:
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Name:
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Title:
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Xxxxxx Xxxx Xxxxx
Xxxxxx Xxxxx, XX
00000
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USI
ELECTRIC INC.
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By:
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/s/
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Name:
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Title:
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Xxxxxx Xxxx Xxxxx
Xxxxxx Xxxxx, XX
00000
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