GUARANTY
WHEREAS, EIF HOLDINGS, INC., a Hawaii corporation ("Buyer"), and ▇▇▇
▇. MANTA, ▇▇▇▇▇▇ ▇. MANTA, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇. MANTA, ▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇ ▇. MANTA, as TRUSTEE OF ▇▇▇▇▇▇▇ MANTA TRUST, ▇▇▇▇ ▇. MANTA, as TRUSTEE
OF ▇▇▇▇▇ MANTA TRUST, ▇▇▇▇ ▇. MANTA, as TRUSTEE OF ALEXANDER MANTA TRUST,
▇▇▇ ▇. MANTA AND ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (collectively, the "Sellers") are parties
to a certain Stock Purchase Agreement dated September 30, 1997 (the "Stock
Purchase Agreement"), whereby the Buyer has agreed to purchase from the
Sellers, and the Sellers have agreed to sell to the Buyer, all of the
outstanding capital stock of ▇.▇. Manta, Inc., an Illinois corporation (the
"Company").
WHEREAS, in consideration of the Sellers selling, transferring,
assigning, and delivering to the Buyer all of its right, title and interest in
and to the Shares of the Company, the Buyer has agreed to pay the Sellers, in
accordance with and in the amount specified in Section 2(b) of the Stock
Purchase Agreement, the sum of Seven Million Six Hundred Thousand
($7,600,000.00) Dollars, with Two Million, Two Hundred Thirty-Five Thousand,
Three Hundred and Twelve ($2,235,312.00) Dollars, in the aggregate, to be paid
to the Sellers in the form of Convertible Promissory Notes issued by the Buyer
(the "Convertible Promissory Notes");
WHEREAS, pursuant to the terms of the Stock Purchase Agreement, Buyer
has agreed to enter into Retention Bonus Agreements with certain key employees
of the Company (the "Retention Bonus Agreements") pursuant to which such
employees shall be paid up to Nine Hundred Thousand ($900,000.00) Dollars, with
Six Hundred Thirty-Five Thousand, Two Hundred Ninety-One and 99/100
($635,291.99) Dollars paid at the Closing and Two Hundred Sixty-four Thousand,
Seven Hundred Eight and 01/100 ($264,708.01) Dollars to be paid subsequent to
the Closing (such payments as are to be paid after the Closing pursuant to the
Retention Bonus Agreements being hereinafter referred to as the "Retention Bonus
Payments");
WHEREAS, the obligations of the Buyer under the Convertible Promissory
Notes and the Retention Bonus Agreements are subject to certain rights of
recoupment by the Buyer pursuant to Section 8(g) of the Stock Purchase Agreement
with respect to any claims of Buyer arising under the Stock Purchase Agreement
or the Sellers' Transaction Documents (the "Recoupment Rights"), which
recoupment rights may result in a reduction of the payments due from Buyer
either under the Convertible Promissory Notes or the Retention Bonus Agreements;
WHEREAS, in accordance with the terms and conditions of the Stock
Purchase Agreement, and the terms and conditions of this Guaranty, the
undersigned has agreed to jointly and severally guaranty the Buyer's obligation
to make payments of principal, interest and other costs and expenses when due,
whether at maturity or earlier, by reason of acceleration or otherwise, under
and pursuant to the Convertible Promissory Notes and Buyer's obligation to make
the Retention Bonus Payments when payable, either as scheduled or earlier by
reason of acceleration of otherwise under and pursuant to the Retention Bonus
Agreements, as the amount or timing of such payments may be reduced or changed
pursuant to and specifically in accordance with the procedures set forth in
Section 8(g) of the Stock Purchase Agreement (collectively, the "Payment
Obligations"); and
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and as an inducement to the Sellers
to enter into the Stock Purchase Agreement with the Buyer, the undersigned
hereby guarantees the Buyer's full performance and observance of the Payment
Obligations, and expressly agrees that the validity of this Guaranty, and the
obligations of the undersigned hereunder, shall in no manner be terminated,
effected or impaired by reason of (a) the validity or enforceability of the
Payment Obligations or of any document evidencing the Payment Obligations, (b)
the granting by the Sellers of any consents, waivers or other indulgences to the
Buyer or by the reason of the assertion by the Sellers against the Buyer of any
of the rights or remedies reserved to the Sellers pursuant to the Payment
Obligations, or (d) the relief of the Buyer from the Payment Obligations by
operation of law or otherwise (including, without limitation, the rejection or
subordination of said Payment Obligations in connection with the proceedings
under the state or federal bankruptcy or insolvency laws now or hereinafter
enacted), the undersigned hereby waiving all suretyship defenses or other
circumstances that might otherwise constitute a legal or equitable discharge or
defense of a guarantor.
It is expressly stated in this Guaranty and agreed that the obligations
of the undersigned do not include any obligation of the Buyer to convert the
Payment Obligations into shares of the Buyer's stock, and the undersigned shall
have no liability hereunder as a result of any failure of Buyer to convert the
Payment Obligations into shares of the Buyer's stock or to provide the Sellers
with any of the Alternative Compensation Arrangements, as defined in the Stock
Purchase Agreement,
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This Guaranty shall be a continuing, absolute and unconditional
guaranty, and shall remain in full force and effect until all of the Payment
Obligations (including any extensions thereof) and all costs and expenses
payable by the undersigned hereunder shall have been indefeasibly paid in full.
This Guaranty may be enforced by the Sellers notwithstanding the delivery of any
Default Notice under the terms of the Convertible Promissory Notes. The
undersigned further agrees that, if at any time all or any part of any payment
theretofore applied by the Sellers to the Payment Obligations is or must be
rescinded by the Sellers for any reason whatsoever (including, without
limitation, the insolvency, bankruptcy or reorganization of the Buyer), the
Payment Obligations shall, for the purposes of this Guaranty, to the extent that
such payment is or must be rescinded or returned, be deemed to have continued in
existence, notwithstanding such application by the Sellers, and this Guaranty
shall continue to be effective or reinstated, as the case may be, as to the
Payment Obligations as if any such application had not been made.
Notwithstanding the foregoing, in the event that the Buyer fails to make payment
of the Payment Obligations, as such Payment Obligations become due and payable,
the Sellers agree to give notice of such default to the undersigned, and the
undersigned shall have twenty (20) days from the date of such notice to cure
Buyer's default (the "Cure Period"). During the Cure Period, and after the Cure
Period in the event that the default has been cured, each of the Sellers agrees
not to exercise any of his rights and remedies under the Convertible Promissory
Notes and the Retention Bonus Agreements, including, without limitation, any
right to accelerate the Payment Obligations, arising as a result of such
default. Sellers are hereby authorized, without notice or demand, and without
affecting the liability of the undersigned hereunder, to at any time and from
time to time (i) renew, extend, modify, accelerate or otherwise change the time
for payment of, or other terms of the Payment Obligations; (ii) accept partial
payments on the Payment Obligations, (iii) take and hold security or collateral
for the payment of the Payment Obligations guaranteed hereby, (iv) apply such
security or collateral and direct the order or manner of sale thereof as in
their sole discretion they may determine; and (v) settle, release, compromise,
collect or otherwise liquidate the Payment Obligations and any security and
collateral therefor in any manner, without affecting or impairing the
obligations of the undersigned hereunder.
It is agreed that the failure of the Sellers to insist in one or more
instances upon the strict performance or observance of the Buyer's Payment
Obligations under the Convertible Promissory Notes or Retention Bonus Agreement
or to exercise any right therein contained shall not be construed or deemed to
be a waiver or relinquishment of any of the Payment Obligations, but the same
shall continue and remain in full force and effect.
Representations, Warranties and Covenants. The Undersigned represents,
warranties and covenants to Sellers that:
i. The statements contained in this Guaranty are true and correct.
ii. The execution, delivery, and performance by the
undersigned of this Guaranty are within the undersigned's corporate powers, have
been duly authorized by all necessary corporate action, and do not (a)
contravene the undersigned's charter or bylaws or (b) violate any law, rule,
regulation, order, writ, judgment, decree, or award.
iii. This Guaranty, when duly executed and delivered, will
constitute a legal, valid and binding obligation of the undersigned, enforceable
against the undersigned in accordance with its terms.
The undersigned waives all defenses, counterclaims and offsets of any
kind or nature with respect to this Guaranty, including, without limitation, any
defense, counterclaim or offset in connection with the validity and/or
enforceability of this Guaranty, arising directly or indirectly from any
agreement, instrument or document executed and delivered, by the Buyer to
Sellers. To the extent the Buyer has exercised its Recoupment Rights, the
undersigned is entitled to any reduction or deferral of the Payment Obligations
in accordance with the applicable terms of the Convertible Promissory Notes, the
Retention Bonus Agreements and Section 8(g) of the Stock Purchase Agreement.
Until all of the Payment Obligations are paid in full, the undersigned
waives any and all rights of subrogation, reimbursement, indemnity, exoneration,
contribution, assignment, implied contract or any other claim which it may now
or hereafter have against the Buyer or any other person directly or contingently
liable for the Payment Obligations, or against or with respect to the Buyer's
property, arising from the existence or performance of this Guaranty. In
furtherance, but not in limitation, of the preceding waiver, the undersigned
agrees that, with respect to any claim of the Sellers, any payment to Sellers by
the undersigned pursuant to this Guaranty shall be deemed a contribution to the
capital of the Buyer and any such payment shall not constitute the undersigned a
creditor of the Buyer.
Page 215
The undersigned waives any right to assert against Sellers as a
defense, counterclaim, set off or cross claim to the payment or performance of
Payment Obligations, any defense (legal or equitable) set off, counterclaim or
claim which the undersigned may now or at any time or times hereafter have
against the Buyer or any other party liable to the Sellers in any way or manner.
The undersigned hereby waives notice of the following events or
occurrences and agrees that the Sellers may do any or all of the following in
such manner, upon such terms and at such times as the Sellers deem advisable
without in any way impairing, affecting, reducing or releasing the undersigned
from Payment Obligations: (i) Sellers' acceptance of this Guaranty; (ii)
presentment, demand, notices of default , non-payment, partial payment and
protest, and all other notices or formalities to which the undersigned may be
entitled (other than the notices provided for in this Guaranty); (iii) Sellers'
heretofore, now or at any time or times hereafter granting to the Buyer (and any
other party liable to Sellers on account of the Payment Obligations) of any
indulgences or extensions of time of payment of the Payment Obligations; and
(viii) Sellers' heretofore, now or at any time or times hereafter, accepting
from the Buyer or any other party any partial payment or payments on account of
the Payment Obligations or Sellers settling, subordinating, compromising,
discharging or releasing the same.
No assignment or other transfer of the Payment Obligations, or any
interest therein or rights thereunder, shall operate to extinguish or diminish
the liability of the undersigned guarantor under this Guaranty; and whenever
reference is made to any Payment Obligation of the Buyer in the Convertible
Promissory Notes or the Retention Bonus Agreements such reference shall be
deemed likewise to refer to the undersigned guarantor.
The undersigned agrees to pay on demand all out of pocket costs and
expenses (including the reasonable fees and expenses of counsel for any of the
Sellers') of the Sellers in connection with the enforcement of this Guaranty,
whether in any action, suit or litigation, any bankruptcy, insolvency or other
proceeding of any nature.
It is further agreed that all of the terms and provisions hereof shall
inure to the benefit of the Sellers and their successors and assigns, and shall
be binding upon the undersigned and its successors and assigns.
Capitalized terms used herein shall have the same meanings that such
terms have when used in the Stock Purchase Agreement unless the context clearly
requires otherwise or otherwise defined herein this Guaranty. All rights, duties
and remedies of the parties shall be governed as to interpretation, validity,
effect and enforcement, and will be governed in all other respects, by the laws
of the State of Illinois.
IN WITNESS WHEREOF, the undersigned guarantor has duly executed this
instrument this ______ day of October, 1997, as a sealed instrument.
AMERICAN ECO CORPORATION
By:_______________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
STATE OF ________________
October ___, 1997
Then personally appeared the above-named ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
of American Eco Corporation and acknowledged that he is authorized to execute
this instrument and that it is his free act and deed and that of American Eco
Corporation, before me,
Notary Public
My Commission Expires:
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The provisions of this Guaranty are hereby accepted and agreed as of November
18, 1997.
------------------------------- ---------------------------------
▇▇▇ ▇. Manta ▇▇▇▇▇▇ ▇. Manta
------------------------------- ---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇. Manta
------------------------------- ---------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇. Manta, as Trustee of
▇▇▇▇▇▇▇ Manta Trust
------------------------------- ---------------------------------
▇▇▇ ▇. Manta ▇▇▇▇ ▇. Manta, as Trustee of
Alexander Manta Trust
------------------------------- ----------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇. Manta, as Trustee of
▇▇▇▇▇ Manta Trust
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