GUARANTY AGREEMENT
This GUARANTY AGREEMENT (the "Guaranty") is made as of December 9,
1998, by ▇▇▇▇ ▇. ▇▇▇▇▇▇, an individual ("▇▇▇▇▇▇"), with a residence at
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇., an individual with a residence at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇▇▇") (▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ hereinafter
are referred to as the "Guarantor"), in favor of ▇▇▇▇▇-▇▇▇▇▇▇▇
ELECTRONICS CORPORATION, an Illinois corporation, with an office at ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Secured Party").
Preliminary Statements:
A. As of the date of this Guaranty, ▇▇▇▇▇ Industries, Inc., an
Illinois corporation ("Industries"), ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ (Industries,
▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ hereinafter are referred to collectively as the
"Debtors"), and the Secured Party have entered into a Note of even date
herewith (the "Note").
B. Pursuant to the Note and Loan Documents (as defined in the
Note), the Secured Party has agreed to extend credit to the Debtors
conditioned upon the Guarantor's agreement to execute and deliver this
Guaranty to the Secured Party.
C. The Guarantor has independently determined that execution,
delivery, and performance of this Guaranty will directly benefit it and
is in the best interests of the Guarantor.
NOW, THEREFORE, in consideration of these background recitals, and
for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and intending to be legally bound
hereby, the Guarantor and the Secured Party agree as follows:
1. Reference to the Note and the Loan Documents.
(A) Reference is hereby made to the Note and the Loan Documents
for a statement of the terms and conditions thereof.
(B) All capitalized terms utilized in this Guaranty which are
defined in the Note or the Loan Documents and not otherwise defined
herein shall have the meanings assigned to them in the Note or the Loan
Documents.
2. Guaranty of Payment and Performance; Indemnification.
(A) The Guarantor hereby irrevocably, absolutely, and
unconditional guarantees and becomes surety for the full and prompt
payment to the Secured Party when due, whether by acceleration or
otherwise, of any and all indebtedness of the Debtors to the Secured
Party arising out of the Note, including, without limitation, all
extensions, renewals, and replacements of such indebtedness:
(i) Whether such indebtedness is for principal, interest,
fees, costs, expenses, or otherwise;
(ii) whether such indebtedness exists now or is hereafter
incurred; and
(iii) whether such indebtedness is direct, related, unrelated,
similar, dissimilar, primary, absolute, secondary, contingent, secured,
unsecured, matured, or unmatured.
(B) The Guarantor hereby irrevocably, absolutely and
unconditionally guarantees and becomes surety for the due, full, prompt,
and unconditional performance of all present and future obligations and
agreements of every kind of the Debtors to or with the Secured Party
arising out of the note or the other Loan Documents. The indebtedness,
obligations and agreements enumerated in Sections 2(A) and (B) of this
Guaranty shall be collectively referred to herein as the "Obligations".
(C) The Guarantor hereby acknowledges and agrees that:
(i) although applicable bankruptcy or insolvency laws may
relieve all or part of the Debtor's obligations for interest, default
interest, fees, costs, or expenses under the Note or the Loan Documents
or otherwise, the Guarantor shall continue to be liable for such
obligations as if bankruptcy or insolvency of the Debtors had not
occurred;
(ii) the Obligations of the Guarantor under this Guaranty may
exceed allowable obligations of the Debtors to the Secured Party under
such bankruptcy and insolvency laws; and
(iii) to this extent, the Guarantor's liability to the Secured
Party hereunder may not be co-extensive with the Debtor's liability to
the Secured Party under the Note, the Loan Documents or otherwise.
3. Nature of Guaranty; Termination.
(A) This Guaranty is a continuing guaranty of the Obligations
(irrespective of the aggregate amount hereof), independent of and in
addition to any other guaranty, endorsement, surety agreement,
collateral, or other agreement held by the Secured Party for the
Obligations or any party thereof, whether executed or granted by the
Guarantor or otherwise. The liability of the Guarantor hereunder shall
be absolute and unconditional irrespective of, and the Guarantor waives
any defense which may otherwise act as a result of, any of the
following;
(i) any lack of validity or enforceability of the Note or any
Loan Documents or any other document, agreement, or writing creating or
evidencing any of the Obligations, including, without limitation, the
lack of validity or enforceability of all or any portion of any liens or
security interests securing all or any part of the Obligations; or
(ii) any event or circumstance which might operate under
applicable law to discharge the liability of the Guarantor hereunder or
might otherwise constitute or give rise to a defense available to the
Debtors, the Guarantor, or any other guarantor of any of the
Obligations.
(B) This Guaranty is a guaranty of payment, not of collection.
(C) This Guaranty shall remain in full force and effect until all
of the Obligations and other fees, costs, and expenses payable by the
Guarantor pursuant to Section 4 hereof have been paid or performed in
full and the Secured Party has no further obligation or commitment to
the Debtors to advance funds under the Note or the Loan Documents or
otherwise. This Guaranty shall continue to be effective or shall be
reinstated, as the case may be, if at any time any payment of any of the
Obligations is rescinded, voided, or rendered void or voidable as a
preferential transfer, impermissible set-off, or fraudulent conveyance
or must otherwise be returned or disgorged by the Secured Party, as if
such rescinded, avoided, voided, or voidable payment had not been made.
4. Costs and Expenses.
The Guarantor agrees to pay on demand all fees, costs, and expenses
of every kind incurred by the Secured Party for any purpose arising
from, relating to, or in connection with the Obligations, the Debtor, or
this Guaranty, including, without limitation, fees, costs, and expenses
incurred by the Secured Party in enforcing this Guaranty, including
without limitation attorney's fees and costs, and collecting any
Obligations from the Debtors or the Guarantor, or in realizing upon or
protecting the Collateral or any collateral securing all or any part of
the Obligations or this Guaranty.
5. Waivers of the Guarantor.
(A) The Guarantor hereby agrees that the Guarantor shall not have,
and hereby expressly waives forever:
(i) any right to require promptness and diligence on the part
of the Secured Party;
(ii) any right to receive notices, including, without
limitation, notice of the acceptance of this Guaranty or of the
incurrence of any Obligation by the Debtor, notice of any action taken
by the Secured Party or the Debtors pursuant to any document, agreement,
or writing relating to the Obligations, or notice of the intended
disposition of the Collateral or any collateral securing all or any part
of the Obligations or this Guaranty; and
(iii) any right to require the Secured Party to advise the
Guarantor of any information known to the Secured Party regarding the
financial or other condition of the Debtor, the Guarantor acknowledging
that the Guarantor is responsible for being and keeping informed
regarding such condition.
(B) The Guarantor hereby agrees that the Guarantor shall not have,
and hereby expressly waives until after all of the Obligations and any
other Obligations of the Guarantor under Section 4 hereof have been
irrevocably satisfied, any right to subrogation, indemnification, or
contribution and any other right to payment from or reimbursement by the
Debtor, in connection with or as a consequence of any payment made by
the Guarantor hereunder, any right to enforce any right or remedy which
the Secured Party has or may hereafter have against the Debtors and any
benefit of, and any right to participate in, the Collateral or any
collateral securing all or any party of the Obligations or any payment
made to the Secured Party or collection by the Secured Party from the
Debtor.
6. Payment of the Obligations.
If any Obligations is not paid punctually when due, subject to any
applicable grace period, including, without limitation, any Obligation
due by acceleration of the maturity thereof, the Guarantor shall
immediately pay such Obligation or cause such Obligation to be paid in
full:
(A) without deduction for any set-off, recoupment, defense, or
counterclaim;
(B) without requiring and notwithstanding the lack of protest or
notice of nonpayment or default of the Guarantor, either Debtor, or any
other person;
(C) without demand for payment or proof of such demand; and
(D) without requiring and without any obligation on the part of
the Secured Party to resort first to the Debtors, to the Collateral, or
to any collateral securing all or any part of the Obligations or this
Guaranty, or to any other guaranty or endorsement which the Secured
Party may hold as security for payment of the Obligations.
7. Rights and Remedies of the Secured Party.
(A) The Guarantor acknowledges and agrees that the Secured Party
may, without the consent of, notice or demand to, or reservation of
rights against the Guarantor, and without affecting the Guarantor's
obligations hereunder, from time to time:
(i) renew, extend, increase, accelerate, or otherwise change
the time for payment of, the terms of, or the rate of interest
applicable to the Obligations or any part thereof;
(ii) accept and hold collateral securing payment of the
Obligations, or any part thereof, and exchange, enforce, or release the
Collateral, such collateral, or any part thereof;
(iii) accept and hold any endorsement or guaranty of payment
of the Obligations or any part thereof, and partially or fully
discharge, release, or substitute the obligations of any such endorser
or guarantor, or any person or entity who has pledged any collateral as
security for payment of the Obligations, or waive any rights or remedies
with respect to any thereof;
(iv) partially or fully discharge or release, or waive any
rights or remedies with respect to, either Debtor;
(v) dispose of the Collateral or any collateral securing all
or any part of the Obligations or this Guaranty in any manner or order
as the Secured Party, in its sole discretion, deems appropriate; and
(vi) determine the manner, amount, and time of application of
payments and credits to be made on all or any part of the Obligations
(whether for principal, interest, fees, costs, expenses, or otherwise),
and apply such payments and credits first to reduce Obligations
exceeding the amount of this Guaranty.
(B) Upon the occurrence of any Event of Default, the Secured Party
may, at any time and from time to time without prior notice to the
Guarantor, set-off and apply any and all deposits (general or special,
time or demand, provisional or final) held and other indebtedness owing
by the Secured Party to or for the credit of the Guarantor against the
Obligations, irrespective of whether the Secured Party shall have made
any demand under this Guaranty. The Secured Party agrees to notify the
Guarantor after any such set-off and application, provided that failure
to give such notice to the Guarantor shall not affect the validity of
such set-off and application.
8. Representations and Warranties of the Guarantor.
The Guarantor hereby represents and warrants as follows:
(A) The execution, delivery, and performance of this Guaranty are
not in contravention of any law or of any indenture, agreement,
undertaking, or other document to which the Guarantor is a party or by
which the Guarantor or any of the Guarantor's property is bound or
affected.
(B) This Guaranty constitutes the legal, valid, and binding
obligation of the Guarantor, enforceable in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy or
insolvency laws and laws affecting creditor's rights generally.
9. Notices.
Any notices and other communications provided for hereunder shall
be made by telegram, telex, electronic transmitter, overnight air
courier, or certified or registered mail, return receipt requested, and
shall be deemed to be received by the party to whom sent one (1)
Business Day after sending, if sent by telegram, telex, electronic
transmitter, or overnight air courier, and three (3) Business Days after
mailing, if sent by certified or registered mail. All such notices and
other communications to a party shall be addressed to such party at the
address set forth on the cover page hereof or to such other address as
such party may designate for itself in a notice to the other party given
in accordance with this section.
10. Miscellaneous.
(A) "Debtor" and "Guarantor" as used in this Guaranty shall
include, respectively:
(i) any successor, individual, association, partnership, or
corporation to which all or a substantial part of the business or assets
of either Debtor or the Guarantor shall have been transferred; and
(ii) any other corporation into which Guarantor or either
Debtor (if the Debtor is a corporation) shall have been merged,
consolidated, reorganized or absorbed, except that the Guarantor shall
not have the right to assign its obligations hereunder or any interest
therein.
(B) "Secured Party" shall include the successors and assigns of
the Secured Party.
(C) The rights and benefits of the Secured Party hereunder shall,
if the Secured Party so agrees, inure to any party acquiring any
interest in the indebtedness or the Obligations, or any part thereof.
(D) No course of dealing between the Debtors or the Guarantor and
the Secured Party, and no delay or omission by the Secured Party in
exercising any right or remedy hereunder or with respect to the
Obligations shall operate as a waiver thereof or of any other right or
remedy, and no single or partial exercise thereof shall preclude any
other or further exercise thereof or the exercise of any other right or
remedy. All rights and remedies of the Secured Party are cumulative.
(E) From time to time, the Guarantor shall take such action and
execute and deliver to the Secured Party such additional documents,
instruments, certificates, and agreements as the Secured Party may
reasonably request to effectuate the purposes of this Guaranty.
(F) The provisions of this Guaranty are independent of and
separable from each other, and no such provision shall be affected or
rendered invalid or unenforceable by virtue of the fact that for any
reason any other such provision may be invalid or unenforceable in whole
or in part. If any provision of this Guaranty is prohibited or
unenforceable in any jurisdiction, such provision shall be ineffective
in such jurisdiction only to the extent of such prohibition or
unenforceability, and such prohibition or unenforceability shall not
invalidate the balance of such provision to the extent it is not
prohibited or unenforceable nor render prohibited or unenforceable such
provision in any other jurisdiction.
(G) THIS GUARANTY AND THE TRANSACTIONS EVIDENCED HEREBY SHALL BE
GOVERNED BY AND CONSTRUED UNDER THE INTERNAL LAWS OF THE STATE WHERE THE
OFFICE OF THE SECURED PARTY IS LOCATED, AS REFLECTED ON THE INITIAL PAGE
HEREOF, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS, AS THE SAME
MAY FROM TIME TO TIME BE IN EFFECT, INCLUDING, WITHOUT LIMITATION, THE
UNIFORM COMMERCIAL CODE AS IN EFFECT IN SUCH STATE.
(H) THE GUARANTOR AND THE SECURED PARTY AGREE THAT ANY ACTION OR
PROCEEDING TO ENFORCE OR ARISING OUT OF THIS GUARANTY MAY BE COMMENCED
IN ANY COURT OF ANY STATE IN ANY COUNTY, OR IN ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ IN ANY DISTRICT, IN WHICH THE SECURED PARTY HAS AN OFFICE,
AND THE GUARANTOR WAIVES PERSONAL SERVICE OF PROCESS AND AGREES THAT A
SUMMONS AND COMPLAINT COMMENCING AN ACTION OR PROCEEDING IN ANY SUCH
COURT SHALL BE PROPERLY SERVED AND SHALL CONFER PERSONAL JURISDICTION IF
SERVED BY REGISTERED OR CERTIFIED MAIL TO THE GUARANTOR, OR AS OTHERWISE
PROVIDED BY THE LAWS OF SUCH STATE OR THE UNITED STATES.
(I) This Guaranty may be executed in any number of counterparts and
by the Secured Party and the Guarantor on separate counterparts, each of
which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same Guaranty.
11. Waiver of Jury Trial.
THE GUARANTOR AND THE SECURED PARTY (BY ACCEPTANCE HEREOF) HEREBY
KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY
JURY THE GUARANTOR OR THE SECURED PARTY MAY HAVE IN ANY ACTION OR
PROCEEDING, IN LAW OR IN EQUITY, IN CONNECTION WITH THIS GUARANTY OR THE
TRANSACTIONS RELATED THERETO. THE GUARANTOR REPRESENTS AND WARRANTS
THAT NO REPRESENTATIVE OR AGENT OF THE SECURED PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT THE SECURED PARTY WILL NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THIS RIGHT TO JURY TRIAL WAIVER. THE
GUARANTOR ACKNOWLEDGES THAT THE SECURED PARTY HAS BEEN INDUCED TO ENTER
INTO THIS GUARANTY BY, AMONG OTHER THINGS, THE PROVISIONS OF THIS
SECTION.
12. Entire Agreement
This Guaranty, together with the Note and the other Loan Documents,
sets forth the entire understanding of the parties with respect to the
subject matter of this Guaranty and supersedes any other agreement,
whether oral or written, between the parties with respect to the subject
matter of this Guaranty, including, without limitation, that certain
Guaranty between the parties dated August 15, 1997.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
executed by a duly authorized officer, as of the date first above
written.
/S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇, an individual
/S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇,, an individual
ACKNOWLEDGED AND ACCEPTED:
▇▇▇▇▇-▇▇▇▇▇▇▇ ELECTRONICS CORPORATION
By: /S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: CEO
