EXHIBIT 4.2
GUARANTY AGREEMENT
(SETECH, INC.)
WHEREAS, the undersigned, SETECH, INC., a Delaware corporation, has
requested that FIRST UNION COMMERCIAL CORPORATION, a North Carolina
corporation (herein called "LENDER") extend credit or make certain
financial accommodations to its subsidiaries, namely, XXXXX SUPPLY COMPANY,
INC., a Delaware corporation, SOUTHEASTERN TECHNOLOGY, INC., a Tennessee
corporation and TITAN SERVICES, INC., a Tennessee corporation (herein
individually and collectively called "BORROWER"), and the Lender has agreed
to extend such credit or make such financial accommodations and/or may in
the future extend such credit or make such financial accommodations to the
Borrower by reason of such request and in reliance upon this guaranty;
NOW, THEREFORE, in consideration of such credit being extended and/or
to be extended or such financial accommodations made or to be made by the
Lender to the Borrower (whether to the same, greater or lesser extent than
any limit, if applicable, of this guaranty), the sum of $5.00 and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the undersigned hereby unconditionally guarantees to
the Lender, and its successors, endorsees, transferees and assigns the
punctual payment when due, whether by acceleration or otherwise, and at all
times thereafter of (a) all debts, liabilities and obligations whatsoever
of the Borrower to the Lender, now existing or hereafter coming into
existence, arising under or pursuant to that certain Loan and Security
Agreement, dated as of June ___, 1997, among the undersigned, the Borrower
and the Lender, as it may be amended or modified from time to time (the
"LOAN AGREEMENT"); (b) accrued but unpaid interest on such debts,
liabilities and obligations, whether accruing before or after any
maturity(ies) thereof; and (c) all attorneys' fees and costs of collection
if any such debts, liabilities or obligations of the Borrower are
collected, or the liability of the undersigned hereunder enforced, by or
through any attorney at law (all of (a), (b) and (c) being hereinafter
referred to as the "Obligations"). Without limitation of the foregoing,
the term "Obligations," as used herein, shall extend to and include all
"Obligations" of the Borrower to the Lender (as that term is defined in
the Loan Agreement).
The undersigned consents that, at any time, and from time to time,
either with or without consideration, the whole or any part of any security
now or hereafter held for any Obligations may be substituted, exchanged,
compromised, impaired, released, or surrendered with or without
consideration; the time or place of payment of any Obligations or of any
security thereof may be changed or extended, in whole or in part; the
Borrower may be granted indulgences generally; any of the provisions of any
note or other instrument evidencing any Obligations or any security
therefor may be modified or waived; any party liable for the payment
thereof (including but not being limited to any co-guarantor) may be
granted indulgences or released; neither the death, termination of
existence, bankruptcy, incapacity, lack of authority nor disability of the
Borrower or any one or more of the guarantors, including any of the
undersigned, shall affect the continuing obligation of any other guarantor,
including any of the undersigned, and that no claim need be asserted
against the personal representative, guardian, custodian, trustee or debtor
in bankruptcy or receiver of any deceased, incompetent, bankrupt or
insolvent guarantor; any deposit balance to the credit of the Borrower or
any other party liable for the payment of the Obligations or liable upon
any security therefor may be released, in whole or in part, at, before
and/or after the stated, extended or accelerated maturity of any
Obligations; and the Lender may release, discharge, compromise or enter
into any accord and satisfaction with respect to any collateral for the
Obligations, or the liability of the Borrower or any of the undersigned, or
any liability of any other person primarily or secondarily liable on any of
the Obligations, all without notice to or further assent by the
undersigned, who shall remain bound hereon, notwithstanding any such
exchange, compromise, surrender, extension, renewal, acceleration,
modification, indulgence, release, discharge or accord and satisfaction.
The undersigned expressly waives: (a) notice of acceptance of this
guaranty and of all extensions or renewals of credit or other financial
accommodations to the Borrower; (b) presentment and demand for payment of
any of the Obligations; (c) protest and notice of dishonor or of default to
the undersigned or to any other party with respect to any of the
Obligations or with respect to any security therefor; (d) any invalidity or
disability in whole or in part at the time of the acceptance of, or at any
time with respect to, any security for the Obligations or with respect to
any party primarily or secondarily liable for the payment of Obligations to
the Lender; (e) the fact that any security for the Obligations may at any
time or from time to time be in default or be inaccurately estimated or may
deteriorate in value for any cause whatsoever; (f) any diligence in the
creation or perfection of a security interest or collection or protection
of or realization upon the Obligations or any security therefor, any
liability hereunder, or any party primarily or secondarily liable for the
Obligations or any lack of commercial reasonableness in dealing with any
security for the Obligations; (g) any duty or obligation on the part of the
Lender to ascertain the extent or nature of any security for the
Obligations, or any insurance or other rights respecting such security, or
the liability of any party primarily or secondarily liable for the
Obligations, or to take any steps or actions to safeguard, protect, handle,
obtain or convey information respecting, or otherwise follow in any manner,
any such security, insurance or other rights; (h) any duty or obligation on
the part of Lender, whether arising pursuant to Official Code of Georgia
Section 10-7-24 or any similar or subsequent law, to proceed to collect the
Obligations from, or to commence an action against, the Borrower, any other
guarantor, or any other person, or to resort to any security or to any
balance of any deposit account or credit on the books of the Lender in
favor of the Borrower or any other person, despite any notice or request of
the undersigned to do so; (i) to the extent not prohibited by law, the
right to assert any of the benefits under any statute providing appraisal
or other rights which may reduce or prohibit any deficiency judgments in
any foreclosure or other action; (j) all other notices to which the
undersigned might otherwise be entitled; and (k) demand for payment under
this guaranty.
This is a guaranty of payment and not of collection. The liability of
the undersigned on this guaranty shall be continuing, direct and immediate
and not conditional or contingent upon either the pursuit of any remedies
against the Borrower or any other person or foreclosure of any security
interests or liens available to the Lender, its successors, endorsees or
assigns. The Lender may accept any payment(s), plan for adjustment of
debts, plan or reorganization or liquidation, or plan of composition or
extension proposed by, or on behalf of, the Borrower or any other guarantor
without in any way affecting or discharging the liability of the
undersigned hereunder. If the Obligations are partially paid, the
undersigned shall remain liable for any balance of such Obligations. This
guaranty shall be revived and reinstated in the event any payment received
by Lender on any Obligation is required to be repaid or rescinded under
present or future federal or state law or regulation relating to
bankruptcy, insolvency or other relief of debtors.
The undersigned agrees to furnish (or cause to be furnished) to the
Lender all those reports concerning the financial condition or performance
of the undersigned set forth in Section 5.1(H) of the Loan Agreement in
respect of the undersigned as and when required to be delivered pursuant to
the terms thereof.
The undersigned expressly represents and acknowledges that loans and
other financial accommodations by the Lender to the Borrower are and will
be to the direct interest and advantage of the undersigned as a shareholder
of Borrower.
The Lender may, without notice of any kind, sell, assign or transfer
all or any of the Obligations, and in such event each and every immediate
and successive assignee, transferee, or holder of all or any of the
Obligations shall have the right to enforce this guaranty, by suit or
otherwise, for the benefit of such assignee, transferee or holder, as fully
as if such assignee, transferee or holder were herein by name specifically
given such rights, powers and benefits, but the Lender shall have an
unimpaired right, prior and superior to that of any such assignee,
transferee or holder, to enforce this guaranty for the benefit of the
Lender, as to so much of the Obligations as it has not sold, assigned or
transferred. Notwithstanding the foregoing, however, unless and until the
undersigned receives written notice from the Lender of any such sale,
assignment or transfer, any payments of the Obligations made by the
undersigned to Lender shall discharge, dollar-for-dollar, the undersigned's
liability hereunder.
No delay or failure on the part of the Lender in the exercise of any
right or remedy shall operate as a waiver thereof, and no single or partial
exercise by the Lender of any right or remedy shall preclude other or
further exercise thereof or the exercise of any other right or remedy.
For purposes of this guaranty, the Obligations shall include all
debts, liabilities and obligations of the Borrower to the Lender,
notwithstanding any right or power of the Borrower or anyone else to asset
any claim or defense as to the invalidity or unenforceability thereof, and
no such claim or defense shall impair or affect the obligations and
liabilities of the undersigned hereunder. Without limiting the generality
of the foregoing, if the Borrower is a corporation, partnership, joint
venture, trust or other form of business organization, this guaranty covers
all Obligations purporting to be made in behalf of such organization by any
officer or agent of the same, without regard to the actual authority of
such officer or agent. The term "corporation" shall include associations
of all kinds and all purported corporations, whether or not correctly and
legally chartered and organized.
To induce Lender to accept this guaranty, the undersigned warrants and
represents to Lender that: (i) the undersigned is a corporation duly
organized, validly existing and in good standing under the laws of the
state of its incorporation; (ii) the undersigned has the right and power
and is duly authorized and empowered to enter into, execute, deliver and
perform this guaranty; (iii) the execution, delivery and performance of
this guaranty have been duly authorized by all necessary corporate action
on the part of the undersigned and does not and will not (A) require any
consent or approval of the shareholders of the undersigned, (B) contravene
the Certificate of Incorporation or bylaws of the undersigned, (C) violate,
or cause the undersigned to be in default under, any provision of any law,
rule, regulation, order, writ, judgment, injunction, decree, determination
or award in effect having applicability to the undersigned, (D) result in a
breach of or constitute a default under any indenture or loan or credit
agreement or any other agreement, lease or instrument to which the
undersigned is a party or by which it or its properties may be bound or
affected, or (E) result in, or require, the creation or imposition of any
lien upon or with respect to any of the properties now owned or hereafter
acquired by the undersigned; (iv) the execution, delivery and performance
by the undersigned of this guaranty, and the consummation of the
transactions contemplated herein, do not and will not require any
registration with, consent or approval of, or notice to, or other action
to, with or by, any governmental authority except for any filings required
by federal or state securities laws (which filings, if required, have been
made); and (v) this guaranty is a legal, valid and binding obligation of
the undersigned enforceable against it in accordance with its terms, except
to the extent that such enforcement may be limited by applicable
bankruptcy, insolvency and other similar laws affecting creditors' rights
generally or by principles of equity pertaining to the availability of
equitable remedies.
To secure the payment and performance of its obligations hereunder, the
undersigned has entered into a Pledge Agreement, dated of even date
herewith, in favor of Lender, pursuant to which the undersigned has pledged
to Lender all of the capital stock of Borrower owned by the undersigned.
Any amount received by the Lender from whatever source and applied by
it toward the payment of the Obligations shall be applied in such order of
application as the Lender may from time to time elect.
This guaranty shall bind and inure to the benefit of the Lender, its
successors and assigns, and likewise shall bind and inure to the benefit of
the undersigned, their heirs, executors, administrators, successors and
assigns. If more than one person shall execute this guaranty or a similar,
contemporaneous guaranty, the term "undersigned" shall mean, as used
herein, all parties executing this guaranty and such similar guaranties and
all such parties shall be liable, jointly and severally, one with the other
with the Borrower, for each of the undertakings, agreements, obligations,
covenants and liabilities provided for herein with respect to the
undersigned. This guaranty contains the entire agreement between Lender
and the undersigned respecting the subject matter hereof, and there is no
understanding that any other person shall execute this or a similar
guaranty. Furthermore, no course of dealing between the parties, no usage
of trade, and no parol or extrinsic evidence shall be used to supplement or
modify any terms of this guaranty; nor are there any conditions to the
complete effectiveness of this guaranty.
THIS GUARANTY SHALL BE DEEMED ACCEPTED BY LENDER IN THE STATE OF GEORGIA.
THE PARTIES AGREE THAT THIS GUARANTY SHALL BE DEEMED, MADE, DELIVERED,
PERFORMED AND ACCEPTED BY LENDER IN THE STATE OF GEORGIA AND SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF GEORGIA. WHEREVER POSSIBLE EACH
PROVISION OF THIS GUARANTY SHALL BE INTERPRETED IN SUCH MANNER AS TO BE
EFFECTIVE AND VALID UNDER APPLICABLE LAW, BUT IF ANY PROVISION OF THIS
GUARANTY SHALL BE PROHIBITED BY OR INVALID UNDER SUCH LAW, SUCH PROVISION
SHALL BE INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR INVALIDITY,
WITHOUT INVALIDATING THE REMAINDER OF SUCH PROVISION OR THE REMAINING
PROVISIONS OF THIS GUARANTY.
IF AND TO THE EXTENT THEN PERMITTED BY APPLICABLE LAW AT THE TIME OF THE
COMMENCEMENT THEREOF, THE UNDERSIGNED AND LENDER HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS GUARANTY, OR ANY DEALINGS BETWEEN THEM RELATING
TO THE SUBJECT MATTER OF THIS TRANSACTION AND THE RELATIONSHIP THAT IS
BEING ESTABLISHED HEREUNDER. THE UNDERSIGNED ALSO WAIVES ANY BOND OR
SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE
REQUIRED OF LENDER. THE SCOPE OF THIS WAIVER IS INTENDED TO BE
ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND
THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING WITHOUT
LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW AND STATUTORY CLAIMS. THE UNDERSIGNED AND LENDER
ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A
BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN
ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THE
WAIVER IN THEIR RELATED FUTURE DEALINGS. THE UNDERSIGNED AND LENDER
FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS
LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN
WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS GUARANTY. IN THE EVENT OF LITIGATION,
THIS GUARANTY MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
WITHOUT IN ANY WAY LIMITING ANY PROVISIONS OF THE FOREGOING PARAGRAPH, UPON
DEMAND OF ANY PARTY HERETO, WHETHER MADE BEFORE OR AFTER INSTITUTION OF ANY
JUDICIAL ACTION, ANY DISPUTE, CLAIM OR CONTROVERSY ("DISPUTES") ARISING OUT
OF OR CONNECTED WITH THIS GUARANTY SHALL BE RESOLVED BY BINDING ARBITRATION
AS PROVIDED HEREIN. DISPUTES MAY INCLUDE, WITHOUT LIMITATION, TORT CLAIMS,
COUNTERCLAIMS AND CLAIMS BROUGHT AS CLASS ACTIONS. ARBITRATION SHALL BE
CONDUCTED UNDER THE COMMERCIAL FINANCIAL DISPUTES ARBITRATION RULES (THE
"ARBITRATION RULES") OF THE AMERICAN ARBITRATION ASSOCIATION AND TITLE 9 OF
THE U.S. CODE. ALL ARBITRATION HEARINGS SHALL BE CONDUCTED IN ATLANTA,
GEORGIA OR ANY PLACE AGREED TO IN WRITING BY THE PARTIES. THE EXPEDITED
PROCEDURES SET FORTH IN RULE 51 ET SEQ. OF THE ARBITRATION RULES SHALL BE
APPLICABLE TO CLAIMS OF LESS THAN ONE MILLION DOLLARS ($1,000,000). ALL
APPLICABLE STATUTES OF LIMITATION SHALL APPLY TO ANY DISPUTE. A JUDGMENT
UPON THE AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. THE PANEL
FROM WHICH ALL ARBITRATORS ARE SELECTED SHALL BE COMPRISED OF LICENSED
ATTORNEYS. THE SINGLE ARBITRATOR SELECTED FOR EXPEDITED PROCEDURE SHALL
BE A RETIRED JUDGE FROM THE HIGHEST COURT OF GENERAL JURISDICTION, STATE OR
FEDERAL, OF THE STATE WHERE THE HEARING WILL BE CONDUCTED. THE ARBITRATORS
SHALL BE APPOINTED AS PROVIDED IN THE ARBITRATION RULES. NOTWITHSTANDING
THE PRECEDING BINDING ARBITRATION PROVISION, EACH PARTY HERETO HEREBY
PRESERVES CERTAIN REMEDIES THAT ANY PARTY HERETO MAY EXERCISE FREELY,
EITHER ALONE OR DURING A DISPUTE. ANY PARTY HERETO SHALL HAVE THE RIGHT TO
PROCEED IN ANY COURT OF PROPER JURISDICTION OR BY SELF HELP TO EXERCISE OR
PROSECUTE THE FOLLOWING REMEDIES, AS APPLICABLE: (I) ALL RIGHTS TO
FORECLOSE AGAINST ANY REAL OR PERSONAL PROPERTY OR OTHER SECURITY BY
EXERCISING A POWER OF SALE GRANTED IN ANY LOAN DOCUMENTS OR UNDER
APPLICABLE LAW, (II) ALL RIGHTS OF SELF-HELP INCLUDING PEACEFUL OCCUPATION
OF REAL PROPERTY AND COLLECTION OF RENTS, SET-OFF, AND PEACEFUL POSSESSION
OF PERSONAL PROPERTY, AND (III) OBTAINING PROVISIONAL OR ANCILLARY REMEDIES
INCLUDING INJUNCTIVE RELIEF, SEQUESTRATION, GARNISHMENT, ATTACHMENT AND
APPOINTMENT OF RECEIVER. PRESERVATION OF THESE REMEDIES DOES NOT LIMIT THE
POWER OF AN ARBITRATOR TO GRANT SIMILAR REMEDIES THAT MAY BE REQUESTED BY A
PARTY IN A DISPUTE. EACH PARTY HERETO AGREES THAT IT SHALL NOT HAVE A
REMEDY OF PUNITIVE OR EXEMPLARY DAMAGES AGAINST THE OTHER IN ANY DISPUTE
AND HEREBY WAIVES ANY RIGHT OR CLAIM TO PUNITIVE OR EXEMPLARY DAMAGES THEY
MAY HAVE NOW OR WHICH MAY ARISE IN THE FUTURE IN CONNECTION WITH ANY
DISPUTE, WHETHER THE DISPUTE IS RESOLVED BY ARBITRATION OR JUDICIALLY.
The undersigned hereby expressly waives, for Lender's benefit and the
benefit of the Borrower and any other guarantor, maker or endorser of the
Obligations, any and all claims or actions against the Borrower, any other
guarantor, maker or endorser of the Obligations and any and all rights of
recourse against any property or assets of the Borrower, any other
guarantor, maker or endorser of the Obligations (including, without
limitation, any security for the Obligations) arising out of or related to
any payment made by the undersigned under this guaranty, including, without
limitation, any claim of the undersigned for subrogation, reimbursement,
exoneration of or indemnity that the undersigned may have against the
Borrower, any other guarantor, maker of or endorser of the Obligations and
any benefit of, and any other right to participate in, any security of the
Obligations of or any guaranty of the Obligations now of or hereafter held
by Lender. The waiver contained in this paragraph shall continue until the
termination of this guaranty and the full payment and satisfaction of the
Obligations.
IN WITNESS WHEREOF, the undersigned has executed this guaranty as of
the _____ day of June, 1997.
"GUARANTOR"
SETECH, INC., a Delaware corporation
By:
Xxxxxx X. Xxxxxxxx, President
and Chief Executive Officer
Attest:
Xxxxx X. Xxxxxxx, Secretary
and Chief Financial Officer
Address for Notices:
000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxx 00000
Accepted:
FIRST UNION COMMERCIAL CORPORATION
By:____________________________________
Name:_______________________________
Title:________________________________
