Exhibit 10.2
UNCONDITIONAL GUARANTY
THIS GUARANTY is made as of this 29th day of June, 1999, by Technology
Flavors & Fragrances, Inc. an Ontario corporation having a business address of
0000 Xxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
(hereinafter the "Guarantor") in favor of Foothill Capital Corporation (the
"Lender") pursuant to, and in order to induce Lender to extend credit to
Technology Flavors & Fragrances, Inc., having an address of 00 Xxxxxx Xxxxxx
Xxxx, Xxxxxxxxxx, Xxx Xxxx 00000, (the "Borrower"), pursuant to that certain
Loan and Security Agreement of even date herewith between the Lender and the
Borrower, as the same has been or may hereafter be amended, modified, extended,
renewed, supplemented or replaced from time to time, (the "Loan Agreement"),
which shall be fair and sufficient consideration for the execution of this
Guaranty.
Section 1. Definitions. All capitalized words and terms used herein shall
have the meanings assigned to them in the Loan Agreement unless otherwise
defined herein.
Section 2. Guaranty.
(a) To induce the Lender to extend credit to the Borrower pursuant
to the Loan Agreement, the Guarantor hereby irrevocably and unconditionally
guarantees to the Lender, its successors and assigns (i) the full and prompt
payment when due, whether by acceleration or otherwise, with such interest as
may accrue thereon either before or after maturity thereof, of all of the
Obligations, including, without limitation, the Revolving Loans, together with
all renewals, modifications, consolidations, and extensions thereof, (ii) the
full and prompt payment and performance of all terms, conditions and covenants
contained in the Loan Agreement and (iii) the full and prompt performance of any
and all other obligations of the Borrower under any other documents or
instruments referred to in the Loan Agreement or now or hereafter evidencing,
securing, or otherwise relating to the Obligations or the Loan Documents. The
Guarantor hereby agrees that if any of the Obligations, duties and covenants are
not paid by the Borrower in accordance with their respective terms or if any and
all sums which are now or may hereafter become due from the Borrower to the
Lender under or pursuant to any of the Obligations or the Loan Documents are not
paid by the Borrower in accordance with their terms, the Guarantor will
immediately make such payments. The Guarantor hereby further agrees to pay the
Lender all reasonable expenses (including, without limitation, reasonable
attorneys' fees and court costs) paid or incurred by the Lender in endeavoring
(x) to collect any indebtedness evidenced by any of the Obligations or the Loan
Documents, or any portion thereof, (y) to enforce any of the Obligations of the
Borrower guaranteed hereby, or (z) to enforce this Guaranty. This Guaranty shall
be a continuing Guaranty of all the Obligations and all of the duties and
covenants of the Borrower created pursuant to any and all of the Loan Documents,
including, without limitation, any and all advances, debts, obligations,
covenants and liabilities heretofore, now or hereafter made, incurred or created
under and pursuant to any of the Loan Documents whether voluntary or
involuntary, absolute or contingent, liquidated or unliquidated, determined or
undetermined, and whether recovery upon such obligations, duties and covenants
may be or hereafter become unenforceable.
(b) As an additional inducement to the Lender to extend credit to
the Borrower, the Guarantor, if a stockholder of the Borrower, hereby covenants
and agrees not to transfer, assign, sell, convey or otherwise dispose of, grant
any option, warrant or other right with respect to, pledge, hypothecate or
otherwise encumber any of the capital stock of the Borrower now or hereafter
owned by the Guarantor without the prior written consent of the Lender, which
consent will not be unreasonably withheld.
Section 3. Guaranty Unconditional. The obligations of the Guarantor
hereunder are irrevocable, absolute and unconditional, irrespective of the
value, genuineness, validity, regularity or enforceability of any of the
Obligations or any term or provision of any of the Loan Documents or any other
document relating to the Obligations or the Loan Documents or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a surety or guarantor.
Section 4. Subordination and Waiver of Subrogation.
(a) The Guarantor hereby subordinates all indebtedness of the
Borrower to the Guarantor, whether now existing or hereafter arising (the
"Subordinated Indebtedness"), to the full and prompt payment of the Obligations.
Any amounts received by the Guarantor as a payment on the Subordinated
Indebtedness, other than
payments on Subordinated Indebtedness permitted under a subordination agreement
approved by the Lender, shall be retained and held in trust by the Guarantor for
the benefit of the Lender.
(b) The Guarantor agrees that no payment made hereunder by the
Guarantor shall entitle it, at any time, to be subrogated to the rights of the
Lender or any other Guarantor with respect to any of the Obligations, duties and
covenants created under and pursuant to any of the Loan Documents and the
Guarantor forever waives any rights to enforce any remedy of the Lender, until
payment and performance in full of the Obligations and all duties and covenants
created under and pursuant to the Loan Documents, which the Lender may now have,
or may hereafter have, against the Borrower, any other Guarantor or any other
person and forever waives any benefit of, or any right to participation in, any
security interest or collateral whatsoever now or hereafter held by the Lender.
Section 5. Representations and Warranties. The Guarantor represents and
warrants to the Lender that:
(a) The Guarantor has full power and authority to make and perform
this Guaranty and this Guaranty has been duly executed and delivered by the
Guarantor and constitutes the valid and legally binding obligation of the
Guarantor enforceable against the Guarantor in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity (whether
enforcement is sought by proceedings in equity or at law).
(b) The making and performance by the Guarantor of this Guaranty
does not and will not (i) contravene any existing provision of law or regulation
or any order, decree, writ or injunction of any court or administrative body or
(ii) result in a breach of or constitute a default or require any consent under
any material contractual restriction binding on the Guarantor or on any of the
Guarantor's properties.
(c) The Guarantor will receive substantial benefit from the
extensions of credit to the Borrower pursuant to the Loan Documents.
(d) No consents, approvals, licenses or authorizations of, or filing
or registrations (collectively the "Consents") with, any governmental authority
are required under applicable federal or state law for the making and
performance by the Guarantor of this Guaranty, except for those Consents which
are not material to the Guarantor.
(e) There is no action, suit investigation or proceeding in any
court or before any arbitrator or regulatory commission, board, administrative
agency or other governmental authority pending or, to the knowledge of the
Guarantor, threatened which, if determined adversely to the Guarantor, would
materially and adversely affect its assets and properties or the Guarantor's
ability to perform the Guarantor's obligations hereunder. The Guarantor has
provided the Lender with information relating to all litigation in which the
Guarantor is a party, none of which the Guarantor deems likely to have a
material and adverse affect upon the Guarantor's assets and properties.
(f) Except as previously disclosed to the Lender in writing, the
Guarantor is not in default in the payment of the principal of or interest on
any indebtedness for borrowed money and is not in default under any instrument
under and subject to which any indebtedness has been incurred and, to the
knowledge of the Guarantor, no event has occurred and is continuing under the
provisions of any such agreement which with the lapse of time or the giving of
notice, or both, would constitute an event of default thereunder, which default
would have a material adverse effect on the Guarantor's assets, the validity of
the Guaranty or the ability of the Guarantor to perform the Guarantor's
obligations hereunder.
(g) The Guarantor is not insolvent (as defined in Section 101(31) of
the United States Bankruptcy Code), unable to pay debts as they mature or
engaged in business with unreasonably small capital; the Guarantor has filed all
federal, state, local and foreign tax returns which are required to be filed by
the Guarantor, and the Guarantor has paid all federal, State, local and foreign
taxes shown to be due on such tax returns or which have been assessed against
the Guarantor; the Guarantor is not or has not been the subject of any
bankruptcy, reorganization, insolvency, readjustment of debt, trusteeship,
receivership, dissolution or liquidation law, statute or proceeding.
2
Section 6. Consents. The Guarantor hereby consents and agrees that any or
all of the following actions may be taken or things done without notice to the
Guarantor and without affecting, diminishing or releasing the liability of the
Guarantor under this Guaranty:
(a) The time for the Borrower's performance of or compliance with
any of the Obligations all duties or covenants created under or pursuant to any
of the Loan Documents may be accelerated, renewed, modified, released or
extended or such performance or compliance may be waived by the Lender,
including, without limitation, the time of payment of the Obligations.
(b) The rate of interest under the Loan Agreement or other evidence
of indebtedness may be increased or decreased.
(c) Any of the acts referred to in any documents, instruments or
certificates evidencing or securing the Obligations or referred to in any of the
Loan Documents may be performed, in accordance with their terms, by the Borrower
or any other party for and or on behalf of the Borrower.
(d) As described therein or herein, the terms of any of the
documents, instruments or certificates evidencing or securing any of the
Obligations or the terms of the Loan Documents may be modified, extended or
renewed for any period for the purpose of adding any provisions thereto or
changing in any manner the rights of the Lender or of the Borrower thereunder.
(e) The Lender may grant releases, compromises and indulgences with
respect to any of the Obligations or any of the Loan Documents to any persons or
entities now or hereafter liable thereunder or hereunder.
(f) The Lender may release any guarantor or endorser of any of the
Obligations, the Loan Documents or any other covenant, obligation or duty
guaranteed hereby or referred to herein.
(g) The Lender may take or fail to take any action of any type
whatsoever without releasing the Guarantor's obligations hereunder or affecting
this Guaranty in any way or affording the Guarantor any recourse against the
Lender.
(h) Any property constituting security of any kind or nature
whatsoever now or hereafter held by the Lender or by any person, firm, trustee
or corporation on the Lender's behalf, or for its account, may be surrendered or
exchanged or substituted for collateral of like kind or of any kind, or such
property or security may be otherwise dealt with, and the Lender's interest
thereunder may be released or remain in effect, all as the Lender, in its sole
discretion, may deem desirable.
(i) The Lender may resort to the Guarantor for payment and
performance of any of the Obligations or any of the obligations, duties and
covenants created under and pursuant to any of the Loan Documents whether or not
the Lender shall have resorted to any property now or hereafter securing any of
the undertakings thereunder or any other party primarily or secondarily liable
on any of the Obligations or any of the obligations, duties and covenants
created under and pursuant to any of the Loan Documents.
Section 7. Credit Information. The Guarantor assumes the responsibility
for being and keeping itself informed of the financial condition of the Borrower
and of all other circumstances bearing upon the risk of non-payment and
non-performance of the Obligations and of any obligations, duties and covenants
created under and pursuant to any of the Loan Documents; and, the Lender shall
have no duty to advise the Guarantor of information known to the Lender
regarding such condition or any such circumstances.
Section 8. Tolling of Statute of Limitations. The Guarantor agrees that
payment or performance of any of the Obligations or other acts which toll any
statute of limitations applicable to the Obligations or to any of the Loan
Documents shall also toll the statute of limitations applicable to the liability
of the Guarantor under this Guaranty.
Section 9. Waivers. The Guarantor unconditionally waives:
3
(a) diligence, presentment, demand for payment, protest, notice of
dishonor and notice of default;
(b) the benefit of any act or omission by the Lender which directly
or indirectly results in or aids the discharge of the Borrower or the Borrower's
payment and performance of the Obligations or any of the obligations, duties and
covenants created under or pursuant to any of the Loan Documents by operation of
law or otherwise, other than any gross negligence of willful misconduct of
Lender;
(c) notice of acceptance of this Guaranty and the incurring of the
Obligations, or any of the obligations, duties and covenants created under or
pursuant to any of the Loan Documents;
(d) the provisions of Section 49-25 and 49-26 of the Code of
Virginia of 1950, as amended;
(e) any defense that may arise by reason of lack of authority of the
Guarantor of the incapacity or lack of authority, death or disability of any
other person or entity or the failure of the Lender to file or enforce a claim
against the estate (in bankruptcy or other proceeding) of the Borrower, the
Guarantor or any other person or entity;
(f) any defense based on the failure of the Lender to give notice of
the existence, creation or incurring of any new or additional indebtedness or
obligation or any action or non-action on the part of any other person
whatsoever in connection with any of the obligations hereby guaranteed;
(g) any duty on the part of the Lender to disclose to the Guarantor
any facts the Lender may now or hereafter know with regard to the Borrower;
(h) any defense based on lack of due diligence by the Lender in
collection, protection or realization upon any Collateral securing the
Obligations; and
(i) any and all rights of subrogation, reimbursement, contribution,
indemnification, exoneration and all other rights and claims which the Guarantor
may now or hereafter have against the Borrower, or against any other person
directly or indirectly, contingently or noncontingently, liable for or obligated
upon any of the Obligations ("Other Obligated Party"), arising on account of
this Guaranty or any sums paid by the Guarantor or collected by the Lender
pursuant to this Guaranty. In furtherance, and not in limitation, of the
preceding waiver, the Guarantor agrees that any sums paid by the Guarantor or
collected by the Lender pursuant to this Guaranty shall be deemed a contribution
to the capital of the Borrower or Other Obligated Party, as the case may be, and
shall not constitute the Guarantor a creditor of the Borrower or such Other
Obligated Party.
Section 10. Certain Rights, Remedies, Etc.
(a) In the event of any demand or default on this Guaranty or the
Obligations: (1) all Obligations shall become due and payable, together with
interest accrued to the date of payment, without notice, at the option of the
Lender; (2) the Guarantor shall reimburse the Lender for any reasonable
expenses, costs and attorneys' fees which the Lender may incur in connection
with the collection of any monies due under this Guaranty or in connection with
the enforcement of any right under this Guaranty.
(b) In pursuing its rights under and pursuant to any of the
Obligations or any of the obligations, duties and covenants created under and
pursuant to the Loan Documents or under this Guaranty, the Lender need not join
the Guarantor in any suit against the Borrower under the Loan Documents or join
the Borrower in any suit against the Guarantor hereunder. The Guarantor hereby
waives any right to require the Lender to give notice of the terms, time and
place of any public or private sale of any Collateral now or hereafter securing
the Obligations or obligations, duties and covenants created under and pursuant
to the Loan Documents or to comply with any other provision of Section 9-504 of
the Uniform Commercial Code as enacted by the Commonwealth of Virginia.
Section 11. No Set-Off. No act or omission of any kind or at any time on
the part of the Lender in respect to any matter whatsoever shall in any way
affect or impair the rights of the Lender to enforce any right, power or benefit
under this Guaranty and no set-off, claim, reduction or diminution of any
obligation or any defense of any kind or
4
nature which the Guarantor has or may have against the Lender shall be available
against the Lender in any suit or action brought by the Lender to enforce any
right, power of benefit provided by this Guaranty, provided that nothing herein
shall prevent the assertion by the Guarantor of any such claim by separate suit
or counterclaim. Nothing in this Guaranty shall be construed as a waiver by the
Guarantor of any rights or claims which the Guarantor may have against the
Lender hereunder or otherwise, but any recovery upon such rights and claims
shall be had from the Lender separately, it being the intent of this Guaranty
that the Guarantor shall be unconditionally and absolutely obligated to perform
fully all the Guarantor's obligations, covenants and agreements hereunder for
the benefit of the Lender.
Section 12. Notices. All notices, demands, requests for modification,
consents or approvals under this Guaranty shall be given in accordance with
Section 16.1 of the Loan Agreement, to the Guarantor at the address specified on
the signature page hereof.
Section 13. Reinstatement. The liability of the Guarantor hereunder shall
be reinstated and revived and the rights of the Lender shall continue if and to
the extent that for any reason any payment by or on behalf of the Borrower or
the Guarantor is rescinded or must be otherwise restored by the Lender, whether
as a result of any proceedings in bankruptcy or reorganization or otherwise, and
all decisions as to whether any such payment must be rescinded or restored shall
be made in good faith by the Lender in its sole discretion; provided, however,
that if the Lender chooses to contest any such matter at the request of the
Guarantor, the Guarantor agrees to indemnify, defend and hold the Lender
harmless with respect to all costs (including, without limitation, attorneys'
fees) of such litigation.
Section 14. No Waiver; Amendments, Etc. No failure on the part of the
Lender to exercise, no delay in exercising and no course of dealing with respect
to, any right hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law. This
Guaranty may not be amended or modified except by written agreement of the
Guarantor and the Lender and no consent or waiver hereunder shall be valid as
against the Lender unless in writing and signed by the Lender.
Section 15. Insolvency. The voluntary or involuntary liquidation,
dissolution, sale or other disposition of all or substantially all the assets
and liabilities, the receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, or other proceeding affecting the Borrower
or the disaffirmance of the Obligations or any obligation, duty or covenant
created pursuant to any of the Loan Documents in any such proceeding shall not
release or discharge the Guarantor from this Guaranty.
Section 16. Jurisdiction, Venue and Waiver of Jury Trial.
(a) The forum having the proper jurisdiction and venue to adjudicate
any claim, dispute or default which may arise out of the execution and delivery
of this Guaranty and the performance of the Guarantor's obligations hereunder
shall be the Circuit Court of the City of Richmond, Virginia, and the proper
appellate courts of the Commonwealth of Virginia, or the United States District
Court of the Eastern District of Virginia, Richmond Division, and the proper
appellate courts of the United States, unless the Lender in its sole discretion
chooses to bring suit on its own behalf in some other court of competent
jurisdiction. The Guarantor and Lender expressly submit and consent to such
jurisdiction and venue and specifically waive any and all rights it may have to
contest the jurisdiction and/or venue of the above mentioned forums and to
demand any other forums. The Guarantor and Lender waive personal service of any
and all legal process upon them and consent and agree that all such service may
be made by Registered Mail directed to the Guarantor or Lender, as the case may
be, at the address for notices set forth at the end of this Agreement, and
service so made shall be deemed to be completed on the date the return receipt
therefor is signed.
(b) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, LENDER AND
GUARANTOR WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ON ANY MATTER ARISING OUT OF THIS GUARANTY AND THE GUARANTOR'S
OBLIGATIONS HEREUNDER.
THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY THE LENDER AND
GUARANTOR, AND LENDER AND GUARANTOR HEREBY REPRESENT THAT NO REPRESENTATIONS OF
FACT OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL
BY JURY OR IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. THE LENDER AND GUARANTOR
5
FURTHER REPRESENTS THAT THEY HAVE BEEN REPRESENTED IN THE SIGNING OF THIS
AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL,
SELECTED OF THEIR OWN FREE WILL, AND THAT THEY HAVE HAD THE OPPORTUNITY TO
DISCUSS THIS WAIVER WITH COUNSEL.
Section 17. Entire Agreement. This Guaranty constitutes the entire
agreement of the Lender and the Guarantor, and supersedes all prior agreements
and understandings, both written and oral, between the Guarantor and the Lender
with respect to the subject matter hereof.
Section 18. Severability. The invalidity or unenforceability of any
phrase, sentence, clause or section in this Guaranty shall not affect the
validity or enforceability of the remaining portions of this Guaranty, or any
hereof.
Section 19. Construction. This Guaranty shall be construed and enforced in
accordance with the laws of the Commonwealth of Virginia without regard to its
rules with respect to choice of law. All references in this Guaranty to the
singular number and neuter gender shall be deemed to mean and include the plural
number and all genders, and vice versa, unless the context shall otherwise
require.
The Guarantor has executed this Guaranty as of the date first above
written.
GUARANTOR:
Technology Flavors & Fragrances, Inc., an Ontario corporation
By: /s/ Xxxxxx X. Gemmo
--------------------------------------
Xxxxxx X. Gemmo
Vice President/Chief Financial Officer
Address for Notices:
0000 Xxxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxx, Xxxxxx L4W 4P4
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 29th day of June, 1999, before me, the undersigned officer,
personally appeared Xxxxxx X. Gemmo, Vice President and Chief Financial Officer
of Technology Flavors & Fragrances, Inc., an Ontario corporation, known to me
(or satisfactorily proven) to be the person whose name is subscribed to within
the instrument and acknowledged that he executed the same on behalf of said
corporation for the purposes therein contained as his free act and deed and the
free act and deed of said corporation.
In Witness Whereof, I hereunder set my hand and official seal.
/s/ Xxxxxxx Xxxxxxxxx
--------------------------------
Notary Public
My Commission Expires:
6
