Exhibit 10.24
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT ("Guaranty") is made as of the 30th day of
September, 1996, by Consolidated Environmental Services, Inc., an Arkansas
corporation ("Guarantor"), for the benefit of American Physicians Service Group,
Inc., a Texas corporation ("Creditor").
FOR VALUE RECEIVED, the receipt and sufficiency of which Guarantor
acknowledges, Guarantor hereby jointly, severally, absolutely, irrevocably, and
unconditionally guarantees to Creditor (a) the prompt payment and performance of
(i) any and all sums becoming due and payable pursuant to the Stock Put
Agreement dated September 30, 1996, executed by Exsorbet Industries, Inc., an
Idaho corporation ("Debtor") and Creditor, including without limitation any sums
which may hereafter become due and owing on the Promissory Note (the "Note"), in
the original principal amount of $3,300,000.00, which may be executed by Debtor
pursuant to the Stock Put Agreement, and payable to the order of Creditor,
including without limitation any and all interest thereon (other than such
interest as may be in excess of the maximum lawful amount), late charges (if
any), and costs of collection (including reasonable attorney's fees); (ii) all
other sums and indebtedness described in or secured by the Transaction Documents
(as defined below); (iii) any and all other sums becoming due and payable by
Debtor to Creditor as a result of advances made by Creditor pursuant to the
terms of the Transaction Documents, including without limitation the repayment
of any future advances made by Creditor to Debtor and the repayment of any sums
advanced for the protection of Creditor's security pursuant to the Transaction
Documents; (iv) any and all renewals, extensions, replacements, rearrangements,
substitutions, or modifications of all or any part of the Indebtedness
(collectively, the "Indebtedness"), and (b) the performance of any and all
obligations, warranties, representations, covenants and agreements made by
Debtor in connection with the Transaction Documents, as the same may be amended,
modified, or restated from time to time (the "Obligations").
2. Transaction Documents. The term "Transaction Documents" shall mean:
the Stock Put Agreement dated September 30, 1996, executed by and between Debtor
and Creditor; the Note (if and when executed pursuant to the terms of the Stock
Put Agreement); the Warrant executed by Debtor in favor of Creditor; the
Shareholder Rights Agreement executed by Debtor and Creditor; the Assignment and
Security Agreement dated September 30, 1996, executed by and between Debtor and
Creditor, and all other security agreements, assignments, and other documents
executed by Debtor for the benefit of Creditor to secure the payment and
performance of the Indebtedness and Obligations and creating a lien and security
interest against the real or personal property described therein (the
"Collateral"); any other Guaranty Agreements or surety agreements executed in
favor of Creditor and guaranteeing the Note; and any other agreement, document,
or instrument executed by Debtor or any other guarantor in connection with the
transaction evidenced by the Stock Put Agreement.
3. Nature of Guaranty. Guarantor agrees that this Guaranty is an
absolute, complete, continuing, unconditional and irrevocable guaranty of
payment and performance of the Indebtedness and the Obligations.
4. Renewals and Extensions. This Guaranty applies to, and the
Indebtedness shall additionally mean and refer to, any and all renewals,
extensions, modifications, alterations, refinancings and rearrangements of all
or any part of the Indebtedness.
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5. Representations and Warranties. Guarantor hereby represents
and warrants the following to Creditor:
(a) Guarantor may reasonably expect to benefit, directly or
indirectly, from the making of this Guaranty and from and from each and every
renewal, extension, modification, alteration, refinancing, and rearrangement of
all or any part of the Indebtedness, the release of collateral or other
relinquishment of legal rights made or granted or to be made or granted by
Creditor to Debtor and the amendment or modification of the terms and conditions
of the Obligations, and the Board of Directors of Guarantor has determined that
Guarantor may reasonably be expected to benefit, directly or indirectly, from
the making of this Guaranty and has adopted resolutions stating the same; and
(b) Guarantor is familiar with, and has independently reviewed
the books and records regarding, the financial condition of Debtor and is
familiar with the value of any and all collateral intended to be security for
the payment of all or any part of the Indebtedness or for the performance of all
or any of the Obligations; provided, however, Guarantor is not relying on such
financial condition or collateral as an inducement to enter into this Guaranty;
and
(c) Guarantor has adequate means to obtain from Debtor on a
continuing basis information concerning the financial condition of Debtor and
Guarantor is not relying on Creditor to provide such information to Guarantor
either now or in the future; and
(d) Guarantor has the power and authority to execute, deliver,
and perform this Guaranty and any other agreements executed by Guarantor
contemporaneously herewith, and the execution, delivery, and performance of this
Guaranty and any other agreements executed by Guarantor contemporaneously
herewith do not and will not violate (i) any agreement or instrument to which
Guarantor is a party, (ii) any law, rule, regulation or order of any
governmental authority to which Guarantor is subject, or (iii) its articles or
certificate of incorporation or bylaw; and
(e) neither Creditor nor any other party has made any
representation, warranty or statement to Guarantor in order to induce Guarantor
to execute this Guaranty; and
(f) the financial statements and other financial information
regarding Guarantor heretofore and hereafter delivered to Creditor are and shall
be true and correct in all material respects and fairly present the financial
position of Guarantor as of the dates thereof, and no material adverse change
has occurred in the financial condition of Guarantor reflected in the financial
statements and other financial information regarding Guarantor heretofore
delivered to Creditor since the date of the last statement thereof; and
(g) as of the date hereof, and after giving effect to this
Guaranty and the obligations evidenced hereby, (i) Guarantor is and will be
solvent, (ii) the fair saleable value of Guarantor's assets exceeds and will
continue to exceed its liabilities (both fixed and contingent), (iii) Guarantor
is and will continue to be able to pay its debts as they mature, and (iv) if
Guarantor is not an individual, Guarantor has and will continue to have
sufficient capital to carry on its business and all businesses in which it is
about to engage.
6. Inducement to Creditor. Guarantor acknowledges that this
Guaranty is given to induce Creditor to extend credit to Debtor which would not
be extended except in reliance upon this Guaranty.
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7. Terms of Guaranty and Indebtedness and Obligations. This Guaranty
contains the entire agreement between Guarantor and Creditor with respect to
Guarantor's guarantee of the Indebtedness and Obligations; provided, however,
this Guaranty is in addition to and does not replace, cancel, modify, impair, or
affect any other guaranty executed by Guarantor and now or hereafter held by
Creditor that relates to Debtor or any other person or entity. No
representations or agreements have been made by Creditor to Guarantor except as
contained in this Guaranty. Guarantor has read and understands the implications
of this Guaranty. Guarantor agrees to the terms, provisions and conditions of
the Note, the Transaction Documents which may have been or may hereafter be
executed by Debtor or other persons evidencing, securing, or in connection with
the Indebtedness or Obligations or any part thereof, and agrees that Guarantor's
liability shall in no manner be affected, impaired or released by reason of any
term, provision, or condition of the Note, the Transaction Documents or by the
failure, refusal, or omission of Creditor to enforce or observe any of same or
by any action taken or omitted to be taken by Creditor pursuant thereto or in
connection therewith.
8. Payment and Performance by Guarantor. In each event that all or any
portion of the Indebtedness shall become due and remain unpaid (however the
maturity may have occurred), Guarantor will, upon demand, pay the amount due to
Creditor (other than any interest as may be in excess of the maximum lawful
amount), without notice having been given to Guarantor previous to such demand
of the acceptance by Creditor of this Guaranty or of the creating or incurring
of such indebtedness. Guarantor specifically agrees that it shall not be
necessary or required in order to enforce any obligations under this Guaranty
that Creditor has made demand for payment upon Debtor or any other person liable
on the Indebtedness for payment thereof or for performance of the Obligations or
has presented same for payment by Debtor or any other person liable thereon or
has made protest thereof or has given notice to Debtor or any other party liable
thereon of the maturity or nonpayment of the Indebtedness. All amounts becoming
payable by Guarantor to Creditor under this Guaranty shall be payable at
Creditor's address stated below, or at such other address as directed by
Creditor in written notice to Guarantor. All payments made upon the Indebtedness
at any time shall be deemed to have been paid by Debtor unless express notice in
writing is given to Creditor at the time of payment by Guarantor that Creditor
has been paid by Guarantor. Upon demand by Creditor, Guarantor shall perform or
cause to be performed any or all of the Obligations.
9. Suit on Guaranty. Suit may be brought by Creditor against Guarantor
alone, or jointly and severally against Guarantor and any one or more other
guarantors of the Indebtedness and/or Obligations, without impairing the rights
of Creditor against Debtor or other guarantors of the Indebtedness and/or
Obligations.
10. Costs of Collection. Guarantor agrees to pay all costs of
collection, including reasonable attorney's fees and expenses, if this Guaranty
is placed in the hands of an attorney for collection or is collected through any
court.
11. Waiver by Guarantor. Guarantor specifically waives any notice (i)
of acceptance of this Guaranty by Creditor, (ii) of the creation, advancement,
increase, existence, renewal, extension, modification, refinancing, or
rearrangement of the Indebtedness, or any indulgence with respect to the
Indebtedness, or any part thereof, (iii) of nonpayment thereof or default
thereon or in the performance of the Obligations, and (iv) of any amendment,
modification, or restatement of all or any of the Obligations. Guarantor waives
grace, demand, protest, presentment, and notice of intent to accelerate the
maturity of the Indebtedness, notice of acceleration of the maturity of the
Indebtedness, demand, protest, or presentment with respect to the Indebtedness,
and Guarantor waives notice of the amount of the Indebtedness outstanding at any
time. Guarantor agrees that the
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maturity of the Indebtedness, or any part thereof, may be accelerated, renewed,
extended, modified, refinanced, or rearranged or any other indulgence may be
granted with respect thereto by Creditor at its will or as may be agreed by
Debtor without notice to or further consent by Guarantor at any time. Guarantor
agrees that Guarantor shall not be considered a "Debtor" as defined in Section
9.105 of the Texas Business and Commerce Code.
12. Guarantor's Direct Liability. Creditor shall not be required,
before or as a condition of enforcing the liability of Guarantor under this
Guaranty, or requiring payment of the Indebtedness by Guarantor hereunder or
performance of the Obligations, or at any time thereafter, to do any of the
following: (a) proceed to obtain or assert a claim for personal judgment against
Debtor for the Indebtedness or make any effort at collection of the Indebtedness
from Debtor; (b) foreclose against or seek to realize upon the Collateral or any
security now or hereafter existing for the Indebtedness or Obligations; (c) file
suit or proceed to obtain or assert a claim for personal judgment against any
other party (including any maker, guarantor, endorser or surety) liable for the
Indebtedness or make any effort at collection of the Indebtedness from any such
other party; (d) exercise or assert any other right or remedy to which Creditor
is or may be entitled in connection with the Indebtedness or Obligations or any
security or other guaranty therefor; (e) assert or file any claim against the
assets or estate of Debtor or other person liable for the Indebtedness or
Obligations, or any part thereof; (f) take any action against Debtor or any
other person, to exhaust its remedies against endorsers, the Collateral or other
collateral or security, or to resort to any balance of any deposit account or
credit on the books of Creditor in favor of Debtor or any other person; or (g)
pursue any other remedies Creditor may have in connection with the Indebtedness
or Obligations.
13. Obligations Not Impaired. Guarantor's obligations under this
Guaranty shall not be released, diminished, impaired, reduced, or adversely
affected, and Guarantor waives any common law, equitable, statutory or other
rights that Guarantor might otherwise have, as a result of any of the following:
(a) any full or partial release of the liability of Debtor,
any other guarantor of the Indebtedness and/or Obligations, or any other person
primarily or secondarily liable on the Indebtedness and/or Obligations, or any
part thereof (including any maker, endorser, guarantor or surety), whether such
liability is direct or indirect, joint, several, or joint and several, it being
recognized, acknowledged and agreed that Guarantor may be required to pay the
Indebtedness and perform the Obligations in full without assistance of any other
party, and Guarantor has not been induced to enter into this Guaranty on the
basis of an understanding or agreement that other parties will at all times be
liable to pay the Indebtedness or perform the Obligations, or that Creditor will
look to other parties to pay the Indebtedness or perform the Obligations;
provided, however, nothing in this Guaranty shall waive or release, either
expressly or impliedly, any rights of subrogation, reimbursement or contribution
that Guarantor may have, after payment in full of the Indebtedness and
performance of the Obligations, against others liable under the Indebtedness or
for performance of the Obligations, but Guarantor's rights of subrogation,
reimbursement and contribution are secondary, subordinate and inferior to the
rights and claims of Creditor;
(b) the voluntary or involuntary liquidation, sale or other
disposition of all or substantially all of the assets of Debtor, or any
receivership, insolvency, bankruptcy, reorganization or other similar
proceedings affecting Debtor or any of its assets;
(c) any impairment, modification, release or limitation of
liability of Debtor, or stay of foreclosure or other lien enforcement
proceedings against Debtor, or Debtor's property, or Debtor's estate in
bankruptcy, or any modification, discharge or extension of the Indebtedness
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resulting from the operation of any present or future provision of the Federal
Bankruptcy Code or other bankruptcy laws, or from the decision of any court, it
being recognized, acknowledged and agreed that Guarantor shall remain liable on
the Indebtedness and the Obligations, notwithstanding any act, omission or thing
which might, but for the provisions hereof, otherwise operate as a legal or
equitable discharge of Guarantor;
(d) any release of, subordination of, or substitution of
any security or other guaranty now or hereafter held by Creditor for payment of
the Indebtedness and performance of the Obligations, or of any part thereof;
(e) Creditor's failure to use diligence or care in
preserving the liability of any person on the Indebtedness or the Obligations,
or in bringing suit to enforce collection of the Indebtedness or performance of
the Obligations;
(f) the addition of another guarantor or guarantors of
the Indebtedness or Obligations;
(g) the substitution or withdrawal of collateral or
release of security;
(h) any renewal, extension, modification, alteration,
refinancing or rearrangement of or any other indulgence with respect to the
Indebtedness or Obligations, or any part thereof;
(i) the exercise, failure to exercise, delay, omission or lack
of diligence or care by Creditor in exercising any right or power conferred upon
Creditor in this Guaranty, the Note, or any Transaction Document evidencing,
securing or relating to the Note or by law or in equity;
(j) Debtor's not being liable for the Indebtedness or
performance of the Obligations because the act of creating the Indebtedness or
Obligations is ultra ▇▇▇▇▇, or the officers or persons creating the Indebtedness
or Obligations acted in excess of their authority, or for any reason the
Indebtedness or Obligations cannot be enforced against Debtor;
(k) any payment by Debtor to Creditor if such payment is held
to constitute a preference under the Federal Bankruptcy Code or other bankruptcy
laws, or if for any other reason Creditor is required to refund such payment to
Debtor or pay the amount thereof to any other party;
(l) Guarantor's being or becoming liable for any
indebtedness owing by Debtor to Creditor, by endorsement or otherwise, other
than under this Guaranty; or
(m) the invalidity, illegality or unenforceability of all or
any part of the Indebtedness, for any reason whatsoever, including without
limitation the fact that the Note or other Transaction Documents pertaining to
the Indebtedness or Obligations have been forged or otherwise are irregular or
not genuine or authentic.
14. Application of Payments. If Creditor should collect or receive any
payments from any person other than Guarantor, or funds which are not
specifically required by law or agreement to be applied to the Indebtedness,
then Creditor may, in Creditor's sole discretion, apply such payments to any
indebtedness of Debtor other than the Indebtedness. Guarantor agrees that
Creditor may apply payments or other funds received by Creditor from Debtor,
from any other party obligated on the Indebtedness, from the liquidation of any
collateral now or hereafter securing the Indebtedness, or from any other source,
including without limitation, insurance proceeds and
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condemnation, to the Indebtedness in any manner or order as Creditor may deem
appropriate in its sole and absolute discretion.
15. Collection of Indebtedness. Guarantor expressly waives any right to
the benefit of or to require or control application of any security or the
proceeds of any security now existing or hereafter obtained by Creditor as
security for the Indebtedness, or any part thereof, and agrees that Creditor
shall have no duty to apply to the Indebtedness any monies, payments or other
property at any time received by or paid to or in the possession of Creditor,
except as Creditor shall determine in its sole discretion. Guarantor
specifically agrees that Guarantor shall not have any recourse or action against
Creditor by reason of any action Creditor may take or omit to take in connection
with the Indebtedness or Obligations, the collection of any sums or amounts
herein mentioned, or in connection with any security for or any other guaranty
of the Indebtedness and/or Obligations.
16. Subordination. Guarantor subordinates all indebtedness owing to
Guarantor from Debtor to the Indebtedness. Guarantor further subordinates any
liens or security interest it may have in the collateral or security of Debtor
(or any other party) to the liens and security interests in favor of Creditor
securing the Indebtedness and the Obligations. Guarantor agrees not to accept
any payments or satisfaction of any kind of any indebtedness of Debtor to
Guarantor. If Guarantor should receive any such payment or satisfaction for
indebtedness of Debtor to Guarantor in violation of the above terms, Guarantor
agrees to deliver the payment or satisfaction to Creditor, and until delivered,
Guarantor agrees to hold the same in trust for Creditor.
17. Notice of Litigation, Claims, and Financial Change. Guarantor shall
promptly inform Creditor of any litigation against Guarantor or affecting any
security for the Indebtedness or Obligations which, if determined adversely,
might have a material adverse effect upon the financial condition of Guarantor
or upon such security or might cause a default under any of the documents
evidencing, securing, or governing the Indebtedness or Obligations, any claim or
controversy which might become the subject of litigation, and any material
adverse change in the financial condition of Guarantor.
18. Usury Disclaimer. No provision herein or in any promissory note,
security instrument, or any other Transaction Document executed by Debtor or
Guarantor evidencing the Indebtedness shall be construed to be or to create a
contract by Guarantor to pay, as consideration for the use, forbearance, or
detention of money, interest in excess of the rate or amount allowed by law. If
any excess of interest in such respect is provided for herein or in any such
promissory note, security instrument, or any other Transaction Document, the
provisions of this Section shall govern, and neither Debtor nor Guarantor shall
be obligated to pay the amount of such interest to the extent that it is in
excess of the amount permitted by applicable law. The intention of the parties
is to conform strictly to the usury laws now in force, and all Promissory Notes
and Transaction Documents executed by Debtor or Guarantor evidencing the
Indebtedness or Obligations shall be held subject to reduction to the amount
allowed under said usury laws as now or hereafter construed by the courts having
jurisdiction.
19. Transferability. This Guaranty is intended for and shall inure to
the benefit of Creditor and each and every other person who shall from time to
time be or become the owner or holder of any of the Indebtedness, and each and
every reference herein to Creditor shall also include and refer to each and
every successor or assignee of Creditor at any time holding or owning any part
of or interest in any part of the Indebtedness. This Guaranty shall be
transferable and negotiable, with the same force and effect and to the same
extent that the Indebtedness is transferable, it being understood and stipulated
that upon the assignment or transfer by Creditor of any of the Indebtedness
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the legal holder or owner of the Indebtedness (or part thereof or interest
therein transferred or assigned by Creditor) shall also, unless provided
otherwise by Creditor in its transfer or assignment, have and may exercise all
of the rights granted to Creditor under this Guaranty to the extent of the part
of or interest in the Indebtedness assigned or transferred to said person.
Guarantor expressly waives notice of transfer or assignment of the Indebtedness,
or any part thereof, or of the rights of Creditor hereunder. Notwithstanding
anything in this Section to the contrary, all Indebtedness and Obligations to
Creditor shall be paid and performed in full first, before any assignee or
transferee shall receive any benefits of this Guaranty.
20. Information Concerning Guarantor. Guarantor acknowledges and agrees
that Creditor may transfer the Indebtedness or partial interests therein to one
or more transferees or participants. Guarantor authorizes Creditor to
disseminate any information Creditor has pertaining to the Indebtedness,
including, without limitation, credit information on Guarantor, to any such
transferee or participant or prospective transferee or participant.
21. Binding on Others. This Guaranty shall be binding upon
Guarantor and Guarantor's heirs, legal representative, personal representatives,
executors, administrators, successors and assigns.
22. Modification or Consent. No modification, consent or waiver of any
provision of this Guaranty shall be effective unless the modification, consent
or waiver is in writing and signed by an officer of Creditor, and then shall be
effective only in the specific instance and for the purpose for which given. No
notice to or demand on Guarantor in any case shall, of itself, entitle Guarantor
to any other or further notice or demand in similar or other circumstances. No
delay or omission by Creditor in exercising any power or right under this
Guaranty shall impair any such right or power or be construed as a waiver
thereof or any acquiescence therein, nor shall any single or partial exercise of
any such power preclude other or further exercise thereof, or the exercise of
any other right or power under this Guaranty. All rights and remedies of
Creditor under this Guaranty are cumulative of each other and of every other
right or remedy which Creditor may otherwise have at law or in equity or under
any other contract or document, and the exercise of one or more rights or
remedies shall not prejudice or impair the concurrent or subsequent exercise of
other rights or remedies.
23. Waiver of Certain Statutory Provisions. Guarantor hereby waives all
rights to which Guarantor may be or might otherwise become entitled to with
respect to the provisions of Sections 34.02 and 34.03 of the Texas Business and
Commerce Code, as amended, and agrees that the rights of Guarantor pursuant to
the provisions of Section 34.04 of the Texas Business and Commerce Code, as
amended, shall be subject to, secondary, subordinate and inferior in all
respects to the rights of Creditor pursuant to this Guaranty.
24. Notices. Any notice or demand to Guarantor may be given and shall
conclusively be deemed and considered to have been given and received upon the
deposit thereof, in writing, in the United States mail, duly stamped and
addressed to Guarantor at Guarantor's address stated below, but actual notice,
however given or received, shall always be effective. The last preceding
sentence shall not be construed in anywise to affect or impair any waiver of
notice or demand herein provided or to require giving of notice or demand to or
upon Guarantor in any situation or for any reason. Creditor's and Guarantor's
respective addresses are:
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Creditor: American Physicians Service Group, Inc.
Attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇-▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇
Guarantor: Consolidated Environmental Services, Inc.
Attn:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
25. Governing Law and Place of Performance. GUARANTOR AGREES THAT
THIS GUARANTY IS GOVERNED BY THE LAWS OF THE UNITED STATES AND THE STATE OF
TEXAS. This Guaranty is performable in ▇▇▇▇▇▇ County, Texas, and Guarantor
hereby waives the right to be sued elsewhere.
26. Headings. Section headings of this Guaranty are inserted for
convenience of reference only, and shall not alter, define, or be used in
construing the text of such sections.
27. Pronouns. As used herein and when required by the context, each
number (singular and plural) shall include all numbers, and each gender shall
include all genders, and unless the context otherwise requires the word "person"
or "party" shall include "person, corporation, firm, partnership or
association".
28. Notice of Invalidity of Oral Agreements. THIS WRITTEN AGREEMENT
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
EXECUTED this 30th day of September, 1996.
GUARANTOR:
Consolidated Environmental Services, Inc.
(an Arkansas corporation)
By:
Name:
Title:
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GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT ("Guaranty") is made as of the 30th day of
September, 1996, by Cierra, Inc., an Arkansas corporation ("Guarantor"),
for the benefit of American Physicians Service Group, Inc., a Texas corporation
("Creditor").
FOR VALUE RECEIVED, the receipt and sufficiency of which Guarantor
acknowledges, Guarantor hereby jointly, severally, absolutely, irrevocably, and
unconditionally guarantees to Creditor (a) the prompt payment and performance of
(i) any and all sums becoming due and payable pursuant to the Stock Put
Agreement dated September 30, 1996, executed by Exsorbet Industries, Inc., an
Idaho corporation ("Debtor") and Creditor, including without limitation any sums
which may hereafter become due and owing on the Promissory Note (the "Note"), in
the original principal amount of $3,300,000.00, which may be executed by Debtor
pursuant to the Stock Put Agreement, and payable to the order of Creditor,
including without limitation any and all interest thereon (other than such
interest as may be in excess of the maximum lawful amount), late charges (if
any), and costs of collection (including reasonable attorney's fees); (ii) all
other sums and indebtedness described in or secured by the Transaction Documents
(as defined below); (iii) any and all other sums becoming due and payable by
Debtor to Creditor as a result of advances made by Creditor pursuant to the
terms of the Transaction Documents, including without limitation the repayment
of any future advances made by Creditor to Debtor and the repayment of any sums
advanced for the protection of Creditor's security pursuant to the Transaction
Documents; (iv) any and all renewals, extensions, replacements, rearrangements,
substitutions, or modifications of all or any part of the Indebtedness
(collectively, the "Indebtedness"), and (b) the performance of any and all
obligations, warranties, representations, covenants and agreements made by
Debtor in connection with the Transaction Documents, as the same may be amended,
modified, or restated from time to time (the "Obligations").
2. Transaction Documents. The term "Transaction Documents" shall mean:
the Stock Put Agreement dated September 30, 1996, executed by and between Debtor
and Creditor; the Note (if and when executed pursuant to the terms of the Stock
Put Agreement); the Warrant executed by Debtor in favor of Creditor; the
Shareholder Rights Agreement executed by Debtor and Creditor; the Assignment and
Security Agreement dated September 30, 1996, executed by and between Debtor and
Creditor, and all other security agreements, assignments, and other documents
executed by Debtor for the benefit of Creditor to secure the payment and
performance of the Indebtedness and Obligations and creating a lien and security
interest against the real or personal property described therein (the
"Collateral"); any other Guaranty Agreements or surety agreements executed in
favor of Creditor and guaranteeing the Note; and any other agreement, document,
or instrument executed by Debtor or any other guarantor in connection with the
transaction evidenced by the Stock Put Agreement.
3. Nature of Guaranty. Guarantor agrees that this Guaranty is an
absolute, complete, continuing, unconditional and irrevocable guaranty of
payment and performance of the Indebtedness and the Obligations.
4. Renewals and Extensions. This Guaranty applies to, and the
Indebtedness shall additionally mean and refer to, any and all renewals,
extensions, modifications, alterations, refinancings and rearrangements of all
or any part of the Indebtedness.
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5. Representations and Warranties. Guarantor hereby represents
and warrants the following to Creditor:
(a) Guarantor may reasonably expect to benefit, directly or
indirectly, from the making of this Guaranty and from and from each and every
renewal, extension, modification, alteration, refinancing, and rearrangement of
all or any part of the Indebtedness, the release of collateral or other
relinquishment of legal rights made or granted or to be made or granted by
Creditor to Debtor and the amendment or modification of the terms and conditions
of the Obligations, and the Board of Directors of Guarantor has determined that
Guarantor may reasonably be expected to benefit, directly or indirectly, from
the making of this Guaranty and has adopted resolutions stating the same; and
(b) Guarantor is familiar with, and has independently reviewed
the books and records regarding, the financial condition of Debtor and is
familiar with the value of any and all collateral intended to be security for
the payment of all or any part of the Indebtedness or for the performance of all
or any of the Obligations; provided, however, Guarantor is not relying on such
financial condition or collateral as an inducement to enter into this Guaranty;
and
(c) Guarantor has adequate means to obtain from Debtor on a
continuing basis information concerning the financial condition of Debtor and
Guarantor is not relying on Creditor to provide such information to Guarantor
either now or in the future; and
(d) Guarantor has the power and authority to execute, deliver,
and perform this Guaranty and any other agreements executed by Guarantor
contemporaneously herewith, and the execution, delivery, and performance of this
Guaranty and any other agreements executed by Guarantor contemporaneously
herewith do not and will not violate (i) any agreement or instrument to which
Guarantor is a party, (ii) any law, rule, regulation or order of any
governmental authority to which Guarantor is subject, or (iii) its articles or
certificate of incorporation or bylaw; and
(e) neither Creditor nor any other party has made any
representation, warranty or statement to Guarantor in order to induce Guarantor
to execute this Guaranty; and
(f) the financial statements and other financial information
regarding Guarantor heretofore and hereafter delivered to Creditor are and shall
be true and correct in all material respects and fairly present the financial
position of Guarantor as of the dates thereof, and no material adverse change
has occurred in the financial condition of Guarantor reflected in the financial
statements and other financial information regarding Guarantor heretofore
delivered to Creditor since the date of the last statement thereof; and
(g) as of the date hereof, and after giving effect to this
Guaranty and the obligations evidenced hereby, (i) Guarantor is and will be
solvent, (ii) the fair saleable value of Guarantor's assets exceeds and will
continue to exceed its liabilities (both fixed and contingent), (iii) Guarantor
is and will continue to be able to pay its debts as they mature, and (iv) if
Guarantor is not an individual, Guarantor has and will continue to have
sufficient capital to carry on its business and all businesses in which it is
about to engage.
6. Inducement to Creditor. Guarantor acknowledges that this
Guaranty is given to induce Creditor to extend credit to Debtor which would not
be extended except in reliance upon this Guaranty.
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GUARANTY AGREEMENT Page 2
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7. Terms of Guaranty and Indebtedness and Obligations. This Guaranty
contains the entire agreement between Guarantor and Creditor with respect to
Guarantor's guarantee of the Indebtedness and Obligations; provided, however,
this Guaranty is in addition to and does not replace, cancel, modify, impair, or
affect any other guaranty executed by Guarantor and now or hereafter held by
Creditor that relates to Debtor or any other person or entity. No
representations or agreements have been made by Creditor to Guarantor except as
contained in this Guaranty. Guarantor has read and understands the implications
of this Guaranty. Guarantor agrees to the terms, provisions and conditions of
the Note, the Transaction Documents which may have been or may hereafter be
executed by Debtor or other persons evidencing, securing, or in connection with
the Indebtedness or Obligations or any part thereof, and agrees that Guarantor's
liability shall in no manner be affected, impaired or released by reason of any
term, provision, or condition of the Note, the Transaction Documents or by the
failure, refusal, or omission of Creditor to enforce or observe any of same or
by any action taken or omitted to be taken by Creditor pursuant thereto or in
connection therewith.
8. Payment and Performance by Guarantor. In each event that all or any
portion of the Indebtedness shall become due and remain unpaid (however the
maturity may have occurred), Guarantor will, upon demand, pay the amount due to
Creditor (other than any interest as may be in excess of the maximum lawful
amount), without notice having been given to Guarantor previous to such demand
of the acceptance by Creditor of this Guaranty or of the creating or incurring
of such indebtedness. Guarantor specifically agrees that it shall not be
necessary or required in order to enforce any obligations under this Guaranty
that Creditor has made demand for payment upon Debtor or any other person liable
on the Indebtedness for payment thereof or for performance of the Obligations or
has presented same for payment by Debtor or any other person liable thereon or
has made protest thereof or has given notice to Debtor or any other party liable
thereon of the maturity or nonpayment of the Indebtedness. All amounts becoming
payable by Guarantor to Creditor under this Guaranty shall be payable at
Creditor's address stated below, or at such other address as directed by
Creditor in written notice to Guarantor. All payments made upon the Indebtedness
at any time shall be deemed to have been paid by Debtor unless express notice in
writing is given to Creditor at the time of payment by Guarantor that Creditor
has been paid by Guarantor. Upon demand by Creditor, Guarantor shall perform or
cause to be performed any or all of the Obligations.
9. Suit on Guaranty. Suit may be brought by Creditor against Guarantor
alone, or jointly and severally against Guarantor and any one or more other
guarantors of the Indebtedness and/or Obligations, without impairing the rights
of Creditor against Debtor or other guarantors of the Indebtedness and/or
Obligations.
10. Costs of Collection. Guarantor agrees to pay all costs of
collection, including reasonable attorney's fees and expenses, if this Guaranty
is placed in the hands of an attorney for collection or is collected through any
court.
11. Waiver by Guarantor. Guarantor specifically waives any notice (i)
of acceptance of this Guaranty by Creditor, (ii) of the creation, advancement,
increase, existence, renewal, extension, modification, refinancing, or
rearrangement of the Indebtedness, or any indulgence with respect to the
Indebtedness, or any part thereof, (iii) of nonpayment thereof or default
thereon or in the performance of the Obligations, and (iv) of any amendment,
modification, or restatement of all or any of the Obligations. Guarantor waives
grace, demand, protest, presentment, and notice of intent to accelerate the
maturity of the Indebtedness, notice of acceleration of the maturity of the
Indebtedness, demand, protest, or presentment with respect to the Indebtedness,
and Guarantor waives notice of the amount of the Indebtedness outstanding at any
time. Guarantor agrees that the
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maturity of the Indebtedness, or any part thereof, may be accelerated, renewed,
extended, modified, refinanced, or rearranged or any other indulgence may be
granted with respect thereto by Creditor at its will or as may be agreed by
Debtor without notice to or further consent by Guarantor at any time. Guarantor
agrees that Guarantor shall not be considered a "Debtor" as defined in Section
9.105 of the Texas Business and Commerce Code.
12. Guarantor's Direct Liability. Creditor shall not be required,
before or as a condition of enforcing the liability of Guarantor under this
Guaranty, or requiring payment of the Indebtedness by Guarantor hereunder or
performance of the Obligations, or at any time thereafter, to do any of the
following: (a) proceed to obtain or assert a claim for personal judgment against
Debtor for the Indebtedness or make any effort at collection of the Indebtedness
from Debtor; (b) foreclose against or seek to realize upon the Collateral or any
security now or hereafter existing for the Indebtedness or Obligations; (c) file
suit or proceed to obtain or assert a claim for personal judgment against any
other party (including any maker, guarantor, endorser or surety) liable for the
Indebtedness or make any effort at collection of the Indebtedness from any such
other party; (d) exercise or assert any other right or remedy to which Creditor
is or may be entitled in connection with the Indebtedness or Obligations or any
security or other guaranty therefor; (e) assert or file any claim against the
assets or estate of Debtor or other person liable for the Indebtedness or
Obligations, or any part thereof; (f) take any action against Debtor or any
other person, to exhaust its remedies against endorsers, the Collateral or other
collateral or security, or to resort to any balance of any deposit account or
credit on the books of Creditor in favor of Debtor or any other person; or (g)
pursue any other remedies Creditor may have in connection with the Indebtedness
or Obligations.
13. Obligations Not Impaired. Guarantor's obligations under this
Guaranty shall not be released, diminished, impaired, reduced, or adversely
affected, and Guarantor waives any common law, equitable, statutory or other
rights that Guarantor might otherwise have, as a result of any of the following:
(a) any full or partial release of the liability of Debtor,
any other guarantor of the Indebtedness and/or Obligations, or any other person
primarily or secondarily liable on the Indebtedness and/or Obligations, or any
part thereof (including any maker, endorser, guarantor or surety), whether such
liability is direct or indirect, joint, several, or joint and several, it being
recognized, acknowledged and agreed that Guarantor may be required to pay the
Indebtedness and perform the Obligations in full without assistance of any other
party, and Guarantor has not been induced to enter into this Guaranty on the
basis of an understanding or agreement that other parties will at all times be
liable to pay the Indebtedness or perform the Obligations, or that Creditor will
look to other parties to pay the Indebtedness or perform the Obligations;
provided, however, nothing in this Guaranty shall waive or release, either
expressly or impliedly, any rights of subrogation, reimbursement or contribution
that Guarantor may have, after payment in full of the Indebtedness and
performance of the Obligations, against others liable under the Indebtedness or
for performance of the Obligations, but Guarantor's rights of subrogation,
reimbursement and contribution are secondary, subordinate and inferior to the
rights and claims of Creditor;
(b) the voluntary or involuntary liquidation, sale or other
disposition of all or substantially all of the assets of Debtor, or any
receivership, insolvency, bankruptcy, reorganization or other similar
proceedings affecting Debtor or any of its assets;
(c) any impairment, modification, release or limitation of
liability of Debtor, or stay of foreclosure or other lien enforcement
proceedings against Debtor, or Debtor's property, or Debtor's estate in
bankruptcy, or any modification, discharge or extension of the Indebtedness
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resulting from the operation of any present or future provision of the Federal
Bankruptcy Code or other bankruptcy laws, or from the decision of any court, it
being recognized, acknowledged and agreed that Guarantor shall remain liable on
the Indebtedness and the Obligations, notwithstanding any act, omission or thing
which might, but for the provisions hereof, otherwise operate as a legal or
equitable discharge of Guarantor;
(d) any release of, subordination of, or substitution of
any security or other guaranty now or hereafter held by Creditor for payment of
the Indebtedness and performance of the Obligations, or of any part thereof;
(e) Creditor's failure to use diligence or care in
preserving the liability of any person on the Indebtedness or the Obligations,
or in bringing suit to enforce collection of the Indebtedness or performance of
the Obligations;
(f) the addition of another guarantor or guarantors of
the Indebtedness or Obligations;
(g) the substitution or withdrawal of collateral or
release of security;
(h) any renewal, extension, modification, alteration,
refinancing or rearrangement of or any other indulgence with respect to the
Indebtedness or Obligations, or any part thereof;
(i) the exercise, failure to exercise, delay, omission or lack
of diligence or care by Creditor in exercising any right or power conferred upon
Creditor in this Guaranty, the Note, or any Transaction Document evidencing,
securing or relating to the Note or by law or in equity;
(j) Debtor's not being liable for the Indebtedness or
performance of the Obligations because the act of creating the Indebtedness or
Obligations is ultra ▇▇▇▇▇, or the officers or persons creating the Indebtedness
or Obligations acted in excess of their authority, or for any reason the
Indebtedness or Obligations cannot be enforced against Debtor;
(k) any payment by Debtor to Creditor if such payment is held
to constitute a preference under the Federal Bankruptcy Code or other bankruptcy
laws, or if for any other reason Creditor is required to refund such payment to
Debtor or pay the amount thereof to any other party;
(l) Guarantor's being or becoming liable for any
indebtedness owing by Debtor to Creditor, by endorsement or otherwise, other
than under this Guaranty; or
(m) the invalidity, illegality or unenforceability of all or
any part of the Indebtedness, for any reason whatsoever, including without
limitation the fact that the Note or other Transaction Documents pertaining to
the Indebtedness or Obligations have been forged or otherwise are irregular or
not genuine or authentic.
14. Application of Payments. If Creditor should collect or receive any
payments from any person other than Guarantor, or funds which are not
specifically required by law or agreement to be applied to the Indebtedness,
then Creditor may, in Creditor's sole discretion, apply such payments to any
indebtedness of Debtor other than the Indebtedness. Guarantor agrees that
Creditor may apply payments or other funds received by Creditor from Debtor,
from any other party obligated on the Indebtedness, from the liquidation of any
collateral now or hereafter securing the Indebtedness, or from any other source,
including without limitation, insurance proceeds and
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GUARANTY AGREEMENT Page 5
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condemnation, to the Indebtedness in any manner or order as Creditor may deem
appropriate in its sole and absolute discretion.
15. Collection of Indebtedness. Guarantor expressly waives any right to
the benefit of or to require or control application of any security or the
proceeds of any security now existing or hereafter obtained by Creditor as
security for the Indebtedness, or any part thereof, and agrees that Creditor
shall have no duty to apply to the Indebtedness any monies, payments or other
property at any time received by or paid to or in the possession of Creditor,
except as Creditor shall determine in its sole discretion. Guarantor
specifically agrees that Guarantor shall not have any recourse or action against
Creditor by reason of any action Creditor may take or omit to take in connection
with the Indebtedness or Obligations, the collection of any sums or amounts
herein mentioned, or in connection with any security for or any other guaranty
of the Indebtedness and/or Obligations.
16. Subordination. Guarantor subordinates all indebtedness owing to
Guarantor from Debtor to the Indebtedness. Guarantor further subordinates any
liens or security interest it may have in the collateral or security of Debtor
(or any other party) to the liens and security interests in favor of Creditor
securing the Indebtedness and the Obligations. Guarantor agrees not to accept
any payments or satisfaction of any kind of any indebtedness of Debtor to
Guarantor. If Guarantor should receive any such payment or satisfaction for
indebtedness of Debtor to Guarantor in violation of the above terms, Guarantor
agrees to deliver the payment or satisfaction to Creditor, and until delivered,
Guarantor agrees to hold the same in trust for Creditor.
17. Notice of Litigation, Claims, and Financial Change. Guarantor shall
promptly inform Creditor of any litigation against Guarantor or affecting any
security for the Indebtedness or Obligations which, if determined adversely,
might have a material adverse effect upon the financial condition of Guarantor
or upon such security or might cause a default under any of the documents
evidencing, securing, or governing the Indebtedness or Obligations, any claim or
controversy which might become the subject of litigation, and any material
adverse change in the financial condition of Guarantor.
18. Usury Disclaimer. No provision herein or in any promissory note,
security instrument, or any other Transaction Document executed by Debtor or
Guarantor evidencing the Indebtedness shall be construed to be or to create a
contract by Guarantor to pay, as consideration for the use, forbearance, or
detention of money, interest in excess of the rate or amount allowed by law. If
any excess of interest in such respect is provided for herein or in any such
promissory note, security instrument, or any other Transaction Document, the
provisions of this Section shall govern, and neither Debtor nor Guarantor shall
be obligated to pay the amount of such interest to the extent that it is in
excess of the amount permitted by applicable law. The intention of the parties
is to conform strictly to the usury laws now in force, and all Promissory Notes
and Transaction Documents executed by Debtor or Guarantor evidencing the
Indebtedness or Obligations shall be held subject to reduction to the amount
allowed under said usury laws as now or hereafter construed by the courts having
jurisdiction.
19. Transferability. This Guaranty is intended for and shall inure to
the benefit of Creditor and each and every other person who shall from time to
time be or become the owner or holder of any of the Indebtedness, and each and
every reference herein to Creditor shall also include and refer to each and
every successor or assignee of Creditor at any time holding or owning any part
of or interest in any part of the Indebtedness. This Guaranty shall be
transferable and negotiable, with the same force and effect and to the same
extent that the Indebtedness is transferable, it being understood and stipulated
that upon the assignment or transfer by Creditor of any of the Indebtedness
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GUARANTY AGREEMENT Page 6
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the legal holder or owner of the Indebtedness (or part thereof or interest
therein transferred or assigned by Creditor) shall also, unless provided
otherwise by Creditor in its transfer or assignment, have and may exercise all
of the rights granted to Creditor under this Guaranty to the extent of the part
of or interest in the Indebtedness assigned or transferred to said person.
Guarantor expressly waives notice of transfer or assignment of the Indebtedness,
or any part thereof, or of the rights of Creditor hereunder. Notwithstanding
anything in this Section to the contrary, all Indebtedness and Obligations to
Creditor shall be paid and performed in full first, before any assignee or
transferee shall receive any benefits of this Guaranty.
20. Information Concerning Guarantor. Guarantor acknowledges and agrees
that Creditor may transfer the Indebtedness or partial interests therein to one
or more transferees or participants. Guarantor authorizes Creditor to
disseminate any information Creditor has pertaining to the Indebtedness,
including, without limitation, credit information on Guarantor, to any such
transferee or participant or prospective transferee or participant.
21. Binding on Others. This Guaranty shall be binding upon
Guarantor and Guarantor's heirs, legal representative, personal representatives,
executors, administrators, successors and assigns.
22. Modification or Consent. No modification, consent or waiver of any
provision of this Guaranty shall be effective unless the modification, consent
or waiver is in writing and signed by an officer of Creditor, and then shall be
effective only in the specific instance and for the purpose for which given. No
notice to or demand on Guarantor in any case shall, of itself, entitle Guarantor
to any other or further notice or demand in similar or other circumstances. No
delay or omission by Creditor in exercising any power or right under this
Guaranty shall impair any such right or power or be construed as a waiver
thereof or any acquiescence therein, nor shall any single or partial exercise of
any such power preclude other or further exercise thereof, or the exercise of
any other right or power under this Guaranty. All rights and remedies of
Creditor under this Guaranty are cumulative of each other and of every other
right or remedy which Creditor may otherwise have at law or in equity or under
any other contract or document, and the exercise of one or more rights or
remedies shall not prejudice or impair the concurrent or subsequent exercise of
other rights or remedies.
23. Waiver of Certain Statutory Provisions. Guarantor hereby waives all
rights to which Guarantor may be or might otherwise become entitled to with
respect to the provisions of Sections 34.02 and 34.03 of the Texas Business and
Commerce Code, as amended, and agrees that the rights of Guarantor pursuant to
the provisions of Section 34.04 of the Texas Business and Commerce Code, as
amended, shall be subject to, secondary, subordinate and inferior in all
respects to the rights of Creditor pursuant to this Guaranty.
24. Notices. Any notice or demand to Guarantor may be given and shall
conclusively be deemed and considered to have been given and received upon the
deposit thereof, in writing, in the United States mail, duly stamped and
addressed to Guarantor at Guarantor's address stated below, but actual notice,
however given or received, shall always be effective. The last preceding
sentence shall not be construed in anywise to affect or impair any waiver of
notice or demand herein provided or to require giving of notice or demand to or
upon Guarantor in any situation or for any reason. Creditor's and Guarantor's
respective addresses are:
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GUARANTY AGREEMENT Page 7
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Creditor: American Physicians Service Group, Inc.
Attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇-▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇
Guarantor: Cierra, Inc.
Attn:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
25. Governing Law and Place of Performance. GUARANTOR AGREES THAT
THIS GUARANTY IS GOVERNED BY THE LAWS OF THE UNITED STATES AND THE STATE OF
TEXAS. This Guaranty is performable in ▇▇▇▇▇▇ County, Texas, and Guarantor
hereby waives the right to be sued elsewhere.
26. Headings. Section headings of this Guaranty are inserted for
convenience of reference only, and shall not alter, define, or be used in
construing the text of such sections.
27. Pronouns. As used herein and when required by the context, each
number (singular and plural) shall include all numbers, and each gender shall
include all genders, and unless the context otherwise requires the word "person"
or "party" shall include "person, corporation, firm, partnership or
association".
28. Notice of Invalidity of Oral Agreements. THIS WRITTEN AGREEMENT
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
EXECUTED this 30th day of September, 1996.
GUARANTOR:
Cierra, Inc.
(an Arkansas corporation)
By:
Name:
Title:
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GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT ("Guaranty") is made as of the 30th day of
September, 1996, by Larco Environmental Services, Inc., a Louisiana corporation
("Guarantor"), for the benefit of American Physicians Service Group, Inc., a
Texas corporation ("Creditor").
FOR VALUE RECEIVED, the receipt and sufficiency of which Guarantor
acknowledges, Guarantor hereby jointly, severally, absolutely, irrevocably, and
unconditionally guarantees to Creditor (a) the prompt payment and performance of
(i) any and all sums becoming due and payable pursuant to the Stock Put
Agreement dated September 30, 1996, executed by Exsorbet Industries, Inc., an
Idaho corporation ("Debtor") and Creditor, including without limitation any sums
which may hereafter become due and owing on the Promissory Note (the "Note"), in
the original principal amount of $3,300,000.00, which may be executed by Debtor
pursuant to the Stock Put Agreement, and payable to the order of Creditor,
including without limitation any and all interest thereon (other than such
interest as may be in excess of the maximum lawful amount), late charges (if
any), and costs of collection (including reasonable attorney's fees); (ii) all
other sums and indebtedness described in or secured by the Transaction Documents
(as defined below); (iii) any and all other sums becoming due and payable by
Debtor to Creditor as a result of advances made by Creditor pursuant to the
terms of the Transaction Documents, including without limitation the repayment
of any future advances made by Creditor to Debtor and the repayment of any sums
advanced for the protection of Creditor's security pursuant to the Transaction
Documents; (iv) any and all renewals, extensions, replacements, rearrangements,
substitutions, or modifications of all or any part of the Indebtedness
(collectively, the "Indebtedness"), and (b) the performance of any and all
obligations, warranties, representations, covenants and agreements made by
Debtor in connection with the Transaction Documents, as the same may be amended,
modified, or restated from time to time (the "Obligations").
2. Transaction Documents. The term "Transaction Documents" shall mean:
the Stock Put Agreement dated September 30, 1996, executed by and between Debtor
and Creditor; the Note (if and when executed pursuant to the terms of the Stock
Put Agreement); the Warrant executed by Debtor in favor of Creditor; the
Shareholder Rights Agreement executed by Debtor and Creditor; the Assignment and
Security Agreement dated September 30, 1996, executed by and between Debtor and
Creditor, and all other security agreements, assignments, and other documents
executed by Debtor for the benefit of Creditor to secure the payment and
performance of the Indebtedness and Obligations and creating a lien and security
interest against the real or personal property described therein (the
"Collateral"); any other Guaranty Agreements or surety agreements executed in
favor of Creditor and guaranteeing the Note; and any other agreement, document,
or instrument executed by Debtor or any other guarantor in connection with the
transaction evidenced by the Stock Put Agreement.
3. Nature of Guaranty. Guarantor agrees that this Guaranty is an
absolute, complete, continuing, unconditional and irrevocable guaranty of
payment and performance of the Indebtedness and the Obligations.
4. Renewals and Extensions. This Guaranty applies to, and the
Indebtedness shall additionally mean and refer to, any and all renewals,
extensions, modifications, alterations, refinancings and rearrangements of all
or any part of the Indebtedness.
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5. Representations and Warranties. Guarantor hereby represents
and warrants the following to Creditor:
(a) Guarantor may reasonably expect to benefit, directly or
indirectly, from the making of this Guaranty and from and from each and every
renewal, extension, modification, alteration, refinancing, and rearrangement of
all or any part of the Indebtedness, the release of collateral or other
relinquishment of legal rights made or granted or to be made or granted by
Creditor to Debtor and the amendment or modification of the terms and conditions
of the Obligations, and the Board of Directors of Guarantor has determined that
Guarantor may reasonably be expected to benefit, directly or indirectly, from
the making of this Guaranty and has adopted resolutions stating the same; and
(b) Guarantor is familiar with, and has independently reviewed
the books and records regarding, the financial condition of Debtor and is
familiar with the value of any and all collateral intended to be security for
the payment of all or any part of the Indebtedness or for the performance of all
or any of the Obligations; provided, however, Guarantor is not relying on such
financial condition or collateral as an inducement to enter into this Guaranty;
and
(c) Guarantor has adequate means to obtain from Debtor on a
continuing basis information concerning the financial condition of Debtor and
Guarantor is not relying on Creditor to provide such information to Guarantor
either now or in the future; and
(d) Guarantor has the power and authority to execute, deliver,
and perform this Guaranty and any other agreements executed by Guarantor
contemporaneously herewith, and the execution, delivery, and performance of this
Guaranty and any other agreements executed by Guarantor contemporaneously
herewith do not and will not violate (i) any agreement or instrument to which
Guarantor is a party, (ii) any law, rule, regulation or order of any
governmental authority to which Guarantor is subject, or (iii) its articles or
certificate of incorporation or bylaw; and
(e) neither Creditor nor any other party has made any
representation, warranty or statement to Guarantor in order to induce Guarantor
to execute this Guaranty; and
(f) the financial statements and other financial information
regarding Guarantor heretofore and hereafter delivered to Creditor are and shall
be true and correct in all material respects and fairly present the financial
position of Guarantor as of the dates thereof, and no material adverse change
has occurred in the financial condition of Guarantor reflected in the financial
statements and other financial information regarding Guarantor heretofore
delivered to Creditor since the date of the last statement thereof; and
(g) as of the date hereof, and after giving effect to this
Guaranty and the obligations evidenced hereby, (i) Guarantor is and will be
solvent, (ii) the fair saleable value of Guarantor's assets exceeds and will
continue to exceed its liabilities (both fixed and contingent), (iii) Guarantor
is and will continue to be able to pay its debts as they mature, and (iv) if
Guarantor is not an individual, Guarantor has and will continue to have
sufficient capital to carry on its business and all businesses in which it is
about to engage.
6. Inducement to Creditor. Guarantor acknowledges that this
Guaranty is given to induce Creditor to extend credit to Debtor which would not
be extended except in reliance upon this Guaranty.
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7. Terms of Guaranty and Indebtedness and Obligations. This Guaranty
contains the entire agreement between Guarantor and Creditor with respect to
Guarantor's guarantee of the Indebtedness and Obligations; provided, however,
this Guaranty is in addition to and does not replace, cancel, modify, impair, or
affect any other guaranty executed by Guarantor and now or hereafter held by
Creditor that relates to Debtor or any other person or entity. No
representations or agreements have been made by Creditor to Guarantor except as
contained in this Guaranty. Guarantor has read and understands the implications
of this Guaranty. Guarantor agrees to the terms, provisions and conditions of
the Note, the Transaction Documents which may have been or may hereafter be
executed by Debtor or other persons evidencing, securing, or in connection with
the Indebtedness or Obligations or any part thereof, and agrees that Guarantor's
liability shall in no manner be affected, impaired or released by reason of any
term, provision, or condition of the Note, the Transaction Documents or by the
failure, refusal, or omission of Creditor to enforce or observe any of same or
by any action taken or omitted to be taken by Creditor pursuant thereto or in
connection therewith.
8. Payment and Performance by Guarantor. In each event that all or any
portion of the Indebtedness shall become due and remain unpaid (however the
maturity may have occurred), Guarantor will, upon demand, pay the amount due to
Creditor (other than any interest as may be in excess of the maximum lawful
amount), without notice having been given to Guarantor previous to such demand
of the acceptance by Creditor of this Guaranty or of the creating or incurring
of such indebtedness. Guarantor specifically agrees that it shall not be
necessary or required in order to enforce any obligations under this Guaranty
that Creditor has made demand for payment upon Debtor or any other person liable
on the Indebtedness for payment thereof or for performance of the Obligations or
has presented same for payment by Debtor or any other person liable thereon or
has made protest thereof or has given notice to Debtor or any other party liable
thereon of the maturity or nonpayment of the Indebtedness. All amounts becoming
payable by Guarantor to Creditor under this Guaranty shall be payable at
Creditor's address stated below, or at such other address as directed by
Creditor in written notice to Guarantor. All payments made upon the Indebtedness
at any time shall be deemed to have been paid by Debtor unless express notice in
writing is given to Creditor at the time of payment by Guarantor that Creditor
has been paid by Guarantor. Upon demand by Creditor, Guarantor shall perform or
cause to be performed any or all of the Obligations.
9. Suit on Guaranty. Suit may be brought by Creditor against Guarantor
alone, or jointly and severally against Guarantor and any one or more other
guarantors of the Indebtedness and/or Obligations, without impairing the rights
of Creditor against Debtor or other guarantors of the Indebtedness and/or
Obligations.
10. Costs of Collection. Guarantor agrees to pay all costs of
collection, including reasonable attorney's fees and expenses, if this Guaranty
is placed in the hands of an attorney for collection or is collected through any
court.
11. Waiver by Guarantor. Guarantor specifically waives any notice (i)
of acceptance of this Guaranty by Creditor, (ii) of the creation, advancement,
increase, existence, renewal, extension, modification, refinancing, or
rearrangement of the Indebtedness, or any indulgence with respect to the
Indebtedness, or any part thereof, (iii) of nonpayment thereof or default
thereon or in the performance of the Obligations, and (iv) of any amendment,
modification, or restatement of all or any of the Obligations. Guarantor waives
grace, demand, protest, presentment, and notice of intent to accelerate the
maturity of the Indebtedness, notice of acceleration of the maturity of the
Indebtedness, demand, protest, or presentment with respect to the Indebtedness,
and Guarantor waives notice of the amount of the Indebtedness outstanding at any
time. Guarantor agrees that the
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maturity of the Indebtedness, or any part thereof, may be accelerated, renewed,
extended, modified, refinanced, or rearranged or any other indulgence may be
granted with respect thereto by Creditor at its will or as may be agreed by
Debtor without notice to or further consent by Guarantor at any time. Guarantor
agrees that Guarantor shall not be considered a "Debtor" as defined in Section
9.105 of the Texas Business and Commerce Code.
12. Guarantor's Direct Liability. Creditor shall not be required,
before or as a condition of enforcing the liability of Guarantor under this
Guaranty, or requiring payment of the Indebtedness by Guarantor hereunder or
performance of the Obligations, or at any time thereafter, to do any of the
following: (a) proceed to obtain or assert a claim for personal judgment against
Debtor for the Indebtedness or make any effort at collection of the Indebtedness
from Debtor; (b) foreclose against or seek to realize upon the Collateral or any
security now or hereafter existing for the Indebtedness or Obligations; (c) file
suit or proceed to obtain or assert a claim for personal judgment against any
other party (including any maker, guarantor, endorser or surety) liable for the
Indebtedness or make any effort at collection of the Indebtedness from any such
other party; (d) exercise or assert any other right or remedy to which Creditor
is or may be entitled in connection with the Indebtedness or Obligations or any
security or other guaranty therefor; (e) assert or file any claim against the
assets or estate of Debtor or other person liable for the Indebtedness or
Obligations, or any part thereof; (f) take any action against Debtor or any
other person, to exhaust its remedies against endorsers, the Collateral or other
collateral or security, or to resort to any balance of any deposit account or
credit on the books of Creditor in favor of Debtor or any other person; or (g)
pursue any other remedies Creditor may have in connection with the Indebtedness
or Obligations.
13. Obligations Not Impaired. Guarantor's obligations under this
Guaranty shall not be released, diminished, impaired, reduced, or adversely
affected, and Guarantor waives any common law, equitable, statutory or other
rights that Guarantor might otherwise have, as a result of any of the following:
(a) any full or partial release of the liability of Debtor,
any other guarantor of the Indebtedness and/or Obligations, or any other person
primarily or secondarily liable on the Indebtedness and/or Obligations, or any
part thereof (including any maker, endorser, guarantor or surety), whether such
liability is direct or indirect, joint, several, or joint and several, it being
recognized, acknowledged and agreed that Guarantor may be required to pay the
Indebtedness and perform the Obligations in full without assistance of any other
party, and Guarantor has not been induced to enter into this Guaranty on the
basis of an understanding or agreement that other parties will at all times be
liable to pay the Indebtedness or perform the Obligations, or that Creditor will
look to other parties to pay the Indebtedness or perform the Obligations;
provided, however, nothing in this Guaranty shall waive or release, either
expressly or impliedly, any rights of subrogation, reimbursement or contribution
that Guarantor may have, after payment in full of the Indebtedness and
performance of the Obligations, against others liable under the Indebtedness or
for performance of the Obligations, but Guarantor's rights of subrogation,
reimbursement and contribution are secondary, subordinate and inferior to the
rights and claims of Creditor;
(b) the voluntary or involuntary liquidation, sale or other
disposition of all or substantially all of the assets of Debtor, or any
receivership, insolvency, bankruptcy, reorganization or other similar
proceedings affecting Debtor or any of its assets;
(c) any impairment, modification, release or limitation of
liability of Debtor, or stay of foreclosure or other lien enforcement
proceedings against Debtor, or Debtor's property, or Debtor's estate in
bankruptcy, or any modification, discharge or extension of the Indebtedness
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resulting from the operation of any present or future provision of the Federal
Bankruptcy Code or other bankruptcy laws, or from the decision of any court, it
being recognized, acknowledged and agreed that Guarantor shall remain liable on
the Indebtedness and the Obligations, notwithstanding any act, omission or thing
which might, but for the provisions hereof, otherwise operate as a legal or
equitable discharge of Guarantor;
(d) any release of, subordination of, or substitution of
any security or other guaranty now or hereafter held by Creditor for payment of
the Indebtedness and performance of the Obligations, or of any part thereof;
(e) Creditor's failure to use diligence or care in
preserving the liability of any person on the Indebtedness or the Obligations,
or in bringing suit to enforce collection of the Indebtedness or performance of
the Obligations;
(f) the addition of another guarantor or guarantors of
the Indebtedness or Obligations;
(g) the substitution or withdrawal of collateral or
release of security;
(h) any renewal, extension, modification, alteration,
refinancing or rearrangement of or any other indulgence with respect to the
Indebtedness or Obligations, or any part thereof;
(i) the exercise, failure to exercise, delay, omission or lack
of diligence or care by Creditor in exercising any right or power conferred upon
Creditor in this Guaranty, the Note, or any Transaction Document evidencing,
securing or relating to the Note or by law or in equity;
(j) Debtor's not being liable for the Indebtedness or
performance of the Obligations because the act of creating the Indebtedness or
Obligations is ultra ▇▇▇▇▇, or the officers or persons creating the Indebtedness
or Obligations acted in excess of their authority, or for any reason the
Indebtedness or Obligations cannot be enforced against Debtor;
(k) any payment by Debtor to Creditor if such payment is held
to constitute a preference under the Federal Bankruptcy Code or other bankruptcy
laws, or if for any other reason Creditor is required to refund such payment to
Debtor or pay the amount thereof to any other party;
(l) Guarantor's being or becoming liable for any
indebtedness owing by Debtor to Creditor, by endorsement or otherwise, other
than under this Guaranty; or
(m) the invalidity, illegality or unenforceability of all or
any part of the Indebtedness, for any reason whatsoever, including without
limitation the fact that the Note or other Transaction Documents pertaining to
the Indebtedness or Obligations have been forged or otherwise are irregular or
not genuine or authentic.
14. Application of Payments. If Creditor should collect or receive any
payments from any person other than Guarantor, or funds which are not
specifically required by law or agreement to be applied to the Indebtedness,
then Creditor may, in Creditor's sole discretion, apply such payments to any
indebtedness of Debtor other than the Indebtedness. Guarantor agrees that
Creditor may apply payments or other funds received by Creditor from Debtor,
from any other party obligated on the Indebtedness, from the liquidation of any
collateral now or hereafter securing the Indebtedness, or from any other source,
including without limitation, insurance proceeds and
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GUARANTY AGREEMENT Page 5
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condemnation, to the Indebtedness in any manner or order as Creditor may deem
appropriate in its sole and absolute discretion.
15. Collection of Indebtedness. Guarantor expressly waives any right to
the benefit of or to require or control application of any security or the
proceeds of any security now existing or hereafter obtained by Creditor as
security for the Indebtedness, or any part thereof, and agrees that Creditor
shall have no duty to apply to the Indebtedness any monies, payments or other
property at any time received by or paid to or in the possession of Creditor,
except as Creditor shall determine in its sole discretion. Guarantor
specifically agrees that Guarantor shall not have any recourse or action against
Creditor by reason of any action Creditor may take or omit to take in connection
with the Indebtedness or Obligations, the collection of any sums or amounts
herein mentioned, or in connection with any security for or any other guaranty
of the Indebtedness and/or Obligations.
16. Subordination. Guarantor subordinates all indebtedness owing to
Guarantor from Debtor to the Indebtedness. Guarantor further subordinates any
liens or security interest it may have in the collateral or security of Debtor
(or any other party) to the liens and security interests in favor of Creditor
securing the Indebtedness and the Obligations. Guarantor agrees not to accept
any payments or satisfaction of any kind of any indebtedness of Debtor to
Guarantor. If Guarantor should receive any such payment or satisfaction for
indebtedness of Debtor to Guarantor in violation of the above terms, Guarantor
agrees to deliver the payment or satisfaction to Creditor, and until delivered,
Guarantor agrees to hold the same in trust for Creditor.
17. Notice of Litigation, Claims, and Financial Change. Guarantor shall
promptly inform Creditor of any litigation against Guarantor or affecting any
security for the Indebtedness or Obligations which, if determined adversely,
might have a material adverse effect upon the financial condition of Guarantor
or upon such security or might cause a default under any of the documents
evidencing, securing, or governing the Indebtedness or Obligations, any claim or
controversy which might become the subject of litigation, and any material
adverse change in the financial condition of Guarantor.
18. Usury Disclaimer. No provision herein or in any promissory note,
security instrument, or any other Transaction Document executed by Debtor or
Guarantor evidencing the Indebtedness shall be construed to be or to create a
contract by Guarantor to pay, as consideration for the use, forbearance, or
detention of money, interest in excess of the rate or amount allowed by law. If
any excess of interest in such respect is provided for herein or in any such
promissory note, security instrument, or any other Transaction Document, the
provisions of this Section shall govern, and neither Debtor nor Guarantor shall
be obligated to pay the amount of such interest to the extent that it is in
excess of the amount permitted by applicable law. The intention of the parties
is to conform strictly to the usury laws now in force, and all Promissory Notes
and Transaction Documents executed by Debtor or Guarantor evidencing the
Indebtedness or Obligations shall be held subject to reduction to the amount
allowed under said usury laws as now or hereafter construed by the courts having
jurisdiction.
19. Transferability. This Guaranty is intended for and shall inure to
the benefit of Creditor and each and every other person who shall from time to
time be or become the owner or holder of any of the Indebtedness, and each and
every reference herein to Creditor shall also include and refer to each and
every successor or assignee of Creditor at any time holding or owning any part
of or interest in any part of the Indebtedness. This Guaranty shall be
transferable and negotiable, with the same force and effect and to the same
extent that the Indebtedness is transferable, it being understood and stipulated
that upon the assignment or transfer by Creditor of any of the Indebtedness
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GUARANTY AGREEMENT Page 6
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the legal holder or owner of the Indebtedness (or part thereof or interest
therein transferred or assigned by Creditor) shall also, unless provided
otherwise by Creditor in its transfer or assignment, have and may exercise all
of the rights granted to Creditor under this Guaranty to the extent of the part
of or interest in the Indebtedness assigned or transferred to said person.
Guarantor expressly waives notice of transfer or assignment of the Indebtedness,
or any part thereof, or of the rights of Creditor hereunder. Notwithstanding
anything in this Section to the contrary, all Indebtedness and Obligations to
Creditor shall be paid and performed in full first, before any assignee or
transferee shall receive any benefits of this Guaranty.
20. Information Concerning Guarantor. Guarantor acknowledges and agrees
that Creditor may transfer the Indebtedness or partial interests therein to one
or more transferees or participants. Guarantor authorizes Creditor to
disseminate any information Creditor has pertaining to the Indebtedness,
including, without limitation, credit information on Guarantor, to any such
transferee or participant or prospective transferee or participant.
21. Binding on Others. This Guaranty shall be binding upon
Guarantor and Guarantor's heirs, legal representative, personal representatives,
executors, administrators, successors and assigns.
22. Modification or Consent. No modification, consent or waiver of any
provision of this Guaranty shall be effective unless the modification, consent
or waiver is in writing and signed by an officer of Creditor, and then shall be
effective only in the specific instance and for the purpose for which given. No
notice to or demand on Guarantor in any case shall, of itself, entitle Guarantor
to any other or further notice or demand in similar or other circumstances. No
delay or omission by Creditor in exercising any power or right under this
Guaranty shall impair any such right or power or be construed as a waiver
thereof or any acquiescence therein, nor shall any single or partial exercise of
any such power preclude other or further exercise thereof, or the exercise of
any other right or power under this Guaranty. All rights and remedies of
Creditor under this Guaranty are cumulative of each other and of every other
right or remedy which Creditor may otherwise have at law or in equity or under
any other contract or document, and the exercise of one or more rights or
remedies shall not prejudice or impair the concurrent or subsequent exercise of
other rights or remedies.
23. Waiver of Certain Statutory Provisions. Guarantor hereby waives all
rights to which Guarantor may be or might otherwise become entitled to with
respect to the provisions of Sections 34.02 and 34.03 of the Texas Business and
Commerce Code, as amended, and agrees that the rights of Guarantor pursuant to
the provisions of Section 34.04 of the Texas Business and Commerce Code, as
amended, shall be subject to, secondary, subordinate and inferior in all
respects to the rights of Creditor pursuant to this Guaranty.
24. Notices. Any notice or demand to Guarantor may be given and shall
conclusively be deemed and considered to have been given and received upon the
deposit thereof, in writing, in the United States mail, duly stamped and
addressed to Guarantor at Guarantor's address stated below, but actual notice,
however given or received, shall always be effective. The last preceding
sentence shall not be construed in anywise to affect or impair any waiver of
notice or demand herein provided or to require giving of notice or demand to or
upon Guarantor in any situation or for any reason. Creditor's and Guarantor's
respective addresses are:
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GUARANTY AGREEMENT Page 7
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Creditor: American Physicians Service Group, Inc.
Attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇-▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇
Guarantor: Larco Environmental Services, Inc.
Attn:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
25. Governing Law and Place of Performance. GUARANTOR AGREES THAT
THIS GUARANTY IS GOVERNED BY THE LAWS OF THE UNITED STATES AND THE STATE OF
TEXAS. This Guaranty is performable in ▇▇▇▇▇▇ County, Texas, and Guarantor
hereby waives the right to be sued elsewhere.
26. Headings. Section headings of this Guaranty are inserted for
convenience of reference only, and shall not alter, define, or be used in
construing the text of such sections.
27. Pronouns. As used herein and when required by the context, each
number (singular and plural) shall include all numbers, and each gender shall
include all genders, and unless the context otherwise requires the word "person"
or "party" shall include "person, corporation, firm, partnership or
association".
28. Notice of Invalidity of Oral Agreements. THIS WRITTEN AGREEMENT
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
EXECUTED this 30th day of September, 1996.
GUARANTOR:
Larco Environmental Services, Inc.
(an Louisiana corporation)
By:
Name:
Title:
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GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT ("Guaranty") is made as of the 30th day of
September, 1996, by KR Industrial Services of Alabama, Inc., an Alabama
corporation ("Guarantor"), for the benefit of American Physicians Service Group,
Inc., a Texas corporation ("Creditor").
FOR VALUE RECEIVED, the receipt and sufficiency of which Guarantor
acknowledges, Guarantor hereby jointly, severally, absolutely, irrevocably, and
unconditionally guarantees to Creditor (a) the prompt payment and performance of
(i) any and all sums becoming due and payable pursuant to the Stock Put
Agreement dated September 30, 1996, executed by Exsorbet Industries, Inc., an
Idaho corporation ("Debtor") and Creditor, including without limitation any sums
which may hereafter become due and owing on the Promissory Note (the "Note"), in
the original principal amount of $3,300,000.00, which may be executed by Debtor
pursuant to the Stock Put Agreement, and payable to the order of Creditor,
including without limitation any and all interest thereon (other than such
interest as may be in excess of the maximum lawful amount), late charges (if
any), and costs of collection (including reasonable attorney's fees); (ii) all
other sums and indebtedness described in or secured by the Transaction Documents
(as defined below); (iii) any and all other sums becoming due and payable by
Debtor to Creditor as a result of advances made by Creditor pursuant to the
terms of the Transaction Documents, including without limitation the repayment
of any future advances made by Creditor to Debtor and the repayment of any sums
advanced for the protection of Creditor's security pursuant to the Transaction
Documents; (iv) any and all renewals, extensions, replacements, rearrangements,
substitutions, or modifications of all or any part of the Indebtedness
(collectively, the "Indebtedness"), and (b) the performance of any and all
obligations, warranties, representations, covenants and agreements made by
Debtor in connection with the Transaction Documents, as the same may be amended,
modified, or restated from time to time (the "Obligations").
2. Transaction Documents. The term "Transaction Documents" shall mean:
the Stock Put Agreement dated September 30, 1996, executed by and between Debtor
and Creditor; the Note (if and when executed pursuant to the terms of the Stock
Put Agreement); the Warrant executed by Debtor in favor of Creditor; the
Shareholder Rights Agreement executed by Debtor and Creditor; the Assignment and
Security Agreement dated September 30, 1996, executed by and between Debtor and
Creditor, and all other security agreements, assignments, and other documents
executed by Debtor for the benefit of Creditor to secure the payment and
performance of the Indebtedness and Obligations and creating a lien and security
interest against the real or personal property described therein (the
"Collateral"); any other Guaranty Agreements or surety agreements executed in
favor of Creditor and guaranteeing the Note; and any other agreement, document,
or instrument executed by Debtor or any other guarantor in connection with the
transaction evidenced by the Stock Put Agreement.
3. Nature of Guaranty. Guarantor agrees that this Guaranty is an
absolute, complete, continuing, unconditional and irrevocable guaranty of
payment and performance of the Indebtedness and the Obligations.
4. Renewals and Extensions. This Guaranty applies to, and the
Indebtedness shall additionally mean and refer to, any and all renewals,
extensions, modifications, alterations, refinancings and rearrangements of all
or any part of the Indebtedness.
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5. Representations and Warranties. Guarantor hereby represents
and warrants the following to Creditor:
(a) Guarantor may reasonably expect to benefit, directly or
indirectly, from the making of this Guaranty and from and from each and every
renewal, extension, modification, alteration, refinancing, and rearrangement of
all or any part of the Indebtedness, the release of collateral or other
relinquishment of legal rights made or granted or to be made or granted by
Creditor to Debtor and the amendment or modification of the terms and conditions
of the Obligations, and the Board of Directors of Guarantor has determined that
Guarantor may reasonably be expected to benefit, directly or indirectly, from
the making of this Guaranty and has adopted resolutions stating the same; and
(b) Guarantor is familiar with, and has independently reviewed
the books and records regarding, the financial condition of Debtor and is
familiar with the value of any and all collateral intended to be security for
the payment of all or any part of the Indebtedness or for the performance of all
or any of the Obligations; provided, however, Guarantor is not relying on such
financial condition or collateral as an inducement to enter into this Guaranty;
and
(c) Guarantor has adequate means to obtain from Debtor on a
continuing basis information concerning the financial condition of Debtor and
Guarantor is not relying on Creditor to provide such information to Guarantor
either now or in the future; and
(d) Guarantor has the power and authority to execute, deliver,
and perform this Guaranty and any other agreements executed by Guarantor
contemporaneously herewith, and the execution, delivery, and performance of this
Guaranty and any other agreements executed by Guarantor contemporaneously
herewith do not and will not violate (i) any agreement or instrument to which
Guarantor is a party, (ii) any law, rule, regulation or order of any
governmental authority to which Guarantor is subject, or (iii) its articles or
certificate of incorporation or bylaw; and
(e) neither Creditor nor any other party has made any
representation, warranty or statement to Guarantor in order to induce Guarantor
to execute this Guaranty; and
(f) the financial statements and other financial information
regarding Guarantor heretofore and hereafter delivered to Creditor are and shall
be true and correct in all material respects and fairly present the financial
position of Guarantor as of the dates thereof, and no material adverse change
has occurred in the financial condition of Guarantor reflected in the financial
statements and other financial information regarding Guarantor heretofore
delivered to Creditor since the date of the last statement thereof; and
(g) as of the date hereof, and after giving effect to this
Guaranty and the obligations evidenced hereby, (i) Guarantor is and will be
solvent, (ii) the fair saleable value of Guarantor's assets exceeds and will
continue to exceed its liabilities (both fixed and contingent), (iii) Guarantor
is and will continue to be able to pay its debts as they mature, and (iv) if
Guarantor is not an individual, Guarantor has and will continue to have
sufficient capital to carry on its business and all businesses in which it is
about to engage.
6. Inducement to Creditor. Guarantor acknowledges that this
Guaranty is given to induce Creditor to extend credit to Debtor which would not
be extended except in reliance upon this Guaranty.
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7. Terms of Guaranty and Indebtedness and Obligations. This Guaranty
contains the entire agreement between Guarantor and Creditor with respect to
Guarantor's guarantee of the Indebtedness and Obligations; provided, however,
this Guaranty is in addition to and does not replace, cancel, modify, impair, or
affect any other guaranty executed by Guarantor and now or hereafter held by
Creditor that relates to Debtor or any other person or entity. No
representations or agreements have been made by Creditor to Guarantor except as
contained in this Guaranty. Guarantor has read and understands the implications
of this Guaranty. Guarantor agrees to the terms, provisions and conditions of
the Note, the Transaction Documents which may have been or may hereafter be
executed by Debtor or other persons evidencing, securing, or in connection with
the Indebtedness or Obligations or any part thereof, and agrees that Guarantor's
liability shall in no manner be affected, impaired or released by reason of any
term, provision, or condition of the Note, the Transaction Documents or by the
failure, refusal, or omission of Creditor to enforce or observe any of same or
by any action taken or omitted to be taken by Creditor pursuant thereto or in
connection therewith.
8. Payment and Performance by Guarantor. In each event that all or any
portion of the Indebtedness shall become due and remain unpaid (however the
maturity may have occurred), Guarantor will, upon demand, pay the amount due to
Creditor (other than any interest as may be in excess of the maximum lawful
amount), without notice having been given to Guarantor previous to such demand
of the acceptance by Creditor of this Guaranty or of the creating or incurring
of such indebtedness. Guarantor specifically agrees that it shall not be
necessary or required in order to enforce any obligations under this Guaranty
that Creditor has made demand for payment upon Debtor or any other person liable
on the Indebtedness for payment thereof or for performance of the Obligations or
has presented same for payment by Debtor or any other person liable thereon or
has made protest thereof or has given notice to Debtor or any other party liable
thereon of the maturity or nonpayment of the Indebtedness. All amounts becoming
payable by Guarantor to Creditor under this Guaranty shall be payable at
Creditor's address stated below, or at such other address as directed by
Creditor in written notice to Guarantor. All payments made upon the Indebtedness
at any time shall be deemed to have been paid by Debtor unless express notice in
writing is given to Creditor at the time of payment by Guarantor that Creditor
has been paid by Guarantor. Upon demand by Creditor, Guarantor shall perform or
cause to be performed any or all of the Obligations.
9. Suit on Guaranty. Suit may be brought by Creditor against Guarantor
alone, or jointly and severally against Guarantor and any one or more other
guarantors of the Indebtedness and/or Obligations, without impairing the rights
of Creditor against Debtor or other guarantors of the Indebtedness and/or
Obligations.
10. Costs of Collection. Guarantor agrees to pay all costs of
collection, including reasonable attorney's fees and expenses, if this Guaranty
is placed in the hands of an attorney for collection or is collected through any
court.
11. Waiver by Guarantor. Guarantor specifically waives any notice (i)
of acceptance of this Guaranty by Creditor, (ii) of the creation, advancement,
increase, existence, renewal, extension, modification, refinancing, or
rearrangement of the Indebtedness, or any indulgence with respect to the
Indebtedness, or any part thereof, (iii) of nonpayment thereof or default
thereon or in the performance of the Obligations, and (iv) of any amendment,
modification, or restatement of all or any of the Obligations. Guarantor waives
grace, demand, protest, presentment, and notice of intent to accelerate the
maturity of the Indebtedness, notice of acceleration of the maturity of the
Indebtedness, demand, protest, or presentment with respect to the Indebtedness,
and Guarantor waives notice of the amount of the Indebtedness outstanding at any
time. Guarantor agrees that the
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maturity of the Indebtedness, or any part thereof, may be accelerated, renewed,
extended, modified, refinanced, or rearranged or any other indulgence may be
granted with respect thereto by Creditor at its will or as may be agreed by
Debtor without notice to or further consent by Guarantor at any time. Guarantor
agrees that Guarantor shall not be considered a "Debtor" as defined in Section
9.105 of the Texas Business and Commerce Code.
12. Guarantor's Direct Liability. Creditor shall not be required,
before or as a condition of enforcing the liability of Guarantor under this
Guaranty, or requiring payment of the Indebtedness by Guarantor hereunder or
performance of the Obligations, or at any time thereafter, to do any of the
following: (a) proceed to obtain or assert a claim for personal judgment against
Debtor for the Indebtedness or make any effort at collection of the Indebtedness
from Debtor; (b) foreclose against or seek to realize upon the Collateral or any
security now or hereafter existing for the Indebtedness or Obligations; (c) file
suit or proceed to obtain or assert a claim for personal judgment against any
other party (including any maker, guarantor, endorser or surety) liable for the
Indebtedness or make any effort at collection of the Indebtedness from any such
other party; (d) exercise or assert any other right or remedy to which Creditor
is or may be entitled in connection with the Indebtedness or Obligations or any
security or other guaranty therefor; (e) assert or file any claim against the
assets or estate of Debtor or other person liable for the Indebtedness or
Obligations, or any part thereof; (f) take any action against Debtor or any
other person, to exhaust its remedies against endorsers, the Collateral or other
collateral or security, or to resort to any balance of any deposit account or
credit on the books of Creditor in favor of Debtor or any other person; or (g)
pursue any other remedies Creditor may have in connection with the Indebtedness
or Obligations.
13. Obligations Not Impaired. Guarantor's obligations under this
Guaranty shall not be released, diminished, impaired, reduced, or adversely
affected, and Guarantor waives any common law, equitable, statutory or other
rights that Guarantor might otherwise have, as a result of any of the following:
(a) any full or partial release of the liability of Debtor,
any other guarantor of the Indebtedness and/or Obligations, or any other person
primarily or secondarily liable on the Indebtedness and/or Obligations, or any
part thereof (including any maker, endorser, guarantor or surety), whether such
liability is direct or indirect, joint, several, or joint and several, it being
recognized, acknowledged and agreed that Guarantor may be required to pay the
Indebtedness and perform the Obligations in full without assistance of any other
party, and Guarantor has not been induced to enter into this Guaranty on the
basis of an understanding or agreement that other parties will at all times be
liable to pay the Indebtedness or perform the Obligations, or that Creditor will
look to other parties to pay the Indebtedness or perform the Obligations;
provided, however, nothing in this Guaranty shall waive or release, either
expressly or impliedly, any rights of subrogation, reimbursement or contribution
that Guarantor may have, after payment in full of the Indebtedness and
performance of the Obligations, against others liable under the Indebtedness or
for performance of the Obligations, but Guarantor's rights of subrogation,
reimbursement and contribution are secondary, subordinate and inferior to the
rights and claims of Creditor;
(b) the voluntary or involuntary liquidation, sale or other
disposition of all or substantially all of the assets of Debtor, or any
receivership, insolvency, bankruptcy, reorganization or other similar
proceedings affecting Debtor or any of its assets;
(c) any impairment, modification, release or limitation of
liability of Debtor, or stay of foreclosure or other lien enforcement
proceedings against Debtor, or Debtor's property, or Debtor's estate in
bankruptcy, or any modification, discharge or extension of the Indebtedness
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resulting from the operation of any present or future provision of the Federal
Bankruptcy Code or other bankruptcy laws, or from the decision of any court, it
being recognized, acknowledged and agreed that Guarantor shall remain liable on
the Indebtedness and the Obligations, notwithstanding any act, omission or thing
which might, but for the provisions hereof, otherwise operate as a legal or
equitable discharge of Guarantor;
(d) any release of, subordination of, or substitution of
any security or other guaranty now or hereafter held by Creditor for payment of
the Indebtedness and performance of the Obligations, or of any part thereof;
(e) Creditor's failure to use diligence or care in
preserving the liability of any person on the Indebtedness or the Obligations,
or in bringing suit to enforce collection of the Indebtedness or performance of
the Obligations;
(f) the addition of another guarantor or guarantors of
the Indebtedness or Obligations;
(g) the substitution or withdrawal of collateral or
release of security;
(h) any renewal, extension, modification, alteration,
refinancing or rearrangement of or any other indulgence with respect to the
Indebtedness or Obligations, or any part thereof;
(i) the exercise, failure to exercise, delay, omission or lack
of diligence or care by Creditor in exercising any right or power conferred upon
Creditor in this Guaranty, the Note, or any Transaction Document evidencing,
securing or relating to the Note or by law or in equity;
(j) Debtor's not being liable for the Indebtedness or
performance of the Obligations because the act of creating the Indebtedness or
Obligations is ultra ▇▇▇▇▇, or the officers or persons creating the Indebtedness
or Obligations acted in excess of their authority, or for any reason the
Indebtedness or Obligations cannot be enforced against Debtor;
(k) any payment by Debtor to Creditor if such payment is held
to constitute a preference under the Federal Bankruptcy Code or other bankruptcy
laws, or if for any other reason Creditor is required to refund such payment to
Debtor or pay the amount thereof to any other party;
(l) Guarantor's being or becoming liable for any
indebtedness owing by Debtor to Creditor, by endorsement or otherwise, other
than under this Guaranty; or
(m) the invalidity, illegality or unenforceability of all or
any part of the Indebtedness, for any reason whatsoever, including without
limitation the fact that the Note or other Transaction Documents pertaining to
the Indebtedness or Obligations have been forged or otherwise are irregular or
not genuine or authentic.
14. Application of Payments. If Creditor should collect or receive any
payments from any person other than Guarantor, or funds which are not
specifically required by law or agreement to be applied to the Indebtedness,
then Creditor may, in Creditor's sole discretion, apply such payments to any
indebtedness of Debtor other than the Indebtedness. Guarantor agrees that
Creditor may apply payments or other funds received by Creditor from Debtor,
from any other party obligated on the Indebtedness, from the liquidation of any
collateral now or hereafter securing the Indebtedness, or from any other source,
including without limitation, insurance proceeds and
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GUARANTY AGREEMENT Page 5
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condemnation, to the Indebtedness in any manner or order as Creditor may deem
appropriate in its sole and absolute discretion.
15. Collection of Indebtedness. Guarantor expressly waives any right to
the benefit of or to require or control application of any security or the
proceeds of any security now existing or hereafter obtained by Creditor as
security for the Indebtedness, or any part thereof, and agrees that Creditor
shall have no duty to apply to the Indebtedness any monies, payments or other
property at any time received by or paid to or in the possession of Creditor,
except as Creditor shall determine in its sole discretion. Guarantor
specifically agrees that Guarantor shall not have any recourse or action against
Creditor by reason of any action Creditor may take or omit to take in connection
with the Indebtedness or Obligations, the collection of any sums or amounts
herein mentioned, or in connection with any security for or any other guaranty
of the Indebtedness and/or Obligations.
16. Subordination. Guarantor subordinates all indebtedness owing to
Guarantor from Debtor to the Indebtedness. Guarantor further subordinates any
liens or security interest it may have in the collateral or security of Debtor
(or any other party) to the liens and security interests in favor of Creditor
securing the Indebtedness and the Obligations. Guarantor agrees not to accept
any payments or satisfaction of any kind of any indebtedness of Debtor to
Guarantor. If Guarantor should receive any such payment or satisfaction for
indebtedness of Debtor to Guarantor in violation of the above terms, Guarantor
agrees to deliver the payment or satisfaction to Creditor, and until delivered,
Guarantor agrees to hold the same in trust for Creditor.
17. Notice of Litigation, Claims, and Financial Change. Guarantor shall
promptly inform Creditor of any litigation against Guarantor or affecting any
security for the Indebtedness or Obligations which, if determined adversely,
might have a material adverse effect upon the financial condition of Guarantor
or upon such security or might cause a default under any of the documents
evidencing, securing, or governing the Indebtedness or Obligations, any claim or
controversy which might become the subject of litigation, and any material
adverse change in the financial condition of Guarantor.
18. Usury Disclaimer. No provision herein or in any promissory note,
security instrument, or any other Transaction Document executed by Debtor or
Guarantor evidencing the Indebtedness shall be construed to be or to create a
contract by Guarantor to pay, as consideration for the use, forbearance, or
detention of money, interest in excess of the rate or amount allowed by law. If
any excess of interest in such respect is provided for herein or in any such
promissory note, security instrument, or any other Transaction Document, the
provisions of this Section shall govern, and neither Debtor nor Guarantor shall
be obligated to pay the amount of such interest to the extent that it is in
excess of the amount permitted by applicable law. The intention of the parties
is to conform strictly to the usury laws now in force, and all Promissory Notes
and Transaction Documents executed by Debtor or Guarantor evidencing the
Indebtedness or Obligations shall be held subject to reduction to the amount
allowed under said usury laws as now or hereafter construed by the courts having
jurisdiction.
19. Transferability. This Guaranty is intended for and shall inure to
the benefit of Creditor and each and every other person who shall from time to
time be or become the owner or holder of any of the Indebtedness, and each and
every reference herein to Creditor shall also include and refer to each and
every successor or assignee of Creditor at any time holding or owning any part
of or interest in any part of the Indebtedness. This Guaranty shall be
transferable and negotiable, with the same force and effect and to the same
extent that the Indebtedness is transferable, it being understood and stipulated
that upon the assignment or transfer by Creditor of any of the Indebtedness
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GUARANTY AGREEMENT Page 6
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the legal holder or owner of the Indebtedness (or part thereof or interest
therein transferred or assigned by Creditor) shall also, unless provided
otherwise by Creditor in its transfer or assignment, have and may exercise all
of the rights granted to Creditor under this Guaranty to the extent of the part
of or interest in the Indebtedness assigned or transferred to said person.
Guarantor expressly waives notice of transfer or assignment of the Indebtedness,
or any part thereof, or of the rights of Creditor hereunder. Notwithstanding
anything in this Section to the contrary, all Indebtedness and Obligations to
Creditor shall be paid and performed in full first, before any assignee or
transferee shall receive any benefits of this Guaranty.
20. Information Concerning Guarantor. Guarantor acknowledges and agrees
that Creditor may transfer the Indebtedness or partial interests therein to one
or more transferees or participants. Guarantor authorizes Creditor to
disseminate any information Creditor has pertaining to the Indebtedness,
including, without limitation, credit information on Guarantor, to any such
transferee or participant or prospective transferee or participant.
21. Binding on Others. This Guaranty shall be binding upon
Guarantor and Guarantor's heirs, legal representative, personal representatives,
executors, administrators, successors and assigns.
22. Modification or Consent. No modification, consent or waiver of any
provision of this Guaranty shall be effective unless the modification, consent
or waiver is in writing and signed by an officer of Creditor, and then shall be
effective only in the specific instance and for the purpose for which given. No
notice to or demand on Guarantor in any case shall, of itself, entitle Guarantor
to any other or further notice or demand in similar or other circumstances. No
delay or omission by Creditor in exercising any power or right under this
Guaranty shall impair any such right or power or be construed as a waiver
thereof or any acquiescence therein, nor shall any single or partial exercise of
any such power preclude other or further exercise thereof, or the exercise of
any other right or power under this Guaranty. All rights and remedies of
Creditor under this Guaranty are cumulative of each other and of every other
right or remedy which Creditor may otherwise have at law or in equity or under
any other contract or document, and the exercise of one or more rights or
remedies shall not prejudice or impair the concurrent or subsequent exercise of
other rights or remedies.
23. Waiver of Certain Statutory Provisions. Guarantor hereby waives all
rights to which Guarantor may be or might otherwise become entitled to with
respect to the provisions of Sections 34.02 and 34.03 of the Texas Business and
Commerce Code, as amended, and agrees that the rights of Guarantor pursuant to
the provisions of Section 34.04 of the Texas Business and Commerce Code, as
amended, shall be subject to, secondary, subordinate and inferior in all
respects to the rights of Creditor pursuant to this Guaranty.
24. Notices. Any notice or demand to Guarantor may be given and shall
conclusively be deemed and considered to have been given and received upon the
deposit thereof, in writing, in the United States mail, duly stamped and
addressed to Guarantor at Guarantor's address stated below, but actual notice,
however given or received, shall always be effective. The last preceding
sentence shall not be construed in anywise to affect or impair any waiver of
notice or demand herein provided or to require giving of notice or demand to or
upon Guarantor in any situation or for any reason. Creditor's and Guarantor's
respective addresses are:
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GUARANTY AGREEMENT Page 7
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Creditor: American Physicians Service Group, Inc.
Attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇-▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇
Guarantor: KR Industrial Services of Alabama, Inc.
Attn:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
25. Governing Law and Place of Performance. GUARANTOR AGREES THAT
THIS GUARANTY IS GOVERNED BY THE LAWS OF THE UNITED STATES AND THE STATE OF
TEXAS. This Guaranty is performable in ▇▇▇▇▇▇ County, Texas, and Guarantor
hereby waives the right to be sued elsewhere.
26. Headings. Section headings of this Guaranty are inserted for
convenience of reference only, and shall not alter, define, or be used in
construing the text of such sections.
27. Pronouns. As used herein and when required by the context, each
number (singular and plural) shall include all numbers, and each gender shall
include all genders, and unless the context otherwise requires the word "person"
or "party" shall include "person, corporation, firm, partnership or
association".
28. Notice of Invalidity of Oral Agreements. THIS WRITTEN AGREEMENT
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
EXECUTED this 30th day of September, 1996.
GUARANTOR:
KR Industrial Services of Alabama, Inc.
(an Alabama corporation)
By:
Name:
Title:
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GUARANTY AGREEMENT Page 8
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT ("Guaranty") is made as of the 30th day of
September, 1996, by Exsorbet Technial Services, Inc., an Arkansas corporation
("Guarantor"), for the benefit of American Physicians Service Group, Inc., a
Texas corporation ("Creditor").
FOR VALUE RECEIVED, the receipt and sufficiency of which Guarantor
acknowledges, Guarantor hereby jointly, severally, absolutely, irrevocably, and
unconditionally guarantees to Creditor (a) the prompt payment and performance of
(i) any and all sums becoming due and payable pursuant to the Stock Put
Agreement dated September 30, 1996, executed by Exsorbet Industries, Inc., an
Idaho corporation ("Debtor") and Creditor, including without limitation any sums
which may hereafter become due and owing on the Promissory Note (the "Note"), in
the original principal amount of $3,300,000.00, which may be executed by Debtor
pursuant to the Stock Put Agreement, and payable to the order of Creditor,
including without limitation any and all interest thereon (other than such
interest as may be in excess of the maximum lawful amount), late charges (if
any), and costs of collection (including reasonable attorney's fees); (ii) all
other sums and indebtedness described in or secured by the Transaction Documents
(as defined below); (iii) any and all other sums becoming due and payable by
Debtor to Creditor as a result of advances made by Creditor pursuant to the
terms of the Transaction Documents, including without limitation the repayment
of any future advances made by Creditor to Debtor and the repayment of any sums
advanced for the protection of Creditor's security pursuant to the Transaction
Documents; (iv) any and all renewals, extensions, replacements, rearrangements,
substitutions, or modifications of all or any part of the Indebtedness
(collectively, the "Indebtedness"), and (b) the performance of any and all
obligations, warranties, representations, covenants and agreements made by
Debtor in connection with the Transaction Documents, as the same may be amended,
modified, or restated from time to time (the "Obligations").
2. Transaction Documents. The term "Transaction Documents" shall mean:
the Stock Put Agreement dated September 30, 1996, executed by and between Debtor
and Creditor; the Note (if and when executed pursuant to the terms of the Stock
Put Agreement); the Warrant executed by Debtor in favor of Creditor; the
Shareholder Rights Agreement executed by Debtor and Creditor; the Assignment and
Security Agreement dated September 30, 1996, executed by and between Debtor and
Creditor, and all other security agreements, assignments, and other documents
executed by Debtor for the benefit of Creditor to secure the payment and
performance of the Indebtedness and Obligations and creating a lien and security
interest against the real or personal property described therein (the
"Collateral"); any other Guaranty Agreements or surety agreements executed in
favor of Creditor and guaranteeing the Note; and any other agreement, document,
or instrument executed by Debtor or any other guarantor in connection with the
transaction evidenced by the Stock Put Agreement.
3. Nature of Guaranty. Guarantor agrees that this Guaranty is an
absolute, complete, continuing, unconditional and irrevocable guaranty of
payment and performance of the Indebtedness and the Obligations.
4. Renewals and Extensions. This Guaranty applies to, and the
Indebtedness shall additionally mean and refer to, any and all renewals,
extensions, modifications, alterations, refinancings and rearrangements of all
or any part of the Indebtedness.
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GUARANTY AGREEMENT Page 1
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5. Representations and Warranties. Guarantor hereby represents
and warrants the following to Creditor:
(a) Guarantor may reasonably expect to benefit, directly or
indirectly, from the making of this Guaranty and from and from each and every
renewal, extension, modification, alteration, refinancing, and rearrangement of
all or any part of the Indebtedness, the release of collateral or other
relinquishment of legal rights made or granted or to be made or granted by
Creditor to Debtor and the amendment or modification of the terms and conditions
of the Obligations, and the Board of Directors of Guarantor has determined that
Guarantor may reasonably be expected to benefit, directly or indirectly, from
the making of this Guaranty and has adopted resolutions stating the same; and
(b) Guarantor is familiar with, and has independently reviewed
the books and records regarding, the financial condition of Debtor and is
familiar with the value of any and all collateral intended to be security for
the payment of all or any part of the Indebtedness or for the performance of all
or any of the Obligations; provided, however, Guarantor is not relying on such
financial condition or collateral as an inducement to enter into this Guaranty;
and
(c) Guarantor has adequate means to obtain from Debtor on a
continuing basis information concerning the financial condition of Debtor and
Guarantor is not relying on Creditor to provide such information to Guarantor
either now or in the future; and
(d) Guarantor has the power and authority to execute, deliver,
and perform this Guaranty and any other agreements executed by Guarantor
contemporaneously herewith, and the execution, delivery, and performance of this
Guaranty and any other agreements executed by Guarantor contemporaneously
herewith do not and will not violate (i) any agreement or instrument to which
Guarantor is a party, (ii) any law, rule, regulation or order of any
governmental authority to which Guarantor is subject, or (iii) its articles or
certificate of incorporation or bylaw; and
(e) neither Creditor nor any other party has made any
representation, warranty or statement to Guarantor in order to induce Guarantor
to execute this Guaranty; and
(f) the financial statements and other financial information
regarding Guarantor heretofore and hereafter delivered to Creditor are and shall
be true and correct in all material respects and fairly present the financial
position of Guarantor as of the dates thereof, and no material adverse change
has occurred in the financial condition of Guarantor reflected in the financial
statements and other financial information regarding Guarantor heretofore
delivered to Creditor since the date of the last statement thereof; and
(g) as of the date hereof, and after giving effect to this
Guaranty and the obligations evidenced hereby, (i) Guarantor is and will be
solvent, (ii) the fair saleable value of Guarantor's assets exceeds and will
continue to exceed its liabilities (both fixed and contingent), (iii) Guarantor
is and will continue to be able to pay its debts as they mature, and (iv) if
Guarantor is not an individual, Guarantor has and will continue to have
sufficient capital to carry on its business and all businesses in which it is
about to engage.
6. Inducement to Creditor. Guarantor acknowledges that this
Guaranty is given to induce Creditor to extend credit to Debtor which would not
be extended except in reliance upon this Guaranty.
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7. Terms of Guaranty and Indebtedness and Obligations. This Guaranty
contains the entire agreement between Guarantor and Creditor with respect to
Guarantor's guarantee of the Indebtedness and Obligations; provided, however,
this Guaranty is in addition to and does not replace, cancel, modify, impair, or
affect any other guaranty executed by Guarantor and now or hereafter held by
Creditor that relates to Debtor or any other person or entity. No
representations or agreements have been made by Creditor to Guarantor except as
contained in this Guaranty. Guarantor has read and understands the implications
of this Guaranty. Guarantor agrees to the terms, provisions and conditions of
the Note, the Transaction Documents which may have been or may hereafter be
executed by Debtor or other persons evidencing, securing, or in connection with
the Indebtedness or Obligations or any part thereof, and agrees that Guarantor's
liability shall in no manner be affected, impaired or released by reason of any
term, provision, or condition of the Note, the Transaction Documents or by the
failure, refusal, or omission of Creditor to enforce or observe any of same or
by any action taken or omitted to be taken by Creditor pursuant thereto or in
connection therewith.
8. Payment and Performance by Guarantor. In each event that all or any
portion of the Indebtedness shall become due and remain unpaid (however the
maturity may have occurred), Guarantor will, upon demand, pay the amount due to
Creditor (other than any interest as may be in excess of the maximum lawful
amount), without notice having been given to Guarantor previous to such demand
of the acceptance by Creditor of this Guaranty or of the creating or incurring
of such indebtedness. Guarantor specifically agrees that it shall not be
necessary or required in order to enforce any obligations under this Guaranty
that Creditor has made demand for payment upon Debtor or any other person liable
on the Indebtedness for payment thereof or for performance of the Obligations or
has presented same for payment by Debtor or any other person liable thereon or
has made protest thereof or has given notice to Debtor or any other party liable
thereon of the maturity or nonpayment of the Indebtedness. All amounts becoming
payable by Guarantor to Creditor under this Guaranty shall be payable at
Creditor's address stated below, or at such other address as directed by
Creditor in written notice to Guarantor. All payments made upon the Indebtedness
at any time shall be deemed to have been paid by Debtor unless express notice in
writing is given to Creditor at the time of payment by Guarantor that Creditor
has been paid by Guarantor. Upon demand by Creditor, Guarantor shall perform or
cause to be performed any or all of the Obligations.
9. Suit on Guaranty. Suit may be brought by Creditor against Guarantor
alone, or jointly and severally against Guarantor and any one or more other
guarantors of the Indebtedness and/or Obligations, without impairing the rights
of Creditor against Debtor or other guarantors of the Indebtedness and/or
Obligations.
10. Costs of Collection. Guarantor agrees to pay all costs of
collection, including reasonable attorney's fees and expenses, if this Guaranty
is placed in the hands of an attorney for collection or is collected through any
court.
11. Waiver by Guarantor. Guarantor specifically waives any notice (i)
of acceptance of this Guaranty by Creditor, (ii) of the creation, advancement,
increase, existence, renewal, extension, modification, refinancing, or
rearrangement of the Indebtedness, or any indulgence with respect to the
Indebtedness, or any part thereof, (iii) of nonpayment thereof or default
thereon or in the performance of the Obligations, and (iv) of any amendment,
modification, or restatement of all or any of the Obligations. Guarantor waives
grace, demand, protest, presentment, and notice of intent to accelerate the
maturity of the Indebtedness, notice of acceleration of the maturity of the
Indebtedness, demand, protest, or presentment with respect to the Indebtedness,
and Guarantor waives notice of the amount of the Indebtedness outstanding at any
time. Guarantor agrees that the
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maturity of the Indebtedness, or any part thereof, may be accelerated, renewed,
extended, modified, refinanced, or rearranged or any other indulgence may be
granted with respect thereto by Creditor at its will or as may be agreed by
Debtor without notice to or further consent by Guarantor at any time. Guarantor
agrees that Guarantor shall not be considered a "Debtor" as defined in Section
9.105 of the Texas Business and Commerce Code.
12. Guarantor's Direct Liability. Creditor shall not be required,
before or as a condition of enforcing the liability of Guarantor under this
Guaranty, or requiring payment of the Indebtedness by Guarantor hereunder or
performance of the Obligations, or at any time thereafter, to do any of the
following: (a) proceed to obtain or assert a claim for personal judgment against
Debtor for the Indebtedness or make any effort at collection of the Indebtedness
from Debtor; (b) foreclose against or seek to realize upon the Collateral or any
security now or hereafter existing for the Indebtedness or Obligations; (c) file
suit or proceed to obtain or assert a claim for personal judgment against any
other party (including any maker, guarantor, endorser or surety) liable for the
Indebtedness or make any effort at collection of the Indebtedness from any such
other party; (d) exercise or assert any other right or remedy to which Creditor
is or may be entitled in connection with the Indebtedness or Obligations or any
security or other guaranty therefor; (e) assert or file any claim against the
assets or estate of Debtor or other person liable for the Indebtedness or
Obligations, or any part thereof; (f) take any action against Debtor or any
other person, to exhaust its remedies against endorsers, the Collateral or other
collateral or security, or to resort to any balance of any deposit account or
credit on the books of Creditor in favor of Debtor or any other person; or (g)
pursue any other remedies Creditor may have in connection with the Indebtedness
or Obligations.
13. Obligations Not Impaired. Guarantor's obligations under this
Guaranty shall not be released, diminished, impaired, reduced, or adversely
affected, and Guarantor waives any common law, equitable, statutory or other
rights that Guarantor might otherwise have, as a result of any of the following:
(a) any full or partial release of the liability of Debtor,
any other guarantor of the Indebtedness and/or Obligations, or any other person
primarily or secondarily liable on the Indebtedness and/or Obligations, or any
part thereof (including any maker, endorser, guarantor or surety), whether such
liability is direct or indirect, joint, several, or joint and several, it being
recognized, acknowledged and agreed that Guarantor may be required to pay the
Indebtedness and perform the Obligations in full without assistance of any other
party, and Guarantor has not been induced to enter into this Guaranty on the
basis of an understanding or agreement that other parties will at all times be
liable to pay the Indebtedness or perform the Obligations, or that Creditor will
look to other parties to pay the Indebtedness or perform the Obligations;
provided, however, nothing in this Guaranty shall waive or release, either
expressly or impliedly, any rights of subrogation, reimbursement or contribution
that Guarantor may have, after payment in full of the Indebtedness and
performance of the Obligations, against others liable under the Indebtedness or
for performance of the Obligations, but Guarantor's rights of subrogation,
reimbursement and contribution are secondary, subordinate and inferior to the
rights and claims of Creditor;
(b) the voluntary or involuntary liquidation, sale or other
disposition of all or substantially all of the assets of Debtor, or any
receivership, insolvency, bankruptcy, reorganization or other similar
proceedings affecting Debtor or any of its assets;
(c) any impairment, modification, release or limitation of
liability of Debtor, or stay of foreclosure or other lien enforcement
proceedings against Debtor, or Debtor's property, or Debtor's estate in
bankruptcy, or any modification, discharge or extension of the Indebtedness
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resulting from the operation of any present or future provision of the Federal
Bankruptcy Code or other bankruptcy laws, or from the decision of any court, it
being recognized, acknowledged and agreed that Guarantor shall remain liable on
the Indebtedness and the Obligations, notwithstanding any act, omission or thing
which might, but for the provisions hereof, otherwise operate as a legal or
equitable discharge of Guarantor;
(d) any release of, subordination of, or substitution of
any security or other guaranty now or hereafter held by Creditor for payment of
the Indebtedness and performance of the Obligations, or of any part thereof;
(e) Creditor's failure to use diligence or care in
preserving the liability of any person on the Indebtedness or the Obligations,
or in bringing suit to enforce collection of the Indebtedness or performance of
the Obligations;
(f) the addition of another guarantor or guarantors of
the Indebtedness or Obligations;
(g) the substitution or withdrawal of collateral or
release of security;
(h) any renewal, extension, modification, alteration,
refinancing or rearrangement of or any other indulgence with respect to the
Indebtedness or Obligations, or any part thereof;
(i) the exercise, failure to exercise, delay, omission or lack
of diligence or care by Creditor in exercising any right or power conferred upon
Creditor in this Guaranty, the Note, or any Transaction Document evidencing,
securing or relating to the Note or by law or in equity;
(j) Debtor's not being liable for the Indebtedness or
performance of the Obligations because the act of creating the Indebtedness or
Obligations is ultra ▇▇▇▇▇, or the officers or persons creating the Indebtedness
or Obligations acted in excess of their authority, or for any reason the
Indebtedness or Obligations cannot be enforced against Debtor;
(k) any payment by Debtor to Creditor if such payment is held
to constitute a preference under the Federal Bankruptcy Code or other bankruptcy
laws, or if for any other reason Creditor is required to refund such payment to
Debtor or pay the amount thereof to any other party;
(l) Guarantor's being or becoming liable for any
indebtedness owing by Debtor to Creditor, by endorsement or otherwise, other
than under this Guaranty; or
(m) the invalidity, illegality or unenforceability of all or
any part of the Indebtedness, for any reason whatsoever, including without
limitation the fact that the Note or other Transaction Documents pertaining to
the Indebtedness or Obligations have been forged or otherwise are irregular or
not genuine or authentic.
14. Application of Payments. If Creditor should collect or receive any
payments from any person other than Guarantor, or funds which are not
specifically required by law or agreement to be applied to the Indebtedness,
then Creditor may, in Creditor's sole discretion, apply such payments to any
indebtedness of Debtor other than the Indebtedness. Guarantor agrees that
Creditor may apply payments or other funds received by Creditor from Debtor,
from any other party obligated on the Indebtedness, from the liquidation of any
collateral now or hereafter securing the Indebtedness, or from any other source,
including without limitation, insurance proceeds and
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GUARANTY AGREEMENT Page 5
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condemnation, to the Indebtedness in any manner or order as Creditor may deem
appropriate in its sole and absolute discretion.
15. Collection of Indebtedness. Guarantor expressly waives any right to
the benefit of or to require or control application of any security or the
proceeds of any security now existing or hereafter obtained by Creditor as
security for the Indebtedness, or any part thereof, and agrees that Creditor
shall have no duty to apply to the Indebtedness any monies, payments or other
property at any time received by or paid to or in the possession of Creditor,
except as Creditor shall determine in its sole discretion. Guarantor
specifically agrees that Guarantor shall not have any recourse or action against
Creditor by reason of any action Creditor may take or omit to take in connection
with the Indebtedness or Obligations, the collection of any sums or amounts
herein mentioned, or in connection with any security for or any other guaranty
of the Indebtedness and/or Obligations.
16. Subordination. Guarantor subordinates all indebtedness owing to
Guarantor from Debtor to the Indebtedness. Guarantor further subordinates any
liens or security interest it may have in the collateral or security of Debtor
(or any other party) to the liens and security interests in favor of Creditor
securing the Indebtedness and the Obligations. Guarantor agrees not to accept
any payments or satisfaction of any kind of any indebtedness of Debtor to
Guarantor. If Guarantor should receive any such payment or satisfaction for
indebtedness of Debtor to Guarantor in violation of the above terms, Guarantor
agrees to deliver the payment or satisfaction to Creditor, and until delivered,
Guarantor agrees to hold the same in trust for Creditor.
17. Notice of Litigation, Claims, and Financial Change. Guarantor shall
promptly inform Creditor of any litigation against Guarantor or affecting any
security for the Indebtedness or Obligations which, if determined adversely,
might have a material adverse effect upon the financial condition of Guarantor
or upon such security or might cause a default under any of the documents
evidencing, securing, or governing the Indebtedness or Obligations, any claim or
controversy which might become the subject of litigation, and any material
adverse change in the financial condition of Guarantor.
18. Usury Disclaimer. No provision herein or in any promissory note,
security instrument, or any other Transaction Document executed by Debtor or
Guarantor evidencing the Indebtedness shall be construed to be or to create a
contract by Guarantor to pay, as consideration for the use, forbearance, or
detention of money, interest in excess of the rate or amount allowed by law. If
any excess of interest in such respect is provided for herein or in any such
promissory note, security instrument, or any other Transaction Document, the
provisions of this Section shall govern, and neither Debtor nor Guarantor shall
be obligated to pay the amount of such interest to the extent that it is in
excess of the amount permitted by applicable law. The intention of the parties
is to conform strictly to the usury laws now in force, and all Promissory Notes
and Transaction Documents executed by Debtor or Guarantor evidencing the
Indebtedness or Obligations shall be held subject to reduction to the amount
allowed under said usury laws as now or hereafter construed by the courts having
jurisdiction.
19. Transferability. This Guaranty is intended for and shall inure to
the benefit of Creditor and each and every other person who shall from time to
time be or become the owner or holder of any of the Indebtedness, and each and
every reference herein to Creditor shall also include and refer to each and
every successor or assignee of Creditor at any time holding or owning any part
of or interest in any part of the Indebtedness. This Guaranty shall be
transferable and negotiable, with the same force and effect and to the same
extent that the Indebtedness is transferable, it being understood and stipulated
that upon the assignment or transfer by Creditor of any of the Indebtedness
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GUARANTY AGREEMENT Page 6
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the legal holder or owner of the Indebtedness (or part thereof or interest
therein transferred or assigned by Creditor) shall also, unless provided
otherwise by Creditor in its transfer or assignment, have and may exercise all
of the rights granted to Creditor under this Guaranty to the extent of the part
of or interest in the Indebtedness assigned or transferred to said person.
Guarantor expressly waives notice of transfer or assignment of the Indebtedness,
or any part thereof, or of the rights of Creditor hereunder. Notwithstanding
anything in this Section to the contrary, all Indebtedness and Obligations to
Creditor shall be paid and performed in full first, before any assignee or
transferee shall receive any benefits of this Guaranty.
20. Information Concerning Guarantor. Guarantor acknowledges and agrees
that Creditor may transfer the Indebtedness or partial interests therein to one
or more transferees or participants. Guarantor authorizes Creditor to
disseminate any information Creditor has pertaining to the Indebtedness,
including, without limitation, credit information on Guarantor, to any such
transferee or participant or prospective transferee or participant.
21. Binding on Others. This Guaranty shall be binding upon
Guarantor and Guarantor's heirs, legal representative, personal representatives,
executors, administrators, successors and assigns.
22. Modification or Consent. No modification, consent or waiver of any
provision of this Guaranty shall be effective unless the modification, consent
or waiver is in writing and signed by an officer of Creditor, and then shall be
effective only in the specific instance and for the purpose for which given. No
notice to or demand on Guarantor in any case shall, of itself, entitle Guarantor
to any other or further notice or demand in similar or other circumstances. No
delay or omission by Creditor in exercising any power or right under this
Guaranty shall impair any such right or power or be construed as a waiver
thereof or any acquiescence therein, nor shall any single or partial exercise of
any such power preclude other or further exercise thereof, or the exercise of
any other right or power under this Guaranty. All rights and remedies of
Creditor under this Guaranty are cumulative of each other and of every other
right or remedy which Creditor may otherwise have at law or in equity or under
any other contract or document, and the exercise of one or more rights or
remedies shall not prejudice or impair the concurrent or subsequent exercise of
other rights or remedies.
23. Waiver of Certain Statutory Provisions. Guarantor hereby waives all
rights to which Guarantor may be or might otherwise become entitled to with
respect to the provisions of Sections 34.02 and 34.03 of the Texas Business and
Commerce Code, as amended, and agrees that the rights of Guarantor pursuant to
the provisions of Section 34.04 of the Texas Business and Commerce Code, as
amended, shall be subject to, secondary, subordinate and inferior in all
respects to the rights of Creditor pursuant to this Guaranty.
24. Notices. Any notice or demand to Guarantor may be given and shall
conclusively be deemed and considered to have been given and received upon the
deposit thereof, in writing, in the United States mail, duly stamped and
addressed to Guarantor at Guarantor's address stated below, but actual notice,
however given or received, shall always be effective. The last preceding
sentence shall not be construed in anywise to affect or impair any waiver of
notice or demand herein provided or to require giving of notice or demand to or
upon Guarantor in any situation or for any reason. Creditor's and Guarantor's
respective addresses are:
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Creditor: American Physicians Service Group, Inc.
Attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇-▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇
Guarantor: Exsorbet Technical Services, Inc.
Attn:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
25. Governing Law and Place of Performance. GUARANTOR AGREES THAT
THIS GUARANTY IS GOVERNED BY THE LAWS OF THE UNITED STATES AND THE STATE OF
TEXAS. This Guaranty is performable in ▇▇▇▇▇▇ County, Texas, and Guarantor
hereby waives the right to be sued elsewhere.
26. Headings. Section headings of this Guaranty are inserted for
convenience of reference only, and shall not alter, define, or be used in
construing the text of such sections.
27. Pronouns. As used herein and when required by the context, each
number (singular and plural) shall include all numbers, and each gender shall
include all genders, and unless the context otherwise requires the word "person"
or "party" shall include "person, corporation, firm, partnership or
association".
28. Notice of Invalidity of Oral Agreements. THIS WRITTEN AGREEMENT
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
EXECUTED this 30th day of September, 1996.
GUARANTOR:
Exsorbet Technical Services, Inc.
(an Arkansas corporation)
By:
Name:
Title:
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GUARANTY AGREEMENT Page 8
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT ("Guaranty") is made as of the 30th day of
September, 1996, by Eco Acquisition, Inc., Inc., an Arkansas corporation, also
known as Eco-Systems, Inc.("Guarantor"), for the benefit of American Physicians
Service Group, Inc., a Texas corporation ("Creditor").
FOR VALUE RECEIVED, the receipt and sufficiency of which Guarantor
acknowledges, Guarantor hereby jointly, severally, absolutely, irrevocably, and
unconditionally guarantees to Creditor (a) the prompt payment and performance of
(i) any and all sums becoming due and payable pursuant to the Stock Put
Agreement dated September 30, 1996, executed by Exsorbet Industries, Inc., an
Idaho corporation ("Debtor") and Creditor, including without limitation any sums
which may hereafter become due and owing on the Promissory Note (the "Note"), in
the original principal amount of $3,300,000.00, which may be executed by Debtor
pursuant to the Stock Put Agreement, and payable to the order of Creditor,
including without limitation any and all interest thereon (other than such
interest as may be in excess of the maximum lawful amount), late charges (if
any), and costs of collection (including reasonable attorney's fees); (ii) all
other sums and indebtedness described in or secured by the Transaction Documents
(as defined below); (iii) any and all other sums becoming due and payable by
Debtor to Creditor as a result of advances made by Creditor pursuant to the
terms of the Transaction Documents, including without limitation the repayment
of any future advances made by Creditor to Debtor and the repayment of any sums
advanced for the protection of Creditor's security pursuant to the Transaction
Documents; (iv) any and all renewals, extensions, replacements, rearrangements,
substitutions, or modifications of all or any part of the Indebtedness
(collectively, the "Indebtedness"), and (b) the performance of any and all
obligations, warranties, representations, covenants and agreements made by
Debtor in connection with the Transaction Documents, as the same may be amended,
modified, or restated from time to time (the "Obligations").
2. Transaction Documents. The term "Transaction Documents" shall mean:
the Stock Put Agreement dated September 30, 1996, executed by and between Debtor
and Creditor; the Note (if and when executed pursuant to the terms of the Stock
Put Agreement); the Warrant executed by Debtor in favor of Creditor; the
Shareholder Rights Agreement executed by Debtor and Creditor; the Assignment and
Security Agreement dated September 30, 1996, executed by and between Debtor and
Creditor, and all other security agreements, assignments, and other documents
executed by Debtor for the benefit of Creditor to secure the payment and
performance of the Indebtedness and Obligations and creating a lien and security
interest against the real or personal property described therein (the
"Collateral"); any other Guaranty Agreements or surety agreements executed in
favor of Creditor and guaranteeing the Note; and any other agreement, document,
or instrument executed by Debtor or any other guarantor in connection with the
transaction evidenced by the Stock Put Agreement.
3. Nature of Guaranty. Guarantor agrees that this Guaranty is an
absolute, complete, continuing, unconditional and irrevocable guaranty of
payment and performance of the Indebtedness and the Obligations.
4. Renewals and Extensions. This Guaranty applies to, and the
Indebtedness shall additionally mean and refer to, any and all renewals,
extensions, modifications, alterations, refinancings and rearrangements of all
or any part of the Indebtedness.
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5. Representations and Warranties. Guarantor hereby represents
and warrants the following to Creditor:
(a) Guarantor may reasonably expect to benefit, directly or
indirectly, from the making of this Guaranty and from and from each and every
renewal, extension, modification, alteration, refinancing, and rearrangement of
all or any part of the Indebtedness, the release of collateral or other
relinquishment of legal rights made or granted or to be made or granted by
Creditor to Debtor and the amendment or modification of the terms and conditions
of the Obligations, and the Board of Directors of Guarantor has determined that
Guarantor may reasonably be expected to benefit, directly or indirectly, from
the making of this Guaranty and has adopted resolutions stating the same; and
(b) Guarantor is familiar with, and has independently reviewed
the books and records regarding, the financial condition of Debtor and is
familiar with the value of any and all collateral intended to be security for
the payment of all or any part of the Indebtedness or for the performance of all
or any of the Obligations; provided, however, Guarantor is not relying on such
financial condition or collateral as an inducement to enter into this Guaranty;
and
(c) Guarantor has adequate means to obtain from Debtor on a
continuing basis information concerning the financial condition of Debtor and
Guarantor is not relying on Creditor to provide such information to Guarantor
either now or in the future; and
(d) Guarantor has the power and authority to execute, deliver,
and perform this Guaranty and any other agreements executed by Guarantor
contemporaneously herewith, and the execution, delivery, and performance of this
Guaranty and any other agreements executed by Guarantor contemporaneously
herewith do not and will not violate (i) any agreement or instrument to which
Guarantor is a party, (ii) any law, rule, regulation or order of any
governmental authority to which Guarantor is subject, or (iii) its articles or
certificate of incorporation or bylaw; and
(e) neither Creditor nor any other party has made any
representation, warranty or statement to Guarantor in order to induce Guarantor
to execute this Guaranty; and
(f) the financial statements and other financial information
regarding Guarantor heretofore and hereafter delivered to Creditor are and shall
be true and correct in all material respects and fairly present the financial
position of Guarantor as of the dates thereof, and no material adverse change
has occurred in the financial condition of Guarantor reflected in the financial
statements and other financial information regarding Guarantor heretofore
delivered to Creditor since the date of the last statement thereof; and
(g) as of the date hereof, and after giving effect to this
Guaranty and the obligations evidenced hereby, (i) Guarantor is and will be
solvent, (ii) the fair saleable value of Guarantor's assets exceeds and will
continue to exceed its liabilities (both fixed and contingent), (iii) Guarantor
is and will continue to be able to pay its debts as they mature, and (iv) if
Guarantor is not an individual, Guarantor has and will continue to have
sufficient capital to carry on its business and all businesses in which it is
about to engage.
6. Inducement to Creditor. Guarantor acknowledges that this
Guaranty is given to induce Creditor to extend credit to Debtor which would not
be extended except in reliance upon this Guaranty.
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7. Terms of Guaranty and Indebtedness and Obligations. This Guaranty
contains the entire agreement between Guarantor and Creditor with respect to
Guarantor's guarantee of the Indebtedness and Obligations; provided, however,
this Guaranty is in addition to and does not replace, cancel, modify, impair, or
affect any other guaranty executed by Guarantor and now or hereafter held by
Creditor that relates to Debtor or any other person or entity. No
representations or agreements have been made by Creditor to Guarantor except as
contained in this Guaranty. Guarantor has read and understands the implications
of this Guaranty. Guarantor agrees to the terms, provisions and conditions of
the Note, the Transaction Documents which may have been or may hereafter be
executed by Debtor or other persons evidencing, securing, or in connection with
the Indebtedness or Obligations or any part thereof, and agrees that Guarantor's
liability shall in no manner be affected, impaired or released by reason of any
term, provision, or condition of the Note, the Transaction Documents or by the
failure, refusal, or omission of Creditor to enforce or observe any of same or
by any action taken or omitted to be taken by Creditor pursuant thereto or in
connection therewith.
8. Payment and Performance by Guarantor. In each event that all or any
portion of the Indebtedness shall become due and remain unpaid (however the
maturity may have occurred), Guarantor will, upon demand, pay the amount due to
Creditor (other than any interest as may be in excess of the maximum lawful
amount), without notice having been given to Guarantor previous to such demand
of the acceptance by Creditor of this Guaranty or of the creating or incurring
of such indebtedness. Guarantor specifically agrees that it shall not be
necessary or required in order to enforce any obligations under this Guaranty
that Creditor has made demand for payment upon Debtor or any other person liable
on the Indebtedness for payment thereof or for performance of the Obligations or
has presented same for payment by Debtor or any other person liable thereon or
has made protest thereof or has given notice to Debtor or any other party liable
thereon of the maturity or nonpayment of the Indebtedness. All amounts becoming
payable by Guarantor to Creditor under this Guaranty shall be payable at
Creditor's address stated below, or at such other address as directed by
Creditor in written notice to Guarantor. All payments made upon the Indebtedness
at any time shall be deemed to have been paid by Debtor unless express notice in
writing is given to Creditor at the time of payment by Guarantor that Creditor
has been paid by Guarantor. Upon demand by Creditor, Guarantor shall perform or
cause to be performed any or all of the Obligations.
9. Suit on Guaranty. Suit may be brought by Creditor against Guarantor
alone, or jointly and severally against Guarantor and any one or more other
guarantors of the Indebtedness and/or Obligations, without impairing the rights
of Creditor against Debtor or other guarantors of the Indebtedness and/or
Obligations.
10. Costs of Collection. Guarantor agrees to pay all costs of
collection, including reasonable attorney's fees and expenses, if this Guaranty
is placed in the hands of an attorney for collection or is collected through any
court.
11. Waiver by Guarantor. Guarantor specifically waives any notice (i)
of acceptance of this Guaranty by Creditor, (ii) of the creation, advancement,
increase, existence, renewal, extension, modification, refinancing, or
rearrangement of the Indebtedness, or any indulgence with respect to the
Indebtedness, or any part thereof, (iii) of nonpayment thereof or default
thereon or in the performance of the Obligations, and (iv) of any amendment,
modification, or restatement of all or any of the Obligations. Guarantor waives
grace, demand, protest, presentment, and notice of intent to accelerate the
maturity of the Indebtedness, notice of acceleration of the maturity of the
Indebtedness, demand, protest, or presentment with respect to the Indebtedness,
and Guarantor waives notice of the amount of the Indebtedness outstanding at any
time. Guarantor agrees that the
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maturity of the Indebtedness, or any part thereof, may be accelerated, renewed,
extended, modified, refinanced, or rearranged or any other indulgence may be
granted with respect thereto by Creditor at its will or as may be agreed by
Debtor without notice to or further consent by Guarantor at any time. Guarantor
agrees that Guarantor shall not be considered a "Debtor" as defined in Section
9.105 of the Texas Business and Commerce Code.
12. Guarantor's Direct Liability. Creditor shall not be required,
before or as a condition of enforcing the liability of Guarantor under this
Guaranty, or requiring payment of the Indebtedness by Guarantor hereunder or
performance of the Obligations, or at any time thereafter, to do any of the
following: (a) proceed to obtain or assert a claim for personal judgment against
Debtor for the Indebtedness or make any effort at collection of the Indebtedness
from Debtor; (b) foreclose against or seek to realize upon the Collateral or any
security now or hereafter existing for the Indebtedness or Obligations; (c) file
suit or proceed to obtain or assert a claim for personal judgment against any
other party (including any maker, guarantor, endorser or surety) liable for the
Indebtedness or make any effort at collection of the Indebtedness from any such
other party; (d) exercise or assert any other right or remedy to which Creditor
is or may be entitled in connection with the Indebtedness or Obligations or any
security or other guaranty therefor; (e) assert or file any claim against the
assets or estate of Debtor or other person liable for the Indebtedness or
Obligations, or any part thereof; (f) take any action against Debtor or any
other person, to exhaust its remedies against endorsers, the Collateral or other
collateral or security, or to resort to any balance of any deposit account or
credit on the books of Creditor in favor of Debtor or any other person; or (g)
pursue any other remedies Creditor may have in connection with the Indebtedness
or Obligations.
13. Obligations Not Impaired. Guarantor's obligations under this
Guaranty shall not be released, diminished, impaired, reduced, or adversely
affected, and Guarantor waives any common law, equitable, statutory or other
rights that Guarantor might otherwise have, as a result of any of the following:
(a) any full or partial release of the liability of Debtor,
any other guarantor of the Indebtedness and/or Obligations, or any other person
primarily or secondarily liable on the Indebtedness and/or Obligations, or any
part thereof (including any maker, endorser, guarantor or surety), whether such
liability is direct or indirect, joint, several, or joint and several, it being
recognized, acknowledged and agreed that Guarantor may be required to pay the
Indebtedness and perform the Obligations in full without assistance of any other
party, and Guarantor has not been induced to enter into this Guaranty on the
basis of an understanding or agreement that other parties will at all times be
liable to pay the Indebtedness or perform the Obligations, or that Creditor will
look to other parties to pay the Indebtedness or perform the Obligations;
provided, however, nothing in this Guaranty shall waive or release, either
expressly or impliedly, any rights of subrogation, reimbursement or contribution
that Guarantor may have, after payment in full of the Indebtedness and
performance of the Obligations, against others liable under the Indebtedness or
for performance of the Obligations, but Guarantor's rights of subrogation,
reimbursement and contribution are secondary, subordinate and inferior to the
rights and claims of Creditor;
(b) the voluntary or involuntary liquidation, sale or other
disposition of all or substantially all of the assets of Debtor, or any
receivership, insolvency, bankruptcy, reorganization or other similar
proceedings affecting Debtor or any of its assets;
(c) any impairment, modification, release or limitation of
liability of Debtor, or stay of foreclosure or other lien enforcement
proceedings against Debtor, or Debtor's property, or Debtor's estate in
bankruptcy, or any modification, discharge or extension of the Indebtedness
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resulting from the operation of any present or future provision of the Federal
Bankruptcy Code or other bankruptcy laws, or from the decision of any court, it
being recognized, acknowledged and agreed that Guarantor shall remain liable on
the Indebtedness and the Obligations, notwithstanding any act, omission or thing
which might, but for the provisions hereof, otherwise operate as a legal or
equitable discharge of Guarantor;
(d) any release of, subordination of, or substitution of
any security or other guaranty now or hereafter held by Creditor for payment of
the Indebtedness and performance of the Obligations, or of any part thereof;
(e) Creditor's failure to use diligence or care in
preserving the liability of any person on the Indebtedness or the Obligations,
or in bringing suit to enforce collection of the Indebtedness or performance of
the Obligations;
(f) the addition of another guarantor or guarantors of
the Indebtedness or Obligations;
(g) the substitution or withdrawal of collateral or
release of security;
(h) any renewal, extension, modification, alteration,
refinancing or rearrangement of or any other indulgence with respect to the
Indebtedness or Obligations, or any part thereof;
(i) the exercise, failure to exercise, delay, omission or lack
of diligence or care by Creditor in exercising any right or power conferred upon
Creditor in this Guaranty, the Note, or any Transaction Document evidencing,
securing or relating to the Note or by law or in equity;
(j) Debtor's not being liable for the Indebtedness or
performance of the Obligations because the act of creating the Indebtedness or
Obligations is ultra ▇▇▇▇▇, or the officers or persons creating the Indebtedness
or Obligations acted in excess of their authority, or for any reason the
Indebtedness or Obligations cannot be enforced against Debtor;
(k) any payment by Debtor to Creditor if such payment is held
to constitute a preference under the Federal Bankruptcy Code or other bankruptcy
laws, or if for any other reason Creditor is required to refund such payment to
Debtor or pay the amount thereof to any other party;
(l) Guarantor's being or becoming liable for any
indebtedness owing by Debtor to Creditor, by endorsement or otherwise, other
than under this Guaranty; or
(m) the invalidity, illegality or unenforceability of all or
any part of the Indebtedness, for any reason whatsoever, including without
limitation the fact that the Note or other Transaction Documents pertaining to
the Indebtedness or Obligations have been forged or otherwise are irregular or
not genuine or authentic.
14. Application of Payments. If Creditor should collect or receive any
payments from any person other than Guarantor, or funds which are not
specifically required by law or agreement to be applied to the Indebtedness,
then Creditor may, in Creditor's sole discretion, apply such payments to any
indebtedness of Debtor other than the Indebtedness. Guarantor agrees that
Creditor may apply payments or other funds received by Creditor from Debtor,
from any other party obligated on the Indebtedness, from the liquidation of any
collateral now or hereafter securing the Indebtedness, or from any other source,
including without limitation, insurance proceeds and
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condemnation, to the Indebtedness in any manner or order as Creditor may deem
appropriate in its sole and absolute discretion.
15. Collection of Indebtedness. Guarantor expressly waives any right to
the benefit of or to require or control application of any security or the
proceeds of any security now existing or hereafter obtained by Creditor as
security for the Indebtedness, or any part thereof, and agrees that Creditor
shall have no duty to apply to the Indebtedness any monies, payments or other
property at any time received by or paid to or in the possession of Creditor,
except as Creditor shall determine in its sole discretion. Guarantor
specifically agrees that Guarantor shall not have any recourse or action against
Creditor by reason of any action Creditor may take or omit to take in connection
with the Indebtedness or Obligations, the collection of any sums or amounts
herein mentioned, or in connection with any security for or any other guaranty
of the Indebtedness and/or Obligations.
16. Subordination. Guarantor subordinates all indebtedness owing to
Guarantor from Debtor to the Indebtedness. Guarantor further subordinates any
liens or security interest it may have in the collateral or security of Debtor
(or any other party) to the liens and security interests in favor of Creditor
securing the Indebtedness and the Obligations. Guarantor agrees not to accept
any payments or satisfaction of any kind of any indebtedness of Debtor to
Guarantor. If Guarantor should receive any such payment or satisfaction for
indebtedness of Debtor to Guarantor in violation of the above terms, Guarantor
agrees to deliver the payment or satisfaction to Creditor, and until delivered,
Guarantor agrees to hold the same in trust for Creditor.
17. Notice of Litigation, Claims, and Financial Change. Guarantor shall
promptly inform Creditor of any litigation against Guarantor or affecting any
security for the Indebtedness or Obligations which, if determined adversely,
might have a material adverse effect upon the financial condition of Guarantor
or upon such security or might cause a default under any of the documents
evidencing, securing, or governing the Indebtedness or Obligations, any claim or
controversy which might become the subject of litigation, and any material
adverse change in the financial condition of Guarantor.
18. Usury Disclaimer. No provision herein or in any promissory note,
security instrument, or any other Transaction Document executed by Debtor or
Guarantor evidencing the Indebtedness shall be construed to be or to create a
contract by Guarantor to pay, as consideration for the use, forbearance, or
detention of money, interest in excess of the rate or amount allowed by law. If
any excess of interest in such respect is provided for herein or in any such
promissory note, security instrument, or any other Transaction Document, the
provisions of this Section shall govern, and neither Debtor nor Guarantor shall
be obligated to pay the amount of such interest to the extent that it is in
excess of the amount permitted by applicable law. The intention of the parties
is to conform strictly to the usury laws now in force, and all Promissory Notes
and Transaction Documents executed by Debtor or Guarantor evidencing the
Indebtedness or Obligations shall be held subject to reduction to the amount
allowed under said usury laws as now or hereafter construed by the courts having
jurisdiction.
19. Transferability. This Guaranty is intended for and shall inure to
the benefit of Creditor and each and every other person who shall from time to
time be or become the owner or holder of any of the Indebtedness, and each and
every reference herein to Creditor shall also include and refer to each and
every successor or assignee of Creditor at any time holding or owning any part
of or interest in any part of the Indebtedness. This Guaranty shall be
transferable and negotiable, with the same force and effect and to the same
extent that the Indebtedness is transferable, it being understood and stipulated
that upon the assignment or transfer by Creditor of any of the Indebtedness
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GUARANTY AGREEMENT Page 6
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the legal holder or owner of the Indebtedness (or part thereof or interest
therein transferred or assigned by Creditor) shall also, unless provided
otherwise by Creditor in its transfer or assignment, have and may exercise all
of the rights granted to Creditor under this Guaranty to the extent of the part
of or interest in the Indebtedness assigned or transferred to said person.
Guarantor expressly waives notice of transfer or assignment of the Indebtedness,
or any part thereof, or of the rights of Creditor hereunder. Notwithstanding
anything in this Section to the contrary, all Indebtedness and Obligations to
Creditor shall be paid and performed in full first, before any assignee or
transferee shall receive any benefits of this Guaranty.
20. Information Concerning Guarantor. Guarantor acknowledges and agrees
that Creditor may transfer the Indebtedness or partial interests therein to one
or more transferees or participants. Guarantor authorizes Creditor to
disseminate any information Creditor has pertaining to the Indebtedness,
including, without limitation, credit information on Guarantor, to any such
transferee or participant or prospective transferee or participant.
21. Binding on Others. This Guaranty shall be binding upon
Guarantor and Guarantor's heirs, legal representative, personal representatives,
executors, administrators, successors and assigns.
22. Modification or Consent. No modification, consent or waiver of any
provision of this Guaranty shall be effective unless the modification, consent
or waiver is in writing and signed by an officer of Creditor, and then shall be
effective only in the specific instance and for the purpose for which given. No
notice to or demand on Guarantor in any case shall, of itself, entitle Guarantor
to any other or further notice or demand in similar or other circumstances. No
delay or omission by Creditor in exercising any power or right under this
Guaranty shall impair any such right or power or be construed as a waiver
thereof or any acquiescence therein, nor shall any single or partial exercise of
any such power preclude other or further exercise thereof, or the exercise of
any other right or power under this Guaranty. All rights and remedies of
Creditor under this Guaranty are cumulative of each other and of every other
right or remedy which Creditor may otherwise have at law or in equity or under
any other contract or document, and the exercise of one or more rights or
remedies shall not prejudice or impair the concurrent or subsequent exercise of
other rights or remedies.
23. Waiver of Certain Statutory Provisions. Guarantor hereby waives all
rights to which Guarantor may be or might otherwise become entitled to with
respect to the provisions of Sections 34.02 and 34.03 of the Texas Business and
Commerce Code, as amended, and agrees that the rights of Guarantor pursuant to
the provisions of Section 34.04 of the Texas Business and Commerce Code, as
amended, shall be subject to, secondary, subordinate and inferior in all
respects to the rights of Creditor pursuant to this Guaranty.
24. Notices. Any notice or demand to Guarantor may be given and shall
conclusively be deemed and considered to have been given and received upon the
deposit thereof, in writing, in the United States mail, duly stamped and
addressed to Guarantor at Guarantor's address stated below, but actual notice,
however given or received, shall always be effective. The last preceding
sentence shall not be construed in anywise to affect or impair any waiver of
notice or demand herein provided or to require giving of notice or demand to or
upon Guarantor in any situation or for any reason. Creditor's and Guarantor's
respective addresses are:
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Creditor: American Physicians Service Group, Inc.
Attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇-▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇
Guarantor: Eco Acquisition, Inc.
Attn:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
25. Governing Law and Place of Performance. GUARANTOR AGREES THAT
THIS GUARANTY IS GOVERNED BY THE LAWS OF THE UNITED STATES AND THE STATE OF
TEXAS. This Guaranty is performable in ▇▇▇▇▇▇ County, Texas, and Guarantor
hereby waives the right to be sued elsewhere.
26. Headings. Section headings of this Guaranty are inserted for
convenience of reference only, and shall not alter, define, or be used in
construing the text of such sections.
27. Pronouns. As used herein and when required by the context, each
number (singular and plural) shall include all numbers, and each gender shall
include all genders, and unless the context otherwise requires the word "person"
or "party" shall include "person, corporation, firm, partnership or
association".
28. Notice of Invalidity of Oral Agreements. THIS WRITTEN AGREEMENT
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
EXECUTED this 30th day of September, 1996.
GUARANTOR:
Eco Acquisition, Inc.
(an Arkansas corporation)
By:
Name:
Title:
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GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT ("Guaranty") is made as of the 30th day of
September, 1996, by 7-7 Merger, Inc., Inc., an Arkansas corporation,
("Guarantor"), for the benefit of American Physicians Service Group, Inc., a
Texas corporation ("Creditor").
FOR VALUE RECEIVED, the receipt and sufficiency of which Guarantor
acknowledges, Guarantor hereby jointly, severally, absolutely, irrevocably, and
unconditionally guarantees to Creditor (a) the prompt payment and performance of
(i) any and all sums becoming due and payable pursuant to the Stock Put
Agreement dated September 30, 1996, executed by Exsorbet Industries, Inc., an
Idaho corporation ("Debtor") and Creditor, including without limitation any sums
which may hereafter become due and owing on the Promissory Note (the "Note"), in
the original principal amount of $3,300,000.00, which may be executed by Debtor
pursuant to the Stock Put Agreement, and payable to the order of Creditor,
including without limitation any and all interest thereon (other than such
interest as may be in excess of the maximum lawful amount), late charges (if
any), and costs of collection (including reasonable attorney's fees); (ii) all
other sums and indebtedness described in or secured by the Transaction Documents
(as defined below); (iii) any and all other sums becoming due and payable by
Debtor to Creditor as a result of advances made by Creditor pursuant to the
terms of the Transaction Documents, including without limitation the repayment
of any future advances made by Creditor to Debtor and the repayment of any sums
advanced for the protection of Creditor's security pursuant to the Transaction
Documents; (iv) any and all renewals, extensions, replacements, rearrangements,
substitutions, or modifications of all or any part of the Indebtedness
(collectively, the "Indebtedness"), and (b) the performance of any and all
obligations, warranties, representations, covenants and agreements made by
Debtor in connection with the Transaction Documents, as the same may be amended,
modified, or restated from time to time (the "Obligations").
2. Transaction Documents. The term "Transaction Documents" shall mean:
the Stock Put Agreement dated September 30, 1996, executed by and between Debtor
and Creditor; the Note (if and when executed pursuant to the terms of the Stock
Put Agreement); the Warrant executed by Debtor in favor of Creditor; the
Shareholder Rights Agreement executed by Debtor and Creditor; the Assignment and
Security Agreement dated September 30, 1996, executed by and between Debtor and
Creditor, and all other security agreements, assignments, and other documents
executed by Debtor for the benefit of Creditor to secure the payment and
performance of the Indebtedness and Obligations and creating a lien and security
interest against the real or personal property described therein (the
"Collateral"); any other Guaranty Agreements or surety agreements executed in
favor of Creditor and guaranteeing the Note; and any other agreement, document,
or instrument executed by Debtor or any other guarantor in connection with the
transaction evidenced by the Stock Put Agreement.
3. Nature of Guaranty. Guarantor agrees that this Guaranty is an
absolute, complete, continuing, unconditional and irrevocable guaranty of
payment and performance of the Indebtedness and the Obligations.
4. Renewals and Extensions. This Guaranty applies to, and the
Indebtedness shall additionally mean and refer to, any and all renewals,
extensions, modifications, alterations, refinancings and rearrangements of all
or any part of the Indebtedness.
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5. Representations and Warranties. Guarantor hereby represents
and warrants the following to Creditor:
(a) Guarantor may reasonably expect to benefit, directly or
indirectly, from the making of this Guaranty and from and from each and every
renewal, extension, modification, alteration, refinancing, and rearrangement of
all or any part of the Indebtedness, the release of collateral or other
relinquishment of legal rights made or granted or to be made or granted by
Creditor to Debtor and the amendment or modification of the terms and conditions
of the Obligations, and the Board of Directors of Guarantor has determined that
Guarantor may reasonably be expected to benefit, directly or indirectly, from
the making of this Guaranty and has adopted resolutions stating the same; and
(b) Guarantor is familiar with, and has independently reviewed
the books and records regarding, the financial condition of Debtor and is
familiar with the value of any and all collateral intended to be security for
the payment of all or any part of the Indebtedness or for the performance of all
or any of the Obligations; provided, however, Guarantor is not relying on such
financial condition or collateral as an inducement to enter into this Guaranty;
and
(c) Guarantor has adequate means to obtain from Debtor on a
continuing basis information concerning the financial condition of Debtor and
Guarantor is not relying on Creditor to provide such information to Guarantor
either now or in the future; and
(d) Guarantor has the power and authority to execute, deliver,
and perform this Guaranty and any other agreements executed by Guarantor
contemporaneously herewith, and the execution, delivery, and performance of this
Guaranty and any other agreements executed by Guarantor contemporaneously
herewith do not and will not violate (i) any agreement or instrument to which
Guarantor is a party, (ii) any law, rule, regulation or order of any
governmental authority to which Guarantor is subject, or (iii) its articles or
certificate of incorporation or bylaw; and
(e) neither Creditor nor any other party has made any
representation, warranty or statement to Guarantor in order to induce Guarantor
to execute this Guaranty; and
(f) the financial statements and other financial information
regarding Guarantor heretofore and hereafter delivered to Creditor are and shall
be true and correct in all material respects and fairly present the financial
position of Guarantor as of the dates thereof, and no material adverse change
has occurred in the financial condition of Guarantor reflected in the financial
statements and other financial information regarding Guarantor heretofore
delivered to Creditor since the date of the last statement thereof; and
(g) as of the date hereof, and after giving effect to this
Guaranty and the obligations evidenced hereby, (i) Guarantor is and will be
solvent, (ii) the fair saleable value of Guarantor's assets exceeds and will
continue to exceed its liabilities (both fixed and contingent), (iii) Guarantor
is and will continue to be able to pay its debts as they mature, and (iv) if
Guarantor is not an individual, Guarantor has and will continue to have
sufficient capital to carry on its business and all businesses in which it is
about to engage.
6. Inducement to Creditor. Guarantor acknowledges that this
Guaranty is given to induce Creditor to extend credit to Debtor which would not
be extended except in reliance upon this Guaranty.
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7. Terms of Guaranty and Indebtedness and Obligations. This Guaranty
contains the entire agreement between Guarantor and Creditor with respect to
Guarantor's guarantee of the Indebtedness and Obligations; provided, however,
this Guaranty is in addition to and does not replace, cancel, modify, impair, or
affect any other guaranty executed by Guarantor and now or hereafter held by
Creditor that relates to Debtor or any other person or entity. No
representations or agreements have been made by Creditor to Guarantor except as
contained in this Guaranty. Guarantor has read and understands the implications
of this Guaranty. Guarantor agrees to the terms, provisions and conditions of
the Note, the Transaction Documents which may have been or may hereafter be
executed by Debtor or other persons evidencing, securing, or in connection with
the Indebtedness or Obligations or any part thereof, and agrees that Guarantor's
liability shall in no manner be affected, impaired or released by reason of any
term, provision, or condition of the Note, the Transaction Documents or by the
failure, refusal, or omission of Creditor to enforce or observe any of same or
by any action taken or omitted to be taken by Creditor pursuant thereto or in
connection therewith.
8. Payment and Performance by Guarantor. In each event that all or any
portion of the Indebtedness shall become due and remain unpaid (however the
maturity may have occurred), Guarantor will, upon demand, pay the amount due to
Creditor (other than any interest as may be in excess of the maximum lawful
amount), without notice having been given to Guarantor previous to such demand
of the acceptance by Creditor of this Guaranty or of the creating or incurring
of such indebtedness. Guarantor specifically agrees that it shall not be
necessary or required in order to enforce any obligations under this Guaranty
that Creditor has made demand for payment upon Debtor or any other person liable
on the Indebtedness for payment thereof or for performance of the Obligations or
has presented same for payment by Debtor or any other person liable thereon or
has made protest thereof or has given notice to Debtor or any other party liable
thereon of the maturity or nonpayment of the Indebtedness. All amounts becoming
payable by Guarantor to Creditor under this Guaranty shall be payable at
Creditor's address stated below, or at such other address as directed by
Creditor in written notice to Guarantor. All payments made upon the Indebtedness
at any time shall be deemed to have been paid by Debtor unless express notice in
writing is given to Creditor at the time of payment by Guarantor that Creditor
has been paid by Guarantor. Upon demand by Creditor, Guarantor shall perform or
cause to be performed any or all of the Obligations.
9. Suit on Guaranty. Suit may be brought by Creditor against Guarantor
alone, or jointly and severally against Guarantor and any one or more other
guarantors of the Indebtedness and/or Obligations, without impairing the rights
of Creditor against Debtor or other guarantors of the Indebtedness and/or
Obligations.
10. Costs of Collection. Guarantor agrees to pay all costs of
collection, including reasonable attorney's fees and expenses, if this Guaranty
is placed in the hands of an attorney for collection or is collected through any
court.
11. Waiver by Guarantor. Guarantor specifically waives any notice (i)
of acceptance of this Guaranty by Creditor, (ii) of the creation, advancement,
increase, existence, renewal, extension, modification, refinancing, or
rearrangement of the Indebtedness, or any indulgence with respect to the
Indebtedness, or any part thereof, (iii) of nonpayment thereof or default
thereon or in the performance of the Obligations, and (iv) of any amendment,
modification, or restatement of all or any of the Obligations. Guarantor waives
grace, demand, protest, presentment, and notice of intent to accelerate the
maturity of the Indebtedness, notice of acceleration of the maturity of the
Indebtedness, demand, protest, or presentment with respect to the Indebtedness,
and Guarantor waives notice of the amount of the Indebtedness outstanding at any
time. Guarantor agrees that the
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maturity of the Indebtedness, or any part thereof, may be accelerated, renewed,
extended, modified, refinanced, or rearranged or any other indulgence may be
granted with respect thereto by Creditor at its will or as may be agreed by
Debtor without notice to or further consent by Guarantor at any time. Guarantor
agrees that Guarantor shall not be considered a "Debtor" as defined in Section
9.105 of the Texas Business and Commerce Code.
12. Guarantor's Direct Liability. Creditor shall not be required,
before or as a condition of enforcing the liability of Guarantor under this
Guaranty, or requiring payment of the Indebtedness by Guarantor hereunder or
performance of the Obligations, or at any time thereafter, to do any of the
following: (a) proceed to obtain or assert a claim for personal judgment against
Debtor for the Indebtedness or make any effort at collection of the Indebtedness
from Debtor; (b) foreclose against or seek to realize upon the Collateral or any
security now or hereafter existing for the Indebtedness or Obligations; (c) file
suit or proceed to obtain or assert a claim for personal judgment against any
other party (including any maker, guarantor, endorser or surety) liable for the
Indebtedness or make any effort at collection of the Indebtedness from any such
other party; (d) exercise or assert any other right or remedy to which Creditor
is or may be entitled in connection with the Indebtedness or Obligations or any
security or other guaranty therefor; (e) assert or file any claim against the
assets or estate of Debtor or other person liable for the Indebtedness or
Obligations, or any part thereof; (f) take any action against Debtor or any
other person, to exhaust its remedies against endorsers, the Collateral or other
collateral or security, or to resort to any balance of any deposit account or
credit on the books of Creditor in favor of Debtor or any other person; or (g)
pursue any other remedies Creditor may have in connection with the Indebtedness
or Obligations.
13. Obligations Not Impaired. Guarantor's obligations under this
Guaranty shall not be released, diminished, impaired, reduced, or adversely
affected, and Guarantor waives any common law, equitable, statutory or other
rights that Guarantor might otherwise have, as a result of any of the following:
(a) any full or partial release of the liability of Debtor,
any other guarantor of the Indebtedness and/or Obligations, or any other person
primarily or secondarily liable on the Indebtedness and/or Obligations, or any
part thereof (including any maker, endorser, guarantor or surety), whether such
liability is direct or indirect, joint, several, or joint and several, it being
recognized, acknowledged and agreed that Guarantor may be required to pay the
Indebtedness and perform the Obligations in full without assistance of any other
party, and Guarantor has not been induced to enter into this Guaranty on the
basis of an understanding or agreement that other parties will at all times be
liable to pay the Indebtedness or perform the Obligations, or that Creditor will
look to other parties to pay the Indebtedness or perform the Obligations;
provided, however, nothing in this Guaranty shall waive or release, either
expressly or impliedly, any rights of subrogation, reimbursement or contribution
that Guarantor may have, after payment in full of the Indebtedness and
performance of the Obligations, against others liable under the Indebtedness or
for performance of the Obligations, but Guarantor's rights of subrogation,
reimbursement and contribution are secondary, subordinate and inferior to the
rights and claims of Creditor;
(b) the voluntary or involuntary liquidation, sale or other
disposition of all or substantially all of the assets of Debtor, or any
receivership, insolvency, bankruptcy, reorganization or other similar
proceedings affecting Debtor or any of its assets;
(c) any impairment, modification, release or limitation of
liability of Debtor, or stay of foreclosure or other lien enforcement
proceedings against Debtor, or Debtor's property, or Debtor's estate in
bankruptcy, or any modification, discharge or extension of the Indebtedness
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resulting from the operation of any present or future provision of the Federal
Bankruptcy Code or other bankruptcy laws, or from the decision of any court, it
being recognized, acknowledged and agreed that Guarantor shall remain liable on
the Indebtedness and the Obligations, notwithstanding any act, omission or thing
which might, but for the provisions hereof, otherwise operate as a legal or
equitable discharge of Guarantor;
(d) any release of, subordination of, or substitution of
any security or other guaranty now or hereafter held by Creditor for payment of
the Indebtedness and performance of the Obligations, or of any part thereof;
(e) Creditor's failure to use diligence or care in
preserving the liability of any person on the Indebtedness or the Obligations,
or in bringing suit to enforce collection of the Indebtedness or performance of
the Obligations;
(f) the addition of another guarantor or guarantors of
the Indebtedness or Obligations;
(g) the substitution or withdrawal of collateral or
release of security;
(h) any renewal, extension, modification, alteration,
refinancing or rearrangement of or any other indulgence with respect to the
Indebtedness or Obligations, or any part thereof;
(i) the exercise, failure to exercise, delay, omission or lack
of diligence or care by Creditor in exercising any right or power conferred upon
Creditor in this Guaranty, the Note, or any Transaction Document evidencing,
securing or relating to the Note or by law or in equity;
(j) Debtor's not being liable for the Indebtedness or
performance of the Obligations because the act of creating the Indebtedness or
Obligations is ultra ▇▇▇▇▇, or the officers or persons creating the Indebtedness
or Obligations acted in excess of their authority, or for any reason the
Indebtedness or Obligations cannot be enforced against Debtor;
(k) any payment by Debtor to Creditor if such payment is held
to constitute a preference under the Federal Bankruptcy Code or other bankruptcy
laws, or if for any other reason Creditor is required to refund such payment to
Debtor or pay the amount thereof to any other party;
(l) Guarantor's being or becoming liable for any
indebtedness owing by Debtor to Creditor, by endorsement or otherwise, other
than under this Guaranty; or
(m) the invalidity, illegality or unenforceability of all or
any part of the Indebtedness, for any reason whatsoever, including without
limitation the fact that the Note or other Transaction Documents pertaining to
the Indebtedness or Obligations have been forged or otherwise are irregular or
not genuine or authentic.
14. Application of Payments. If Creditor should collect or receive any
payments from any person other than Guarantor, or funds which are not
specifically required by law or agreement to be applied to the Indebtedness,
then Creditor may, in Creditor's sole discretion, apply such payments to any
indebtedness of Debtor other than the Indebtedness. Guarantor agrees that
Creditor may apply payments or other funds received by Creditor from Debtor,
from any other party obligated on the Indebtedness, from the liquidation of any
collateral now or hereafter securing the Indebtedness, or from any other source,
including without limitation, insurance proceeds and
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condemnation, to the Indebtedness in any manner or order as Creditor may deem
appropriate in its sole and absolute discretion.
15. Collection of Indebtedness. Guarantor expressly waives any right to
the benefit of or to require or control application of any security or the
proceeds of any security now existing or hereafter obtained by Creditor as
security for the Indebtedness, or any part thereof, and agrees that Creditor
shall have no duty to apply to the Indebtedness any monies, payments or other
property at any time received by or paid to or in the possession of Creditor,
except as Creditor shall determine in its sole discretion. Guarantor
specifically agrees that Guarantor shall not have any recourse or action against
Creditor by reason of any action Creditor may take or omit to take in connection
with the Indebtedness or Obligations, the collection of any sums or amounts
herein mentioned, or in connection with any security for or any other guaranty
of the Indebtedness and/or Obligations.
16. Subordination. Guarantor subordinates all indebtedness owing to
Guarantor from Debtor to the Indebtedness. Guarantor further subordinates any
liens or security interest it may have in the collateral or security of Debtor
(or any other party) to the liens and security interests in favor of Creditor
securing the Indebtedness and the Obligations. Guarantor agrees not to accept
any payments or satisfaction of any kind of any indebtedness of Debtor to
Guarantor. If Guarantor should receive any such payment or satisfaction for
indebtedness of Debtor to Guarantor in violation of the above terms, Guarantor
agrees to deliver the payment or satisfaction to Creditor, and until delivered,
Guarantor agrees to hold the same in trust for Creditor.
17. Notice of Litigation, Claims, and Financial Change. Guarantor shall
promptly inform Creditor of any litigation against Guarantor or affecting any
security for the Indebtedness or Obligations which, if determined adversely,
might have a material adverse effect upon the financial condition of Guarantor
or upon such security or might cause a default under any of the documents
evidencing, securing, or governing the Indebtedness or Obligations, any claim or
controversy which might become the subject of litigation, and any material
adverse change in the financial condition of Guarantor.
18. Usury Disclaimer. No provision herein or in any promissory note,
security instrument, or any other Transaction Document executed by Debtor or
Guarantor evidencing the Indebtedness shall be construed to be or to create a
contract by Guarantor to pay, as consideration for the use, forbearance, or
detention of money, interest in excess of the rate or amount allowed by law. If
any excess of interest in such respect is provided for herein or in any such
promissory note, security instrument, or any other Transaction Document, the
provisions of this Section shall govern, and neither Debtor nor Guarantor shall
be obligated to pay the amount of such interest to the extent that it is in
excess of the amount permitted by applicable law. The intention of the parties
is to conform strictly to the usury laws now in force, and all Promissory Notes
and Transaction Documents executed by Debtor or Guarantor evidencing the
Indebtedness or Obligations shall be held subject to reduction to the amount
allowed under said usury laws as now or hereafter construed by the courts having
jurisdiction.
19. Transferability. This Guaranty is intended for and shall inure to
the benefit of Creditor and each and every other person who shall from time to
time be or become the owner or holder of any of the Indebtedness, and each and
every reference herein to Creditor shall also include and refer to each and
every successor or assignee of Creditor at any time holding or owning any part
of or interest in any part of the Indebtedness. This Guaranty shall be
transferable and negotiable, with the same force and effect and to the same
extent that the Indebtedness is transferable, it being understood and stipulated
that upon the assignment or transfer by Creditor of any of the Indebtedness
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the legal holder or owner of the Indebtedness (or part thereof or interest
therein transferred or assigned by Creditor) shall also, unless provided
otherwise by Creditor in its transfer or assignment, have and may exercise all
of the rights granted to Creditor under this Guaranty to the extent of the part
of or interest in the Indebtedness assigned or transferred to said person.
Guarantor expressly waives notice of transfer or assignment of the Indebtedness,
or any part thereof, or of the rights of Creditor hereunder. Notwithstanding
anything in this Section to the contrary, all Indebtedness and Obligations to
Creditor shall be paid and performed in full first, before any assignee or
transferee shall receive any benefits of this Guaranty.
20. Information Concerning Guarantor. Guarantor acknowledges and agrees
that Creditor may transfer the Indebtedness or partial interests therein to one
or more transferees or participants. Guarantor authorizes Creditor to
disseminate any information Creditor has pertaining to the Indebtedness,
including, without limitation, credit information on Guarantor, to any such
transferee or participant or prospective transferee or participant.
21. Binding on Others. This Guaranty shall be binding upon
Guarantor and Guarantor's heirs, legal representative, personal representatives,
executors, administrators, successors and assigns.
22. Modification or Consent. No modification, consent or waiver of any
provision of this Guaranty shall be effective unless the modification, consent
or waiver is in writing and signed by an officer of Creditor, and then shall be
effective only in the specific instance and for the purpose for which given. No
notice to or demand on Guarantor in any case shall, of itself, entitle Guarantor
to any other or further notice or demand in similar or other circumstances. No
delay or omission by Creditor in exercising any power or right under this
Guaranty shall impair any such right or power or be construed as a waiver
thereof or any acquiescence therein, nor shall any single or partial exercise of
any such power preclude other or further exercise thereof, or the exercise of
any other right or power under this Guaranty. All rights and remedies of
Creditor under this Guaranty are cumulative of each other and of every other
right or remedy which Creditor may otherwise have at law or in equity or under
any other contract or document, and the exercise of one or more rights or
remedies shall not prejudice or impair the concurrent or subsequent exercise of
other rights or remedies.
23. Waiver of Certain Statutory Provisions. Guarantor hereby waives all
rights to which Guarantor may be or might otherwise become entitled to with
respect to the provisions of Sections 34.02 and 34.03 of the Texas Business and
Commerce Code, as amended, and agrees that the rights of Guarantor pursuant to
the provisions of Section 34.04 of the Texas Business and Commerce Code, as
amended, shall be subject to, secondary, subordinate and inferior in all
respects to the rights of Creditor pursuant to this Guaranty.
24. Notices. Any notice or demand to Guarantor may be given and shall
conclusively be deemed and considered to have been given and received upon the
deposit thereof, in writing, in the United States mail, duly stamped and
addressed to Guarantor at Guarantor's address stated below, but actual notice,
however given or received, shall always be effective. The last preceding
sentence shall not be construed in anywise to affect or impair any waiver of
notice or demand herein provided or to require giving of notice or demand to or
upon Guarantor in any situation or for any reason. Creditor's and Guarantor's
respective addresses are:
APSGI/Exsorbet
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Creditor: American Physicians Service Group, Inc.
Attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇-▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇
Guarantor: 7-7 Merger, Inc.
Attn:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
25. Governing Law and Place of Performance. GUARANTOR AGREES THAT
THIS GUARANTY IS GOVERNED BY THE LAWS OF THE UNITED STATES AND THE STATE OF
TEXAS. This Guaranty is performable in ▇▇▇▇▇▇ County, Texas, and Guarantor
hereby waives the right to be sued elsewhere.
26. Headings. Section headings of this Guaranty are inserted for
convenience of reference only, and shall not alter, define, or be used in
construing the text of such sections.
27. Pronouns. As used herein and when required by the context, each
number (singular and plural) shall include all numbers, and each gender shall
include all genders, and unless the context otherwise requires the word "person"
or "party" shall include "person, corporation, firm, partnership or
association".
28. Notice of Invalidity of Oral Agreements. THIS WRITTEN AGREEMENT
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
EXECUTED this 30th day of September, 1996.
GUARANTOR:
7-7 Merger, Inc.
(an Arkansas corporation)
By:
Name:
Title:
APSGI/Exsorbet
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