GUARANTY BY CORPORATION
GUARANTY
BY CORPORATION
This
Guaranty, dated as of November 20, 2007, is made by GVI Security Solutions,
Inc., a Delaware corporation (the “Guarantor”), for the benefit of Well Fargo
Bank, National Association (with its participants, successors and assigns,
the
“Lender”), acting through its ▇▇▇▇▇ Fargo Business Credit operating
division.
The
Lender and GVI Security, Inc., a Delaware corporation (the “Borrower”), are
parties to a Credit and Security Agreement of even date herewith (as the same
may be amended, supplemented or restated from time to time, the “Credit
Agreement”) pursuant to which the Lender may make advances and extend other
financial accommodations to the Borrower.
As
a
condition to extending such credit to the Borrower, the Lender has required
the
execution and delivery of this Guaranty.
ACCORDINGLY,
the Guarantor, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
hereby agrees as follows:
1. Definitions.
All
terms defined in the Credit Agreement that are not otherwise defined herein
shall have the meanings given them in the Credit Agreement.
2. Indebtedness
Guaranteed.
The
Guarantor hereby absolutely and unconditionally guarantees to the Lender the
full and prompt payment when due, whether at maturity or earlier by reason
of
acceleration or otherwise, of the Indebtedness.
3. Guarantor’s
Representations and Warranties.
The
Guarantor represents and warrants to the Lender that (i) the Guarantor is a
corporation, duly organized and existing in good standing and has full power
and
authority to make and deliver this Guaranty; (ii) the execution, delivery
and performance of this Guaranty by the Guarantor have been duly authorized
by
all necessary action of its directors and shareholders and do not and will
not
violate the provisions of, or constitute a default under, any presently
applicable law or its Constituent Documents or any agreement presently binding
on it; (iii) this Guaranty has been duly executed and delivered by an
authorized Officer of the Guarantor and constitutes its lawful, binding and
legally enforceable obligation; and (iv) the authorization, execution,
delivery and performance of this Guaranty do not require notification to,
registration with, or consent or approval by, any federal, state or local
regulatory body or administrative agency. The Guarantor represents and warrants
to the Lender that the Guarantor has a direct and substantial economic interest
in the Borrower and expects to derive substantial benefits therefrom and from
any loans, credit transactions, financial accommodations, discounts, purchases
of property and other transactions and events resulting in the creation of
the
Indebtedness guarantied hereby, and that this Guaranty is given for a corporate
purpose. The Guarantor agrees to rely exclusively on the right to revoke this
Guaranty prospectively as to future transactions, in accordance with paragraph
4, if at any time, in the opinion of the directors or officers, the benefits
then being received by the Guarantor in connection with this Guaranty are not
sufficient to warrant the continuance of this Guaranty as to the future
Indebtedness of the Borrower. Accordingly, so long as this Guaranty is not
revoked prospectively in accordance with paragraph 4, the Lender may rely
conclusively on a continuing warranty, hereby made, that the Guarantor continues
to be benefited by this Guaranty and the Lender shall have no duty to inquire
into or confirm the receipt of any such benefits, and this Guaranty shall be
effective and enforceable by the Lender without regard to the receipt, nature
or
value of any such benefits.
4. Unconditional
Nature.
No act
or thing need occur to establish the Guarantor’s liability hereunder, and no act
or thing, except full payment and discharge of all of the Indebtedness, shall
in
any way exonerate the Guarantor hereunder or modify, reduce, limit or release
the Guarantor’s liability hereunder. This is an absolute, unconditional and
continuing guaranty of payment of the Indebtedness and shall continue to be
in
force and be binding upon the Guarantor, whether or not all of the Indebtedness
is paid in full, until this Guaranty is revoked prospectively as to future
transactions, by written notice actually received by the Lender, and such
revocation shall not be effective as to the amount of Indebtedness existing
or
committed for at the time of actual receipt of such notice by the Lender, or
as
to any renewals, extensions, refinancings or refundings thereof.
5. Dissolution
or Insolvency of Guarantor.
The
dissolution or adjudication of bankruptcy of the Guarantor shall not revoke
this
Guaranty, except upon actual receipt of written notice thereof by the Lender
and
only prospectively, as to future transactions, as herein set forth. If the
Guarantor shall be dissolved or shall be or become insolvent (however defined),
then the Lender shall have the right to declare immediately due and payable,
and
the Guarantor will forthwith pay to the Lender, the full amount of all of the
Indebtedness whether due and payable or unmatured. If the Guarantor voluntarily
commences or there is commenced involuntarily against the Guarantor a case
under
the United States Bankruptcy Code, the full amount of all Indebtedness, whether
due and payable or unmatured, shall be immediately due and payable without
demand or notice thereof.
6. Subrogation,
etc.
The
Guarantor hereby waives all rights that the Guarantor may now have or hereafter
acquire, whether by subrogation, contribution, reimbursement, recourse,
exoneration, contract or otherwise, to recover from the Borrower or from any
property of the Borrower any sums paid under this Guaranty until all of the
Indebtedness shall have been fully paid and discharged. The Guarantor will
not
exercise or enforce any right of contribution to recover any such sums from
any
person who is a co-obligor with the Borrower or a guarantor or surety of the
Indebtedness or from any property of any such person until all of the
Indebtedness shall have been fully paid and discharged.
7. Enforcement
Expenses.
The
Guarantor will pay or reimburse the Lender for all costs, expenses and
attorneys’ fees paid or incurred by the Lender in endeavoring to collect and
enforce the Indebtedness and in enforcing this Guaranty.
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8. Lender’s
Rights.
The
Lender shall not be obligated by reason of its acceptance of this Guaranty
to
engage in any transactions with or for the Borrower. Whether or not any existing
relationship between the Guarantor and the Borrower has been changed or ended
and whether or not this Guaranty has been revoked, the Lender may enter into
transactions resulting in the creation or continuance of the Indebtedness and
may otherwise agree, consent to or suffer the creation or continuance of any
of
the Indebtedness, without any consent or approval by the Guarantor and without
any prior or subsequent notice to the Guarantor. The Guarantor’s liability shall
not be affected or impaired by any of the following acts or things (which the
Lender is expressly authorized to do, omit or suffer from time to time, both
before and after revocation of this Guaranty, without consent or approval by
or
notice to the Guarantor): (i) any acceptance of collateral security,
guarantors, accommodation parties or sureties for any or all of the
Indebtedness; (ii) one or more extensions or renewals of the Indebtedness
(whether or not for longer than the original period) or any modification of
the
interest rates, maturities, if any, or other contractual terms applicable to
any
of the Indebtedness or any amendment or modification of any of the terms or
provisions of any loan agreement or other agreement under which the Indebtedness
or any part thereof arose; (iii) any waiver or indulgence granted to the
Borrower, any delay or lack of diligence in the enforcement of the Indebtedness
or any failure to institute proceedings, file a claim, give any required notices
or otherwise protect any of the Indebtedness; (iv) any full or partial
release of, compromise or settlement with, or agreement not to ▇▇▇, the Borrower
or any guarantor or other person liable in respect of any of the Indebtedness;
(v) any release, surrender, cancellation or other discharge of any evidence
of the Indebtedness or the acceptance of any instrument in renewal or
substitution therefor; (vi) any failure to obtain collateral security
(including rights of setoff) for the Indebtedness, or to see to the proper
or
sufficient creation and perfection thereof, or to establish the priority
thereof, or to preserve, protect, insure, care for, exercise or enforce any
collateral security; or any modification, alteration, substitution, exchange,
surrender, cancellation, termination, release or other change, impairment,
limitation, loss or discharge of any collateral security; (vii) any
collection, sale, lease or disposition of, or any other foreclosure or
enforcement of or realization on, any collateral security; (viii) any
assignment, pledge or other transfer of any of the Indebtedness or any evidence
thereof; (ix) any manner, order or method of application of any payments or
credits upon the Indebtedness; and (x) any election by the Lender under
Section 1111(b) of the United States Bankruptcy Code. The Guarantor waives
any
and all defenses and discharges available to a surety, guarantor or
accommodation co-obligor.
9. Waivers
by Guarantor.
The
Guarantor waives any and all defenses, claims, setoffs and discharges of the
Borrower, or any other obligor, pertaining to the Indebtedness, except the
defense of discharge by payment in full. Without limiting the generality of
the
foregoing, the Guarantor will not assert, plead or enforce against the Lender
any defense of waiver, release, discharge or disallowance in bankruptcy, statute
of limitations, res judicata, statute of frauds, anti-deficiency statute, fraud,
incapacity, minority, usury, illegality or unenforceability which may be
available to the Borrower or any other person liable in respect of any of the
Indebtedness, or any setoff available against the Lender to the Borrower or
any
other such person, whether or not on account of a related transaction. The
Guarantor expressly agrees that the Guarantor shall be and remain liable for
any
deficiency remaining after foreclosure of any mortgage or security interest
securing the Indebtedness, whether or not the liability of the Borrower or
any
other obligor for such deficiency is discharged pursuant to statute or judicial
decision. The liability of the Guarantor shall not be affected or impaired
by
any voluntary or involuntary liquidation, dissolution, sale or other disposition
of all or substantially all of the assets, marshalling of assets and
liabilities, receivership, insolvency, bankruptcy, assignment for the benefit
of
creditors, reorganization, arrangement, composition or readjustment of, or
other
similar event or proceeding affecting, the Borrower or any of its assets. The
Guarantor will not assert, plead or enforce against the Lender any claim,
defense or setoff available to the Guarantor against the Borrower. The Guarantor
waives presentment, demand for payment, notice of dishonor or nonpayment and
protest of any instrument evidencing the Indebtedness. The Lender shall not
be
required first to resort for payment of the Indebtedness to the Borrower or
other persons, or their properties, or first to enforce, realize upon or exhaust
any collateral security for the Indebtedness, before enforcing this
Guaranty.
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10. If
Payments Set Aside, etc.
If any
payment applied by the Lender to the Indebtedness is thereafter set aside,
recovered, rescinded or required to be returned for any reason (including,
without limitation, the bankruptcy, insolvency or reorganization of the Borrower
or any other obligor), the Indebtedness to which such payment was applied shall
for the purpose of this Guaranty be deemed to have continued in existence,
notwithstanding such application, and this Guaranty shall be enforceable as
to
such Indebtedness as fully as if such application had never been
made.
11. Additional
Obligation of Guarantor.
The
Guarantor’s liability under this Guaranty is in addition to and shall be
cumulative with all other liabilities of the Guarantor to the Lender as
guarantor, surety, endorser, accommodation co-obligor or otherwise of any of
the
Indebtedness or obligation of the Borrower, without any limitation as to amount,
unless the instrument or agreement evidencing or creating such other liability
specifically provides to the contrary.
12. Financial
Information.
The
Guarantor will deliver to the Lender all financial information concerning the
Guarantor required to be delivered under the Credit Agreement.
13. No
Duties Owed by Lender.
The
Guarantor acknowledges and agrees that the Lender (i) has not made any
representations or warranties with respect to, (ii) does not assume any
responsibility to the Guarantor for, and (iii) has no duty to provide
information to the Guarantor regarding, the enforceability of any of the
Indebtedness or the financial condition of the Borrower or any guarantor. The
Guarantor has independently determined the creditworthiness of the Borrower
and
the enforceability of the Indebtedness and until the Indebtedness is paid in
full will independently and without reliance on the Lender continue to make
such
determinations.
14. Miscellaneous.
This
Guaranty shall be effective upon delivery to the Lender, without further act,
condition or acceptance by the Lender, shall be binding upon the Guarantor
and
the successors and assigns of the Guarantor and shall inure to the benefit
of
the Lender and its participants, successors and assigns. Any invalidity or
unenforceability of any provision or application of this Guaranty shall not
affect other lawful provisions and application thereof, and to this end the
provisions of this Guaranty are declared to be severable. This Guaranty may
not
be waived, modified, amended, terminated, released or otherwise changed except
by a writing signed by the Guarantor and the Lender. This Guaranty shall be
governed by and construed in accordance with the substantive laws (other than
conflict laws) of the State of Texas. The Guarantor hereby (i) consents to
the personal jurisdiction of the state and federal courts located in the State
of Texas in connection with any controversy related to this Guaranty;
(ii) waives any argument that venue in any such forum is not convenient,
(iii) agrees that any litigation initiated by the Lender or the Guarantor
in connection with this Guaranty may be venued in either the state or federal
courts located in Dallas County, Texas; and (iv) agrees that a final
judgment in any such suit, action or proceeding shall be conclusive and may
be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
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15. Waiver
of Jury Trial.
THE
GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF, BASED ON OR PERTAINING TO THIS
GUARANTY.
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IN
WITNESS WHEREOF, this Guaranty has been duly executed by the Guarantor as of
the
date set forth above.
| GVI SECURITY SOLUTIONS, INC. | ||
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| By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | |
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇ |
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| Chief Financial Officer | ||
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Address:
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▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, #▇▇▇
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▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
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STATE
OF __________
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)
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)
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COUNTY
OF _________
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)
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The
foregoing instrument was acknowledged before me this ____ day of November,
2007,
by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, the Chief Financial Officer of GVI Security Solutions, Inc.,
a Delaware corporation, on behalf of the corporation.
| Notary Public |
SIGNATURE
PAGE TO GUARANTY - [GVI SECURITY SOLUTIONS, INC.]