Continuing Guaranty - ClimaChem Inc. and BankAmerica Business Credit Inc.
CONTINUING GUARANTY
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This Continuing Guaranty (herein referred to as the "Guaranty") is executed
as of the 21st day of November, 1997, by CLIMACHEM, INC., a Delaware
corporation, whose place of business is 16 South Pennsylvania, Oklahoma City,
Oklahoma 73107 (herein referred to as the "Guarantor"), in order to induce
BANKAMERICA BUSINESS CREDIT, INC., a Delaware corporation, with an office at 55
South Lake Avenue, Suite 900, Pasadena, California 91101 (herein referred to as
"Secured Party" or "Lender"), to continue to provide financial accommodations to
(i) El Dorado Chemical Company, an Oklahoma corporation ("EDC"), with offices at
P.0. Box 231, El Dorado, Arizona 71730, (ii) Slurry Explosive Corporation, an
Oklahoma corporation ("Slurry"), with offices at 5700 N. Portland, Oklahoma
City, Oklahoma 73112, (iii) Climate Master, Inc., a Delaware corporation
("CMI"), with offices at 7300 S.W. 44th, Oklahoma City, Oklahoma 73125, and (iv)
International Environmental Corporation, an Oklahoma corporation ("IEC"), with
offices at 5000 West I-40, Oklahoma City, Oklahoma 73128 (EDC, Slurry, CMI, and
IEC are herein individually and collectively referred to as "Debtor").
WITNESSETH:
WHEREAS, Debtor and Lender, concurrently with the execution and delivery of
this Guaranty, have entered into that certain Amended and Restated Loan and
Security Agreement (herein referred to as the "Loan Agreement") dated of even
date herewith, by and among EDC, Slurry, CMI, IEC and Lender;
WHEREAS, Guarantor will directly and indirectly benefit from the loans
evidenced and governed by the Loan Agreement and the other transactions
evidenced by and contemplated in the Loan Documents described therein;
WHEREAS, Lender has requested this Guaranty as a condition to its execution
and delivery of the Loan Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Guarantor hereby agrees as follows:
1. Definitions. Unless otherwise defined in this Guaranty, all defined
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terms used in this Guaranty shall have the meanings ascribed to such terms in
the Loan Agreement.
2. Guaranty of Payment.
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(a) Guarantor and any debtor-in-possession or trustee in bankruptcy which
succeeds to the interest of Guarantor hereby unconditionally guarantees the full
and prompt payment to Secured Party when due and after any applicable grace
periods, whether by acceleration or otherwise, of any and all Indebtedness (as
hereinafter defined) of Debtor to Secured Party.
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(b) As used in this Guaranty, "Indebtedness" shall mean any and all
indebtedness of Debtor to Secured Party under the Loan Agreement, and all
extensions, renewals and replacements thereof, including, without limitation,
all unpaid accrued interest thereon and all costs and expenses payable as
therein provided: (i) whether now existing or hereafter incurred; (ii) whether
direct, indirect, primary, absolute, secondary, contingent, secured, unsecured,
matured or unmatured; (iii) whether such indebtedness is from time to time
reduced and thereafter increased, or entirely extinguished and thereafter
reincurred; and (iv) whether or not such indebtedness is evidenced by a
negotiable or nonnegotiable instrument or any other writing; and (v) whether
such indebtedness is contracted by Debtor alone or jointly or severally with
another or others. Notwithstanding that Debtor may not be obligated to Secured
Party for interest and/or attorneys' fees and expenses on, or in connection
with, the Indebtedness from and after the Petition Date (as hereinafter defined)
as a result of the provisions of the federal bankruptcy law or otherwise,
Indebtedness for which Guarantor shall be obligated under this Guaranty shall
include interest accruing on the Indebtedness at the highest rate provided for
in the Loan Agreement from and after the date on which Debtor files for
protection under the federal bankruptcy laws or from and after the date on which
an involuntary proceeding is filed against Debtor under the federal bankruptcy
laws (herein collectively referred to as the "Petition Date") and all reasonable
attorneys' fees and expenses incurred by the Secured Party from and after the
Petition Date in connection with the Indebtedness.
(c) Guarantor acknowledges that valuable consideration supports this
Guaranty, including, without limitation, any commitment to lend, extension of
credit or other financial accommodation, whether heretofore or hereafter made by
Secured Party to Debtor; any extension, renewal or replacement of any
Indebtedness; any forbearance with respect to any Indebtedness or otherwise; any
cancellation of an existing guaranty; or any other valuable consideration.
3. Secured Party's Costs and Expense. Guarantor agrees to pay on demand
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all costs and expenses of every kind incurred by Secured Party: (a) in enforcing
this Guaranty; (b) in collecting any Indebtedness from Debtor or Guarantor after
the occurrence of an Event of Default that is continuing; (c) in realizing upon
or protecting any collateral for this Guaranty or for payment of any
Indebtedness; and (d) for any other purpose related to the Indebtedness or this
Guaranty. "Costs and expenses" as used in the preceding sentence shall include,
without limitation, reasonable attorneys' fees incurred by Secured Party in
retaining counsel for advice, suit, appeal, any insolvency or other proceedings
under the Federal Bankruptcy Code or otherwise, or for any purpose specified in
the preceding sentence.
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4. Nature of Guaranty: Continuing, Absolute and Unconditional.
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(a) This Guaranty is and is intended to be a continuing guaranty of
payment of the Indebtedness (irrespective of the aggregate amount thereof)
independent of and in addition to any other guaranty, endorsement, collateral or
other agreement held by Secured Party therefor or with respect thereto, whether
or not furnished by Guarantor.
(b) This Guaranty is absolute and unconditional and shall not be changed
or affected by any representation, oral agreement, act or thing whatsoever,
except as herein provided. This Guaranty is intended by Guarantor to be the
final, complete and exclusive expression of the agreement between Guarantor and
Secured Party relating to this Guaranty. No modification or amendment of any
provision of this Guaranty shall be effective unless in writing and signed by a
duly authorized officer of Secured Party, and then shall be effective in the
specific instance and for the specific purpose given.
5. Certain Rights and Obligations.
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(a) Guarantor authorizes Secured Party, without notice, demand or any
reservation of rights against Guarantor and without affecting Guarantor's
obligations hereunder, from time to time: (i) to renew, extend, increase,
accelerate (pursuant to the terms of the Loan Agreement) or otherwise change the
time for payment of, the terms of, or the interest on, the Indebtedness or any
part thereof; (ii) to accept from any person or entity and hold collateral for
the payment of the Indebtedness or any part thereof, and to exchange, enforce or
refrain from enforcing, or release, such collateral or any part thereof; (iii)
to accept and hold any indorsement or guaranty of payment of the Indebtedness or
any part thereof, and to discharge, release or substitute any such obligation of
any such indorser or guarantor, or any person or entity who has given any
security interest in any collateral as security for the payment of the
Indebtedness or any part thereof, or any other person or entity in any way
obligated to pay the Indebtedness or any part thereof, and to enforce or refrain
from enforcing, or compromise or modify, the terms of any obligation of any such
indorser, guarantor, person or entity; (iv) to dispose of any and all collateral
securing the Indebtedness in any manner as Secured Party, in its sole
discretion, may deem appropriate, and to direct the order or manner of such
disposition and the enforcement of any and all endorsements and guaranties
relating to the Indebtedness or any part thereof as Secured Party, in its sole
discretion, may determine; and (v) to determine the manner, amount and time of
application of payments and credits, if any, to be made on all or any part of
any component or components of the Indebtedness (whether principal, interest,
costs and expenses, or otherwise).
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(b) If any default shall be made in the payment of any Indebtedness after
such is due and after expiration of applicable grace periods, Guarantor hereby
agrees to pay the same in full: (i) without deduction by reason of any setoff,
defense or counterclaim of Debtor; (ii) without requiring protest or notice of
nonpayment or notice of default to Guarantor, to Debtor or to any other person;
(iii) without demand for payment or proof of such demand; (iv) without requiring
Secured Party to resort first to Debtor (this being a guaranty of payment and
not of collection) or to any other guaranty or any collateral which the Secured
Party may hold; (v) without requiring notice of acceptance hereof or assent
hereto by Secured Party; and (vi) without requiring notice that any Indebtedness
has been incurred or of the reliance by the Secured Party upon this Guaranty;
all of which Guarantor hereby waives.
(c) Guarantor's obligation hereunder shall not be affected by any of the
following, all of which Guarantor hereby waives: (i) any failure to perfect or
continue the perfection of any security interest in or other lien on any
collateral securing payment of any Indebtedness or Guarantor's obligations
hereunder; (ii) the invalidity, unenforceability, propriety or manner of
enforcement of, or loss or change in priority of, any such security interest or
other lien; (iii) any failure to protect, preserve or insure any such
collateral; (iv) failure of Guarantor to receive notice of any intended
disposition of such collateral; (v) any defense arising by reason of the
cessation from any cause whatsoever of liability of the Debtor including,
without limitation, any failure, negligence or omission by Secured Party in
enforcing its claims against the Debtor or any person liable for all or any part
of the Indebtedness; (vi) any release, settlement or compromise of any
obligation of Debtor; (vii) the invalidity or unenforceability of any of the
Indebtedness, or (viii) it is especially and expressly agreed that if the
indebtedness of said Debtor now or at any time hereafter exceeds the amount
permitted by law, or if any Debtor's obligation to pay interest, attorneys'
fees, costs or expenses or any other sums ceases to exist by operation of law,
or if said Debtor is not liable because the act of creating the obligation is
ultra vires, or the officers creating same acted without authority, and for
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these reasons the indebtedness to Secured Party which Guarantor agrees to pay
cannot be enforced against the Debtor, such fact shall in no manner affect
Guarantor's liability hereunder, notwithstanding the fact that said Debtor is
not liable for such indebtedness, but Guarantor shall be liable hereunder to the
same extent as Guarantor would have been if the indebtedness of the said Debtor
had been fully enforceable against said Debtor.
6. Other Parties; Joint and Several Liability.
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(a) If more than one party executes this Guaranty, or if other separately
executed guaranties of the Indebtedness presently, or in the future, exist,
Secured Party shall have the right to discharge or release one or more of the
undersigned from any
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obligation hereunder, in whole or in part, without in any way releasing,
impairing or affecting its right against the other or others of the undersigned.
The failure of any other person to sign this Guaranty shall not release or
affect the obligations or liability of any of the undersigned.
(b) If more than one party executes this Guaranty, the obligations of the
undersigned hereunder shall be joint and several, and the term "Guarantor" shall
include each as well as all of them.
7. Guaranty of Performance. Guarantor also guarantees the full, prompt
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and unconditional performance of all obligations and agreements of every kind
owed or hereafter to be owed by Debtor to Secured Party under the Loan
Agreement.
8. RESERVED.
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9. Termination. This Guaranty shall remain in full force and effect as to
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the Guarantor until Secured Party shall actually receive from such Guarantor
written notice of its discontinuance, or notice of the death or judicial
declaration of incompetency of such Guarantor; provided, however, this Guaranty
shall remain in full force and effect thereafter until all Indebtedness
outstanding or contracted or committed for (whether or not outstanding) before
the receipt of such notice by Secured Party, and any extensions, renewals or
replacements thereof (whether made before or after receipt of such notice),
together with interest accruing thereon after such notice, shall be finally and
irrevocably paid in full. Discontinuance of this Guaranty as to one Guarantor
shall not operate as a discontinuance hereof as to any other Guarantor. Payment
of all of the Indebtedness from time to time shall not operate as a
discontinuance of this Guaranty, unless notice of discontinuance as above
provided has theretofore actually been received by Secured Party. If after
receipt of any payment of all or any part of the Indebtedness, Secured Party is
for any reason compelled to surrender such payment to any person or entity,
because such payment is determined to be void or voidable as a preference,
impermissible setoff, or a diversion of trust funds, or for any reason, this
Guaranty shall continue in full force notwithstanding any contrary action which
may have been taken by Secured Party in reliance upon such payment, and any such
contrary action so taken shall be without prejudice to Secured Party's rights
under this Guaranty and shall be deemed to have been conditioned upon such
payment having become final and irrevocable.
10. Representations and Warranties. Guarantor represents and warrants to
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Secured Party as follows:
(a) Guarantor has the corporate power and authority to execute, deliver
and perform its obligations under this Guaranty, and this Guaranty constitutes
the legal, valid and binding
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obligation of Guarantor, enforceable against Guarantor in accordance with its
terms, except as limited by bankruptcy, insolvency, fraudulent conveyance or
other laws of general application relating to the enforcement of creditor's
rights.
(b) The execution, delivery, and performance by Guarantor of this Guaranty
will not conflict with, result in a breach of, or constitute a default under, or
result in the imposition of any lien upon any assets of Guarantor pursuant to
the provisions of, any material indenture, mortgage, deed of trust, security
agreement, franchise, permit, license, or other instrument or agreement to which
Guarantor or its properties is bound.
(c) No authorization, approval, or consent of, and no filing or
registration with, any court, governmental authority, or third party is
necessary for the execution, delivery or performance by Guarantor of this
Guaranty or the validity or enforceability thereof, except as may be required
under the Uniform Commercial Code and applicable state law to perfect Lender's
rights in and to the Collateral.
(d) Guarantor and Debtor are members of an affiliated and integrated group
of corporations and are engaged in related businesses and supporting lines of
business; Guarantor has received and will receive a direct and indirect material
benefit from the transactions evidenced by and contemplated in the Loan
Agreement and the other Loan Documents; this Guaranty is given by Guarantor in
furtherance of the direct and indirect business interests and corporate purposes
of Guarantor, and is necessary to the conduct, promotion and attainment of the
businesses of Debtor and Guarantor; and the value of the consideration received
and to be received by Guarantor is reasonably worth at least as much as the
liability and obligation of Guarantor hereunder;
(e) Guarantor is familiar with, and has independently received books and
records regarding, the financial condition of Debtor and is familiar with the
value of any and all collateral (if any) intended to secure the Indebtedness;
however, Guarantor is not relying on such financial condition or any such
collateral (if any) as an inducement to enter into this Guaranty;
(f) Guarantor has not been induced to enter into this Guaranty on the
basis of a contemplation, belief, understanding or agreement that any Person
other than Guarantor will be liable to pay the Indebtedness; and
(g) Neither Lender nor any other Person has made any representation,
warranty or statement to, or promise, covenant or agreement with, Guarantor in
order to induce Guarantor to execute this Guaranty.
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11. Covenants. Guarantor covenants and agrees that, as long as the
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Indebtedness or any part thereof is outstanding or Secured Party has any
commitment to Debtor:
(a) Guarantor will furnish promptly to Secured Party written notice of the
occurrence of any default under this Guaranty;
(b) Guarantor will furnish promptly to Secured Party such additional
information concerning Guarantor as Secured Party may request;
(c) Guarantor will obtain at any time and from time to time all
authorizations, licenses, consents or approvals as shall now or hereafter be
necessary or desirable under all applicable laws or regulations or otherwise in
connection with the execution, delivery and performance of this Guaranty and
will promptly furnish copies thereof to Secured Party; and
(d) Guarantor will not use any of the Revolving Loans to make any
Distributions or Restricted Investments to any of its Affiliates or Subsidiaries
except as allowed under Section 9.14 of the Loan Agreement.
12. Right of Setoff. During the existence of an Event of Default the
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Guarantor grants to Lender a right of setoff upon any and all monies, securities
or other property of Guarantor, and the proceeds therefrom, now or hereafter
held or received by or in transit to Lender from or for the account of
Guarantor, whether for safekeeping, custody, pledge, transmission, collection or
otherwise, and also upon any and all deposits (general or special) and credits
of Guarantor, and any and all claims of Guarantor against Lender at any time
existing. The right of setoff granted pursuant to this Paragraph shall be
cumulative of and in addition to Lender's common law right of setoff.
13. Miscellaneous.
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(a) "Debtor" and "Guarantor" as used in this Guaranty shall include: (i)
in the case of a partnership Debtor or Guarantor, any new partnership which
shall have been created by reason of the admission of any new partner or
partners therein or by reason of the dissolution of the existing partnership by
voluntary agreement or the death, resignation or other withdrawal of any
partner; and (ii) in the case of a corporate Debtor, any other corporation into
or with which Debtor shall have been merged, consolidated, reorganized or
absorbed.
(b) Without limiting any other right of Secured Party, whenever Secured
Party has the right to declare any Indebtedness to be immediately due and
payable (whether or not it has so declared) under the terms of the Loan
Agreement, Secured Party at its sole election may set off against the
Indebtedness any and all monies
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then owed to Guarantor by Secured Party in any capacity, and Secured Party shall
be deemed to have exercised such right of setoff immediately at the time of such
election even though any charge therefor is made or entered on Secured Party's
records subsequent thereto.
(c) Guarantor's obligation hereunder is to pay the Indebtedness in full
when due after expiration of the applicable grace periods according to its
terms, and shall not be affected by any extension of time for payment by the
Debtor resulting from any proceeding under the Federal Bankruptcy Code or any
similar law.
(d) No course of dealing between Debtor or Guarantor and Secured Party and
no act, delay or omission by Secured Party in exercising any right or remedy
hereunder or with respect to the Indebtedness shall operate as a waiver thereof
or of any other right or remedy, and no single or partial exercise thereof shall
preclude any other or further exercise thereof or the exercise of any other
right or remedy. Secured Party may remedy any default by Debtor under any
agreement with Debtor or with respect to the Indebtedness in any reasonable
manner without waiving the default remedied and without waiving any other prior
or subsequent default by Debtor. All rights and remedies of Secured Party
hereunder are cumulative.
(e) Secured Party and Guarantor as used herein shall include the
successors or assigns of those parties. The rights and benefits of Secured Party
hereunder shall, if Secured Party so directs, inure to any party acquiring any
interest in the Indebtedness or any part thereof. If any right of Secured Party
hereunder is construed to be a power of attorney, such power of attorney shall
not be affected by the subsequent disability or incompetence of Guarantor.
(f) Captions of the paragraphs of this Guaranty are solely for the
convenience of Secured Party and Guarantor, and are not an aid in the
interpretation of this Guaranty.
(g) GUARANTOR AGREES THAT ANY ACTION OR PROCEEDING TO ENFORCE OR ARISING
OUT OF THIS GUARANTY MAY BE COMMENCED IN THE DISTRICT COURT LOCATED IN OKLAHOMA
COUNTY, OKLAHOMA, OR IN THE DISTRICT COURT OF THE UNITED STATES LOCATED IN THE
WESTERN DISTRICT OF OKLAHOMA, IN WHICH SECURED PARTY HAS AN OFFICE, AND
GUARANTOR WAIVES PERSONAL SERVICE OF PROCESS AND AGREES THAT A SUMMONS AND
COMPLAINT COMMENCING AN ACTION OR PROCEEDING IN ANY SUCH COURT SHALL BE PROPERLY
SERVED AND SHALL CONFER PERSONAL JURISDICTION IF SERVED BY REGISTERED MAIL TO
GUARANTOR, OR AS OTHERWISE PROVIDED BY THE LAWS OF THE STATE OF OKLAHOMA OR THE
UNITED STATES.
(h) If any provision of this Guaranty is unenforceable in whole or in part
for any reason, the remaining provisions shall continue to be effective.
Furthermore, in lieu of such illegal,
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invalid or unenforceable provision there shall be added automatically as a part
of this Guaranty a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.
No provision herein or in any other Loan Document evidencing the Indebtedness
shall require the payment or permit the collection of interest in excess of the
maximum permitted by applicable law.
(i) Guarantor agrees that Secured Party has no obligation to preserve
rights to the collateral against prior parties or to marshal any collateral for
the benefit of Guarantor or any other third party.
(j) PAYMENTS OF ALL SUMS OF MONEY AND THE PERFORMANCE OF ALL OF THE
COVENANTS AND AGREEMENTS HEREUNDER SHALL BE PAYABLE AND DUE AT THE OFFICE OF
SECURED PARTY IN PASADENA, CALIFORNIA. THIS GUARANTY AND THE TRANSACTION
EVIDENCED HEREBY SHALL BE CONSTRUED UNDER THE INTERNAL LAWS OF THE STATE OF
OKLAHOMA.
(k) THIS WRITTEN AGREEMENT REPRESENTS THE FINAL GUARANTY 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.
(l) GUARANTOR AND SECURED PARTY HEREBY KNOWINGLY, VOLUNTARILY, AND
INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY THAT GUARANTOR OR SECURED PARTY
MAY HAVE IN ANY ACTION OR PROCEEDING, IN LAW OR IN EQUITY, IN CONNECTION WITH
THE TRANSACTION DOCUMENTS OR THE TRANSACTIONS RELATED THERETO. GUARANTOR
REPRESENTS AND WARRANTS THAT NO REPRESENTATIVE OR AGENT OF SECURED PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SECURED PARTY WILL NOT, IN THE EVENT
OF LITIGATION, SEEK TO ENFORCE THIS RIGHT TO JURY TRIAL WAIVER. GUARANTOR
ACKNOWLEDGES THAT SECURED PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT
BY, AMONG OTHER THINGS, THE PROVISIONS OF THIS SUBSECTION 14(l).
(m) ALL NOTICES, REQUESTS AND OTHER COMMUNICATIONS TO GUARANTOR OR SECURED
PARTY HEREUNDER SHALL BE GIVEN IN WRITING (INCLUDING BANK WIRE, TELEX OR SIMILAR
WRITING) AND SHALL BE GIVEN AT THE ADDRESSES PROVIDED IN, AND SHALL BE EFFECTIVE
IN ACCORDANCE WITH THE PROVISIONS OF, THE LOAN AGREEMENT.
GUARANTOR:
CLIMACHEM, INC.
By /s/ David R. Goss
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David R. Goss
Vice President
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