Exhibit 4.96
GUARANTY OF PAYMENT AND PERFORMANCE
THIS Guaranty dated September 22, 1998 (the "Guaranty") from LING
ELECTRONICS, INC., a California corporation with an office for the transaction
of business located at 4890 E. LaPalma Avenue, Anaheim, California 92807
(whether individually or if more than one, collectively, the "Guarantor") to
KEYBANK NATIONAL ASSOCIATION, a national banking association with an office for
the transaction of business located at 66 South Pearl Street, Albany, New York
12207 (the "Bank").
W I T N E S S E T H :
WHEREAS, MECHANICAL TECHNOLOGY INCORPORATED, a New York corporation
(the "Borrower"), is about to borrow from the Bank the sum of up to Four Million
and no/100 ($4,000,000.00) Dollars, (the "Loan") in accordance with a certain
Credit Agreement of even date herewith (hereinafter, together with all exhibits
thereto, as it may from time to time be amended, modified or supplemented,
referred to as the "Credit Agreement") by and between the Borrower and the
Bank; and
WHEREAS, the Bank is unwilling to make the Loan to the Borrower unless
it receives this Guaranty; and
WHEREAS, the Guarantor is willing to enter into this Guaranty in order
to induce the Bank to make the Loan and the Guarantor has approved the form and
substance of any documents executed or delivered by Borrower in connection with
the Loan (the "Loan Documents"); and
WHEREAS, all capitalized terms used herein which are defined in the
Credit Agreement shall have the respective meanings provided therefor in the
Credit Agreement, unless otherwise defined herein or unless the context
otherwise requires;
NOW, THEREFORE, in order to induce the Bank to make the Loan to the
Borrower and in consideration of the premises and of other good and valuable
consideration, the Guarantor intends to guarantee absolutely and unconditionally
(and jointly and severally if there be more than one Guarantor) to the Bank,
the punctual payment of the Loan and all notes or other evidences of
indebtedness given by the Borrower to the Bank in connection therewith and all
extensions, modifications or renewals thereof (collectively, the "Note") and all
interest and other sums due under the Note or any Loan Document and such further
payment and performance as may be set forth in Article 2 hereof.
ARTICLE 1
REPRESENTATIONS AND WARRANTIES OF THE GUARANTORS
The Guarantor hereby represents and warrants to the Bank (if the
Guarantor is more than one party, said representations and warranties are made
only with respect to the particular party) that:
Section 1.1 Capacity of the Guarantor. Guarantor:
(A) Has the capacity to enter into this Guaranty.
(B) Has an office for the transaction of business at the
address set forth at the head of this Guaranty.
Section 1.2 No Violation of Restrictions. Neither the execution
and delivery of this Guaranty, the consummation of the transactions contemplated
hereby nor the fulfillment of or compliance with the provisions of this Guaranty
will conflict with or result in a breach of any of the terms, covenants,
conditions or provisions of any agreement, judgment or order to which any party
named as a Guarantor is a party or by which the Guarantor is bound, or will
constitute a default under any of the foregoing, or result in the creation or
imposition of any lien of any nature whatsoever.
Section 1.3 Compliance with Law. Each party named as a
Guarantor (A) is not in violation of any law, ordinance, governmental rule,
regulation, order or judgment to which the Guarantor may be subject or which
would materially and adversely affect the business of the Guarantor and (B) has
not failed to obtain any license, permit, franchise or other governmental
authorization necessary to the conduct of their present business if such failure
would have a material and adverse effect on the business of the Guarantor.
Section 1.4 Financial Statements. The financial statements
submitted by each party named as Guarantor, including balance sheets, statement
of income, retained earnings and other related schedules, to the Bank fairly
represent the financial condition as of the date of each statement and there has
been no material change in the financial condition of any Guarantor since the
date of the respective statements submitted to the Bank, except as disclosed to
the Bank in writing.
Section 1.5 Solvency of Guarantor and Borrower. Each party named
as a Guarantor is solvent and each Guarantor has made an appropriate financial
investigation of the Borrower and has determined that the Borrower is solvent at
the time of execution of this Guaranty.
ARTICLE 2
COVENANTS AND AGREEMENTS
Section 2.1 Guaranty of Payment. The Guarantor (jointly and
severally, if there be more than one Guarantor) irrevocably, absolutely and
unconditionally guarantees to the Bank:
(A) The punctual payment of the Loan, the Note, all
principal and interest due thereunder and any other sums due under
the Note or any Loan Document.
(B) The full and prompt payment and performance of any
and all obligations of Borrower to the Bank under the Loan Documents
including, without limitation, the obligations of Borrower concerning
hazardous materials and other environmental matters contained in any
of the Loan Documents.
Section 2.2 Obligations Unconditional. This Guaranty shall remain
in full force and effect until the Loan, the Note and all sums due thereunder or
under any Loan Document are paid in full, irrespective of any interruptions in
the business relationships of the Borrower and the Guarantor with the Bank, and
shall not be affected, modified or impaired by any state of facts or the
happening from time to time of any event, including, without limitation, any of
the following, whether or not with notice to or the consent of the Guarantor:
(A) The invalidity, irregularity, illegality or
unenforceability of, or any defect in, the Note or any Loan Document
or any collateral security for the Loan (the "Collateral").
(B) Any present or future law or order of any government
(de jure or de facto) or of any agency thereof purporting to reduce,
amend or otherwise affect the Note or any other obligation of the
Borrower or any other obligor or to any other terms of payment.
(C) The waiver, compromise, settlement, release or
termination of any or all of the obligations, covenants or agreements
of the Borrower under the Note or any Loan Documents or of any party
named as a Guarantor under this Guaranty.
(D) The loss, release, sale, exchange, surrender or other
change in any Collateral.
(E) The extension of the time for payment of any principal
of or interest on the Note or of the time for performance of any other
obligations, covenants or agreements under or arising out of the Note
or any Loan Document or the extension or the renewal of any thereof.
(F) The modification or amendment (whether material or
otherwise) of any obligation, covenant or agreement set forth in the
Note or any Loan Document.
(G) The taking of, or the omission to take, any of the
actions referred to in the Note or any Loan Document.
(H) Any failure, omission or delay on the part of the Bank
to enforce, assert or exercise any right, power or remedy conferred on
the Bank in the Note or any Loan Document.
(I) The voluntary or involuntary liquidation, dissolution,
sale or other disposition of all or substantially all the assets,
marshalling of assets and liabilities, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition with creditors or readjustment of, or other
similar proceedings affecting the Guarantor or the Borrower or any of
their assets, or any allegation or contest of the validity of the
Note or any Loan Document.
(J) The default or failure of the Guarantor to fully
perform any obligations set forth in this Guaranty.
(K) Any event or action that would, in the absence of this
paragraph, result in the release or discharge of the Guarantor from
the performance or observance of any obligation, covenant or agreement
contained in this Guaranty.
(L) Any other circumstances which might otherwise
constitute a legal or equitable discharge or defense of a surety or a
guarantor.
Section 2.3 Waiver by Guarantor. The Guarantor hereby waives:
(A) Notice of acceptance of this Guaranty.
(B) Diligence, presentment and demand for payment of the
Loan and/or the Note.
(C) Protest and notice of protest, dishonor or default to
the Guarantor or to any other party with respect to the Loan.
(D) Any and all notices to which the Guarantor might
otherwise be entitled.
(E) Any and all defenses to payment including, without
limitation, any defenses and counterclaims of the Guarantor or the
Borrower based upon fraud, negligence or the failure of any condition
precedent or claims of offset or defenses involving the invalidity,
irregularity or unenforceability of all or any part of the liabilities
herein guaranteed or any defense otherwise available to the Guarantor
or the Borrower.
(F) Any and all rights of subrogation, reimbursement,
indemnity, exoneration, contribution or any other claim which the
Guarantor may now or hereafter have against the Borrower or any other
person directly or contingently liable for the Loan guaranteed
hereunder, or against or with respect to the Borrower's property
(including, without limitation, property collateralizing the Loan),
arising from the existence or performance of this Guaranty and
whether or not such claim, right or remedy arises in equity, under
contract, by statute, under common law or otherwise.
Section 2.4 Nature of Guaranty. This Guaranty is a guaranty of
payment and not of collection and the Guarantor hereby waives the right to
require that any action be brought first against the Borrower or any other
Guarantor, or any security, or to require that resort be made to any security or
to any balance of any deposit account on credit on the books of the Bank in
favor of the Borrower or of any Guarantor.
Section 2.5 Continuation of Guaranty. The Guarantor further
agrees that the obligations hereunder shall continue to be effective or
reinstated, as the case may be, if at any time payment or any part thereof of
the Loan or the Note is rescinded or must otherwise be restored by the Bank
upon the bankruptcy or reorganization of the Borrower, the Guarantor or
otherwise.
Section 2.6 Subordination of Debt. The Guarantor hereby
subordinates any and all indebtedness of Borrower now or hereafter owed to
Guarantor to all indebtedness of Borrower to the Bank and agrees with the Bank
that Guarantor shall not demand or accept any payment from Borrower, shall not
claim any offset or other reduction of Guarantor's obligations hereunder
because of any such indebtedness and shall not take any action to obtain any
interest in any of the security described in and encumbered by the Loan
Documents; provided, however, that, if the Bank so requests, such indebtedness
shall be collected, enforced and received by Guarantor as trustee for the Bank
and paid over to the Bank on account of the indebtedness of Borrower to the
Bank, but without reducing or affecting in any manner the liability of Guarantor
under the other provisions of this Guaranty except to the extent the principal
amount of such outstanding indebtedness shall have been reduced by such payment.
Section 2.7 Financial Statements. Guarantor will advise the Bank
in writing if Guarantor operates on other than a calendar year basis. Guarantor
will at all times keep proper books of record and account in which full, true
and correct entries shall be made in accordance with generally accepted
accounting principles and will deliver to the Bank the reports, certificates
and other information described in Section 9.1 of the Credit Agreement. So long
as the financial results of Guarantor are included in consolidated statements
submitted to the Bank by Borrower in compliance with Section 9.1 of the Credit
Agreement, Guarantor will have no obligation to provide independent financial
statements to the Bank.
Section 2.8 Transfer of Interest. Guarantor agrees not to make or
permit to be made, by a voluntary or involuntary means, any transfer of the
interest of Guarantor in the Borrower, without first obtaining the prior written
consent of the Bank.
ARTICLE 3
EVENTS OF DEFAULT
Section 3.1 Events of Default Defined. An "Event of Default"
shall exist if any of the following occurs:
(A) Any party named as a Guarantor fails to perform or
observe any covenant contained herein for a period of ten (10) days
after notice from the Bank.
(B) Any warranty, representation or other statement by or
on behalf of any party named as a Guarantor contained in this Guaranty
is false or misleading in any material respect when made.
(C) A receiver, liquidator or trustee of any party named
as a Guarantor or any of his or its property is appointed by court
order, or any party named as a Guarantor is adjudicated bankrupt or
insolvent or any of his or its property is sequestered by court order
and such order remains in effect for more than one hundred twenty
(120) days, or a petition is filed against any party named as a
Guarantor under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation law of
any jurisdiction, whether now or hereafter in effect, and is not
dismissed within one hundred twenty (120) days of such filing.
(D) Any party named as a Guarantor files a petition in
voluntary bankruptcy or seeks relief under any provision of any
reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation law of any jurisdiction, whether now or
hereafter in effect, or consents to the filing of any petition against
it under any such law.
(E) Any party named as a Guarantor makes an assignment
for the benefit of creditors or admits in writing inability to pay
debts generally as they become due, or consents to the appointment of
a receiver, trustee or liquidator of all or any part of his or its
property.
(F) The occurrence of an event of default under any other
Loan Document.
Section 3.2 Remedies on Default. If an event of default exists,
the Bank may proceed to enforce the provisions hereof and to exercise any other
rights, powers and remedies available to the Bank.
Section 3.3 Waiver and Notice.
(A) No remedy herein conferred upon or reserved to the
Bank is intended to be exclusive of any other available remedy or
remedies, but each and every such remedy shall be cumulative and
shall be in addition to every other remedy given under this Guaranty
now or hereafter existing at law or in equity or by statute.
(B) No delay or omission to exercise any right or power
accruing upon the occurrence of any Event of Default shall impair any
such right or power or shall be construed to be a waiver thereof, but
any such right or power may be exercised from time to time and as
often as may be deemed expedient.
(C) In order to entitle the Bank to exercise any remedy
reserved to it in this Guaranty, it shall not be necessary to give
any notice, other than such notice as may be expressly required in
this Guaranty.
(D) No waiver, amendment, release or modification of this
Guaranty shall be established by conduct, custom or course of dealing.
ARTICLE 4
MISCELLANEOUS
Section 4.1 Construction. If this Guaranty is executed by two or
more parties, they shall be jointly and severally liable hereunder and the
phrase Guarantor whenever used herein shall be construed to refer to each of
the parties in the same manner and with the same effect as if each party had
signed a separate guaranty.
Section 4.2 Governing Law. This Guaranty shall be governed by and
construed in accordance with the laws of the State of New York.
Section 4.3 Submission to Jurisdiction. The Guarantor hereby
irrevocably and unconditionally agrees that any suit, action or proceeding
arising out of or relating to this Guaranty shall be brought in the state courts
of the State of New York or federal district court for the Northern District of
New York and waives any right to object to jurisdiction within either of the
foregoing forums by the Bank. Nothing contained herein shall prevent the Bank
from bringing any suit, action or proceeding or exercising any rights against
any security and against any Guarantor personally, and against any property of
any Guarantor, within any other jurisdiction and the initiation of such suit,
action or proceeding or taking of such action in any such other jurisdiction
shall in no event constitute a waiver of the agreements contained herein with
respect to the laws of the State of California governing the rights and
obligations of the parties hereto or the agreement of the Guarantor to submit to
personal jurisdiction within the State of New York.
Section 4.4 Waiver of Jury Trial. The Guarantor and the Bank
agree that any suit, action or proceeding arising under or in connection with
this Guaranty shall be before a court without a jury.
Section 4.5 Successors and Assigns. This Guaranty shall inure to
the benefit of and be binding upon the successors and assigns of each of the
parties hereto.
Section 4.6 Notices. Any notices required or permitted to be
given hereunder shall be: (i) personally delivered or (ii) given by registered
or certified mail, postage prepaid, return receipt requested, or (iii) forwarded
by overnight courier service, in each instance addressed to the addresses set
forth at the head of this Guaranty, or such other addresses as the parties may
for themselves designate in writing as provided herein for the purpose of
receiving notices hereunder. All notices shall be in writing and shall be
deemed given, in the case of notice by personal delivery, upon actual delivery,
and in the case of appropriate mail or courier service, upon deposit with the
U.S. Postal Service or delivery to the courier service.
Section 4.7 Entire Agreement. This Guaranty and the Note and
other Loan Documents constitute the entire understanding between Borrower, the
Guarantor and the Bank and to the extent that any writings not signed by the
Bank or oral statements or conversations at any time made or had are
inconsistent with the provisions of this Guaranty, the Note or the other Loan
Documents, the same shall be null and void.
Section 4.8 Amendments. No amendment, change, modification,
alteration or termination of this Guaranty shall be made except upon the written
consent of the parties hereto.
Section 4.9 Assignment. This Guaranty is assignable by the Bank
in whole or in part in conjunction with an assignment of the Note and any
assignment hereof or any transfer or assignment of the Note or portions thereof
shall operate to vest in any such assignee the rights and powers, in whole or in
part, as appropriate, herein conferred upon and granted to the Bank.
Section 4.10 Partial Invalidity. The invalidity or
unenforceability of any one or more phrases, sentences, clauses or sections in
this Guaranty shall not affect the validity or enforceability of the remaining
portions of the Guaranty or any part thereof.
IN WITNESS WHEREOF, the Guarantor has executed this Guaranty as of the
day and year first above written.
LING ELECTRONICS, INC.
By: /s/ C.Scheuer
----------------------------
Name: Cynthia A. Scheuer
Title: Secretary
STATE OF NEW YORK )
) ss.:
COUNTY OF ALBANY )
On this 22nd day of Septemer, 1998, before me the subscriber
personally appeared Cynthia A. Scheuer, who being by me duly sworn, did depose
and say; that she resides at 2757 Doelner Circle, Castleton, New York, that she
is Secretary of Ling Electronics, Inc., the corporation described in and which
executed the foregoing instrument; and that she signed her name thereto by order
of the Board of Directors of said corporation.
/s/ M.S.Lamb
---------------------
M. Sheila Lamb
NOTARY PUBLIC