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Exhibit 10.6
CONTINUING LIMITED GUARANTY AGREEMENT
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RECITALS
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A. Zoltek Companies, Inc., a Missouri corporation, Zoltek
Corporation, a
Missouri corporation, Engineering Technology Corporation, a
Missouri
corporation and Zoltek Properties, Inc., a Missouri corporation
(collectively,
"Borrower") is presently indebted or obligated to Southwest Bank of
St. Louis
("Bank"), pursuant to that certain Standby Letter of Credit
Application and
Agreement for Southwest Bank dated December 14, 2006, by and
between Bank and
Borrower (the "Letter of Credit Reimbursement Agreement") relating
to an
irrevocable standby letter of credit to be issued by Bank for the
account of
Borrower and for the benefit of Travelers Casualty and Surety
Company of
America, for itself and on behalf of its parents, affiliates and
subsidiaries
in the original face amount of up to $40,000,000.00 (the "Letter of
Credit");
and
B. For the purpose of inducing Bank to issue the Letter of
Credit
pursuant to the Letter of Credit Reimbursement Agreement, the
undersigned
("Guarantor") agrees to guarantee the prompt payment of the
indebtedness and
liabilities of Borrower to Bank under the Letter of Credit
Reimbursement
Agreement in accordance with the terms and conditions hereinafter
set forth.
WITNESSETH
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NOW, THEREFORE, for value received, and in consideration of the
financial
accommodations given or to be given or continued to Borrower by
Bank and/or of
Bank's presently refraining from making demand on Borrower or
otherwise
pursuing Bank's legal remedies against Borrower, and for other good
and
valuable consideration to Guarantor moving, the receipt and
sufficiency of
which is hereby acknowledged:
1. Guarantor hereby unconditionally guarantees to Bank the prompt
payment
when due, whether by acceleration or otherwise, and at all times
thereafter,
of any and all indebtedness and obligations of Borrower to Bank
under the
Letter of Credit Reimbursement Agreement, including extensions,
renewals or
refundings thereof (and extensions, renewals or refundings made
after any
release or termination hereof), whether such be direct or indirect,
liquidated
or unliquidated, absolute or contingent, single, joint, by the
entirety or
several, now existing or hereafter arising, due or to become due
(hereinafter
collectively referred to as "Liabilities" or, in the singular,
"Liability").
"Liabilities" or a "Liability" shall also include reasonable
expenses,
including reasonable attorney's fees, incurred by Bank in the
efforts to
collect any Liability or to enforce the undertakings of Guarantor
hereunder.
Whenever any such Liabilities shall become due and remain unpaid,
Guarantor
will, on demand, make prompt payment of the amount due thereof;
provided,
that, notwithstanding any provision contained herein to the
contrary, while
the amount of the Liabilities that may be incurred by Borrower is
not limited,
the liability of Guarantor to Bank hereunder shall not exceed Ten
Million
Dollars ($10,000,000.00) plus the cost of enforcement of this
Guaranty,
including court costs and reasonable attorneys' fees.
2. Guarantor shall be obligated to make payment in full to Bank
in
accordance with the terms and provisions hereof irrespective of the
validity,
regularity or enforceability of any instrument or writing
evidencing such
Liability or of the Liability itself, and if the Liability is
secured, said
obligation of Guarantor to make payment hereunder shall be made
irrespective
of the validity, perfection, regularity or enforceability of any
instrument or
writing evidencing such security or of the security itself and it
shall not be
necessary for Bank to resort to such security before enforcing
Guarantor's
liability hereunder. Demand may be made upon Guarantor for the
enforcement of
this Guaranty without the necessity of
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action at any time by Bank against Borrower or any collateral or to
first
accelerate the maturity of any Liabilities. Any action taken by
Bank against
Borrower, including foreclosure of any security held by Bank, shall
in no
event be considered a waiver or diminishment of any rights against
Guarantor
under this Guaranty and Bank shall, at its sole discretion, have
the right at
any time to discontinue any action or proceeding against Borrower
and require
full payment by Guarantor of the Liabilities together with
attorneys' fees,
cost of the proceedings and court costs. It is agreed that a
compromise and
settlement of any Liability shall, in no sense, compromise or
settle
Guarantor's liability hereunder. Bank may apply any collateral for
the
Liabilities in such order as it may elect and without any
obligation to
account to Guarantor or any of them for the manner or order of
application.
3. Guarantor does hereby waive presentment of any instrument,
demand for
payment, protest and notice of dishonor or nonpayment and, to the
extent
permitted by applicable law, Guarantor waives all rights arising
out of any
statute now existing or hereafter enacted with respect to guaranty
or
suretyship and which may otherwise require Bank at any time to take
legal
action against Borrower. Guarantor does hereby waive notice of the
acceptance
of this Guaranty and notice of any Liability contracted or incurred
by
Borrower.
4. Bank may, from time to time, without the consent of or notice
to
Guarantor, change the manner, interest rate, place or terms of
payment, and
change or extend the time of payment of, refund, increase,
decrease, renew or
alter in any manner any Liability or security therefor, and may,
from time to
time, at its own discretion, without the consent of or notice to
Guarantor,
exchange, release, surrender, realize upon or otherwise deal with
in any
manner and in any order, any collateral pledged or mortgaged to
secure any
Liability, without in any way affecting Guarantor's obligation
hereunder.
5. The obligations of Guarantor hereunder shall apply to all
Liabilities,
including Liabilities arising on or prior to notice in writing from
Guarantor
that Guarantor will not be responsible for any further Liabilities
or notice
from Guarantor's personal representative that Guarantor has died or
been
adjudicated incompetent. Any such notice, to be effective, must be
actually
received by Bank. Notwithstanding the giving of such notice, the
obligations
of Guarantor shall continue in full force and effect as to all
Liabilities
then existing including those contingent, unliquidated or not yet
accrued and
to any Liab
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