Exhibit 10.4
Execution Copy
GUARANTY
THIS GUARANTY, dated as of April 21,
2008, is made by TURBOSONIC TECHNOLOGIES, INC. (the “
Guarantor ”) in favor of CANADIAN IMPERIAL BANK OF
COMMERCE , as lender (the “ Lender
”).
WHEREAS, it is a condition precedent
to the Lender extending credit to the Borrower, under that certain
Banking Agreement, dated January 14, 2008 (said agreement including
all schedules attached thereto, as amended, amended and restated,
supplemented or otherwise modified from time to time, being the
“ Banking Agreement ”), between Turbosonic Inc.
(the “ Borrower ”) and the Lender, that the
Guarantor execute and deliver to the Lender this
guaranty;
WHEREAS, the Guarantor wishes to
guaranty the Borrower’s obligations to the Lender under or in
respect of the Banking Agreement as provided herein; and
WHEREAS, contemporaneously with this
Guaranty, the Guarantor will also enter into a Security Agreement,
dated as of the date hereof, in favor of the Lender to secure the
Guarantor’s obligations hereunder;
NOW, THEREFORE, the Guarantor hereby
agrees with the Lender as follows:
1.
Definitions
. Capitalized
terms used herein, and not otherwise defined herein, shall have the
meanings ascribed to such terms in the Banking
Agreement.
2.
Guaranty of Payment and
Performance . Guarantor hereby absolutely
and unconditionally guarantees to the Lender the full and punctual
payment when due (whether at stated maturity, by required
pre-payment, by acceleration or otherwise), of all advances to, and
debts, liabilities, obligations, covenants and duties of, the
Borrower, including all such which would become due but for the
operation of the automatic stay pursuant to §362(a) of the
Federal Bankruptcy Code and the operation of §§502(b) and
506(b) of the Federal Bankruptcy Code (the “
Obligations ”). This Guaranty is an absolute,
unconditional and continuing guaranty of the full and punctual
payment of all of the Obligations and not of their collectibility
only and is in no way conditioned upon any requirement that the
Lender first attempt to collect any of the Obligations from the
Borrower or resort to any collateral security or other means of
obtaining payment. Should the Borrower default in the payment
of any of the Obligations, the obligations of the Guarantor
hereunder with respect to such Obligations in default shall, upon
demand by the Lender, become immediately due and payable to the
Lender, without any other demand or notice of any nature, all of
which are expressly waived by Guarantor. Payments by the
Guarantor hereunder may be required by the Lender on any number of
occasions. All payments by Guarantor hereunder shall be made
to the Lender in the manner and at the place of payment specified
therefor in the Banking Agreement.
3.
Guarantor’ Agreement to Pay
Enforcement Costs, etc . Guarantor agrees, as a
principal obligor and not as a guarantor only, to pay to the Lender
, within ten (10) Business Days after receiving a written demand
therefor, all reasonable out-of-pocket costs and expenses
(including court costs and legal expenses) incurred or expended by
the Lender in connection with the Obligations, this Guaranty and
the enforcement thereof, together with interest on amounts
recoverable under this §3 from the time when such amounts
become due until payment, whether before or after judgment provided
that if such interest exceeds the maximum amount permitted to be
paid under applicable law, then such interest shall be reduced to
such maximum permitted amount.
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4.
Waivers by Guarantor;
Lender’s Freedom to Act . Guarantor agrees that the
Obligations will be paid and performed strictly in accordance with
their respective terms, regardless of any law, regulation or order
now or hereafter in effect in any jurisdiction affecting any of
such terms or the rights of the Lender with respect thereto.
To the extent permitted by law, Guarantor waives promptness,
diligence, presentment, demand, protest, notice of acceptance,
notice of any Obligations incurred and all other notices of any
kind, all defenses which may be available by virtue of any
valuation, stay, moratorium law or other similar law now or
hereafter in effect, any right to require the marshalling of assets
of the Borrower or any other entity or other person primarily or
secondarily liable with respect to any of the Obligations, and all
suretyship defenses generally. Without limiting the
generality of the foregoing, Guarantor agrees to the provisions of
any instrument evidencing, securing or otherwise executed in
connection with any Obligation and agrees that the obligations of
Guarantor hereunder shall not be released or discharged, in whole
or in part, or otherwise affected by (i) the failure of the Lender
to assert any claim or demand or to enforce any right or remedy
against the Borrower or any other entity or other person primarily
or secondarily liable with respect to any of the Obligations; (ii)
any extensions, compromise, refinancing, consolidation or renewals
of any Obligation; (iii) any change in the time, place or manner of
payment of any of the Obligations or any rescissions, waivers,
compromise, refinancing, consolidation or other amendments or
modifications of any of the terms or provisions of the Banking
Agreement or any other agreement evidencing, securing or otherwise
executed in connection with any of the Obligations; (iv) the
addition, substitution or release of any entity or other person
primarily or secondarily liable for any Obligation; (v) the
adequacy of any rights which the Lender may have against any
collateral security or other means of obtaining repayment of any of
the Obligations; (vi) the impairment of any collateral securing any
of the Obligations, including without limitation the failure to
perfect or preserve any rights which the Lender might have in such
collateral security or the substitution, exchange, surrender,
release, loss or destruction of any such collateral security; or
(vii) any other act or omission which might in any manner or to any
extent vary the risk of Guarantor or otherwise operate as a release
or discharge of Guarantor, all of which may be done without notice
to Guarantor. To the fullest extent permitted by law,
Guarantor hereby expressly waives any and all rights or defenses
arising by reason of (A) any “one action” or
“anti-deficiency” law which would otherwise prevent the
Lender from bringing any action, including any claim for a
deficiency, or exercising any other right or remedy (including any
right of set-off), against Guarantor before or after the
Lender’s commencement or completion of any foreclosure
action, whether judicially, by exercise of power of sale or
otherwise, or (B) any other law which in any other way would
otherwise require any election of remedies by the
Lender.
5.
Unenforceability of Obligations
Against Borrower; Severability .
5.1.
Unenforceability of Obligations
Against Borrower . If for any reason the
Borrower has no legal existence or is under no legal obligation to
discharge any of the Obligations, or if any of the Obligations have
become irrecoverable from the Borrower by reason of the
Borrower’s insolvency, bankruptcy or reorganization or by
other operation of law or for any other reason, this Guaranty shall
nevertheless be binding on Guarantor to the same extent as if
Guarantor at all times had been the principal obligor on all such
Obligations. In the event that acceleration of the time for
payment of any of the Obligations is stayed upon the insolvency,
bankruptcy or reorganization of the Borrower, or by operation of
law or for any other reason, all such amounts otherwise subject to
acceleration under the terms of the Banking Agreement, this
Guaranty or the Security Agreement (the “ Loan
Documents ”) or any other agreement evidencing, securing
or otherwise executed in connection with any Obligation shall be
immediately due and payable by the Guarantor.
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5.2.
Severability, etc
. It is the
intention and agreement of Guarantor and the Lender that the
obligations of Guarantor under this Guaranty shall be valid and
enforceable against Guarantor to the maximum extent permitted by
applicable law. Accordingly, if any provision of this
Guaranty creating any obligation of Guarantor in favor of the
Lender shall be declared to be invalid or unenforceable in any
respect or to any extent, it is the stated intention and agreement
of Guarantor and the Lender that any balance of the obligation
created by such provision and all othe
