GUARANTY AND SURETYSHIP
AGREEMENT
IN
CONSIDERATION of the credit accommodation granted or to be granted
by CITIZENS BANK OF PENNSYLVANIA, a banking institution organized
under the laws of the Commonwealth of Pennsylvania (the
“Lender”), to INTERNATIONAL PLASTICS AND EQUIPMENT
CORP., a Pennsylvania corporation (the “Principal”),
pursuant to that certain Revolving Credit and Term Loan Agreement
dated as of February 18, 2005 between the Lender and the Principal
(the “Loan Agreement”) and that certain Revolving
Credit Loan Note in the maximum principal amount of $3,500,000, the
Term Note in the original principal amount of $1,500,000 and the
Multi-Draw Term Note in the maximum principal amount of $1,000,000
each dated as of February 18, 2005 and payable by the
Principal to the Lender (the “Notes”) and under the
other Guaranteed Liabilities (as hereinafter defined), the
undersigned; (i) guarantees and unconditionally becomes surety to
the Lender, its successors, endorsees and assigns, for the payment
on demand or at maturity of all Guaranteed Liabilities (as
hereinafter defined); (ii) assents to all agreements made or to be
made with the Lender by the Principal under or in connection with
the transactions contemplated by the Loan Agreement or any of the
other Guaranteed Liabilities; (iii) consents that the Lender may,
by action or inaction, (a) exchange or surrender any property
pledged by the Principal or any other obligor or provider of
security for the Guaranteed Liabilities or any other obligations of
the Principal to the Lender, (b) renew or change the terms of any
or all of the Principal’s liabilities under the Loan
Agreement or any of the other Guaranteed Liabilities, or (c) waive
any of the Lender’s rights or remedies against the Principal
or any other surety or guarantor of the Principal’s
liabilities under the Loan Agreement, any of the other Guaranteed
Liabilities or under any other agreement or instrument of
indebtedness; and (iv) waives any right, under any statute or rule
of law, where such right or rights can be legally waived, to
require the Lender to take any action against the Principal or to
marshal its claims against any or all of the Principal’s
assets.
“Guaranteed
Liabilities” shall mean all liabilities (primary, secondary,
direct, contingent, sole, joint and/or several) of the Principal to
the Lender, now or hereafter arising, including, without
limitation, (a) all liabilities now or hereafter arising under the
Loan Agreement, the Notes and any and all other documents and
agreements executed and delivered by the Principal to the Lender in
connection with the Loan Agreement, (b) all other debts,
liabilities, duties and obligations of the Principal to the Lender
now existing or contracted or incurred after the date of this
Agreement, whether arising under or in connection with the Loan
Agreement or arising under any other agreement, instrument or
undertaking made by or for the benefit of the Borrower to or for
the benefit of the Bank including, without limitation, all
obligations under any interest rate cap, swap, hedge or other
interest rate protection agreement, cash management or treasury
agreement or currency exchange agreement, credit or debit card
program or agreement and all reimbursement and other obligations
arising under or with respect to any letters of credit, and (c) all
costs and expenses incurred by the Lender in the collection of any
of the Guaranteed Liabilities or in connection with the enforcement
of any of the duties and obligations of the Principal to the
Lender, including reasonable attorneys’ fees and legal
expenses.
The obligations of the
undersigned under this Agreement are direct and primary obligations
of the undersigned and are independent of the Guaranteed
Liabilities, and a separate action or actions may be brought
against the undersigned regardless of whether action is brought
against the Principal, any other guarantor or surety or any other
person or whether the Principal, any other guarantor or surety or
any other person is joined in any such action or actions.
Furthermore, the obligations of the undersigned under this
Agreement shall be absolute, unconditional and irrevocable,
irrespective of (x) any lack of legality, validity, enforceability,
allowability (in a bankruptcy, insolvency, reorganization,
dissolution or similar proceeding, or otherwise), or any avoidance
or subordination, in whole or in part, of any of the Guaranteed
Liabilities, (y) any bankruptcy, insolvency, reorganization,
dissolution or similar proceedings with respect to, or any change,
restructuring or termination of the corporate structure or
existence of, the Principal, the undersigned or any other person,
or (z) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Principal or a
guarantor or surety.
The undersigned further agrees that:
1.
The
undersigned need not be notified by the Lender of its acceptance of
this Agreement or of its intention to act in reliance on this
Agreement, or of any loan to or any other transaction between the
Lender and the Principal or any default by the Principal or Event
of Default under the Loan Agreement or any of the other Guaranteed
Liabilities.
2.
The
undersigned will hold harmless the Lender and will pay to the
Lender on demand all costs and expenses (including reasonable
counsel and paralegal fees) which may be incurred in the
enforcement of any of the Guaranteed Liabilities of the Principal,
or of the rights of the Lender against the undersigned.
3.
Until
such time as all Guaranteed Liabilities are finally and irrevocably
paid in full, the undersigned agrees not to seek recourse against
the Principal by subrogation or otherwise in the event the
undersigned is called upon to pay the Lender under the suretyship
established by this Agreement. Until such time as all Guaranteed
Liabilities are paid in full, the undersigned irrevocably waives
any and all rights it may have at any time (whether arising
directly or indirectly, by operation of law or contract) to assert
any claim against any or all of the Principal on account of
payments made by the undersigned under this Agreement, including,
without limitation, any and all rights of subrogation,
reimbursement, exoneration, contribution or indemnity.
2
4.
If
any Secured Liability of the Principal to the Lender is not paid
when due, the Lender: (a) may forthwith recover from the
undersigned the full amount of any liability under this Agreement,
at any time or times without demand, notice, presentment or protest
of any kind to any party including the undersigned (all of which
are waived); and (b) may sell all or any part of any property held
as security under this Agreement on any exchange or at public or
private sale at the option of the Lender, at any time or times
without advertisement or demand upon or notice to the undersigned
(all of which are waived), except such notice as is required by
applicable statute and cannot be waived, with the right on the part
of the Lender or its nominee to become the purchaser of the
property at such sale (unless prohibited by statute).
