GUARANTY BY CORPORATION
This
Guaranty, dated as of November 20, 2007, is made by GVI
Security Solutions, Inc., a Delaware corporation (the
“Guarantor”), for the benefit of Well Fargo Bank,
National Association (with its participants, successors and
assigns, the “Lender”), acting through its Wells
Fargo Business Credit operating division.
The
Lender and GVI Security, Inc., a Delaware corporation (the
“Borrower”), are parties to a Credit and Security
Agreement of even date herewith (as the same may be amended,
supplemented or restated from time to time, the “Credit
Agreement”) pursuant to which the Lender may make
advances and extend other financial accommodations to the
Borrower.
As
a condition to extending such credit to the Borrower, the
Lender has required the execution and delivery of this
Guaranty.
ACCORDINGLY,
the Guarantor, in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, hereby agrees as
follows:
1.
Definitions .
All terms defined in the Credit Agreement that are not otherwise
defined herein shall have the meanings given them in the Credit
Agreement.
2.
Indebtedness Guaranteed .
The Guarantor hereby absolutely and unconditionally guarantees to
the Lender the full and prompt payment when due, whether at
maturity or earlier by reason of acceleration or otherwise, of the
Indebtedness.
3.
Guarantor’s Representations and Warranties
.
The Guarantor represents and warrants to the Lender that
(i) the Guarantor is a corporation, duly organized and
existing in good standing and has full power and authority to make
and deliver this Guaranty; (ii) the execution, delivery and
performance of this Guaranty by the Guarantor have been duly
authorized by all necessary action of its directors and
shareholders and do not and will not violate the provisions of, or
constitute a default under, any presently applicable law or its
Constituent Documents or any agreement presently binding on it;
(iii) this Guaranty has been duly executed and delivered by an
authorized Officer of the Guarantor and constitutes its lawful,
binding and legally enforceable obligation; and (iv) the
authorization, execution, delivery and performance of this Guaranty
do not require notification to, registration with, or consent or
approval by, any federal, state or local regulatory body or
administrative agency. The Guarantor represents and warrants to the
Lender that the Guarantor has a direct and substantial economic
interest in the Borrower and expects to derive substantial benefits
therefrom and from any loans, credit transactions, financial
accommodations, discounts, purchases of property and other
transactions and events resulting in the creation of the
Indebtedness guarantied hereby, and that this Guaranty is given for
a corporate purpose. The Guarantor agrees to rely exclusively on
the right to revoke this Guaranty prospectively as to future
transactions, in accordance with paragraph 4, if at any time, in
the opinion of the directors or officers, the benefits then being
received by the Guarantor in connection with this Guaranty are not
sufficient to warrant the continuance of this Guaranty as to the
future Indebtedness of the Borrower. Accordingly, so long as this
Guaranty is not revoked prospectively in accordance with paragraph
4, the Lender may rely conclusively on a continuing warranty,
hereby made, that the Guarantor continues to be benefited by this
Guaranty and the Lender shall have no duty to inquire into or
confirm the receipt of any such benefits, and this Guaranty shall
be effective and enforceable by the Lender without regard to the
receipt, nature or value of any such benefits.
4.
Unconditional Nature .
No act or thing need occur to establish the Guarantor’s
liability hereunder, and no act or thing, except full payment and
discharge of all of the Indebtedness, shall in any way exonerate
the Guarantor hereunder or modify, reduce, limit or release the
Guarantor’s liability hereunder. This is an absolute,
unconditional and continuing guaranty of payment of the
Indebtedness and shall continue to be in force and be binding upon
the Guarantor, whether or not all of the Indebtedness is paid in
full, until this Guaranty is revoked prospectively as to future
transactions, by written notice actually received by the Lender,
and such revocation shall not be effective as to the amount of
Indebtedness existing or committed for at the time of actual
receipt of such notice by the Lender, or as to any renewals,
extensions, refinancings or refundings thereof.
5.
Dissolution or Insolvency of Guarantor .
The dissolution or adjudication of bankruptcy of the Guarantor
shall not revoke this Guaranty, except upon actual receipt of
written notice thereof by the Lender and only prospectively, as to
future transactions, as herein set forth. If the Guarantor shall be
dissolved or shall be or become insolvent (however defined), then
the Lender shall have the right to declare immediately due and
payable, and the Guarantor will forthwith pay to the Lender, the
full amount of all of the Indebtedness whether due and payable or
unmatured. If the Guarantor voluntarily commences or there is
commenced involuntarily against the Guarantor a case under the
United States Bankruptcy Code, the full amount of all Indebtedness,
whether due and payable or unmatured, shall be immediately due and
payable without demand or notice thereof.
6.
Subrogation, etc. The
Guarantor hereby waives all rights that the Guarantor may now have
or hereafter acquire, whether by subrogation, contribution,
reimbursement, recourse, exoneration, contract or otherwise, to
recover from the Borrower or from any property of the Borrower any
sums paid under this Guaranty until all of the Indebtedness shall
have been fully paid and discharged. The Guarantor will not
exercise or enforce any right of contribution to recover any such
sums from any person who is a co-obligor with the Borrower or a
guarantor or surety of the Indebtedness or from any property of any
such person until all of the Indebtedness shall have been fully
paid and discharged.
7.
Enforcement Expenses .
The Guarantor will pay or reimburse the Lender for all costs,
expenses and attorneys’ fees paid or incurred by the Lender
in endeavoring to collect and enforce the Indebtedn
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