EXHIBIT 10.9
PARENT GUARANTY
THIS GUARANTY (this
“Guaranty”) is made as of February 13, 2007, by Sten
Corporation, a Minnesota corporation (the “Guarantor”)
in favor of R. W. Sabes Investment, LLC (the
“Lender”);
WITNESSETH
WHEREAS, Colfax Financial Corporation, a
Utah corporation (the “Borrower”) and Lender have
entered into a certain Credit Agreement, Secured Convertible
Promissory Note and Security Agreement, all of which are dated as
of even date herewith (as they may be amended or modified further
from time to time, collectively, the “Loan Documents”),
providing, subject to the terms and conditions thereof, for
extensions of credit to be made by the Lender to the Borrower;
and
WHEREAS, Guarantor is the parent
corporation of Borrower and will benefit directly or indirectly
from the transactions contemplated by the Loan Documents;
and
WHEREAS, it is required by the Loan
Documents, that the Guarantor execute and deliver this Guaranty
whereby the Guarantor shall guarantee the payment when due of all
principal, interest and other amounts that shall be at any time
payable by the Borrower under the Loan Documents; and
WHEREAS, in order to induce the Lender to
enter into the Loan Documents, the Guarantor is willing to
guarantee the obligations of the Borrower under the Loan
Documents;
NOW, THEREFORE, in consideration of the
foregoing and the promises contained herein and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as
follows:
1.
Definitions
Terms defined in the Loan Agreement and
not otherwise defined herein have, as used herein, the respective
meanings provided for therein.
2.
Representations and Warranties
The Guarantor represents and warrants
(which representations and warranties shall be deemed to have been
renewed by the Guarantor upon each Borrowing under the Loan
Documents) that:
a.
it (i) is a corporation duly organized,
validly existing and in good standing under the laws of its
jurisdiction of organization; (ii) has all requisite corporation
power, and has all material governmental licenses, authorizations,
consents and approvals necessary to own its assets and carry on its
business as now being or as proposed to be conducted; and (iii) is
qualified to do business in all jurisdictions in which the nature
of the business conducted by it makes such qualification necessary
and where failure to so qualify would have a material adverse
effect on its condition (financial or otherwise), assets, nature of
assets, liabilities (including, without limitation, tax, ERISA and
environmental liabilities) or prospects.
b.
it has all necessary corporate power and
authority to execute, deliver and perform its obligations under
this Guaranty; the execution, delivery and performance by the
Guarantor of this Guaranty have been duly authorized by all
necessary corporate action; and this Guaranty has been duly and
validly executed and delivered by it and constitutes its legal,
valid and binding obligation, enforceable in accordance with its
terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization or moratorium or other
similar laws relating to the enforcement of creditors’ rights
generally and by general equitable principles.
c.
neither the execution and delivery by it
of this Guaranty nor compliance with the terms and provisions
hereof by the Guarantor will conflict with or result in a breach
of, or require any consent under, its articles of incorporation or
any applicable law or regulation, or any order, writ, injunction or
decree of any court or governmental authority or agency, or any
material agreement or instrument to which it is a party or by which
it is bound or to which it is subject (except for the consent
required under the Business Loan Agreement dated January 18, 2006
between Guarantor and Citizens Independent Bank, as amended by
Commercial Loan/Note Amendment Agreement dated January 8, 2007), or
constitute a default under any such agreement or instrument, or
result in the creation or imposition of any Lien upon any of its
revenues or assets pursuant to the terms of any such agreement or
instrument.
d.
after giving effect to the execution and
delivery of the Loan Documents to which it is a party and the
incurring of its obligations hereunder, it will not be
“insolvent,” within the meaning of such term as defined
in § 101 of Title 11 of the United States Code or § 2 of
either the Uniform Fraudulent Transfer Act or the Uniform
Fraudulent Conveyance Act, as each is amended from time to time, or
be unable to pay its debts generally as such debts become due, or
have an unreasonably small capital to engage in any business or
transaction, whether current or contemplated.
3.
The Guaranty and Security
Interest
The Guarantor hereby unconditionally
guarantees the full and punctual payment (whether at stated
maturity, upon acceleration or otherwise) of the principal of and
interest on the Secured Convertible Promissory Note, and the full
and punctual payment of all other amounts payable by the Borrower
under the Loan Documents (all of the foregoing obligations being
referred to collectively as the “Guaranteed
Obligations”). Upon failure by the Borrower to pay punctually
any such amount, the Guarantor agrees that it shall forthwith on
demand pay the amount not so paid at the place and in the manner
specified in the Loan Documents, as the case may be. To
secure the Guaranteed Obligations, the Guarantor has granted the
Lender a se
