The Guarantor hereby unconditionally guaranties the full and prompt payment and performance to CPC of any and all indebtedness, obligations and liabilities of every kind and nature of Reseller to CPC, under the Credit Agreement and Other Documents, whether at stated maturity, by acceleration or otherwise, whether now existing or hereafter created or arising, whether absolute or contingent, due or to become due, including, but not limited to, the full and prompt payment of the indebtedness, obligations and liabilities of Reseller under the Credit Agreement and Other Documents, including, but not limited to, the Indebtedness (“Guarantied Obligations”), up to a maximum amount of One Million Dollars ($1,000,000) (the “Guarantied Amount”). Guarantor further agrees to pay all costs of collection thereof, including reasonable attorneys’ fees and expenses (whether or not there is litigation), court costs and all costs in connection with any proceedings involving Reseller or the Guarantor under the United States Bankruptcy Code up to the Guarantied Amount (but such costs of collections in connection with proceedings against Reseller are to be counted toward the Guarantied Amount). Capitalized terms not otherwise defined herein have the meaning ascribed to such terms in the Credit Agreement.

This Guaranty shall be a continuing, absolute and unconditional guaranty, and shall remain in full force and effect until any and all of the Guarantied Obligations shall be fully and indefeasibly paid, and CPC has no other commitment to extend credit or make advances to or for the account of Reseller. This Guaranty is a guaranty of payment and performance, not of collection. Guarantor’s liability with respect to the Guarantied Obligations is primary, not secondary. In case of any event of Default and at any time thereafter, any or all of the Guarantied Obligations, at the option of CPC, immediately become due and payable from the Guarantor and CPC may proceed directly against the Guarantor without first proceeding against Reseller or any person liable for the payment or performance of the Guarantied Obligations, or any collateral or other security for the Guarantied Obligations. CPC will not be required to mitigate damages or take any other action to reduce, collect or enforce any Guarantied Obligations. Notwithstanding the occurrence of any such event of Default, this Guaranty shall continue and remain in full force and effect.

The liability of the Guarantor hereunder shall in no event be affected or impaired by any of the following (any of which may be done or omitted by CPC from time to time, without notice to the Guarantor): (a) any sale, pledge, surrender, compromise, settlement, release, renewal, extension, indulgence, alteration, substitution, surrender, exchange, change in, modification or other disposition of any of said indebtedness, obligations or liabilities, whether express or implied, or of any contract or contracts evidencing any thereof, or of any security or collateral therefor; (b) any acceptance by CPC of any security for, or other guarantors upon any of the Guarantied Obligations; (c) any failure, neglect or omission on the part of CPC to realize upon or protect any of the Guarantied Obligations, or any collateral or security therefor, or to exercise any lien upon or right of appropriation of any moneys, credits or property of Reseller possessed by CPC, toward the liquidation of said indebtedness, obligations or liabilities; (d) any application of payments or credits by CPC; (e) the granting of credit from time to time by CPC to Reseller in excess of the amount set forth in the Credit Agreement; (f) any release or discharge in whole or in part of any guarantor of the Guarantied Obligations; or (g) any act of commission or omission of any kind or at any time upon the part of CPC with respect to any matter whatsoever. CPC shall have the sole and exclusive right to determine how, when and to what extent application of payments and credits, if any, shall be made on the Guarantied Obligations, or any part therof. In order to hold the Guarantor liable hereunder, there shall be no obligation on the part of CPC at any time to resort for payment to Reseller or other persons or corporations, their properties or estates, or resort to any collateral, security, property, liens or other rights or remedies whatsoever.

The Guarantor acknowledges and agrees that the Guarantor’s liability pursuant on this Guaranty shall be and is joint and several with any other guaranty of the Guarantied Obligations by any other person or entity, whether any such other guaranty now exists or hereinafter arises.

Guarantor’s liability under this Guaranty will not be reduced, extinguished, discharged or released by, and Guarantor is not entitled to raise as a defense, any:

The Guarantor hereby agrees that CPC shall have no duty to advise Guarantor of information now or hereafter known to CPC regarding the financial or other condition of Reseller or any other person primarily or secondarily liable on the indebtedness or regarding any circumstance bearing on the risk of non-payment of the indebtedness.

CPC may, without any notice whatsoever to the Guarantor, sell, assign or transfer all of said indebtedness, obligations and liabilities, or any part thereof, and, in that event, each and every immediate and successive assignee, transferee or holder of all or any part of said indebtedness, obligations and liabilities, shall have the right to enforce this Guaranty, by suit or otherwise, for the benefit of such assignee, transferee or holder, as fully as if such assignee, transferee or holder were herein by name specifically given such rights, powers and benefits.

CPC is authorized by the Guarantor at any time and from time to time in its sole discretion, without demand or notice of any kind, to appropriate, hold, setoff and apply, in such order of application as CPC, in its sole and absolute discretion, may from time to time elect, toward the payment of any amount due hereunder, whether now due or hereinafter arising, all moneys, credits or other property belonging to or in the name of the Guarantor, at any time held by CPC, whether now being held or held in the future, on deposit or otherwise, and CPC is hereby granted a lien and security interest upon such moneys, credits or other property.

No delay on the part of CPC in the exercise of any right or remedy under any agreement (including, but not limited to, this Guaranty) shall operate as a waiver thereof, including, but not limited to, any delay in the enforcement of any security interest, and no single or partial exercise by CPC of any right or remedy shall preclude other or further exercise thereof or the exercise of any other right or remedy.

The Guarantor agrees that the sale of any inventory collateral by CPC to a person that is liable to CPC under an agreement to repurchase inventory shall not be deemed a transfer subject to Section 9-618 of the Uniform Commercial Code as in effect in any applicable jurisdiction. Guarantor agrees that repurchase of inventory collateral by the seller of such inventory to Reseller pursuant to an agreement between CPC or an affiliate of CPC and such seller of inventory, to repurchase such inventory shall be deemed a commercially reasonable disposition of such inventory.

The Guarantor represents and warrants to CPC that: (a) the execution and delivery of this Guaranty, does not and will not contravene or conflict with any provisions of (i) law, rule, regulation or ordinance or (ii) any agreement binding upon Guarantor or the Guarantor’s properties, as the case may be; and (b) this Guaranty is the legal, valid and binding obligation of the Guarantor, enforceable against Guarantor in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization and other similar laws affecting the rights and remedies of creditors and except as to the availability of equitable remedies is subject to judicial discretion; and (c) the financial statements and other information submitted by the Guarantor to CPC accurately present the financial condition of such person as of the date stated therein and there have been no material adverse changes in such financial conditions since that date.

The Guarantor covenants and agrees that the Guarantor will furnish to CPC such information about the financial condition and affairs of Guarantor as CPC may from time to time reasonably request, including, but not limited to, within 90 days after the end of each calendar year a financial statement dated as of December 31 of such ending calendar year in form and manner satisfactory to CPC.

To the extent permitted by law, Guarantor waives any right it might have to terminate or limit Guarantor’s liability under this Guaranty. Notwithstanding this waiver where Guarantor is permitted to terminate or limit Guarantor’s liability, then such termination or limitation shall not be effective until after CPC’s receipt of written notice to such effect, however no such termination or limitation shall be effective with respect to any indebtedness existing on the effective date of such notification or any indebtedness arising after the notification, to the extent CPC is otherwise obligated to make any credit extension on behalf of Reseller.

To the extent that Guarantor or Reseller make a payment to CPC, or CPC forecloses on its collateral or exercises setoff and such payment, foreclosure or setoff is later invalidated, declared fraudulent or preferential is set aside or required to be paid back under any state or federal law, then the Guarantied Obligations will not be deemed to have been satisfied to the extent of the returned or invalidated payment and the obligations of Guarantor under this Guaranty shall be revived automatically and to continue to be owed.

All notices and other communications required or permitted to be given to the Guarantor or to CPC shall be done in accordance with the procedure set forth in the Credit Agreement to the addresses set forth below the signature lines of this Guaranty.

Guarantor hereby acknowledges, agrees and consents to the terms and conditions of the Credit Agreement and all Other Documents, copies of which have been received by the Guarantor. The Guarantor hereby acknowledges that (1) Guarantor has reviewed the Credit Agreement and all Other Documents; (2) Guarantor has received good and valuable consideration to execute this Guaranty, (3) in the negotiation and drafting of this Guaranty, Guarantor has been represented by and has relied upon the advice of counsel of its choice, or that Guarantor has affirmatively waived its opportunity to be represented by counsel; and (4) therefore, this Guaranty will be deemed drafted by each of Guarantor and CPC and the rule of construction to the effect that any ambiguities are to be resolved against the drafter will not be employed in the interpretation of this Guaranty.

Guarantor acknowledges and agrees that except as specifically set forth in the Credit Agreement or this Guaranty, CPC makes no covenants to either Reseller or the Guarantor, including, but not limited to, any other commitments to provide additional financing to Reseller.

This Guaranty may be executed by the parties hereto on any number of separate counterparts and all such counterparts taken together constitute on and the same instrument. It is not necessary in making proof of this Guaranty to produce or account for more than one counterpart signed by the party to be charged.

For purposes of this Guaranty, a document (or signature page thereto) signed and transmitted by facsimile machine or telecopier or by a scanned and transmitted electronic means is to be treated as an original document. The signature of any person thereof, for purposes hereof, is to be considered as an original signature, and the document transmitted is to be considered to have the same binding effect as an original signature on an original document. At the request of any party hereto, any facsimile, telecopy or electronically scanned document is to be re-executed in original form by the persons who executed the facsimile, telecopy or electronically scanned document. No party hereto may raise the use of a facsimile, telecopier or electronically scanned document as a defense to the enforcement of this Guaranty or any amendment or other document executed in compliance with this Section.

This Guaranty, together with the Credit Agreement and Other Documents, is intended by the parties as a final expression of their agreement and is intended as a complete and exclusive statement of the terms and conditions thereof. Acceptance of or acquiescence in a course of performance or course of dealing rendered or taken under or with respect to this Guaranty, the Credit Agreement or Other Documents will not be relevant to determine the meaning of this Guaranty, the Credit Agreement or Other Documents even though the accepting or acquiescing party had knowledge of the nature of the performance and opportunity for objection.

Binding Arbitration. Except as otherwise specified below, all actions, disputes, claims and controversies under common law, statutory law or in equity of any type or nature whatsoever, whether arising before or after the date of this Guaranty, and whether directly or indirectly relating to (a) this Guaranty and/or any amendments or other modifications hereof, or the breach, invalidity or termination hereof, (b) any previous or subsequent agreement between CPC and Guarantor, (c) any act or omission by CPC or by any employee, agent, officer or director of CPC, whether or not arising within the scope and course of employment or other contractual representation of CPC provided that such act or omission arises under a relationship, transaction or dealing between CPC and Reseller or CPC and Guarantor, and/or (d) any other relationship, transaction, dealing or agreement between CPC and Reseller or CPC and Guarantor (collectively, the “Disputes”), will be subject to and resolved by binding arbitration. Notwithstanding the foregoing, the parties agree that either party may pursue claims against the other that do not exceed $15,000 in the aggregate in a court of competent jurisdiction. Service of arbitration claims shall be acceptable if made by U.S. mail or overnight delivery to the address for the party described herein. All arbitration hereunder will be conducted in accordance with The Commercial Arbitration Rules of The American Arbitration Association (“AAA”). The arbitration rules are currently found at www.adr.org for AAA. AAA claims may be filed in any AAA office. All arbitrator(s) selected will be attorneys with at least five years secured transactions experience. A panel of three arbitrators shall hear all claims exceeding $1,000,000, exclusive of interest, costs and attorneys’ fees. The arbitrator(s) will decide if any inconsistency exists between the rules of any applicable arbitral forum and the arbitration provisions contained herein. If such inconsistency exists, the arbitration provisions contained herein will control and supersede such rules. The arbitrator shall follow the terms of this agreement and the applicable law, including without limitation, the attorney-client privilege and the attorney work product doctrine.

 

 

 

 

 

 

By: 

Managing Partner