CORPORATE GUARANTY

 

Date: at the 26th of July, 2012

 

GE CF México, S.A. de C.V.

GE Capital CEF Mexico, S. de R. L de C.V.

Av. Antonio Dovalí Jaime Torre A Piso 5

Colonia Santa Fe

01210, México, D.F.

 

To induce you to enter into that certain Loan Agreement dated on 25th of July,
2012 and any and all Schedules, Annexes, Exhibits and the other documents
related thereto including, but not limited to the promissory note(s), security
agreements, pledge agreements, lease agreements, and/or any other documents or
instruments evidencing, or relating to, loan, extension of credit or other
financial accommodation(collectively "Account Documents" and each an "Account
Document") with Nexus Magneticos de Mexico, S. de R.L. de C.V., a Mexican
company organized and existing under the laws of the United Mexican States
("Customer"), but without in any way binding you to do so the undersigned, for
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, does hereby guarantee to you, your successors and assigns, the
due, regular and punctual payment of any sum or sums of money which the Customer
may owe to you now or at any time hereafter, evidenced by the Account Documents,
and whether it represents principal, interest, late charges, indemnities, an
original balance, an accelerated balance, liquidated damages, a balance reduced
by partial payment, a deficiency after sale or other disposition of any
collateral or security, or any other type of sum of any kind whatsoever that the
Customer may owe to you now or at any time prior to the termination of this
Corporate Guaranty, and does hereby further guarantee to you, your successors
and assigns, the due regular and punctual performance of any another duty or
obligation of any kind or character whatsoever (subject to any notice and cure
period set forth in the Account Documents) that the Customer may owe to you now
or at any time hereafter directly related or derived from the Account
Documents(all such payment obligations being collectively referred to as
"Obligations"). The undersigned does hereby further guarantee to pay upon simple
demand all direct damages, costs, reasonable attorneys' fees and expenses which
may be suffered by you by reason of Customer´s default or default of the
undersigned.

 

This Guaranty is a guaranty of prompt payment (and not merely a guaranty of
collection). Should there be any default of the Account Documents, nothing
herein shall require you to first seek or exhaust any remedy against the
Customer, its successors and assigns, or any other person obligated with respect
to the Obligations, or to first foreclose, exhaust or otherwise proceed against
any collateral or security which may be given in connection with the
Obligations. It is agreed that you may, upon any breach or default of the
Customer (subject to any notice and cure period set forth in the Account
Documents), make demand upon the undersigned and receive payment of the
Obligations, with or without notice or demand for payment or performance by the
Customer, its successors or assigns, or any other person (other than the
undersigned). Suit may be brought and maintained against the undersigned, at
your election, without joinder of the Customer or any other person as parties
thereto. The obligations of each signatory to this Guaranty shall be joint and
several.

 

The undersigned agrees that its obligations under this Guaranty shall be
primary, absolute, continuing and unconditional, irrespective of and unaffected
by any of the following actions or circumstances (regardless of any notice to or
consent of the undersigned): (a) the enforceability of the Account Documents;
(b) any extension, renewal, amendment, change, waiver or other modification of
the Account Documents or any other document except to the extent that such
amendment, change, waiver or modification to the Account Documents waives and/or
releases Customer of its Obligations; (c) the absence of, or delay in, any
action to enforce the Account Documents, this Guaranty or any other document;
(d) your failure or delay in obtaining any other guaranty of the Obligations
(including, without limitation, your failure to obtain the signature of any
other guarantor hereunder); (e) the extension of time for payment or performance
by, or any other indulgence granted to the Customer or any other person with
respect to the Obligations by operation of law or otherwise; (f) the existence,
value, condition, loss, subordination or release (with or without substitution)
of, or failure to have title to or perfect and maintain a security interest in,
or the time, place and manner of any sale or other disposition of any collateral
or security given in connection with the Obligations, or any other impairment
(whether intentional or negligent, by operation of law or otherwise) of the
rights of the undersigned; (g) the Customer's voluntary or involuntary
bankruptcy, assignment for the benefit of creditors, reorganization, or similar
proceedings affecting the Customer or any of its assets; or (h) any other action
or circumstances which might otherwise constitute a legal or equitable discharge
or defense of a surety or guarantor. Notwithstanding anything to the contrary
contained in this Guaranty, in no event shall the aggregate of the obligations
and liabilities of Guarantor and Customer be greater and of any longer duration
than the Obligations and liabilities of Customer under the Account Documents
and, for avoidance of doubt, Guarantor’s liability under this Guaranty shall be
subject to your duty to mitigate any loss in the same manner and to the same
extent as if Guarantor had executed the Account Documents in place of Customer.

 

This Guaranty, the Account Documents and the Obligations may be assigned by you,
without consent but with notice to the undersigned. The undersigned agrees that
if it receives written notice of an assignment from you, the undersigned will
pay all amounts due hereunder to such assignee. The undersigned also agrees to
confirm in writing receipt of the notice of assignment as may be reasonably
requested by assignee. The undersigned hereby waives and agrees not to assert
against any such assignee any of the defenses set forth in the immediate
preceding paragraph.

 

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This Guaranty may be terminated upon delivery to you (at your address shown
above) of a written termination notice from the undersigned. However, as to all
Obligations (whether matured, unmatured, absolute or otherwise) incurred by the
Customer prior to your receipt of such written termination notice (and
regardless of any subsequent amendment, extension or other modification which
may be made with respect to such Obligations), this Guaranty shall nevertheless
continue and remain undischarged until all such Obligations are paid and
performed in full.

 

The undersigned agrees that this Guaranty shall remain in full force and effect
or be reinstated (as the case may be) if at any time payment or performance of
any of the Obligations (or any part thereof) is rescinded, reduced or must
otherwise be restored or returned by you, all as though such payment or
performance had not been made. If, by reason of any bankruptcy, insolvency or
similar laws effecting the rights of creditors, you shall be prohibited from
exercising any of your rights or remedies against the Customer or any other
person or against any property, then, as between you and the undersigned, such
prohibition shall be of no force and effect, and you shall have the right to
make demand upon, and receive payment from, the undersigned of all amounts and
other sums that would be due to you upon a default with respect to the
Obligations.

 

Except as set forth in the Account Documents, notice of acceptance of this
Guaranty and of any default by the Customer or any other person is hereby
waived. Presentment, protest demand, and notice of protest, demand and dishonor
of any of the Obligations, and the exercise of possession, collection or other
remedies for the Obligations, are hereby waived. The undersigned warrants that
it has adequate means to obtain from the Customer on a continuing basis
financial data and other information regarding the Customer and is not relying
upon you to provide any such data or other information. Without limiting the
foregoing, notice of adverse change in the Customer's financial condition or of
any other fact which might materially increase the risk of the undersigned is
also waived.

 

Payment of all amounts now or hereafter owed to the undersigned by the Customer
for any of the Obligations is hereby subordinated in right of payment to the
payment in full to you of all Obligations. The undersigned hereby irrevocably
and unconditionally waives until the payment in full to you of all the
Obligations all statutory, contractual, common law, equitable and all other
claims against the Customer for any of the Obligations, any collateral
therefore, or any other assets of the Customer, for subrogation, reimbursement,
exoneration, contribution, indemnification, setoff or other recourse in respect
of sums paid or payable to you by the undersigned hereunder, and the undersigned
hereby further irrevocably and unconditionally waives until the payment in full
to you of all the Obligations any and all other benefits which it might
otherwise directly or indirectly receive or be entitled to receive by reason of
any amounts paid by, or collected or due from, it, the Customer for any of the
Obligations, or realized from any of their respective assets.

 

THE UNDERSIGNED HEREBY UNCONDITIONALLY WAIVES ITS RIGHT TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY,
THIS GUARANTY, THE OBLIGATIONS GUARANTEED HEREBY, ANY OF THE RELATED DOCUMENTS,
ANY DEALINGS BETWEEN US RELATING TO THE SUBJECT MATTER HEREOF OR THEREOF, AND/OR
THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN US. THE SCOPE OF THIS WAIVER
IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN
ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH
OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS). THIS WAIVER IS
IRREVOCABLE MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS GUARANTY, THE OBLIGATIONS GUARANTEED HEREBY, OR ANY RELATED DOCUMENTS.
IN THE EVENT OF LITIGATION, THIS GUARANTY MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.

 

As used in this Guaranty, the word "person" shall include any individual,
corporation, partnership, joint venture, association, joint- stock company,
trust, unincorporated organization, or any government or any political
subdivision thereof.

 

This Guaranty is intended by the parties as a final expression of the guaranty
of the undersigned and is also intended as a complete and exclusive statement of
the terms thereof. No course of dealing, course of performance or trade usage,
nor any paid evidence of any kind, shall be used to supplement or modify any of
the terms hereof. Nor are there any conditions to the full effectiveness of this
Guaranty. This Guaranty and each of its provisions may only be waived, modified,
varied, released, terminated or surrendered, in whole or in part, by a duly
authorized written instrument signed by you and the undersigned. No failure by
you to exercise your rights hereunder shall give rise to any estoppel against
you, or excuse the undersigned from performing hereunder. Your waiver of any
right to demand performance hereunder shall not be a waiver of any subsequent or
other right to demand performance hereunder.

 

This Guaranty shall bind the undersigned's successors and assigns and the
benefits thereof shall extend to and include your successors and assigns. During
the occurrence and continuance of an event of default hereunder, you may at any
time inspect undersigned's accounting records (provided that such inspection is
not a violation of the Security and Exchange rules of the United States of
America),

 

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If any provisions of this Guaranty are in conflict with any applicable statute,
rule or law, then such provisions shall be deemed null and void to the extent
that they may conflict therewith, but without invalidating any other provisions
hereof.

 

Each signatory on behalf of a corporate guarantor warrants that he had authority
to sign on behalf of such corporation and by so signing, to bind said guarantor
corporation hereunder.

 

This guarantee and all other documents related therewith, shall be governed by
and construed by the laws of the State of New York in the United States of
America, without regard to the conflicts of laws provisions thereof, and all
disputes, controversies or claims derived from, arising out of or related
thereto shall be subject to the jurisdiction of the competent courts of the
State of New York, without giving effect to the current or future domiciles of
the parties.

 

IN WITNESS WHEREOF, this Guaranty is executed the day and year above written.

 

PIONEER POWER SOLUTIONS, INC.

 

 

 

By:              /s/ Andrew Minkow            

Name: Andrew Minkow

Title: Chief Financial Officer, Secretary and Treasurer

 

 

 

ATTEST: By: /s/ Patricia A. Blackwell             Name: Patricia A. Blackwell  
          Title: Notary Republic of New Jersey  

 

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