EX-10.1



 




Exhibit
10.1




GUARANTEE




          Guarantee, dated as of July 8, 2007 (this “Guarantee”), by Carlyle Partners V, L.P.
(the “Guarantor”), in favor of Sequa Corporation (the “Guaranteed Party”).




          1. GUARANTEE. To induce the Guaranteed Party to enter into an Agreement and Plan of
Merger, dated as of July 8, 2007 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the “Merger Agreement”), among Blue Jay Acquisition
Corporation, a Delaware corporation in which the Guarantor proposes to invest (“Parent”),
Blue Jay Merger Corporation, a Delaware corporation and a wholly-owned subsidiary of Parent
(“Merger Co”), and the Guaranteed Party, pursuant to which Merger Co will merge with and
into the Guaranteed Party, the Guarantor hereby absolutely, unconditionally and irrevocably
guarantees to the Guaranteed Party, the due and punctual observance, performance and discharge of
the payment obligations of Parent under Sections 8.03(d) and 8.03(e) of the Merger Agreement (the
“Obligations”). In furtherance of the foregoing, the Guarantor acknowledges that its
liability hereunder shall extend to the full amount of the Obligations, and that the Guaranteed
Party may, in its sole discretion, bring and prosecute a separate action or actions against the
Guarantor for the full amount of the Obligations.




          2. NATURE OF GUARANTEE. The Guaranteed Party shall not be obligated to file any claim
relating to the Obligations in the event that Parent becomes subject to a bankruptcy,
reorganization or similar proceeding, and the failure of the Guaranteed Party to so file shall not
affect the Guarantor’s obligations hereunder. In the event that any payment to the Guaranteed
Party in respect of the Obligations is rescinded or must otherwise be returned for any reason
whatsoever, the Guarantor shall remain liable hereunder with respect to the Obligations as if such
payment had not been made. This is an unconditional guarantee of payment and not of
collectibility.




          3. CHANGES IN OBLIGATIONS, CERTAIN WAIVERS. The Guarantor agrees that the Guaranteed
Party may at any time and from time to time, without notice to or further consent of the Guarantor,
extend the time of payment of any of the Obligations, and may also make any agreement with Parent
or with any other person interested in the transactions contemplated by the Merger Agreement, for
the extension, renewal, payment, compromise, discharge or release thereof, in whole or in part, or
for any modification of the terms thereof or of any agreement between the Guaranteed Party and
Parent or any such other person without in any way impairing or affecting the Guarantor’s
obligations under this Guarantee. The Guarantor agrees that the obligations of the Guarantor
hereunder shall not be released or discharged, in whole or in part, or otherwise affected by: (a)
the failure of the Guaranteed Party to assert any claim or demand or to enforce any right or remedy
against Parent or any other person interested in the transactions contemplated by the Merger
Agreement; (b) any change in the time, place or manner of payment of any of the Obligations or any
rescission, waiver, compromise, consolidation or other amendment or modification of any of the
terms or provisions of the Merger Agreement or any other agreement evidencing, securing or
otherwise executed in connection with any of the Obligations; (c) the addition, substitution or
release of any entity or other person interested in the transactions contemplated by the Merger
Agreement; (d) any change in the corporate existence, structure or ownership of Parent or any other
person interested



 









 








in the transactions contemplated by the Merger Agreement; (e) any insolvency, bankruptcy,
reorganization or other similar proceeding affecting Parent or any-other person
interested in the transactions contemplated by the Merger Agreement; (f) the existence of any
claim, set-off or other right which the Guarantor may have at any time against Parent, whether in
connection with the Obligations or otherwise; or (g) the adequacy of any other means the Guaranteed
Party may have of obtaining repayment of any of the Obligations. To the fullest extent permitted
by law, the Guarantor hereby expressly waives any and all rights or defenses arising by reason of
any law which would otherwise require any election of remedies by the Guaranteed Party. The
Guarantor waives promptness, diligence, notice of the acceptance of this Guarantee and of the
Obligations, presentment, demand for payment, notice of non-performance, default, dishonor and
protest, notice of any Obligations incurred and all other notices of any kind (except for notices
to be provided to Parent under the Merger Agreement), all defenses which may be available by virtue
of any valuation, stay, moratorium law or other similar law now or hereafter in effect, any right
to require the marshalling of assets of Parent or any other person interested in the transactions
contemplated by the Merger Agreement, and all suretyship defenses generally (other than fraud or
willful misconduct by the Guaranteed Party or any of its “Subsidiaries” (as defined in the Merger
Agreement), defenses to the payment of the Obligations that are available to Parent under the
Merger Agreement or breach by the Guaranteed Party of this Guarantee). The Guarantor acknowledges
that it will receive substantial direct and indirect benefits from the transactions contemplated by
the Merger Agreement and that the waivers set forth in this Guarantee are knowingly made in
contemplation of such benefits.




          The Guaranteed Party hereby covenants and agrees that it shall not institute, and shall cause
its respective affiliates not to institute, any proceeding or bring any other claim arising under,
or in connection with, the Merger Agreement or the transactions contemplated thereby, against the
Guarantor or the former, current or future stockholders, partners, members, affiliates, directors,
officers, employees or agents of the Guarantor or Parent or any former, current or future
stockholder, partner, member, affiliate, director, officer, employee or agent of any of the
foregoing (other than, in each case, Parent), except for claims against the Guarantor under this
Guarantee, and the Guarantor hereby covenants and agrees that it shall not institute, and shall
cause its respective affiliates not to institute, any proceeding asserting that this Guarantee is
illegal, invalid or unenforceable in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws
affecting creditors’ rights generally, and general equitable principles (whether considered in a
proceeding in equity or at law). Unless and until all of the Obligations and all other amounts
payable under this Guarantee shall have been paid in full in cash, the Guarantor hereby
unconditionally and irrevocably agrees not to exercise any rights that it may now have or hereafter
acquire against Parent or any other person interested in the transactions contemplated by the
Merger Agreement that arise from the existence, payment, performance, or enforcement of the
Guarantor’s Obligations under or in respect of this Guarantee or any other agreement in connection
therewith, including, without limitation, any right of subrogation, reimbursement, exoneration,
contribution or indemnification and any right to participate in any claim or remedy of the
Guaranteed Party against Parent or such other person, whether or not such claim, remedy or right
arises in equity or under contract, statute or common law, including, without limitation, the right
to take or receive from Parent or such other person, directly or indirectly, in cash or other
property or by set-off or in any other manner, payment or security on account of such claim, remedy
or right. If any amount shall be paid to the Guarantor in violation of the




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immediately preceding sentence at any time prior to the payment in full in cash of the
Obligations and all other amounts payable under this Guarantee, such amount shall be received and
held in trust for the benefit of the Guaranteed Party, shall be segregated from other property and
funds of the Guarantor and shall forthwith be paid or delivered to the Guaranteed Party in the same
form as so received (with any necessary endorsement or assignment) to be credited and applied to
the Obligations and all other amounts payable under this Guarantee, in accordance with the terms of
the Merger Agreement, whether matured or unmatured, or to be held as collateral for any Obligations
or other amounts payable under this Guarantee thereafter arising. Notwithstanding anything to the
contrary contained in this Guarantee, the Guaranteed Party hereby agrees that to the extent Parent
is relieved of its obligations under and pursuant to the terms of 8.03(d) and 8.03(e) of the Merger
Agreement, the Guarantor shall be similarly relieved of its Obligations under this Guarantee.




          4. NO WAIVER; CUMULATIVE RIGHTS. No failure on the part of the Guaranteed Party to
exercise, and no delay in exercising, any right, remedy or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by the Guaranteed Party of any right,
remedy or power hereunder preclude any other or future exercise of any right, remedy or power.
Each and every right, remedy and power hereby granted to the Guaranteed Party or allowed it by law
or other agreement shall be cumulative and not exclusive of any other, and may be exercised by the
Guaranteed Party at any time or from time to time.




          5. REPRESENTATIONS AND WARRANTIES. The Guarantor hereby represents and warrants that:




               (a) the execution, delivery and performance of this Guarantee have been duly authorized by all
necessary action and do not contravene any provision of the Guarantor’s charter, partnership
agreement, operating agreement or similar organizational documents or any law, regulation, rule,
decree, order, judgment or contractual restriction binding on the Guarantor or its assets;



               (b) all consents, approvals, authorizations, permits of, filings with and notifications to,
any governmental authority necessary for the due execution, delivery and performance of this
Guarantee by the Guarantor have been obtained or made and all conditions thereof have been duly
complied with, and no other action by, and no notice to or filing with, any governmental authority
or regulatory body is required in connection with the execution, delivery or performance of this
Guarantee;



               (c) this Guarantee constitutes a legal, valid and binding obligation of the Guarantor
enforceable against the Guarantor in accordance with its terms, subject to (i) the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws
affecting creditors’ rights generally, and (ii) general equitable principles (whether considered in
a proceeding in equity or at law); and



               (d) the Guarantor has the financial capacity to pay and perform its obligations under this
Guarantee, and all funds necessary for the Guarantor to fulfill its Obligations under this
Guarantee shall be available to the Guarantor for so long as this Guarantee shall remain in effect
in accordance with Section 8 hereof.



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          6. NO ASSIGNMENT. Neither the Guarantor nor the Guaranteed Party may assign its
rights, interests or obligations hereunder to any other person (except by operation of law) without
the prior written consent of the Guaranteed Party or the Guarantor, as the case may be.




          7. NOTICES. All notices and other communications hereunder shall be in writing in the
English language and shall be given (a) on the date of delivery if delivered personally, (b) on the
first business day following the date of dispatch if delivered by a nationally recognized next-day
courier service, (c) on the fifth business day following the date of mailing if delivered by
registered or certified mail (postage prepaid, return receipt requested) or (d) if sent by
facsimile transmission, when transmitted and receipt is confirmed. All notices to the Guarantor
hereunder shall be delivered as set forth below or to such other address or facsimile number as the
Guarantor shall have notified the Guaranteed Party in a written notice delivered to the Guaranteed
Party in accordance with the Merger Agreement:



Carlyle Partners V, L.P.

1001 Pennsylvania Avenue, NW

Suite 220 South

Washington, DC 20004

Attention: Peter Clare

                    Adam Palmer



Facsimile: (202) 347-9250



with a copy to:



Latham & Watkins LLP

555 Eleventh Street, NW

Washington, DC 20004

Attention: Daniel T. Lennon

                    David S. Dantzic



Facsimile: (202) 637-2201




          8. CONTINUING GUARANTEE. This Guarantee shall remain in full force and effect and
shall be binding on the Guarantor, its successors and assigns until all of the Obligations and all
amounts payable under this Guarantee have been indefeasibly paid, observed, performed or satisfied
in full. Notwithstanding the foregoing, this Guarantee shall terminate and the Guarantor shall
have no further obligations under this Guarantee as of the earlier of (i) the Effective Time (as
defined in the Merger Agreement) and (ii) the second year anniversary of the date hereof.




          9. GOVERNING LAW. This Guarantee shall be governed by, and construed in accordance
with, the laws of the State of Delaware applicable to contracts executed in and to be performed in
that State. All Actions (as defined in the Merger Agreement) arising out of or relating to this
Guarantee shall be heard and determined exclusively in the Court of Chancery or other courts of the
State of Delaware. The parties hereto hereby (a) submit to the exclusive jurisdiction of the Court
of Chancery or other courts of the State of Delaware for the purpose of any Action arising out of
or relating to this Guarantee brought by any party hereto, and (b)
 

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irrevocably waive, and agree not to assert by way of motion, defense, or otherwise, in any
such Action, any claim that it is not subject personally to the jurisdiction of the Court of
Chancery or other courts of the State of Delaware, that its property is exempt or immune from
attachment or execution, that the Action is brought in an inconvenient forum, that the venue of the
Action is improper, or that this Guarantee or the transactions contemplated hereby may not be
enforced in or by any of the above-named courts.




          10. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS GUARANTEE OR ANY
OF THE TRANSACTIONS CONTEMPLATED HEREBY.




          11. COUNTERPARTS. This Guarantee may be executed and delivered (including by
facsimile transmission) in one or more counterparts, and by the different parties hereto in
separate counterparts, each of which when executed shall be deemed to be an original but all of
which taken together shall constitute one and the same instrument.




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          IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be executed and delivered as of
the date first written above by its officer thereunto duly authorized.




	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	CARLYLE PARTNERS V, L.P.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	TC Group V, L.P., its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	TC Group V, L.L.C., its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	TC Group, L.L.C., its Managing Member	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	TCG Holdings, L.L.C., its Managing Member	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Adam Palmer	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Adam Palmer	 	 
	 

	 	 	 	Title: Managing Director	 	 






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	 	 	ACKNOWLEDGED AND AGREED:	 	 
	 
	 	 	 	 	 	 
	 	 	SEQUA CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/  Martin Weinstein	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Martin Weinstein	 	 
	 

	 	 	 	Title:   Chief Executive Officer	 	 







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