**Exhibit 10(k)**

 

**EXECUTION VERSION**

 

**GUARANTY**

 

THIS GUARANTY OF PAYMENT(as amended, modified and restated from time to time, the “**Guaranty**”)is made and entered into as of the 12th day of May, 2005, by J.L. HalseyCorporation, a Delaware corporation (the “**Guarantor**”), in favor ofThe John Buckman and Jan Hanford Trust (“**Payee**”):

 

**W I T N E S S E T H:**

 

WHEREAS, CommodoreResources, Inc., a Delaware corporation (“**Maker**”), has entered intothat certain Stock Purchase Agreement dated as of May 6, 2005 (the “**Agreement**”) whereby Maker is acquiringall of the issued and outstanding shares of capital stock of Lyris Technologies, Inc.,a Delaware corporation (the “**Company**”)from Payee;

 

WHEREAS, Guarantordirectly or indirectly owns equity interests in Maker and will obtain certaindirect and indirect benefits from the Agreement and the transactions relatedthereto;

 

WHEREAS, the Agreementcontemplates that a portion of the purchase consideration under the Agreementwill be paid pursuant to the terms of a Promissory Note dated the date hereof(said Promissory Note, together with any amendments, modifications,supplements, renewals, extensions and restatements thereto or thereof, beinghereinafter collectively referred to as the “**Promissory Note**”),pursuant to which Maker promises to pay the principal sum of $5,600,000,subject to the terms of the Promissory Note (the “**Note Amount**”); and

 

WHEREAS, concurrentlywith the execution and delivery hereof and as a material inducement to Payee’sexecution of the Agreement, Guarantor has agreed to execute and deliver thisGuaranty.

 

NOW, THEREFORE, Guarantordoes hereby covenant and agree with Payee as follows:

 

**ARTICLE 1COVENANTS, AGREEMENTS AND REPRESENTATIONS**

 

**Section 1.1****                                   GuaranteedObligations**.  Guarantor herebyabsolutely, irrevocably and unconditionally guarantees to Payee, subject to theterms and provisions of Section 2.10, the full and prompt payment of (a) theNote Amount when and as the same shall become due under the terms of thePromissory Note, together with all accrued and unpaid interest thereon underthe terms of the Promissory Note, (b) the Cash Purchase Price (as definedin the Agreement) when due pursuant to the terms of the Agreement and (c) anyamounts payable by Maker pursuant to Article 11 of the Agreement when dueand payable by Maker pursuant to Article 11 of the Agreement(collectively, the “**Guaranteed Obligations**”);providedthat, until a period of 30 days after any GuaranteedObligation becomes due and payable has elapsed, Payee shall refrain from makingdemand upon Guarantor for payment of such Guaranteed Obligation; provided,further, that, during such 30 day period, Payee shall exercisecommercially reasonable efforts to pursue and collect the Guaranteed Obligationfrom the Maker.  If at the end of such 30day

 

----

 

period, any of such Guaranteed Obligation remains uncollected,Guarantor shall promptly pay the uncollected amount due thereon to Payee upondemand.

 

**Section 1.2****                                   Absolute,Unconditional Guaranty**.  TheGuaranteed Obligations shall remain in full force and effect until the earliestto occur of:  (i) the Note Amounthaving been fully and indefeasibly repaid in full with applicable interest; (ii) Guarantorhaving fully and indefeasibly paid in full or otherwise satisfied theGuaranteed Obligations; or (iii) the Note Amount having been reduced tozero pursuant to the terms of the Note; at which time, on such earlier to occurdate, this Guaranty shall terminate.

 

**Section 1.3****                                   Representationsand Warranties**.  Guarantor herebyrepresents and warrants as follows:

 

(a)                                  Guarantoris a corporation duly incorporated and validly existing under the laws of theState of Delaware;

 

(b)                                 Guarantorhas duly executed and delivered this Guaranty. This Guaranty is a legal, validand binding obligation of Guarantor enforceable against Guarantor in accordancewith the terms of this Guaranty, subject to bankruptcy or other similar lawsaffecting creditors’ rights generally and general equitable principles;

 

(c)                                  Guarantoris not a party to, or otherwise bound by or subject to, any agreements orinstrument, the observance of the terms and provisions of which wouldmaterially impair Guarantor’s ability to perform its obligations under, and tobe bound by, this Guaranty.  Neitherexecution and delivery of this Guaranty nor the consummation of thetransactions herein contemplated, nor compliance with the terms and provisionshereof, will to Guarantor’s knowledge contravene any provision of applicablelaw, statute, rule or regulation or any judgment, decree, franchise, orderor permit applicable to Guarantor or will conflict or be inconsistent with, orwill result in any breach of, any of the terms, covenants, conditions orprovisions of, or constitute a default under, or, except as contemplatedhereby, result in the creation or imposition of any lien, security interest,charge or encumbrance upon any of the property or assets of Guarantor pursuantto the terms of any indenture, mortgage, deed of trust or other materialagreement or instrument to which Guarantor is a party or by which Guarantor orany of its property may be bound;

 

(d)                                 Thereis no action, suit, proceeding or investigation pending, or to the best of theknowledge of Guarantor, threatened, against or affecting Guarantor at law, inequity, in admiralty or before any arbitrator of any kind or before anygovernmental department, commission, board, bureau, agency or instrumentality(domestic or foreign) which, in the opinion of Guarantor, is likely to resultin any material adverse change in the property or assets, or in the condition(financial or otherwise) of Guarantor, or materially impair its ability toperform its obligations under this Guaranty; and

 

(e)                                  Guarantorhas received, or will receive, direct or indirect benefit from the making ofthis Guaranty and the making of the Note;

 

**Section 1.4****                                   Subordination**.  This Guaranty is subordinate and subject inright of payment, priority and collection to any secured indebtedness ofGuarantor.

 

2

----

 

**ARTICLE 2MISCELLANEOUS**

 

**Section 2.1****                                   ActionsAgainst Guarantor**.  In the eventof a default in the payment of all or any part of the Guaranteed Obligationswhen such Guaranteed Obligations become due and payable pursuant to the termsof the Promissory Note or the Agreement, as applicable, Guarantor shall,subject to the terms and provisions of Section 1.1 hereof, upon receipt ofnotice of demand, promptly pay the amount due thereon to Payee, in lawful moneyof the United States.

 

**Section 2.2****                                   EntireAgreement**.  This Guaranty,together with the Agreement, constitutes the entire agreement, and supersedesall prior agreements and understandings, both written and oral, between theparties with respect to the subject matter hereof.

 

**Section 2.3****                                   GoverningLaw**.  This Guaranty shall begoverned by and construed in accordance with the laws of the State of Delawarewithout regard to the conflicts of laws provisions thereof.  Guarantor hereby irrevocably andunconditionally consents to submit to the exclusive jurisdiction of the courtsof the State of California and the courts of the United States of Americalocated in the State of California for any litigation arising out of orrelating to this Guaranty or the transactions contemplated hereby or any of theother transactions contemplated hereby (and agrees not to commence anylitigation relating hereto except in such courts), and further agrees thatservice of any process, summons, notice or document by U.S. registered mail toits respective address set forth in Section 2.7 shall be effective serviceof process for any litigation brought against it in any such court.  Guarantor hereby irrevocably andunconditionally waives any objection to the laying of venue of any litigationarising out of this Guaranty or any of the transactions contemplated hereby inthe courts of the State of California or the courts of the United States ofAmerica located in Alameda County, the State of California and hereby furtherirrevocably and unconditionally waives and agrees not to plead or claim in anysuch court that any such litigation brought in any such court has been broughtin an inconvenient forum.  Guarantorhereby irrevocably and unconditionally waives any right it may have to trial byjury in connection with any litigation arising out of or relating to this Noteor any of the transactions contemplated hereby. Reasonable attorneys’ fees and out-of-pocket costs incurred by Payee inthe event of the initiation by Payee of any suit under or in connection withthis Note shall be paid by Guarantor if such action is successful; providedthat, if such action is not successful, reasonable attorneys’ fees andout-of-pocket costs incurred by Guarantor in connection therewith shall be paidby Payee.

 

**Section 2.4****                                   Benefit**.  This Guaranty is for the benefit of Payee.

 

**Section 2.5****                                   Reinstatement;No Release if Preference, Refund, Etc.** This Guaranty shall remain in full force and effect and continue to beeffective should any petition be filed by or against Maker under the UnitedStates Bankruptcy Code, as at any time amended, for liquidation orreorganization, should Maker become insolvent or make an assignment for thebenefit of creditors or a receiver or trustee be appointed for all or anysignificant part of Maker’s assets, and shall continue to be effective or bereinstated, as the case may be, if at any time payment of the GuaranteedObligations, or any part thereof, is, pursuant to applicable law, rescinded orreduced in amount, or must otherwise be restored or returned by Payee whetheras a “preferential transfer”, “voidable preference”, “fraudulent conveyance”,or otherwise, all as though such

 

3

----

 

reduction, repayment or restoration by Payee had not been made.  In the event any payment by Maker to Payee isdetermined to be a preferential payment, or if for any reason Payee is requiredto refund part or all of any payment or pay the amount thereof to any otherparty, such repayment by Payee to Maker or to such other party shall notconstitute a release of Guarantor from any liability hereunder, and Guarantoragrees to pay such amount to Payee upon demand to the extent such amountconstitutes a Guaranteed Obligation.

 

**Section 2.6****                                   Notices**.

 

All notices and othercommunications required or permitted hereunder will be in writing and will bedeemed to have been duly given when delivered in person or when dispatched byelectronic facsimile transfer or one business day after having been dispatchedby an internationally recognized overnight courier service to the appropriateperson at the address specified below:

 
| If to Payee:     |   | The John  Buckman and Jan Hanford Trust         |
|------------------|--------|-------------------------------------------------|
|             |   | 2735 Fulton  Street                             |
|             |   | Berkeley,  California  94705-1031          |
|             |   | Attention:   John  Buckman       |
|             |   |                                            |
| with a copy  to: |   | Higham,  McConnell & Dunning LLP       |
|             |   | 15 Enterprise, Suite 360                   |
|             |   | Aliso Viejo, California  92656             |
|             |   | Attention:   Curt  C. Barwick    |
|             |   | Telecopy  No.:  (949) 900-4403             |
|             |   |                                            |
| If to Guarantor: |   | J. L. Halsey Corporation                        |
|             |   | 103 Foulk Road, Suite 205-Q                |
|             |   | Wilmington, Delaware  19803                |
|             |   | Attention:  David Burt                     |
|             |   | Telecopy  No.:  (978) 945-5992             |
|             |   |                                            |
| with a copy  to: |   | Vinson &  Elkins L.L.P.                |
|             |   | 3700  Trammell Crow Center                      |
|             |   | 2001 Ross  Avenue                               |
|             |   | Dallas,  Texas  75201                      |
|             |   | Attention:   Michael  D. Wortley |
|             |   | Telecopy  No.:  (214) 999-7732             |
|             |   |                                            |
| with a copy to:  |   | Admiral Management Company                      |
|             |   | 790 Turnpike Street, Suite 202             |
|             |   | North Andover, Massachusetts   01845       |
|             |   | Attention:  David Burt                     |
|             |   | Telecopy No.:  (978) 945-5992              |

 

or to such other address or addresses as any such party may from timeto time designate as to itself by like notice to the other party.

 

4

----

 

**Section 2.7****                                   FurtherAssurances**.  Guarantor agrees,upon the written request of Payee, to execute and deliver to Payee from time totime any additional instruments or documents reasonably considered necessary byPayee or its counsel to cause this Guaranty to be, become or remain valid andeffective in accordance with its terms.

 

**Section 2.8****                                   Severability**.  In the event that any one or more of theprovisions contained in this Guaranty shall be determined to be invalid,illegal or unenforceable in any respect for any reason, the validity, legalityand enforceability of any such provision or provisions in every other respectand of the remaining provisions of this Guaranty shall not be in any wayimpaired.

 

**Section 2.9****                                   PermittedAssignment by Payee**.  Payee mayfreely assign its rights and delegate its duties under this Guaranty to JohnBuckman, Jan Hanford or any entity affiliated with John Buckman and/or JanHanford, but no such assignment or delegation shall increase Guarantor’sobligations or diminish its rights hereunder. In the event of any such assignment or delegation, Payee will giveGuarantor prompt notice of such assignment or delegation and agrees to use itsbest efforts to give such notice at least 10 days prior to such assignment ordelegation, but the consent of Guarantor shall not be required for any suchassignment or delegation and failure to give such notice shall not affect thevalidity or enforceability of any such assignment or delegation or subject Payeeto any liability.

 

**Section 2.10****                            Limitationof Liability**.  Notwithstandingany provisions contained herein to the contrary, the maximum liability ofGuarantor hereunder for the Guaranteed Obligations shall not exceed, in thecase of payment with respect to the Note, the Note Amount plus applicableinterest thereon in accordance with the terms of the Note and, in the case ofpayment with respect to the Agreement, the Cash Purchase Price (as defined inthe Agreement) and any amounts payable by Maker pursuant to Article 11 ofthe Agreement.

 

[EXECUTIONPAGE FOLLOWS.]

 

5

----

 

IN WITNESS WHEREOF,Guarantor has executed this Guaranty as of the day and year first abovewritten.

 

 
|   | GUARANTOR:              |
|--------|-------------------------|
|   |                    |
|   | J.L. HALSEY CORPORATION |
|   |                    |
|   |                    |
|   | By:                     |  /s/ David R. Burt |   |
|   | Name:                   |  David R. Burt |   |
|   | Title:                  |  Chief Executive  Officer |   |
|        |                         |  |  |  |  |

 

 

[SIGNATURE PAGE TO GUARANTY]

 

----