Exhibit 10.4


 


LIMITED
GUARANTY


 


1.                                       Identification.  This Limited Guaranty (this “Guaranty”) is
made this 2nd day of December, 2003 by Chase Corporation, a
Massachusetts corporation having an address of 26 Summer Street, Bridgewater,
Massachusetts (the “Guarantor”) in favor of Citizens Bank of Massachusetts
having an address of 28 State Street, Boston, Massachusetts 02109 (“Lender”).


 


2.                                       Background
and Reasons for Guaranty.


 


2.1                                 Loan
Documents.  On the date hereof,
Sunburst Electronic Manufacturing Solutions, Inc. (the “Borrower”) executed and
delivered a certain Revolving Demand Line of Credit Note payable to Lender in
the principal amount $2,000,000.00 (the “Note”).  The obligations of the Borrower to Lender under the Note is
further evidenced by a certain Revolving Demand Line of Credit Agreement of
even date herewith between Borrower and Lender (the “Loan Agreement”).  To secure the obligations of the Borrower
under the Note, the Borrower has executed and delivered to the Lender a certain
Security Agreement of even date herewith covering all business assets of
Borrower (the “Security Agreement”).  As
further security for Borrower’s obligations under the Note and to secure this
Guaranty, the Guarantor has executed and delivered to Lender a certain Cash
Collateral Agreement dated as of the date hereof (the “Cash Collateral
Agreement”).  The Note, the Loan
Agreement, the Security Agreement, the Cash Collateral Agreement, this Guaranty
and all other documents executed in connection herewith are sometimes collectively
referred to herein as the “Loan Documents.” 
The obligations evidenced by the Loan Documents are sometimes
collectively referred to herein as the “Loans.”


 


2.2                                 Requirement
of Guaranty.  As a condition
precedent to the making of the Loan to Borrower, Lender has required that
Guarantor execute and deliver this Guaranty to Lender.


 


3.                                       Guaranty.  Guarantor, in consideration of Lender
entering into the Loan Documents and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and for the purpose
of inducing Lender to enter into the Loan Documents, hereby (if more than one,
jointly and severally,) irrevocably and unconditionally guarantees to Lender
(a) the full, punctual and prompt payment of all sums payable under the terms
of the Note, and/or the other Loan Documents, whether at maturity or by
acceleration or otherwise, in immediately available coin and currency of the
United States which is legal  tender for
the payment of all public and private debts, and (b) all other obligations of
every kind and description now existing or hereafter arising, direct or
indirect, absolute or contingent, secured or unsecured, matured or unmatured,
primary or secondary, of Borrower to Lender (collectively, the “Guaranteed Obligations”).  The liability of the Guarantor hereunder
shall be limited to the amount which remains outstanding under the Loan
Documents, including any and all costs of collection incurred against Borrower,
after liquidation by Lender of all Collateral given by


 


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Borrower to Lender as
defined in the Security Agreement. 
Notwithstanding anything to the contrary in this Guaranty, the liability
of the Guarantor under this Guaranty is hereby limited to (i) the repayment of
no more than $500,000.00 towards the outstanding Guarantied Obligations, (ii)
interest on all amounts due hereunder from the date of demand by Lender until
payment by Guarantor in full at a rate equal to the Prime Rate (as announced by
Lender from time to time) per annum, and (iii) any and all collection costs or
expenses incurred by Lender against the Guarantor, including reasonable
attorneys fees and expenses, in the event the Guarantor does not make prompt
payment under this Guaranty after demand for such payment by Lender.  Furthermore, this Guaranty shall expire and
be deemed automatically released by Lender and of no further force and effect
two (2) years after the date of this Guaranty (the “Expiration Date”), provided
that prior to the Expiration Date Borrower has not failed to repay the Loan
after demand has been made for repayment by Lender.  Lender hereby agrees to proceed diligently and in a commercially
reasonable manner in the event Lender pursues the liquidation of Borrower’s
assets upon Borrower’s failure to repay the Loan after demand for such
repayment by Lender.


 


4.                                       Warranties
and Representations.  Guarantor
hereby warrants and represents to Lender that:


 


4.1                                 The
Board of Directors of the Guarantor has determined the execution, delivery and
performance of this Agreement to be necessary or convenient to the conduct,
promotion or attainment of the business of the Borrower and the Guarantor, and
to be in the best interests of the Guarantor and in pursuance of its corporate
purposes as an integral part of the business now conducted and proposed to be
conducted by the Guarantor.  By virtue
of the foregoing, after considering the Guarantor’s probable liability
hereunder, the Guarantor is receiving at least reasonably equivalent value from
Lender for its guaranty and will not be rendered insolvent thereby; and after
giving effect to the transactions contemplated hereby, the Guarantor does not,
and will not, have an unreasonably small capital for the conduct of its
business and has, and will have, the ability to pay its debts from time to time
incurred in connection therewith as such debts mature.


 


4.2                                 The
execution, delivery and performance by the Guarantor of this Agreement do not
and will not:


 


(i)                                     violate
any provision of, or require any filings, registration, consent or approval
under, any law, rule, regulation (including, without limitation, Regulation U),
order, writ, judgment, injunction, decree, determination or award presently in
effect having applicability to the Guarantor or the Borrower;


 


(ii)                                  result
in a breach of or constitute a default or require any consent under any
indenture or loan or credit agreement or any other agreement, lease or
instrument to which the Guarantor is a party or


 


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by which Guarantor or any of its properties may be
bound or affected;


 


(iii)                               result in, or require,
the creation or imposition of any lien, security interest or other
encumbrance  (other than as created
hereunder), upon or with respect to any of the properties now owned or
hereafter acquired by the Guarantor; or


 


(iv)                              cause
the Guarantor to be in default under any such law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award or any such
indenture, agreement, lease or instrument.


 


4.3                                 The
Guarantor is a corporation duly organized, validly existing and in good
standing under the laws of Massachusetts and has the legal power and authority
to execute, deliver and fulfill its obligations set forth in this Agreement.  The Guarantor has all requisite corporate
power to own and operate its properties and to carry on its business as now
conducted and as proposed to be conducted and is duly qualified to do business
and in good standing in each other jurisdiction where the failure to so qualify
would have a material adverse effect on the Guarantor’s business, prospects,
operations or financial condition.


 


4.4                                 This
Agreement has been duly authorized by all necessary corporate action and is a
legal, valid and binding obligation of the Guarantor, enforceable against the
Guarantor in accordance with its terms.


 


4.5                                 Any
and all financial statements and other financial data which have previously
been furnished to Lender with respect to Guarantor are true and correct in all
material respects, fairly, completely and accurately representing the financial
condition of Guarantor as of the date thereof and, since the date thereof,
there have been no additional borrowings of Guarantor, nor has there been any
material adverse change in the financial condition of Guarantor; there are no
material legal proceedings, claims or demands pending against, or to the best
of Guarantor’s knowledge, threatened against Guarantor or any of Guarantor’s
assets; there are no federal or state liens filed or threatened against
Guarantor or any of Guarantor’s assets; and Guarantor is not in default or
claimed default under any agreement for borrowed money.


 


5.                                       Non-Primary
Nature of Guaranty.  In giving this
Guaranty, Guarantor hereby acknowledges that this Guaranty is not a guarantee
of payment or performance under the Loan Documents but is only a guaranty of
collection effective after Lender has exhausted all of its remedies against
Borrower and the Collateral (as defined in the Security Agreement).


 


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6.                                       Continuing
Nature of Guaranty.  The liability
of Guarantor shall remain and continue in full force and effect
notwithstanding:


 


6.1                                 The
non-liability of Borrower for any reason whatsoever for the payment and
performance of the Guaranteed Obligations or any part thereof;


 


6.2                                 The
voluntary or involuntary liquidation, dissolution, sale of all or substantially
all of the property of Borrower, marshaling of assets and liabilities,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment or any similar
proceeding, affecting Borrower or any of its assets;


 


6.3                                 The
assignment or transfer of the Note or other Loan Documents;


 


6.4                                 The
release of Borrower from the observance of any of the agreements, covenants,
terms or conditions contained in the Note and/or other Loan Documents by
operation of law;


 


6.5                                 Any
defenses or rights of set-off or counter-claims which Borrower may have or
assert; or


 


6.6                                 Any
failure by Lender to inform Guarantor of any facts Lender may now or hereafter
know about Borrower, the Loan or the transactions contemplated in connection
therewith, it being understood and agreed that Lender has no duty so to inform;
it being the intention hereof that Guarantor shall remain liable hereunder
subject to the provisions of Section 3 above, until the Guaranteed
Obligations of Borrower shall have been fully paid, performed and observed by
Borrower, notwithstanding any act, omission or thing that might otherwise
operate as a legal or equitable discharge of Guarantor.


 


7.                                       Certain
Rights of Lender.  Lender may at any
time and from time to time, with or without consideration, without prejudice to
any claim against Guarantor hereunder, without in any way changing, releasing
or discharging Guarantor from its liabilities and obligations hereunder and
without notice to or the consent of Guarantor:


 


7.1                                 Exchange,
release or surrender all or any part of the security which Lender may at any
time hold if requested by Borrower in the ordinary course of its business
operations;


 


7.2                                 Sell
all or any part of the security and become the purchaser thereof at any such
sale;


 


7.3                                 Renew,
rearrange or extend the time, manner, place or terms of payment and performance
of the Guaranteed Obligations or any renewal or


 


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extension
thereof provided there is no increase to the liability of Guarantor under this
Guaranty and provided there is no extension of the Expiration Date of this
Guaranty;


 


7.4                                 Forbear,
extend the time for, or grant indulgences with respect to the enforcement of
any of the Guaranteed Obligations or the exercise by Lender of any other Loan
Document right or remedy contained in the Note or any other Loan Documents
available under applicable law, whether such enforcement be fully prosecuted or
otherwise provided there is no increase to the liability of Guarantor under
this Guaranty and provided there is no extension of the Expiration Date of this
Guaranty;


 


7.5                                 Supplement,
change, amend, substitute, modify, alter or cancel the Guaranteed Obligations,
the Note or any other Loan Documents provided there is no increase to the
liability of Guarantor under this Guaranty and provided there is no extension
of the Expiration Date of this Guaranty; and


 


7.6                                 Take
other guarantees, collateral or security with respect to the Guaranteed
Obligations.


 


8.                                       Certain
Waivers by Guarantor.  Guarantor
hereby waives:


 


8.1                                 Notice
of the acceptance of this Guaranty, presentment, demand, protest and notice of
protest, nonpayment, default or dishonor of the Guaranteed Obligations or any
renewal or extension thereof and any and all other rights and remedies now or
hereafter accorded to guarantors by applicable law; and


 


9.                                       No
Waiver by Lender.  No failure,
omission or delay on the part of Lender in exercising any rights hereunder or
in taking any action to collect or enforce payment or performance of the
Guaranteed Obligations against Guarantor shall operate as a waiver of any such
right or in any manner prejudice the rights of Lender against Guarantor.


 


10.                                 Subordination
of Subrogation.  Guarantor hereby
unconditionally and irrevocably agrees that it will not at any time exert or
exercise against Borrower, and does hereby subordinate any right of or claim to
subrogation, reimbursement, indemnity, contribution or payment (including any
right to proceed upon any collateral pledged by Borrower to Guarantor) for or
with respect to any amounts which Guarantor may pay or be obligated to pay to
Lender other than lease payments with respect to real estate leased by
Guarantor to Borrower, including, without limitation, any right to enforce any
remedy which Guarantor now or hereafter shall have against Borrower by reason
of obligations which Guarantor may perform, satisfy or discharge under or with
respect to this Guaranty.  The payment
of any amounts due with respect to any indebtedness of the Borrower now or
hereafter held by the Guarantor is hereby subordinated to the prior payment in
full of the Guaranteed Obligations, provided that so long as no default in the
payment or performance of the Guaranteed Obligations has occurred and is
continuing, or no


 


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demand for payment of any
of the Guaranteed Obligations has been made that remains unsatisfied, the
Borrower may make, and the Guarantor may demand and accept, any scheduled
payments of principal of and interest on such subordinated indebtedness in the
amounts, at the rates and on the dates specified in such instruments,
securities or other writings as shall evidence such subordinated
indebtedness.  The Guarantor agrees that
after the occurrence of any default in the payment or performance of the
Guaranteed Obligations, the Guarantor will not demand, sue for or otherwise
attempt to collect any such indebtedness of the Borrower to the Guarantor until
the Guaranteed Obligations shall have been paid in full.  If, notwithstanding the foregoing sentence,
the Guarantor shall collect, enforce or receive any amounts in respect of such
indebtedness, such amounts shall be collected, enforced and received by the
Guarantor as trustee for the Lender and be paid over to the Lender on account
of the Guaranteed Obligations without affecting in any manner the liability of
the Guarantor under the other provisions of this Guaranty.


 


11.                                 Financial
Condition.  Guarantor shall
immediately notify Lender of any material adverse change in its financial
condition.


 


12.                                 Right
of Set-Off.  Intentionally omitted.


 


13.                                 Mandatory
Refunds.  If, for any reason, any
payment to Lender on account of the Guaranteed Obligations is required to be
refunded to Borrower, or paid over to any other party, including, without
limitation, by reason of the operation of bankruptcy laws now or hereafter enacted,
Guarantor agrees to pay the amounts so required to be refunded or paid over
upon demand, it being acknowledged and agreed that the Guaranteed Obligations
shall not be treated as having been discharged by reason of any payment to
Lender giving rise to an obligation on the part of Lender to repay the same,
and this Guaranty shall be treated as remaining in full force and effect with
respect to any such repayment so made by Lender, as well as for any amounts not
previously paid to Lender on account of the Guaranteed Obligations.


 


14.                                 Multiple
Guarantors.  Intentionally omitted.


 


15.                                 Default.  Failure of Guarantor to keep, observe or
perform any term, covenant or agreement made under this Guaranty by Guarantor
shall constitute an Event of Default under this Guaranty and under the Note and
the other Loan Documents, whether or not provision therefor is made in such
documents.  In addition to the Events of
Default described in this Section 15, the following events shall also
constitute “Events of Default” under this Guaranty:


 


15.1                           If
any material representation or warranty by the undersigned or in any writing
furnished by the undersigned in connection with or pursuant to this Guaranty
shall be false in any material respect with respect to the undersigned on the
date as of which made; or


 


15.2                           If
the undersigned makes an assignment for the benefit of creditors; or


 


15.3                           If
the undersigned petitions or applies to any tribunal for the appointment of a
trustee or receiver of the business, estate or assets or of any


 


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substantial portion of the business, estate or assets
of the undersigned, or commences any proceedings relating to the undersigned
under any bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution or liquidation law of any jurisdiction, whether now or
hereafter in effect; or


 


15.4                           If
any such petition or application is filed or any such proceedings are commenced
against the undersigned and the undersigned by any act indicates its approval
thereof, consent thereto, or acquiescence therein, or any order is entered
appointing any such trustee or receiver, or declaring the undersigned bankrupt
or insolvent, or approving the petition in any such proceedings; or


 


15.5                           If
the undersigned shall dissolve, terminate or otherwise fail to maintain its
existence, as the case may be.


 


If an Event of Default
shall occur, then or at any time thereafter, while such Event of Default shall
continue, the Lender may declare all Guaranteed Obligations, together with all
obligations of the undersigned hereunder, to be immediately due and payable.


 


16.                                 General.


 


16.1                           Costs
and Expenses.  Guarantor shall pay
all reasonable attorneys’ fees and disbursements, costs and expenses incurred
by Lender in the enforcement of this Guaranty. 
“Attorneys’ fees” and “counsel fees” and the like as used herein shall
include reasonable fees for the attorneys’ services whether outside or within
judicial proceedings, including also appellate and  bankruptcy court proceedings.


 


16.2                           Governing
Law.  This Guaranty shall be
enforced and construed in accordance with the laws of the Commonwealth of
Massachusetts and Guarantor waives the 
right to be sued elsewhere.  In
the event suit is brought by Lender, Guarantor agrees that service of process
may be made, and personal jurisdiction obtained, by service of a copy of the
summons, complaint and other pleadings required to commence such litigation
upon Guarantor at the address designated in Paragraph 1 above.


 


16.3                           Jury
Trial Waiver.  GUARANTOR HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO A JURY IN ANY PROCEEDINGS HEREAFTER INSTITUTED
BY OR AGAINST GUARANTOR IN RESPECT OF THIS GUARANTY OR ARISING OUT OF ANY
DOCUMENT, INSTRUMENT OR AGREEMENT EVIDENCING, GOVERNING OR SECURING THE NOTE OR
GUARANTY, INCLUDING ALL LOAN DOCUMENTS.


 


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16.4                           Successors
and Assigns.  This Guaranty shall be
binding upon Guarantor and the successors, assigns and legal representatives of
Guarantor, and shall inure to the benefit of Lender and the successors, assigns
and legal representatives of Lender. 
Guarantor may not assign its rights or delegate its duties under this
Guaranty.  The transfer or assignment by
Lender of the Note shall operate as a transfer or assignment to the transferee
or assignee of this Guaranty and all rights and privileges hereunder.


 


16.5                           Cumulative
Remedies.  Intentionally omitted.


 


16.6                           Gender
and Number.  Whenever the context so
requires the masculine gender shall include the feminine and/or neuter and the
singular number shall include the plural and conversely in each case.


 


16.7                           Modifications.  No provision hereof shall be modified or
limited except by a written agreement expressly referring to this Guaranty and
to the provision so modified or limited and signed by Guarantor and Lender.


 


16.8                           Severability.                              In
case any one or more of the provisions contained in this Guaranty shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof, and this Guaranty shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.


 


16.9                           Notices.  Any notice, request, demand or other
communication required or permitted hereunder shall be given in writing by
delivering the same in person to the intended addressee, by overnight courier
service with guaranteed next day delivery or by certified United States Mail,
postage prepaid or telegram sent to the intended addressee at the applicable
address set forth on Page 1 hereof or to such different address as either
Guarantor or Lender shall have designated by written notice to the other sent
in accordance herewith.  Such notices
shall be deemed given when received or, if earlier, in the case of delivery by
courier service with guaranteed next day delivery, the next day or the day
designated for delivery, or in the case of delivery by certified United States
Mail, two days after deposit therein.


 


16.10                                                Headings.  The headings of sections herein are inserted
only for convenience and shall in no way define, describe or limit the scope or
intent of any provisions of this Guaranty.


 


16.11                                                Counterparts.  This Guaranty may be executed in any number
of counterparts, each of which shall be an original for all purposes. Further,
if there is more than one Guarantor, the fact that any counterpart is executed


 


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by only one of the Guarantors shall not in any way
derogate from the validity or enforceability of the obligations of the
Guarantor signing a counterpart of this Guaranty, whether or not the other
intended party signatory to this Guaranty shall have executed a counterpart,
the liability of a Guarantor outstanding independently of the liability of any
other Guarantor.


 


IN
WITNESS WHEREOF, Guarantor has executed this Guaranty under seal as of the date
first above written.


 


	
   

  	
  CHASE
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Paula M
  Myers

  	
   

  	
  By:

  	
  /s/ Everett
  Chadwick

  	
   

  
	
  Witness:

  	
   

  	
   

  
	
   

  	
  Name:  Everett Chadwick

  
	
   

  	
  Title: Treasurer

  
					



 


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