Exhibit 10.5
CONTINUING GUARANTY
For value received and in consideration of the extension of credit by SANWA BANK
CALIFORNIA (the "Bank") to XXXXXXX X. XXXXXX (the "Debtor") or the benefits to
the undersigned derived therefrom, the undersigned (the "Guarantor"), guarantees
and promises to pay to the Bank any and all Indebtedness (as defined below) and
agrees as follows:
1. Indebtedness. The term "Indebtedness" is used herein in its most
comprehensive sense and includes any and all advances, debts, obligations,
guaranties and liabilities of the Debtor heretofore, now, or hereafter
made,incurred or created, whether voluntary or involuntary and however
arising, whether direct or acquired by the Bank by assignment or
succession, whether due or not due, absolute or contingent, liquidated or
unliquidated, determined or undetermined, and whether the Debtor may be
liable individually or jointly with others, or whether recovery upon any
Indebtedness may be or hereafter becomes barred by any statute of
limitations or whether any Indebtedness may be or hereafter becomes
otherwise unenforceable.
2. Guaranty. The Guarantor unconditionally agrees to pay to the Bank or its
order, on demand, an amount equal to the amount of the Indebtedness or
otherwise perform any obligation of the Debtor undertaken pursuant to any
Indebtedness. In addition to any maximum principal liability hereunder, the
Guarantor agrees to (i) bear the expenses enumerated hereunder in the
paragraph herein entitled "Attorneys' Fees" and (ii) pay interest on the
Indebtedness at the rate(s) applicable thereto. Notwithstanding the
foregoing, the Bank may allow the Indebtedness to exceed the Guarantor's
liability hereunder. Any payment by the Guarantor shall not reduce the
maximum principal obligation of the Guarantor hereunder unless written
notice to that effect is actually received by the Bank at or prior to the
time of such payment. Any payment by the Debtor or any other person shall
not reduce the Guarantor's maximum principal liability hereunder.
3. Right to Amend or Modify Indebtedness. The Guarantor authorizes the Bank,
at its sole discretion, with or without notice and without affecting the
Guarantor's liability hereunder, from time to time to: (i) change the
time or manner of payment of any Indebtedness by renewal, extension,
modification, acceleration or otherwise; (ii) alter or change any provision
of any Indebtedness including, but not limited to, the rate of interest
thereon, and any document, instrument or agreement (other than this
Guaranty) evidencing, guaranteeing, securing or related to any
Indebtedness; (iii) release, discharge, exonerate, substitute or add one or
more parties liable on any Indebtedness or one or more endorsers, cosigners
or guarantors for any Indebtedness; (iv) obtain collateral for the payment
of any Indebtedness or any guaranty thereof; (v) release existing or
after-acquired collateral on such terms as the Bank, in its sole
discretion, shall determine; (vi) apply any sums received from the Debtor,
any endorser, cosigner, other guarantor or other person liable on any
Indebtedness or from the sale or collection of collateral or its proceeds
to any indebtedness whatsoever owed or to be owed to the Bank by the Debtor
in any order or amount and regardless of whether or not such indebtedness
is guaranteed hereby, is secured by collateral or is due and payable; and
(vii) apply to any Indebtedness, in any order or amount, regardless of
whether such Indebtedness is secured by collateral or is due and payable,
any sums received from the Guarantor or from the sale of collateral in
which the Guarantor has granted the Bank a security interest.
4. Waivers. The Guarantor hereby unconditionally and irrevocably acknowledges
and agrees to the matters set forth below.
A. Deficiency. In the event that any Indebtedness is now or hereafter
secured by a deed of trust, the Guarantor waives any defense and all
rights and benefits of those laws purporting to state that no
deficiency judgment may be recovered on certain real property purchase
money obligations (as presently contained in Section 580b of the
California Code of Civil Procedure and as it may be amended or
superseded in the future) and those laws purporting to state that no
deficiency judgment may be recovered after a trustee's sale under a
deed of trust (as presently contained in Section 580d of the
California Code of Civil Procedure and as it may be amended or
superseded in the future). THE GUARANTOR ACKNOWLEDGES THAT A
FORECLOSURE BY A TRUSTEE'S SALE UNDER A DEED OF TRUST MAY RESULT IN
THE DESTRUCTION OF THE GUARANTOR'S SUBROGATION RIGHTS THAT MAY
OTHERWISE EXIST AND THAT A DESTRUCTION OF THOSE RIGHTS MAY CREATE A
DEFENSE TO A DEFICIENCY JUDGEMENT. THE GUARANTOR HEREBY SPECIFICALLY
WAIVES ANY SUCH DEFENSE.
B. Election of Remedies. The Guarantor waives any defense based upon the
Guarantor's loss of a right against the Debtor arising from the Bank's
election of a remedy on any Indebtedness under bankruptcy or other
debtor relief laws or under any other laws, including, but not limited
to, those purporting to reduce the Bank's right against the Guarantor
in proportion to the principal obligation of any Indebtedness (as
presently contained in Section 2809 of the California Civil Code and
as it may be amended or superseded in the future).
Without limiting the generality of the foregoing, the Guarantor waives
all rights and defenses arising out of an election of remedies by the
Bank, even though that election of remedies, such as a nonjudicial
foreclosure with respect to security for a guaranteed obligation, has
destroyed the Guarantor's rights of subrogation and reimbursement
against the Debtor by operation of Section 580d of the California Code
of Civil Procedure or otherwise.
C. Statute of Limitations. The Guarantor waives the benefit of the
statute of limitations affecting Guarantor's liability hereunder or
the enforcement hereof.
D. Action Against the Debtor and Collateral (and Other Remedies). The
Guarantor waives all right to require the Bank to: (i) proceed against
the Debtor, any endorser, cosigner, other guarantor or other person
liable on any Indebtedness; (ii) join the Debtor or any endorser,
cosigner, other guarantor or other person liable on any Indebtedness
in any action or actions that may be brought and prosecuted by the
Bank solely and separately against the Guarantor on any Indebtedness;
(iii) proceed against any item or items of collateral securing any
Indebtedness or any guaranty thereof; or (iv) pursue or refrain from
pursuing any other remedy whatsoever in the Bank's power.
X. Xxxxxx's Defenses. The Guarantor waives any defense arising by reason
of any disability or other defense of the Debtor, the Debtor's
successor or any endorser, cosigner, other guarantor or other person
liable on any Indebtedness. Until all Indebtedness has been paid in
full, even though it may be in excess of the liability incurred
hereby, the Guarantor shall not have any right of subrogation and the
Guarantor waives any benefit of and right to participate in any
collateral now or hereafter held by the Bank. The Guarantor waives all
presentments, demands for performance, notices of nonperformance,
protests, notices of protest, notices of dishonor, notices of sale of
any collateral securing any Indebtedness or any guaranty thereof, and
notice of the existence, creation or incurring of new or additional
Indebtedness.
X. Xxxxxx's Financial Condition. The Guarantor hereby recognizes,
acknowledges and agrees that advances may be made in the future from
time to time with respect to any Indebtedness without authorization
from or notice to the Guarantor even though the financial condition of
the Debtor, any endorser, cosigner, other guarantor or other person
liable on any Indebtedness may have deteriorated since the date of
this Guaranty. The Guarantor waives all right to require the Bank to
disclose any information with respect to: (i) any Indebtedness now
existing or hereafter incurred; (ii) the present or future financial
condition, credit or character of the Debtor, any endorser, cosigner,
other guarantor or other person liable on any Indebtedness; (iii) any
present or future collateral securing any Indebtedness or any guaranty
thereof; or (iv) any present or future action or inaction on the part
of the Bank, the Debtor or any endorser, cosigner, other guarantor or
other person liable on any Indebtedness. The Guarantor hereby assumes
the responsibility for being informed of the financial condition,
credit and character of the Debtor and of all circumstances bearing
upon the risk of non-payment of any Indebtedness which diligent
inquiry would reveal.
5. Right of Set-off; Grant of Security Interest. In addition to all liens
upon and rights of set-off against any monies, securities or other
property of the Guarantor given to the Bank by law, the Bank shall have a
security interest in and a right to set off against all monies, securities
and other property of the Guarantor now or hereafter in the possession of
or on deposit with the Bank, the Bank's agents or any one or more of them,
whether held in general or special account or deposit or for safekeeping
or otherwise; and each such security interest and right of set-off may be
exercised without demand upon or notice to the Guarantor. No action or
inaction by the Bank with respect to any security interest or right of
set-off shall be deemed a waiver thereof and every right of set-off and
security interest shall continue in full force and effect until
specifically released by the Bank in writing. The security interest
created hereby shall secure all of the Guarantor's obligations under this
Guaranty.
6. Right of Foreclosure. The Bank may foreclose, either by judicial
foreclosure or by exercise of power of sale, any deed of trust securing
any Indebtedness even though such foreclosure may destroy or diminish the
Guarantor's rights against the Debtor. The Guarantor shall be liable to
the Bank for any part of any Indebtedness remaining unpaid after any such
foreclosure whether or not such foreclosure was for fair market value.
7. Subordination. Any indebtedness of the Debtor or any endorser, cosigner,
other guarantor or other person liable on any Indebtedness now or
hereafter owed to the Guarantor is hereby subordinated to the
Indebtedness. Such indebtedness owed to the Guarantor shall, if the Bank
so requests, be collected, enforced and received by the Guarantor as
trustee for the Bank and be paid over to the Bank on account of the
Indebtedness but without reducing or affecting in any manner the liability
of the Guarantor set forth herein. Should the Guarantor fail to collect
the proceeds of any such indebtedness owed to it and pay the proceeds to
the Bank, the Bank, as the Guarantor's attorney-in-fact, may do such acts
and sign such documents in the Guarantor's name as the Bank considers
necessary to effect such collection.
8. Invalid, Fraudulent or Preferential Payments. The Guarantor agrees that, to
the extent the Debtor or any endorser, cosigner, other guarantor or other
person liable on any Indebtedness makes a payment or payments to, or is
credited for any payment or payments made for or on behalf of the Debtor to
the Bank, which payment or payments, or any part thereof, is subsequently
invalidated, determined to be fraudulent or preferential, set aside or
required to be repaid to any trustee, receiver, assignee or any other party
whether under any bankruptcy, state or federal law or under any common law
or equitable cause or otherwise, then, to the extent thereof, the
obligation or part thereof intended to be satisfied thereby shall be
revived, reinstated and continued in full force and effect as if such
payment or payments had not originally been made or credited.
9. Joint and Several Obligations; Independent Obligations. If more than one
Guarantor signs this Guaranty, the obligations hereunder are joint and
several. The Guarantor's obligations hereunder are independent of the
obligations of the Debtor or any endorser, cosigner, other guarantor or
other person liable on any Indebtedness and a separate action or actions
may be brought and prosecuted against the Guarantor on any Indebtedness.
10. Acknowledgement of Receipt. Receipt of a true copy of this Guaranty is
hereby acknowledged by the Guarantor. The Guarantor understands and agrees
that this Guaranty shall not constitute a commitment of any nature
whatsoever by the Bank to renew or hereafter extend credit to the Debtor.
The Guarantor agrees that this Guaranty shall be effective with or without
notice from the Bank of the Bank's acceptance hereof.
11. Continuing Guaranty. This Guaranty is a continuing guaranty. Revocation
shall be effective only upon written notice personally received by an
officer of the Bank at the originating office indicated below or actually
received at the originating office by United States mail postage prepaid.
Notice shall be effective at any office of the Bank should the originating
office no longer be in existence. Revocation shall be effective at the
close of the Bank's business day when such notice is actually received.
Any revocation shall be effective only as to the revoking party and shall
not affect that party's obligation with respect to any Indebtedness
existing before such revocation is effective.
12. Non-Reliance. In executing this Guaranty, the undersigned is not relying,
and has not relied, upon any statement or representation made by the Bank,
or any employee, agent or representative of the Bank, with respect to the
status, financial condition or other matters related to the Debtor or the
relationship between the Debtor and the Bank.
13. Multiple Guaranties. If the Guarantor has executed or does execute more
than one guaranty of any indebtedness of the Debtor to the Bank, the
limits of liability thereunder and hereunder shall be cumulative.
14. Severability. Should any one or more provisions of this Guaranty be
determined to be illegal or unenforceable, all other provisions shall
remain effective.
15. Corporate or Partnership Authority. If the Debtor is a corporation or
partnership, the Bank need not inquire into the power of the Debtor or the
authority of its officers, directors, partners or agents acting or
purporting to act in its behalf and any credit granted in reliance upon
the purported exercise of such power or authority is guarantied hereunder.
16. Separate Property. Any married person who signs this Guaranty expressly
agrees that recourse may be had against such person's separate property
for all obligations hereunder.
17. Collateral. This Continuing Guaranty is secured by a Security Agreement
dated as of February 17, 1998 executed by the Guarantor on behalf of the
Debtor.
18. Assignment. The Bank may, with or without notice, assign this Guaranty in
whole or in part. This Guaranty shall inure to the benefit of the Bank,
its successors and assigns, and shall bind the Guarantor and the
Guarantor's heirs, executors, administrators, successors and assigns.
19. Waiver of Jury. The Guarantor and the Bank hereby expressly and
voluntarily waive any and all rights, whether arising under the California
constitution, any rules of the California Code of Civil Procedure, common
law or otherwise, to demand a trial by jury in any action, matter, claim
or cause of action whatsoever arising out of or in any way related to this
Guaranty or any other agreement, document or transaction contemplated
hereby.
20. Dispute Resolution.
A. Disputes. It is understood and agreed that, upon the request of any
party to this Guaranty, any dispute, claim or controversy of any kind,
whether in contract or in tort, statutory or common law, legal or
equitable, now existing or hereinafter arising between the parties in
any way arising out of, pertaining to or in connection with: (i) this
Guaranty, or any related agreements, documents or instruments, (ii)
all past and present loans, credits, accounts, deposit accounts
(whether demand deposits or time deposits), safe deposit boxes,
safekeeping agreements, guarantees, letters of credit, goods or
services, or other transactions, contracts or agreements of any kind,
(iii) any incidents, omissions, acts, practices, or occurrences
causing injury to any party whereby another party or its agents,
employees or representatives may be liable, in whole or in part, or
(iv) any aspect of the past or present relationships of the parties,
shall be resolved through a two-step dispute resolution process
administered by the Judicial Arbitration & Mediation Services, Inc.
("JAMS") as follows:
B. Step I - Mediation. At the request of any party to the dispute, claim
or controversy, the matter shall be referred to the nearest office of
JAMS for mediation, which is an informal, non-binding conference or
conferences between the parties in which a retired judge or justice
from the JAMS panel will seek to guide the parties to a resolution of
the case.
C. Step II - Arbitration (Contracts Not Secured By Real Property). Should
any dispute, claim or controversy remain unresolved at the conclusion
of the Step I Mediation Phase, then (subject to the restriction at the
end of this subparagraph) all such remaining matters shall be resolved
by final and binding arbitration before a different judicial panelist,
unless the parties shall agree to have the mediator panelist act as
arbitrator. The hearing shall be conducted at a location determined by
the arbitrator in Los Angeles, California (or such other city as may
be agreed upon by the parties) and shall be administered by and in
accordance with the then existing Rules of Practice and Procedure of
JAMS and judgement upon any award rendered by the arbitrator may be
entered by any State or Federal Court having jurisdiction thereof. The
arbitrator shall determine which is the prevailing party and shall
include in the award that party's reasonable attorneys' fees and
costs. This subparagraph shall apply only if, at the time of the
submission of the matter to JAMS, the dispute or issues involved do
not arise out of any transaction which is secured by real property
collateral or, if so secured, all parties consent to such submission.
As soon as practicable after selection of the arbitrator, the
arbitrator, or the arbitrator's designated representative, shall
determine a reasonable estimate of anticipated fees and costs of the
arbitrator, and render a statement to each party setting forth that
party's pro-rata share of said fees and costs. Thereafter, each party
shall, within 10 days of receipt of said statement, deposit said sum
with the arbitrator. Failure of any party to make such a deposit shall
result in a forfeiture by the non-depositing party of the right to
prosecute or defend the claim which is the subject of the arbitration,
but shall not otherwise serve to xxxxx, stay or suspend the
arbitration proceedings.
D. Step II - Trial By Court Reference(Contracts Secured By Real
Property). If the dispute, claim or controversy is not one required or
agreed to be submitted to arbitration, as provided in the above
subparagraph, and has not been resolved by Step I mediation, then any
remaining dispute, claim or controversy shall be submitted for
determination by a trial on Order of Reference conducted by a retired
judge or justice from the panel of JAMS appointed pursuant to the
provisions of Section 638(1) of the California Code of Civil
Procedure, or any amendment, addition or successor section thereto, to
hear the case and report a statement of decision thereon. The parties
intend this general reference agreement to be specifically enforceable
in accordance with said section. If the parties are unable to agree
upon a member of the JAMS panel to act as referee, then one shall be
appointed by the Presiding Judge of the county wherein the hearing is
to be held. The parties shall pay in advance, to the referee, the
estimated reasonable fees and costs of the reference, as may be
specified in advance by the referee. The parties shall initially share
equally, by paying their proportionate amount of the estimated fees
and costs of the reference. Failure of any party to make such a fee
deposit shall result in a forfeiture by the non-depositing party of
the right to prosecute or defend any cause of action which is the
subject of the reference, but shall not otherwise serve to xxxxx, stay
or suspend the reference proceeding.
E. Provisional Remedies, Self Help and Foreclosure. No provision of,
or the exercise of any rights under any portion of this Dispute
Resolution provision, shall limit the right of any party to exercise
self help remedies such as set off, foreclosure against any real or
personal property collateral, or the obtaining of provisional or
ancillary remedies, such as injunctive relief or the appointment of a
receiver, from any court having jurisdiction before, during or after
the pendency of any arbitration. At the Bank's option, foreclosure
under a deed of trust or mortgage may be accomplished either by
exercise of power of sale under the deed of trust or mortgage, or by
judicial foreclosure. The institution and maintenance of an action for
provisional remedies, pursuit of provisional or ancillary remedies or
exercise of self help remedies shall not constitute a waiver of the
right of any party to submit the controversy or claim to arbitration.
21. Attorneys' Fees. Whether or not any suit, action, arbitration or other
dispute resolution proceeding is instituted, the Guarantor agrees to pay
reasonable attorneys' fees and all other costs and expenses which may be
incurred in the collection of any Indebtedness, in the protection or
preservation of, or realization on, any collateral securing any
Indebtedness and in the enforcement by the Bank of this Guaranty.
22. Governing Law. This Guaranty shall be governed by and construed according
to the laws of the State of California and the Guarantor hereby submits to
the jurisdiction of the courts of the State of California.
23. Entire Agreement. This Guaranty and all documents, instruments and
agreements mentioned herein constitute the entire and complete
understanding of the parties with respect to the transactions contemplated
hereunder. All previous conversations, memoranda and writings between the
parties pertaining to the transactions contemplated hereunder not
incorporated or referenced in this Guaranty or in such documents,
instruments and agreements are superseded hereby.
24. Headings. The headings used herein are solely for the purpose of
identification and have no legal significance.
25. Address of the Bank. The Bank's originating office under this Guaranty
is: Santa Xxxxxxx Xxxx Office, 0000 Xxxxx Xxxxxx, Xxxxx Xxxxxxx, XX 00000.
26. Maximum Principal Liability. THE MAXIMUM PRINCIPAL LIABILITY UNDER THIS
GUARANTY IS the amount of $7,600,000.00, plus interest at the rate(s)
applicable to any Indebtedness as set forth in the paragraph herein
entitled "Guaranty" and the expenses enumerated in the paragraph herein
entitled "Attorneys' Fees".
This Guaranty is made as of February 17, 1998, which shall be the date of this
Guaranty. Executed by the undersigned Guarantor as of the date set forth above.
GUARANTOR:
MIRAVANT MEDICAL TECHNOLOGIES
By: /s/ Xxxx X. Xxxxxxx
--------------------------------------------
Xxxx X. Xxxxxxx, Chief Executive Officer
Address:
0000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
