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[UNION BANK LOGO] EXHIBIT 10.16
PROMISSORY NOTE
BASE RATE
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Borrower Name
EVER-TEK COMPUTER CORPORATION
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Borrower Address Office Loan Number
40061 2723048307 0080-00-0-000
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2604 TEMPLE HEIGHTS DRIVE Maturity Date Amount
OCEANSIDE, CA 92056 SEPTEMBER 15, 1999 $3,500,000.00
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Date APRIL 20, 1999 $ 3,500,000.00
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FOR VALUE RECEIVED, on SEPTEMBER 15, 1999 the undersigned ("Debtor") promises to
pay the order of UNION BANK of CALIFORNIA, N.A. ("Bank"), as indicated below,
the principal sum of THREE MILLION FIVE HUNDRED THOUSAND AND NO/100 Dollars
($3,500,000.00), or so much thereof as is distributed, together with interest
on the balance of such principal from time to time outstanding, at a per annum
rate or rates and at the time set forth below.
1. INTEREST PAYMENTS. Debtors shall pay interest MONTHLY. Should interest not be
paid when due, it shall become a part of the principal and thereafter bear
interest as herein provided. All computations of interest under this Note shall
be made on the basis of a year of 360 days, for actual days elapsed.
a. BASE INTEREST RATE. At Debtor's option, amounts outstanding hereunder in
minimum amounts of at least $ 100,000.00 shall bear interest at a rate,
based on an index selected by Debtor, which is 2.750% per annum in excess
of Bank's LIBOR Rate for the Interest Period selected by Debtor, acceptable
to Bank.
No Base Interest Rate may be changed, altered or otherwise modified until
the expiration of the Interest Period selected by Debtor. The exercise of
interest rate options by Debtor shall be as recorded in Bank's records,
which records shall be prima facie evidence of the amount borrowed under
either interest option and the interest rate; provided, however, that
failure of Bank to make any such notation in its records shall not discharge
Debtor from its obligations to repay in full with interest all amounts
borrowed. In no event shall any Interest Period extend beyond the maturity
date of this note.
To exercise this option, Debtor may, from time to time with respect to
principal outstanding on which a Base Interest Rate is not accruing, and on
the expiration of any Interest Period which respect to principal outstanding
on which a Base Interest Rate has been accruing, select an Index offered by
Bank for a Base Interest Rate Loan and an Interest Period by telephoning an
authorized lending officer of Bank located at the banking office identified
below prior to 10:00 a.m., Pacific time, on any Business Day and advising
that officer of the selected index, the Interest Period and the Origination
Date selected (which Origination Date, for a Base Interest Rate Loan based
on the LIBOR Rate, shall follow the date of such selection by no more than
two (2) Business Days).
Bank will mail a written confirmation of the terms of the selection to
Debtor promptly after the selection is made. Failure to send such
confirmation shall not affect Bank's rights to collect interest at the rate
selected. If, on the date of the selection, the index selected is
unavailable for any reason, the selection shall be void. Bank reserves the
right to fund the principal from any source of funds notwithstanding any
Base Interest Rate selected by Debtor.
b. VARIABLE INTEREST RATE. All principal outstanding hereunder which is not
bearing interest at a Base Interest Rate shall bear Interest at a rate per
annum of 0.500 % in excess of the Reference Rate, which rate shall vary as
and when the Reference Rate changes.
At any time prior to the maturity of this note, subject to the provisions of
paragraph 4. below, of this note, Debtor may borrow, repay and reborrow
hereon so long as the total outstanding at any one time does not exceed the
principal amount of this note. Debtor shall pay all amounts due under this
note in lawful money of the United States at Bank's SAN DIEGO COMMERCIAL
BANKING Office, or such other office as may be designated by Bank from time
to time.
2. LATE PAYMENTS. If any payment required by the terms of this note shall remain
unpaid ten days after same is due, at the option of Bank, Debtor shall pay a fee
of $100 to Bank.
3. INTEREST RATE FOLLOWING DEFAULT. In the event of default, at the option of
Bank, and, to the extent permitted by law, interest shall be payable on the
outstanding principal under this Note at a per annum rate equal to FIVE AND
NO/100 percent (5.00%) in excess of the interest rate specified in paragraph
1.b. above, calculated from the date of default until all amounts payable under
this note are paid in full.
4. PREPAYMENT.
a. Amounts outstanding under this note bearing interest at a rate based on the
Reference Rate may be prepaid in whole or in part at any time, without penalty
or premium. Debtor may prepay amounts outstanding under this note bearing
interest at a Base Interest Rate in whole or in part provided Debtor has given
Bank not less than five (5) Business Days prior written notice of Debtor's
intention to make such prepayment and pays to Bank the liquidated Damages due as
a result. Liquidated Damages shall also be paid, if Bank, for any other reason,
including acceleration or foreclosure, receives all or any portion of principal
bearing interest at a Base Interest Rate prior to its scheduled payment date.
Liquidated Damages shall be an amount equal to the present value of the product
of: (i) the difference (but not less than zero) between (a) the Base Interest
Rate applicable to the principal amount which is being prepaid, and (b) the
return which Bank could obtain if it used the amount of such prepayment of
principal to purchase at bid price regularly quoted securities issued by the
United States having a maturity date mostly closely coinciding with the relevant
Base Rate Maturity Date and such securities were held by Bank until the relevant
Base Rate Maturity Date ("Yield Rate"); (ii) a fraction, the numerator of which
is the number of days in the period between the date of prepayment and the
relevant Base Rate Maturity Date and the denominator of which is 360; and (iii)
the amount of the principal so prepaid (except in the event that principal
payments are required and have been made as scheduled under the terms of the
Base Interest Rate Loan being prepaid, then an amount equal to the lesser of (A)
the amount prepaid or (B) 50% of the sum of (1) the amount prepaid and (2) the
amount of principal scheduled under the terms of the Base Interest Rate Loan
being prepaid to its outstanding at the relevant Base Rate Maturity Date ).
Present value under this note is determined by discounting the above product to
present value using the Yield Rate as the annual discount factor.
b. In no event shall Bank be obligated to make any payment or refund to Debtor,
nor shall Debtor be entitled to any setoff or other claim against Bank, should
the return which Bank could obtain under this prepayment formula exceed the
interest rate that Bank would have received if no prepayment had occurred. All
prepayments shall include payment of accrued interest on the principal amount so
prepaid and shall be applied to payment of Interest before application to
principal. A determination by Bank as to the prepayment fee amount, if any,
shall be conclusive.
c. Bank shall provide Debtor a statement of the amount payable on account of
prepayment. Debtor acknowledges that (i) Bank establishes a Base Interest Rate
upon the understanding that it apply to the Base Interest Rate Loan for the
entire Interest Period, and (ii) any prepayment may result in Bank incurring
additional costs, expenses or liabilities; and Debtor agrees to pay these
liquidated damages as a reasonable estimate of the costs, expenses and
liabilities of Bank association with such prepayment.
5. DEFAULT AND ACCELERATION OF TIME FOR PAYMENT. Default shall include, but not
be limited to, any of the following: (a) the failure of Debtor to make any
payment required under this note when due; (b) any breach, misrepresentation or
other default by Debtor, any guarantor, co-maker, endorser, or any other person
or entity other than Debtor providing security for this note (hereinafter
individually and collectively referred to as the "Obligor") under any security
agreement, guaranty or other agreement between Bank and any Obligor; (c) the
insolvency of any Obligor or the failure of any Obligor generally to pay such
Obligor's debts as such debts become due; (d) the commencement as to any Obligor
of any voluntary or involuntary proceeding under any laws relating to
bankruptcy, insolvency, reorganization, arrangement, debt adjustment or debtor
relief; (e) the assignment by any Obligor for the benefit of such Obligor's
creditors; (f) the appointment, or commencement of any proceeding for the
appointment of a receiver, trustee, custodian or similar official for all or
substantially all of any Obligor's property; (g) the commencement of any
proceeding for the dissolution or liquidation of any Obligor; (h) the
termination of existence or death of any Obligor; (i) the revocation of guaranty
or subordination agreement given in connection with this note; (j) the failure
of any Obligor to comply with any order, judgment, injunction, decree, writ or
demand of any court or other public authority; (k) the filing or recording
against any Obligor, or the property of any Obligor, of any notice of levy,
notice to withhold, or other legal process for taxes other than property taxes;
(l) the default by any Obligor personally liable for amounts owed hereunder on
any obligation concerning the borrowing of money; (m) the issuance against any
Obligor, or the property of any Obligor, of any writ of attachment,
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execution, or other judicial lien; or (n) the deterioration of the financial
condition of any Obligor which results in Bank deeming itself, in good faith,
insecure. Upon the occurrence of any such default, Bank, in its discretion, may
cease to advance funds hereunder and may declare all obligations under this note
immediately due and payable; however, upon the occurrence of an event of default
under d, e, f, or g, all principal and interest shall automatically become
immediately due and payable.
6. ADDITIONAL AGREEMENT OF DEBTOR. If any amounts owing under this note are not
paid when due, Debtor promises to pay all costs and expenses, including
reasonable attorneys' fees, incurred by Bank in the collection or enforcement of
this note. Debtor and any endorsers of this note, for the maximum period of time
and the full extent permitted by law, (a) waive diligence, presentment, demand,
notice of nonpayment, protest, notice of protest, and notice of every kind; (b)
waive the right to assert the defense of any statute of limitations to any debt
or obligation hereunder; and (c) consent to renewals and extensions of time for
the payment of any amounts due under this note. If this note is signed by more
than one party, the term "Debtor" includes each of the undersigned and any
successors in interest thereof; all of whose liability shall be joint and
several. Any married person who signs this note agrees that recourse may be had
against the separate property of that person for any obligations hereunder. The
receipt of any check or other item of payment by Bank, at its option, shall not
be considered a payment on account until such check or other item of payment is
honored when presented for payment at the drawee bank. Bank may delay the credit
of such payment based upon Bank's schedule of funds availability, and interest
under this note shall accrue until the funds are deemed collected. In any action
brought under or arising out of this note, Debtor and any Obligor, including
their successors and assigns, hereby consent to the jurisdiction of any
competent court within the State of California, as provided in any alternative
dispute resolution agreement executed between Debtor and Bank, and consent to
service of process by any means authorized by said state's law. The term "Bank"
includes, without limitation, any holder of this note. This note shall be
construed in accordance with and governed by the laws of the State of
California. This note hereby incorporates any alternative dispute resolution
agreement previously, concurrently or hereafter executed between Debtor and
Bank.
7. DEFINITIONS. As used herein, the following terms shall have the meanings
respectively set forth below: "BASE INTEREST RATE" means a rate of interest
based on the LIBOR Rate. "BASE INTEREST RATE LOAN" means amounts outstanding
under this note shall bear interest at a Base Interest Rate. "BASE RATE MATURITY
DATE" means the last day of the Interest Period with respect to principal
outstanding under a Base Interest Rate Loan. "BUSINESS DAY" means a day on which
Bank is open for business for the funding of corporate loans, and, with respect
to the rate of interest based on the LIBOR Rate, on which dealings in U.S.
dollar deposits outside of the United States may be carried on by Bank.
"Interest Period" means with respect to funds bearing interest at a rate based
on the LIBOR Rate, any calendar period of one, three, six, nine or twelve
months. In determining an Interest Period, a month means a period that starts on
one Business Day in a month and ends on and includes the day preceding the
numerically corresponding day in the next month. For any month in which there is
no such numerically corresponding day, then as to that month, such day shall be
deemed to be the last calendar day of such month. Any Interest Period which
would otherwise end on a non-Business Day shall end on the next succeeding
Business Day unless that is the first day of a month, in which event such
Interest Period shall end on the next preceding Business Day. "LIBOR RATE" means
a per annum rate of interest (rounded upward, if necessary, to the nearest 1/100
of 1%) at which dollar deposits, in immediately available funds and in lawful
money of the United States would be offered to Bank, outside of the United
States, for a term coinciding with the Interest Period selected by Debtor and
for an amount equal to the amount of principal covered by Debtor's Interest rate
selection, plus Bank's costs, including the cost, if any, of reserve
requirements. "ORIGINATION DATE" means the first day of the Interest Period.
"REFERENCE RATE" means the rate announced by Bank from time to time at its
corporate headquarters as its Reference Rate. The Reference Rate is an index
rate determined by Bank from time to time as a means of pricing certain
extensions of credit and is neither directly tied to any external rate of
interest or index nor necessarily the lowest rate of interest charged by Bank at
any given time.
EVER-TEK COMPUTER CORPORATION
By: /s/ Xxxxx Xxxxxx
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XXXXX XXXXXX, PRESIDENT
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[Union Bank logo]
CONTINUING GUARANTY
1. OBLIGATIONS GUARANTEED. For consideration, the adequacy and sufficiency of
which is acknowledged, the undersigned ("Guarantor") unconditionally guaranties
and promises (a) to pay UNION BANK OF CALIFORNIA, N.A. ("Bank") on demand, in
lawful United States money, all Obligations to Bank of EVER-TEK COMPUTER
CORPORATION ("Borrower") and (b) to perform all undertakings of Borrower in
connection with the Obligations, "Obligations" is used in its most comprehensive
sense and includes any and all debts, liabilities, rental obligations, and other
obligations and liabilities of every kind of Borrower to Bank, whether made,
incurred or created previously, concurrently or in the future, whether voluntary
or involuntary and however arising, whether incurred directly or acquired by
Bank by assignment or succession, whether due or not due, absolute or
contingent, liquidated or unliquidated, legal or equitable, whether Borrower is
liable individually or jointly or with others, whether incurred before, during
or after any bankruptcy, reorganization, insolvency, receivership or similar
proceeding ("insolvency Proceeding"), and whether recovery thereof is or becomes
barred by a statute of limitations or is or becomes otherwise unenforceable,
together with all expenses of, for and incidental to collection, including
reasonable attorney's fees.
2. LIMITATION ON GUARANTOR'S LIABILITY. Although this Guaranty covers all
Obligations, Guarantor's liability under this Guaranty for Borrower's
Obligations shall not exceed at any one time the sum of the following (the
"Guarantied Liability Amount"): (a) FOUR MILLION FIVE HUNDRED THOUSAND AND
NO/100 ($4,500,000.00) for Obligations representing principal and/or rent
("Principal Amount"), (b) all interest, fees and costs, attorneys' fees, and
expenses of Bank relating to or arising out of the enforcement of the
Obligations and all indemnity liabilities of Guarantor under this Guaranty. The
foregoing limitation applies only to Guarantor's liability under this particular
Guaranty. Unless Bank otherwise agrees in writing, every other guaranty of any
Obligations previously, concurrently, or hereafter given to Bank by Guarantor is
independent of this Guaranty and of every other such guaranty. Without notice to
Guarantor, Bank may permit the Obligations to exceed the Principal Amount and
may apply or reapply any amounts received in respect of the Obligations from any
source other than from Guarantor to that portion of the Obligations not included
within the Guarantied Liability Amount.
3. CONTINUING NATURE/REVOCATION/REINSTATEMENT. This Guaranty is in addition to
any other guaranties of the Obligations, is continuing and covers all
Obligations, including those arising under successive transactions which
continue or increase the Obligations from time to time, renew all or part of the
Obligations after they have been satisfied, or create new Obligations.
Revocation by one or more signers of this Guaranty or any other guarantors of
the Obligations shall not (a) affect the obligations under this Guaranty of a
non-revoking Guarantor, (b) apply to Obligations outstanding when Bank receives
written notice of revocation, or to any extensions, renewals, readvances,
modifications, amendments or replacements of such Obligations, or (c) apply to
Obligations, arising after Bank receives such notice of revocation, which are
created pursuant to a commitment existing at the time of the revocation, whether
or not there exists an unsatisfied condition to such commitment or Bank has
another defense to its performance. All of Bank's rights pursuant to this
Guaranty continue with respect to amounts previously paid to Bank on account of
any Obligations which are thereafter restored or returned by Bank, whether in an
Insolvency Proceeding of Borrower or for any other reason, all as though such
amounts had not been paid to Bank; and Guarantor's liability under this Guaranty
(and all its terms and provisions) shall be reinstated and revised,
notwithstanding any surrender or cancellation of this Guaranty. Bank, at its
sole discretion, may determine whether any amount paid to it must be restored or
returned; provided, however, that if Bank elects to contest any claim for return
or restoration, Xxxxxxxxx agrees to indemnify and hold Bank harmless from and
against all costs and expenses, including reasonable attorneys' fees, expended
or incurred by Bank in connection with such contest. No payment by Guarantor
shall reduce the Guarantied Liability Amount hereunder unless, at or prior to
the time of such payment, Bank receives Guarantor's written notice to that
effect. If any Insolvency Proceeding is commenced by or against Borrower or
Guarantor, at Bank's election, Guarantor's obligations under this Guaranty shall
immediately and without notice or demand become due and payable, whether or not
then otherwise due and payable.
4. AUTHORIZATION. Guarantor authorizes Bank, without notice and without
affecting Guarantor's liability under this Guaranty, from time to time, whether
before or after any revocation of this Guaranty, to (a) renew, compromise,
extend, accelerate, release, subordinate, waive, amend and restate, or otherwise
amend or change, the interest rate, time or place for payment or any other terms
of all or any part of the Obligations; (b) accept delinquent or partial payments
on the Obligations; (c) take or not take security or other credit support for
this Guaranty or for all or any part of the Obligations, and exchange, enforce,
waive, release, subordinate, fail to enforce or perfect, sell, or otherwise
dispose of any such security or credit support; (d) apply proceeds of any such
security or credit support and direct the order or manner of its sale or
enforcement as Bank, at its sole discretion, may determine; and (e) release or
substitute Borrower or any guarantor or other person or entity liable on the
Obligations.
5. WAIVERS. To the maximum extent permitted by law, Guarantor waives (a) all
rights to require Bank to proceed against Borrower, or any other guarantor, or
proceed against, enforce or exhaust any security for the Obligations or to
xxxxxxxx assets or to pursue any other remedy in Bank's power whatsoever; (b)
all defenses arising by reason of any disability or other defense of Borrower,
the cessation for any reason of the liability of Borrower, any defense that any
other indemnity, guaranty or security was to be obtained, any claim that Bank
has made Guarantor's obligations more burdensome or more burdensome than
Borrower's obligations, and the use of any proceeds of the Obligations other
than as intended or understood by Bank or Guarantor; (c) all presentments,
demands for performance, notices of nonperformance, protests notices of protest,
notices of dishonor, notices of acceptance of this Guaranty and of the existence
or creation of new or additional Obligations, and all other notices or demands
to which Guarantor might otherwise be entitled; (d) all conditions precedent to
the effectiveness of this Guaranty; (e) all rights to file a claim in connection
with the Obligations in an Insolvency Proceeding filed by or against Borrower;
(f) all rights to require Bank to enforce any of its remedies; and (g) until the
Obligations are satisfied or fully paid with such payment not subject to return:
(i) all rights of subrogation, contribution, indemnification or reimbursement,
(ii) all rights of recourse to any assets or property of Borrower, or to any
collateral or credit support for the Obligations, (iii) all rights to
participate in or benefit from any security or credit support Bank may have or
acquire and (iv) all rights, remedies and defenses Guarantor may have or acquire
against Borrower. Guarantor understands that if Bank forecloses by trustee's
sale on a deed of trust securing any of the Obligations, Guarantor would than
have a defense preventing Bank from thereafter enforcing Guarantor's liability
for the unpaid balance of the secured Obligations. This defense arises because
the trustee's sale would eliminate Guarantor's right of subrogation, and
therefore Guarantor would be unable to obtain reimbursement from Xxxxxxxx.
Guarantor specifically waives this defense and all rights and defenses that
Guarantor may have because the Obligations are secured by real property. This
means, among other things: (1) Bank may collect from Guarantor without first
foreclosing on any real or personal property collateral pledged by Borrower; and
(2) if Bank forecloses on any real property collateral pledged by Borrower: (A)
the amount of the Obligations may be reduced only by the price for which the
collateral is sold at the foreclosure sale, even if the collateral is worth more
than the sale price; and (B) Bank may collect from Guarantor even if Bank, by
foreclosing on the real property collateral, has destroyed any right Guarantor
may have to collect from Borrower. This is an unconditional and irrevocable
waiver of any rights and defenses Guarantor may have because the Obligations are
secured by real property. These rights and defenses include, but are not limited
to, any rights or defenses based upon Section 580a, 580b, 580d or 726 of the
California Code of Civil Procedure or similar laws in other states.
6. GUARANTOR TO KEEP INFORMED. Guarantor warrants having established with
Borrower adequate means of obtaining, on an ongoing basis, such information as
Guarantor may require concerning all matters bearing on the risk of nonpayment
or nonperformance of the Obligations. Guarantor assumes sole, continuing
responsibility for obtaining such information from sources other than from Bank.
Bank has no duty to provide any information to Guarantor until Bank receives
Guarantor's written request for specific information in Bank's possession and
Borrower has authorized Bank to disclose such information to Guarantor.
7. SUBORDINATION. All obligations of Borrower to Guarantor which presently or in
the future may exist ("Guarantor's Claims") are hereby subordinated to the
Obligations. At Bank's request, Guarantor's Claims will be enforced and
performance thereon received by Guarantor only as a trustee for Bank, and
Guarantor will promptly pay over to Bank all proceeds recovered for application
to the Obligations without reducing or affecting Guarantor's liability under
other provisions of this Guaranty.
8. SECURITY. To secure Guarantor's obligations under this Guaranty, other than
for payment of Obligations which are subject to the disclosure requirements of
the United States Truth in Lending Act, Guarantor grants Bank a security
interest in all moneys, general and special deposits, instruments and other
property of Guarantor at any time maintained with or held by Bank, and all
proceeds of the foregoing.
9. AUTHORIZATION. Where Borrower is a corporation, partnership or other entity,
Bank need not inquire into or verify the powers of Borrower or authority of
those acting or purporting to act on behalf of Borrower, and this Guaranty shall
be enforceable with respect to any Obligations Bank grants or creates in
reliance on the purported exercise of such powers or authority.
10. ASSIGNMENTS. Without notice to Guarantor, Bank may assign the Obligations
and this Guaranty, in whole or in part, an may disclose to any prospective or
actual purchaser of all or part of the Obligations any and all information Bank
has or acquires concerning Guarantor, this Guaranty and any security for this
Guaranty.
11. COUNSEL FEES AND COSTS. The prevailing party shall be entitled to attorney's
fees (including a reasonable allocation for Bank's internal counsel) and all
other costs and expenses which it may incur in connection with the enforcement
or preservation of its rights under, or defense of, this Guaranty or in
connection with any other dispute or proceeding relating to this Guaranty,
whether or not incurred in any Insolvency Proceeding, arbitration, litigation or
other proceeding.
12. MARRIED GUARANTORS. By executing this Guaranty, a Guarantor who is married
agrees that recourse may be had against his or her separate and community
property for all his or her obligations under this Guaranty.
13. MULTIPLE GUARANTORS/BORROWERS. When there is more than on Borrower named
herein or when this Guaranty is executed by more than one Guarantor, then the
words "Borrower" and "Guarantor", respectively, shall mean all and any one or
more of them, and their respective successors and assigns, including
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debtors-in-possession, and bankruptcy trustees; words used herein in the
singular shall be considered to have been used in the plural where the context
and construction so requires in order to refer to more than one Borrower or
Guarantor, as the case may be.
14. INTEGRATION/SEVERABILITY/AMENDMENTS. This Guaranty is intended by Guarantor
and Bank as the complete, final expression of their agreement concerning its
subject matter. It supersedes all prior understandings or agreements with
respect thereto and may be changed only by a writing signed by Guarantor and
Bank. No course of dealing, or parole or extrinsic evidence shall be used to
modify or supplement the express terms of this Guaranty. If any provision of
this Guaranty is found to be illegal, invalid or unenforceable, such provision
shall be enforced to the maximum extent permitted, but if fully unenforceable,
such provision shall be severable, and this Guaranty shall be construed as if
such provision had never been a part of this Guaranty, and the remaining
provisions shall continue in full force and effect.
15. JOINT AND SEVERAL. If more than one Guarantor signs this Guaranty, the
obligations of each under this Guaranty are joint and several, and independent
of the Obligations and of the obligations of any other person or entity. A
separate action or actions maybe brought and prosecuted against any one of more
guarantors, whether action is brought against Borrower or other guarantors of
the Obligations, and whether Borrower or others are joined in any such action.
16. NOTICE. Any notice, including notice of revocation, given by any party under
this Guaranty shall be effective only upon its receipt by the other party and
only if (a) given in writing and (b) personally delivered or sent by Unites
States mail, postage prepaid, and addressed to Bank or Guarantor at their
respective addresses for notices indicated below. Guarantor and Bank may change
the place to which notices, requests, and other communications are to be sent to
them by giving written notice of such change to the other.
17. GOVERNING LAW. This Guaranty shall be governed by and construed according to
the laws of California, and, except as provided in any alternative dispute
resolution agreement executed between Guarantor and Bank, Guarantor submits to
the non-exclusive jurisdiction of the state or federal courts in said state.
18. DISPUTE RESOLUTION. This Guaranty hereby incorporates any alternative
dispute resolution agreement previously, concurrently or hereafter executed
between Guarantor and Bank.
Executed as of APRIL 20, 1999 . Guarantor acknowledges having received a copy of
this Guaranty and having made each waiver contained in this Guaranty with full
knowledge of its consequences.
By: /s/ Xxxxx Xxxxxx
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XXXXX XXXXXX
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UNION BANK OF CALIFORNIA, N.A.
BY: /s/ Xxxxxxx Xxxxxxxx
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XXXXXXX XXXXXXXX
TITLE: VICE PRESIDENT
Address for notices to Bank: Address for notices to Guarantor:
ATTN: 0000 XXXXXX XXXXXXX XXXXX
XXX XXXXX COMMERCIAL BANKING OFFICE OCEANSIDE, CA 92056
000 X XX., 0XX XXXXX XXX. SEC. NO.:
SAN DIEGO, CA 92101
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[Union Bank logo]
CONTINUING GUARANTY
1. OBLIGATIONS GUARANTEED. For consideration, the adequacy and sufficiency of
which is acknowledged, the undersigned ("Guarantor") unconditionally guaranties
and promises (a) to pay UNION BANK OF CALIFORNIA, N.A. ("Bank") on demand, in
lawful United States money, all Obligations to Bank of EVER-TEK COMPUTER
CORPORATION ("Borrower") and (b) to perform all undertakings of Borrower in
connection with the Obligations, "Obligations" is used in its most comprehensive
sense and includes any and all debts, liabilities, rental obligations, and other
obligations and liabilities of every kind of Borrower to Bank, whether made,
incurred or created previously, concurrently or in the future, whether voluntary
or involuntary and however arising, whether incurred directly or acquired by
Bank by assignment or succession, whether due or not due, absolute or
contingent, liquidated or unliquidated, legal or equitable, whether Borrower is
liable individually or jointly or with others, whether incurred before, during
or after any bankruptcy, reorganization, insolvency, receivership or similar
proceeding ("insolvency Proceeding"), and whether recovery thereof is or becomes
barred by a statute of limitations or is or becomes otherwise unenforceable,
together with all expenses of, for and incidental to collection, including
reasonable attorney's fees.
2. LIMITATION ON GUARANTOR'S LIABILITY. Although this Guaranty covers all
Obligations, Guarantor's liability under this Guaranty for Borrower's
Obligations shall not exceed at any one time the sum of the following (the
"Guarantied Liability Amount"): (a) FOUR MILLION FIVE HUNDRED THOUSAND AND
NO/100 ($4,500,000.00) for Obligations representing principal and/or rent
("Principal Amount"), (b) all interest, fees and costs, attorneys' fees, and
expenses of Bank relating to or arising out of the enforcement of the
Obligations and all indemnity liabilities of Guarantor under this Guaranty. The
foregoing limitation applies only to Guarantor's liability under this particular
Guaranty. Unless Bank otherwise agrees in writing, every other guaranty of any
Obligations previously, concurrently, or hereafter given to Bank by Guarantor is
independent of this Guaranty and of every other such guaranty. Without notice to
Guarantor, Bank may permit the Obligations to exceed the Principal Amount and
may apply or reapply any amounts received in respect of the Obligations from any
source other than from Guarantor to that portion of the Obligations not included
within the Guarantied Liability Amount.
3. CONTINUING NATURE/REVOCATION/REINSTATEMENT. This Guaranty is in addition to
any other guaranties of the Obligations, is continuing and covers all
Obligations, including those arising under successive transactions which
continue or increase the Obligations from time to time, renew all or part of the
Obligations after they have been satisfied, or create new Obligations.
Revocation by one or more signers of this Guaranty or any other guarantors of
the Obligations shall not (a) affect the obligations under this Guaranty of a
non-revoking Guarantor, (b) apply to Obligations outstanding when Bank receives
written notice of revocation, or to any extensions, renewals, readvances,
modifications, amendments or replacements of such Obligations, or (c) apply to
Obligations, arising after Bank receives such notice of revocation, which are
created pursuant to a commitment existing at the time of the revocation, whether
or not there exists an unsatisfied condition to such commitment or Bank has
another defense to its performance. All of Bank's rights pursuant to this
Guaranty continue with respect to amounts previously paid to Bank on account of
any Obligations which are thereafter restored or returned by Bank, whether in an
Insolvency Proceeding of Borrower or for any other reason, all as though such
amounts had not been paid to Bank; and Guarantor's liability under this Guaranty
(and all its terms and provisions) shall be reinstated and revised,
notwithstanding any surrender or cancellation of this Guaranty. Bank, at its
sole discretion, may determine whether any amount paid to it must be restored or
returned; provided, however, that if Bank elects to contest any claim for return
or restoration, Xxxxxxxxx agrees to indemnify and hold Bank harmless from and
against all costs and expenses, including reasonable attorneys' fees, expended
or incurred by Bank in connection with such contest. No payment by Guarantor
shall reduce the Guarantied Liability Amount hereunder unless, at or prior to
the time of such payment, Bank receives Guarantor's written notice to that
effect. If any Insolvency Proceeding is commenced by or against Borrower or
Guarantor, at Bank's election, Guarantor's obligations under this Guaranty shall
immediately and without notice or demand become due and payable, whether or not
then otherwise due and payable.
4. AUTHORIZATION. Guarantor authorizes Bank, without notice and without
affecting Guarantor's liability under this Guaranty, from time to time, whether
before or after any revocation of this Guaranty, to (a) renew, compromise,
extend, accelerate, release, subordinate, waive, amend and restate, or otherwise
amend or change, the interest rate, time or place for payment or any other terms
of all or any part of the Obligations; (b) accept delinquent or partial payments
on the Obligations; (c) take or not take security or other credit support for
this Guaranty or for all or any part of the Obligations, and exchange, enforce,
waive, release, subordinate, fail to enforce or perfect, sell, or otherwise
dispose of any such security or credit support; (d) apply proceeds of any such
security or credit support and direct the order or manner of its sale or
enforcement as Bank, at its sole discretion, may determine; and (e) release or
substitute Borrower or any guarantor or other person or entity liable on the
Obligations.
5. WAIVERS. To the maximum extent permitted by law, Guarantor waives (a) all
rights to require Bank to proceed against Borrower, or any other guarantor, or
proceed against, enforce or exhaust any security for the Obligations or to
xxxxxxxx assets or to pursue any other remedy in Bank's power whatsoever; (b)
all defenses arising by reason of any disability or other defense of Borrower,
the cessation for any reason of the liability of Borrower, any defense that any
other indemnity, guaranty or security was to be obtained, any claim that Bank
has made Guarantor's obligations more burdensome or more burdensome than
Borrower's obligations, and the use of any proceeds of the Obligations other
than as intended or understood by Bank or Guarantor; (c) all presentments,
demands for performance, notices of nonperformance, protests notices of protest,
notices of dishonor, notices of acceptance of this Guaranty and of the existence
or creation of new or additional Obligations, and all other notices or demands
to which Guarantor might otherwise be entitled; (d) all conditions precedent to
the effectiveness of this Guaranty; (e) all rights to file a claim in connection
with the Obligations in an Insolvency Proceeding filed by or against Borrower;
(f) all rights to require Bank to enforce any of its remedies; and (g) until the
Obligations are satisfied or fully paid with such payment not subject to return:
(i) all rights of subrogation, contribution, indemnification or reimbursement,
(ii) all rights of recourse to any assets or property of Borrower, or to any
collateral or credit support for the Obligations, (iii) all rights to
participate in or benefit from any security or credit support Bank may have or
acquire and (iv) all rights, remedies and defenses Guarantor may have or acquire
against Borrower. Guarantor understands that if Bank forecloses by trustee's
sale on a deed of trust securing any of the Obligations, Guarantor would than
have a defense preventing Bank from thereafter enforcing Guarantor's liability
for the unpaid balance of the secured Obligations. This defense arises because
the trustee's sale would eliminate Guarantor's right of subrogation, and
therefore Guarantor would be unable to obtain reimbursement from Xxxxxxxx.
Guarantor specifically waives this defense and all rights and defenses that
Guarantor may have because the Obligations are secured by real property. This
means, among other things: (1) Bank may collect from Guarantor without first
foreclosing on any real or personal property collateral pledged by Borrower; and
(2) if Bank forecloses on any real property collateral pledged by Borrower: (A)
the amount of the Obligations may be reduced only by the price for which the
collateral is sold at the foreclosure sale, even if the collateral is worth more
than the sale price; and (B) Bank may collect from Guarantor even if Bank, by
foreclosing on the real property collateral, has destroyed any right Guarantor
may have to collect from Borrower. This is an unconditional and irrevocable
waiver of any rights and defenses Guarantor may have because the Obligations are
secured by real property. These rights and defenses include, but are not limited
to, any rights or defenses based upon Section 580a, 580b, 580d or 726 of the
California Code of Civil Procedure or similar laws in other states.
6. GUARANTOR TO KEEP INFORMED. Guarantor warrants having established with
Borrower adequate means of obtaining, on an ongoing basis, such information as
Guarantor may require concerning all matters bearing on the risk of nonpayment
or nonperformance of the Obligations. Guarantor assumes sole, continuing
responsibility for obtaining such information from sources other than from Bank.
Bank has no duty to provide any information to Guarantor until Bank receives
Guarantor's written request for specific information in Bank's possession and
Borrower has authorized Bank to disclose such information to Guarantor.
7. SUBORDINATION. All obligations of Borrower to Guarantor which presently or in
the future may exist ("Guarantor's Claims") are hereby subordinated to the
Obligations. At Bank's request, Guarantor's Claims will be enforced and
performance thereon received by Guarantor only as a trustee for Bank, and
Guarantor will promptly pay over to Bank all proceeds recovered for application
to the Obligations without reducing or affecting Guarantor's liability under
other provisions of this Guaranty.
8. SECURITY. To secure Guarantor's obligations under this Guaranty, other than
for payment of Obligations which are subject to the disclosure requirements of
the United States Truth in Lending Act, Guarantor grants Bank a security
interest in all moneys, general and special deposits, instruments and other
property of Guarantor at any time maintained with or held by Bank, and all
proceeds of the foregoing.
9. AUTHORIZATION. Where Borrower is a corporation, partnership or other entity,
Bank need not inquire into or verify the powers of Borrower or authority of
those acting or purporting to act on behalf of Borrower, and this Guaranty shall
be enforceable with respect to any Obligations Bank grants or creates in
reliance on the purported exercise of such powers or authority.
10. ASSIGNMENTS. Without notice to Guarantor, Bank may assign the Obligations
and this Guaranty, in whole or in part, an may disclose to any prospective or
actual purchaser of all or part of the Obligations any and all information Bank
has or acquires concerning Guarantor, this Guaranty and any security for this
Guaranty.
11. COUNSEL FEES AND COSTS. The prevailing party shall be entitled to attorney's
fees (including a reasonable allocation for Bank's internal counsel) and all
other costs and expenses which it may incur in connection with the enforcement
or preservation of its rights under, or defense of, this Guaranty or in
connection with any other dispute or proceeding relating to this Guaranty,
whether or not incurred in any Insolvency Proceeding, arbitration, litigation or
other proceeding.
12. MARRIED GUARANTORS. By executing this Guaranty, a Guarantor who is married
agrees that recourse may be had against his or her separate and community
property for all his or her obligations under this Guaranty.
13. MULTIPLE GUARANTORS/BORROWERS. When there is more than on Borrower named
herein or when this Guaranty is executed by more than one Guarantor, then the
words "Borrower" and "Guarantor", respectively, shall mean all and any one or
more of them, and their respective successors and assigns, including
6
debtors-in-possession, and bankruptcy trustees; words used herein in the
singular shall be considered to have been used in the plural where the context
and construction so requires in order to refer to more than one Borrower or
Guarantor, as the case may be.
14. INTEGRATION/SEVERABILITY/AMENDMENTS. This Guaranty is intended by Guarantor
and Bank as the complete, final expression of their agreement concerning its
subject matter. It supersedes all prior understandings or agreements with
respect thereto and may be changed only by a writing signed by Guarantor and
Bank. No course of dealing, or parole or extrinsic evidence shall be used to
modify or supplement the express terms of this Guaranty. If any provision of
this Guaranty is found to be illegal, invalid or unenforceable, such provision
shall be enforced to the maximum extent permitted, but if fully unenforceable,
such provision shall be severable, and this Guaranty shall be construed as if
such provision had never been a part of this Guaranty, and the remaining
provisions shall continue in full force and effect.
15. JOINT AND SEVERAL. If more than one Guarantor signs this Guaranty, the
obligations of each under this Guaranty are joint and several, and independent
of the Obligations and of the obligations of any other person or entity. A
separate action or actions maybe brought and prosecuted against any one of more
guarantors, whether action is brought against Borrower or other guarantors of
the Obligations, and whether Borrower or others are joined in any such action.
16. NOTICE. Any notice, including notice of revocation, given by any party under
this Guaranty shall be effective only upon its receipt by the other party and
only if (a) given in writing and (b) personally delivered or sent by Unites
States mail, postage prepaid, and addressed to Bank or Guarantor at their
respective addresses for notices indicated below. Guarantor and Bank may change
the place to which notices, requests, and other communications are to be sent to
them by giving written notice of such change to the other.
17. GOVERNING LAW. This Guaranty shall be governed by and construed according to
the laws of California, and, except as provided in any alternative dispute
resolution agreement executed between Guarantor and Bank, Guarantor submits to
the non-exclusive jurisdiction of the state or federal courts in said state.
18. DISPUTE RESOLUTION. This Guaranty hereby incorporates any alternative
dispute resolution agreement previously, concurrently or hereafter executed
between Guarantor and Bank.
Executed as of APRIL 20, 1999 . Guarantor acknowledges having received a copy of
this Guaranty and having made each waiver contained in this Guaranty with full
knowledge of its consequences.
XXXXX XXXXXX, TRUSTEE OF THE XXXXXX
FAMILY TRUST
By: /s/ Xxxxx Xxxxxx
------------------------------- -----------------------------------
XXXXX XXXXXX, TRUSTEE
----------------------------------- -----------------------------------
----------------------------------- -----------------------------------
----------------------------------- -----------------------------------
----------------------------------- -----------------------------------
----------------------------------- -----------------------------------
UNION BANK OF CALIFORNIA, N.A.
BY: /s/ Xxxxxxx Xxxxxxxx
-------------------------------
XXXXXXX XXXXXXXX
TITLE: VICE PRESIDENT
----------------------------
Address for notices to Bank: Address for notices to Guarantor:
ATTN: 0000 XXXXX XXXXXX #X
SAN DIEGO COMMERCIAL BANKING OFFICE CARLSBAD, CA 92008
000 X XX., 0XX FLOOR TAX ID: ###-##-####
SAN DIEGO, CA 92101
7
[Union Bank logo]
CONTINUING GUARANTY
1. OBLIGATIONS GUARANTEED. For consideration, the adequacy and sufficiency of
which is acknowledged, the undersigned ("Guarantor") unconditionally guaranties
and promises (a) to pay UNION BANK OF CALIFORNIA, N.A. ("Bank") on demand, in
lawful United States money, all Obligations to Bank of EVER-TEK COMPUTER
CORPORATION ("Borrower") and (b) to perform all undertakings of Borrower in
connection with the Obligations, "Obligations" is used in its most comprehensive
sense and includes any and all debts, liabilities, rental obligations, and other
obligations and liabilities of every kind of Borrower to Bank, whether made,
incurred or created previously, concurrently or in the future, whether voluntary
or involuntary and however arising, whether incurred directly or acquired by
Bank by assignment or succession, whether due or not due, absolute or
contingent, liquidated or unliquidated, legal or equitable, whether Borrower is
liable individually or jointly or with others, whether incurred before, during
or after any bankruptcy, reorganization, insolvency, receivership or similar
proceeding ("insolvency Proceeding"), and whether recovery thereof is or becomes
barred by a statute of limitations or is or becomes otherwise unenforceable,
together with all expenses of, for and incidental to collection, including
reasonable attorney's fees.
2. LIMITATION ON GUARANTOR'S LIABILITY. Although this Guaranty covers all
Obligations, Guarantor's liability under this Guaranty for Borrower's
Obligations shall not exceed at any one time the sum of the following (the
"Guarantied Liability Amount"): (a) FOUR MILLION FIVE HUNDRED THOUSAND AND
NO/100 ($4,500,000.00) for Obligations representing principal and/or rent
("Principal Amount"), (b) all interest, fees and costs, attorneys' fees, and
expenses of Bank relating to or arising out of the enforcement of the
Obligations and all indemnity liabilities of Guarantor under this Guaranty. The
foregoing limitation applies only to Guarantor's liability under this particular
Guaranty. Unless Bank otherwise agrees in writing, every other guaranty of any
Obligations previously, concurrently, or hereafter given to Bank by Guarantor is
independent of this Guaranty and of every other such guaranty. Without notice to
Guarantor, Bank may permit the Obligations to exceed the Principal Amount and
may apply or reapply any amounts received in respect of the Obligations from any
source other than from Guarantor to that portion of the Obligations not included
within the Guarantied Liability Amount.
3. CONTINUING NATURE/REVOCATION/REINSTATEMENT. This Guaranty is in addition to
any other guaranties of the Obligations, is continuing and covers all
Obligations, including those arising under successive transactions which
continue or increase the Obligations from time to time, renew all or part of the
Obligations after they have been satisfied, or create new Obligations.
Revocation by one or more signers of this Guaranty or any other guarantors of
the Obligations shall not (a) affect the obligations under this Guaranty of a
non-revoking Guarantor, (b) apply to Obligations outstanding when Bank receives
written notice of revocation, or to any extensions, renewals, readvances,
modifications, amendments or replacements of such Obligations, or (c) apply to
Obligations, arising after Bank receives such notice of revocation, which are
created pursuant to a commitment existing at the time of the revocation, whether
or not there exists an unsatisfied condition to such commitment or Bank has
another defense to its performance. All of Bank's rights pursuant to this
Guaranty continue with respect to amounts previously paid to Bank on account of
any Obligations which are thereafter restored or returned by Bank, whether in an
Insolvency Proceeding of Borrower or for any other reason, all as though such
amounts had not been paid to Bank; and Guarantor's liability under this Guaranty
(and all its terms and provisions) shall be reinstated and revised,
notwithstanding any surrender or cancellation of this Guaranty. Bank, at its
sole discretion, may determine whether any amount paid to it must be restored or
returned; provided, however, that if Bank elects to contest any claim for return
or restoration, Xxxxxxxxx agrees to indemnify and hold Bank harmless from and
against all costs and expenses, including reasonable attorneys' fees, expended
or incurred by Bank in connection with such contest. No payment by Guarantor
shall reduce the Guarantied Liability Amount hereunder unless, at or prior to
the time of such payment, Bank receives Guarantor's written notice to that
effect. If any Insolvency Proceeding is commenced by or against Borrower or
Guarantor, at Bank's election, Guarantor's obligations under this Guaranty shall
immediately and without notice or demand become due and payable, whether or not
then otherwise due and payable.
4. AUTHORIZATION. Guarantor authorizes Bank, without notice and without
affecting Guarantor's liability under this Guaranty, from time to time, whether
before or after any revocation of this Guaranty, to (a) renew, compromise,
extend, accelerate, release, subordinate, waive, amend and restate, or otherwise
amend or change, the interest rate, time or place for payment or any other terms
of all or any part of the Obligations; (b) accept delinquent or partial payments
on the Obligations; (c) take or not take security or other credit support for
this Guaranty or for all or any part of the Obligations, and exchange, enforce,
waive, release, subordinate, fail to enforce or perfect, sell, or otherwise
dispose of any such security or credit support; (d) apply proceeds of any such
security or credit support and direct the order or manner of its sale or
enforcement as Bank, at its sole discretion, may determine; and (e) release or
substitute Borrower or any guarantor or other person or entity liable on the
Obligations.
5. WAIVERS. To the maximum extent permitted by law, Guarantor waives (a) all
rights to require Bank to proceed against Borrower, or any other guarantor, or
proceed against, enforce or exhaust any security for the Obligations or to
xxxxxxxx assets or to pursue any other remedy in Bank's power whatsoever; (b)
all defenses arising by reason of any disability or other defense of Borrower,
the cessation for any reason of the liability of Borrower, any defense that any
other indemnity, guaranty or security was to be obtained, any claim that Bank
has made Guarantor's obligations more burdensome or more burdensome than
Borrower's obligations, and the use of any proceeds of the Obligations other
than as intended or understood by Bank or Guarantor; (c) all presentments,
demands for performance, notices of nonperformance, protests notices of protest,
notices of dishonor, notices of acceptance of this Guaranty and of the existence
or creation of new or additional Obligations, and all other notices or demands
to which Guarantor might otherwise be entitled; (d) all conditions precedent to
the effectiveness of this Guaranty; (e) all rights to file a claim in connection
with the Obligations in an Insolvency Proceeding filed by or against Borrower;
(f) all rights to require Bank to enforce any of its remedies; and (g) until the
Obligations are satisfied or fully paid with such payment not subject to return:
(i) all rights of subrogation, contribution, indemnification or reimbursement,
(ii) all rights of recourse to any assets or property of Borrower, or to any
collateral or credit support for the Obligations, (iii) all rights to
participate in or benefit from any security or credit support Bank may have or
acquire and (iv) all rights, remedies and defenses Guarantor may have or acquire
against Borrower. Guarantor understands that if Bank forecloses by trustee's
sale on a deed of trust securing any of the Obligations, Guarantor would than
have a defense preventing Bank from thereafter enforcing Guarantor's liability
for the unpaid balance of the secured Obligations. This defense arises because
the trustee's sale would eliminate Guarantor's right of subrogation, and
therefore Guarantor would be unable to obtain reimbursement from Xxxxxxxx.
Guarantor specifically waives this defense and all rights and defenses that
Guarantor may have because the Obligations are secured by real property. This
means, among other things: (1) Bank may collect from Guarantor without first
foreclosing on any real or personal property collateral pledged by Borrower; and
(2) if Bank forecloses on any real property collateral pledged by Borrower: (A)
the amount of the Obligations may be reduced only by the price for which the
collateral is sold at the foreclosure sale, even if the collateral is worth more
than the sale price; and (B) Bank may collect from Guarantor even if Bank, by
foreclosing on the real property collateral, has destroyed any right Guarantor
may have to collect from Borrower. This is an unconditional and irrevocable
waiver of any rights and defenses Guarantor may have because the Obligations are
secured by real property. These rights and defenses include, but are not limited
to, any rights or defenses based upon Section 580a, 580b, 580d or 726 of the
California Code of Civil Procedure or similar laws in other states.
6. GUARANTOR TO KEEP INFORMED. Guarantor warrants having established with
Borrower adequate means of obtaining, on an ongoing basis, such information as
Guarantor may require concerning all matters bearing on the risk of nonpayment
or nonperformance of the Obligations. Guarantor assumes sole, continuing
responsibility for obtaining such information from sources other than from Bank.
Bank has no duty to provide any information to Guarantor until Bank receives
Guarantor's written request for specific information in Bank's possession and
Borrower has authorized Bank to disclose such information to Guarantor.
7. SUBORDINATION. All obligations of Borrower to Guarantor which presently or in
the future may exist ("Guarantor's Claims") are hereby subordinated to the
Obligations. At Bank's request, Guarantor's Claims will be enforced and
performance thereon received by Guarantor only as a trustee for Bank, and
Guarantor will promptly pay over to Bank all proceeds recovered for application
to the Obligations without reducing or affecting Guarantor's liability under
other provisions of this Guaranty.
8. SECURITY. To secure Guarantor's obligations under this Guaranty, other than
for payment of Obligations which are subject to the disclosure requirements of
the United States Truth in Lending Act, Guarantor grants Bank a security
interest in all moneys, general and special deposits, instruments and other
property of Guarantor at any time maintained with or held by Bank, and all
proceeds of the foregoing.
9. AUTHORIZATION. Where Borrower is a corporation, partnership or other entity,
Bank need not inquire into or verify the powers of Borrower or authority of
those acting or purporting to act on behalf of Borrower, and this Guaranty shall
be enforceable with respect to any Obligations Bank grants or creates in
reliance on the purported exercise of such powers or authority.
10. ASSIGNMENTS. Without notice to Guarantor, Bank may assign the Obligations
and this Guaranty, in whole or in part, an may disclose to any prospective or
actual purchaser of all or part of the Obligations any and all information Bank
has or acquires concerning Guarantor, this Guaranty and any security for this
Guaranty.
11. COUNSEL FEES AND COSTS. The prevailing party shall be entitled to attorney's
fees (including a reasonable allocation for Bank's internal counsel) and all
other costs and expenses which it may incur in connection with the enforcement
or preservation of its rights under, or defense of, this Guaranty or in
connection with any other dispute or proceeding relating to this Guaranty,
whether or not incurred in any Insolvency Proceeding, arbitration, litigation or
other proceeding.
12. MARRIED GUARANTORS. By executing this Guaranty, a Guarantor who is married
agrees that recourse may be had against his or her separate and community
property for all his or her obligations under this Guaranty.
8
13. MULTIPLE GUARANTORS/BORROWERS. When there is more than on Borrower named
herein or when this Guaranty is executed by more than one Guarantor, then the
words "Borrower" and "Guarantor", respectively, shall mean all and any one or
more of them, and their respective successors and assigns, including
debtors-in-possession, and bankruptcy trustees; words used herein in the
singular shall be considered to have been used in the plural where the context
and construction so requires in order to refer to more than one Borrower or
Guarantor, as the case may be.
14. INTEGRATION/SEVERABILITY/AMENDMENTS. This Guaranty is intended by Guarantor
and Bank as the complete, final expression of their agreement concerning its
subject matter. It supersedes all prior understandings or agreements with
respect thereto and may be changed only by a writing signed by Guarantor and
Bank. No course of dealing, or parole or extrinsic evidence shall be used to
modify or supplement the express terms of this Guaranty. If any provision of
this Guaranty is found to be illegal, invalid or unenforceable, such provision
shall be enforced to the maximum extent permitted, but if fully unenforceable,
such provision shall be severable, and this Guaranty shall be construed as if
such provision had never been a part of this Guaranty, and the remaining
provisions shall continue in full force and effect.
15. JOINT AND SEVERAL. If more than one Guarantor signs this Guaranty, the
obligations of each under this Guaranty are joint and several, and independent
of the Obligations and of the obligations of any other person or entity. A
separate action or actions maybe brought and prosecuted against any one of more
guarantors, whether action is brought against Borrower or other guarantors of
the Obligations, and whether Borrower or others are joined in any such action.
16. NOTICE. Any notice, including notice of revocation, given by any party under
this Guaranty shall be effective only upon its receipt by the other party and
only if (a) given in writing and (b) personally delivered or sent by Unites
States mail, postage prepaid, and addressed to Bank or Guarantor at their
respective addresses for notices indicated below. Guarantor and Bank may change
the place to which notices, requests, and other communications are to be sent to
them by giving written notice of such change to the other.
17. GOVERNING LAW. This Guaranty shall be governed by and construed according to
the laws of California, and, except as provided in any alternative dispute
resolution agreement executed between Guarantor and Bank, Guarantor submits to
the non-exclusive jurisdiction of the state or federal courts in said state.
18. DISPUTE RESOLUTION. This Guaranty hereby incorporates any alternative
dispute resolution agreement previously, concurrently or hereafter executed
between Guarantor and Bank.
Executed as of APRIL 20, 1999 . Guarantor acknowledges having received a copy of
this Guaranty and having made each waiver contained in this Guaranty with full
knowledge of its consequences.
COMPUTER GEEKS DISCOUNT OUTLET, INC.
By: /s/ Xxxxx Xxxxx
-------------------------------
XXXXX X. XXXXX, PRESIDENT
----------------------------------- -----------------------------------
----------------------------------- -----------------------------------
----------------------------------- -----------------------------------
----------------------------------- -----------------------------------
----------------------------------- -----------------------------------
UNION BANK OF CALIFORNIA, N.A.
BY: /s/ Xxxxxxx Xxxxxxxx
-------------------------------
XXXXXXX XXXXXXXX
TITLE: VICE PRESIDENT
-----------------------------
Address for notices to Bank: Address for notices to Guarantor:
ATTN: 0000 XXX XXXXX XXX
XXX XXXXX XXXXXXXXXX XXXXXXX XXXXXX XXXXX, XX 00000
000 X XX., 0XX XXXXX XXX XX:
XXX XXXXX, XX 00000
9
AUTHORIZATION TO DISBURSE
--------------------------------------------------------------------------------
Borrower Name
EVER-TEK COMPUTER CORPORATION
--------------------------------------------------------------------------------
Borrower Address Office Loan Number
40061 2723048307 0080-00-0-000
-----------------------------------------
2604 TEMPLE HEIGHTS DRIVE Maturity Date Amount
OCEANSIDE, CA 92056 SEPTEMBER 15, 1999 $3,500,000.00
--------------------------------------------------------------------------------
Union Bank of California, N.A. ("Bank") is hereby authorized and instructed to
disburse the proceeds of that certain promissory note ("Note") evidencing the
obligation referred to above in the following manner:
DEPOSIT THE PROCEEDS OF MY/OUR REVOLVING NOTE INTO MY/OUR ACCOUNT #40000146655
FROM TIME TO TIME AND IN SUCH AMOUNTS AS MAY BE REQUESTED VERBALLY OR IN
WRITING. CHANGE IN TERMS OF OBLG #0080-00-0-000 MATURING 9-15-99 $ 3,500,000.00
--------------------------------------------------------------------------------
Fees itemized below are payable as follows (check one):
[ ] Charge account # _________________ [ ] Check enclosed
--------------------------------------------------------------------------------
TERMS AND CONDITIONS
--------------------------------------------------------------------------------
1. Bank is authorized to charge account number 4000146655 in the name(s) of
EVER-TEK COMPUTER CORPORATION for payments of interest (or
principal/interest) when due in connection with the Note and all renewals or
extensions thereof.
2. Bank shall disburse proceeds in the amounts stated above in accordance with
the foregoing authorization or when Bank receives verbal or written
authorization to do so from Borrower(s) or any one of the Borrowers, if
there are joint Borrows, but not later than the final date for availability
provided in the loan documents. Bank, at its discretion, may elect to extend
this date without notice to or acknowledgment by the Borrower(s). This
Authorization and the Note will remain in full force and effect until the
obligations in connection with the Note have been fulfilled.
3. Unless dated by Bank prior to execution, the Note shall be dated by Bank as
of the date on which Bank disburses proceeds.
4. Notwithstanding anything to the contrary herein, Bank reserves the right to
decline to advance the proceeds of the Note if there is a filing as to the
Borrower(s), or any of them of a voluntary or involuntary petition under the
provisions of the Federal Bankruptcy Act or any other insolvency law; the
issuance of any attachment, garnishment, execution or levy of any asset of
the Borrower(s), or any endorser or guarantor which resulted in Bank deeming
itself, in good faith insecure.
5. The Borrower(s) authorize Bank to release information concerning the
Borrower(s) financial condition to suppliers, other creditors, credit
bureaus and other credit reporters; and also authorize Bank to obtain such
information from any third party at any time.
The Borrower(s) by their execution of this Authorization accept the foregoing
terms, conditions and instructions.
Executed on 4-21-99
EVER-TEK COMPUTER CORPORATION
By: /s/ Xxxxx Xxxxxx
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XXXXX XXXXXX, PRESIDENT
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