EXHIBIT 10.79
GUARANTY
FOR VALUE RECEIVED, and as direct inducement to Polyphase Corporation, a
corporation duly authorized and existing pursuant to the state of Nevada with
its principal place of business at 0000 Xxxxxxxx, Xxxxx X, Xxxxxxx Xxxxx 00000
xx Xxxxxx Xxxxxx, Xxxxx, (hereinafter "Payee"), to loan and advance funds to
Polyphase Instrument Acquisition Corporation, a Pennsylvania corporation
("Maker") pursuant to that certain Subordinated Promissory Note executed of even
date herewith (the "Note"), POLYPHASE INSTRUMENT CO., a corporation duly
authorized and existing pursuant to the laws of the Commonwealth of Pennsylvania
with its principal place of business at 000 Xxxxxxxx Xxxxx, Xxxx Xxxxxxxxxx,
Xxxxxxxxxxxx 00000 (hereinafter referred to as "PIC" or "Guarantor"), does
hereby absolutely, unconditionally and irrevocably guaranty the full, complete
and prompt payment and performance to Payee of all amounts that become due and
owing to it, whether at stated maturity, upon acceleration or otherwise, and at
all times thereafter pursuant to the terms of the Note, a true and correct copy
of which is attached hereto as Exhibit "A."
1. Guaranty. This is an absolute, irrevocable, present and continuing
guaranty and shall remain in full force and effect from the date hereof
until any and all amounts due and owing by Maker pursuant to the Note have
been paid in full or until this Guaranty shall be revoked by the mutual
written agreement of Payee and Guarantor, whichever first occurs.
2. Xxxxx's Remedies. Guarantor is a primary obligor of the indebtedness
and not merely a surety. In the event of any default by Maker in payment of
the obligations under the Note (the "Obligations"), Guarantor agrees, on
demand by Xxxxx, to pay all sums due hereunder and to perform all
Obligations of Maker under the Note. In any action to enforce this
Guaranty, Payee, at its election, may proceed against the Guarantor, with
or without: (i) joining Maker in any such action; (ii) commencing any
action against or obtaining any judgment against Maker; or (iii) commencing
any proceeding to enforce the Note.
3. No Discharge. Guarantor agrees that the obligations, covenants, and
agreements of Guarantor under this Guaranty shall not be affected or
impaired by any act of Payee, or any event or condition except payment in
full and full performance of the Obligations. Specifically,
Guarantor agrees that, without payment in full and full performance of the
Obligations, the liability of Guarantor hereunder shall not be discharged
by: (i) the renewal or extension of time for the payment of or performance
of the Obligations; or (ii) any waiver or modification of the Note; (iii)
any failure, omission, delay or inadequacy, whether entire or partial, of
Payee to exercise any right, power or remedy regarding the Obligations; and
(iv) the addition of any and all other endorsers, guarantors, obligors and
other persons liable for the payment or performance of the Obligations and
the acceptance of any and all other security for the payment of performance
of the Obligations; all whether or not Guarantor shall have had notice or
knowledge of any act or omission referred to in the foregoing clauses (i)
through (iv) of this Section 4.
4. Negative Covenants. So long as any principal of or interest on the
Note (whether or not due) shall remain unpaid, the Guarantor shall not,
unless the Payee shall otherwise consent in writing:
(a) Pay total compensation, including salaries, withdrawals, fees,
bonuses, commission, drawing accounts and other payments, whether
directly or indirectly, in money or otherwise, during any fiscal
year to the four most highly compensated of Guarantor's
executives, officers, directors or employees in an amount in
excess of Six Hundred Thousand Dollars ($600,000), plus annual
increases in the ordinary course of business consistent with past
practice; provided, that during any year Guarantor may pay, in
addition to such amounts the amount necessary to permit the Maker
to provide to its shareholders the amount of the federal and
state income taxes payable by them with respect to any income of
Maker attributable to them.
(b) Declare or pay any dividends, purchase or otherwise acquire for
value any of its capital stock now or hereafter outstanding,
return any capital to its stockholders, or make any other payment
or distribution of assets to its stockholders except as may be
necessary to make payments on the Note and the Senior
Indebtedness (as that term is defined in the Stock Purchase
Agreement dated the date hereof between Maker, Payee, and
Guarantor) and except as may be necessary to fund administrative
expenses of Maker
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(not to exceed $45,000 in any one calendar year), and except as
provided for herein.
(c) Enter into any transaction, which materially and adversely
affects the Collateral for the Note or this Guaranty.
(d) Amend or otherwise modify its certificate of incorporation or by-
laws.
(e) Make any loan or advance to any person or entity.
(f) Create, incur, or suffer to exist any obligations as lessee for
the payment of rent for any real or personal property other than
in the ordinary course of business.
(g) Make or be committed to make any capital expenditure (by purchase
or capitalized lease) other than in the ordinary course of its
business.
5. Waiver. Guarantor expressly waives: (i) notice of the acceptance by
Payee of this Guaranty; and (ii) presentment, demand, notice of dishonor
and protest. No modification or waiver of any of the provisions of this
Guaranty will be valid and enforceable unless in a writing duly signed and
delivered by Xxxxx.
6. Assignment. This Guaranty will inure to the benefit of Payee and
permitted successors and assigns and will bind Guarantor and its successors
and assigns. Payee may assign this Guaranty and any or all of its rights,
privileges, interests and remedies hereunder in whole or in part, to any
other person, firm, association, or corporation without the prior consent
of Guarantor. If assigned, any such assignee will be entitled to the
benefits of this Guaranty so assigned and to exercise all rights, interests
and remedies so assigned as fully as Payee. Guarantor may assign or
transfer its obligations hereunder only with the prior written consent of
Xxxxx and in the event of any such assignment or transfer, Guarantor and
each assignee or transferee will be primarily and jointly and severally
liable under this Guaranty.
7. Binding Effect. This Guaranty shall insure to the benefit of and be
binding upon Payee, Guarantor and their respective permitted successors and
assigns.
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8. Governing Law. THIS GUARANTY HAS BEEN DELIVERED AT DALLAS, DALLAS
COUNTY, TEXAS, AND SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF TEXAS.
9. Representations and Warranties of Guarantor. Guarantor hereby
represents and warrants to Payee as follows:
a. This Guaranty has been duly and validly executed and delivered by
Guarantor and constitutes the legal, valid and binding obligation of
Guarantor, enforceable against Guarantor in accordance with its terms.
b. The execution and delivery of this Guaranty by Guarantor and the
consummation of the transactions contemplated hereby will not conflict
with or result in a material breach of any terms or provisions of, or
constitute a material default under, (i) any note, bond, mortgage,
indenture, license, lease, contract, commitment, agreement or other
instrument or obligation to which Guarantor is a party or by which
Guarantor may be bound; or (ii) any statute, order, writ, injunction,
decree, rule or regulation applicable to Guarantor or any of its
properties.
c. No material consent, approval, authorization, declaration or
other order of, or registration or filing with, any court or
regulatory authority or any third person is required for the valid
execution, delivery and performance of this Guaranty by Guarantor or
their consummation of the transactions contemplated hereby.
10. Subordination, The obligations of Guarantor under this Guaranty are
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subordinate and subject to the obligations of Guarantor with respect to the
Senior Indebtedness (as that term is defined on the Stock Purchase
Agreement dated the date hereof by and between Payee and Maker).
IN WITNESS WHEREOF, XXXXXXXXX INSTRUMENT CO has executed this Guaranty as
of September 30, 1999, and to be executed on its behalf by its officer thereunto
duly authorized.
GUARANTOR:
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POLYPHASE INSTRUMENT CO.
______________________________
By: Xxx X. Xxxxxxxxx
Its: President
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