GUARANTY
In consideration of an extension of credit made by CHAPEAU, INC., a
Utah corporation ("Chapeau"), to or on behalf of ELAGENT CORPORATION (the
"Borrower") and the Promissory Note (the "Note") executed by Xxxxxxxx, as
Debtor, in favor of Chapeau, as Secured party, in the principal amount of TWO
HUNDRED THOUSAND DOLLARS ($200,000), AND ANY RENEWALS, EXTENSIONS, OR
MODIFICAITONS THEREOF (COLLECTIVELY THE "Indebtedness"), and for other valuable
consideration, the adequacy and receipt of which are hereby acknowledged,
XXXXXXX X. XXXXXXX (the "Guarantor"), guarantees unto Chapeau the prompt
performance of all obligations, and the payment of all indebtedness arising in
connection with the Indebtedness. Guarantor's liability hereunder is limited to
the Indebtedness, together with interest thereon and reasonable costs of
collection, including court costs and attorneys' fees, incurred by Xxxxxxx in
collection the Indebtedness and/or enforcing this Guaranty, whether prior to,
during or subsequent to any bankruptcy proceeding, litigation, or appeal.
Guarantor's liability to Chapeau hereunder is referred to as the "Obligation".
It is hereby agreed that this Guaranty is an absolute, unconditional,
and continuing guaranty subject to the following terms and conditions:
1. To the fullest extent possible, Guarantor expressly waives
notice of the acceptance of this Guaranty, notice of demand
for payment, notice of nonpayment, notice of other default,
notice of suit on the part of Chapeau against Borrower, and
all other notices to which Guarantor might otherwise be
entitled in connection with this Guaranty. Guarantor waives
any responsibility or duty Chapeau may have to Guarantor to
proceed against Borrower or to pursue any other legal remedy
Chapeau may have against Borrower, any other guarantor or
co-obligator, or any collateral.
2. Chapeau is hereby given full power, without notice to or
consent of Guarantor, to make advances beyond the dollar limit
above-mentioned; to make, change, alter, cancel, renew,
extend, decrease or increase the Indebtedness; to make
substitution, release, discharge, settle or compromise any
claim against any Borrower, any other guarantor or co-obligor,
or any collateral, whether real or personal, securing the
Indebtedness or the Obligation or any part thereof, and
otherwise to deal with Borrower, any other guarantor or
co-obligor, or any collateral as it may elect without in any
way diminishing, releasing or discharging the liability
hereunder of Guarantor. Guarantor shall not be released or
discharged in whole or part, by reason of, and hereby waives
any defense or claims with respect to Chapeau's (i) impairment
of any collateral securing the Indebtedness or the Obligation;
(ii) failure or delay to perfect of continue the perfection of
its security interest in any such collateral; (iii) failure or
delay to preserve, defend or protect such collateral or its
security interest therein. All settlements, compromises,
compositions, and accounts stated and agreed balances made in
good faith between Chapeau and Borrower shall be binding upon
Guarantor.
3. Such liability shall be a continuing one, and shall only be
affected by full performance and payment to Chapeau of the
Obligation, or satisfaction, in Chapeau's sole discretion, of
the Obligation in connection with Xxxxxxx's acquisition of
certain of the assets of Borrowers. No payments made by or on
behalf of Guarantor to Chapeau shall discharge or diminish the
continuing liability of the Guarantor hereunder, unless and
until written notice is given to Chapeau that such payments
are being made for the purpose of liquidating such liability.
Moreover, the liability of Guarantor is not in consideration
of or contingent upon the liability of any other person
hereunder or under any similar instrument, and the release of
or cancellation by any signer of a similar instrument shall
not act to release or otherwise affect the continuing
liability of Guarantor.
4. Upon any default of Borrower, Chapeau may, at its option,
proceed directly and at once, without notice, against
Guarantor to collect and recover the full amount of the
Obligation, or any portion thereof, without proceeding against
Borrower or any other person, or without foreclosing upon,
selling, or otherwise disposing of or collecting or applying
any property, real or personal, it may then have a security
for the Indebtedness or the Obligation.
5. Xxxxxxxxx assumes the responsibility for being and keeping
himself informed of the financial condition of Xxxxxxxx and of
all other circumstances bearing upon the risk of nonpayment or
nonperformance of the Indebtedness which diligent inquiry
would reveal, and Xxxxxxx shall have no duty to advise
Guarantor of information know to it regarding such financial
condition or any such circumstance.
6. Guarantor further agrees, without demand, immediately to
reimburse Chapeau for all costs and expenses, including
reasonable attorneys' fees, incurred prior to, during, or
subsequent to any bankruptcy proceeding, litigation or appeal,
incurred in the enforcement of the Indebtedness of this
Guaranty.
7. This Guaranty is assignable by Chapeau with all or any part of
the Indebtedness. If so assigned, Guarantor shall be bound by
the terms and conditions of this Guaranty to the assignees.
8. Any indebtedness of Borrower now or hereafter held by
Guarantor is hereby subordinated to the Indebtedness. Such
indebtedness of Borrower to Guarantor, if Chapeau so requests,
shall be collected, enforced, and received by Guarantor as
trustee for Chapeau and be paid over to Chapeau on account of
the Indebtedness, but without affecting or impairing in any
manner the liability of Guarantor under the other provisions
of this Guaranty. Any instruments now or hereafter evidencing
any indebtedness of Borrower to Guarantor shall be marked with
a legend that the same are subject to this Guaranty and, if
Chapeau so request, shall be delivered to Chapeau. Guarantor
shall have no recourse or subrogation rights against Borrower
in the event Guarantor is called upon to honor this Guaranty.
9. Xxxxxxxxx agrees to furnish Chapeau with such financial
information concerning Guarantor as Chapeau may request.
This Guarantor is intended as the final express of the subject matter
set forth herein and as a complete and exclusive statement of the terms of the
guaranty. This Guaranty shall bind the respective heirs, personal
representative, successors and assigns of the undersigned.
THIS GUARANTY is executed as of the 24th of January, 2001.
2
