Amended and Restated Guaranty
As of April 12, 2000, the undersigned, for value received,
unconditionally and absolutely guarantees to Comerica Bank - California
("Bank"), a California banking corporation, payment when due, whether by
stated maturity, demand, acceleration or otherwise, of all existing and
future indebtedness ("Indebtedness") to the Bank of Datron World
Communications Inc., a California corporation ("DWC"), and Datron/Transco
Inc., a California corporation ("DT", and together with DWC, "Borrower").
Indebtedness includes without limit any and all obligations or liabilities
of the Borrower to the Bank, whether absolute or contingent, direct or
indirect, voluntary or involuntary, liquidated or unliquidated, joint or
several, known or unknown; any and all indebtedness, obligations or
liabilities for which Borrower would otherwise be liable to the Bank were
it not for the invalidity, irregularity or unenforceability of them by
reason of any bankruptcy, insolvency or other law or order of any kind, or
for any other reason; all amendments, modifications, renewals and/or
extensions of the above; and all costs of collecting Indebtedness,
including, without limit, attorney fees. Any reference in this Guaranty to
attorney fees shall be deemed a reference to reasonable fees, charges,
costs and expenses of both in-house and outside counsel and paralegals,
whether or not a suit or action is instituted, and to court costs if a suit
or action is instituted, and whether attorney fees or court costs are
incurred at the trial court level, on appeal, in a bankruptcy,
administrative or probate proceeding or otherwise. All costs shall be
payable by the undersigned when incurred by the Bank, without demand, and
if not paid within ten (10) business days of when first due, shall bear
interest at the default rate of interest applicable to the Indebtedness
under Xxxxxxxx's agreements with Bank until paid in full, but not in excess
of the maximum rate permitted by law.
1. LIMITATION: The total obligation of the undersigned under this
Guaranty shall include, IN ADDITION TO the principal guaranteed, all
interest on the principal amount, and all costs incurred by the Bank in
collection efforts against the Borrower and/or the undersigned or otherwise
incurred by the Bank in any way relating to the Indebtedness, or this
Guaranty, including without limit attorney fees. The undersigned agrees
that (a) this limitation shall not be a limitation on the amount of
Borrower's Indebtedness to the Bank; (b) any payments by the undersigned
shall not reduce the maximum liability of the undersigned under this
Guaranty unless written notice to that effect is actually received by the
Bank at, or prior to, the time of the payment; and (c) the liability of the
undersigned to the Bank shall at all times be deemed to be the aggregate
liability of the undersigned under this Guaranty and any other guaranties
previously or subsequently given to the Bank by the undersigned and not
expressly revoked, modified or invalidated in writing.
2. NATURE OF GUARANTY: This is a continuing Guaranty of payment and not
of collection, and remains effective whether the Indebtedness is from time
to time reduced and later increased or entirely extinguished and later
reincurred. The undersigned delivers this Guaranty based solely on the
undersigned's independent investigation of (or decision not to investigate)
the financial condition of Borrower and is not relying on any information
furnished by the Bank. The undersigned assumes full responsibility for
obtaining any further information concerning the Borrower's financial
condition, the status of the Indebtedness or any other matter which the
undersigned may deem necessary or appropriate now or later. The
undersigned knowingly accepts the full range of risk encompassed in this
Guaranty, which risk includes, without limit, the possibility that Borrower
may incur Indebtedness to the Bank after the financial condition of the
Borrower, or the Borrower's ability to pay debts as they mature, has
deteriorated.
3. APPLICATION OF PAYMENTS: The undersigned authorizes the Bank, either
before or after termination of this Guaranty, without notice to or demand
on the undersigned and without affecting the undersigned's liability under
this Guaranty, from time to time to: (a) apply any security and direct the
order or manner of sale; and (b) apply payments received by the Bank from
the Borrower to any indebtedness of the Borrower to the Bank, in such order
as the Bank shall determine in its sole discretion, whether or not this
indebtedness is covered by this Guaranty, and the undersigned waives any
provision of law regarding application of payments which specifies
otherwise. The undersigned agrees to provide to the Bank copies of the
undersigned's financial statements upon request.
4. SETOFF: The undersigned acknowledges the Bank's right of setoff as to
any and all deposits and other amounts from time to time in the possession
of, or owing to the undersigned by, the Bank. The undersigned further
assigns to the Bank as collateral for the obligations of the undersigned
under this Guaranty all claims of any nature that the undersigned now or
later has (have) against the Borrower (other than any claim under a deed of
trust or mortgage covering California real property) with full right on the
part of the Bank, in its own name or in the name of the undersigned, to
collect and enforce these claims. The undersigned agrees that no security
now or later held by the Bank for the payment of any Indebtedness, whether
from the Borrower, any guarantor, or otherwise, and whether in the nature
of a security interest, pledge, lien, assignment, setoff, suretyship,
guaranty, indemnity, insurance or otherwise, shall affect in any manner the
unconditional obligation of the undersigned under this Guaranty, and the
Bank, in its sole discretion, without notice to the undersigned, may
release, exchange, enforce and otherwise deal with any security without
affecting in any manner the unconditional obligation of the undersigned
under this Guaranty. The undersigned acknowledges and agrees that the Bank
has no obligation to acquire or perfect any lien on or security interest in
any asset(s), whether realty or personalty, to secure payment of the
Indebtedness, and the undersigned is not relying upon any asset(s) in which
the Bank has or may have a lien or security interest for payment of the
Indebtedness.
5. OTHER GUARANTORS: If any Indebtedness is guaranteed by two or more
guarantors, the obligation of the undersigned shall be several and also
joint, each with all and also each with any one or more of the others, and
may be enforced at the option of the Bank against each severally, any two
or more jointly, or some severally and some jointly. The Bank, in its sole
discretion, may release any one or more of the guarantors for any
consideration which it deems adequate, and may fail or elect not to prove a
claim against the estate of any bankrupt, insolvent, incompetent or
deceased guarantor; and after that, without notice to any guarantor, the
Bank may extend or renew any or all Indebtedness and may permit the
Borrower to incur additional Indebtedness, without affecting in any manner
the unconditional obligation of the remaining guarantor(s). The
undersigned acknowledges that the effectiveness of this Guaranty is not
conditioned on any or all of the indebtedness being guaranteed by anyone
else.
6. TERMINATION: The undersigned may not terminate its obligation under
this Guaranty as to future Indebtedness (except as provided below) by (and
only by) delivering written notice of termination to an officer of the Bank
and receiving from an officer of the Bank written acknowledgment of
delivery; provided, however, the termination shall not be effective until
the opening of business on the fifth (5th) day ("effective date") following
written acknowledgment of delivery. Any termination shall not affect in
any way the unconditional obligations of the remaining guarantor(s), if
any, whether or not the termination is known to the remaining guarantor(s).
Any termination shall not affect in any way the unconditional obligations
of the terminating guarantor(s) as to any Indebtedness existing at the
effective date of termination or any Indebtedness created after that
pursuant to any commitment or agreement of the Bank or pursuant to any
Borrower loan with the Bank existing at the effective date of termination
(whether advances or readvances by the Bank after the effective date of
termination are optional or obligatory), or any modifications, extensions
or renewals of any of this Indebtedness, whether in whole or in part, and
as to all of this Indebtedness and modifications, extensions or renewals of
it, this Guaranty shall continue effective until the same shall have been
fully paid. The Bank has no duty to give notice of termination by any
guarantor(s) to any remaining guarantor(s). The undersigned shall
indemnify the Bank against all claims, damages, costs and expenses,
including, without limit, attorney fees, incurred by the Bank in connection
with any suit, claim or action against the Bank arising out of any
modification or termination of a Borrower loan or any refusal by the Bank
to extend additional credit in connection with the termination of this
Guaranty.
7. REINSTATEMENT: Notwithstanding any prior revocation, termination,
surrender or discharge of this Guaranty (or of any lien, pledge or security
interest securing this Guaranty) in whole or in part, the effectiveness of
this Guaranty, and of all liens, pledges and security interests securing
this Guaranty, shall automatically continue or be reinstated in the event
that any payment received or credit given by the Bank in respect of the
Indebtedness is returned, disgorged or rescinded under any applicable state
or federal law, including, without limitation, laws pertaining to
bankruptcy or insolvency, in which case this Guaranty, and all liens,
pledges and security interests securing this Guaranty, shall be enforceable
against the undersigned as if the returned, disgorged or rescinded payment
or credit had not been received or given by the Bank, and whether or not
the Bank relied upon this payment or credit or changed its position as a
consequence of it. In the event of continuation or reinstatement of this
Guaranty and the liens, pledges and security interests securing it, the
undersigned agrees upon demand by the Bank, to execute and deliver to the
Bank those documents which the Bank determines are appropriate to further
evidence (in the public records or otherwise) this continuation or
reinstatement, although the failure of the undersigned to do so shall not
affect in any way the reinstatement or continuation. If the undersigned
does not execute and deliver to the Bank upon demand such documents, the
Bank and each Bank officer is irrevocably appointed (which appointment is
coupled with an interest) the true and lawful attorney of the undersigned
(with full power of substitution) to execute and deliver such documents in
the name and on behalf of the undersigned.
8. WAIVERS: The undersigned waives any right to require the Bank to: (a)
proceed against any person or property; (b) give notice of the terms, time
and place of any public or private sale of personal property security held
from the Borrower or any other person, or otherwise comply with the
provisions of Section 9-504 of the California Uniform Commercial Code or
other applicable Uniform Commercial Code; or (c) pursue any other remedy in
the Bank's power. The undersigned waives notice of acceptance of this
Guaranty and presentment, demand, protest, notice of protest, dishonor,
notice of dishonor, notice of default, notice of intent to accelerate or
demand payment of any Indebtedness, any and all other notices to which the
undersigned might otherwise be entitled, and diligence in collecting any
Indebtedness, and agrees that the Bank may, once or any number of times,
modify the terms of any Indebtedness, compromise, extend, increase,
accelerate, renew or forbear to enforce payment of any or all Indebtedness,
or permit the Borrower to incur additional Indebtedness, all without notice
to the undersigned and without affecting in any manner the unconditional
obligation of the undersigned under this Guaranty.
The undersigned unconditionally and irrevocably waives each and every
defense and setoff of any nature which, under principles of guaranty or
otherwise, would operate to impair or diminish in any way the
obligation of the undersigned under this Guaranty, and acknowledges
that each such waiver is by this reference incorporated into each
security agreement, collateral assignment, pledge and/or other document
from the undersigned now or later securing this Guaranty and/or the
Indebtedness, and acknowledges that as of the date of this Guaranty no
such defense or setoff exists.
The undersigned understands that, absent this waiver, Bank's election
of remedies, including but not limited to its decision to proceed to
nonjudicial foreclosure on any real property securing the Indebtedness,
could preclude Bank from obtaining a deficiency judgment against
Borrower and the undersigned pursuant to California Code of Civil
Procedures Sections 580a, 580b, 580d or 726 and could also destroy any
subrogation rights which the undersigned has against Borrower. The
undersigned further understands that, absent this waiver, California
law, including without limitation, California Code of Civil Procedure
Sections 580a, 580b, 580d or 726, could afford the undersigned one or
more affirmative defenses to any action maintained by Bank against the
undersigned on this Guaranty.
Although, the intent of the undersigned and the Bank is that California
law shall apply, the undersigned waives any and all rights and
provisions of California Code of Civil Procedure Sections 580a, 580b,
580d and 726, including, but not limited to any provision thereof that:
(i) may limit the time period for Bank to commence a lawsuit against
Borrower or the undersigned to collection any Indebtedness owing by
Borrower or the undersigned to Bank; (ii) may entitle Borrower or the
undersigned to a judicial or nonjudicial determination of any
deficiency owed by Borrower or the undersigned to Bank, or to otherwise
limit Bank's right to collect a deficiency based on the fair market
value of such real property security; (iii) may limit Bank's right to
collect a deficiency judgment after a sale of any real property
securing the indebtedness; (iv) may require Bank to take only one
action to collect the indebtedness or that may otherwise limit the
remedies available to Bank to collect the Indebtedness.
Although, the intent of the undersigned and the Bank is that California
law shall apply, the undersigned waives all rights and defenses arising
out of an election of remedies by Bank even though that election of
remedies, such as a nonjudicial foreclosure with respect to security
for a guarantee obligation, has destroyed the undersigned's rights of
subrogation and reimbursement against Borrower by the operation of
Section 580d of the Code of Civil Procedure or otherwise.
9. WAIVER OF SUBROGATION: The undersigned postpones any and all rights
(whether by subrogation, indemnity, reimbursement, or otherwise) to recover
from the Borrower any amounts paid by the undersigned pursuant to this
Guaranty until such time that all Indebtedness has been finally and
irrevocably paid to Bank.
10. SALE/ASSIGNMENT: The undersigned acknowledges that the Bank has the
right to sell, assign, transfer, negotiate, or grant participations in all
or any part of the Indebtedness and any related obligations, including,
without limit, this Guaranty, without notice to the undersigned and that
the Bank may disclose any documents and information which the Bank now has
or later acquires relating to the undersigned or to the Borrower in
connection with such sale, assignment, transfer, negotiation, or grant.
The undersigned agrees that the Bank may provide information relating to
this Guaranty or relating to the undersigned to the Bank's parent,
affiliates, subsidiaries and service providers.
11. WITHHOLDING TAXES: All payments to be made by the undersigned under
this Guaranty shall be made without setoff or counterclaim and without
deduction for or on account of any present or future withholding or other
taxes of any nature imposed by any governmental authority or of any
political subdivision thereof or any federation or organization of which
such governmental authority may at the time of payment be a member, unless
the undersigned is compelled by law to make payment subject to such tax.
In such event, the undersigned shall: (a) pay to the Bank for the account
of the Bank such additional amounts as may be necessary to ensure that the
Bank receives a net amount equal to the full amount which would have been
receivable under this Guaranty had payment not been made subject to such
tax; and (b) send to the Bank such certificates or certified copies of
receipts as the Bank shall reasonably require as proof of the payment by
the undersigned of any such taxes payable by the undersigned. As used
herein, the terms "tax", "taxes" and "taxation" include all existing taxes,
levies, imposts, duties, charges, fees, deductions and withholdings and any
restrictions or conditions resulting in a charge, together with interest
thereon and fines and penalties with respect thereto, which may be imposed
by reason of any violation or default with respect to the law regarding
such tax, assessed as a result of or in connection with the Indebtedness or
the obligation of the undersigned hereunder, or the payment or delivery of
funds into or out of any jurisdiction other than the United States (whether
assessed against Borrower, the undersigned or the Bank).
12. GENERAL: This Guaranty constitutes the entire agreement of the
undersigned and the Bank with respect to the subject matter of this
Guaranty. No waiver, consent, modification or change of the terms of the
Guaranty shall bind any of the undersigned or the Bank unless in writing
and signed by the waiving party or an authorized officer of the waiving
party, and then this waiver, consent, modification or change shall be
effective only in the specific instance and for the specific purpose given.
This Guaranty shall inure to the benefit of the Bank and its successors and
assigns and shall be binding on the undersigned and the undersigned's
heirs, legal representatives, successors and assigns including, without
limit, any debtor in possession or trustee in bankruptcy for any of the
undersigned. The undersigned has knowingly and voluntarily entered into
this Guaranty in good faith for the purpose of inducing the Bank to extend
credit or make other financial accommodations to the Borrower. If any
provision of this Guaranty is unenforceable in whole or in part for any
reason, the remaining provisions shall continue to be effective.
13. GOVERNING LAW AND JURISDICTION: THIS GUARANTY SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA, UNITED STATES OF AMERICA, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES; The undersigned hereby irrevocably agrees that any legal
action, suit, or proceeding against it with respect to its obligations,
liabilities or any other matter under or arising out of or in connection
with this Guaranty, the Indebtedness or the transactions or documents
contemplated hereby or for recognition or enforcement of any judgment
rendered in any such action, suit or proceeding may be brought in the
United States Courts or in the courts of the State of California, or in any
other court having jurisdiction over the subject matter, as the Bank in its
sole discretion may elect, and, by its execution and delivery of this
Guaranty, the undersigned hereby irrevocably accepts and submits to the non-
exclusive jurisdiction of each of the aforesaid courts generally and
unconditionally with respect to any such action, suit or proceeding for
itself and in respect of its property. The undersigned further agrees that
final judgment against it in any action, suit, or proceeding referred to
herein shall be conclusive and may be enforced in any other jurisdiction,
within or outside the United States of America, by suit on the judgment, a
certified or exemplified copy of which shall be conclusive evidence of the
fact and of the amount of its indebtedness. The undersigned further
irrevocably consents and agrees to the service of any and all legal
process, summons, notices, and documents out of any of the aforesaid courts
in any action, suit or proceeding by mailing copies thereof by registered
or certified mail, postage prepaid, to the undersigned at its address set
forth in this Guaranty or to any other address of which the undersigned
shall have given prior written notice to Bank. The undersigned agrees that
service upon the undersigned as provided for herein shall constitute valid
and effective personal service upon the undersigned. Nothing herein shall,
or shall be construed so as to, limit the right of the Bank, or any of its
successors or assigns, to bring actions, suits or proceedings with respect
to the obligations and liabilities of the undersigned under, or any other
matter arising out of or in connection with, this Guaranty, the
Indebtedness or the transactions or documents contemplated hereby, or for
recognition or enforcement of any judgment rendered in any proceeding, in
the courts of whatever jurisdiction in which the Indebtedness or the
obligations or liabilities of the undersigned hereunder may arise or are
created or in which the assets of the undersigned may be found or as
otherwise shall seem appropriate to the Bank, or any of its successors or
assigns, or to affect the right to service of process in any jurisdiction
in any other manner permitted by law; (c) In addition, the undersigned
hereby irrevocably and unconditionally waives any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid
actions, suits or proceedings arising out of or in connection with this
Guaranty, the Indebtedness or the transactions contemplated hereby brought
in any federal or state court situate in the State of California, and
hereby further irrevocably and unconditionally waives and agrees not to
plead any claim that any such action, suit or proceeding brought in any
such court has been brought in an inconvenient forum.
14. REPRESENTATIONS AND WARRANTIES:
The undersigned hereby represents and warrants to Bank:
a. Undersigned is a corporation duly organized and existing in good
standing under the laws of Delaware, is duly qualified and authorized to
do business in each jurisdiction where the character of its assets or the
nature of its activities makes such qualification necessary and failure to
so qualify could have a Material Adverse Effect; execution, delivery and
performance of this Guaranty, and any other documents and instruments
required under this Guaranty, are within its corporate powers, have been
duly authorized, are not in contravention of law or the terms of its
organizational documents, and do not require the consent or approval of
any governmental body, agency or authority that has not been obtained; and
this Guaranty, and any other documents and instruments required under this
Guaranty, when issued and delivered under this Guaranty, will be valid and
binding upon the undersigned in accordance with their terms.
b. The execution, delivery and performance of this Guaranty, and any
other documents and instruments required under this Guaranty, are not in
contravention of the unwaived terms of any indenture, agreement or
undertaking to which the undersigned is party or by which it is bound.
c. No litigation or other proceeding before any court or administrative
agency is pending, or to the knowledge of the officers of the undersigned
is threatened against it, the outcome of which if determined adversely
would have a material adverse effect on the properties, assets or
financial condition of the undersigned ("Material Adverse Effect").
d. The audited balance sheet and operating statement of the undersigned
dated March 31, 1999 and the unaudited balance sheet and operating
statement of the undersigned dated December 31, 1999, previously furnished
Bank, are complete and correct and fairly present the financial condition
of the undersigned and the results of its operations; since said dates
there has been no change in the financial condition of the undersigned
that has resulted, or could result, in a Material Adverse Effect; to the
knowledge of the undersigned's officers, the undersigned has no contingent
obligations (including any liability for taxes) not disclosed by or
reserved against in said balance sheets, and at the present time there are
no material unrealized or anticipated losses from any present commitment.
e. The undersigned has reviewed its operations and those of its
subsidiaries and major commercial counterparts with a view to assessing
whether it or its subsidiaries' respective businesses will, in the
receipt, transmission, processing, manipulation, storage, retrieval,
retransmission or other utilization of data, be vulnerable to a year 2000
issue. Based on such review, the undersigned has no reason to believe
that any Material Adverse Effect will occur with respect to its or its
subsidiaries businesses or operations resulting from a year 2000 issue.
15. COVENANTS:
The undersigned covenants and agrees that it will, and cause its
subsidiaries to, so long as Bank is committed to make any advances to
either Borrower and thereafter so long as any Indebtedness remains
outstanding:
a. Furnish Bank:
(i) within ninety (90) days after and as of the end of the undersigned's
fiscal years, financial statements of the undersigned on a consolidated and
consolidating basis containing the balance sheet of the undersigned as of
the close of each such fiscal year, statements of income and retained
earnings and a statement of cash flows for each such fiscal year, and such
other comments and financial details as are usually included in similar
reports. Such reports shall be prepared in accordance with GAAP by
independent certified public accountants of recognized standing selected by
the undersigned and acceptable to Bank and shall contain unqualified
opinions as to the fairness of the statements therein contained;
(ii) within thirty (30) days after the end of each month, financial
statements on a consolidated and consolidating basis containing the balance
sheet of the undersigned as of the end of each such period and statements
of income of the undersigned for the portion of the fiscal year up to the
end of such period. These statements shall be prepared on the same
accounting basis as the statements required in paragraph (i) above and
shall be in such detail as the Bank may reasonably require, and the
accuracy of the statements shall be certified by the chief executive or
financial officer of the undersigned;
(iii) promptly, upon becoming available, a copy of all financial
statements, reports, notices, proxy statements and other communications
sent by the undersigned or any of its subsidiaries to their stockholders,
and all regular and periodic reports filed by the undersigned or any of its
subsidiaries with any securities exchange, the Securities and Exchange
Commission, and any state securities bureau or commission;
(iv) as soon as available and in any event within thirty (30) days after
the end of each fiscal quarter of the undersigned, and ninety (90) days
after the fiscal year end, a report in such detail as Bank may specify
demonstrating the undersigned's compliance with Sections 15 (g), (h), (i)
and (j) hereof, certified by an authorized officer of the undersigned,; and
(v) promptly, and in form to be satisfactory to Bank, such other
information as Bank may reasonably request from time to time.
b. Pay and discharge, all taxes and other governmental charges, and all
contractual obligations calling for the payment of money, before the same
shall become overdue, unless and to the extent only that such payment is
being contested in good faith.
c. Maintain insurance coverage on its physical assets and against other
business risks in such amounts and of such types as-are customarily carried
by companies similar in size and nature, and in the event of acquisition of
additional property, real or personal, or of incurrence of additional risks
of any nature, increase such insurance coverage in such manner and to such
extent as prudent business judgment and present practice would dictate.
d. Permit Bank, through its authorized attorneys, accountants, and
representatives, to examine the books, accounts, records, ledgers and
assets of every kind and description of the undersigned at all reasonable
times upon oral or written request of Bank and, in connection therewith,
reimburse Bank for all costs and expenses incurred by Bank in connection
with audits of the assets and records of the undersigned.
e. Promptly, not later than three (3) business days after becoming aware
thereof, notify Bank of any condition or event which constitutes or with
the running of time and/or the giving of notice would constitute a default
in the undersigned's performance of any obligation hereunder.
f. Maintain in good standing all licenses required by the jurisdiction of
the incorporation, or any agency thereof, or any other governmental
authority that may be necessary or required for the undersigned to carry
on its general business objects and purposes.
g. Maintain a Current Ratio, on an consolidated basis, not less than 1.25
to 1.0, tested quarterly.
"Current Assets" shall mean, for any Person, such Person's current
assets determined in accordance with GAAP.
"Current Liabilities" shall mean, as of any applicable date of
determination, all liabilities of a person that would be classified as
current in accordance with GAAP, and shall also include, notwithstanding
any provisions of GAAP to the contrary, the face amount of any letters of
credit outstanding and any funded advances under the Co-Borrower Facility
(as defined in the Credit Agreement) and the DT Facility (as defined in the
Credit Agreement).
"Current Ratio" shall mean, as of any applicable date of
determination, the ratio of Current Assets to Current Liabilities.
"Credit Agreement" shall mean that Credit Agreement of even date
herewith among DT, DWC and Bank.
h. Maintain, on a consolidated basis, a Debt Ratio less than 1.5 to 1.0,
tested quarterly.
"Debt Ratio" shall mean, as of any applicable date of determination,
the ratio of Debt to Tangible Net Worth.
"Debt" shall mean, as of any applicable date of determination,
all items of indebtedness, obligation or liability of a person,
whether matured or unmatured, liquidated or unliquidated, direct or
indirect, absolute or contingent, joint or several, that should be
classified as liabilities in accordance with GAAP, and shall also
include, notwithstanding any provisions of GAAP to the contrary, the
face amount of any letters of credit outstanding.
"Tangible Net Worth" shall mean, as of the date of any
determination, the shareholders equity of the undersigned (minus
amounts included therein in accordance with GAAP as intangible assets,
including patents, patent rights, trademarks, trade names, franchises,
copyrights, licenses, goodwill, investment in any individual
corporation, partnership, joint ventures, advances to officers or
employees in excess of Two Hundred Thousand Dollars ($200,000)) after
all appropriate deductions in accordance with GAAP, consistently
applied (including, without limitation, reserves for doubtful
receivables, obsolescence, depreciation and amortization).
"GAAP" shall mean generally accepted accounting principles,
applied in a manner consistent with those used in connection with the
preparation of the financial reports mentioned in Section 15(a) above.
i. Maintain, as of January 31, 2000, on a consolidated basis, Tangible
Net Worth of not less than $25,400,000. Thereafter, the undersigned shall
maintain, as of the end of each March, June, September, and December, a
Tangible Net Worth of not less than the base minimum Tangible Net Worth for
the prior quarter plus fifty percent (50%) of positive Net Income for the
prior quarter; provided, however, that the Tangible Net Worth requirement
for March 31, 2000 shall be $25,400,000 plus fifty percent (50%) of
positive Net Income for February and March, 2000.
"Net Income" shall mean, as of any applicable date of determination,
net income (or loss) of a person for any period determined in
accordance with GAAP but excluding in any event:
(i) any gains or losses on the sale or other disposition, not in the
ordinary course of business, of investments or fixed or capital assets, and
any taxes on the excluded gains and any tax deductions or credits on
account on any excluded losses; and
(ii) net earnings of any person in which the undersigned has an ownership
interest except for wholly owned subsidiaries for which earnings have been
consolidated per GAAP unless such net earnings shall have actually been
received by the undersigned in the form of cash distributions.
j. Not have a negative Net Income for any two consecutive fiscal
quarters.
k. Not purchase, acquire or redeem any of its capital stock or make any
material change in its capital structure or general business objects or
purpose, or pay cash dividends on any class of its capital stock without
the prior written consent of the Bank.
l. Not enter into any merger or consolidation or sell, lease, transfer,
or dispose of all, substantially all, or any material part of its assets
without the prior written consent of the Bank.
m. Not guarantee, endorse, otherwise become or remain secondarily liable
for or upon the obligations of others, except:
(a) by endorsement for deposit in the ordinary course of business;
(b) its Guaranty of indebtedness of Borrower; and
(c) its unsecured guaranty of Three Million Three Hundred Thousand Dollar
($3,300,000) loan from Xxxxxxx National Life Insurance Co to Datron
Resources Inc.
n. Not purchase, lease or become obligated for the purchase or lease of
any fixed assets, except for purchases, capital leases and obligations to
purchase or lease fixed assets which, in aggregate, do not exceed
$1,700,000 in any fiscal year.
o. Not become or remain obligated for any indebtedness for borrowed
money, or for any indebtedness incurred in connection with the acquisition
of any property, real or personal, tangible or intangible, except:
(a) indebtedness to Bank;
(b) current unsecured trade, utility or non-extraordinary accounts payable
arising in the ordinary course of undersigned's business;
(c) purchase money indebtedness and capital lease obligations for fixed
assets incurred in connection with purchases of fixed assets (or any
refinancings thereof) to the extent consistent with the limitations of
paragraph 15(n) above; and
(d) indebtedness relating to the unsecured guaranty of a Three Million
Three Hundred Thousand Dollar ($3,300,000) loan from Xxxxxxx National Life
Insurance Co to Datron Resources Inc.
p. Not make payments or distributions to undersigned's shareholders
and/or controlling persons or entities.
q. Not purchase or otherwise acquire or become obligated for the purchase
of all or substantially all of the assets of business interests of any
person, firm or corporation or any shares of stock of any corporation,
trusteeship or association or in any other manner effectuate or attempt to
effectuate an expansion of present business by acquisition without the
written consent of Bank, except for purchases and acquisitions permitted
under paragraph 15 (n) above.
r. Not make or allow to remain outstanding any investment (whether such
investment shall be of the character of investment in shares of stock,
evidences of indebtedness or other securities or otherwise) in, or any
loans or advances to, any person, firm, corporation or other entity or
association except:
(a) Loans and advances to employees, officers and directors not to exceed
$400,000 in aggregate amount at any time outstanding, including a Two
Hundred Forty Four Thousand Dollars($244,000) Note from Xxxxx X. Xxxxx
recorded as a contra equity account; and
(b) Loans and investments in customers of undersigned and Borrower arising
in the ordinary course of business as the result of the compromise or
settlement of accounts payable owing by such customers.
s. Not affirmatively pledge or mortgage any of its assets, whether now
owned or hereafter acquired, or create, suffer or permit to exist any lien,
security interest in, or creditor encumbrance thereon, without the written
consent of Bank, except:
(a) liens and encumbrances in favor of Bank;
(b) liens for taxes, assessments or other governmental charges incurred in
the ordinary course of business and not yet past due or being contested in
good faith by appropriate proceedings and with proper reserves therefor
maintained in accordance with GAAP;
(c) liens not delinquent created by statute in connection with worker's
compensation, unemployment insurance, social security and similar statutory
obligations;
(d) liens of mechanics, materialmen, carriers, warehousemen or other like
statutory or common law liens securing obligations incurred in good faith
in the ordinary course of business that are not yet due and payable or that
are being contested in good faith by appropriate proceedings and with
proper reserves therefor maintained in accordance with GAAP;
(e) encumbrances consisting of easements, rights of way, zoning
restrictions or other similar restrictions on the use of real property,
none of which materially impairs the use of such property by Borrower in
the operation of the business for which it is used and none of which is
violated in any material respect by any existing or proposed structure or
land use;
(f) liens on real estate, furniture, fixtures and equipment (other than
the Machinery and Equipment) for purchase money financing (including loans
and leases) used to acquire fixed assets to the extent consistent with the
limitations of paragraph 15(n) above;
(g) liens arising by operation of law in connection with judgments being
appealed; and
(h) liens on property acquired by a Borrower or any subsidiary to the
extent such Liens are in existence when such property or subsidiary was
acquired and were not made in anticipation of such acquisition.
t. Not sell, assign, transfer or confer a security interest in any
account, contract, note, trade acceptance or other receivable, except to
Bank.
16. JURY TRIAL WAIVER: THE UNDERSIGNED AND BANK ACKNOWLEDGE THAT THE
RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED.
EACH PARTY, AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT)
WITH COUNSEL OF THEIR CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR
MUTUAL BENEFIT WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION
REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS
GUARANTY OR THE INDEBTEDNESS.
17. HEADINGS: Headings in this Agreement are included for the convenience
of reference only and shall not constitute a part of this Agreement for any
purpose.
18. This Amended and Restated Guaranty amends and restates that Guaranty
delivered by Guarantor to Bank on March 24, 1999 with respect to the
indebtedness of Borrower to Bank.
IN WITNESS WHEREOF, Xxxxxxxxx has signed and delivered this Guaranty the
day and year first written above.
WITNESSES: Datron Systems Incorporated
Signature of: By:/s/ Xxxxx X. Xxxxx
Its: Chairman, President and Chief
Signature of: Executive Officer
XXXXXXXXX'S ADDRESS:
0000 Xxxxxxxxxx Xxxxx
Xxxxx, Xxxxxxxxxx 00000
