Contract
Exhibit
10.2
This
continuing Guaranty Agreement (“Guaranty”)
is
entered into as of February 26th,
2008,
by XXXXXXX
X. XXXX
(“Guarantor”),
in
favor of SILICON
VALLEY BANK (“Bank”).
RECITALS
A. Concurrently
herewith. Bank and GPS Industries, Inc., a Nevada corporation (“Borrower”)
are
entering into that certain Loan and Security Agreement dated of even date
herewith (as amended, restated, or otherwise modified from time to time,
me
“Loan
Agreement”)
pursuant to which Bank has agreed to make certain advances of money and to
extend certain financial accommodations to Borrower (collectively, the
“Loans”),
subject to the terms and conditions set forth therein. Capitalized terms
used
but not otherwise defined herein shall have the meanings given them in the
Loan
Agreement.
B. In
consideration of the agreement of Bank to make the Loans to Borrower under
the
Loan Agreement, Guarantor is willing to guaranty the full payment and
performance by Borrower of all of its obligations thereunder and under the
other
Loan Documents, all as further set forth herein.
C. Guarantor
is the Chief Executive Officer of Borrower and will obtain substantial direct
and indirect benefit from the Loans made by Bank to Borrower under the Loan
Agreement.
Now,
THEREFORE,
to
induce Bank to enter into the Loan Agreement, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
and
intending to be legally bound, Guarantor hereby represents, warrants, covenants
and agrees as follows:
Section
1. Guaranty.
1.1 Unconditional
Guaranty of Payment.
In
consideration of the foregoing. Guarantor hereby irrevocably, absolutely
and
unconditionally guarantees to Bank the prompt and complete payment and
performance when due (whether at stated maturity, by acceleration or otherwise)
of all Obligations; provided, however, the maximum liability of Guarantor
hereunder shall not exceed at any time the sum of (a) principal
indebtedness of Borrower to Bank in the amount of $1,500,000, plus (b) all
accrued and unpaid interest on such principal indebtedness, plus (c) all
Bank Expenses. Guarantor agrees that it shall execute such other documents
or
agreements and take such action as Bank shall reasonably request to effect
the
purposes of this Guaranty.
1.2 Separate
Obligations.
These
obligations are independent of Borrower’s obligations and separate actions may
be brought against Guarantor (whether action is brought against Borrower
or
whether Borrower is joined in the action).
Section
2. Representations
and Warranties.
Guarantor
hereby represents and warrants that:
(a) The
execution, delivery and performance by Guarantor of this Guaranty (i) do
not contravene any law or any contractual restriction binding on or affecting
Guarantor or by which Guarantor’s property may be affected; (ii) do not
require any authorization or approval or other action by, or any notice to
or
filing with, any governmental authority or any other Person under any indenture,
mortgage, deed of trust, lease, agreement or other instrument to which Guarantor
is a party or by which Guarantor or any of its property is bound, except
such as
have been obtained or made; and (iii) do not result in the imposition or
creation of any Lien upon any property of Guarantor.
(b) Guarantor
is legally competent to execute, deliver and perform this Guaranty.
(c) This
Guaranty is a valid and binding obligation of Guarantor, enforceable against
Guarantor in accordance with its terms, except as the enforceability thereof
may
be subject to or limited by bankruptcy, insolvency, reorganization, arrangement,
moratorium or other similar laws relating to or affecting the rights of
creditors generally.
(d) There
is
no action, suit or proceeding affecting Guarantor pending or threatened before
any court, arbitrator, or governmental authority, domestic or foreign, which
may
have a material adverse effect on the ability of Guarantor to perform its
obligations under this Guaranty.
(e) Guarantor’s
obligations hereunder are not subject to any offset or defense against Bank
or
Borrower of any kind.
(f) The
personal financial statements as of Jan 2008 for Guarantor and the U.S. federal
2006 tax returns of Guarantor, copies of which have been furnished to Bank,
fairly present the financial position of Guarantor for the dates and periods
purported to be covered thereby, and there has been no material adverse change
in the financial position of Guarantor since the date of such personal financial
statements and tax returns.
(g) Neither
Guarantor nor its property has any immunity from jurisdiction of any court
or
from any legal process (whether through service or notice, attachment prior
to
judgment, attachment in aid of execution, execution or otherwise) under
applicable law.
(h) The
incurrence of Guarantor’s obligations under this Guaranty will not cause
Guarantor to (i) become insolvent; (ii) be left with unreasonably
small capital for any business or transaction in which Guarantor is presently
engaged or plans to be engaged; or (iii) be unable to pay its debts as such
debts mature.
(i) Guarantor
covenants, warrants, and represents to Bank that all representations and
warranties contained in this Guaranty shall be true at the time of Guarantor’s
execution of this Guaranty, and shall continue to be true so long as this
Guaranty remains in effect. Guarantor expressly agrees that any
misrepresentation or breach of any warranty whatsoever contained in this
Guaranty shall be deemed material.
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Section
3. General
Waivers. Guarantor waives:
(a) Any
right
to require Bank to (i) proceed against Borrower or any other person;
(ii) proceed against or exhaust any security or (iii) pursue any other
remedy. Bank may exercise or not exercise any right or remedy it has against
Borrower or any security it holds (including the right to foreclose by judicial
or nonjudicial sale) without affecting Guarantor’s liability
hereunder.
(b) Any
defenses from disability or other defense of Borrower or from tile cessation
of
Borrowers liabilities.
(c) Any
setoff, defense or counterclaim against Bask.
(d) Any
defense from the absence, impairment or loss of any right of reimbursement
or
subrogation or any other rights against Borrower, Until Borrower’s obligations
to Bank have been paid. Guarantor has no right of subrogation or reimbursement
or other rights against Borrower.
(e) Any
right
to enforce any remedy that Bank has against Borrower.
(f) Any
rights to participate in any security held by Bank.
(g) Any
demands for performance, notices of nonperformance or of new or additional
indebtedness incurred by Borrower to Bank, Guarantor is responsible for being
and keeping itself informed of Borrower’s financial condition.
(h) The
benefit of any act or omission by Bank which directly or indirectly results
in
or aids the discharge of Borrower from any of the Obligations by operation
of
law or otherwise.
Section
4. Real
Property Security Waiver.
Guarantor acknowledges that, to the extent Guarantor has or may have rights
of
subrogation or reimbursement against Borrower for claims arising out of this
Guaranty, those rights may be impaired or destroyed if Bank elects to proceed
against any real property security of Borrower by non-judicial foreclosure.
That
impairment or destruction could, under certain judicial cases and based on
equitable principles of estoppel, give rise to a defense by Guarantor against
its obligations under this Guaranty. Guarantor waives that defense and any
others arising from Bank’s election to pursue non-judicial foreclosure.
Guarantor waives the benefits, if any, of any statutory or common law rule
that
may permit a subordinating creditor to assert any defenses of a surety or
guarantor, or that may give the subordinating creditor the right to require
a
senior creditor to marshal assets, and Guarantor agrees that it shall not
assert
any such defenses or rights.
Section
5. Reinstatement.
Notwithstanding any provision of the Loan Agreement to the contrary, the
liability of Guarantor hereunder shall be reinstated and revived and the
rights
of Bank shall continue if and to the extent that for any reason any payment
by
or on behalf of Guarantor or Borrower is rescinded or must be otherwise restored
by Bank, whether as a result of any proceedings in bankruptcy or reorganization
or otherwise, all as though such amount had not been paid. The determination
as
to whether any such payment must be rescinded or restored shall be made by
Bank
in its sole discretion; provided, however, that if Bank chooses to contest
any
such matter at the request of Guarantor, Guarantor agrees to indemnify and
hold
harmless Bank from all costs and expenses (including, without limitation,
reasonable attorneys’ fees) of such litigation. To the extent any payment is
rescinded or restored. Guarantor’s obligations hereunder shall be revived in mil
force and effect without reduction or discharge for that payment.
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Section
6. No
Waiver; Amendments.
No
failure on the part of Bank to exercise, no delay in exercising and no course
of
dealing with respect to, any right hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any right hereunder preclude
any
other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law. This Guaranty may not be amended or modified except by written
agreement between Guarantor and Bank, and no consent or waiver hereunder
shall
be valid unless in writing and signed by Bank.
Section
7. Compromise
and Settlement.
No
compromise, settlement, release, renewal, extension, indulgence, change in,
waiver or modification of any of the Obligations or the release or discharge
of
Borrower from the performance of any of the Obligations shall release or
discharge Guarantor from this Guaranty or the performance of the obligations
hereunder.
Section
8. Notice.
Any
notice or other communication herein required or permitted to be given shall
be
in writing and may be delivered in person or sent by facsimile transmission,
overnight courier, or by United States mail, registered or certified, return
receipt requested, postage prepaid and addressed as follows:
| If to Guarantor: |
Xxxxxxx X. Xxxx
|
| Tel: 000-000-0000
Fax: 000-000-0000
|
|
|
If
to Bank:
|
Silicon
Valley Bank
0000
X. XxXxx Xxxxxxxxxx, Xxxxx 000
Xxxxxx,
XX 00000
Attn: Xxxxxxx
Xxxxxx
Fax: 000-000-0000
Email: xxxxxxx@xxxxxx.xxx
|
or
at
such other address as may be substituted by notice given as herein provided.
Every notice, demand, request, consent, approval, declaration or other
communication hereunder shall be deemed to have been duly given or served
on the
date on which personally delivered or sent by facsimile transmission or
three (3) Business Days after the same shall have been deposited in tile
United States mail. If sent by overnight courier service, the date of delivery
shall be deemed to be the next Business Day after deposited with such
service.
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Section
9. Entire
Agreement.
This
Guaranty constitutes and contains the entire agreement of the parties and
supersedes any and all prior and contemporaneous agreements, negotiations,
correspondence, understandings and communications between Guarantor and Bank,
whether written or oral, respecting the subject matter hereof.
Section
10. Severability.
If any
provision of this Guaranty is held to be unenforceable under applicable law
for
any reason, it shall be adjusted, if possible, rather than voided in order
to
achieve the intent of Guarantor and Bank to the extent possible. In any event,
all other provisions of this Guaranty shall be deemed valid and enforceable
to
the full extent possible under applicable law,
Section
11. Subordination
of Indebtedness.
Any
indebtedness or other obligation of Borrower now or hereafter held by or
owing
to Guarantor is hereby subordinated in time and right of payment to all
obligations of Borrower to Bank, except as such indebtedness or other obligation
is expressly permitted to be paid under the Credit Agreement; and such
indebtedness of Borrower to Guarantor is assigned to Bank as security for
this
Guaranty, and if Bank so requests shall be collected, enforced and received
by
Guarantor in trust for Bank and to be paid over to Bank on account of the
Obligations of Borrower to Bank, but without reducing or affecting in any
manner
the liability of Guarantor under the other provisions of this Guaranty, Any
notes now or hereafter evidencing such indebtedness of Borrower to Guarantor
shall be marked with a legend that the same are subject to this
Guaranty.
Section
12. Business
Debt.
Guarantor hereby represents and agrees (hat none of the Obligations and none
of
Guarantor’s obligations hereunder are consumer debt, or were or shall be
incurred by Borrower or Guarantor, respectively, primarily for personal,
family
or household purposes. Guarantor farther agrees and represents that the
Obligations are and shall be incurred by Borrower, and the obligations of
Guarantor hereunder are and shall be incurred by Guarantor, for business
and
commercial purposes only.
Section
13. Separate
Property.
Notwithstanding anything to the contrary contained herein. Guarantor hereby
expressly agrees that recourse may be had against Guarantor’s separate property
for the payment and performance of Guarantor’s obligations
hereunder.
Section
14. Payment
of Expenses.
Guarantor shall pay, promptly on demand, all Expenses incurred by Bank in
defending and/or enforcing this Guaranty. For purposes hereof, “Expenses” shall
mean costs and expenses (including reasonable fees and disbursements of any
law
firm or other external counsel and the allocated cost of internal legal services
and all disbursements of internal counsel) for defending and/or enforcing
tins
Guaranty (including those incurred in connection with appeals or proceedings
by
or against any Guarantor under the United States Bankruptcy Code, or any
other
bankruptcy or insolvency law, including assignments for (he benefit of
creditors, compositions, extensions generally with its creditors, or proceedings
seeking reorganization, arrangement, or other relief).
Section
15. Assignment;
Governing Law.
This
Guaranty shall be binding upon and inure to the benefit of Guarantor and
Bank
and their respective successors and assigns, except that Guarantor shall
not
have the right to assign its rights hereunder or any interest herein without
the
prior written consent of Bank, which may be granted or withheld in Bank’s sole
discretion. Any such purported assignment by Guarantor without Bank’s written
consent shall be void. This Guaranty shall be governed by, and construed
in
accordance with, the laws of the State of Texas without regard to principles
thereof regarding conflict of laws.
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Section
16. PERSONAL
JURISDICTION.
GUARANTOR HEREBY IRREVOCABLY AGREES THAT ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS GUARANTY OR ANY OF THE AGREEMENTS, DOCUMENTS OR INSTRUMENTS
DELIVERED IN CONNECTION HEREWITH MAY BE BROUGHT IN THE STATE AND FEDERAL
COURTS
LOCATED IN THE STATE OF TEXAS AS BANK MAY ELECT (PROVIDED THAT GUARANTOR
ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A
COURT
LOCATED OUTSIDE OF THE STATE OF TEXAS), AND, BY EXECUTION AND DELIVERY HEREOF,
GUARANTOR ACCEPTS AND CONSENTS TO, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS AND AGREES THAT SUCH JURISDICTION SHALL
BE
EXCLUSIVE, UNLESS WAIVED BY BANK IN WRITING, WITH RESPECT TO ANY ACTION OR
PROCEEDING BROUGHT BY GUARANTOR AGAINST BANK. NOTHING HEREIN SHALL LIMIT
THE
RIGHT OF BANK TO BRING PROCEEDINGS AGAINST GUARANTOR IN THE COURTS OF ANY
OTHER
JURISDICTION. GUARANTOR HEREBY WAIVES, TO THE FULL EXTENT PERMITTED BY LAW,
ANY
RIGHT TO STAY OR TO DISMISS ANY ACTION OR PROCEEDING BROUGHT BEFORE SAID
COURTS
ON THE BASIS OF FORUM NON CONVENIENS.
Section
17. WAIVER
OF JURY TRIAL.
EACH OF
BANK AND GUARANTOR HEREBY WAIVES, TO THE FULL EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
GUARANTY. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS GUARANTY AND ANY RELATED INSTRUMENTS, AS APPLICABLE,
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 17.
|
GUARANTOR
|
|
| XXXXXXX X. XXXX |
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