Continuing Guaranty
Exhibit
10.5
Continuing
Guaranty
Guaranty:
To
induce The PrivateBank and Trust Company (the “Lender”) directly or through any
of its branches, offices, subsidiaries, or affiliates to provide or extend
certain financial accommodations and Liabilities to Advanced Photonix, Inc.,
a
Delaware corporation (the “Borrower”), and because the undersigned (the
“Guarantor”) has determined that executing this Guaranty is in its interest and
to its financial benefit, the Guarantor absolutely and unconditionally
guaranties to the Lender the full and prompt payment of all Liabilities when
due, whether at stated maturity, on demand, by acceleration or otherwise. The
Guarantor’s obligations under this Guaranty shall be payable in lawful money of
the United States of America.
Liabilities:
The term
“Liabilities” as used in this Guaranty means (i) all obligations, indebtedness
and liabilities of the Borrower to the Lender, and any of its subsidiaries,
affiliates or successors, now existing or later arising, including, without
limitation, all loans, advances, interest, costs, expenses, fees, overdraft
indebtedness, credit card indebtedness, letter of credit indebtedness or lease
obligations, (ii) all costs and expenses, including reasonable attorneys’ fees,
that the Lender may pay or incur in collecting from the Borrower, the Guarantor,
or any other guarantor of all or any of the Liabilities and for liquidating
any
Collateral (as defined below), (iii) all monetary obligations incurred or
accrued during the pendency of any bankruptcy, insolvency, receivership or
other
similar proceedings, regardless of whether allowed or allowable in such
proceeding, including reasonable attorneys’ fees, and (iv) all renewals,
extensions, modifications, consolidations or substitutions of any of the
foregoing, whether the Borrower may be liable jointly with others or
individually liable as a debtor, maker, co-maker, drawer, endorser, guarantor,
surety or otherwise, and whether voluntarily or involuntarily incurred, known
or
unknown, due or not due, absolute or contingent, direct or indirect, liquidated
or unliquidated.
Limitation:
The
Guarantor’s obligation under this Guaranty is UNLIMITED and shall include all
costs, expenses, fees, interest, and other amounts included in the
Liabilities.
Continued
Reliance.
The
Lender may continue to provide or extend Liabilities to the Borrower based
on
this Guaranty until it receives written notice of termination from the
Guarantor. Such notice shall be effective upon the opening of business on the
fifth (5th)
day
following written acknowledgment of delivery. If terminated, the Guarantor
will
continue to be liable to the Lender for any Liabilities created, assumed or
committed to at the time the termination becomes effective, and all subsequent
renewals, extensions, modifications and amendments of those Liabilities, until
all of the same have been fully paid. Termination by any other guarantor shall
not release the Guarantor from its obligations under this Guaranty.
Security.
As
security for this Guaranty, the Guarantor pledges and grants to the Lender
a
continuing security interest in the following described property and all of
its
additions, substitutions, increments, proceeds and products, whether now owned
or later acquired (“Collateral”):
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(1)
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All
securities and other property of the Guarantor in the custody, possession
or control of the Lender (other than property held by the Lender
solely in
a fiduciary capacity);
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(2)
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All
property or securities declared or acknowledged by the Guarantor
to
constitute security for any past, present or future liability, direct
or
indirect, of the Guarantor to the Lender;
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(3)
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All
claims of any nature, whether now existing or later acquired, that
Guarantor has against Xxxxxxxx (excepting claims under a deed of
trust or
mortgage covering California real property), including the right
of the
Lender to collect and realize upon such claims;
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(4)
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All
balances of deposit accounts of the Guarantor with the Lender (“deposit
account” having the meaning given to it §9-102(a)(29) of the UCC (as
defined below));
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The
Lender shall have the right at any time to apply its own debt or liability
to
the Guarantor in whole or partial payment of this Guaranty or other present
or
future liabilities of the Guarantor, direct or indirect, without any requirement
for mutual maturity.
If
the
Guarantor fails to pay any amount owing under this Guaranty, the Lender shall
have all of the rights and remedies provided by law or under any other agreement
to liquidate or foreclose on and sell the Collateral, including but not limited
to the rights and remedies of a secured party under the Uniform Commercial
Code
of the State of Michigan, as in effect from time to time (the “UCC”). These
rights and remedies shall be cumulative and not exclusive. If the Guarantor
is
entitled to notice, that requirement will be met if the Lender sends notice
at
least ten (10) days prior to the date of sale, disposition or other event which
requires notice. The proceeds of any sale shall be applied first to the
reasonable costs incurred in conducting such sale, then toward payment of the
amount owing under this Guaranty. The Lender is authorized to cause all or
any
part of the Collateral to be transferred to or registered in its name or in
the
name of any other person, firm or corporation, with or without designation
of
the capacity of such nominee.
For
purposes of the following paragraphs, “any collateral” shall include the
Collateral and any other collateral securing the Liabilities.
Action
Regarding Borrower.
If any
monies become available that the Lender can apply to the Liabilities, the Lender
may apply them in any manner it chooses, including but not limited to applying
them against Liabilities which are not covered by this Guaranty. The Lender
can
take any action against the Borrower, any collateral, or any other person liable
for any of the Liabilities. The Lender can release the Borrower or anyone else
from its liability for the Liabilities, either in whole or in part, or release
any collateral, and need not perfect a security interest in any collateral.
The
Lender does not have to exercise any rights that it has against the Borrower
or
anyone else, or make any effort to realize on any collateral or right of
set-off. If the Borrower requests more credit or any other benefit, the Lender
may grant it and the Lender may grant renewals, extensions, modifications and
amendments of any of the Liabilities and otherwise deal with the Borrower or
any
other person as the Lender sees fit and as if this Guaranty were not in effect.
The Guarantor’s obligations under this Guaranty shall not be released or
affected by (a) any act or omission of the Lender, (b) the voluntary or
involuntary liquidation, sale or other disposition of all or substantially
all
of the assets of the Borrower, or any receivership, insolvency, bankruptcy,
reorganization, or other similar proceedings affecting the Borrower or any
of
its assets, or (c) any change in the composition or structure of the Borrower
or
the Guarantor, including a merger or consolidation with any other person or
entity.
Nature
of Guaranty. This
Guaranty is a guaranty of payment and not of collection. The Lender can insist
that the Guarantor pay immediately, and the Lender is not required to attempt
to
collect first from the Borrower, any collateral, or any other person liable
for
any of the Liabilities. The obligation of the Guarantor shall be unconditional
and absolute, regardless of the unenforceability of any provision of any
agreement between the Borrower and the Lender, or the existence of any defense,
setoff or counterclaim which the Borrower may assert.
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Other
Guarantors.
If there
is more than one Guarantor, their obligations under this Guaranty shall be
joint
and several. In addition, each Guarantor shall be jointly and severally liable
with any other guarantor of any of the Liabilities. If the Lender elects to
enforce its rights against less than all guarantors of the Liabilities, that
election shall not release the Guarantor from its obligations under this
Guaranty. The compromise or release of any of the obligations of any of the
other guarantors or the Borrower shall not serve to waive, alter or release
the
Guarantor’s obligations under this Guaranty. This Guaranty is not conditioned on
anyone else executing this or any other guaranty.
Rights
of Subrogation.
The
Guarantor agrees not to enforce any rights of subrogation, contribution or
indemnification that it has against the Borrower, any entity liable for any
of
the Liabilities, or any collateral, until all Liabilities are irrevocably paid
in full, even if all of the Liabilities are not covered by this Guaranty. The
Guarantor further agrees that if any payments to the Lender on any of the
Liabilities are in whole or in part invalidated, declared to be fraudulent
or
preferential, set aside or required to be repaid to a trustee, receiver or
any
other party under any bankruptcy act or code, state or federal law, common
law
or equitable doctrine, this Guaranty and the Lender’s interest in any collateral
remain in full force and effect (or are reinstated as the case may be) until
payment in full of those amounts. Any payment is due on demand.
Waivers.
The
Guarantor waives any right it may have to receive notice of the following
matters before the Lender enforces any of its rights: (a) the Lender’s
acceptance of this Guaranty, (b) any credit or other Liabilities that the Lender
extends to the Borrower, (c) the Borrower’s default, (d) any demand and (e) any
action that the Lender takes regarding the Borrower, anyone else, any
collateral, or any of the Liabilities, which it might be entitled to by law
or
under any other agreement. The Lender may waive or delay enforcing any of its
rights without losing them. Any waiver shall affect only the specific terms
and
time period stated in the waiver. No modification, waiver or amendment of this
Guaranty shall be effective unless it is in writing and signed by the party
against whom it is being enforced.
Information.
The
Guarantor assumes full responsibility for keeping itself informed of the
Borrower’s financial condition and assets, and all other circumstances bearing
upon the risk of nonpayment of any of the Liabilities and the nature, scope
and
extent of the Guarantor’s risks under this Guaranty. The Guarantor has not
relied on any representation of Lender as to Borrower’s financial condition and
assets, and all other circumstances bearing upon the risk of nonpayment of
any
of the Liabilities. The Lender has no duty to advise the Guarantor of
information known to it regarding Borrower’s financial conditions, assets,
circumstances or risks.
Representations
by Guarantor.
The
Guarantor represents: (a) that the execution and delivery of this Guaranty
and
the performance of the obligations it imposes do not violate any law, conflict
with any agreement by which it is bound, or require the consent or approval
of
any governmental authority or any third party; (b) that this Guaranty is a
valid
and binding agreement, enforceable according to its terms; and (c) that all
balance sheets, profit and loss statements, and other financial statements
furnished by it to the Lender are accurate and fairly reflect the financial
condition of the organizations and persons to which they apply on their
effective dates, including contingent liabilities of every type, which financial
condition has not changed materially and adversely since those dates. Each
Guarantor, other than a natural person, further represents: (a) that it is
duly
organized, existing and in good standing pursuant to the laws under which it
is
organized; and (b) that the execution and delivery of this Guaranty and the
performance of the obligations it imposes (i) are within its powers and have
been duly authorized by all necessary action of its governing body and (ii)
do
not contravene the terms of its articles of incorporation or organization,
its
by-laws, or any partnership, operating or other agreement governing its affairs.
Lending
Installations. The
Liabilities may be booked at any office, branch, subsidiary or affiliate of
the
Lender, as selected by the Lender. All terms of this Guaranty apply to and
may
be enforced by or on behalf of any such office, branch, subsidiary or affiliate
of the Lender. Without limiting the rights of the Lender under applicable law,
the Guarantor authorizes the Lender to apply any sums outstanding to the credit
of the Guarantor with any such office, branch, subsidiary or affiliate of the
Lender toward the payment of the Liabilities by the Guarantor under this
Guaranty, whether or not all or any part of the Liabilities is then due.
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Notices.
Notice
from one party to another relating to this Guaranty shall be deemed effective
if
made in writing (including telecommunications) and delivered to the recipient’s
address or facsimile number listed below by any of the following means: (a)
hand
delivery, (b) registered or certified mail, postage prepaid, with return receipt
requested, (c) first class or express mail, postage prepaid, (d) Federal Express
or like overnight courier service or (e) facsimile, telex or other wire
transmission with request for assurance of receipt in a manner typical with
respect to communications of that type. Notice made in accordance with this
section shall be deemed delivered on receipt if delivered by hand or wire
transmission, on the third business day after mailing if mailed by first class,
registered or certified mail, or on the next business day after mailing or
deposit with an overnight courier service if delivered by express mail or
overnight courier. Notwithstanding the foregoing, notice of termination of
this
Guaranty shall be deemed received only upon the receipt of actual written notice
by the Lender in accordance with the paragraph above labeled “Continued
Reliance.” Notice shall be delivered as follows:
If
to the
Guarantor:
c/o
Advanced Photonix, Inc.
0000
Xxxxxxxxx
Ann
Arbor, Michigan 48104
Attn:
Xxxxx X. Xxxxxx
Phone:
(000) 000-0000
Fax:
(000) 000-0000
With
a
copy to:
Xxxxxxxx
Xxxxxxxxx Xxxxxxxx & Xxxxxxxx
000
Xxxxx
Xxxxxx
New
York,
New York 10017
Attn:
Xxxxxx Xxxxxxxx, Esq.
Phone:
(000) 000-0000
Fax:
(000) 000-0000
If
to
Lender:
The
PrivateBank and Trust Company
00
X.
Xxxxxxx Xxxxxx
Chicago,
Illinois 60602
Attention:
__________________________
Facsimile
No.: _______________________
With
a
copy to:
The
PrivateBank
00000
Xxxxxxxx Xxxxxx, Xxxxx 0000
Bloomfield
Hills, Michigan 48304
Attn:
Xxxx Xxxxx
Phone:
__________________________
Fax:
____________________________
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Law
and Judicial Forum that Apply.
This
agreement is governed by Michigan law, without regard to conflict of law
principles. The Guarantor agrees that any legal action or proceeding against
it
with respect to any of its obligations under this Guaranty shall be brought
in
any court of the State of Michigan or of the United States of America for the
Eastern or Western District of Michigan, as the Lender in its sole discretion
may elect. By the execution and delivery of this Guaranty, the Guarantor submits
to and accepts, with regard to any such action or proceeding, for itself and
in
respect of its property, generally and unconditionally, the jurisdiction of
those courts. The Guarantor waives any claim that the State of Michigan is
not a
convenient forum or the proper venue for any suit, action or proceeding.
Miscellaneous.
The
Guarantor’s liability under this Guaranty is independent of its liability under
any other guaranty previously or subsequently executed by the Guarantor or
any
one of them, singularly or together with others, as to all or any part of the
Liabilities, and may be enforced for the full amount of this Guaranty regardless
of the Guarantor’s liability under any other guaranty. This Guaranty is binding
on the Guarantor’s heirs, successors and assigns, and will operate to the
benefit of the Lender and its successors and assigns. The use of headings shall
not limit the provisions of this Guaranty. All discussions and documents arising
between this Guaranty and the last guaranty signed by the Guarantor as to the
Borrower, if any, are merged into this Guaranty. In the event any one or more
provisions of this Guaranty is deemed invalid, illegal or unenforceable in
any
respect, the remaining provisions of this Guaranty shall continue in full force
and effect as if such invalid, illegal or unenforceable provision(s) was not
a
part of this Guaranty.
Information
Sharing.
The
Lender may provide, without any limitation whatsoever, any information or
knowledge the Lender may have about the Guarantor or any matter relating to
this
Guaranty and any related documents to any of its subsidiaries or affiliates
or
their successors, or to any one or more purchasers or potential purchasers
of
the Liabilities or this Guaranty or any related documents, provided that any
such purchaser or potential purchaser is subject to the confidentiality
provisions of Section 8.15 of the Loan Agreement dated September 25, 2008
between Xxxxxx and Borrower, as it may be amended or modified from time to
time,
and the Guarantor waives any right to privacy the Guarantor may have with
respect to such matters. The Guarantor agrees that the Lender may without notice
and at any time sell, negotiate, assign or transfer one or more interests or
participations in all or any part of its rights or obligations under the
documents evidencing the Liabilities or in this Guaranty to one or more
purchasers whether or not related to the Lender. This Guaranty may only be
modified or amended in a written instrument executed by the Lender and the
Guarantor.
Additional
Terms and Conditions.
None.
Waiver
of Jury Trial.
Xxxxxx
and the Guarantor acknowledge that the right to a trial by jury is a
constitutional right that may be waived. After consulting or being given the
opportunity to consult with legal counsel, the Lender and the Guarantor
knowingly and voluntarily waive any right either of them have to a trial by
jury
in any proceeding (whether sounding in contract or tort) which is in any way
connected with this Guaranty, any related agreement or the relationship
established under them, or the Liabilities.
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IN
WITNESS WHEREOF, the Guarantor has signed and delivered this Guaranty to the
Lender as of this 25th day of September, 2008.
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Witnesses:
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Guarantor(s):
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/s/
Xxxx Xxxxx
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SILICON
SENSORS, INC.
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Signature
of
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By:
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/s/
Xxxxxxx X. Xxxxx
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Signature
of
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Its:
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President
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PICOMETRIX
LLC
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By:
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/s/
Xxxxxxx X. Xxxxx
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Its:
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President
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Address:
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0000
Xxxxxxxxx
Xxx
Xxxxx, Xxxxxxxx 00000
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