EXHIBIT 10.02
AMENDED AND RESTATED LICENSE AGREEMENT
This Amended and Restated License Agreement (this "License") is made as
of August 7, 1998 (the "Effective Date") between Radius Inc., a California
corporation, maintaining its principal place of business at 000 Xxxx
Xxxxxxxxxxx Xxxx, Xxxxxxxx Xxxx, XX 00000 ("Radius"), and Korea Data Systems
(America), a California corporation, maintaining its principal place of
business at 00000 Xxxxxx Xxx, Xxxxxx Xxxxx, XX 92841("KDS"). This License
replaces and supersedes in its entirety a License Agreement dated June 5,
1998 between the parties (and related guaranties).
1. Relationship. Radius and KDS recently concluded the negotiation of the
transfer of various Radius brand names and trademarks and related
intellectual property for use in connection with KDS' computer monitor
business (the "Transfer"). Pending the Closing (as defined in the Asset
Purchase Agreement of even date) of the Transfer, or in the event such
Agreement does not close for any reason, Radius will license the use of the
trademarks identified on Exhibit A to this License (the "Trademarks") and the
"PressView IP" (as defined on Exhibit B) to KDS on the terms and conditions
set forth below. During the term of this License, Radius will continue to
use the Trademarks and PressView IP and reserves all rights to such and
related goodwill; however, Radius shall not use, directly or indirectly, the
Trademarks with computer monitors and "graphics adapters" (which for purposes
of this License, include flat panel displays) with limited exceptions
described in Section 2. The parties are independent contractors. KDS will
comply with all reasonable criteria and policies developed and modified by
Radius from time to time in connection with the use of its trademarks by
licensees generally. Neither party will issue press releases referring to
the other or disclose the terms or existence of this License, without the
other's prior written approval, except as may be required by law.
2. License Grant. During the term of this License (or longer, subject to
the last sentence in Section 6) and subject to Radius' rights below, Radius
grants KDS (a) all of Radius' rights to use the Trademarks worldwide on an
exclusive basis solely for purposes of manufacturing, marketing, advertising,
selling and servicing computer monitors and graphics adapters manufactured by
or for KDS, and (b) all of Radius' rights to use the Trademarks and PressView
IP worldwide on a non exclusive basis solely for purposes of manufacturing,
marketing, advertising, selling and servicing computer hardware manufactured
by or for KDS other than digital video hardware; all provided that such
monitors, graphics adapters and computer hardware are of a quality acceptable
to Radius and KDS remains in good standing under this Agreement Subject to
the last sentence of Section 6, this License is nontransferable,
nonsublicensable and subject to early termination as set forth in Section 6
below. Radius reserves all rights and benefits associated with the
Trademarks and PressView IP and the use of same, including the right to use
and license the Trademarks and the PressView IP; however, Radius will not use
or authorize others to use the Trademarks during the term of this Agreement
in connection with the distribution, manufacturing, marketing, advertising,
selling and servicing of computer monitors and graphics adapters, except: (a)
in connection with the distribution of existing inventories of Radius branded
monitors (whether held by Radius or third parties), (b) in connection with
the service and support of previously sold Radius and Supermac monitors and
graphics adapters, and (c) as previously authorized to its Japanese and
European master distributors by existing agreements or applicable law. (The
parties acknowledge that third parties may continue
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to distribute, refurbish and resell previously sold monitors and graphics
adapters, subject to Radius' trademark rights.) KDS will not at any time
during or after this License do anything that may adversely affect the
validity or enforceability of or contribute to the infringement of the
Trademarks. During the term of this License (and thereafter, if the license
becomes perpetual as set forth in the last sentence to Section 6), Radius
will use commercially reasonable efforts to (i) maintain the effectiveness of
its trademark registrations in all countries where the Trademarks are
currently registered and in good standing as well as (ii) defend the
Trademarks from infringement by third parties. If KDS desires trademark
registration protection beyond what Radius considers reasonable or in any
other country during the term or desires more assertive trademark enforcement
against third parties, then Radius will reasonably cooperate in such efforts
after notice from KDS and at KDS' expense, provided that such registrations
and actions will be in Radius' name unless Radius elects otherwise.
3. Payment. In consideration of the license rights conferred above, KDS
has paid Radius $1,000,000 and tenders a note to Radius in the amount of
$5,200,000 in the form attached hereto (the "Note"). The Note is secured in
the form of the Security Agreement attached and is guarantied by Korea Data
Sytems Co., Ltd. and Korea Data Systems (USA), Inc. in the form attached (the
"Guaranties"), all duly executed and delivered to Radius in connection with
this License.
4. Miscellaneous. KDS may not refer to itself as an authorized Radius
Reseller or agent and is not authorized to use other Radius trademarks or
intellectual property pursuant to this License. KDS will not make any
representation, warranty or guarantee on behalf of Radius. KDS must disclaim
warranties and limit liability for Radius with respect to Radius branded
monitors and graphics adapters sold by or for KDS to the same extent that KDS
disclaims its own warranties and limits its own liability on other KDS
monitors and graphics adapters, and in any event, KDS must at least disclaim
all indirect, punitive, special and consequential damages. KDS will have the
exclusive responsibility to support purchasers of Radius branded monitors and
graphics adapters sold by or through KDS which utilize any of the Trademarks
or the PressView IP. KDS shall not refer its customers, distributors or
resellers to Radius for support. Each party acknowledges that it will have
access to certain information and materials concerning the other party's
business, plans, customers, technology and products that are confidential and
of substantial value to the other party, which value will be impaired if such
information and materials were disclosed to third parties. Each party
further agrees that it will not use such information (except in performance
of this License), or disclose such information to third parties, and that it
will not obtain any rights in such information except as specified in this
License. Each party will also take every reasonable precaution to protect
the confidentiality of such information, including but not limited to
executing confidentiality agreements in form and substance satisfactory to
the other party. KDS will indemnify, defend and hold Radius (including its
officers, directors, shareholders, employees, distributors and agents)
harmless from all loss, liability, expense (including reasonable attorneys'
and experts' charges) and claims ("Losses") occasioned by KDS' use of the
Trademarks and PressView IP or any breach by KDS of this Agreement, except to
the extent such Losses are caused by Radius' intentional misconduct or gross
negligence and except to the extent such Losses are caused by the Trademarks
or PressView IP's infringement or violation of the rights of any third
parties.
5. Limitations. NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY OF ANY
KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING BUT NOT LIMITED TO WARRANTIES
OF
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MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE
LICENSE, EXCEPT THAT (I) EACH PARTY HAS AUTHORITY TO ENTER INTO THIS LICENSE
AND (II) TO EACH PARTY'S KNOWLEDGE ENTRY INTO THIS LICENSE DOES NOT VIOLATE
ANY DOCUMENT OR ORDER AND IS NOT SUBJECT TO LITIGATION. RADIUS' LIABILITY
UNDER THIS AGREEMENT, WHETHER RESULTING FROM STATUTE, TORT, STRICT LIABILITY,
BREACH OF CONTRACT OR OTHER FORM OF ACTION, SHALL BE LIMITED TO THE ACTUAL
AMOUNTS PAID BY KDS UNDER THIS LICENSE AND SHALL IN NO EVENT INCLUDE
INCIDENTAL, INDIRECT, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES OF ANY KIND,
EVEN IF RADIUS IS AWARE OF THE POSSIBILITY OF SUCH DAMAGES. SIMILARLY, KDS'
LIABILITY TO RADIUS HEREUNDER SHALL BE LIMITED TO THE PAYMENTS DUE PLUS ANY
LIABILITY UNDER INDEMNIFICATION PROVISIONS OF SECTION 4 ABOVE.
6. Term. The term of this License will expire on any date the Transfer is
closed and the final three monthly Note payments are prepaid to Radius. (The
Note, Security Agreement and Guaranties will survive such termination,
however.) Prior to such time, either party may terminate this License prior
to its expiration if the other party fails to perform any material obligation
under this License and such failure continues unremedied for thirty business
days after written notice, in which event, KDS' right to use the Trademarks
and PressView IP shall immediately cease. NEITHER PARTY SHALL BE LIABLE TO
THE OTHER AS A RESULT OF THE EXPIRATION OR TERMINATION OF THIS LICENSE
PURSUANT TO ITS TERMS, INCLUDING FOR ANY SUMS EXPENDED, DAMAGES SUFFERED OR
LIABILITIES INCURRED BY EITHER IN THE CONDUCTING OR PROMOTING OF THEIR
BUSINESS, OR FOR LOST PROFITS OR CONSEQUENTIAL DAMAGES OF ANY KIND. KDS'
obligations to pay Radius all amounts due under this License will survive the
expiration and any termination of this License except termination by Radius
without cause, along with the provisions of Sections 4, 5 and 7. In the
event there is no Transfer and KDS remains in good standing under this
License, then after the Note has been timely paid in full the license rights
conferred in Section 2 above will become fully paid up (subject to all
previously accrued obligations having been paid), perpetual, irrevocable,
transferable (after notice to Radius) and sublicensable (after notice to
Radius).
7. General. This License is not assignable by either party without the
prior written consent of the other party, which shall not be unreasonably
withheld, except in connection with a merger or disposition of substantially
all of the assignor's related assets or business. Any other attempted
assignment will be null and void. These provisions shall be binding upon and
inure to the benefit of the parties, their successors and permitted assigns.
All notices and demands hereunder shall be in writing and shall be served by
personal service or by first class certified or registered mail, or by any
return receipt express courier to the address indicated on the signature page
of this License, or to any other address of the receiving party designated by
written notice. The parties acknowledge that breaches of this License
warrant equitable or injunctive relief in addition to other remedies. This
License constitutes the entire agreement between the parties pertaining to
its subject matter and supersedes any prior or contemporaneous written or
oral agreements between the parties. The parties acknowledge that they are
not entering into this License on the basis of any representations not
expressly made in this License. Any modifications of this License must be in
writing and signed by both parties. The waiver by one party of any default of
the other party shall not waive subsequent defaults of the same or different
kind. This License shall become binding only after it has been signed
jointly by Radius and KDS. This License will be
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governed by and construed in accordance with the laws of the United States
and the State of California as applied to agreements entered into and to be
performed entirely within California between California residents. The
parties hereby submit to the jurisdiction of, and waive any venue objections
against, the United States District Court for the Northern District of
California and the Superior Court of the State of California for the County
of Santa Xxxxx in any litigation arising out of or related to this License.
THE PARTIES EXPRESSLY WAIVE THEIR RIGHTS TO A TRIAL BY JURY IN ANY SUCH
LITIGATION. The parties and their respective counsel have negotiated this
License. Therefore, this License will be interpreted without any strict
construction in favor of or against either party. In the event any provision
of this License is determined to be invalid or unenforceable by a court of
competent jurisdiction, then the remaining provisions will remain effective.
In such event, the parties agree to negotiate in good faith to substitute a
valid and enforceable provision that preserves the intent and economic effect
of the original provision. If the parties cannot agree on such a substitute
provision, the court will establish a provision that is enforceable that
follows the parties expressed intent and economic effect of the unenforceable
clause as closely as possible. This License may be executed in two
counterparts by original or facsimile signature, each of which when so
executed shall be deemed an original, and both of which together shall
constitute one instrument. Use of the word "including" is inclusive, as if
"without limitation" followed each instance.
The parties execute this License on the dates specified below.
RADIUS INC. Korea Data Systems (America), Inc.
Signature and Date: Signature and Date:
----------------------------------- --------------------------------------
Name and Title: Name and Title:
-------------------- ----------------------
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PROMISSORY NOTE
Amount: $5,200,000.00 August 7, 0000 Xxxxxxxx Xxxx, Xxxxxxxxxx
FOR VALUE RECEIVED, the undersigned "Maker" promises to pay to Radius
Inc., or order (the "Holder"), at Mountain View, California, or at such place
as the Holder of this Note may from time to time designate, the principal sum
of five million two hundred thousand and no hundredths dollars
($5,200,000.00), without offset or deduction in fourteen monthly installments
of principal of $350,000.00 each on beginning on the date of this Note and
continuing on the first business day of each month thereafter until October
1, 1999, on which date a final payment of $300,000 principal shall be made
.(all unless "accelerated" as set forth below). No interest will be due on
timely payments of principal; however, interest on delinquent or accelerated
principal will accrue at the monthly rate of one percent per month or any
lower legal maximum. This Note may be prepaid at any time without penalty.
No notice of payment due or made is required.
In the event that Maker fails to timely pay any sum due under this Note
after five days' notice from Holder, a late charge of the lesser of $10,000
or five percent of the delinquent amount will become immediately due and
payable in addition to such sum and Holder can elect on ten days' notice to
Maker to accelerate the entire outstanding balance due. In the latter event,
the entire indebtedness must be paid to Holder within fifteen days after
Holder sends its notice of acceleration election to Maker and will accrue
interest thereafter at the rate set forth above. Maker also promises to pay
Holder's costs of collection and reasonable attorneys' charges if Holder
seeks legal redress to recover the amount due under this Note.
This Note is governed by California law and forum and is intended to be
negotiable or assignable at Holder's election.
IN WITNESS WHEREOF, the undersigned has executed this Note as of the
date written above.
Maker: Korea Data Systems (America), Inc.
By Xxxx Xxx, President
--------------------------------------- -------------------------
Please sign Date
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SECURITY AGREEMENT
This Security Agreement (the "AGREEMENT") is made and entered into as of
August 7, 1998 by Korea Data Systems (America), Inc., a California
corporation ("DEBTOR"), in favor of Radius Inc., a California corporation
(the "SECURED PARTY").
RECITALS
A. Secured Party has or will extend credit to Debtor in the amount of
$5.2 million (the "TOTAL PRINCIPAL") under the terms of a certain Amended and
Restated License Agreement, Asset Purchase Agreement and Promissory Note of
even date executed by Debtor in favor of the Secured Party (collectively, the
"Transfer Agreement"); and
B. Secured Party desires to obtain, and Debtor desires to give,
security for the full and punctual performance of the obligations created by
the Transfer Agreement and any substitutions or extensions thereof and any
expenses, fees or costs associated therewith (the "OBLIGATIONS"), all as more
fully set forth below;
NOW, THEREFORE, in consideration of the extension of credit by Secured
Party and the covenants and agreements set forth in the Transfer Agreement
and this Agreement, the parties agree as follows:
1. SECURITY AGREEMENT. To secure performance of the Obligations and
Debtor's obligations hereunder, Debtor hereby grants Secured Party a security
interest in the rights and property set forth on EXHIBIT A hereto (the
"COLLATERAL") with the security interest in the Collateral being senior to
all other security interest holders.
1.1 COVENANTS. The security interest created in this Section 1
is given to secure all of the Obligations and the obligations of Debtor
hereunder. While such security interest is in existence, Debtor will: (a)
promptly pay, when due, all taxes and assessments levied or assessed against
the Collateral, or any part thereof, or for its use or operation and (b)
notify Secured Party when requested from time to time of the physical
location of such Collateral if tangible. The physical location of any
tangible collateral is currently at the address of Debtor set forth below.
1.2 DEFAULT. In the event of default under the Transfer
Agreement or this Agreement:
1.2.1 Secured Party may exercise any or all of its rights
and remedies under California law, and any other applicable laws, and may
elect to offset, against any payment due from Secured Party to Debtor, the
whole or any part of any indebtedness of Debtor to the Secured Party.
1.2.2 While Debtor is in default, Debtor will: (a)
deliver to Secured Party from time to time, as requested by such Secured
Party, current lists of Collateral; (b) not dispose of Collateral except on
terms approved by Secured Party or in the ordinary course of Debtor's
business; and (c) assemble and deliver all Collateral to a designated
representative of Secured Party at a reasonably convenient place designated
by Secured Party. Debtor hereby consents to the entry of Secured Party (or a
Secured Party agent) following reasonable notice on Debtor's business
premises, between the hours of 8:00 a.m. and 5:00 p.m. on Monday through
Friday, in order to enforce the Secured Party's rights or remedies set forth
herein or given to Secured Party by law or in equity, all of which shall be
cumulative.
1.2.3 If required by law, Secured Party will give Debtor
reasonable notice of the time and place of any public sale of the Collateral,
or any part thereof, or of the time after which any private sale or any
intended disposition of the Collateral is to be made. Unless otherwise
provided by law, the requirement of reasonable notice shall be met if such
notice is delivered in accordance with Section 3.6 below at least thirty (30)
calendar days before the time of such intended sale or other disposition.
Upon such sale and to the extent permitted by law, Secured Party may bid for
and purchase all or any portion of the Collateral to the extent and for
purchase price agreed to by Secured Party may bid on its sole behalf
therefor. On compliance with the terms of sale, Secured Party may hold,
retain, possess and dispose of such Collateral in its own absolute right,
without further accountability. Debtor agrees to reimburse Secured
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Party, upon demand, for any and all costs (including, by way of example,
reasonable attorneys' fees and expenses) incurred or paid by Secured Party in
exercising its rights or remedies or protecting its interests under this
Agreement.
1.3 PERFECTION IN GENERAL. Debtor agrees to execute and deliver
all financing statements, PTO cover sheets, UCC-1s or other documents, or
procure any document reasonably deemed necessary by Secured Party to perfect
the security interest granted in this Section 1 and to confer a security
interest senior to all other security interests in the Purchased Assets
portion of the Collateral. The current form of UCC-1 is attached as Exhibit
B. The current form of PTO cover sheet is attached as Exhibit C. Upon
performance of all of Debtor's obligations under and secured hereby, Secured
Party agrees to execute and deliver such documents as may be reasonably
requested by Debtor in order to release the Collateral from the security
interest granted herein.
2. REPRESENTATIONS AND WARRANTIES OF DEBTOR. Debtor hereby
represents, warrants and agrees as follows:
2.1 LITIGATION. Debtor is neither a party to, nor, except as
disclosed in the Transfer Agreement, has it any notice or knowledge of, any
pending or threatened action, suit, proceeding or investigation involving it,
at law or in equity or otherwise, in, before or by a court or any
governmental board, commission, agency, department or officer, in which an
adverse determination would have a material adverse effect on the assets or
financial condition of Debtor or the Collateral described herein.
2.2 NO RESTRICTION OR TRANSACTION. Debtor is not subject to any
charter provision, bylaw, indenture, mortgage, lien, lease agreement,
instrument, law, rule, regulation, order, judgment or decree or any other
restriction which would interfere with the consummation of the transaction
contemplated by this Agreement. This Agreement is a valid and enforceable
obligation of Debtor, enforceable in accordance with its terms.
2.3 COLLATERAL. Debtor has good and marketable title to the
Collateral subject to no material mortgage, lien, pledge, claim, charge or
encumbrance, security interest or other defect in title, excluding those
which may have existed prior to the effective date of the Transfer Agreement
arising by or through Secured Party. Subject to such security interests and
to Secured Party's security interest in the Collateral, Debtor is, and will
remain while any Obligation is outstanding, the sole owner of the Collateral
with full right to transfer or encumber same without obtaining the consent or
approval of any other person or entity, except as disclosed in the Transfer
Agreement. Debtor hereby agrees, without the prior written consent of
Secured Party, other than in the ordinary course of business and other than
in a sale and leaseback transaction, not to sell, lend or transfer ownership
of a substantial portion of the Collateral while the Obligations, or any part
thereof, are outstanding.
3. GENERAL PROVISIONS.
3.1 AMENDMENT AND WAIVER. No failure or delay by Secured Party
in exercising any right, power or privilege under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or of any other right, power
or privilege. No waiver shall be deemed to be made by Secured Party of any
of its rights under this Agreement unless the same shall be in writing, and
each waiver, if any, shall be a waiver only with respect to the specific
instance involved and shall in no way impair the rights of Secured Party or
the obligations of Debtor to Secured Party in any other respect at any other
time. This Agreement may not be altered or amended except by an agreement in
writing signed by Debtor and Secured Party.
3.2 ASSIGNMENT. This Agreement shall be binding upon Debtor,
its representatives, successors and assigns and shall inure to the benefit of
Secured Party, its heirs, representatives, successors and assigns, except
that Debtor shall not voluntarily assign any or all of its obligations
hereunder. This Agreement shall continue in full force and be binding upon
Debtor, and its successors notwithstanding the merger, liquidation or
dissolution of Debtor.
3.3 SEVERABILITY. If any provision of this Agreement is held to
be unenforceable for any reason, such provision shall be adjusted, if
possible, to the extent necessary in order to achieve the intent of the
parties or shall be stricken from this Agreement if adjustment is not
possible. In any event, all other provisions of this Agreement shall be
deemed valid and enforceable.
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3.4 ENTIRE AGREEMENT. This Agreement (in connection with the
Transfer Agreement) contains the entire agreement of the parties and
supersedes any and all prior negotiations, correspondence, understandings and
agreements between the parties regarding the subject matter hereof.
3.5 NOTICES. Any demand or other notice required or permitted
to be given to a party hereunder shall be deemed duly given or delivered if
personally delivered or if sent by certified mail, postage prepaid, addressed
to the receiving party at its address set forth under its signature or to
such other address as the receiving party shall duly notice the sending party
in writing (which demand or notice shall be effective on deposit in the
United States mail, if delivery is by mail, and on receipt, if personally
delivered).
3.6. TIME. Time is of the essence of this Agreement.
3.7 GOVERNING LAW AND FORUM. This Agreement shall be governed
by and construed and interpreted in accordance with the laws of the State of
California. Debtor, by its execution of this Agreement, hereby irrevocably
submits to the personal jurisdiction of the state courts of the State of
California and of the United States District Court for the Northern District
of California that are located in Santa Xxxxx County, California for the
purpose of any suit, action or other proceeding arising out of or based upon
this Agreement.
3.8 COUNTERPARTS. This Agreement may be entered into in any
number of counterparts, each of which will be deemed an original and all of
which, taken together, will constitute one and the same Agreement.
3.9 ATTORNEYS' CHARGES. Debtor agrees to pay all reasonable
attorneys' fees, court costs and all other costs and expenses which may be
incurred by Secured Party in the enforcement of this Security Agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed by persons
duly authorized by or on behalf of the parties as of the date first above
written.
DEBTOR:
KOREA DATA SYSTEMS (AMERICA), Inc.
By:
----------------------------------
Its:
--------------------------------
Address:
SECURED PARTY:
RADIUS INC.
By:
----------------------------------
Its:
--------------------------------
Address:
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EXHIBIT A
COLLATERAL
This Financing Statement covers:
(a) the license under the Amended and Restated License Agreement dated
August 7, 1998, the Purchased Assets and the Buyer's License (as defined in
the Transfer Agreement) and all Intellectual Property Rights therein (as
defined in the Transfer Agreement);
(b) All proceeds and products of any and all of the foregoing
collateral and, to the extent not otherwise included, all payments under
insurance or in connection with any indemnity, warranty or guaranty payable
by reason of loss or damage to, or otherwise with respect to, any of the
foregoing collateral.
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EXHIBIT B
ATTACH INITIAL UCC-1
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EXHIBIT C
ATTACH INITIAL PTO COVER SHEET
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GUARANTY
This Guaranty is made and given as of August 7, 1998 by
[Korea Data Systems Co., Ltd. or Korea Data Systems (USA), Inc.] with a place
of business at _______________________________________
______________________________________________________________________________
("GUARANTOR") in favor of Radius Inc., a California corporation ("SELLER").
R E C I T A L S
A. Guarantor is affiliated with Korean Data Services (America), Inc.
("BUYER").
B. Guarantor desires to induce Seller to extend credit to Buyer under
a certain Amended and Restated License Agreement and Asset Purchase Agreement
(and related agreements and instruments including a promissory note and
security agreement) dated of even date herewith between Seller and Buyer
(collectively, the "TRANFER AGREEMENT") by providing Seller with this
Guaranty. It is a condition precedent, and a material inducement, to the
extension of credit by Seller to Buyer under the Transfer Agreement that
Guarantor makes and provides this Guaranty to Seller. Guarantor will benefit
significantly as a result of such extension of credit.
NOW, THEREFORE, as a material inducement to Seller to enter into the
Transfer Agreement, and in consideration of loans made or to be made by
Seller under the Transfer Agreement, and for other good and valuable
consideration, Guarantor hereby agrees with Seller as follows:
1. MEANINGS OF CAPITALIZED TERMS. Unless they are otherwise
expressly defined herein, each capitalized term used in this Guaranty will
have the same meaning given to such term in the Transfer Agreement.
2. GUARANTY. As a material inducement and consideration for
Seller to enter into the Transfer Agreement and to extend credit to Buyer
under the Transfer Agreement, which Seller is unwilling to do without
Guarantor's agreements and guaranty hereunder, Guarantor hereby guarantees
and promises to pay Seller, or order, on demand, in lawful money of the
United States of America, any and all Indebtedness (as defined below) of
Buyer to Seller when such Indebtedness is due. The liability of Guarantor
under this Guaranty is exclusive and independent of any security for or other
guarantee of the Indebtedness of Buyer, whether executed by Guarantor or any
other party, and the liability of Guarantor under this Guaranty shall not be
affected or impaired by (a) any Indebtedness exceeding Guarantor's liability;
(b) any other continuing or other guaranty, or undertaking or liability of
Guarantor or of any other party as to any Indebtedness of Buyer; (c) any
payment on or in reduction of any other guaranty or undertaking; or (d) any
payment made on the Indebtedness which Seller repays to Buyer pursuant to
court order in any bankruptcy, reorganization, arrangement, moratorium, or
other debtor relief proceeding, and Guarantor hereby waives any right to the
deferral or modification of Guarantor's obligations hereunder by virtue of
any such proceeding.
3. INDEBTEDNESS DEFINED. The word "INDEBTEDNESS" as used
herein means any and all debts, obligations, or liabilities of Buyer to
Seller under the Transfer Agreement executed and delivered by Buyer
thereunder (including but not limited to principal, accrued interest and
attorneys' fees) whether or not recovery of such Indebtedness may now be or
may hereafter become barred by any statute of limitations, or whether such
Indebtedness may now be or may hereafter otherwise become unenforceable
against, or uncollectible from, Buyer for any reason, including but not
limited to Buyer's bankruptcy or insolvency, other principles of equity or
usury laws.
4. SEPARATE AND INDEPENDENT OBLIGATIONS; CERTAIN WAIVERS. The
obligations of Guarantor under this Guaranty are separate and independent of
the obligations of Buyer under the Transfer Agreement and a separate action
or actions may be brought and prosecuted against Guarantor, whether or not
any action is brought
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against Buyer or whether Buyer be joined in any such action or actions; and
Guarantor hereby waives the benefit of any statute of limitations affecting
its liability under this Guaranty or the enforcement of this Guaranty, to the
maximum extent permitted by law. Any part payment by Buyer or other
circumstances which operate to toll any statute of limitations as to Buyer
will operate to toll the statute of limitations as to Guarantor. Guarantor
further agrees that recourse may be had under this Guaranty against any and
all property and property interests owned by Guarantor, whether legally or
beneficially, including but not limited to any property which is such
Guarantor's separate property and any property in which such Guarantor has a
community property interest, to satisfy such Guarantor's obligations under
this Guaranty.
5. AUTHORIZATION. Guarantor authorizes Seller, without notice
or demand or any further or additional consent of Guarantor, and without
affecting Guarantor's liability hereunder, to at any time and/or from time to
time: (a) renew, extend, accelerate or otherwise change the time for payment
of, or otherwise change or modify the terms of, any Indebtedness or any part
thereof ; and (b) apply the collateral and direct the order or manner of sale
thereof as Seller in its discretion may determine, and Guarantor agrees that
no such renewal, extension, acceleration, or other change, or any such
application or non-application of collateral shall relieve Guarantor of any
of Guarantor's obligations or liabilities hereunder. Seller may, without
notice to Seller, assign this Guaranty in whole or in part and any rights in
related collateral.
6. WAIVERS OF GUARANTOR. Guarantor expressly waives any right
to require Seller to: (a) proceed against Buyer, or to proceed against Buyer
prior to proceeding against Guarantor under this Guaranty or otherwise; (b)
proceed against any other party or guarantor; (c) protect, preserve or
perfect any of Seller's rights in or to, or to proceed against, or exercise
any rights or remedies of a secured creditor with respect to, or to exhaust,
any collateral, security, mortgage, deed of trust, security interest or lien
held by Seller in any assets or properties of Buyer; or (c) pursue any other
right or remedy in Seller's power whatsoever with respect to the Indebtedness
or any part thereof. Seller may, at its election, exercise or refrain from
exercising any right or remedy it may have against Buyer or any security
interest in Buyer's assets (including without limitation the right to
foreclose upon any such security by judicial or nonjudicial sale), without
thereby affecting or impairing in any way Guarantor's liability hereunder,
except to the extent that Buyer has reduced the amount of the Indebtedness.
In addition, Guarantor hereby also waives: (a) any defense arising out of
the absence, impairment or loss of any right of reimbursement or subrogation
or other right or remedy of such Guarantor against Buyer or any such
security; (b) any defense arising by reason of any disability or other
defense of Buyer or by reason of the cessation from any cause whatsoever of
the liability of Buyer to Seller; and (c) all presentments, demands for
performance, notices of nonperformance, protests, notice of protest, notices
of dishonor, and notices of acceptance of this Guaranty and of the existence,
creation or incurring of new or additional Indebtedness.
7. GUARANTOR'S UNDERSTANDING. Guarantor warrants and agrees
that each of the authorizations and waivers set forth in Sections 5 and 6
above are made with Guarantor's full knowledge and understanding of their
significance and consequences, and that under the circumstances, such
authorizations and waivers are reasonable and not contrary to public policy
or law. If any of said authorizations or waivers are determined to be
contrary to any applicable law or public policy, such authorizations and
waivers will nevertheless be effective to the fullest extent permitted by law
or public policy.
8. SUBROGATION. Until all Indebtedness shall have been paid in
full, Guarantor will have no right of subrogation to any right of Seller
against Buyer, and Guarantor waives any right to enforce any remedy which
Seller now has or may hereafter have against Buyer, and waives any benefit
of, and any right to participate in, any security now or hereinafter held by
Seller.
9. INFORMATION. Guarantor assumes the responsibility for being
and keeping itself informed of the financial condition of Buyer and of all
other circumstances bearing upon the risk of nonpayment of the Indebtedness
and agrees that Seller will have no duty to advise Guarantor of any
information regarding such condition or any such circumstances.
10. SUBORDINATION. In the event of any default by Buyer under the
Transfer Agreement or other failure to pay any sum when due, then any debt or
obligation of Buyer now or hereafter held by Guarantor is hereby
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fully subordinated in right of payment to the repayment of the Indebtedness
and any such debt or obligation of Buyer to Guarantor will, if Seller so
requests, be collected, enforced and received by Guarantor as trustee for
Seller and be paid over to Seller on account of the Indebtedness, but without
reducing or affecting in any manner the liability of Guarantor under the
other provisions of this Guaranty.
11. JURISDICTION; VENUE. Guarantor, by its execution of this
Guaranty, hereby irrevocably submits to the personal jurisdiction of the
state courts of the State of California and of the United States District
Court for the Northern District of California that are located in Santa Xxxxx
County, California for the purpose of any suit, action or other proceeding
arising out of or based upon this Guaranty.
12. AMENDMENT; WAIVER. No amendment or modification of this
Guaranty may be made unless it is set forth in writing and signed by both
Guarantor and Seller. No waiver of any right of Seller under this Guaranty
will be effective unless expressly set forth in a writing signed by Seller.
No course of dealing between the parties will operate as a waiver of Seller's
rights under this Guaranty. A waiver by Seller on any one occasion will not
be construed as a bar to or waiver by Seller of any right or remedy on any
future occasion.
13. ATTORNEYS' FEES. Guarantor agrees to pay all reasonable
attorneys' fees, court costs and all other costs and expenses which may be
incurred by Seller in the enforcement of this Guaranty.
14. SUCCESSORS AND ASSIGNS. The provisions of this Guaranty
will inure to the benefit of, and be binding on, each party's respective
heirs, successors and assigns; EXCEPT THAT Guarantor may not assign or
delegate any of its rights or obligations under this Guaranty without
Seller's prior written consent.
15. SEVERABILITY. The invalidity or unenforceability of any
term or provision of this Guaranty will not affect the validity or
enforceability of any other term or provision hereof. The headings in this
Guaranty are for convenience of reference only and will not alter or
otherwise affect the meaning of this Guaranty.
16. EXECUTION IN COUNTERPARTS. This Guaranty may be executed in
any number of counterparts, which together will constitute one instrument.
17. GOVERNING LAW. This Guaranty will be governed by and
construed in accordance with the laws of the State of California.
18. ENTIRE AGREEMENT. This Guaranty will constitute the entire
agreement and understanding of the parties with respect to the subject matter
hereof and supersedes any and all prior understandings or agreements
regarding such subject matter.
IN WITNESS WHEREOF, the undersigned Guarantor has executed and delivered
this Guaranty effective as of the date first above written.
Accepted by:
"SELLER" "GUARANTOR"
Name: Name:
------------------------- ----------------------------
By: By:
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Title: Title:
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