1
EXHIBIT 4.9
CONTINUING LIMITED GUARANTY AGREEMENT
1. The undersigned (hereinafter called "Guarantor") for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
to induce THE INTERNATIONAL BANK, (hereinafter called "Lender"), with offices
at Corpus Christi, Texas, at its option, at any time or from time to time, to
loan monies or otherwise extend credit with or without security, to or for the
account of TEXAS AIRSONICS, INC. and AMERICAN DENTAL TECHNOLOGIES, INC.
(hereinafter jointly called "Borrower"), and at the special insistence and
request of Lender, Guarantor hereby unconditionally guarantees the prompt
payment, at the said office of Lender in Nueces County, Texas, when due of the
following (hereinafter called the "Indebtedness"):
All the obligations, including, but not limited to principal, interest
and costs of collection including attorneys' fees, evidenced by or
arising pursuant to the following described Revolving Credit Promissory
Note executed by Borrower payable to the order of Lender together with
any and all renewals, extensions and/or rearrangements from time to time
thereof, with or without notice to Guarantor:
Date: October 17, 1996 Original Principal Sum: $2,500,000.00
In addition to the other obligations of Guarantor imposed by this
Guaranty Agreement, Guarantor agrees to pay the costs of collection,
including reasonable attorneys' fees, incurred by Lender in collection
of the Indebtedness from Guarantor.
2. This guaranty is an absolute, completed and continuing one, and no notice
of the Indebtedness or any extension of credit already or hereafter contracted
by or extended to the Borrower need be given to the Guarantor. Lender may
extend credit to Borrower in excess of the amount guaranteed hereunder.
Borrower and Lender may rearrange, extend and/or renew from time to time any
or all of the Indebtedness without notice to the Guarantor and in such event
Guarantor will remain fully bound hereunder on such Indebtedness regardless of
the number of rearrangements, renewals and extensions. The Guarantor hereby
expressly waives marshalling of assets and liabilities, sale in inverse order of
alienation, presentment, demand, protest, notice of intention to accelerate
maturity, notice of acceleration of maturity, and notice of protest and dishonor
on any and all forms of such Indebtedness, and also notice of acceptance of this
guaranty, acceptance on the part of Lender being conclusively presumed by its
request for this guaranty and delivery of the same to it.
3. Guarantor authorizes Lender, without notice or demand and without affecting
Guarantor's liability hereunder, to take and hold security for the payment of
this guaranty and/or the Indebtedness guaranteed, and exchange, enforce, waive
and release any such security; and to apply such security and direct the order
or manner of sale thereof as Lender in its discretion may determine; and
to obtain a guaranty of the Indebtedness from any one or more other persons,
corporations or entities whomsoever and at any time or times to enforce, waive,
rearrange, modify, limit or release such other persons, corporations or entities
from their obligations under such guaranties. If at any time there be other
debt of Borrower to Lender not guaranteed hereby, then Lender may apply all
amounts realized by Lender from Borrower, from other guarantors or from
collateral to such other debt. Provided, if a particular instrument (such as a
guaranty or security agreement) expressly requires application of amounts
received by Lender different than permitted under the preceding sentence, then
such amounts shall be applied as provided in such instrument. Guarantor agrees
that if the maturity of any Indebtedness hereby guaranteed is accelerated by
bankruptcy or otherwise, such maturity shall also be deemed accelerated for the
purpose of this guaranty without demand or notice to Guarantor.
4. Guarantor waives any right to require Lender to (a) proceed against the
Borrower or (b) proceed against or exhaust any security held to secure the
Indebtedness, or (c) exercise any right of set-off against Borrower, or (d)
pursue any other remedy in Lender's power whatsoever. Guarantor waives any
defense arising by reason of any disability, lack of corporate authority or
power, or other defense of the Borrower or of any other guarantor of the
Indebtedness, and shall remain liable hereon regardless of whether Borrower or
any other guarantor be found not liable thereon for any reason. Until all the
Indebtedness shall have been paid in full, Guarantor shall have no right of
subrogation, and waives any right to enforce any remedy which Lender now has or
may hereafter have against the Borrower, and waives any benefit of and any
right to participate in any security now or hereafter held by Lender. A
payment received by Lender from Guarantor shall be effective to reduce
Guarantor's liability hereunder only if accompanied by a written transmittal
document received by Lender advising Lender that such payment is made hereunder
for such purpose. Without limiting any other provisions hereof, Guarantor
waives any rights Guarantor has under, or any requirements imposed by, Chapter
34 of the Texas Business and Commerce Code, as in effect on the date of this
Guaranty or as it may be amended from time to time.
5. Guarantor hereby grants to the Lender a right of set-off (which right
of set-off herein granted shall be in addition to and not in lieu of any other
right of set-off Lender may have) against the balance of every deposit account
(whether interest bearing or non-interest bearing and whether a demand deposit
or time deposit), now or hereafter existing, of the Guarantor with the Lender
and any other claim of the Guarantor against the Lender, now or hereafter
existing. The grant of the above right of set-off shall not in anywise limit
or be construed as limiting Lender to collect payment of any liability of
Guarantor incurred hereby only by way of set-off, but it is expressly
understood and provided that all such liability shall constitute the absolute
and unconditional obligation of Guarantor. Guarantor hereby subordinates all
indebtedness owing to the Guarantor from Borrower to all Indebtedness of
Borrower to Lender, and shall not attempt to set off or reduce any obligations
to Lender because of such indebtedness. The Guarantor further subordinates any
lien or security interest that he may have on any collateral or security of the
Borrower or any other party to the liens and security interests on said
collateral and security in favor of the Lender. Upon an event of default on
the Indebtedness and for so long as such default exists, Guarantor agrees not
to accept any payment on the subordinated indebtedness nor realize upon any
collateral therefor. If the Guarantor should receive any such payment,
satisfaction or security for indebtedness of the Borrower to the Guarantor in
violation of the terms hereof, the Guarantor agrees forthwith to deliver the
same to the Lender in the form received, endorsed or assigned as may be
appropriate for application on account of, or as security for, the
Indebtedness, and until so delivered, agree to hold the same in trust for the
Lender.
6. The term of this Agreement shall be for so long as any of the Indebtedness
remains outstanding and unpaid. It is further agreed that maturity of the
Indebtedness, as such may be extended from time to time by agreement between
Lender and Borrower as aforesaid, shall be the same with respect to Guarantor
as with respect to Borrower.
7. Notwithstanding anything herein or in any notes, contracts, agreements
or other instruments of Borrower to the contrary, Guarantor is not obligated to
and shall never be required to pay interest on amounts owing by Borrower to
Lender in excess of the maximum permissible to be paid by a guarantor of the
Indebtedness under applicable law; and if payment by Guarantor of the
Indebtedness of Borrower shall involve transcending the limit of validity
prescribed by law for a guarantor, then, ipso facto, the obligation to be
fulfilled shall be reduced as to Guarantor to the limit of such validity.
8. Guarantor warrants to Lender that Guarantor has independent means of
obtaining financial and other information about Borrower, and agrees that
Guarantor has not been induced to sign this guaranty by reason of information
regarding Borrower furnished by Lender, and agrees that Lender shall not in the
future be required to furnish Guarantor with any information regarding Borrower
nor notify Guarantor of any adverse changes as to Borrower's financial
condition or otherwise.
9. This Guaranty does not supersede, cancel, amend, discharge or limit
any other guaranty or similar obligation of Guarantor in favor of Lender, but
this Guaranty is in addition to and cumulative of any other such guaranty. If
more than one person or entity executes this instrument as Guarantor, their
liabilities and obligations hereunder shall be joint and several. If other
persons or entities have executed other instruments guaranteeing any
indebtedness of Borrower to Lender, this Guaranty and instrument is in addition
to such other instruments. Guarantor's liability hereunder shall be joint and
several with the liability of Borrower and all endorsers and other sureties and
guarantors whether or not the liability of other sureties and guarantors may be
limited. This guaranty is and shall be in every particular available to the
successors and assigns of Lender and is and shall always be fully binding upon
the heirs, successors and legal representatives of Guarantor.
Dated effective the 17th day of October, 1996.
GUARANTOR:
Xxxxxxxx X. Xxxxxxx
----------------------------------
Xxxxxxxx X. Xxxxxxx, Individually
