Exhibit 10.19
GUARANTY
THIS GUARANTY is entered into as of July 28, 1998 by XXXXXXX-XXXXXX,
INC., a Delaware corporation ("Guarantor"), in favor of EAST-WEST BANK, a
California banking corporation ("Lender").
RECITALS
A. Lender and Xxxxxxx-Xxxxxx Properties Ltd. ("Borrower") are entering
into the Revolving Loan Agreement dated as of July 28, 1998 pursuant to which
Lender is making loans to Borrower up to an aggregate amount of $1,000,000
("Loans"). The Loans are evidenced by the Promissory Note of this date in the
principal amount of $1,000,000 made by Borrower and payable to the order of
Lender (the "Note"). The Note and all other documents, agreements and
instruments evidencing, securing or otherwise delivered in connection with the
Loans are referred to as the "Loan Documents."
B. Guarantor's execution and delivery of this Guaranty are conditions
precedent to Lender's making the Loans. Guarantor is willing to enter into this
Guaranty to induce Lender to make the Loans to Borrower.
C. Guarantor owns all of the outstanding stock of Borrower and will
benefit from Lender's making the Loans to Borrower.
AGREEMENT
1. Guaranty.
(a) Guarantor unconditionally and irrevocably guarantees the full
and prompt payment of all principal, interest, fees, costs and other sums owed
under the Loan Documents at the times and according to the terms expressed in
the Loan Documents, including any interest, late charges, default interest, fees
and costs (including reasonable attorneys' fees) that would have accrued under
the Loan Documents but for the commencement of a case under Title 11 of the
United States Code or any successor statute (the "Bankruptcy Code").
(b) Guarantor's liability under this Guaranty is a guaranty of
payment and performance of the Note and not of collectibility only.
2. Changes Do Not Affect Liability. Guarantor agrees that Lender may
without notice to Guarantor and without limiting Guarantor's liability under, or
affecting the enforceability of, this Guaranty:
(a) grant extensions of time, renewals or other indulgences and
modifications to Borrower or any other party under the Loan Documents;
(b) change the rate of interest provided for in the Loan
Agreement;
(c) change, amend or modify the Loan Documents;
(d) authorize the sale, exchange, release or subordination of any
security or collateral in which Lender has an interest or fail to create,
perfect or maintain the priority of any security interest in any such
collateral;
(e) take additional security for any obligation in connection
with the Loans;
(f) discharge or release any party or parties liable under the
Loan Documents;
(g) accept or make compositions or other arrangements or file or
refrain from filing a claim in any bankruptcy proceeding of Borrower, any other
guarantor of the Loans, any pledgor of collateral for any person's obligations
to Lender or any other person related to the Loans;
(h) make other or additional loans to Borrower in such amounts
and at such times as Lender may determine;
(i) credit payments in such manner and order of priority to
principal, interest or other obligations as Lender may determine; and
(j) otherwise deal with Borrower, any other guarantor of the
Loans, any pledgor of collateral for any person's obligations to Lender or any
other person related to the Loans as Lender may determine in its discretion.
3. Additional Waivers.
(a) Guarantor waives all benefits and defenses it may have under
California Civil Code Section 2809 and agrees that Guarantor's liability may be
larger in amount and more burdensome than that of Borrower. Guarantor's
liability under this Guaranty shall continue until all sums due under the Loan
Documents have been paid in full and shall not be limited or affected in any way
by any impairment or any diminution or loss of value of any security or
collateral for the Loans, from whatever cause, including, without limitation,
Lender's failure to perfect a security interest in any such security or
collateral or any disability or other defense of Borrower, any other guarantor
of the Loans, any pledgor of collateral for any person's obligations to Lender
or any other person related to the Loans.
(b) Guarantor agrees that its liability under, and the
enforceability of, this Guaranty are absolute and are not contingent upon the
genuineness, validity or enforceability of any of the Loan Documents or the
availability of any defense to Borrower, any other guarantor of the Loans, any
pledgor of collateral for any person's obligations to Lender or any other person
related to the Loans. Guarantor waives all benefits and defenses it may have
under California Civil Code Section 2810 and agrees that Guarantor shall be
liable even if Borrower, any other guarantor of the Loans, any pledgor of
collateral for any person's obligations to Lender or any other person related to
the Loans had no liability at the time of execution of the Note or later ceases
to be liable.
(c) Guarantor waives its rights under California Civil Code
Section 2815 and agrees that by doing so Guarantor has no right to revoke this
Guaranty until all obligations under the Loan Documents have been fully
satisfied.
(d) Guarantor waives its rights under California Civil Code
Section 2819 and agrees that by doing so Guarantor's liability and the
enforceability of this Guaranty shall continue even if Lender alters any
obligations under the Loan Agreement or any of the other Loan Documents in any
respect.
(e) Guarantor waives its rights under California Civil Code
Section 2839 and agrees that by doing so (i) its obligations under this Guaranty
shall not be deemed satisfied by a mere offer of payment by Borrower or any
other person of the principal obligations under the Loan Documents and (ii)
Guarantor's liability under and the enforceability of this Guaranty shall
continue until all obligations under the Loan Documents have been fully
satisfied.
(f) Guarantor waives all benefits and defenses it may have under
California Civil Code Sections 2845, 2849 and 2850, including, without
limitation, the right to require Lender to (i) proceed against Borrower, any
other guarantor of the Loans, any pledgor of collateral for any person's
obligations to Lender or any other person related to the Loans, (ii) proceed
against or exhaust any other security or collateral Lender may hold, or (iii)
pursue any other right or remedy for any Guarantor's benefit, and agrees that
Lender may foreclose against all or a part of the Property or any other security
Lender may hold without taking any action against Borrower, any other guarantor
of the Loans, any pledgor of collateral for any person's obligations to Lender
or any other person related to the Loans, and without proceeding against or
exhausting any security or collateral Lender holds.
(g) Guarantor waives its rights under California Civil Code
Sections 2899 and 3433 and agrees that by doing so Lender has no obligation
regarding the order in which it exercises its remedies.
(h) Guarantor waives diligence and all demands, protests,
presentments and notices of every kind or nature, including notices of protest,
dishonor, nonpayment, acceptance of this Guaranty and creation, renewal,
extension, modification or accrual of any of the obligations under the Loan
Agreement or the other Loan Documents. Guarantor also waives the right to plead
all statutes of limitation as a defense to Guarantor's liability under, or the
enforceability of, this Guaranty.
4. Guarantor Informed of Borrower's Condition. Guarantor acknowledges
that it has had an opportunity to review the Loan Documents, the value of the
security for the Loans and Borrower's financial condition and ability to repay
the Loans. Guarantor agrees to keep itself fully informed of all aspects of
Borrower's financial condition and the performance of Borrower's obligations to
Lender and that Lender has no duty to disclose to Guarantor any information
pertaining to Borrower or any security for the Loans.
5. Subrogation, Reimbursement and Contribution Rights. Guarantor
agrees that its rights of subrogation and reimbursement against Borrower, its
right of subrogation against any other collateral or security for the Loans or
the pledgor of such collateral or security and its right of contribution from
any guarantor of the Loans shall be subordinate to Lender's rights against
Borrower, in such collateral or security, against any such pledgor and against
any such guarantor. Guarantor shall have no such rights of subrogation,
reimbursement or contribution until all amounts due under the Loan Documents
have been paid in full and Lender has released, transferred or disposed of all
of its rights in any collateral or security. Guarantor waives its rights under
California Civil Code Sections 2847, 2848 and 2849 to the extent inconsistent
with the foregoing.
6. Guaranty Continues if Payments Are Avoided or Recovered from
Lender. If all or any portion of the obligations guaranteed under this Guaranty
are paid or performed, Guarantor's obligations under this Guaranty shall
continue and remain in full force and effect if all or any part of such payment
or performance is avoided or recovered directly or indirectly from Lender as a
preference, fraudulent transfer or otherwise, irrespective of (a) any notice of
revocation given by Guarantor prior to such avoidance or recovery, and (b)
payment in full of the Loans.
7. Representations and Warranties. Guarantor makes the following
representations and warranties to Lender:
(a) This Guaranty has been duly executed and delivered and is the
legal, valid and binding obligations of Guarantor, enforceable against Guarantor
in accordance with its terms.
(b) Guarantor's execution and delivery of, and its performance of
its obligations under, this Guaranty do not and will not conflict with any (i)
contractual or legal restriction or obligation, or (ii) court or regulatory
order, binding on or affecting Guarantor.
(c) There is no pending or, to the actual knowledge of Guarantor,
threatened action, proceeding or investigation before any court, governmental
agency or arbitrator against or affecting Guarantor or any of Guarantor's other
assets which, if decided adversely to Guarantor, would materially and adversely
affect the financial condition of Guarantor or of any of Guarantor's assets or
would materially and adversely affect the present or future ability of Guarantor
to perform its obligations under the Guaranty.
(d) Guarantor is not and will not be rendered insolvent by the
transactions contemplated by the Loan Documents. After giving effect to the
transactions contemplated by the Loan Documents, Guarantor will not be left with
an unreasonably small amount of capital with which to engage in its business or
undertakings, nor will Guarantor have intended to incur, or believe that it has
incurred, debts beyond its ability to pay such debts as they mature.
(e) Except as disclosed to Lender in writing, the financial
statements and all financial data delivered to Lender relating to Guarantor are
true, correct and complete in all material respects. Such financial statements
fairly present the financial position of Guarantor as of the dates indicated. No
material adverse change has occurred in Guarantor's financial position since the
date of such financial statements, and Guarantor has not incurred any
indebtedness since the date of any such statements.
(f) Guarantor has filed all required federal, state and local tax
returns. Guarantor has paid all federal, state and local taxes prior to
delinquency (including any interest and penalties) other than taxes being
promptly and actively contested in good faith and by appropriate proceedings.
(g) Guarantor is in material compliance with all laws,
regulations and court orders applicable to it or its business.
(h) None of Guarantor's representations or warranties contained
in this Guaranty or any other document, certificate or written statement
furnished to Lender on behalf of Guarantor contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained in this Agreement or in such other document, certificate or
written statement (when taken in their entirety) not misleading. There is no
fact known to Guarantor which materially or adversely affects the business,
operations, assets or condition (financial or otherwise) of Guarantor which has
not been disclosed in this Agreement or in another written statement delivered
to Lender by Borrower or Guarantor.
8. Borrower. As used in this Guaranty, "Borrower" shall include any
successor to Borrower with respect to the Loans and any estate created by the
commencement of a case under the Bankruptcy Code or any other insolvency,
bankruptcy, reorganization or liquidation proceeding, or by any trustee under
the Bankruptcy Code, liquidator, sequestrator or receiver of Borrower or
Borrower's property or similar person duly appointed pursuant to any law
generally governing any insolvency, bankruptcy, reorganization, liquidation,
receivership or like proceeding.
9. Opportunity to Review. Guarantor acknowledges that it has had the
opportunity to review the matters discussed and contemplated by the Loan
Documents, including the remedies Lender may pursue against Borrower in the
event of a default under the Loan Documents, the value of any security or
collateral for the Loans and Borrower's financial condition and ability to
perform under the Loans. Guarantor further has had the opportunity to review
this Guaranty with its counsel.
10. Miscellaneous.
(a) Notices. Any notice, demand or request required under this
Guaranty shall be given in writing at the addresses set forth below by personal
service; telecopy; overnight courier; or registered or certified, first class
mail, return receipt requested.
If to Guarantor:
Xxxxxxx-Xxxxxx, Inc.
000 Xxxxxxxx Xxxx., Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. XxXxxxxx
Fax No.: (000) 000-0000
If to Lender:
East-West Bank
000 Xxxxxxxxxx Xxxxx
Xxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx Xxxx
Fax No.: (000) 000-0000
Such addresses may be changed by notice to the other parties given in the same
manner as required above. Any notice, demand or request shall be deemed received
as follows: (i) if sent by personal service, at the time such personal service
is effected; (ii) if sent by telecopy, upon the sender's receipt of a
confirmation report indicating receipt by the recipient's telecopier; (iii) if
sent by overnight courier, on the business day immediately following deposit
with the overnight courier; and (iv) if sent by mail, 48 hours following deposit
in the mail.
(b) Governing Law. All questions with respect to the construction
of this Guaranty and the rights and liabilities of the parties to this Guaranty
shall be governed by the laws of the State of California.
(c) Binding on Successors. This Guaranty shall inure to the
benefit of, and shall be binding upon, the successors and assigns of each of the
parties to this Guaranty. Lender may assign this Guaranty with one or more of
the Loan Documents, without in any way affecting Guarantor's liability under it
or them.
(d) Attorneys' Fees.
(i) Guarantor shall reimburse Lender for all reasonable
attorneys' fees, costs and expenses, incurred by Lender in connection with the
enforcement of Lender's rights under this Guaranty and each of the other Loan
Documents, including, without limitation, reasonable attorneys' fees, costs and
expenses for trial, appellate proceedings, out-of-court negotiations, workouts
and settlements or for enforcement of rights under any state of federal statute,
including, without limitation, reasonable attorneys' fees, costs and expenses
incurred to protect Lender's security and attorneys' fees, costs and expenses
incurred in bankruptcy and insolvency proceedings such as (but not limited to)
seeking relief from stay in a bankruptcy proceeding. The term "expenses" means
any expenses incurred by Lender in connection with any of the out-of-court, or
state, federal or bankruptcy proceedings referred to above, including, without
limitation, the fees and expenses of any appraisers, consultants and expert
witnesses retained or consulted by Lender in connection with any such
proceeding.
(ii) Lender shall also be entitled to its attorneys' fees,
costs and expenses incurred in any post-judgment proceedings to collect and
enforce the judgment. This provision is separate and several and shall survive
the merger of this Guaranty into any judgment on this Guaranty.
(e) Counterparts. This Guaranty may be executed in any number of
original counterparts, each of which shall be deemed an original, but all of
which when taken together shall constitute one instrument. The original
signature page of any counterpart may be detached from such counterpart and
attached to any other counterpart identical to such counterpart (except having
additional signature pages executed by other parties to this Guaranty) without
impairing the legal effect of any such signature(s).
(f) Entire Agreement. This Guaranty constitutes the entire
agreement and understanding between the parties in respect of the subject matter
of this Guaranty and supersedes all prior agreements and understandings with
respect to such subject matter, whether oral or written.
(g) Waivers. Waiver by Lender of any term, covenant or condition
under this Guaranty or the Loan Documents, or of any default by Guarantor under
this Guaranty or the Loan Documents, or any failure by Lender to insist upon
strict performance by Guarantor of any term, covenant or condition contained in
this Guaranty or the Loan Documents, shall be effective or binding on Lender
only if made in writing by Lender; no such wavier shall be implied from any
omission by Lender to take action with respect to any such term, covenant,
condition or default. No express written waiver by Lender of any term, covenant,
condition or default shall affect any other term, covenant, condition or default
or cover any other time period than the application of any such term, covenant
or condition to the matter as to which a waiver has been given or the default or
time period specified in such express waiver. This Guaranty may be amended only
by an instrument in writing signed by the parties to this Guaranty.
(h) Severability. If any part of this Guaranty is declared
invalid for any reason, such shall not affect the validity of the rest of the
Guaranty. The other parts of this Guaranty shall remain in effect as if this
Guaranty had been executed without the invalid part. The parties declare that
they intend and desire that the remaining parts of this Guaranty continue to be
effective without any part or parts that have been declared invalid.
11. Waiver of Trial by Jury. EACH OF LENDER AND GUARANTOR WAIVES TRIAL
BY JURY WITH RESPECT TO ANY ACTION, CLAIM, SUIT OR PROCEEDING IN RESPECT OF OR
ARISING OUT OF THIS GUARANTY OR THE OTHER LOAN DOCUMENTS OR THE CONDUCT OF THE
RELATIONSHIP BETWEEN LENDER AND GUARANTOR. BOTH LENDER AND GUARANTOR HAVE
OBTAINED THE ADVICE OF THEIR RESPECTIVE LEGAL COUNSEL BEFORE SIGNING THIS
GUARANTY AND ACKNOWLEDGE THAT THEY VOLUNTARILY AGREED TO THIS WAIVER OF THEIR
RIGHT TO TRIAL BY JURY WITH FULL KNOWLEDGE OF ITS SIGNIFICANCE AND LEGAL
CONSEQUENCE.
XXXXXXX-XXXXXX, INC., a Delaware corporation
By:
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Xxxxxxx X. XxXxxxxx, President
