California Bank & Trust Continuing Guaranty
EXHIBIT
10.33
California
Bank & Trust
Borrower: Collectors
Finance Corporation, a
California corporation
Guarantor: Collectors
Universe, Inc., a
Delaware corporation
Date: June
30, 2005
This
Continuing Guaranty
(this
"Guaranty") is executed by the above-named guarantor ("Guarantor"), as of the
above date, in favor of CALIFORNIA BANK & TRUST, a California banking
corporation ("CB&T"), with offices at 000 Xxxxx Xxxx Xxxxxx,
0xx
Xxxxx,
Xxx Xxxxxxx, Xxxxxxxxxx 00000, with respect to the Indebtedness (as
hereinafter defined) of the above-named borrowers (jointly and severally, the
"Borrower").
1
1. Continuing
Guaranty.
Guarantor hereby unconditionally guarantees and promises to pay on demand to
CB&T, at the address indicated above, or at such other address as CB&T
may direct, in lawful money of the United States, and to perform for the benefit
of CB&T, as and for Guarantor's own debt, all Indebtedness of Borrower now
or hereafter owing to or held by CB&T, until the Indebtedness has been
indefeasibly paid in full in accordance with Section 12 hereof. As used
herein, the term "Indebtedness" is used in its most comprehensive sense and
shall mean and include without limitation: (a) any and all debts, duties,
obligations, liabilities, representations, warranties and guaranties of Borrower
under that certain Loan and Security Agreement of even date herewith heretofore,
now, or hereafter made, incurred, or created, however arising, whether voluntary
or involuntary, due or not due, absolute or contingent, liquidated or
unliquidated, certain or uncertain, determined or undetermined, monetary or
nonmonetary, written or oral, and whether Borrower may be liable individually
or
jointly with others, and regardless of whether recovery thereon may be or
hereafter become barred by any statute of limitations, discharged or
uncollectible in any bankruptcy, insolvency or other proceeding, or otherwise
unenforceable; and (b) any and all amendments and modifications, of
any or
all of the foregoing, including without limitation amendments and modifications
which are evidenced by any new or additional instruments, documents or
agreements; and (c) any and all attorneys' fees, court costs, and
collection charges incurred in endeavoring to collect or enforce any of the
foregoing against Borrower, Guarantor, or any other person liable thereon
(whether or not suit be brought) and any other expenses of, for or incidental
to
collection thereof; provided,
however,
that
unless this Guaranty is renewed by Guarantor, Indebtedness shall not include
any
of the foregoing relating to loans made by CB&T to Borrower after the date
hereof. As used herein, the term "Borrower" shall include any successor to
the
business and assets of Borrower, and shall also include Borrower in its capacity
as a debtor or debtor in possession under the federal Bankruptcy Code, and
any
trustee, custodian or receiver for Borrower or any of its assets, should
Borrower hereafter become the subject of any bankruptcy or insolvency
proceeding, voluntary or involuntary; and all indebtedness, liabilities and
obligations incurred by any such person shall be included in the Indebtedness
guaranteed hereby. This Guaranty is given in consideration for credit and other
financial accommodations which may, from time to time, be given by CB&T to
Borrower in CB&T's sole discretion, but Guarantor acknowledges and agrees
that acceptance by CB&T of this Guaranty shall not constitute a commitment
of any kind by CB&T to extend such credit or other financial accommodation
to Borrower or to permit Borrower to incur Indebtedness to
CB&T.
2. Performance
Under This Guaranty.
In the
event that Borrower fails to make any payment of any Indebtedness on or before
the due date thereof, or perform, keep, observe or fulfill any obligation,
agreement or covenant included in the Indebtedness on or before the due date
thereof, Guarantor immediately shall cause such Indebtedness to by paid,
performed, kept, observed, or fulfilled, as the case may be.
3. Waivers.
Guarantor hereby waives: (a) presentment for payment, notice of dishonor,
demand, protest, and notice thereof as to any instrument, and, to the extent
permitted by law, all other notices and demands to which Guarantor might be
entitled, including without limitation notice of all of the following: the
acceptance hereof; the creation, existence, or acquisition of any Indebtedness;
the amount of the Indebtedness from time to time outstanding; any foreclosure
sale or other disposition of any property which secures any or all of the
Indebtedness or which secures the obligations of any other guarantor of any
or
all of the Indebtedness; any adverse change in Borrower's financial position;
any other fact which might increase Guarantor's risk; any default, partial
payment or non-payment of all or any part of the Indebtedness; the occurrence
of
any other Event of Default (as hereinafter defined); any and all agreements
and
arrangements between CB&T and Borrower and any changes, modifications, or
extensions thereof, and any revocation, modification or release of any guaranty
of any or all of the Indebtedness by any person (including without limitation
any other person signing this Guaranty); (b) any right to require CB&T
to institute suit against, or to exhaust its rights and remedies against,
Borrower or any other person, or to proceed against any property of any kind
which secures all or any part of the Indebtedness, or to exercise any right
of
offset or other right with respect to any reserves, credits or deposit accounts
held by or maintained with CB&T or any indebtedness of CB&T to Borrower,
or to exercise any other right or power, or pursue any other remedy CB&T may
have; (c) any defense arising by reason of any disability or other defense
of Borrower or any other guarantor or any endorser, co-maker or other person
(other than payment in full of the Indebtedness), or by reason of the cessation
from any cause whatsoever of any liability of Borrower or any other guarantor
or
any endorser, co-maker or other person, with respect to all or any part of
the
Indebtedness, or by reason of any act or omission of CB&T or others which
directly or indirectly results in the discharge or release of Borrower or any
other guarantor or any other person or any Indebtedness or any security
therefor, whether by operation of law or otherwise; (d) any defense
arising
by reason of any failure of CB&T to obtain, perfect, maintain or keep in
force any security interest in, or lien or encumbrance upon, any property of
Borrower or any other person; (e) any defense based upon any failure
of
CB&T to give Guarantor notice of any sale or other disposition of any
property securing any or all of the Indebtedness, or any defects in any such
notice that may be given, or any failure of CB&T to comply with any
provision of applicable law in enforcing any security interest in or lien upon
any property securing any or all of the Indebtedness including, but not limited
to, any failure by CB&T to dispose of any property securing any or all of
the Indebtedness in a commercially reasonable manner; (f) any defense
based
upon or arising out of any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, liquidation or dissolution proceeding commenced by or
against Borrower or any other guarantor or any endorser, co-maker or other
person, including without limitation any discharge of, or bar against
collecting, any of the Indebtedness (including without limitation any interest
thereon), in or as a result of any such proceeding; and (g) the benefit
of
any and all statutes of limitation with respect to any action based upon,
arising out of or related to this Guaranty. Until all of the Indebtedness has
been paid, performed, and discharged in full, nothing shall discharge or satisfy
the liability of Guarantor hereunder except the full performance and payment
of
all of the Indebtedness. If any claim is ever made upon CB&T for repayment
or recovery of any amount or amounts received by CB&T in payment of or on
account of any of the Indebtedness, because of any claim that any such payment
constituted a preferential transfer or fraudulent conveyance, or for any other
reason whatsoever, and CB&T repays all or part of said amount by reason of
any judgment, decree or order of any court or administrative body having
jurisdiction over CB&T or any of its property, or by reason of any
settlement or compromise of any such claim effected by CB&T with any such
claimant (including without limitation the Borrower), then and in any such
event, Guarantor agrees that any such judgment, decree, order, settlement and
compromise shall be binding upon Guarantor, notwithstanding any revocation
or
release of this Guaranty or the cancellation of any note or other instrument
evidencing any of the Indebtedness, or any release of any of the Indebtedness,
and Guarantor shall be and remain liable to CB&T under this Guaranty for the
amount so repaid or recovered, to the same extent as if such amount had never
originally been received by CB&T, and the provisions of this sentence shall
survive, and continue in effect, notwithstanding any revocation or release
of
this Guaranty. Until such time as the Indebtedness is paid in full, Guarantor
hereby expressly and unconditionally postpones all rights of subrogation,
reimbursement and indemnity of every kind against Borrower, and all rights
of
recourse to any assets or property of Borrower, and all rights to any collateral
or security held for the payment and performance of any Indebtedness, including
(but not limited to) any of the foregoing rights which Guarantor may have under
any present or future document or agreement with any Borrower or other person,
and including (but not limited to) any of the foregoing rights which Guarantor
may have under any equitable doctrine of subrogation, implied contract, or
unjust enrichment, or any other equitable or legal doctrine. Neither CB&T,
nor any of its directors, officers, employees, agents, attorneys or any other
person affiliated with or representing CB&T shall be liable for any claims,
demands, losses or damages, of any kind whatsoever, made, claimed, incurred
or
suffered by Guarantor or any other party through the ordinary negligence of
CB&T, or any of its directors, officers, employees, agents, attorneys or any
other person affiliated with or representing CB&T.
2
4. Consents.
Guarantor hereby consents and agrees that, without notice to or by Guarantor
and
without affecting or impairing in any way the obligations or liability of
Guarantor hereunder, CB&T may, from time to time before or after revocation
of this Guaranty, do any one or more of the following in CB&T's sole and
absolute discretion: (a) accelerate, accept partial payments of, compromise
or settle, renew, extend the time for the payment, discharge, or performance
of,
refuse to enforce, and release all or any parties to, any or all of the
Indebtedness; (b) grant any other indulgence to Borrower or any other
person in respect of any or all of the Indebtedness or any other matter;
(c) accept, release, waive, surrender, enforce, exchange, modify, impair,
or extend the time for the performance, discharge, or payment of, any and all
property of any kind securing any or all of the Indebtedness or any guaranty
of
any or all of the Indebtedness, or on which CB&T at any time may have a
lien, or refuse to enforce its rights or make any compromise or settlement
or
agreement therefor in respect of any or all of such property;
(d) substitute or add, or take any action or omit to take any action
which
results in the release of, any one or more endorsers or guarantors of all or
any
part of the Indebtedness, including, without limitation one or more parties
to
this Guaranty, regardless of any destruction or impairment of any right of
contribution or other right of Guarantor; (e) amend, alter or change
in any
respect whatsoever any term or provision relating to any or all of the
Indebtedness, including the rate of interest thereon; (f) apply any
sums
received from Borrower, any other guarantor, endorser, or co-signer, or from
the
disposition of any collateral or security, to any indebtedness whatsoever owing
from such person or secured by such collateral or security, in such manner
and
order as CB&T determines in its sole discretion, and regardless of whether
such indebtedness is part of the Indebtedness, is secured, or is due and
payable; (g) apply any sums received from Guarantor or from the disposition
of any collateral or security securing the obligations of Guarantor, to any
of
the Indebtedness in such manner and order as CB&T determines in its sole
discretion, regardless of whether or not such Indebtedness is secured or is
due
and payable. Guarantor consents and agrees that CB&T shall be under no
obligation to marshal any assets in favor of Guarantor, or against or in payment
of any or all of the Indebtedness. Guarantor further consents and agrees that
CB&T shall have no duties or responsibilities whatsoever with respect to any
property securing any or all of the Indebtedness which is not in the possession
of CB&T. Without limiting the generality of the foregoing, CB&T shall
have no obligation to monitor, verify, audit, examine, or obtain or maintain
any
insurance with respect to, any property securing any or all of the
Indebtedness.
5. Account
Stated.
CB&T's books and records showing the account between it and the Borrower
shall be admissible in evidence in any action or proceeding as prima facie
proof
of the items therein set forth. CB&T's monthly statements rendered to
Borrower shall be binding upon Guarantor (whether or not Guarantor receives
copies thereof), and shall constitute an account stated between CB&T and
Borrower, unless CB&T receives a written statement of Borrower's exceptions
within 30 days after the statement was mailed to Borrower. Guarantor
assumes full responsibility for obtaining copies of such monthly statements
from
Borrower, if Guarantor desires such copies.
6. Exercise
of Rights and Remedies; Foreclosure of Trust Deeds.
Guarantor consents and agrees that, without notice to or by Guarantor and
without affecting or impairing in any way the obligations or liability of
Guarantor hereunder, CB&T may, from time to time, exercise any right or
remedy it may have with respect to any or all of the Indebtedness or any
property securing any or all of the Indebtedness or any guaranty thereof,
including without limitation, judicial foreclosure, nonjudicial foreclosure,
exercise of a power of sale, and taking a deed, assignment or transfer in lieu
of foreclosure as to any such property, and Guarantor expressly waives any
defense based upon the exercise of any such right or remedy, notwithstanding
the
effect thereof upon any of Guarantor's rights, including without limitation,
any
destruction of Guarantor's right of subrogation against Borrower and any
destruction of Guarantor's right of contribution or other right against any
other guarantor of any or all of the Indebtedness or against any other person,
whether by operation of Sections 580a, 580d or 726 of the California
Code
of Civil Procedure, or any comparable provisions of the laws of any other
jurisdiction, or any other statutes or rules of law now or hereafter in effect,
or otherwise. Pursuant to Section 2856 of the California Civil Code,
Guarantor waives all rights and defenses that Guarantor may have because the
Indebtedness is secured by real property. This means, among other things:
(a) CB&T may collect from Guarantor without first foreclosing on any
real or personal property collateral pledged by Borrower or any other guarantor;
and (b) if CB&T forecloses on any real property collateral pledged by
Borrower or any other guarantor: (i) the amount of the Indebtedness
may be
reduced only by the price for which that collateral is sold at the foreclosure
sale, even if the collateral is worth more than the sale price; and
(ii) CB&T may collect from Guarantor even if CB&T, by foreclosing
on such real property collateral, has destroyed any right Guarantor may have
to
collect from Borrower or such other guarantor. This is an unconditional and
irrevocable waiver of any rights and defenses Guarantor may have because the
Indebtedness is secured by real property. These rights and defenses include,
but
are not limited to, any rights or defenses based upon Section 580a,
580b,
580d, or 726 of the California Code of Civil Procedure.
3
7. Right
to Attachment Remedy.
Guarantor agrees that, notwithstanding the existence of any property securing
any or all of the Indebtedness, CB&T shall have all of the rights of an
unsecured creditor of Guarantor, including without limitation the right to
obtain a temporary protective order and writ of attachment against Guarantor
with respect to any sums due under this Guaranty. Guarantor further agrees
that
in the event any property secures the obligations of Guarantor under this
Guaranty, to the extent that CB&T, in its sole and absolute discretion,
determines prior to the disposition of such property that the amount to be
realized by CB&T therefrom may be less than the indebtedness of the
Guarantor under this Guaranty, CB&T shall have all the rights of an
unsecured creditor against Guarantor, including without limitation the right
of
CB&T, prior to the disposition of said property, to obtain a temporary
protective order and writ of attachment against Guarantor. Guarantor waives
the
benefit of Section 483.010(b) of the California Code of Civil Procedure and
of
any and all other statutes and rules of law now or hereafter in effect requiring
CB&T to first resort to or exhaust all such collateral before seeking or
obtaining any attachment remedy against Guarantor. CB&T shall have no
liability to Guarantor as a result thereof, whether or not the actual deficiency
realized by CB&T is less than the anticipated deficiency on the basis of
which CB&T obtains a temporary protective order or writ of
attachment.
8. Indemnity.
Guarantor hereby agrees to indemnify and hold CB&T harmless from and against
any and all claims, debts, liabilities, demands, obligations, actions, causes
of
action, penalties, costs and expenses (including without limitation attorneys'
fees), of every nature, character and description, which CB&T may sustain or
incur based upon or arising out of any of the Indebtedness, any actual or
alleged failure to collect and pay over any withholding or other tax relating
to
Borrower or its employees, any relationship or agreement between CB&T and
Borrower, any actual or alleged failure of CB&T to comply with any writ of
attachment or other legal process relating to Borrower or any of its property,
or any other matter, cause or thing whatsoever occurred, done, omitted or
suffered to be done by CB&T relating in any way to Borrower or the
Indebtedness (except any such amounts sustained or incurred as the result of
the
gross negligence or willful misconduct of CB&T or any of its directors,
officers, employees, agents, attorneys, or any other person affiliated with
or
representing CB&T). Notwithstanding any provision in this Guaranty to the
contrary, the indemnity agreement set forth in this Section shall survive any
termination or revocation of this Guaranty and shall for all purposes continue
in full force and effect.
9. Subordination.
Any and
all rights of Guarantor under any and all debts, liabilities and obligations
owing from Borrower to Guarantor, including any security for and guaranties
of
any such obligations, whether now existing or hereafter arising, are hereby
subordinated in right of payment to the prior payment in full of all of the
Indebtedness. Notwithstanding the foregoing, until an Event of Default has
occurred, Guarantor may receive payments in respect of any such subordinated
obligations while Indebtedness is outstanding. If any Event of Default has
occurred, Borrower and any assignee, trustee in bankruptcy, receiver, or any
other person having custody or control over any or all of Borrower's property
are hereby authorized and directed to pay to CB&T the entire unpaid balance
of the Indebtedness before making any payments whatsoever to Guarantor, whether
as a creditor, shareholder, or otherwise; and insofar as may be necessary for
that purpose, Guarantor hereby assigns and transfers to CB&T solely as
security for the obligations of Guarantor under this Section 9 all rights
to any and all debts, liabilities and obligations owing from Borrower to
Guarantor, including any security for and guaranties of any such obligations,
whether now existing or hereafter arising, including without limitation any
payments out of the business or assets of Borrower. Any amounts received by
Guarantor in violation of the foregoing provisions shall be received and held
as
trustee for the benefit of CB&T and shall forthwith be paid over to CB&T
to be applied to the Indebtedness in such order and sequence as CB&T shall
in its sole discretion determine, without limiting or affecting any other right
or remedy which CB&T may have hereunder or otherwise and without otherwise
affecting the liability of Guarantor hereunder. Guarantor hereby expressly
waives any right to set-off or assert any counterclaim against
Borrower.
4
10. Continuing
Guaranty.
This
Guaranty includes Indebtedness arising under successive transactions continuing,
compromising, extending, increasing, modifying, releasing, or renewing the
Indebtedness, changing the interest rate, payment terms, or other terms and
conditions thereof, or creating new or additional Indebtedness after prior
Indebtedness has been satisfied in whole or in part. Guarantor hereby waives
and
agrees not to assert any right Guarantor has under Section 2815 of the
California Civil Code, or otherwise, to revoke this Guaranty as to future
Indebtedness.
11. Independent and
Primary Liability.
This
Guaranty is a primary and original obligation of Guarantor, is not merely the
creation of a surety relationship, and is an absolute, unconditional, and
continuing guaranty of payment and performance which shall remain in full force
and effect without respect to future changes in conditions, including any change
of law or any invalidity or irregularity with respect to any of the agreements
between Borrower and CB&T. Guarantor agrees that Guarantor is severally and
not jointly and severally liable, with any other guarantor of the Indebtedness,
to CB&T, to the extent set forth in Section 2 hereof, that the
obligations of Guarantor hereunder are independent of the obligations of
Borrower or any other guarantor, and that a separate action may be brought
against Guarantor whether such action is brought against Borrower or any other
guarantor or whether Borrower or any such other guarantor is joined in such
action. Guarantor agrees that Guarantor's liability hereunder shall be immediate
and shall not be contingent upon the exercise or enforcement by CB&T of
whatever remedies it may have against Borrower or any other guarantor, or the
enforcement of any lien or realization upon any security CB&T may at any
time possess. Guarantor agrees that any release which may be given by CB&T
to Borrower or any other guarantor shall not release Guarantor (other than
as a
result of payment in full of the Indebtedness). The liability of Guarantor
hereunder shall not be affected, revoked, impaired, or reduced by any one or
more of the following: (a) any direction as to the application of payment
by Borrower or by any other party; or (b) any other continuing or
restrictive guaranty or undertaking or any limitation on the liability of any
other guarantor (whether under this Guaranty or under any other agreement);
or
(c) any payment on or reduction of any such other guaranty or undertaking;
or (d) any revocation, amendment, modification or release of any such
other
guaranty or undertaking. Guarantor hereby expressly represents that he was
not
induced to give this Guaranty by the fact that there are or may be other
guarantors either under this Guaranty or otherwise, and Guarantor agrees that
any release of any one or more of such other guarantors shall not release
Guarantor from his obligations hereunder either in full or to any lesser
extent.
12. Indefeasible
Payment.
The
Indebtedness shall not be considered indefeasibly paid for purposes of this
Guaranty unless and until all payments to CB&T are no longer subject to any
right on the part of any person, including Borrower, Borrower as a debtor in
possession, or any trustee (whether appointed under the Bankruptcy Code or
otherwise) of any of Borrower's assets, to invalidate or set aside such payments
or to seek to recoup the amount of such payments or any portion thereof, or
to
declare same to be fraudulent or preferential. In the event that, for any
reason, any portion of such payments to CB&T is set aside or restored,
whether voluntarily or involuntarily, after the making thereof, then the
obligation intended to be satisfied thereby shall be revived and continued
in
full force and effect as if said payment or payments had not been made, and
Guarantor shall be liable for the full amount CB&T is required to repay plus
any and all costs and expenses (including attorneys' fees and expenses and
attorneys' fees and expenses incurred pursuant to proceedings arising under
the
Bankruptcy Code) paid by CB&T in connection therewith.
13. Financial
Condition of Borrower.
Guarantor is fully aware of the financial condition of Borrower and is executing
and delivering this Guaranty at Borrower's request and based solely upon his
own
independent investigation of all matters pertinent hereto, and Guarantor is
not
relying in any manner upon any representation or statement of CB&T with
respect thereto. Guarantor represents and warrants that he is in a position
to
obtain, and Guarantor hereby assumes full responsibility for obtaining, any
additional information concerning Borrower's financial condition and any other
matter pertinent hereto as Guarantor may desire, and Guarantor is not relying
upon or expecting CB&T to furnish to him any information now or hereafter in
CB&T's possession concerning the same or any other matter. By executing this
Guaranty, Guarantor knowingly accepts the full range of risks encompassed within
a contract of continuing guaranty, which risks Guarantor acknowledges include
without limitation the possibility that Borrower will incur additional
Indebtedness for which Guarantor will be liable hereunder after Borrower's
financial condition or ability to pay such Indebtedness has deteriorated and/or
after bankruptcy or insolvency proceedings have been commenced by or against
Borrower. Guarantor shall have no right to require CB&T to obtain or
disclose any information with respect to the Indebtedness, the financial
condition or character of Borrower, the existence of any collateral or security
for any or all of the Indebtedness, the filing by or against Borrower of any
bankruptcy or insolvency proceeding, the existence of any other guaranties
of
all or any part of the Indebtedness, any action or non-action on the part of
CB&T, Borrower, or any other person, or any other matter, fact, or
occurrence.
5
14. Reports
and Financial Statements of Guarantor.
Guarantor shall, at its sole cost and expense, at any time and from time to
time, prepare or cause to be prepared, and provide to CB&T upon CB&T's
request (i) within ninety (90) days of the end of each fiscal year,
copies
of the Guarantor’s annual audited financial statements and reports concerning
Guarantor for such periods of time as CB&T may designate, (ii) within
thirty (30) days of the end of each month, copies of the Guarantor’s interim
financial statements (iii) any other information concerning Guarantor's
business, financial condition or affairs as CB&T may request, and
(iv) within fifteen (15) days after the filing thereof, copies of any
and
all foreign, federal, state and local tax returns and reports of or relating
to
Guarantor as CB&T may from time to time request. Guarantor hereby
intentionally and knowingly waives any and all rights and privileges it may
have
not to divulge or deliver said tax returns, reports and other information which
are requested by CB&T hereunder or in any litigation in which CB&T may
be involved relating directly or indirectly to Borrower or to Guarantor.
Guarantor further agrees immediately to give written notice to CB&T of any
adverse change in Guarantor's financial condition. All reports and information
furnished to CB&T hereunder shall be complete, accurate and correct in all
respects. Whenever requested, Guarantor shall further deliver to CB&T a
certificate signed by Guarantor warranting and representing that all reports,
financial statements and other documents and information delivered or caused
to
be delivered to CB&T under this Guaranty, are complete, correct and
thoroughly and accurately present the financial condition of Guarantor, and
that
there exists on the date of delivery of said certificate to CB&T no
condition or event which constitutes an Event of Default under this
Guaranty.
15. Representations
and Warranties.
Guarantor hereby represents and warrants to CB&T that: (i) the
execution, delivery and performance of this Guaranty do not result in a breach
of or constitute a default under any contract, obligation, indenture or other
instrument to which Guarantor is a party or by which Guarantor is bound or
affected; and (ii) there is no law, rule or regulation, nor is there any
judgment, decree or order of any court or governmental authority binding on
Guarantor which would be contravened by the execution, delivery, performance
or
enforcement of this Guaranty and the other agreements, instruments and documents
executed by Guarantor in connection herewith (collectively, with this Guaranty,
the "Guarantor Loan Documents"). Upon their execution and delivery in accordance
with their respective terms, the Guarantor Loan Documents will constitute legal,
valid and binding agreements and obligations of Guarantor enforceable against
Guarantor in accordance with their respective terms, except as enforceability
may be limited by bankruptcy, insolvency, fraudulent conveyance, and similar
laws and equitable principles affecting the enforcement of creditors' rights
generally; (iv) no approval, consent, exemption or other action by, or notice
to
or filing with, any governmental authority is necessary in connection with
the
execution, delivery, performance or enforcement of the Guarantor Loan Documents;
and (v) it is in Guarantor's direct interest to assist Borrower in procuring
credit, because Borrower is an affiliate of Guarantor, furnishes goods or
services to Guarantor, purchases or acquires goods or services from Guarantor,
and/or otherwise has a direct or indirect corporate or business relationship
with Guarantor.
16. Financial
Covenants and Other Covenants.
(a) Guarantor
shall maintain at all times a maximum Total Liabilities to Tangible Net Worth
ratio of 0.75:1.00, measured quarterly or such other ratio as CB&T may
approve in writing following any merger, consolidation or acquisition approved
by CB&T or any Permitted Acquisition;
(b) Guarantor
shall not experience two (2) consecutive quarterly pre-tax losses (exclusive
of
any expense associated with goodwill impairment) measured quarterly;
and
(c) Guarantor
shall not experience a pre-tax loss in any fiscal year (exclusive of any expense
associated with goodwill impairment).
(d) Guarantor
shall not merge or consolidated with or acquire any other person without
CB&T’s prior written consent other than the Permitted
Acquisitions.
(e) Guarantor
shall not declare or pay cash dividends upon any of its stock or distribute
any
of its property or redeem, retire, purchase or acquire directly or indirectly
any of its stock; provided,
however,
Guarantor may declare or pay cash dividends upon its stock or distribute any
of
its property or redeem, retire, purchase or acquire directly or indirectly
any
of its stock so long as such cash dividends, property distributions, or stock
redemptions, retirements or purchases do not exceed Guarantor’s annual net
profit to be measured on an annual basis.
6
“Permitted
Acquisitions”
means
acquisitions made by the Guarantor that do not exceed Five Million Dollars
($5,000,000) in the aggregate in any fiscal year.
“Tangible
Net Worth”
means
the book value of Guarantor’s assets, less,
goodwill, patents, trademarks, copyrights, franchises, formulas, leasehold
interests, leasehold improvements, non-compete agreements, engineering plans,
deferred tax benefits, organization costs, amounts due from affiliates, and
any
other assets of Guarantor that would be treated as intangible assets on
Guarantor's balance sheet prepared in accordance with GAAP, less
Total
Liabilities.
“Total
Liabilities”
means,
as of the date of determination, all obligations of the Guarantor that should
be
classified as liabilities on a balance sheet in accordance with GAAP.
Notwithstanding
the foregoing, no default shall exist with respect to Guarantor not satisfying
Section 16(a), (b) and (e) as a result of an acquisition, consolidation
or
merger not approved by CB&T for a period of three (3) months from the date
of such acquisition, consolidation or merger.
17. Costs.
Whether
or not suit be instituted, Guarantor agrees to reimburse CB&T on demand for
all attorneys' fees and all other costs and expenses incurred by CB&T in
enforcing this Guaranty, or arising out of or relating in any way to this
Guaranty, or in enforcing any of the Indebtedness against Borrower, Guarantor,
or any other person, or in connection with any property of any kind securing
all
or any part of the Indebtedness. Without limiting the generality of the
foregoing, and in addition thereto, Guarantor shall reimburse CB&T on demand
for all attorneys' fees and costs CB&T incurs in any way relating to
Guarantor, Borrower or the Indebtedness, in order to: obtain legal advice;
enforce or seek to enforce any of its rights; commence, intervene in, respond
to, or defend any action or proceeding; file, prosecute or defend any claim
or
cause of action in any action or proceeding (including without limitation any
probate claim, bankruptcy claim, third-party claim, secured creditor claim,
reclamation complaint, and complaint for relief from any stay under the
Bankruptcy Code or otherwise); protect, obtain possession of, sell, lease,
dispose of or otherwise enforce any security interest in or lien on any property
of any kind securing any or all of the Indebtedness; or represent CB&T in
any litigation with respect to Borrower's or Guarantor's affairs. In the event
either CB&T or Guarantor files any lawsuit against the other predicated on a
breach of this Guaranty, the prevailing party in such action shall be entitled
to recover its attorneys' fees and costs of suit from the non-prevailing
party.
18. Notices.
Any
notice which a party shall be required or shall desire to give to the other
hereunder (except for notice of revocation, which shall be governed by Section
10 of this Guaranty) shall be given by personal delivery or by telecopier or
by
depositing the same in the United States mail, first class postage pre-paid,
addressed to CB&T at its address set forth in the heading of this Guaranty
and to Guarantor at his address set forth under his signature hereon, and such
notices shall be deemed duly given on the date of personal delivery or one
day
after the date telecopied or three business days after the date of mailing
as
aforesaid. CB&T and Guarantor may change their address for purposes of
receiving notices hereunder by giving written notice thereof to the other party
in accordance herewith. Guarantor shall give CB&T immediate written notice
of any change in his address.
19. Claims.
Guarantor agrees that any claim or cause of action by Guarantor against
CB&T, or any of CB&T's directors, officers, employees, agents,
accountants or attorneys, based upon, arising from, or relating to this
Guaranty, or any other present or future agreement between CB&T and
Guarantor or between CB&T and Borrower, or any other transaction
contemplated hereby or thereby or relating hereto or thereto, or any other
matter, cause or thing whatsoever, whether or not relating hereto or thereto,
occurred, done, omitted or suffered to be done by CB&T, or by CB&T's
directors, officers, employees, agents, accountants or attorneys, whether
sounding in contract or in tort or otherwise, shall be barred unless asserted
by
Guarantor by the commencement of an action or proceeding in a court of competent
jurisdiction within Los Angeles County, California, by the filing of a complaint
within one year after the first act, occurrence or omission upon which such
claim or cause of action, or any part thereof, is based and service of a summons
and complaint on an officer of CB&T or any other person authorized to accept
service of process on behalf of CB&T, within 30 days thereafter. Guarantor
agrees that such one year period is a reasonable and sufficient time for
Guarantor to investigate and act upon any such claim or cause of action. The
one
year period provided herein shall not be waived, tolled, or extended except
by a
specific written agreement of CB&T. This provision shall survive any
termination of this Guaranty or any other agreement.
7
20. Construction; Severability.
If more
than one person has executed this Guaranty, the term "Guarantor" as used herein
shall be deemed to refer to all and any one or more such persons and their
obligations hereunder shall be joint and several. Without limiting the
generality of the foregoing, if more than one person has executed this Guaranty,
this Guaranty shall in all respects be interpreted as though each person signing
this Guaranty had signed a separate Guaranty, and references herein to "other
guarantors" or words of similar effect shall include without limitation other
persons signing this Guaranty. As used in this Guaranty, the term "property"
is
used in its most comprehensive sense and shall mean all property of every kind
and nature whatsoever, including without limitation real property, personal
property, mixed property, tangible property and intangible property. Words
used
herein in the masculine gender shall include the neuter and feminine gender,
words used herein in the neuter gender shall include the masculine and feminine,
words used herein in the singular shall include the plural and words used in
the
plural shall include the singular, wherever the context so reasonably requires.
If any provision of this Guaranty or the application thereof to any party or
circumstance is held invalid, void, inoperative or unenforceable, the remainder
of this Guaranty and the application of such provision to other parties or
circumstances shall not be affected thereby, the provisions of this Guaranty
being severable in any such instance.
21. General
Provisions.
CB&T shall have the right to seek recourse against Guarantor to the full
extent provided for herein and in any other instrument or agreement evidencing
obligations of Guarantor to CB&T, and against Borrower to the full extent of
the Indebtedness. No election in one form of action or proceeding, or against
any party, or on any obligation, shall constitute a waiver of CB&T's right
to proceed in any other form of action or proceeding or against any other party.
The failure of CB&T to enforce any of the provisions of this Guaranty at any
time or for any period of time shall not be construed to be a waiver of any
such
provision or the right thereafter to enforce the same. All remedies hereunder
shall be cumulative and shall be in addition to all rights, powers and remedies
given to CB&T by law or under any other instrument or agreement. Time is of
the essence in the performance by Guarantor of each and every obligation under
this Guaranty. If Borrower is a corporation, partnership or other entity,
Guarantor hereby agrees that CB&T shall have no obligation to inquire into
the power or authority of Borrower or any of its officers, directors, partners,
or agents acting or purporting to act on its behalf, and any Indebtedness made
or created in reliance upon the professed exercise of any such power or
authority shall be included in the Indebtedness guaranteed hereby. This Guaranty
is the entire and only agreement between Guarantor and CB&T with respect to
the guaranty of the Indebtedness of Borrower by Guarantor, and all
representations, warranties, agreements, or undertakings heretofore or
contemporaneously made, which are not set forth herein, are superseded hereby.
No course of dealings between the parties, no usage of the trade, and no parole
or extrinsic evidence of any nature shall be used or be relevant to supplement
or explain or modify any term or provision of this Guaranty. There are no
conditions to the full effectiveness of this Guaranty. The terms and provisions
hereof may not be waived, altered, modified, or amended except in a writing
executed by Guarantor and a duly authorized officer of CB&T. All rights,
benefits and privileges hereunder shall inure to the benefit of and be
enforceable by CB&T and its successors and assigns and shall be binding upon
Guarantor and his heirs, executors, administrators, personal representatives,
successors and assigns. Section headings are used herein for convenience only.
Guarantor acknowledges that the same may not describe completely the subject
matter of the applicable Section, and the same shall not be used in any manner
to construe, limit, define or interpret any term or provision
hereof.
22. Governing
Law; Venue and Jurisdiction.
This
instrument and all acts and transactions pursuant or relating hereto and all
rights and obligations of the parties hereto shall be governed, construed,
and
interpreted in accordance with the internal laws of the State of California
without regard for principles of conflicts of laws. In order to induce CB&T
to accept this Guaranty, and as a material part of the consideration therefor,
Guarantor (i) agrees that all actions or proceedings relating directly
or
indirectly hereto shall, at the option of CB&T, be litigated in courts
located within Los Angeles County, California; (ii) consents to the
jurisdiction of any such court and consents to the service of process in any
such action or proceeding by personal delivery or any other method permitted
by
law; and (iii) waives any and all rights Guarantor may have to transfer
or
change the venue of any such action or proceeding.
8
23. Mutual
Waiver of Right to Jury Trial.
CB&T AND GUARANTOR HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION,
CLAIM, LAWSUIT OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATING
TO: (i) THIS GUARANTEE OR ANY SUPPLEMENT OR AMENDMENT THERETO; OR (ii) ANY
BREACH, CONDUCT, ACTS OR OMISSIONS OF CB&T OR GUARANTOR OR ANY OF THEIR
RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSON
AFFILIATED WITH OR REPRESENTING CB&T OR GUARANTOR; IN EACH OF THE FOREGOING
CASES, WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE
24. Receipt
of Copy.
Guarantor acknowledges receipt of a copy of this Guaranty.
COLLECTORS-UNIVERSE,
INC.
a
Delaware Corporation
|
By:
|
|
Name:
|
|
Title
|
ACCEPTED
AND AGREED
CALIFORNIA
BANK & TRUST
a
California banking corporation
|
By:
|
|
Name:
|
|
Title
|
9
