HomeMy WebLinkAbout1995-06-27; Industrial Development Authority; 002 Exhibit 11; Unconditional Guaranty AgreementUNCONDITIONAL GUARANTY AGREEMENT
Among
JEFFREY C. "N, as an individual and as
Trustee of the J.C. "N FAMILY TRUST, UTD 12/23/83, GREGG "N, as an individual and as Trustee of the GREGG "N FAMILY TRUST, UTD 4/25/86, DANIEL M. WHITAKER, as an individual, DANIEL M. WHITAKER and/or DONA C. WHITAKER, as Co-Trustees
of the WHITAKER FAMILY TRUST, UTD 10/22/79,
as Amended and Restated 12/22/83
and
FIRST INTERSTATE BANK OF CALIFORNIA
Dated as of July 1, 1995
TABLE OF CONTENTS
RECITALS .............................. 1
ARTICLE I: NATURE AND SCOPE OF GUARANTY .............. 3
Sect ion
Section
Section
Section
Section
Section
Section
Section
Section
Section
1.01. Definition of Guaranteed Debt ...... 3
1.02. Guaranteed Debt Not Reduced by Offset . . 3
1.03. Guaranty of Obligation .......... 3
1.04. Nature of Guaranty ............ 3
1.05. Payment by Guarantor ........... 4
1.06. Payment of Expenses ........... 4
1.07. No Duty to Pursue Others ......... 4
1.08. Statutory Waiver of Rights and Defenses Regarding Election of Remedies ...... 5
1.09. Waiver of Notices, etc .......... 5
1.10. Effect of Bankruptcy, Other Matters ... 6
ARTICLE 11: ADDITIONAL EVENTS AND CIRCUMSTANCES NOT REDUCING OR
DISCHARGING GUARANTOR’S OBLIGATIONS .......... 6
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Sect ion
Section
Section
2.01.
2.02.
2.03.
2.04.
2.05.
2.06.
2.07.
2.08.
2.09.
2.10.
2.11.
2.12.
2.13.
Modifications. etc ............ 6 Adjustment. etc ............. 7 Condition. Composition or Structure of the Issuer or any Guarantor ....... 7 Invalidity of Guaranteed Debt ...... 7
Release of Obligors ........... 7
Other Security .............. 8 Release of Collateral. etc ........ 8 Care and Diligence ............ 8 Status of Liens ............. 9 Offset .................. 9 Merger .................. 9 Preference ................ 9 Other Actions Taken or Omitted ...... 9
ARTICLE 111: REPRESENTATIONS AND WARRANTIES ............ 10
Section
Section
Section
Section
Section
Section Section Section Section Section Section
Section
3.01.
3.02.
3.03.
3.04.
3.05.
3.06.
3.07.
3.08.
3.09.
3.10.
3.11.
3.12.
Benefit ................. 10 Familiarity and Reliance ......... 10 Financial Condition ........... 10 No Representation by Bank ........ 11 Guarantor’s Financial Condition ..... 11 Determination of Benefit ......... 11 Legality ................. 11
Survival ................. 11
Existence and Authority ......... 11
Financial Statements ........... 12 Litigation and Judgments ......... 12 Approvals ................ 12
LAOU80267.1
06-01 -95
Section 3.13. Taxes .................. 12
Section 3.14. Disclosure ................ 12
Section 3.15. Contracts ................ 13
Section 3.16. Compliance with Law ........... 13
Section 3.17. Authority of Borrower Regarding Loan ... 13
Section 3.18. Hazardous Substances ........... 13
ARTICLE IV: POSITIVE COVENANTS ................... 13
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
Section
4.01.
4.02.
4.03.
4.04.
4.05.
4.06.
4.07.
4.08.
4.09.
4.10.
4.11.
Financial Statements ........... 14 Performance of Obligations ........ 14 Maintenance of Properties ........ 14 Payment of Taxes and Claims ....... 14 Insurance ................ 15 Compliance with Laws ........... 15 Compliance with Agreements ........ 15 Notices ................. 15 Further Assurances ............ 15 Environmental Matters .......... 16 Maintenance of Net Worth ......... 17
ARTICLEV: DEFAULT ........................ 17
Section 5.01. Events of Default ............ 17
Section 5.02. Remedies Upon Default .......... 19
ARTICLE VI: SUBORDINATION OF CERTAIN INDEBTEDNESS ......... 20
Section 6.01. Subordination of Guarantor Claims .... 20
Section 6.02. Claims in Bankruptcy ........... 21
Section 6.03. Payments Held in Trust .......... 21
Section 6.04. Liens Subordinate ............ 21
Section 6.05. Notation of Records ........... 22
LAOU80267.1
06-01-95
ARTICLE VII: MISCELLANEOUS ..................... 22
Section 7.01.
Section 7.02.
Section 7.03.
Section 7.04.
Section 7.05.
Section 7.06.
Section 7.07.
Section 7.08.
Section 7.09.
Section 7.10.
Section 7.11.
Section 7.12.
Waiver .................. 22
Notices ................. 22
Governing Law .............. 23
Arbitration ............... 24
Invalid Provisions ............ 27
Entirety and Amendments ......... 27
Parties Bound: Assignment ........ 27
Headings ................. 27
Multiple Counterparts .......... 28
Rights and Remedies ........... 28
Costs and Expenses ............ 28
WAIVER OF JURY TRIAL ........... 28
EXHIBIT A DEFINITIONS
EXHIBIT B DEBT OF EACH GUARANTOR
EXHIBIT C THE PROPERTY
EXHIBIT D PROJECTIONS
LA01/80267.1
06-01-95
UNCONDITIONAL GUARANTY AGREEMENT
This GUARANTY AGREEMENT is executed as of July 1, 1995,
by JEFFREY C. HAMANN, as an individual and as Trustee of the J.C.
"N FAMILY TRUST, UTD 12/23/83, GREGG HAMA", as an individual
and as Trustee of the GREGG "N FAMILY TRUST, UTD 4/25/86, DANIEL M. WHITAKER, as an individual, DANIEL M. WHITAKER and/or DONA C. WHITAKER, as Co-Trustees of the WHITAKER FAMILY TRUST,
UTD 10/22/79, (the foregoing entities are referred to herein,
jointly and severally, as IlGuarantorIl and each use of the term IIGuarantor" or reference thereto shall mean or be a reference to
each of such persons, jointly and severally) for the benefit of
First Interstate Bank of California and its successors and assigns (in such capacity, the IlBankIl). Unless otherwise defined
herein, capitalized terms used in this Guaranty Agreement shall
have the meaning assigned to such term in Exhibit A hereto.
RE C I TALS
WHEREAS, the Industrial Development Authority of the
City of Carlsbad, a public instrumentality duly organized and
validly existing under the laws of the State of California (the
lfIssuerlt) intends to issue its $1,102,500.00 Industrial Revenue
Bonds, Series 1995 (Aalto Project) dated as of July 1, 1995 (the
I1Bondstt ) ; and
WHEREAS, the Bonds are to be issued under and pursuant
to a Trust Indenture dated as of July 1, 1995 (the ltIndenturel1), executed by and between the Issuer, as issuer, and First Interstate Bank of California, as trustee (in such capacity, the
ltTrusteell) ; and
WHEREAS, the Issuer has entered into a Loan Agreement
dated as of July 1, 1995 (the "Loan Agreementt1) between the
Issuer and CIP Limited, L.P., a California Limited Partnership (lIBorrowerlt) providing for, among other things, the agreement of
the Issuer to loan to the Borrower the proceeds of the Bonds to
finance the construction, including repayment of any interim construction financing, of a manufacturing facility (the tlFacilitv") to be constructed on certain real property located in San Diego County, California and identified on Exhibit C hereto (the ItPropertylt) ; and
WHEREAS, Borrower has executed a Deed of Trust and Security Agreement dated as of July 1, 1995 (the "Deed of Trustll) in favor of the Trustee, pursuant to which Borrower grants certain liens and security interests in the Property, the Facility to the Trustee to secure payment and performance of the Bonds; and
LA01/80267.1
06- 01 -95 -1-
WHEREAS, the Bank desires to purchase the Bonds
subject, among other things, to the execution and delivery by each of the Guarantors of this Guaranty Agreement and to the
execution and delivery by the Bank, as purchaser, Borrower, as borrower, and the Issuer, of the Bond Purchase Agreement dated as of July 1, 1995 (the "Bond Purchase Agreementt1); and
WHEREAS, each of the Guarantors desires that the Issuer
issue the Bonds and that the proceeds be applied as aforesaid and is willing to enter into this Guaranty Agreement to enhance the
marketability of the Bonds and induce the Bank to purchase the
Bonds and thereby provide the Bank with funds to apply as
aforesaid and in connection therewith achieve interest cost and
other savings to and for the benefit of Borrower; and
WHEREAS, the Indenture, the Loan Agreement, the Deed of
Trust, the Bond Purchase Agreement and the other Loan Documents, are sometimes collectively referred to herein as the "Bond Documents .
NOW, THEREFORE, as an inducement to the purchase of the
Bonds by all who may at any time become holders of the Bonds, and
for other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, each Guarantor,
jointly and severally, hereby guarantees payment of the
Guaranteed Debt (hereinafter defined) as more specifically
described hereinbelow in Section 1.03 and hereby covenants and
agrees as follows:
LA01/80267.1
06-01-95 -2-
ARTICLE I: NATURE AND SCOPE OF GUARANTY
Section 1.01. Definition of Guaranteed Debt.
As used herein, the term "Guaranteed Debt" means:
(a) All principal, interest, attorneys' fees,
liabilities for costs and expenses and other indebtedness,
obligations and liabilities of the Issuer to the Bank at any time
created or arising in connection with or under the Bonds, and
under any renewals, modifications, increases and extensions of
the Bonds; and
(b) All costs, expenses and fees, including but not
limited to court costs and attorneys' fees, arising in connection
with the collection of any or all amounts, indebtedness,
obligations and liabilities of the Issuer to Bank described in
item (a) of this Section 1.01.
Section 1.02. Guaranteed Debt Not Reduced bv Offset.
The Bonds, and all other indebtedness, liabilities,
obligations and other Guaranteed Debt guaranteed hereby, and the
liabilities and obligations of each Guarantor to Bank hereunder,
shall not be reduced, discharged or released because or by reason
of any existing or future offset, claim or defense of the Issuer,
any Guarantor or any other Person, against Bank or against
payment of the Guaranteed Debt, whether such offset, claim or
defense arises in connection with the Guaranteed Debt (or the
transactions creating the Guaranteed Debt) or otherwise.
Section 1.03. Guarantv of Oblisation.
Each Guarantor, jointly and severally, hereby
irrevocably and unconditionally guarantees to Bank and its
successors and assigns (i) the due and punctual payment of the
Guaranteed Debt, and (ii) the timely performance of all other
obligations now or hereafter owed by the Issuer to Bank in
connection with the Guaranteed Debt. Each Guarantor, jointly and
severally, hereby irrevocably and unconditionally covenants and
agrees that it is liable for the Guaranteed Debt as primary
obligor.
Section 1.04. Nature of Guarantv.
This Guaranty Agreement is intended to be an
irrevocable, absolute, continuing guaranty of payment and is not a guaranty of collection. This Guaranty Agreement may not be revoked by any Guarantor, and shall continue to be effective with respect to any Guaranteed Debt arising or created after any attempted revocation by any Guarantor. The fact that at any time
LA01/80267.1
06-01-95 -3-
or from time to time the Guaranteed Debt may be increased, reduced or paid in full shall not release, discharge or reduce the obligation of any Guarantor with respect to indebtedness or obligations of the Issuer to Bank thereafter incurred (or other Guaranteed Debt thereafter arising) under the Bonds or otherwise. This Guaranty Agreement may be enforced by Bank and any subsequent holder of the Guaranteed Debt and shall not be
discharged by the assignment or negotiation of all or part of the
Guaranteed Debt.
Section 1.05. Pavment bv Guarantor.
If all or any part of the Guaranteed Debt shall not be
punctually paid when due, whether at maturity or earlier by
acceleration or otherwise, Guarantor shall, immediately upon demand by Bank, and without presentment, protest, notice of protest, notice of nonpayment, notice of intention to accelerate or acceleration or any other notice whatsoever, pay in lawful money of the United States of America, the amount due on the
Guaranteed Debt to Bank at Bank's principal office in Los
Angeles, California. Such demand(s) may be made at any time coincident with or after the time for payment of all or part of
the Guaranteed Debt, and may be made from time to time with
respect to the same or different items of Guaranteed Debt. Such
demand shall be deemed made, given and received in accordance
with Section 8.02 hereof.
Section 1.06. Pavment of ExDenses.
In the event that any Guarantor should breach or fail
to timely perform any provision of this Guaranty Agreement, each
Guarantor shall, immediately upon demand by Bank, pay Bank all
costs and expenses (including court costs and reasonable
attorneys' fees) incurred by Bank in the enforcement hereof or
the preservation of Bank's rights hereunder. The covenant contained in this Section 1.06 shall survive the payment of the Guaranteed Debt.
Section 1.07. No Dutv to Pursue Others.
It shall not be necessary for Bank (and each Guarantor
hereby waives any rights which such Guarantor may have to require
Bank), in order to enforce such payment by such Guarantor, first
to (i) demand payment from, or institute suit or exhaust its
remedies against the Issuer, Borrower or others liable on the Guaranteed Debt or any other person, (ii) enforce Bank's rights against any security which shall ever have been given to secure
the Guaranteed Debt, (iii) enforce Bank's rights against any
other guarantors of the Guaranteed Debt, (iv) join the Issuer or
any others liable on the Guaranteed Debt in any action seeking to
enforce this Guaranty Agreement, (v) exhaust any remedies
LA01/80267.1
06-01-95 -4-
available to Bank against any security which shall ever have been
given to secure the Guaranteed Debt, or (vi) resort to any other
means of obtaining payment of the Guaranteed Debt. Bank shall
not be required to mitigate damages or take any other action to
reduce, collect or enforce the Guaranteed Debt. Further, each
Guarantor expressly waives each and every right to which it may
be entitled by virtue of the suretyship law of the state of
California.
Section 1.08. Statutorv Waiver of Rishts and Defenses Resardins Election of Remedies.
Without limiting the generality of any other provision
of this Guaranty Agreement, each Guarantor hereby expressly waives any defense, right of set-off, claim or counterclaim
whatsoever and any and all other rights, benefits, protections
and other defenses available to such Guarantor now or at any time hereafter, including, without limitation, under California Civil Code Sections 2787 to 2855, inclusive, and California Code of Civil Procedure Sections 580a, 580b, 580d or 726, and all successor sections. Each Guarantor waives all rights and defenses arising out of an election of remedies by Bank, even
though that election of remedies, such as a nonjudicial
foreclosure with respect to security for the Guaranteed Debt, has
destroyed such Guarantor's rights of subrogation and
reimbursement against Borrower by the operation of Section 580d
of the California Code of Civil Procedure or otherwise.
Section 1-09. Waiver of Notices, etc.
Each Guarantor agrees to the provisions of the Bonds and the other Bond Documents (and acknowledges that it has had an opportunity to review the same), and hereby waives notice of (i) any loans or advances made by Bank to the Issuer or Borrower, (ii) acceptance of this Guaranty Agreement, (iii) any amendment or extension of the Bonds or the Bond Documents or of any other instrument or document pertaining to all or any part of the Guaranteed Debt, (iv) the occurrence of any breach by the Issuer or event of default in connection with the Guaranteed Debt, the Bonds and any instruments, agreements or security documents with
respect thereto, (v) Bank's transfer or disposition of the
Guaranteed Debt, or any part thereof, (vi) sale or foreclosure
(or posting or advertising for sale or foreclosure) of any
collateral for the Guaranteed Debt, (vii) protest, proof of nonpayment or default by the Issuer, or (viii) any other action at any time taken or omitted by Bank, and, generally, all demands and notices of every kind in connection with this Guaranty Agreement, the Bond Documents and any documents or agreements
evidencing, securing or relating to any of the Guaranteed Debt
and the obligations hereby guaranteed.
LA01/80267.1
06-01-95 -5-
Section 1.10. Effect of BankruDtcv, Other Matters.
In the event that, pursuant to any insolvency, bankruptcy, reorganization, receivership or other debtor relief law, or any judgment, order or decision thereunder, or for any other reason, (i) Bank must rescind or restore any payment, or any part thereof, received by Bank in satisfaction of the Guaranteed Debt, as set forth herein, any prior release or discharge from the terms of this Guaranty Agreement given to any
Guarantor by Bank shall be without effect, and this Guaranty
Agreement shall remain in full force and effect, (ii) the Issuer
shall cease to be liable to Bank for any of the Guaranteed Debt
(other than by reason of the indefeasible payment in full thereof
by the Issuer), the obligations of each Guarantor under this
Guaranty Agreement shall remain in full force and effect. It is
the intention of Bank and each Guarantor that such Guarantor's
obligations hereunder shall not be discharged except by such
Guarantor's performance of such obligations and then only to the
extent of such performance. Without limiting the generality of
the foregoing, it is the intention of Bank and each Guarantor
that the filing of any bankruptcy or similar proceeding by or against the Issuer, Borrower or any other Person obligated on any portion of the Guaranteed Debt shall not affect the obligations
of any Guarantor under this Guaranty Agreement or the rights of
Bank under this Guaranty Agreement, including, without
limitation, the right or ability of Bank to pursue or institute
suit against Guarantor for the entire Guaranteed Debt.
ARTICLE 11: ADDITIONAL EVENTS AND CIRCUMSTANCES NOT REDUCING OR
DISCHARGING GUARANTOR'S OBLIGATIONS
Each Guarantor hereby consents and agrees to each of
the following, and agrees that such Guarantor's obligations under
this Guaranty Agreement shall not be released, diminished,
impaired, reduced or adversely affected by any of the following,
and waives any common law, equitable, statutory or other rights
(including without limitation rights to notice) which each
Guarantor might otherwise have as a result of or in connection
with any of the following:
Section 2.01. Modifications. etc.
Any renewal, extension, increase, modification,
alteration or rearrangement of all or any part of the Guaranteed Debt, or of the Bonds, any of the Bond Documents, or any loan agreement, security agreement, collateral document or other document, instrument, contract or understanding between the Issuer and Bank, or any other parties, pertaining to the Guaranteed Debt;
LA01/80267. I
06-01-95 -6-
Section 2.02. Adjustment, etc.
Any adjustment, indulgence, forbearance or compromise
that might be granted or given by Bank to the Issuer, Borrower or any Guarantor;
Section 2.03. Condition, Composition or Structure of the Issuer
or any Guarantor.
The insolvency, bankruptcy, arrangement, adjustment,
composition, structure, liquidation, disability, dissolution or lack of power of the Issuer, Borrower or any other party at any time liable for the payment of all or part of the Guaranteed Debt; or any dissolution of the Issuer, Borrower or any Guarantor, or any sale, lease or transfer of any or all of the assets of the Issuer, Borrower or any Guarantor, or any changes in name, business, location, composition, structure or changes in the shareholders, partners or members (whether by accession, secession, cessation, death, dissolution, transfer of assets or other matter) of the Issuer, Borrower or any Guarantor; or any
reorganization of the Issuer, Borrower or any Guarantor;
Section 2.04. Invalidity of Guaranteed Debt.
The invalidity, illegality or unenforceability of all or any part of the Guaranteed Debt, or any document or agreement executed in connection with the Guaranteed Debt, for any reason whatsoever, including without limitation the fact that (i) the Guaranteed Debt, or any part thereof, exceeds the amount
permitted by law, (ii) the act of creating the Guaranteed Debt or any part thereof is ultra vires, (iii) the officers or
representatives executing the Bonds or other documents or
otherwise creating the Guaranteed Debt acted in excess of their
authority, (iv) the Guaranteed Debt violates applicable usury
laws, (v) the Issuer has valid defenses, claims or offsets (whether at law, in equity or by agreement) which render the
Guaranteed Debt wholly or partially uncollectible from the Issuer, (vi) the creation, performance or repayment of the Guaranteed Debt (or the execution, delivery and performance of any document or instrument representing part of the Guaranteed Debt or executed in connection with the Guaranteed Debt, or given to secure the repayment of the Guaranteed Debt) is illegal, uncollectible or unenforceable, or (vii) the Bonds, any of the Bond Documents, or other documents or instruments pertaining to the Guaranteed Debt have been forged or otherwise are irregular
or not genuine or authentic;
Section 2.05. Release of Oblisors.
Any full or partial release of the liability of the
Issuer or Borrower on the Guaranteed Debt or any part thereof, or
LAOU80267.1
06-01-95 -7-
of any Guarantor, or any other Person now or hereafter liable,
whether directly or indirectly, jointly, severally, or jointly
and severally, to pay, perform, guarantee or assure the payment
of the Guaranteed Debt or any part thereof, it being recognized,
acknowledged and agreed by each Guarantor that such Guarantor may
be required to pay the Guaranteed Debt in full without assistance
or support of any other party, and no Guarantor has been induced
to enter into this Guaranty Agreement on the basis of a
contemplation, belief, understanding or agreement that any other Person will be liable to perform the Guaranteed Debt, or that Bank will look to any other Person to perform the Guaranteed
Debt; notwithstanding the foregoing, no Guarantor hereby waives or releases (expressly or impliedly) any rights of subrogation,
reimbursement or contribution which it may have, after payment in full of the Guaranteed Debt, against others liable on the
Guaranteed Debt; each Guarantor's rights of subrogation and
reimbursement are, however, subordinate to the rights and claims
of Bank;
Section 2.06. Other Securitv.
The taking or accepting of any other security, collateral or guaranty, or other assurance of payment, for all or any part of the Guaranteed Debt;
Section 2.07. Release of Collateral, etc.
Any release, surrender, exchange, subordination,
deterioration, waste, loss or impairment (including without limitation negligent, willful, unreasonable or unjustifiable impairment) of the Collateral or any other collateral, property or security, at any time existing in connection with, or assuring or securing payment of, all or any part of the Guaranteed Debt;
Section 2.08. Care and Dilisence.
The failure of Bank or any other party to exercise diligence or reasonable care or act, fail to act or comply with any duty in the administration, preservation, protection, enforcement, sale, application, disposal or other handling or treatment of all or any part of the Guaranteed Debt or the Collateral or any other collateral, property or security at any time securing any portion thereof, including, without limiting the generality of the foregoing, the failure to conduct any foreclosure or other remedy fairly or in such a way so as to obtain the best possible price or a favorable price or otherwise act or fail to act;
LA01/80267.1
06-01-95 -8-
Section 2.09. Status of Liens.
The fact that any collateral, security, security interest or lien contemplated or intended to be given, created or granted as security for the repayment of the Guaranteed Debt shall not be properly perfected or created, or shall prove to be unenforceable or subordinate to any other security interest or
lien, it being recognized and agreed by each Guarantor that such
Guarantor is not entering into this Guaranty Agreement in
reliance on, or in contemplation of the benefits of, the
validity, enforceability, collectibility or value of the
Collateral or any other collateral, property or security at any time securing any portion of the Guaranteed Debt; notwithstanding
the foregoing, no Guarantor hereby waives or releases (expressly or impliedly) any right to be subrogated to the rights of Bank in any collateral or security for the Guaranteed Debt after payment in full of the Guaranteed Debt; each Guarantor's rights of subrogation are, however, subordinate to the rights, claims,
liens and security interests of Bank;
Section 2.10. Offset.
The Bonds and other Guaranteed Debt guaranteed hereby,
and the liabilities and obligations of each Guarantor to Bank
hereunder, shall not be reduced, discharged or released because
of or by reason of any existing or future right of offset, claim
or defense of the Issuer against Bank, or any other Person, or against payment of the Guaranteed Debt, whether such right of offset, claim or defense arises in connection with the Guaranteed Debt (or the transactions creating the Guaranteed Debt) or otherwise;
Section 2.11. Merser.
The reorganization, merger or consolidation of the
Issuer or any Guarantor into or with any other Person;
Section 2.12. Preference.
Any payment to Bank on account of the Guaranteed Debt
is held to constitute a preference under bankruptcy laws, or for
any reason Bank is required to refund such payment or pay such
amount to the Issuer or any other Person; or
Section 2.13. Other Actions Taken or Omitted.
Any other action taken or omitted to be taken with respect to the Bond Documents, the Guaranteed Debt, or the security and collateral therefor, whether or not such action or omission prejudices any Guarantor or increases the likelihood or risk that any Guarantor will be required to pay the Guaranteed
LA01/80267.1
06-01-95 -9-
Debt pursuant to the terms hereof; it is the unambiguous and
unequivocal intention of each Guarantor that such Guarantor shall
be obligated to pay the Guaranteed Debt when due, notwithstanding
any occurrence, circumstance, event, action, or omission
whatsoever, whether contemplated or uncontemplated, and whether
or not otherwise or particularly described herein, except for the
full and final payment and satisfaction of the Guaranteed Debt.
ARTICLE 111: REPRESENTATIONS AND WARRANTIES
To induce Bank to purchase the Bonds, each Guarantor
represents and warrants to Bank and to the Issuer (except for
such representations and warranties specifically made only by the
Borrower) that:
Section 3.01. Benefit.
Each Guarantor has received, or will receive, direct or
indirect benefit from the making of this Guaranty and the Guaranteed Debt.
Section 3.02. Familiaritv and Reliance.
Each Guarantor is familiar with the financial condition of the Issuer and Borrower and is familiar with the value of any and all collateral intended to be created as security for the payment of the Guaranteed Debt; however, no Guarantor is relying
on such financial condition or the collateral as an inducement to
enter into this Guaranty Agreement.
Section 3.03. Financial Condition.
Each Guarantor delivers this Continuing Guaranty based
solely upon its own independent investigation of Borrower's
financial condition and in no part upon any representation or
statement of Bank with respect thereto. Each Guarantor is in a position to and hereby does assume full responsibility for obtaining such additional information concerning Borrower's
financial condition as such Guarantor may deem material to its
obligations hereunder, and no Guarantor is relying upon, nor expecting Bank to furnish it any information in Bank's possession concerning Borrower's financial condition or concerning any circumstances bearing on the existence or creation, or the risk of nonpayment or nonperformance of the Guaranteed Debt. Each
Guarantor hereby waives any duty on the part of Bank to disclose
to such Guarantor any facts that Bank may now or hereafter know
about Borrower, regardless of whether Bank has reason to believe
that any such facts materially increase the risk beyond that which such Guarantor intends to assume or has reason to believe
that such facts are unknown to such Guarantor.
LA01/80267.1
06-01-95 -10-
Section 3.04. No Remesentation bv Bank.
Neither Bank nor any other Person has made any representation, warranty or statement (express or implied) to any
Guarantor in order to induce such Guarantor to execute this
Guaranty Agreement.
Section 3.05. Guarantor's Financial Condition.
As of the date hereof, and after giving effect to this
Guaranty Agreement and the contingent obligation evidenced
hereby, each Guarantor is, and will be, solvent, and has and will
have assets which, fairly valued, exceed its obligations,
liabilities and debts.
Section 3.06. Determination of Benefit.
Each Guarantor has determined that this Guaranty
Agreement directly or indirectly benefits such Guarantor and is
in the best interests of such Guarantor.
Section 3.07. Lesalitv.
The execution, delivery and performance by each
Guarantor of this Guaranty Agreement, and the consummation of the transactions contemplated hereby (i) do not, and will not, contravene or conflict with any law, statute or regulation
whatsoever to which such Guarantor is subject, or constitute a
default (or an event which with notice or lapse of time or both
would constitute a default) under, or result in the breach of,
any indenture, mortgage, deed of trust, trust agreement, charge,
lien, or any contract, agreement or other instrument to which
such Guarantor is a party or which may be applicable to such
Guarantor or any of its assets; this Guaranty Agreement is a
legal and binding obligation of each Guarantor and is enforceable
in accordance with its terms, except as limited by bankruptcy,
insolvency or other laws of general application relating to the
enforcement of creditors' rights.
Section 3.08. Survival.
All representations and warranties made by Guarantor
herein shall survive the execution hereof.
Section 3.09. Existence and Authoritv.
Each Guarantor has the power and authority to execute, deliver, and perform its obligations under this Guaranty
Agreement and the other Bond Documents to which it is or may
become a party.
LAOU80267.1
06-01-95 -11-
Section 3.10. Financial Statements.
The unaudited financial statements of each Guarantor
dated [ I I are true and correct, and fairly and accurately present the financial condition of such Guarantor
as of the respective dates indicated therein for the respective
periods indicated therein. No Guarantor has any material
contingent liabilities, liabilities for taxes, material forward
or long-term commitments, or unrealized or anticipated losses
from any unfavorable commitments not reflected in such financial
statements. There has been no material adverse change in the
condition, financial or otherwise, or operations of any
Guarantor, since the effective date of the most recent financial statement referred to herein.
Section 3.11. Litisation and Judsments.
Except as disclosed in writing to Bank, there is no
action, suit, or proceeding before any court, governmental authority or arbitrator pending, or to the knowledge of any
Guarantor, threatened against or affecting such Guarantor that
would, if adversely determined, have a material adverse effect on
the financial condition or operations of such Guarantor or the
ability of such Guarantor to pay and perform its obligations
under this Guaranty Agreement or any of the Bond Documents to
which it is or may become a party. There are no outstanding
judgments against any Guarantor.
Section 3.12. Approvals.
No authorization, approval, or consent of, and no
filing or registration with, any court, governmental authority,
or third party is or will be necessary for the execution,
delivery, or performance by any Guarantor of this Guaranty
Agreement and the other Bond Documents to which any Guarantor is
or may become a party or the validity or enforceability thereof.
Section 3.13. Taxes.
Each Guarantor has filed all tax returns (federal, state and local) required to be filed prior to the date hereof, including all income, franchise, employment, property, and sales taxes, and has paid all of its tax liabilities required to be paid prior to the date hereof, and no Guarantor knows of any
pending investigation of any Guarantor by any taxing authority or
of any pending but unassessed tax liability of any Guarantor.
Section 3.14. Disclosure.
No representation or warranty made by any Guarantor in this Guaranty Agreement or any other Bond Document contains any
LA01/80267.1
06-01-95 -12-
untrue statement of a material fact or omits to state any
material fact necessary to make the statements herein or therein
not misleading. There is no fact known to any Guarantor which
has a material adverse effect, or which might in the future have
a material adverse effect, on the business, assets, financial
condition, or operations of such Guarantor.
Section 3.15. Contracts.
No Guarantor is a party to, or bound by any agreement,
condition, contract, or arrangement which might in the future
have a material adverse effect on the business, operations, or
financial condition of such Guarantor.
Section 3.16. Compliance with Law.
Each Guarantor is in compliance with all laws, rules,
regulations, orders and decrees which are applicable to it or any
of its properties.
Section 3.17. Authoritv of Borrower Resardins Loan.
The Loan Agreement and each of the other Loan Documents
are the legal and binding obligation of Borrower and are
enforceable against Borrower in accordance with their respective
terms, except as limited by bankruptcy, insolvency or other laws
of general application relating to the enforcement of creditors'
rights.
Section 3.18. Hazardous Substances.
There are no Hazardous Substances in existence or constructed, released, deposited, stored, disposed, placed or located in, on or under the Property, the Facility or any other improvements located on the Property which do not comply with applicable Environmental Laws. There are no underground storage
tanks located at the Property. The Property and any improvements
thereon are and, upon its completion, the Facility will be free
of Hazardous Substances and in full compliance with all
applicable Environmental Laws.
ARTICLE IV: POSITIVE COVENANTS
Each Guarantor covenants and agrees (except for those
covenants specifically applicable only to Borrower) that, as long
as the Guaranteed Debt or any part thereof is outstanding, such Guarantor will perform and observe the following positive covenants, unless Bank shall otherwise consent in writing:
LA01/80267.1
06-01-95 -13-
Section 4.01. Financial Statements.
Each Guarantor will furnish to Bank:
(a) As soon as available, and in any event within ninety (90) days after the end of each fiscal year of Borrower, beginning with the fiscal year ended December 31, 1994, (i) a copy of the annual financial statements of Guarantor for
such fiscal year containing a balance sheet, statement of income,
and statement of cash flows as at the end of such fiscal year and
for the twelve-month period then ended, in each case setting forth in comparative form the figures for the preceding fiscal
year, all in reasonable detail; and (ii) if required by Bank, copies of each Guarantor's tax returns.
(b) Concurrently with the delivery of each of the
financial statements referred to in Section 4.01(a), a
certificate of Jeffrey C. Hamann stating that to the best of his
knowledge, no Event of Default and no event that with notice or
lapse of time or both would be an Event of Default has occurred
and is continuing.
(c) To the extent permitted by applicable law, such additional information concerning each Guarantor as Bank may reasonably request.
Section 4.02. Performance of Oblisations.
Each Guarantor will duly and punctually pay and perform
such Guarantor's obligations under this Guaranty Agreement and the other Bond Documents to which it is a party.
Section 4.03. Maintenance of Properties.
Each Guarantor will maintain its assets and properties
in good condition and repair, except for reasonable wear and tear
and for obsolescence resulting from outmoded design and age of the machinery.
Section 4.04. Pavment of Taxes and Claims.
Each Guarantor will pay or discharge at or before maturity or before becoming delinquent (a) all taxes, levies, assessments, and governmental charges imposed on it or any of its property, and (b) all lawful claims for labor, material, and supplies, which, if unpaid, might become a Lien upon any of its property; provided, however, that no Guarantor shall be required to pay or discharge any tax, levy, assessment, or governmental charge which is being contested in good faith by appropriate proceedings diligently pursued, and for which adequate reserves
have been established.
LA01/80267.1
06-01-95 -14-
Section 4.05. Insurance.
Each Guarantor will maintain with financially sound and
reputable insurance companies workmen's compensation insurance,
liability insurance, and insurance on its property, assets, and
business at least in such amounts and against such risks as are
usually insured against by Persons engaged in similar businesses;
provided, however, any Guarantor may self-insure workmen's
compensation claims in a manner reasonably acceptable to Bank
provided such Guarantor maintains sufficient liability coverage
to protect such Guarantor from claims the resulting loss from
which would have a material adverse effect upon the condition (financial or otherwise) of such Guarantor or adversely affect
the ability of such Guarantor to perform its obligations under
this Guaranty Agreement or any of the other Bond Documents to
which it is a party.
Section 4.06. ComDliance with Laws.
Each Guarantor will comply with all applicable laws,
rules, regulations, and orders of any court, governmental
authority or arbitrator.
Section 4.07. ComDliance with Aqreements.
Each Guarantor will comply in all material respects
with all agreements, indentures, mortgages, deeds of trust, and
other documents binding on it or affecting its properties or
business.
Section 4.08. Notices.
Each Guarantor will promptly notify Bank of (i) the
occurrence of an Event of Default, or of any event that with notice or lapse of time or both would be an Event of Default,
(ii) the commencement of any action, suit, or proceeding against
such Guarantor that might have a material adverse effect on the
business, condition (financial or otherwise), or operations of such Guarantor, (iii) any significant change in the management of such Guarantor, and (iv) any other matter that might have a material adverse effect on the business, condition (financial or otherwise), or operations of such Guarantor.
Section 4.09. Further Assurances.
Each Guarantor will execute and deliver such further
instruments as may be deemed necessary or desirable by Bank to carry out the provisions and purposes of this Guaranty Agreement and the other Bond Documents and to preserve and perfect the Lien of Bank in the Collateral.
LA01/80267.1
06-01-95 -15-
Section 4.10. Environmental Matters.
(a) Each Guarantor acknowledges that Borrower has convenanted as follows:
Borrower shall, at its own expense, comply and cause
all persons entering the Property to comply with all
Environmental Laws applicable to the Project. Borrower
shall immediately advise Bank in writing of any (i)
discovery of any Hazardous Substance(s1 on the
Property; or (ii) claim, action or order threatened or
instituted by any third party (including Governmental
Authorities) against the Project or Borrower relating
to damages, cost recovery, loss or injury resulting from any Hazardous Substances. Borrower shall provide Bank with copies of all communications with any third party (including Governmental Authorities) relating to any Environmental Law or any claim, action or order
relating to Hazardous Substances at, on, under or in the Project. Bank shall have the right, at Borrower's expense, to retain a professional environmental consultant to conduct an investigation of the Project with respect to Hazardous Substances or its compliance with Environmental Laws. Borrower hereby grants to Bank, its agents, employees, consultants and contractors, an irrevocable license and authorization to enter upon and inspect the Project and to conduct such tests and investigations on the Project as Bank, in its sole discretion, determines necessary. If any remedial action is required to bring the Project into
compliance with Environmental Laws, Borrower shall
immediately notify Bank of such situation and shall
prepare a written plan setting forth a description of such situation (and all environmental reports relating thereto) and the remedial action that Borrower proposes to implement to bring the Project into compliance with all Environmental Laws. Borrower shall, at its own expense, thereafter diligently and continuously pursue the redemption of the condition necessary to bring the
Project into compliance with all Environmental Laws.
(b) To the fullest extent permitted by law, each
Guarantor agrees to protect, indemnify, defend, save and hold harmless Bank and Trustee, and their respective directors,
officers, agents and employees from and against any and all loss, liability, expense or damage of any kind or nature and from any
suits, claims or demands, including (i) all consequential
damages; (ii) all damages to any natural resources, and the costs
of any required or necessary repair, clean up, response cost, or
remediation of the Property and the Project, and the preparation and implementation of any closure, remedial or other required
LAOU80267.1
06-01-95 -16-
plans; and (iii) all costs and expenses incurred in connection
with clauses (i) and (ii), including reasonable attorneys' fees
and costs, whether in suit or not, to the extent arising directly
or indirectly, in whole or in part, out of (a) the existence or
alleged existence of any Hazardous Substances on or under the
Property or in the Facility or any other improvements on the
Property, (b) the removal of or failure to remove any Hazardous
Substances from the Property or the Facility or any other
improvements on the Property, or (c) any activity involving
Hazardous Substances with respect to the Property carried on or undertaken on or off the Project, whether prior to the creation of the Guaranteed Debt or at any time while any of the Guaranteed Debt is outstanding, and whether by Borrower or any predecessor-in-title or any employees, agents, contractors or subcontractors of Borrower or any predecessor-intitle, or any third parties occupying or present on the Property. The foregoing indemnity shall apply to any residual contamination on or under the Project that occurs prior to the creation of the Guaranteed Debt or at any time while any of the Guaranteed Debt is outstanding, and to any contamination of any property or natural resources arising in connection with any activity involving Hazardous Substances with respect to the property that occurs prior to the creation of the Guaranteed Debt or at any time while any of the Guaranteed Debt is outstanding, irrespective of whether any of such activities were or will be undertaken in accordance with applicable Environmental Laws. Upon receiving knowledge of any suit, claim or demand asserted by a third party that Bank believes is covered by this indemnity, Lender shall give Borrower notice of the matter and an opportunity to defend it, at Borrower's sole cost and expense,
with legal counsel satisfactory to Bank. Bank may also require
Borrower to so defend the matter. The obligations of Borrower
and each other Guarantor under this Section 4.17(b) shall survive
the issuance of the Bonds and the repayment of the Guaranteed
Debt.
Section 4.11. Maintenance of Net Worth.
During the term of the Loan and until the principal and
interest with respect to the Bonds have been paid in full, the Guarantors shall maintain, in the aggregate, a net worth of not
less than $7,500,000.
ARTICLE V: DEFAULT
Section 5.01. Events of Default.
Each of the following shall be deemed an "Event of
Default" :
LAOU80267.1
06-01-95 -17-
(a) Any Guarantor shall fail to pay when due the
Guaranteed Debt or any part thereof, and such failure is not rectified immediately or in any event by 2:OO p.m. (Los Angeles
time) on the business day following Bank providing either verbal or written notice of such failure to Guarantor; or
(b) Any representation or warranty made or deemed made
by any Guarantor in any Bond Document or in any certificate,
report, notice, or financial statement furnished at any time in
connection with this Guaranty Agreement shall be false, misleading, or erroneous in any material respect when made or
deemed to have been made; or
(c) Any Guarantor shall fail to perform, observe, or
comply with any covenant, agreement or term contained in this
Guaranty Agreement, any other Bond Document or any promissory note, security agreement, loan agreement or instrument furnished to Bank, prior to the date hereof or hereafter, in connection with any loan, advance or letter of credit made to, or for the benefit of, any Guarantor, existing as of the date hereof or hereafter arising (exceDt for covenants to pay when due the Guaranteed Debt or any part thereof, and further except for covenants, agreements and terms that are identified in clauses (a), (b) and (d) through (1) of this Section 6.011, and such failure shall continue for a period of at least thirty (30) days following written notice to such Guarantor; or
(d) Any Guarantor shall commence a voluntary proceeding
seeking liquidation, reorganization, or other relief with respect to itself or its debts under any bankruptcy, insolvency, or other
similar law now or hereafter in effect or seeking the appointment
of a trustee, receiver, liquidator, custodian, or other similar
official of it or a substantial part of its property or shall
consent to any such relief or to the appointment of or taking
possession by any such official in such a proceeding commenced
against it or shall make a general assignment for the benefit of
creditors or shall generally fail to pay its debts as they become
due or shall take any corporate action to authorize any of the
foregoing; or
(e) An involuntary proceeding shall be commenced against any Guarantor seeking liquidation, reorganization, or other relief with respect to it or its debts under any bankruptcy, insolvency, or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official for it or a
substantial part of its property, and such involuntary proceeding shall remain undismissed and unstayed for a period of thirty (30) days; or
LA01/80267.1
06 - 01 -95 -18-
(f) Any Guarantor shall fail to discharge within a
period of thirty (30) days after the commencement thereof any
attachment, sequestration, or similar proceeding involving an
amount in excess of $250,000 against any of its assets or
properties; or
(9) Any Guarantor shall fail to satisfy and discharge
within a period of thirty (30) days from its issuance any final
non-appealable judgment against it for the payment of money in an
amount in excess of $250,000; or
(h) Any Guarantor shall default in the payment of any
of its Debt beyond any applicable grace period, or shall default in the performance of any other agreement binding upon it or its property and such default shall continue for a period of thirty
(30) days following written notice to such Guarantor; or
(i) This Guaranty Agreement or any other Bond Document
shall cease to be in full force and effect or shall be declared
null and void or the validity or enforceability thereof shall be contested or challenged by any Guarantor or any of their
respective shareholders, or any Guarantor shall deny that it has any further liability or obligation under this Guaranty Agreement or any of the Bond Documents; or
(j) The discovery by Bank of information that (i) the
value (as determined by Bank in the exercise of its reasonable
discretion) of the Collateral has materially decreased; or
(k) The occurrence of an Event of Default under any of
the Loan Documents (as such term is defined therein).
Section 5.02. Remedies Upon Default.
Upon the occurrence of an Event of Default, Bank may
thereafter, consistent with the provisions of the Bond Documents,
cause the Guaranteed Debt or any part thereof to be immediately due and payable, without demand, presentment, notice of dishonor, notice of acceleration, notice of intent to accelerate, notice of intent to demand, or protest, which are hereby expressly waived; provided, however, that upon the occurrence of an Event of Default under Section 5.01(a), Section 5.01(d), or Section 5.01(e) of this Guaranty Agreement the Guaranteed Debt shall become immediately due and payable without notice, demand, presentment, notice of dishonor, notice of acceleration, notice of intent to accelerate, notice of intent to demand, or protest, which are hereby expressly waived. In addition, upon the
occurrence of any Event of Default, Bank may, at its election, do
any one or more of the following:
LA01/80267.1
06 -01 -95 -19-
(a) exercise the rights of offset and/or banker's lien
against the interest of any Guarantor in and to every account
and/or other property of such Guarantor which are in possession of Bank to the extent of the full amount of the Guaranteed Debt;
(b) reduce any claim to judgment;
(c) foreclose any and all liens in favor of Bank
and/or otherwise realize upon any and all of the rights Bank may
have in and to any Collateral, or any part thereof; provided, however, Bank shall provide written notice to each Guarantor at least ten (10) days prior to any public or private sale or other
disposition of any Collateral, or any part thereof made in
accordance with Article 9 of the California Uniform Commercial
Code; or
(d) exercise any and all other rights afforded by any
applicable laws, or by the Bond Documents, at law or in equity, or otherwise, including but not limited to, the rights to bring suit or other proceeding before any court of competent jurisdiction, either for specific performance of any covenant or condition contained in the Bond Documents or in aid of the exercise of any right granted to Bank in the Bond Documents, all as Bank shall deem appropriate in its sole discretion.
ARTICLE VI: SUBORDINATION OF CERTAIN INDEBTEDNESS
Section 6.01. Subordination of Guarantor Claims.
As used herein, the term "Guarantor Claimsll shall mean
all debts and liabilities of the Issuer to any Guarantor, whether
such debts and liabilities now exist or are hereafter incurred or
arise, or whether the obligations of the Issuer thereon be direct, contingent, primary, secondary, several, joint and several, or otherwise, and irrespective of whether such debts or liabilities be evidenced by note, contract, open account, or otherwise, and irrespective of the person or persons in whose favor such debts or liabilities may, at their inception, have
been, or may hereafter be created, or the manner in which they have been or may hereafter be acquired by such Guarantor. The Guarantor Claims shall include without limitation all rights and claims of any Guarantor against the Issuer (arising as a result of subrogation or otherwise) as a result of such Guarantor's payment of all or a portion of the Guaranteed Debt. Until the
Guaranteed Debt shall be indefeasibly paid and satisfied in full and Guarantor shall have performed all of its obligations
hereunder, Guarantor shall not receive or collect, directly or
indirectly, from the Issuer or any other party any amount upon
the Guarantor Claims.
LAOU80267.1
06-01-95 -20-
Section 6.02. Claims in Bankruptcy.
In the event of receivership, bankruptcy, reorganization, arrangement, debtor‘s relief, or other insolvency
proceedings involving the Issuer as debtor, Bank shall have the
right to prove its claim in any such proceeding so as to
establish its rights hereunder and receive directly from the
receiver, trustee or other court custodian dividends and payments which would otherwise be payable upon Guarantor Claims. Each
Guarantor hereby assigns such dividends and payments to Bank. Should Bank receive, for application upon the Guaranteed Debt, any such dividend or payment which is
otherwise payable to such Guarantor, and which, as between the Issuer and such Guarantor, shall constitute a credit upon the
Guarantor Claims, then upon payment to Bank in full of the
Guaranteed Debt, such Guarantor shall become subrogated to the
rights of Bank to the extent that such payments to Bank on the
Guarantor Claims have contributed toward the liquidation of the
Guaranteed Debt, and such subrogation shall be with respect to
that proportion of the Guaranteed Debt which would have been
unpaid if Lender had not received dividends or payments upon the
Guarantor Claims.
Section 6.03. Payments Held in Trust.
In the event that, notwithstanding Sections 6.01 and
6.02 above, any Guarantor should receive any funds, payment, claim or distribution which is prohibited by such Sections, such
Guarantor agrees to hold in trust for Bank, in kind, all funds,
payments, claims or distributions so received, and agrees that it
shall have absolutely no dominion over such funds, payments,
claims or distributions so received except to pay them promptly
to Bank, and each Guarantor covenants promptly to pay the same to
Bank.
Section 6.04. Liens Subordinate.
Each Guarantor agrees that any liens, security interests, judgment liens, charges or other encumbrances upon the Issuer’s assets securing payment of the Guarantor Claims shall be and remain inferior and subordinate to any liens, security interests, judgment liens, charges or other encumbrances upon the Issuer’s assets securing payment of the Guaranteed Debt, regardless of whether such encumbrances in favor of any Guarantor or Bank presently exist or are hereafter created or attach. Without the prior written consent of Bank, no Guarantor shall (i) exercise or enforce any creditor’s right it may have against the Issuer, or (ii) foreclose, repossess, sequester or otherwise take
steps or institute any action or proceedings (judicial or
otherwise, including without limitation the commencement of, or
joinder in, any liquidation, bankruptcy, rearrangement, debtor’s
LA01/80267.1
06-01-95 -21-
relief or insolvency proceeding) to enforce any liens, mortgages,
deeds of trust, security interest, collateral rights, judgments
or other encumbrances on assets of the Issuer held by such
Guarantor.
Section 6.05. Notation of Records.
All promissory notes, accounts receivable ledgers or
other evidences of the Guarantor Claims accepted by or held by
such Guarantor shall contain a specific written notice thereon that the indebtedness evidenced thereby is subordinated under the terms of this Guaranty Agreement.
ARTICLE VII: MISCELLANEOUS
Section 7.01. Waiver.
No failure to exercise, and no delay in exercising, on the part of Bank, any right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right. The rights of Bank hereunder shall be in addition to all other rights provided by
law. No modification or waiver of any provision of this Guaranty
Agreement, nor consent to departure therefrom, shall be effective unless in writing and no such consent or waiver shall extend beyond the particular case and purpose involved. No notice or demand given in any case shall constitute a waiver of the right to take other action in the same, similar or other instances without such notice or demand.
Section 7.02. Notices.
Any notices or other communications required or
permitted to be given by this Guaranty Agreement must be (i) given in writing and personally delivered or mailed by prepaid certified or registered mail, return receipt requested, or (ii) made by tested telex or facsimile delivered or transmitted, to the party to whom such notice or communication is directed, to the address of such party as follows:
LA01/80267.1
06-01-95 -22-
Guarantors:
JEFFREY C. "N,
c/o CIP Limited, L.P.
a California Limited Partnership
475 West Bradley Avenue El Cajon, California 92020
Telecopy No.: (619) 440-8914
GREGG "N,
Telecopy No.:
DANIEL M. WHITAKER and DONA C. WHITAKER c/o CIP Limited, L.P. a California Limited Partnership
475 West Bradley Avenue El Cajon, California 92020
Telecopy No. : (619) 531-1783
Bank :
First Interstate Bank of California
401 B Street, Suite 304 (A-129) San Diego, California 92101 Attention: Jeffrey Stites
Telecopy No. : (619) 699-3105
Any such notice or other communication shall be deemed to have been given (whether actually received or not) on the day it is personally delivered as aforesaid or, if mailed, on the day it is mailed as aforesaid, or, if transmitted by telex or facsimile, on the day that such notice is transmitted as aforesaid. Any party may change its address for purposes of this Guaranty Agreement by giving notice of such change to the other parties pursuant to this Section 7.02.
Section 7.03. Governins Law.
This Guaranty Agreement has been prepared, and is
intended to be performed in the State of California, and the
substantive laws of such state shall govern the validity,
LA01/80267.1
06-01 -95 -23-
construction, enforcement and interpretation of this Guaranty
Agreement.
Sect ion 7.04. Arbitration.
(a) Bindins Arbitration. Upon the demand of any party
(l1Party/Partiesl1), to a Document (as defined below), whether made
before the institution of any judicial proceeding or not more than
60 days after service of a complaint, third party complaint, cross-
claim or counterclaim or any answer thereto or any amendment to any
of the above, any Dispute (as defined below) shall be resolved by
binding arbitration in accordance with the terms of this
arbitration program ("Arbitration Programtt) . A llDisputell shall
include any action, dispute, claim or controversy of any kind,
whether founded in contract, tort, statutory or common law, equity,
or otherwise, now existing or hereafter arising between any of the
Parties arising out of, pertaining to or in connection with any
agreement, document or instrument to which this Arbitration Program
is attached or in which it appears or is referenced or any related
agreements, documents, or instruments (ltDocumentsll) . Any Party who
fails to submit to binding arbitration following a lawful demand by
another Party shall bear all costs and expenses, including
reasonable attorneys' fees (including those incurred in any trial,
bankruptcy proceeding or on appeal), incurred by the other Party
in obtaining a stay of any pending judicial proceeding and
compelling arbitration of any Dispute. The Parties agree that any
agreement, document or instrument which includes, attaches to or
incorporates this Arbitration Program represents a transaction
involving commerce as that term is used in the Federal Arbitration
Act, Title 9 United States Code ('IFAA1I). THE PARTIES UNDERSTAND
THAT BY THIS AGREEMENT THEY HAVE DECIDED THAT THEIR DISPUTES SHALL
BE RESOLVED BY BINDING ARBITRATION RATHER T" IN COURT, AND ONCE
DECIDED BY ARBITRATION NO DISPUTE CAN LATER BE BROUGHT, FILED OR
PURSUED IN COURT.
(b) Governins Rules. Arbitrations conducted pursuant to this Arbitration Program shall be administered by the American Arbitration Association (llAAAtl) , or other mutually agreeable administrator ( l1Adrninistratorl1) in accordance with the terms of this Arbitration Program and the Commercial Arbitration Rules of
the M. Proceedings hereunder shall be governed by the provisions of the FAA. The arbitrator(s) shall resolve all Disputes in accordance with the applicable substantive law designated in the Documents. Judgment upon any award rendered hereunder may be entered in any court having jurisdiction; provided, however, that nothing herein shall be construed to be a waiver by any Party that is a bank of the protections afforded pursuant to 12 U.S.C. 91 or any similar applicable state law.
(c) Arbitrator Powers and Oualifications; Awards. The
LA01/80267.1
06-01-95 -24-
Parties agree to select a neutral qualified arbitrator or a panel
of three qualified arbitrators to resolve any Dispute hereunder.
"Qualified" means a retired judge or practicing attorney, with not less than 10 years practice in commercial law, licensed to practice in the state of the applicable substantive law designated in the Documents. A Dispute in which the claims or amounts in controversy
do not exceed $1,000,000, shall be decided by a single arbitrator.
A single arbitrator shall have authority to render an award up to
but not to exceed $1,000,000.00 including all damages of any kind
whatsoever, costs, fees, attorneys' fees and expenses. Submission
to a single arbitrator shall be a waiver of all Parties' claims to
recover more than $1,000,000.00. A Dispute involving claims or amounts in controversy exceeding $1,000,000.00 shall be decided by a majority vote of a panel of three qualified arbitrators. All three arbitrators on the arbitration panel must actively
participate in all hearings and deliberations. The arbitrator(s) shall be empowered to, at the written request of any Party in any Dispute, 1) to consolidate in a single proceeding any multiple
party claims that are substantially identical or based upon the same underlying transaction; 2) to consolidate any claims and Disputes between other Parties which arise out of or relate to the
subject matter hereof, including all claims by or against
borrowers, guarantors, sureties and/or owners of collateral; and
3) to administer multiple arbitration claims as class actions in
accordance with Rule 23 of the Federal Rules of Civil Procedure.
In any consolidated proceeding the first arbitrator (s) selected in
any proceeding shall conduct the consolidated proceeding unless disqualified due to conflict of interest. The arbitrators (s) shall be empowered to resolve any dispute regarding the terms of this arbitration clause, including questions about the arbitrability of any Dispute, but shall have no power to change or alter the terms of the Arbitration Program. The prevailing Party in any Dispute shall be entitled to recover its reasonable attorneys' fees in any arbitration, and the arbitrator(s1 shall have the power to award
such fees. The award of the arbitrator(s) shall be in writing and shall set forth the factual and legal basis for the award.
(d) Real Prolsertv Collateral. Notwithstanding the
provisions of Subparagraphs (a) through (c), no Dispute shall be
submitted to arbitration without the consent of all Parties if, at
the time of the proposed submission, such Dispute arises from or relates to an obligation which is secured directly or indirectly and in whole or in part by real property collateral. If all Parties do not consent to submission of such a Dispute to arbitration, the Dispute shall be determined as provided in Paragraph 5.
(e) Judicial Reference. At the request of any Party, a Dispute which is not submitted to arbitration as provided and limited in Subparagraphs (a) through (d) shall be determined by a reference in accordance with California Code of Civil Procedure
LA01/80267. I
06-01-95 -25-
Section 638 et seq. If such an election is made, the Parties shall
designate to the court a referee or referees selected under the auspices of the AAA, unless otherwise agreed to in writing by all parties. With respect to a Dispute in which the amounts in controversy do not exceed $1,000,000, a single referee shall be
chosen and shall resolve the Dispute. The referee shall have authority to render an award up to but not to exceed $1,000,000,
including all damages of any kind whatsoever, including costs, fees
and expenses. A Dispute involving amounts in controversy exceeding
$1,000,000 shall be decided by a majority vote of a panel of three
referees (a "Referee Panel") , provided, however, that all three
referees on the Referee Panel must actively participate in all
hearings and deliberations. Referees, including any Referee Panel,
may grant any remedy of relief deemed just and equitable and within
the scope of this Arbitration Program and may also grant such ancillary relief as is necessary to make effective any award. The
presiding referee of the Referee Panel, or the referee if there is a single referee, shall be a retired judge. Judgment upon the award rendered by such referee(s1 shall be entered in the court in which such proceeding was commenced in accordance with California Code of Civil Procedure Sections 644 and 645. Determinations and
awards by a referee or Referee Panel shall be binding on all Parties and shall not be subject to further review or appeal except as allowed by applicable law.
(f) Preservation of Remedies. No provision of, nor the
exercise of any rights under, this Arbitration Program shall limit
the right of any Party to: (1) foreclose against and/or sale of
any real or personal property collateral or other security, or obtain a personal or deficiency award; (2) exercise self-help
remedies (including repossession and setoff rights); or (3) obtain
provisional or ancillary remedies such as injunctive relief ,
sequestration, attachment, replevin, garnishment, or the
appointment of a receiver from a court having jurisdiction. Such
rights can be exercised at any time except to the extent such
action is contrary to a final award or decision in any arbitration
proceeding. The institution and maintenance of an action as
described above shall not constitute a waiver of the right of any
Party to submit the Dispute to arbitration, nor render inapplicable
the compulsory exercise of any self-help, auxiliary or other rights
under this paragraph shall be a Dispute hereunder.
(9) Miscellaneous. All statutes of limitation
applicable to any Dispute shall apply to any proceeding in
accordance with this Arbitration Program. The Parties agree, to
the maximum extent practicable, to take any action necessary to
conclude an arbitration hereunder within 180 days of the filing of a Dispute with the Administrator. The arbitrator(s) shall be empowered to impose sanctions for any Party's failure to proceed within the times established herein. Arbitrations shall be conducted in the state of the applicable substantive law
LAOU80267.1
06-01 -95 -26-
designated in the Documents. The provisions of this Arbitration Program shall survive a termination, amendment, or expiration hereof or of the Documents unless the Parties otherwise expressly
agree in writing. Each Party agrees to keep all Disputes and
arbitration proceedings strictly confidential, except for
disclosures of information required in the ordinary course of
business of the Parties or as required by applicable law or
regulation. If any provision of this Arbitration Program is
declared invalid by any court, the remaining provisions shall not
be affected thereby and shall remain fully enforceable.
Section 7.05. Invalid Provisions.
If any provision of this Guaranty Agreement is held to
be illegal, invalid or unenforceable under present or future laws effective during the term of this Guaranty Agreement, such provision shall be fully severable and this Guaranty Agreement
shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part of this
Guaranty Agreement, and the remaining provisions of this Guaranty
Agreement shall remain in full force and effect and shall not be
affected by the illegal, invalid or unenforceable provision or by
its severance from this Guaranty Agreement, unless such continued
effectiveness of this Guaranty Agreement, as modified, would be contrary to the basic understandings and intentions of the parties as expressed herein.
Section 7.06. Entirety and Amendments.
This Guaranty Agreement, together with the other Bond
Documents, embodies the entire agreement between the parties and
supersedes all prior agreements and understandings, if any,
relating to the subject matter hereof, and this Guaranty Agreement may be amended only by an instrument in writing executed by an authorized officer of the party against whom such amendment is sought to be enforced.
Section 7.07. Parties Bound: Assiqnment.
This Guaranty Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective
successors, assigns and legal representatives; provided, however,
that Guarantor may not, without the prior written consent of
Bank, assign any of its rights, powers, duties or obligations
hereunder.
Section 7.08. Headinss.
LA01/80267. I
06-01-95 -27-
Section headings are for convenience of reference only
and shall in no way affect the interpretation of this Guaranty Agreement.
Section 7.09. Multiple Counterparts.
This Guaranty Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one
and the same agreement, and any of the parties hereto may execute this Guaranty Agreement by signing any such counterpart.
Section 7.10. Rishts and Remedies.
If Guarantor becomes liable for any indebtedness owing
by the Issuer to Bank, by endorsement or otherwise, other than under this Guaranty Agreement, such liability shall not be in any
manner impaired or affected hereby and the rights of Bank
hereunder shall be cumulative of any and all other rights that
Lender may ever have against Guarantor. The exercise by Bank of
any right or remedy hereunder or under any other instrument, or
at law or in equity, shall not preclude the concurrent or
subsequent exercise of any other right or remedy.
Section 7.11. Costs and Expenses.
Guarantor agrees to pay on demand all costs and
expenses of Bank (including attorneys’ fees and the reasonable
estimate of the allocated cost of in-house counsel and staff) in
connection with the preparation, amendment, modification,
enforcement (including, without limitation, in appellate,
bankruptcy, insolvency, liquidation, reorganization, moratorium
or other similar proceedings) or restructuring of this Guaranty
Agreement.
Section 7.12. WAIVER OF JURY TRIAL.
GUARANTOR HEREBY WAIVES THE RIGHT TO TRIAL BY JURY (WHICH BANK HEREBY ALSO WAIVES) IN ANY ACTION, SUIT, PROCEEDING
OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO THIS GUARANTY AGREEMENT OR ANY OF THE OTHER BOND DOCUMENTS. BORROWER ACKNOWLEDGES THAT THE FOREGOING WAIVER IS A MATERIAL INDUCEMENT TO BANK’S ENTERING INTO THIS GUARANTY AGREEMENT AND THE OTHER BOND DOCUMENTS AND THAT BANK IS RELYING UPON THE FOREGOING WAIVER IN ITS FUTURE DEALINGS WITH GUARANTOR. GUARANTOR WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THE FOREGOING WAIVER AND THE OTHER WAIVERS HEREIN WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY MADE SUCH WAIVERS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED
AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
LA01/80267.1
06-01-95 -28-
EXECUTED as of the day and year first above written.
GUARANTORS :
JEFFREY C. "N, as an individual
JEFFREY C. "N, as Trustee
of the J.C. Hamann Family Trust,
UTD 12/23/83
GREGG HAMA", as an individual
GREGG "N, as Trustee of the
GREGG HAMA" Family Trust, UTD
4/25/86
DANIEL M. WHITAKER, as an
individual
DANIEL M. WHITAKER, as Co-Trustee
of the Whitaker Family Trust,
UTD 10/22/79, as Amended and
Restated 12/22/83
DONA C. WHITAKER, as Co-Trustee
of the Whitaker Family Trust, UTD
10/22/79, as Amended and Restated
12/22/83
LA01/80267.1
06-01-95 -29-
EXHIBIT A
DEFINITIONS
As used in this Guaranty Agreement, the following terms have the following meanings:
"Affiliatell means any Person who directly or
indirectly, owns or controls, on an aggregate basis, including
all beneficial ownership and ownership or control as a trustee,
guardian or other fiduciary, at least ten percent (10%) of the
partnership shares having ordinary voting power of Borrower or
which is controlled by or is under common control with any
Guarantor, or any constituent partner of Borrower. For purposes of this definition, llcontrollv means the possession, directly or
indirectly, of the power to direct or to cause the direction of
management and policies, whether through the ownership of voting securities, by contract or otherwise.
llCollateralll means the property described in the
following documents and any collateral which may now or hereafter
secure the Guaranteed Debt or any part thereof including, without
limitation, the following:
(a) any Security Agreement and financing statements covering the property and collateral hereinafter described, whether now owned or existing, or hereinafter acquired or arising, or in which Borrower or any Guarantor now or hereafter
has any rights or interest in or to, and wheresoever located:
(i) The Facility;
(ii) All monies, residues and property of any kind, now
or hereinafter in the possession or under the control
of Bank or a bailee of Bank;
(iii
and
any
.) All of Borrower's and Guarantors' right, title
interest in and to all deposits and other sums at
time credited by or due from banks to Borrower or
any Guarantor, with the same rights therein as if the
deposits or other sums were created by or due from Bank;
(iv) All accessions to, substitutions for and all replacements, products and proceeds of the foregoing, including, without limitation, proceeds of insurance policies insuring the Collateral; and
(v) All books and records (including, without
limitation, customer lists, credit files, computer
programs, printouts and other computer materials and
LA01/80267.1
06-01-95 -1-
records) of Borrower and Guarantor pertaining to any of
the Collateral.
(b) Deeds of trust, security agreements and financing
statements covering the Facility, and the Property and granting
Bank a first, perfected lien thereon prior to any funding with
respect thereto.
I1Debttf means, for any Person (i) all indebtedness,
whether or not represented by bonds, debentures, notes or other
evidences of indebtedness, for the repayment of money borrowed,
(ii) all indebtedness representing deferred payment of the
purchase price of property or assets, (iii) all indebtedness
under any lease which is required to be capitalized for balance
sheet purposes, including operating leases but excluding real
estate leases, (iv) all indebtedness under guaranties,
endorsements, assumptions or other contingent obligations, in
respect of, or to purchase or otherwise acquire, indebtedness of
others and (v) all indebtedness secured by a Lien existing on
property owned, subject to such Lien, whether or not the
indebtedness secured thereby shall have been assumed by the owner thereof.
"Environmental Laws" shall mean any and all present and
future federal, state and local laws, ordinances, regulations,
policies and any other requirements of Governmental Authorities relating to health, safety, the environment or to any Hazardous Substances, including without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), the Resource Conservation Recovery Act (RCRA) , the Hazardous Materials Transportation Act, the Toxic Substance Control Act, the Endangered Species Act, the Clean Water Act, the Occupational
Safety and Health Act, the California Environmental Quality Act
and the applicable provisions of the California Health and Safety
Code, California Labor Code and the California Water Code, and the rules, regulations and guidance documents promulgated thereunder.
IIGovernmental Authority1# shall mean each federal, state
or local body or agency which has jurisdiction over the Property
or the Facility, or the use, occupancy or operation thereof, or the power to regulate, govern, approve or control the Property or the Facility or any aspect thereof.
"Hazardous Substancell shall mean (i) any chemical,
compound, material, mixture or substance that is now or hereafter defined or listed in, or otherwise classified pursuant to, any Environmental Laws as a Ilhazardous substancell , "hazardous material" , "hazardous waste" , "extremely hazardous waste" , "acutely hazardous waste" , "radioactive waste" , Ilinfectious waste" , "biohazardous wastell, "toxic substance" , llpollutantll ,
LA01/80267.1
06-01-95 -2-
"toxic pollutant", llcontaminantll as well as any formulation not mentioned herein intended to define, list, or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity, "EP toxicity" , or "TCLP toxicity"; (ii) petroleum, natural gas, natural gas liquids, liquified natural gas, synthetic gas usable for fuel (or mixtures of natural gas and such synthetic gas) and ash produced by a resource recovery facility utilizing a municipal solid waste stream, and drilling fluids, produced waters and other wastes associated with the exploration, development or production of crude oil, natural gas, or geothermal resources; (iii) Ilhazardous substancell as defined in Section 25281(f) of the California Health and Safety Code; (iv) llwastell as defined in Section 13050(d) of the California Water Code; (v) asbestos in any form; (vi) urea formaldehyde foam insulation; (vii) polychlorinated biphenyls (PCBs) ; (viii) radon;
and (ix) any other chemical, material, or substance that, because
of its quantity, concentration, or physical or chemical
characteristics, exposure to which is limited or regulated for
health and safety reasons by any Governmental Authority, or which poses a significant present or potential hazard to human health
and safety or to the environment if released into the workplace
or the environment.
"Lienll means any lien, mortgage, security interest, tax
lien, pledge, encumbrance, or conditional sale or title retention
agreement, or any other interest in property designed to secure
the repayment of Debt or any other obligation, whether arising by
agreement, operation of law, or otherwise.
"Loan Documents" means the Loan Agreement and all
promissory notes and other instruments, documents and agreements
executed and delivered pursuant to or in connection with the Loan
Agreement and any future amendments thereto.
llOblisationsll means all obligations, indebtedness, and
liabilities of Borrower to Bank, now existing or hereafter arising, whether direct, indirect, related, unrelated, fixed, contingent, liquidated, unliquidated, joint, several, or joint and several, including, without limitation, the obligations, indebtedness and liabilities of Borrower under the Bond Purchase Agreement, the Loan Agreement, and the other Loan Documents, the Deed of Trust, this Guaranty Agreement and the other Bond Documents, and all interest accruing thereon and all reasonable attorneys fees and other reasonable expenses incurred in the enforcement or collection thereof.
llPersontl means any individual, corporation, business
trust, association, company, partnership, joint venture, or other
entity.
LA01/80267. I
06-01-95 -3-
IISubsidiarv" means any other corporation of which more
than fifty percent (50%) of the issued and outstanding securities having ordinary voting power for the election of a majority of directors is owned or controlled, directly or indirectly, by
Guarantor, by Guarantor and one or more other Subsidiaries, or by
one or more other Subsidiaries.
LAOU80267.1
06-01-95 -4-
LA01/80267.1
06-01-95
EXHIBIT B
DEBT OF EACH GUARANTOR
1
LA01/80267,1
06-01 -95
EXHIBIT C
THE PROPERTY
1