Exhibit 99.3
COMMERCIAL GUARANTY
BORROWER: EMERGENT INFORMATION TECHNOLOGIES, INC.,
A CALIFORNIA CORPORATION
0000 XXXXXXXXX XXXXX, 0XX XXXXX
XXXXXXX XXXXX, XX 00000
GUARANTOR: XXXXXX XXXXX & ASSOCIATES, INC.,
A CALIFORNIA CORPORATION
0000 XXXXXXXXX XXXXX, 0XX XXXXX
XXXXXXX XXXXX, XX 00000
LENDER: CITY NATIONAL BANK, NA
SOUTH ORANGE COUNTY COMMERCIAL BANKING CENTER
#02100
00000 XXX XXXXXX XXXXXX, XXXXX 000
XXXXXX, XX 00000
AMOUNT OF GUARANTY. The principal amount of this Guaranty is Nine Million Five
Hundred thousand & 00/100 Dollars ($9,500,000.00).
CONTINUING GUARANTY. For good and valuable consideration, XXXXXX XXXXX &
ASSOCIATES, INC., A CALIFORNIA CORPORATION ("Guarantor") absolutely and
unconditionally guarantees and promises to pay to City National Bank, NA
("Lender") or its order, in legal tender of the United States of America, the
Indebtedness (as that term is defined below) of EMERGENT INFORMATION
TECHNOLOGIES, INC., A CALIFORNIA CORPORATION ("Borrower") to Lender on the terms
and conditions set forth in this Guaranty. The obligations of Guarantor under
this Guaranty are continuing.
MAXIMUM LIABILITY. The maximum liability of Guarantor under this Guaranty shall
not exceed at any one time the sum of the principal amount of $9,500,000.00,
plus all interest thereon, plus all of Lender's costs, expenses and attorneys'
fees incurred in connection with or relating to (A) the collection of the
Indebtedness, (B) the collection and sale of any collateral for the Indebtedness
or this Guaranty, or (C) the enforcement of this Guaranty. Attorneys' fees
include, without limitation, attorneys' fees whether or not there is a lawsuit,
and if there is a lawsuit, any fees and costs for trial and appeals.
The above limitation on liability is not a restriction on the amount of the
Indebtedness of Borrower to Lender either in the aggregate or at any one time.
If Lender presently holds one or more guaranties, or hereafter receives
additional guaranties from Guarantor, Lender's rights under all guaranties shall
be cumulative. This Guaranty shall not (unless specifically provided below to
the contrary) affect or invalidate any such other guaranties. Guarantor's
liability will be
Guarantor's aggregate liability under the terms of this Guaranty and any such
other unterminated guaranties.
INDEBTEDNESS GUARANTEED. The indebtedness guaranteed by this Guaranty includes
any and all of Borrower's indebtedness to Lender and is used in the most
comprehensive sense and means and includes any and all of Borrower's
liabilities, obligations and debts to Lender, now existing or hereinafter
incurred or created, including, without limitation, all loans, advances,
interest, costs, debts, overdraft indebtedness, credit card indebtedness, lease
obligations, other obligations, and liabilities of Borrower, or any of them, and
any present or future judgments against Borrower, or any of them; and whether
any such indebtedness is voluntarily or involuntarily incurred, due or not due,
absolute or contingent, liquidated or unliquidated, determined or undetermined;
whether Borrower may be liable individually or jointly with others, or primarily
or secondarily, or as guarantor or surety; whether recovery on the indebtedness
may be or may become barred or unenforceable against Borrower for any reason
whatsoever; and whether the indebtedness arises from transactions which may be
voidable on account of infancy, insanity, ultra xxxxx, or otherwise.
DURATION OF GUARANTY. This Guaranty will take effect when received by Lender
without the necessity of any acceptance by Xxxxxx, or any notice to Guarantor or
to Borrower, and will continue in full force until all indebtedness incurred or
contracted before receipt by Lender of any notice of revocation shall have been
fully and finally paid and satisfied and all of Guarantor's other obligations
under this Guaranty shall have been performed in full. If guarantor elects to
revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written
notice of revocation must be mailed to Lender, by certified mail, at Xxxxxx's
address listed above or such other place as Lender may designate in writing.
Written revocation of this Guaranty will apply only to advance or new
indebtedness created after actual receipt by Xxxxxx of guarantor's written
revocation. For this purpose and without limitation, the term "new indebtedness"
does not include indebtedness which at the time of notice of revocation is
contingent, unliquidated, undetermined or not due and which later becomes
absolute, liquidated, determined or due. This Guaranty will continue to bind
Guarantor for all indebtedness incurred by Xxxxxxxx or committed by Lender prior
to receipt of Guarantor's written notice of revocation, including any
extensions, renewals, substitutions or modifications of the indebtedness. All
renewals, extensions, substitutions, and modifications of the indebtedness
granted after Guarantor's revocation, are contemplated under this Guaranty and,
specifically will not be considered to be new indebtedness. This Guaranty shall
bind Guarantor's estate as to indebtedness created both before and after
guarantor's death or incapacity, regardless of Xxxxxx's actual notice of
Guarantor's death. Subject to the foregoing, Guarantor's executor or
administrator or other legal representative may terminate this Guaranty in the
same manner in which Guarantor might have terminated it and with the same
effect. Release of any other guarantor or termination of any other guaranty of
the indebtedness shall not affect the liability of guarantor under this
Guaranty. A revocation Lender receives from any one or more Guarantors shall not
affect the liability of any remaining Guarantors under this Guaranty. It is
anticipated that fluctuations may occur in the aggregate amount of indebtedness
covered by this Guaranty, and Guarantor specifically
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acknowledges and agrees that reductions in the amount of indebtedness, even to
zero dollars ($0.00), prior to Guarantor's written revocation of this Guaranty
shall not constitute a termination of this Guaranty. This Guaranty is binding
upon Guarantor and Guarantor's heirs, successors and assigns so long as any of
the guaranteed indebtedness remains unpaid and even though the indebtedness
guaranteed may from time to time be zero dollars ($0.00).
GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either
before or after any revocation hereof, without notice or demand and without
lessening guarantor's liability under this Guaranty, form time to time: (A)
prior to revocation as set forth above, to make one or more additional secured
or unsecured loans to Borrower, to lease equipment or other goods to Borrower,
or otherwise to extend additional credit to Borrower; (B) to alter, compromise,
renew, extend, accelerate, or otherwise change one or more times the time for
payment or other terms of the indebtedness or any part of the indebtedness,
including increases and decreases of the rate of interest on the indebtedness;
extensions may be repeated and may be for longer than the original loan term;
(C) to take and hold security for the payment of this guaranty or the
indebtedness, and exchange, enforce, waive, subordinate, fail or decide not to
perfect, and release any such security, with or without the substitution of new
collateral; (D) to release, substitute, agree not to sue, or deal with any one
or more of Borrower's sureties, endorsers, or other guarantors on any terms or
in any manner Lender may choose; (E) to determine how, when and what application
of payments and credits shall be made on the indebtedness; (F) to apply such
security and direct the order or manner of sale thereof, including without
limitation any nonjudicial sale permitted by the terms of the controlling
security agreement or deed of trust, as Lender in its discretion may determine;
(G) to sell, transfer, assign or grant participations in all or any part of the
indebtedness; and (H) to assign or transfer this Guaranty in whole or in part.
GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and
warrants to Lender that (A) no representations or agreements of any kind have
been made to Guarantor which would limit or qualify in any way the terms of this
Guaranty; (B) this Guaranty is executed at Borrower's request and not at the
request of Lender; (C) Guarantor has full power, right and authority to enter
into this Guaranty; (D) the provisions of this Guaranty do not conflict with or
result in a default under any agreements or other instrument binding upon
Guarantor and do not result in a violation of any law, regulation, court decree
or order applicable to Guarantor; (E) Guarantor has not and will not, without
the prior written consent of Lender, sell, lease, assign, encumber, hypothecate,
transfer, or otherwise dispose of all or substantially all of Guarantor's
assets, or any interest therein; (F) upon Lender's request, Guarantor will
provide to Lender financial and credit information in form acceptable to Lender,
and all such financial information which currently has been, and all future
financial information which will be provided to Lender is and will be true and
correct in all material respects and fairly present Guarantor's financial
condition as of the dates the financial information is provided; (G) no material
adverse change has occurred in Guarantor's financial condition since the date of
the most recent financial statements provided to Lender and no event has
occurred which may materially adversely affect Guarantor's financial condition;
(H) no litigation, claim, investigation, administrative proceeding
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or similar action (including those for unpaid taxes) against Guarantor is
pending or threatened; (I) Lender has made no representation to Guarantor as to
the creditworthiness of Borrower; and (J) Guarantor has established adequate
means of obtaining from Borrower on a continuing basis information regarding
Borrower's financial condition. Guarantor agrees to keep adequately informed
from such means of any facts, events, or circumstances which might in any way
affect Guarantor's risks under this Guaranty, and Guarantor further agrees that,
absent a request for information, Xxxxxx shall have no obligation to disclose to
Guarantor any information or documents acquired by lender in the course of its
relationship with Borrower.
GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives
any right to require Lender to (A) make any presentment, protest, demand, or
notice of any kind, including notice of change of any terms of repayment of the
indebtedness, default by Borrower or any other guarantor or surety, any action
or nonaction taken by Borrower, Lender, or any other guarantor or surety of
Borrower, or the creation of new or additional indebtedness; (B) proceed against
any person, including Borrower, before proceeding against Guarantor; (C) proceed
against any collateral for the indebtedness, including Xxxxxxxx's collateral,
before proceeding against Guarantor; (D) apply any payments or proceeds received
against the indebtedness in any order; (E) give notice of the terms, time, and
place of any sale of the collateral pursuant to the Uniform Commercial Code or
any other law governing such sale; (F) disclose any information about the
indebtedness, the Borrower, the collateral, or any other guarantor or surety, or
about any action or nonaction of Lender; or (G) pursue any remedy or course of
action in Xxxxxx's power whatsoever.
Guarantor also waives any and all rights or defenses arising by reason of (H)
any disability or other defense of Borrower, any other guarantor or surety or
any other person; (I) the cessation from any cause whatsoever, other than
payment in full, of the indebtedness; (J) the application of proceeds of the
indebtedness by Borrower for purposes other than the purposes understood and
intended by Guarantor and Lender; (K) any act of omission or commission by
Lender which directly or indirectly results in or contributes to the discharge
of Borrower or any other guarantor or surety, or the indebtedness, or the loss
or release of any collateral by operation of law or otherwise; (L) any statute
of limitations in any action under this Guaranty or on the indebtedness; or (M)
any modification or change in terms of the indebtedness, whatsoever, including
without limitation, the renewal, extension, acceleration, or other change in the
time payment of the indebtedness is due and any change in the interest rate, and
including any such modification or change in terms after revocation of this
Guaranty on indebtedness incurred prior to such revocation.
Guarantor waives all rights and any defenses arising out of an election of
remedies by Xxxxxx even though that the election of remedies, such as a
non-judicial foreclosure with respect to security for a guaranteed obligation,
has destroyed Guarantor's rights of subrogation and reimbursement against
Borrower by operation of Section 580d of the California Code of Civil Procedure
or otherwise.
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Guarantor waives all rights and defenses that Guarantor may have because
Xxxxxxxx's obligation is secured by real property. This means among other
things: (1) Lender may collect from Guarantor without first foreclosing on any
real or personal property collateral pledged by Borrower. (2) If Lender
forecloses on any real property collateral pledged by Borrower: (a) the amount
of Borrower's obligation may be reduced only by the price for which the
collateral is sold at the foreclosure sale, even if the collateral is worth more
than the sale price. (b) Lender may collect from Guarantor even if Lender, by
foreclosing on the real property collateral, has destroyed any right Guarantor
may have to collect from Borrower. This is an unconditional waiver of any rights
and defenses Guarantor may have because Xxxxxxxx's obligation is secured by real
property. These rights and defenses include, but are not limited to, any rights
and defenses based upon Section 580a, 580b, 580d, or 726 of the Code of Civil
Procedure.
Xxxxxxxxx understands and agrees that the foregoing waivers are waivers of
substantive rights and defenses to which Guarantor might otherwise be entitled
under state and federal law. The rights and defenses waived include, without
limitation, those provided by California laws of suretyship and guaranty,
anti-deficiency laws, and the Uniform Commercial Code. Guarantor acknowledges
that Guarantor has provided these waivers of rights and defenses with the
intention that they be fully relied upon by Xxxxxx. Until all indebtedness is
paid in full, Guarantor waives any right to enforce any remedy Lender may have
against the Borrower or any other guarantor, surety, or other person, and
further, Guarantor waives any right to participate in any collateral for the
indebtedness now or hereafter held by Lender.
GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor
warrants and agrees that each of the waivers set forth above is made with the
Guarantor's full knowledge of its significance and consequences and that, under
the circumstances, the waivers are reasonable and not contrary to public policy
or law. If any such waiver is determined to be contrary to any applicable law or
public policy, such waiver shall be effective only to the extent permitted by
law or public policy.
SUBORDINATION OF BORROWS DEBT TO GUARANTOR. Guarantor agrees that the
indebtedness of Borrower to Lender, whether now existing or hereafter created,
shall be superior to any claim that Guarantor may now have or hereafter acquire
against Borrower, whether or not Borrower becomes insolvent. Guarantor hereby
expressly subordinates any claim Guarantor may have against Borrower, upon any
account whatsoever, to any claim that Lender may now or hereafter have against
Borrower. In the event of insolvency and consequent liquidation of the assets of
Borrower, through bankruptcy, by an assignment for the benefit of creditors, by
voluntary liquidation, or otherwise, the assets of Borrower applicable to the
payment of the claims of both Xxxxxx and Guarantor shall be paid to Lender and
shall be first applied by Lender to the indebtedness of Borrower to Lender.
Guarantor does hereby assign to Lender all claims which it may have or acquire
against Borrower or against any assignee or trustee in bankruptcy of Borrower;
provided however, that such assignment shall be effective only for the purpose
of assuring to Lender full payment in legal tender of the indebtedness. If
Lender so requests, any notes or credit agreement now or hereafter evidencing
any debts or obligations of Borrower to
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Guarantor shall be marked with a legend that the same are subject to this
Guaranty and shall be delivered to Lender. Xxxxxxxxx agrees, and Xxxxxx is
hereby authorized, in the name of Guarantor, from time to time to execute and
file financing statements and continuation statements and to execute such other
documents and to take such other actions as Lender deems necessary or
appropriate to perfect, preserve and enforce its rights under this Guaranty.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Guaranty:
AMENDMENTS. This Guaranty, together with any Related Documents, constitutes
the entire understanding and agreement of the parties as to the matters set
forth in this Guaranty. No alteration of or amendment to this Guaranty
shall be effective unless given in writing and signed by the party or
parties sought to be charged or bound by the alteration or amendment.
ATTORNEYS' FEES; EXPENSES. Xxxxxxxxx agrees to pay upon demand all of
Xxxxxx's costs and expenses, including Xxxxxx's attorneys' fees and
Xxxxxx's legal expenses, incurred in connection with the enforcement of
this Guaranty. Lender may hire or pay someone else to help enforce this
Guaranty, and Guarantor shall pay the costs and expenses of such
enforcement. Costs and expenses include Xxxxxx's attorneys' fees and legal
expenses whether or not there is a lawsuit, including attorneys' fees and
legal expenses for bankruptcy proceedings (including efforts to modify or
vacate any automatic stay or injunction), appeals, and any anticipated
post-judgment collection services. Guarantor also shall pay all court costs
and such additional fees as may be directed by the court.
CAPTION HEADINGS. Caption headings in this Guaranty are for convenience
purposes only and are not to be used to interpret or define the provisions
of this Guaranty.
GOVERNING LAW. This Guaranty will be governed by, construed and enforced in
accordance with federal law and the laws of the State of California. This
Guaranty has been accepted by Xxxxxx in the State of California.
CHOICE OF VENUE. If there is a lawsuit, Xxxxxxxxx agrees upon Xxxxxx's
request to submit to the jurisdiction of the courts of ORANGE County, State
of California.
INTEGRATION. Xxxxxxxxx further agrees that Guarantor has read and fully
understands the terms of this Guaranty; Guarantor has had the opportunity
to be advised by Guarantor's attorney with respect to this Guaranty; the
Guaranty fully reflects Guarantor's intentions and parol evidence is not
required to interpret the terms of this Guaranty. Guarantor hereby
indemnifies and holds Lender harmless from all losses, claims, damages, and
costs (including Xxxxxx's attorneys' fees) suffered or incurred by Xxxxxx
as a result of any breach by Guarantor of the warranties, representations
and agreements of this paragraph.
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INTERPRETATION. In all cases where there is more than one Borrower or
Guarantor, then all words used in this Guaranty in the singular shall be
deemed to have been used in the plural where the context and construction
so require; and where there is more than one Borrower named in this
Guaranty or when this Guaranty is executed by more than one Guarantor, the
words "Borrower" and "Guarantor" respectively shall mean all and any one or
more of them. The words "guarantor," "Borrower," and "Lender" include the
heirs, successors, assigns, and transferees of each of them. If a court
finds that any provision of this Guaranty is not valid or should not be
enforced, that fact by itself will not mean that the rest of this Guaranty
will not be valid or enforced. Therefore, a court will enforce the rest of
the provisions of this Guaranty even if a provision of this Guaranty may be
found to be invalid or unenforceable. If any one or more of Borrower or
Guarantor are corporations, partnerships, limited liability companies, or
similar entities, it is not necessary for Lender to inquire into the powers
of Borrower or Guarantor or of the officers, directors, partners, managers,
or other agents acting or purporting to act on their behalf, and any Loan
indebtedness made or created in reliance upon the professed exercise of
such powers shall be guaranteed under this Guaranty.
NOTICES. Any notice required to be given under this Guaranty shall be given
in writing, and, except for revocation notices by Guarantor, shall be
effective when actually delivered, when actually received by telefacsimile
(unless otherwise required by law), when deposited with a nationally
recognized overnight courier, or, if mailed, when deposited in the United
States mail, as first class, certified or registered mail postage prepaid,
directed to the addresses shown near the beginning of this Guaranty. All
revocation notices by Guarantor shall be in writing and shall be effective
upon delivery to Lender as provided in th section of this Guaranty entitled
"DURATION OF GUARANTY." Any party may change its address for notices, under
this Guaranty by giving formal written notice to the other parties,
specifying that the purpose of the notice is to change the party's address.
For notice purposes, Xxxxxxxxx agrees to keep Xxxxxx informed at all times
of Guarantor's current address. Unless otherwise provided or required by
law, if there is more than one Guarantor, any notice given by Lender to any
Guarantor is deemed to be notice given to all Guarantors.
NO WAIVER BY XXXXXX. Lender shall not be deemed to have waived any rights
under this Guaranty unless such waiver is given in writing and signed by
Xxxxxx. No delay or omission on the part of Lender in exercising any right
shall operate as a waiver of such right or any other right. A waiver by
Xxxxxx of a provision of this Guaranty shall not prejudice or constitute a
waiver of Lender's right otherwise to demand strict compliance with that
provision or any other provision of this Guaranty. No prior waiver by
Xxxxxx, nor any course of dealing between Xxxxxx and Guarantor, shall
constitute a waiver of any of Lender's rights or of any of Guarantor's
obligations as to any future transactions. Whenever the consent of Lender
is required under this Guaranty, the granting of such consent by Lender in
any instance shall not constitute continuing consent to subsequent
instances where such consent is required and in all cases such consent may
be granted or withheld in the sole discretion of Lender.
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SUCCESSORS AND ASSIGNS. Subject to any limitations stated in this Guaranty
on transfer of Guarantor's interest, this Guaranty shall be binding upon
and inure to the benefit of the parties, their successors and assigns.
DEFINITIONS. The following capitalized words and terms shall have the following
meanings when used in this Guaranty. Unless specifically stated to the contrary,
all references to dollar amounts shall mean amounts in lawful money of the
United States of America. Words and terms used in the singular shall include the
plural, and the plural shall include the singular, as the context may require.
Words and terms not otherwise defined in this Guaranty shall have the meanings
attributed to such terms in the Uniform Commercial Code:
BORROWER. The word "Borrower" means EMERGENT INFORMATION TECHNOLOGIES,
INC., A CALIFORNIA CORPORATION, and all other persons and entities signing
the Note in whatever capacity.
GUARANTOR. The word "Guarantor" means each and every person or entity
signing this Guaranty, including without limitation XXXXXX XXXXX &
ASSOCIATES, INC., A CALIFORNIA CORPORATION.
GUARANTY. The word "Guaranty" means the guaranty from Guarantor to Lender,
including without limitation a guaranty of all or part of the Note.
INDEBTEDNESS. The word "Indebtedness" means Xxxxxxxx's indebtedness to
Lender as more particularly described in this Guaranty.
LENDER. The word "Lender" means City National Bank, NA, its successors and
assigns.
RELATED DOCUMENTS. The words "Related Documents" means all promissory
notes, credit agreements, loan agreements, environmental agreements,
guaranties, security agreements, mortgages, deeds of trust, security deeds,
collateral mortgages, and all other instruments, agreements and documents,
whether now or hereafter existing, executed in connection with the
indebtedness.
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GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS COMMERCIAL
GUARANTY AND GUARANTOR AGREES TO ITS TERMS. THIS COMMERCIAL GUARANTY IS DATED
JANUARY 10, 2002.
GUARANTOR:
XXXXXX XXXXX & ASSOCIATES, INC., A CALIFORNIA CORPORATION
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxx
---------------------------------- -------------------------------
XXXXXX X. XXXXX, PRESIDENT XXXXX X. XXXX, SECRETARY
of XXXXXX XXXXX & of XXXXXX XXXXX &
ASSOCIATES, INC., A ASSOCIATES, INC., A
CALIFORNIA CORPORATION CALIFORNIA CORPORATION
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