EXHIBIT 4.05
CONTINUING GUARANTY
The undersigned (hereinafter referred to as "Guarantor") hereby requests and authorizes
XXXXXX CAPITAL CORPORATION, XXXXXXX X XxXXXXXXX, XXXX XXXXXX and
XXXXXXXXX XXXXXX (hereinafter collectively referred to as the "Lenders") to extend credit to
LEXON TECHNOLOGIES, INC., a Delaware corporation (hereinafter referred to as "Debtor"), and
in consideration of the granting of such credit by Xxxxxxx to Debtor, Guarantor agrees as follows:
1. The words "indebtedness" and "credit" are used herein in their most comprehensive
sense and include any and all advances, debts, obligations and liabilities, including interest thereon,
of Debtor heretofore, now or hereafter made (including without limitation that certain loan in the
aggregate amount of $750,000 of even date herewith, $250,000 of which was made by Xxxxxx Capital
Corporation, $125,000 of which was made by Xxxxxx X XxXxxxxxx, $125,000 of which was made
by Xxxx Xxxxxx and $250,000 of which was made by Xxxxxxxxx Xxxxxx), incurred or created, with
or without notice to Guarantor, whether voluntary or involuntary and however arising, whether due
or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, whether
assumed by Xxxxxx's successors or assigns by operation of law or otherwise, and whether Debtor
is liable individually or jointly with others, and whether recovery upon any such indebtedness or
credit is or hereafter becomes barred by any statute of limitations or is or hereafter becomes
otherwise unenforceable.
2. Credit may be granted from time to time at the request of Xxxxxx and without further
authorization from or notice to Guarantor, even though Xxxxxx's financial condition may have
deteriorated since the date hereof. If Debtor is a corporation or a partnership, Lenders need not
inquire into the power of Debtor or the authority of its officers, directors, partners or agents acting
or purporting to act in its behalf. Each credit heretofore or hereafter granted to Debtor shall be
considered to have been granted at the special instance and request of Guarantor and in consideration
of and in reliance upon this Guaranty.
3. Guarantor hereby unconditionally guarantees and promises to pay each of the Lenders
or the order of any thereof any and all indebtedness of Debtor to any such Lender and to perform any
and all obligations of Debtor under the terms of any agreement or instrument evidencing, securing
or executed in connection with any such indebtedness ("Credit Documents"). The liability of
Guarantor shall not at any time exceed the sum of $750,000.00, plus the interest thereon in
accordance with the Credit Documents and the costs, attorneys' fees and other expenses provided
for in Paragraph 15 hereof. Lenders may permit Xxxxxx's indebtedness to exceed any maximum
liability without impairing the obligations of Guarantor hereunder. No payments made by or on
behalf of Guarantor to Lenders shall reduce any such maximum liability unless written notice to that
effect is received by Lenders at or prior to the time such payment is made. If Guarantor has executed
more than one guarantee of the indebtedness of Debtor to Lenders, the guarantees shall be
cumulative.
4. Either before or after revocation hereof and in such manner, upon such terms and at
such times as it considers best and with or without notice to Guarantor, Lenders may alter,
compromise, accelerate, extend or change the time or manner for the payment of any indebtedness
hereby guaranteed, increase or reduce the rate of interest thereon, release or add any one or more
guarantors or endorsers, accept additional or substituted security therefor, or release or subordinate
any security therefor. No exercise or nonexercise by any of the Lenders of any right hereby given
it, no dealing by any of the Lenders with Debtor or any other person, and no change, impairment or
suspension of any right or remedy of any of the Lenders shall in any way affect any of the
obligations of Guarantor hereunder or any security furnished by Guarantor or give Guarantor any
recourse against Lenders.
5. In addition to all liens upon and all rights of offset given to Lenders by law against
any property of Debtor or of Guarantor, Guarantor hereby grants a security interest in all property
of Guarantor now or hereafter in the possession of or on deposit with any of the Lenders, whether
held in a general or special account or for safekeeping or otherwise. Each such security interest may
be exercised without demand upon or notice to Guarantor, shall continue in full force unless
specifically waived or released by Lenders in writing and shall not be considered waived by any
conduct of Lenders or by any failure of Lenders to exercise any right of offset or to enforce any such
security interest or by any neglect or delay in so doing.
6. Guarantor waives and agrees not to assert or take advantage of (a) any right to require
Lenders to proceed against Debtor or any other person, firm or corporation or to proceed against or
exhaust any security held by it at any time or to pursue any other remedy in its power; (b) the
defense of the statute of limitations in any action hereunder or for the collection of any indebtedness
or the performance of any obligation guaranteed hereby; (c) any defense that may arise by reason
of the incapacity, lack of authority, death or disability of, or revocation hereof by, any other or others
or the failure of Lenders to file or enforce a claim against the estate (either in administration,
bankruptcy, or other proceedings) of any other or others; (d) demand, protest and notice of any kind
including, without limiting the generality of the foregoing, notice of the existence, creation or
incurring of new or additional indebtedness or of any action or non-action on the part of Debtor, any
of the Lenders, any endorser, creditor of Debtor or Guarantor under this or any other instrument, or
any other person whomsoever, in connection with any obligation or evidence of indebtedness hereby
guaranteed; (e) any defense based upon an election of remedies by Xxxxxxx, including without
limitation, an election to proceed by nonjudicial rather than judicial foreclosure, which election
destroys or otherwise impairs subrogation rights of Guarantor or the right of Guarantor to proceed
against Debtor for reimbursement, or both; (f) any defense or right based upon the fair value
deficiency protections; and (g) any defense or right based upon the acceptance by any of the Lenders
or an affiliate thereof of a deed in lieu of foreclosure, without extinguishing the indebtedness, even
if such acceptance destroys, alters or otherwise impairs subrogation rights of Guarantor or the right
of Guarantor to proceed against Debtor for reimbursement, or both.
7. Guarantor, by execution hereof, represents to Lenders that the relationship between
Guarantor and Debtor is such that Guarantor has access to all relevant facts and information
concerning the indebtedness and Debtor and that Lenders can rely upon Guarantor having such
access. Guarantor waives and agrees not to assert any duty on the part of Lenders to disclose to
Guarantor any facts that Lenders may now or hereafter know about Debtor, regardless of whether
Lenders have reason to believe that any such facts materially increase the risk beyond that which
Guarantor intends to assume, or have reason to believe that such facts are unknown to Guarantor,
or have a reasonable opportunity to communicate such facts to Guarantor. Guarantor is fully
responsible for being and keeping informed of the financial condition of Debtor and all
circumstances bearing on the risk of non-payment of the indebtedness guaranteed hereby.
8. Until all indebtedness of Debtor to Lenders has been paid in full, even though such
indebtedness is in excess of the liability of Guarantor, Guarantor shall have no right of subrogation
and waives any right to enforce any remedy which Lenders now or may hereafter have against
Debtor and any benefit of and any right to participate in any security now or hereafter held by
Lenders.
9. Except as otherwise provided in this paragraph, all existing or future indebtedness
of Debtor to Guarantor is hereby subordinated to all indebtedness hereby guaranteed and, without
the prior written consent of all of the Lenders, shall not be paid or withdrawn in whole or in part nor
will Guarantor accept any payment of or on account of any such indebtedness while this Guaranty
is in effect. At Lenders' request, Debtor shall pay to Lenders all or any part of subordinated
indebtedness and any capital which Guarantor is entitled to withdraw. Each payment by Debtor to
Guarantor in violation of this paragraph shall be received in trust for Lenders and shall be paid to
the Lenders immediately on account of the indebtedness of Debtor to Lenders. No such payment
shall reduce or affect in any manner Guarantor's liability under any of the provisions of this
Guaranty. Guarantor reserves the right to receive from Debtor payment of any salary for personal
services at the same monthly rate as that at which Guarantor has been paid during the preceding
twelve months, it being expressly understood that such amount shall not be subordinated to the
indebtedness guaranteed hereby.
10. Guarantor will file all claims against Debtor in any bankruptcy or other proceeding
in which the filing of claims is required by law upon any indebtedness of Debtor to Guarantor and
shall concurrently assign to Lenders all of Guarantor's rights thereunder. If Guarantor does not file
any such claim, each of the Lenders, as Guarantor's attorney-in-fact, is hereby authorized to do so
in Guarantor's name or, in Xxxxxxx' discretion, to assign the claim and to cause proof of claim to be
filed in the name of Xxxxxxx' nominee. In all such cases, whether in administration, bankruptcy or
otherwise, the person or persons authorized to pay such claims shall pay to Lenders the full amount
thereof and, to the full extent necessary for the purpose, Guarantor hereby assigns to Lenders all of
Guarantor's rights to any and all such payments or distributions to which Guarantor would otherwise
be entitled. If the amount so paid is greater than the guaranteed indebtedness then outstanding,
Lenders will pay the amount of the excess to the person entitled thereto.
11. With or without notice to Guarantor, any or all of the Lenders, in its or their sole
discretion and at any time and from time to time either before or after delivery of any notice of
revocation hereunder and in such manner and upon such terms as it considers fit, may (a) apply any
or all payments or recoveries from Debtor, from Guarantor or from any other guarantors under this
or any other instrument or realized from any security, in such manner and order or priority as
Lenders elect, to any indebtedness of Debtor to Lenders, whether or not such indebtedness is
guaranteed hereby or is otherwise secured or is due at the time of such application; and (b) refund
to Debtor any payment received by Lenders upon any indebtedness hereby guaranteed and payment
of the amount refunded shall be fully guaranteed hereby. Any recovery realized from any other
guarantors under this or any other instrument shall be first credited upon that portion of the
indebtedness of Debtor to Lenders which exceeds Guarantor's maximum liability, if any, hereunder.
12. The amount of Guarantor's liability and all rights, powers and remedies of Lenders
hereunder and under the Credit Documents and any other agreement now or at any time hereafter
in force between Lenders and Guarantor shall be cumulative and not alternative, and such rights,
powers and remedies shall be in addition to all rights, powers and remedies given to Lenders by law.
13. Guarantor's obligations hereunder are independent of the obligations of Xxxxxx and,
in the event of any default hereunder, a separate action or actions may be brought and prosecuted
against Guarantor whether action is brought against Debtor or whether Debtor is joined by any such
action or actions. Lenders may maintain successive actions for other defaults. Xxxxxxx' rights
hereunder shall not be exhausted by the exercise of any of their rights or remedies or by any such
action or by any number of successive actions until and unless all indebtedness and obligations
hereby guaranteed have been paid and fully performed.
14. This is a Continuing Guaranty and Xxxxxxxxx agrees that it shall remain in full force
until and unless Guarantor delivers to each of the Lenders written notice that it has been revoked as
to credit granted subsequent to the effective time of revocation as herein provided. Delivery of such
notice shall not affect any of Guarantor's obligations hereunder with respect to credit granted prior
to the effective date of such revocation, nor shall it affect any of the obligations of any other
guarantors for the credit granted to Debtor.
15. Guarantor agrees to pay to Lenders without demand reasonable attorneys' fees and
all costs and other expenses which Lenders expend or incur in collecting or compromising any
indebtedness of Debtor, in protecting Lenders' security under the Credit Documents or in enforcing
this Guaranty against Guarantor or any other guarantors of any indebtedness hereby guaranteed
whether or not suit is filed, including, without limitation, attorney's fees, costs and other such
expenses incurred in any bankruptcy proceeding. Guarantor warrants and represents that it is fully
authorized by law to execute this Guaranty.
16. This Guaranty shall benefit Xxxxxxx, their respective successors and assigns,
including the assignees of any indebtedness hereby guaranteed, and binds Guarantor's heirs and
personal representatives. This Guaranty is assignable by any or all of Lenders with respect to all or
any portion of the indebtedness and obligations guaranteed hereunder, and, when so assigned,
Guarantor shall be liable to the assignees under this Guaranty without in any manner affecting
Guarantor's liability hereunder with respect to any indebtedness or obligations retained by any of
the Lenders. No delegation or assignment of this Guaranty by Guarantor shall be of any force or
effect or release Guarantor from any obligation hereunder.
17. No provision of this Guaranty or right of Lenders hereunder can be waived, nor can
Guarantor be released from his obligations hereunder, except by a writing duly executed by each of
the Lenders prejudiced in any manner by such waiver or release. Should any one or more provisions
of this Guaranty be determined to be illegal or unenforceable, all other provisions nevertheless shall
be governed by and construed in accordance with the laws of Arizona, and Guarantor agrees to
submit to the jurisdiction of the courts of Arizona.
18. If more than one Guarantor signs this Guaranty, the obligation of all such Guarantors
shall be joint and several. When the context and construction so require, all words used in the
singular shall be deemed to have been used in the plural and the masculine shall include the feminine
and neuter. Any married person who signs this Guaranty agrees that recourse may be had against
separate property for all obligations under this Guaranty.
19. Except as provided in any other written agreement now or at any time hereafter in
force between all of the Lenders and Guarantor, this Guaranty shall constitute the entire agreement
of Guarantor with Lenders with respect to the subject matter hereof and no representation,
understanding, promise or condition concerning the subject matter hereof shall be binding upon
Lenders unless expressed herein. Any notice to Guarantor shall be considered to have been duly
given when delivered personally or forty-eight hours after being mailed, postage prepaid, to the
address set forth below or to such other address as Guarantor may from time to time designate to
Lenders in writing.
20. The undersigned Guarantor hereby acknowledges the receipt of a true copy of this
Guaranty.
21. This Guaranty is secured by a Stock Pledge and Security Agreement of even date
herewith by Guarantor in favor of Xxxxxxx.
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GUARANTY AMOUNT $750,000.00
Executed by the Guarantor on August 10, 1999.
Signature of Guarantor Address
_______________________________
Xxxxxx X. Xxxxxxxxx
_________________________________
