GUARANTY
THIS GUARANTY is made this 9th day of February, 2000, among LYTTON
INCORPORATED, a Delaware corporation (the "Guarantor"), and THE PROVIDENT
BANK, an Ohio banking corporation ("Lender"), under the following circum-
stances:
WHEREAS, Lender has entered into an Asset Based Loan and Security
Agreement ("the Loan Agreement") committing Lender to loan up to the
principal sum of FIVE MILLION FIVE HUNDRED THOUSAND DOLLARS ($5,500,000.00)
(the "Loan") to Techdyne, Inc., a Florida corporation ("Borrower").
WHEREAS, the indebtedness is evidenced by (a) Borrower's Line of Credit
Promissory Note in the amount of FOUR MILLION FIVE HUNDRED THOUSAND DOLLARS
($4,500,000.00) ("Line of Credit Note"), and (b) Borrower's Term Loan
Promissory Note in the amount of ONE MILLION DOLLARS ($1,000,000.00) ("Term
Note"), both of which are dated February 9, 2000 and are hereinafter
collectively referred to as the "Notes".
WHEREAS, the Notes are secured by a security interest in all of
Borrower's assets, inventory, accounts, equipment and general intangibles.
WHEREAS, as an inducement to Lender to make the Loan to Borrower pursuant
to the Loan Agreement, the Guarantor is willing to guaranty all obligations of
the Borrower under the Notes and to execute and deliver this Guaranty.
NOW, THEREFORE, Guarantor and Lender agree as follows:
Section 1. Representations and Warranties. Guarantor hereby represents
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and warrants as follows:
(a) Guarantor is a corporation duly organized, existing and in good
standing under the laws of the State of Delaware and is authorized
to do business in Ohio. Guarantor has the power to own its own
properties and to carry on its business as now being conducted;
(b) the execution of this Guaranty has been fully authorized by Guarantor
and the officer so executing same has been duly authorized;
(c) this Guaranty is a legal, valid and binding obligation of the
Guarantor, enforceable in accordance with its terms except as
enforcement of such terms may be limited by (i) bankruptcy,
insolvency or similar laws affecting enforcement of creditors' rights
generally and (ii) equitable principles which may limit the
availability of the remedy of specific performance or other equitable
remedies;
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(d) the execution, delivery and performance of this Guaranty do not and
will not violate or contravene the Articles of Incorporation or
By-Laws of Guarantor, any authority having the force of law or any
material indenture, agreement or other instrument to which the
Guarantor is a party or by which the Guarantor or any of its property
or assets is or may be bound or materially affected.
Section 2. Statement of Guaranty. Guarantor hereby absolutely and
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unconditionally guarantees prompt payment when due of any and all existing
and future indebtedness or liability of every kind, nature or character
(including, without limitation, principal, interest, all costs of collection,
and attorneys' fees) owing to Lender by Borrower, whether direct or indirect,
absolute or contingent, joint or several, whether due or to become due and
whether now existing or hereafter arising under the Notes and Loan Agreement
and all extensions and renewals thereof (the "Indebtedness"). The Guarantor
undertakes this continuing, absolute, and unconditional guaranty of the
aforementioned payment and performance by Borrower notwithstanding that any
portion of the Indebtedness shall be void or voidable as between the
Borrower and any of its creditors, including, without limitation, any
bankruptcy trustee of the Borrower.
Section 3. Waiver. This absolute, continuing, unconditional guaranty
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is a guaranty of payment and not a guaranty of collection. Upon Borrower's
failure to pay the Indebtedness promptly when due, Lender, at its sole
option, may proceed against the Guarantor to collect the Indebtedness, with
or without proceeding against the Borrower, any co-maker or co-surety or co-
guarantor, any indorser or any collateral held as security for the
Indebtedness. The Guarantor waives any right to require that any action be
brought against the Borrower or to require that resort be had to any security
or other right or remedy which may be available to Lender. Any and all
payments upon the Indebtedness made by the Borrower, the Guarantor, or any
other person, and the proceeds of any and all collateral securing the payment
of the Indebtedness and this Guaranty, may be applied by Lender in whatever
manner it may determine in its sole discretion. The Guarantor agrees to
reimburse Lender for all reasonable expenses of any nature whatsoever
including, without limitation, reasonable attorneys' fees, incurred or paid
by Lender in exercising any right, power, or remedy conferred by this
Guaranty. Until the Indebtedness is paid in full, the Guarantor shall not
exercise any right of subrogation with respect to payments made by the
Guarantor pursuant to this Guaranty.
The obligations of the Guarantor set forth in this Guaranty shall extend
to all amendments, supplements, modifications, renewals, replacements or
extensions of the Indebtedness at any rate of interest. The liability of
the Guarantor and the rights of Lender under this Guaranty shall not be
impaired or affected in any manner by, and the Guarantor hereby consents
in advance to and waives any requirement of notice for, any (1) disposition,
impairment, release, surrender, substitution, or modification of any
collateral securing the Indebtedness or the obligations created by this
Guaranty or any failure to perfect a security interest in any collateral
through no fault on the part of Lender; (2) release (including adjudication
or discharge in bankruptcy) or settlement with any person primarily or
secondarily liable for the Indebtedness (including, without limitation,
any maker, indorser, guarantor or surety); (3) delay in enforcement of
payment of the Indebtedness or delay in enforcement of this Guaranty; (4)
delay, omission, waiver, or forbearance in exercising any right or power with
respect to the Indebtedness or this Guaranty; (5) defense arising from the
enforceability
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or validity of the Indebtedness or any part thereof or the genuineness,
enforceability or validity of any agreement relating thereto: (6) any
defenses or counterclaims that the Borrower may assert on the Indebtedness,
including but not limited to failure of consideration, breach of warranty,
fraud, payment, statute of frauds, bankruptcy, infancy, statute of limita-
tions, lender liability, accord and satisfaction and usury; or (7) other act
or omission which might constitute a legal or equitable discharge of the
Guarantor. The Guarantor waives presentment, protest, demand for payment,
any right or set-off, notice of dishonor or default, notice of acceptance of
this Guaranty, notice of the incurring of any of the Indebtedness and notice
of any other kind in connection with the Indebtedness or this Guaranty.
Section 4. Insolvency of Borrower. The Guarantor agrees that in the
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event of (i) the dissolution or insolvency of the Borrower, (ii) the
inability of the Borrower to pay its debts as they become due, (iii) an
assignment by the Borrower for the benefit of its creditors, or (iv) the
institution of any bankruptcy or other proceeding by the Borrower or the
filing of an involuntary bankruptcy proceeding against Borrower alleging that
the Borrower is insolvent or unable to pay its debts as they become due
(provided however, that Borrower shall have sixty (60) days in which to cause
the petition to be released or dismissed if, in Lender's reasonable judgment,
such petition is likely to be released or dismissed within such sixty (60)
days); and whether or not such event shall occur at a time when the Indebted-
ness was then due and payable, the Guarantor shall pay the Indebtedness to
Lender promptly upon demand as if the Indebtedness was then due and payable.
The Guarantor hereby waives any claim, right or remedy which the Guarantor
may now have or hereafter acquire against Borrower that arises hereunder
and/or from the performance by the Guarantor hereunder including, without
limitation, any claim, remedy or right of subrogation, reimbursement,
exoneration, contribution, indemnification, or participation in any claim,
right or remedy of Lender against Borrower or any security which Lender now
has or hereafter acquires, whether or not such claim, right or remedy arises
in equity, under contract, by statute, under common law or otherwise.
The Guarantor agrees that this Guaranty shall continue to be effective
or be reinstated, as the case may be, if at any time payment, or any part
thereof, of principal, interest or any other amount with respect to the
Indebtedness is rescinded or must otherwise be restored by Lender upon the
bankruptcy or reorganization of the Borrower, any other person or otherwise.
Upon any portion of the Indebtedness becoming due and not being fully
paid and satisfied, the total sum then due hereunder may immediately be
charged against any account or accounts maintained by the Guarantor with
Lender, without notice to or further consent from the Guarantor. The
Guarantor shall promptly provide such financial information as the holder
shall reasonably request from time to time.
Lender shall not be compelled to resort first to any collateral for
payment of any of the Indebtedness, but may at its election require the
obligation to be paid by the Guarantor, with or without suit. The provisions
of this Guaranty shall apply to any new or additional collateral given by
the Guarantor to further secure the Indebtedness and the obligations created
by this Guaranty.
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Section 5. Security. This Guaranty will be secured by a Security
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Agreement granting Lender a security interest in all of Guarantor's Accounts,
Equipment, General Intangibles, Inventory and all other items of personal
property now owned or hereafter acquired by the Guarantor or in which the
Guarantor has granted or may in the future grant a security interest to the
Bank hereunder ("Collateral").
Section 6. Waiver of Jury Trial. As a specifically bargained induce-
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ment for Lender to extend credit to Borrower: (i) THE GUARANTOR HEREBY
EXPRESSLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LAWSUIT OR PROCEEDING
RELATED TO THIS GUARANTY OR ARISING IN ANY WAY FROM THE INDEBTEDNESS OR
TRANSACTIONS INVOLVING LENDER AND THE DEBTOR AND (ii) THE GUARANTOR HEREBY
DESIGNATES ALL COURTS OF RECORD SITTING IN DAYTON, OHIO AND HAVING JURIS-
DICTION OVER THE SUBJECT MATTER, STATE AND FEDERAL, AS FORUMS WHERE ANY
ACTION, SUIT OR PROCEEDING IN RESPECT OF OR ARISING FROM OR OUT OF THIS
GUARANTY, ITS MAKING, VALIDITY OR PERFORMANCE, MAY BE PROSECUTED AS TO ALL
PARTIES, THEIR SUCCESSORS AND ASSIGNS, AND BY THE FOREGOING DESIGNATION THE
GUARANTOR CONSENTS TO THE JURISDICTION AND VENUE OF SUCH COURTS.
Section 7. Successors and Assigns. This Guaranty shall inure to the
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benefit of and bind the parties hereto, their successors and assigns, and
their legal representatives or heirs. Lender may, at its option, assign
this Guaranty to any other party who is or becomes the indorsee or assignee
of any part of the Indebtedness or who is in possession of or the bearer of
any part of the Indebtedness that is payable to the bearer, and the
Guarantor shall continue to be liable under this Guaranty to such other
party to the extent of such indorsed, assigned, or possessed Indebtedness.
Section 8. Confession of Judgment. The Guarantor authorizes any
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attorney at law, including an attorney engaged by Lender, to appear in
Xxxxxxxx County or Xxxxxxxxxx County, Ohio, or in any other court of record
in the State of Ohio or any other State or Territory of the United State,
after the indebtedness evidenced hereby, or any part thereof, becomes due
and waive the issuance and service of process and confess judgment against
the Guarantor in favor of Lender, for the amount then appearing due,
together with costs of suit, and thereupon, to release all errors and waive
all rights of appeal and stay of execution. The Guarantor hereby expressly
waives any conflict of interest that Lender's attorney may have in confessing
such judgment against the Guarantor and expressly consents to the confessing
attorney receiving a legal fee from Lender or confessing such judgment
against the Guarantor. This warrant of attorney to confess judgment is a
joint and several warrant of attorney. The foregoing warrant of attorney
shall survive any judgment; and if any judgment be vacated for any reason,
the holder hereof nevertheless may thereafter use the foregoing warrant of
attorney to obtain an additional judgment or judgments against the Guarantor.
WARNING--BY SIGNING THIS PAPER, YOU GIVE UP YOUR RIGHT TO NOTICE AND
COURT TRIAL. IF YOU DO NOT PAY ON TIME, A COURT JUDGMENT MAY BE TAKEN
AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE, AND THE POWERS OF A COURT
CAN BE USED TO
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COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE
CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON ITS
PART TO COMPLY WITH THE AGREEMENT OR ANY OTHER CAUSE.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Guaranty on the day and year first above written.
WITNESSES GUARANTOR
LYTTON INCORPORATED,
a Delaware corporation
/s/ Xxxx Xxxxx Xxxxxxx /s/ Xxxxx Xxxxx
---------------------------------- By---------------------------------
XXXXX XXXXX
/s/ M. Xxxxxxx Xxxxxx, Esq. Its Chief Financial Officer
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LENDER
THE PROVIDENT BANK,
an Ohio banking corporation
/s/ Xxxx Xxxxx Xxxxxxx /s/ Xxxxxxxx X. Xxxxxx
---------------------------------- By---------------------------------
Xxxxxxxx X. Xxxxxx
/s/ M. Xxxxxxx Xxxxxx, Esq. Vice President
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