1
EXHIBIT 10.29.2
SPECIFIC GUARANTY
THIS SPECIFIC GUARANTY (this "Guaranty") dated the 29th day of March, 2001, is
executed by the undersigned, PROLOGIC MANAGEMENT SYSTEMS, INC., individually,
whose address for notice hereunder is 0000 X. Xxxxxxxx Xxxxxx, #000, Xxxxxx,
Xxxxxxx 85714("Guarantor"), in favor of KBK FINANCIAL, INC., a Delaware
corporation, authorized to do business in Texas, whose address for notice
hereunder is 2200 City Center II, 000 Xxxxxxxx Xxxxxx, Xxxx Xxxxx, Xxxxx 00000
("KBK").
1. Obligations. As an inducement to KBK to extend or continue to extend
credit and other financial accommodations to Basis, Inc., an Arizona
corporation ("Borrower"), Guarantor, for value received, does hereby
unconditionally and absolutely guarantee the prompt and full payment
and performance of the Guaranteed Indebtedness when due or declared to
be due and at all times thereafter. The term "Guaranteed Indebtedness"
shall mean (i) all amounts owing by Borrower under that certain Account
Transfer and Purchase Agreement, between Borrower and KBK, dated March
29, 2001 (as such document may be amended from time to time, whether
one or more, collectively, the "Financing Documents"), (iii) all costs
and expenses incurred by KBK in connection with the collection of all
or any part of the indebtedness and obligations owing by Borrower under
the Financing Documents, or the protection of, or realization upon, the
collateral securing all or any part of such indebtedness and
obligations, and (iv) all renewals, extensions, modifications and
rearrangements of the indebtedness and obligations owing by Borrower
under the Financing Documents. This is an absolute, continuing and
unconditional guarantee of payment and not of collection and if at any
time or from time to time there is no outstanding Guaranteed
Indebtedness, the obligations of Guarantor with respect to any and all
Guaranteed Indebtedness incurred thereafter shall not be affected. This
Guaranty and the Guarantor's obligations hereunder are irrevocable and,
in the event of Guarantor's death, shall be binding upon Guarantor's
estate pursuant to paragraph 8 herein. All of the Guaranteed
Indebtedness shall be conclusively presumed to have been made or
acquired in acceptance hereof. Guarantor shall be liable, jointly and
severally, with Borrower and any other guarantor of all or any part of
the Guaranteed Indebtedness.
2. Representations and Warranties. Guarantor hereby represents and
warrants the following to KBK:
(a) This Guaranty may reasonably be expected to benefit, directly
or indirectly, Guarantor, and (i) if Guarantor is a
corporation, the Board of Directors of Guarantor has
determined that this Guaranty may reasonably be expected to
benefit, directly or indirectly, Guarantor, or (ii) if
Guarantor is a partnership, the requisite number of its
partners have determined that this Guaranty may reasonably be
expected to benefit, directly or indirectly, Guarantor; and
(b) Guarantor has adequate means to obtain from Borrower on a
continuing basis information concerning the financial
condition of Borrower and Guarantor is not relying on KBK to
provide such information to Guarantor either now or in the
future; and
(c) Guarantor has the power and authority to execute, deliver and
perform this Guaranty and any other agreements executed by
Guarantor contemporaneously herewith, and the execution,
delivery and performance of this Guaranty and any other
agreements executed by Guarantor contemporaneously herewith do
not and will not violate (i) any agreement or instrument to
which Guarantor is a party, (ii) any law, rule, regulation or
order of any governmental authority to which Guarantor is
subject, or (iii) its articles or certificate of incorporation
or bylaws, if Guarantor is a corporation, or its partnership
agreement, if Guarantor is a partnership; and
(d) Neither KBK nor any other party has made any representation,
warranty or statement to Guarantor in order to induce
Guarantor to execute this Guaranty; and
(e) The financial statements and other financial information
regarding Guarantor heretofore and hereafter delivered to KBK
are and shall be true and correct in all material respects and
fairly present the financial position of Guarantor as of the
dates thereof, and no material adverse change has occurred in
the financial condition of Guarantor reflected in the
financial statements and other financial information regarding
Guarantor heretofore delivered to KBK since the date of the
last statement thereof; and
(f) As of the date hereof, and after giving effect to this
Guaranty and the obligations evidenced hereby, (i) Guarantor
is and will be solvent, (ii) the fair saleable value of
Guarantor's assets exceeds and will continue to exceed its
liabilities (both fixed and contingent), (iii) Guarantor is
and will continue to be able to pay its debts as they mature,
and (iv) if Guarantor is not an individual, Guarantor has and
will continue to have sufficient capital to carry on its
business and all businesses in which it is about to engage;
and
(g) Guarantor acknowledges that, in consideration for its
execution, delivery and performance of this Guaranty,
Guarantor has received "reasonably equivalent in value" within
the meaning of the Uniform Fraudulent Transfer Act set forth
in Chapter 24 of the Texas Business and Commerce Code, and
Section 548 of the United States Bankruptcy Code, as amended;
and
(h) Except as may be set out on any exhibit attached hereto, (i)
there are no legal proceedings, material claims or demands
pending or, to the knowledge of Guarantor, threatened against
Guarantor or any of Guarantor's assets, (ii) Guarantor is not
in material breach or material default of any legal
requirement; and (iii) no event has occurred which, with a
lapse of time or action by a third party, could result in
Guarantor's material breach or material default under any
legal requirement.
3. Covenants. Guarantor hereby covenants and agrees with KBK as follows:
(a) Guarantor shall not, so long as its obligations under this
Guaranty continue, transfer or pledge any material portion of
its assets for less than reasonably adequate consideration;
and
(b) Guarantor shall promptly furnish to KBK at any time and from
time to time such financial statements and other financial
information of Guarantor as KBK may require, in form and
substance satisfactory to KBK
1
2
(including, without limitation, annual financial statements
within 90 days after the end of each calendar year); and
(c) Guarantor shall promptly inform KBK of (i) any litigation or
governmental investigation against Guarantor or affecting any
security for all or any part of the Guaranteed Indebtedness or
this Guaranty which, if determined adversely, might have a
material adverse effect upon the financial condition of
Guarantor or upon such security or might cause a default under
any of the Financing Documents, (ii) any claim or controversy
which might become the subject of such litigation or
governmental investigation, and (iii) any material adverse
change in the financial condition of Guarantor; and
(d) Guarantor hereby subordinates all indebtedness now or
hereafter owing by Borrower to Guarantor to the Guaranteed
Indebtedness.
4. Consent and Waiver.
(a) Guarantor waives (i) promptness, diligence and notice of
acceptance of this Guaranty and notice of the incurring of any
obligation, indebtedness or liability to which this Guaranty
applies or may apply and waives presentment for payment,
notice of nonpayment, protest, demand, notice of protest,
notice of intent to accelerate, notice of acceleration, notice
of dishonor, diligence in enforcement and indulgences of every
kind, and (ii) the taking of any other action by KBK,
including without limitation giving any notice of default or
any other notice to, or making any demand on, Borrower, any
other guarantor of all or any part of the Guaranteed
Indebtedness or any other party.
(b) Guarantor waives any rights Guarantor has under, or any
requirements imposed by, Chapter 34 of the Texas Business and
Commerce Code, as in effect on the date of this Guaranty or as
it may be amended from time to time and waives all other
notices to which Guarantor may be entitled.
(c) KBK may at any time, without the consent of or notice to
Guarantor, without incurring responsibility to Guarantor and
without impairing, releasing, reducing or affecting the
obligations of Guarantor hereunder: (i) change the manner,
place or terms of payment of all or any part of the Guaranteed
Indebtedness, or renew, extend, modify, rearrange or alter all
or any part of the Guaranteed Indebtedness; (ii) change the
interest rate accruing on any of the Guaranteed Indebtedness
(including, without limitation, any periodic change in such
interest rate that occurs because such Guaranteed Indebtedness
accrues interest at a variable rate which may fluctuate from
time to time); (iii) sell, exchange, release, surrender,
subordinate, realize upon or otherwise deal with in any manner
and in any order any collateral for all or any part of the
Guaranteed Indebtedness or this Guaranty or setoff against all
or any part of the Guaranteed Indebtedness; (iv) neglect,
delay, omit, fail or refuse to take or prosecute any action
for the collection of all or any part of the Guaranteed
Indebtedness or this Guaranty or to take or prosecute any
action in connection with any of the Financing Documents; (v)
exercise or refrain from exercising any rights against
Borrower or others, or otherwise act or refrain from acting;
(vi) settle or compromise all or any part of the Guaranteed
Indebtedness and subordinate the payment of all or any part of
the Guaranteed Indebtedness to the payment of any obligations,
indebtedness or liabilities which may be due or become due to
KBK or others; (vii) apply any payment, collections through
process of law or otherwise or other collateral of Borrower to
the satisfaction and liquidation of the indebtedness or
obligations of Borrower to KBK not guaranteed under this
Guaranty; and (viii) apply any sums paid to KBK by Guarantor,
Borrower or others to the Guaranteed Indebtedness in such
order and manner as KBK, in its sole discretion, may
determine.
(d) Should KBK seek to enforce the obligations of Guarantor
hereunder by action in any court or otherwise, Guarantor
waives any requirement, substantive or procedural, that (i)
KBK first enforce any rights or remedies against Borrower or
any other person or entity liable to KBK for all or any part
of the Guaranteed Indebtedness, including without limitation
that a judgment first be rendered against Borrower or any
other person or entity, or that Borrower or any other person
or entity should be joined in such cause, or (ii) KBK first
enforce rights against any collateral which shall ever have
been given to secure all or any part of the Guaranteed
Indebtedness or this Guaranty. Such waiver shall be without
prejudice to KBK's right, at its option, to proceed against
Borrower or any other person or entity, whether by separate
action or by joinder.
(e) In addition to any other waivers, agreements and covenants of
Guarantor set forth herein, Guarantor hereby further waives
and releases all claims, causes of action, defenses and
offsets for any act or omission of KBK, its directors,
officers, employees, representatives or agents in connection
with KBK's administration of the Guaranteed Indebtedness,
except for KBK's willful misconduct and gross negligence.
5. Obligations Not Impaired.
(a) Guarantor agrees that its obligations hereunder shall not be
released, diminished, impaired, reduced or affected by the
occurrence of any one or more of the following events: (i) the
death, disability or lack of corporate power of Borrower,
Guarantor (except as provided in paragraph 8 herein) or any
other guarantor of all or any part of the Guaranteed
Indebtedness, (ii) any receivership, insolvency, bankruptcy or
other proceedings affecting Borrower, Guarantor or any other
guarantor of all or any part of the Guaranteed Indebtedness,
or any of their respective property; (iii) the partial or
total release or discharge of Borrower or any other guarantor
of all or any part of the Guaranteed Indebtedness, or any
other person or entity from the performance of any obligation
contained in any instrument or agreement evidencing, governing
or securing all or any part of the Guaranteed Indebtedness,
whether occurring by reason of law or otherwise; (iv) the
taking or accepting of any collateral for all or any part of
the Guaranteed Indebtedness or this Guaranty; (v) the taking
or accepting of any other guaranty for all or any part of the
Guaranteed Indebtedness; (vi) any failure by KBK to acquire,
perfect or continue any lien or security interest on
collateral securing all or any part of the Guaranteed
Indebtedness or this Guaranty; (vii) the impairment of any
collateral securing all or any part of the Guaranteed
Indebtedness or this Guaranty; (viii) any failure by KBK to
sell any collateral securing all or any part of the Guaranteed
Indebtedness or this Guaranty in a commercially reasonable
manner or as otherwise required by law; (ix) any invalidity or
unenforceability of or defect or deficiency in any of the
Financing Documents; or (x) any other circumstance which might
otherwise constitute a defense
2
3
available to, or discharge of, Borrower or any other guarantor
of all or any part of the Guaranteed Indebtedness.
(b) This Guaranty shall continue to be effective or be reinstated,
as the case may be, if at any time any payment of all or any
part of the Guaranteed Indebtedness is rescinded or must
otherwise be returned by KBK upon the insolvency, bankruptcy
or reorganization of Borrower, Guarantor, any other guarantor
of all or any part of the Guaranteed Indebtedness, or
otherwise, all as though such payment had not been made.
(c) Guarantor agrees that its obligations hereunder shall not be
released, diminished, impaired, reduced or affected by the
existence of any other guaranty or the payment by any other
guarantor of all or any part of the Guaranteed Indebtedness.
(d) Guarantor's obligations hereunder shall not be released,
diminished, impaired, reduced or affected by, nor shall any
provision contained herein be deemed to be a limitation upon,
the amount of credit which KBK may extend to Borrower, the
number of transactions between KBK and Borrower, payments by
Borrower to KBK or KBK's allocation of payments by Borrower.
(e) In the event Borrower is a corporation or partnership, none of
the following shall affect Guarantor's liability hereunder:
(i) the unenforceability of all or any part of the Guaranteed
Indebtedness against Borrower by reason of the fact that the
Guaranteed Indebtedness exceeds the amount permitted by law;
(ii) the act of creating all or any part of the Guaranteed
Indebtedness is ultra xxxxx; or (iii) the officers or partners
creating all or any part of the Guaranteed Indebtedness acted
in excess of their authority. Guarantor hereby acknowledges
that withdrawal from, or termination of, any ownership
interest in Borrower now or hereafter owned or held by
Guarantor shall not alter, affect or in any way limit the
obligations of Guarantor hereunder.
6. Actions against Guarantor. In the event of a default in the payment or
performance of all or any part of the Guaranteed Indebtedness when such
Guaranteed Indebtedness becomes due, whether by its terms, by
acceleration or otherwise, Guarantor shall pay the amount due thereon
to KBK, in lawful money of the United States, at KBK's address set
forth above within 5 days after demand thereof by KBK. One or more
successive or concurrent actions may be brought against Guarantor,
either in the same action in which Borrower is sued or in separate
actions, as often as KBK deems advisable. The exercise by KBK of any
right or remedy under this Guaranty or under any other agreement or
instrument, at law, in equity or otherwise, shall not preclude
concurrent or subsequent exercise of any other right or remedy. The
books and records of KBK shall be admissible in evidence in any action
or proceeding involving this Guaranty and shall be prima facie evidence
of the payments made on, and the outstanding balance of, the Guaranteed
Indebtedness.
7. Payment by Guarantor. Whenever Guarantor pays any sum which is or may
become due under this Guaranty, written notice must be delivered to KBK
contemporaneously with such payment. In the absence of such notice to
KBK by Guarantor in compliance with the provisions hereof, any sums
received by KBK on account of the Guaranteed Indebtedness shall be
conclusively deemed paid by Borrower.
8. Death of Guarantor. In the event of the death of Guarantor, the
obligations of the deceased Guarantor under this Guaranty shall
continue as an obligation against Guarantor's estate as to (a) all of
the Guaranteed Indebtedness that is outstanding on the date of
Guarantor's death, and any renewals or extensions thereof, and (b) all
loans, advances and other extensions of credit made to or for the
account of Borrower on or after the date of Guarantor's death pursuant
to an obligation of KBK under a commitment or agreement described in
paragraph 1 above and made to or with Borrower prior to the date of
Guarantor's death. The terms and conditions of this Guaranty, including
without limitation the consents and waivers set forth in paragraph 4
hereof, shall remain in effect with respect to the Guaranteed
Indebtedness described in the preceding sentence in the same manner as
if Guarantor had not died.
9. Notice of Sale. In the event that Guarantor is entitled to receive any
notice under the Uniform Commercial Code, as it exists in the state
governing any such notice, of the sale or other disposition of any
collateral securing all or any part of the Guaranteed Indebtedness or
this Guaranty, reasonable notice shall be deemed given when such notice
is deposited in the United States mail, postage prepaid, at the address
for Guarantor set forth on the first page of this Guaranty, five (5)
days prior to the date any public sale, or after which any private
sale, of any such collateral is to be held; provided, however, that
notice given in any other reasonable manner or at any other reasonable
time shall be sufficient.
10. Waiver by KBK. No delay on the part of KBK in exercising any right
hereunder or failure to exercise the same shall operate as a waiver of
such right. In no event shall any waiver of the provisions of this
Guaranty be effective unless the same be in writing and signed by an
officer of KBK, and then only in the specific instance and for the
purpose given.
11. Successors and Assigns. This Guaranty is for the benefit of KBK, its
successors and assigns, and in the event of an assignment by KBK of the
Guaranteed Indebtedness, or any part thereof, the rights and benefits
hereunder shall be transferred with such indebtedness. This Guaranty is
binding upon Guarantor and Guarantor's heirs, executors,
administrators, personal representatives and successors, including
without limitation any person or entity obligated by operation of law
upon the reorganization, merger, consolidation or other change in the
organizational structure of Guarantor.
12. Costs and Expenses. Guarantor shall pay on demand by KBK all costs and
expenses, including without limitation all reasonable attorneys' fees,
incurred by KBK in connection with the enforcement and/or collection of
this Guaranty. This covenant shall survive the payment of the
Guaranteed Indebtedness.
13. Severability. If any provision of this Guaranty is held by a court of
competent jurisdiction to be illegal, invalid or unenforceable under
present or future laws, such provision shall be fully severable, shall
not impair or invalidate the remainder of this Guaranty and the effect
thereof shall be confined to the provision held to be illegal, invalid
or unenforceable.
14. No Obligation. Nothing contained herein shall be construed as an
obligation on the part of KBK to extend or continue to extend credit to
Borrower.
3
4
15. Amendment. No modification or amendment of any provision of this
Guaranty, nor consent to any departure by Guarantor therefrom, shall be
effective unless the same shall be in writing and signed by an officer
of KBK, and then shall be effective only in the specific instance and
for the purpose for which given.
16. Cumulative Rights. All rights and remedies of KBK hereunder are
cumulative of each other and of every other right or remedy which KBK
may otherwise have at law or in equity or under any instrument or
agreement, and the exercise of one or more of such rights or remedies
shall not prejudice or impair the concurrent or subsequent exercise of
any other rights or remedies.
17. GOVERNING LAW; VENUE; SUBMISSION TO JURISDICTION. THIS GUARANTY SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF TEXAS WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS
THEREOF. THIS GUARANTY IS PERFORMABLE IN TARRANT COUNTY, TEXAS.
GUARANTOR AGREES THAT TARRANT COUNTY, TEXAS SHALL BE THE EXCLUSIVE
VENUE FOR LITIGATION OF ANY DISPUTE OR CLAIM ARISING UNDER OR RELATING
TO THIS GUARANTY, AND THAT SUCH COUNTY IS A CONVENIENT FORUM IN WHICH
TO DECIDE ANY SUCH DISPUTE OR CLAIM. GUARANTOR CONSENTS TO THE PERSONAL
JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN TARRANT COUNTY,
TEXAS FOR THE LITIGATION OF ANY SUCH DISPUTE OR CLAIM. GUARANTOR
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE
OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY
SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
18. Compliance with Applicable Usury Laws. Notwithstanding any other
provision of this Guaranty or of any instrument or agreement
evidencing, governing or securing all or any part of the Guaranteed
Indebtedness, Guarantor and KBK by its acceptance hereof agree that
Guarantor shall never be required or obligated to pay interest in
excess of the maximum nonusurious interest rate as may be authorized by
applicable law for the written contracts which constitute the
Guaranteed Indebtedness. It is the intention of Guarantor and KBK to
conform strictly to the applicable laws which limit interest rates, and
any of the aforesaid contracts for interest, if and to the extent
payable by Guarantor, shall be held to be subject to reduction to the
maximum nonusurious interest rate allowed under said law.
19. Descriptive Headings. The headings in this Guaranty are for convenience
only and shall not define or limit the provisions hereof.
20. Gender. Within this Guaranty, words of any gender shall be held and
construed to include the other gender.
21. Notices. All notices hereunder shall be in writing and shall be
personally delivered or sent by registered or certified mail, return
receipt requested, to the address for KBK and Guarantor set forth on
the first page of this Guaranty. KBK and Guarantor may, by proper
written notice hereunder, change the address to which notices may be
sent thereafter to such party.
22. Entire Agreement. This Guaranty contains the entire agreement between
Guarantor and KBK regarding the subject matter hereof and supersedes
all prior written and oral agreements and understandings, if any,
regarding same; provided, however, this Guaranty is in addition to and
does not replace, cancel, modify or affect any other guaranty of
Guarantor now or hereafter held by KBK that relates to Borrower or any
other person or entity.
23. WAIVER OF JURY TRIAL. GUARANTOR HEREBY IRREVOCABLY WAIVES, TO THE
MAXIMUM EXTENT PERMITTED BY LAW, ANY RIGHT GUARANTOR MAY HAVE TO A
TRIAL BY JURY IN RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY AT
ANY TIME ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS GUARANTY OR
ANY TRANSACTION CONTEMPLATED HEREBY OR ASSOCIATED HEREWITH.
24. NOTICE OF NO ORAL AGREEMENTS. THIS GUARANTY REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT TO THE TRANSACTIONS
CONTEMPLATED HEREIN AND MAY NOT CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
EXECUTED AND EFFECTIVE as of the date first set forth above.
GUARANTOR:
PROLOGIC MANAGEMENT SYSTEMS, INC.
By: /s/ Xxxxxxx X. Xxxx
------------------------------------
Name: /s/ Xxxxxxx X. Xxxx
---------------------------------
Title: President
---------------------------------
4
