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EXHIBIT 6.3
CONTINUING LIMITED GUARANTY
THIS CONTINUING LIMITED GUARANTY (the "Guaranty") is entered into as of
April 17, 1997 (the "Effective Date") by ▇▇▇▇▇▇ ▇. ▇▇▇▇, an individual
("Guarantor") in favor of CAPITAL BUSINESS CREDIT, A DIVISION OF CAPITAL
FACTORS, INC., a Florida corporation ("Lender").
Guarantor, in order to induce Lender to enter into a financing
relationship with WSL, INC., a California corporation ("Borrower"), and for the
benefit of Lender, agrees as set forth below.
1. RECITALS. This Guaranty is executed and delivered to Lender in connection
with the execution of a Loan and Security Agreement, dated of even date
herewith, between Borrower and Lender (the "Loan Agreement"). There are a number
of additional agreements that have been entered into in connection with the Loan
Agreement (collectively, including the Loan Agreement, as amended from time to
time, referred to as the "Loan Documents)". For example, the Loan Documents may
include promissory notes, security agreements, subordination agreements, deeds
of trust and other guaranties.
2. DEFINITIONS. Any capitalized term not otherwise defined in this Guaranty
shall have the meaning given to the term in the Loan Documents.
3. GUARANTY. Guarantor unconditionally guaranties to Lender the timely (whether
as scheduled or upon acceleration) payment and performance by Borrower of all of
the following, whenever and however they may arise (the "Guarantied
Obligations"): (i) the debts, liabilities, obligations, covenants, interest,
commissions, fees, and other charges or amounts due under the Loan Documents;
(ii) the other obligations set forth in or arising out of the Loan Documents;
(iii) any obligations of Borrower owing to any third parties which are assigned
to Lender; (iv) any liabilities, costs or expenses, including attorneys' fees,
incurred by Lender in connection with enforcing Lender's rights under the Loan
Documents; (v) any of the foregoing arising out of, in connection with or
following any renewals (including renewals of obligations which had been
previously satisfied), extensions, modifications, alterations and rearrangements
of any of the Loan Documents; (vi) any of the foregoing arising after Borrower
has commenced or becomes subject to any case under the Bankruptcy Code,
including any advances made to Borrower, any interest that accrues after the
filing of the bankruptcy petition (even if the interest cannot be collected in
the proceeding under the Bankruptcy Code), and attorneys' fees. If Borrower
fails to pay or perform any of the Guarantied Obligations, Guarantor will
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immediately pay or perform such Guarantied Obligation. NOTWITHSTANDING ANYTHING
HEREIN TO THE CONTRARY, THE MAXIMUM LIABILITY OF GUARANTOR UNDER THIS GUARANTY
IS LIMITED TO THE PRINCIPAL AMOUNT OF ONE MILLION FOUR HUNDRED THOUSAND DOLLARS
($1,400,000.00), PLUS ACCRUED AND UNPAID INTEREST, AND ANY COSTS, EXPENSES AND
FEES OF ENFORCEMENT OF THIS GUARANTY OR THE LOAN DOCUMENTS; PROVIDED, HOWEVER,
THAT IF ANY OF THE GUARANTIED OBLIGATIONS ARISE FROM LENDER MAKING AN ADVANCE
AGAINST ACCOUNTS (AS DEFINED IN THE LOAN AGREEMENT) THAT ARE FRAUDULENT,
SPURIOUS, NOT BONA FIDE OR FROM LENDER'S RELIANCE ON FALSE INFORMATION WHICH WAS
PROVIDED BY BORROWER TO LENDER WHERE BORROWER EITHER KNEW THAT SUCH INFORMATION
WAS FALSE OR BORROWER WAS GROSSLY NEGLIGENT IN PROVIDING SUCH INFORMATION TO
LENDER, THEN THE LIABILITY OF GUARANTOR FOR SUCH GUARANTIED OBLIGATIONS SHALL BE
UNLIMITED. IN CONNECTION WITH THE FOREGOING, GUARANTOR SHALL NOT BE LIABLE FOR
ANY PUNITIVE DAMAGES UNLESS THE GUARANTOR INDIVIDUALLY OR WITH OTHERS CAUSED
SUCH ACCOUNTS (AS DEFINED IN THE LOAN AGREEMENT) TO BE PLEDGED TO LENDER OR
CAUSED SUCH FALSE INFORMATION TO BE PROVIDED TO LENDER. IN THE EVENT THAT
SUBSEQUENT TO THE EFFECTIVE DATE OF THIS GUARANTY ADDITIONAL SHARES OF COMMON
STOCK OF BORROWER ARE ISSUED TO THIRD PARTIES THEREBY LOWERING THE PERCENTAGE OF
GUARANTOR'S OWNERSHIP INTEREST IN BORROWER, THEN, SO LONG AS NO EVENT OF DEFAULT
THEN EXISTS UNDER THE LOAN DOCUMENTS, LENDER AGREES TO CONSIDER A REQUEST FROM
GUARANTOR FOR A REDUCTION IN THE MAXIMUM ONE MILLION FOUR HUNDRED THOUSAND
($1,400,000) OF PRINCIPAL LIABILITY SET FORTH ABOVE TO AN AMOUNT COMMENSURATE
WITH THE RESULTING PERCENTAGE OF GUARANTOR'S OWNERSHIP INTEREST IN BORROWER;
PROVIDED, HOWEVER, THAT IN NO EVENT SHALL THE MAXIMUM PRINCIPAL LIABILITY BE
REDUCED BELOW ONE MILLION DOLLARS ($1,000,000).
4. LENDER'S DIRECT RIGHTS.
4.1 GUARANTY OF PAYMENT. This is a guaranty of payment and performance
and is not a guaranty of collection.
4.2 DIRECT RIGHTS AGAINST GUARANTOR. Upon the occurrence of an Event of
Default (as defined in the Loan Agreement), Lender may enforce its rights under
this Guaranty without first seeking to obtain payment or performance from or
without resorting to: (i) Guarantor (the undersigned), meaning that Lender may
delay, in Lender's sole and complete discretion, in the exercise of rights
against Guarantor; (ii) Borrower; (iii) any other guarantor; or (iv) any
collateral Lender may hold for the Guarantied Obligations; (iv) any other remedy
or right that Lender may have.
4.3 BORROWER'S BANKRUPTCY. Upon the occurrence of an Event of
Default (as defined in the Loan Agreement), Lender may immediately pursue its
rights under this
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Guaranty, even though Lender may be stayed from accelerating or collecting the
Guarantied Obligations from Borrower.
4.4 WAIVER OF PRIORITY OF COLLECTION. Guarantor waives any rights
Guarantor may have to require Lender to proceed against the Borrower or to
pursue any other remedy in Lender's power which Guarantor cannot pursue which
would lighten Guarantor's burden. In addition, Guarantor waives Guarantor's
right to benefit from every security which now or hereafter exists for the
performance of the Guarantied Obligations or for the performance of any other
guarantor's obligations owing to Lender. If Lender decides to proceed first to
exercise any other remedy or right, or to proceed against another person or any
collateral, Lender retains all of Lender's rights under this Guaranty.
5. CONTINUING GUARANTY AND REVOCATION. This Guaranty guaranties the Guarantied
Obligations, including Borrower's existing obligations under the Loan Documents,
as well as all future advances made under the Loan Documents. This Guaranty also
guaranties Borrower's future liability under successive transactions which
either continue the Guarantied Obligations or from time to time renew some or
all of them after having been satisfied and to that extent is a continuing
guaranty of the Guarantied Obligations. Guarantor may not terminate or revoke
this Guaranty. Guarantor irrevocably waives any right he has, including any
rights under California Civil Code Section 2815, to terminate or revoke the
continuing nature of this Guaranty and its application to any Guarantied
Obligations arising after any attempt to terminate this Guaranty.
6. NO NOTICE REQUIRED. Guarantor will not be released or exonerated from
Guarantor's obligations under this Guaranty if Guarantor is not notified by
Lender of these events: (i) Borrower's failure to pay timely any amount owed
under any of the Loan Documents or to pay or perform any of the other Guarantied
Obligations; (ii) Borrower's failure to perform any other obligation under any
of the Loan Documents; (iii) any adverse change in Borrower's financial
condition of business; (iv) Lender's acceptance of this Guaranty; (v) all other
notices to which Guarantor might be entitled.
7. GUARANTOR'S ADDITIONAL WAIVERS. Guarantor waives any right Guarantor may
have to require any of the following acts: demand; presentment; diligence;
protest; notice of dishonor; and any other notice to which Guarantor may be
entitled.
8. NO RELEASE OF GUARANTOR. Lender may do or suffer any of the following, by
action or inaction, without releasing or exonerating Guarantor from any of
Guarantor's obligations under this Guaranty and without notifying Guarantor of
any
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of the following: (i) renew, extend, rearrange, alter, impair, suspend or
otherwise modify any of the other Loan Documents, any of the Guarantied
Obligations or any of the rights or remedies of Lender under the Loan Documents;
(ii) release Borrower or any other guarantor from any of the Guarantied
Obligations; (iii) sell, release, subordinate, impair, suspend, waive or
otherwise fail to obtain, perfect or realize upon (or continue the perfection
of) a security interest in any collateral for any of the Guarantied Obligations,
this Guaranty or any other guaranty of the Guarantied Obligations; (iv) exercise
Lender's rights in any collateral for any of the Guarantied Obligations, this
Guaranty or any other guaranty of the Guarantied Obligations in any order that
Lender may elect in its sole discretion; (v) advance additional funds to or for
the benefit of Borrower; (vi) foreclose on any collateral for the Guarantied
Obligations, or any portion thereof (including the collateral provided under a
deed of trust) or a guaranty of the Guarantied Obligations, or any portion
thereof in a manner that diminishes, impairs or precludes the right of Guarantor
to enjoy any rights of subrogation against Borrower or any other guarantor, or
to obtain reimbursement, performance, or indemnification for payment or
performance under this Guaranty (in this connection, Guarantor waives any rights
and defenses arising out of an election of remedies by Lender, even though that
election of remedies, such as nonjudicial foreclosure with respect to security
for a Guarantied Obligation or any other guaranty, has destroyed Guarantor's
rights of subrogation and reimbursement against Borrower or any other guarantor
by operation of law and, in addition, Guarantor waives any defenses arising
under Uniform Commercial Code Sections 1103 and 9501 et seq.); (vii) permit or
suffer the impairment of any of the Guarantied Obligations in a case under the
Bankruptcy Code by or against Borrower; (viii) make an election under Bankruptcy
Code Section 1111(b)(2) in a case by or against Borrower; (ix) permit or suffer
the creation of secured or unsecured credit or debt under Bankruptcy Code
Section 364 in a case by or against Borrower; (x) permit or suffer the
disallowance, avoidance or subordination of any of the Guarantied Obligations or
collateral for any of the Guarantied Obligations; (xi) fail to exercise any
right or remedy Lender may have with respect to the payment or performance of,
any of the Loan Documents or any of the Guarantied Obligations; or (xii) fail to
obtain a guaranty, other assurance of payment, or credit enhancement from any
other person.
9. WAIVER OF SUBROGATION, REIMBURSEMENT, PERFORMANCE AND INDEMNIFICATION.
Guarantor permanently waives and shall not seek to exercise any of the following
rights that Guarantor may have against Borrower, any other guarantor, or any
collateral provided by Borrower or any other guarantor, for
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any amounts paid by Guarantor, or acts performed by Guarantor under this
Guaranty: (i) all rights that Guarantor may have, upon satisfying the Guarantied
Obligations, or any portion thereof, to enforce any remedies which Lender then
has against Borrower and to require any other guarantor to contribute to the
amount paid by Guarantor in connection with this Guaranty (including, without
limitation, any right of subrogation, whether contractual, under Section 509 of
the Bankruptcy Code, other similar insolvency laws or arrangements, or
otherwise); (ii) all rights that Guarantor may have to the benefit of any
security for the performance of the Guarantied Obligations or the performance by
any other guarantor of the Guarantied Obligations; (iii) all rights of
reimbursement from Borrower for the amounts paid by Guarantor in connection with
the Guarantied Obligations (including costs and expenses); (iv) any right to
compel client to perform the Guarantied Obligations when due; or (v) all rights
of indemnification from Borrower, any other guarantor or any other third party.
Guarantor irrevocably waives and releases Borrower from all "claims" (as defined
in Section 101(4) of the Bankruptcy Code) to which Guarantor is or would be
entitled by virtue of this Guaranty of the Guarantied Obligations or the payment
of all or a portion of the Guarantied Obligations by Guarantor pursuant to this
Guaranty.
10. SUBORDINATION OF GUARANTOR.
10.1 SUBORDINATION OF CLAIMS. Upon the occurrence of a default under
Paragraph 11 hereof or an Event of Default under the Loan Agreement, where such
default pursuant to Paragraph 11 hereof or Event of Default under the Loan
Agreement is not timely cured during any applicable cure period, if any, then at
all times thereafter all principal and interest on all then existing and future
indebtedness, liabilities, and obligations of Borrower, any other guarantor or
any other third party that is also indebted to Lender owing to Guarantor,
whether fixed or contingent, matured or unmatured, and liquidated or
unliquidated (the "Subordinated Debt") shall be subordinated in right of payment
to the payment and performance of the Guarantied Obligations, the obligations of
such other guarantor owing to Lender, or the obligations of such other third
party owing to Lender, as appropriate. The subordination, once effective, shall
be irrevocable so long as the Loan Documents remain in effect or any of the
Guarantied Obligations are outstanding.
10.2 PAYMENTS. In the event the subordination becomes effective pursuant
to Paragraph 10.1 hereof, then Guarantor agrees that:
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A. Guarantor will not thereafter accept any
payments on any of the Subordinated Debt.
B. If Guarantor receives any payment on the Subordinated Debt
following the subordination becoming effective pursuant to
▇▇▇▇▇▇▇▇▇ ▇▇.▇, ▇▇▇▇▇▇▇▇▇ shall immediately deliver the
payment to Lender.
C. If Guarantor receives any payments, security interests, or
other rights in any property of Borrower in violation of
the subordination, such payment or property shall be
received by Guarantor in trust for Lender and shall
immediately be delivered and transferred to Lender.
10.3 ATTORNEY-IN-FACT. Guarantor appoints Lender, conditioned upon the
subordination becoming effective pursuant to Paragraph 10.1 hereof, as
Guarantor's attorney-in-fact to file claims, vote on any plan of reorganization
and receive payments, on behalf of Guarantor with respect to any of the
Subordinated Debt in any case by or against Borrower under the Bankruptcy Code
(including Chapters 7 or 11), any assignment for the benefit of creditors made
by Borrower, or in any other reorganization or insolvency proceeding.
10.4 LIMITATION ON ACTIONS. So long as any of the Guarantied
Obligations remain unpaid, in whole or in part, or so long as the Loan Documents
remain in effect, Guarantor agrees: (i) not to sell, assign, transfer, pledge,
or give a security interest in the Subordinated Debt (except subject expressly
to this Guaranty); (ii) not to enforce or apply, or take any steps to enforce or
apply, any security now or hereafter existing, for the Subordinated Debt; (iii)
not to commence, prosecute or participate in any administrative, legal or
equitable action against Borrower or in any administrative, legal or equitable
action that might adversely affect Borrower; and (iv) not to join in any
petition for bankruptcy, assignment for the benefit of creditors, or creditors'
agreement against Borrower.
11. DEFAULT. Upon the happening of any of the following events: the occurrence
of an Event of Default under the Loan Agreement which is not timely cured during
any applicable cure period, any revocation, breach or termination by Guarantor
of this Guaranty, or suspension of business of Guarantor, or the issuance of any
writ of attachment against any of the property of Guarantor where such writ is
not dismissed or discharged within fifteen (15) days from the date that it was
first issued, or the making by Guarantor of any assignment for the benefit of
creditors,
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or a trustee or receiver being appointed for Guarantor or for any property of
Guarantor, or any proceeding being commenced by or against Guarantor under any
bankruptcy, reorganization, adjustment of debt, insolvency, receivership,
liquidation or dissolution law or statute and, in the case of such a proceeding
being commenced against Guarantor, such proceeding is not dismissed within
thirty (30) days following the commencement date thereof, then and in any such
event and at any time thereafter, Lender may, without notice to Borrower or
Guarantor, declare any or all of the Guarantied Obligations, whether or not then
due, immediately due and payable by Guarantor under this Guaranty, and Lender
shall be entitled to enforce the obligations of Guarantor hereunder.
12. MISCELLANEOUS.
12.1 REVIVAL OF DEBT. Notwithstanding any revocation of this Guaranty,
Guarantor's obligations under this Guaranty shall include and shall be increased
by the amount returned by Lender which was previously paid by Borrower or any
other guarantor of any of the Guarantied Obligations prior to the effectiveness
of such revocation because of the application of the Bankruptcy Code, any
fraudulent transfer law, or any law respecting preferences.
12.2 EFFECT OF COMPLIANCE. Except as is expressly provided in the last
sentence of Paragraph 3 hereof, Guarantor's compliance with any of the
provisions of this Guaranty will not reduce or affect in any manner the
liability of Guarantor under the any of the other provisions of this Guaranty.
12.3 NO MARSHALING. Lender has no obligation to marshal any assets in
favor of Guarantor, or against or in payment of: (i) any of the Guarantied
Obligations, or (ii) any other obligation owed to Lender by Guarantor, Borrower,
or any other person.
12.4 FEES AND COSTS. Guarantor will pay all of Lender's fees and costs
incurred in enforcing this Guaranty, including Lender's reasonable attorneys'
fees (including without limitation any attorneys fees' incurred by Lender in
connection with any probate claim, bankruptcy claim, third-party claim, secured
creditor claim, reclamation complaint, and complaint for relief from any stay
under the U.S. Bankruptcy Code or otherwise).
12.5 ASSIGNMENT. Guarantor may not assign Guarantor's obligations or
liabilities under this Guaranty. Subject to the preceding sentence, this
Guaranty shall be binding upon the parties hereto and their respective heirs,
executors, successors, representatives and assigns and shall
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inure to the benefit of the parties hereto and their respective successors and
assigns. Lender may assign its rights under this Guaranty.
12.6 APPLICABLE LAW. The laws of the State of California will apply to
the interpretation and enforcement of this Guaranty, without regard to
California's internal laws regarding conflicts of law.
12.7 INTEGRATION. This Guaranty is the entire agreement of Guarantor
with respect to the subject matter of this Guaranty.
12.8 RIGHTS CUMULATIVE. All of Lender's rights under this Guaranty are
cumulative. The exercise of any one right does not exclude the exercise of any
other right given in this Guaranty or any other right of Lender not set forth in
this Guaranty.
12.9 RULES OF CONSTRUCTION. The following rules shall apply in
interpreting the meaning of this Guaranty: (i) "Includes" and "including" are
not limiting; (ii) "Or" is not exclusive; and (iii) "All" includes "any" and
"any" includes "all."
12.10 SEVERABILITY. If any provision of this Guaranty is unenforceable,
or otherwise invalid, the remaining provisions of this Guaranty shall be
enforced to the fullest possible extent.
12.11 NOTICES. Any notice given in connection with this Guaranty shall
be in writing addressed to the respective party at its address set forth below
its signature on the last page of this Guaranty and may be personally served,
telecopied or sent by overnight courier service or United States certified mail,
postage prepaid; provided, however, that any notice of revocation of this
Guaranty may only be sent by United States certified mail, postage prepaid.
Notices shall be deemed to have been given: (a) if delivered in person, when
delivered; (b) if delivered by telecopy, on the date of transmission if
confirmed and if transmitted on a business day before 4:00 p.m. or, if not, on
the next succeeding business day; (c) if delivered by overnight courier, two
days after delivery to such courier properly addressed; or (d) if by United
States certified mail, five business days after depositing in the United States
mail, with postage prepaid and properly addressed. The address for notices may
be changes by delivering written notice of such change in accordance with this
Paragraph.
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12.12 JOINT AND SEVERAL LIABILITY. The obligations hereunder of the
persons or entities constituting Guarantor under this Guaranty are joint and
several.
12.13 HEADINGS; NUMBER; GENDER. Paragraph headings used in this Guaranty
are for convenience only. They are not a part of this Guaranty and shall not be
used in construing this Guaranty. Wherever appropriate in this Guaranty, the
singular shall be deemed to also refer to the plural, and the plural to the
singular.
12.14 REVIEW OF DOCUMENTS. Guarantor acknowledges reviewing copies of,
and is fully familiar with, each and every Loan Document.
12.15 COUNTERPARTS. This Guaranty may be executed in counterparts, each
of which shall be deemed an original, but all of which, when taken together,
shall be deemed one and the same agreement.
13. ACKNOWLEDGMENT OF WAIVERS AND LOSS OF DEFENSES.
13.1 Guarantor acknowledges that certain provisions of this Guaranty
operate as waivers of rights that Guarantor would otherwise have under
applicable law. Other provisions permit Lender to take actions that Lender would
otherwise not have a right to take, to fail to take actions that Lender would
otherwise have an obligation to take, or to take actions that may prejudice
Guarantor's rights and obligations under this Guaranty and against the Borrower.
In the absence of these provisions Guarantor might have defenses against
Guarantor's obligations under this Guaranty. These defenses might permit
Guarantor to avoid some or all of Guarantor's obligations under this Guaranty.
13.2 Guarantor intends by the waivers and other provisions of this
Guaranty, including the acknowledgement set forth in this section, to be liable
to the greatest extent permitted by law for all of Borrower's obligations to
Lender. Guarantor intends to have this liability even if the terms of the Loan
Documents change or if Guarantor does not have any rights against Borrower.
13.3 Guarantor acknowledges that (i) Guarantor understands the
seriousness of the provisions of this Guaranty; (ii) Guarantor has had a full
opportunity to consult with counsel of Guarantor's choice; and (iii) Guarantor
has consulted with counsel of Guarantor's choice or has decided not to consult
with counsel.
14. WAIVER OF JURY TRIAL. GUARANTOR AND LENDER EACH WAIVE
ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING
RELATING TO THIS GUARANTY.
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IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the date
first above written.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇
Address c/o United Golf Products, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone No. (▇▇▇) ▇▇▇-▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
Social Security No._______________
LENDER hereby accepts this Guaranty and agrees to the provisions
contained in Paragraph 14.
CAPITAL BUSINESS CREDIT,
A DIVISION OF CAPITAL FACTORS,
INC.,
a Florida corporation
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Title: Vice President
Address ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
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