EXHIBIT 4.4
PROMISSORY NOTE
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Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials
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$2,750,000.00 06-01-97 06-01-98 81 310
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References in the shaded area are for Lender's use only and do not limit the applicability of this
document to any particular loan or item.
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Borrower: New Horizons Education Corporation Lender: Marine National Bank
1231 East ▇▇▇▇ Road, Suite ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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Principal Amount: $2,750,000.00 Initial Rate: 9.000% Date of Note: June 1, 1997
PROMISE TO PAY. NEW HORIZONS EDUCATION CORPORATION ("Borrower") promises to pay
to MARINE NATIONAL BANK ("Lender"), or order, in lawful money of the United
States of America, the principal amount of Two Million Seven Hundred Fifty
Thousand & 00/100 Dollars ($2,750,000.00) or so much as may be outstanding,
together with interest on the unpaid outstanding principal balance of each
advance. Interest shall be calculated from the date of each advance until
repayment of each advance.
PAYMENT. Borrower will pay this loan on demand, or if no demand is made, in one
payment of all outstanding principal plus all accrued unpaid interest on June 1,
1998. In addition, Borrower will pay regular monthly payments of accrued unpaid
interest beginning July 1, 1997, and all subsequent interest payments are due on
the same day of each month after that. Interest on this Note is computed on a
365/360 simple interest basis; that is, by applying the ratio of the annual
interest rate over a year of 360 days, multiplied by the outstanding principal
balance, multiplied by the actual number of days the principal balance is
outstanding. Borrower will pay Lender at Lender's address shown above or at such
other place as Lender may designate in writing. Unless otherwise agreed or
required by applicable law, payments will be applied first to accrued unpaid
interest, then to principal, and any remaining amount to any unpaid collection
costs and late charges.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from
time to time based on changes in an Independent Index which is the NATIONAL
PRIME, WHICH IS THE COMMERICAL PRIME RATE AS REPORTED IN THE WESTERN EDITION OF
THE WALL STREET JOURNAL (the "Index"). The Index is not necessarily the lowest
rate charged by Lender on its loans. If the Index becomes unavailable during the
term of this loan, Lender may designate a substitute Index after notice to
Borrower. Lender will tell Borrower the current Index rate upon Borrower's
request. Borrower understands that Lender may make loans based on other rates as
well. The interest rate change will not occur more often than each DAY. The
Index currently is 8.500% per annum. The interest rate to be applied to the
unpaid principal balance of this Note will be at a rate of 0.500 percentage
points over the Index, resulting in an initial rate of 9.000% per annum. NOTICE:
Under no circumstances will the interest rate on this Note be more than the
maximum rate allowed by applicable law.
PREPAYMENT; MINIMUM INTEREST CHARGE. In any event, even upon full prepayment of
this Note, Borrower understands that Lender is entitled to a minimum interest
charge of $100.00. Other than Borrower's obligation to pay any minimum interest
charge, Borrower may pay without penalty all or a portion of the amount owed
earlier than it is due. Early payments will not, unless agreed to by Lender in
writing, relieve Borrower of Borrower's obligation to continue to make payments
of accrued unpaid interest. Rather they will reduce the principal balance due.
LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged
5.000% of the regularly scheduled payment or $5.00, whichever is greater.
DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to comply with or to perform when
due any other term, obligation, covenant, or condition contained in this Note or
any agreement related to this Note, or in any other agreement or loan Borrower
has with Lender. (c) Any representation or statement made or furnished to Lender
by Borrower or on Borrower's behalf is false or misleading in any material
respect either now or at the time made or furnished. (d) Borrower becomes
insolvent, a receiver is appointed for any part of Borrower's property, Borrower
makes an assignment for the benefit of creditors, or any proceeding is commenced
either by Borrower or against Borrower under any bankruptcy or insolvency laws.
(e) Any creditor tries to take any of Borrower's property on or in which Lender
has a lien or security interest. This includes a garnishment of any of
Borrower's accounts with Lender. (f) Any guarantor dies or any of the other
events described in this default section occurs with respect to any guarantor of
this Note. (g) A material adverse change occurs in Borrower's financial
condition, or Lender believes the prospect of payment or performance of the
indebtedness is impaired. (h) Lender in good ▇▇▇▇▇ ▇▇▇▇▇ itself insecure.
If any default, other than a default in payment, is curable and if Borrower has
not been given a notice of a breach of the same provision of this Note within
the preceding twelve (12) months, it may be cured (and no event of default will
have occurred). If Borrower, after receiving written notice from Lender
demanding cure of such default: (a) cures the default within fifteen (15) days;
or (b) if the cure requires more than fifteen (15) days, immediately initiates
steps which Lender deems in Lender's sole discretion to be sufficient to cure
the default and thereafter continues and completes all reasonable and necessary
steps sufficient to produce compliance as soon as reasonably practical.
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, without
notice, and then Borrower will pay that amount. Upon Borrower's failure to pay
all amounts declared due pursuant to this section, including failure to pay upon
final maturity, Lender, at its option, may also, if permitted under applicable
law, increase the variable interest rate on this Note to 5.500 percentage points
over the Index. Lender may hire or pay someone else to help collect this Note if
Borrower does not pay. Borrower also will pay Lender that amount. This includes,
subject to any limits under applicable law, Lender's attorneys' fees and
Lender's 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. Borrower also will pay any court costs, in
addition to all other sums provided by law. This Note has been delivered to
Lender and accepted by Lender in the State of California. If there is a lawsuit,
Borrower agrees upon Lender's request to submit to the jurisdiction of the
courts of ORANGE County, the State of California. Lender and Borrower hereby
waive the right to any jury trial in any action, proceeding, or counterclaim
brought by either Lender or Borrower against the other. This Note shall be
governed by and construed in accordance with the laws of the State of
California.
RIGHT OF SETOFF. Borrower grants to Lender a contractual possessory security
interest in, and hereby assigns, conveys, delivers, pledges, and transfers to
Lender all Borrower's right, title and interest in and to, Borrower's accounts
with Lender (whether checking, savings, or some other account), including
without limitation all accounts held jointly with someone else and all accounts
Borrower may open in the future, excluding however all ▇▇▇ and ▇▇▇▇▇ accounts,
and all trust accounts for which the grant of a security interest would be
prohibited by law. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on this Note against any and
all such accounts.
COLLATERAL. This Note is secured by SIX COMMERCIAL SECURITY AGREEMENTS DATED
June 1, 1997, EXECUTED BY BORROWER OR PLEDGOR IN CONNECTION WITH THIS NOTE.
LINE OF CREDIT. This Note evidences a straight line of credit. Once the total
amount of principal has been advanced, Borrower is not entitled to further loan
advances. Advances under this Note may be requested either orally or in writing
by Borrower or by an authorized person. Lender may, but need not,
require that all oral requests be confirmed in writing. All communications,
instructions, or directions by telephone or otherwise to Lender are to be
directed to Lender's office shown above. The following party or parties are
authorized to request advances under the line of credit until Lender receives
from Borrower at Lender's address shown above written notice of revocation of
their authority: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, CHIEF FINANCIAL OFFICER; ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
PRESIDENT AND CEO; and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, CHAIRMAN OF THE BOARD & CEO. Borrower
agrees to be liable for all sums either: (a) advanced in accordance with the
instructions of an authorized person or (b) credited to any of Borrower's
accounts with Lender. The unpaid principal balance owing on this Note at any
time may be evidenced by endorsements on this Note or by Lender's internal
records, including daily computer print-outs. Lender will have no obligation to
advance funds under this Note if: (a) Borrower or any guarantor is in default
under the terms of this Note or any agreement that Borrower or any guarantor has
with Lender, including any agreement made in connection with the signing of this
Note; (b) Borrower or any guarantor ceases doing business or is insolvent; (c)
any guarantor seeks, claims or otherwise attempts to limit, modify or revoke
such guarantor's guarantee of this Note or any other loan with Lender; (d)
Borrower has applied funds provided pursuant to this Note for purposes other
than those authorized by Lender; or (e) Lender in good ▇▇▇▇▇ ▇▇▇▇▇ itself
insecure under this Note or any other agreement between Lender and Borrower.
GENERAL PROVISIONS. This Note is payable on demand. The inclusion of specific
default provisions or rights of Lender shall not preclude Lender's right to
declare payment of this Note on its demand. Lender may delay or forgo enforcing
any of its rights or remedies under this Note without losing them. Borrower and
any other person who signs, guarantees or endorses this Note, to the extend
allowed by law, waive any applicable statute of limitations, presentment, demand
for payment, protest and notice of dishonor. Upon any change in the terms of
this Note, and unless otherwise expressly stated in writing, no party who signs
this Note, whether as maker, guarantor, accommodation maker or endorser, shall
be released from liability. All such parties agree that Lender may renew or
extend (repeatedly and for any length of time) this loan, or release any party
or guarantor or collateral; or impair, fail to realize upon or perfect Lender's
security interest in the collateral; and take any other action deemed necessary
by Lender without the consent of or notice to anyone. All such parties also
agree that Lender may modify this loan without the consent of or notice to
anyone other than the party with whom the modification is made.
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PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO
THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE.
BORROWER:
NEW HORIZONS EDUCATION CORPORATION
By: _______________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, CHIEF FINANCIAL OFFICER
COMMERCIAL GUARANTY
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Principal Loan Date Maturity Loan No. Call Collateral Account Officer Initials
$2,750,▇▇▇ ▇▇-▇▇-▇▇ 06-01-98 20 310
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References in the shaded area are for Lender's use only and do not limit the applicability of this
document to any particular loan or item.
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Borrower: NEW HORIZONS EDUCATION CORPORATION Lender: MARINE NATIONAL BANK
1231 EAST ▇▇▇▇ ROAD, SUITE ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Guarantor: NEW HORIZONS WORLDWIDE, INC.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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AMOUNT OF GUARANTY. The principal amount of this Guaranty is Three Million Eight
Hundred and Twenty-Five Thousand & 00/100 Dollars ($3,825,000.00).
CONTINUING GUARANTY. For good and valuable consideration, NEW HORIZONS
WORLDWIDE, INC. ("Guarantor") absolutely and unconditionally guarantees and
promises to pay to MARINE NATIONAL BANK (" Lender") or Its order, on demand, in
legal tender of the United States of America, the Indebtedness (as that term is
defined below) of NEW HORIZONS EDUCATION CORPORATION ("Borrower") to Lender on
the terms and conditions set forth in this Guaranty. The obligations of
Guarantor under this Guaranty are continuing.
DEFINITIONS. The following words shall have the following meanings when used in
this Guaranty:
Borrower. The word Borrower means NEW HORIZONS EDUCATION CORPORATION
Guarantor. The word Guarantor means NEW HORIZONS WORLDWIDE, INC.
Guaranty. The word "Guaranty" means this Guaranty made by Guarantor for the
benefit of Lender dated JUNE 1, 1997.
INDEBTEDNESS. The word "Indebtedness" is used in its most comprehensive sense
and means and including any and all of Borrower's liabilities, obligations,
debts and indebtedness 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 any 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 ▇▇▇▇▇, or otherwise.
LENDER. The word "Lender" means MARINE NATIONAL BANK, its successors and
assigns.
RELATED DOCUMENTS. The words "Related Documents" mean and include without
limitation all promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, mortgages, deeds of
trust, and all other instruments, agreements and documents, whether now or
hereafter existing, executed in connection with the Indebtedness.
MAXIMUM LIABILITY. The maximum liability of Guarantor under this Guaranty shall
not exceed at any one time the sum of the principal amount of $3,825,000.00,
plus all interest thereon, plus all of Lender's costs, expenses, and attorney's
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. Attorney's fees
include, without limitation, attorney's 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, the rights of Lender under all guaranties
shall be cumulative. This Guaranty shall not (unless specifically provided below
to the contrary) affect or invalidate any such other guaranties The liability of
Guarantor will be the aggregate liability of Guarantor under the terms of this
Guaranty and any such other unterminated guaranties.
NATURE OF GUARANTY. Guarantor liability under this Guaranty shall be open and
continuous for so long as the Guaranty remains in force. Guarantor intends to
guarantee at all times the performance and prompt payment when due, whether at
maturity or earlier by reason of acceleration or otherwise, of all Indebtedness
within the limits set forth in the preceding section of this Guaranty.
Accordingly, no payments made upon the Indebtedness will discharge or diminish
the continuing liability of Guarantor in connection with any remaining portions
of the Indebtedness or any of the Indebtedness which subsequently arises or is
thereafter incurred or contracted.
DURATION OF GUARANTY. This Guaranty will take effect when received by Lender
without the necessity of any acceptance by Lender, 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 or revocation shall have been
fully and finally paid and satisfied and all other obligations of 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 the address of Lender 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 creted after
actual receipt by Lender 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 Borrower or committed by Lender prior to receipt of Guarantor's
written notice of revocation, including any extensions, renewals, substitutions
or modification of the Indebtedness. All renewals, extensions, substitutions,
and modification 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 the estate of Guarantor as to
Indebtedness created both before and after the death or incapacity of Guarantor,
regardless of Lender's actual notice of Guarantor's death. Subject to the
foregoing, Guarantors 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 received by Lender from
any on 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 it is
specifically acknowledged and agreed by Guarantor that reductions in the amount
of Indebtedness, even to zero dollars ($0.00), prior to written revocation of
this Guaranty by Guarantor 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, from time to time: (a) prior to
revocation as set forth above, 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
release, substitute, agree not to ▇▇▇, 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; (d) to determine how, when and what application of
payments and credits shall be made on the Indebtedness; (e) to apply such
security and direct the order or manner of sale thereof, Including without
Imitation, any nonjudicial sale permitted by the terms of the controlling
security agreement or deed of trust, as Lender in its discretion may determine;
(f) to sell, transfer, assign, or grant participations in all or any part of the
Indebtedness; and (g) 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 agreement 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, liquidate, 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 the financial condition of Guarantor 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 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,
Lender 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 Borrower'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 Lender'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; (I) 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. Until all Indebtedness is paid in full, Guarantor waives all
rights and any defenses Guarantor may have arising out of an election of
remedies by Lender even though that election of remedies, such as a nonjudicial
foreclosure with respect to security for a guaranteed obligation, has destroyed
Guarantor's rights of subrogation and reimbursement against Borrower or any
other guarantor or surety by operation of Section 580a, 580b, 580d and 726 of
the California Code of Civil Procedure or otherwise. This waiver includes,
without limitation, any loss of rights Guarantor may suffer by reason of any
rights or protections of Borrower in connection with any anti-deficiency laws or
other laws limiting or discharging the Indebtedness or Borrower's obligations
(including, without limitation, Sections 726, 580a, 580b, and 580d of the
California Code of Civil Procedure). Guarantor waives all rights and protections
of any kind which Guarantor may have for any reason, which would affect or limit
the amount of any recovery by Lender from Guarantor following a nonjudicial sale
or judicial foreclosure of any real or personal property security for the
Indebtedness including, but not limited to, the right to any fair market value
hearing pursuant to California Code of Civil Procedure Section 580a. Guarantor
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 Lender. Until all Indebtedness is paid in full, Guarantor
waives any right to enforce any remedy Lender may have against 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.
If now or hereafter (a) Borrower shall be or become insolvent, and (b) the
Indebtedness shall not at all times until paid be fully secured by collateral
pledged by Borrower, Guarantor hereby forever waives and relinquishes in favor
of Lender and Borrower, and their respective successors, any claim or right to
payment Guarantor may now have or hereafter have or acquire against Borrower, by
subrogation or otherwise, so that at no time shall Guarantor be or become a
"creditor of Borrower within the meaning of 11 U.S.C. section 547(b), or any
successor provision of the Federal bankruptcy laws.
GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees
that each of the waivers set forth above is made with 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.
LENDER'S RIGHT OF SETOFF. In addition to all liens upon and rights of setoff
against the moneys, securities or other property of Guarantor given to Lender by
law, Lender shall have, with respect to Guarantor's obligations to Lender under
this Guaranty and to the extent permitted by law, a contractual possessory
security interest in and a right of setoff against, and Guarantor hereby
assigns, conveys, delivers, pledges, and transfers to Lender all of Guarantor's
right, title and interest in and to, all deposits, moneys, securities and other
property of Guarantor now or hereafter in the possession of or on deposit with
Lender, whether held in a general or special account or deposit, excluding
however all ▇▇▇, ▇▇▇▇▇, and trust accounts. Every such security interest and
right of setoff may be exercised without demand upon or notice to Guarantor. No
security interest or right of setoff shall be deemed to have been waived by any
act or conduct on the part of Lender or by any neglect to exercise such right of
setoff or to enforce such security interest or by any delay in so doing. Every
right of setoff and security interest shall continue in full force and effect
until such right of setoff or security interest is specifically waived or
released by an instrument in writing executed by Lender.
SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the
Indebtedness of Borrower to Lender, whether now existing or hereafter created,
shall be prior 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 Lender 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 agreements now or hereafter evidencing any debts or
obligations of Borrower to Guarantor shall be marked with a legend that the same
are subject to this Guaranty and shall be delivered to Lender. Guarantor agrees,
and Lender hereby is 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:
INTEGRATION, AMENDMENT. Guarantor warrants, represents and agrees that this
Guaranty, together with any exhibits or schedules incorporated herein, fully
Incorporates the agreements and understandings of Guarantor with Lender with
respect to the subject matter hereof and all prior negotiations, drafts, and
other extrinsic communications between Guarantor and Lender shall have no
evidentiary effect whatsoever. Guarantor 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
Lender's attorneys' fees) suffered or incurred by Lender as a result of any
breach by Guarantor of the warranties, representations and agreements of this
paragraph. No alteration or amendment to this Guaranty shall be effective unless
given in writing and signed by the parties sought to be charged or bound by the
alteration or amendment.
APPLICABLE LAW. This Guaranty has been delivered to Lender and accepted by
Lender in the State of California. If there is a lawsuit, Guarantor agrees upon
Lender's request to submit to the jurisdiction of the courts of ORANGE County,
State of California. Lender and Guarantor hereby waive the right to any jury
trial in any action, proceeding, or counterclaim brought by either Lender or
Guarantor against the other. This Guaranty shall be governed by and construed in
accordance with the laws of the State of California.
ATTORNEYS' FEES; EXPENSES. Guarantor agrees to pay upon demand all of Lender's
costs and expenses, including attorney's fees and Lender's legal expenses,
incurred in connection with the enforcement of this Guaranty. Lender may pay
someone else to help enforce this Guaranty, and Guarantor shall pay the costs
and expenses of such enforcement. Costs and expenses include Lender's attorneys
fees and legal expenses whether or not there is a lawsuit, including attorney's
fees and legal expenses for bankruptcy proceedings (and 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.
NOTICES. All notices required to be given under this Guaranty and all requests
and other communications shall be in writing and shall be deemed to have been
duly delivered if delivered either personally, by overnight delivery service or
three days from the date of mailing by certified mail, return receipt requested,
or on the date of first refusal of delivery, to the parties at their addresses
set forth above or such other address as a party may designate in the manner
provided herein for giving of notices. All revocation notices by Guarantor shall
be in writing and shall be effective only upon delivery to Lender as provided
above in the section titled "DURATION OF GUARANTY." If there is more than one
Guarantor, notice to any Guarantor will constitute notice to all Guarantors. For
notice purposes, Guarantor agrees to keep Lender informed at all times of
Guarantor's current address.
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. 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. If a court of competent jurisdiction finds any provision of this
Guaranty to be invalid or unenforceable as to any person or circumstance, such
finding shall not render that provision invalid or unenforceable as to any other
persons or circumstances, and all provisions of this Guaranty in all other
respects shall remain valid and enforceable. If any one or more of Borrower or
Guarantor are corporations or partnerships, it is not necessary for Lender to
inquire into the powers of Borrower or Guarantor or of the officers, directors,
partners, or agents acting or purporting to act on their behalf, and any
Indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed under this Guaranty.
WAIVER. Lender shall not be deemed to have waived any rights under this Guaranty
unless such waiver is given in writing and signed by Lender. 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 Lender 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 Lender, nor any course of dealing between Lender
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.
EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT
THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS
GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE
MANNER SET FORTH IN THE SECTION TITLED "DURATION OF GUARANTY." NO FORMAL
ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY
IS DATED JUNE 1, 1997.
GUARANTOR:
NEW HORIZONS WORLDWIDE, INC.
BY:
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, PRESIDENT
Signed, acknowledged and delivered in the presence of:
X
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Witness
X
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Witness
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