Exhibit 10.5
Guaranty: To induce The PrivateBank and Trust Company (the
“Lender”) directly or through any of its branches,
offices, subsidiaries, or affiliates to provide or extend certain
financial accommodations and Liabilities to Advanced Photonix,
Inc., a Delaware corporation (the “Borrower”), and
because the undersigned (the “Guarantor”) has
determined that executing this Guaranty is in its interest and to
its financial benefit, the Guarantor absolutely and unconditionally
guaranties to the Lender the full and prompt payment of all
Liabilities when due, whether at stated maturity, on demand, by
acceleration or otherwise. The Guarantor’s obligations under
this Guaranty shall be payable in lawful money of the United States
of America.
Liabilities: The term “Liabilities” as used in
this Guaranty means (i) all obligations, indebtedness and
liabilities of the Borrower to the Lender, and any of its
subsidiaries, affiliates or successors, now existing or later
arising, including, without limitation, all loans, advances,
interest, costs, expenses, fees, overdraft indebtedness, credit
card indebtedness, letter of credit indebtedness or lease
obligations, (ii) all costs and expenses, including reasonable
attorneys’ fees, that the Lender may pay or incur in
collecting from the Borrower, the Guarantor, or any other guarantor
of all or any of the Liabilities and for liquidating any Collateral
(as defined below), (iii) all monetary obligations incurred or
accrued during the pendency of any bankruptcy, insolvency,
receivership or other similar proceedings, regardless of whether
allowed or allowable in such proceeding, including reasonable
attorneys’ fees, and (iv) all renewals, extensions,
modifications, consolidations or substitutions of any of the
foregoing, whether the Borrower may be liable jointly with others
or individually liable as a debtor, maker, co-maker, drawer,
endorser, guarantor, surety or otherwise, and whether voluntarily
or involuntarily incurred, known or unknown, due or not due,
absolute or contingent, direct or indirect, liquidated or
unliquidated.
Limitation: The Guarantor’s obligation under this
Guaranty is UNLIMITED and shall include all costs, expenses, fees,
interest, and other amounts included in the Liabilities.
Continued Reliance. The Lender may continue to provide or extend
Liabilities to the Borrower based on this Guaranty until it
receives written notice of termination from the Guarantor. Such
notice shall be effective upon the opening of business on the fifth
(5 th ) day following written acknowledgment of
delivery. If terminated, the Guarantor will continue to be liable
to the Lender for any Liabilities created, assumed or committed to
at the time the termination becomes effective, and all subsequent
renewals, extensions, modifications and amendments of those
Liabilities, until all of the same have been fully paid.
Termination by any other guarantor shall not release the Guarantor
from its obligations under this Guaranty.
Security. As security for this Guaranty, the Guarantor
pledges and grants to the Lender a continuing security interest in
the following described property and all of its additions,
substitutions, increments, proceeds and products, whether now owned
or later acquired (“Collateral”):
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All securities
and other property of the Guarantor in the custody, possession or
control of the Lender (other than property held by the Lender
solely in a fiduciary capacity);
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All property or
securities declared or acknowledged by the Guarantor to constitute
security for any past, present or future liability, direct or
indirect, of the Guarantor to the Lender;
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All claims of
any nature, whether now existing or later acquired, that Guarantor
has against Borrower (excepting claims under a deed of trust or
mortgage covering California real property), including the right of
the Lender to collect and realize upon such claims;
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All balances of
deposit accounts of the Guarantor with the Lender (“deposit
account” having the meaning given to it §9-102(a)(29) of
the UCC (as defined below));
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The Lender
shall have the right at any time to apply its own debt or liability
to the Guarantor in whole or partial payment of this Guaranty or
other present or future liabilities of the Guarantor, direct or
indirect, without any requirement for mutual maturity.
If the
Guarantor fails to pay any amount owing under this Guaranty, the
Lender shall have all of the rights and remedies provided by law or
under any other agreement to liquidate or foreclose on and sell the
Collateral, including but not limited to the rights and remedies of
a secured party under the Uniform Commercial Code of the State of
Michigan, as in effect from time to time (the “UCC”).
These rights and remedies shall be cumulative and not exclusive. If
the Guarantor is entitled to notice, that requirement will be met
if the Lender sends notice at least ten (10) days prior to the date
of sale, disposition or other event which requires notice. The
proceeds of any sale shall be applied first to the reasonable costs
incurred in conducting such sale, then toward payment of the amount
owing under this Guaranty. The Lender is authorized to cause all or
any part of the Collateral to be transferred to or registered in
its name or in the name of any other person, firm or corporation,
with or without designation of the capacity of such
nominee.
For purposes of
the following paragraphs, “any collateral” shall
include the Collateral and any other collateral securing the
Liabilities.
Action
Regarding Borrower. If any monies become available that the Lender
can apply to the Liabilities, the Lender may apply them in any
manner it chooses, including but not limited to applying them
against Liabilities which are not covered by this Guaranty. The
Lender can take any action against the Borrower, any collateral, or
any other person liable for any of the Liabilities. The Lender can
release the Borrower or anyone else from its liability for the
Liabilities, either in whole or in part, or release any collateral,
and need not perfect a security interest in any collateral. The
Lender does not have to exercise any rights that it has against the
Borrower or anyone else, or make any effort to realize on any
collateral or right of set-off. If the Borrower requests more
credit or any other benefit, the Lender may grant it and the Lender
may grant renewals, extensions, modifications and amendments of any
of the Liabilities and otherwise deal with the Borrower or any
other person as the Lender sees fit and as if this Guaranty were
not in effect. The Guarantor’s obligations under this
Guaranty shall not be released or affected by (a) any act or
omission of the Lender, (b) the voluntary or involuntary
liquidation, sale or other disposition of all or substantially all
of the assets of the Borrower, or any receivership, insolvency,
bankruptcy, reorganization, or other similar proceedings affecting
the Borrower or any of its assets, or (c) any change in the
composition or structure of the Borrower or the Guarantor,
including a merger or consolidation with any other person or
entity.
Nature
of Guaranty. This
Guaranty is a guaranty of payment and not of collection. The Lender
can insist that the Guarantor pay immediately, and the Lender is
not required to attempt to collect first from the Borrower, any
collateral, or any other person liable for any of the Liabilities.
The obligation
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