Document:

Exhibit 10.16

 

UNCONDITIONAL GUARANTY

 

For and in consideration of the loan by SQUARE 1 BANK (“Bank”) to Lucid, Inc. (“Borrower”), which loan is made pursuant to a Loan and Security Agreement (as amended from time to time, the “Agreement”), and acknowledging that Bank would not enter into the Agreement without the benefit of this Guaranty, the undersigned guarantor (“Guarantor”) hereby unconditionally and irrevocably guarantees the prompt and complete payment of all amounts that Borrower owes to Bank and performance by Borrower of the Agreement and any other agreements between Borrower and Bank, as amended from time to time (collectively referred to as the “Agreements”), in strict accordance with their respective terms. This Guaranty is a continuing guaranty that covers, without limitation, new debts incurred by Borrower under the Agreement or any other agreements between Borrower and bank. All terms used without definition in this Guaranty shall have the meaning assigned to them in the Agreement.

 

1.             If Borrower does not pay any amount or perform its obligations in strict accordance with the Agreements, Guarantor shall immediately pay all amounts due thereunder (including, without limitation, all principal, interest, and fees) and otherwise proceed to complete the same and satisfy all of Borrower’s obligations under the Agreements; provided however, that if the Borrower fulfills the Guaranty Release Conditions (as defined below), then contingent upon such fulfillment, this Guaranty shall thereafter be of no further force or effect and shall instead be null and void. “Guaranty Release Conditions” means that one of the following has occurred: (i) a Release Event (as defined in the Agreement), or (ii) Borrower has achieved an EBITDA (as defined below) of at least $1.00for six (6) consecutive months. “EBITDA” means Earnings before Tax (+) Depreciation and Amortization (+) Interest and Non-cash Expenses (+) any non-cash stock compensation expenses.

 

2.             If there is more than one guarantor, the obligations hereunder are joint and several, and whether or not there is more than one guarantor, the obligations hereunder are independent of the obligations of Borrower and any other person or entity, and a separate action or actions may be brought and prosecuted against Guarantor whether action is brought against Borrower or whether Borrower be joined in any such action or actions. Guarantor waives the benefit of any statute of limitations affecting its liability hereunder or the enforcement thereof, to the extent permitted by law. Guarantor’s liability under this Guaranty is not conditioned or contingent upon the genuineness, validity, regularity or enforceability of the Agreements.

 

3.             Guarantor authorizes Bank, without notice or demand and without affecting its liability hereunder, from time to time to (a) renew, extend, or otherwise change the terms of the Agreements or any part thereof; (b) take and hold security for the payment of this Guaranty or the Agreements, and exchange, enforce, waive and release any such security; and (c) apply such security and direct the order or manner of sale thereof as Bank in its sole discretion may determine.

 

4.             Guarantor waives any right to require Bank to (a) proceed against Borrower, any guarantor or any other person; (b) proceed against or exhaust any security held from Borrower; or (c) pursue any other remedy in Bank’s power whatsoever. Bank may, at its election, exercise or decline or fail to exercise any right or remedy it may have against Borrower or any security held by Bank, including without limitation the right to foreclose upon any such security by

 

 

judicial or nonjudicial sale, without affecting or impairing in any way the liability of Guarantor hereunder. Guarantor waives any defense arising by reason of any disability or other defense of Borrower or by reason of the cessation from any cause whatsoever of the liability of Borrower. Guarantor waives any setoff, defense or counterclaim that Borrower may have against Bank. Guarantor waives any defense arising out of the absence, impairment or loss of any right of reimbursement or subrogation or any other rights against Borrower. Until all of the amounts that Borrower owes to Bank have been paid in full, Guarantor shall have no right of subrogation or reimbursement, contribution or other rights against Borrower, and Guarantor waives any right to enforce any remedy that Bank now has or may hereafter have against Borrower. Guarantor waives all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor, and notices of acceptance of this Guaranty and of the existence, creation, or incurring of new or additional indebtedness. Guarantor assumes the responsibility for being and keeping himself informed of the financial condition of Borrower and of all other circumstances bearing upon the risk of nonpayment of any indebtedness or nonperformance of any obligation of Borrower, warrants to Bank that it will keep so informed, and agrees that absent a request for particular information by Guarantor, Bank shall not have any duty to advise Guarantor of information known to Bank regarding such condition or any such circumstances. Guarantor waives any benefits that he has that permit a subordinating creditor to assert suretyship defenses or that give a subordinating creditor rights to require a senior creditor to marshal assets. Guarantor will not assert such a defense or right. In addition to the waivers set forth above, Guarantor expressly waives, to the extent permitted by North Carolina law, all of Guarantor’s rights under North Carolina General Statute Section 26-7 through Section 26-9, inclusive, or any similar or subsequent laws.

 

5.             If Borrower becomes insolvent or is adjudicated bankrupt or files a petition for reorganization, arrangement, composition or similar relief under any present or future provision of the United States Bankruptcy Code, or if such a petition is filed against Borrower, and in any such proceeding some or  all of any indebtedness or obligations under the Agreements are terminated or rejected or any obligation of Borrower is modified or abrogated, or if Borrower’s obligations are otherwise avoided for any reason, Guarantor agrees that Guarantor’s liability hereunder shall not thereby be affected or modified and such liability shall continue in full force and effect as if no such action or proceeding had occurred. This Guaranty shall continue to be effective or be reinstated, as the case may be, if any payment must be returned by Bank upon the insolvency, bankruptcy or reorganization of Borrower, Guarantor, any other guarantor, or otherwise, as though such payment had not been made.

 

6.             Any indebtedness of Borrower now or hereafter held by Guarantor is hereby subordinated to any indebtedness of Borrower to Bank; and such indebtedness of Borrower to Guarantor shall be collected, enforced and received by Guarantor as trustee for Bank and be paid over to Bank on account of the indebtedness of Borrower to Bank but without reducing or affecting in any manner the liability of Guarantor under the other provisions of this Guaranty.

 

7.             Guarantor agrees to pay reasonable attorneys’ fees and all other costs and expenses which may be incurred by Bank in the enforcement of this Guaranty. No terms or provisions of this Guaranty may be changed, waived, revoked or amended without Bank’s prior written consent. Should any provision of this Guaranty be determined by a court of competent jurisdiction to be unenforceable, all of the other provisions shall remain effective. This

 

 

Guaranty, together with any agreements (including without limitation any security agreements or any pledge agreements) executed in connection with this Guaranty, embodies the entire agreement among the parties hereto with respect to the matters set forth herein, and supersedes all prior agreements among the parties with respect to the matters set forth herein. No course of prior dealing among the parties, no usage of trade, and no parol or extrinsic evidence of any nature shall be used to supplement, modify or vary any of the terms hereof. There are no conditions to the full effectiveness of this Guaranty. Bank may assign this Guaranty without in any way affecting Guarantor’s liability under it. This Guaranty shall inure to the benefit of Bank and its successors and assigns. This Guaranty is in addition to the guaranties of any other guarantors and any and all other guaranties of Borrower’s indebtedness or liabilities to Bank.

 

8.             Guarantor represents and warrants to Bank that (i) Guarantor has taken all necessary and appropriate action to authorize the execution, delivery and performance of this Guaranty, (ii) execution, delivery and performance of this Guaranty do not conflict with or result in a breach of or constitute a default under any agreements to which Guarantor is party or by which he is bound, and (iii) this Guaranty constitutes a valid and binding obligation, enforceable against Guarantor in accordance with its terms.

 

9.             Guarantor covenants and agrees that Guarantor shall do all of the following:

 

9.1          Guarantor shall deliver to Bank all of the following information: (i) as soon as available, but in any event within 60 days after the end of each calendar year, personal financial statements of Guarantor, (ii) as soon as available each year, but in any event within 10 Business Days after they are filed, copies of Guarantor’s federal and state tax returns, and (iii) such other reports and information as Bank may reasonably request from time to time.

 

9.2          Guarantor shall comply with all statutes, laws, ordinances, directives, orders, and government rules and regulations to which he is subject if non-compliance with such laws could adversely affect the financial condition of Guarantor.

 

9.3          At any time and from time to time Guarantor shall execute and deliver  such further instruments and take such further action as may reasonably be requested by Bank to effect the purposes of this Guaranty.

 

10.          This Guaranty shall be governed by the laws of the State of North Carolina, without regard to conflicts of laws principles. GUARANTOR WAIVES ANY RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS GUARANTY OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. Guarantor submits to the exclusive jurisdiction of the state and federal courts located in Durham, North Carolina for purposes of this Guaranty and the Agreements.  IF THIS JURY WAIVER IS UNENFORCEABLE FOR ANY REASON THE PARTIES WILL RESOLVE ALL DISPUTES ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREIN BY BINDING ARBITRATION CONDUCTED IN DURHAM COUNTY, NORTH CAROLINA IN ACCORDANCE WITH THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION. The arbitrator shall apply North Carolina

 

 

law to the resolution of any dispute, without reference to rules of conflicts of law or rules of statutory arbitration. Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. Notwithstanding the foregoing, the parties may apply to any court of competent jurisdiction for preliminary or interim equitable relief, or to compel arbitration in accordance with this Section. The costs and expenses of the arbitration, including without limitation, the arbitrator’s fees and expert witness fees, and reasonable attorneys’ fees, incurred by the parties to the arbitration may be awarded to the prevailing party, in the discretion of the arbitrator, or may be apportioned between the parties in any manner deemed appropriate by the arbitrator. Unless and until the arbitrator decides that one party is to pay for all (or a share) of such costs and expenses, both parties shall share equally in the payment of the arbitrator’s fees as and when billed by the arbitrator.

 

11.          All payments made by Guarantor hereunder will be made free and clear of, and without deduction or withholding for, any present or future taxes, levies, imposts, duties, fees, assessments or other charges of whatever nature now or hereafter imposed by any governmental authority or by any political subdivision or taxing authority thereof or therein with respect to such payments (but excluding any tax imposed on or measured by the net income or profits of a Bank pursuant to the laws of the jurisdiction in which it is organized or the jurisdiction in which the principal office or applicable lending office of such Bank is located or any subdivision thereof or therein) and all interest, penalties or similar liabilities with respect thereto (all such non-excluded taxes, levies, imposts, duties, fees, assessments or other charges being referred to collectively as “Taxes”). If any Taxes are so levied or imposed, Guarantor agrees to pay the full amount of such Taxes, and such additional amounts as may be necessary so that every payment of all amounts due under this Guaranty, after withholding or deduction for or on account of any Taxes, will not be less than the amount provided for herein and in the Loan Documents.

 

 

IN WITNESS WHEREOF, the undersigned Guarantor has executed this Guaranty as of this 20th day of July, 2011.

 

 

	
 
    	
GUARANTOR
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/   William J. Shea
    
	
 
    	
William   J. Shea
    
	
 
    	
 
    
	
 
    	
 
    
	
WITNESSED BY:
    	
 
    
	
 
    	
 
    
	
SIGNATURE:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
NAME:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
ADDRESS:Exhibit 10.32

 

NON-NEGOTIABLE PROMISSORY NOTE

 

	
$ 612,411.70
    	
 
    	
December  31, 2010
    
	
 
    	
 
    	
Rochester, New York
    

 

FOR VALUE RECEIVED, LUCID, INC., a New York corporation  (“Maker”), promises to pay to DALE E. CRANE  (“Payee”), in lawful money of the United States of America, the sum of six hundred twelve thousand four hundred eleven and 70/100 Dollars ($612,411.70), without interest, in a  first payment of one hundred fifty three thousand, one hundred two and 70/100 Dollars ($153,102.70) and in three equal, successive annual payments of one hundred fifty three thousand, one hundred three and 00/100 Dollars ($153,103.00) each, the first payment to be made on or before March 31st, 2011, and subsequent payments to be made on or before January 15th  of 2012, 2013 and 2014.

 

1.             Payments.

 

1.1           Manner of Payment.  All payments of principal and interest on this Note shall be made by check at 137 N. Silver Shoals Dr., Shell Beach CA 93449 or at such other place in the United States of America as Payee shall designate to Maker in writing.  If any payment on this Note is due on a day which is not a Business Day, the payment shall be due on the first Business Day that immediately follows the date the payment is due.  “Business Day” means any day other than a Saturday, Sunday or legal holiday in the State of New York.

 

1.2           Prepayment.  Maker may, without premium or penalty, at any time and from time to time prepay all or any portion of the outstanding balance due under this Note.

 

2.             Defaults.

 

2.1           Events of Default.  The occurrence of any one or more of the following events with respect to Maker shall constitute an event of default hereunder (“Event of Default”):

 

(a)           If Maker shall fail to pay when due any payment required by this Note and such failure continues for fifteen (15) days after such due date.

 

(b)           If, pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors (a “Bankruptcy Law”), Maker shall (i) commence a voluntary case or proceeding; (ii) consent to the entry of an order for relief against it in an involuntary case; (iii) consent to the appointment of a trustee, receiver, assignee, liquidator or similar official; (iv) make an assignment for the benefit of its creditors; or (v) admit in writing its inability to pay its debts as they become due.

 

 

(c)           If a court of competent jurisdiction enters an order or decree under any bankruptcy law that (i) is for relief against Maker in an involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator or similar official for Maker or substantially all of Maker’s properties, or (iii) orders the dissolution of Maker, and in each case the order or decree is not dismissed within 120 days.

 

(d)           In the event that Maker completes a “Qualified Public Offering,” then any balance due under this Note shall be due and payable within fourteen (14) business days of the closing of such Qualified Public Offering. For purposes of this Note, the term “Qualified Offering” means an underwritten public offering of shares of common stock by Maker that results in gross cash proceeds (before discounts, commissions or expenses) to Maker of at least $10,000,000, inclusive of the converted principal and interest of any notes of Maker automatically convertible upon closing of a public offering.

 

2.2           Notice by Maker.  Maker shall notify Payee in writing within 5 days after the occurrence of an Event of Default of which Maker acquires knowledge.

 

2.3           Remedies.  Upon the occurrence of an Event of Default hereunder (unless all Events of Default have been cured or waived by Payee), Payee may, at its option, (i) by written notice to Maker, declare the entire unpaid balance of this Note immediately due and payable regardless of any prior forbearance, and (ii) exercise any and all rights and remedies available to him under applicable law, including, without limitation, the right to collect from Maker all sums due under this Note.  Maker shall pay all reasonable costs and expenses incurred by or on behalf of Payee in connection with Payee’s exercise of any or all of its rights and remedies under this Note, including, without limitation, reasonable attorneys’ fees.

 

3.             Miscellaneous.

 

3.1           Waiver.  The rights and remedies of Payee under this Note shall be cumulative and not alternative.  No waiver by Payee of any right or remedy under this Note shall be effective unless in a writing signed by Payee.  Neither the failure nor any delay in exercising any right, power or privilege under this Note will operate as a waiver of such right, power or privilege and no single or partial exercise of any such right, power or privilege by Payee will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege.  To the maximum extent permitted by applicable law, (a) no claim or right of Payee arising out of this Note can be discharged by Payee, in whole or in part, by a waiver or renunciation of the claim or right unless in a writing, signed by Payee; (b) no waiver that may be given by Payee will be applicable except in the specific instance for which it was given; and (c) no notice to or demand on Maker will be deemed to be a waiver of any obligation of Maker or of the right of Payee to take further action without notice or demand as provided in this Note.  Maker hereby waives presentment, demand, protest and notice of dishonor in protest.

 

 

3.2           Severability.  If any provision of this Note is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Note will remain in full force and effect.  Any provision of this Note held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

 

3.3           Governing Law.  This Note will be governed by the laws of the State of New York without regard to conflicts of laws principles.

 

3.4           Parties and Interest.  This Note shall bind Maker and its successors and assigns.  This Note shall not be assigned or transferred by Payee without the express prior written consent of Maker, except by will or, in default thereof, by operation of law.

 

IN WITNESS WHEREOF, Maker has executed and delivered this Note as of the date first stated above.

 

	
 
    	
LUCID, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jay M. Eastman
    
	
 
    	
Name:
    	
Jay M. Eastman
    
	
 
    	
Title:
    	
Chief Executive Officer

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