CONTINUING UNCONDITIONAL GUARANTY
Exhibit
10.3
This
Continuing Unconditional Guaranty
(this “Guaranty”) dated as of the 12th
day of November,
2007 (the “Effective Date”), is made by UMT Holdings,
L.P., a Delaware limited partnership (the
“Guarantor”), for the benefit of United Development
Funding III, L.P., a Delaware limited partnership and its affiliates,
subsidiaries, successors and assigns
(“Lender”).
R
E C I T A L S:
A. Lender
has committed to make a loan (the “Loan”) to United
Development Funding X, L.P., a Delaware limited partnership
(“Borrower”), pursuant to the terms and conditions of
that certain Secured Line of Credit Promissory Note (the
“Note”) issued by Borrower and payable to the order of
Lender dated the Effective Date in the principal amount of U.S. Seventy Million
and NO/100 Dollars ($70,000,000.00), the proceeds of which shall be used by
Borrower for business purposes.
B. Guarantor
is an affiliate of Borrower and shall benefit, directly and indirectly, from
the
Loan made to Borrower pursuant to the Note.
C. Guarantor
is willing to execute this Guaranty in favor of Lender and hereby agrees to
be
bound by its terms and conditions.
A
G R E E M E N T:
NOW,
THEREFORE, for good and valuable
consideration, and intending to be legally bound hereby, Guarantor agrees and
covenants with Lender as follows:
1. Definitions. Capitalized
terms not defined in this Guaranty shall have the respective meanings given
to
such terms in the Note.
2. Guaranty
and Surety. Guarantor hereby absolutely and unconditionally
guarantees, and becomes surety for, the full, timely and complete payment when
due, whether by lapse of time, by acceleration of payment, or otherwise, of
all
indebtedness, liabilities and obligations of every kind and nature of Borrower
to Lender, whether now existing or hereinafter arising, including, without
limitation, all indebtedness, liabilities and obligations arising under or
related to (a) the Note, and the other Loan Documents and all amounts due
thereunder, pursuant to or in connection therewith, (b) all costs reasonably
incurred by Lender to obtain, preserve, perfect and enforce the security
interests granted by the Loan Documents and to maintain, preserve and collect
any collateral, and all taxes, assessments, insurance premiums, repairs,
reasonable attorneys’ fees and legal expenses, rent, storage charges,
advertising costs, brokerage fees and expenses of sale related thereto, and
(c) all renewals, extensions, modifications and substitutions of all or any
part of the indebtedness and obligations described in the foregoing clauses
(a)
through (b) (collectively, the “Guaranteed
Obligations”). Guarantor’s obligation under this
Guaranty is unconditional, absolute and enforceable, irrespective of (a) the
validity or enforceability of the Guaranteed Obligations in whole or in part
or
of the Note and the other Loan Documents or any provision thereof,
(b) whether recovery against Borrower with respect to the Guaranteed
Obligations in whole or in part is prevented by bankruptcy, the operation of
law, or otherwise, and (c) any other circumstance that might otherwise cause
a
legal or equitable discharge or defense of Guarantor.
1
3. Subsequent
Acts by Lender. Lender may, in its sole discretion and without
notice, take or refrain from taking any action that might otherwise be deemed
a
legal or equitable release or discharge of Guarantor’s obligations under this
Guaranty, without either impairing or affecting the liability of Guarantor
for
the full, timely and complete payment of the Guaranteed Obligations, which
actions might include, by way of illustration and not limitation:
(a) the
renewal or extension of any of the Guaranteed Obligations or any payments
thereunder, or the acceleration or change of time for payment of the Guaranteed
Obligations any increase in the principal amount of any promissory note or
other
instrument comprising a part of the Guaranteed Obligations and/or any additional
funds advanced under the Guaranteed Obligations;
(b) the
modification, amendment or change in any of the terms relating to any promissory
note or other agreement, document or instrument now or hereafter executed by
Borrower in favor of Lender, including, without limitation, the Note and the
other Loan Documents;
(c) the
absence of any attempt to collect the Guaranteed Obligations from Borrower
or
any other person or entity primarily or secondarily liable for the Guaranteed
Obligations or any other action to enforce Lender’s rights with respect to the
Guaranteed Obligations;
(d) the
waiver, consent, or delay in enforcement by Lender with respect to any provision
of any instrument evidencing the Guaranteed Obligations, including, without
limitation, the Note and the other Loan Documents;
(e) any
failure by Lender to take any steps to perfect and maintain its security
interest in, or to preserve its rights to, any security or collateral given
for
the Guaranteed Obligations, or the release or compromise of any lien or security
held by Lender as security for the Guaranteed Obligations;
(f) the
compounding, rearrangement or consolidation by Lender of all or any part of
the
Guaranteed Obligations;
(g) the
release from liability of Borrower or any other guarantor or person or entity
primarily or secondary liable for the Guaranteed Obligations who may guarantee
or provide security for the Guaranteed Obligations in whole or in part;
or
(h) the
settlement, release, compromise or cancellation of all or any part of the
Guaranteed Obligations, or the acceptance of partial payment of all or any
part
of the Guaranteed Obligations.
2
4. Expenses. Guarantor
agrees to pay all costs and expenses, including, without limitation, all court
costs and reasonable attorneys’ fees paid or incurred by Lender in endeavoring
to collect all or any part of the Guaranteed Obligations, or in enforcing or
pursuing its remedies with respect to the Guaranteed Obligations.
5. Payment
by Guarantor. In the event of any failure to pay with respect to
the Guaranteed Obligations or any Event of Default under the Note, Guarantor
agrees to pay on demand, all of the Guaranteed Obligations and all other costs,
expenses and other amounts payable under this Guaranty. Lender shall
not be required to liquidate any lien or any other form of security, instrument,
or note held by Lender prior to making such demand. THIS IS A
GUARANTY OF PAYMENT AND NOT OF COLLECTION, and Guarantor specifically agrees
that Lender shall not be required to assert any claim, file suit, or proceed
to
obtain a judgment against Borrower or any other guarantor, endorser or surety
for the Guaranteed Obligations, or make any effort at collection of the
Guaranteed Obligations, or foreclose against or seek to realize upon any
security or collateral now or hereafter existing for the Guaranteed Obligations,
or exercise or assert any other right or remedy to which Lender is or may be
entitled in connection with the Guaranteed Obligations, before or as a condition
of enforcing the liability of Guarantor under this Guaranty or requiring payment
of the Guaranteed Obligations under this
Guaranty. Guarantor agrees, to the full extent it may legally do so,
that suit may be brought against Guarantor with or without making Borrower
or
any other person or entity a party to such suit, as Lender may
elect. Guarantor agrees that Guarantor shall remain fully liable
under this Guaranty regardless of whether Borrower is held to be not liable
on
the Guaranteed Obligations and regardless of whether all or any portion of
the
Guaranteed Obligations are “non-recourse” or “limited recourse” to
Borrower.
6. Application
of Payments. Lender shall have the exclusive right to determine
the time and manner of application of any payments or credits to the Guaranteed
Obligations, whether received from Borrower or any other source, and such
determination shall be binding on Guarantor. All such payments and
credits may be applied, reversed and reapplied, in whole or in part, to any
of
the Guaranteed Obligations as Lender shall determine in its sole discretion
without affecting the validity or enforceability of this Guaranty.
7. Guarantor’
Responsibilities. Guarantor hereby assumes responsibility for
keeping itself informed of the financial condition of Borrower, and any and
all
endorsers and/or other Guarantor of any instrument or document evidencing all
or
any part of the Guaranteed Obligations and of all other circumstances bearing
upon the risk of nonpayment of the Guaranteed Obligations. Guarantor
further agrees that Lender shall have no duty to advise Guarantor of any
information known to Lender regarding such condition or such circumstances
or to
undertake any investigation. If Lender, in its sole discretion,
undertakes at any time or from time to time to provide any information to
Guarantor, Lender shall be under no obligation to update any such information
or
to provide any such information to Guarantor on any subsequent
occasion.
8. Reinstatement. Guarantor
agrees that, to the extent any payment or payments are made to Lender or Lender
receives any proceeds of collateral, which payments or proceeds are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to Borrower or any other party, then Guarantor’s
obligations under this Guaranty to the extent of such repayment, shall
immediately and automatically be reinstated and continued in full force and
effect.
3
9. RESERVED.
10. Waivers
by Guarantor. Guarantor hereby waives to the extent permissible
by law: (a) notice of acceptance of this Guaranty and of creation of the
Guaranteed Obligations, (b) presentment, notice of non-payment, and demand
for
payment of the Guaranteed Obligations, (c) protest, notice of protest, and
notice of dishonor or default to Guarantor or to any other party with respect
to
any of the Guaranteed Obligations, and (d) all other notices to which Guarantor
might otherwise be entitled.
11. Continuation. This
Guaranty shall continue in full force and effect with respect to Guarantor,
and
Lender shall be entitled to make loans and advances and extend financial
accommodations to Borrower on the faith of this Guaranty, until Lender delivers
to Guarantor, a written revocation of this Guaranty executed by
Lender.
12. Mutual
Understanding. Guarantor represents and warrants to Lender that
Guarantor has read and fully understands the terms and provisions hereof, has
had an opportunity to review this Guaranty with legal counsel and has executed
this Guaranty based on Guarantor’s own judgment and advice of
counsel. If an ambiguity or question of intent or interpretation
arises, this Guaranty will be construed as if drafted jointly by the Guarantor
and Lender and no presumption or burden of proof will arise favoring or
disfavoring any party because of authorship of any provision of this
Guaranty.
13. Further
Assurances. Guarantor at Guarantor’s expense will promptly (a)
execute and deliver to Lender on Lender’s request, all such other and further
documents, agreements and instruments as may be requested by Lender, and (b)
deliver all such supplementary information as may be requested by Lender, in
compliance with or accomplishment of the agreements of Guarantor under this
Guaranty.
14. Cumulative
Remedies. Guarantor hereby agrees that all rights and remedies
that Lender is afforded by reason of this Guaranty are separate and cumulative
with respect to Guarantor and otherwise and may be pursued separately,
successively, or concurrently, as Lender deems advisable. In
addition, all such rights and remedies of Lender are non-exclusive and shall
in
no way limit or prejudice Lender’s ability to pursue any other legal or
equitable rights or remedies that may be available to Lender.
15. Notice. All
notices and other communications under this Guaranty will be in writing and
will
be mailed by registered or certified mail, postage prepaid, sent by facsimile,
delivered personally by hand, or delivered by nationally recognized overnight
delivery service addressed to Guarantor at the address or facsimile number
for
notice provided for such party on the signature page hereto, or to such other
address or facsimile number as Guarantor may have delivered to Lender for
purposes of notice pursuant to this Guaranty. Each notice or other
communication will be treated as effective and as having been given and received
(a) if sent by mail, at the earlier of its receipt or three business days after
such notice or other communication has been deposited in a regularly maintained
receptacle for deposit of United States mail, (b) if sent by facsimile, upon
electronic or written confirmation of facsimile transfer, (c) if delivered
personally by hand, upon electronic or written confirmation of delivery from
the
person delivering such notice or other communication, or (d) if sent by
nationally recognized overnight delivery service, upon electronic or written
confirmation of delivery from such service.
4
16. Enforcement
and Waiver by Lender. Lender shall have the right at all times to
enforce the provisions of this Guaranty and the other Loan Documents in strict
accordance with their respective terms, notwithstanding any conduct or custom
on
the part of Lender in refraining from so doing at any time or
times. The failure of Lender at any time or times to enforce its
rights under such provisions strictly in accordance with the same, shall not
be
construed as having created a custom or in any way or manner modified or waived
the same. All rights and remedies of Lender are cumulative and concurrent and
the exercise of one right or remedy shall not be deemed a waiver or release
of
any other right or remedy.
17. CHOICE
OF LAW. EXCEPT TO THE EXTENT
THAT THE VALIDITY OR PERFECTION OF SECURITY INTERESTS OR REMEDIES IN RESPECT
OF
ANY PARTICULAR COLLATERAL IS GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN
THE STATE OF TEXAS, THIS GUARANTY SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO ITS
CONFLICTS OF LAWS PROVISIONS.
18. JURISDICTION;
VENUE. GUARANTOR IRREVOCABLY AGREES THAT ANY LEGAL PROCEEDING IN
RESPECT OF THIS GUARANTY AND THE OTHER LOAN DOCUMENTS SHALL BE BROUGHT IN THE
DISTRICT COURTS OF TARRANT COUNTY, TEXAS OR THE UNITED STATES DISTRICT COURT
FOR
THE NORTHERN DISTRICT OF TEXAS, FORT WORTH DIVISION (THE “SPECIFIED
COURTS”). GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF THE SPECIFIED COURTS. GUARANTOR HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH GUARANTOR
MAY NOW OR HEREAFTER HAVE THAT THE LAYING OF VENUE OF ANY SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH SPECIFIED COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM AND HEREBY IRREVOCABLY AGREES TO A TRANSFER OF ALL SUCH
PROCEEDINGS TO THE SPECIFIED COURTS. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF LENDER TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST ANY GUARANTOR IN ANY JURISDICTION OR TO SERVE PROCESS IN ANY
MANNER PERMITTED BY APPLICABLE LAW.
19. Severability. If
any provision of this Guaranty shall be held invalid under any applicable laws,
then all other terms and provisions of this Guaranty shall nevertheless remain
effective and shall be enforced to the fullest extent permitted by applicable
law.
5
20. Amendments;
Waivers. No amendment or waiver of any provision of this Guaranty
nor consent to any departure by Guarantor herefrom shall in any event be
effective unless the same shall be in writing and signed by Lender, and then
such waiver or consent shall be effective only in the specific instance and
for
the specific purpose for which given.
21. Binding
Effect; Assignment. This Guaranty shall be binding on Guarantor and
Guarantor’s administrators, legal representatives, successors, heirs and/or
assigns, including, without limitation, any receiver, trustee or debtor in
possession of or for Guarantor, and shall inure to the benefit of Lender and
its
successors and assigns. Guarantor shall not be entitled to transfer
or assign this Guaranty in whole or in part without the prior written consent
of
Lender. This Guaranty is freely assignable and transferable by Lender without
the consent of Guarantor. Should the status, composition, structure
or name of Guarantor change, this Guaranty shall continue and also cover the
Guaranteed Obligations under the new status composition, structure or name
according to the terms of this Guaranty.
22. RESERVED.
23. Captions. The
captions in this Guaranty are for the convenience of reference only and shall
not limit or otherwise affect any of the terms or provisions
hereof.
24. Number
or Gender of Words. Except where the context indicates otherwise,
words in the singular number will include the plural and words in the masculine
gender will include the feminine and neutral, and vice versa, when they should
so apply.
25. WAIVER
OF JURY TRIAL, PUNITIVE DAMAGES, ETC. GUARANTOR HEREBY KNOWINGLY,
VOLUNTARILY, INTENTIONALLY, AND IRREVOCABLY (A) WAIVES, TO THE MAXIMUM EXTENT
NOT PROHIBITED BY LAW, ANY RIGHT GUARANTOR MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED HEREON, OR DIRECTLY OR INDIRECTLY AT ANY TIME
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS GUARANTY OR THE LOAN DOCUMENTS
OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY OR ASSOCIATED HEREWITH OR
THEREWITH, BEFORE OR AFTER MATURITY OF THE NOTE; (B) WAIVES, TO THE MAXIMUM
EXTENT NOT PROHIBITED BY LAW, ANY RIGHT GUARANTOR MAY HAVE TO CLAIM OR RECOVER
IN ANY SUCH LITIGATION ANY “SPECIAL DAMAGES”, AS DEFINED BELOW, (C) CERTIFIES
THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OF LENDER OR COUNSEL FOR ANY PARTY
HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY
WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND
(D)
ACKNOWLEDGES THAT LENDER HAS BEEN INDUCED TO MAKE THE LOAN AND ACCEPT THE NOTE
BASED UPON, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED IN
THIS
SECTION. AS USED IN THIS SECTION, “SPECIAL DAMAGES” INCLUDES ALL SPECIAL,
CONSEQUENTIAL, EXEMPLARY, OR PUNITIVE DAMAGES (REGARDLESS OF HOW NAMED), BUT
DOES NOT INCLUDE ANY PAYMENTS OR FUNDS WHICH ANY PARTY HERETO HAS EXPRESSLY
PROMISED TO PAY OR DELIVER TO ANY OTHER PARTY HERETO.
6
26. ACKNOWLEDGEMENT
AND CONSENT TO PLEDGE. THIS GUARANTY IS SUBJECT TO A SECURITY
INTEREST IN FAVOR OF, AND PLEDGED AS COLLATERAL TO, PREMIER BANK AND ITS ASSIGNS
(“PREMIER”). BY EXECUTION HEREOF, GUARANTOR HEREBY CONSENTS TO SUCH
SECURITY INTEREST AND PLEDGE OF THIS GUARANTY TO PREMIER, AND CONSENTS TO THE
ASSIGNMENT OF THIS GUARANTY TO PREMIER IN ACCORDANCE
THEREWITH.
27. ENTIRE
AGREEMENT. THIS GUARANTY TOGETHER WITH THE NOTE
AND THE OTHER LOAN DOCUMENTS TOGETHER CONSTITUTE THE ENTIRE AGREEMENT AMONG
THE
PARTIES CONCERNING THE SUBJECT MATTER HEREOF, AND ALL PRIOR DISCUSSIONS,
AGREEMENTS AND STATEMENTS, WHETHER ORAL OR WRITTEN, ARE MERGED INTO THIS
GUARANTY, THE NOTE AND THE OTHER LOAN DOCUMENTS. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES. THIS GUARANTY, THE NOTE
AND THE OTHER LOAN DOCUMENTS MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
[The
remainder of this page is left blank intentionally.]
7
IN
WITNESS WHEREOF, Guarantor has duly executed this Guaranty on this the 12th
day
of November, 2007, effective for all purposes as of the Effective
Date.
GUARANTOR:
|
|
UMT
HOLDINGS, L.P.,
|
a
Delaware limited
partnership
By: UMT
Services,
Inc.
Its: General
Partner
By: /s/
Xxxxxx X. Xxxxxxxx
Name: Xxxxxx
X. Xxxxxxxx
Its: President
and Chief ExecutiveOfficer
Signature
page to
Guaranty
