Exhibit 10.5
GUARANTY
TO: PAN AMERICAN BANK, FSB
FOR GOOD AND valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the undersigned (hereinafter referred to as the
"Guarantor") hereby guarantees, promises and undertakes as follows:
1. Guarantor unconditionally, absolutely and irrevocably guarantees
and promises to pay to PAN AMERICAN BANK, FSB ("Bank"), on demand, any sums
owing to Bank and not paid by BPN Corporation ("Contractor") under that certain
Insurance Premium Financing Management Agreement of even date herewith between
Contractor and Bank (the "Agreement") within fifteen (15) days of Bank's demand
therefor given on or after the date on which Contractor's performance is due
thereunder.
2. This Guaranty ("Guaranty") shall remain effective so long as any
amounts remain due under the Agreement to Bank or until the "Closing Date" as
defined in that certain Stock Option Agreement of even date herewith by and
among Contractor, Pan American Group, Inc., ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇ and The ▇▇▇▇▇▇ Family Trust, whichever occurs earlier;
provided, however, any claim asserted by Bank prior to the Closing Date that is
-------- -------
subject to this Guaranty shall not be affected by the limitations contained in
this sentence. Guarantor agrees that nothing shall discharge or satisfy his
obligations created hereunder except for the full payment of all sums due and
owing to Bank by Contractor under the Agreement. This Guaranty is a personal and
direct obligation of Guarantor, irrespective of the regularity, validity, or
enforceability of any provision of the Agreement against Contractor and shall
not be affected or impaired by any compromise, release, renewal, extension,
indulgence, alteration, change in or modification of the Agreement, nor by any
failure, negligence, or omission on the part of Bank to realize upon any
obligations of Contractor or any other security therefor.
3. Guarantor agrees that he is directly and primarily liable to Bank,
that his obligation hereunder is independent of the obligations of Contractor
under the Agreement, or of any other guarantor, and that a separate action or
actions may be brought and prosecuted against Guarantor, whether action is
brought against Contractor or any other guarantor or whether Contractor or
Guarantor are joined in any such action or actions.
In the event that any bankruptcy, insolvency, receivership or similar
proceeding is instituted by or against Contractor, the obligations of the
Guarantor hereunder shall be immediately due, payable and enforceable against
Guarantor without Bank's prior demand of any kind for performance given to
Contractor.
As a condition to payment or performance by Guarantor under this
Guaranty, Bank shall not be required to, and Guarantor hereby waives any and all
rights to require Bank to prosecute or seek to enforce any remedies against
Contractor or any other party liable to Bank and/or to require Bank to seek to
enforce or resort to any
remedies with respect to any security interests, liens or encumbrances granted
to Bank by Contractor or any other party.
4. Guarantor hereby authorizes Bank to assign, without notice, the
benefit of this Guaranty in whole or in part and/or Bank's rights hereunder to
any assignee of the Agreement or of any loans originated thereunder.
5. Guarantor hereby waives any right to assert against Bank any
defense (1egal or equitable), set-off, counterclaims, and/or claim which
Guarantor may now or at any time hereafter have against Contractor and/or any
other party liable to Bank in any way or manner.
Guarantor hereby waives any defenses arising by reason of any claim
based upon an election of remedies by Bank, which, in any manner impairs,
affects, reduces, releases, destroys and/or extinguishes Guarantor' subrogation
rights, rights to proceed against Contractor for reimbursement, and/or any other
rights of the Guarantor to proceed against Contractor, against any other
guarantor, or against any other person or security, including without limitation
any defense that may arise by reason of the incapacity, lack of authority, death
or disability of, or revocation hereof by, any other or others or the failure of
Bank to file or enforce a claim against the estate (either in administration,
bankruptcy, or other proceeding) of any other or others.
Any and all present and future debts of Contractor to Guarantor are
hereby postponed in favor of and subordinated to the full payment and
performance of all present and future debts and obligations of Contractor to
Bank. All monies or other property of Guarantor at any time in Bank's possession
may be held by Bank as security for any and all obligations of Guarantor to Bank
no matter how or when arising, whether absolute or contingent, whether due or to
become due, and whether under this Guaranty or otherwise.
6. Guarantor is presently informed of the financial condition of
Contractor and of all other circumstances which a diligent inquiry would reveal
and which bear upon the risk of nonpayment of any obligation of Contractor to
Bank under the Agreement. Guarantor hereby covenants that he will continue to
keep himself informed of Contractor's financial condition and of all other
circumstances which bear upon the risk of nonpayment. Guarantor hereby waives
his right, if any, to require Bank to disclose to him any information which Bank
may now or hereafter acquire concerning such condition or circumstances.
7. This Guaranty shall continue in full force and effect until the
earlier to occur of (i) the Closing Date, provided, however, that any claim
-------- -------
asserted by Bank prior to the Closing Date that is subject to this Guaranty
shall not be affected by such limitation, or (ii) Contractor's obligations to
Bank under the Agreement being fully paid, performed and discharged and Bank
giving the Guarantor written notice of that fact. In connection with subpart
(ii) of this paragraph 7, Contractor's obligations shall not be considered fully
paid, performed and discharged unless and until all payments by Contractor to
Bank are no longer subject to any right on the part of any person whomsoever,
including but not
- 2 -
limited to Contractor, Contractor as a debtor-in-possession, and/or any trustee
in bankruptcy, to set aside such payments or seek to recoup the amount of such
payments, or any part thereof. The foregoing shall include, by way of example
and not by way of limitation, all rights to recover preferences voidable under
Title 11 of the United States Bankruptcy Code. In the event that any such
payments by Contractor to Bank are set aside after the making thereof, in whole
or in part, or settled without litigation, to the extent of such settlement, all
of which is within Bank's discretion, Guarantor shall be liable for the full
amount Bank is required to repay up to the amount of the dollar limit of this
Guaranty plus costs, interest, attorneys' fees and any and all reasonable
expenses which Bank paid or incurred in connection therewith.
8. This Guaranty shall be binding upon the successors and assigns of
the Guarantor and shall inure to the benefit of Bank's successors and assigns.
The death of Guarantor and the incapacity, lack of authority, death, disability
or revocation hereof by Guarantor shall not terminate or otherwise impair this
Guaranty.
9. No modification of this Guaranty shall be effective for any purpose
unless it is in writing and executed by an officer of Bank authorized to do so.
This Guaranty merges all negotiations, stipulations and provisions relating to
the subject matter of this Guaranty which preceded or may accompany the
execution of this Guaranty.
10. Guarantor agrees to pay reasonable attorneys' fees and all costs
and expenses which may be incurred by Bank in the enforcement of this Guaranty
or in any way arising out of, following, or consequential to the enforcement of
Contractor's obligations under the Agreement.
11. All acts and transactions hereunder and the rights and obligations
of the parties hereto shall be governed, construed and interpreted in accordance
with the laws of the State of California.
12. No action which Bank may take or omit to take in connection with
the Agreement, nor any course of dealing with Contractor or any other person
shall release undersigned's obligations hereunder, affect this Guaranty in any
way or afford undersigned any recourse, claims or offsets against Bank, which
undersigned hereby waives.
13. The amount of this Guaranty and the liability of the Guarantor
hereunder shall be limited to $400,000.00 plus any costs of enforcement of this
Guaranty, including attorneys' fees.
IN WITNESS WHEREOF, the undersigned has executed this Guaranty this
17th day of May, 1995.
"Guarantor"
/s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇
- 3 -
