GUARANTY OF PAYMENT
THIS GUARANTY OF PAYMENT ("this Guaranty") is made by the undersigned (whether
one or more herein collectively called the "Guarantor") with SOUTHTRUST BANK OF
ALABAMA, NATIONAL ASSOCIATION (herein called the "Bank"), a/an _______________
bank having its principal office located at Xxxxxxxx, Alabama,:
W I T N E S S E T H:
To induce Bank to make a loan or to extend credit or make other financial
products or services available to QUALITY HOUSING SUPPLY, LLC (as hereinafter
further defined, called "Borrower"), and for the consideration set forth below,
Guarantor hereby agrees with Bank as follows:
1. This Guaranty is made for the purpose of securing to Borrower, at
Guarantor's request, one or more loans or other extensions of credit from, or a
line of credit with, or the issuance of one or more letters of credit by, or the
issuance of one or more bankers' acceptances by, or the lease of personal
property from, or the furnishing of other financial products or services by
Bank, but the amount of the loan or other financial products or services and the
terms and conditions thereof will be such as Bank, in its sole discretion, may
deem appropriate. All such loans or other financial products or services now or
hereafter provided by Bank to Borrower, and all extensions or renewals of debts
or other obligations now or at any time hereafter owing by Borrower to Bank, are
made by Bank in reliance on this Guaranty, and are the consideration for the
execution and delivery of this Guaranty by Guarantor. Each term and provision of
every promissory note or other evidence of debt, and every loan agreement,
security agreement, mortgage, deed to secure debt, deed of trust, letter of
credit reimbursement agreement, bankers' acceptance agreement, lease agreement,
and every other contract executed by Borrower and delivered to Bank, shall bind
Guarantor as if executed by Guarantor as the primary and individual obligation
of Guarantor.
2. Guarantor, jointly and severally if more than one, hereby
unconditionally guarantees to Bank the payment and performance by Borrower of
all of the Guaranteed Obligations (as hereinafter defined). This Guaranty is a
guaranty of payment and performance and not of collection. In the event Borrower
at any time defaults in the payment or performance of any of the Guaranteed
Obligations as and when the same becomes due, whether by acceleration of
maturity of the debt or obligation or otherwise, Guarantor agrees to pay such
debt or perform such obligation immediately. Upon failure of Guarantor to do so,
Bank may, in its discretion, enforce the collection of such debt or the
performance of such obligation out of Guarantor by action in any court of
competent jurisdiction, or in any other manner provided by law, the same as if
such debt or obligation were the primary and individual debt or obligation of
Guarantor, and without first seeking to enforce such debt or obligation by
action or otherwise against Borrower; or, Bank may, in its discretion, proceed
in any matter provided by law or by contract for collection of debts against
either or both Guarantor and Borrower the same as if such debts and obligations
were primarily and individually the debt of both Guarantor and Borrower, jointly
and severally. (The remainder of this paragraph applies only if this box is
marked: ) x Guarantor's liability under this Guaranty is limited to the sum of $
600,000.00 * , plus interest accrued on that sum prior to default at the rate
provided for interest on the Guaranteed Obligations and interest on that sum
after default at the rate provided for interest following default by Borrower,
plus all costs (including attorneys' fees) incurred by Bank in collecting any
sum owed by Guarantor hereunder following default by Guarantor. This limittion
of liability applies separately to each Guarantor under this Guaranty. Payments
made by Guarantor prior to default by Borrower and payments made by any other
person (including any other Guarantor) will not reduce each Guarantor's maximum
liability under this Guaranty. Guarantor agrees that Borrower's obligation to
Bank may exceed any limitation of liability of Guarantor (individually and in
the aggregate, if more than one) under this Guaranty. * or 60% of the
outstanding principal balance of any and all debts owing.
3. This is a continuing Guaranty. This Guaranty extends to all debts and
other obligations now contracted or owing by Borrower to Bank and also to all
debts and other obligations contracted or owing by Borrower to Bank in the
future at any time up to the time this Guaranty is terminated pursuant to the
provisions of this paragraph, even though from time to time and for extended
periods of time there may be no debt or obligation owed to Bank by Borrower.
Subject to the provisions which follow, Guarantor shall have the right to
terminate this Guaranty at any time effective 10 days after receipt by the then
president of Bank of written notice of Guarantor's intention to terminate this
Guaranty. Such termination will have prospective effect only and will not affect
Guarantor's obligations with respect to, and this Guaranty will remain in full
force and effect with respect to, all of the Guaranteed Obligations then due and
owing or then contracted for or existing, whether or not yet due, at the time
such notice becomes effective, and all interest then accrued or thereafter
accruing on any of the foregoing, and all expenses, including costs of
collection and attorneys' fees, with respect to such Guaranteed Obligations with
respect to this Guaranty, and all obligations described in paragraph 5.e. of
this Guaranty, whether then existing or arising in the future, and also with
respect to any subsequent loans, extensions of credit, and other financial
accommodations which, prior to receipt of such notice, Bank may have committed
to make to Borrower (regardless of whether Bank waives any default or condition
precedent to the making of such loans, extensions of credit, or other financial
accommodations), together with all interest thereon and all expenses, including
costs of collection and attorneys' fees, related thereto.
4. Guarantor's obligations under this Guaranty are secured by the following
property and/or separate agreements provided by Guarantor:
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The foregoing is for ease of reference only; failure to describe any property or
any separate agreement which by its terms secures this Guaranty does not
constitute a waiver of such property or separate agreement as collateral for
Guarantor's obligations hereunder.) Guarantor hereby assigns to Bank and grants
to Bank, as additional collateral and in addition to any applicable right of set
off, a security interest in all deposit accounts now or hereafter owed to
Guarantor by Bank and all personal property of Guarantor now or hereafter in the
actual or constructive possession or control of Bank.
5. Guarantor hereby irrevocably:
a. Assents to all terms and agreement heretofore or hereafter made
by Borrower with Bank, including, but without limitation, agreements regarding
the manner of disposing of any collateral in a commercially reasonable manner
and agreements regarding the manner of giving notice and the time of giving
notice of any sale or other intended disposition of any of such collateral;
b. Consents that Bank may, without discharging Guarantor or in any
way affecting the obligations of Guarantor under this Guaranty; (i) exchange,
release or surrender to Borrower or to any guarantor or any other person, or
waive, release, subordinate, fail to perfect any lien or security interest in,
or otherwise impair, any collateral now or hereafter held as security for any of
the Guaranteed Obligations or any right of setoff against any deposit account of
Borrower; (ii) waive or delay the exercise of any of its rights or remedies
against Borrower or any other person or entity, including, without limitation,
Guarantor; (iii) with or without consideration, release Borrower or any other
person or entity, including, without limitation, any other guarantor of the
Guaranteed Obligations; (iv) renew, extend, or modify the terms of any of the
Guaranteed Obligations or of any promissory note or other instrument or
agreement evidencing the same; (v) apply payments by Borrower, Guarantor, or any
other person or entity to any of the Guaranteed Obligations in such manner and
in such order as Bank may elect; (vi) apply payments received for Borrower's
account first to pay any indebtedness of Borrower that is not guaranteed by
Guarantor, if any, before reducing the Guaranteed Obligations; and (vii) in the
event of the filing of a petition (whether voluntary or involuntary) under any
chapter of the federal Bankruptcy Code with respect to Borrower, participate in
the bankruptcy proceedings and exercise any and all rights set forth in clauses
(i) through (vi) above, including, but without limitation, voting for or against
any plan of reorganization, consenting to the use of any cash collateral,
consenting to the sale, use or lease of any collateral securing any of the
Guaranteed Obligations, and entering into any compromise or settlement regarding
the Guaranteed Obligations or any collateral therefor;
c. Waives all notices whatsoever with respect to this Guaranty or with
respect to the Guaranteed Obligations or any collateral therefor, including, but
without limitation, notice of (i) Bank's acceptance of this Guaranty or its
intention to act, or its action, in reliance hereon; (ii) the present existence
or future incurring of any of the Guaranteed Obligations or the terms or amounts
thereof or any change therein; (iii) any default by Borrower or any surety,
pledgor, grantor of any lien or security interest, or guarantor, including,
without limitation, Guarantor; (iv) the obtaining or release of any guaranty of
surety agreement (in addition to this Guaranty), or any pledge, assignment,
security agreement, mortgage, deed to secure debt, deed of trust, or other
security for any of the Guaranteed Obligations;
d. Waives demand, dishonor, protest, notice of presentment and notice of
nonpayment or dishonor with respect to any promissory note or other instrument
or agreement now or hereafter evidencing any of the Guaranteed Obligations, and
any other demands and notices, except such notices as are required by law and
cannot be waived, and waives any requirement that suit under this Guaranty be
brought within any period of time shorter than the general statute of
limitations applicable to contracts under seal;
e. Agrees that, if at any time all or any part of any payment previously
applied by Bank to any of the Guaranteed Obligations must be returned by Bank
for any reason, whether upon the claim of a preference, fraudulent transfer,
prior lien, or other claim of a creditor, debtor-in-possession, trustee in
bankruptcy or other representative of creditors of Borrower, or otherwise, and
whether by court order, administrative order, or non-judicial settlement, this
Guaranty shall continue in effect or shall be reinstated, as the case may be,
and Guarantor shall remain liable for the full amount returned as if such amount
had never been received by Bank, notwithstanding any termination of this
Guaranty (whether under paragraph 3 above or otherwise) or cancellation of any
promissory note or other instrument or agreement evidencing any of the
Guaranteed Obligations;
f. Waives acceptance of this Guaranty by Bank and agrees that this
Guaranty will be valid and binding upon Guarantor when delivered to Bank by
anyone having possession hereof after execution of this Guaranty by Guarantor;
g. Agrees that Guarantor's liability under this Guaranty is
absolute and is not conditioned on the execution of this or any similar
guaranty by any other person or upon the occurrence or nonoccurrence of any
other event;
h. Waives any right to require Bank to xxxxxxxx the assets of Borrower
or any other person and agrees that Bank may proceed against any collateral
securing the Guaranteed Obligations (whether or not Guarantor or any other
person holds a lien on only a part of such collateral) and against parties
liable on any of the Guaranteed Obligations in such order as Bank may elect, the
benefit of any rule of law or equity to the contrary being hereby expressly
waived by Guarantor;
i. Agrees that the liability of Guarantor under this Guaranty shall not
be affected or impaired by, and this Guaranty shall remain fully enforceable
against Guarantor for the full amount of the Guaranteed Obligations less only
payments thereon actually received and retained by Bank irrespective of and
without reduction on account of, (i) any defense, offset, or counterclaim which
Borrower may have or assert with respect to any of the Guaranteed Obligations,
including, but without limitation, filing of a petition in bankruptcy, discharge
in bankruptcy, confirmation of a plan of reorganization (whether Bank voted for
or against such plan), composition with creditors (whether or not including
Bank), failure of consideration, breach of warranty, statue of frauds, statue of
limitations, accord and satisfaction, waiver, estoppel, release, usury, or fraud
or misrepresentation, (ii) termination of any present or future relationship
between Guarantor and Borrower or between Guarantor and any other guarantor of
any obligations of Borrower, or (iii) death, incompetency, or dissolution of
Guarantor or Borrower;
j. Agrees that Bank may, at its election, release or satisfy
of record any collateral for this Guaranty only after any applicable
preference periods have elapsed; and
k. Subordinates any right of subrogation against Borrower to Bank's
rights under the Guaranteed Obligations and agrees that Guarantor shall have no
right to any payment or reimbursement from Borrower on account of any sums paid
under this Guaranty until the Guaranteed Obligations have been paid and
discharged in full.
6. Guarantor hereby wholly subordinates all claims which Guarantor may
now or hereafter have against Borrower to all debts and other obligations which
Borrower may now or hereafter owe to Bank, and assigns all such claims to Bank
as additional collateral for the Guaranteed Obligations. This agreement of
subordination and assignment shall survive the termination of this Guaranty, and
shall remain in effect until all Guaranteed Obligations existing on the date of
such termination, whether or not then due, and all interest then accrued and
thereafter accruing thereon, together with all expenses, including collection
costs and attorneys' fees, are paid and performed in full. Until full payment
and performance are made, Guarantor agrees not to accept any payment or
satisfaction of any kind on, or any security for, any of the claims hereby
subordinated. If Guarantor should receive any such payment or security,
Guarantor agrees to deliver the same immediately to Bank in the form received,
endorsed or assigned to Bank or in blank as Bank may require, for application on
account of, or as security for, the Guaranteed Obligations. Until such payment
or security is delivered to Bank, Guarantor agrees to hold the same in trust for
Bank. If at any time any of the claims hereby subordinated is evidenced by any
promissory note, chattel paper, or other instrument or writing, Guarantor agrees
to affix to every such writing, in form and manner satisfactory to Bank, a
statement that the writing is subject to the terms of this Guaranty and, upon
request of Bank, agrees to endorse and deliver any such writing to Bank as
additional collateral for the Guaranteed Obligations. Bank will not be under any
duty to take any action in connection with any such writing and will not be
responsible in any respect in connection therewith, whether for any action it
may take or refrain from taking against prior parties thereto or otherwise,
except to use reasonable care in the custody of the writing, and except for
willful misconduct of its employees. At the request of Bank, Guarantor agrees to
cause Borrower to xxxx Borrower's records to indicate that the claims of
Guarantor against Borrower are subordinate to the claims of Bank against
Borrower and have been assigned to Bank as collateral. In the event Borrower at
any time defaults in the payment of any debt owing to Bank when due, whether by
acceleration of maturity or otherwise, Bank may, in its own name or that of
Guarantor, compromise, collect, xxx on, and give receipt for all claims hereby
assigned by Guarantor. If Borrower files or has filed against it a petition
under any chapter of the Bankruptcy Code, Bank may file proofs of claims in its
own name with respect to the claims hereby assigned and may vote such claims in
the bankruptcy proceedings.
7. Guarantor acknowledges that the statute of limitations applicable to
this Guaranty shall begin to run only upon Guarantor's failure or refusal to pay
any of the Guaranteed Obligations following default in the payment or
performance thereof by Borrower; provided, that if subsequent to such default,
Bank reaches an agreement with Borrower on any terms causing Bank to forbear in
the enforcement of its claims against Guarantor, the statute of limitations
shall be reinstated for its full duration until Borrower again defaults.
8. Guarantor hereby consents to the jurisdiction of any state of federal
court holding in the county or district in which Bank's principal office is
located and, to the extent permitted by applicable law, waives any objection
based on venue or forum non conveniens with respect to any action instituted in
any such court and agrees that such court shall be the exclusive venue for any
action under this Guaranty or concerning or relating to the relationship between
Guarantor and Bank or the obligations of Guarantor with respect to any of the
Guaranteed Obligations, and agrees that process in any such action will be
sufficient if served on Guarantor by certified mail, return receipt requested,
or in any manner provided by law. Notwithstanding the foregoing, Bank shall have
the right to bring any action or proceeding against Guarantor or Guarantor's
property in the courts of any other jurisdiction Bank deems necessary or
appropriate in order to enforce the obligations of Guarantor under this
Guaranty.
9. Guarantor hereby agrees to pay all costs of collecting under this
Guaranty after default by Guarantor, including, but without limitation, court
costs, litigation expenses, and attorneys' fees in the amount which is 15
percent of the unpaid balance of the Guaranteed Obligations at the time of
default by Borrower, including attorneys fees incurred by Bank in connection
with any bankruptcy or other court or receivership proceedings involving
Guarantor, and in connection with any work-out of the obligations of Guarantor
to Bank hereunder, whether involving court proceedings or not. If attorneys'
fees in such amount would be prohibited by applicable law, then Guarantor agrees
to pay reasonable attorneys' fees not exceeding the maximum amount allowed by
law. Each provision of this Guaranty for the payment of attorneys' fees by
Guarantor shall be construed by reference to the provisions of this paragraph 9.
10. As used in this Guaranty, the following terms have the following
meanings:
"Borrower" means the debtor identified above in this Guaranty, together
with his, her, its or their heirs, administrators, executors, successors, and
assigns, including any resulting or surviving corporation following any merger
or any other reorganization, and also includes any debtor-in-possession or
similar entity following the filing of a petition for relief by or against
Borrower under any chapter of the federal Bankruptcy Code or in any similar
proceeding under state or federal law, and also includes any proprietorship,
partnership, corporation, trust, or other entity resulting from or arising out
of the dissolution, liquidation or change in form of business organization by
Borrower or following any change of name or domicile by Borrower.
"Guaranteed Obligations" means all debts and other obligations now
owed to Bank by Borrower, all debts and other obligations in the future owed to
Bank by Borrower, all extensions and renewals of any of such debts or
obligations, and all interest and other lawful charges on any or all of such
debts and obligations, including, but without limitation, late charges, penalty
interest, and costs of collection (including reasonable attorneys' fees) which
Borrower has agreed to pay to Bank, or for which borrower has agreed to
reimburse Bank, or for which Borrower is obligated to Bank under applicable law,
together with each and every promissory note or other instrument or writing now
or hereafter evidencing the obligation of Borrower to pay any such debt, the
interest thereon, or such other charges; whether such debts or other obligations
are now foreseen or unforeseen; whether now due or to become due in the future;
whether incurred with or without notice to Guarantor; whether arising from
contract, tort or otherwise; whether arising from an original obligation of
Borrower to Bank or from an obligation of Borrower which was purchased by Bank
from another; whether from time to time increased, or reduced, or entirely
extinguished and then reincurred; whether direct or indirect, absolute or
contingent, or secured or unsecured; whether otherwise guaranteed or not; and
whether arising out of a loan of money or other extension of credit, an
overdraft on a deposit account or line of credit account with Bank, use of a
credit card or cards, a sale or lease of goods, the issuance of a letter of
credit or bankers' acceptance, the purchase, discount, acceptance or
certification of a note, check, or draft, any combination of the foregoing, or
otherwise. The Guaranteed Obligations include, without limitation, interest and
other charges on any debt or obligation of Borrower to Bank accruing after the
filing of a petition under any chapter of the federal Bankruptcy Code by or
against Borrower and any loans or other credit or financial products or services
extended to Borrower after the filing of any such petition. The Guaranteed
Obligations specifically are not limited to debts and other obligations
contracted for or arising concurrently with or prior to the execution of this
Guaranty and are not limited in amount unless otherwise specifically set forth
in writing in this Guaranty.
11. No delay by Bank in enforcing its rights hereunder shall prejudice
Bank's rights to enforce this Guaranty. All of Bank's rights and remedies under
this Guaranty, under any other agreement, and under applicable law shall be
cumulative, and any failure of Bank to exercise any such right or remedy shall
not be construed as a waiver of the right to exercise the same or any other
right or remedy at any time, and from time to time, thereafter. No waiver by
Bank shall be effective unless made in writing by a duly authorized officer or
agent of Bank, and no waiver by Bank of any right or remedy shall constitute a
waiver of any other or future right or remedy. This Guaranty shall inure to the
benefit of Bank, its successors and assigns, and to any person to whom Bank may
grant an interest in any of the Guaranteed Obligations, and shall be binding
upon Guarantor, and his, her, its, or their respective heirs, executors,
administrators, successors, and assigns. This Guaranty shall be governed,
construed, and enforced in accordance with the substantive laws of the United
States and the state in which Bank's principal office is located, without regard
to principles of conflict of laws. This Guaranty is intended to take effect as a
document under seal.
12. This Guaranty sets forth the entire agreement and understanding of
Guarantor with respect to the subject matter hereof. Guarantor acknowledges that
no agent of Bank has made any representation which is inconsistent with any of
the terms of this Guaranty and that no officer or agent of Bank has the
authority to vary the terms of this Guaranty except in a writing signed by a
duly authorized officer of Bank. The making of the loans and providing of the
other financial services referred to in this Guaranty shall be solely in the
discretion of the Bank, and reference thereto in this Guaranty, whether in
paragraph 1 hereof or elsewhere, shall not be deemed to be a commitment by Bank
to make any loan or provide any financial service. In the event any one or more
of the provisions of this Guaranty shall be invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions of this Guaranty shall not in any way be affected or impaired
thereby. If more than one person or entity signs this Guaranty below, the
liability of such persons or entitles on this Guaranty is joint and several, and
all references to the singular in this Guaranty also include the plural. In the
event of termination of this Guaranty as to any one or more of such Guarantors,
this Guaranty shall continue in full force and effect with respect to the
remaining Guarantors. Bank may file a photocopy of this Guaranty as a financing
statement in any public office.
IN WITNESS WHEREOF, each of the Guarantors has hereunto set his or her
hand and seal, or has caused this Guaranty to be executed by its officer(s) or
partner(s) thereunto duly authorized and its corporate seal to be affixed
hereto, on the date first above written.
WINTESS(ES): GUARANTOR(S):
(Individual Guarantors sign below)
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--------------------------------- ------------------------------ (Seal)
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ATTEST: (Corporate or Partnership Guarantor
sign below)
Cavalier Homes, Inc. TID#00-0000000
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(Corporate Seal) Title By: Xxxxxxx X. Xxxxxx Secretary
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Corp. Gty/Full Name Corp. Gty Title
