GUARANTY
Minneapolis, Minnesota
THIS GUARANTY, made and entered into as of this _____ day of April,
1997, by XXXXXX XXXXXXXX, XXXXX XXXXXXXX, XXXXX XXXXXX, XXXXXXX X. XXXXX and
XXXXXX XXXXXXXX, jointly and severally (hereinafter collectively referred to as
the "Guarantors"), to FIRST BANK NATIONAL ASSOCIATION, a national banking
association (hereinafter referred to as the "Lender"), whose post office address
is First Bank Place, 000 Xxxxxx Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000-0000.
RECITALS
A. The Guarantors are shareholders of XXXXXXXX BROS. CONSTRUCTION,
INC., a Minnesota corporation (hereinafter referred to as the "Debtor"), which
is or will be the owner of certain real estate and the improvements thereon
located in the State of Minnesota (hereinafter referred to as the "Premises").
B. The Debtor and the Lender have agreed that the Lender will make
a revolving construction and development loan (hereinafter referred to as the
"Loan") to the Debtor in the principal amount of Five Million and No/100 Dollars
($5,000,000.00) to finance the acquisition, development and construction of
single family homes, multifamily homes and single family developments as set
forth in the Loan Agreement as defined below.
C. The Loan is evidenced by a Revolving Credit Note dated of even
date herewith from the Debtor to the Lender (hereinafter referred to as the
"Note").
D. The Lender has agreed to disburse the proceeds of the Loan to
the Debtor, pursuant to the terms of a certain Revolving Construction and
Development Loan Agreement of even date herewith, entered into between the
Lender and the Debtor (hereinafter referred to as the "Loan Agreement").
E. To secure payment of the Note, the Debtor has executed and
delivered to the Lender a Mortgage and Security Agreement and Fixture Financing
Statement dated of even date herewith (hereinafter referred to as the
"Mortgage"), covering the Premises and such other documents as Lender has
required (the Note, the Mortgage, the Loan Agreement and such other documents
are hereinafter collectively referred to as the "Loan Documents").
F. In order to induce the Lender to make the Loan enter into the
Loan Agreement and accept the Note and the other Loan Documents, and as
additional security for the Loan and all other monies to be advanced under the
Note and the other Loan Documents, the Guarantors have agreed to give this
Guaranty.
G. The Lender has refused to make the Loan or to make any advances
under the Loan Agreement unless this Guaranty is executed by the Guarantors and
delivered to Lender.
NOW, THEREFORE, in consideration of the recitals and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Guarantors hereby, jointly and severally, covenant and agree
with the Lender as follows:
1. The Note, the Mortgage, the Loan Agreement and the other
Loan Documents are hereby made a part of this Guaranty by
reference thereto with the same force and effect as if fully
set forth herein and all representations and warranties made
by the Debtor in the Loan Documents are true and correct.
2. The Guarantors hereby, jointly and severally, irrevocably,
unconditionally and absolutely, guarantee to Lender the due
and prompt payment, and not just the collectibility, of the
principal of, and interest and late charges and all other
indebtedness, if any, on the Note when due, whether at
maturity, pursuant to mandatory or optional prepayments, by
acceleration or otherwise all at the times and places and at
the rates described in, and otherwise according to the terms
of the Note, the Loan Agreement and the Loan Documents.
3. The Guarantors further hereby, jointly and severally,
irrevocably, unconditionally and absolutely guarantee to
Lender the due and prompt performance by the Debtor of all
duties, agreements and obligations of the Debtor contained
in the Note, the Loan Agreement and the Loan Documents, and
the due and prompt payment of all costs incurred, including
attorneys' fees, in enforcing the payment and performance of
the Note, the Loan Agreement and the Loan Documents and this
Guaranty (the payment and performance of the items set forth
in Paragraphs 2 and 3 of this Guaranty being hereinafter
collectively referred to as the "Indebtedness Guaranteed").
4. The Guarantors hereby agree that the Lender may from time to
time without notice to or consent of the Guarantors and upon
such terms and conditions as the Lender may deem advisable
without affecting this Guaranty: (a) release any maker,
surety or other person liable for payment of all or any part
of the Indebtedness Guaranteed; (b) make any agreement
extending or otherwise altering the time for or the terms of
payment of all or any part of the sums due under the Note,
the other Loan Documents or the Indebtedness Guaranteed; (c)
modify, waive, compromise, release, subordinate, resort to,
exercise or refrain from exercising any right the Lender may
have hereunder, under the Note or any other Loan Documents;
(d) accept additional security or guarantees of any kind;
(e) endorse, transfer or assign the Note and other Loan
Documents to any other party; (f) accept from Debtor or any
other party partial payment or payments on account of the
Indebtedness Guaranteed; (g) from time to time hereafter
further loan monies or give or extend credit to or for the
benefit of the Debtor; or (h) release, settle or compromise
any claim of the Lender against the Debtor, or against any
other person, firm or corporation whose obligation is held
by the Lender as collateral security for repayment of the
Note or for the Indebtedness Guaranteed.
5. The Guarantors hereby unconditionally and absolutely waive:
(a) any obligation on the part of the Lender to protect,
secure or insure any of the security given for the payment
of the sums due under the Note and the other Loan Documents
or for payment of the Indebtedness Guaranteed; (b) the
invalidity or unenforceability of the Indebtedness
Guaranteed; (c) the release of any of the security given for
the payment of the Note; (d) notice of acceptance of this
Guaranty by the Lender; (e) notice of presentment, demand
for payment, notice of non-performance, protest, notices of
protest and notices of dishonor, notice of non-payment or
partial payment; (f) notice of any defaults under the Note,
the Loan Agreement or in the performance of any of the
covenants and agreements contained therein or in any other
Loan Document given as security for the Note; (g) any
limitation or exculpation of liability on the part of the
Debtor whether contained in the Note or otherwise; (h) the
transfer or sale by the Debtor of any security given for the
Note, the other Loan Documents or the Indebtedness
Guaranteed or the diminution in value thereof; (i) any
failure, neglect or omission on the part of the Lender to
realize on or protect any security given for the Note, the
other Loan Documents or the Indebtedness Guaranteed; (j) any
right to insist that the Lender prosecute collection of the
Note or resort to any instrument or security given to secure
the Indebtedness Guaranteed or to proceed against the Debtor
or against any other guarantor or surety prior to enforcing
this Guaranty; provided, however, at its sole discretion the
Lender may either in a separate action or an action pursuant
to this Guaranty pursue its remedies against the Debtor or
any other guarantor or surety, without affecting its rights
under this Guaranty; (k) notice to the Guarantors of the
existence of or the extending to the Debtor of the
Indebtedness Guaranteed; (l) any order, method or manner of
application of any payments on the Indebtedness Guaranteed;
or (m) any right to insist Lender disburse the full
principal amount of the Note to Debtor or the order, method,
manner or amounts disbursed under the Note.
6. Without limiting the generality of the foregoing, the
Guarantors will not assert against the Lender any defense of
waiver, release, discharge in bankruptcy, statute of
limitations, res judicata, statute of frauds,
anti-deficiency statute, fraud, ultra xxxxx acts, usury,
illegality or unenforceability which may be available to the
Debtor in respect of the Note or any other Loan Document, or
any setoff available against the Lender to the Debtor
whether or not on account of a related transaction, and the
Guarantors expressly agree that they shall be and remain
liable for any deficiency remaining after foreclosure of any
mortgage or security interest securing the Note,
notwithstanding provisions of law that may prevent the
Lender from enforcing such deficiency against the Debtor.
The liability of the Guarantors shall not be affected or
impaired by any voluntary or involuntary dissolution, sale
or other disposition of all or substantially all the assets,
marshalling of assets and liabilities, receivership,
insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or
readjustment of, or other similar event or proceeding
affecting the Debtor or any of its assets and that upon the
institution of any of the above actions, at the Lender's
sole discretion and without notice thereof or demand
therefor, the Guarantors' obligations shall become due and
payable and enforceable against the Guarantors, whether or
not the Indebtedness Guaranteed is then due and payable. The
Guarantors further agree that no act or thing, except for
payment in full, which but for this provision might or could
in law or in equity act as a release of the liabilities of
the Guarantors hereunder shall in any way affect or impair
this Guaranty and the Guarantors agree that this shall be a
continuing, absolute and unconditional Guaranty and shall be
in full force and effect until all sums due on the Note and
the other Loan Documents as well as all Indebtedness
Guaranteed has been paid in full.
7. The Guarantors agree that all indebtedness, liability or
liabilities now or at any time or times hereafter owing by
Debtor to the Guarantors are hereby subordinated to the
Indebtedness Guaranteed and any payment of indebtedness of
the Debtor to the Guarantors, if the Lender so requests,
shall be received by the Guarantors as trustee for the
Lender on account of the Indebtedness Guaranteed. The
Guarantors agree that the payment of any amount or amounts
by the Guarantors pursuant to this Guaranty shall not in any
way entitle the Guarantors whether at law, in equity or
otherwise to any right to participate in any security held
by the Lender for the payment of the Indebtedness
Guaranteed, any right to direct the application or
disposition of any such security or any right to direct the
enforcement of any such security. Performance by the
Guarantors under this Guaranty shall not entitle the
Guarantors to be subrogated to any of the Indebtedness
Guaranteed or to any security therefor, unless and until the
full amount of the Indebtedness Guaranteed has been fully
paid.
8. Each Guarantor hereby warrants and represents unto Lender
that (a) any and all balance sheets, net worth statements
and other financial statements and data which have
heretofore been given to Lender with respect to said
Guarantor fairly and accurately represent the financial
condition of said Guarantor as of the date hereof, and,
since the date thereof, there has been no material adverse
change in the financial condition of said Guarantor and (b),
except as may be set out on any exhibit attached hereto, (i)
there are no legal proceedings, material claims or demands
pending against, or to the knowledge of said Guarantor
threatened against, said Guarantor or any of said
Guarantor's assets, (ii) said Guarantor is not in breach or
default of any obligation to pay money, and (iii) no event
(including specifically said Guarantor's execution and
delivery of this Guaranty) has occurred which, with or
without the lapse of time or action by a third party,
constitutes or could constitute a material breach or
material default under any document evidencing or securing
any obligation to pay money or under any other contract or
agreement to which said Guarantor is a party and (c) said
Guarantor has knowledge of Debtor's financial condition and
affairs and of all other circumstances which bear upon the
risk assumed by said Guarantor under this Guaranty (each
Guarantor hereby agreeing to continue to keep itself
informed thereof while this Guaranty is in force and
agreeing that Lender does not have and will not have any
obligation to investigate the financial condition or affairs
of Debtor for the benefit of said Guarantor or to advise
said Guarantor of any fact respecting, or any change in, the
financial condition or affairs of Debtor or any other
circumstance which may bear upon Guarantor's risk hereunder
which come to the knowledge of Lender, its directors,
officers, employees or agents of any time, whether or not
Lender knows, believes or has reason to know or to believe
that any such fact or change is unknown to any Guarantor or
might or does materially increase the risk of any Guarantor
hereunder). Guarantors shall not transfer any of their
assets for the purpose of preventing Lender from satisfying
any judgment rendered under this Guaranty therefrom, either
before or after the entry of any such judgment. Guarantors
shall promptly deliver to Debtor all financial statements of
Guarantors, if any, which Debtor is required by the Mortgage
to deliver to Lender, in time for Debtor to deliver the same
to Lender on or before the date provided for the delivery
thereof under the Mortgage.
9. The Guarantors agree this Guaranty is executed in order to
induce the Lender to make and disburse the Loan and with the
intent that it be relied upon by the Lender in making and
disbursing the Loan. Disbursement of any part of the Loan
without any further action or notice, shall constitute
conclusive evidence of the reliance hereon by the Lender.
This Guaranty shall run with the Note, the Loan Agreement
and other Loan Documents and without the need for any
further assignment of this Guaranty to any subsequent holder
of the Note or the need for any notice to the Guarantors
thereof. Upon endorsement or assignment of the Note to any
subsequent holder, said subsequent holder of the Note may
enforce this Guaranty as if said holder had been originally
named as Lender hereunder.
10. The Guarantors submit and consent to personal jurisdiction
in the State of Minnesota for the enforcement of this
Guaranty and waive any and all personal rights under the
laws of any state or the United States of America to object
to jurisdiction in the State of Minnesota for the purposes
of litigation to enforce this Guaranty. Litigation may be
commenced either in the court of general jurisdiction of
such state or the United States District Court for the
district in that state, at the election of the Lender. In
the event that such litigation is commenced in lieu of
personal service, service of process may be made, and
personal jurisdiction over the Guarantors obtained, by the
mailing of a copy of any summons and complaint, U.S. Mail,
Certified Mail, Return Receipt Requested, or any other
method provided under the laws of the jurisdiction for
service of process in a civil action, to the Guarantors at
their last known addresses. Nothing contained herein shall
prevent Lender from bringing any action or exercising any
rights against any security given to Lender by the
Guarantors, or against the Guarantors personally, or against
any property of the Guarantors, within any other state.
Commencement of any such action or proceeding in any other
state shall not constitute a waiver of the agreement as to
the laws of the state which shall govern the rights and
obligations of the Guarantors and Lender hereunder or of the
submission made by the Guarantors to personal jurisdiction
within the State of Minnesota. The aforesaid means of
obtaining personal jurisdiction and perfecting service of
process are not intended to be exclusive but are cumulative
and in addition to all other means of obtaining personal
jurisdiction and perfecting service of process now or
hereafter provided by the laws of the state where an action
on this Guaranty is commenced.
11. No right or remedy herein conferred upon or reserved to the
Lender is intended to be exclusive of any other available
remedy or remedies but each and every remedy shall be
cumulative and shall be in addition to every other remedy
given under this Guaranty or now or hereafter existing at
law or in equity. No waiver, amendment, release or
modification of this Guaranty shall be established by
conduct, custom or course of dealing, but only by an
instrument in writing duly executed by the Lender.
12. This Guaranty is delivered in and made in and shall in all
respects be construed pursuant to the laws of the State of
Minnesota.
13. This Guaranty, and each and every part hereof, shall be
binding upon the Guarantors and upon their heirs,
administrators, representatives, executors, successors and
assigns and shall inure to the benefit of each and every
future holder of the Note, including the heirs,
administrators, representatives, executors, successors and
assigns of the Lender.
14. Any notice which any party hereto may desire or may be
required to give to any other party shall be in writing and
the mailing thereof by certified mail to their respective
addresses as set forth herein, or to such other places any
party hereto may hereafter by notice in writing designate,
shall constitute service of notice hereunder. The Guarantors
hereby represent and warrant to the Lender that the
addresses of the Guarantors as specified below are true and
correct and until the Lender shall have actually received a
written notice specifying any such change of address and
specifically requesting that notices be issued to such
changed address, the Lender may rely on the addresses stated
as being accurate. The Guarantors hereby agree to provide
the Lender with written notice of any change of address of
the Guarantors within fifteen (15) days of such change.
Xxxxxx Xxxxxxxx
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Telephone No.: ________________
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Facsimile No.: _________________
15. The promises and agreements herein shall be construed to be
and are hereby declared to be joint and several in each and
every particular and shall be fully binding upon and
enforceable against any or all of such parties or persons,
and neither the death nor release of any person or party to
this Guaranty shall affect or release the joint and several
liability of any other person or party.
16. The Guarantors agree that if, at any time, all or any part
of any payment previously applied by the Lender to any of
the Indebtedness Guaranteed must be returned by the Lender
for any reason, whether by court order, administrative order
or settlement, the Guarantors shall remain liable for the
full amount returned as if said amount had never been
received by the Lender, notwithstanding any term of this
Guaranty or the cancellation or return of any note or other
agreement evidencing the Indebtedness Guaranteed.
17. THE LENDER BY ITS ACCEPTANCE HEREOF AND THE GUARANTORS
HEREBY VOLUNTARILY, KNOWINGLY AND INTENTIONALLY WAIVE ANY
AND ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING ARISING UNDER THIS GUARANTY OR CONCERNING THE
INDEBTEDNESS GUARANTEED AND/OR ANY COLLATERAL CONTEMPLATED
THEREBY, REGARDLESS OF WHETHER SUCH ACTION OR PROCEEDING
CONCERNS ANY CONTRACTUAL OR TORTIOUS OR OTHER CLAIM. THE
GUARANTORS ACKNOWLEDGE THAT THIS WAIVER OF JURY TRIAL IS A
MATERIAL INDUCEMENT TO THE LENDER IN EXTENDING CREDIT TO THE
DEBTOR, THAT THE LENDER WOULD NOT HAVE EXTENDED SUCH CREDIT
WITHOUT THIS JURY TRIAL WAIVER, AND THAT SUCH GUARANTORS
HAVE BEEN REPRESENTED BY AN ATTORNEY OR HAS HAD AN
OPPORTUNITY TO CONSULT WITH AN ATTORNEY IN CONNECTION WITH
THIS JURY TRIAL WAIVER AND UNDERSTANDS THE LEGAL EFFECT OF
THIS WAIVER.
IN WITNESS WHEREOF, the Guarantors have executed this
Guaranty as of the day and year first above written.
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