GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT, made and entered into this 31st day
of July, 1996, by and among X. XXXXXXX XXXXXXX, an individual,
(the "Guarantor"); and PIONEER BANK, A Kentucky corporation, (the
"Lender").
WHEREAS, FREEDOM FINANCIAL CORPORATION, having an address of
0000 Xxxxxxxxxxx Xxxx, Xxxxx X, Xxx Xxxxxx, XX 00000
("Borrower"), desires to transact business with and to obtain
credit from the PIONEER BANK, a Kentucky corporation, having an
address at X.X. Xxx 000, Xxxxxxxxxxxx, XX 00000, ("Lender"); and
WHEREAS, Lender is unwilling to extend credit to Borrower
unless the undersigned, X. XXXXXXX XXXXXXX ("Guarantor"), shall
guarantee payment to Lender of the obligations of Borrower, as
hereinafter defined;
NOW, THEREFORE, in consideration of the premises contained
herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged by Guarantor,
and to induce Lender from time to time, in its discretion, to
extend credit to Borrower, and acknowledging that Lender in
extending such credit shall rely on this Guaranty, Guarantor for
himself, and his successors (including, without limitation, by
operation of law) and assigns, hereby unconditionally and
irrevocably guarantees to Lender, its successors and assigns,
including each and every holder or owner of any obligations of
Borrower which are guaranteed hereby (each reference to Lender
shall be construed to refer to each such holder or owner), the
prompt payment when due and at all times thereafter of:
(A) All principal advanced pursuant to and interest
(including but not limited to any interest due after
default, interest accruing after any insolvency of
Borrower or filing by Borrower of a petition for relief
under federal or state bankruptcy laws, and late charges)
due under the certain promissory note (the "Note") dated
the 31st day of July, 1996, made by Borrower to the order
of Lender totaling in face principal amount of ONE MILLION
EIGHT HUNDRED THOUSAND DOLLARS AND NO/CENTS
($1,800,000.00) and any renewals, extensions, or
amendments of the note, or any substitutions or
replacements for the note; and
(B) All fees, expenses, costs, and charges of any
nature whatsoever, including, without limitation,
reasonable attorney fees of Lender, required to be paid by
Lender in enforcing any of its rights and remedies under
the note, or the Stock Pledge Agreement by and among
Borrower and Lender (the "Stock Pledge Agreement") or the
Loan Agreement (the "Loan Agreement") entered into among
Lender and Borrower pursuant to which the note was issued,
or any other "Loan Documents" as defined in the Loan
Agreement, or any other document or instrument heretofore,
contemporaneously herewith, or hereafter given to secure
any of the obligations (collectively, the "Loan
Documents"); and
(C) The due and punctual performance and observance of
all other agreements, obligations, warranties and
representations of Borrower to Lender under any Loan
Document; and
(D) Any and all other debts, liabilities and obligations
of Borrower to Lender, whether created directly by
Borrower or acquired by assignment or otherwise, whether
joint or several, matured or unmatured, absolute or
contingent, and whether now existing or hereafter arising;
(all of which are hereinafter collectively referred to as the
"obligations"); provided, however, anything contained in this
Guaranty to the contrary notwithstanding, the maximum aggregate
liability of Guarantor hereunder shall not exceed at any one time
$1,800,000.00.
This guaranty is a continuing guaranty and shall remain in
full force and effect so long as any of the obligations have not
been fully paid or performed; provided, however, anything
contained in this guaranty to the contrary notwithstanding, this
guaranty shall terminate on the 31st day of July, 1998, (which is
one year following the maturity of the Note), except that such
termination shall not affect the liability of Guarantor with
respect to
(a) obligations created or incurred prior to such date, or
(b) extensions or renewals of, interest accruing on, or
fees, costs, or expenses, including reasonable attorney
fees, incurred with respect to, such obligations on or
after such date.
The liability of Guarantor under this Guaranty shall continue,
notwithstanding the payment in full of the obligations, if any
payments made on the obligations are subsequently recovered from
Lender under any federal, state, or other bankruptcy, insolvency,
or similar law. Lender shall have the right of immediate
recourse against Guarantor for full and immediate payment of the
obligations guaranteed at any time after the obligations, or any
part thereof, have not been paid in full according to the tenor
and under the terms of the instrument governing such obligations,
whether on demand, at fixed maturity, or maturity accelerated by
reason of a default.
This guaranty is a guaranty of payment, not of collection,
and the Guarantor therefore agrees that Lender shall not be
obligated prior to or as a condition to seeking recourse against
or receiving payment from Guarantor, to do any of the following
(although Lender may do so, in whole or in part, at its sole
option), all of which are hereby unconditionally waived by
Guarantor:
(A) Take any steps whatsoever to collect from Borrower or
to file a claim of any kind against Borrower; or
(B) Take any steps whatsoever to accept, perfect Lender's
security interest in, foreclose, realize on, or deal in any
manner with collateral security, if any, for the payment of the
obligations, or any other guaranty of the obligations; or
(C) In any other respect exercise any diligence whatever in
collecting or attempting to collect any of the obligations by any
means.
The liability of Guarantor for payment of the obligations
shall be absolute and unconditional, and nothing whatever except
actual full payment to the Lender of all the obligations
guaranteed by Guarantor hereunder and except as otherwise
provided herein shall operate to discharge Guarantor's liability.
Accordingly, Guarantor unconditionally and irrevocably waives
each and every defense which, under principles of guaranty or
suretyship law, would otherwise operate to impair or diminish the
liability of Guarantor. Without limiting the generality of the
foregoing, Guarantor agrees that none of the following shall
diminish or impair the liability of Guarantor in any respect (all
of which may be done without notice to Guarantor of any kind):
(A) Any extension, modification, indulgence, compromise,
settlement, or variation of the terms of any of the obligations,
or of any agreement entered into with Guarantor or any other
person liable for any part of the obligations;
(B) The voluntary or involuntary discharge or release of
any of the obligations, or of any person liable therefore, by
reason of bankruptcy or insolvency laws or otherwise;
(C) The acceptance or release, with or without
substitution, by Lender of any collateral security or other
guaranty, or collateral security for such other guaranty, or any
settlement, compromise, or extension with respect to any
collateral security, other guaranty, or collateral security for
such other guaranty;
(D) The application or allocation by Lender of payments,
collections, or credits on any portion of the obligations
regardless of what portion of the obligations remains unpaid;
(E) The creation of any new obligations covered by this
guaranty or renewal of any existing obligations.
(F) The extension of credit by Lender to Borrower in an
aggregate amount exceeding the maximum aggregate liability of
Guarantor hereunder; or
(G) The making of a demand, or absence of demand, for
payment of the obligations or giving, or failing to give, any
notice of dishonor to protest or any other notice.
Guarantor unconditionally waives:
(A) Any subrogation to the rights of Lender against
Borrower, until all of the obligations have been satisfied in
full;
(B) Any right of indemnity against Borrower, or right to
reimbursement from Borrower, if such rights would impair the
remedies of Lender against Guarantor under this guaranty or
against any collateral for any of the obligations, in connection
with the bankruptcy of Borrower or otherwise;
(C) Any acceptance or notice of acceptance of this
guaranty; and
(D) Any set-offs or counterclaims against Lender which
would otherwise impair Lender's rights against Guarantor
hereunder.
Guarantor represents and warrants to Lender that:
(A) The execution, delivery, and performance by Guarantor
of this guaranty (1) is authorized by all documents, agreements,
and stipulations limiting the activities of Guarantor, (2) does
not require approval of any governmental authority, (3) will not
violate any provision of law, any order of any court or any
governmental authority, or any indenture, agreement, or other
instrument to which Guarantor is a party or by which Guarantor or
any of Guarantor's property is bound, (4) will not be in conflict
with, result in a breach of, or constitute (with or without due
notice and/or lapse of time) a default under any such indenture,
agreement, or other instrument, or (5) will not result in the
creation or imposition of any lien, charge, or encumbrance of any
nature whatsoever upon any of Guarantor's property or assets.
This guaranty constitutes the legal, valid, and binding
obligation of Guarantor, enforceable in accordance with its
terms.
(B) There is no action, suit, or proceeding pending, or to
the knowledge of Guarantor threatened, against or affecting
Guarantor or involving the validity or enforceability of this
guaranty, including before or by any governmental authority, and
Guarantor is not in default with respect to any order, writ,
judgment, decree, or demand of any court or other governmental
authority.
(C) The financial statements of Guarantor most recently
delivered to Lender (1) are complete and correct in all material
respects, (2) accurately represent the financial condition of
Guarantor as of their date, and (3) disclose all of Guarantor's
liabilities, direct or contingent, as of such date. There has
been no adverse change in the financial condition of Guarantor
since the date of such financial statement. The term "adverse
change in financial condition" means a decrease of 20% or more in
aggregate net worth, insolvency, bankruptcy, or prospective
failure to meet current liabilities as they come due.
(D) All of the indebtedness and liabilities constituted by
the obligations, including but not limited to the indebtedness
evidenced by the note, shall be paid and performed strictly in
accordance with the terms thereof, regardless of any insolvency
or bankruptcy of the Borrower or any other person or entity.
(E) Neither this guaranty nor any certificate or other
document furnished to Lender by or on behalf of Guarantor
pursuant to the note or any of the other obligations contains or
will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary in order to make the
statements contained herein and therein not misleading. There are
no facts known to Guarantor that, individually or in the
aggregate, materially adversely affect or involve any substantial
possibility of materially adversely affecting Guarantor's
business condition or affairs, properties, or assets considered
as an entirety.
The liability of each Guarantor (if more than one) as to the
obligations guaranteed hereby shall be joint and several with any
and each other Guarantor of all or any portion of the
obligations.
If Lender shall have exculpated Borrower or any other
Guarantor of the obligations from liability in whole or in part,
said exculpation or agreement shall not affect the obligations of
the Guarantor hereunder, Guarantor hereby acknowledging that the
obligations under this guaranty are independent of the
obligations of the Borrower and are to be construed as if no such
exculpation or agreement has been granted to the Borrower or such
other guarantor by the Lender.
This Guaranty shall inure to the benefit of Lender, its
successors and assigns, including each and every holder or owner
of any of the obligations guaranteed hereby and this guaranty
shall be deemed a separate contract with each such holder and
owner.
Notwithstanding the death or adjudication of incompetency of
any Guarantor, this Guaranty Agreement shall be binding on the
estate or committee of such Guarantor.
No invalidity, irregularity, or unenforceability of all or
any part of the obligations hereby guaranteed or of any security
therefor shall affect, impair, or be a defense to this guaranty,
and this guaranty is a primary obligation of Guarantor.
Lender shall have the right to set off at any time after
default by Borrower with respect to any of the obligations,
without notice to Guarantor, any and all deposits or other sums
at any time or times credited by or due from Lender to Guarantor,
whether or not held by Lender in a special account or other
account or represented by a certificate of deposit (whether or
not matured), which deposits and other sums shall at all times
constitute additional security for the obligations and the
obligations and warranties arising under this guaranty. Guarantor
hereby grants to Lender a lien on and a continuing security
interest in all instruments, documents, securities, cash, chattel
paper, general intangibles, deposits, certificates of deposit,
all other property, and the proceeds of any of the foregoing,
owned by Guarantor or in which Guarantor has an interest, which
now or hereafter are at any time in possession or control of
Lender, or in transit by mail or carrier to or from Lender or in
the possession of any third party on behalf of Lender, without
regard to whether lender received the same pledge, for
safekeeping, as agent for collection or transmission or
otherwise, or whether Lender had conditionally released the same,
all of which shall at all times constitute additional security
for the obligations and the obligations and warranties arising
under this guaranty, and all of which may be applied at any time
after default with respect to any of the obligations, without
notice to Borrower or to Guarantor to the obligations of Borrower
in such order as Lender may determine.
Guarantor shall furnish to Lender a personal financial
statement on or before the end of each fiscal year of the
Borrower, dated within thirty (30) days prior to such fiscal year
end while any portion of the Obligations are unpaid or
unperformed, detailing the assets, liabilities (including all
contingent liabilities), net worth and annual income of said
Guarantor, certified by Guarantor to be complete and accurate.
Guarantor shall further furnish to Lender prompt written notice
of any condition or event which has resulted or could reasonably
be expected to result in a material adverse change in the
financial condition or net worth of such Guarantor.
No amendment, modification, or waiver of this guaranty shall
be deemed to be made by Lender unless in a writing signed by a
duly authorized officer of Lender, and any such amendment,
modification, or waiver shall be strictly construed. No waiver by
Lender shall be construed or deemed to be a waiver of any other
provision or condition of this guaranty or a waiver of a
subsequent breach of the same provision or condition.
The invalidity or unenforceability of any one or more
provision of this guaranty shall not impair the validity and
enforceability of all of the other provisions of this guaranty.
Lender and Guarantor hereby acknowledge and agree that this
guaranty has been delivered in Bullitt County, Kentucky, and that
in the event Lender or Guarantor at any time shall institute any
action or proceeding against Guarantor or Lender or otherwise
pertaining to the obligations guaranteed hereby, Guarantor and
Lender shall be subject to (and hereby consent to) the
jurisdiction of all courts of the Commonwealth of Kentucky and to
the venue of any such action or proceeding in the courts of
Bullitt County, Kentucky.
Any notice given to Lender hereunder shall be given in
writing and either personally delivered, sent by a nationally
recognized courier service, or sent by registered or certified
mail, postage prepaid, to Lender, to the address set out above,
or to such other address as Lender shall have specified in a
notice to Guarantor given in accordance with the second sentence
of this paragraph. Any notice given to Guarantor hereunder shall
be sufficiently given if in writing and either personally
delivered, sent by a nationally recognized courier service, or
sent by registered or certified mail, postage prepaid, addressed
to Guarantor at the address for Guarantor set forth opposite
Guarantor's name at the end of this guaranty, or to such other
address as Guarantor shall have designated in a written notice to
Lender given in accordance with the first sentence of this
paragraph.
This guaranty, and all rights and obligations hereunder
including matters of construction, validity, and performance,
shall be governed by the laws of the Commonwealth of Kentucky,
and no defense given or allowed by the laws of any other state or
country shall be interposed in any action hereon unless such
defense is also given or allowed by the laws of the Commonwealth
of Kentucky.
This guaranty agreement supplements and is in addition to any
other guaranties given by Guarantor and other persons and
entities, respectively, to Lender of obligations, indebtedness,
and liabilities of Borrower to Lender, and shall not be deemed to
be in substitution for nor otherwise impair in any manner the
enforceability of such other guaranties against Guarantor or any
other person or entity which is a party to any such other
guaranties. The guaranty which is written on the Note is
intended to supplement this Guaranty, and in the event of any
conflict between the terms of the Guaranty which is written on
the Note and this Guaranty, this Guaranty shall control, except
that the unenforceability of this Guaranty, in whole or in part,
shall not affect the enforceability of the guaranty which is
written on the Note.
GUARANTOR (AND EACH OF THEM IF MORE THAN ONE) HEREBY
KNOWINGLY AND VOLUNTARILY WAIVES TRIAL BY JURY IN CONNECTION WITH
ANY ACTION, CLAIM, COUNTER-CLAIM, CROSS-CLAIM, OR OTHER
LITIGATION OR PROCEEDING, BY WHOMSOEVER COMMENCED, CONNECTED WITH
OR ARISING OUT OF THIS AGREEMENT OR THE OBLIGATIONS.
IN TESTIMONY WHEREOF, witness the signature of Guarantor as
of the date first above set forth.
GUARANTOR
BY: ADDRESS: 0000 Xxxxxxxxxxx Xxxx
X. XXXXXXX XXXXXXX Suite D
New Albany, IN 47150
PIONEER BANK, LENDER
BY:
XXXXXXX XXXX,
VICE-PRESIDENT
STATE OF KENTUCKY
COUNTY OF __________
The foregoing instrument was sworn and acknowledged before me
this ______ day of ____________, 1996, by X. XXXXXXX XXXXXXX, in
his individual capacity to be his true voluntary act and deed.
My commission expires: ___________.
NOTARY PUBLIC
XXXXX XX XXXXX, XXXXXXXX
XXXXX XX XXXXXXXX
XXXXXX OF __________
The foregoing instrument was sworn and acknowledged before me
this ____ day of ________, 1996, by XXXXXXX XXXX, VICE-PRESIDENT
OF PIONEER BANK, in his corporate capacity to be the true
voluntary act of the corporation.
My commission expires: ___________.
NOTARY PUBLIC
STATE AT LARGE, KENTUCKY
This instrument prepared by:
XXXXX X. XXXXXXXX
ATTORNEY AT LAW
J. XXXXXXX XXXXXX & ASSOCIATES
X.X. Xxx 000
Xxxxxxxxxxxx, XX 00000
