CONTINUING UNCONDITIONAL GUARANTY
This
Continuing Unconditional Guaranty (this “Guaranty”)
dated
as of the 19th
day of
December, 2006 (the “Effective
Date”),
is
made by Xxxxxxxxxx Hidden Lakes GP, Inc., a Texas corporation (the “Guarantor”),
for
the benefit of United Development Funding III, L.P., a Delaware limited
partnership and its successors and assigns (“Lender”).
R
E C I T A L S:
A. Lender
has agreed to advance funds to Xxxxxxxxxx Hidden Lakes, Ltd., a Texas limited
partnership (“Borrower”)
as
borrower under that certain Secured
Promissory Note dated as of the Effective Date in the original principal
amount
of U.S. $4,484,077.00 (the “Note”).
B. Guarantor
is an affiliate of, and the general partner of, Borrower and shall benefit,
directly or indirectly, from the loan made to Borrower under the Note.
C. Guarantor
is willing to execute this Guaranty in favor of Lender and hereby agree 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 obligations under this Guaranty are 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.
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 joint and several 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 executed by Borrower at any
time
in the past, present or future 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.
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.
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 he 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’s
Responsibilities.
Guarantor hereby assumes responsibility for keeping himself informed of the
financial condition of Borrower, and any and all endorsers and/or other
guarantors 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 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 under applicable
law, 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.
9. Subordination.
Guarantor agrees that any and all claims of Guarantor against Borrower, any
endorser or any other guarantor of all or any part of the Guaranteed
Obligations, or against any of Borrower’s assets and properties, whether arising
by reason of any payment by Guarantor to Lender pursuant to the provisions
of
this Guaranty or otherwise, shall be subordinate and subject in right of
payment
to the prior payment, in full, to Lender of all of the Guaranteed Obligations.
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 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 Lender and Guarantor at the addresses provided
in
the Note (Guarantor having executed the Note not as a borrower thereunder,
but
as the general partner of Borrower for
certain
limited purposes described therein), or to such other address as a party
may
have delivered to the other parties for purposes of notice. 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
confirmation of facsimile transfer, (c) if delivered personally by hand,
upon
written confirmation of delivery from the person delivering such notice or
other
communication, or (d) if sent by nationally recognized overnight delivery
service, upon written confirmation of delivery from such service.
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; JURISDICTION; VENUE.
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 AND THE OTHER LOAN
DOCUMENTS 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.
JURISDICTION FOR ALL MATTERS ARISING OUT OF THIS GUARANTY AND THE OTHER LOAN
DOCUMENTS SHALL BE EXCLUSIVELY IN THE STATE AND FEDERAL COURTS SITTING IN
DALLAS
COUNTY, TEXAS, AND GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION
OF
SUCH STATE AND FEDERAL COURTS AND AGREES AND CONSENTS NOT TO ASSERT IN ANY
PROCEEDING, THAT ANY SUCH PROCESS IS BROUGHT IN AN INCONVENIENT FORUM OR
THAT
THE VENUE THEREOF IS IMPROPER, AND FURTHER AGREES TO A TRANSFER OF SUCH
PROCEEDING TO THE COURTS SITTING IN DALLAS COUNTY, TEXAS.
18. Severability.
If any
provision of this Guaranty or any other Loan Document shall be held invalid
under any applicable laws, then all other terms and provisions of this Guaranty
and the Loan Documents shall nevertheless remain effective and shall be enforced
to the fullest extent permitted by applicable law.
19. 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 Guarantor, and then such waiver
or
consent shall be effective only in the specific instance and for the specific
purpose for which
given.
Guarantor may not be released from Guarantor’s obligations hereunder, except
pursuant to a written agreement executed by Lender.
20. Binding
Effect; Assignment.
This
Guaranty shall be binding on Guarantor and Guarantor’s administrators, other
legal representatives, successors, heirs and 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.
No
Guarantor shall 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 any 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.
21. 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.
22. Number
of 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.
23. 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 HE OR IT 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 HE OR IT 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 AND, 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.
24. 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.
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remainder of this page is intentionally left blank.]
IN
WITNESS WHEREOF, Guarantor has duly executed this Guaranty on the _____ day
of
________________, 2006, effective for all purposes as of the Effective
Date.
GUARANTOR:
|
XXXXXXXXXX
HIDDEN LAKES GP, INC.,
a Texas corporation
|
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| |
|
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| By: | /s/ Xxxxxxx Xxxxxxx | |
|
Xxxxxxx Xxxxxxx |
||
| Vice President | ||
