Exhibit 10.5
GUARANTY
LENDER: TEMPORARY FINANCIAL SERVICES, INC.
000 Xxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
BORROWER: GENESIS FINANCIAL, INC.
000 Xxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
GUARANTOR: XXXXXXX X. XXXX, A SINGLE MAN
0000 Xxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
XXXXXXX X. XXXXXX AND XXXXXXX X. XXXXXX, HUSBAND AND WIFE
0000 Xxxx 00xx
Xxxxxxx, Xxxxxxxxxx 00000
This Guaranty supports and backs the Warehousing Line of Credit
Promissory Note and the related Security Agreement between BORROWER and LENDER,
both dated as of February 20, 2002 (collectively the "Credit Facility").
Executed at: Spokane, Washington, this 20th day of February, 2002.
For a valuable consideration the undersigned and each of them,
hereinafter collectively called "Guarantor", jointly and severally and
unconditionally guarantees and promises to pay Temporary Financial Services,
Inc., a Washington corporation, (herein called `LENDER'), its successors or
assigns, on demand in lawful money of the United States of America, any and all
indebtedness of the above named "BORROWER", to LENDER, as follows:
1. MAXIMUM LIABILITY. The liability of Guarantor hereunder shall not
exceed at any one time the sum of: (a) The principal amount of the Credit
Facility; (b) An amount equal to interest, and fees owed by BORROWER on the
Credit Facility; and, (c) All costs, expenses and attorneys' fees, including any
on appeals, incurred by LENDER in connection with the collection of the
indebtedness of BORROWER or with the collection or sale of any collateral in
accordance with the Credit Facility.
2. "INDEBTEDNESS" DEFINED. The word "indebtedness" is used herein in
its most comprehensive sense and includes, but is not limited to, any and all
advances, debts, obligations, and liabilities of BORROWER to LENDER, including
judgments against BORROWER by LENDER, whether currently existing or arising at a
later date, whether voluntarily or involuntarily created, and however arising,
and whether due or not due, absolute or contingent, liquidated or unliquidated,
determined or undetermined.
3. NATURE OF GUARANTOR'S UNDERTAKING. The liability of Guarantor
hereunder shall be open and continuous for as long as this guaranty shall be in
force. Guarantor intends to guarantee at all times the performance of all
obligations of BORROWER to LENDER within the limits set forth above. Thus, no
payments made upon BORROWER's indebtedness shall be held to discharge or
diminish the liability of Guarantor for any and all remaining and succeeding
indebtedness of BORROWER to LENDER. The liability of Guarantor hereunder shall
be joint and several with all other Guarantors hereunder, shall also be binding
upon Guarantor's marital community (if any), and shall be enforceable against
both the
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separate and community property of Guarantor existing at the date of execution
hereof or hereafter acquired.
4. LENDER'S RIGHTS AND OBLIGATIONS IN DEALING WITH BORROWER. Guarantor
authorizes LENDER to deal with BORROWER and BORROWER's sureties, endorsers, and
other guarantors, in any manner in which LENDER sees fit in connection with any
indebtedness of BORROWER to LENDER, now or hereafter created, without any
further consent or authorization from Guarantor being necessary. Specifically,
but without limiting the powers of LENDER, LENDER may make various types of
secured or unsecured financing arrangements for BORROWER; LENDER may extend the
time for payment of any indebtedness of BORROWER, LENDER may release any
collateral given to LENDER by BORROWER, with or without the substitution of new
collateral; LENDER may release or agree not to xxx BORROWER's sureties,
endorsers, or other guarantors on any terms it chooses; LENDER may xxx or fail
to xxx BORROWER upon any overdue indebtedness or may realize or neglect to
realize upon any collateral held in connection therewith; all of the foregoing
without the necessity of any notice to or consent from Guarantor and all without
affecting Guarantor's liability hereunder.
5. DURATION OF GUARANTY. This guaranty shall take effect when received
by LENDER, without the necessity of any acceptance by LENDER, and shall continue
in full force until such time as Guarantor shall notify LENDER in writing, at
the office of LENDER to which this guaranty shall be delivered in the first
instance, of Guarantor's election to terminate the same. Any such election to
terminate shall be effective only as to indebtedness incurred by BORROWER to
LENDER after receipt of such written notice; provided, that this guaranty shall
be effective even as to indebtedness incurred by BORROWER after receipt of such
written notice if LENDER committed itself to BORROWER in regard to such
indebtedness prior to receipt of such notice. This guaranty shall bind the
Guarantor for renewals and extensions granted after the termination hereof which
pertain to debts guaranteed hereby whether or not the renewals or extensions are
longer than the original period of the debts guaranteed hereunder. This guaranty
shall bind the estate of Guarantor as to indebtedness created both before and
after the death or incapacity of Guarantor; provided, that Guarantor's executor
or administrator or other legal representative may terminate this guaranty in
the same manner in which Guarantor might have terminated it and with the same
effect. Termination of this guaranty by one of the undersigned shall not affect
the liability hereunder of the remaining of the undersigned.
6. LENDER'S RIGHTS AGAINST AND OBLIGATIONS TO GUARANTOR. Guarantor
hereby expressly waives presentment, protest, demand, or notice of any kind,
including notice of nonpayment of any of BORROWER's indebtedness or of any
collateral thereto and notice of any action or nonaction on the part of
BORROWER, LENDER, or any surety, endorser, or other guarantor. Upon any default
of BORROWER on any obligation to LENDER, LENDER may, at its option, then and
there demand and be entitled to payment from Guarantor of the full amount or any
part of the amount of BORROWER's indebtedness to LENDER, within the limitations
set forth above, and if Guarantor shall not pay the sum demanded to LENDER,
LENDER may proceed directly and at once against Guarantor to collect such sum
without first proceeding against BORROWER, or any surety, endorser, or other
guarantor and without foreclosing upon or selling or otherwise disposing of any
collateral it may have as security for any of BORROWER's indebtedness. Failure
to make such demand at such time or so to proceed shall not relieve Guarantor of
its obligations hereunder or in any sense constitute a waiver. LENDER shall have
the right to demand and collect from Guarantor all or any portion of BORROWER's
indebtedness and failure of LENDER at any time to demand from Guarantor or to
proceed to collect from Guarantor the full amount of BORROWER's indebtedness
from Guarantor shall not preclude LENDER from later demanding or proceeding to
collect from Guarantor any remaining indebtedness of BORROWER to LENDER covered
by this guaranty. In any action or suit against Guarantor to enforce this
guaranty,
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LENDER shall be entitled to recover from Guarantor, in addition to costs and
disbursements allowed by law, a reasonable amount for LENDER's attorney's fees
in such action or suit or appeal therefrom. In any action or suit brought by
LENDER against Guarantor, Guarantor will not assert as a defense any statute of
limitations if at the time the action or suit is commenced there is outstanding
any indebtedness of BORROWER to LENDER which is not barred by the statute of
limitations of the State of Washington. If payment is made by BORROWER on a debt
guaranteed hereby and thereafter LENDER is forced to remit the amount of that
payment to the BORROWER's trustee in bankruptcy or similar person under any
federal or state bankruptcy law or law for the relief of debtors, the BORROWER's
debt shall be considered unpaid for the purpose of enforcement of this Guaranty.
7. SUBORDINATION OF GUARANTOR'S RIGHTS AGAINST BORROWER. Guarantor
agrees that the indebtedness of BORROWER to LENDER, whether now existing or
hereafter created, shall be and the same hereby is declared to be prior to any
claim that Guarantor may now have or hereafter acquire against BORROWER, whether
or not BORROWER becomes insolvent, and Guarantor shall and does expressly
subordinate such claim Guarantor may have against BORROWER, upon any account
whatsoever, to any claim that LENDER may now or hereafter have against BORROWER.
In the event of insolvency and consequent liquidation of the assets of BORROWER,
through Bankruptcy, by an assignment for the benefit of creditors, by voluntary
liquidation, or otherwise, the assets of BORROWER applicable to the payment of
the claims of both LENDER and Guarantor shall be paid to LENDER and shall be
first applied by LENDER to the indebtedness of BORROWER to LENDER. Guarantor
does hereby assign to LENDER all claims which it may have or acquire against
BORROWER or any assignee or trustee in bankruptcy of BORROWER; provided, that
such assignment shall be effective only for the purpose of assuring to LENDER
full payment of all indebtedness of BORROWER to LENDER.
8. ASSIGNMENT OF GUARANTY. Assignment by LENDER of all or part of the
indebtedness shall transfer to the assignee all benefits of this Guaranty as to
the portion of the indebtedness assigned. This Guaranty shall remain in effect
in favor of LENDER as to the portion of the indebtedness not assigned.
9. RELEASES AND WAIVERS. Guarantor hereby expressly and irrevocably
releases and waives any and all "claims" (as now or hereafter defined in the
United States Bankruptcy Code, 11 USC 101 et.seq.) of any nature whatsoever,
whether known or unknown and whether now existing or hereafter acquired, against
any debtor or the estate in any existing or future bankruptcy case in which the
debtors include BORROWER or any person or entity with respect to whom Guarantor
is an "insider" (as now or hereafter defined in such Bankruptcy Code), to the
extent such claims in any manner relate to or arise out of this Guaranty or any
indebtedness guaranteed hereby (including but not limited to fixed or contingent
claims based on subrogation, indemnity, reimbursement, contribution or
contract). Guarantor authorizes and empowers LENDER to at any time exercise, in
its sole discretion, any right or remedy or any combination thereof which may
then be available to LENDER; Guarantor agrees that nothing contained herein
shall prevent LENDER from suing on any indebtedness instrument or from
exercising any right or remedy available to LENDER thereunder, and Guarantor
further agrees that the exercise of any such rights or remedies shall not
constitute a legal or equitable discharge of Guarantor. It is Guarantor's intent
and purpose that the obligation hereunder shall be absolute, independent, and
unconditional under any and all circumstances.
Notwithstanding any foreclosure of any lien on real or personal
property securing any indebtedness guaranteed hereby, whether by the exercise of
a power of sale, by an action for judicial foreclosure or by acceptance of a
deed in lieu of foreclosure, Guarantor shall remain bound under this Guaranty.
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Guarantor acknowledges that LENDER's financing for BORROWER is of
substantial and material benefit to Guarantor, that Guarantor has been informed
and believes that LENDER would not provide financing for BORROWER but for this
Guaranty and the representations, acknowledgments, releases, waivers and
agreements contained herein, and that LENDER will rely on all such
representations, acknowledgments, releases, waivers and agreements in providing
financing for BORROWER.
10. INDEBTEDNESS CONTINUED. The term "indebtedness" as defined in
paragraph 2 above includes, but is not limited to, all existing and future
obligations and liabilities of BORROWER under the Credit Facility between
BORROWER and LENDER referenced above, a copy of which is attached to this
Guaranty.
11. DISPUTES. This Guaranty shall be governed by and construed and
enforced in accordance with Washington Law. Notwithstanding any arbitration
under the Credit Facility, any legal action taken in connection with this
Guaranty shall be commenced in Spokane, Washington, and the parties agree that
they will be subject to the jurisdiction of the Courts of Spokane County,
Washington.
/S/ XXXXXXX X. XXXX
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XXXXXXX X. XXXX, GUARANTOR
/s/ Xxxxxxx X. Xxxxxx
-------------------------------
XXXXXXX X. XXXXXX, GUARANTOR
/s/ Xxxxxxx X. Xxxxxx
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XXXXXXX X. XXXXXX, GUARANTOR
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