EXHIBIT 10.4
GUARANTY
TO: PAN AMERICAN BANK, FSB
FOR GOOD AND valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the undersigned (hereinafter referred to as the
"Guarantors") hereby jointly and severally guarantee, promise and undertake as
follows:
1. Guarantors unconditionally, absolutely and irrevocably guarantee and
promise to pay to PAN AMERICAN BANK, FSB ("Bank"), on demand, any sums owing to
Bank and not paid by BPN Corporation ("Contractor") under that certain Insurance
Premium Financing Management Agreement of even date herewith between Contractor
and Bank (the "Agreement") within fifteen (15) days of Bank's demand therefor
given on or after the date on which Contractor's performance is due thereunder:
2. This Guaranty ("Guaranty") shall remain effective so long as any
amounts remain due under the Agreement to Bank or until the "Closing Date" as
defined in that certain Stock Option Agreement of even date herewith by and
among Contractor, Pan American Group, Inc., Xxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxx,
Xxxxxxxxx X. X'Xxxx and The Xxxxxx Family Trust, whichever occurs earlier;
provided, however, any claim asserted by Bank prior to the Closing Date that is
-------- -------
subject to this Guaranty shall not be affected by the limitations contained in
this sentence. Guarantors agree that nothing shall discharge or satisfy their
obligations created hereunder except for the full payment of all sums due and
owing to Bank by Contractor under the Agreement. This Guaranty is a personal and
direct obligation of Guarantors, irrespective of the regularity, validity, or
enforceability of any provision of the Agreement against Contractor and shall
not be affected or impaired by any compromise, release, renewal, extension,
indulgence, alteration, change in or modification of the Agreement, nor by any
failure, negligence, or omission on the part of Bank to realize upon any
obligations of Contractor or any other security therefor.
3. Guarantors agree that they are directly and primarily liable to Bank,
that their obligations hereunder are independent of the obligations of
Contractor under the Agreement, or of any other guarantor, and that a separate
action or actions may be brought and prosecuted against Guarantors or any of
them, whether action is brought against Contractor or any other guarantor or
whether Contractor or Guarantors are joined in any such action or actions.
In the event that any bankruptcy, insolvency, receivership or similar
proceeding is instituted by or against Contractor, the obligations of the
Guarantors hereunder shall be immediately due, payable and enforceable against
Guarantors without Bank's prior demand of any kind for performance given to
Contractor.
As a condition to payment or performance by Guarantors under this
Guaranty, Bank shall not be required to, and Guarantors hereby waive any and all
rights to require Bank to prosecute or seek to enforce any remedies against
Contractor or any other party liable to Bank and/or to require Bank to seek to
enforce or resort to any remedies with respect to any security interests, liens
or encumbrances granted to Bank by Contractor or any other party.
1
4. Guarantors hereby authorize Bank to assign, without notice, the benefit
of this Guaranty in whole or in part and/or Bank's rights hereunder to any
assignee of the Agreement or of any loans originated thereunder.
5. Guarantors hereby waive any right to assert against Bank any
defense (legal or equitable), set-off, counterclaims, and/or claim which
Guarantors may now or at any time hereafter have against Contractor and/or any
other party liable to Bank in any way or manner.
Guarantors hereby waive any defenses arising by reason of any claim
based upon an election of remedies by Bank, which, in any manner impairs,
affects, reduces, releases, destroys and/or extinguishes Guarantors' subrogation
rights, rights to proceed against Contractor for reimbursement, and/or any other
rights of the Guarantors to proceed against Contractor, against any other
guarantor, or against any other person or security, including without limitation
any defense that may arise by reason of the incapacity, lack of authority, death
or disability of, or revocation hereof by, any other or others or the failure of
Bank to file or enforce a claim against the estate (either in administration,
bankruptcy, or other proceeding) of any other or others.
Any and all present and future debts of Contractor to Guarantors are
hereby postponed in favor of and subordinated to the full payment and
performance of all present and future debts and obligations of Contractor to
Bank. All monies or other property of Guarantors at any time in Bank's
possession may be held by Bank as security for any and all obligations of
Guarantors to Bank no matter how or when arising, whether absolute or
contingent, whether due or to become due, and whether under this Guaranty or
otherwise.
6. Guarantors are presently informed of the financial condition of
Contractor and of all other circumstances which a diligent inquiry would reveal
and which bear upon the risk of nonpayment of any obligation of Contractor to
Bank under the Agreement. Guarantors hereby covenant that they will continue to
keep themselves informed of Contractor's financial condition and of all other
circumstances which bear upon the risk of nonpayment. Guarantors hereby waive
their rights, if any, to require Bank to disclose to them any information which
Bank may now or hereafter acquire concerning such condition or circumstances.
7. This Guaranty shall continue in full force and effect until the
earlier to occur of (i) the Closing Date, provided, however, that any claim
--------- -------
asserted by Bank prior to the Closing Date that is subject to this Guaranty
shall not be affected by such limitation, or (ii) Contractor's obligations to
Bank under the Agreement are fully paid, performed and discharged and Bank gives
the Guarantors written notice of that fact. In connection with subpart (ii) of
this paragraph 7, Contractor's obligations shall not be considered fully paid,
performed and discharged unless and until all payments by Contractor to Bank are
no longer subject to any right on the part of any person whomsoever, including
but not limited to Contractor, Contractor as a debtor-in-possession, and/or any
trustee in bankruptcy, to set aside such payments or seek to recoup the amount
of such payments, or any part thereof. The foregoing shall include, by way of
example and not by way of limitation, all
2
rights to recover preferences voidable under Title 11 of the United States
Bankruptcy Code. In the event that any such payments by Contractor to Bank are
set aside after the making thereof, in whole or in part, or settled without
litigation, to the extent of such settlement, all of which is within Bank's
discretion, Guarantors shall be liable for the full amount Bank is required to
repay up to the amount of the dollar limit of this Guaranty plus costs,
interest, attorneys' fees and any and all reasonable expenses which Bank paid or
incurred in connection therewith.
8. This Guaranty shall be binding upon the successors and assigns of
the Guarantors and shall inure to the benefit of Bank's successors and assigns.
The death of any Guarantor and the incapacity, lack of authority, death,
disability or revocation hereof by any other Guarantor shall not terminate or
otherwise impair this Guaranty.
9. No modification of this Guaranty shall be effective for any purpose
unless it is in writing and executed by an officer of Bank authorized to do so.
This Guaranty merges all negotiations, stipulations and provisions relating to
the subject matter of this Guaranty which preceded or may accompany the
execution of this Guaranty.
10. Guarantors agree to pay reasonable attorneys' fees and all costs and
expenses which may be incurred by Bank in the enforcement of this Guaranty or in
any way arising out of, following, or consequential to the enforcement of
Contractor's obligations under the Agreement.
11. All acts and transactions hereunder and the rights and obligations
of the parties hereto shall be governed, construed and interpreted in accordance
with the laws of the State of California.
12. No action which Bank may take or omit to take in connection with the
Agreement, nor any course of dealing with Contractor or any other person shall
release undersigned's obligations hereunder, affect this Guaranty in any way or
afford undersigned any recourse, claims or offsets against Bank, which
undersigned hereby waives.
13. The amount of this Guaranty and the joint and several liability of
the Guarantors hereunder shall be limited to $600,000.00 plus any costs of
enforcement of this Guaranty, including attorneys' fees.
IN WITNESS WHEREOF, the undersigned has executed this Guaranty this
17th day of May , 1995.
---- ------
"Guarantors"
/s/ XXXXX XXXXXX
----------------------------
XXXXX XXXXXX
/s/ XXXXXXX XXXXXX
----------------------------
XXXXXXX XXXXXX
3
