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EXHIBIT 10.3
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT (this "Guaranty") by XXX X. XXXXX
("Guarantor"), is in favor of COASTAL BANC ssb (such bank, together with its
successors and assigns herein called the "Lender") whose address is 0000
Xxxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000, Attn: Xxxx X. Xxxxxxx, Executive
Vice President. This Guaranty is executed and delivered pursuant to that
certain Loan Agreement dated as of even date herewith (as amended, supplemented
or otherwise modified from time to time, the "Loan Agreement") by and among
ALLIED MORTGAGE CORPORATION, a Texas corporation, and ALLIED MORTGAGE CAPITAL
CORPORATION, a Texas corporation (collectively, the "Borrowers" and
individually, the "Borrower") and the Lender. All capitalized terms used herein
but not defined herein shall have the meanings ascribed to them in the Loan
Agreement.
W I T N E S S E T H:
WHEREAS, the Lender will extend credit and financial accommodations
to Borrowers pursuant to the Loan Agreement, pursuant to which the Lender has
agreed to extend loans to the Borrowers in the aggregate principal amount of up
to $5,500,000.00 upon the terms and subject to the conditions set forth therein
(the "Credit Facility");
WHEREAS, the Guarantor will derive substantial direct and indirect
benefits from the Credit Facility;
WHEREAS, it is a condition precedent to the obligation of the Lender
to extend the Credit Facility under the Loan Agreement that the Guarantor shall
have executed and delivered this Guaranty to the Lender;
NOW, THEREFORE, (i) to induce Lender, at any time from time to time,
to loan monies, with or without security to or for the account of either
Borrower, (ii) at the special insistence and request of Lender, and (iii) for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, Guarantor hereby agrees as follows:
1. Guarantor hereby absolutely and unconditionally guarantees the
prompt and punctual payment and performance when due (whether at its maturity,
by lapse of time, by acceleration or otherwise) of the Guaranteed Obligations
(hereinafter defined).
Continuing Guaranty. This is a continuing guaranty applicable
to and guaranteeing any and all indebtedness, obligations, and
liabilities of every kind and character of each Borrower to Lender
whether now existing or hereafter arising, whether due and owing or to
become due and owing, howsoever created or arising or evidenced,
whether joint or several, or joint and several, whether absolute or
contingent, and all renewals, extensions, increases, and
rearrangements of such indebtedness, obligations or liabilities,
including any and all amounts owing or which may hereafter become
owing thereon or in connection therewith, including, without
limitation, any and all amounts of principal, pre- and post-maturity
interest (including without limitation, all post-petition interest if
any Borrower voluntarily
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or involuntarily files for protection under any Debtor Law), attorneys'
fees, costs of collection and other amounts owing thereunder including,
without limitation, any and all indebtedness, obligations, and
liabilities of each Borrower now or hereafter arising on account of (i)
the revolving credit note (the "Note") dated as of even date herewith
executed by the Borrowers payable to the order of the Lender in the
original principal sum of $5,500,000.00, as the same may be renewed,
extended, modified, rearranged, increased, restated or replaced; (ii)
the Loan Agreement, as the same may be renewed, extended, modified,
rearranged, restated or replaced, (iii) any other document executed in
connection with or as security for payment of the Note or any renewal,
extension, modification, rearrangement, restatement or replacement
thereof, and (iv) all costs, attorney's fees and other expenses
incurred by Lender by reason of any default by any Borrower under any
of the foregoing. All of the foregoing is hereinafter called the
"Guaranteed Obligations".
2. Guarantor hereby waives marshalling of assets and liabilities, sale
in inverse order of alienation, notice of acceptance of this Guaranty and of
any indebtedness, obligation or liability to which it applies or may apply, and
waives presentment and demand for payment thereof, notice of dishonor or
nonpayment thereof, notice of intention to accelerate, notice of acceleration,
protest, and notice thereof and all other notices and demands, collection or
instigation of suit or any other action by the Lender in collection thereof,
including any notice of default in payment thereof or other notice to, or
demand of payment therefor on, any party. Further, Guarantor expressly waives
each and every right to which it may be entitled by virtue of the suretyship
law of the State of Texas including without limitation, any rights it may have
pursuant to Rule 31, Texas Rules of Civil Procedure, V.T.C.A., Civil Practice
and Remedies Code Section 17.01, Chapter 34 of the Texas Business and Commerce
Code.
3. Guarantor agrees to pay to the Lender its collection costs,
including any additional amount for attorneys' fees, but in no event to exceed
the maximum amount permitted by law, if the Guaranteed Obligations are not paid
by Guarantor upon demand when due as required herein or if this Guaranty is
enforced by suit or through probate or bankruptcy court or through any judicial
proceedings whatsoever, and should it be necessary to reduce the Lender's claim
to judgment, such judgment shall bear interest at the rate of 10% per annum or
such greater maximum rate, if any, allowed by applicable laws.
4. This is an absolute and unconditional guaranty of payment and not of
collection, by Guarantor, jointly and severally with any guarantor of the
Guaranteed Obligations in each and every particular, and Guarantor waives any
right to require that (a) any action be brought against the Borrowers or any
other person or entity, (b) the Lender enforce its rights against any other
guarantor of the Guaranteed Obligations, (c) the Lender proceed or enforce its
rights against or exhaust any security given to secure the Guaranteed
Obligations, (d) the Lender have the Borrowers joined with Guarantor or any
other guarantor of all or part of the Guaranteed Obligations in any suit arising
out of this Guaranty and/or the Guaranteed Obligations, or (e) the Lender pursue
any other remedy in the Lender's powers whatsoever. The Lender shall not be
required to mitigate damages or take any action to reduce, collect or enforce
the Guaranteed Obligations. Guarantor waives any defense arising by reason of
any disability, lack of corporate authority or power, or other defense of any
Borrower or any other guarantor of the Guaranteed
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Obligations, and shall remain liable hereon regardless of whether any Borrower
or any other guarantor be found not liable thereon for any reason. Should the
Lender seek to enforce the obligations of Guarantor by action in any court,
Guarantor waives any necessity, substantive or procedural, that a judgment
previously be rendered against the Borrowers or any other person or entity or
that the Borrowers or any other person or entity be joined in such cause or
that a separate action be brought against the Borrowers or any other person or
entity. The obligations of Guarantor hereunder are several from those of the
Borrowers or any other person or entity (including without limitation any other
surety for the Borrowers), and are primary obligations concerning which
Guarantor is the principal obligor. All waivers herein contained shall be
without prejudice to the Lender at its option to proceed against the Borrowers
or any other person or entity, whether by separate action or by joinder. The
payment by Guarantor of any amount pursuant to this Guaranty shall not in
anywise entitle Guarantor to any right, title or interest (whether by way of
subrogation or otherwise) in and to any of the Guaranteed Obligations or any
proceeds thereof, or any security therefor, unless and until the full amount
owing to the Lender on the Guaranteed Obligations has been fully paid, but when
the same has been fully paid Guarantor shall be subrogated as to any payments
made by him to the rights of the Lender as against the Borrowers and/or any
endorsers, sureties or other guarantors.
5. Guarantor agrees that suit may be brought against Guarantor and any
other guarantors of the Guaranteed Obligations, jointly and severally, and
against one or more of them, less than all, without impairing the rights of the
Lender, its successors or assigns, against the other guarantors; nor shall the
Lender be required to join any Borrower or any other guarantor or liable party
in a suit against a particular guarantor; and the Lender may release any
Borrower and/or one or more guarantor(s) or settle with such persons or
entities as the Lender deems fit without releasing or impairing the rights of
the Lender to demand and collect the balance of such indebtedness from the
other remaining guarantors not so released.
6. Guarantor hereby consents and agrees to each of the following to
the fullest extent permitted by law, and agrees that the Guarantor's
obligations under this Guaranty shall not be released, diminished, impaired,
reduced or adversely affected by any of the following, and waives any rights
(including without limitation rights to notice) which Guarantor might otherwise
have as a result of or in connection with any of the following:
(a) Any renewal, extension, modification, increase,
decrease, alteration or rearrangement of all or any part of the Guaranteed
Obligations or any instrument executed in connection therewith, or any contract
or understanding between the Borrowers and the Lender, or any other person or
entity, pertaining to the Guaranteed Obligations;
(b) Any adjustment, indulgence, forbearance or compromise
that might be granted or given by the Lender to any Borrower or Guarantor or
any person or entity liable on the Guaranteed Obligations;
(c) The insolvency, bankruptcy arrangement, adjustment,
composition, liquidation, disability, dissolution, death or lack of power of
any Borrower or Guarantor or any other person or entity at any time liable for
the payment of all or part of the Guaranteed Obligations; or any dissolution of
any Borrower or Guarantor, or any sale, lease or transfer of any or all of the
assets of any Borrower or Guarantor, or any changes in the shareholders,
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partners, or members of any Borrower or Guarantor; or any reorganization of any
Borrower or Guarantor;
(d) The invalidity, illegality or unenforceability of all or
any part of the Guaranteed Obligations, or any document or agreement executed
in connection with the Guaranteed Obligations, for any reason whatsoever,
including without limitation the fact that the Guaranteed Obligations, or any
part thereof, exceed the amount permitted by law, the act of creating the
Guaranteed Obligations or any part thereof is ultra xxxxx, the officers or
representatives executing the documents or otherwise creating the Guaranteed
Obligations acted in excess of their authority, the Guaranteed Obligations
violate applicable usury laws, any Borrower has valid defenses, claims or
offsets (whether at law, in equity or by agreement) which render the Guaranteed
Obligations wholly or partially uncollectible from such Borrower, the creation,
performance or repayment of the Guaranteed Obligations (or the execution,
delivery and performance of any document or instrument representing part of the
Guaranteed Obligations or executed in connection with the Guaranteed
Obligations, or given to secure the repayment of the Guaranteed Obligations) is
illegal, uncollectible, legally impossible or unenforceable, or the documents
or instruments pertaining to the Guaranteed Obligations have been forged or
otherwise are irregular or not genuine or authentic;
(e) Any full or partial release of the liability of any
Borrower on the Guaranteed Obligations or any part thereof, of any
co-guarantors, or any other person or entity now or hereafter liable, whether
directly or indirectly, jointly, severally, or jointly and severally, to pay,
perform, guarantee or assure the payment of the Guaranteed Obligations or any
part thereof, it being recognized, acknowledged and agreed by Guarantor that
Guarantor may be required to pay the Guaranteed Obligations in full without
assistance or support of any other person or entity, and Guarantor has not been
induced to enter into this Guaranty on the basis of a contemplation, belief,
understanding or agreement that other parties other than the Borrowers will be
liable to perform the Guaranteed Obligations, or the Lender will look to other
parties to perform the Guaranteed Obligations;
(f) The taking or accepting of any other security,
collateral or guaranty, or other assurance of payment, for all or any part of
the Guaranteed Obligations;
(g) Any release, surrender, exchange, subordination,
deterioration, waste, loss or impairment of any collateral, property or
security, at any time existing in connection with, or assuring or securing
payment of, all or any part of the Guaranteed Obligations;
(h) The failure of the Lender or any other person or entity
to exercise diligence or reasonable care in the preservation, protection,
enforcement, sale or other handling or treatment of all or any part of such
collateral, property or security;
(i) The fact that any collateral, security, security
interest or lien contemplated or intended to be given, created or granted as
security for the repayment of the Guaranteed Obligations shall not be properly
perfected or created, or shall prove to be unenforceable or subordinate to any
other security interest or lien, it being recognized and agreed by Guarantor
that Guarantor is not entering into this Guaranty in reliance on, or in
contemplation of the benefits
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of, the validity, enforceability, collectibility or value of any of the
collateral for the Guaranteed Obligations;
(j) Any payment by any Borrower to the Lender is held to
constitute a preference under the bankruptcy laws, or for any reason the Lender
is required to refund such payment or pay such amount to such Borrower or
someone else;
(k) Any other action taken or omitted to be taken with
respect to the Guaranteed Obligations, or the security and collateral therefor,
whether or not such action or omission prejudices Guarantor or increases the
likelihood that Guarantor will be required to pay the Guaranteed Obligations
pursuant to the terms hereof; it being the unambiguous and unequivocal
intention of Guarantor that Guarantor shall be obligated to pay the Guaranteed
Obligations when due, notwithstanding any occurrence, circumstance, event,
action, or omission whatsoever, whether contemplated or uncontemplated, and
whether or not otherwise or particularly described herein, except for the full
and final payment and satisfaction of the Guaranteed Obligations; or
(l) The fact that all or any of the Guaranteed Obligations
cease to exist by operation of law, including without limitation by way of a
discharge, limitation or tolling thereof under applicable bankruptcy laws.
7. In the event any payment by any Borrower or any other guarantor of
all or part of the Guaranteed Obligations to the Lender is held to be a
preference under the bankruptcy laws, or if for any other reason the Lender is
required to refund such payment or pay the amount thereof to any other party,
such payment by such Borrower or by such guarantor to the Lender shall not
constitute a release of Guarantor from any liability respecting payment of the
Guaranteed Obligations, and Guarantor agrees to pay such amount to the Lender
upon demand.
8. It is the intention of the parties hereto to comply with applicable
usury laws; accordingly, it is agreed that notwithstanding any provision to the
contrary in the Guaranteed Obligations or in this Guaranty, in any note or
other instrument, or in any documents securing payment thereof or hereof, or
otherwise relating thereto or hereto, no such provision shall require the
payment or permit the collection of interest in excess of the maximum permitted
by such laws. If any excess of interest in such respect is provided for, or
shall be adjudged to be so provided for, then in such event (a) the provisions
of this paragraph shall govern and control, (b) neither Guarantor nor
Guarantor's heirs, successors, or assigns or any other party liable for the
payment hereof shall be obligated to pay the amount of such interest to the
extent that it is the excess of the maximum amount permitted by such laws, (c)
any such excess which may have been collected shall be, at the Lender's option,
either applied as a credit against the then unpaid principal amount owing on the
Guaranteed Obligations, or refunded, and (d) the effective rate of interest
covered by this Guaranty shall be automatically subject to reduction to the
maximum lawful rate allowed under applicable usury laws.
9. This Guaranty is for the benefit of the Lender, and for such other
persons and entities as may from time to time become or be the holders of any
Guaranteed Obligations; and this Guaranty shall be transferable and negotiable,
with the same force and effect and to the same extent as the Guaranteed
Obligations may be transferable, it being understood that upon the
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assignment or transfer by the Lender of any Guaranteed Obligations, the legal
holder of such Guaranteed Obligations shall have all of the rights granted to
the Lender under this Guaranty.
10. Payment of all amounts hereunder shall be made at the offices of
the Lender.
11. Any notice, request or other communication required or permitted to
be given hereunder shall be given in writing by delivering the same against
receipt therefor or by depositing the same in the United States Postal Service,
postage prepaid, registered or certified mail, return receipt requested,
addressed to the respective parties at the address shown below or to such other
address as the intended recipient may have specified in a prior written notice
received by the sender (and if so given, shall be deemed given when mailed).
12. This Guaranty shall not be wholly or partially satisfied or
extinguished by Guarantor's partial payment of any amount due on the Guaranteed
Obligations, but shall continue in full force and effect as against Guarantor
for the full amount of the Guaranteed Obligations until payment in full thereof.
13. This Guaranty shall be binding upon Guarantor, his heirs,
devisees, executors, administrators, personal representatives, successors and
assigns and shall inure to the benefit of, and be enforceable by, the Lender
and its successors and assigns and each and every other person who shall from
time to time be or become the owner or holder of any of the Guaranteed
Obligations, and each and every reference herein to "the Lender" shall also
include each and every successor, assign, owner or holder. Guarantor shall not
assign or delegate its obligations hereunder without the prior written consent
of the Lender.
14. Guarantor understands and agrees that Guarantor may revoke his
future obligations under this Guaranty at any time by giving Lender written
notice that Guarantor will not be liable hereunder for any indebtedness or
obligations of any Borrower incurred on or after the effective date of such
revocation. Such revocation shall be deemed to be effective on the day
following the day Lender receives such notice delivered either by: (a) personal
delivery to the address of Lender identified above, or (b) United States mail,
registered or certified, return receipt requested, postage prepaid, addressed
to Lender at the address shown above. Notwithstanding such revocation,
Guarantor shall remain liable on his obligations hereunder until payment in
full to Lender of (x) all of the Guaranteed Obligations that is outstanding on
the effective date of such revocation, and any renewals and extensions thereof,
and (y) all loans, advances and other extensions of credit made to or for the
account of each Borrower on or after the effective date of such revocation
pursuant to the obligation of Lender under a commitment or agreement made to or
with such Borrower prior to the effective date of such revocation. The terms
and conditions of this Guaranty shall remain in effect with respect to the
Guaranteed Obligations described in the preceding sentence in the same manner
as if such revocation had not been made by Guarantor.
15. In the event of the death of Guarantor, any duly authorized
representative of the estate of Guarantor may revoke Guarantor's future
obligations under this Guaranty by giving Lender written notice of Guarantor's
death and that the estate of Guarantor shall not be liable hereunder for any
indebtedness or obligations of any Borrower incurred on or after the effective
date of such revocation. Such revocation shall be deemed to be effective on the
day following
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the day Lender receives such notice delivered either by: (a) personal delivery
to the address of Lender identified above, or (b) United States mail,
registered or certified, return receipt requested, postage prepaid, addressed
to Lender at the address shown above. Notwithstanding such revocation, the
obligations of the deceased Guarantor shall continue as an obligation against
his estate as to (x) all of the Guaranteed Obligations that is outstanding on
the effective date of such revocation, and any renewals or extensions thereof,
and (y) all loans, advances and other extensions of credit made to or for the
account of each Borrower on or after the effective date of such revocation
pursuant to an obligation of Lender under a commitment or agreement made to or
with such Borrower prior to the effective date of such revocation. The terms
and conditions of this Guaranty shall remain in effect with respect to the
Guaranteed Obligations described in the preceding sentence in the same manner
as if such revocation had not been made.
16. The release by the Lender of any Borrower or one or more other
guarantors of all or part of the Guaranteed Obligations shall not affect the
Guarantor, who shall remain fully liable in accordance with the terms of this
Guaranty.
17. This Guaranty, whether continuing, specific, and/or limited, shall
be in addition to and cumulative of, and not in substitution, novation or
discharge of, any and all prior or contemporaneous guaranty agreements by
Guarantor or other persons or entities, in favor of the Lender or assigned to
the Lender by others.
18. Guarantor represents and warrants that (i) this Guaranty is not
given with actual intent to hinder, delay or defraud any entity to which
Guarantor is or will become, on or after the date hereof, indebted; (ii)
Guarantor has received at least a reasonably equivalent value in exchange for
the giving of this Guaranty; (iii) Guarantor is not insolvent on the date
hereof and will not become insolvent as a result of the giving of this
Guaranty; (iv) Guarantor is not engaged in a business or transaction, nor is
about to engage in a business or transaction, for which any property remaining
with Guarantor constitute an unreasonably small amount of capital; or (v)
Guarantor does not intend to incur debts that will be beyond the Guarantor's
ability to pay as such debts mature.
19. This Guaranty shall be governed by and construed and interpreted
in accordance with the laws of the United States of America and the State of
Texas. Xxxxxx County, Texas shall be the proper place of venue to enforce
payment or performance under this Guaranty. Guarantor irrevocably agrees that
any legal proceeding arising out of or in connection with this Guaranty shall
be brought in the state district courts of Xxxxxx County, Texas or in the
United States District Court for the District in which Xxxxxx County, Texas is
located.
20. Guarantor shall furnish to the Lender all such financial
statements and other information relating to the financial condition,
properties and affairs of Guarantor as the Lender may from time to time
request.
21. Guarantor will not change his address, name or identity without
notifying the Lender of such change in writing at least thirty (30) days prior
to the effective date of such change.
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22. No delay on the part of the Lender in exercising any right
hereunder or failure to exercise the same shall operate as a waiver of such
right, nor shall any single or partial exercise of any right, power or privilege
bar any further or subsequent exercise of the same or any other any right, power
or privilege.
23. This Guaranty shall not be changed orally, but shall be changed
only by agreement in writing signed by the person against whom enforcement of
such change is sought.
24. The masculine and neuter genders used herein shall each include
the masculine, feminine and neuter genders and the singular number used herein
shall include the plural number. The words "person" and "entity" shall include
without limitation individuals, corporations, partnerships, joint ventures,
associations, joint stock companies, trusts, unincorporated organizations, and
governments and any agency or political subdivision thereof. The term
"guarantor" shall include, without limitation, the Guarantor.
25. If any provision of this Guaranty is determined to be invalid by
any court of competent jurisdiction or to be in violation of any applicable law,
such invalidity or violation shall have no effect on any other provisions of
this Guaranty (which shall remain valid and binding and in full force and
effect) or in any other jurisdiction, and to that end the provisions of this
Guaranty shall be considered severable.
26. If this Guaranty is given by a corporation, then the undersigned
guaranteeing corporation does hereby acknowledge that it has investigated fully
the benefits and advantages which will be derived by the undersigned from
execution of this Guaranty, and the Board of Directors of the undersigned
corporation has decided that, and the undersigned corporation does hereby
acknowledge, warrant and represent that, a direct or an indirect benefit will
accrue to the undersigned by reason of execution of this Guaranty.
27. GUARANTOR HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN
ANY ACTION OR LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY OR
THE GUARANTEED OBLIGATIONS.
EXECUTED this 30th day of April, 1996.
/s/ XXX X. XXXXX
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XXX X. XXXXX
Address: Xx 0 Xxx 000
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Hockley 77447-9772
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Tax I.D. No.: ----
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Driver's License No.\State: 00000000 TEX
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STATE OF TEXAS )
)
COUNTY OF XXXXXX )
This instrument was acknowledged before me on this 30 day of April,
1996, by XXX X. XXXXX.
/s/ PETUNIA X. XXXXX
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NOTARY PUBLIC IN AND FOR
THE STATE OF TEXAS
[SEAL]
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