[EXECUTION]
GUARANTY
THIS GUARANTY is made as of July 1, 1996, by Xxxx Xxxxxxxx
("Guarantor"), in favor of Bank One, Texas, National Association ("Lender").
RECITALS:
1. CapRock Fiber Network, Ltd., a Texas limited partnership
("Borrower") has executed in favor of Lender that certain promissory note of
even date herewith, payable to the order of Lender in the principal amount of
$10,000,000 (such promissory note, as from time to time amended, and all
promissory notes given in substitution, renewal or extension therefor or
thereof, in whole or in part, being herein collectively called the "Note").
2. The Note was executed pursuant to a Loan Agreement of even date
herewith, (herein, as from time to time amended, supplemented or restated,
called the "Loan Agreement"), by and between Borrower and Lender, pursuant to
which Lender has agreed to advance funds to Borrower under the Note.
3. It is a condition precedent to Lender's obligation to advance funds
pursuant to the Loan Agreement that Guarantor shall execute and deliver to
Lender a satisfactory guaranty of Borrower's obligations under the Note and
the Loan Agreement.
4. Guarantor owns a 39.96% limited partnership interest in Borrower.
NOW, THEREFORE, in consideration of the premises, of the benefits which
will inure to Guarantor from Lender's advances of funds to Borrower under the
Loan Agreement, and of Ten Dollars and other good and valuable consideration,
the receipt and sufficiency. of all of which are hereby acknowledged, and in
order to induce Lender to advance funds under the Loan Agreement, Guarantor
hereby agrees with Lender as follows:
AGREEMENTS
Section 1. DEFINITIONS. Reference is hereby made to the Loan Agreement
for all purposes. All terms used in this Guaranty which are defined in the
Loan Agreement and not otherwise defined herein shall have the same meanings
when used herein. All references herein to any Obligation Document, Loan
Document, or other document or instrument refer to the same as from time to
time amended, supplemented or restated. As used herein the following terms
shall have the following meanings:
"OBLIGATIONS" means collectively all of the indebtedness, obligations,
and undertakings which are guaranteed by Guarantor and described in
subsections (a) and (b) of Section 2.
"OBLIGATION DOCUMENTS" means this Guaranty, the Note, the Loan
Agreement, the Loan Documents, all other documents and instruments under, by
reason of which, or pursuant to which any or all of the Obligations are
evidenced, governed, secured, or otherwise dealt with, and all other
documents, instruments, agreements, certificates, legal opinions and other
writings heretofore or hereafter delivered in connection herewith or
therewith.
"OBLIGORS" means Borrower, Guarantor and any other endorsers, guarantors
or obligors, primary or secondary, of any or all of the Obligations.
"SECURITY" means any rights, properties, or interests of Lender, under
the Obligation Documents or otherwise, which provide recourse or other
benefits to Lender in connection with the Obligations or the non-payment or
non-performance thereof, including collateral (whether real or personal,
tangible or intangible) in which Lender has rights under or pursuant to any
Obligation Documents, guaranties of the payment or performance of any
Obligation, bonds, surety agreements, keep-well agreements, letters of
credit, rights of subrogation, rights of offset, and rights pursuant to which
other claims are subordinated to the Obligations.
Section 2. GUARANTY.
(a) Guarantor hereby irrevocably, absolutely, and unconditionally
guarantees to Lender the prompt, complete, and full payment when due, and no
matter how the same shall become due, of:
(i) the Note, including all principal, all interest thereon and all
other sums payable thereunder; and
(ii) all other sums payable under the other Obligation Documents,
whether for principal, interest, fees or otherwise; and
(iii) any and all other indebtedness or liabilities which Borrower
may at any time owe to Lender, whether incurred heretofore or hereafter or
concurrently herewith, voluntarily or involuntarily, whether owed alone or
with others, whether fixed, contingent, absolute, inchoate, liquidated or
unliquidated, whether such indebtedness or liability arises by notes,
discounts, overdrafts, open account indebtedness or in any other manner
whatsoever, and including interest, attorneys' fees and collection costs as
may be provided by law or in any instrument evidencing any such
indebtedness or liability.
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Without limiting the generality of the foregoing, Guarantor hereby agrees
that his liability hereunder shall extend to and include all post-petition
interest, expenses, and other duties and liabilities of Borrower described
above in this subsection (a), or below in the following subsection (b), which
would be owed by Borrower but for the fact that they are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization, or similar
proceeding involving Borrower.
(b) Guarantor hereby irrevocably, absolutely, and unconditionally
guarantees to Lender the prompt, complete and full performance, when due, and
no matter how the same shall become due, of all obligations and undertakings
of Borrower to Lender under, by reason of, or pursuant to any of the
Obligation Documents.
(c) If Borrower shall for any reason fail to pay any Obligation, as and
when such Obligation shall become due and payable, whether at its stated
maturity, as a result of the exercise of any power to accelerate, or
otherwise, Guarantor will, forthwith upon demand by Lender, pay such
Obligation in full to Lender. If Borrower shall for any reason fail to
perform promptly any Obligation, Guarantor will, forthwith upon demand by
Lender, cause such Obligation to be performed or, if specified by Lender,
provide sufficient funds, in such amount and manner as Lender shall in good
faith determine, for the prompt, full and faithful performance of such
Obligation by Lender or such other Person as Lender shall designate.
(d) If either Borrower or Guarantor fails to pay or perform any
Obligation as described in the immediately preceding subsections (a), (b), or
(c) Guarantor will incur the additional obligation to pay to Lender, and
Guarantor will forthwith upon demand by Lender pay to Lender, the amount of
any and all expenses, including fees and disbursements of Lender's counsel
and of any experts or agents retained by Lender, which Lender may incur as a
result of such failure.
(e) As between Guarantor and Lender, this Guaranty shall be considered
a primary and liquidated liability of Guarantor.
Section 3. UNCONDITIONAL GUARANTY.
(a) No action which Lender may take or omit. to take in connection with
any of the Obligation Documents, any of the Obligations (or any other
indebtedness owing by Borrower to Lender), or any Security, and no course of
dealing of Lender with any Obligor or any other Person, shall release or
diminish Guarantor's obligations, liabilities, agreements or duties
hereunder, affect this Guaranty in any way, or afford Guarantor any recourse
against Lender, regardless of whether any such action or inaction may
increase any risks to or liabilities of Lender or any Obligor or increase any
risk to or diminish any safeguard of any
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Security. Without limiting the foregoing, Guarantor hereby expressly agrees
that Lender may, from time to time, without notice to or the consent of
Guarantor, do any or all of the following:
(i) Amend, change or modify, in whole or in part, any one or more
of the Obligation Documents and give or refuse to give any waivers or other
indulgences with respect thereto.
(ii) Neglect, delay, fail, or refuse to take or prosecute any action
for the collection or enforcement of any of the Obligations, to foreclose
or take or prosecute any action in connection with any Security or
Obligation Document, to bring suit against any Obligor or any other Person,
or to take any other action concerning the Obligations or the Obligation
Documents.
(iii) Accelerate, change, rearrange, extend, or renew the time, rate,
terms, or manner for payment or performance of any one or more of the
Obligations (whether for principal, interest, fees, expenses,
indemnifications, affirmative or negative covenants, or otherwise).
(iv) Compromise or settle any unpaid or unperformed Obligation or
any other obligation or amount due or owing, or claimed to be due or owing,
under any one or more of the Obligation Documents.
(v) Take, exchange, amend, eliminate, surrender, release, or
subordinate any or all Security for any or all of the Obligations, accept
additional or substituted Security therefor, and perfect or fail to perfect
Lender's rights in any or all Security.
(vi) Discharge, release, substitute or add Obligors.
(vii) Apply all monies received from Obligors or others, or from any
Security for any of the Obligations, as Lender may determine to be in its
best interest, without in any way being required to xxxxxxxx Security or
assets or to apply all or any part of such monies upon any particular
Obligations.
(b) No action or inaction of any Obligor or any other Person, and no
change of law or circumstances, shall release or diminish Guarantor's
obligations, liabilities, agreements, or duties hereunder, affect this
Guaranty in any way, or afford Guarantor any recourse against Lender.
Without limiting the foregoing, the obligations, liabilities, agreements, and
duties of Guarantor under this Guaranty shall not be released, diminished,
impaired, reduced, or affected by the occurrence of any or all of the
following from time to time, even if occurring without notice to or without
the consent of Guarantor:
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(i) Any voluntary or involuntary liquidation, dissolution, sale of
all or substantially all assets, marshalling of assets or liabilities,
receivership, conservatorship, assignment for the benefit of creditors,
insolvency, bankruptcy, reorganization, arrangement, or composition of any
Obligor or any other proceedings involving any Obligor or any of the assets
of any Obligor under laws for the protection of debtors, or any discharge,
impairment, modification, release, or limitation of the liability of, or
stay of actions or lien enforcement proceedings against, any Obligor, any
properties of any Obligor, or the estate in bankruptcy of any Obligor in
the course of or resulting from any such proceedings.
(ii) The failure by Lender to file or enforce a claim in any
proceeding described in the immediately preceding subsection (i) or to take
any other action in any proceeding to which any Obligor is a party.
(iii) The release by operation of law of any Obligor from any of the
Obligations or any other obligations to Lender.
(iv) The invalidity, deficiency, illegality, or unenforceability of
any of the Obligations or the Obligation Documents, in whole or in part,
any bar by any statute of limitations or other law of recovery on any of
the Obligations, or any defense or excuse for failure to perform on account
of force majeure, act of God, casualty, impossibility, impracticability, or
other defense or excuse whatsoever.
(v) The failure of any Obligor or any other Person to sign any
guaranty or other instrument or agreement within the contemplation of any
Obligor or Lender.
(vi) The fact that Guarantor may have incurred directly part of the
Obligations or is otherwise primarily liable therefor.
(vii) Without limiting any of the foregoing, any fact or event
(whether or not similar to any of the foregoing) which in the absence of
this provision would or might constitute or afford a legal or equitable
discharge or release of or defense to a guarantor or surety other than the
actual payment and performance by Guarantor under this Guaranty.
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(c) Lender may invoke the benefits of this Guaranty before pursuing any
remedies against any Obligor or any other Person and before proceeding
against any Security now or hereafter existing for the payment or performance
of any of the Obligations. Lender may maintain an action against Guarantor
on this Guaranty without joining any other Obligor therein and without
bringing a separate action against any other Obligor.
(d) If any payment to Lender by any Obligor is held to constitute a
preference or a voidable transfer under applicable state or federal laws, or
if for any other reason Lender is required to refund such payment to the
payor thereof or to pay the amount thereof to any other Person, such payment
to Lender shall not constitute a release of Guarantor from any liability
hereunder, and Guarantor agrees to pay such amount to Lender on demand and
agrees and acknowledges that this Guaranty shall continue to be effective or
shall be reinstated, as the case may be, to the extent of any such payment or
payments. Any transfer by subrogation which is made as contemplated in
Section 6 prior to any such payment or payments shall (regardless of the
terms of such transfer) be automatically voided upon the making of any such
payment or payments, and all rights so transferred shall thereupon revert to
and be vested in Lender.
(e) This is a continuing guaranty and shall apply to and cover all
Obligations and renewals and extensions thereof and substitutions therefor
from time to time.
Section 4. WAIVER. Guarantor hereby waives, with respect to the
Obligations, this Guaranty, and the other Obligation Documents:
(a) notice of the incurrence of any Obligation by Borrower, and notice
of any kind concerning the assets, liabilities, financial condition,
creditworthiness, businesses, prospects, or other affairs of Borrower (it
being understood and agreed that: (i) Guarantor shall take full
responsibility for informing itself of such matters, (ii) Lender shall have
no responsibility of any kind to inform Guarantor of such matters, and (iii)
Lender is hereby authorized to assume that Guarantor, by virtue of his
relationships with Borrower which are independent of this Guaranty, has full
and complete knowledge of such matters at each time when Lender extends
credit to Borrower or takes any other action which may change or increase
Guarantor's liabilities or losses hereunder).
(b) notice that Lender, any Obligor, or any other Person has taken or
omitted to take any action under any Obligation Document or any other
agreement or instrument relating thereto or relating to any Obligation.
(c) notice of acceptance of this Guaranty and all rights of Guarantor
under Section 34.02 of the Texas Business and Commerce Code.
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(d) demand, presentment for payment, and notice of demand, dishonor,
nonpayment, or nonperformance.
(e) notice of intention to accelerate, notice of acceleration, protest,
notice of protest, notice of any exercise of remedies (as described in the
following Section 5 or otherwise), and all other notices of any kind
whatsoever.
Section 5. EXERCISE OF REMEDIES. Lender shall have the right to
enforce, from time to time, in any order and at Lender's sole discretion, any
rights, powers and remedies which Lender may have under the Obligation
Documents or otherwise, including judicial foreclosure, the exercise of
rights of power of sale, the taking of a deed or assignment in lieu of
foreclosure, the appointment of a receiver to collect rents, issues and
profits, the exercise of remedies against personal property, or the
enforcement of any assignment of leases, rentals, oil or gas production, or
other properties or rights, whether real or personal, tangible or intangible;
and Guarantor shall be liable to Lender hereunder for any deficiency
resulting from the exercise by Lender of any such right or remedy even though
any rights which Guarantor may have against Borrower or others may be
destroyed or diminished by exercise of any such right or remedy. No failure
on the part of Lender to exercise, and no delay in exercising, any right
hereunder or under any other Obligation Document shall operate as a waiver
thereof; nor shall any single or partial exercise of any right preclude any
other or further exercise thereof or the exercise of any other right. The
rights, powers and remedies of Lender provided herein and in the other
Obligation Documents are cumulative and are in addition to, and not exclusive
of, any other rights, powers or remedies provided by law or in equity. The
rights of Lender hereunder are not conditional or contingent on any attempt
by Lender to exercise any of its rights under any other Obligation Document
against any Obligor or any other Person.
Section 6. LIMITED SUBROGATION. Until all of the Obligations have been
paid and performed in full Guarantor shall have no right to exercise any
right of subrogation, reimbursement, indemnity, exoneration, contribution or
any other claim, which he may now or hereafter have against or to any Obligor
or any Security in connection with this Guaranty (including any right of
subrogation under Section 34.04 of the Texas Business and Commerce Code), and
Guarantor hereby defers any rights to enforce any remedy which Guarantor may
have against Borrower and any right to participate in any Security until such
time. The foregoing shall not be deemed to prohibit reallocations of
partnership interests among the partners of Borrower in accordance with the
terms of the limited partnership agreement of Borrower. If any amount shall
be paid to Guarantor on account of any such subrogation or other rights, any
such other remedy, or any Security at any time when all of the Obligations
and all other expenses guaranteed pursuant hereto shall not have been paid in
full, such amount shall be held in trust for the benefit of
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Lender, shall be segregated from the other funds of Guarantor and shall
forthwith be paid over to Lender to be held by Lender as collateral for, or
then or at any time thereafter applied in whole or in part by Lender against,
all or any portion of the Obligations, whether matured or unmatured, in such
order as Lender shall elect. If Guarantor shall make payment to Lender of
all or any portion of the Obligations and if all of the Obligations shall be
finally paid in full, Lender will, at Guarantor's request and expense,
execute and deliver to Guarantor (without recourse, representation or
warranty) appropriate documents necessary to evidence the transfer by
subrogation to Guarantor of an interest in the Obligations resulting from
such payment by Guarantor; provided that such transfer shall be subject to
Section 3(d) above and that without the consent of Lender (which Lender may
withhold in its discretion) Guarantor shall not have the right to be
subrogated to any claim or right against any Obligor which has become owned
by Lender.
Section 7. SUCCESSORS AND ASSIGNS. Guarantor's rights or obligations
hereunder may not be assigned or delegated, but this Guaranty and such
obligations shall pass to and be fully binding upon the successors of
Guarantor, as well as Guarantor. This Guaranty shall apply to and inure to
the benefit of Lender and its successors or assigns. Without limiting the
generality of the immediately preceding sentence, Lender, subject to the
provisions of the Loan Agreement, may assign, grant a participation in, or
otherwise transfer any Obligation held by it or any portion thereof, and
Lender may assign or otherwise transfer its rights or any portion thereof
under any Obligation Document, to any other Person, and such other Person
shall thereupon become vested with all of the benefits in respect thereof
granted to Lender hereunder unless otherwise expressly provided by Lender in
connection with such assignment or transfer.
Section 8. SUBORDINATION AND OFFSET. Guarantor hereby subordinates and
makes inferior to the Obligations any and all indebtedness now or at any time
hereafter owed by Borrower to Guarantor. Prior to the date the Obligations
are paid in cash and satisfied in full, and such payment is not subject to
rescission, Guarantor shall not accept, receive or collect (by set-off or
other manner) any payment or distribution on account of, or ask for, demand
or accelerate, directly or indirectly, any payment on such indebtedness
except as permitted under the Loan Agreement. Guarantor agrees that after the
occurrence of any Default or Event of Default he will neither permit Borrower
to repay such indebtedness or any part thereof nor accept payment from
Borrower of such indebtedness or any part thereof without the prior written
consent of Lender. If Guarantor receives any such payment without the prior
written consent of Lender, the amount so paid shall be held in trust for the
benefit of Lender, shall be segregated from the other funds of Guarantor, and
shall forthwith be paid over to Lender to be held by Lender as collateral
for, or then or at any
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time thereafter applied in whole or in part by Lender against, all or any
portions of the Obligations, whether matured or unmatured, in such order as
Lender shall elect.
Guarantor hereby grants to Lender a right of offset to secure the
payment of the Obligations and Guarantor's obligations and liabilities
hereunder, which right of offset shall be upon any and all monies, securities
and other property (and the proceeds there from) of Guarantor now or
hereafter held or received by or in transit to Lender from or for the account
of Guarantor, whether for safekeeping, custody, pledge, transmission,
collection or otherwise, and also upon any and all deposits (general or
special), credits and claims of Guarantor at any time existing against
Lender. Upon the occurrence of any Default or Event of Default Lender is
hereby authorized at any time and from time to time, without notice to
Guarantor, to offset, appropriate and apply any and all items hereinabove
referred to against the Obligations and Guarantor's obligations and
liabilities hereunder irrespective of whether or not Lender shall have made
any demand under this Guaranty and although such obligations and liabilities
may be contingent or unmatured. Lender agrees promptly to notify Guarantor
after any such offset and application made by Lender, provided that the
failure to give such notice shall not affect the validity of such offset and
application. The rights of Lender under this section are in addition to, and
shall not be limited by, any other rights and remedies (including other
rights of offset) which Lender may have.
Section 9. REPRESENTATIONS AND WARRANTIES. Guarantor hereby represents
and warrants to Lender as follows:
(a) The Recitals at the beginning of this Guaranty are true and correct
in all respects.
(b) The execution, delivery and performance by Guarantor of this
Guaranty do not and will not contravene any law or governmental regulation or
any contractual restriction binding on or affecting Guarantor, and do not and
will not result in or require the creation of any lien, security interest or
other charge or encumbrance upon or with respect to any of his properties.
(c) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or other regulatory body or third
party is required for the due execution, delivery and performance by
Guarantor of this Guaranty.
(d) This Guaranty is a legal, valid and binding obligation of
Guarantor, enforceable against Guarantor in accordance with its terms except
as limited by bankruptcy, insolvency or similar laws of general application
relating to the enforcement of creditors' rights.
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(e) There is no action, suit or proceeding pending or, to the knowledge
of Guarantor, threatened against or otherwise affecting Guarantor before any
court, arbitrator or governmental department, commission, board, bureau,
agency or instrumentality which may reasonably be expected to materially and
adversely affect Guarantor's financial condition or his ability to perform
his obligations hereunder.
(f) The direct or indirect value of the consideration received and to
be received by Guarantor in connection herewith is reasonably worth at least
as much as the liability and obligations of Guarantor hereunder, and the
incurrence of such liability and obligations in return for such consideration
may reasonably be expected to benefit Guarantor, directly or indirectly.
(g) Guarantor is not "insolvent" on the date hereof (that is, the sum
of Guarantor's absolute and contingent liabilities, including the
Obligations, does not exceed the fair market value of Guarantor's assets).
Guarantor's capital is adequate for the businesses in which Guarantor is
engaged and intends to be engaged. Guarantor has not incurred (whether hereby
or otherwise), nor does Guarantor intend to incur or believe that he will
incur, debts which will be beyond his ability to pay as such debts mature.
(h) All balance sheets, earning statements, financial data and other
information concerning Guarantor which have been furnished to Lender to
induce it to accept this Guaranty (or otherwise furnished to Lender in
connection with the transactions contemplated hereby or associated herewith)
fairly represent the financial condition of Guarantor as of the dates and the
results of Guarantor's operations for the periods for which the same are
furnished. None of such balance sheets, earnings and cash flow statements,
financial data and other information contains any untrue statement of a
material fact or omits to state any material fact which is necessary to make
any statements contained therein not misleading.
Section 10. LIQUID ASSETS.
(a) Until the Limited Guarantors are released of their obligations
pursuant to the Loan Agreement, Guarantor will maintain unencumbered
investments in cash, cash equivalents, and marketable securities having an
aggregate market value of at least $1,000,000.
(b) Until all of the Obligations have been completely paid and
performed, Guarantor will maintain a securities account at Banc One Capital
Corporation holding securities with an aggregate market value of at least
$400,000, which such account shall be pledged to Lender under that certain
Securities Pledge Agreement of even date herewith given Guarantor for the
benefit of Lender to secure repayment of the Obligations.
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Section 11. NO ORAL CHANGE. No amendment of any provision of this
Guaranty shall be effective unless it is in writing and signed by Guarantor
and Lender, and no waiver of any provision of this Guaranty, and no consent
to any departure by Guarantor therefrom, shall be effective unless it is in
writing and signed by Lender, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for
which given.
Section 12. INVALIDITY OF PARTICULAR PROVISIONS. If any term or
provision of this Guaranty shall be determined to be illegal or unenforceable
all other terms and provisions hereof shall nevertheless remain effective and
shall be enforced to the fullest extent permitted by applicable law.
Section 13. HEADINGS AND REFERENCES. The headings used herein are for
purposes of convenience only and shall not be used in construing the
provisions hereof. The words "this Guaranty," "this instrument," "herein,"
"hereof," "hereby" and words of similar import refer to this Guaranty as a
whole and not to any particular subdivision unless expressly so limited. The
phrases "this section" and "this subsection" and similar phrases refer only
to the subdivisions hereof in which such phrases occur. The word "or" is not
exclusive, and the word "including" (in its various forms) means "including
without limitation". Pronouns in masculine, feminine and neuter genders
shall be construed to include any other gender, and words in the singular
form shall be construed to include the plural and vice versa, unless the
context otherwise requires.
Section 14. TERM. This Guaranty shall be irrevocable until all of the
Obligations have been completely and finally paid and performed, Lender has
no obligation to make any loans or other advances to Borrower, and all
obligations and undertakings of Borrower under, by reason of, or pursuant to
the Obligation Documents have been completely performed, and this Guaranty is
thereafter subject to reinstatement as provided in Section 3(d). All
extensions of credit and financial accommodations heretofore or hereafter
made by Lender to Borrower shall be conclusively presumed to have been made
in acceptance hereof and in reliance hereon.
In the event of the death of Guarantor, the obligation of the deceased
shall continue in full force and effect against his estate as to all
Obligations that shall have been created or incurred by Borrower prior to the
time when Lender shall have received notice, in writing, of such death.
All indebtedness, of whatever kind or character, created pursuant to the
provisions of any Obligation Document, any other loan agreement between
Lender and Borrower, or other form of commitment by Lender to Borrower,
entered into prior to receipt by
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Lender of any notice referred to in the immediately preceding paragraphs of
this section shall be deemed to be Obligations created, incurred or arising
prior to receipt of any such notice by Lender, even though advances
constituting all or a portion of such Obligations are made after Lender's
receipt of any such notice.
Section 15. NOTICES. Any notice or communication required or permitted
hereunder shall be given in writing, sent by personal delivery, by telecopy,
by delivery service with proof of delivery, or by registered or certified
United States mail, postage prepaid, addressed to the appropriate party as
follows:
To Guarantor: Xxxx Xxxxxxxx
0000 Xxxxxxxxx
Xxxxx #000
Xxxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
To Lender: Bank One, Texas, N.A.
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxx Xxxxxx
Fax No.:________________
or to such other address or to the attention of such other individual as
hereafter shall be designated in writing by the applicable party sent in
accordance herewith. Any such notice or communication shall be deemed to
have been given (a) in the case of personal delivery or delivery service, as
of the date of first attempted delivery at the address or in the manner
provided herein, (b) in the case of telecopy, upon receipt, or (b) in the
case of registered or certified United States mail, three days after deposit
in the mail.
Section 16. LIMITATION ON INTEREST. Lender and Guarantor intend to
contract in strict compliance with applicable usury law from time to time in
effect. Notwithstanding anything to the contrary herein or in any of the
Obligation Documents, this Guaranty shall never be construed as a contract
obligating Guarantor to pay interest in excess of the maximum amount of
interest permitted by applicable law from time to time in effect, and
Guarantor shall have no liability hereunder to pay interest in excess of such
maximum amount. Lender expressly disavows any intention to charge or collect
excessive unearned interest or finance charges in the event the maturity of
any Obligation is accelerated. If Lender shall collect monies which are
deemed to constitute interest which would otherwise increase the amount of
interest paid by Guarantor to an amount in excess of that permitted by
applicable law in effect at the relevant times, all such sums deemed to
constitute interest in excess of such legal limit shall be immediately
returned to Guarantor upon such determination. In determining whether or not
the interest paid or payable by
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Guarantor, under any specific circumstance exceeds the maximum interest
permitted under applicable law, Lender and Guarantor shall, to the greatest
extent permitted by applicable law: (a) characterize any non-principal
payment as an expense, fee or premium rather than as interest, (b) exclude
voluntary payments and the effects thereof, and (c) amortize, prorate,
allocate, and spread the total amount of interest throughout the entire
contemplated term of the Obligation Documents evidencing the Obligations in
accordance with the maximum amounts outstanding from time to time thereunder
and the maximum legal rates of interest from time to time in effect under
applicable law in order to lawfully charge the maximum amount of interest
permitted under applicable law. If applicable law provides for an interest
ceiling under Texas Revised Civil Statutes Annotated article 5069-1.04 (and
if no other ceiling has been established for the Obligation in question),
that ceiling shall be the indicated rate ceiling. As used in this section
the term "applicable law" means the laws of the state of Texas or the laws of
the United States of America, whichever laws allow the greater interest, as
such laws now exist or may be changed or amended or come into effect in the
future.
Section 17. LOAN DOCUMENT. This Guaranty is a Loan Document, as
defined in the Loan Agreement, and is subject to the provisions of the Loan
Agreement governing Loan Documents.
Section 18. COUNTERPARTS. This Guaranty may be executed in any number
of counterparts, each of which when so executed shall be deemed to constitute
one and the same Guaranty.
SECTION 19. GOVERNING LAW. THIS GUARANTY IS TO BE PERFORMED IN THE
STATE OF TEXAS AND SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF SUCH STATE WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW.
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IN WITNESS WHEREOF, Guarantor has executed and delivered this Guaranty
as of the date first written above.
/s/ Xxxx Xxxxxxxx
----------------------------------
Xxxx Xxxxxxxx
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ACKNOWLEDGMENT AND STIPULATION
The undersigned hereby acknowledges and stipulates that (i) she is the
spouse of Guarantor and (ii) all community property interests of Guarantor
and the undersigned in all their assets whether now owned or hereafter
acquired (whether subject to the sole management of Guarantor or the
undersigned) are subject to, and may be used for, the payment and performance
of Guarantor's obligations under the above Guaranty. Notwithstanding the
foregoing, Lender shall have no recourse against the separate property of the
undersigned for satisfaction of any such obligations.
This Acknowledgment and Stipulation is entered into as of June 28, 1996,
for the benefit of Lender.
/s/ Xxxxxxxx Xxxxxxxx
-------------------------------
Name:
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