1
EXHIBIT 4.9
COMMERCIAL GUARANTY
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PRINCIPAL DATE MATURITY LOAN NO CALL COLLATERAL ACCOUNT OFFICER INITIALS
$25,000,000.00 09-11-1996 09-11-1999 855
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References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
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BORROWER: SEARCH FUNDING II, INC. LENDER: HIBERNIA NATIONAL BANK
(TIN: 00-0000000) (TIN: 00-0000000)
000 XXXXX XXXXX XXXXXX 313 CARONDELET STREET
SUITE 400, L.B. 000 XXXX XXXXXX XXX 00000
XXXXXX, XXXXX 00000-0000 XXX XXXXXXX, XXXXXXXXX 00000
GUARANTOR: SEARCH CAPITAL GROUP, INC.
000 XXXXX XXXXX XXXXXX
XXXXX 000, X.X. 000
XXXXXX, XXXXX 00000-0000
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AMOUNT OF GUARANTY. THE AMOUNT OF THIS COMMERCIAL GUARANTY IS UNLIMITED.
DEFINITIONS. The following terms shall have the following meanings when used in
this Agreement:
AGREEMENT. The word "Agreement" means this Guaranty Agreement as this
Agreement may be amended or modified from time to time.
BORROWER. The word "Borrower" means individually, collectively and
interchangeably SEARCH FUNDING II, INC..
BUSINESS DAY. The words "Business Day" mean a day on which commercial
banks are open for business in New Orleans, Louisiana, excluding Saturdays
and Sundays.
EVENT OF DEFAULT. The words "Event of Default" mean and include each event
that qualifies as an event of default or default event under any of the
Indebtedness in favor of Lender or under any of the Related Documents
(after expiration of any applicable cure period).
GUARANTOR. The word "Guarantor" means individually, collectively and
interchangeably SEARCH CAPITAL GROUP, INC., and all other persons
guaranteeing payment and satisfaction of the Indebtedness as hereinafter
defined.
INDEBTEDNESS. The word "Indebtedness" means the indebtedness of Borrower
evidenced by the Note, in principal, interest, costs, expenses and
attorneys' fees and all other fees and charges arising thereunder, together
with all other indebtedness and costs and expenses for which Borrower is
responsible under any of the Related Documents.
LENDER. The word "Lender" means HIBERNIA NATIONAL BANK [TIN: 00-0000000],
its successors and assigns, and any subsequent holder or holders of the
Indebtedness.
NOTE. The word "Note" means the promissory note DATED SEPTEMBER 11, 1996,
in the principal amount of $25,000,000.00 from Borrower to Lender, together
with all substitute or replacement notes therefor, as well as all renewals,
extensions, modifications, refinancings, consolidations and substitutions
of and for such promissory note.
RELATED DOCUMENTS. The words "Related Documents" mean and include
individually, collectively, interchangeably and without limitation, the
Loan Agreement between Grantor and Lender dated SEPTEMBER 11, 1996, as
amended or modified from time to time ("THE LOAN AGREEMENT"), and all
promissory notes, credit agreements, other loan agreements, environmental
agreements, guaranties, security agreements, mortgages, collateral
mortgages, deeds of trust, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection with
the Loan Agreement.
GUARANTEE OF THE INDEBTEDNESS. GUARANTOR HEREBY ABSOLUTELY AND UNCONDITIONALLY
AGREES TO, AND BY THESE PRESENTS DOES HEREBY, GUARANTEE THE PROMPT AND PUNCTUAL
PAYMENT, PERFORMANCE AND SATISFACTION OF ANY AND ALL OF THE INDEBTEDNESS IN
FAVOR OF LENDER.
CONTINUING GUARANTY. THIS IS A CONTINUING GUARANTY AGREEMENT UNDER WHICH
GUARANTOR AGREES TO GUARANTEE PAYMENT OF THE INDEBTEDNESS IN FAVOR OF LENDER ON
A CONTINUING BASIS. Guarantor's obligations and liability under this Agreement
shall be open and continuous in effect. Guarantor intends to and does hereby
guarantee at all times the prompt and punctual payment, performance and
satisfaction of all of the Indebtedness in favor of Lender. Accordingly, any
payments made on the Indebtedness will not discharge or diminish the
obligations and liability of Guarantor under this Agreement for any remaining
and succeeding Indebtedness of Borrower in favor of Lender.
JOINT, SEVERAL AND SOLIDARY LIABILITY. Guarantor's obligations and liability
under this Agreement shall be on a "solidary" or "joint and several" basis
along with Borrower to the same degree and extent as if Guarantor had been
and/or will be a co-borrower, co-principal obligor and/or co-maker of the
Indebtedness. In the event that there is more than one Guarantor under this
Agreement, or in the event that there are other guarantors, endorsers or
sureties of all or any portion of the Indebtedness, Guarantor's obligations and
liability hereunder shall further be on a "solidary" or "joint and several"
basis along with such other guarantors, endorsers and/or sureties.
DURATION OF GUARANTY. This Agreement and Guarantor's obligations and liability
hereunder shall remain in full force and effect until such time as this
Agreement may be canceled or otherwise terminated by Lender under a written
cancellation instrument in favor of Guarantor (subject to the automatic
reinstatement provisions hereinbelow). It is anticipated that fluctuations may
occur in the aggregate amount of the Indebtedness guaranteed under this
Agreement and it is specifically acknowledged and agreed to by Guarantor that
reductions in the amount of the Indebtedness, even to zero ($0.00) dollars,
prior to Lender's written cancellation of this Agreement, shall not constitute
or give rise to a termination of this Agreement. At the request of Guarantor,
Lender agrees to deliver a written cancellation instrument to Guarantor (which
shall be subject to the automatic reinstatement provisions hereinbelow) after
the Indebtedness has been fully repaid and all obligations of Lender to
Borrower, and of Borrower to Lender under the Related Documents, have been
fully performed or otherwise terminated.
CANCELLATION OF AGREEMENT; EFFECT. Unless otherwise indicated under such a
written cancellation instrument, Lender's agreement to terminate or otherwise
cancel this Agreement shall affect only, and shall be expressly limited to,
Guarantor's continuing obligations and liability to guarantee the Indebtedness
incurred, originated and/or extended (without prior commitment) after the date
of such a written cancellation instrument; with Guarantor remaining fully
obligated and liable under this Agreement for any and all of the Indebtedness
incurred, originated, extended, or committed to prior to the date of such a
written cancellation instrument. Nothing under this Agreement or under any
other agreement or understanding by and between Guarantor and Lender, shall in
any way obligate, or be construed to obligate, Lender to agree to the
subsequent termination or cancellation of Guarantor's obligations and liability
hereunder; it being fully understood and agreed to by Guarantor that Lender has
and intends to continue to rely on Guarantor's assets, income and financial
resources in extending credit and other Indebtedness to and in favor of
Borrower, and that to release Guarantor from Guarantor's continuing obligations
and liabilities under this Agreement would so prejudice Lender that Lender may,
within its sole and uncontrolled discretion and judgment, refuse to release
Guarantor from any of its continuing
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09-11-1996 COMMERCIAL GUARANTY PAGE 2
LOAN NO. (CONTINUED)
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obligations and liability under this Agreement for any reason whatsoever as
long as any of the Indebtedness remains unpaid and outstanding, or otherwise.
DEFAULT. Should any Event of Default occur, Guarantor unconditionally and
absolutely agrees to pay Lender the then unpaid amount of the Indebtedness, in
principal, interest, costs, expenses, attorneys' fees and other fees and
charges. Such payment or payments shall be made at Lender's offices indicated
above, immediately following demand by Lender.
GUARANTOR'S WAIVERS. Guarantor hereby waives:
(a) Notice of Lender's acceptance of this Agreement.
(b) Presentment for payment of the Indebtedness, notice of dishonor and of
nonpayment, notice of intention to accelerate, notice of acceleration,
protest and notice of protest, collection or institution of any suit or
other action by Lender in collection thereof, including any notice of
default in payment thereof, or other notice to, or demand for payment
thereof, on any party.
(c) Any right to require Lender to notify Guarantor of any nonpayment
relating to any collateral directly or indirectly securing the
Indebtedness, or notice of any action or nonaction on the part of Borrower,
Lender, or any other guarantor, surety or endorser of the Indebtedness, or
notice of the creation of any new or additional Indebtedness subject to
this Agreement
(d) Any rights to demand or require collateral security from the Borrower
or any other person as provided under applicable Louisiana law or
otherwise.
(e) Any right to require Lender to notify Guarantor of the terms, time and
place of any public or private sale of any collateral directly or
indirectly securing the Indebtedness.
(f) Any "one action" or "anti-deficiency" law or any other law which may
prevent Lender from bringing any action, including a claim for deficiency,
against Guarantor, before or after Lender's commencement or completion of
any foreclosure action, or any action in lieu of foreclosure.
(g) Any election of remedies by Lender that may destroy or impair
Guarantor's subrogation rights or Guarantor's right to proceed for
reimbursement against Borrower or any other guarantor, surety or endorser
of the Indebtedness, including without limitation, any loss of rights
Guarantor may suffer by reason of any law limiting, qualifying, or
discharging the Indebtedness.
(h) Any disability or other defense of Borrower, or any other guarantor,
surety or endorser, or any other person, or by reason of the cessation from
any cause whatsoever, other than payment in full of the Indebtedness.
(i) Any statute of limitations or prescriptive period, if at the time an
action or suit brought by Lender against Guarantor is commenced, there is
any outstanding Indebtedness of Borrower to Lender which is barred by any
applicable statute of limitations or prescriptive period.
Guarantor warrants and agrees that each of the waivers set forth above is made
with Guarantor's full knowledge of its significance and consequences, and that,
under the circumstances, such waivers are reasonable and not contrary to public
policy or law. If any such waiver is determined to be contrary to any
applicable law or public policy, such waiver shall be effective only to the
extent permitted by law.
GUARANTOR'S SUBORDINATION OF RIGHTS. In the event that Guarantor should for
any reason (a) advance or lend monies to Borrower, whether or not such funds
are used by Borrower to make payment(s) under the Indebtedness, and/or (b) make
any payment(s) to Lender or others for and on behalf of Borrower under the
Indebtedness, and/or (c) make any payment to Lender in total or partial
satisfaction of Guarantor's obligations and liabilities under this Agreement,
and/or (d) if any of Guarantor's property is used to pay or satisfy any of the
Indebtedness, Guarantor hereby agrees that any and all rights that Guarantor
may have or acquire to collect from or to be reimbursed by Borrower (or from or
by any other guarantor, endorser or surety of the Indebtedness), whether
Guarantor's rights of collection or reimbursement arise by way of subrogation
to the rights of Lender or otherwise, shall in all respects, whether or not
Borrower is presently or subsequently becomes insolvent, be subordinate,
inferior and junior to the rights of Lender to collect and enforce payment,
performance and satisfaction of Borrower's then remaining Indebtedness, until
such time as the Indebtedness is fully paid and satisfied. In the event of
Borrower's insolvency or consequent liquidation of Borrower's assets, through
bankruptcy, by an assignment for the benefit of creditors, by voluntary
liquidation, or otherwise, the assets of Borrower applicable to the payment of
claims of both Lender and Guarantor shall be paid to Lender and shall be first
applied by Lender to Borrower's then remaining Indebtedness. Guarantor hereby
assigns to Lender all claims which it may have or acquire against Borrower or
any assignee or trustee of Borrower in bankruptcy; provided that, such
assignment shall be effective only for the purpose of assuring to Lender full
payment of the Indebtedness guaranteed under this Agreement.
GUARANTOR'S RECEIPT OF PAYMENTS. If Guarantor should for any reason whatsoever
receive, after any Event of Default occurs, any payment(s) from Borrower (or
any other guarantor, surety or endorser of the Indebtedness) that Borrower (or
such a third party) may owe to Guarantor for any reason, Guarantor agrees to
accept such payment(s) in trust for and on behalf of Lender, advising Borrower
(or the third party payee) of such fact. Guarantor further unconditionally
agrees to immediately deliver such funds to Lender, with such funds being held
by Guarantor over any interim period, in trust for Lender. In the event that
Guarantor should for any reason whatsoever receive any such funds from Borrower
(or any third party), and Guarantor should deposit such funds in one or more of
Guarantor's deposit accounts, no matter where located, Lender shall have the
right to attach any and all of Guarantor's deposit accounts in which such funds
were deposited, whether or not such funds were commingled with other monies of
Guarantor, and whether or not such funds then remain on deposit in such an
account or accounts. To this end and to secure Guarantor's obligations under
this Agreement, Guarantor collaterally assigns and pledges to Lender, and
grants to Lender a continuing security interest in, any and all of Guarantor's
present and future rights, title and interest in and to all monies that
Guarantor may now and/or in the future maintain on deposit with banks, savings
and loan associations and other entities (other than tax deferred accounts), in
which Guarantor may at any time deposit any such funds that may be received
from Borrower (or any other guarantor, endorser or surety of the Indebtedness)
in favor of Lender.
DEPOSIT ACCOUNTS. As collateral security for repayment of Guarantor's
obligations hereunder and under any additional guaranties previously granted or
to be granted by Guarantor in the future, and additionally as collateral
security for any present and future indebtedness of Guarantor in favor of
Lender, Guarantor is granting Lender a continuing security interest in any and
all funds that Guarantor may now and in the future have on deposit with Lender
or in certificates of deposit or other deposit accounts as to which Guarantor
is an account holder (with the exception of XXX, pension, and other
tax-deferred deposits). Guarantor further agrees that, after any Event of
Default occurs, Lender may at any time apply any funds that Guarantor may have
on deposit with Lender or in certificates of deposit or other deposit accounts
as to which Guarantor is an account holder (with the exception of XXX, pension,
and other tax-deferred deposits) against the unpaid balance of any and all
other present and future obligations and indebtedness of Guarantor to Lender,
in principal, interest, fees, costs, expenses, and attorneys' fees.
ADDITIONAL COVENANTS. Guarantor agrees that Lender may, at its sole option, at
any time, and from time to time, without the consent of or notice to Guarantor,
or any of them, or to any other party, and without incurring any responsibility
to Guarantor or to any other party, and without impairing or releasing any of
Guarantor's obligations or liabilities under this Agreement:
(a) Make additional secured and/or unsecured loans to Borrower.
(b) Discharge, release or agree not to xxx any party (including, but not
limited to, Borrower or any other guarantor, surety, or endorser of the
Indebtedness), who is or may be liable to Lender for any of the
Indebtedness.
(c) Release, surrender, or abandon, in any manner and in any order, any
collateral directly or indirectly securing repayment of any of the
Indebtedness.
(d) Sell, lease, transfer, or otherwise deal with, in any manner and in
any order, any collateral directly or indirectly securing repayment of any
of the Indebtedness, after an Event of Default occurs.
(e) Alter, renew, extend, accelerate, or otherwise change the manner,
place, terms and/or times of payment or other terms of the Indebtedness, or
any part thereof, including any increase or decrease in the rate or rates
of interest on any of the Indebtedness.
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09-11-1996 COMMERCIAL GUARANTY PAGE 3
LOAN NO. (CONTINUED)
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(f) Settle or compromise any of the Indebtedness.
(g) Subordinate and/or agree to subordinate the payment of all or any part
of the Indebtedness, or Lender's security rights in any collateral directly
or indirectly securing any such Indebtedness, to the payment and/or
security rights of any other present and/or future creditors of Borrower.
(h) Apply any payments and/or proceeds to any of the Indebtedness in such
priority or with such preferences as Lender may determine in its sole
discretion, regardless of which of the Indebtedness then remains unpaid.
(i) Take or accept any other collateral security or guaranty for any or
all of the Indebtedness.
(j) Enter into, deliver, modify, amend, or waive compliance with, any
instrument or arrangement evidencing, securing or otherwise affecting, all
or any part of the Indebtedness.
NO IMPAIRMENT OF GUARANTOR'S OBLIGATIONS. No course of dealing between Lender
and Borrower (or any other guarantor, surety or endorser of the Indebtedness),
nor any failure or delay on the part of Lender to exercise any of Lender's
rights and remedies under this Agreement or any other agreement or agreements
by and between Lender and Borrower (or any other guarantor, surety or
endorser), shall have the effect of impairing or releasing Guarantor's
obligations and liabilities to Lender, or of waiving any of Lender's rights and
remedies under this Agreement or otherwise. Any partial exercise of any rights
and remedies granted to Lender shall furthermore not constitute a waiver of any
of Lender's other rights and remedies; it being Guarantor's intent and
agreement that Lender's rights and remedies shall be cumulative in nature.
Guarantor further agrees that any waiver or forbearance on the part of Lender
to pursue Lender's available rights and remedies shall be binding upon Lender
only to the extent that Lender specifically agrees to such waiver or
forbearance in writing. A waiver or forbearance on the part of Lender as to
one Event of Default shall not constitute a waiver or forbearance as to any
other Event of Default.
NO RELEASE OF GUARANTOR. Guarantor's obligations and liabilities under this
Agreement shall not be released, impaired, reduced, or otherwise affected by,
and shall continue in full force and effect notwithstanding the occurrence of
any event, including without limitation any one or more of the following
events:
(a) The death, insolvency, bankruptcy, arrangement, adjustment,
composition, liquidation, disability, dissolution, or lack of authority
(whether corporate, partnership or trust) of Borrower (or any person acting
on Borrower's behalf), or of any other guarantor, surety or endorser of the
Indebtedness.
(b) Any payment by Borrower, or any other party, to Lender that is held to
constitute a preferential transfer or a fraudulent conveyance under any
applicable law, or any such amounts or payment which, for any reason,
Lender is required to refund or repay to Borrower or to any other person.
(c) Any dissolution of Borrower, or any sale, lease or transfer of all or
any part of Borrower's assets.
(d) Any failure of Lender to notify Guarantor of the making of additional
loans or other extensions of credit in reliance on this Agreement.
AUTOMATIC REINSTATEMENT. This Agreement and Guarantor's obligations and
liabilities hereunder shall continue to be effective, and/or shall
automatically and retroactively be reinstated, if a release or discharge has
occurred, or if at any time, any payment or part thereof to Lender with respect
to any of the Indebtedness, is rescinded or must otherwise be restored by
Lender pursuant to any insolvency, bankruptcy, reorganization, receivership, or
any other debt relief granted to Borrower or to any other party to the
Indebtedness or any such security therefor. In the event that Lender must
rescind or restore any payment received in total or partial satisfaction of the
Indebtedness, any prior release or discharge from the terms of this Agreement
given to Guarantor shall be without effect, and this Agreement and Guarantor's
obligations and liabilities hereunder shall automatically and retroactively be
renewed and/or reinstated and shall remain in full force and effect to the same
degree and extent as if such a release or discharge had never been granted. It
is the intention of Lender and Guarantor that Guarantor's obligations and
liabilities hereunder shall not be discharged except by Guarantor's full and
complete performance and satisfaction of such obligations and liabilities; and
then only to the extent of such performance.
LEGAL EXISTENCE. Guarantor is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. Guarantor is duly
qualified and in good standing as a foreign corporation in each jurisdiction
where in the nature of the business transacted and the property owned by
Guarantor makes such qualification necessary, except where the failure to be so
qualified will not have a material adverse affect on Guarantor. Guarantor's
guaranty of the Indebtedness and this Agreement does not violate Guarantor's
Certificate of Incorporation or Bylaws. Guarantor has taken all corporate
action necessary to authorize the execution, delivery and performance of this
Agreement.
REPRESENTATIONS AND WARRANTIES BY GUARANTOR. Guarantor represents and warrants
that:
(a) Guarantor is the parent corporation and owner of all of the
authorized, issued and outstanding stock of Borrower.
(b) Guarantor has the lawful power to own its properties and to engage in
its business as presently conducted.
(c) Guarantor's guaranty of the Indebtedness and Guarantor's execution,
delivery and performance of this Agreement are not in violation of any laws
and will not result in a default under any contract, agreement, or
instrument to which Guarantor is a party, or by which Guarantor or its
property may be bound.
(d) Guarantor has agreed and consented to execute this Agreement and to
guarantee the Indebtedness in favor of Lender, at Borrower's request and
not at the request of Lender.
(e) Guarantor will receive and/or has received a direct or indirect
material benefit from the transactions contemplated herein and/or arising
out of the Indebtedness.
(f) This Agreement, when executed and delivered to Lender, will constitute
a valid, legal and binding obligation of Guarantor, enforceable in
accordance with its terms.
(g) Guarantor has established adequate means of obtaining information from
Borrower on a continuing basis regarding Borrower's financial condition.
(h) Lender has made no representations to Guarantor as to the
creditworthiness of Borrower.
(i) There are no suits or proceedings pending, or to the knowledge of
Guarantor, threatened against or affecting Borrower, Guarantor, or the
assets of Borrower or Guarantor, before any court or by any governmental
agency, other than those previously disclosed to Lender in documents filed
by Borrower or Guarantor with the Securities and Exchange Commission and
delivered to Lender by Borrower or Guarantor, which, if adversely
determined, may have a material adverse effect on the financial condition
or business of Borrower or Guarantor.
AFFIRMATIVE COVENANTS. Guarantor covenants and agrees with Lender that, so
long as this Agreement remains in effect, Guarantor will:
CHANGES IN FINANCIAL CONDITION AND LITIGATION. PROMPTLY INFORM LENDER OF
(A) all material adverse changes in the financial condition of Borrower or
Guarantor, and (b) the threat of, the institution of, or any adverse
determination by final judgment in, any litigation, arbitration proceeding
or governmental proceeding which could reasonably be expected to involve a
claim against Borrower or Guarantor for more than $100,000.00.
FINANCIAL RECORDS. Maintain its books and records in accordance with
generally accepted accounting principles, applied on a consistent basis,
and permit Lender to examine and audit Guarantor's books and records at all
reasonable times.
FINANCIAL REPORTS. Prepare all annual financial statements and reports
required to be provided under this Agreement in accordance with generally
accepted accounting principles, applied on a consistent basis and prepare
all other financial statements and reports required to be provided under
this Agreement in accordance with generally accepted accounting principles
(with the exception of year-end adjustments and footnoting), applied on a
consistent basis, and each statement and report shall be certified as being
true and correct, in all material respects, to the best knowledge and
belief, by the chief financial officer of Guarantor or other officer or
person acceptable to Lender.
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LOAN NO. (CONTINUED)
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ANNUAL FINANCIAL STATEMENTS. Without demand or request by Lender, furnish
Lender with, as soon as available, but in no event later than one hundred
twenty (120) days after the end of each fiscal year, fiscal year-end
financial statements (including consolidated balance sheet, income
statement and statement of cash flows) for Guarantor, prepared in the form
of consolidated statements for Guarantor and all of its subsidiaries,
including Borrower, audited by a certified public accountant satisfactory
to Lender and accompanied by the unqualified opinion of the certified
public accountant. The certified public accounting firm of BDO Xxxxxxx
shall be qualified as a certified public accountant satisfactory to Lender
unless and until Lender notifies Guarantor to the contrary.
MONTHLY FINANCIAL STATEMENTS. Without demand or request by Lender, furnish
Lender with, as soon as available, but in no event later than ten (10)
Business Days after the end of each calendar month, month-end financial
statements (including balance sheet and income statement) for Guarantor,
prepared in the form of consolidated statements for Guarantor and all of
its subsidiaries, including Borrower, for the prior month, prepared and
certified as correct, in all material respects, to the best knowledge and
belief, by the chief financial officer of Guarantor or other officer or
person acceptable to Lender.
TAX RETURNS. Upon request of Lender, furnish Lender with copies of the
most current federal tax returns filed by Guarantor, with all schedules and
supporting documentation.
PUBLIC DOCUMENTS. Without demand or request by Lender, within thirty (30)
days of the filing of each, furnish Lender with copies of the 10-K, 10-Q,
and each other document filed by Guarantor with the Securities and Exchange
Commission.
ADDITIONAL INFORMATION. Furnish such additional information, statements
and reports with respect to the financial condition and business operations
of Guarantor as Lender may reasonably request from time to time.
GUARANTOR INFORMATION. Guarantor agrees to keep adequately informed of any
facts, events or circumstances which might in any way affect Guarantor's
risks under this Agreement. Guarantor further agrees that Lender shall
have no obligation to disclose to Guarantor any information or material
relating to Borrower or the Indebtedness.
NEGATIVE COVENANTS. Guarantor covenants and agrees with Lender that as long as
this Agreement remains in effect Guarantor shall not, without the prior written
consent of Lender:
DIVIDENDS. Pay any dividends on Guarantor's stock (other than dividends
payable in its stock) unless (a) Guarantor's Adjusted Net Worth (as defined
in the FINANCIAL COVENANTS section below) exceeds $22,500,000.00, and (b)
the dividend payment will not reduce Guarantor's Adjusted Net Worth to
amount equal to or less than $22,500,000.00.
REDEMPTION OF SHARES. Redeem, retire or repurchase any shares of its
capital stock or other securities if such redemption, retirement or
repurchase would cause Guarantor to be out of compliance with any of the
Financial Covenants provided for in this Agreement.
CONTINUITY OF OPERATIONS. (a) Engage in any business activities other than
those related to financial services, (b) cease operations, liquidate, or
dissolve, (c) merge with any other entity if the members of the board of
directors of Guarantor immediately prior to the merger do not immediately
after the merger constitute a majority of (i) the members of the board of
directors of Guarantor if it survives the merger, or (ii) the board of
directors of the surviving company if Guarantor does not survive the
merger, or (d) sell all or substantially all of Guarantor's assets.
FINANCIAL COVENANTS. Guarantor covenants and agrees with Lender that as long
as this Agreement remains in effect Guarantor shall comply with the following
financial covenants:
DEFINITIONS. For purposes of testing compliance with these Financial
Covenants the following terms shall have the following meanings. Except as
otherwise provided by these defined terms, all computations made to
determine compliance with these Financial Covenants shall be made on a
consolidated basis for Guarantor and all of its subsidiaries, in accordance
with generally accepted accounting principles, applied on a consistent
basis, and certified as true and correct, in all material respects, to the
best knowledge and belief, by the chief financial officer of Guarantor or
other officer or person acceptable to Lender.
ADJUSTED NET WORTH. The term "Adjusted Net Worth" shall mean the Stated
Net Worth of Guarantor and its subsidiaries, on a consolidated basis, plus
Subordinated Debt, less Intangibles, and less amounts (a) due from any
shareholder, director, officer, employee or agent of Guarantor or of any
subsidiary or affiliate of Guarantor, or (b) due from any person or entity
(other than a subsidiary) which is affiliated with, or related to,
Guarantor or any of its subsidiaries, or any of the shareholders, officers,
or directors of Guarantor or any of its subsidiaries.
DEBT. The term "Debt" shall mean all liabilities of Guarantor and
its subsidiaries, on a consolidated basis, INCLUDING SUBORDINATED
DEBT.
INTANGIBLES. The term "Intangibles" shall mean all of the
intangible assets of Guarantor and its subsidiaries, on a
consolidated basis, including goodwill, trademarks, patents,
copyrights, organizational expenses, and similar intangible
expenses, but excluding leaseholds and leasehold improvements.
SUBORDINATED DEBT. The term "Subordinated Debt" shall mean
indebtedness and liabilities of Guarantor and its subsidiaries
which have been subordinated by written agreement to the
Indebtedness, and to the indebtedness of any Guarantor to Lender,
in form and substance acceptable to Lender.
STATED NET WORTH. The term "Stated Net Worth" shall mean the total
assets of Guarantor and its subsidiaries, on a consolidated basis,
less total Debt.
MINIMUM ADJUSTED NET WORTH. Guarantor shall maintain an Adjusted Net Worth
of no less than $20,000,000.00.
MAXIMUM LEVERAGE POSITION. Guarantor shall maintain a leverage position of
no more than 5.00 to 1.00, where leverage position is the result of the
following formula:
Debt - Subordinated Debt
------------------------------------
Stated Net Worth + Subordinated Debt
TESTING FREQUENCY. Compliance with Minimum Adjusted Net Worth and Maximum
Leverage Position requirements shall be tested quarterly (based on the
fiscal year of Guarantor) based on the then most recent financial
statements of Guarantor and its subsidiaries, on a consolidated basis.
TRANSFER OF INDEBTEDNESS. This Agreement is for the benefit of Lender and for
such other person or persons as may from time to time become or be the holders
of all or any part of the Indebtedness. This Agreement shall be transferrable
and negotiable with the same force and
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LOAN NO. (CONTINUED)
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effect and to the same extent as the Indebtedness may be transferrable; it
being understood and agreed to by Guarantor that, upon any transfer or
assignment of all or any part of the Indebtedness, the holder of such
Indebtedness shall have all of the rights and remedies granted to Lender under
this Agreement. Guarantor further agrees that, upon any transfer of all or any
portion of the Indebtedness, Lender may transfer and deliver any and all
collateral securing repayment of such Indebtedness (including, but not limited
to, any collateral provided by Guarantor) to the transferee of such
Indebtedness, and such collateral shall secure any and all of the Indebtedness
in favor of such a transferee. Guarantor additionally agrees that, after any
such transfer or assignment has taken place, Lender shall be fully discharged
from any and all liability and responsibility to Borrower and Guarantor with
respect to such collateral, and the transferee thereafter shall be vested with
all the powers and rights with respect to such collateral, except for gross
negligence or willful misconduct.
CONSENT TO PARTICIPATION. Guarantor recognizes and agrees that Lender may,
from time to time, one or more times, transfer all or any part of the
Indebtedness through sales of participation interests in such Indebtedness to
one or more third party lenders. Lender agrees to notify Guarantor of any sale
or transfer of (a) the Indebtedness in its entirety, and (b) any assignment of
the "lead lender" position if participation interests in the Indebtedness are
sold or transferred. Guarantor specifically agrees and consents to all such
transfers and assignments, and waives any and all other notices of sale of
participation interests, as well as all notices of any repurchase of
participation interests. Guarantor additionally agrees that the purchaser of a
participation interest in the Indebtedness will be considered as the absolute
owner of a percentage interest of such Indebtedness and that such a purchaser
will have all of the rights granted under any participation agreement governing
the sale of such a participation interest. Guarantor waives any rights of
offset that Guarantor may have against Lender and/or any purchaser of such a
participation interest, and Guarantor unconditionally agrees that either Lender
or such a purchaser may enforce Guarantor's obligations and liabilities under
this Agreement, irrespective of the failure or insolvency of Lender or any such
purchaser.
NOTICES. To give Guarantor any notice required under this Agreement, Lender
may hand deliver or mail such notice to Guarantor at the address specified for
Guarantor in this Agreement, or at any other address that Guarantor may have
given to Lender by written notice as provided in this paragraph. To give
Lender any notice under this Agreement, Guarantor may hand deliver or mail such
notice to Lender at the address specified in this Agreement, or at any other
address that Lender may have given to Guarantor by written notice as provided
in this paragraph. All notices required or permitted under this Agreement must
be in writing and will be considered as given on the day it is delivered by
hand or deposited in the U. S. Mail in the form and to the address specified in
this Agreement.
ADDITIONAL GUARANTIES. Guarantor recognizes and agrees that Guarantor may have
previously granted, and may in the future grant, one or more additional
guaranties of the Indebtedness in favor of Lender. Should this occur, the
execution of this Agreement and any additional guaranties on the part of
Guarantor will not be construed as a cancellation of this Agreement or any of
Guarantor's additional guaranties; it being Guarantor's full intent and
agreement that all such guaranties of the Indebtedness in favor of Lender shall
remain in full force and effect and shall be cumulative in nature and effect.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Guaranty:
AMENDMENT. No amendment, modification, consent or waiver of any provision
of this Agreement, and no consent to any departure by Guarantor therefrom,
shall be effective unless the same shall be in writing signed by a duly
authorized officer of Lender, and then shall be effective only as to the
specific instance and for the specific purpose for which given.
CAPTION HEADINGS. Caption headings of the sections of this Agreement are
for convenience purposes only and are not to be used to interpret or to
define their provisions. In this Agreement, whenever the context so
requires, the singular includes the plural and the plural also includes the
singular.
ENTIRE AGREEMENT. This Agreement embodies the final, entire agreement of
the parties hereto and supersede any and all prior commitments, agreements,
representations, and understandings, whether written or oral, relating to
the subject matter hereof and may not be contradicted or varied by evidence
of prior, contemporaneous, or subsequent oral agreements or discussions of
the parties hereto. THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES TO
THIS AGREEMENT.
GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the substantive laws of the State of Louisiana.
SEVERABILITY. If any provision of this Agreement is held to be illegal,
invalid or unenforceable under present or future laws effective during the
term hereof, such provision shall be fully severable. This Agreement shall
be construed and enforceable as if the illegal, invalid or unenforceable
provision had never comprised a part of it, and the remaining provisions of
this Agreement shall remain in full force and effect and shall not be
affected by the illegal, invalid or unenforceable provision or by its
severance herefrom. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as a part of
this Agreement, a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and legal, valid and
enforceable.
SUCCESSORS AND ASSIGNS BOUND. Guarantor's obligations and liabilities
under this Agreement shall be binding upon Guarantor's successors, heirs,
legatees, devisees, administrators, executors and assigns.
WAIVE JURY. Guarantor and Lender hereby waive the right to any jury trial
in any action, proceeding, or counterclaim brought by either against the
other.
GUARANTOR AND LENDER ACKNOWLEDGE HAVING READ ALL THE PROVISIONS OF THIS
AGREEMENT AND AGREES TO ITS TERMS. IN ADDITION, GUARANTOR UNDERSTANDS THAT
THIS AGREEMENT IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS
AGREEMENT TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED. NO
FORMAL ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS AGREEMENT EFFECTIVE.
THIS AGREEMENT IS DATED SEPTEMBER 11, 1996.
GUARANTOR:
SEARCH CAPITAL GROUP, INC.
By: /s/ XXXXXX X. XXXX
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Xxxxxx X. Xxxx, Senior Executive Vice President
LENDER:
HIBERNIA NATIONAL BANK
By: /s/ XXXX XXXXXXX
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Authorized Officer
