GUARANTY AGREEMENT
THIS AGREEMENT, (this "Agreement") made as of the 27th day of July, 1998, by
CAVALIER HOMES, INC., a Delaware corporation (the "Guarantor"), in favor of
SOUTHTRUST BANK, NATIONAL ASSOCIATION, a national banking association (the
"Bank"). As used in this Agreement, except as otherwise defined herein or unless
the context may clearly require to the contrary, all capitalized word and
phrases shall have the meaning attributed to them in that certain amended and
Restated Credit Agreement dated of even date herewith between WoodPerfect, Ltd.
an Alabama limited partnership (the "Borrower"), and the Bank (as the same may
be amended or modified from time to time (the "Credit Agreement").
In consideration of One Dollar ($1.00) and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Guarantor agrees, covenants and represents as follows;
1. A. The Guarantor hereby absolutely and unconditionally guarantees
to the Bank the due, regular and punctual payment and prompt
performance of the Guaranteed Obligations including without
limitation payment of any sum or sums of money which Borrower
now owes the Bank or from time to time hereafter shall owe the
Bank in connection with the Term Loan No. 2, whether evidenced
by notes or other instruments, or by open account or
otherwise, and whether it represents an original balance, a
balance reduced by part payment, or a deficiency after sale
of collateral, an extension or renewal of an original debt, or
otherwise. Further, the Guarantor guarantees the payment of
all costs, attorney fees or expenses which may be incurred
by the Bank by reason of a Default arising on account of the
failure to pay any principal or interest under the Term Note
No. 2 when due.
B. In the event of any Default by the Borrower in the payment of
the Guaranteed Obligations, the Guarantor absolutely and
unconditionally promises to pay to the Bank such amounts as
are necessary to cure the Default, or at the option of the
Bank, the Guarantor agrees to pay to Bank the entire amount
of the Guaranteed Obligations.
C. This Guaranty is an unconditional guaranty, and the Guarantor
agrees that the Bank, upon the occurrence of an Event of
Default by Borrower with respect to the Guaranteed Obligations
shall not be required to assert any claim or cause of action
against Borrower or any other party before asserting any claim
or cause of action against the Guarantor under this Agreement.
Furthermore, the Guarantor agrees that the Bank shall not be
required to pursue or foreclose on any collateral that it may
receive from Borrower, the Guarantor or others as security for
any Guaranteed Obligations before making a claim or asserting
a cause of action against the Guarantor under this Agreement.
D. The failure of the Bank to perfect any portion of its security
interest in any Collateral as set forth in the Loan Documents
or any other collateral now or hereafter securing all or any
part of the Guaranteed Obligations, shall not release the
Guarantor from the Guarantor's liabilities and obligations
hereunder.
E. To the extent permitted by law; notice of acceptance of this
Agreement and of any default by the Borrower is hereby waived
by the Guarantor presentment, protest, demand, and notice of
protest and demand of any and all collateral, and of the
exercise of possessory remedies or foreclosure on any and all
collateral received by the Bank from the Borrower or the
Guarantor are hereby waived; and all settlements, compromises,
compositions, accounts stated, and agreed balances in good
faith between primary and secondary obligors on any accounts
received as collateral shall be binding upon the Guarantor.
F. This Agreement shall not be affected, modified, or impaired by
the voluntary or involuntary liquidation, dissolution, sale
or other disposition of all or substantially all of the assets
marshalling of assets and liabilities, receivership,
insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangements, composition with
creditors or readjustment of or other similar proceedings
affecting the Borrower, the Guarantor or any other guarantor,
or any of the assets belonging to one or more of them, nor
shall this Agreement be affected, modified or impaired by the
invalidity of any note, the Credit Agreement, any of the
other Loan Documents or any other document executed by the
Borrower or the Guarantor in connection with the Loans.
G. Without notice to the Guarantor, without the consent of the
Guarantor, and without affecting or limiting the Guarantor's
liability hereunder, the Bank may:
(a) grant the Borrower extensions of time for payment of the
Obligations or any part thereof;
(b) renew any of the Obligations;
(c) grant the Borrower extensions of time for performance
of agreements or other indulgences;
(d) at any time release any or all of the collateral held
by the Bank as security for the Obligations;
(e) at any time release any other guarantor from such
guarantor's guarantee of any of the Obligations;
(f) compromise, settle, release, or terminate any or all of
the obligations, covenants, or agreement of Borrower under
any Note, the Credit Agreement, and /or any one or more of
the other Loan Documents; and
(g) with Borrower's written consent, modify or amend any
obligation, covenant or agreement of Borrower set forth
in any one or more of the Notes, the Credit Agreement,
and/or the other Loan Documents.
H. This Agreement may not be terminated by the Guarantor until
such time as all guaranteed Obligations, including any
renewals or extensions thereof, have been paid and performed
in full and such payments and performance of the Guaranteed
Obligations have become final and are not subject to being
refunded as a preference or fraudulent transfer under the
Bankruptcy Law or other applicable Law.
2. The Guarantor represents and warrants to the Bank and covenants that
the Guarantor has full power and unrestricted right to enter into this
Agreement, to incur the obligations provided for herein, and to execute
and deliver the same to Bank, and that when executed and delivered,
this Agreement will institute a valid and legally binding obligation of
the Guarantor, enforceable in accordance with its terms. The Guarantor
acknowledges that the Bank is relying upon the Guarantor's covenants
herein in making the loans to Borrower, and the Guarantor undertakes to
perform the Guarantor's obligations hereunder promptly and in good
faith.
3. The Guarantor covenants and agrees that so long as the Guaranteed
Obligations are outstanding, the Guarantor will from time to time upon
request, furnish to the Bank such information regarding the business
affairs, finances, and conditions of the Guarantor and the Guarantor's
properties as may reasonably be required of the Guarantor (in whatever
capacity) under the Credit Agreement.
4. If Borrower is or shall hereafter be indebted to Bank for any
obligations, liability or indebtedness other than the Guaranteed
Obligations, and Bank should collect or receive any payments, funds or
distributions which are not specifically required, by law or agreement,
to be applied to the Guaranteed Obligations, Bank may in its sole
discretion, apply such payments, funds or distributions to indebtedness
of the Borrower other than the Guaranteed Obligations.
5. The Guarantor hereby waives any right to indemnification and
subrogation or other rights of reimbursement that the Guarantor might
have against Borrower or Borrower's estate.
6. This Agreement shall be binding upon, and insure to the benefit of, the
Guarantor, the Bank and their respective legal representatives,
successors and assigns.
7. The validity, interpretation, enforcement and effect of this Agreement
shall be governed by, and construed according to the laws of, the State
of Alabama. The Guarantor consents that any legal action or proceeding
arising hereunder may be brought, at the election of the Bank, in the
Circuit Court of Jefferson County, of the State of Alabama, or in the
United States District Court for the Northern District of Alabama,
Southern Division, and assents and submits to the personal jurisdiction
of any such courts in any such action or proceeding.
8. GUARANTOR HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY ON ANY CLAIM,
COUNTERCLAIM, SETOFF, DEMAND, ACTION OR CAUSE OF ACTION ARISING OUT OF
OR IN ANY WAY PERTAINING OR RELATING TO THIS AGREEMENT OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH OR IN CONNECTION WITH THE TRANSACTIONS RELATED HERETO OR
THERETO OR CONTEMPLATED HEREBY OR THEREBY OR THE EXERCISE OF ANY RIGHTS
AND REMEDIES HEREUNDER OR THEREUNDER, IN ALL OF THE FOREGOING CASES
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE. GUARANTOR AGREES THAT BANK MAY FILE A
COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE
KNOWING, VOLUNTARY AND BARGAINED AGREEMENT OF GUARANTOR WITH BANK
IRREVOCABLY TO WAIVE TRIAL BY JURY, AND THAT ANY DISPUTE OR CONTROVERSY
WHATSOEVER BETWEEN THEM SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT
JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
9. In the event that any provision hereof is deemed to be invalid by
reason of the operation of any law or by reason of the interpretation
placed thereon by any court, this Agreement shall be construed as not
containing such provisions and the invalidity of such provisions shall
not affect other provisions hereof which are otherwise lawful and valid
and shall remain in full force and effect.
10. Any notice or payment required hereunder or by reason of the
application of any law shall be given and deemed delivered as provided
in the Credit Agreement, except no payment shall be deemed received
until the actual receipt thereof.
11. The failure at any time or times hereafter to require strict
performance by the Guarantor of any of the provisions, warranties,
terms and conditions contained herein or in any other agreement,
document or instrument now or hereafter executed by the Guarantor and
delivered to the Bank shall not waive, affect or diminish any right of
the Bank hereafter to demand strict compliance or performance therewith
and with respect to any other provisions, warranties, terms and
conditions contained in such agreements, documents and instruments, and
any waiver of any default shall not waive or affect any other
default, whether prior or subsequent thereto and whether of the same
or a different type. None of the warranties, conditions, provisions
and terms contained in this Agreement or in any agreement, document
or instrument now or hereafter executed by the Guarantor and delivered
to the Bank shall be deemed to have been waived by any act or
knowledge of the Bank, its agents, officers or employees, but only be
an instrument in writing, signed by an officer of the Bank, and
directed to Guarantor specifying such waiver.
12. The obligations of the Guarantor under this Agreement will continue to
be effective or be reinstated, as the case might be, if at any time any
payment from Borrower to the Bank of the Guaranteed Obligations is
rescinded or must otherwise be restored or returned by the Bank on the
insolvency, bankruptcy, dissolution, liquidation or reorganization of
Borrower or as a result of the appointment of a custodian, conservator,
receiver, trustee or other officer with similar powers with respect to
Borrower or any part of Borrower's property or otherwise. If an event
permitting the acceleration of the maturity of the Term Loan No.
2 has occurred and is continuing and such acceleration is at such time
prevented by reason of the pendency against Borrower of a proceeding
under any bankruptcy or insolvency law, the Guarantor agrees that,
for the purposes of this Agreement and the obligations of the
Guarantor under this Agreement, the maturity of the Term Loan No. 2
will be deemed to have been accelerated with the same effect
as if the Bank had accelerated the same in accordance with the
terms of the Credit Agreement, the Term Note No. 2 any of the other
Loan Documents or any other document executed in connection with
the Loans, and the Guarantor will immediately pay the unpaid balance
of the Term Loan No.2.
13. The Guarantor will, on demand, reimburse the Bank for all expenses
incurred by the Bank in connection with the preparation,
administration, amendment, modification or enforcement of this
Agreement, and if at any time hereafter the Bank employs counsel to
advise or provide other representation with respect to this agreement
or any other agreement, document or instrument heretofore now or
hereafter executed by the Guarantor and delivered to the Bank with
respect to the Borrower or the Guaranteed Obligations, or to commence,
defend or intervene, file a petition, complaint, answer, motion or
other pleadings or to take any other action in or with respect to any
suit or proceeding relating to this Agreement or any other agreement,
instrument or document heretofore, now or hereafter executed by the
Guarantor and delivered to the Bank with respect to the Borrower or
the Guaranted Obligaitons, or to represent the Bank in any
litigation with respect to the affairs of the Guarantor, or to enforce
any rights of the Bank or obigations of the Guarantor or any other
person, firm or coporation which may be obligated to the Bank by
virtue of this Agreement or any other agreement, document or instrument
heretofore, now or hereafter delivered to the Bank by or for the
benefit of the Guarantor with respect to the Borrower or the Guaranteed
Obligation, or to collect from Guarantor any amounts owing hereunder,
then in any such event, all of the reasonable attorneys' fees incurred
by the Bank arising from such services and any expenses, costs and
charges relating thereto shall constitute additional obligations of the
Guarantor payable on demand.
14. The Guarantor does hereby waive any rights of exemption of property
from levy or sale under execution or other process for the
collection of debts under the Constitution or laws of the United States
or any state thereof as to any of the obligations created hereunder.
15. This Agreement constitutes the entire agreement and supersedes all
prior agreements and understandings, both oral and written, between the
Guarantor and the Bank with respect to the subject matter hereof.
IN WITNESS WHEREOF, this instrument has been executed by the Guarantor
as of the day and year first above written.
CAVALIER HOMES, INC.
By:/s/ Xxxxxxx X. Xxxxxx
--------------------------------
Its: Vice President
STATE OF Alabama
COUNTY OF WINSTON
I, the undersigned, a Notary Public in and for said County in said
State, hereby certify that Xxxxxxx X. Xxxxxx, whose name as Vice
President of Cavalier Homes, Inc., a Delaware corporation, is signed to
the foregoing instrument, and who is known to me, acknowledged before
me that, being informed of the contents of such instrument, he, as such
officer and with full authority, executed the same voluntary for and as
the act of said corporation.
Given under my hand and official seal, this the 24th day of July, 1998.
/s/ Xxxxxxx Xxx Xxxxxxx (seal)
--------------------------------
Notary Public
AFFIX SEAL
My commission expires: My commission expires 2-4-2001
