Exhibit 10.12
UNCONDITIONAL AND CONTINUING GUARANTY
AND INDEMNITY AGREEMENT
This Unconditional and Continuing Guaranty and Indemnity Agreement (the
"Guaranty") is made and entered into as of August 20, 1998 by and between
XXXXXXX HOMEBUILDERS INCORPORATED, a Florida corporation (hereinafter referred
to as the "Guarantor") and OHIO SAVINGS BANK, a federal savings bank, 200 Ohio
Savings Plaza, 0000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000 (hereinafter
referred to as the "Bank").
W I T N E S S E T H
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WHEREAS, the Bank has agreed to loan to Xxxxxxx Malibu Bay, Inc., a Florida
corporation, Xxxxxxx at Deerfield Beach, Inc., a Florida corporation, Xxxxxxx
Forest Lakes Villas, Inc., a Florida corporation, Xxxxxxx at Harmony Lakes,
Inc., a Florida corporation, and Xxxxxxx at Windsor Palms, Inc., a Florida
corporation (collectively, the "Borrower"), in one or more loans for the
construction of single family attached (townhouse) residential dwellings within
the residential Subdivisions or Projects described in Exhibit "A" attached
hereto and incorporated herein, in the aggregate amount of Thirty Two Million
Eighty Thousand Four Hundred Thirteen and no/100 Dollars ($32,080,413.00) (U.S.)
in the aggregate outstanding at any one time, pursuant to one or more promissory
notes (collectively referred to as the "Loan"), and the Borrower has executed
and delivered or will execute and deliver to the Bank one or more Mortgage Notes
in an aggregate principal amount not exceeding the amount of the Loan
(collectively the "Notes" and individually a "Note") and has also executed and
delivered or will execute and deliver to the Bank in connection therewith
certain Loan Agreements (collectively the "Agreements" and individually an
"Agreement") and has also executed and delivered or will execute and deliver to
the Bank certain Mortgage and Security Agreements for the purpose of securing
said Notes and Agreements (collectively the "Mortgages" and individually a
"Mortgage");
WHEREAS, the Bank has conditioned the making of the Loan upon receipt of this
Guaranty, and the Guarantor desires that the Bank make the aforesaid Loan and is
willing to enter into this Guaranty as an inducement to the Bank to make the
Loan and in order to achieve interest and other savings to the Borrower, which
will be of financial benefit to the Guarantor;
NOW, THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, the Guarantor does hereby covenant and
agree with the Bank as follows:
ARTICLE I
Representations and Warranties of the Guarantor
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Guarantor hereby represents and warrants that:
(a) it (i) is a corporation duly organized, validly existing and in good
standing under the laws of the State of Florida, (ii) has full power and
authority to enter into, execute, deliver and perform its obligations
hereunder, (iii) is duly qualified and authorized to do business in every
jurisdiction in which the nature of its business or its properties makes
such qualification necessary, (iv) has duly authorized the execution,
delivery and performance of this Guaranty, and (v) is not in violation of
any law, statute, regulation, ordinance, judgment, decree, order, rule or
regulation of any court or governmental authority applicable to it if
such noncompliance would have a material adverse effect upon the
Guarantor, this Guaranty, any of the transactions contemplated hereby, or
the Guarantor's ability to perform its obligations hereunder;
(b) this Guaranty has been duly executed and delivered on behalf of the
Guarantor and constitutes the legal, valid and binding obligation of the
Guarantor enforceable in accordance with its terms, subject only to
bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting the rights of creditors generally, and except that the
availability of equitable remedies is subject to applicable equitable
principles;
(c) the execution and delivery by the Guarantor of this Guaranty and the
consummation of the transactions contemplated thereby do not, and the
performance of the Guarantor's obligations hereunder will not (i)
conflict with or result in a violation or breach of or a default under
(a) the Articles of Incorporation, By-laws or similar organizational
documents of Guarantor, (b) any agreement, lease, mortgage, indenture or
any other contract or instrument to which Guarantor is a party or by
which it or any of its property is bound, or (c) any law, statute,
ordinance, rule, regulation, writ, order, judgment or decree to which it
is a party or by which it or any of its property is bound, nor (ii)
result in the creation or imposition of any lien, charge or encumbrance
of any nature whatsoever upon any of its properties or assets;
(d) there are no actions, suits, restraining orders, injunctions,
investigations, proceedings or inquiries at law or in equity, pending or
threatened, by or before any judicial, quasi-judicial, legislative or
administrative court, agency or authority, or any arbitrator, nor to the
best of its knowledge any basis for any of the foregoing, wherein an
unfavorable determination, ruling or finding would materially adversely
affect the validity or enforceability of the Guaranty, or any of the
transactions contemplated hereby, or the business, financial condition or
assets of Guarantor;
(e) the assumption by Guarantor of its obligations hereunder will result in
direct financial benefit to Guarantor; and
(f) the Borrower shall make full and prompt payment of the principal,
interest, premiums, penalties and late charges, if any, and other amounts
required to be paid by Borrower pursuant to each Note, Agreement and/or
Mortgage, and all renewals, replacements, extensions and/or modifications
thereof, when and as the same shall become due, whether at the stated
maturity thereof, by acceleration or otherwise, and the Borrower
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shall fully and promptly perform all other obligations, if any, required
to be performed by the Borrower pursuant to each Note, Agreement and/or
Mortgage, and all renewals, replacements, extensions and/or modifications
thereof, when the same shall become due, including any such amounts
thereafter paid by the Bank to any trustee, receiver or any other person
pursuant to any bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or conveyance or similar statute, common law or
equitable doctrine.
ARTICLE II
Covenants and Warranties
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Section 2.1. The Guarantor hereby absolutely and unconditionally guarantees
to the Bank (a) the full and prompt payment of the principal, interest,
premiums, penalties and late charges, if any, and other amounts required to be
paid by Borrower pursuant to each Note, Agreement and/or Mortgage, and all
renewals, replacements, extensions and/or modifications thereof, when and as the
same shall become due, whether at the stated maturity thereof, by acceleration
or otherwise, and (b) the full and prompt performance of all other obligations,
if any, required to be performed by the Borrower pursuant to each Note,
Agreement and/or Mortgage, and all renewals, replacements, extensions and/or
modifications thereof, as and when the same shall become due, including any such
amounts thereafter paid by the Bank to any trustee, receiver or any other person
pursuant to any bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or conveyance or similar statute, common law or equitable doctrine.
Section 2.2. If any obligation of Guarantor under the guarantee in Section
2.1 above is at any time and for any reason void or unenforceable, the
Guarantor, as an additional and independent obligation, hereby agrees to
indemnify and hold harmless Bank against and from any and all loss, cost, damage
or expense (including attorneys' fees in all trial, bankruptcy and appellate
proceedings, and whether or not litigation has been commenced) suffered or
incurred by Bank as a result of any such obligation being void or unenforceable
against Guarantor, and the Guarantor expressly agrees that in such event the
Guarantor shall be liable to the Bank as principal obligor on each Note, the
Agreement and Mortgage to the same extent as if Guarantor had been the original
signer and obligor thereof and said instruments were fully enforceable as
written against said Guarantor.
Section 2.3. The obligations of Guarantor under this Guaranty shall be
absolute and unconditional and shall remain in full force and effect and shall
not be discharged, affected, modified or impaired upon the happening from time
to time of any event, including, without limitation, any of the following,
whether or not with notice to or the consent of the Guarantor:
(a) the waiver, compromise, settlement, release, termination, modification or
amendment (including extending the time for payment or performance) of
any or all of the obligations, covenants or agreements of the Borrower or
any obligor under any Note, Agreement or Mortgage or of any or all of the
obligations, covenants or agreements of any other guarantor of the Loan;
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(b) the failure to give notice to Guarantor of the occurrence of a default
under the terms and provisions of any Note, Agreement or Mortgage;
(c) the release by the holder of any Note of any security held by it for the
payment of any amount due pursuant thereto or to this Guaranty, or of the
liabilities or obligations of the Borrower with respect thereto (whether
with or without consideration), or the acceptance by the holder of any
Note of any additional security for any such payments or obligations or
the availability or claimed availability of any other security,
collateral or source of payment therefor;
(d) the voluntary or involuntary liquidation, dissolution, sale or other
disposition of all or substantially all the assets, marshalling of assets
and liabilities, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition with
creditors or readjustment of, or other similar proceedings affecting the
Guarantor or the Borrower or any of their assets;
(e) Any merger or consolidation involving Borrower, any sale, assignment,
transfer, conveyance or issuance of any stock or any other equity
interest by Borrower, or any sale, assignment, transfer or conveyance by
Guarantor or any other person of all or any part of his interest in
Borrower or any affiliate of Borrower;
(f) any failure, omission or delay by the Bank in enforcing, asserting or
exercising any right, power or remedy under any Note, Agreement or
Mortgage, this Guaranty, or at law or in equity;
(g) to the extent permitted by law, any event or action that would, in the
absence of this clause, result in the release or discharge of the
Guarantor from the performance or observance of any obligation, covenant
or agreement contained in this Guaranty;
(h) any assignment or transfer by the Bank or any other person entitled to
the benefit of this Guaranty of all or any interest in any Note without
the express assignment of this Guaranty; or
(i) the invalidity or unenforceability of any term or provision in any Note,
Agreement, Mortgage or this Guaranty.
Without limiting the foregoing, it is the intention of the parties that any
modification, limitation, or discharge of the obligations of the Guarantor
arising out of or by virtue of any bankruptcy, reorganization or similar
proceeding for relief of debtors under Federal or state law shall not affect,
modify, limit, or discharge the liability of any other guarantor of the Loan in
any manner whatsoever, and this Guaranty shall remain and continue in full force
and effect and shall be enforceable against Guarantor to the same extent and
with the same force and effect as if any such proceedings had not been
instituted; and the Guarantor shall be liable to the Bank under this Guaranty
for the full amount payable hereunder irrespective of any modification,
limitation, or discharge of the liability of any other guarantor that may result
from any such proceeding. The Guarantor's obligations to Bank pursuant hereto
include and apply to any payment or payments received by Bank on account of the
liabilities guaranteed hereby, which payment or payments or
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any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be paid to a trustee, receiver, or
any other person or entity under any bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or conveyance or similar law, common law or
equitable doctrine. The Guarantor's obligations to Bank and this Guaranty, and
any security therefor, shall remain in full force and effect (or be reinstated)
until Bank has received payment in full of all amounts payable to it pursuant to
the Notes, Agreements, Mortgages and this Guaranty and the expiration of any
applicable preference or similar period pursuant to any bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or conveyance or similar law, or
at law or equity, without any claim to all or any part of any such payment being
made before the expiration of such period. If any action or proceeding seeking
such repayment is pending or, in Bank's sole judgment, threatened, this Guaranty
and any security interest therefor shall remain in full force and effect
notwithstanding that Borrower or Guarantor may not then be otherwise obligated
to Bank.
Section 2.4. No set-off, counterclaim, reduction or diminution of any
obligation, or any defense of any kind or nature which Guarantor has or may have
against the Borrower shall affect, modify or impair its obligations hereunder.
Section 2.5. In the event of a default in the payment of the principal,
penalties and late charges, if any, or interest on any Note when and as the same
shall become due, whether at the stated maturity thereof, by acceleration or
otherwise, or in the event of any Event of Default under any Mortgage or
Agreement or any instrument collateral or supplemental thereto, the Bank may
proceed first and directly against the Guarantor without proceeding first or
concurrently against the Borrower or exercising, pursuing or exhausting any
other rights, powers or remedies which it may have and without resorting to any
other security held or available to it.
Section 2.6. This Guaranty shall constitute a continuing guarantee, and the
Bank may continue, without notice to the Guarantor, to make loans to the
Borrower subsequent to the date of this Guaranty. The Guarantor hereby
expressly waives notice in writing, or otherwise, from the Bank at any time or
from time to time of its acceptance and reliance on this Guaranty. The
Guarantor also waives presentment, demand for payment, protest and notice of
nonpayment or dishonor relating to any Note or this Guaranty and all other
notices to which the undersigned might otherwise be entitled by law. The
Guarantor agrees to pay all costs, expenses and fees, including all reasonable
attorneys' fees (whether in trial, appellate, bankruptcy or other proceedings),
which may be incurred in enforcing or attempting to enforce this Guaranty,
whether the same shall be enforced by suit or otherwise.
Section 2.7. All rights and claims of Guarantor (collectively the "Guarantor
Claims") against Borrower or any of Borrower's property, now or hereafter
existing, shall be subordinate and subject in right of payment to the prior
payment in full of Borrower's and Guarantor's obligations to Bank. Until such
obligations have been paid in full and Guarantor shall have performed all of its
obligations hereunder, Guarantor shall not receive or collect, directly or
indirectly, from Borrower or any other party any payment upon the Guarantor
Claims nor seek to realize upon any collateral securing any such Guarantor
Claim. Notwithstanding the foregoing, if Guarantor should receive any such
payment, Guarantor agrees to hold same in trust for Bank, and agrees that it
shall have absolutely no rights in or to such payments except to pay them
promptly to Bank, and Guarantor hereby covenants to do so. Guarantor will not
assert any right to which it
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may be or may become entitled, whether by subrogation, contribution or
otherwise, against the Borrower or against its properties, by reason of the
performance by the Guarantor of its obligations under this Guaranty, except
after satisfaction and discharge in full of the obligations to Bank under the
Notes, the Agreement, Mortgage and this Guaranty.
Section 2.8. Guarantor shall at all times during the term of the Loan (i)
own all of the outstanding stock of the Borrower; (ii) maintain its common stock
effectively registered under the Securities Exchange Act of 1934; (iii) maintain
at all times a tangible net worth as hereinafter defined ("Tangible Net Worth")
of not less than $3,500,000.00 (which requirement may be adjusted by Bank twelve
(12) months after the date hereof and each anniversary thereafter); and (iv)
have thirty five percent (35%) of its common stock issued and outstanding
individually owned of record by Xxxxx Xxxxxxx, including shares owned by Xxxxx
Xxxxxxx indirectly through his ownership interest in HAI Capital, Ltd. Bank
agrees to reduce the ownership requirement in clause (iv) to thirty percent
(30%), provided all of Guarantor's other lenders also reduce the ownership
covenants in their lending agreements to thirty percent (30%).
Tangible Net Worth is defined as the excess of the consolidated net book
value (after deducting all amounts due from subsidiaries and affiliates, if any,
all applicable reserves and any value attributable to the re-appraisal or write-
up of any asset) of assets of Guarantor and its subsidiaries (other that
patents, copyrights, trademarks, franchises, licenses, goodwill, customer lists,
employees, and similar intangibles, treasury stock and amounts due from
directors, stockholders or affiliates) over all their liabilities (other than
nonrecourse financing to Guarantor not to exceed $2,000,000.00 in the aggregate)
as determined on an accrual basis and in accordance with generally accepted
accounting principles consistently applied.
Within thirty (30) days after the close of each fiscal quarter of Guarantor,
Guarantor shall deliver to Bank a Certificate in a form reasonably acceptable to
Bank and substantially similar to the form of Certificate attached hereto as
Exhibit "A", signed by the chief executive or chief financial officer of
Guarantor, certifying Guarantor's compliance with the financial covenants
contained in this Section 2.8 as of the end of such fiscal quarter, and
containing the data (dollar amounts, ratios, identity and equity interest in
each subsidiary of Guarantor).
Section 2.9. Not later than ninety (90) days after the close of each fiscal
year of Guarantor, Guarantor shall furnish to Bank a Certificate from the
auditors of Guarantor, (i) briefly setting forth the scope of their review which
shall include a review of the relevant provisions of Guarantor's Agreements with
its lenders and stating that in their judgment such review is sufficient to
enable them to give the Certificate, and (ii) stating whether or not their
review has disclosed the existence of any condition or event which constitutes
an Event of Default under any such Agreements, or which, with the passage of
time or service of notice or both, would constitute such an Event of Default,
and, if their review has disclosed such a condition or event, specifying the
nature and period of the existence thereof.
Section 2.10. Guarantor shall deliver to Bank complete copies (with all
schedules and exhibits) of each of the Form 10-K Annual Reports and Form 10-Q
Quarterly Reports filed by Guarantor with the United States Securities and
Exchange Commission (the "SEC") no later than five (5) business days following
the earlier of actual delivery to the SEC or the last date of timely
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filing thereof with the SEC or within any legally permitted unconditional
extension up to a maximum of thirty (30) days.
Section 2.11. Guarantor shall pay no cash dividends without the prior
written consent of Bank.
Section 2.12. Xxxxx Xxxxxxx shall remain chief executive officer of
Guarantor at all times during the term of the Loan.
ARTICLE III
Miscellaneous
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Section 3.1. Guarantor will keep complete, accurate and proper books of
record and account in accordance with generally accepted accounting principles
consistently applied and will promptly furnish to the Bank such information
respecting its business affairs, operations and financial condition as Bank may
reasonably request.
Section 3.2. This Guaranty shall be binding upon the Guarantor, and its
successors and assigns, and shall inure to the benefit of the Bank, its
successors and assigns, all of whom shall be entitled to enforce performance and
observance of this Guaranty and of the guarantees and other provisions herein
contained to the same extent as if they were parties signatory hereto. All
references herein to the Bank shall apply to its successors and assigns.
Section 3.3. The terms of this Guaranty may be enforced as to any one or
more breaches either separately or cumulatively. Each and every default
hereunder shall give rise to a specific cause of action hereunder and separate
suits may be brought hereunder as each cause of action arises.
Section 3.4. All notices, demands and requests which are permitted or
required pursuant hereto, shall be in writing and shall be deemed effective at
the earliest of (a) when actually delivered to the address of the party to
receive such notice set forth below, (b) at 2:00 P.M. on the next business day
after deposit with a nationally recognized overnight courier service for next
day delivery, with all charges prepaid, or (c) at 6:00 P.M., Eastern Time, on
the second business day after deposit in any post office or mail receptacle
regularly maintained by the United States government for such purposes,
certified or registered mail, return receipt requested, postage prepaid,
addressed as follows:
If to Bank: Ohio Savings Bank
200 Ohio Savings Plaza
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
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Attn: Xxxxx X. Xxxxxxxx,
Senior Vice President
If to Guarantor: Xxxxxxx Homebuilders Incorporated
0000 Xxxxxxxxx 000xx Xxxxxx, Xxxxx 000
Xxxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxxxx, President
or other such place in the continental United States as Bank or Guarantor,
respectively, may from time to time designate by written notice to the other as
provided below.
Section 3.5. No remedy herein conferred upon or reserved to the Bank
hereunder is intended to be exclusive of any other available remedy or remedies,
but each and every such remedy shall, to the extent permitted by law, be
cumulative and in addition to every other remedy given under this Guaranty or
now or hereafter existing at law or in equity or by statute. No delay, failure
or omission to exercise any right, power or remedy accruing upon any default,
omission or failure of performance hereunder shall impair any such right, power
or remedy or shall be construed to be a waiver thereof, and any such right,
power or remedy may be exercised from time to time and as often as may be deemed
expedient. In order to entitle the Bank to exercise any remedy reserved to it
in this Guaranty, it shall not be necessary to give any notice, other than such
notice as may be herein expressly required. In the event any provision
contained in this Guaranty shall be breached by any party and thereafter duly
waived by the other party so empowered to act, such waiver shall be limited to
the particular breach so waived and shall not be deemed to waive any other or
subsequent breach hereunder. No waiver, amendment, release or modification of
this Guaranty shall be established by conduct, custom, or course of dealing, but
solely by an instrument in writing duly executed by the parties hereto.
Section 3.6. This Guaranty, together with the Notes, the Agreements, the
Mortgages, and all other agreements collateral thereto, constitutes the entire
agreement and understanding and supersedes all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof.
Section 3.7. If any clause, provision or section of this Guaranty be
determined illegal, invalid or unenforceable by any court, the illegality or
unenforceability of such clause, provision, or section shall not affect any of
the remaining clauses, provisions or sections hereof, and this Guaranty shall be
construed and enforced as if such illegal, invalid or unenforceable clause,
provision or section had not been contained herein. If any obligation, covenant
or agreement contained in this Guaranty be held to be in violation of law, then
such obligation, covenant or agreement shall be deemed to be the obligation,
covenant or agreement of the Guarantor to the full extent permitted by law.
Section 3.8. This Guaranty shall be deemed to be a contract made under the
laws of the State of Florida and for all purposes shall be governed by and
construed in accordance with the laws of said State, and the undersigned hereby
submits and consents to personal jurisdiction in any state or federal court in
the State of Florida in connection with any claim, allegation, cause of action
or proceeding relating in any way to this Guaranty.
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Section 3.9. Whenever any pronoun is used herein, it shall be construed to
include the masculine pronoun, the feminine pronoun or the neuter pronoun as
shall be appropriate.
Section 3.10. THE UNDERSIGNED WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING BASED UPON, OR RELATED TO, ANY ASPECT OF THE TRANSACTION IN
CONNECTION WITH WHICH THIS DOCUMENT IS BEING GIVEN OR ANY DOCUMENT EXECUTED OR
DELIVERED IN CONNECTION WITH SUCH TRANSACTION. THIS WAIVER IS KNOWINGLY,
INTENTIONALLY AND VOLUNTARILY MADE BY THE UNDERSIGNED AND THE UNDERSIGNED
ACKNOWLEDGES THAT NO ONE HAS MADE ANY REPRESENTATIONS OF FACT TO INDUCE THIS
WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. THE
UNDERSIGNED FURTHER ACKNOWLEDGES HAVING BEEN REPRESENTED IN CONNECTION WITH THE
TRANSACTION WITH RESPECT TO WHICH THIS DOCUMENT IS BEING GIVEN AND IN THE MAKING
OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED BY THE UNDERSIGNED'S OWN
FREE WILL, AND THAT THE UNDERSIGNED HAS HAD THE OPPORTUNITY TO DISCUSS THIS
WAIVER WITH SUCH COUNSEL. THE UNDERSIGNED FURTHER ACKNOWLEDGES HAVING READ AND
UNDERSTOOD THE MEANING AND RAMIFICATIONS OF THIS WAIVER PROVISION.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed to
be effective as of the date first above written.
WITNESSED: GUARANTOR:
WEITZERHOMEBUILDERSINCORPORATED
a Florida corporation
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Name Printed:
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By:
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Xxxxx Xxxxxxx, President
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Name Printed:
-------------------
Accepted as of the date first above written
OHIO SAVINGS BANK
By:
Xxxxx X. Xxxxxxxx
Senior Vice President
STATE OF FLORIDA )
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)
COUNTY OF MIAMI-DADE )
BEFORE ME, a Notary Public in and for said County and State, on this
_______ day of August, 1998, personally appeared the above-named Xxxxxxx
Homebuilders Incorporated, a Florida corporation, by Xxxxx Xxxxxxx, its
President, who acknowledged that he did sign the foregoing instrument on behalf
of said corporation, and that such signing was his free act and deed,
individually and as such officer, and the free act and deed of said corporation.
He is personally known to me or has produced ___________________________________
as identification.
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Print Name:
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(SEAL) Notary Public, State of Florida at Large
My Commission Expires:
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