CONTINUING GUARANTY AGREEMENT
THIS CONTINUING GUARANTY AGREEMENT ("this Guaranty") is made by the
undersigned (whether one or more, herein collectively called the "Guarantor")
with First Commercial Bank (herein called the "Bank"), an Alabama banking
corporation having its principal office located at 000 Xxxxxx Xxxxx Xxxxxxx,
Xxxxxxxxxx, Xxxxxxx, 00000;
WITNESSETH:
To induce Bank to make a loan or to extend credit or make other financial
products or services available to CAVALIER ACCEPTANCE CORPORATION (herein called
the "Borrower"), and in consideration therefor, and for other good and valuable
consideration, the receipt and sufficiency of which being hereby acknowledged,
Guarantor hereby agrees (and if more than one person signs this Guaranty as
Guarantor, each Guarantor jointly and severally agrees) with Bank as follows:
Guarantor hereby unconditionally guarantees to Bank the payment and
performance by Borrower of all of the Liabilities (as hereinafter defined). As
used herein, "Liabilities" means all debts and other obligations now owed to
Bank by Borrower, all debts and other obligations in the future owed to Bank by
Borrower, all extensions and renewals of any of such debts or obligations, and
all interest and other lawful charges on any or all of such debts and
obligations, including, but without limitation, late charges, penalty interest,
and costs of collection (including reasonable attorneys' fees) which Borrower
has agreed to pay to Bank, or for which Borrower has agreed to reimburse Bank,
or for which Borrower is obligated to Bank under applicable law, together with
each and every promissory note or other instrument or writing now or hereafter
evidencing the obligation of Borrower to pay any such debt, the interest
thereon, and such other charges; whether such debts or other obligations are now
foreseen or unforeseen; whether now due or to become due in the future; whether
incurred with or without notice to Guarantor; whether arising from contract,
overdraft on a deposit account or line-of-credit account, use of a credit card
or cards, tort or otherwise; whether arising from an original obligation of
Borrower to Bank or from an obligation of Borrower which was purchased by Bank
from another; whether from time to time increased, or reduced, or entirely
extinguished and then reincurred; whether direct or indirect, absolute or
contingent, or secured or unsecured; whether otherwise guaranteed or not; and
whether arising out of a loan of money or other extension of credit, a sale or
lease of goods, the issuance of a letter of credit or banker's acceptance, the
purchase, discount, acceptance or certification of a note or draft, any
combination of the foregoing, or otherwise. The Liabilities include, without
limitation, interest and other charges on any debt or obligation of Borrower to
Bank accruing after the filing of a petition under any chapter of the federal
Bankruptcy Code by or against Borrower and any loans or other credit or
financial products or services extended to Borrower after the filing of any such
petition. The Liabilities specifically are not limited to debts and other
obligations contracted for or arising concurrently with or prior to the
execution of this Guaranty and are not limited in amount unless otherwise
specifically set forth in writing on this Guaranty.
Notwithstanding the foregoing definition of Liabilities, if one of the
following boxes is checked, the obligation of the Guarantor with respect to the
Liabilities guaranteed hereunder shall be limited to:
[ ] the following described debt (including all renewals, extensions,
refinancings, amendments, substitutions or replacements) of the
Borrower:
[ ] the maximum principal amount of $_____ , plus interest, attorney's
fees and collection costs (including attorney's fees when
permitted by law), and all other amounts agreed to be paid under
this Guaranty. This principal amount may be applied to such debts
of the Borrower as may be selected from time to time by the Bank.
Guarantor further agrees (a) to pay to the Bank, in immediately available
funds at the Bank's address in Alabama set forth above (or at such other address
as Bank may direct), any and all of the Liabilities upon demand at any time
after maturity thereof (whether by acceleration or otherwise); (b) to be bound
by all of the terms and provisions appearing on the face of any instrument or
agreement evidencing, securing or executed in connection with any of the
Liabilities and of any renewal instrument or agreement (including any terms
waiving notice and agreeing to pay costs and expenses of collection in the event
of default) just as though Guarantor had signed such instrument or agreement;
and (c) that the Bank will not be required first to resort to the Borrower or
any other maker, endorser, surety guarantor or other Guarantor (each of the same
being hereinafter individually with the Borrower sometimes called an "Obligor")
or to the security pledged or granted to it by any instrument or agreement, or
otherwise assigned or conveyed to it, but in case of default in the payment of
any of the Liabilities, the Bank may forthwith look to the Guarantor for payment
under the provisions hereof.
Guarantor further agrees that the obligations of the Guarantor hereunder
are primary and direct, absolute, unconditional, present and continuing
guaranties of payment and not of collection, and shall not be subject to any
counterclaim, recoupment, set-off, reduction or defense based either upon any
claim that the Guarantor, or any of them, may have against the Borrower or the
Bank, or based upon any claim that the Borrower may have against the Bank, and
shall not be discharged, impaired, modified or otherwise affected by (a) the
unenforceability, non- existence, invalidity or non-perfection of (i) any of the
Liabilities, (ii) any instrument or agreement evidencing, guaranteeing or
securing the Liabilities, or any part thereof; (c) Bank's resort or failure or
refusal to resort to any other security or remedy for the collection of the
Liabilities, or any part thereof; (d) the sale, exchange, release or surrender
of any collateral or other security for the Liabilities, or any part thereof;
(e) the death, insolvency or bankruptcy of any Obligor or the failure of the
Bank to file a claim against such deceased or bankrupt Obligor's estate for the
amount of such Obligor's liability or obligation to the Bank; (f) any
modification, amendment, supplement or change in the status or terms of any of
the Liabilities or any collateral or other security for the Liabilities, or any
part thereof; (g) any default by the Borrower in payment of any of the
Liabilities; (h) any compromise, settlement, release, discharge, termination,
waiver or extension of time for payment, performance or observance of, any
obligation of any Obligor with respect to any of the Liabilities; (i) the
application of any payments, proceeds of collateral or other sums to any of the
Liabilities in such order as the Bank may elect; (j) any exercise or
non-exercise of any right, remedy, power or privilege of the Bank with respect
to any of the Liabilities or any collateral or other security therefor; (i) any
failure, omission, delay or lack of diligence on the part of the Bank to enforce
assert or exercise any such right, power, privilege or remedy; or (l) any other
event, circumstance or condition, whether or not the Guarantor, or any of them,
shall have notice or knowledge thereof.
Guarantor further agrees that it shall not be necessary for the Bank to
give any Guarantor notice of, or to obtain consent or approval of any Guarantor
in connection with (a) the making of any advances or any extensions of credit or
the terms thereof, or of any renewal or extension of or other modification with
respect to the Liabilities, or any part thereof; (b) any of the matters
described in clauses (a) through (l) of the preceding paragraph; or (c) the
Bank's acceptance of and reliance on this Guaranty. The terms hereof shall inure
to the benefit of the successors and assigns of the Bank and shall be binding,
jointly and severally, upon the Guarantor, its heirs, executors, administrators,
successors and assigns.
Guarantor hereby irrevocably: (a) waives and relinquishes any right of
subrogation or other right or reimbursement from the Borrower or the Borrower's
estate, and any other right of payment from the Borrower or the Borrower's
estate, arising out of or on account of any sums paid or agreed to be paid by
Guarantor under this Guaranty, whether any such right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, secured, or unsecured; (b) agrees that if at any time all or any
part of any payment previously applied by the Bank to any of the Liabilities
must be returned by Bank for any reason, whether upon the claim of a preference,
fraudulent transfer, or other claim of a debtor-in-possession, trustee in
bankruptcy, or other representative of creditors of Borrower, or otherwise, and
whether by court order, administrative order, or non-judicial settlement, this
Guaranty shall continue in effect or shall be reinstated, as the case may be,
and Guarantor shall remain liable for the full amount returned as if such amount
had never been received by the Bank, notwithstanding any termination of this
Guaranty or cancellation of any promissory note or other instrument or agreement
evidencing or securing any of the Liabilities; (c) agrees that the liability of
the Guarantor under this Guaranty shall not be affected or impaired by, and this
Guaranty shall remain fully enforceable against Guarantor for the full amount of
the Liabilities less only payments thereon actually received and retained by
Bank irrespective of and without reduction on account of: (i) any defenses which
Borrower may have or assert with respect to any of the Liabilities, including,
but without limitation, filing of a petition in bankruptcy, discharge in
bankruptcy, confirmation of a plan of reorganization (whether Bank voted for or
against such plan), composition with creditors (whether or not including Bank),
failure of consideration, breach of warranty, statute of frauds, statute of
limitations, accord and satisfaction, waiver, estoppel, release, usury, or fraud
or misrepresentation; or (ii) death or incompetency of Borrower.
Neither any failure nor any delay on the part of the Bank in exercising
any right, power or privilege under this Guaranty shall operate as a waiver
thereof, nor shall a single or partial exercise thereof preclude any other or
further exercise or the exercise of any other right, power or privilege. No
modification, amendment or waiver of any provision of this Guaranty shall be
effective unless in writing and signed by a duly authorized officer of the Bank,
and then the same shall be effective only in the specific instance and for the
purpose for which given. No notice to or demand on the Guarantor in any case
shall entitle the Guarantor to any other or further notice or demand in the
same, similar or other circumstances.
Guarantor further agrees that, in the event the Bank grants to the
Borrower one or more extensions or renewals of any of the Liabilities, or any
part thereof, or permits or requires any other modification in any of the terms
of the Liabilities or any part thereof, in any manner which may be acceptable to
the Bank, with or without notice to Guarantor, this Guaranty shall, and is
hereby made to extend to and cover such extended, renewed or modified
Liabilities, on whatever terms and conditions the same may be extended, renewed
or modified, and without regard to the number of time or the manner in which the
same may have been or shall be extended, renewed or modified.
Guarantor further agrees to indemnify and hold the Bank harmless against
any loss or expense, including reasonable attorneys' fees and disbursements,
that may result from any failure of any Obligor to pay any of the Liabilities
when and as due and payable, or that may be incurred by or on behalf of the Bank
in enforcing or attempting to enforce payment of any of the Liabilities against
Guarantor or any of the Obligors. Without limiting the generality of the
foregoing, Guarantor specifically agrees to be liable to the Bank for reasonable
attorneys' fees in the event any claim under this Guaranty is referred after
default in the Liabilities to an attorney for collections, and in connection
therewith, Guarantor and Bank agree that a reasonable attorneys' fee shall be
not less than 15% of the unpaid balance of the Liabilities after default, and
that a reasonable attorneys' fee may be a greater amount when warranted by the
circumstances or requirements applicable to the particular situation.
In addition to all liens upon, and rights of set-off against, any moneys,
securities or other property of Guarantor given to the Bank by law, the Bank
shall have a lien upon and a right of set-off against all moneys, securities and
other property of Guarantor now or hereafter in the possession of, or on deposit
with the Bank, whether held in a general or special account or deposit, for
safekeeping or otherwise; and every such lien and right of set-off may be
exercised without demand upon or notice to Guarantor.
Guarantor further agrees that this Guaranty shall remain in full force and
effect until revoked or terminated by a written instrument, signed by Guarantor
and delivered to the Bank and acknowledged in writing by the Bank, and, even
after any such revocation or termination, this Guaranty shall be and remain
effective as to any Liabilities then outstanding; and that this Guaranty shall
not be construed as being terminated by payment in full of the Liabilities to
the Bank, if, thereafter, in the absence of written revocation or termination by
Guarantor acknowledged by the Bank, the Borrower obtains or incurs additional or
new Liabilities.
Guarantor hereby wholly subordinates all claims which Guarantor may now or
hereafter have against Borrower to all debts and other obligations which
Borrower may now or hereafter owe to Bank, and assigns all such claims to Bank
as additional collateral for the Liabilities. This agreement of subordination
and assignment shall survive the termination of this Guaranty, and shall remain
in effect until all Liabilities existing on the date of such termination,
whether or not then due, and all interest then accrued and thereafter accruing
thereon, together with all expenses, including collection costs and attorneys'
fees, are paid and performed in full. Until full payment and performance are
made, Guarantor agrees not to accept any payment or satisfaction of any kind on,
or any security for, any of the claims hereby subordinated. If Guarantor should
receive any such payment or security, Guarantor agrees to deliver the same
immediately to Bank in the form received, endorsed or assigned to Bank or in
blank as Bank may require, for application on account of, or as security for,
the Liabilities. Until such payment or security is delivered to Bank, Guarantor
agrees to hold the same in trust for Bank. At the request of Bank, Guarantor
agrees to cause Borrower to xxxx Borrower's records to indicate that; the claims
of Guarantor against Borrower are subordinate to the Claims of Bank against
Borrower and have been assigned to Bank as collateral. If at any time any of the
claims hereby subordinated is evidenced by any promissory note, chattel paper,
or other instrument or writing, Guarantor agrees to affix to every such writing,
in form and manner satisfactory to Bank, a statement that the writing is subject
to the terms of this Guaranty and, upon request of Bank, agrees to endorse and
deliver any such writing to Bank as additional collateral for the Liabilities.
Bank will not be under any duty to take any action in connection with any such
writing and will not be responsible in any respect in connection therewith,
whether for any action it may take or refrain from taking against prior parties
thereto or otherwise, except to use reasonable care in the custody of the
writing, and except for willful misconduct of its employees. In the event
Borrower at any time defaults in the payment of any debt owing to Bank when due,
whether by acceleration of maturity or otherwise, Bank may, in its own name or
that of Guarantor, compromise, collect, xxx on, and give receipt for all claims
hereby assigned by Guarantor. If Borrower files or has filed against it a
petition under any chapter of the Bankruptcy Code, Bank may file proofs of
claims in its own name with respect to the claims hereby assigned and may vote
such claims in the bankruptcy proceedings.
The terms "Guarantor" as used herein refers to each of the undersigned,
whether one or more natural persons, corporation, associations, partnerships or
other entities.
This agreement shall be governed by, and construed in accordance with, the
laws of the United States and the State of Alabama. Each Guarantor acknowledges:
(a) that payments to the Bank by the Borrower and the Guarantor are to be made
to the Bank in Alabama; (b) that failure of the Borrower or the Guarantor to
make such payment will have a substantial impact on the economy of the State of
Alabama; (c) that the Bank is organized under the laws of, and/or has its main
office located in the State of Alabama; and (d) that it is foreseeable and
expected by each Guarantor that: (i) the Guarantor will be held accountable on
this Guaranty in the State of Alabama, and (ii) the Bank will enforce its rights
against the Guarantor in the State of Alabama. Each Guarantor submits to
jurisdiction in the State of Alabama for any cause of action or action arising
out of or in connection with this Guaranty and agrees that venue for any such
action shall be proper in the county of the main office of the Bank. Each
Guarantor hereby waives any and all rights under the laws of any state or
jurisdiction to object to venue or jurisdiction within such county.
Witness the signatures and seals of the undersigned on this 31st day of
March, 2000.
CAVALIER HOMES, INC.
By: Xxxxxxx X. Xxxxxx
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Its: Vice President
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[Corporate Seal]
Witnessed By:
________________________
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