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EXHIBIT 10.12
GUARANTY AGREEMENT
------------------
(LIMITED)
WHEREAS, the execution of this Guaranty Agreement (this "Guaranty
Agreement") is a condition to SERVICE ASSET INVESTMENT, INC., a Texas
corporation ("Borrower"), borrowing from GUARANTY FEDERAL BANK, F.S.B., a
federal savings bank ("Lender"), a term loan in the aggregate principal amount
of $10,000,000 pursuant to that certain Loan Agreement dated March 30, 2000, as
amended of even date herewith (such Loan Agreement, as it may have been or may
hereafter be amended or modified from time to time, being hereinafter referred
to as the "Loan Agreement") between Borrower and Lender;
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, ROGER J. ENGEMOEN, JR., an individual residing at
1501 Barclay Drive, Austin, Texas 78746 (the "Guarantor"), hereby irrevocably
and unconditionally guarantees to Lender, subject to the terms of this Guaranty
Agreement, the full and prompt payment and performance of the Guaranteed
Indebtedness (hereinafter defined), this Guaranty Agreement being upon the
following terms:
1. DEFINITION OF GUARANTEED INDEBTEDNESS. The term "Guaranteed
Indebtedness" as used herein means the Borrower's obligations under Term Loan C
(as defined in the Loan Agreement), provided that Guarantor's liability with
respect to such obligations shall be limited to an amount not to exceed
$2,600,000. All other capitalized terms used and not otherwise defined herein
shall have their respective meanings as set forth in the Loan Agreement.
2. ABSOLUTE GUARANTY; NO SET-OFF RIGHTS. This instrument shall be an
absolute, continuing, irrevocable, and unconditional guaranty of payment and
performance, and not a guaranty of collection, of the Guaranteed Indebtedness as
provided herein, and the Guarantor shall remain liable on its obligations
hereunder until the payment and performance in full of the Guaranteed
Indebtedness. No set-off counterclaim, recoupment, reduction, or diminution of
any obligation, or any defense of any kind or nature which Borrower may have
against Lender or any other party, or the Guarantor may have against Borrower,
Lender, or any other party, shall be available to, or shall be asserted by, the
Guarantor against Lender or any subsequent holder of the Guaranteed Indebtedness
or any part thereof or against payment of the Guaranteed Indebtedness or any
part thereof.
3. NO IMPAIRMENT OF RIGHTS. If the Guarantor becomes liable for any
indebtedness owing by Borrower to Lender by endorsement or otherwise, other than
under this Guaranty Agreement, such liability shall not be in any manner
impaired or affected hereby, and the rights of Lender hereunder shall be
cumulative of any and all other rights that Lender may ever have against the
Guarantor. The exercise by Lender of any right or remedy hereunder or under any
other instrument, or at law or in equity, shall not preclude the concurrent or
subsequent exercise of any other right or remedy.
4. OBLIGATIONS OF GUARANTORS; NO DUTY TO EXHAUST REMEDIES; WAIVER OF
SUBROGATION. In the event of default by Borrower in payment or performance of
the Guaranteed Indebtedness, or any part thereof, when such Guaranteed
Indebtedness becomes due, whether by its terms, by acceleration, or otherwise,
Guarantor shall promptly pay the amount due thereon to Lender
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without notice or demand in lawful money of the United States of America and it
shall not be necessary for Lender, in order to enforce such payment by either
Guarantor, first to institute suit or exhaust its remedies against Borrower or
any other guarantor or others liable on such Guaranteed Indebtedness, or to
enforce any rights against any collateral which shall ever have been given to
secure such Guaranteed Indebtedness. Notwithstanding anything to the contrary
contained in this Guaranty Agreement, until such time as the Guaranteed
Indebtedness has been paid in full, Guarantor hereby irrevocably waives any and
all rights it may now or hereafter have under any agreement or at law or in
equity (including, without limitation, any law subrogating Guarantor to the
rights of Lender) to assert any claim against or seek contribution,
indemnification or any other form of reimbursement from Borrower or any other
guarantors or any other party liable for payment of any or all of the Guaranteed
Indebtedness for any payment made by Guarantor under or in connection with this
Guaranty Agreement or otherwise. If acceleration of the time for payment of any
amount payable by Borrower under the Guaranteed Indebtedness is stayed upon the
insolvency, bankruptcy, or reorganization of Borrower, all such amounts
otherwise subject to acceleration under the terms of the Guaranteed Indebtedness
shall nonetheless be payable by Guarantor hereunder forthwith on demand by
Lender.
5. NO IMPAIRMENT OF GUARANTOR'S OBLIGATIONS. Guarantor hereby agrees
that its obligations under this Guaranty Agreement shall not be released,
discharged, diminished, impaired, reduced, or affected for any reason or by the
occurrence of any event, including, without limitation, one or more of the
following events, whether or not with notice to or the consent of the Guarantor:
(a) the taking or accepting of collateral as security for any or all of the
Guaranteed Indebtedness or the release, surrender, exchange, or subordination of
any collateral now or hereafter securing any or all of the Guaranteed
Indebtedness; (b) any partial release of the liability of the Guarantor
hereunder, or the full or partial release of any other guarantor or obligor from
liability for any or all of the Guaranteed Indebtedness; (c) any disability of
Borrower, or the dissolution, insolvency, or bankruptcy of Borrower, the
Guarantor, or any other party at any time liable for the payment of any or all
of the Guaranteed Indebtedness; (d) any renewal, extension, modification,
waiver, amendment, or rearrangement of any or all of the Guaranteed Indebtedness
or any instrument, document, or agreement evidencing, securing, or otherwise
relating to any or all of the Guaranteed Indebtedness; (e) any adjustment,
indulgence, forbearance, waiver, or compromise that may be granted or given by
Lender to Borrower, the Guarantor, or any other party ever liable for any or all
of the Guaranteed Indebtedness; (f) any neglect, delay, omission, failure, or
refusal of Lender to take or prosecute any action for the collection of any of
the Guaranteed Indebtedness or to foreclose or take or prosecute any action in
connection with any instrument, document, or agreement evidencing, securing, or
otherwise relating to any or all of the Guaranteed Indebtedness; (g) the
unenforceability or invalidity of any or all of the Guaranteed Indebtedness or
of any instrument, document, or agreement evidencing, securing, or otherwise
relating to any or all of the Guaranteed Indebtedness; (h) any payment by
Borrower or any other party to Lender is held to constitute a preference under
applicable bankruptcy or insolvency law or if for any other reason Lender is
required to refund any payment or pay the amount thereof to someone else; (i)
the settlement or compromise of any of the Guaranteed Indebtedness; (j) the
non-perfection of any security interest or lien securing any or all of the
Guaranteed Indebtedness; (k) any impairment of any collateral securing any or
all of the Guaranteed Indebtedness; (l) the failure of Lender to sell any
collateral securing any or all of the Guaranteed Indebtedness in a commercially
reasonable manner or as otherwise required by law; (m) any change in the
GUARANTY AGREEMENT - Page 2
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corporate existence, structure, or ownership of Borrower; or (n) any other
circumstance which might otherwise constitute a defense available to, or
discharge of, Borrower or the Guarantor.
6. REPRESENTATIONS AND WARRANTIES. The Guarantor represents and
warrants to Lender as follows:
(a) The Guarantor has the power and authority and legal right
to execute, deliver, and perform its obligations under this Guaranty
Agreement and this Guaranty Agreement constitutes the legal, valid, and
binding obligation of the Guarantor, enforceable against the Guarantor
in accordance with its terms, except as limited by bankruptcy,
insolvency, or other laws of general application relating to the
enforcement of creditors' rights.
(b) The execution, delivery, and performance by the Guarantor
of this Guaranty Agreement do not and will not violate or conflict with
any law, rule, or regulation or any order, writ, injunction, or decree
of any court, governmental authority or agency, or arbitrator and do
not and will not conflict with, result in a breach of, or constitute a
default under, or result in the imposition of any lien upon any assets
of the Guarantor pursuant to the provisions of any indenture, mortgage,
deed of trust, security agreement, franchise, permit, license, or other
instrument or agreement to which the Guarantor or its properties is
bound.
(c) No authorization, approval, or consent of, and no filing or
registration with, any court, governmental authority, or third party is
necessary for the execution, delivery, or performance by the Guarantor
of this Guaranty Agreement or the validity or enforceability thereof.
(d) The value of the consideration received and to be received
by the Guarantor as a result of Lender making Term Loan C to Borrower
under the Loan Agreement and the Guarantor executing and delivering
this Guaranty Agreement is reasonably worth at least as much as the
liability and obligation of the Guarantor hereunder, and such liability
and obligation and the Loan Agreement have benefitted and may
reasonably be expected to benefit the Guarantor directly and
indirectly.
(e) The Guarantor has, independently and without reliance upon
Lender and based upon such documents and information as the Guarantor
has deemed appropriate, made its own analysis and decision to enter
into this Guaranty Agreement.
7. COVENANTS OF GUARANTOR. Guarantor covenants and agrees that, as long
as the Guaranteed Indebtedness or any part thereof is outstanding or Lender has
any commitment under the Loan Agreement:
(a) Guarantor will furnish promptly to Lender written notice of
the occurrence of any default under this Guaranty Agreement or an Event
of Default under the Loan Agreement of which Guarantor has knowledge.
GUARANTY AGREEMENT - Page 3
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(b) Guarantor will furnish promptly to Lender such additional
information concerning Guarantor as Lender may request.
(c) Guarantor will obtain at any time and from time to time
all authorizations, licenses, consents or approvals as shall now or
hereafter be necessary or desirable under all applicable laws or
regulations or otherwise in connection with the execution, delivery and
performance of this Guaranty Agreement and will promptly furnish copies
thereof to Lender.
(d) Guarantor will at all times own directly or indirectly and
free and clear of all liens and encumbrances whatsoever at least the
same percentage of voting shares of Borrower, if any, as it owns
directly or indirectly on the date hereof.
8. LENDER'S RIGHTS WITH RESPECT TO GUARANTOR'S PROPERTY IN LENDER'S
POSSESSION. Lender shall have the right to set off and apply against this
Guaranty Agreement or the Guaranteed Indebtedness or both, at any time and
without notice to Guarantor, any and all deposits (general or special, time or
demand, provisional or final) or other sums at any time credited by or owing
from Lender to Guarantor whether or not the Guaranteed Indebtedness is then due
and irrespective of whether or not Lender shall have made any demand under this
Guaranty Agreement. As security for this Guaranty Agreement and the Guaranteed
Indebtedness, Guarantor hereby grants Lender a security interest in all money,
instruments, certificates of deposit, and other property of Guarantor now or
hereafter held by Lender, including, without limitation, property held in
safekeeping. In addition to Lender's right of setoff and as further security for
this Guaranty Agreement and the Guaranteed Indebtedness, Guarantor hereby grants
Lender a security interest in all deposits (general or special, time or demand,
provisional or final) and all other accounts of Guarantor now or hereafter on
deposit with or held by Lender and all other sums at any time credited by or
owing from Lender to Guarantor. The rights and remedies of Lender hereunder are
in addition to other rights and remedies (including, without limitation, other
rights of setoff) which Lender may have.
9. SUBORDINATION. (a) Guarantor hereby agrees that the Subordinated
Indebtedness (as hereinafter defined) shall be subordinate and junior in right
of payment to the prior payment in full of all Guaranteed Indebtedness, and the
Guarantor hereby assigns the Subordinated Indebtedness to Lender as security for
the Guaranteed Indebtedness. If any sums shall be paid to the Guarantor by
Borrower or any other person or entity on account of the Subordinated
Indebtedness, such sums shall be held in trust by the Guarantor for the benefit
of Lender and shall forthwith be paid to Lender without affecting the liability
of the Guarantor under this Guaranty Agreement and may be applied by Lender
against the Guaranteed Indebtedness in such order and manner as Lender may
determine in its sole discretion. Upon the request of Lender, the Guarantor
shall execute, deliver, and endorse to Lender such documents and instruments as
Lender may request to perfect, preserve, and enforce its rights hereunder. For
purposes of this Guaranty Agreement, the term "Subordinated Indebtedness" means
all indebtedness, liabilities, and obligations of Borrower to the Guarantor,
whether such indebtedness, liabilities, and obligations now exist or are
hereafter incurred or arise, or whether the obligations of Borrower thereon are
direct, indirect, contingent, primary, secondary, several, joint and several, or
otherwise, and irrespective of whether such indebtedness, liabilities, or
obligations are evidenced by a note, contract, open account, or otherwise, and
GUARANTY AGREEMENT - Page 4
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irrespective of the person or persons in whose favor such indebtedness,
obligations, or liabilities may, at their inception, have been, or may hereafter
be created, or the manner in which they have been or may hereafter be acquired
by the Guarantor.
(b) Guarantor agrees that any and all liens, security interests,
judgment liens, charges, or other encumbrances upon Borrower's assets securing
payment of any Subordinated Indebtedness shall be and remain inferior and
subordinate to any and all liens, security interests, judgment liens, charges,
or other encumbrances upon Borrower's assets securing payment of the Guaranteed
Indebtedness or any part thereof, regardless of whether such encumbrances in
favor of the Guarantor or Lender presently exist or are hereafter created or
attached. Without the prior written consent of Lender, Guarantor shall not (i)
file suit against Borrower or exercise or enforce any other creditor's right it
may have against Borrower, or (ii) foreclose, repossess, sequester, or otherwise
take steps or institute any action or proceedings (judicial or otherwise,
including without limitation the commencement of, or joinder in, any
liquidation, bankruptcy, rearrangement, debtor's relief or insolvency
proceeding) to enforce any liens, security interests, collateral rights,
judgments or other encumbrances held by the Guarantor on assets of Borrower.
(c) In the event of any receivership, bankruptcy, reorganization,
rearrangement, debtor's relief, or other insolvency proceeding involving
Borrower as debtor, Lender shall have the right to prove and vote any claim
under the Subordinated Indebtedness and to receive directly from the receiver,
trustee or other court custodian all dividends, distributions, and payments made
in respect of the Subordinated Indebtedness. Lender may apply any such
dividends, distributions, and payments against the Guaranteed Indebtedness in
such order and manner as Lender may determine in its sole discretion.
10. AMENDMENTS; CUMULATIVE REMEDIES. No amendment or waiver of any
provision of this Guaranty Agreement nor consent to any departure by the
Guarantor therefrom shall in any event be effective unless the same shall be in
writing and signed by Lender. No failure on the part of Lender to exercise, and
no delay in exercising any right, power, or privilege hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any right, power,
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power, or privilege. The remedies herein provided
are cumulative and not exclusive of any remedies provided by law.
11. SUCCESSORS AND ASSIGNS. This Guaranty Agreement is for the benefit
of Lender and its successors and assigns, and in the event of an assignment of
the Guaranteed Indebtedness, or any part thereof, the rights and benefits
hereunder, to the extent applicable to the indebtedness so assigned, may be
transferred with such indebtedness. This Guaranty Agreement is binding not only
on the Guarantor, but on the Guarantor's heirs and personal representatives.
12. RELIANCE BY LENDER. The Guarantor recognizes that Lender is relying
upon this Guaranty Agreement and the undertakings of the Guarantor hereunder in
making extensions of credit to Borrower under the Loan Agreement and further
recognizes that the execution and delivery of this Guaranty Agreement is a
material inducement to Lender in making Term Loan C under the Loan Agreement.
The Guarantor hereby acknowledges that there are no conditions to the full
effectiveness of this Guaranty Agreement.
GUARANTY AGREEMENT - Page 5
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13. GOVERNING LAW. THIS GUARANTY AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
14. FEES AND EXPENSES. The Guarantor shall pay on demand all reasonable
attorneys' fees and all other costs and expenses incurred by Lender in
connection with the enforcement or collection of this Guaranty Agreement.
15. WAIVERS BY GUARANTOR. The Guarantor hereby waives promptness,
diligence, notice of any default under the Guaranteed Indebtedness, demand for
payment, notice of acceptance of this Guaranty Agreement, presentment, notice of
protest, notice of dishonor, notice of the incurring by Borrower of additional
indebtedness, and all other notices and demands with respect to the Guaranteed
Indebtedness and this Guaranty Agreement.
16. VALIDITY; ENFORCEABILITY. The Loan Agreement, and all of the terms
thereof, are incorporated herein by reference, the same as if stated verbatim
herein, and Guarantor agrees that Lender may exercise any and all rights granted
to it under the Loan Agreement and the other Loan Documents (as defined in the
Loan Agreement) without affecting the validity or enforceability of this
Guaranty Agreement.
17. NO RELIANCE ON LENDER. The Guarantor hereby represents and warrants
to Lender that the Guarantor has adequate means to obtain from Borrower and the
Subsidiaries on a continuing basis information concerning the financial
condition and assets of Borrower and the Subsidiaries and that the Guarantor is
not relying upon Lender to provide (and Lender shall have no duty to provide)
any such information to the Guarantor either now or in the future.
18. NO ORAL AGREEMENTS. THIS GUARANTY AGREEMENT REPRESENTS THE FINAL
AGREEMENT OF GUARANTOR AND LENDER WITH RESPECT TO GUARANTOR'S GUARANTY OF THE
GUARANTEED INDEBTEDNESS AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS AMONG THE PARTIES HERETO.
GUARANTY AGREEMENT - Page 6
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EXECUTED as of the 31st day of July, 2000.
GUARANTOR:
/s/ ROGER J. ENGEMOEN, JR.
----------------------------------------
Roger J. Engemoen, Jr.
GUARANTY AGREEMENT - Page 7
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GUARANTY AGREEMENT
(LIMITED)
WHEREAS, the execution of this Guaranty Agreement (this "Guaranty
Agreement") is a condition to SERVICE ASSET INVESTMENT, INC., a Texas
corporation ("Borrower"), borrowing from GUARANTY FEDERAL BANK, F.S.B., a
federal savings bank ("Lender"), a term loan in the aggregate principal amount
of $10,000,000 pursuant to that certain Loan Agreement dated March 30, 2000, as
amended of even date herewith (such Loan Agreement, as it may have been or may
hereafter be amended or modified from time to time, being hereinafter referred
to as the "Loan Agreement") between Borrower and Lender;
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, J. KELLY GRAY, an individual residing at 1313
Weston Lane, Austin, Texas 78746 (the "Guarantor") hereby irrevocably and
unconditionally guarantees to Lender, subject to the terms of this Guaranty
Agreement, the full and prompt payment and performance of the Guaranteed
Indebtedness (hereinafter defined), this Guaranty Agreement being upon the
following terms:
1. DEFINITION OF GUARANTEED INDEBTEDNESS. The term "Guaranteed
Indebtedness" as used herein means the Borrower's obligations under Term Loan C
(as defined in the Loan Agreement), in an amount not to exceed $2,600,000. All
other capitalized terms used and not otherwise defined herein shall have their
respective meanings as set forth in the Loan Agreement
2. ABSOLUTE GUARANTY; NO SET-OFF RIGHTS. This instrument shall be an
absolute, continuing, irrevocable, and unconditional guaranty of payment and
performance, and not a guaranty of collection, of the Guaranteed Indebtedness as
provided herein, and the Guarantor shall remain liable on its obligations
hereunder until the payment and performance in full of the Guaranteed
Indebtedness. No set-off, counterclaim, recoupment, reduction, or diminution of
any obligation, or any defense of any kind or nature which Borrower may have
against Lender or any other party, or the Guarantor may have against Borrower,
Lender, or any other party, shall be available to, or shall be asserted by, the
Guarantor against Lender or any subsequent holder of the Guaranteed Indebtedness
or any part thereof or against payment of the Guaranteed Indebtedness or any
part thereof.
3. NO IMPAIRMENT OF RIGHTS. If the Guarantor becomes liable for any
indebtedness owing by Borrower to Lender by endorsement or otherwise, other than
under this Guaranty Agreement, such liability shall not be in any manner
impaired or affected hereby, and the rights of Lender hereunder shall be
cumulative of any and all other rights that Lender may ever have against the
Guarantor. The exercise by Lender of any right or remedy hereunder or under any
other instrument, or at law or in equity, shall not preclude the concurrent or
subsequent exercise of any other right or remedy.
4. OBLIGATIONS OF GUARANTORS; NO DUTY TO EXHAUST REMEDIES; WAIVER OF
SUBROGATION. In the event of default by Borrower in payment or performance of
the Guaranteed Indebtedness, or any part thereof, when such Guaranteed
Indebtedness becomes due, whether by its terms, by acceleration, or otherwise,
Guarantor shall promptly pay the amount due thereon to Lender without notice or
demand in lawful money of the United States of America and it shall not be
necessary for
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Lender, in order to enforce such payment by either Guarantor, first to institute
suit or exhaust its remedies against Borrower or any other guarantor or others
liable on such Guaranteed Indebtedness, or to enforce any rights against any
collateral which shall ever have been given to secure such Guaranteed
Indebtedness. Notwithstanding anything to the contrary contained in this
Guaranty Agreement, until such time as the Guaranteed Indebtedness has been paid
in full, Guarantor hereby irrevocably waives any and all rights it may now or
hereafter have under any agreement or at law or in equity (including, without
limitation, any law subrogating Guarantor to the rights of Lender) to assert any
claim against or seek contribution, indemnification or any other form of
reimbursement from Borrower or any other guarantors or any other party liable
for payment of any or all of the Guaranteed Indebtedness for any payment made by
Guarantor under or in connection with this Guaranty Agreement or otherwise. If
acceleration of the time for payment of any amount payable by Borrower under the
Guaranteed Indebtedness is stayed upon the insolvency, bankruptcy, or
reorganization of Borrower, all such amounts otherwise subject to acceleration
under the terms of the Guaranteed Indebtedness shall nonetheless be payable by
Guarantor hereunder forthwith on demand by Lender.
5. NO IMPAIRMENT OF GUARANTOR'S OBLIGATIONS. Guarantor hereby agrees that
its obligations under this Guaranty Agreement shall not be released, discharged,
diminished, impaired, reduced, or affected for any reason or by the occurrence
of any event, including, without limitation, one or more of the following
events, whether or not with notice to or the consent of the Guarantor: (a) the
taking or accepting of collateral as security for any or all of the Guaranteed
Indebtedness or the release, surrender, exchange, or subordination of any
collateral now or hereafter securing any or all of the Guaranteed Indebtedness;
(b) any partial release of the liability of the Guarantor hereunder, or the full
or partial release of any other guarantor or obligor from liability for any or
all of the Guaranteed Indebtedness; (c) any disability of Borrower, or the
dissolution, insolvency, or bankruptcy of Borrower, the Guarantor, or any other
party at any time liable for the payment of any or all of the Guaranteed
Indebtedness; (d) any renewal, extension, modification, waiver, amendment, or
rearrangement of any or all of the Guaranteed Indebtedness or any instrument,
document, or agreement evidencing, securing, or otherwise relating to any or all
of the Guaranteed Indebtedness; (e) any adjustment, indulgence, forbearance,
waiver, or compromise that may be granted or given by Lender to Borrower, the
Guarantor, or any other party ever liable for any or all of the Guaranteed
Indebtedness; (f) any neglect, delay, omission, failure, or refusal of Lender to
take or prosecute any action for the collection of any of the Guaranteed
Indebtedness or to foreclose or take or prosecute any action in connection with
any instrument, document, or agreement evidencing, securing, or otherwise
relating to any or all of the Guaranteed Indebtedness; (g) the unenforceability
or invalidity of any or all of the Guaranteed Indebtedness or of any instrument,
document, or agreement evidencing, securing, or otherwise relating to any or all
of the Guaranteed Indebtedness; (h) any payment by Borrower or any other party
to Lender is held to constitute a preference under applicable bankruptcy or
insolvency law or if for any other reason Lender is required to refund any
payment or pay the amount thereof to someone else; (i) the settlement or
compromise of any of the Guaranteed Indebtedness; (j) the non-perfection of any
security interest or lien securing any or all of the Guaranteed Indebtedness;
(k) any impairment of any collateral securing any or all of the Guaranteed
Indebtedness; (l) the failure of Lender to sell any collateral securing any or
all of the Guaranteed Indebtedness in a commercially reasonable manner or as
otherwise required by law; (m) any change in the
GUARANTY AGREEMENT - Page 2
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corporate existence, structure, or ownership of Borrower; or (n) any other
circumstance which might otherwise constitute a defense available to, or
discharge of, Borrower or the Guarantor.
6. REPRESENTATIONS AND WARRANTIES. The Guarantor represents and warrants to
Lender as follows:
(a) The Guarantor has the power and authority and legal right to
execute, deliver, and perform its obligations under this Guaranty Agreement
and this Guaranty Agreement constitutes the legal, valid, and binding
obligation of the Guarantor, enforceable against the Guarantor in
accordance with its terms, except as limited by bankruptcy, insolvency, or
other laws of general application relating to the enforcement of creditors'
rights.
(b) The execution, delivery, and performance by the Guarantor of this
Guaranty Agreement do not and will not violate or conflict with any law,
rule, or regulation or any order, writ, injunction, or decree of any court,
governmental authority or agency, or arbitrator and do not and will not
conflict with, result in a breach of, or constitute a default under, or
result in the imposition of any lien upon any assets of the Guarantor
pursuant to the provisions of any indenture, mortgage, deed of trust,
security agreement, franchise, permit, license, or other instrument or
agreement to which the Guarantor or its properties is bound.
(c) No authorization, approval, or consent of, and no filing or
registration with, any court, governmental authority, or third party is
necessary for the execution, delivery, or performance by the Guarantor of
this Guaranty Agreement or the validity or enforceability thereof.
(d) The value of the consideration received and to be received by the
Guarantor as a result of Lender making Term Loan C to Borrower under the
Loan Agreement and the Guarantor executing and delivering this Guaranty
Agreement is reasonably worth at least as much as the liability and
obligation of the Guarantor hereunder, and such liability and obligation
and the Loan Agreement have benefitted and may reasonably be expected to
benefit the Guarantor directly and indirectly.
(e) The Guarantor has, independently and without reliance upon Lender
and based upon such documents and information as the Guarantor has deemed
appropriate, made its own analysis and decision to enter into this Guaranty
Agreement.
7. COVENANTS OF GUARANTOR. Guarantor covenants and agrees that, as long as
the Guaranteed Indebtedness or any part thereof is outstanding or Lender has any
commitment under the Loan Agreement:
(a) Guarantor will furnish promptly to Lender written notice of the
occurrence of any default under this Guaranty Agreement or an Event of
Default under the Loan Agreement of which Guarantor has knowledge.
GUARANTY AGREEMENT - Page 3
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(b) Guarantor will furnish promptly to Lender such additional
information concerning Guarantor as Lender may request.
(c) Guarantor will obtain at any time and from time to time all
authorizations, licenses, consents or approvals as shall now or hereafter
be necessary or desirable under all applicable laws or regulations or
otherwise in connection with the execution, delivery and performance of
this Guaranty Agreement and will promptly furnish copies thereof to Lender.
(d) Guarantor will at all times own directly or indirectly and free
and clear of all liens and encumbrances whatsoever at least the same
percentage of voting shares of Borrower, if any, as it owns directly or
indirectly on the date hereof.
8. LENDER'S RIGHTS WITH RESPECT TO GUARANTOR'S PROPERTY IN LENDER'S
POSSESSION. Lender shall have the right to set off and apply against this
Guaranty Agreement or the Guaranteed Indebtedness or both, at any time and
without notice to Guarantor, any and all deposits (general or special, time or
demand, provisional or final) or other sums at any time credited by or owing
from Lender to Guarantor whether or not the Guaranteed Indebtedness is then due
and irrespective of whether or not Lender shall have made any demand under this
Guaranty Agreement. As security for this Guaranty Agreement and the Guaranteed
Indebtedness, Guarantor hereby grants Lender a security interest in all money,
instruments, certificates of deposit, and other property of Guarantor now or
hereafter held by Lender, including, without limitation, property held in
safekeeping. In addition to Lender's right of setoff and as further security for
this Guaranty Agreement and the Guaranteed Indebtedness, Guarantor hereby grants
Lender a security interest in all deposits (general or special, time or demand,
provisional or final) and all other accounts of Guarantor now or hereafter on
deposit with or held by Lender and all other sums at any time credited by or
owing from Lender to Guarantor. The rights and remedies of Lender hereunder are
in addition to other rights and remedies (including, without limitation, other
rights of setoff) which Lender may have.
9. SUBORDINATION. (a) Guarantor hereby agrees that the Subordinated
Indebtedness (as hereinafter defined) shall be subordinate and junior in right
of payment to the prior payment in full of all Guaranteed Indebtedness, and the
Guarantor hereby assigns the Subordinated Indebtedness to Lender as security for
the Guaranteed Indebtedness. If any sums shall be paid to the Guarantor by
Borrower or any other person or entity on account of the Subordinated
Indebtedness, such sums shall be held in trust by the Guarantor for the benefit
of Lender and shall forthwith be paid to Lender without affecting the liability
of the Guarantor under this Guaranty Agreement and may be applied by Lender
against the Guaranteed Indebtedness in such order and manner as Lender may
determine in its sole discretion. Upon the request of Lender, the Guarantor
shall execute, deliver, and endorse to Lender such documents and instruments as
Lender may request to perfect, preserve, and enforce its rights hereunder. For
purposes of this Guaranty Agreement, the term "Subordinated Indebtedness" means
all indebtedness, liabilities, and obligations of Borrower to the Guarantor,
whether such indebtedness, liabilities, and obligations now exist or are
hereafter incurred or arise, or whether the obligations of Borrower thereon are
direct, indirect, contingent, primary, secondary, several, joint and several, or
otherwise, and irrespective of whether such indebtedness, liabilities, or
obligations are evidenced by a note, contract, open account, or otherwise, and
GUARANTY AGREEMENT - Page 4
<PAGE> 12
irrespective of the person or persons in whose favor such indebtedness,
obligations, or liabilities may, at their inception, have been, or may hereafter
be created, or the manner in which they have been or may hereafter be acquired
by the Guarantor.
(b) Guarantor agrees that any and all liens, security interests, judgment
liens, charges, or other encumbrances upon Borrower's assets securing payment of
any Subordinated Indebtedness shall be and remain inferior and subordinate to
any and all liens, security interests, judgment liens, charges, or other
encumbrances upon Borrower's assets securing payment of the Guaranteed
Indebtedness or any part thereof, regardless of whether such encumbrances in
favor of the Guarantor or Lender presently exist or are hereafter created or
attached. Without the prior written consent of Lender, Guarantor shall not (i)
file suit against Borrower or exercise or enforce any other creditor's right it
may have against Borrower, or (ii) foreclose, repossess, sequester, or otherwise
take steps or institute any action or proceedings (judicial or otherwise,
including without limitation the commencement of, or joinder in, any
liquidation, bankruptcy, rearrangement, debtor's relief or insolvency
proceeding) to enforce any liens, security interests, collateral rights,
judgments or other encumbrances held by the Guarantor on assets of Borrower.
(c) In the event of any receivership, bankruptcy, reorganization,
rearrangement, debtor's relief, or other insolvency proceeding involving
Borrower as debtor, Lender shall have the right to prove and vote any claim
under the Subordinated Indebtedness and to receive directly from the receiver,
trustee or other court custodian all dividends, distributions, and payments made
in respect of the Subordinated Indebtedness. Lender may apply any such
dividends, distributions, and payments against the Guaranteed Indebtedness in
such order and manner as Lender may determine in its sole discretion.
10. AMENDMENTS; CUMULATIVE REMEDIES. No amendment or waiver of any
provision of this Guaranty Agreement nor consent to any departure by the
Guarantor therefrom shall in any event be effective unless the same shall be in
writing and signed by Lender. No failure on the part of Lender to exercise, and
no delay in exercising any right, power, or privilege hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power,
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power, or privilege. The remedies herein provided
are cumulative and not exclusive of any remedies provided by law.
11. SUCCESSORS AND ASSIGNS. This Guaranty Agreement is for the benefit of
Lender and its successors and assigns, and in the event of an assignment of the
Guaranteed Indebtedness, or any part thereof, the rights and benefits hereunder,
to the extent applicable to the indebtedness so assigned, may be transferred
with such indebtedness. This Guaranty Agreement is binding not only on the
Guarantor, but on the Guarantor's heirs and personal representatives.
12. RELIANCE BY LENDER. The Guarantor recognizes that Lender is relying
upon this Guaranty Agreement and the undertakings of the Guarantor hereunder in
making extensions of credit to Borrower under the Loan Agreement and further
recognizes that the execution and delivery of this Guaranty Agreement is a
material inducement to Lender in making Term Loan C under the Loan Agreement.
The Guarantor hereby acknowledges that there are no conditions to the full
effectiveness of this Guaranty Agreement.
GUARANTY AGREEMENT - Page 5
<PAGE> 13
13. GOVERNING LAW. THIS GUARANTY AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
14. FEES AND EXPENSES. The Guarantor shall pay on demand all reasonable
attorneys' fees and all other costs and expenses incurred by Lender in
connection with the enforcement or collection of this Guaranty Agreement.
15. WAIVERS BY GUARANTOR. The Guarantor hereby waives promptness,
diligence, notice of any default under the Guaranteed Indebtedness, demand for
payment, notice of acceptance of this Guaranty Agreement, presentment, notice of
protest, notice of dishonor, notice of the incurring by Borrower of additional
indebtedness, and all other notices and demands with respect to the Guaranteed
Indebtedness and this Guaranty Agreement.
16. VALIDITY; ENFORCEABILITY. The Loan Agreement, and all of the terms
thereof, are incorporated herein by reference, the same as if stated verbatim
herein, and Guarantor agrees that Lender may exercise any and all rights granted
to it under the Loan Agreement and the other Loan Documents (as defined in the
Loan Agreement) without affecting the validity or enforceability of this
Guaranty Agreement.
17. NO RELIANCE ON LENDER. The Guarantor hereby represents and warrants to
Lender that the Guarantor has adequate means to obtain from Borrower and the
Subsidiaries on a continuing basis information concerning the financial
condition and assets of Borrower and the Subsidiaries and that the Guarantor is
not relying upon Lender to provide (and Lender shall have no duty to provide)
any such information to the Guarantor either now or in the future.
18. NO ORAL AGREEMENTS. THIS GUARANTY AGREEMENT REPRESENTS THE FINAL
AGREEMENT OF GUARANTOR AND LENDER WITH RESPECT TO GUARANTOR'S GUARANTY OF THE
GUARANTEED INDEBTEDNESS AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS AMONG THE PARTIES HERETO.
GUARANTY AGREEMENT - Page 6
<PAGE> 14
EXECUTED as of the 31st day of July, 2000.
GUARANTOR:
/s/ J. KELLY GRAY
-----------------
J. Kelly Gray
GUARANTY AGREEMENT - Page 7
<PAGE> 15
GUARANTY AGREEMENT
(LIMITED)
WHEREAS, the execution of this Guaranty Agreement (this "Guaranty
Agreement") is a condition to SERVICE ASSET INVESTMENT, INC., a Texas
corporation ("Borrower"), borrowing from GUARANTY FEDERAL BANK, F.S.B., a
federal savings bank ("Lender"), a term loan in the aggregate principal amount
of $10,000,000 pursuant to that certain Loan Agreement dated March 30, 2000, as
amended of even date herewith (such Loan Agreement, as it may have been or may
hereafter be amended or modified from time to time, being hereinafter referred
to as the "Loan Agreement") between Borrower and Lender;
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, WILLIAM D. GROSS, an individual residing at 7424
Axminster, Dallas, Texas 75214 (the "Guarantor"), hereby irrevocably and
unconditionally guarantees to Lender, subject to the terms of this Guaranty
Agreement, the full and prompt payment and performance of the Guaranteed
Indebtedness (hereinafter defined), this Guaranty Agreement being upon the
following terms:
1. DEFINITION OF GUARANTEED INDEBTEDNESS. The term "Guaranteed
Indebtedness" as used herein means the Borrower's obligations under Term Loan C
(as defined in the Loan Agreement), provided that Guarantor's liability with
respect to such obligations shall be limited to an amount not to exceed
$1,600,000. All other capitalized terms used and not otherwise defined herein
shall have their respective meanings as set forth in the Loan Agreement.
2. ABSOLUTE GUARANTY; NO SET-OFF RIGHTS. This instrument shall be an
absolute, continuing, irrevocable, and unconditional guaranty of payment and
performance, and not a guaranty of collection, of the Guaranteed Indebtedness as
provided herein, and the Guarantor shall remain liable on its obligations
hereunder until the payment and performance in full of the Guaranteed
Indebtedness. No set-off, counterclaim, recoupment, reduction, or diminution of
any obligation, or any defense of any kind or nature which Borrower may have
against Lender or any other party, or the Guarantor may have against Borrower,
Lender, or any other party, shall be available to, or shall be asserted by, the
Guarantor against Lender or any subsequent holder of the Guaranteed Indebtedness
or any part thereof or against payment of the Guaranteed Indebtedness or any
part thereof.
3. NO IMPAIRMENT OF RIGHTS. If the Guarantor becomes liable for any
indebtedness owing by Borrower to Lender by endorsement or otherwise, other than
under this Guaranty Agreement, such liability shall not be in any manner
impaired or affected hereby, and the rights of Lender hereunder shall be
cumulative of any and all other rights that Lender may ever have against the
Guarantor. The exercise by Lender of any right or remedy hereunder or under any
other instrument, or at law or in equity, shall not preclude the concurrent or
subsequent exercise of any other right or remedy.
4. OBLIGATIONS OF GUARANTORS; NO DUTY TO EXHAUST REMEDIES; WAIVER OF
SUBROGATION. In the event of default by Borrower in payment or performance of
the Guaranteed Indebtedness, or any part thereof, when such Guaranteed
Indebtedness becomes due, whether by its terms, by acceleration, or otherwise,
Guarantor shall promptly pay the amount due thereon to Lender
<PAGE> 16
without notice or demand in lawful money of the United States of America and it
shall not be necessary for Lender, in order to enforce such payment by either
Guarantor, first to institute suit or exhaust its remedies against Borrower or
any other guarantor or others liable on such Guaranteed Indebtedness, or to
enforce any rights against any collateral which shall ever have been given to
secure such Guaranteed Indebtedness. Notwithstanding anything to the contrary
contained in this Guaranty Agreement, until such time as the Guaranteed
Indebtedness has been paid in full, Guarantor hereby irrevocably waives any and
all rights it may now or hereafter have under any agreement or at law or in
equity (including, without limitation, any law subrogating Guarantor to the
rights of Lender) to assert any claim against or seek contribution,
indemnification or any other form of reimbursement from Borrower or any other
guarantors or any other party liable for payment of any or all of the Guaranteed
Indebtedness for any payment made by Guarantor under or in connection with this
Guaranty Agreement or otherwise. If acceleration of the time for payment of any
amount payable by Borrower under the Guaranteed Indebtedness is stayed upon the
insolvency, bankruptcy, or reorganization of Borrower, all such amounts
otherwise subject to acceleration under the terms of the Guaranteed Indebtedness
shall nonetheless be payable by Guarantor hereunder forthwith on demand by
Lender.
5. NO IMPAIRMENT OF GUARANTOR'S OBLIGATIONS. Guarantor hereby agrees
that its obligations under this Guaranty Agreement shall not be released,
discharged, diminished, impaired, reduced, or affected for any reason or by the
occurrence of any event, including, without limitation, one or more of the
following events, whether or not with notice to or the consent of the Guarantor:
(a) the taking or accepting of collateral as security for any or all of the
Guaranteed Indebtedness or the release, surrender, exchange, or subordination of
any collateral now or hereafter securing any or all of the Guaranteed
Indebtedness; (b) any partial release of the liability of the Guarantor
hereunder, or the full or partial release of any other guarantor or obligor from
liability for any or all of the Guaranteed Indebtedness; (c) any disability of
Borrower, or the dissolution, insolvency, or bankruptcy of Borrower, the
Guarantor, or any other party at any time liable for the payment of any or all
of the Guaranteed Indebtedness; (d) any renewal, extension, modification,
waiver, amendment, or rearrangement of any or all of the Guaranteed Indebtedness
or any instrument, document, or agreement evidencing, securing, or otherwise
relating to any or all of the Guaranteed Indebtedness; (e) any adjustment,
indulgence, forbearance, waiver, or compromise that may be granted or given by
Lender to Borrower, the Guarantor, or any other party ever liable for any or all
of the Guaranteed Indebtedness; (f) any neglect, delay, omission, failure, or
refusal of Lender to take or prosecute any action for the collection of any of
the Guaranteed Indebtedness or to foreclose or take or prosecute any action in
connection with any instrument, document, or agreement evidencing, securing, or
otherwise relating to any or all of the Guaranteed Indebtedness; (g) the
unenforceability or invalidity of any or all of the Guaranteed Indebtedness or
of any instrument, document, or agreement evidencing, securing, or otherwise
relating to any or all of the Guaranteed Indebtedness; (h) any payment by
Borrower or any other party to Lender is held to constitute a preference under
applicable bankruptcy or insolvency law or if for any other reason Lender is
required to refund any payment or pay the amount thereof to someone else; (i)
the settlement or compromise of any of the Guaranteed Indebtedness; (j) the
non-perfection of any security interest or lien securing any or all of the
Guaranteed Indebtedness: (k) any impairment of any collateral securing any or
all of the Guaranteed Indebtedness; (l) the failure of Lender to sell any
collateral securing any or all of the Guaranteed Indebtedness in a commercially
reasonable manner or as otherwise required by law; (m) any change in the
GUARANTY AGREEMENT - Page 2
<PAGE> 17
corporate existence, structure, or ownership of Borrower; or (n) any other
circumstance which might otherwise constitute a defense available to, or
discharge of, Borrower or the Guarantor.
6. REPRESENTATIONS AND WARRANTIES. The Guarantor represents and
warrants to Lender as follows:
(a) The Guarantor has the power and authority and legal right to
execute, deliver, and perform its obligations under this Guaranty
Agreement and this Guaranty Agreement constitutes the legal, valid, and
binding obligation of the Guarantor, enforceable against the Guarantor
in accordance with its terms, except as limited by bankruptcy,
insolvency, or other laws of general application relating to the
enforcement of creditors' rights.
(b) The execution, delivery, and performance by the Guarantor of
this Guaranty Agreement do not and will not violate or conflict with
any law, rule, or regulation or any order, writ, injunction, or decree
of any court, governmental authority or agency, or arbitrator and do
not and will not conflict with, result in a breach of, or constitute a
default under, or result in the imposition of any lien upon any assets
of the Guarantor pursuant to the provisions of any indenture, mortgage,
deed of trust, security agreement, franchise, permit, license, or other
instrument or agreement to which the Guarantor or its properties is
bound.
(c) No authorization, approval, or consent of, and no filing or
registration with, any court, governmental authority, or third party is
necessary for the execution, delivery, or performance by the Guarantor
of this Guaranty Agreement or the validity or enforceability thereof.
(d) The value of the consideration received and to be received by
the Guarantor as a result of Lender making Term Loan C to
Borrower under the Loan Agreement and the Guarantor executing and
delivering this Guaranty Agreement is reasonably worth at least as much
as the liability and obligation of the Guarantor hereunder, and such
liability and obligation and the Loan Agreement have benefitted and may
reasonably be expected to benefit the Guarantor directly and
indirectly.
(e) The Guarantor has, independently and without reliance upon
Lender and based upon such documents and information as the Guarantor
has deemed appropriate, made its own analysis and decision to enter
into this Guaranty Agreement
7. COVENANTS OF GUARANTOR. Guarantor covenants and agrees that, as long
as the Guaranteed Indebtedness or any part thereof is outstanding or Lender has
any commitment under the Loan Agreement:
(a) Guarantor will furnish promptly to Lender written notice of the
occurrence of any default under this Guaranty Agreement or an Event of
Default under the Loan Agreement of which Guarantor has knowledge.
GUARANTY AGREEMENT - Page 3
<PAGE> 18
(b) Guarantor will furnish promptly to Lender such additional
information concerning Guarantor as Lender may request.
(c) Guarantor will obtain at any time and from time to time all
authorizations, licenses, consents or approvals as shall now or
hereafter be necessary or desirable under all applicable laws or
regulations or otherwise in connection with the execution, delivery and
performance of this Guaranty Agreement and will promptly furnish copies
thereof to Lender.
(d) Guarantor will at all times own directly or indirectly and free
and clear of all liens and encumbrances whatsoever at least the same
percentage of voting shares of Borrower, if any, as it owns directly
or indirectly on the date hereof.
8. LENDER'S RIGHTS WITH RESPECT TO GUARANTOR'S PROPERTY IN LENDER'S
POSSESSION. Lender shall have the right to set off and apply against this
Guaranty Agreement or the Guaranteed Indebtedness or both, at any time and
without notice to Guarantor, any and all deposits (general or special, time or
demand, provisional or final) or other sums at any time credited by or owing
from Lender to Guarantor whether or not the Guaranteed Indebtedness is then due
and irrespective of whether or not Lender shall have made any demand under this
Guaranty Agreement. As security for this Guaranty Agreement and the Guaranteed
Indebtedness, Guarantor hereby grants Lender a security interest in all money,
instruments, certificates of deposit, and other property of Guarantor now or
hereafter held by Lender, including, without limitation, property held in
safekeeping. In addition to Lender's right of setoff and as further security for
this Guaranty Agreement and the Guaranteed Indebtedness, Guarantor hereby grants
Lender a security interest in all deposits (general or special, time or demand,
provisional or final) and all other accounts of Guarantor now or hereafter on
deposit with or held by Lender and all other sums at any time credited by or
owing from Lender to Guarantor. The rights and remedies of Lender hereunder are
in addition to other rights and remedies (including, without limitation, other
rights of setoff) which Lender may have.
9. SUBORDINATION. (a) Guarantor hereby agrees that the Subordinated
Indebtedness (as hereinafter defined) shall be subordinate and junior in right
of payment to the prior payment in full of all Guaranteed Indebtedness, and the
Guarantor hereby assigns the Subordinated Indebtedness to Lender as security for
the Guaranteed Indebtedness. If any sums shall be paid to the Guarantor by
Borrower or any other person or entity on account of the Subordinated
Indebtedness, such sums shall be held in trust by the Guarantor for the benefit
of Lender and shall forthwith be paid to Lender without affecting the liability
of the Guarantor under this Guaranty Agreement and may be applied by Lender
against the Guaranteed Indebtedness in such order and manner as Lender may
determine in its sole discretion. Upon the request of Lender, the Guarantor
shall execute, deliver, and endorse to Lender such documents and instruments as
Lender may request to perfect, preserve, and enforce its rights hereunder. For
purposes of this Guaranty Agreement, the term "Subordinated Indebtedness" means
all indebtedness, liabilities, and obligations of Borrower to the Guarantor,
whether such indebtedness, liabilities, and obligations now exist or are
hereafter incurred or arise, or whether the obligations of Borrower thereon are
direct, indirect, contingent, primary, secondary, several, joint and several, or
otherwise, and irrespective of whether such indebtedness, liabilities, or
obligations are evidenced by a note, contract, open account, or otherwise, and
GUARANTY AGREEMENT - Page 4
<PAGE> 19
irrespective of the person or persons in whose favor such indebtedness,
obligations, or liabilities may, at their inception, have been, or may hereafter
be created, or the manner in which they have been or may hereafter be acquired
by the Guarantor.
(b) Guarantor agrees that any and all liens, security interests,
judgment liens, charges, or other encumbrances upon Borrower's assets securing
payment of any Subordinated Indebtedness shall be and remain inferior and
subordinate to any and all liens, security interests, judgment liens, charges,
or other encumbrances upon Borrower's assets securing payment of the Guaranteed
Indebtedness or any part thereof, regardless of whether such encumbrances in
favor of the Guarantor or Lender presently exist or are hereafter created or
attached. Without the prior written consent of Lender, Guarantor shall not (i)
file suit against Borrower or exercise or enforce any other creditor's right it
may have against Borrower, or (ii) foreclose, repossess, sequester, or otherwise
take steps or institute any action or proceedings (judicial or otherwise,
including without limitation the commencement of, or joinder in, any
liquidation, bankruptcy, rearrangement, debtor's relief or insolvency
proceeding) to enforce any liens, security interests, collateral rights,
judgments or other encumbrances held by the Guarantor on assets of Borrower.
(c) In the event of any receivership, bankruptcy, reorganization,
rearrangement, debtor's relief, or other insolvency proceeding involving
Borrower as debtor, Lender shall have the right to prove and vote any claim
under the Subordinated Indebtedness and to receive directly from the receiver,
trustee or other court custodian all dividends, distributions, and payments made
in respect of the Subordinated Indebtedness. Lender may apply any such
dividends, distributions, and payments against the Guaranteed Indebtedness in
such order and manner as Lender may determine in its sole discretion.
10. AMENDMENTS; CUMULATIVE REMEDIES. No amendment or waiver of any
provision of this Guaranty Agreement nor consent to any departure by the
Guarantor therefrom shall in any event be effective unless the same shall be in
writing and signed by Lender. No failure on the part of Lender to exercise, and
no delay in exercising any right, power, or privilege hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power,
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power, or privilege. The remedies herein provided
are cumulative and not exclusive of any remedies provided by law.
11. SUCCESSORS AND ASSIGNS. This Guaranty Agreement is for the benefit
of Lender and its successors and assigns, and in the event of an assignment of
the Guaranteed Indebtedness, or any part thereof, the rights and benefits
hereunder, to the extent applicable to the indebtedness so assigned, may be
transferred with such indebtedness. This Guaranty Agreement is binding not only
on the Guarantor, but on the Guarantor's heirs and personal representatives.
12. RELIANCE BY LENDER. The Guarantor recognizes that Lender is relying
upon this Guaranty Agreement and the undertakings of the Guarantor hereunder in
making extensions of credit to Borrower under the Loan Agreement and further
recognizes that the execution and delivery of this Guaranty Agreement is a
material inducement to Lender in making Term Loan C under the Loan Agreement.
The Guarantor hereby acknowledges that there are no conditions to the full
effectiveness of this Guaranty Agreement.
GUARANTY AGREEMENT - Page 5
<PAGE> 20
13. GOVERNING LAW. THIS GUARANTY AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
14. FEES AND EXPENSES. The Guarantor shall pay on demand all reasonable
attorneys' fees and all other costs and expenses incurred by Lender in
connection with the enforcement or collection of this Guaranty Agreement.
15. WAIVERS BY GUARANTOR. The Guarantor hereby waives promptness,
diligence, notice of any default under the Guaranteed Indebtedness, demand for
payment, notice of acceptance of this Guaranty Agreement, presentment, notice of
protest, notice of dishonor, notice of the incurring by Borrower of additional
indebtedness, and all other notices and demands with respect to the Guaranteed
Indebtedness and this Guaranty Agreement
16. VALIDITY; ENFORCEABILITY. The Loan Agreement, and all of the terms
thereof, are incorporated herein by reference, the same as if stated verbatim
herein, and Guarantor agrees that Lender may exercise any and all rights granted
to it under the Loan Agreement and the other Loan Documents (as defined in the
Loan Agreement) without affecting the validity or enforceability of this
Guaranty Agreement.
17. NO RELIANCE ON LENDER The Guarantor hereby represents and warrants
to Lender that the Guarantor has adequate means to obtain from Borrower and the
Subsidiaries on a continuing basis information concerning the financial
condition and assets of Borrower and the Subsidiaries and that the Guarantor is
not relying upon Lender to provide (and Lender shall have no duty to provide)
any such information to the Guarantor either now or in the future.
18. NO ORAL AGREEMENTS. THIS GUARANTY AGREEMENT REPRESENTS THE FINAL
AGREEMENT OF GUARANTOR AND LENDER WITH RESPECT TO GUARANTOR'S GUARANTY OF THE
GUARANTEED INDEBTEDNESS AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS AMONG THE PARTIES HERETO.
GUARANTY AGREEMENT - Page 6
<PAGE> 21
EXECUTED as of the 31st day of July, 2000.
GUARANTOR:
/s/ WILLIAM D. GROSS
----------------------
William D. Gross
GUARANTY AGREEMENT - Page 7
<PAGE> 22
GUARANTY AGREEMENT
(LIMITED)
WHEREAS, the execution of this Guaranty Agreement (this "Guaranty
Agreement") is a condition to SERVICE ASSET INVESTMENT, INC., a Texas
corporation ("Borrower"), borrowing from GUARANTY FEDERAL BANK, F.S.B., a
federal savings bank ("Lender"), a term loan in the aggregate principal amount
of $10,000,000 pursuant to that certain Loan Agreement dated March 30, 2000, as
amended of even date herewith (such Loan Agreement, as it may have been or may
hereafter be amended or modified from time to time, being hereinafter referred
to as the "Loan Agreement") between Borrower and Lender;
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, PHILIP A. PENDERGRAFT, an individual residing at
3708 Big Bear Lake Drive, Arlington, Texas 76016 (the "Guarantor") hereby
irrevocably and unconditionally guarantees to Lender, subject to the terms of
this Guaranty Agreement, the full and prompt payment and performance of the
Guaranteed Indebtedness (hereinafter defined), this Guaranty Agreement being
upon the following terms:
1. DEFINITION OF GUARANTEED INDEBTEDNESS. The term "Guaranteed
Indebtedness" as used herein means the Borrower's obligations under Term Loan C
(as defined in the Loan Agreement), provided that Guarantor's liability with
respect to such obligations shall be limited to an amount not to exceed
$1,600,000. All other capitalized terms used and not otherwise defined herein
shall have their respective meanings as set forth in the Loan Agreement.
2. ABSOLUTE GUARANTY; NO SET-OFF RIGHTS. This instrument shall be an
absolute, continuing, irrevocable, and unconditional guaranty of payment and
performance, and not a guaranty of collection, of the Guaranteed Indebtedness as
provided herein, and the Guarantor shall remain liable on its obligations
hereunder until the payment and performance in full of the Guaranteed
Indebtedness. No set-off, counterclaim, recoupment, reduction, or diminution of
any obligation, or any defense of any kind or nature which Borrower may have
against Lender or any other party, or the Guarantor may have against Borrower,
Lender, or any other party, shall be available to, or shall be asserted by, the
Guarantor against Lender or any subsequent holder of the Guaranteed Indebtedness
or any part thereof or against payment of the Guaranteed Indebtedness or any
part thereof.
3. NO IMPAIRMENT OF RIGHTS. If the Guarantor becomes liable for any
indebtedness owing by Borrower to Lender by endorsement or otherwise, other than
under this Guaranty Agreement, such liability shall not be in any manner
impaired or affected hereby, and the rights of Lender hereunder shall be
cumulative of any and all other rights that Lender may ever have against the
Guarantor. The exercise by Lender of any right or remedy hereunder or under any
other instrument, or at law or in equity, shall not preclude the concurrent or
subsequent exercise of any other right or remedy.
4. OBLIGATIONS OF GUARANTORS; NO DUTY TO EXHAUST REMEDIES; WAIVER OF
SUBROGATION. In the event of default by Borrower in payment or performance of
the Guaranteed Indebtedness, or any part thereof, when such Guaranteed
Indebtedness becomes due, whether by its terms, by acceleration, or otherwise,
Guarantor shall promptly pay the amount due thereon to Lender
<PAGE> 23
without notice or demand in lawful money of the United States of America and it
shall not be necessary for Lender, in order to enforce such payment by either
Guarantor, first to institute suit or exhaust its remedies against Borrower or
any other guarantor or others liable on such Guaranteed Indebtedness, or to
enforce any rights against any collateral which shall ever have been given to
secure such Guaranteed Indebtedness. Notwithstanding anything to the contrary
contained in this Guaranty Agreement, until such time as the Guaranteed
Indebtedness has been paid in full, Guarantor hereby irrevocably waives any and
all rights it may now or hereafter have under any agreement or at law or in
equity (including, without limitation, any law subrogating Guarantor to the
rights of Lender) to assert any claim against or seek contribution,
indemnification or any other form of reimbursement from Borrower or any other
guarantors or any other party liable for payment of any or all of the Guaranteed
Indebtedness for any payment made by Guarantor under or in connection with this
Guaranty Agreement or otherwise. If acceleration of the time for payment of any
amount payable by Borrower under the Guaranteed Indebtedness is stayed upon the
insolvency, bankruptcy, or reorganization of Borrower, all such amounts
otherwise subject to acceleration under the terms of the Guaranteed Indebtedness
shall nonetheless be payable by Guarantor hereunder forthwith on demand by
Lender.
5. NO IMPAIRMENT OF GUARANTOR'S OBLIGATIONS. Guarantor hereby agrees
that its obligations under this Guaranty Agreement shall not be released,
discharged, diminished, impaired, reduced, or affected for any reason or by the
occurrence of any event, including, without limitation, one or more of the
following events, whether or not with notice to or the consent of the Guarantor:
(a) the taking or accepting of collateral as security for any or all of the
Guaranteed Indebtedness or the release, surrender, exchange, or subordination of
any collateral now or hereafter securing any or all of the Guaranteed
Indebtedness; (b) any partial release of the liability of the Guarantor
hereunder, or the full or partial release of any other guarantor or obligor from
liability for any or all of the Guaranteed Indebtedness; (c) any disability of
Borrower, or the dissolution, insolvency, or bankruptcy of Borrower, the
Guarantor, or any other party at any time liable for the payment of any or all
of the Guaranteed Indebtedness; (d) any renewal, extension, modification,
waiver, amendment, or rearrangement of any or all of the Guaranteed Indebtedness
or any instrument, document, or agreement evidencing, securing, or otherwise
relating to any or all of the Guaranteed Indebtedness; (e) any adjustment,
indulgence, forbearance, waiver, or compromise that may be granted or given by
Lender to Borrower, the Guarantor, or any other party ever liable for any or all
of the Guaranteed Indebtedness; (f) any neglect, delay, omission, failure, or
refusal of Lender to take or prosecute any action for the collection of any of
the Guaranteed Indebtedness or to foreclose or take or prosecute any action in
connection with any instrument, document, or agreement evidencing, securing, or
otherwise relating to any or all of the Guaranteed Indebtedness; (g) the
unenforceability or invalidity of any or all of the Guaranteed Indebtedness or
of any instrument, document, or agreement evidencing, securing, or otherwise
relating to any or all of the Guaranteed Indebtedness; (h) any payment by
Borrower or any other party to Lender is held to constitute a preference under
applicable bankruptcy or insolvency law or if for any other reason Lender is
required to refund any payment or pay the amount thereof to someone else; (i)
the settlement or compromise of any of the Guaranteed Indebtedness; (j) the
non-perfection of any security interest or lien securing any or all of the
Guaranteed Indebtedness; (k) any impairment of any collateral securing any or
all of the Guaranteed Indebtedness; (1) the failure of Lender to sell any
collateral securing any or all of the Guaranteed Indebtedness in a commercially
reasonable manner or as otherwise required by law; (m) any change in the
GUARANTY AGREEMENT - Page 2
<PAGE> 24
corporate existence, structure, or ownership of Borrower; or (n) any other
circumstance which might otherwise constitute a defense available to, or
discharge of, Borrower or the Guarantor.
6. REPRESENTATIONS AND WARRANTIES. The Guarantor represents and
warrants to Lender as follows:
(a) The Guarantor has the power and authority and legal right to
execute, deliver, and perform its obligations under this Guaranty
Agreement and this Guaranty Agreement constitutes the legal, valid, and
binding obligation of the Guarantor, enforceable against the Guarantor
in accordance with its terms, except as limited by bankruptcy,
insolvency, or other laws of general application relating to the
enforcement of creditors' rights.
(b) The execution, delivery, and performance by the Guarantor of
this Guaranty Agreement do not and will not violate or conflict with
any law, rule, or regulation or any order, writ, injunction, or decree
of any court, governmental authority or agency, or arbitrator and do
not and will not conflict with, result in a breach of, or constitute a
default under, or result in the imposition of any lien upon any assets
of the Guarantor pursuant to the provisions of any indenture, mortgage,
deed of trust, security agreement, franchise, permit, license, or other
instrument or agreement to which the Guarantor or its properties is
bound.
(c) No authorization, approval, or consent of, and no filing or
registration with, any court, governmental authority, or third party is
necessary for the execution, delivery, or performance by the Guarantor
of this Guaranty Agreement or the validity or enforceability thereof.
(d) The value of the consideration received and to be received by
the Guarantor as a result of Lender making Term Loan C to Borrower
under the Loan Agreement and the Guarantor executing and delivering
this Guaranty Agreement is reasonably worth at least as much as the
liability and obligation of the Guarantor hereunder, and such liability
and obligation and the Loan Agreement have benefitted and may
reasonably be expected to benefit the Guarantor directly and
indirectly.
(e) The Guarantor has, independently and without reliance upon
Lender and based upon such documents and information as the Guarantor
has deemed appropriate, made its own analysis and decision to enter
into this Guaranty Agreement.
7. COVENANTS OF GUARANTOR. Guarantor covenants and agrees that, as long
as the Guaranteed Indebtedness or any part thereof is outstanding or Lender has
any commitment under the Loan Agreement:
(a) Guarantor will furnish promptly to Lender written notice of the
occurrence of any default under this Guaranty Agreement or an Event of
Default under the Loan Agreement of which Guarantor has knowledge.
GUARANTY AGREEMENT - Page 3
<PAGE> 25
(b) Guarantor will furnish promptly to Lender such additional
information concerning Guarantor as Lender may request.
(c) Guarantor will obtain at any time and from time to time all
authorizations, licenses, consents or approvals as shall now or
hereafter be necessary or desirable under all applicable laws or
regulations or otherwise in connection with the execution, delivery and
performance of this Guaranty Agreement and will promptly furnish copies
thereof to Lender.
(d) Guarantor will at all times own directly or indirectly and free
and clear of all liens and encumbrances whatsoever at least the same
percentage of voting shares of Borrower, if any, as it owns directly or
indirectly on the date hereof.
8. LENDER'S RIGHTS WITH RESPECT TO GUARANTOR'S PROPERTY IN LENDER'S
POSSESSION. Lender shall have the right to set off and apply against this
Guaranty Agreement or the Guaranteed Indebtedness or both, at any time and
without notice to Guarantor, any and all deposits (general or special, time or
demand, provisional or final) or other sums at any time credited by or owing
from Lender to Guarantor whether or not the Guaranteed Indebtedness is then due
and irrespective of whether or not Lender shall have made any demand under this
Guaranty Agreement. As security for this Guaranty Agreement and the Guaranteed
Indebtedness, Guarantor hereby grants Lender a security interest in all money,
instruments, certificates of deposit, and other property of Guarantor now or
hereafter held by Lender, including, without limitation, property held in
safekeeping. In addition to Lender's right of setoff and as further security for
this Guaranty Agreement and the Guaranteed Indebtedness, Guarantor hereby grants
Lender a security interest in all deposits (general or special, time or demand,
provisional or final) and all other accounts of Guarantor now or hereafter on
deposit with or held by Lender and all other sums at any time credited by or
owing from Lender to Guarantor. The rights and remedies of Lender hereunder are
in addition to other rights and remedies (including, without limitation, other
rights of setoff) which Lender may have.
9. SUBORDINATION. (a) Guarantor hereby agrees that the Subordinated
Indebtedness (as hereinafter defined) shall be subordinate and junior in right
of payment to the prior payment in full of all Guaranteed Indebtedness, and the
Guarantor hereby assigns the Subordinated Indebtedness to Lender as security for
the Guaranteed Indebtedness. If any sums shall be paid to the Guarantor by
Borrower or any other person or entity on account of the Subordinated
Indebtedness, such sums shall be held in trust by the Guarantor for the benefit
of Lender and shall forthwith be paid to Lender without affecting the liability
of the Guarantor under this Guaranty Agreement and may be applied by Lender
against the Guaranteed Indebtedness in such order and manner as Lender may
determine in its sole discretion. Upon the request of Lender, the Guarantor
shall execute, deliver, and endorse to Lender such documents and instruments as
Lender may request to perfect, preserve, and enforce its rights hereunder. For
purposes of this Guaranty Agreement, the term "Subordinated Indebtedness" means
all indebtedness, liabilities, and obligations of Borrower to the Guarantor,
whether such indebtedness, liabilities, and obligations now exist or are
hereafter incurred or arise, or whether the obligations of Borrower thereon are
direct, indirect, contingent, primary, secondary, several, joint and several, or
otherwise, and irrespective of whether such indebtedness, liabilities, or
obligations are evidenced by a note, contract, open account, or otherwise, and
GUARANTY AGREEMENT - Page 4
<PAGE> 26
irrespective of the person or persons in whose favor such indebtedness,
obligations, or liabilities may, at their inception, have been, or may hereafter
be created, or the manner in which they have been or may hereafter be acquired
by the Guarantor.
(b) Guarantor agrees that any and all liens, security interests,
judgment liens, charges, or other encumbrances upon Borrower's assets securing
payment of any Subordinated Indebtedness shall be and remain inferior and
subordinate to any and all liens, security interests, judgment liens, charges,
or other encumbrances upon Borrower's assets securing payment of the Guaranteed
Indebtedness or any part thereof, regardless of whether such encumbrances in
favor of the Guarantor or Lender presently exist or are hereafter created or
attached. Without the prior written consent of Lender, Guarantor shall not (i)
file suit against Borrower or exercise or enforce any other creditor's right it
may have against Borrower, or (ii) foreclose, repossess, sequester, or otherwise
take steps or institute any action or proceedings (judicial or otherwise,
including without limitation the commencement of, or joinder in, any
liquidation, bankruptcy, rearrangement, debtor's relief or insolvency
proceeding) to enforce any liens, security interests, collateral rights,
judgments or other encumbrances held by the Guarantor on assets of Borrower.
(c) In the event of any receivership, bankruptcy, reorganization,
rearrangement, debtor's relief, or other insolvency proceeding involving
Borrower as debtor, Lender shall have the right to prove and vote any claim
under the Subordinated Indebtedness and to receive directly from the receiver,
trustee or other court custodian all dividends, distributions, and payments made
in respect of the Subordinated Indebtedness. Lender may apply any such
dividends, distributions, and payments against the Guaranteed Indebtedness in
such order and manner as Lender may determine in its sole discretion.
10. AMENDMENTS; CUMULATIVE REMEDIES. No amendment or waiver of any
provision of this Guaranty Agreement nor consent to any departure by the
Guarantor therefrom shall in any event be effective unless the same shall be in
writing and signed by Lender. No failure on the part of Lender to exercise, and
no delay in exercising any right, power, or privilege hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power,
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power, or privilege. The remedies herein provided
are cumulative and not exclusive of any remedies provided by law.
11. SUCCESSORS AND ASSIGNS. This Guaranty Agreement is for the benefit
of Lender and its successors and assigns, and in the event of an assignment of
the Guaranteed Indebtedness, or any part thereof, the rights and benefits
hereunder, to the extent applicable to the indebtedness so assigned, may be
transferred with such indebtedness. This Guaranty Agreement is binding not only
on the Guarantor, but on the Guarantor's heirs and personal representatives.
12. RELIANCE BY LENDER. The Guarantor recognizes that Lender is relying
upon this Guaranty Agreement and the undertakings of the Guarantor hereunder in
making extensions of credit to Borrower under the Loan Agreement and further
recognizes that the execution and delivery of this Guaranty Agreement is a
material inducement to Lender in making Term Loan C under the Loan Agreement.
The Guarantor hereby acknowledges that there are no conditions to the full
effectiveness of this Guaranty Agreement.
GUARANTY AGREEMENT - Page 5
<PAGE> 27
13. GOVERNING LAW. THIS GUARANTY AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
14. FEES AND EXPENSES. The Guarantor shall pay on demand all reasonable
attorneys' fees and all other costs and expenses incurred by Lender in
connection with the enforcement or collection of this Guaranty Agreement.
15. WAIVERS BY GUARANTOR. The Guarantor hereby waives promptness,
diligence, notice of any default under the Guaranteed Indebtedness, demand for
payment, notice of acceptance of this Guaranty Agreement, presentment, notice of
protest, notice of dishonor, notice of the incurring by Borrower of additional
indebtedness, and all other notices and demands with respect to the Guaranteed
Indebtedness and this Guaranty Agreement.
16. VALIDITY; ENFORCEABILITY. The Loan Agreement, and all of the terms
thereof, are incorporated herein by reference, the same as if stated verbatim
herein, and Guarantor agrees that Lender may exercise any and all rights granted
to it under the Loan Agreement and the other Loan Documents (as defined in the
Loan Agreement) without affecting the validity or enforceability of this
Guaranty Agreement.
17. NO RELIANCE ON LENDER. The Guarantor hereby represents and warrants
to Lender that the Guarantor has adequate means to obtain from Borrower and the
Subsidiaries on a continuing basis information concerning the financial
condition and assets of Borrower and the Subsidiaries and that the Guarantor is
not relying upon Lender to provide (and Lender shall have no duty to provide)
any such information to the Guarantor either now or in the future.
18. NO ORAL AGREEMENTS. THIS GUARANTY AGREEMENT REPRESENTS THE FINAL
AGREEMENT OF GUARANTOR AND LENDER WITH RESPECT TO GUARANTOR'S GUARANTY OF THE
GUARANTEED INDEBTEDNESS AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS AMONG THE PARTIES HERETO.
GUARANTY AGREEMENT - Page 6
<PAGE> 28
EXECUTED as of the 31st day of July, 2000.
GUARANTOR:
/s/ PHILIP A. PENDERGRAFT
-------------------------
Philip A. Pendergraft
GUARANTY AGREEMENT - Page 7
<PAGE> 29
GUARANTY AGREEMENT
(LIMITED)
WHEREAS, the execution of this Guaranty Agreement (this "Guaranty
Agreement") is a condition to SERVICE ASSET INVESTMENT, INC., a Texas
corporation ("Borrower"), borrowing from GUARANTY FEDERAL BANK, F.S.B., a
federal savings bank ("Lender"), a term loan in the aggregate principal amount
of $10,000,000 pursuant to that certain Loan Agreement dated March 30, 2000, as
amended of even date herewith (such Loan Agreement, as it may have been or may
hereafter be amended or modified from time to time, being hereinafter referred
to as the "Loan Agreement") between Borrower and Lender;
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, DANIEL P. SON, an individual residing at 7138
Azalea Lane, Dallas, Texas 75230 (the "Guarantor"), hereby irrevocably and
unconditionally guarantees to Lender, subject to the terms of this Guaranty
Agreement, the full and prompt payment and performance of the Guaranteed
Indebtedness (hereinafter defined), this Guaranty Agreement being upon the
following terms:
1. DEFINITION OF GUARANTEED INDEBTEDNESS. The term "Guaranteed
Indebtedness" as used herein means the Borrower's obligations under Term Loan C
(as defined in the Loan Agreement), provided that Guarantor's liability with
respect to such obligations shall be limited to an amount not to exceed
$1,600,000. All other capitalized terms used and not otherwise defined herein
shall have their respective meanings as set forth in the Loan Agreement.
2. ABSOLUTE GUARANTY; NO SET-OFF RIGHTS. This instrument shall be an
absolute, continuing, irrevocable, and unconditional guaranty of payment and
performance, and not a guaranty of collection, of the Guaranteed Indebtedness as
provided herein, and the Guarantor shall remain liable on its obligations
hereunder until the payment and performance in full of the Guaranteed
Indebtedness. No set-off, counterclaim, recoupment, reduction, or diminution of
any obligation, or any defense of any kind or nature which Borrower may have
against Lender or any other party, or the Guarantor may have against Borrower,
Lender, or any other party, shall be available to, or shall be asserted by, the
Guarantor against Lender or any subsequent holder of the Guaranteed Indebtedness
or any part thereof or against payment of the Guaranteed Indebtedness or any
part thereof.
3. NO IMPAIRMENT OF RIGHTS. If the Guarantor becomes liable for any
indebtedness owing by Borrower to Lender by endorsement or otherwise, other than
under this Guaranty Agreement, such liability shall not be in any manner
impaired or affected hereby, and the rights of Lender hereunder shall be
cumulative of any and all other rights that Lender may ever have against the
Guarantor. The exercise by Lender of any right or remedy hereunder or under any
other instrument, or at law or in equity, shall not preclude the concurrent or
subsequent exercise of any other right or remedy.
4. OBLIGATIONS OF GUARANTORS; NO DUTY TO EXHAUST REMEDIES; WAIVER OF
SUBROGATION. In the event of default by Borrower in payment or performance of
the Guaranteed Indebtedness, or any part thereof, when such Guaranteed
Indebtedness becomes due, whether by its terms, by acceleration, or otherwise,
Guarantor shall promptly pay the amount due thereon to Lender
<PAGE> 30
without notice or demand in lawful money of the United States of America and it
shall not be necessary for Lender, in order to enforce such payment by either
Guarantor, first to institute suit or exhaust its remedies against Borrower or
any other guarantor or others liable on such Guaranteed Indebtedness, or to
enforce any rights against any collateral which shall ever have been given to
secure such Guaranteed Indebtedness. Notwithstanding anything to the contrary
contained in this Guaranty Agreement, until such time as the Guaranteed
Indebtedness has been paid in full, Guarantor hereby irrevocably waives any and
all rights it may now or hereafter have under any agreement or at law or in
equity (including, without limitation, any law subrogating Guarantor to the
rights of Lender) to assert any claim against or seek contribution,
indemnification or any other form of reimbursement from Borrower or any other
guarantors or any other party liable for payment of any or all of the Guaranteed
Indebtedness for any payment made by Guarantor under or in connection with this
Guaranty Agreement or otherwise. If acceleration of the time for payment of any
amount payable by Borrower under the Guaranteed Indebtedness is stayed upon the
insolvency, bankruptcy, or reorganization of Borrower, all such amounts
otherwise subject to acceleration under the terms of the Guaranteed Indebtedness
shall nonetheless be payable by Guarantor hereunder forthwith on demand by
Lender.
5. NO IMPAIRMENT OF GUARANTOR'S OBLIGATIONS. Guarantor hereby agrees
that its obligations under this Guaranty Agreement shall not be released,
discharged, diminished, impaired, reduced, or affected for any reason or by the
occurrence of any event, including, without limitation, one or more of the
following events, whether or not with notice to or the consent of the Guarantor:
(a) the taking or accepting of collateral as security for any or all of the
Guaranteed Indebtedness or the release, surrender, exchange, or subordination of
any collateral now or hereafter securing any or all of the Guaranteed
Indebtedness; (b) any partial release of the liability of the Guarantor
hereunder, or the full or partial release of any other guarantor or obligor from
liability for any or all of the Guaranteed Indebtedness; (c) any disability of
Borrower, or the dissolution, insolvency, or bankruptcy of Borrower, the
Guarantor, or any other party at any time liable for the payment of any or all
of the Guaranteed Indebtedness; (d) any renewal, extension, modification,
waiver, amendment, or rearrangement of any or all of the Guaranteed Indebtedness
or any instrument, document, or agreement evidencing, securing, or otherwise
relating to any or all of the Guaranteed Indebtedness; (e) any adjustment,
indulgence, forbearance, waiver, or compromise that may be granted or given by
Lender to Borrower, the Guarantor, or any other party ever liable for any or all
of the Guaranteed Indebtedness; (f) any neglect, delay, omission, failure, or
refusal of Lender to take or prosecute any action for the collection of any of
the Guaranteed Indebtedness or to foreclose or take or prosecute any action in
connection with any instrument, document, or agreement evidencing, securing, or
otherwise relating to any or all of the Guaranteed Indebtedness; (g) the
unenforceability or invalidity of any or all of the Guaranteed Indebtedness or
of any instrument, document, or agreement evidencing, securing, or otherwise
relating to any or all of the Guaranteed Indebtedness; (h) any payment by
Borrower or any other party to Lender is held to constitute a preference under
applicable bankruptcy or insolvency law or if for any other reason Lender is
required to refund any payment or pay the amount thereof to someone else; (i)
the settlement or compromise of any of the Guaranteed Indebtedness; (j) the
non-perfection of any security interest or lien securing any or all of the
Guaranteed Indebtedness; (k) any impairment of any collateral securing any or
all of the Guaranteed Indebtedness; (l) the failure of Lender to sell any
collateral securing any or all of the Guaranteed Indebtedness in a commercially
reasonable manner or as otherwise required by law; (m) any change in the
GUARANTY AGREEMENT - Page 2
<PAGE> 31
corporate existence, structure, or ownership of Borrower; or (n) any other
circumstance which might otherwise constitute a defense available to, or
discharge of, Borrower or the Guarantor.
6. REPRESENTATIONS AND WARRANTIES. The Guarantor represents and
warrants to Lender as follows:
(a) The Guarantor has the power and authority and legal right
to execute, deliver, and perform its obligations under this Guaranty
Agreement and this Guaranty Agreement constitutes the legal, valid, and
binding obligation of the Guarantor, enforceable against the Guarantor
in accordance with its terms, except as limited by bankruptcy,
insolvency, or other laws of general application relating to the
enforcement of creditors' rights.
(b) The execution, delivery, and performance by the Guarantor
of this Guaranty Agreement do not and will not violate or conflict with
any law, rule, or regulation or any order, writ, injunction, or decree
of any court, governmental authority or agency, or arbitrator and do
not and will not conflict with, result in a breach of, or constitute a
default under, or result in the imposition of any lien upon any assets
of the Guarantor pursuant to the provisions of any indenture, mortgage,
deed of trust, security agreement, franchise, permit, license, or other
instrument or agreement to which the Guarantor or its properties is
bound.
(c) No authorization, approval, or consent of, and no filing
or registration with, any court, governmental authority, or third party
is necessary for the execution, delivery, or performance by the
Guarantor of this Guaranty Agreement or the validity or enforceability
thereof.
(d) The value of the consideration received and to be received
by the Guarantor as a result of Lender making Term Loan C to Borrower
under the Loan Agreement and the Guarantor executing and delivering
this Guaranty Agreement is reasonably worth at least as much as the
liability and obligation of the Guarantor hereunder, and such liability
and obligation and the Loan Agreement have benefitted and may
reasonably be expected to benefit the Guarantor directly and
indirectly.
(e) The Guarantor has, independently and without reliance upon
Lender and based upon such documents and information as the Guarantor
has deemed appropriate, made its own analysis and decision to enter
into this Guaranty Agreement.
7. COVENANTS OF GUARANTOR. Guarantor covenants and agrees that, as long
as the Guaranteed Indebtedness or any part thereof is outstanding or Lender has
any commitment under the Loan Agreement:
(a) Guarantor will furnish promptly to Lender written notice
of the occurrence of any default under this Guaranty Agreement or an
Event of Default under the Loan Agreement of which Guarantor has
knowledge.
GUARANTY AGREEMENT - Page 3
<PAGE> 32
(b) Guarantor will furnish promptly to Lender such additional
information concerning Guarantor as Lender may request.
(c) Guarantor will obtain at any time and from time to time
all authorizations, licenses, consents or approvals as shall now or
hereafter be necessary or desirable under all applicable laws or
regulations or otherwise in connection with the execution, delivery and
performance of this Guaranty Agreement and will promptly furnish copies
thereof to Lender.
(d) Guarantor will at all times own directly or indirectly and
free and clear of all liens and encumbrances whatsoever at least the
same percentage of voting shares of Borrower, if any, as it owns
directly or indirectly on the date hereof.
8. LENDER'S RIGHTS WITH RESPECT TO GUARANTOR'S PROPERTY IN LENDER'S
POSSESSION. Lender shall have the right to set off and apply against this
Guaranty Agreement or the Guaranteed Indebtedness or both, at any time and
without notice to Guarantor, any and all deposits (general or special, time or
demand, provisional or final) or other sums at any time credited by or owing
from Lender to Guarantor whether or not the Guaranteed Indebtedness is then due
and irrespective of whether or not Lender shall have made any demand under this
Guaranty Agreement. As security for this Guaranty Agreement and the Guaranteed
Indebtedness, Guarantor hereby grants Lender a security interest in all money,
instruments, certificates of deposit, and other property of Guarantor now or
hereafter held by Lender, including, without limitation, property held in
safekeeping. In addition to Lender's right of setoff and as further security for
this Guaranty Agreement and the Guaranteed Indebtedness, Guarantor hereby grants
Lender a security interest in all deposits (general or special, time or demand,
provisional or final) and all other accounts of Guarantor now or hereafter on
deposit with or held by Lender and all other sums at any time credited by or
owing from Lender to Guarantor. The rights and remedies of Lender hereunder are
in addition to other rights and remedies (including, without limitation, other
rights of setoff) which Lender may have.
9. SUBORDINATION. (a) Guarantor hereby agrees that the Subordinated
Indebtedness (as hereinafter defined) shall be subordinate and junior in right
of payment to the prior payment in full of all Guaranteed Indebtedness, and the
Guarantor hereby assigns the Subordinated Indebtedness to Lender as security for
the Guaranteed Indebtedness. If any sums shall be paid to the Guarantor by
Borrower or any other person or entity on account of the Subordinated
Indebtedness, such sums shall be held in trust by the Guarantor for the benefit
of Lender and shall forthwith be paid to Lender without affecting the liability
of the Guarantor under this Guaranty Agreement and may be applied by Lender
against the Guaranteed Indebtedness in such order and manner as Lender may
determine in its sole discretion. Upon the request of Lender, the Guarantor
shall execute, deliver, and endorse to Lender such documents and instruments as
Lender may request to perfect, preserve, and enforce its rights hereunder. For
purposes of this Guaranty Agreement, the term "Subordinated Indebtedness" means
all indebtedness, liabilities, and obligations of Borrower to the Guarantor,
whether such indebtedness, liabilities, and obligations now exist or are
hereafter incurred or arise, or whether the obligations of Borrower thereon are
direct, indirect, contingent, primary, secondary, several, joint and several, or
otherwise, and irrespective of whether such indebtedness, liabilities, or
obligations are evidenced by a note, contract, open account, or otherwise, and
GUARANTY AGREEMENT - Page 4
<PAGE> 33
irrespective of the person or persons in whose favor such indebtedness,
obligations, or liabilities may, at their inception, have been, or may hereafter
be created, or the manner in which they have been or may hereafter be acquired
by the Guarantor.
(b) Guarantor agrees that any and all liens, security interests,
judgment liens, charges, or other encumbrances upon Borrower's assets securing
payment of any Subordinated Indebtedness shall be and remain inferior and
subordinate to any and all liens, security interests, judgment liens, charges,
or other encumbrances upon Borrower's assets securing payment of the Guaranteed
Indebtedness or any part thereof, regardless of whether such encumbrances in
favor of the Guarantor or Lender presently exist or are hereafter created or
attached. Without the prior written consent of Lender, Guarantor shall not (i)
file suit against Borrower or exercise or enforce any other creditor's right it
may have against Borrower, or (ii) foreclose, repossess, sequester, or otherwise
take steps or institute any action or proceedings (judicial or otherwise,
including without limitation the commencement of, or joinder in, any
liquidation, bankruptcy, rearrangement, debtor's relief or insolvency
proceeding) to enforce any liens, security interests, collateral rights,
judgments or other encumbrances held by the Guarantor on assets of Borrower.
(c) In the event of any receivership, bankruptcy, reorganization,
rearrangement, debtor's relief, or other insolvency proceeding involving
Borrower as debtor, Lender shall have the right to prove and vote any claim
under the Subordinated Indebtedness and to receive directly from the receiver,
trustee or other court custodian all dividends, distributions, and payments made
in respect of the Subordinated Indebtedness. Lender may apply any such
dividends, distributions, and payments against the Guaranteed Indebtedness in
such order and manner as Lender may determine in its sole discretion.
10. AMENDMENTS; CUMULATIVE REMEDIES. No amendment or waiver of any
provision of this Guaranty Agreement nor consent to any departure by the
Guarantor therefrom shall in any event be effective unless the same shall be in
writing and signed by Lender. No failure on the part of Lender to exercise, and
no delay in exercising any right, power, or privilege hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power,
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power, or privilege. The remedies herein provided
are cumulative and not exclusive of any remedies provided by law.
11. SUCCESSORS AND ASSIGNS. This Guaranty Agreement is for the benefit
of Lender and its successors and assigns, and in the event of an assignment of
the Guaranteed Indebtedness, or any part thereof, the rights and benefits
hereunder, to the extent applicable to the indebtedness so assigned, may be
transferred with such indebtedness. This Guaranty Agreement is binding not only
on the Guarantor, but on the Guarantor's heirs and personal representatives.
12. RELIANCE BY LENDER. The Guarantor recognizes that Lender is relying
upon this Guaranty Agreement and the undertakings of the Guarantor hereunder in
making extensions of credit to Borrower under the Loan Agreement and further
recognizes that the execution and delivery of this Guaranty Agreement is a
material inducement to Lender in making Term Loan C under the Loan Agreement.
The Guarantor hereby acknowledges that there are no conditions to the full
effectiveness of this Guaranty Agreement.
GUARANTY AGREEMENT - Page 5
<PAGE> 34
13. GOVERNING LAW. THIS GUARANTY AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
14. FEES AND EXPENSES. The Guarantor shall pay on demand all reasonable
attorneys' fees and all other costs and expenses incurred by Lender in
connection with the enforcement or collection of this Guaranty Agreement.
15. WAIVERS BY GUARANTOR. The Guarantor hereby waives promptness,
diligence, notice of any default under the Guaranteed Indebtedness, demand for
payment, notice of acceptance of this Guaranty Agreement, presentment, notice of
protest, notice of dishonor, notice of the incurring by Borrower of additional
indebtedness, and all other notices and demands with respect to the Guaranteed
Indebtedness and this Guaranty Agreement.
16. VALIDITY; ENFORCEABILITY. The Loan Agreement, and all of the terms
thereof, are incorporated herein by reference, the same as if stated verbatim
herein, and Guarantor agrees that Lender may exercise any and all rights granted
to it under the Loan Agreement and the other Loan Documents (as defined in the
Loan Agreement) without affecting the validity or enforceability of this
Guaranty Agreement.
17. NO RELIANCE ON LENDER. The Guarantor hereby represents and warrants
to Lender that the Guarantor has adequate means to obtain from Borrower and the
Subsidiaries on a continuing basis information concerning the financial
condition and assets of Borrower and the Subsidiaries and that the Guarantor is
not relying upon Lender to provide (and Lender shall have no duty to provide)
any such information to the Guarantor either now or in the future.
18. NO ORAL AGREEMENTS. THIS GUARANTY AGREEMENT REPRESENTS THE FINAL
AGREEMENT OF GUARANTOR AND LENDER WITH RESPECT TO GUARANTOR'S GUARANTY OF THE
GUARANTEED INDEBTEDNESS AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS AMONG THE PARTIES HERETO.
GUARANTY AGREEMENT - Page 6
<PAGE> 35
EXECUTED as of the 31 day of July, 2000.
GUARANTOR:
/s/ DANIEL P. SON
--------------------------------
Daniel P. Son
GUARANTY AGREEMENT - Page 7
<PAGE> 36
AMENDED AND RESTATED
STOCK PLEDGE AGREEMENT
This AMENDED AND RESTATED STOCK PLEDGE AGREEMENT ("Pledge Agreement"),
dated as of July 31, 2000, is made by and between Service Asset Investments,
Inc., a Texas corporation ("Pledgor") and Guaranty Federal Bank, F.S.B., a
federal savings bank ("Pledgee").
WITNESSETH:
WHEREAS, Pledgor and Pledgee have entered into a Loan Agreement dated
as of March 30, 2000 (such agreement, together with all amendments,
restatements, modifications and supplements thereto, being hereinafter referred
to as the "Loan Agreement"); and
WHEREAS, in connection with the transactions contemplated by the Loan
Agreement, the Pledgor executed that certain Pledge Agreement dated March 30,
2000 (the "Original Pledge Agreement"), which the Pledgor hereby acknowledges
and ratifies;
WHEREAS, Pledgor has requested Pledgee to make an additional term loan
to Pledgor in the principal amount of $10,000,000 pursuant to the terms of a
First Amendment to Loan Agreement, dated of even date herewith, between Pledgor
and Pledgee (the "First Amendment");
WHEREAS, Pledgee has conditioned its acceptance of the First Amendment
upon the execution and delivery of this Pledge Agreement by Pledgor, which
amends and restates the Original Pledge Agreement; and
WHEREAS, capitalized terms used herein shall have the meanings assigned
to them in the Loan Agreement.
NOW, THEREFORE, to induce Pledgee to enter into the First Amendment to
Loan Agreement and for good and valuable considerations, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows, intending to be legally bound:
1. Grant of Security Interest and Pledge.
(a) As security for the payment and performance of the Notes
and the Obligations, including, without limitation, the due and
punctual payment of the principal of, and accrued and unpaid interest
on, the Notes, whether at maturity, by acceleration or otherwise, and
all renewals, extensions, rearrangements, amendments, modifications and
increases thereof, Pledgor hereby pledges and grants to Pledgee a first
priority security interest in and to, and assigns and transfers to
Pledgee, (i) all of the capital stock of (y) Service Asset Management
Company, a North Carolina corporation and (z) Penson Worldwide, Inc., a
Delaware corporation, as evidenced on the date hereof by the
certificates described on Schedule 1 attached hereto; (ii) all proceeds
and products of the stock described
<PAGE> 37
in item (i) above; and (iii) all income, stock dividends and other
distributions from items (i) and (ii) above (such shares, proceeds,
products, income, stock dividends and distributions being referred to
collectively as the "Collateral"). The Collateral shall be held by
Pledgee, but shall continue to be registered in the name of the Pledgor
unless and until the occurrence of an Event of Default.
(b) Pledgor hereby designates and appoints Pledgee as its
attorney-in-fact and proxy, with full power of substitution, which
designation and appointment is irrevocable and coupled with an
interest, exercisable upon the occurrence of an Event of Default for
the purpose of voting the Collateral and performing any and all acts,
in the name, place and stead of Pledgor, that are authorized by the
provisions of this Pledge Agreement. Accordingly, Pledgor irrevocably
constitutes and appoints Pledgee as Pledgor's proxy and
attorney-in-fact, effective only after notice to Pledgor after an Event
of Default has occurred and so long as it is continuing, but with full
power of substitution, to vote, and to act with respect to, the
Collateral, standing in the name of Pledgor or with respect to which
Pledgor is entitled to vote and act.
(c) Concurrently with, or within two Business Days after, the
execution and delivery of this Pledge Agreement, Pledgor shall deliver
to Pledgee all certificates identified in Schedule 1 accompanied by
undated stock powers duly executed in blank.
2. Voting.
During the term of this Pledge Agreement and for so long as no Event of
Default shall have occurred, Pledgor shall have the sole and absolute right to
vote the Collateral. After an Event of Default has occurred and so long as it is
continuing, the right to vote the Collateral is vested exclusively in Pledgee.
Such proxy is coupled with an interest, is irrevocable, and continues until the
Obligations are fully paid and performed.
3. Cash Dividends and Distributions.
During the term of this Pledge Agreement and for so long as no Event of
Default shall have occurred, cash dividends and cash distribution payments may
be paid to Pledgor. All non-cash dividends and other non-cash distributions
shall be immediately delivered to Pledgee (together with appropriate stock
powers signed by Pledgor).
4. Transfer, Dividends, Etc. After Default.
If an Event of Default shall have occurred, then upon written notice to
Pledgor, Pledgee may take any of the following actions:
(a) Pledgee may, in its absolute discretion, cause all or any
of the Collateral then held by it under this Pledge Agreement to be
transferred into the name of Pledgee, or the name or names of the
nominee or nominees of Pledgee;
-2-
<PAGE> 38
(b) Pledgee may receive, and Pledgor upon request shall assign to the
order of Pledgee, all dividends, interest or principal and payments or other
distributions in respect of the Collateral, all of which shall thereafter be
held by Pledgee as part of the Collateral or shall be applied to the Notes and
the Obligations in such manner and order as Pledgee determines in its absolute
discretion;
(c) Pledgee, as Pledgor's attorney-in-fact and proxy, shall have and
may exercise on behalf of Pledgor all rights of an owner in respect of any of
the Collateral hereunder or may, in any respect not contrary to the provisions
of this Pledge Agreement, permit such rights to be exercised by Pledgor; and,
without limiting the generality of the foregoing, in its discretion:
(i) Pledgee may join in and become a party to any plan of
reorganization and readjustment, whether voluntary or involuntary, may
deposit any of the Collateral under such plan or make any exchange or
surrender or permit any substitution of or cancellation of the
Collateral as required by such plan and may take all such action as may
be required by such plan; provided, however, that all securities issued
or created under such plan and exchanged for the Collateral or any
portion thereof, and all securities, monies or property received
pursuant to such plan shall thereafter be subject to the terms of this
Pledge Agreement and become part of the Collateral or shall be applied
to the Notes and Obligations in such manner and order as Pledgee
determines in its absolute discretion; and
(ii) Pledgee may receive, endorse and collect all checks,
whether or not made payable to the order of Pledgor, representing any
dividend, interest or principal payments or other distributions at any
time paid or made on or with respect to the Collateral all of which
shall be held by Pledgee pursuant to the terms of this Pledge Agreement
as part of the Collateral or shall be applied to the Notes and
Obligations in such manner and order as Pledgee determines in its
absolute discretion.
5. Representations and Warranties of Pledgor. Pledgor represents and
warrants to Pledgee as follows:
(a) Financing Statements. Except for financing statements in
favor of Pledgee, no financing statement covering the Collateral or any
portion thereof, or any proceeds thereof, is on file in any public
office.
(b) Ownership Free of Encumbrances. All shares of capital
stock that are Collateral are duly issued, fully paid and
non-assessable, and except for the security interest granted hereby to
Pledgee, Pledgor now owns the Collateral free from any lien, security
interest, claim or encumbrance.
(c) Benefit. Pledgor will benefit, directly or indirectly,
from the loans to Pledgor evidenced by the Notes.
-3-
<PAGE> 39
(d) All Outstanding Stock: No Warrants; Etc. The 1,000 shares
of common stock of Service Asset Management Company pledged hereunder
represent all of the outstanding capital stock of Service Asset
Management Company. The ____ shares of stock of Penson Worldwide, Inc.
pledged hereunder represent all of the outstanding capital stock of
Penson Worldwide, Inc. There are no warrants, options or other rights
to acquire capital stock of Service Asset Management Company and Penson
Worldwide, Inc. outstanding.
(e) Organization and Authority. Pledgor is a corporation duly
organized, validly existing, and in good standing under the laws of its
state of incorporation. Pledgor has the corporate power and authority
to execute, deliver, and perform this Agreement, and the execution,
delivery, and performance of this Agreement by Pledgor have been duly
authorized by all necessary corporate action on the part of Pledgor and
do not and will not violate or conflict with the articles of
incorporation or bylaws of Pledgor or any law, rule, or regulation or
any order, writ, injunction, or decree of any court, governmental
authority, or arbitrator and do not and will not conflict with, result
in a breach of, or constitute a default under the provisions of any
indenture, mortgage, deed of trust, security agreement, or other
instrument or agreement binding on Pledgor or any of its property.
6. Covenants.
(a) Encumbrances. Pledgor shall not create, permit, or suffer
to exist, and shall defend the Collateral against, any Lien, security
interest, or other encumbrance on the Collateral except the pledge and
security interest of Pledgee hereunder, and shall defend Pledgor's
rights in the Collateral and Pledgee's security interest in the
Collateral against the claims of all Persons.
(b) Sale of Collateral. Pledgor shall not sell, assign, or
otherwise dispose of the Collateral or any part thereof without the
prior written consent of Pledgee.
(c) Distributions. If Pledgor shall become entitled to receive
or shall receive any stock certificate (including, without limitation,
any certificate representing a stock dividend or a distribution in
connection with any reclassification, increase, or reduction of capital
or issued in connection with any reorganization), option or rights,
whether as an addition to, in substitution of, or in exchange for any
Collateral or otherwise, Pledgor agrees to accept the same as Pledgee's
agent and to hold the same in trust for Pledgee, and to deliver the
same forthwith to Pledgee in the exact form received, with the
appropriate endorsement of Pledgor when necessary and/or appropriate
undated stock powers duly executed in blank, to be held by Pledgee as
additional Collateral for the Obligations, subject to the terms hereof.
Any sums paid upon or in respect of the Collateral upon the liquidation
or dissolution of the issuer thereof shall be paid over to Pledgee to
be held by it as additional Collateral for the Obligations subject to
the terms hereof; and in case any distribution of capital shall be made
on or in respect of the Collateral or any property shall be distributed
upon or with respect to the Collateral pursuant to any recapitalization
or reclassification of the capital of the issuer thereof or pursuant to
any reorganization of the issuer thereof, the property so distributed
-4-
<PAGE> 40
shall be delivered to the Pledgee to be held by it, as additional
Collateral for the Obligations, subject to the terms hereof. All sums
of money and property so paid or distributed in respect of the
Collateral that are received by Pledgor shall, until paid or delivered
to Pledgee, be held by Pledgor in trust as additional security for the
Obligations.
(d) Further Assurances. At any time and from time to time,
upon the request of Pledgee, and at the sole expense of Pledgor,
Pledgor shall promptly execute and deliver all such further instruments
and documents and take such further action as Pledgee may deem
necessary or desirable to preserve and perfect its security interest in
the Collateral and carry out the provisions and purposes of this
Agreement, including, without limitation, the execution and filing of
such financing statements as Pledgee may require. A carbon,
photographic, or other reproduction of this Agreement or of any
financing statement covering the Collateral or any part thereof shall
be sufficient as a financing statement and may be filed as a financing
statement. Subject to the right of Pledgor to receive cash dividends
under Section 3 hereof, in the event any Collateral is ever received by
Pledgor, Pledgor shall promptly transfer and deliver to Pledgee such
Collateral so received by Pledgor (together with any necessary
endorsements in blank or undated stock powers duly executed in blank),
which Collateral shall thereafter be held by Pledgee pursuant to the
terms of this Agreement. Pledgee shall at all times have the right to
exchange any certificates representing Collateral for certificates of
smaller or larger denominations for any purpose consistent with this
Agreement.
(e) Inspection Rights. Pledgor shall permit Pledgee and its
representatives to examine, inspect, and copy Pledgor's books and
records at any reasonable time and as often as Pledgee may reasonably
desire.
(f) Taxes. Pledgor agrees to pay or discharge prior to
delinquency all taxes, assessments, levies, and other governmental
charges imposed on it or its property, except Pledgor shall not be
required to pay or discharge any tax, assessment, levy, or other
governmental charge if (i) the amount or validity thereof is being
contested by Pledgor in good faith by appropriate proceedings
diligently pursued, (ii) such proceedings do not involve any risk of
sale, forfeiture, or loss of the Collateral or any interest therein,
and (iii) adequate reserves therefor have been established in
conformity with GAAP.
(g) Notification. Pledgor shall promptly notify Pledgee of (i)
any Lien, security interest, encumbrance, or claim made or threatened
against the Collateral, (ii) any material change in the Collateral,
including, without limitation, any material decrease in the value of
the Collateral, and (iii) the occurrence or existence of any Event of
Default or the occurrence or existence of any condition or event that,
with the giving of notice or lapse of time or both, would be an Event
of Default.
(h) Additional Securities. Pledgor shall not consent to or
approve the issuance of any additional shares of any class of capital
stock of any issuer of Collateral, or any securities convertible into,
or exchangeable for, any such shares or any warrants, options,
-5-
<PAGE> 41
rights, or other commitments entitling any Person to purchase or
otherwise acquire any such shares.
7. Rights of Pledgee Upon Event of Default.
Upon the occurrence of an Event of Default, Pledgee may, at its option,
but subject to the provisions of this Section 7, have and exercise all rights of
a secured party under the Texas Business and Commerce Code, including, without
limitation, the following specific rights:
(a) to take and assume immediate possession of the Collateral
without further notice to Pledgor or prior resort to legal process;
(b) to sell or otherwise dispose of all or any portion of the
Collateral judicially or at public or private sale or any combination
thereof, and to bid and become a purchaser at any public (including
judicial) sale;
(c) written notice shall be given to Pledgor as provided for
in Section 13 hereof 10 days prior to the date of any public sale of
all or any portion of the Collateral, or 10 days prior to the date
after which a private sale of all or any portion of Collateral will be
made, and Pledgor agrees that such notice shall constitute reasonable
commercial notice of such public or private sale;
(d) to apply the proceeds of disposition of the Collateral in
satisfaction of the Notes and the Obligations; and
(e) to apply any cash or other proceeds received by Pledgee
pursuant to Section 4(c)(ii) hereof in full or partial satisfaction of
the Notes and the Obligations.
Pledgee, pursuant to paragraph (b) of Section 1 of this Pledge
Agreement, may make and execute all conveyances, assignments and transfers of
the Collateral sold pursuant to this Section 7 that Pledgee shall reasonably
deem advisable, and the Pledgor hereby ratifies and confirms all that Pledgee,
as Pledgor's attorney-in-fact, shall reasonably do by virtue thereof.
Nevertheless, Pledgor shall, if so requested by Pledgee, ratify and confirm any
sale or sales by executing and delivering or causing to be executed and
delivered to Pledgee or to such purchaser or purchasers all such instruments as
may, in the sole judgment of Pledgee, be advisable for the purpose.
The receipt of Pledgee for the purchase money paid at any such sale
made by it shall be sufficient discharge therefor to any purchaser of any of the
Collateral, or any portion thereof, sold as aforesaid; and no such purchaser (or
his, her or its representatives or assigns), after paying such purchase money
and receiving such receipt, shall be bound to see to the application of such
purchase money or any part thereof or in any manner whatsoever be answerable for
any loss, misapplication or non-application of any such purchase money, or any
part thereof, or be bound to inquire as to the authorization, necessity,
expediency or regularity of any such sale.
-6-
<PAGE> 42
8. No Waiver.
No failure on the part of the Pledgee to exercise, and no delay on the
part of Pledgee in exercising, any right, power or remedy hereunder shall
operate as a waiver hereof, nor shall any single or partial exercise by Pledgee
of any right, power or remedy hereunder serve to in any way limit Pledgee in the
further exercise of all or any portion of its rights, powers and remedies
hereunder. The remedies herein provided are cumulative and are not exclusive of
any remedies provided by law.
9. Termination of Pledge.
When the Notes and Obligations (and all renewals, extensions,
modifications and increases thereof) have been fully and indefeasibly paid and
performed and all commitments to lend under the Loan Agreement have terminated,
this Pledge Agreement shall terminate and be of no further force or effect. Upon
termination of this Pledge Agreement, Pledgee hereby covenants and agrees to
forthwith assign, transfer and deliver the Collateral, or to cause such
Collateral to be assigned, transferred and delivered, to Pledgor or its
designees.
10. Governing Law, Severability.
This Pledge Agreement shall in all respects be construed and
interpreted in accordance with and governed by the laws of the State of Texas.
Any provisions of this Pledge Agreement which are found to be invalid shall be
severable and shall not invalidate the remainder of this Pledge Agreement.
11. Successors and Assigns.
This Pledge Agreement shall be binding upon and inure to the benefit of
the respective successors and assigns of Pledgor and Pledgee and each subsequent
holder of the Notes and the Obligations; provided, however, Pledgor may not
assign any of its rights or obligations under this Pledge Agreement.
12. Additional Instruments and Assurances.
Pledgor hereby agrees, at its own expense, to execute and deliver or
cause to be executed and delivered, from time to time, any and all other
instruments and to perform such other acts as Pledgee may reasonably request to
effect the purpose of this Pledge Agreement. Pledgor agrees to pay all transfer
taxes, if any, that may be payable or determined to be payable in connection
with any transfer of all or any portion of the Collateral pursuant to the terms
hereof.
13. Notices.
All notices, demands and other communications required or permitted to
be given shall be in writing and must be personally delivered or mailed by
prepaid certified or registered mail to the
-7-
<PAGE> 43
party to whom such notice or communication is directed at the address of such
party shown on the signature page hereof. Any such notice or other communication
shall be deemed to have been given (whether actually received or not) on the day
it is personally delivered as aforesaid or, if mailed, on the second business
day it is mailed as aforesaid.
14. Amendment.
Neither this Pledge Agreement nor any term or provision hereof may be
amended, except by an instrument in writing executed by Pledgor and Pledgee.
15. Compliance and Securities Laws.
The securities initially pledged to Pledgee hereunder have not been
registered under the Securities Act of 1933 or any other securities statute.
Pledgor agrees that, because of the Securities Act of 1933, as amended, or any
other laws or regulations, and for other reasons, there may be legal and/or
practical restrictions or limitations affecting Pledgee in any attempts to
dispose of certain portions of the Collateral and to enforce its rights,
privileges and remedies granted pursuant to this Pledge Agreement. For these
reasons, Pledgee is hereby authorized by Pledgor, but not obligated, in the
event of the occurrence of an Event of Default, to sell all or any part of the
Collateral at private sale, subject to investment letter or in any other manner
that will not require the Collateral, or any part thereof, to be registered in
accordance with the Securities Act of 1933, as amended, or the rules and
regulations promulgated thereunder, or any other similar law or regulation, at
the best price reasonably obtainable by Pledgee at any such private sale or
other disposition in the manner mentioned above. Pledgee is also hereby
authorized by Pledgor, but not obligated, to take such actions, give such
notices, obtain such consents, and do such other things as Pledgee reasonably
may deem to be required or appropriate in the event of sale or disposition of
any of the Collateral. Pledgor understands that Pledgee may in its discretion
approach a restricted number of potential purchasers and that a sale under such
circumstances may yield a lower price for the Collateral, or any part or parts
thereof, than would otherwise be obtainable if same were either offered to a
large number of potential purchasers, or registered and sold in the open market.
Pledgor agrees (a) that in the event Pledgee shall, upon the occurrence of an
Event of Default, sell the Collateral, or any portion thereof, at such private
sale or sales, Pledgee shall have the right, but not the obligation, to obtain
or rely upon the advice and opinion of any member or firm of a national
securities exchange as to the best price reasonably obtainable upon such a
private sale thereof, and (b) that such reliance shall be conclusive evidence
that Pledgee handled such matter in a commercially reasonable manner under the
applicable provisions of the Texas Business and Commerce Code.
16. Liens Carried Forward.
This Pledge Agreement is an amendment and restatement of the Original
Pledge Agreement and does not constitute a novation or discharge thereof. Except
for the release of Pledgor's security interest in the capital stock of Yee
Desmond, Schroeder & Allen and IBI, Inc. all of the security interests and liens
granted in the Original Pledge Agreement are renewed, extended, carried forward,
ratified and confirmed in this Pledge Agreement.
-8-
<PAGE> 44
17. Final Agreement. THIS WRITTEN AGREEMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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<PAGE> 45
Executed to be effective as of the date first written above.
PLEDGOR:
SERVICE ASSET INVESTMENTS, INC.
By: /s/ ROGER J. ENGEMOEN, JR.
----------------------------------------
Name: Roger J. Engemoen, Jr.
----------------------------------
Title: President
---------------------------------
Address: 1700 Pacific Avenue
Suite 1400
Dallas, Texas 75201
PLEDGEE:
GUARANTY FEDERAL BANK, F.S.B.
By: /s/ TROY ANDERSON
----------------------------------------
Troy Anderson
Vice President
Address: 8333 Douglas Avenue
Dallas, Texas 75235
AMENDED AND RESTATED
STOCK PLEDGE AGREEMENT
SIGNATURE PAGE
<PAGE> 46
SCHEDULE 1
<TABLE>
<CAPTION>
ENTITY NUMBER OF SHARES CERTIFICATE NUMBER(S)
------ ---------------- ---------------------
<S> <C> <C>
Service Asset Management Company 1,000 4
Penson Worldwide, Inc. 1,000 1
</TABLE>
<PAGE> 47
PENSON STOCK PLEDGE AGREEMENT
This PENSON STOCK PLEDGE AGREEMENT ("Pledge Agreement"), dated as of
July 31, 2000, is made by and between Penson Worldwide, Inc., a Delaware
corporation ("Pledgor"), and Guaranty Federal Bank, F.S.B., a federal savings
bank ("Pledgee").
WITNESSETH:
WHEREAS, Service Asset Investments, Inc. and Pledgee have entered into
a Loan Agreement dated as of March 30, 2000 (such agreement, together with all
amendments, restatements, modifications and supplements thereto, being
hereinafter referred to as the "Loan Agreement"); and
WHEREAS, the Borrower has requested Pledgee to make an additional term
loan to Pledgor in the principal amount of $10,000,000 pursuant to the terms of
a First Amendment to Loan Agreement, dated of even date herewith, between
Borrower and Pledgee (the "First Amendment"); and
WHEREAS, Pledgee has conditioned its acceptance of the First Amendment
upon the execution and delivery of this Pledge Agreement by Pledgor; and
WHEREAS, Pledgor is a subsidiary of the Borrower, and expects to derive
direct and indirect benefits from the execution and delivery of the First
Amendment and the making of the additional term loan thereunder;
WHEREAS, capitalized terms used herein shall have the meanings assigned
to them in the Loan Agreement.
NOW, THEREFORE, to induce Pledgee to enter into the First Amendment to
Loan Agreement and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows, intending to be legally bound:
1. Grant of Security Interest and Pledge.
(a) As security for the payment and performance of the Notes
and the Obligations, including, without limitation, the due and
punctual payment of the principal of, and accrued and unpaid interest
on, the Notes, whether at maturity, by acceleration or otherwise, and
all renewals, extensions, rearrangements, amendments, modifications and
increases thereof, Pledgor hereby pledges and grants to Pledgee a first
priority security interest in and to, and assigns and transfers to
Pledgee, (i) all of the capital stock of Penson Worldwide Settlements,
Ltd., a United Kingdom company, as evidenced on the date hereof by the
certificates described on Schedule 1 attached hereto; (ii) all proceeds
and products of the stock described in item (i) above; and (iii) all
income, stock dividends and other distributions from items (i) and (ii)
above (such shares, proceeds, products, income, stock
<PAGE> 48
dividends and distributions being referred to collectively as the
"Collateral"). The Collateral shall be held by Pledgee, but shall
continue to be registered in the name of the Pledgor unless and until
the occurrence of an Event of Default.
(b) Pledgor hereby designates and appoints Pledgee as its
attorney-in-fact and proxy, with full power of substitution, which
designation and appointment is irrevocable and coupled with an
interest, exercisable upon the occurrence of an Event of Default for
the purpose of voting the Collateral and performing any and all acts,
in the name, place and stead of Pledgor, that are authorized by the
provisions of this Pledge Agreement. Accordingly, Pledgor irrevocably
constitutes and appoints Pledgee as Pledgor's proxy and
attorney-in-fact, effective only after notice to Pledgor after an Event
of Default has occurred and so long as it is continuing, but with full
power of substitution, to vote, and to act with respect to, the
Collateral, standing in the name of Pledgor or with respect to which
Pledgor is entitled to vote and act.
(c) Concurrently with, or within two Business Days after, the
execution and delivery of this Pledge Agreement, Pledgor shall deliver
to Pledgee all certificates identified in Schedule 1 accompanied by
undated stock powers duly executed in blank.
2. Voting.
During the term of this Pledge Agreement and for so long as no Event of
Default shall have occurred, Pledgor shall have the sole and absolute right to
vote the Collateral. After an Event of Default has occurred and so long as it is
continuing, the right to vote the Collateral is vested exclusively in Pledgee.
Such proxy is coupled with an interest, is irrevocable, and continues until the
Obligations are fully paid and performed.
3. Cash Dividends and Distributions.
During the term of this Pledge Agreement and for so long as no Event of
Default shall have occurred, cash dividends and cash distribution payments may
be paid to Pledgor. All non-cash dividends and other non-cash distributions
shall be immediately delivered to Pledgee (together with appropriate stock
powers signed by Pledgor).
4. Transfer, Dividends. Etc. After Default.
If an Event of Default shall have occurred, then upon written notice to
Pledgor, Pledgee may take any of the following actions:
(a) Pledgee may, in its absolute discretion, cause all or any
of the Collateral then held by it under this Pledge Agreement to be
transferred into the name of Pledgee, or the name or names of the
nominee or nominees of Pledgee;
-2-
<PAGE> 49
(b) Pledgee may receive, and Pledgor upon request shall assign
to the order of Pledgee, all dividends, interest or principal and
payments or other distributions in respect of the Collateral, all of
which shall thereafter be held by Pledgee as part of the Collateral or
shall be applied to the Notes and the Obligations in such manner and
order as Pledgee determines in its absolute discretion;
(c) Pledgee, as Pledgor's attorney-in-fact and proxy, shall
have and may exercise on behalf of Pledgor all rights of an owner in
respect of any of the Collateral hereunder or may, in any respect not
contrary to the provisions of this Pledge Agreement, permit such rights
to be exercised by Pledgor; and, without limiting the generality of the
foregoing, in its discretion:
(i) Pledgee may join in and become a party to any
plan of reorganization and readjustment, whether voluntary or
involuntary, may deposit any of the Collateral under such plan
or make any exchange or surrender or permit any substitution
of or cancellation of the Collateral as required by such plan
and may take all such action as may be required by such plan;
provided, however, that all securities issued or created under
such plan and exchanged for the Collateral or any portion
thereof, and all securities, monies or property received
pursuant to such plan shall thereafter be subject to the terms
of this Pledge Agreement and become part of the Collateral or
shall be applied to the Notes and Obligations in such manner
and order as Pledgee determines in its absolute discretion;
and
(ii) Pledgee may receive, endorse and collect all
checks, whether or not made payable to the order of Pledgor,
representing any dividend, interest or principal payments or
other distributions at any time paid or made on or with
respect to the Collateral all of which shall be held by
Pledgee pursuant to the terms of this Pledge Agreement as part
of the Collateral or shall be applied to the Notes and
Obligations in such manner and order as Pledgee determines in
its absolute discretion.
5. Representations and Warranties of Pledgor. Pledgor represents and
warrants to Pledgee as follows:
(a) Financing Statements. Except for financing statements in
favor of Pledgee, no financing statement covering the Collateral or any
portion thereof, or any proceeds thereof is on file in any public
office.
(b) Ownership Free of Encumbrances. All shares of capital
stock that are Collateral are duly issued, fully paid and
non-assessable, and except for the security interest granted hereby to
Pledgee, Pledgor now owns the Collateral free from any lien, security
interest, claim or encumbrance.
(c) Benefit. Pledgor will benefit, directly or indirectly,
from the loans to Pledgor evidenced by the Notes.
-3-
<PAGE> 50
(d) All Outstanding Stock; No Warrants; Etc. The ____ shares
of stock of Penson Worldwide Settlements, Inc. pledged hereunder
represent all of the outstanding capital stock of Penson Worldwide
Settlements, Ltd. There are no warrants, options or other rights to
acquire capital stock of Penson Worldwide, Settlements, Ltd.
outstanding.
(e) Organization and Authority. Pledgor is a corporation duly
organized, validly existing, and in good standing under the laws of its
state of incorporation. Pledgor has the corporate power and authority
to execute, deliver, and perform this Agreement, and the execution,
delivery, and performance of this Agreement by Pledgor have been duly
authorized by all necessary corporate action on the part of Pledgor and
do not and will not violate or conflict with the articles of
incorporation or bylaws of Pledgor or any law, rule, or regulation or
any order, writ, injunction, or decree of any court, governmental
authority, or arbitrator and do not and will not conflict with, result
in a breach of, or constitute a default under the provisions of any
indenture, mortgage, deed of trust, security agreement, or other
instrument or agreement binding on Pledgor or any of its property.
6. Covenants.
(a) Encumbrances. Pledgor shall not create, permit, or suffer
to exist, and shall defend the Collateral against, any Lien, security
interest, or other encumbrance on the Collateral except the pledge and
security interest of Pledgee hereunder, and shall defend Pledgor's
rights in the Collateral and Pledgee's security interest in the
Collateral against the claims of all Persons.
(b) Sale of Collateral. Pledgor shall not sell, assign, or
otherwise dispose of the Collateral or any part thereof without the
prior written consent of Pledgee.
(c) Distributions. If Pledgor shall become entitled to receive
or shall receive any stock certificate (including, without limitation,
any certificate representing a stock dividend or a distribution in
connection with any reclassification, increase, or reduction of capital
or issued in connection with any reorganization), option or rights,
whether as an addition to, in substitution of, or in exchange for any
Collateral or otherwise, Pledgor agrees to accept the same as Pledgee's
agent and to hold the same in trust for Pledgee, and to deliver the
same forthwith to Pledgee in the exact form received, with the
appropriate endorsement of Pledgor when necessary and/or appropriate
undated stock powers duly executed in blank, to be held by Pledgee as
additional Collateral for the Obligations, subject to the terms hereof.
Any sums paid upon or in respect of the Collateral upon the liquidation
or dissolution of the issuer thereof shall be paid over to Pledgee to
be held by it as additional Collateral for the Obligations subject to
the terms hereof; and in case any distribution of capital shall be made
on or in respect of the Collateral or any property shall be distributed
upon or with respect to the Collateral pursuant to any recapitalization
or reclassification of the capital of the issuer thereof or pursuant to
any reorganization of the issuer thereof, the property so distributed
shall be delivered to the Pledgee to be held by it, as additional
Collateral for the Obligations, subject to the terms hereof. All sums
of money and property so paid or distributed in respect
-4-
<PAGE> 51
of the Collateral that are received by Pledgor shall, until paid or
delivered to Pledgee, be held by Pledgor in trust as additional
security for the Obligations.
(d) Further Assurances. At any time and from time to time,
upon the request of Pledgee, and at the sole expense of Pledgor,
Pledgor shall promptly execute and deliver all such further instruments
and documents and take such further action as Pledgee may deem
necessary or desirable to preserve and perfect its security interest in
the Collateral and carry out the provisions and purposes of this
Agreement, including, without limitation, the execution and filing of
such financing statements as Pledgee may require. A carbon,
photographic, or other reproduction of this Agreement or of any
financing statement covering the Collateral or any part thereof shall
be sufficient as a financing statement and may be filed as a financing
statement. Subject to the right of Pledgor to receive cash dividends
under Section 3 hereof, in the event any Collateral is ever received by
Pledgor, Pledgor shall promptly transfer and deliver to Pledgee such
Collateral so received by Pledgor (together with any necessary
endorsements in blank or undated stock powers duly executed in blank),
which Collateral shall thereafter be held by Pledgee pursuant to the
terms of this Agreement. Pledgee shall at all times have the right to
exchange any certificates representing Collateral for certificates of
smaller or larger denominations for any purpose consistent with this
Agreement.
(e) Inspection Rights. Pledgor shall permit Pledgee and its
representatives to examine, inspect, and copy Pledgor's books and
records at any reasonable time and as often as Pledgee may reasonably
desire.
(f) Taxes. Pledgor agrees to pay or discharge prior to
delinquency all taxes, assessments, levies, and other governmental
charges imposed on it or its property, except Pledgor shall not be
required to pay or discharge any tax, assessment, levy, or other
governmental charge if (i) the amount or validity thereof is being
contested by Pledgor in good faith by appropriate proceedings
diligently pursued, (ii) such proceedings do not involve any risk of
sale, forfeiture, or loss of the Collateral or any interest therein,
and (iii) adequate reserves therefor have been established in
conformity with GAAP.
(g) Notification. Pledgor shall promptly notify Pledgee of (i)
any Lien, security interest, encumbrance, or claim made or threatened
against the Collateral, (ii) any material change in the Collateral,
including, without limitation, any material decrease in the value of
the Collateral, and (iii) the occurrence or existence of any Event of
Default or the occurrence or existence of any condition or event that,
with the giving of notice or lapse of time or both, would be an Event
of Default.
(h) Additional Securities. Pledgor shall not consent to or
approve the issuance of any additional shares of any class of capital
stock of any issuer of Collateral, or any securities convertible into,
or exchangeable for, any such shares or any warrants, options, rights,
or other commitments entitling any Person to purchase or otherwise
acquire any such shares.
-5-
<PAGE> 52
7. Rights of Pledgee Upon Event of Default.
Upon the occurrence of an Event of Default, Pledgee may, at its option,
but subject to the provisions of this Section 7, have and exercise all rights of
a secured party under the Texas Business and Commerce Code, including, without
limitation, the following specific rights:
(a) to take and assume immediate possession of the Collateral
without further notice to Pledgor or prior resort to legal process;
(b) to sell or otherwise dispose of all or any portion of the
Collateral judicially or at public or private sale or any combination
thereof, and to bid and become a purchaser at any public (including
judicial) sale;
(c) written notice shall be given to Pledgor as provided for
in Section 13 hereof 10 days prior to the date of any public sale of
all or any portion of the Collateral, or 10 days prior to the date
after which a private sale of all or any portion of Collateral will be
made, and Pledgor agrees that such notice shall constitute reasonable
commercial notice of such public or private sale;
(d) to apply the proceeds of disposition of the Collateral in
satisfaction of the Notes and the Obligations; and
(e) to apply any cash or other proceeds received by Pledgee
pursuant to Section 4(c)(ii) hereof in full or partial satisfaction
of the Notes and the Obligations.
Pledgee, pursuant to paragraph (b) of Section 1 of this Pledge
Agreement, may make and execute all conveyances, assignments and transfers of
the Collateral sold pursuant to this Section 7 that Pledgee shall reasonably
deem advisable, and the Pledgor hereby ratifies and confirms all that Pledgee,
as Pledgor's attorney-in-fact, shall reasonably do by virtue thereof.
Nevertheless, Pledgor shall, if so requested by Pledgee, ratify and confirm any
sale or sales by executing and delivering or causing to be executed and
delivered to Pledgee or to such purchaser or purchasers all such instruments as
may, in the sole judgment of Pledgee, be advisable for the purpose.
The receipt of Pledgee for the purchase money paid at any such sale
made by it shall be sufficient discharge therefor to any purchaser of any of the
Collateral, or any portion thereof, sold as aforesaid; and no such purchaser (or
his, her or its representatives or assigns), after paying such purchase money
and receiving such receipt, shall be bound to see to the application of such
purchase money or any part thereof or in any manner whatsoever be answerable for
any loss, misapplication or non-application of any such purchase money, or any
part thereof, or be bound to inquire as to the authorization, necessity,
expediency or regularity of any such sale.
-6-
<PAGE> 53
8. No Waiver.
No failure on the part of the Pledgee to exercise, and no delay on the
part of Pledgee in exercising, any right, power or remedy hereunder shall
operate as a waiver hereof, nor shall any single or partial exercise by Pledgee
of any right, power or remedy hereunder serve to in any way limit Pledgee in the
further exercise of all or any portion of its rights, powers and remedies
hereunder. The remedies herein provided are cumulative and are not exclusive of
any remedies provided by law.
9. Termination of Pledge.
When the Notes and Obligations (and all renewals, extensions,
modifications and increases thereof) have been fully and indefeasibly paid and
performed and all commitments to lend under the Loan Agreement have terminated,
this Pledge Agreement shall terminate and be of no further force or effect. Upon
termination of this Pledge Agreement, Pledgee hereby covenants and agrees to
forthwith assign, transfer and deliver the Collateral, or to cause such
Collateral to be assigned, transferred and delivered, to Pledgor or its
designees.
10. Governing Law, Severability.
This Pledge Agreement shall in all respects be construed and
interpreted in accordance with and governed by the laws of the State of Texas.
Any provisions of this Pledge Agreement which are found to be invalid shall be
severable and shall not invalidate the remainder of this Pledge Agreement.
11. Successors and Assigns.
This Pledge Agreement shall be binding upon and inure to the benefit of
the respective successors and assigns of Pledgor and Pledgee and each subsequent
holder of the Notes and the Obligations; provided, however, Pledgor may not
assign any of its rights or obligations under this Pledge Agreement.
12. Additional Instruments and Assurances.
Pledgor hereby agrees, at its own expense, to execute and deliver or
cause to be executed and delivered, from time to time, any and all other
instruments and to perform such other acts as Pledgee may reasonably request to
effect the purpose of this Pledge Agreement. Pledgor agrees to pay all transfer
taxes, if any, that may be payable or determined to be payable in connection
with any transfer of all or any portion of the Collateral pursuant to the terms
hereof.
13. Notices.
All notices, demands and other communications required or permitted to
be given shall be in writing and must be personally delivered or mailed by
prepaid certified or registered mail to the
-7-
<PAGE> 54
party to whom such notice or communication is directed at the address of such
party shown on the signature page hereof. Any such notice or other communication
shall be deemed to have been given (whether actually received or not) on the day
it is personally delivered as aforesaid or, if mailed, on the second business
day it is mailed as aforesaid.
14. Amendment.
Neither this Pledge Agreement nor any term or provision hereof may be
amended, except by an instrument in writing executed by Pledgor and Pledgee.
15. Compliance and Securities Laws.
The securities initially pledged to Pledgee hereunder have not been
registered under the Securities Act of 1933 or any other securities statute.
Pledgor agrees that, because of the Securities Act of 1933, as amended, or any
other laws or regulations, and for other reasons, there may be legal and/or
practical restrictions or limitations affecting Pledgee in any attempts to
dispose of certain portions of the Collateral and to enforce its rights,
privileges and remedies granted pursuant to this Pledge Agreement. For these
reasons, Pledgee is hereby authorized by Pledgor, but not obligated, in the
event of the occurrence of an Event of Default, to sell all or any part of the
Collateral at private sale, subject to investment letter or in any other manner
that will not require the Collateral, or any part thereof, to be registered in
accordance with the Securities Act of 1933, as amended, or the rules and
regulations promulgated thereunder, or any other similar law or regulation, at
the best price reasonably obtainable by Pledgee at any such private sale or
other disposition in the manner mentioned above. Pledgee is also hereby
authorized by Pledgor, but not obligated, to take such actions, give such
notices, obtain such consents, and do such other things as Pledgee reasonably
may deem to be required or appropriate in the event of sale or disposition of
any of the Collateral. Pledgor understands that Pledgee may in its discretion
approach a restricted number of potential purchasers and that a sale under such
circumstances may yield a lower price for the Collateral, or any part or parts
thereof, than would otherwise be obtainable if same were either offered to a
large number of potential purchasers, or registered and sold in the open market.
Pledgor agrees (a) that in the event Pledgee shall, upon the occurrence of an
Event of Default, sell the Collateral, or any portion thereof, at such private
sale or sales, Pledgee shall have the right, but not the obligation, to obtain
or rely upon the advice and opinion of any member or firm of a national
securities exchange as to the best price reasonably obtainable upon such a
private sale thereof, and (b) that such reliance shall be conclusive evidence
that Pledgee handled such matter in a commercially reasonable manner under the
applicable provisions of the Texas Business and Commerce Code.
16. Final Agreement. THIS WRITTEN AGREEMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-8-
<PAGE> 55
Executed to be effective as of the date first written above.
PLEDGOR:
PENSON WORLDWIDE, INC.
By: /s/ ROGER J. ENGEMOEN JR.
---------------------------
Name: Roger J. Engemoen Jr.
----------------------
Title: Chairman
---------------------
Address: 1700 Pacific Avenue
Suite 1400
Dallas, Texas 75201
PLEDGEE:
GUARANTY FEDERAL BANK, F.S.B.
By: /s/ TROY ANDERSON
---------------------------
Troy Anderson
Vice President
Address: 8333 Douglas Avenue
Dallas, Texas 75235
PENSON STOCK PLEDGE AGREEMENT
SIGNATURE PAGE
<PAGE> 56
SCHEDULE 1
<TABLE>
<CAPTION>
ENTITY NUMBER OF SHARES CERTIFICATE NUMBER(S)
------ ---------------- ---------------------
<S> <C> <C>
Penson Worldwide Settlements, Ltd. -- --
</TABLE>
<PAGE> 57
CERTIFICATE
NO. 1
[ILLEGIBLE] 1,000 Shares
Issued to
Service Asset Investments, Inc.
Dated March 24, 2000
FROM WHOM TRANSFERRED
Dated
ORIGINAL NO. ORIGINAL NO. OF SHARES
CERTIFICATE SHARES TRANSFERRED
RECEIVED CERTIFICATE NO.
[ILLEGIBLE] Shares
day of
ORGANIZED UNDER THE LAWS
OF THE STATE OF TEXAS
NUMBER SHARES
PENSON WORLDWIDE, INC.
THIS CERTIFIES THAT Service Asset Investments, Inc. is the owner of One Thousand
(1,000) fully paid and non-assessable shares of a corporation organized under
the laws of the State of Texas transferable only on the books of the Corporation
by the holder hereof in person by duly authorized Attorney upon surrender of
this Certificate properly endorsed.
IN WITNESS WHEREOF, the said Corporation has caused this Certificate to be
signed by its duly authorized officers and to be sealed with the Seal of the
Corporation this 24th day of March, 2000
[SEAL]
/s/ ROGER J. ENGEMOEN, JR. /s/ PHILIP A. PENDERGRAFT
------------------------------- --------------------------------
Roger J. Engemoen, Jr. Chairman Philip A. Pendergraft, Secretary
SHARES $ EACH
<PAGE> 58
CERTIFICATE
FOR
SHARES
ISSUED TO
DATED
For Value Received. hereby sell, assign and transfer unto
Shares
represented by the written Certificate and do hereby irrevocably constitute and
affirms
Attorney
to transfer the said Shares on the books of the written named
Certification with full power of substitution in the premises
Dated
In presence of
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION
ENLARGEMENT OR ANY CHANGE WHATEVER.
<PAGE> 59
STOCK POWER
FOR VALUE RECEIVED, the undersigned does hereby sell, assign and
transfer unto __________________________________________ (_______) shares of
common stock, par value $1.00 per share, of Penson Worldwide, Inc., a Delaware
corporation (the "Company"), standing in its name on the books of the Company
represented by Certificate Number ____, dated _____________________, and does
hereby irrevocably constitute and appoint ________________, the undersigned's
attorney to transfer said stock on the books of the Company with full power of
substitution in the premises.
Dated: July ____, 2000
SERVICE ASSET INVESTMENTS, INC.
By: /s/ ROGER J. ENGEMOEN, JR.
------------------------------------
Name: Roger J. Engemoen, Jr.
-----------------------------
<PAGE> 60
STOCK POWER
FOR VALUE RECEIVED, the undersigned does hereby sell, assign and
transfer unto ____________________ ___________________________ (_______) shares
of common stock, par value $1.00 per share, of Penson Worldwide Settlements,
Ltd., a United Kingdom company, (the "Company"), standing in its name on the
books of the Company represented by Certificate Number ____, dated
_____________________, and does hereby irrevocably constitute and appoint
________________, the undersigned's attorney to transfer said stock on the books
of the Company with full power of substitution in the premises.
Dated: July ___, 2000
PENSON WORLDWIDE, INC.
By: /s/ ROGER J. ENGEMOEN, JR.
------------------------------------
Name: Roger J. Engemoen, Jr.
-----------------------------
<PAGE> 61
UNIFORM COMMERCIAL CODE - FINANCING STATEMENT CHANGE - FORM UCC-3 (REV. 9/1/92)
<TABLE>
<S> <C> <C> <C>
THIS STATEMENT IS PRESENTED TO A FILING
OFFICER FOR FILING PURSUANT TO THE
UNIFORM COMMERCIAL CODE.
---------------------------------------
11. [ ] CHECK TO REQUEST SAME DEBTOR
Filed with: Secretary of State SEARCH CERTIFICATE.
------------------------------------------------------------------------------------------------------------------------------------
1. DEBTOR (IF PERSONAL) LAST NAME FIRST NAME M.I. 1A. PREFIX 1B. SUFFIX
Service Asset Investments, Inc.
------------------------------------------------------------------------------------------------------------------------------------
1C. MAILING ADDRESS 1D. CITY, STATE 1E. ZIP CODE
1700 Pacific Avenue, Suite 1400 Dallas, Tx. 75201
------------------------------------------------------------------------------------------------------------------------------------
2. ADDITIONAL DEBTOR (IF PERSONAL) LAST NAME FIRST NAME M.I. 2A. PREFIX 2B. SUFFIX
------------------------------------------------------------------------------------------------------------------------------------
2C. MAILING ADDRESS 2D. CITY, STATE 2E. ZIP CODE
------------------------------------------------------------------------------------------------------------------------------------
3. SECURED PARTY (IF PERSONAL) LAST NAME FIRST NAME M.I.
Guaranty Federal Bank, F.S.B.
------------------------------------------------------------------------------------------------------------------------------------
3A. MAILING ADDRESS 3B. CITY, STATE 3C. ZIP CODE
8333 Douglas Avenue Dallas, Tx. 75235
------------------------------------------------------------------------------------------------------------------------------------
4. ADDITIONAL SECURED PARTY (IF ANY)
------------------------------------------------------------------------------------------------------------------------------------
4A. MAILING ADDRESS 4B. CITY, STATE 4C. ZIP CODE
------------------------------------------------------------------------------------------------------------------------------------
5. ORIGINAL FINANCING STATEMENT NUMBER 5A. ORIGINAL DATE FILED 6. CHECK THIS FINANCING STATEMENT CHANGE IS TO BE
00-489561 5/5/00 IF FILED IN THE REAL ESTATE RECORDS.
APPLICABLE [ ] NO. OF ADDITIONAL SHEETS PRESENTED ______
------------------------------------------------------------------------------------------------------------------------------------
7. A. [X] AMENDMENT - THE FINANCING STATEMENT IS AMENDED AS SET FORTH IN ITEM 8 BELOW.
------------------------------------------------------------------------------------------------------------------------------------
B. [ ] TOTAL ASSIGNMENT - ALL OF SECURED PARTY'S RIGHTS UNDER THE FINANCING STATEMENT HAVE BEEN ASSIGNED TO THE ASSIGNEE
WHOSE NAME AND ADDRESS ARE SET FORTH IN ITEM 8 BELOW.
------------------------------------------------------------------------------------------------------------------------------------
C. [ ] PARTIAL ASSIGNMENT - SOME OF SECURED PARTY'S RIGHTS HAVE BEEN ASSIGNED TO THE ASSIGNEE SHOWN IN ITEM 8 BELOW.
------------------------------------------------------------------------------------------------------------------------------------
D. [ ] CONTINUATION - THE ORIGINAL STATEMENT IS STILL EFFECTIVE.
------------------------------------------------------------------------------------------------------------------------------------
E. [ ] TOTAL RELEASE - THE SECURED PARTY RELEASES ALL OF THEIR INTEREST IN THE COLLATERAL.
------------------------------------------------------------------------------------------------------------------------------------
F. [ ] PARTIAL RELEASE - THE SECURED PARTY RELEASES THE FOLLOWING COLLATERAL DESCRIBED IN ITEM 8 BELOW.
------------------------------------------------------------------------------------------------------------------------------------
G. [ ] TERMINATION - THE SECURED PARTY(IES) OF RECORD NO LONGER CLAIMS A SECURITY INTEREST AND THE FINANCING
STATEMENT IS TERMINATED.
------------------------------------------------------------------------------------------------------------------------------------
8. Amendment: The Secured Party's correct zip code is 75225.
Exhibit A has been amended, is attached hereto and made a part hereof.
------------------------------------------------------------------------------------------------------------------------------------
9. Service Asset Investments, Inc. THIS SPACE FOR USE OF FILING OFFICER
(DATE, TIME, NUMBER, FILING OFFICER)
/s/ [ILLEGIBLE]
--------------------------------------------------------------------------------
SIGNATURE(S) OF DEBTOR(S)
Guaranty Federal Bank, F.S.B.
/s/ [ILLEGIBLE]
--------------------------------------------------------------------------------
SIGNATURE(S) OF SECURED PARTY(IES)
--------------------------------------------------------------------------------
10. Return copy to:
NAME
ADDRESS
CITY
STATE
ZIP
--------------------------------------------------------------------------------
</TABLE>
STANDARD FORM - FORM UCC-3 (REV. 9/1/92) (C) 1992 OFFICE OF THE SECRETARY OF
STATE OF TEXAS
<PAGE> 62
EXHIBIT A TO FINANCING STATEMENT
(a) all of Debtor's shares of common capital stock of Service Asset
Management Company, a North Carolina corporation, now owned or hereafter
acquired, including without limitation the shares presently evidenced by
certificate number 4; and
(b) all of Debtor's shares of common stock of Penson Worldwide, Inc., a
Delaware company, now owned or hereafter acquired; and
(c) all products, proceeds, revenues, distributions, dividends, stock
dividends, securities, and other property, rights, and interests that Debtor
receives or is at any time entitled to receive on account of the above.
<PAGE> 63
STATE OF DELAWARE
UNIFORM COMMERCIAL CODE - FINANCING STATEMENT - FORM UCC - 1
-------------------------------------------------------------------------------
This FINANCING STATEMENT is presented to a Filing Owner for filing pursuant to
the Uniform Commercial Code.
If to be filed with Recorder of Deeds indicate Tax Parcel No.(s).
---------------
No. of additional sheets presented
---------------------------------------------
-------------------------------------------------------------------------------
PARTIES
-------------------------------------------------------------------------------
Debtor (or Assignor) (last name first if individual) and mailing address:
Penson Worldwide, Inc.
1700 Pacific Avenue
Suite 1400
Dallas, TX 75201
-------------------------------------------------------------------------------
Debtor (or Assignor) (last name first if individual) and mailing address:
-------------------------------------------------------------------------------
This statement is filed without the Debtor's signature to perfect a security
interest in collateral (check X in applicable box(es))
[ ] Already subject to a security interest in another jurisdiction when it was
brought into this State.
[ ] Already subject to a security interest in another jurisdiction when the
Debtor's location changed to this State.
[ ] Which is proceeds of the original collateral described below in which a
security interest is perfected.
[ ] Acquired after a change of name, identity or corporate structure of
Debtor.
[ ] As to which the filing has lapsed.
By:
--------------------------------------------------------------------
Signature of Secured Party(ies) (Required only if item is checked)
-------------------------------------------------------------------------------
PARTIES
-------------------------------------------------------------------------------
Secured Party(ies) (last name first if individual) and address:
Guaranty Federal Bank, F.S.B.
8333 Douglas Avenue
Dallas, TX 75225
-------------------------------------------------------------------------------
Assignee (if any) of Secured Party(ies) and address of Assignee:
--------------------------------------------------------------------------------
Special Types of Parties (check X in applicable box(es))
[ ] The terms "Debtor" and "Secured Party" mean "Lessee" and "Lessor",
respectively.
[ ] The terms "Debtor" and "Secured Party" mean "Consignee" and "Cosignor",
respectively.
[ ] Debtor is a Transmitting Utility.
[ ] Debtor acting in representative capacity (e.g., as trustee).
-------------------------------------------------------------------------------
Filed With: Secretary of State
-------------------------------------------------------------------------------
Prepared By (Name And Address):
Jennifer Knapek, Esq.
Winstead Sechrest & Minick P.C.
1201 Elm Street, #5400
Dallas, Texas 75270
-------------------------------------------------------------------------------
[ ] Check to request Continuation Statement notice for additional fee.
-------------------------------------------------------------------------------
--------------------------------------------------------------------------------
This Financing Statement covers the following types (or items) of property:
Check only if applicable: [X] Products of collateral are also covered.
See Exhibit A attached hereto and made a part hereof.
--------------------------------------------------------------------------------
If the collateral is crops, the crops are growing or to be grown on the
following described real estate:
--------------------------------------------------------------------------------
If the collateral is (a) goods that are or are to become fixtures; (b) timber to
be cut; or (c) minerals or the like (including oil and gas) or accounts
resulting from the sale thereof at the wellhead or minehead, the description of
the real estate concerned is: (check X in applicable box(es))
[ ] Fixtures [ ] Timber [ ] Minerals or accounts resulting from
sale thereof at wellhead or minehead
And this Financing Statement is to be filed in the real estate records where a
mortgage on such real estate would be recorded. If the Debtor does not have an
interest or record, the name of a record owner is:
--------------------------------------------------------------------------------
Penson Worldwide, Inc.
By: /s/ ROGER J. ENGEMOEN JR. Chairman
----------------------------------------------------------------------------
Signature of Debtor (or Assignor) Title
--------------------------------------------------------------------------------
THIS SPACE FOR USE OF FILING OFFICER (DATE, TIME, NUMBER, FILING OFFICER)
--------------------------------------------------------------------------------
<PAGE> 64
EXHIBIT A TO FINANCING STATEMENT
(a) all of Debtor's shares of common stock of Penson Worldwide
Settlements, Ltd., a United Kingdom company, now owned or hereafter acquired;
and
(b) all products, proceeds, revenues, distributions, dividends, stock
dividends, securities, and other property, rights, and interests that Debtor
receives or is at any time entitled to receive on account of the above.
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RESOLUTIONS OF THE BOARD OF DIRECTORS
OF SERVICE ASSET INVESTMENTS, INC.
WHEREAS, on or about March 30, 2000, Service Asset Investments, Inc., a
Texas corporation (the "Company"), entered into a Loan Agreement (the "Loan
Agreement") with Guaranty Federal Bank, F.S.B., a federal savings bank ("Bank"),
pursuant to which Bank provided to the Company (a) a term loan in the principal
amount of $10,000,000, and (b) a term loan in the principal amount of
$15,000,000, each of which is secured by the capital stock of Service Asset
Management Co., Yee, Desmond, Schroeder & Allen, IBI, Inc., and Worldwide
Settlements, Ltd.;
WHEREAS, the Company now desires to obtain an additional term loan in
the principal amount of $10,000,000 and to amend the Loan Agreement to provide
for such additional loan and to modify the collateral which will secure the
three loans described in the Loan Agreement;
WHEREAS, to evidence the extension of credit from the Bank to the
Company, the Company shall execute and deliver to Bank (a) the First Amendment
to Loan Agreement, (b) a term note in the principal amount of $10,000,000, (c)
Amended And Restated Stock Pledge Agreement (the "Amended Pledge Agreement", and
(d) such other documents or instruments as requested by Bank (the "Amended Loan
Documents");
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors finds that
the Amended Loan Documents, and the transactions provided for therein, will
benefit, directly or indirectly, the Company and deems it in the best interests
of the Company that the Company enter into and perform its obligations under the
Amended Loan Documents in substantially the form submitted to the Board of
Directors;
RESOLVED, FURTHER, that the President (each, an "Authorized Officer")
of the Company is hereby authorized to execute and deliver for and on behalf of
the Company the Amended Loan Documents with such changes in the terms,
conditions and provisions thereof as Authorized Officer deems appropriate and in
the best interests of the Company; the execution of the Amended Loan Documents
shall be conclusive against the Company that such Authorized Officer deemed the
terms, conditions and provisions thereof to be appropriate and in the best
interests of the Company;
RESOLVED, FURTHER, that each Authorized Officer of the Company or any
one or more of them be, and each hereby is, authorized and directed, on behalf
of the Company, at any time and from time to time hereafter and without further
action by or authority or direction from the Board of Directors of the Company,
to execute and deliver all such other and further agreements, requests,
statements and documents and to do or cause to be done all such other and
further acts and things as any Authorized Officer may determine to be necessary
or advisable under or in connection with the Amended Loan Documents and the
transactions provided for therein; the execution by any Authorized Officer of
any such agreement, request, statement, instrument or document or the doing of
any such act or thing will be conclusive evidence of his or their determination
in that respect;
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RESOLVED, FURTHER, that any and all actions taken by any of the
officers or representatives of the Company, for and on behalf of and in the name
of the Company, with Bank prior to the adoption of these resolutions, which are
within the authority conferred by the foregoing resolutions, are hereby
ratified, authorized, adopted and approved in all respects for all purposes.
RESOLVED FURTHER, that Bank be, and it hereby is, authorized to rely on
the continuing effect of these resolutions, until Bank receives written notice
to the contrary.
/s/ GARY R. HOLLIDAY
----------------------------------------
Gary R. Holliday, Secretary
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