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Exhibit
10.3
CONTINUING UNCONDITIONAL GUARANTY
This Continuing
Unconditional Guaranty (this “
Guaranty ”) dated as of the
12 th day
of November, 2007 (the “ Effective
Date ”), is made by UMT Holdings, L.P., a
Delaware limited partnership (the “
Guarantor ”), for the benefit
of United Development Funding III, L.P., a Delaware limited
partnership and its affiliates, subsidiaries, successors and
assigns (“ Lender
”).
R E C I T A L S:
A. Lender
has committed to make a loan (the “
Loan ”) to United Development
Funding X, L.P., a Delaware limited partnership (“
Borrower ”), pursuant to the
terms and conditions of that certain Secured Line of Credit
Promissory Note (the “ Note
”) issued by Borrower and payable to the order of
Lender dated the Effective Date in the principal amount of
U.S. Seventy Million and NO/100 Dollars ($70,000,000.00), the
proceeds of which shall be used by Borrower for business
purposes.
B. Guarantor
is an affiliate of Borrower and shall benefit, directly and
indirectly, from the Loan made to Borrower pursuant to the
Note.
C. Guarantor
is willing to execute this Guaranty in favor of Lender and
hereby agrees to be bound by its terms and
conditions.
A G R E E M E N T:
NOW, THEREFORE, for good
and valuable consideration, and intending to be legally bound
hereby, Guarantor agrees and covenants with Lender as
follows:
1.
Definitions . Capitalized terms not defined
in this Guaranty shall have the respective meanings given to
such terms in the Note.
2.
Guaranty and Surety . Guarantor hereby
absolutely and unconditionally guarantees, and becomes surety
for, the full, timely and complete payment when due, whether
by lapse of time, by acceleration of payment, or otherwise,
of all indebtedness, liabilities and obligations of every
kind and nature of Borrower to Lender, whether now existing
or hereinafter arising, including, without limitation, all
indebtedness, liabilities and obligations arising under or
related to (a) the Note, and the other Loan Documents and all
amounts due thereunder, pursuant to or in connection
therewith, (b) all costs reasonably incurred by Lender to
obtain, preserve, perfect and enforce the security interests
granted by the Loan Documents and to maintain, preserve and
collect any collateral, and all taxes, assessments, insurance
premiums, repairs, reasonable attorneys’ fees and legal
expenses, rent, storage charges, advertising costs, brokerage
fees and expenses of sale related thereto, and (c) all
renewals, extensions, modifications and substitutions of all
or any part of the indebtedness and obligations described in
the foregoing clauses (a) through (b) (collectively, the
“ Guaranteed Obligations
”). Guarantor’s obligation under this
Guaranty is unconditional, absolute and enforceable,
irrespective of (a) the validity or enforceability of the
Guaranteed Obligations in whole or in part or of the Note and
the other Loan Documents or any provision thereof,
(b) whether recovery against Borrower with respect to
the Guaranteed Obligations in whole or in part is prevented
by bankruptcy, the operation of law, or otherwise, and (c)
any other circumstance that might otherwise cause a legal or
equitable discharge or defense of Guarantor.
3.
Subsequent Acts by Lender . Lender may, in
its sole discretion and without notice, take or refrain from
taking any action that might otherwise be deemed a legal or
equitable release or discharge of Guarantor’s
obligations under this Guaranty, without either impairing or
affecting the liability of Guarantor for the full, timely and
complete payment of the Guaranteed Obligations, which actions
might include, by way of illustration and not
limitation:
(a) the
renewal or extension of any of the Guaranteed Obligations or
any payments thereunder, or the acceleration or change of
time for payment of the Guaranteed Obligations any increase
in the principal amount of any promissory note or other
instrument comprising a part of the Guaranteed Obligations
and/or any additional funds advanced under the Guaranteed
Obligations;
(b) the
modification, amendment or change in any of the terms
relating to any promissory note or other agreement, document
or instrument now or hereafter executed by Borrower in favor
of Lender, including, without limitation, the Note and the
other Loan Documents;
(c) the
absence of any attempt to collect the Guaranteed Obligations
from Borrower or any other person or entity primarily or
secondarily liable for the Guaranteed Obligations or any
other action to enforce Lender’s rights with respect to
the Guaranteed Obligations;
(d) the
waiver, consent, or delay in enforcement by Lender with
respect to any provision of any instrument evidencing the
Guaranteed Obligations, including, without limitation, the
Note and the other Loan Documents;
(e) any
failure by Lender to take any steps to perfect and maintain
its security interest in, or to preserve its rights to, any
security or collateral given for the Guaranteed Obligations,
or the release or compromise of any lien or security held by
Lender as security for the Guaranteed
Obligations;
(f) the
compounding, rearrangement or consolidation by Lender of all
or any part of the Guaranteed Obligations;
(g) the
release from liability of Borrower or any other guarantor or
person or entity primarily or secondary liable for the
Guaranteed Obligations who may guarantee or provide security
for the Guaranteed Obligations in whole or in part;
or
(h) the
settlement, release, compromise or cancellation of all or any
part of the Guaranteed Obligations, or the acceptance of
partial payment of all or any part of the Guaranteed
Obligations.
4.
Expenses . Guarantor agrees to pay all
costs and expenses, including, without limitation, all court
costs and reasonable attorneys’ fees paid or incurred
by Lender in endeavoring to collect all or any part of the
Guaranteed Obligations, or in enforcing or pursuing its
remedies with respect to the Guaranteed
Obligations.
5.
Payment by Guarantor . In the event of any
failure to pay with respect to the Guaranteed Obligations or
any Event of Default under the Note, Guarantor agrees to pay
on demand, all of the Guaranteed Obligations and all other
costs, expenses and other amounts payable under this
Guaranty. Lender shall not be required to
liquidate any lien or any other form of security, instrument,
or note held by Lender prior to making such
demand. THIS IS A GUARANTY OF PAYMENT AND NOT OF
COLLECTION, and Guarantor specifically agrees that Lender
shall not be required to assert any claim, file suit, or
proceed to obtain a judgment against Borrower or any other
guarantor, endorser or surety for the Guaranteed Obligations,
or make any effort at collection of the Guaranteed
Obligations, or foreclose against or seek to realize upon any
security or collateral now or hereafter existing for the
Guaranteed Obligations, or exercise or assert any other right
or remedy to which Lender is or may be entitled in connection
with the Guaranteed Obligations, before or as a condition of
enforcing the liability of Guarantor under this Guaranty or
requiring payment of the Guaranteed Obligations
under this Guaranty. Guarantor agrees, to the full
extent it may legally do so, that suit may be brought against
Guarantor with or without making Borrower or any other person
or entity a party to such suit, as Lender may
elect. Guarantor agrees that Guarantor shall
remain fully liable under this Guaranty regardless of whether
Borrower is held to be not liable on the Guaranteed
Obligations and regardless of whether all or any portion of
the Guaranteed Obligations are “non-recourse” or
“limited recourse” to Borrower.
6.
Application of Payments . Lender shall have
the exclusive right to determine the time and manner of
application of any payments or credits to the Guaranteed
Obligations, whether received fro
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