Green Brick Partners, Inc. 8-K [grbk-8k_073015.htm]

 

Exhibit 10.3

GUARANTY AGREEMENT

(JBGL Mustang, LLC, JBGL Chateau, LLC, JBGL Exchange, LLC,

JBGL Builder Finance, LLC, Johns Creek 206, LLC)

 

For and in consideration of the sum of Ten and no/100 Dollars ($10.00) and other
good and valuable consideration in hand paid to the undersigned (“Guarantor”),
the receipt and sufficiency of which consideration is hereby acknowledged, and
for the purpose of enabling GREEN BRICK PARTNERS, INC., a Delaware corporation
(“Debtor”), to borrow certain funds from INWOOD NATIONAL BANK, a national
banking association (“Holder”), and recognizing that Guarantor has benefited or
shall benefit, directly or indirectly, from the making of such loan by Holder to
Debtor, and that but for this Guaranty such loan would not be made by Holder to
Debtor and the funds advanced thereunder, Guarantor hereby irrevocably,
absolutely, and unconditionally guarantees to Holder the prompt payment at
maturity and the prompt performance when due of the following (collectively, the
“Obligations”): (i) all indebtedness and obligations of any kind of Debtor to
Holder, now outstanding or owing or which may hereafter be executed or incurred
directly between Debtor and Holder, absolute or contingent, joint and/or
several, secured or unsecured, arising by operation of law or otherwise, direct
or indirect, and arising out of that certain Revolving Line of Credit Note of
even date herewith, made by Debtor, payable to the order of Holder, in the
original stated principal amount of FIFTY MILLION AND 00/100 DOLLARS
($50,000,000.00) (“Note”), including all principal, interest, charges and
attorneys’ fees which may be or become due or owing on or under or in connection
with the Note, and all renewals, rearrangements, extensions, modifications,
increases in principal amount, and consolidations thereof, and of any part
thereof and any sums due or to become due pursuant to any instrument which
secures the payment of the Note; (ii) all of the covenants, agreements, and
other obligations undertaken by Debtor in all instruments securing the payment
of the Obligations; and (iii) all actual, out-of-pocket costs and expenses and
reasonable attorneys’ fees incurred or expended by Holder in collecting any of
the Obligations or due to any default in the performance of the Obligations or
in enforcing any right granted hereunder. Guarantor’s obligations hereunder
shall further be subject to the terms and conditions hereinafter set forth.

 

1.     Primary Liability.     Guarantor shall be liable as a primary obligor for
the payment and performance of the Obligations. This is an absolute, continuing,
and unconditional guaranty of payment and not of collection and if at any time
or from time to time there are no outstanding Obligations, the obligations of
Guarantor with respect to any and all Obligations incurred thereafter shall not
be affected. This Guaranty and the Guarantor’s obligations hereunder are
irrevocable and, in the event of Guarantor’s death, shall be binding upon
Guarantor’s estate. All of the Obligations shall be conclusively presumed to
have been made or acquired in acceptance hereof.

 

Guaranty Agreement Page 1

 

 

 

2.     Payment.     In each event whenever any of the Obligations shall become
due and remain unpaid (howsoever the maturity thereof may have occurred),
Guarantor will, on demand, pay the amount due thereon to Holder. All amounts
becoming payable by Guarantor to Holder under this Guaranty shall be payable at
Holder’s offices at 7621 Inwood Road, Dallas, Texas, 75209, or such other place
as Holder may from time to time designate. The payment by Guarantor of any
amount pursuant to this Guaranty shall not in anywise entitle Guarantor to any
right, title or interest (whether by way of subrogation or otherwise) in and to
any of the Obligations or any proceeds thereof, or any security or collateral
therefor. Nothing contained in this paragraph 2 is intended or shall be
construed to give the Guarantor any right of subrogation in or under the
documents evidencing the Obligations, or any right to participate in any way
therein, notwithstanding any payments made by the Guarantor under the terms and
conditions of the documents evidencing the Obligations, all such rights of
subrogation and participation being expressly waived and released by the
Guarantor’s execution and delivery of this instrument. Whenever Guarantor pays
any sum which is or may become due under this Guaranty, written notice must be
delivered to Bank contemporaneously with such payment. In the absence of such
notice to Holder by Guarantor in compliance with the provisions hereof, any sum
received by Holder on account of the Obligations shall be conclusively deemed
paid by Debtor.

 

3.     Waiver of Notice.     Guarantor specifically waives any notice of
acceptance of this Guaranty by Holder and of the creation, advancement,
existence, extension, renewal, modification, consolidation, or rearrangement
from time to time of the Obligations, or increase from time to time in the
principal amount thereof, or increase or reduction from time to time of the rate
of interest thereon, or any indulgence from time to time with respect to the
Obligations, or any part thereof. Guarantor additionally waives grace, demand,
protest, presentment and notice of demand, protest, presentment and dishonor
with respect to the Obligations, notice of intent to accelerate, notice of
acceleration and notice of disposition of collateral, and waives notice of the
amount of the Obligations outstanding at any time, and agrees that the maturity
of the Obligations, or any part thereof, may be accelerated, extended, modified,
amended or renewed from time to time, or any other indulgence may be granted
with respect thereto by Holder at its will or as may be agreed by Debtor without
notice to or further consent by Guarantor, at any time or times.

 

4.     Rights of Holder.

 

a.     Guarantor agrees that no release of Debtor, any co-guarantor, or of any
other person primarily or secondarily liable on the Obligations, or any part
thereof shall in any manner impair, diminish or affect the liability of
Guarantor or the rights of Holder hereunder.

 

b.     Guarantor specifically agrees that it shall not be necessary or required,
and that Guarantor shall not be entitled to require, that Holder mitigate
damages, or file suit or proceed to obtain or assert a claim for personal
judgment against Debtor for the Obligations, or make any effort at collection of
the Obligations from Debtor, or foreclose against or seek to realize upon any
security or collateral now or hereafter existing for the Obligations, or file
suit or proceed to obtain or assert a claim for personal judgment against any
other party (whether maker, guarantor, endorser or surety) liable for the
Obligations, or make any effort at collection of the Obligations from any such
other party, or exercise or assert any other right or remedy to which Holder is
or may be entitled in connection with the Obligations or any security or
collateral or other guaranty therefor, or assert or file any claim against the
assets or estate of Debtor or any other guarantor or other person liable for the
Obligations, or any part thereof, before or as a condition of enforcing the
liability of Guarantor under this Guaranty or requiring payment of the
Obligations by Guarantor hereunder, or at any time thereafter.

 

Guaranty Agreement Page 2

 

 

  

c.     If any or all of the Obligations are now or hereafter secured in whole or
in part, Guarantor agrees that Holder may, from time to time, at its discretion,
and with or without valuable consideration, allow substitution, withdrawal,
release, surrender, exchange, subordination, deterioration, waste, loss or other
impairment of all or any part of such security or collateral, without notice to
or consent by Guarantor, and without in anywise impairing, diminishing or
releasing the liability of Guarantor hereunder.

 

d.     No delay or omission or lack of diligence or care in exercising any right
or power with respect to the Obligations or any security or collateral therefor
(including without limitation the failure of Holder to perfect a security
interest therein) or guarantee thereof or under this Guaranty shall in any
manner impair, diminish or affect the liability of Guarantor or the rights of
Holder hereunder. Guarantor expressly waives any right to the benefit of or to
require or control application of any security or collateral or the proceeds of
any security or collateral now existing or hereafter obtained by Holder as
security for the Obligations, or any part thereof, and agrees that Holder shall
have no duty insofar as Guarantor is concerned to apply upon any of the
Obligations any monies, payments or other property at any time received by or
paid to or in the possession of Holder, except as Holder shall determine in its
sole discretion.

 

e.     Guarantor’s liability hereunder shall in no manner be affected, reduced,
impaired or released by reason of any renewal, extension, modification,
consolidation, or rearrangement of or any other indulgence, forbearance or
compromise with respect to the Obligations, or any part thereof; or increase in
the principal amount thereof; or increase or reduction of the rate of interest
thereon.

 

f.     Guarantor waives all defenses given to sureties or guarantors at law or
in equity other than actual payment of the indebtedness, and performance of the
actions, constituting the Obligations including, but not limited to, any rights
Guarantor has under, or any requirements imposed by, applicable Texas law in
effect on the date of this Guaranty or as it may be amended from time to time.
Guarantor absolutely and unconditionally covenants and agrees that if all or any
part of the Obligations (or any instrument or agreement made or executed in
connection therewith) is for any reason found to be invalid, illegal,
unenforceable, uncollectible or legally impossible, for any reason whatsoever
(including, without limiting the generality of the foregoing, upon the grounds
that the payment and/or performance of the Obligations is ultra vires or
otherwise without authority, may violate applicable usury laws, is subject to
valid defenses, claims or offsets of Debtor, or any instrument evidencing any of
the Obligations is forged or otherwise irregular); then in any such case
Guarantor shall pay and perform the Obligations as herein provided and that no
such occurrence shall in any way diminish or otherwise affect Guarantor’s
obligations hereunder.

 

Guaranty Agreement Page 3

 

 

 

g.     Guarantor agrees, to the full extent he may legally do so, that suit may
be brought against Guarantor with or without making Debtor a party to such suit
(as Holder may elect).

 

5.     Liability in the Event of Preference.      In the event any payment of
Debtor to Holder is held to constitute a preference under the bankruptcy laws,
such payment by Debtor to Holder shall not constitute a release of Guarantor
from any liability hereunder, but Guarantor agrees to pay such amount to Holder
upon demand and this Guaranty shall continue to be effective or shall be
reinstated, as the case may be, to the extent of any such payment or payments.

 

6.     Assignment.     This Guaranty is intended for and shall inure to the
benefit of Holder and each and every other person who shall from time to time be
or become the owner or holder of any of the Obligations, and each and every
reference herein to “Holder” shall also include and refer to each and every
successor or assignee of Holder at any time holding or owning any part of or
interest in any part of the Obligations. This Guaranty shall be transferable by
Holder, it being understood and stipulated that upon the assignment or transfer
by Holder of any of the Obligations (or any part thereof or interest therein
thus transferred or assigned by Holder), such transferee shall also, unless
provided otherwise by Holder in its assignment, have and may exercise all the
rights granted to Holder under this Guaranty to the extent of the part of or
interest in the Obligations thus assigned or transferred to said person.
Guarantor expressly waives notice of transfer or assignment of the Obligations,
or any part thereof, or of the rights of Holder hereunder.

 

7.     Notice.      Any notice or demand to Guarantor hereunder or in connection
herewith may be given and shall conclusively be deemed and considered to have
been given and received upon the deposit thereof, in writing, in the U.S. mails,
duly stamped and addressed to Guarantor at the address of Guarantor shown below;
but actual notice, however given or received, shall always be effective. The
last preceding sentence shall not be construed in anywise to affect or impair
any waiver of notice or demand herein provided or to require giving of notice or
demand to or upon Guarantor in any situation for any reason. Guarantor waives
(i) promptness, diligence and notice of acceptance of this Guaranty and notice
of the incurring of any obligation, indebtedness or liability to which this
Guaranty applies or may apply, and waives present for payment, notice of
non-payment, protest, demand, notice of protest, notice of intent to accelerate,
notice of acceleration, notice of dishonor, diligence in enforcement and
indulgences of every kind, and (ii) the taking of any other action by Bank,
including without limitation giving any notice of default or any other notice
to, or making any demand on, Debtor, any other guarantor of all or any part of
the Obligations or any other party.

 

Guaranty Agreement Page 4

 

 

 

8.     Covenants.     Guarantor hereby covenants and agrees with Holder as
follows:

 

(a)     Guarantor shall not, so long as its obligations under this Guaranty
continue, transfer or pledge any material portion of its assets for less than
full and adequate consideration; and

 

(b)     Guarantor shall promptly furnish to Holder at any time and from time to
time such financial statements and other financial information of Guarantor as
Holder may require, in form and substance satisfactory to Holder; and

 

(c)     Guarantor shall comply with all terms and provisions of the Loan
Documents that apply to Guarantor; and

 

(d)     Guarantor shall promptly inform Bank of (i) any litigation or
governmental investigation known to Guarantor against Guarantor or affecting any
security for all or any part of the Obligations or this Guaranty which, if
determined adversely, might have a material adverse effect upon the financial
condition of Guarantor or upon such security or might cause a default under any
of the Loan Documents, (ii) any claim or controversy known to Guarantor which
might become the subject of such litigation or governmental investigation, and
(iii) any material adverse change in the financial condition of Guarantor.

 

9.     Rights of Holder Cumulative.     The rights of Holder hereunder are
cumulative and shall not be exhausted by its exercise of any of its rights
hereunder, under any prior guaranty or otherwise against Guarantor or by any
number of successive actions until and unless all indebtedness constituting the
Obligations has been paid, and all other Obligations have been performed. The
existence of this Guaranty shall not in any way diminish or discharge the rights
of Holder under any prior guaranty agreement executed by Guarantor.

 

10.     Governing Law/Venue.     THIS GUARANTY SHALL BE DEEMED TO HAVE BEEN MADE
UNDER AND SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS IN ALL RESPECTS.
THIS GUARANTY SHALL BE PERFORMABLE IN DALLAS COUNTY, TEXAS AND VENUE FOR ANY
DISPUTES ARISING UNDER OR PERTAINING TO THIS GUARANTY SHALL BE IN DALLAS COUNTY,
TEXAS.

 

11.     Entire Agreement.     Guarantor acknowledges and agrees that this
Guaranty accurately represents and contains the entire agreement between
Guarantor and Holder with respect to the subject matter hereof, that Guarantor
is not relying, in the execution of this Guaranty, on any representations
(whether written or oral) made by or on behalf of Holder except as expressly set
forth in this Guaranty, and that any and all prior statements and/or
representations made by or on behalf of Holder to Guarantor (whether written or
oral) in connection with the subject matter hereof are merged herein. This
Guaranty shall not be waived, altered, modified or amended as to any of its
terms or provisions except in writing duly signed by Holder and Guarantor.

 

Guaranty Agreement Page 5

 

 

 

12.     Successors and Assigns.      This Guaranty shall bind the heirs,
personal representatives, and assigns of Guarantor and shall inure to the
benefit of all transferees, credit participants, assignees, and/or endorsees of
Holder, notwithstanding that some or all of the monies owed by Guarantor
pursuant to this Guaranty may be actually advanced after any bankruptcy,
receivership, reorganization or death of Guarantor.

 

13.     Interpretation.     Headings are provided as a matter of convenience
only and are not to be considered in interpreting the meaning of any provision
hereunder. The use of any gender herein shall include the other gender.

 

14.     Severability.     A determination that any provision of this Guaranty is
unenforceable or invalid shall not affect the enforceability or validity of any
other provision.

 

15.     Advice of Counsel.     Guarantor acknowledges that, to the extent
Guarantor deems necessary, Guarantor has had the benefit of the advice of legal
counsel of its own choice in connection with the preparation and negotiation of
this Guaranty, and has been afforded an opportunity to review this Guaranty with
such legal counsel, and that Guarantor fully understands the implications and
ramifications of the agreements herein made by the Guarantor.

 

16.     Loan Agreement.     The terms and conditions contained herein are
subject to that certain Loan Agreement (“Loan Agreement”) of even date herewith,
made by and between Debtor, Holder, and the guarantors defined therein. To the
extent anything contained herein is inconsistent with or contrary to the terms
of the Loan Agreement, the terms of the Loan Agreement shall control. All
capitalized terms used but not defined in this Guaranty shall have the same
meaning as used and defined in the Loan Agreement.

 

17.     Beneficial Interest.     This Guaranty may reasonably be expected to
benefit directly or indirectly, Guarantor, and members and managers of Guarantor
have determined that this Guaranty may reasonably be expected to benefit,
directly or indirectly, Guarantor.

 

THE REMAINDER OF THIS PAGE IS BLANK

SIGNATURE PAGE FOLLOWS

 

Guaranty Agreement Page 6

 

 

EXECUTED effective as of (but not necessarily on) the 30th day of July, 2015.

 

GUARANTOR:   Address for Notice:           JBGL Mustang, LLC,       a Texas
limited liability company               By: /s/ James R. Brickman   2805 North
Dallas Parkway     James R. Brickman   Suite 400     Manager   Dallas, Texas
75093             JBGL Chateau, LLC,       a Texas limited liability company    
          By: /s/ James R. Brickman   2805 North Dallas Parkway     James R.
Brickman   Suite 400     Manager   Dallas, Texas 75093           JBGL Exchange,
LLC,       a Texas limited liability company               By: /s/ James R.
Brickman   2805 North Dallas Parkway     James R. Brickman   Suite 400    
Manager   Dallas, Texas 75093           JBGL Builder Finance, LLC       a Texas
limited liability company,               By: /s/ James R. Brickman   2805 North
Dallas Parkway     James R. Brickman   Suite 400     Manager   Dallas, Texas
75093           Johns Creek 206, LLC,       a Georgia limited liability company
              By: /s/ James R. Brickman   2805 North Dallas Parkway     James R.
Brickman   Suite 400     Manager   Dallas, Texas 75093  

 

Guaranty Agreement Page 7