LAW, OR RULE APPLICABLE TO IT OR ITS
PROPERTY OR CONSTITUTE A DEFAULT (OR AN EVENT WHICH, WITH NOTICE OR LAPSE OF
TIME, OR BOTH WOULD CONSTITUTE A DEFAULT) UNDER OR RESULT IN A BREACH OF ANY
MATERIAL AGREEMENT OR OTHER MATERIAL INSTRUMENT BY WHICH IT IS BOUND OR BY WHICH
ANY OF ITS ASSETS ARE AFFECTED; (VI) IT HAS RECEIVED APPROVAL AND AUTHORIZATION
TO ENTER INTO THIS GUARANTEE PURSUANT TO ITS INTERNAL POLICIES AND PROCEDURES;
(VII) THIS GUARANTEE IS NOT ENTERED INTO IN CONTEMPLATION OF INSOLVENCY OR WITH
INTENT TO HINDER, DELAY OR DEFRAUD ANY CREDITOR AND (VIII) IT HAS EXAMINED AND
COMPREHENDS THE CREDIT AGREEMENT IN ITS ENTIRETY.
(B)
GUARANTOR REPRESENTS, WARRANTS AND COVENANTS TO MLMCI THAT AS OF
THE DATE OF THIS GUARANTEE, AS OF THE DATE OF ANY TRANSACTION UNDER THE CREDIT
AGREEMENT AND AT ALL TIMES WHILE THIS GUARANTEE AND ANY TRANSACTION UNDER THE
CREDIT AGREEMENT ARE IN EFFECT OR THERE ARE OBLIGATIONS OUTSTANDING:
(I)
PERFORMANCE OF GUARANTEE.
GUARANTOR DOES NOT BELIEVE, NOR DOES
IT HAVE ANY REASON OR CAUSE TO BELIEVE, THAT IT CANNOT PERFORM EACH AND EVERY
COVENANT CONTAINED IN THIS GUARANTEE ON ITS PART TO BE PERFORMED.
(II)
GUARANTOR NOT INSOLVENT.
GUARANTOR IS NOT, AND WITH THE PASSAGE
OF TIME DOES NOT EXPECT TO BECOME, INSOLVENT.
(III)
OWNERSHIP OF BORROWER.
GUARANTOR IS NOW, AND WILL REMAIN, THE
DIRECT OR INDIRECT OWNER OF 100% OF THE MEMBERSHIP INTERESTS OF HOUSING LLC.
(IV)
OWNERSHIP OF BORROWER.
GUARANTOR IS NOW, AND WILL REMAIN, THE
DIRECT OR INDIRECT OWNER OF 100% OF THE PARTNERSHIP INTERESTS OF HOUSINGTX LP.
7
11.
COVENANTS.
GUARANTOR COVENANTS AND AGREES AS FOLLOWS:
(A)
CONSOLIDATIONS, MERGERS AND SALES OF ASSETS.
THE GUARANTOR SHALL
NOT (I) CONSOLIDATE WITH OR MERGE WITH OR INTO ANY OTHER PERSON OR (II) SELL,
LEASE OR OTHERWISE TRANSFER ALL OR SUBSTANTIALLY ALL OF ITS ASSETS TO ANY OTHER
PERSON; PROVIDED, THE GUARANTOR MAY MERGE OR CONSOLIDATE WITH ANOTHER PERSON IF
THE GUARANTOR IS THE PERSON SURVIVING SUCH MERGER.
(B)
GUARANTEES.
THE GUARANTOR SHALL NOT CREATE, INCUR, ASSUME OR
SUFFER TO EXIST ANY GUARANTEES OTHER THAN THIS GUARANTEE EXCEPT (I) TO THE
EXTENT REFLECTED IN THE GUARANTOR'S FINANCIAL STATEMENTS OR NOTES THERETO;
(II) TO THE EXTENT THE AGGREGATE GUARANTEES OF THE GUARANTOR (OTHER THAN THOSE
MADE PURSUANT TO CLAUSES (III) AND (IV) BELOW) DO NOT EXCEED $5,000,000;
(III) OF OBLIGATIONS OF ARC DEALERSHIP INC. TO TEXTRON FINANCIAL CORPORATION
("TEXTRON") ARISING IN CONNECTION WITH LOANS TO ARC DEALERSHIP INC. FROM TEXTRON
IN AN AGGREGATE AMOUNT OF $ 50,000,000 AT ANY TIME, (IV) THE GUARANTY TO TEXTRON
WITH RESPECT TO THAT CERTAIN $25,000,000 AGREEMENT FOR WHOLESALE FINANCING FROM
TEXTRON TO ARC HOUSING LLC AND ARC HOUSINGTX LP DATED FEBRUARY 18, 2005 AND (V)
THE GUARANTEE TO MLMCI UNDER THAT CERTAIN CHATTEL PAPER FACILITY; PROVIDED,
HOWEVER, THAT FOR THE PURPOSES OF THIS CLAUSE (B) ONLY THE TERM "GUARANTEES"
SHALL EXCLUDE GUARANTEES ARISING PURSUANT TO CUSTOMARY CARVE-OUTS TO LIMITED
RECOURSE DEBT SUCH AS, FOR EXAMPLE, PERSONAL RECOURSE TO THE GUARANTOR OR ANY