Court Opinion

ID: 4076162
Source: CourtListenerOpinion
Date Created: 2016-09-30 07:09:50.528453+00
Date Added: 2024-06-11T14:32:57.625069
License: Public Domain

ACCEPTED
                                                                                    03-15-00506-CV
                                                                                            8341468
                                                                         THIRD COURT OF APPEALS
                                                                                    AUSTIN, TEXAS
                                                                             12/22/2015 11:57:23 AM
                          No. 03-15-00506-CV                                      JEFFREY D. KYLE
                                                                                             CLERK

                 IN THE COURT OF APPEALS           FILED IN
                                             3rd COURT
     FOR THE THIRD COURT OF APPEALS DISTRICT OF   TEXAS OF APPEALS
                                                 AUSTIN, TEXAS
                                                          12/22/2015 11:57:23 AM
                                                             JEFFREY D. KYLE
EUGENE MILES PRENTICE, RICHARD M.                       SPAZIANO,  Clerk and

           CARL WILLIAM POLLOCK,
                                Appellants,

                                      vs.

                            FROST BANK,
                                 Appellees.

     On appeal from the 200th District Court of Travis County, Texas
                    Docket No. D-1-GN-13-000711

                        APPELLANTS’ BRIEF

PENDERGRAFT & SIMON, L.L.P.             CARL WILLIAM POLLOCK
Robert L. Pendergraft                   1200 Barton Creek Blvd. #3
Texas Bar No. 15743500                  Austin, TX 78735
William P. Haddock                      Tel. 512-656-6374
Texas Bar No. 00793875
2777 Allen Parkway, Suite 800           Appellant, Pro Se
Houston, TX 77019
Tel. 713-528-8555
Fax. 713-868-1267
Counsel for Eugene Miles Prentice &
Richard M. Spaziano

                     ORAL ARGUMENT REQUESTED
                      Identity of Parties & Counsel

             Appellants:                             Counsel:
Eugene Miles Prentice                   William P. Haddock
                                        Robert L. Pendergraft
                                        Pendergraft & Simon, LLP
                                        2777 Allen Parkway, Suite 800
                                        Houston, TX 77019

Richard M. Spaziano                     William P. Haddock
                                        Robert L. Pendergraft
                                        Pendergraft & Simon, LLP
                                        2777 Allen Parkway, Suite 800
                                        Houston, TX 77019

Carl William Pollock                    Pro se
1200 Barton Creek Blvd. #3
Austin, TX 78735

             Appellee:                               Counsel:
Frost Bank                              Kendall D. Hamilton
                                        Law Office of Ken Hamilton
                                        900 RR 620 South
                                        Suite C101 #164
                                        Austin, TX 78734

                                    i
                 Statement Regarding Oral Argument

The Appellant believes an oral argument would aid the Court in determin-
ing the legal and factual issues presented in this appeal because:
   a.   This case involves legal issues regarding the interpretation of
        multiple guaranty agreements have not been definitively de-
        cided by the Supreme Court of Texas or by this Court.
   b.   As described in this brief, the decisional process of this Court
        may be significantly aided by oral argument.

                                     ii
                                              Table of Contents
Identity of Parties & Counsel .............................................................................. i	

Statement Regarding Oral Argument ...............................................................ii	

Index of Authorities ............................................................................................. v	

Statement of the Case ........................................................................................... 1	

Statement of Jurisdiction ..................................................................................... 2	

Issues Presented .................................................................................................... 3	

Statement of Facts ................................................................................................. 4	

        A.	 The Underlying Promissory Note & Guaranty
            Agreements.............................................................................................. 4	
        B.	 Default & Initial Demands on the Guarantors ................................... 6	
        C.	 Settlement with Bruce Ling & Other Payments to Frost
            Bank .......................................................................................................... 6	
        D.	 Frost Bank Files Suit Against the Remaining
            Guarantors ............................................................................................... 7	
Summary of the Argument ................................................................................. 9	

Argument .............................................................................................................. 11	

I. 	 The trial court erred in granting a no-evidence summary
     judgment on a claim in which Frost Bank had the burden of
     proof ............................................................................................................... 12	
II. 	 The trial court erred in granting a traditional summary
      judgment where latent ambiguities required strict
      construction in favor of the Guarantors .................................................... 14	
        A.	 Unambiguous language in the Guaranty Agreements
            must be interpreted by its plan language as a matter of
            law........................................................................................................... 18	

                                                             iii
        B.	 Latent ambiguities arising from the reading of the
            Guaranty Agreements together require construction in
            the Guarantors’ favor ........................................................................... 19	
        C.	 The Court must resolve ambiguities in the Guaranty
            Agreements in favor of the Guarantors ............................................ 22	
III. 	 The trial court erred in denying Appellants’ Cross-Motion
       for Summary Judgment ............................................................................... 25	
Conclusion & Prayer........................................................................................... 25	

Certificate of Compliance.................................................................................. 27	

Certificate of Service .......................................................................................... 27	

Appendix .............................................................................................................. 28	

                                                           iv
                                      Index of Authorities

                                                  Cases	

Board of Ins. Comm’rs v. Great S. Life Ins. Co.,
   239 S.W.2d 803 (Tex. 1951) ........................................................................... 19
Bromlow v. Pyne Corp.,
   490 So. 2d 1027 (Fla.Dist.Ct.App. 1986) ....................................................... 20
Coker v. Coker,
   650 S.W.2d 391 (Tex. 1983) ............................................................... 16, 17, 22
DeWitt County Elec. Co-op., Inc. v. Parks,
  1 S.W.3d 96 (Tex. 1999) ................................................................................. 19
FM Properties Operating Co. v. City of Austin,
  22 S.W.3d 868 (Tex. 2000) ....................................................................... 11, 25
Gulf Ins. Co. v. Burns Motors, Inc.,
   22 S.W.3d 417 (Tex. 2000) ............................................................................. 17
Heritage Res. Inc. v. NationsBank,
   939 S.W.2d 118 (Tex. 1996) ........................................................................... 17
Hill Mercantile Co. v. Rotan Grocery Co.,
    127 S.W. 1080 (Tex.Civ.App.—Austin 1910, writ dism’d) ................. 16, 22
In re Prudential Ins. Co. of America,
    148 S.W.3d 124 (Tex. 2004) (orig. proceeding) ........................................... 17
JMW Partners, L.P. v. Northstar Bank of Texas,
  No. 2-09-167-CV, 2010 WL 2331399 (Tex.App.—Fort Worth
  Jun. 10, 2010, no pet.) (mem. op.) .............................................. 17, 22, 23, 24
Lear Siegler, Inc. v. Perez,
    819 S.W.2d 470 (Tex. 1991) ........................................................................... 15
Limestone Products Distrib., Inc. v. McNamara,
   71 S.W.3d 308 (Tex. 2002) ............................................................................. 14
Mack Trucks, Inc. v. Tamez,
   206 S.W.3d 572 (Tex. 2006) ........................................................................... 13

                                                      v
Masterson v. Diocese of Northwest Texas,
   422 S.W.3d 594 (Tex. 2013) ........................................................................... 11
McCrea v. Cubilla Condo. Corp. N.V.,
  685 S.W.2d 755 (Tex.App.—Houston [1st Dist.] 1985, writ
  ref’d n.r.e.)....................................................................................................... 11
National Union Fire Ins. Co. of Pittsburgh, PA v. CBI Indus., Inc.,
   907 S.W.2d 517 (Tex. 1995) ........................................................................... 19
Nixon v. Mr. Prop. Mgmt. Co.,
   690 S.W.2d 546 (Tex. 1985) ........................................................................... 14
Pham v. Mongiello,
   58 S.W.3d 284 (Tex.App.—Austin 2001, pet. denied) ............................... 15
Principal Commercial Acceptance, L.L.C. v. Buchanan Fund V,
    L.L.C., No. 01-11-00782-CV, 2012 WL 6095236 (Tex.App.—
    Houston [1st Dist.] Dec. 6, 2012, pet. denied) (mem. op.)........................ 17
Progressive Cnty. Mut. Ins. Co. v. Kelley,
   284 S.W.3d 805 (Tex. 2009) ........................................................................... 17
Rhône-Poulenc, Inc. v. Steel,
   997 S.W.2d 217 (Tex. 1999) ........................................................................... 14
Scott v. City of Tampa,
    30 So. 2d 300 (Fla. 1947), cert. denied, 332 U.S. 790 (1947) .......................... 20
Sidelnik v. American States Ins. Co.,
    914 S.W.2d 689 (Tex.App.—Austin 1996, writ denied) ............................ 14
Smith v. Montgomery,
   3 Tex. 199 (1848) ............................................................................................. 16
Stone v. Midland Multifamily Equity REIT,
   334 S.W.3d 371 (Tex.App.—Dallas 2011, no pet.) ..................................... 15
Walker v. Harris,
   924 S.W.2d 375 (Tex. 1996) ........................................................................... 15
Whitney Nat’l Bank v. Labry,
   No. 09-cv-02518, 2011 WL 1211606 (W.D. Tenn. Mar. 29,
   2011) (not designated for publication) .................................................. 20, 21

                                                           vi
                                                    Statutes	

Tex. Gov’t Code Ann. § 22.220 (West Supp. 2014) ............................................ 2

                                                      Rules	

Tex. R. Civ. P. 166a ............................................................................................... 13

                                                         vii
TO THE HONORABLE JUSTICES OF THIS COURT:
   Eugene Miles Prentice, Richard M. Spaziano, and Carl William Pollock

respectfully submit this Appellants’ Brief showing the Court why the lower

court erred in its interpretation of the law leading to the improper entry of

a summary judgment in favor of Frost Bank on its sole cause of action for

breach of a guaranty agreement and in denying the Appellants’ cross-

motions for summary judgment. In support, the Appellants respectfully

show:

                         Statement of the Case

Nature of the Case    Frost Bank filed suit against Eugene Miles Prentice,
                      Richard M. Spaziano, and Carl William Pollock for
                      breach of separate, but essentially identical, guaranty
                      agreements guaranteeing 50 percent of the indebted-
                      ness owed by National Insurance Partners. (C.R. 3–8).
                      The Appellants answered and pled affirmative de-
                      fenses. (C.R. 38–39, 195–96).
Trial Court           While originally assigned to the 126th District Court
                      of Travis County, Texas the final order being ap-
                      pealed was entered by the 200th District Court of
                      Travis County, Texas, the Honorable Giesela D. Tria-
                      na presiding.

Trial Court           After hearing Frost Bank’s motion for summary
Disposition           judgment and Appellants’ cross-motion for summary
                      judgment, on August 5, 2015, the court entered a final
                      summary judgment finding the Appellants liable un-
                      der the guaranty agreements and holding each Ap-
                      pellants personally liable for up to $360,471.60 until
                      the total underlying indebtedness is paid. (C.R. 507–
                      09; App. 1).

                                      1
Appellate             On August 12, 2015, the Appellants perfected an ap-
Proceedings           peal to this Court. (C.R. 512).

                        Statement of Jurisdiction

   This Court has jurisdiction over the final, summary judgment pursuant

to Tex. Gov’t Code Ann. § 22.220(a) (West Supp. 2014).

   Following the entry of the final, summary judgment on August 5, 2015,

this appeal was perfected on August 12, 2015. (C.R. 512).

                                     2
                          Issues Presented

1.   Whether the trial court erred in granting a no-evidence motion
     for summary judgment on the basis that the parties defending a
     plaintiff’s cause of action, where the plaintiff had the burden of
     proof, allegedly did not have more than a scintilla of evidence
     to defeat the movant’s cause of action.
2.   Whether the trial court erred in determining that four, substan-
     tially identical guaranty agreements, when read together did
     not contain a latent ambiguity.
3.   Whether the trial court erred by denying the Appellants’ cross-
     motion for summary judgment asserting that the Appellee
     could not prevail in its cause of action for breach of a guaranty
     agreement.

                                   3
                            Statement of Facts

   The facts of this case are not in dispute; this case involves legal matters

only and the application of law to the undisputed facts.

A. The Underlying Promissory Note & Guaranty Agreements

   In exchange for a loan, National Insurance Partners, Inc. (“NIP”) exe-

cuted a promissory note, dated May 22, 2007, in the amount of $1 million.

(C.R. 225, 229, 233, 237). On October 16, 2009, a new promissory note paya-

ble to Frost Bank, in the amount of $1,292,000, was executed as part of a

modification of the original loan agreement. (C.R. 215, 219–21).

   As a condition of making the original loan, the bank required guaranty

agreements to be made by NIP’s principal officer, Appellant, Carl William

Pollock, and three other individuals who were neither officers, directors,

nor employees of NIP:

   1.   Bruce W. Ling,
   2.   Appellant, Eugene Miles Prentice, and
   3.   Appellant, Richard M. Spaziano.
   (C.R. 215).
   The guaranty agreements, all of which were dated May 22, 2007, were

identical except for the identity of the respective guarantors. (C.R. 215, 223–

38). The guaranty agreements provide, in relevant part:

                                      4
      Guarantor absolutely and unconditionally guarantees full and
      punctual payment and satisfaction of Guarantor’s Share of the In-
      debtedness of Borrower to Lender. . . .
      If Lender presently holds one or more guarantees, or hereafter
      receives additional guarantees from Guarantor, Lender’s rights
      under all guaranties shall be cumulative. This Guaranty shall
      not (unless specifically provided below to the contrary) affect or
      invalidate any such other guaranties. Guarantor’s liability will
      be Guarantor’s aggregate liability under the terms of this Guar-
      anty and any such other unterminated guaranties. . . .
      The words “Guarantor’s Share of the Indebtedness” . . . mean
      50.000% of all of the principal amount, interest thereon to the
      extent not prohibited by law, and all collection costs, expenses
      and Lender’s reasonable attorneys’ fees whether or not there is
      a lawsuit, and if there is a lawsuit, any fees and costs for trial
      and appeals. . . .
      In all cases where there is more than one . . . Guarantor, then all
      words used in this Guaranty in the singular shall be deemed to
      have been used in the plural where the context and construc-
      tion so requires.
      (C.R. 223–38) (emphasis added).
    The guaranty agreements defined “the Note” as:

      [T]he promissory note dated May 22, 2007, in the original prin-
      cipal amount of $1,000,000.00 from Borrower to Lender, togeth-
      er with all renewals of, extensions of, modifications of,
      refinancings of, consolidations, of and substitutions for the
      promissory note or agreement.
      (C.R. 225–26, 229–30, 233–34, 237–38).1

1
  True and correct copies of the guaranty agreements were submitted as summary
judgment evidence by the parties, and they appear at various places in the Clerk’s Rec-
ord as follows:

                                          5
B. Default & Initial Demands on the Guarantors

   It is undisputed that NIP failed to pay its indebtedness to Frost Bank

before it became a debtor in bankruptcy. (C.R. 215). As a result, on, or

about, October 22, 2012, the the bank made demand on Pollock, Ling, Pren-

tice, and Spaziano for payment of $712,554.68. (C.R. 215, 240–47).

C. Settlement with Bruce Ling & Other Payments to Frost Bank

   On, or about, December 19, 2012, the Frost Bank and Ling entered into a

settlement agreement where Ling paid the bank $358,684.32 in exchange

for a full release of his personal liability. (C.R. 216, 481, 488–90). This pay-

ment was 50 percent of the indebtedness identified in Frost Bank’s de-

mands plus accrued interest through the time of the settlement agreement.

   Between the time Frost Bank ultimately filed its lawsuit and the time it

filed its motion for summary judgment, the bankruptcy trustee administer-

ing NIP’s bankruptcy estate was able to pay Frost Bank $66,281.49 out of

the assets on hand. (C.R. 216).

        Guaranty              Frost MSJ           Appellants’ Cross-MSJ
        Agreement       Motion       Response      Motion      Response
        Prentice       C.R. 227–30 C.R. 367–70   C.R. 312–15 C.R. 470–73
        Spaziano            235–38      373–76        318–21       476–79
        Pollock             231–34      388–91        333–36       491–94
        Ling                223–26      379–82        324–27       482–85

                                       6
D. Frost Bank Files Suit Against the Remaining Guarantors

   Despite having received approximately 50 percent of the indebtedness

owed by NIP, Frost Bank filed suit to collect additional monies from the

remaining three guarantors—Prentice, Spaziano, and Pollock. (C.R. 3–8).

   On March 19, 2014, Prentice and Spaziano filed a motion for summary

judgment. (C.R. 41–85). The Motion was heard by a Visiting Judge, the

Honorable Charles Ramsay, and on May 18, 2014, he entered an Order

denying the motion. (C.R. 197).

   On April 20, 2015, Frost Bank filed its own motion for summary judg-

ment on both traditional and no-evidence grounds. (C.R. 201–95). Prentice,

Spaziano, and Pollock filed a response on June 15, 2015. (C.R. 454–99). A

hearing was held June 22, 2015. (C.R. 502).

   In conjunction with Frost Bank’s motion for summary judgment, Pren-

tice, Spaziano, and Pollock field a cross-motion for summary judgment on

June 1, 2015. (C.R. 296–341). Frost Bank filed a timely response on June 12,

2015. (C.R. 346–453). The arguments Frost Bank raised in its motion for

summary judgment were essentially the same arguments raised in its re-

sponse to Appellant’s cross-motion for summary judgment; likewise, the

arguments raised in Appellant’s cross-motion for summary judgment were

essentially identical to the arguments made in response to Frost Bank’s mo-

tion for summary judgment. Whether filed in the motion for summary

                                      7
judgment, the cross-motion, or in any response, there were no objections to

any summary judgment evidence, and none of the summary judgment ev-

idence raised any issue of material fact. The parties agreed that the issue

before the trial court merely involved the application of undisputed facts to

the law.

    The motion for summary judgment and the cross-motion for summary

judgment were heard June 22, 2015. (C.R. 502). On June 24, 2015, the Judge

Triana announced her ruling on the two motions and asked Frost Bank’s

counsel to draft a final summary judgment in conformity with her ruling.

(C.R. 502).

    On July 30, the Appellants again requested that the court make a ruling

expressly denying Frost Bank’s no-evidence motion for summary judg-

ment.2 (C.R. 503–06).

    On August 5, 2015, the Court entered the final summary judgment.

(C.R. 507–10; App. 1). A week later, Prentice, Spaziano, and Pollock filed

their Notice of Appeal. (C.R. 512–17).

2
  This request for a ruling was made when Frost Bank would not agree to language in
the proposed summary judgment that would deny the no-evidence portion of Frost
Bank’s motion.

                                         8
                      Summary of the Argument

   The trial court heard a motion for summary judgment and a cross-

motion for summary judgment. In its motion for summary judgment, Frost

Bank urged the court to grant a summary judgment on its sole cause of ac-

tion for breach of a guaranty agreement on both traditional and no-

evidence grounds. In their cross-motion for summary judgment, the Appel-

lants urged the court to deny Frost Bank’s claims due to latent ambiguities

in the guaranty agreements.

   While not specifying the grounds for granting the summary judgment,

the trial court should most certainly have denied the no-evidence motion

for summary judgment because it amounted to an improper shifting of the

burden of proof to the Appellants. Guarantors never have the burden of

proof on a cause of action for breach of a guaranty agreement. The only

way Frost Bank could have properly moved for a no-evidence summary

judgment would be to do so on an affirmative defense, but this was not

done.

   Under well-settled Texas law, guaranty agreements are construed in

favor of the guarantor. When the guaranty agreement is unambiguous, the

Court must interpret the agreement as a matter of law using established

principles of contract construction. When a guaranty agreement contains

patent or latent ambiguities, no parol evidence can be used to determine

                                     9
the parties’ intent unless those ambiguities are resolved in the guarantors’

favor.

   When read together, the guaranty agreements, which were executed at

the same time and involve the same subject matter, contain a patent ambi-

guity. In each individual guaranty agreement, Bruce Ling, Miles Prentice,

Richard Spaziano, and William Pollock agreed to guarantee half of the in-

debtedness National Insurance Partners owed to Frost Bank. The guaranty

agreements stated:

     In all cases where there is more than one . . . Guarantor, then all
     words used in this Guaranty in the singular shall be deemed to
     have been used in the plural where the context and construc-
     tion so requires.
Applying that clause to the guaranty agreements, this literally means:

     [Guarantors] absolutely and unconditionally guarantee full and
     punctual payment and satisfaction of [Guarantors’] Share of
     the Indebtedness of Borrower to Lender. . . .
     The words “[Guarantors’] Share of the Indebtedness” . . . mean
     50.000% of all of the principal amount, interest thereon to the
     extent not prohibited by law, and all collection costs, expenses
     and Lender’s reasonable attorneys’ fees whether or not there is
     a lawsuit, and if there is a lawsuit, any fees and costs for trial
     and appeals.
   Given that guaranty agreements are strictly construed in favor of guar-

antors, the Court should reverse the summary judgment and render the

judgment that the trial court should have entered. A remand would be fu-

tile as no amount of parol evidence of the parties’ intent can salvage Frost

                                     10
Bank’s claims that it should recover from the four Guarantors any more

than 50 percent of the indebtedness due from National Insurance Partners.

                                  Argument

    The lower court erred in entering a summary judgment in favor of Frost

Bank and in denying the cross-motion for summary judgment filed by the

Appellants. The Court should review the granting of a summary judgment

de novo. E.g., Masterson v. Diocese of Northwest Texas, 422 S.W.3d 594, 607

(Tex. 2013).

    As stated in FM Properties Operating Co. v. City of Austin:

      When both sides move for summary judgment and the trial
      court grants one motion and denies the other, the reviewing
      court should review both sides’ summary judgment evidence
      and determine all questions presented. . . . The reviewing court
      should render the judgment that the trial court should have
      rendered. . . . When a trial court’s order granting summary
      judgment does not specify the grounds relied upon, the review-
      ing court must affirm summary judgment if any of the sum-
      mary judgment grounds are meritorious.
      22 S.W.3d 868, 872 (Tex. 2000) (internal citations omitted).
    Because the summary judgment does not state the grounds on which it

was granted, the Appellants demonstrate herein that each ground alleged

in the motion is insufficient to support the judgment. See McCrea v. Cubilla

Condo. Corp. N.V., 685 S.W.2d 755, 757 (Tex.App.—Houston [1st Dist.] 1985,

writ ref’d n.r.e.).

                                       11
   Frost Bank alleged it was entitled to summary judgment on both tradi-

tional and no-evidence grounds. On its traditional motion for summary

judgment, Frost Bank had to prove that it was entitled to a judgment be-

cause it could prove, as a matter of law, each and every element of its claim

for breach of a guaranty agreement. As to the no-evidence portion of the

motion for summary judgment, Frost Bank’s arguments were meritless,

and the trial court should have never considered them.

                                     I.

        The trial court erred in granting a no-evidence summary
      judgment on a claim in which Frost Bank had the burden of
                                   proof

   The trial court erred by not sustaining Appellants’ objection to a no-

evidence motion for summary judgment and not otherwise denying sum-

mary judgment, where Frost Bank alleged:

     Frost hereby alleges that it is entitled to no-evidence summary
     judgment as to the liability of each of the Defendants to pay
     Frost their Guarantor’s Share of the Indebtedness, pursuant to
     the terms of their respective Guaranty Agreement, until the
     principal, interest, and costs of collection occurred in regard to
     the underlying Note have been paid full, on the grounds that
     Defendants are unable to present more than a scintilla of evi-
     dence that Frost cannot establish all necessary elements of its
     claim to enforce the Guaranty Agreements.
     (C.R. 212).
   This is an improper use of a no-evidence motion for summary judg-

ment. There is no conceivable way Frost Bank could be granted a summary

                                     12
judgment on no-evidence grounds on its own cause of action where it had

the burden of proof. See Tex. R. Civ. P. 166a(i) (“a party without presenting

summary judgment evidence may move for summary judgment on the

ground that there is no evidence . . . on which an adverse party would have

the burden of proof at trial.”); see also App. 6.

   A no-evidence motion for summary is the equivalent of a pre-trial di-

rected verdict. Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 581–82 (Tex.

2006). The filing of a no-evidence motion that complies with Rule 166a(i)

shifts the burden to the non-movant to file more than a scintilla of evi-

dence, showing there is a genuine issue of material fact as to the challenged

elements of the non-movant’s cause of action or affirmative defense that is

being challenged. See id.

   By moving for a no-evidence motion for summary judgment on its own

cause of action, Frost Bank improperly shifted the burden of proof in the

entire case to the Appellants. The Appellants should no more have had the

burden of proof on the Frost Bank’s case in a summary judgment proceed-

ing than they would have at a trial on the merits.

                                        13
                                     II.

   The trial court erred in granting a traditional summary judgment
   where latent ambiguities required strict construction in favor of
                             the Guarantors

   Latent ambiguities in the guaranty agreements, which are evident when

the agreements are read together, are an absolute bar to Frost Bank obtain-

ing a summary judgment. When a latent ambiguity exists, a fact issue ex-

ists. See Sidelnik v. American States Ins. Co., 914 S.W.2d 689, 691–92 (Tex.

App.—Austin 1996, writ denied) (in resolving patent ambiguities, parol ev-

idence is admissible).

   In deciding whether there is a disputed issue of material fact that pre-

cludes summary judgment, the Court should consider as true all evidence

favorable to the nonmovant. Limestone Products Distrib., Inc. v. McNamara,

71 S.W.3d 308, 311 (Tex. 2002); Rhône-Poulenc, Inc. v. Steel, 997 S.W.2d 217,

223 (Tex. 1999); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548–49 (Tex.

1985). The Court must view the evidence in the light most favorable to the

nonmovant and must indulge every reasonable inference and resolve all

doubts in favor of the nonmovant. Limestone Prods., 71 S.W.3d at 311; Nixon,
690 S.W.2d at 549.

   To establish liability under a guaranty agreement, the holder of the

guaranty must prove:

   1.   The existence and ownership of the guaranty,

                                     14
   2.   The performance of the terms of the underlying loan agreement
        by the holder,
   3.   The occurrence of the condition upon which liability is based,
        and
   4.   The guarantor’s failure or refusal to perform the promise.
E.g., Stone v. Midland Multifamily Equity REIT, 334 S.W.3d 371, 378 (Tex.

App.—Dallas 2011, no pet.). If liability is proved, the amount of liability is

measured by the principal’s liability, unless the guaranty agreement ex-

pressly provides for greater or lesser liability. Pham v. Mongiello, 58 S.W.3d
284, 288 (Tex.App.—Austin 2001, pet. denied). In the present case, the

Guarantors’ liability was limited to 50 percent of the total indebtedness due

to the bank. (C.R. 223–38).

   Because the amount of liability is an essential element, to be entitled to

a summary judgment, the Appellants only need to disprove a single ele-

ment of Frost Bank’s claims—in this case the amount of liability. Walker v.

Harris, 924 S.W.2d 375, 378 (Tex. 1996); Lear Siegler, Inc. v. Perez, 819 S.W.2d
470, 471 (Tex. 1991).

   The determinative question involving the four, identical guaranty

agreements is whether each guarantor personally guaranteed 50 percent of

the total indebtedness, making all guarantors collectively liable for up to

200 percent of all indebtedness that might be due, or whether all guaran-

tors are collectively liable for only 50 percent of the total indebtedness. If

                                      15
the former is true, each Appellant in this case would be liable for

$360,471.60 as set forth in the underlying summary judgment. (C.R. 508–09;

see also App. 1). If the latter is true, the Appellants would be collectively li-

able for $356,277.34 of the indebtedness that was due on October 22, 2012,

and since Ling previously paid the same amount to settle the Frost Bank’s

claim, the Appellants’ liability should have been $0.

    As shown herein, the latter scenario—where the Appellants should

have no liability to Frost Bank—is the proper one because it is fundamental

that ambiguities in guaranty agreements are strictly construed in favor of

guarantors. E.g., Coker v. Coker, 650 S.W.2d 391, 394 (Tex. 1983). This has

been the fundamental principal of the law involving guaranty agreements

in Texas since the mid-19th century. Smith v. Montgomery, 3 Tex. 199, 209

(1848);3 see also Hill Mercantile Co. v. Rotan Grocery Co., 127 S.W. 1080, 1082

(Tex.Civ.App.—Austin 1910, writ dism’d) (“It is a well-settled rule of law

that contracts of guaranty and suretyship are to be strictly construed, and

all reasonable doubts resolved in favor of the guarantor or surety.”).

3
  Justice Wheeler wrote, “It is a well settled rule, applicable to this class of cases, that the
liability of a guarantor or surety cannot be extended by implication, or otherwise, be-
yond the actual terms of his engagement. It does not matter that a proposed alteration
would even be for his benefit; for he has a right to stand upon the very terms of his
agreement. The case must be brought strictly within the terms of the guaranty, when
reasonably interpreted, or the guarantor will not be liable.” Smith v. Montgomery, 3 Tex.
199, 209 (1848).

                                              16
   This is especially true where the ordinary rules of contract interpreta-

tion render the parties’ obligations uncertain or ambiguous. Principal Com-

mercial Acceptance, L.L.C. v. Buchanan Fund V, L.L.C., No. 01-11-00782-CV,

2012 WL 6095236, at *8 (Tex.App.—Houston [1st Dist.] Dec. 6, 2012, pet.

denied) (mem. op.) (citing Coker, 650 S.W.2d at 393 n. 1); JMW Partners, L.P.

v. Northstar Bank of Texas, No. 2-09-167-CV, 2010 WL 2331399, at *4 (Tex.

App.—Fort Worth Jun. 10, 2010, no pet.) (mem. op.) (citing Coker, 650
S.W.2d at 393 n. 1).

   The interpretation of a guaranty agreement is a question of law. Gulf

Ins. Co. v. Burns Motors, Inc., 22 S.W.3d 417, 423 (Tex. 2000). Where multiple

guarantees were executed at the same time, with the same purpose, they

are construed together. In re Prudential Ins. Co. of America, 148 S.W.3d 124,

135 (Tex. 2004) (orig. proceeding). In construing guaranty agreements, the

primary concern is to ascertain the intent of the parties. Coker, 650 S.W.2d at

393. The inquiry into the parties’ intent must begin with the express lan-

guage of the contract. Progressive Cnty. Mut. Ins. Co. v. Kelley, 284 S.W.3d
805, 807 (Tex. 2009). The entire document should be considered, each part

with every other part so that the effect and meaning of one part on any

other part may be determined. Heritage Res. Inc. v. NationsBank, 939 S.W.2d
118, 121 (Tex. 1996).

                                      17
A. Unambiguous language in the Guaranty Agreements must be
   interpreted by its plan language as a matter of law

   The language of the applicable clauses of the guaranty agreements is

quoted on Page 5 of this Brief, and copies of the guaranty agreements are

behind Tabs 2 through 5 of the Appendix. One of the key paragraphs of the

guaranty agreements—labeled “Interpretation”—states:

      In all cases where there is more than one . . . Guarantor, then all
      words used in this Guaranty in the singular shall be deemed to
      have been used in the plural where the context and construc-
      tion so requires.
      (C.R. 225, 229, 233, 237) (emphasis added).
Applying this provision to the definition of the guarantors’ liability, the

plain language means that, collectively, the Appellants should not be liable

for more than 50 percent of the total indebtedness due to the bank:

      [Guarantors] absolutely and unconditionally guarantee full and
      punctual payment and satisfaction of [Guarantors’] Share of
      the Indebtedness of Borrower to Lender. . . .
      The words “[Guarantors’] Share of the Indebtedness” . . . mean
      50.000% of all of the principal amount, interest thereon to the
      extent not prohibited by law, and all collection costs, expenses
      and Lender’s reasonable attorneys’ fees whether or not there is
      a lawsuit, and if there is a lawsuit, any fees and costs for trial
      and appeals.
      (C.R. 223, 227, 231, 235) (emphasis added, bracketed words re-
      flecting the presence of multiple guarantors per clause regard-
      ing “interpretation”).
   Looking at the plan language of the guaranty agreements, Guarantors’

Share of the Indebtedness refers to all of the guarantors, collectively. The four

                                       18
documents should be considered as a single guaranty contract. “Under

generally accepted principles of contract interpretation, all writings that

pertain to the same transaction will be considered together, even if they

were executed at different times and do not expressly refer to one another.”

DeWitt County Elec. Co-op., Inc. v. Parks, 1 S.W.3d 96, 102 (Tex. 1999) (citing

Board of Ins. Comm’rs v. Great S. Life Ins. Co., 239 S.W.2d 803, 809 (Tex.

1951)).

   The plain language of the guaranty agreements should be the end of the

Court’s inquiry. This is because, as shown below, if the Court finds that the

language is ambiguous, any such ambiguities must be resolved in the

guarantors’ favor.

B. Latent ambiguities arising from the reading of the Guaranty
   Agreements together require construction in the Guarantors’ favor

   An ambiguity in a contract may be patent or latent. National Union Fire

Ins. Co. of Pittsburgh, PA v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1995).

A patent ambiguity is apparent on the face of the contract, but a latent am-

biguity only becomes apparent when a facially unambiguous contract is

applied under the circumstances. Id. The present case is on where a single

guaranty agreement becomes ambiguous when interpreting the meaning of

Guarantors’ Share of the Indebtedness in light of four, identical guaranty

agreements guaranteeing payment of the same debt.

                                      19
   The fundamental question is whether Guarantors’ Share of the Indebted-

ness means 50 percent of the entire indebtedness owed by NIP owned by

the four guarantors collectively, or whether each individual guarantor is

individually liable for 50 percent of the indebtedness, making the four

guarantors mathematically liable for up to 200 percent of the indebtedness.

   No reported decision in Texas has addressed the fundamental question

presented in this case. However, the issue was examined in a federal dis-

trict court in Tennessee, in a diversity case involving Florida law. Whitney

Nat’l Bank v. Labry, No. 09-cv-02518, 2011 WL 1211606 (W.D. Tenn. Mar. 29,

2011) (not designated for publication). As in Texas, guaranty agreements

governed by Florida law are strictly construed in favor of guarantors. Scott

v. City of Tampa, 30 So. 2d 300, 302 (Fla. 1947), cert. denied, 332 U.S. 790

(1947); see also Bromlow v. Pyne Corp., 490 So. 2d 1027, 1029 (Fla.Dist.Ct.App.

1986) (guarantor should only be held to strict terms of his guaranty).

   As in the present case, each promissory note in Labry was guaranteed

by four identical guarantees. Labry, 2011 WL 1211606 at *3. The language of

the guaranty agreement, addressing multiple guarantors, in Labry was also

similar to that in the present case as shown below:

                       This space intentionally left blank

                                       20
                Labry                                 Present Case
If this Guaranty is executed by more      In all cases where there is more than
than one person, each person is           one . . . Guarantor, then all words
bound by all of the provisions of this    used in this Guaranty in the singular
Guaranty and is jointly and several-      shall be deemed to have been used
ly liable for the payment in full of      in the plural where the context and
the Obligations up to the full            construction so requires.
amount of this Guaranty as if such
person was the only person execut-
ing this Guaranty.
Labry, 2011 WL 1211606 at *7–*8.          (C.R. 225, 229, 233, 237; see also App.
                                          2–5).

   Both Labry and the present case are similar because none of the contrac-

tual provisions called for multiplying the amount the guarantors would be

collectively liable for just because there were multiple guarantors. Labry

found the argument that the guarantors were collectively responsible for

paying multiple guarantees to be untenable. Labry, 2011 WL 1211606 at *11.

This was based upon an examination of the plain language of the identical

guaranty agreements. See id. at *9–*10.

   Moreover, in determining the context of the scope of the “interpreta-

tion” clause dealing with multiple guaranty agreements, where the plural

form of singular words is used “where the context and construction so re-

quires,” the Court should not just choose an interpretation the paragraph

defining guarantors’ share of the indebtedness must always be defined in the

singular, even when multiple guaranty agreements exist.

                                         21
C. The Court must resolve ambiguities in the Guaranty Agreements in
   favor of the Guarantors

   Even if the Court finds that the ambiguities exist that require determin-

ing the parties’ intent so that the meaning of the guaranty agreements may

be construed—in the guarantor’s favor, of course—the Court can arrive at

no other conclusion that the guarantee agreements cannot be multiplied in

order to allow the Frost Bank to recover more than 50 percent of the in-

debtedness from the Appellants. See e.g., Coker, 650 S.W.2d at 394; Hill Mer-

cantile Co., 127 S.W. at 1082 (guaranty agreements are strictly construed in

the guarantor’s favor).

   An example of ambiguity arising with the execution multiple guaranty

agreements is illustrated in JMW Partners, L.P. v. Northstar Bank of Texas.

No. 2-09-167-CV, 2010 WL 2331399 (Tex.App.—Fort Worth Jun. 10, 2010, no

pet.) (mem. op.). However, the ambiguity in JMW Parners involved wheth-

er guaranty agreements guaranteeing payment of a second loan extended

to the indebtedness from an earlier loan with separate guaranty agree-

ments. Id. at *1–*2. Nonetheless, JMW Parners is still instructive to the pre-

sent case.

   In JMW Partners, two guarantors, jointly and severally, guaranteed 100

percent of a $162,500 debt owed to Northstar Bank. Id. at *1. Two years lat-

er they guaranteed a second promissory note to Northstar Bank made by

                                      22
the same debtor, but the second guarantee limited their liability to ⅓ of the

outstanding indebtedness. Id. at *2. In the second guarantee, the Guarantor’s

share of the indebtedness was defined as:

      The words “Guarantor’s Share of the Indebtedness” as used in
      this Guaranty mean 33.330% of the principal amount of the In-
      debtedness that is outstanding from time to time and at any one
      or more times. ‘Guarantor’s Share of the Indebtedness' also in-
      cludes all accrued unpaid interest on the Indebtedness and all
      collection costs, expenses, and Lender’s reasonable attorneys’
      fees. . . .”
      Id.
    The Court found that neither guaranty agreement by itself was ambig-

uous. Rather ambiguity was found to exist, warranting a remand to the tri-

al court, because the Court was unable to determine whether the parties

intended the second guaranty agreement to apply to the original indebted-

ness. Id. at *7.

    Most importantly, the definition of Guarantor’s share of indebtedness was

substantially identical to the same definition in this case:

                       This space intentionally left blank

                                       23
            JMW Partners                             Present Case
The words “Guarantor’s Share of         The words “Guarantor’s Share of
the     Indebtedness” . . .    mean     the Indebtedness” . . . mean 50.000%
33.330% of the principal amount of      of all of the principal amount, inter-
the Indebtedness that is outstanding    est thereon to the extent not prohib-
from time to time and at any one or     ited by law, and all collection costs,
more times. ‘Guarantor’s Share of       expenses and Lender’s reasonable
the Indebtedness' also includes all     attorneys’ fees whether or not there
accrued unpaid interest on the In-      is a lawsuit, and if there is a lawsuit,
debtedness and all collection costs,    any fees and costs for trial and ap-
expenses, and Lender’s reasonable       peals. . . .
attorneys’ fees. . . .
JMW Partners, 2010 WL 2331399 at (C.R. 223, 227, 231, 235; see also App.
*2.                              2–5).

The Court in JMW Partners, did not find its substantially similar definition

of guarantor’s share of indebtedness to allow the multiplication of the guaran-

tors’ individual liability beyond ⅓ of the indebtedness. See id. at *7. The in-

terpretation of the second guaranty agreement in JMW Partners was based

upon an examination of the plain language. While it is unclear whether the

the guaranty agreements in JMW Partners had the same “interpretation”

clause as in the present case, there was no attempt to make the guarantors

liable for more than ⅓ of the indebtedness. Id. at *7.

   Accordingly, the lower court erred when it did not limit guarantors’

collective liability to 50 percent of the indebtedness due to Frost Bank.

                                       24
                                     III.

     The trial court erred in denying Appellants’ Cross-Motion for
                          Summary Judgment

   Just as the lower court erred in granting Frost Bank’s motion for sum-

mary judgment, the same factors set forth in Section II, above, demonstrate

that the lower court erred when it denied the Appellants’ cross-motion for

summary judgment. Accordingly, the this Court should reverse the sum-

mary judgment and render a new judgment holding that Frost Bank should

take nothing by way of its claims against the Appellants. See FM Properties

Operating Co., 22 S.W.3d at 872.

   No amount of fact finding by the lower court can result in the refor-

mation of the guaranty agreements in this case to allow Frost Bank to re-

cover more than 50 percent of the indebtedness from the four guarantors.

                          Conclusion & Prayer

   The latent ambiguity created in the four guaranty agreements must be

resolved in the Appellants’ favor. The definition of guarantor’s share of the

indebtedness should not have separate meanings for when there is a single

guaranty agreement versus multiple guaranty agreements.

                                     25
   Being that there are no material facts in dispute, the Court may proper-

ly reverse and render a judgment on the grounds raised in the cross-motion

for summary judgment.

   WHEREFORE, for these reasons, Appellants, Eugene Miles Prentice,

Richard M. Spaziano, and Carl William Pollock respectfully request that

the Court reverse the summary judgment entered against them and render

a judgment ordering Frost Bank to take nothing.

                                    Respectfully Submitted,
                                    PENDERGRAFT & SIMON, L.L.P.
                                    2777 Allen Parkway, Suite 800
                                    Houston, TX 77019
                                    Tel. 713-528-8555
                                    Fax. 713-868-1267
                                    /s/ William P. Haddock
                                    By: Robert L. Pendergraft
                                    Texas Bar No. 15743500
                                    rlp@pendergraftsimon.com
                                    William P. Haddock
                                    Texas Bar No. 00793875
                                    whaddock@pendergraftsimon.com

                                    Counsel for Eugene Miles Prencitce &
                                    Richard M. Spaziano

                                    /s/ Carl William Pollock*with permission by WPH
                                    Carl William Pollock
                                    1200 Barton Creek Blvd. #3
                                    Austin, TX 78735
                                    Tel. 512-656-6374
                                    bpollock@healthcarerecoveryadvisors.com

                                    Appellant, pro se

                                    26
                       Certificate of Compliance

1. This brief complies with the type-volume limitation of TEX. R. APP. P.
   9.4(i) because it contains 5,411 words, excluding those parts exempted
   by Tex. R. App. P. 9.4(i)(1).
2. This brief complies with the form and typeface requirements of TEX. R.
   APP. P. 9.4, using the Palatino, Helvetica Neue, and Optima typefaces in
   14-point or larger for body text and 12-point for footnotes.
                                            /s/ William P. Haddock
                                            William P. Haddock

                          Certificate of Service

I hereby certify that a true and correct copy of the foregoing Appellant’s
Brief has been served on the following counsel/parties of record via e-
service, in accordance with the Tex. R. App. P. 9.5 and local rules for elec-
tronic filing on the 21st day of December 2015:
Kendall D. Hamilton                  Carl William Pollock
Law Office of Ken Hamilton           1200 Barton Creek Blvd. #3
900 RR 620 South                     Austin, TX 78735
Suite C101#164                       bpollock@healthcarerecoveryadvisors.com
Austin, TX 78734                     (by agreement)
Counsel for Frost Bank               Appellant, pro se

                                            /s/ William P. Haddock
                                            William P. Haddock

                                     27
                                                   Appendix

                             Description of Document                                                       Tab No.

Order and Final Summary Judgment ................................................................. 1
Commercial Guaranty Agreements:
     • Eugene Miles Prentice ................................................................................. 2
     • Richard M. Spaziano .................................................................................... 3
     • Carl William Pollock .................................................................................... 4
     • Bruce W. Ling ............................................................................................... 5
Tex. R. Civ. P. 166a ................................................................................................. 6

                                                          28
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                    tACH                                     AC:)(!'JQWI.J;QI'iU K•WfNG liMP AI.&. Thl! PJOV!SION3 OF T)IIS QII-'Min"l APiP AGilE$ T IU
                    Tli\I.US. l1ol o\PD(nOii,       t:lU4li.J,NTDR                    Tt1AT lt11! t0Ufii'AATY IS                         GUAilAtt10R'S
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                    1111 THR G!CTION          '0\.lll.O.TION OF GUARliNTY'. f'ID
                                                                                 CIIJII!IANTY WIU. CON,.ue         Tl!illlliWIUI:J Lt.! THE M4Nl'IEII BeT FQI!Ttl
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     I              C:IIAMNTOR:

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                                                                                                                                                                                     473
Tab 3
age 1   of   4)

                                                                        COMMERCIAl GUARANTY

             Borrower:         NATIONAl. INSURANCE PARTNERS. INC . . .                               lander:         THE. FROST NATIONAL BANK
                                                                                                                     OOWNTOWN AUSTIN FINANCIAL CENTER
                               1608 MESA RIOGE lN                                                                    P.O. 80X 1600
                               AUSTIN, TX 78735                                                                      SAN ANTONIO, TX 78296
             Guarantor:        RICHARD M. S P A Z I A N O · · · · · · · ·
                               70 CEDAR BAY OR
                               WARWICK , Rl 02888

              GUARANTEE OF PAYMENT ANO PERFORMAN                         E. For good end valuable conaldsratlon, Guarantor absolutely and unconditionally guarantees
              full and punctual            and aatlllfactlon of G       arantor'a Share of tha lnciebtedneu ol Borrower to L.encler. and tha performDnc:e and discharge
              of all Borrower'$ obllgatlol\8 under tha Note an          the Ralal:$d Documanla. This is a guaranty of payment and parform11nca and not cl colf8ctlon,
              ao Lend or can enforce this Guaratlty ageinat Gu          r antor even when lender hila not ru lndabtadnf (;redlt
                  and It Ia •pec:lflcaiJy afrtlclpaotad that lluctuatlo wnl occur 11'1 tha aggragaw amount of th& lndabtednua. Guarantor •peclllc:elfy aclmowl•dgea
                  and          tho!                 In th1> amount of t lndebtedneoa, 11ven to zaro doll are 10 0.00), ahelt not con•tJtuta a tonnf•H•tltm or this Guattn\ly,
                  Guanmtor'a llabnlty under this Guuanty •hall t rmlnato only upon [AI urmlnatlon 1n writing by Borrower and Lendar of the Uri& of cr&dit,. IBI
                  payment ol the lndebtodneu In lull In letJIII ta dar, and ICI pavment ln full In legal wndor of 1111 or Guarantor'a othar oblllilallonl un4ar thT•
                  GuarBnt\f.
                  GUARANTOR'S AUTHORIZATION TO LENDER, Gu•raotor outhorizos Lender, wltho"t notlea Qr demand and without lunnlng or otluorwlae
                  affa$\g GuarB:ntDr'a llubllty under tllb Guaranty, from time to time; (AI to mpke OM or mora additional secured or uM&CiJTed loeM to
                  Borrower, to laasa equipment or other gooda to Borrower, or otherwiEe to e>rtend additional credit to Borrower; ·lBl to alter, compromise,
                  ral'lllw, extend, accelerate, or otherwiu chanQe one or mere times the time for payment or other terms of the lndebtednaas or any part of the
                  iodilbtedneaa, incloJdlng lncreaua end decteauea of the rate at Interest on tho Indebtedness; extension& may be repee.tad encJ may ba for longer
                  than lhe otir. whether voluntarily ur                 or by ony thiod party,
               oil the                 and thereafter lender Is fore od tO 1emit the amount of that pevrnent to Borrower's trustee In bllnkf"tilltcy or to anv .similar
                        under anv federal or state bankr\lptcy lew or law f01 the relief 1:1f debtora, tha Indebtedness snell be coAAidered unpaid for tho purpose of
               the enforcement of this
               Guarentor fulther walvas end agr"• not to a:seart or    et     time any deducl!ono to the amount guaranteed undsr this Guaranty for eny
               claim of aatoff, counterclaim, counter demand, recoupment or eimilllr 1ight. whsther such claim, demand or right may be asserted by the
               Borrow81', the G1.1erentor, or both.
               QUARANTDR'S UNDERSTANDING WITH RESPIOCT TO WAIVERS. Guarantor warrants end egrees that each of the w&lvers set forth ab& payment of the claims of            Lender and Guarantor shell bo pald to lellder and shall be first llflplied by Lllndoot ta the lndabtadnasa.
               Guarantor does hereby assign to Lender all cllllrnt which it mav have or acquire against Bolfower or against any assignee or trustee In
               bankluptc'l of Borrowa1; ptovlded however, thet auch assignment shall be affactivs only for the purpoaa of as aurin(} to Lendat lull payment in
               lsgal tander ol U\e lndebtedtlllea. If lender ao requeats, eny flOtes Qt credit agreemant11 now or hareefter avidar\Cing eny dabta 01 obligalionl of
               Bo!Towsr to Guarantor shall be marked with a leoend that tha aetna            el.lbjoGt to thla Guaranty and shall ba deliverad to lAnder. Guarantor
               agreea, and           is herli!by authorized, in the narna ol Guarantor, from lime to time to file finandng Matements and continuation statements
               and til axecute documanta and to taka auch other ac:t!ons a Lender da11ms nacassltl'y or appropriate to perlect,                 and enfolf;:e its rights
               under this G11•raonty.                                                                          ·
               MISCELlANEOUS PROVISIONS. The following mlacallanaoua provisions era a part of thb Gllaranty:
                    Anandmel'ltll. This Gl.larenty, together with any Related Documents, r::onstitutBll the entire           and agreement of the parties as
                    to the mettera aat !orth En this Guarentv. No alteration of or emendmerrt to this Guaranty ahall ba ethlctiva unless glven in writing end
                    tloned by the party or partlea aol.lght to be clulrgad oo bound by thil alteration or amendment.
                    AttomDYa' file;; &panna.                   agrees tCl pay upon demand all of Lender's CCllltA and expenses. lnell.ldiag lender's reasonable
                    attorn&ys' fellS and l.el\d1u'.a legal expana1", Incurred in coMal;tion with tho enf<>rr:ament of this Guaranty. Landor may hlte or pay
                    aomeona elsa to help enforce tl'lls Guaranty, and Guarantor shall pal( the oosu       aJtpun$811 of sl.lch e.nlorcemant. Coats and axpenses

                                                                                                                                                                              477
(Page !   of   4)

                                                                         COMMERCIAL GUARANTY
               Loan No: 9002                                                          (Continued J                                                                   Page 3

                       include landar• 11 reuonahte attomsys • tees and leg a! exJl(lnaas whether or not there is a lawso.rlt, inclllding Lender'• raascmabla Ott0tf\8Y$'
                       laas and lagalllllpensaa 1or bankruptcy prcx;eadlnga !including efforts to modify or vacaUt UIV aU\Omath: !ltaY or lnjunctlonl, appeals, and
                       any anticipated post..judgment collection .services. Guarantor also s:hall pay all COUll coalS and auch additional fees as may be directed by
                       tha court.
                        Capdon H.. adlnga. Caption headings In this Guaranty are far                 purposaa only and aro nat to be           to intarprat or        l.he
                        provi5ion' of thi' Guaranty.
                        Goltilmlno Law. This Guarantf wiD be gover11ad by fedam le.w appllcabla to Lender and. to the elrtent nal preempted by fellaral law, the
                       laws of the Stetfl Df Taos without regard to Its conflicts of law                 This Guaranty has been accaptad by landar In the Stete of
                       Ta)(as.
                       Choi<;& of Venue. If thore Is a lawsuit, ancllf tho tfanaaction         by this Guaranty occurred in BEXAR County, Guarantor aoroaea upon
                       Lalldar's ruqoNt to submit 10 tha jurisdictiOn ol the oourt6 or BEXAR County, State of Texas.
                       lnteQratlon. Guarantor turtl'>tlr agr$et 1hDt Guarantor haa raad and fully understands the terms of 1tU8 Guaranty; Guarantor has had the
                       opportunitf to ba advised by Guaranror·a attorney with raspect to this Guaranty; the Guaranty fully reflects Guarantor's intontionll and parol
                       evidence is not required 1o intarprat the terms of thls Guaranty.                 l'lereby indemnifin$ 1111d holds lender harmless from all
                       clairria, damaoall, and costs !lnctudl11g lender's attornavs" fees} suffered or incurred byl!lndar as a r88ult of any breach by Guarantor of the
                       warrantias.                  and agreements of thla peragraph.
                       1/lterpretatiCMI. In 1111 cases where there IG more than one Sorrow11r or Gunrantor, then ell words used in this                   in the singular a:hall
                       be deamao to hallll bean used in '"" plural whera the context and con5ttuc;tlon so requlro; end where there Ia more tnan one eorrowcr
                       n11mod in this Guaranty or when thla Guaranty Ia alCocumd by more than ono Guarantor, the words "Bonowa1• end "Guarantof"
                       t!Nij)ll(:ti,.ly shllll mean all and any MO or more of mem. The warda "Guarantor," "Borrower, • and "L11nder• include the hairs, auccas$ota.
                       aasigna, and ttllnllfarees of each or them. lf a court finda that any prolhaion of this Gus rantv lo m>t valid or ahould oot be enforced, th11t
                       fact by Itself will not            that tha re$t of this GU8ranty will not b11 valid or enforced. Therefore, a oourt win enforce the reat of th11
                       provisions of this Guaranty even if a provlelo11 of this                  may be found to be invaHd or unentorc:eable, If any one or more of
                       Borrowar or Guaranttlr are corporations, partMrships, limited Uabltlty                   or similar entities, it ia not nacBSS8fV lor Lender to lnqui111
                       Into the IMJWers of Borrow..r or Goorantor or ol tile officers, diraC1ors. partners, managers, or other agents acting or purl)r;orting to act on
                       their behalf, and any                     m11de or croaled iA reliance upon the prolassed exercise of aucl\ powers ahall boa guetenteed under thi:.
                        Guaranty.
                        Notlcae. Any notk:e required to be given under this Guaranty snell be given In writing, and shall be effective when actuaDy delivered. when
                                 recei..,.d by            [unlass o!Nirwlea required by t11wl, when deposltlld with a nationally             overnight courier, or, if
                        mailed, when depo$lted in tho United State' mall, aa first eless, certified or registered mall postage prllpaid, dir!ICted to the addresses
                        ahown naar the beolnntng of thfs Guaranty. Any parw may change its addraae lor notices under this Guaranty by giving formsl written
                        ootice to thG other parties. $peeiMng that th11 purpose ot the 11otlce Is za change tl'ca party's add rasa. FOl' notk:e purposes. Guarantor
                        agreos to kGEII) lender Informed at all tlmea of Guarantor's current addrea&. Unlaas otherwise provided or requirlld by lew, if tlwre is more
                             one Guarantor, any notico given by Lender to any Guarantor is deemed to ba no1ice gi'llen to all Guarantors.
                        No Walll8r by Lender. Lender shall not ba dllemoo to havo waived any rlghta under lhia Guaranty unless such wai¥er is given in writing and
                        $IQned by lender. N1> delay or omission on the part of Lender In alCetclslng any right             operata a. a waiver of such right or any a !her
                        ri[Jht. A_ waiver by lander of a provision of lhia ChJIII!IIIlW shall nat prejudice or constitute a waiver of lender's ril)ht omerwise to demand
                               compllsnca with that provision or any other p11 beated lor 111U purposes as an original document. Additionally, the 9i(lnature of llfiY parw on this document
                    ttanamitterl by way of a rax machine aMit btl considered ror ali purpose& as 11n original signi>tu1'111. Any 5uch faxed document shall be conslllerod
                    to heva ttl$ nama binding lega1 effett a$ an otlglnal document. At the               of any party, any        document shall be re-exocutud by each
                    signatory party In an original form,
                    DEFINITIONS. The fol!owh1Q capltaUzad words end terms shall have the following meanings when us&d ln this Gu11ranty. Unless specifically
                    stated to tha contrary, all ralerencee to dollar amounts &hall mean amounta in lowful mona-, of the Unitlld States of Amerlu. Words and terms
                    usud In the c;;ingul&r ahall includll tha plural, and the plural shall include tho •lngular, as tlu! may require. Wcrds ami term& not otharvvlas
                    defined in this Guarantf shall have the meanings otulbut!ld 10 auch terms in the Uniform Commercial Coda;
                        Barrowar. The word "Borrower• meana NATIONAl INSURANCE PARTNERS, INC. anrf includes all co-'11ignars end co·mekera &lgrtlng tha
                        Nota and all their succi!Ssol3 end
                        Guarantor. The word              means everyone signing this Guarsnty, lncludl"ii wlttlout limitation RtCHAFIO M. SPAZIANO, and 11'1 each
                             any 6igner's succassDr• and assigns.
                                     Share of the lndabtedn'"•· The worde "Guarel\tor's Shate of tha Indebtedness• mean Guarantor';a indebtedness !O lender
                         more particularly descrUHJd In thlt Ciuaramv.
                         GUI'renty. The word "Guaranty' means this guaranty !rom Guarantor to lender.
                         lndebtedneaa. The word "lndebtedne$S" mlilons Borrower's                       to lander as more particularly described In this Guaranty.
                         Lender. The ward "Lender· means THE FROST NATIONAl BANK, its successor; and
                         Nlrte. Tho word "Note" muna lhe promissory note dated May 22, 2007, In tha orlginal priiiCTpal &mount of $\,000,000.00 1rom Bonowar

                                                                                                                                                                                   478
(Page 4   of   4)

    f
                                                                  COMMERCIAL GUARANTY
               loan No: 9002                                                  (Continued)                                                             Page 4

   I                to Lender, together whh all ranawals of, axtansions ol,
                    promill'lory note or agreement.
                    Related Ooc:uments. The
                                                                                              ol,              ol, consolidations of, and

                                                     "Ral&tad Dooomentg• mean all promissory notes, credit agreements, loan &grooments, environmental
                                                                                                                                                        for the

                                  guaranties,       agreemente, mortgages, deeds of trust. 5ecurity .:Jeads,             mcrtiJagn, and all other insttvments,
                    Blllaement' aoo documents, whether now or hereafter Bxisting, !I:JCecuted in connection with the Indebtedness.
               EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING R.EAD ALL THE PROVISIONS OF THIS GUARANTY AND AGREES TO ITS
               TERMS. IN ADDITION, !ACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS El'FECTIVE UPON GUARANTOR'S EXECUTION AND
               DELIVERY OF THIS GUARANTY TO lENDER AND THAT THE GUARANTY Wll.L CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH
               IN TiiE SECllON TinED "DURATION OF              NO FORMAL ACCEPTANCE BY LENDER IS NliCiSSARY YO MAKE THIS GUARANTY
               EFFECTIVE. THIS GUARANTY IS DATED MAY 22. 2007.

                                                                                                                                                                  479
Tab 4
•age l    of   4)

                                                            COMMERCIAL GUARANTY

         Borrower:     NATIONAl INSURANCE PARTNERS. I N C . -                         Lender:          THE FROST NATIONAL. BANK

                       '17
                         08MEsi1oGE LNI
                       AUSTIN. TX 78735
                                                                   -                                   DOWNTOWN AUSTIN FINANCIAL CENTER
                                                                                                       P.O. BOX 1600  .
                                                                                                       SAN ANTONIO, TX 78296
         Guarantor:    CARl WilLIAM POLlOCK . . . . . . ...
                       1508 MESA RIOGE LN
                       AUSnN.TX 78735      -
    ========-======
          GUARANTEE OF PAYMENT AND PERFORMANCE. For good and valuable consideration, Guarantor absolutely and                                   gvar;mtee.s
          full and punctual payment end aatisf&ctiof'l of Guarantor's Share of the Indebtedness of Borrower to Lender, and the performance and discharge
          ol ell Borrower's obligations under the Nota and the Related Documents. This is a guaranty ol payment and performance and not C>f collection,
          so Lender can eniC>rce this Guaranty against Guarantor even when Lender has not exhausted Lender's remedies against anyone else obligated to
          pay the Indebtedness or against anv collaterel securing the Indebtedness, this Guaranty·or any other guaranty of the Indebtedness. Guarantor
          will make any payments to lender or its order, on demand, in legal tender of the United States of America, in :!lime-day funds. without set·olf or
          deduction or                and will otherwise perform Borrower's obligacions under the Note and Related Documents.
          INDEBTEDNESS. The word "Indebtedness" as used in this Guaranty mean.s all of the principal amount outstanding from time to time and at any
          one or more times. accrued unpaid interest thereon and all collection coats and legal expenses related thereto permitted by law, Lender's
          rea&onable Pttorney;;' 1ees, arising from any and all debts, liabilities end obligations that Borrower individually or collectively or inter<;hangeably
          with others, owes or will owe Lender under the Note and Related Do<:uments and any renewals, extensions, modifications. refinancings.
          consolidations and substitutions of the NC>ta and Related Documents.
          If Lender presently holds one or mora guaranties, or hereafter receives additional guarenties from Guarantor, Lender'11 rights under all guaranties
          shell    cumulative. This Guaranty shall not (unless specifically provided below to the tontraryl affect or invalidate any such other guaranties.
          Guarantor'$ liability will oo GuarantC>r's .aggregate liability under the terms of this Guaranty end any such other umerminated guaran1ies.
          GUARANTOR'S SHARE OF THE INOEB1EDNESS. The words "Guarantor's Share of the Indebtedness'' as used in this Guaranty mean 50.000%
          ol all the principal amount, interest thereon tC> the extent not prohibited by law, and all collection <;0$t$, expenses and Lender's reasonable
          &HomQys' lees whether or not ther"' is a lawsuit, and if there is a lawsuit, any fee$ and co&ts for trial and appeals.
           lender shall determine Guarantor's Share ot the Indebtedness when Lender mskes demand on Guarantor. After a determination, Guarantor's
           Share of the Indebtedness will only be reduced by &ums octually paid by Guarantor under this Guaranty, but wllf not be reduced by sums from
           anv other source including. but not limited to, sums realiled from any collateral securin,. the lndebtedn&S$ or this Guaranty. or payments by
           anvone other than Gue.rantor, or reductions by operation ol fllw, judicial Otder or eQuitable principles. lender has the sole and absolute
           distretion 10 dato;trrnine how sums shall be applied amono guaranties ot the Indebtedness.
           The above limitalion on liability is not a restriction on the amount of the Note ot Burrower to Lender either in the aggregate or at eny one time.
           CONTINUING GUARANTY. THIS GUARANT'f ENCOMPASSES A LINE OF CREDIT AND GUARAN'TOR UNDERSTANDS AND AGREES THAT
           THIS GUARANTY SHALL BE OPEN AND CONTINUOUS UNTIL THE INDEBTEDNESS IS PAID IN FULL AND THE LENDER DECLARES THAT THE
           LINE Of CREDIT IS FULLY SATISFIED, PERFORMED AND TERMINATED.
           DURATION OF GUARANTY. This Guaranty will take effect when received by Lender wlthC>ut the necenity of any acceptance by Lender. or any
           notice to Guarantor or to Borrower, and will continue in full force until all the Indebtedness shall have boen fully and finally paid and se.tisfiad and
           all of Guarantol's other obligations under this Guaranty shall have been perlo1med in full. Release of any other guarantor or termination ol any
           ot.her guaranty of the Indebtedness shall not aftect the liability of Guarantor under this Guaranty. A revocation Lendar receives ftom any one or
           more Guaramors shall not altect the liability of anv remaining Guarantors under this Guaranty. lhla Gual the
           Indebtedness, including increases and decrea$es of the rate of interest on the lndebtltdnass; extensions may be repeated l!nd rnay oe ror longer
           than the original loan term: ICJ to take and hold se<:urity for the payment of this Guaranty or the Indebtedness, and                  enforce, waive.
           subordinate, fail or decide not to perfect, and relaase any such security, with or without iha substitution ot new collateral; lO) to ratease,
           substitute, agree not to SIJe, or deal with any one or more of Borrawer's sur(lties, endorsers, or other guarantors on any terms or in any maMar
            Lender may chOose; (El to determine how, when and what applicBtion of paymenls and credits sh811 be made on the lndebtednus; IF) to
            apply such security and direct the order or manner ol sale thereof, including without limila\ion, any nonjudicial sale permitted by thEI terms ot tha
           contmlling security agteement or deed of trust, as Lender in its discretion may d11termine; ·        to sell, tnmsfer, essign or grant participations in
            all or any part of the Indebtedness; and (H) to          or tran$fer this Guaranty In whOle or in part.
           GUARANTOR'S REPRESENTATIONS AND WARRANTIES.                     Guarantor tepresents and warrants to Lender that          !Al   no representations or      _"P'',.,.._P""""'-

                                                                                                                                                                            D
                                                                                                                                                                            491
(Page 2   of   4)

                                                              COMMERCIAL GUARANTY
          Loan No: 9002                                                   (Continued)                                                                 Page 2

          agreements ol any l<.ind !lave been made to Guarantor which would limit or qualify in eny wev the terms ol this Guanmty; [Bl this Guaranty is
          executed al Borrower's request and not et the request of Lender; !CI Guarantor has lull power, right and authority to enter into this Guaranty;
          (0) the provisions o! this Guaranty do not Cl>nllict with or result in " delault under any agreement or other instrument binding upon Guarantor
          and do not result io a ..,;oletion oi any law, regulation. court decree or order applicable to Guarantor; (EI Guarantor 1\as not and will not. without
          the prior written consent of Lender, t;eR, lease, assign, encumbet, hypothecate,                   or otherwise dispose of all or substanttally all of
          Guarantor's assets. or any interest therein; If) upon Lender's request, Guarantor will provide to Lender financial end credit information in lorm
          •cc::eptable to Lender. end all such linanciel information which currenttv has been, and all future financial information which will be provided to
          Lender is and will be true and correct in aU                respects and fairly present Guarantor's financial condition as of the detes the financial
          inlorm11tion is providad; [GJ no mat&rlal adverse chang& has occurred in Guarantor's financial conllition since the date of the most recent
          linenciel sUitements provided to lender and no event has occurred which may materially adversely aflect Guarantor's financial condition; IHl
          no liligalion, claim, investigation, administrative prcx;eeding or similar action Cinc1uding those for unpeid t11xasl 11gsinst Guarantor is         or
          threatened; !II Lender has made no representation to Gutor in connection with the lndobtedne.ss or in connection with the creation of new or additional
          loans or obligations; ICI to tesort for payment or to proceed dirt!(:tly or at once against any person, including Borrower or any other guarantor;
          (01 to proceed directly against or exhaust any collater!ll held by lender !rom Borrower, any other guarantor, or any other person; (E) to give
          notice ol the terms, time, and place of any public or private sala of personal property security held by Lender from Borrower or to comply with
          anv other            provisions ol the Uniform Commercial Code; (Fl to pur&ua any other remedy within Lender's power; or IGI to commit any
          act or omission of any kind, or at any time, with r4!sl)ect to any metter whatsoever.
          Guerontar waives all rights of Guarantor under Chapter 34 ol the Tex01s Business and Commerce Code. Guarantor also waives any and all tights
          or defensas balled on suretyship or Impairment of collateral incltJding, but not limited to. anv rights or defenses arising by reason of lA! MY
          'one action· or "anti·deficiency" law or any other law which may prevent lender from bringing any action, including a claim fot daliciency,
          against Guarantor, before or after lender's commencement or completioll of any foreclosure             either judicially or by exercise of a power ol
          sale; !BI any election of ramedles by Lender which destroys or otharwise advers&ly aflects Guarantor's subrogation rights or Guarantor's rights
          to proceed against Borrower for reimbursement, including without limitation, any loss of rights Guarantor may sulfer by reason ol any law
          limiting, qualifying, or discharging the Indebtedness; !Cl any disebilitv or other defense of Borrower, of any other                  or of any othtn
          person, or by reason of tho cessation of Borrower's liability from 11nv             whatsoever. other tha.n payment in lull in legal tender, of the
          Indebtedness; 101 any right to claim discharge of the lndebt!ldf\6$S on the basis of unjustified impairment of any collateral for the Indebtedness;
          [El any statute ol limitetions. if at any time any action or svlt brought by Lender agaii\St Guarantor is commenced, there is outstanding
          Indebtedness which is not barred bv anv applicable statute of limitations; or !Fl any defenses given to guarantors 11t law or in equity other than
          actual payment and performaiiCe of the lndabtedne$s. If payment is made by Borrower, whether voluntarily or otherwise. or by any third party,
          oo the Indebtedness and thereafter \.11ndar is forced to remit the amount of that payment to Botrower's trustee in ba"kruptcy or to any similar
          J)(lrson under 10ny federal or state bankruptcy l3w or law lor the relief of debtors, the             sheA be considered unpaid for the purpose of
          tha enforcement of this Guarantv.
          Guarantor further waives and agreas not to assert or claim at any time any deductions to the amount guaranteed under this Guaranty for any
          claim of setolf, counterclaim, counter demand, recoupment or similar right, whether such claim, demand or right may be asserted by the
          Btlrrower, the Guarantor, or both.
          GUARANTOR'S UNDERSTANDING WITH RESPECT TO WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above is
          made with                lull knowledge of its significance and consequences and that. undi!!l tho circumstances, the waivers are reasonable and
          not contrary to public policy or law. If any such waiver is determined to be contrary to any eppHcable law or public policy, such waivar shall be
          ellective only to the extent permitted by law or public policy.
          RIGHT OF SETOFf. To the extsnt permitted by applicable law, Lender reaervl!s a right of setoff in all Guarantor's accounts with Lender
          !whether checking, savings, or soma other account). This includes all               Guarantor holds jointly with someone else and all accounts
          Guarantor rney open in the future. However, this does not includa any IRA or Keogh accounJS. or arw trust accounts for which setoff would be
          prohibit9d llY law. Guarantor           Lander, to the eJCtent permitted b\f applicable law, tb hold thase funds if tMre is a defouh, and lendar
          may apply the fundi in these accounts to pay what Guarantor awes under the terms of this
           SUBORDINATION OF BORROWER'S DEBTS TO GUARANTOR. Guarantor agrees that the Indebtedness, whether now eJCisting or hereafter
           created, shall be superior to any claim thBt Guerantor mav now hsve or hareatter acquire against Borrower, whether or not Borrower becomes
           insolvent. Guarantor hereby expressly subordinates any claim Guarantor may have against Bonower, upon any acco\lnt whatsoever. to any
           cint c:otle<::tion services. Guarantor also shaU pay aU court costs and such _additional fees 8S may be dorected by
               the court.
               Caption Headin11s. Caption headings in this Guerii'nty are for convenience purposes only and are not to be used to interpret or define the
                provisions or this Guaranty.
                Gonrnlng Law. Thill Guaranty will be g11vemed by federal law applicable to Lender ancl, to the extent not preempt"d by f?deral law, the
                laws of the State of T.xes without regard to Ita             ot l11w provlalon1. This Guaranty has beon acceptad by Lender '" the State of
               Tl!ltBI.
               Clloic:e of Venue. If there is alawsult, and if the transaction evidenced by this Guaranty occurred in BEXAR County, Guarantor agrees upon
               Lender's request to submit to the jurisdiction of the courts of BEXAR County, State of Texas.
               lntagretion. Guarantor further IIQrBe5 that Guarantor has read end fully understancls the terms of this Guaranty;               has nacl the
               opportunity to be advi$ed by Guaranlor's attorney with respect to this Guaranty; the Guaranty fully reffects Guarantors 1ntant•ons and ).larol
               evidenca is not required to intarpret the terms of this Guaranty. Guarantor hereby indemnifies .,nd holds Lender harmless from aU losses,
               claims. damages. and costs !including Lender'a attorneys' lees) suffered or incurred by lender as a result ol    breach by            of the
               warranties. representations and agreements of this paragraph.
               Interpretation. In an cases whate there is more than one Bortower or Guaramor, then 1111 words used in this Guaranty in the singular shall
               be deemed to have been used in the plural where the conte:.rt and construction sa require; and where there is more than one Bouower
                       In this Guaranty or when this Guaranty is e>doD of tho lllnno, llrnc, and lll'u:o of onv "" . nr "''"_."
                                                                                                                   "!::llatorQ/
                                                                                                                          held by                     !f'd"
                                                                                                                                            from BorroWir,
                                                                                                                                                             .• ,
                                                                                                                                                                             91llor IIUiA'OntOI, or ..,., otllor lllfiOn;
                                                                                                                                                                                     :') _- · - ..... aom>w•• cor Ia
                                                                                                                                                                                                                                         ca
                                                                                                                                                                                                                                         tD 11M
                                                                                                                                                                                                                                            WWI
                                                 or., au"'r BIIJII!Cllble po'IMIIonl oiU.• Unlfatm Co!llmorcl:ll Cod1; (FJ tD pur11111 any Dllwr remocly within Lond1r1 powlll'; or (GJ Ul commit 1111'(
                                                 act D< omlubn col           klncl, ar -.: on\1 tim•, wim               m '"" "'"
                                                 Guarontar walvll1 aU rfulllll ol Glllll'antar und.,                   34 of tho Tu.u l!ullrlOM lltld CcmlllGI'COI CCida, Guuantor •lao walllu .,.... •NI B11 ,,,_
                                                 "' - 'h•"""                         -"                      ,"'                               na< omOUia to, &11'1'                   gr dlllonN.I arbln11 by                   ar 11\l
                                                 "OIIa actJo:n• or 1 arnkloftcbncy" IDW or lnY othar low whioh miV pqv-nt Londar ''""' tlrlrog&!o onv !11111on. 11\c:h;dJne o ellllm lar dofk:ianay,
                                                 .;:...b.;,,;                        ..tt..        •                                            _•.,7                                                               e.un:1111ol o power of
                                                 .... ; fBI anv Mll1fon 11f ro,.lfln by Lencltr whlo:lh dNUIIYI or                            •II'Mn•ly atrac,_ Gurr•nllJI'alllbrovatlon rtgh .. Of GUII111111Dr'• riui!U
                                                 w praceod aaulnll                    eo,..,_
                                                                                       r.;;: ·                   .... o.nn.;          ' 11•                   ':"'""     ! ':!.'   .,....,                111'1111'     rooacn        lillY law
                                                            1JUDilrylr1Q, or cfiachaI\EIIqu.IICII 41\d '11!111. undw thlo c                    . rhA         •w ""
                                                                                                     , _'.' .,_,, ... w,                  ,.ro to-              !II •"Y            .. law or pubtlo podcy, auch wel11111 llhoD lito
                                                 oltacdvo atlly 10 ""'D1WII\1 pomiiiUUI by low                           poOay.
                                                 "'':''" "'" .,.,_, urr, TO 1M llxt!U\t pOttnhted b'i' IIJIPiiDabfo IDw, I.Gnilet ,....WI I llaht af 111mlf In Ill (]UIIIIInhlr'l ICC:OIIlllll With l.Mdu
                                                 lwllftt.r chGeklni:j, oiNlrigJ, or K'!l'l4l o11- a1100uml. Thlo ino!udol ol ,...,.,.,unto "'                                     · "'"'                                   - _ .........
                                                 ""':''_•:•- m•:r_                 ,_ nowro.                   'lhlo do" not Include lillY IRA
                                                 po-ahllli1od by law. GuatlntDf' OIITholfzoa ......dOl, to tilt NC'!Oftl I>Ofminod by o
                                                                                                                                                               ":.!;!'s.
                                                                                                                                                                   law. 'lO
                                                                                                                                                                                      wst IICCOUIIl$ tor whiM 1111:011 would be
                                                                                                                                                                                  lh-• fo-• If'            ·"                 - --
                                                                        ,,_ ... ,., G<;"""'"'" w I"'Y ..,.., .. IIGt":""'r awa WtOia'ftet
                                                              ohclll be Slq>eri..r 10 lillY           tha• DII111111Tot                     or               aoql.litt •111)!m Borrower. whttnot or ncr Barrowor
              I
                                                 IMG!varu. Cuw•ntcr hor!Oby axpra1111 oijbord'll'ltft """                                                                    .-"v'" , "::""' .•."f. "•""""' WMUD.....,, to ony
                                                 cuom mat I.CilCir ......, rtGW 111 hrnaftm hov11 ogaln•• Svrrowor. II\ ll111 D\lllnt Gf mo,....;.;., and DMHquont RqiiiiMIIan of the auou of 8«1'0"""•
                                                 tllrlll.lllh                  b"p 1111 111lgnmont lor the banellt 111 "'""'""_;,- '"'                     ·                                   DH.,,.                                 ta
                                                        poymo;rnt "' <1111               ul l>lllh tandor and G""lllltll' 111811 bll paid loa Landor ""' ahlll bit llr$1                        bY             t11 rJia bldubtadMii,
                                                 Glllllantor              ro.reby •1lgn ID Lemlllf o.ll GIIIIIN whld! h "'a" tuvA "'                                          "         _               "".!.               _Vl.tl"""
                                                                 o• . ...,rrowor;_ "':"'"Did ,_._, thoc oum                             ohllll bD               oii; fOf thll            a;:-,.rt.l'ing llJ Lllno:t11 tllll psym.nt In
              i                                  logultandar 11l 'rlla
                                                       .v,     -          :··
                                                                                     lndeb-.....
                                                                                  "''"." ••
                                                                                                II Lender u rllqiJtiiS, IIIII' natoa or e....ut
                                                                                                       ":'Ill '
                                                                                                                                                                     """' "'               •        ·-:-          ... ¥o
                                                                                                                          that tho oama &Ill oubjoCI to thll Guvllllti en!l oholl bo dah'erocl to l.al!dor. GUArantor
                                                                                                                                                                                                                            '!: ·     "'

                                                 •11,.,.,, 1M LendeJit hlltllby authorlzod. In tile                      ol Guoramar, ''""'limo 1oa time to m.--rin.-;.,,....
                                                                                      · ••N w •••• oueo ""'"' lontON •• Ur>dDf llaRm• naceu.a.-, or                                  tD porl4ct; Plll$01,.. ood anlorc:. R:ao rlghro
                                                 undco lli$ c......nw.

                                                 "l"'"""'"ftOIIO""V-          •w  • ,_.,.,..., ThG  faDcwlrol1    milcollanooiJI  PJDVIIIanl   41'C 1  part  of lfll:s Dutotenty;
                  I
                  I                                          Amolno:tme..u. Thbr                  M""'k.              "·                  •           , ""'                     anc1 1graomem ol tha           Da
                                                             \0 tile mtman Ht fDI\h in tNa Qc.cotanty. Nel .all•ollol1 alor amoNIIImam llJ tilll C..uamy thall bt 1ltectiva U11!1u o;...., In willlna ond
                  :                                          IIQnOd by tho <>IIttY or....,,.;,._.
                                                                           Fn•:
                                                                                                        In h.,                           - - · -•    11mamomam,
                                                                                                  Guar.ntat III'DIII to poy vpon clomDild all af Lend"t'l ca•tl IUid              lncludlna   .,.j,

                  i                                                  '""'                     -'·                              n ca"""c""" Wltfl 1111 onfwOIIIIUnt of thll Glllllamy. Lo,., tllol'f hi"" "' PO'f
                  :                                          IICI1lGOI1II 1fu 10 halp enforc. thll GUitlnty,           GuJ111111or     P-lY h coeu ond otp....,u of lluch                   Cn•"' i...d    ... .,

                                                                                                                                                                                                                                                            483
age 3   of   4)   I

                                                          ___ ............. ....                                                                                       ..
                                                                             . COMMERCIAl GUARANTY
                      Loan No; 9002                                                           (Continued)                                                                   Page 3

                         Clpllnn lhad!ftR•. C.PI)an holll!lil,gs In 'Iilla Guar.11nv   1111   far conve"lsnca               an !yo lllld "" not   10   bo 1111od   IIIIa
                          r01<1sl4ne oJ Pll$ Gwr

                         T••••.

                                    .       w         1111•amor·         ov1oyo111t slglllng thiJI G......my,               YVkhOIIlllmlusl!Qn EIRUQ! W. UfolG, and ln oadl ca1111,
                         lln\1 lil1,..''1 IUCC:OPIIlllnwm..,...,
   I                                   EACH VNDI!R!IONID ........                AI'IIMI'\IAH .....   O..>AUuon · - · -