WHEREAS, [name], a [specify] corporation (Borrower) has requested [bank], a [specify] banking corporation having its principal office at [address], (Lender), to lend it the sum of [$ amount] (with the option on the part of Lender to lend to Borrower the additional sum of [$ amount]) to be evidenced by the Note(s) or (Obligation) of Borrower for [$ amount] bearing interest at the rate of [percent] per annum, and to be secured by a (consolidated) first lien Mortgage in the principal amount of [$ amount] covering Premises located at [address] (Premises); and
WHEREAS, Borrower and Lender have entered into a Building Loan Agreement (Building Loan Agreement) bearing even date herewith and to be filed in the office of the clerk of the [county], in which it is provided, among other things, that Borrower is to erect and equip a [specify improvement] (Improvements) on the Premises, to be built in accordance with the plans and specifications that have been submitted to Lender, as they may be modified from time to time with Lender's written approval, and in which Agreement it is also provided, among other things, that Lender, on certain conditions and in the manner set forth in the Agreement, will lend to Borrower the sum of [$ amount]; and
WHEREAS, pursuant to the Building Loan Agreement, Borrower is about to execute and deliver to Lender its Note bearing even date herewith in the principal amount of [$ amount] and, as security therefor to execute and deliver to Lender a first lien Mortgage covering the Premises which Mortgage is to be recorded in the office of the register of [city, county], and is about to cause to be assigned to Lender certain note(s) (bonds) and mortgage(s) is (are) to be (spread and) consolidated with the Mortgage of [$ amount] as a single consolidated first lien on the Premises in the aggregate principal amount of [$ amount], which note(s) (bonds) and mortgage(s) (as consolidated) are hereinafter referred to (in the singular) as the Note and the Mortgage; and
WHEREAS, in order to induce Lender to make the Loan in the principal amount of [$ amount] and to accept the Mortgage and the Note secured thereby, and as additional security of the moneys to be advanced under the Mortgage and the Note secured thereby and the Building loan Agreement, Borrower has agreed to procure and deliver this Guaranty to be executed by: [name(s) and address(es) of guarantor(s)] (Guarantor) and, if more than one, each shall be jointly and severally liable hereunder and the term "Guarantor" whenever used herein shall mean the persons named in this Paragraph or any one or more of them); and
WHEREAS, Lender has refused to make the Loan or to enter into the Building Loan Agreement or to make the advances provided under the Building Loan Agreement or to accept the Mortgage or the Note secured thereby unless this Guaranty is executed by Guarantor and delivered to Lender.
NOW, THEREFORE, in consideration of the Premises and of the sum of one dollar paid to Guarantor by Lender, the receipt whereof is hereby acknowledged, and as part of the consideration for the making by Lender to Borrower of the Loan, Guarantor hereby (jointly and severally) covenants and agrees with Lender as follows:
1. Guarantor hereby guarantees to Lender, its successors and assignsa. The performance by Borrower of all the terms and conditions of the Building Loan Agreement;
b. Borrower, until such completion, shall fully and punctually comply with all the terms, covenants, and the Mortgage and the Note secured thereby, other than the payment of the principal indebtedness at maturity;
c. Borrower shall fully and punctually pay and discharge any and all costs and expenses for the construction and equipment of the Improvements and as the same may become due and payable, and also pay and discharge all proper claims and demands for labor and materials used in the construction of the Improvements which are or, if unpaid, may become liens on the Premises;
d. The Premises shall be and remain free and clear of all liens equal or prior in lien to the lien of the Mortgage for a period from the date hereof to a date thirty (30) days after the expiration of the time allowed by law for the filing of such liens; and
e. Borrower shall keep in full force and effect the Commitment of [specify], dated [date], for a Loan in the principal Premises, which Commitment is hereby deemed incorporated herein by reference, and all of the terms and conditions of the Commitment shall duly be complied with by Borrower on or before [date], or on or before such date to which the Commitment may be extended.
2. The Building Loan Agreement, Mortgage, and the Note secured thereby are hereby made a part of this Guaranty by reference thereto with the same force and effect as if fully set forth herein.
3. Guarantor hereby consents that the plans and specifications, and the schedule of advances and any other terms, covenants, and conditions contained in the Building Loan Agreement, Mortgage, and Note secured thereby, and the Loan Commitment may be altered, extended, changed, modified, or released by Borrower with the approval of Lender without in any manner affecting this Guaranty or releasing Guarantor therefrom, or without the further consent of Guarantor.
4. Guarantor hereby waives any and all legal requirements that Lender, its successors or assigns, shall institute any action or proceedings at law or in equity against Borrower, or anyone else, with respect to the Mortgage and the Note secured thereby and the Building Loan Agreement, or with respect to any other security held by Lender, as a condition precedent to bringing an action against Guarantor on this Guaranty. All remedies afforded to Lender, its successors, or assigns, by reason of this Guaranty are separate and cumulative remedies and no one of such remedies, whether exercised by Lender, or its successors or assigns, or not, shall be deemed to be an exclusion of any one of the other remedies available to Lender, its successors or assigns, and shall in no way limit or prejudice any other legal or equitable remedies which Lender, its successors, or assigns, may have in the Premises.
5. Until the Improvements are erected fully equipped, and completed as aforesaid, and until each and all of the terms, covenants, and conditions of this Guaranty are performed fully, Guarantor shall not be released by any act or thing that might, but for this provision of this Guaranty, be deemed a legal or equitable discharge of a surety, or by reason of any waiver, extension, modification, forbearance, or delay of Lender, its successors or assigns, or its or their failure to proceed promptly or otherwise, or by reason of any further obligation or agreement between any owner of the Mortgaged Premises and the then holder of the Mortgage and the Note secured thereby and/or the Building Loan Agreement relating to the payment of any sum secured thereby or to any of the other terms, covenants, and conditions contained therein, and Guarantor hereby expressly waives and surrenders any defense to his liability hereunder based on any of the foregoing acts, things, agreements, or waivers, or any of them.
6. Guarantor hereby waives presentment for payment, demand, protest, notice of protest and dishonor, notice of acceptance hereof, notices of default, and all other notice shown or hereafter provided by law.
7. In the event that Guarantor shall advance or become obligated to pay any sums toward the construction or equipment of the Improvements, or in the event that for any reason Borrower or any subsequent owner of the Premises is now or shall hereafter become indebted to Guarantor, the amount of each sum and of such indebtedness shall at all times be subordinate as to lien, time of payment and in all other respects, to the amounts owing to Lender under the Mortgage and the Note secured thereby or any right to participate in any way therein, or in the right, title, or interest of Lender in the Premises, notwithstanding any payments made by Lender toward the construction of the Improvements or any payments made by him under this Guaranty, all rights of subrogation and participation being hereby expressly waived and released.
8. Any notice, demand, or request by Lender, its successors or assigns, to Guarantor shall be in writing and shall be deemed to have duly been given or made if either delivered personally to Guarantor or if mailed by registered mail to him at the respective aforementioned address.
9. Notwithstanding anything herein contained, this Guaranty shall become null and void in the [event] pursuant to the Commitment, or other assignee shall take over by assignment from Lender the Mortgage and the Note secured thereby and [name] or other assignee or Borrower shall pay to Lender in full the amount of principal and interest then owing to Lender, or its successors or assigns, thereon and all other sums and payments that may be or become owing under the Mortgage, the Note secured thereby, and the Building Loan Agreement.
10. This Instrument shall inure to the benefit of Lender, its successors, and assigns, and shall bind Guarantor and his legal representatives and assigns.
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