Business Loan Personal Guarantee Agreement

PERSONAL GUARANTEE AGREEMENT

THIS PERSONAL GUARANTEE AGREEMENT (this "Guarantee") is made and entered into as of the [____] day of [________________________________], 20[____] (the "Effective Date").

PARTIES

GUARANTOR(S):

Name: [________________________________]
Address: [________________________________]
City, State, ZIP: [________________________________]
Social Security Number: [________________________________]
Date of Birth: [__/__/____]

☐ Additional Guarantor (if applicable):

Name: [________________________________]
Address: [________________________________]
City, State, ZIP: [________________________________]
Social Security Number: [________________________________]
Date of Birth: [__/__/____]

(individually and collectively referred to as "Guarantor")

LENDER:

Name: [________________________________]
Address: [________________________________]
City, State, ZIP: [________________________________]
Entity Type: [________________________________]

(referred to as "Lender")

BORROWER:

Name: [________________________________]
Address: [________________________________]
City, State, ZIP: [________________________________]
Entity Type: [________________________________]
State of Formation: [________________________________]

(referred to as "Borrower")

RECITALS

WHEREAS, Borrower has requested that Lender extend credit or other financial accommodations to Borrower in the form of:

☐ Term Loan in the principal amount of $[________________________________]
☐ Revolving Line of Credit with a maximum limit of $[________________________________]
☐ Commercial Mortgage Loan in the principal amount of $[________________________________]
☐ Equipment Financing in the principal amount of $[________________________________]
☐ Other: [________________________________]

(the "Loan") pursuant to a Loan Agreement, Promissory Note, or other credit documents dated [________________________________] (collectively, the "Loan Documents");

WHEREAS, Guarantor has a direct or indirect ownership interest in Borrower or will otherwise directly benefit from Lender's extension of credit to Borrower, with Guarantor's ownership interest being approximately [____]% of Borrower;

WHEREAS, Lender is unwilling to extend the Loan to Borrower unless Guarantor unconditionally guarantees the payment and performance of all of Borrower's obligations to Lender under the Loan Documents;

WHEREAS, Guarantor acknowledges that the extension of credit to Borrower will directly benefit Guarantor and that Guarantor has reviewed the Loan Documents and is fully informed of the terms thereof;

NOW, THEREFORE, in consideration of Lender extending the Loan to Borrower, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Guarantor agrees as follows:

ARTICLE I: DEFINITIONS

1.1 Defined Terms. As used in this Guarantee, the following terms shall have the meanings set forth below:

"Collateral" means all property, real or personal, tangible or intangible, that secures any of the Guaranteed Obligations.

"Default" means any Event of Default as defined in Section 6.1 of this Guarantee or in the Loan Documents.

"Guaranteed Obligations" means all present and future debts, liabilities, and obligations of Borrower to Lender of every kind, nature, and description, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, including without limitation:

(a) All principal, interest (including interest accruing after the filing of any bankruptcy petition, whether or not allowed as a claim in such proceeding), fees, costs, and expenses under the Loan Documents;

(b) All costs and expenses incurred by Lender in collecting or enforcing any of the Guaranteed Obligations or this Guarantee, including reasonable attorneys' fees and legal expenses;

(c) All obligations arising from any renewals, extensions, modifications, refinancings, or restructurings of the Loan Documents;

(d) All obligations under any interest rate swap, hedge, or similar agreement related to the Loan; and

(e) All other amounts payable by Borrower to Lender under the Loan Documents.

"Indebtedness" means any obligation for borrowed money, including obligations evidenced by bonds, debentures, notes, or similar instruments.

"Lien" means any mortgage, deed of trust, pledge, security interest, encumbrance, lien, or charge of any kind.

"Loan Documents" means the Promissory Note, Loan Agreement, Security Agreement, and all other documents, instruments, and agreements executed in connection with the Loan, as amended, modified, supplemented, or restated from time to time.

"Person" means any individual, corporation, limited liability company, partnership, trust, governmental authority, or other entity.

ARTICLE II: GUARANTEE OF PAYMENT

2.1 Absolute and Unconditional Guarantee. Guarantor hereby absolutely, unconditionally, and irrevocably guarantees to Lender the full and punctual payment and performance of all Guaranteed Obligations when due, whether at stated maturity, by acceleration, or otherwise.

2.2 Guarantee of Payment, Not Collection. THIS IS A GUARANTEE OF PAYMENT AND NOT OF COLLECTION. Guarantor agrees that Lender may enforce this Guarantee directly against Guarantor without first:

(a) Pursuing any remedy against Borrower or any other person;

(b) Foreclosing upon or exhausting any Collateral;

(c) Obtaining a judgment against Borrower or any other person;

(d) Exercising any other right or remedy to which Lender may be entitled; or

(e) Filing any claim in any bankruptcy, insolvency, or similar proceeding.

2.3 Primary Obligation. The obligations of Guarantor under this Guarantee shall be primary, direct, and immediate and not secondary or contingent. Guarantor shall be liable for the Guaranteed Obligations as a primary obligor, and not merely as a surety.

2.4 Continuing Guarantee. This Guarantee is a continuing guarantee and shall remain in full force and effect until all Guaranteed Obligations have been indefeasibly paid and performed in full and Lender has no further commitment to extend credit to Borrower. This Guarantee shall apply to and secure any ultimate balance due or owing to Lender regardless of any intermediate payment or discharge in whole or in part.

ARTICLE III: SCOPE OF GUARANTEE

3.1 Type of Guarantee. (Select one)

☐ UNLIMITED GUARANTEE: Guarantor's liability under this Guarantee shall be unlimited, and Guarantor guarantees the full amount of all Guaranteed Obligations without any cap or limitation.

☐ LIMITED GUARANTEE: Guarantor's liability under this Guarantee shall be limited as follows:

(a) Maximum Liability Amount: $[________________________________]

(b) Percentage Limitation: [____]% of all Guaranteed Obligations outstanding at any time

(c) Time Limitation: This Guarantee shall expire on [________________________________], provided that Guarantor shall remain liable for all Guaranteed Obligations incurred or arising prior to such date

(d) Other Limitation: [________________________________]

3.2 Joint and Several Liability. If more than one person executes this Guarantee, all such persons shall be jointly and severally liable for all of the obligations of Guarantor under this Guarantee. Lender may pursue any one or more Guarantors for all or any portion of the Guaranteed Obligations without being required to pursue any other Guarantor.

3.3 Independent Obligations. The obligations of each Guarantor under this Guarantee are independent of the obligations of Borrower and any other guarantor. A separate action may be brought against any Guarantor whether or not an action is brought against Borrower or any other guarantor.

ARTICLE IV: WAIVERS

4.1 Waiver of Notice. Guarantor hereby waives:

(a) Notice of acceptance of this Guarantee;

(b) Notice of any loans, advances, or extensions of credit made to Borrower;

(c) Notice of the existence, creation, or incurrence of any new or additional Guaranteed Obligations;

(d) Notice of any action taken or omitted by Lender in reliance on this Guarantee;

(e) Notice of any Default or Event of Default by Borrower under the Loan Documents;

(f) Notice of any adverse change in Borrower's financial condition or business operations;

(g) Notice of any sale, transfer, or other disposition of Collateral;

(h) Notice of any renewal, extension, acceleration, or modification of the Loan Documents; and

(i) Any other notice to which Guarantor might otherwise be entitled.

4.2 Waiver of Demand, Presentment, and Protest. Guarantor hereby waives:

(a) Demand for payment or performance from Borrower or any other person;

(b) Presentment for payment of any instrument evidencing any Guaranteed Obligation;

(c) Protest and notice of dishonor or nonpayment of any instrument;

(d) Notice of protest for nonpayment of any instrument; and

(e) Any requirement that Lender make any demand upon or give any notice to Borrower or any other person as a condition to Guarantor's liability.

4.3 Waiver of Suretyship Defenses. Guarantor hereby waives, to the fullest extent permitted by law, all suretyship defenses and any defenses based upon:

(a) Any disability, incapacity, lack of authority, or other defense of Borrower or any other person;

(b) The cessation or limitation of the liability of Borrower for any reason other than full payment of the Guaranteed Obligations;

(c) Any act or omission of Lender that directly or indirectly results in the discharge of Borrower or any other guarantor;

(d) Any modification, renewal, extension, or amendment of the Loan Documents;

(e) Any change in the composition, structure, or ownership of Borrower;

(f) The invalidity, unenforceability, or lack of due authorization of the Loan Documents;

(g) Any impairment or release of Collateral;

(h) Any election of remedies by Lender, including any election to proceed judicially or non-judicially;

(i) Any failure by Lender to perfect or maintain perfection of any security interest in Collateral;

(j) The statute of limitations or any other time-based defense;

(k) Any bankruptcy, insolvency, or similar proceeding involving Borrower; and

(l) Any other circumstance that might otherwise constitute a legal or equitable discharge of a guarantor or surety.

4.4 Waiver of Right to Require Lender to Proceed Against Others. Guarantor waives any right to require Lender to:

(a) Proceed against Borrower or any other person;

(b) Proceed against or exhaust any Collateral;

(c) Pursue any other remedy in Lender's power; or

(d) Marshal assets or proceed in any particular order against Borrower, any Collateral, or any other person.

4.5 Waiver of Subrogation Until Full Payment. Until all Guaranteed Obligations have been indefeasibly paid and satisfied in full and Lender has no further commitment to extend credit to Borrower, Guarantor hereby waives any right of subrogation, reimbursement, exoneration, contribution, or indemnity against Borrower or any other guarantor, and any right to participate in any Collateral or other security.

4.6 Waiver of Setoff. Guarantor waives any right of setoff, recoupment, counterclaim, or deduction that Guarantor may have against Borrower or Lender.

ARTICLE V: SUBROGATION, SUBORDINATION, AND REINSTATEMENT

5.1 Waiver of Subrogation. Notwithstanding any payment made by Guarantor hereunder or any setoff or application of funds by Lender, Guarantor shall not be entitled to be subrogated to any of the rights of Lender against Borrower or any other guarantor or any Collateral or other security until all Guaranteed Obligations have been indefeasibly paid and satisfied in full.

5.2 Subordination. Guarantor hereby subordinates any and all indebtedness, liabilities, and obligations of Borrower to Guarantor (the "Subordinated Debt") to all Guaranteed Obligations. Until all Guaranteed Obligations are indefeasibly paid in full:

(a) Guarantor shall not demand, accept, or receive any payment of principal, interest, or other amount on account of any Subordinated Debt;

(b) Guarantor shall not take any action to accelerate, collect, or enforce any Subordinated Debt;

(c) Guarantor shall not take any action to secure or perfect any Lien with respect to any Subordinated Debt;

(d) If Guarantor receives any payment on account of Subordinated Debt in violation of this Section, Guarantor shall hold such payment in trust for the benefit of Lender and shall promptly deliver such payment to Lender for application to the Guaranteed Obligations; and

(e) Guarantor shall execute and deliver such additional documents as Lender may request to further evidence or effect such subordination.

5.3 Reinstatement. This Guarantee shall continue to be effective, or shall be reinstated, as the case may be, if at any time any payment of any Guaranteed Obligation is rescinded, avoided, or must otherwise be restored or returned by Lender upon the insolvency, bankruptcy, reorganization, dissolution, liquidation, or other similar proceeding involving Borrower, Guarantor, or any other person, or upon the appointment of any receiver, intervenor, conservator, trustee, or similar official for Borrower, Guarantor, or any other person, or for any substantial part of their respective properties, or otherwise, all as though such payment had not been made. Guarantor agrees that Guarantor shall not be entitled to any benefit of restitution, reimbursement, or subrogation until all Guaranteed Obligations have been indefeasibly paid in full.

ARTICLE VI: REPRESENTATIONS AND WARRANTIES

6.1 Guarantor's Representations and Warranties. Guarantor represents and warrants to Lender as follows:

(a) Capacity and Authority. Guarantor has full legal capacity, power, and authority to execute, deliver, and perform this Guarantee. If Guarantor is an entity, Guarantor is duly organized, validly existing, and in good standing under the laws of its jurisdiction of organization.

(b) Binding Obligation. This Guarantee constitutes a valid and legally binding obligation of Guarantor, enforceable against Guarantor in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, or similar laws affecting creditors' rights generally.

(c) No Conflict. The execution, delivery, and performance of this Guarantee do not and will not violate any law, regulation, order, or agreement by which Guarantor is bound.

(d) Financial Benefit. Guarantor has received or will receive direct or indirect financial benefit from the extension of credit to Borrower.

(e) Financial Condition. Guarantor's financial statements previously delivered to Lender are true, complete, and accurate in all material respects and fairly present Guarantor's financial condition as of the dates indicated.

(f) No Material Adverse Change. Since the date of Guarantor's most recent financial statements delivered to Lender, there has been no material adverse change in Guarantor's financial condition, business, or prospects.

(g) Litigation. There is no pending or threatened litigation, arbitration, or administrative proceeding that could materially adversely affect Guarantor's ability to perform under this Guarantee.

(h) Information. All information provided by Guarantor to Lender in connection with this Guarantee is true, complete, and accurate in all material respects.

(i) Independent Investigation. Guarantor has independently investigated Borrower's financial condition and business operations and has not relied upon any information or representations made by Lender.

(j) Review of Loan Documents. Guarantor has reviewed and is fully informed of the terms and conditions of the Loan Documents.

ARTICLE VII: EVENTS OF DEFAULT

7.1 Events of Default. The occurrence of any of the following events shall constitute an Event of Default under this Guarantee:

(a) Guarantor fails to pay any amount due under this Guarantee within [____] days after written demand therefor;

(b) Guarantor fails to perform or observe any covenant, term, or condition of this Guarantee;

(c) Any representation or warranty made by Guarantor in this Guarantee or in any certificate or document delivered in connection herewith proves to be false or misleading in any material respect when made;

(d) An Event of Default occurs under the Loan Documents;

(e) Guarantor dies, becomes incapacitated, or is declared legally incompetent;

(f) Guarantor files a petition for bankruptcy, insolvency, reorganization, or similar relief, or such a petition is filed against Guarantor and is not dismissed within sixty (60) days;

(g) Guarantor makes an assignment for the benefit of creditors;

(h) A receiver, trustee, conservator, or similar official is appointed for Guarantor or for any substantial part of Guarantor's property;

(i) Guarantor admits in writing an inability to pay debts as they become due;

(j) Any material adverse change occurs in Guarantor's financial condition;

(k) Guarantor transfers or attempts to transfer assets with intent to defraud or hinder Lender;

(l) Any judgment is entered against Guarantor in excess of $[________________________________] that is not satisfied, stayed, or bonded within thirty (30) days; or

(m) Guarantor fails to provide financial statements or other information when required under this Guarantee.

ARTICLE VIII: REMEDIES

8.1 Acceleration and Remedies. Upon the occurrence of an Event of Default, Lender may, at its option:

(a) Declare all Guaranteed Obligations immediately due and payable without notice or demand;

(b) Proceed directly against Guarantor for the full amount of all Guaranteed Obligations;

(c) Exercise any and all rights and remedies available under this Guarantee, the Loan Documents, or applicable law;

(d) Set off and apply any and all deposits, balances, or other sums held by Lender for the account of Guarantor against any Guaranteed Obligations;

(e) Pursue any combination of remedies, either simultaneously or successively; and

(f) Recover all costs and expenses, including reasonable attorneys' fees, incurred in enforcing this Guarantee.

8.2 No Waiver. No delay or omission by Lender in exercising any right or remedy shall operate as a waiver thereof. No single or partial exercise of any right or remedy shall preclude any other or further exercise thereof or the exercise of any other right or remedy.

8.3 Cumulative Remedies. All rights and remedies of Lender under this Guarantee are cumulative and not exclusive of any other rights or remedies that Lender may have.

ARTICLE IX: GENERAL PROVISIONS

9.1 Amendments. This Guarantee may not be amended, modified, or waived except by a written instrument signed by Lender and Guarantor.

9.2 Notices. All notices, demands, and other communications under this Guarantee shall be in writing and shall be deemed given when (a) delivered personally, (b) sent by certified mail, return receipt requested, (c) sent by overnight courier service, or (d) sent by email with confirmation of receipt, to the addresses set forth above or to such other address as either party may designate in writing.

9.3 Assignment. Lender may assign, sell, or transfer this Guarantee and any or all of the Guaranteed Obligations without notice to or consent of Guarantor. Guarantor may not assign this Guarantee or any of Guarantor's obligations hereunder.

9.4 Successors and Assigns. This Guarantee shall be binding upon Guarantor and Guarantor's heirs, executors, administrators, successors, and assigns, and shall inure to the benefit of Lender and its successors and assigns.

9.5 Severability. If any provision of this Guarantee is held to be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not be affected or impaired.

9.6 Entire Agreement. This Guarantee constitutes the entire agreement between Guarantor and Lender with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral or written.

9.7 Headings. The headings in this Guarantee are for convenience only and shall not affect the interpretation of this Guarantee.

9.8 Interpretation. This Guarantee shall be construed without regard to any presumption or rule requiring construction against the party drafting the instrument.

9.9 Counterparts. This Guarantee may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

9.10 Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS GUARANTEE OR THE TRANSACTIONS CONTEMPLATED HEREBY.

ARTICLE X: GOVERNING LAW AND JURISDICTION

10.1 Governing Law. This Guarantee shall be governed by and construed in accordance with the laws of the State of [________________________________], without regard to conflict of laws principles.

10.2 Jurisdiction. Guarantor hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts located in [________________________________] County, State of [________________________________], for any action or proceeding arising out of or relating to this Guarantee.

10.3 Venue. Guarantor hereby irrevocably waives any objection to venue in any such court and any claim that such forum is inconvenient.

10.4 Service of Process. Guarantor consents to service of process by any means permitted by applicable law.

ARTICLE XI: SPOUSAL CONSENT

(Required if Guarantor is married and in a community property or marital property state, or when spousal assets may be affected)

SPOUSAL CONSENT AND ACKNOWLEDGMENT

I, [________________________________], am the spouse of the Guarantor named above. I have read and understand this Personal Guarantee Agreement. I hereby consent to the execution of this Guarantee by my spouse and agree that:

(a) My community property interest in any assets owned jointly with my spouse may be used to satisfy the obligations of my spouse under this Guarantee;

(b) I waive any right to require Lender to proceed against my spouse's separate property before proceeding against community property;

(c) I have had the opportunity to consult with independent legal counsel regarding this consent; and

(d) I am signing this consent voluntarily and without coercion.

☐ I am also a Guarantor under this Agreement and have executed the Guarantee above.

☐ I am consenting to my spouse's Guarantee but am not personally guaranteeing the obligations.

Spouse's Printed Name: [________________________________]

Spouse's Signature: [________________________________]

Date: [__/__/____]

SIGNATURE BLOCK

IN WITNESS WHEREOF, Guarantor has executed this Personal Guarantee Agreement as of the Effective Date first written above.

GUARANTOR:

Signature: [________________________________]

Printed Name: [________________________________]

Date: [__/__/____]

ADDITIONAL GUARANTOR (if applicable):

Signature: [________________________________]

Printed Name: [________________________________]

Date: [__/__/____]

LENDER:

By: [________________________________]

Name: [________________________________]

Title: [________________________________]

Date: [__/__/____]

NOTARY ACKNOWLEDGMENT

For Guarantor:

STATE OF [________________________________]

COUNTY OF [________________________________]

On this [____] day of [________________________________], 20[____], before me, the undersigned, a Notary Public in and for said State, personally appeared [________________________________], known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.

Notary Public Signature: [________________________________]

Printed Name: [________________________________]

My Commission Expires: [__/__/____]

[NOTARIAL SEAL]

For Additional Guarantor (if applicable):

STATE OF [________________________________]

COUNTY OF [________________________________]

On this [____] day of [________________________________], 20[____], before me, the undersigned, a Notary Public in and for said State, personally appeared [________________________________], known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.

Notary Public Signature: [________________________________]

Printed Name: [________________________________]

My Commission Expires: [__/__/____]

[NOTARIAL SEAL]

For Spouse (if applicable):

STATE OF [________________________________]

COUNTY OF [________________________________]

On this [____] day of [________________________________], 20[____], before me, the undersigned, a Notary Public in and for said State, personally appeared [________________________________], known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.

Notary Public Signature: [________________________________]

Printed Name: [________________________________]

My Commission Expires: [__/__/____]

[NOTARIAL SEAL]

EXHIBIT A: DESCRIPTION OF GUARANTEED OBLIGATIONS

The following Loan Documents and obligations are guaranteed under this Agreement:

1. Promissory Note dated [________________________________] in the original principal amount of $[________________________________]

2. Loan Agreement dated [________________________________] between Borrower and Lender

3. Security Agreement dated [________________________________]

4. [________________________________]

5. [________________________________]

Principal Amount of Loan: $[________________________________]

Interest Rate: [________________________________]

Maturity Date: [________________________________]

Payment Schedule: [________________________________]

This Personal Guarantee Agreement creates serious legal obligations. Guarantor is advised to seek independent legal counsel before signing.