A guaranty is an agreement on the part of one person (the guarantor) that is collateral to an obligation of another person (the debtor or obligor), and which binds the guarantor to performance of the obligation in the event of default by the debtor or obligor. Guaranties may be classified in several ways. A particular guaranty may be general or special; absolute or conditional; continuing or restricted. Various combinations of these categories are also possible. The intent of the parties to a guaranty transaction determines the classification of the guaranty. Such classification in turn determines rights and liabilities under the guaranty.
Continuing Limited Guaranty of a Business Debt To: (Name of Creditor) (Address of Creditor) Guaranty made this the (date), by (Name of Guarantor), of (street address, city, state, zip code), hereinafter called Guarantor, in favor of (Name of Obligee) of (street address, city, state, zip code), hereinafter called Debtor, with respect to credit extended and to be extended to Debtor by (Name of Obligor), hereinafter called the Creditor, of (street address, city, state, zip code). Whereas, Debtor is currently indebted to Creditor for $____________ and desires to obtain a further line of credit from Creditor for use in conducting his business of (describe business); and Whereas, Creditor requires security for payment of the current indebtedness and all indebtedness incurred in the future by Debtor; and Whereas, Guarantor is willing to furnish such security in the form of a personal Guaranty of payment of the current and future indebtedness; Now, therefore, for and in consideration of the mutual covenants contained in this Agreement, and other good and valuable consideration, Guarantor agrees as follows: 1. Statement of Guaranty Guarantor hereby guarantees prompt repayment when due of all amounts advanced in the past or to be advanced in the future by Creditor to Debtor for use in the conduct of the Debtor's business described above and located at (street address, city, state, zip code). If Debtor defaults in the payment of any such indebtedness, Guarantor will pay to Creditor or its order on demand, in any coin or currency that is legal tender in the United States at the time of payment, the amount due, subject to the limitation of liability set forth in Section 3 of this Guaranty. Guarantor shall also pay to Creditor on demand reasonable attorney fees and all costs and other expenses incurred by Creditor in collecting or compromising any indebtedness of Debtor guaranteed under this Guaranty or in enforcing this Guaranty against Guarantor. 2. Duration and Scope of Guaranty This is a continuing Guaranty. Notice of acceptance is waived. This Guaranty shall remain in full force and effect until Guarantor delivers to Creditor written notice revoking it as to indebtedness incurred subsequent to such delivery. Such revocation shall not affect any of Guarantor's obligations under this Guaranty with respect to indebtedness previously incurred. 3 Limitation of Liability. The maximum liability of Guarantor under this Agreement shall be limited to $____________. 4. Rights of Creditors A. Without further authorization from or notice to Guarantor, Creditor may grant credit to Debtor from time to time. With or without notice to Guarantor, Creditor may alter, compromise, accelerate, extend, or change the time or manner of payment of any indebtedness, increase or reduce the rate of interest on the same, or add or release any one or more other Guarantors. No exercise or non-exercise by Creditor of any right given to him by this Guaranty, no dealing by Creditor with Debtor or any other Guarantor, and no change, impairment, or suspension of any right or remedy of Creditor shall in any way affect any of Guarantor's obligations under this Guaranty or give Guarantor any recourse against Creditor. B. If legal action is taken to enforce this Guaranty or any provision of it, such action may be maintained alone, or joined with any action or other proceeding against Debtor or any other Guarantor of Debtor's obligations to Creditor. Prior action or suit against Debtor, whether alone or jointly with other Guarantors, shall not be a prerequisite to Creditor's right to proceed under this Guaranty in case of Debtor's default. The rights of Creditor are cumulative and shall not be exhausted by its exercise of any of its rights under this
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