Common use of Guaranty Fee Clause in Contracts

Guaranty Fee. In the event the Company shall borrow funds from a lender, and the lender shall require guaranties from the members, the parties shall attempt to persuade the lender to allow the members to guarantee repayment only of the portion of the debt represented by the proportionate share of each Member's capital account. In the event, and each time, a lender requires Low to guarantee the portion of debt represented by CRC's proportion of capital, but does not require CRC to guarantee the portion of debt represented by Low's proportion of capital, CRC shall pay to Low a guaranty fee in the amount of four percent (4%) (the "Guaranty Percentage") of the greater of (1) amount of the loan represented by CRC's proportion of capital, or (2) twenty percent (20%). The Guaranty Fee shall be paid annually, but shall be reduced each year in proportion to any reduction in the outstanding balance of the loan. However, if Low and CRC both agree, CRC may eliminate all future Guaranty Fees related to a specific loan by dilution of its equity interest in the Company on a proportionate basis. For instance, and only by way of example, if the Guaranty Fee is calculated to be one-hundred thousand dollars ($100,000.00), which amount represents one percent (1%) of the total capital of the Company, CRC may eliminate the Guaranty Fee for the current year, and all future years, by transferring one-percent (1%) of the Company to Low.