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EXHIBIT 10.25
(_________)
FORM OF
GUARANTY OF PAYMENT AND PERFORMANCE
THIS GUARANTY OF PAYMENT AND PERFORMANCE ("this Guaranty") made as of
the _________________________, by BALANCED CARE CORPORATION, a Delaware
corporation, "Guarantor" in favor of CAPSTONE CAPITAL OF PENNSYLVANIA, INC., a
Pennsylvania corporation, its successors and assigns (the "Lessor").
R E C I T A L S:
Pursuant to a Lease Agreement of even date herewith (as the same may
hereafter be amended, the "Lease") between ______________________, (the
"Lessee"), and Lessor, Lessor has agreed to lease to Lessee certain real and
personal property and improvements comprising the _________________________
______________________________________________________ provided as one of the
conditions therefor Lessor requires that the Guarantor guarantee the Lease
Obligations (as defined hereunder), now existing or hereafter incurred, owing
to the Lessor pursuant to the Lease. Capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the Lease.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing Recitals, and in
order to induce the Lessor to enter into the Lease, and as security for the
payment of all Rent and all other obligations of Lessee under the Lease
("Obligations"), including, but not limited to, the payment of all expenses,
charges and other amounts from time to time owing to Lessor pursuant to the
Lease the performance of all covenants, agreements and other obligations from
time to time owing to or for the benefit of Lessor pursuant to the Lease, the
Guarantor agrees and covenants with Lessor and represents and warrants to
Lessor as follows:
l. Guarantee of Lease Obligations. The Guarantor hereby
unconditionally guarantees to the Lessor (a) the due, regular, and punctual
payment and performance of the Obligations, including, but not limited to, (i)
the payment obligations of the Lease, and (ii) the indemnity obligations of the
Lease (which guaranty shall survive concurrently with such indemnity
obligations); (b) upon the failure of the Lessee timely to pay or perform any
of the Obligations, the payment of all reasonable costs and expenses incurred
by Lessor in paying or performing such Obligations (but Lessor shall not be
required to pay or perform such Obligations); and (c) all reasonable costs,
attorneys' fees, and expenses that may be incurred by the Lessor by reason of a
Default by the Lessee, including reasonable fees and expenses in any appellate
or bankruptcy proceedings.
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Upon any Event of Default pursuant to the Lease, the Guarantor
unconditionally promises to pay to the Lessor such amounts as are necessary to
cure the Event of Default.
This Guaranty is unconditional and the Guarantor agrees that the
Lessor, upon the occurrence of an Event of Default pursuant to the Lease, shall
not be required to assert any claim or cause of action against the Lessee
before asserting any claim or cause of action against the Guarantor under this
Guaranty. The Guarantor further agrees that the Lessor shall not be required to
pursue or foreclose on any collateral that it may receive from the Lessee or
others as security for any of the Lease Obligations before making a claim or
asserting a cause of action against the Guarantor under this Guaranty.
The failure of the Lessor to perfect its security interest in any of
the collateral as set forth in the Lease or any other collateral now or
hereafter securing all or any part of the Obligations shall not release the
Guarantor from its liabilities and obligations hereunder.
Notice of acceptance of this Guaranty and of any Default by the Lessee
is hereby waived by the Guarantor, except to the extent notice is otherwise
expressly required by the Lease. Presentment, protest, demand, and notice of
protest and demand, and notice of receipt of any and all collateral, and of the
exercise of possessory remedies or foreclosure on any and all collateral
received by the Lessor from the Lessee or the Guarantor are hereby waived. All
settlements, compromises, compositions, accounts stated, and agreed balances in
good faith between any primary or secondary obligors on any accounts received
as collateral shall be binding upon the Guarantor.
This Guaranty shall not be affected, modified, or impaired by the
voluntary or involuntary liquidation, dissolution, sale or other disposition of
all or substantially all of the assets, marshalling of assets and liabilities,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangements, composition with creditors or readjustment of, or
other similar proceedings affecting the Lessee or the Guarantor, or any of the
assets belonging to any of them, nor shall this Guaranty be affected, modified,
or impaired by the invalidity of the Lease.
Without notice to the Guarantor, without the consent of the Guarantor,
and without affecting or limiting the Guarantor's liability hereunder, the
Lessor may:
(a) grant the Lessee extensions of time for payment of the Obligations
or any part thereof;
(b) renew any of the Obligations or make further advances to Lessee;
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(c) grant the Lessee extensions of time for performance of agreements
or other indulgences;
(d) at any time release any or all of the collateral, or security
interest in any collateral, that now or hereafter secures any of the
Obligations;
(e) compromise, settle, release, or terminate any or all of the
obligations, covenants, or agreements of the Lessee under the Lease;
(f) at any time release any one or more other guarantors from their
guarantees of any of the Obligations; and
(g) with the Lessee's written consent modify or amend any obligations,
covenant, or agreement of the Lessee as set forth in the Lease (and such
amendments shall nevertheless be binding upon Guarantor)
This Guaranty shall continue to be effective, or be reinstated, as the
case may be, if at any time any whole or partial payment or performance of any
Obligation is or is sought to be rescinded or must otherwise be restored or
returned by the Lessor upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Lessee or Guarantor upon or as a result of
the appointment of a receiver, intervenor, or conservator of, or trustee or
similar officer for, the Lessee or guarantor of or for any substantial part of
its property, or otherwise, all as though such payments and performance had not
been made. This Guaranty shall not be affected in any way by the transfer or
other disposition of any of the collateral described in and granted to Lessor
pursuant to the Lease, whether by operation of law, or otherwise.
2. Representations and Warranties of the Guarantor. To induce the
Lessor to enter into the Lease, the Guarantor represents and warrants to the
Lessor as follows:
(a) Power to Incur Obligations. The Guarantor has full power and
unrestricted right to enter into this Guaranty and to incur the obligations
provided for herein and the execution and delivery of this Guaranty has been
authorized by all required corporate action.
(b) Conflicts. This Guaranty does not violate, conflict with or
constitute any default under any decree, judgment, or any other agreement or
instrument binding upon the Guarantor or the articles of incorporation or
bylaws of Guarantor.
(c) Pending Matters. No action or investigation is pending, or to
the best of Guarantor's knowledge, threatened before or by any state or federal
court or administrative agency which might result in any material adverse
change in the financial condition or operations
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or prospects of Guarantor. Guarantor is not in violation of any agreement, the
violation of which might reasonably be expected to have a materially adverse
effect on its business or assets, and Guarantor is not in violation of any
order, judgment, or decree of any state or federal court.
(d) Financial Statements Accurate. All financial statements
heretofore provided by the Guarantor are true and complete in all material
respects as of their respective dates and fairly present the financial
condition of the Guarantor, and there are no liabilities, direct or indirect,
fixed or contingent, as of the respective dates of such statements which are
not reflected therein or in the notes thereto or in a written certificate
delivered with such statements. The financial statements of the Guarantor are
prepared on a consistent basis from year to year. There has been no material
adverse change in the financial condition, operations, or prospects of
Guarantor since the dates of such statements except as fully disclosed in
writing with the delivery of such statements.
(e) No Defaults or Restrictions. There is no declared default under
any agreement or instrument that caused or would cause a material adverse
effect on the business, properties, and financial operations or condition of
Guarantor.
(f) Payment of Taxes. Guarantor has filed all federal, state, and
local tax returns which are required to be filed and has paid, or made adequate
provision for the payment of, all taxes which have or may become due pursuant
to said return or to assessments received by Guarantor.
(g) Disclosure. Neither the Guaranty nor any other document,
financial statement, credit information, certificate or statement required
herein to be furnished to Lessor by Guarantor in connection with the Guaranty
contains any untrue, incorrect or misleading statement of material fact. All
representations and warranties made herein or any certificate or other document
delivered to Lessor by or on behalf of Guarantor pursuant to or in connection
with this Guaranty shall be deemed to have been relied upon by Lessor
notwithstanding any investigation heretofore or hereafter made by Lessor or on
its behalf.
(h) Organization. Guarantor is a Delaware corporation duly
organized and validly existing and is duly qualified and in good standing in
each jurisdiction in which its business or assets makes its qualification
necessary.
(i) Stock Ownership. On the date hereof, the capital stock of
Guarantor is owned as set forth in Exhibit A.
3. Affirmative Covenants of the Guarantor. The Guarantor covenants and
agrees that so long as the Obligations are outstanding, it shall comply with
each of the following affirmative covenants:
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(a) Payment of Lease/Performance of Lease Obligations. Within five
(5) business days of Lessor's demand thereof, duly and punctually pay or cause
to be paid all Obligations in accordance with its terms.
(b) Payment of Taxes. Pay and discharge all taxes, assessments, and
governmental charges or levies imposed upon it, including, without limitation,
all current tax liabilities of all kinds, all required withholdings of income
taxes of employees, all required old age and unemployment contributions, and
all so-called provider taxes.
(c) Reporting Requirements. From time to time upon request, furnish
to Lessor such information regarding the business affairs, finances, and
conditions of the Guarantor and its respective properties in such detail as the
Lessor reasonably may request; will furnish to Lessor, as soon as available and
in any event furnish to Lessor such financial reports and statements as set
forth in the Lease Agreement.
(d) Payment of Indebtedness. Pay duly and punctually or cause to be
paid, all principal and interest of any indebtedness of Guarantor legally due
its creditors, comply with and perform all conditions terms and obligations of
the notes and other instruments evidencing such indebtedness and any mortgages,
deeds of trust, security agreements and other instruments evidencing security
for such indebtedness.
(e) Notice of Loss. Notify Lessor of any event causing a loss or
reduction in value of Guarantor's assets which has a material adverse effect on
Guarantor's net worth (as set forth in the Lease Agreement).
(f) Existence. Maintain its existence and, in each jurisdiction in
which its business or assets makes qualification necessary, its qualification
and good standing.
(g) Financial Covenants.
(a) Throughout the Term of the Lease, Guarantor shall maintain
the following:
(i) a ratio of consolidated current assets to consolidated
current liabilities equal to or greater than 1.0 to 1.0.;
(ii) a tangible net worth equal to or greater than $5,000,000,
unless otherwise approved (or waived) by Lessor, approval of which
shall not be unreasonably withheld (for purposes of this Section
3(g)(a)(ii), the line item identified as "Mandatorily Redeemable
Preferred B Stock" reflected on Guarantor's consolidated financial
statement shall be included in Guarantor's shareholder's equity).
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(iii) a Consolidated Cash Flow Coverage not less than 1.0 to
1.0.
"Consolidated Cash Flow Coverage" shall mean a ratio of (i) earnings
before interest, taxes, depreciation, amortization, rent and home office
expense minus an assumed five percent (5%) management fee to (ii) all interest
and rent payments.
(b) Comply with all other requirements and covenants to be
maintained and performed by Guarantor pursuant to the Lease.
4. Negative Covenant of the Guarantors. So long as any of the Lease
Obligations are outstanding, Guarantor shall not, without Lessor's prior
approval, which approval shall not be unreasonably be withheld:
(a) Changes in Accounting. Change its method of accounting to one
inconsistent with the method heretofore used by the Guarantor.
(b) Merger, Consolidation, Etc. Enter in any merger, consolidation
or similar transaction, or sell, assign, lease or otherwise dispose of (whether
in one transaction or in a series of transactions), all or substantially all of
its assets (whether now or hereafter acquired) such that, immediately after
giving effect to such merger, consolidation or sale, the survivor or purchaser
of the same has a consolidated net worth less than the consolidated net worth
of Guarantor immediately prior to such merger, consolidation or sale.
(c) Transfer of Stock. Permit the transfer of any of its capital
stock which would cause a change in control of Guarantor other than transfer in
connection with a registered public offering or transfer to family members or
transfer upon such shareholder's death.
5. Events of Default. Guarantor's violation of any covenant set forth
in paragraph 4 hereof, or Guarantor's failure to properly and timely perform or
observe any covenant or condition set forth in this Guaranty (other than that
in paragraph 4) which is not cured within any applicable cure period as set
forth herein or, if no cure period is specified therefor, is not cured within
thirty (30) days of Lessor's notice to Guarantor of such default, or the
falsity of any representation or warranty herein or in any financial statement,
certificate or other information heretofore or hereafter provided by Guarantor
to Lessor, shall constitute an "Event of Default" hereunder and under each of
the Lease Documents. The foregoing provision or any other provision requiring
or providing for notice or demand from Lessor is deemed eliminated if Lessor is
prevented from giving such notice or demand by bankruptcy or other applicable
law, and the Event of Default shall occur on the occurrence of such event or
condition if not cured within any applicable period measured from he occurrence
of such event or condition rather than from notice or demand.
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6. Subordination. Guarantor expressly subordinates its right to
payments of any indebtedness owing from Lessee to Guarantor, whether now
existing or arising at any time in the future (including, but not limited to,
rights to payment arising by virtue of any subrogation or indemnification upon
payment by Guarantor of amounts due from Lessee to Lessor), to the prior right
of Lessor to receive or require payment in full of the Obligations, until such
time as the Obligations are fully paid (and including accrued interest after
any petition under the Bankruptcy Code which post-petition interest Guarantor
agrees shall remain a claim that is prior and superior to any claim of
Guarantor notwithstanding any contrary practice, custom or ruling in
proceedings under the Bankruptcy Code generally) and such payments are final
and not subject to refund or rescission under bankruptcy or other applicable
law. Furthermore, upon the occurrence of an Event of Default under the Lease,
Guarantor agrees not to accept any payment or satisfaction of any kind of
indebtedness of Lessee to the Guarantor or any security for such indebtedness.
If Guarantor should receive any such payment, satisfaction or security for any
indebtedness of Lessee to the Guarantor, the Guarantor agrees to deliver the
same promptly to Lessor in the form received, endorsed, or assigned as may be
appropriate for application on account of, or as security for, the Obligations
and until so delivered, agrees to hold the same in trust for Lessor.
7. Successors and Assigns. This Guaranty shall be binding upon, and
inure to the benefit of, the parties hereto and their respective heirs, legal
representatives, successors, and assigns.
8. Severability. In the event that any provision hereof is deemed to
be invalid by reason of the operation of any law or by reason of the
interpretation placed thereon by any court, this Guaranty shall be construed as
not containing such provisions and the invalidity of such provisions shall not
affect other provisions hereof which are otherwise lawful and valid and which
shall remain in full force and effect.
9. Notices. Any notice or other communication required or permitted to
be given pursuant to this Guaranty or by applicable law shall be in writing and
shall be deemed received (a) on the date delivered, if delivered in person or
department specified below, (b) three (3) days after depositing the same in the
U.S. Mail, certified or registered, with return receipt requested, or (c) one
(1) day following the date deposited with Federal Express or other national
overnight carrier, and in each case addressed as follows:
If to Guarantor:
Balanced Care Corporation
0000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx, Esq.
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With a copy to:
Xxxxxxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx Xxxxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
If to the Lessor to:
Capstone Capital Corporation
0000 Xxxxx Xxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. XxXxxxx
With a copy to:
Xxxxxxx X. Xxxxx, Esq.
Johnston, Barton, Xxxxxxx & Xxxxxx
0000 XxXxxxx/Xxxxxxx Xxxxx
0000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000-0000
Any party may change its address to another single address by notice
given as herein provided, except that any change of address must be actually
received in order to be effective.
10. Waivers. The failure by the Lessor at any time or times hereafter
to require strict performance by the Guarantor of any of the provisions,
warranties, terms, and conditions contained herein or in any other agreement,
document, or instrument now or hereafter executed by Guarantor and delivered to
the Lessor shall not waive, affect, or diminish any right of the Lessor
hereafter to demand strict compliance or performance therewith and with respect
to any other provisions, warranties, terms, and conditions contained in such
agreements, documents, and instruments, and any waiver of any default shall not
waive or affect any other default, whether prior or subsequent thereto and
whether of the same or a different type. None of the warranties, conditions,
provisions, and terms contained in this Guaranty or in any agreement, document,
or instrument now or hereafter executed by Guarantor and delivered to the
Lessor shall be deemed to have been waived by any act or knowledge of the
Lessor, its agents, officers, or employees, but only by an instrument in
writing, signed by an officer of the Lessor, and directed to the Guarantor
specifying such waiver.
11. Expenses. If, at any time or times hereafter, the Lessor employs
counsel to advise or provide other representation with respect to this Guaranty
or any other agreement,
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document, or instrument heretofore, now, or hereafter executed by Guarantor and
delivered to the Lessor with respect to the Lessee or the Obligations, or to
commence, defend, or intervene, file a petition, complaint, answer, motion, or
any other pleading or take any other action in or with respect to any suit or
proceeding relating to this Guaranty or any other agreement, instrument, or
document heretofore, now, or hereafter executed by Guarantor and delivered to
the Lessor with respect to the Lessee or the Obligations, or to represent the
Lessor in any litigation with respect to the affairs of Guarantor or to enforce
any rights of the Lessor or obligations of Guarantor or any other person, firm,
or corporation that may be obligated to the Lessor by virtue of this Guaranty,
or any other agreement, document, or instrument heretofore or hereafter
delivered to the Lessor by or for the benefit of Guarantor with respect to the
Lessee or the Obligations, then in any such event, all of the reasonable
attorneys' fees actually incurred arising from such services, including fees in
any appellate or bankruptcy proceedings, and any other reasonable expenses,
costs,and charges relating to his Guaranty, the Lessee or the Obligations,
shall constitute additional obligation of the Guarantor payable on demand.
12. Singular and Plural. Singular terms shall include the plural
forms, and vice versa.
13. Entire Agreement; Counterparts. This Guaranty constitutes the
entire agreement and supersedes all prior agreements and understandings both
oral and written, between the parties with respect to the subject matter
hereof. This Agreement may be executed in counterparts which together shall
constitute one instrument. It shall not be necessary for all parties to sign
the same counterpart.
14. Applicable Law; Jurisdiction. THE VALIDITY, INTERPRETATION,
ENFORCEMENT, AND EFFECT OF THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED
ACCORDING TO THE LAWS OF THE STATE OF ALABAMA. THE LESSOR'S PRINCIPAL PLACE OF
BUSINESS IS LOCATED IN JEFFERSON COUNTY IN THE STATE OF ALABAMA, AND GUARANTOR
AGREES THAT THIS GUARANTY SHALL BE HELD BY LESSOR AT SUCH PRINCIPAL PLACE OF
BUSINESS, AND THE HOLDING OF THIS GUARANTY BY LESSOR THEREAT SHALL CONSTITUTE
SUFFICIENT MINIMUM CONTACTS OF GUARANTOR WITH JEFFERSON COUNTY AND THE STATE OF
ALABAMA FOR THE PURPOSE OF CONFERRING JURISDICTION UPON THE FEDERAL AND STATE
COURTS PRESIDING IN SUCH COUNTY AND STATE. THE GUARANTOR CONSENTS THAT ANY
LEGAL ACTION OR PROCEEDING ARISING HEREUNDER MAY BE BROUGHT IN THE CIRCUIT
COURT OF THE STATE OF ALABAMA, IN JEFFERSON COUNTY, ALABAMA OR THE UNITED
STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMA AND ASSENT AND
SUBMIT TO THE PERSONAL JURISDICTION OF ANY SUCH COURTS IN ANY SUCH ACTION OR
PROCEEDING. NOTHING HEREIN SHALL LIMIT THE JURISDICTION OF ANY OTHER COURT.
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15. Jury Trial Waiver. GUARANTOR HEREBY WAIVES ANY RIGHT TO TRIAL BY
JURY ON ANY CLAIM, COUNTERCLAIM, SETOFF, DEMAND, ACTION OR CAUSE OF ACTION (A)
ARISING OUT OF OR IN ANY WAY RELATED TO THIS GUARANTY OR THE LEASE, OR (B) IN
ANY WAY CONNECTED WITH OR PERTAINING OR RELATED TO OR INCIDENTAL TO ANY
DEALINGS OF LESSOR AND/OR LESSEE AND GUARANTOR WITH RESPECT TO THE LEASE OR IN
CONNECTION WITH THIS GUARANTY OR THE EXERCISE OF ANY PARTY'S RIGHTS AND
REMEDIES UNDER THIS GUARANTY OR OTHERWISE, OR THE CONDUCT OR THE RELATIONSHIP
OF THE PARTIES HERETO, IN ALL OF THE FOREGOING CASES WHETHER NOW EXISTING OR
HEREAFTER ARISING AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE,
GUARANTOR AGREES THAT LESSOR MAY FILE A COPY OF THIS GUARANTY WITH ANY COURT AS
WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY, AND BARGAINED AGREEMENT OF
GUARANTOR IRREVOCABLY TO WAIVE ITS RIGHTS TO TRIAL BY JURY AS AN INDUCEMENT OF
LESSOR TO MAKE THE LEASE, AND THAT, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
ANY DISPUTE OR CONTROVERSY WHATSOEVER (WHETHER OR NOT MODIFIED HEREIN) BETWEEN
GUARANTOR AND LESSOR SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT
JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
IN WITNESS WHEREOF, the Guarantor has executed this Guaranty as of the
day and year first above written.
BALANCED CARE CORPORATION
By:
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Its:
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SCHEDULE TO EXHIBIT 10.25 FILED PURSUANT TO INSTRUCTION 2 TO ITEM 601(a) OF
REGULATION S-K
GUARANTY OF PAYMENT AND PERFORMANCE
PROJECT LESSEE FACILITY DATE
------- ------ -------- ----
Bloomsburg, PA BCC at Bloomsburg, Inc. Bloomsburg Manor Personal Care and Retirement 1/31/97
Center
Blakely, PA BCC at Blakely, Inc. Xxxxxxx-Xxxx Health Care Center 1/31/97
Kingston I, PA BCC at Kingston I, Inc. Kingston Manor Personal Care and Retirement 1/31/97
Center
Kingston II, PA BCC at Kingston II, Inc. Kingston Health Care Center 1/31/97
Mid-Valley, PA BCC at Mid-Valley, Inc. Mid-Valley Manor Personal Care and Retirement 1/31/97
Center
Old Forge, PA BCC at Old Forge, Inc. Old Forge Manor Personal Care and Retirement 1/31/97
Center
West View, PA BCC at West View, Inc. West Side Manor Personal Care and Retirement 1/31/97
Center
Harrisburg, PA BCC at Harrisburg, Inc. Outlook Pointe at Harrisburg 3/28/97
Greensboro, NC BCC at Greensboro, Inc Outlook Pointe at Greensboro 3/28/97
Ravenna, OH BCC at Ravenna, Inc. Outlook Pointe at Ravenna 3/28/97
Nevada, MO (2 BCC at Missouri, Inc. Xxx Xxxxx Residential Care Home 5/15/97
Leases) 0000 X. Xxxxxxx Xxxxxx
Xxxxxx, XX
Xxxxxx, MO BCC at Missouri, Inc. Xxx Xxxxx Residential Care Home 5/15/97
000 X. Xxxxxxxx Xxxxxx
Xxxxxx, XX
Lamar, MO BCC at Lamar, Inc. Xxx Xxxxx Residential Care Home 8/18/97
0 Xxxxxxxxx Xxxxx Xxxx
Xxxxx, XX
