EXHIBIT 10.9
MEZZANINE GUARANTY AND SURETYSHIP AGREEMENT
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THIS MEZZANINE GUARANTY AND SURETYSHIP AGREEMENT (as modified and
supplemented and in effect from time to time, this "Mezzanine Guaranty") is
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executed and delivered as of this ____ day of March, 1998 by BROOKDALE LIVING
COMMUNITIES OF ILLINOIS-HV, INC., a Delaware corporation having an address of
c/o Brookdale Living Communities, Inc. at 00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxxx, Xx., Telefax Number
(000) 000-0000 (the "Guarantor"), in favor of NOMURA ASSET CAPITAL CORPORATION,
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a Delaware corporation, with offices at 2 World Xxxxxxxxx Xxxxxx, Xxxxxxxx X,
Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Xxxxxxx X. Xxxxxxx, Telefax Number
(000) 000-0000 (together with its successors and assigns, "Mezzanine Lender"),
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to secure certain obligations of THE HARBOR VILLAGE BUSINESS TRUST, a Delaware
business trust, with offices at c/o Wilmington Trust Company, as Trustee, Xxxxxx
Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000,
Attention: Corporate Trust Administration, Telefax Number (000) 000-0000 (the
"Borrower").
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BACKGROUND
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A. Mezzanine Lender is lending to Borrower One Million Seven Hundred
Fifty Thousand Dollars ($1,750,000) (such amount, the "Mezzanine Loan"). The
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Mezzanine Loan is evidenced by a Mezzanine Loan Agreement by and among Mezzanine
Lender, Borrower, and Guarantor, dated as of the date hereof (as modified and
supplemented and in effect from time to time, the "Mezzanine Loan Agreement"), a
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Mezzanine Promissory Note (the "Mezzanine Note") of even date herewith, and
certain other collateral documents, all dated of even date herewith. Capitalized
terms when used herein without definition shall have the same meaning as defined
in the Mezzanine Loan Agreement.
B. Borrower and Guarantor are entering into a certain operator lease
dated the date herewith (the "Operator Lease"), pursuant to which Guarantor
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shall lease, manage and operate the Property.
C. In order to induce Mezzanine Lender to make the Mezzanine Loan,
the Guarantor has agreed to execute and deliver this Mezzanine Guaranty to
Mezzanine Lender. As security for the performance of its obligations under this
Mezzanine Guaranty and under the Mezzanine Loan Agreement, the Guarantor has
executed that certain Mezzanine Leasehold Mortgage, Assignment of Rents,
Security Agreement and Fixture Filing of even date herewith (as modified and
supplemented and in effect from time to time, the "Mezzanine Leasehold
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Mortgage"), pursuant to which the Guarantor has pledged to Mezzanine Lender the
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Collateral (as defined in the Mezzanine Leasehold Mortgage), that certain
Mezzanine Assignment of Leases and Rents of even date herewith (as modified and
supplemented and in effect from time to time, the "Mezzanine Assignment of
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Leases") pursuant to which the Guarantor has pledged to Mezzanine Lender the
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Leases and Rents (as defined in the Mezzanine Assignment of Leases). and that
certain Mezzanine Assignment of Agreements Affecting Real Estate of even date
herewith (as modified and supplemented and in effect from time to time, the
"Mezzanine Assignment") pursuant to which the Guarantor has pledged to Mezzanine
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Lender the Additional Collateral (as defined in the Mezzanine Assignment).
AGREEMENTS
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In consideration of the premises recited above, and intending to be
legally bound hereby, the Guarantor, hereby agrees:
1. Obligations. The following guarantees and obligations (together,
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the "Obligations") are undertaken by Guarantor:
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(a) Guarantor hereby unconditionally, absolutely and irrevocably
guarantees and becomes surety to Mezzanine Lender for the prompt payment of the
entire amount of the Indebtedness in strict accordance with the terms of the
Mezzanine Loan Agreement. The obligations of Guarantor constitute a guarantee of
payment and not merely of collection, are absolute and unconditional under all
circumstances and shall not in any event be discharged, impaired, or otherwise
affected except by payment to Mezzanine Lender. Guarantor agrees that it will
upon notice from Mezzanine Lender that any Event of Default has occurred under
the Mezzanine Note or under any Mezzanine Loan Document, pay directly to
Mezzanine Lender all of the then outstanding Indebtedness. Guarantor further
agrees that any payment required hereunder will be made to Mezzanine Lender
regardless of whether such sums have become due by reason of the maturity of the
Mezzanine Note, acceleration of the Indebtedness or otherwise. The proceeds of
any amounts paid pursuant to this Mezzanine Guaranty will be applied in such
order and in such manner as Mezzanine Lender may elect in its sole discretion.
(b) Mezzanine Lender shall have the right to require Guarantor
to pay, comply with and satisfy its obligations and liabilities under this
Mezzanine Guaranty and shall have the right to proceed immediately against
Guarantor with respect thereto, without being required to bring any proceeding
or take any action of any kind against Borrower or any other guarantor or any
other person, entity or property prior thereto, the liability of Guarantor
hereunder being independent of and separate from the liability of Borrower, any
other guarantors and persons and the availability of other collateral security
for the Mezzanine Note and the Mezzanine Loan Documents.
2. Cancellation. This Mezzanine Guaranty and all obligations and
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liabilities of Guarantor hereunder will be cancelled when the Indebtedness has
been paid in full; provided, however, that this Mezzanine Guaranty shall be
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reinstated and remain in full force and effect for so long as such payment may
be voided or rescinded in bankruptcy proceedings as a preference
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or for any other reason.
3. Costs and Fees. Guarantor hereby agrees that if it does not
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satisfy its obligations under this Mezzanine Guaranty in accordance with the
terms hereof, the same shall be considered an Event of Default hereunder and
Mezzanine Lender shall have the right, in addition to the other rights described
in this Mezzanine Guaranty, to collect from Guarantor all costs, fees and
expenses (including reasonable attorneys' fees) incurred by Mezzanine Lender in
connection with the enforcement of this Mezzanine Guaranty against Guarantor, as
well as interest thereon at the Default Rate set forth in the Note, from and
after the date any Event of Default occurs and is continuing through the date of
payment.
4. Bankruptcy of Borrower or Guarantor. The obligations of
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Guarantor under this Mezzanine Guaranty shall not be discharged, impaired or
otherwise affected by the insolvency, bankruptcy, liquidation, readjustment,
composition, dissolution or other similar proceeding involving or affecting
Borrower or Guarantor, proceedings affecting the ownership of any of the above
through merger, consolidation or otherwise, inconsistent orders in or claims by
parties to any such proceedings or other release of obligations by operation of
law.
5. Agreements and Waivers. Guarantor hereby:
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(a) agrees that its obligations hereunder shall not be released
or otherwise affected by any agreement, amendment, release, suspension,
compromise, forbearance, indulgence, waiver, extension, renewal, supplement or
modification of any of the Mezzanine Loan Documents, or any other obligations of
Borrower to Mezzanine Lender, provided, however, the Mezzanine Loan Documents
may only be amended in accordance with the terms of the Mezzanine Loan
Agreement;
(b) consents that Mezzanine Lender may, without affecting the
liability of Guarantor under this Mezzanine Guaranty, (i) exchange, release or
surrender any property pledged by or on behalf of Borrower or any other
guarantor of any liabilities of Borrower to Mezzanine Lender, (ii) renew or
change, with and subject to the consent of Borrower and Operator, the terms of
any of Borrower's liabilities to Mezzanine Lender, or (iii) waive any of
Mezzanine Lender's rights or remedies against Borrower or any other guarantor of
any obligations of Borrower;
(c) Intentionally omitted;
(d) agrees that its liability under this Mezzanine Guaranty
shall be in addition to that stated in any other guaranty that may be hereafter
given by the undersigned and shall not be reduced or affected by any payment
made under any such guaranty;
(e) agrees that any failure or delay by Mezzanine Lender to
exercise any right under this Mezzanine Guaranty or under any other guaranty or
with respect to any of the Mezzanine Loan Documents or otherwise with respect to
the Indebtedness shall not be construed as a waiver of the right to exercise the
same or any other right hereunder at any time
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and from time to time thereafter;
(f) Intentionally deleted;
(g) agrees that Mezzanine Lender shall have, as security for the
undertakings under this Mezzanine Guaranty, a lien upon, a security interest in
and right of set-off against the Collateral (as defined in the Mezzanine
Leasehold Mortgage), the Mortgaged Property (as defined in the Mezzanine
Leasehold Mortgage) and the Additional Collateral (as defined in the Mezzanine
Assignment) which lien is subject to the lien granted under the First Mortgage
Loan;
(h) agrees that Mezzanine Lender shall not, under any
circumstances, be required to exhaust remedies or proceed against Borrower,
other sureties, parties, or any other security for the Indebtedness before
proceeding under this Mezzanine Guaranty against the Guarantor;
(i) agrees that under no circumstances (other than payment in
full of the Mezzanine Loan) shall it become subrogated to the claims or liens of
Mezzanine Lender against Borrower or any other guarantor and that all amounts
due to Mezzanine Lender under the Mezzanine Loan Documents shall have priority
over any amounts, whether or not related to the Mezzanine Loan Documents,
payable now or hereafter from Borrower to Guarantor;
(j) agrees that the obligations undertaken in this Mezzanine
Guaranty shall not be affected by the lack of validity or enforceability of any
Mezzanine Loan Document, any change in the time, manner or place of payment or
in any other term in respect of any of the Indebtedness or any other amendment
or waiver or a consent to or any departure from the Mezzanine Loan Documents,
provided, however, any amendments to the Mezzanine Loan Documents shall be done
in accordance with the Mezzanine Loan Agreement;
(k) agrees it will neither take or cause to be taken any action,
or permit any inaction, which will violate or cause a default under any of the
Mezzanine Loan Documents;
(l) waives the right to marshalling of Borrower's assets or any
stay of execution and the benefit of all exemption laws, to the extent permitted
by law, other protection granted by law to guarantors, now or hereafter in
effect with respect to any action or proceeding brought by Mezzanine Lender
against it;
(m) agrees that no single exercise of the power to bring any
action or institute any proceeding shall be deemed to exhaust such power, but
such power shall continue undiminished and may be exercised from time to time as
often as Mezzanine Lender may elect until all of Guarantor's liabilities and
obligations hereunder have been satisfied;
(n) agrees that its liability under this Mezzanine Guaranty
shall in no way be released or otherwise affected by the commencement, existence
or completion of any proceeding against Borrower, any other guarantors or any
other person or entity or otherwise
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with respect to the collection of the Indebtedness; and Mezzanine Lender shall
be under no obligation to take any action and shall not be liable for any action
taken or any failure to take action or any delay in taking action against
Guarantor, Borrower or any other person or entity or otherwise with respect to
the Indebtedness;
(o) waives, to the maximum extent permitted by applicable law,
any notice of (i) Mezzanine Lender's intention to act in reliance of this
Mezzanine Guaranty, (ii) any presentment, demand, protest or notice of dishonor,
nonpayment or other default with respect to the Indebtedness other than as
required under the Mezzanine Loan Documents, if any, and (iii) the commencement
or prosecution of any enforcement proceeding against Borrower or any other
guarantor or any other person or entity with respect to the Indebtedness or
otherwise;
(p) represents and acknowledges that the indebtedness evidenced
by the Mezzanine Note is and will be of direct benefit, interest and advantage
to it; and
(q) irrevocably waives all claims of waiver, release, surrender,
alteration or compromise and all defenses, set-offs, counterclaims, recoupments,
reductions, limitations or impairments and any other available defense at law or
in equity.
6. Intentionally Omitted.
7. Governing Law. (a) This Mezzanine Guaranty was negotiated in
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New York, and made by Guarantor and accepted by Mezzanine Lender in the State of
New York, which State the parties agree has a substantial relationship to the
parties and to the underlying transaction embodied hereby, and in all respects,
including, without limitation, matters of construction, validity and
performance, this Mezzanine Guaranty and the obligations arising hereunder shall
be governed by, and construed in accordance with, the laws of the State of New
York applicable to contracts made and performed in such State and any applicable
law of the United States of America. To the fullest extent permitted by law,
Guarantor hereby unconditionally and irrevocably waives any claim to assert that
the law of any other jurisdiction governs this Mezzanine Guaranty, and this
Mezzanine Guaranty shall be governed by and construed in accordance with the
laws of the State of New York pursuant to (S) 5-1401 of the New York General
Obligations Law.
(b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST GUARANTOR ARISING
OUT OF OR RELATING TO THIS MEZZANINE GUARANTY SHALL BE INSTITUTED IN ANY FEDERAL
OR STATE COURT IN NEW YORK, NEW YORK, PURSUANT TO (S) 5-1402 OF THE NEW YORK
GENERAL OBLIGATIONS LAW AND GUARANTOR WAIVES ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING,
AND GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT
IN ANY SUIT, ACTION OR PROCEEDING. GUARANTOR DOES HEREBY DESIGNATE AND APPOINT
CT CORPORATION SYSTEMS, 0000 XXXXXXXX, XXX XXXX, XXX XXXX 00000, AS ITS
AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL
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PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY
FEDERAL OR STATE COURT AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT
SAID ADDRESS (OR AT SUCH OTHER OFFICE AS MAY BE DESIGNATED BY GUARANTOR FROM
TIME TO TIME IN ACCORDANCE WITH THE TERMS HEREOF) WITH A COPY TO GUARANTOR AT
ITS PRINCIPAL EXECUTIVE OFFICES, ATTENTION: GENERAL COUNSEL AND WRITTEN NOTICE
OF SAID SERVICE OF GUARANTOR MAILED OR DELIVERED TO GUARANTOR IN THE MANNER
PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS
UPON GUARANTOR, IN ANY SUCH SUIT, ACTION OR PROCEEDING. GUARANTOR (I) SHALL GIVE
PROMPT NOTICE TO Mezzanine Lender OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT
HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE
AUTHORIZED AGENT (WHICH OFFICE SHALL BE DESIGNATED AS THE ADDRESS FOR SERVICE OF
PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED
AGENT CEASES TO HAVE AN OFFICE OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.
8. Modification, Waiver in Writing. No modification, amendment,
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extension, discharge, termination or waiver of any provision of this Mezzanine
Guaranty , or consent to any departure by the Guarantor therefrom, shall in any
event be effective unless the same shall be in a writing signed by Guarantor and
Mezzanine Lender, and then such waiver or consent shall be effective only in the
specific instance, and for the purpose, for which given. Except as otherwise
expressly provided herein, no notice to or demand on the Guarantor shall entitle
the Guarantor to any other or future notice or demand in the same, similar or
other circumstances.
9. Delay Not a Waiver. Neither any failure nor any delay on the
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part of Mezzanine Lender in insisting upon strict performance of any term,
condition, covenant or agreement, or exercising any right, power, remedy or
privilege hereunder, or any other instrument given as security therefor, shall
operate as or constitute a waiver thereof, nor shall a single or partial
exercise thereof preclude any other future exercise, or the exercise of any
other right, power, remedy or privilege.
10. Notices. All notices, requests, demands, directions and other
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communications which may or are required to be given, served or sent by the
Guarantor or the Mezzanine Lender to the other shall be given, served or sent as
provided in the Mezzanine Loan Agreement and shall be effective in accordance
with the terms of the Mezzanine Loan Agreement provided that notices to
Guarantor shall be sent to the address set forth for the Guarantor in the first
paragraph of this Mezzanine Guaranty with copies delivered concurrently to each
of the following: Brookdale Living Communities of Illinois-HV, Inc., 00 Xxxx
Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxxx, Xx.,
Telefax Number (000) 000-0000; Brookdale Living Communities of Illinois-HV,
Inc., 00 Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X.
Xxxxxx, Esquire, Telefax Number (000) 000-0000; and Xxxxx, Xxxxxx, XxxXxx &
Xxxxxxxxxx, 000 Xxxxx Xxxxxx Xxxxxx, 00xx Xxxxx, XXX Xxxxx, Xxxxxxx, Xxxxxxxx
00000-0000, Attention: Xxxxxxx X. Xxxxxxx, Esq.
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11. TRIAL BY JURY. THE GUARANTOR AND MEZZANINE LENDER, TO THE
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FULLEST EXTENT THAT THEY MAY LAWFULLY DO SO, HEREBY WAIVE TRIAL BY JURY IN ANY
ACTION OR PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY TORT ACTION, BROUGHT BY
ANY PARTY HERETO WITH RESPECT TO THIS MEZZANINE GUARANTY.
12. Headings. The Section headings in this Mezzanine Guaranty are
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included herein for convenience of reference only and shall not constitute a
part of this Mezzanine Guaranty for any other purpose.
13. Mezzanine Assignment. Mezzanine Lender shall have the right to
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assign in whole or in part this Mezzanine Guaranty and the obligations hereunder
to any Person, including, without limitation, to a trustee or servicer before or
after a Securitization.
14. Severability. Wherever possible, each provision of this
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Mezzanine Guaranty shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Mezzanine Guaranty
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Mezzanine Guaranty.
15. Waiver of Counterclaim. Guarantor hereby waives the right to
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assert a counterclaim, other than compulsory counterclaim, in any action or
proceeding brought against it by Mezzanine Lender or its agents.
16. Exculpation. This Mezzanine Guaranty is and shall be subject to
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the exculpation provisions of Section 8.14 of the Mezzanine Loan Agreement.
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[Signatures on the following page]
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IN WITNESS WHEREOF, Guarantor has executed and delivered this
Mezzanine Guaranty the date first written above.
BROOKDALE LIVING COMMUNITIES OF
ILLINOIS-HV, INC., a Delaware corporation
By: ________________________________
Name:
Title:
