OPERATING DEFICIT GUARANTY AGREEMENT
Exhibit
10.81
THIS
OPERATING DEFICIT GUARANTY AGREEMENT
(this
“Guaranty”)
is made
as of ____________ ___, 2005, by AMERICAN RETIREMENT CORPORATION, a Tennessee
corporation (“Guarantor”),
for
the benefit of GMAC COMMERCIAL MORTGAGE BANK, a Utah industrial corporation
(including its successors, transferees and assigns, “Lender”).
RECITALS:
A. DENVER
XXXXX XX, LLC, a Delaware limited liability company (“Borrower”),
by its
promissory note of even date herewith given to Lender (the note together
with
all extensions, renewals, modifications, consolidations, substitutions,
replacements, restatements and increases thereof shall collectively be
referred
to as the “Note”)
and
that certain Loan Agreement by and between Lender and Borrower of even
date
herewith (the “Loan
Agreement”)
is
indebted to Lender in the maximum principal sum of Twenty-Five Million
Four
Hundred Eighty Thousand and No/100 Dollars ($25,480,00.00) in lawful money
of
the United States of America, with interest from the date thereof at the
rates
set forth in the Note (the indebtedness evidenced by the Note, together
with
such interest accrued thereon, shall collectively be referred to as the
“Loan”),
principal and interest to be payable in accordance with the terms and conditions
provided in the Note.
B. The
Loan
is secured by, among other things, a Deed of Trust, Assignment of Rents
and
Security Agreement (the “Security
Instrument”),
dated
as of the date hereof which grants Lender a first lien on the property
encumbered thereby (the “Property”).
All
and any of the documents other than the Note, the Security Instrument and
this
Assignment now or hereafter executed by Borrower and/or others and by or
in
favor of Lender, which wholly or partially secure or guarantee payment
of the
Note are referred to as the “Other
Security Documents.”
C. Lender
is
willing to make the Loan only if Guarantor agrees to guaranty to Lender
the
advancement of funds by Guarantor to Borrower in an amount sufficient to
enable
Borrower to fund any monthly Operating Deficit (as defined below) related
to the
operation of the Property upon the terms and conditions set forth in this
Guaranty.
AGREEMENT:
NOW
THEREFORE, in consideration of the above and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
and
as an inducement to Lender to make the Loan, Guarantor, intending to be
legally
bound, hereby covenants, agrees, represents and warrants as
follows:
1. Definitions.
The
following defined terms have the meaning ascribed to them:
(a) “Actual
Gross Income”
means,
with respect to any calendar month, the actual monthly gross rental income
derived from leases of space in the Property plus any other items of income
attributable to and received from the operation of the Property;
(b) “Approved
Expenses”
means,
with respect to any calendar month, the actual expenses of operation of
the
Property (as approved by Lender in its sole and absolute discretion) in
such
calendar month, excluding any payments for (i) services rendered with respect
to
the Property by Borrower or any affiliate of Borrower which were not included
by
Lender in underwriting the Loan, and (ii) nonrecurring extraordinary expenses,
unless Lender has consented to include any such payment as an “Approved
Expense;”
(c) “Debt
Service”
means,
with respect to any calendar month, all regularly scheduled monthly payments
of
interest and/or principal due under the Note in such calendar month (but
specifically excluding payment of the balance of principal and unpaid interest
at maturity, whether by acceleration or otherwise), plus all deposits required
to be made under the Note, the Security Instrument, or the Other Security
Documents to be held in escrow for taxes and insurance, for replacement
reserves
or any other reserves required to be made under the Note, the Security
Instrument, or the Other Security Documents in such month; and
(d) “Operating
Deficit”
means,
with respect to any calendar month, the dollar amount by which the sum
of (i)
Approved Expenses and (ii) Debt Service for the calendar month exceeds
the
Actual Gross Income for the same month, as set forth in the monthly statements
required by the Security Instrument to be provided to Lender and such other
confirmatory records as Lender may request for review, and as adjusted
by
Lender, in its sole discretion.
2. Guaranty.
Guarantor hereby absolutely and unconditionally guarantees to Lender the
prompt
and punctual payment to Borrower, or to such other Person as may be designated
by Lender in writing, which may include Lender or any assignee of Lender,
an
amount equal to the Operating Deficit for the immediately preceding month,
such
amount to be applied toward the payment of such items of Approved Expenses
or
Debt Service as may be directed by Lender in writing (the “Guaranteed
Obligations”)
within
seven (7) days of Lender’s demand therefor. In addition, Guarantor guarantees
the full payment of, and agrees to reimburse Lender for, all costs of collection
incurred by Lender in enforcing the Guaranteed Obligations and pursuing
any
remedies set forth in this Guaranty, including, without limitation, court
costs
and actual attorneys’ fees (including, but not limited to, fees in any
bankruptcy or appellate proceeding).
3. Payments.
All
payments to be made by Guarantor to Lender hereunder shall be made in lawful
money of the United States of America, in immediately available funds,
at 000
Xxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000, or such other location
designated by Lender in writing, and shall be accompanied by a notice from
Guarantor stating that such payments are made under this Guaranty. All
payments
available to Lender for application in payment or reduction of the Guaranteed
Obligations may be applied by Lender in such manner and in such amount,
and at
such time or times and in such order and priority as Lender may see fit
and to
the payment or reduction of such portion of the Guaranteed Obligations
as Lender
may elect.
4. Subsequent
Acts by Lender.
Lender
may, in its sole discretion and without notice to Guarantor, take any action
which might otherwise be deemed a legal or equitable release or discharge
of
Guarantor’s obligations hereunder without either impairing or affecting the
liability of Guarantor for payment of the Guaranteed Obligations, which
actions
might include, by way of illustration and not limitation:
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(a) at
any
time or from time to time, the time for Borrower’s performance of or compliance
with any provision of the Note, the Security Instrument, or the Other Security
Documents may be extended or such performance or compliance may be waived
by
Lender;
(b) the
acceptance of partial payment of the Guaranteed Obligations;
(c) any
of the
acts permitted in the Note, the Security Instrument, or the Other Security
Documents may be performed;
(d) the
Note,
the Security Instrument, or the Other Security Documents may from time
to time
be amended and/or renewed by Borrower and Lender for the purpose of adding
any
provisions thereto or changing in any manner the rights of Lender or of
Borrower
thereunder;
(e) the
maturity date of the Note may be changed, extended or renewed in whole
or in
part;
(f) the
maturity of the Note may be accelerated in accordance with the terms of
the
Note, the Security Instrument, or the Other Security Documents or any future
agreement between Borrower and Lender or the holder of such Note;
(g) any
collateral security for all or any part of the Guaranteed Obligations may
be
exchanged, released, compromised, consolidated, surrendered or otherwise
dealt
with, and Lender’s interest therein may be released and may or may not be
perfected;
(h) the
settlement, release, compounding, compromise, cancellation, rearrangement
or
consolidation of any of the Guaranteed Obligations;
(i) the
collection of or other liquidation of any claims Lender may have in respect
to
the Guaranteed Obligations;
(j) the
granting of indulgences, forbearance, compromises, extensions or adjustments
in
respect to any covenant or agreement under the Note, the Security Instrument,
or
the Other Security Documents; and/or
(k) the
release from liability of any Guarantor and/or any additional parties who
may
guarantee payment of the Guaranteed Obligations or any portion
thereof.
5. Certain
Rights, Subordination, Etc.
(a) Lender
may
pursue its rights and remedies under this Guaranty and shall be entitled
to
payment hereunder notwithstanding any other guaranty of all or any part
of the
Guaranteed Obligations, and notwithstanding any action taken by Lender
to
enforce any of its rights or remedies under such other guaranty, or any
payment
received thereunder (but in no event shall Lender collect more than the
aggregate amount of the Guaranteed Obligations).
(b) Any
obligation or debt of Borrower now or hereafter held by Guarantor is hereby
subordinated to the Guaranteed Obligations. Following the occurrence of
an Event
of Default (as defined below), Guarantor shall not enforce or collect any
such
indebtedness from Borrower. Nevertheless, upon request by Lender, Guarantor
shall collect, enforce and receive such indebtedness of Borrower to Guarantor.
Any sums collected at Lender’s request or collected in contravention of the
prohibition set forth herein shall be held by Guarantor as trustee for
Lender
and shall be paid over to Lender on account of the Guaranteed Obligations;
provided, however, that such payments shall not impair, reduce or affect
in any
manner the liability of Guarantor under the other provisions of this
Guaranty.
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(c) Guarantor
agrees that if any event of default exists under the Note, the Security
Instrument, or the Other Security Documents (“Event
of Default”),
(i)
such Guarantor shall not accept payment from any other guarantor of any
Guaranteed Obligations by way of contribution or similar rights on account
of
any payment made hereunder by Guarantor to Lender, all of which rights
are
hereby subordinated to Guarantor’s obligations hereunder to Lender, (ii)
Guarantor will not take any action to exercise or enforce any rights to
such
contribution, and (iii) if Guarantor should receive payment, satisfaction
or
security for any indebtedness of Borrower to Lender, the same shall be
delivered
to Lender in the form received, endorsed or signed as may be appropriate
for
application on account of or as security for the indebtedness of Borrower
to
Lender and, until so delivered, shall be held in trust for Lender as security
for the indebtedness of Borrower to Lender.
(d) Upon
the
occurrence of an Event of Default with respect to the Guaranteed Obligations,
Guarantor agrees to pay or perform on demand such Guaranteed Obligations
within
five (5) days of Lender’s demand therefor. Lender shall not be under a duty to
protect, secure or insure or be required to liquidate any security or lien
provided by the Security Instrument or other such collateral held by Lender
prior to making such demand.
(e) Notwithstanding
any payment or payments made by Guarantor under this Guaranty, Guarantor
expressly, irrevocably and unconditionally waives and releases any and
all
“claims” (as that term is defined in the Bankruptcy Reform Act of 1978, as
amended, 11 U.S.C. Sections 101 et seq.,
and the
regulations adopted and promulgated pursuant thereto (collectively, the
“Bankruptcy Code”)) it may now or hereafter have against Borrower, and shall not
be entitled to, and hereby expressly waives, any and all rights of subrogation,
reimbursement, indemnity, exoneration and contribution against Borrower,
which
Guarantor may now or hereafter have against Borrower without regard to
whether
any such right or claim arises expressly; provided, that such waiver and
release
shall not be effective as to any such claim or entitlement or such subrogation
and other rights that accrue after the indefeasible payment, performance
or
other satisfaction in full of the Guaranteed Obligations.
6. Representations
and Warranties.
Guarantor represents and warrants to Lender that:
(a) Existence,
Power and Qualification.
Guarantor is a duly organized and validly existing corporation, has the
power to
own its properties and to carry on its business as is now being conducted,
and
is duly qualified to do business and is in good standing in every jurisdiction
in which the character of the properties owned by it or in which the transaction
of its business makes such qualification and
good
standing necessary, except where failure to so qualify or be in good standing
would not adversely affect Guarantor’s ability to perform its obligations
hereunder.
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(b) Power
and Authority.
Guarantor has full power and authority to execute and deliver this Guaranty
and
perform its obligations hereunder, all of which have been authorized by
all
proper and necessary action.
(c) Financial
Condition.
The
financial statements of Guarantor heretofore furnished to Lender are complete
and correct and fairly present the financial condition of Guarantor as
of the
date thereof. Since the date of said financial statements there has been
no
material adverse change in the financial position or operations, or the
business
taken as a whole, of Guarantor from that set forth therein.
(d) Litigation.
There
are no legal or arbitral proceedings or any proceedings by or before any
governmental or regulatory authority or agency now pending or, to the best
of
Guarantor’s knowledge, threatened against Guarantor, in which an adverse
decision could materially and adversely affect the ability of Guarantor
to
perform its obligations hereunder.
(e) No
Breach.
The
execution and delivery of this Guaranty, the consummation of the transactions
herein contemplated and compliance with the terms and provisions hereof
will not
(i) conflict with or result in a breach of, or require any consent (not
heretofore obtained at the time this representation is made) under, any
applicable law, administrative proceeding or regulation, or any order,
writ,
injunction or decree of any court or governmental authority or agency,
or any
agreement or instrument to which Guarantor is a party or by which Guarantor
is
bound or to which Guarantor is subject, (ii) constitute a default under
any such
agreement or instrument or under Guarantor’s organizational documents, or,
except for any conflict or default which would not materially affect Guarantor’s
ability to perform its obligations hereunder, any other agreement or instrument
binding upon Guarantor, or (iii) result in the creation or imposition of
any
lien upon any of the revenues or assets of Guarantor pursuant to the terms
of
any such agreement or instrument.
(f) Approvals.
To the
best of Guarantor’s knowledge, no authorizations, approvals, or consents of
(other than those heretofore obtained and in full force and effect), and
no
filings or registrations with (other than those heretofore obtained and
in full
force and effect), any governmental or regulatory authority or agency are
necessary for the execution, delivery or performance by Guarantor of this
Guaranty or for the validity or enforceability thereof.
(g) Taxes,
etc.
Guarantor has filed all United States federal and state tax returns and
all
other tax returns that are required to be filed by Guarantor and has paid
all
taxes due pursuant to such returns or pursuant to any assessment received
by
Guarantor, except such taxes, the payment of which is not yet due, or which
if
due, is not yet delinquent or is being contested in good faith or which
has not
been finally determined.
(h) Benefit.
The
making of the Loan by Lender to Borrower will directly benefit
Guarantor.
7. Guaranty
is a Continuing Obligation.
The
obligations of Guarantor under this Guaranty shall be continuing, absolute,
irrevocable and unconditional under all circumstances, and shall remain
in full
force and effect or be reinstated, until all of the Guaranteed
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Obligations
shall have been paid and performed in full, irrespective of the bankruptcy,
insolvency, merger, reorganization, termination, discontinuation or dissolution
of Borrower or any assignment for the benefit of creditors by Borrower.
Guarantor acknowledges and agrees that Guarantor’s obligations hereunder shall
apply to and continue with respect to any of the obligations of Borrower
under
the Note, the Security Instrument, or the Other Security Documents which
are
subsequently recovered from Lender for the reasons set forth below. In
the event
that any payment by or on the behalf of Borrower to Lender is held to constitute
a preference, fraudulent transfer or other voidable payment under any
bankruptcy, insolvency or similar law, or if for any other reason Lender
is
required to refund such payment or pay the amount thereof to any other
party,
including, without limitation, as a result of the appointment of a receiver,
intervenor, or conservator of, or trustee or similar officer for, Borrower
or of
any substantial part of its property or otherwise, such payment by Borrower
or
any other party to Lender shall not constitute a release of Guarantor from
any
liability hereunder, and this Guaranty shall continue to be effective or
shall
be reinstated (notwithstanding any prior release, surrender or discharge
by
Lender of this Guaranty or of Guarantor), as the case may be, with respect
to,
and this Guaranty shall apply to, any and all amounts so refunded by Lender
or
paid by Lender to another party (which amounts shall constitute part of
the
Guaranteed Obligations), and any interest paid by Lender and any attorneys’
fees, costs and expenses paid or incurred by Lender in connection with
any such
event. It is the intent of Guarantor and Lender that the obligations and
liabilities of Guarantor hereunder are absolute and unconditional under
any and
all circumstances and that until the Guaranteed Obligations are fully and
finally paid and performed, and not subject to refund or disgorgement,
the
obligations and liabilities of Guarantor hereunder shall not be discharged
or
released, in whole or in part, by any act or occurrence that might, but
for the
provisions of this Guaranty, be deemed a legal or equitable discharge or
release
of a guarantor. Lender shall be entitled to continue to hold this Guaranty
in
its possession for a period of one year from the later of (a) the date
the
Guaranteed Obligations are paid and performed in full, or (b) if not paid
in
accordance with the Guaranteed Obligations, the expiration or termination
of the
Loan, and for so long thereafter as may be necessary to enforce any obligation
of Guarantor hereunder and/or to exercise any right or remedy of Lender
hereunder.
8. Waiver
and Release of Subrogation and Participation.
Until
the Guaranty Obligations have been satisfied, (a) Guarantor shall have
no right
of subrogation in or under the Guaranteed Obligations, and no rights of
reimbursement, indemnity or contribution from Borrower or any other rights
by
law, equity, statute or contract that would give rise to a creditor-debtor
relationship between Guarantor and Borrower, (b) Guarantor shall have no
right
to participate in any way in any of the collateral which is conveyed under
the
Note, the Security Instrument, or the Other Security Documents as security
for
the Guaranteed Obligations, and (c) Guarantor hereby explicitly waives
and
releases any of the above-described rights of subrogation, reimbursement,
indemnity, contribution, participation, and any right to require the marshalling
of Borrower’s assets under any circumstances.
9. Continuing
Validity.
Guarantor further agrees that the validity of this Guaranty and the obligations
of Guarantor hereunder shall in no way be terminated, affected or impaired
(a)
by reason of the assertion by Lender of any rights or remedies which it
may have
under or with respect to either the Note, the Security Instrument, or the
Other
Security Documents, against any person obligated thereunder or against
the owner
of the premises covered by the Security Instrument, (b) by reason of any
failure
to file or record
6
any
of
such instruments or to take or perfect any security intended to be provided
thereby, (c) by reason of the commencement of a case under the Bankruptcy
Code
by or against any person obligated under the Note, the Security Instrument
or
the Other Security Documents, or the death of any Guarantor, or (d) by
reason of
any payment made on the Guaranteed Obligations or any other indebtedness
arising
under the Note, the Security Instrument or the Other Security Documents,
whether
made by Borrower or Guarantor or any other person, which is required to
be
refunded pursuant to any bankruptcy or insolvency law; it being understood
that
no payment so refunded shall be considered as a payment of any portion
of the
Guaranteed Obligations, nor shall it have the effect of reducing the liability
of Guarantor hereunder. It is further understood, that if Borrower shall
have
taken advantage of, or be subject to the protection of, any provision in
the
Bankruptcy Code, the effect of which is to prevent or delay Lender from
taking
any remedial action against Borrower, including the exercise of any option
Lender has to declare the Guaranteed Obligations due and payable on the
happening of any default or event by which under the terms of the Note,
the
Security Instrument or the Other Security Documents, the Guaranteed Obligations
shall become due and payable, Lender may, as against Guarantor, nevertheless,
declare the Guaranteed Obligations due and payable and enforce any or all
of its
rights and remedies against Guarantor provided for herein.
10. No
Abrogation of Borrower’s Obligations.
The
existence of this Guaranty will not abrogate Borrower’s agreement to fulfill all
obligations under the Note, the Security Instrument and the Other Security
Documents.
11. Notice.
All
notices given under this Guaranty shall be in writing and shall be either
hand
delivered or mailed, by certified U.S. mail, return receipt requested,
first
class postage prepaid, to the other party, at its address set forth below
or at
such other address as such party may designate by notice to the other
party:
(a) If
to
Guarantor:
American
Retirement Corporation
000
Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx,
Xxxxxxxxx 00000
Attention:
Xxxxxx Xxxxx, Executive Vice President
with
a
copy to:
T.
Xxxxxx
Xxxxx, Esquire
Bass,
Xxxxx & Xxxx, PLC
000
Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx,
Xxxxxxxxx 00000-0000
(b) If
to
Lender:
GMAC
Commercial Mortgage Bank
000
Xxxxx
Xxxxxx Xxxxx
Xxxxx
000
Xxxxxxx,
Xxxxxxxx 00000
Attention:
Construction Department
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with
a
copy to:
GMAC
Commercial Mortgage Corporation
0000
Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx,
Xxxxx 00000
Attention:
Xxxxxxx Xxxxxx
and:
Xxxxx
X.
Xxxxx, Esquire
Xxxxxxx
Xxxxx Xxxxxxx & Xxxxxxxxx, LLP
000
00xx
Xxxxxx,
XX, Xxxxx 0000 Xxxxx
Xxxxxxxxxx,
XX 00000-0000
12. No
Waiver by Lender; Remedies.
No
failure on the part of Lender or the holder of the Note to exercise, and
no
delay in exercising, any right hereunder or thereunder shall operate as
a waiver
thereof; nor shall any single or partial exercise of any right hereunder
or
thereunder preclude any other or further exercise thereof or the exercise
of any
other right. Guarantor hereby agrees that all rights and remedies that
Lender is
afforded by reason of this Guaranty are separate and cumulative and may
be
pursued separately, successively, or concurrently, as Lender deems advisable.
In
addition, all such rights and remedies are non-exclusive and shall in no
way
limit or prejudice Lender’s ability to pursue any other legal or equitable
rights or remedies that may be available. Failure of Lender to insist upon
strict performance or observance of any of the terms, provisions and covenants
hereof or to exercise any right herein contained shall not be construed
as a
waiver or relinquishment of the right to demand strict performance at another
time. Receipt by Lender of any payment or performance on the Guaranteed
Obligations shall not be deemed a waiver of the breach of any provision
hereof
or of any of the Note, the Security Instrument, or the Other Security Documents.
Without limiting the generality of the foregoing, Guarantor agrees that
in any
action by Lender by reason of the Guaranteed Obligations, Lender, at its
election, may proceed (a) against Guarantor together with Borrower, (b)
against
Guarantor and Borrower, individually, or (c) against Guarantor only without
having commenced any action against, or having obtained any judgment against,
Borrower.
13. Certain
Waivers by Guarantor.
AS
A FURTHER INDUCEMENT TO LENDER TO MAKE THE LOAN AND IN CONSIDERATION THEREOF,
GUARANTOR FURTHER COVENANTS AND AGREES THAT SERVICE OF ANY SUMMONS AND
COMPLAINT
OR OTHER PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE MADE BY REGISTERED
OR
CERTIFIED MAIL DIRECTED TO GUARANTOR AT GUARANTOR’S ADDRESS HEREINABOVE SET
FORTH, GUARANTOR HEREBY WAIVING PERSONAL SERVICE THEREOF. GUARANTOR HEREBY
WAIVES THE PLEADING OF ANY STATUTE OF LIMITATIONS AS A DEFENSE TO THE
OBLIGATIONS HEREUNDER. GUARANTOR HEREBY WAIVES NOTICE OF THE ACCEPTANCE
HEREOF,
PRESENTMENT, DEMAND FOR PAYMENT, PROTEST, NOTICE OF PROTEST, OR ANY AND
ALL
NOTICE OF NON-PAYMENT, NON-PERFORMANCE OR NON-OBSERVANCE, OR OTHER PROOF,
OR
NOTICE OR DEMAND.
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GUARANTOR
FURTHER WAIVES AND AGREES NOT TO ASSERT: (A) ANY RIGHT TO REQUIRE LENDER
TO
PROCEED AGAINST BORROWER OR TO PROCEED AGAINST ANY OTHER GUARANTOR, OR
TO
PROCEED AGAINST OR EXHAUST ANY SECURITY FOR THE GUARANTEED OBLIGATIONS,
OR TO
PURSUE ANY OTHER REMEDY AVAILABLE TO LENDER, OR TO PURSUE ANY REMEDY IN
ANY
PARTICULAR ORDER OR MANNER, (B) THE BENEFIT OF ANY STATUTE OF LIMITATIONS
AFFECTING GUARANTOR’S LIABILITY HEREUNDER OR THE ENFORCEMENT HEREOF, (C) NOTICE
OF THE EXISTENCE, CREATION OR INCURRING OF NEW OR ADDITIONAL INDEBTEDNESS
OF
BORROWER TO LENDER, (D) THE BENEFITS OF ANY STATUTORY PROVISION LIMITING
THE
LIABILITY OF A SURETY, (E) ANY DEFENSE ARISING BY REASON OF ANY DISABILITY
OR
OTHER DEFENSE OF BORROWER OR BY REASON OF THE CESSATION FROM ANY CAUSE
WHATSOEVER (OTHER THAN PAYMENT IN FULL) OF THE LIABILITY OF BORROWER FOR
THE
GUARANTEED OBLIGATIONS, (F) THE BENEFITS OF ANY STATUTORY PROVISION
LIMITING THE RIGHT OF LENDER TO RECOVER A DEFICIENCY JUDGMENT, OR TO OTHERWISE
PROCEED AGAINST ANY PERSON OR ENTITY OBLIGATED FOR PAYMENT OF THE GUARANTEED
OBLIGATIONS, AFTER ANY FORECLOSURE OR TRUSTEE’S SALE OF ANY SECURITY FOR THE
GUARANTEED OBLIGATIONS, AND (G) ANY OTHER DEFENSE OR CIRCUMSTANCE WHICH
MIGHT
OTHERWISE CONSTITUTE A LEGAL OR EQUITABLE DISCHARGE OF GUARANTOR’S LIABILITY
HEREUNDER, ARISING FROM OR OUT OF THE LOAN, THE NOTE, THE SECURITY INSTRUMENT,
OR THE OTHER SECURITY DOCUMENTS AND/OR THE PROPERTY.
14. Waiver
of Automatic Stay.
GUARANTOR
HEREBY AGREES THAT, IN CONSIDERATION OF LENDER’S AGREEMENT TO MAKE THE LOAN AND
IN RECOGNITION THAT THE FOLLOWING COVENANT IS A MATERIAL INDUCEMENT FOR
LENDER
TO MAKE THE LOAN, IN THE EVENT THAT GUARANTOR SHALL (A) FILE WITH ANY BANKRUPTCY
COURT OF COMPETENT JURISDICTION OR BE THE SUBJECT OF ANY PETITION UNDER
ANY
SECTION OR CHAPTER OF TITLE 11 OF THE UNITED STATES CODE, AS AMENDED
(“BANKRUPTCY CODE”), OR SIMILAR LAW OR STATUTE, (B) BE THE SUBJECT OF ANY ORDER
FOR RELIEF ISSUED UNDER THE BANKRUPTCY CODE OR SIMILAR LAW OR STATUTE,
(C) FILE
OR BE THE SUBJECT OF ANY PETITION SEEKING ANY REORGANIZATION, ARRANGEMENT,
COMPOSITION, READJUSTMENT, LIQUIDATION, DISSOLUTION, OR SIMILAR RELIEF
UNDER ANY
PRESENT OR FUTURE FEDERAL OR STATE ACT OR LAW RELATING TO BANKRUPTCY,
INSOLVENCY, OR OTHER RELIEF FOR DEBTORS, (D) HAVE SOUGHT OR CONSENTED TO
OR
ACQUIESCED IN THE APPOINTMENT OF ANY TRUSTEE, RECEIVER, CONSERVATOR, OR
LIQUIDATOR, OR (E) BE THE SUBJECT OF AN ORDER, JUDGMENT OR
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DECREE
ENTERED BY ANY COURT OF COMPETENT JURISDICTION APPROVING A PETITION FILED
AGAINST GUARANTOR FOR ANY REORGANIZATION, ARRANGEMENT, COMPOSITION,
READJUSTMENT, LIQUIDATION, DISSOLUTION, OR SIMILAR RELIEF UNDER ANY PRESENT
OR
FUTURE FEDERAL OR STATE ACT OR LAW RELATING TO BANKRUPTCY, INSOLVENCY OR
RELIEF
FOR DEBTORS, THEN, SUBJECT TO APPLICABLE LAW (INCLUDING WITHOUT LIMITATION,
COMMON LAW OR STATUTORY FIDUCIARY DUTIES), LENDER SHALL THEREUPON BE ENTITLED,
AND GUARANTOR HEREBY IRREVOCABLY CONSENTS TO, AND WILL NOT CONTEST, AND
AGREES
TO STIPULATE TO RELIEF FROM, ANY AUTOMATIC STAY OR OTHER INJUNCTION IMPOSED
BY
SECTION 362 OF THE BANKRUPTCY CODE, OR SIMILAR LAW OR STATUTE (INCLUDING,
WITHOUT LIMITATION, RELIEF FROM ANY EXCLUSIVE PERIOD SET FORTH IN SECTION
1121
OF THE BANKRUPTCY CODE) OR OTHERWISE, ON OR AGAINST THE EXERCISE OF THE
RIGHTS
AND REMEDIES OTHERWISE AVAILABLE TO LENDER AS PROVIDED IN THIS AGREEMENT
AND/OR
THE NOTE, THE SECURITY INSTRUMENT, OR THE OTHER SECURITY DOCUMENTS, AND
AS
OTHERWISE PROVIDED BY LAW, AND GUARANTOR HEREBY IRREVOCABLY WAIVES GUARANTOR’S
RIGHTS TO OBJECT TO SUCH RELIEF.
15. Guaranty
of Payment.
This is
a guaranty of payment and not of collection and upon any Event of Default
of
Borrower under the Note, the Security Instrument, the Loan Agreement or
the
Other Security Documents, Lender may, at its option, proceed directly and
at
once, without notice, against Guarantor to collect and recover the full
amount
of the liability hereunder or any portion thereof, without proceeding against
Borrower or any other person, or foreclosing upon, selling, or otherwise
disposing of or collecting or applying against any of the Property or other
collateral for the Loan.
(a) Joint
and Several Liability.
The term
“Guarantor” as used in this Guaranty shall refer individually and collectively
to all signers of this Guaranty. Each undertaking herein contained shall
be the
joint and several undertaking of each signer hereof if more than one, and
it is
specifically agreed that Lender may enforce the provisions hereof with
respect
to one or more of such signers without seeking to enforce the same as to
all or
any such signers. Guarantor hereby waives any requirement of joinder of
all or
any other of the parties hereto in any suit or proceeding to enforce the
provisions hereof.
(b) Assignment.
Lender
may assign this Guaranty or any rights or powers hereunder, in whole or
in part,
in connection with the sale of the Note and assignment of the Security
Instrument. The duties and obligations of Guarantor may not be delegated
or
transferred by Guarantor without the prior written consent of Lender which
may
be withheld in its absolute discretion. Each reference herein to Lender
shall be
deemed to include its successors and assigns, to whose favor the provisions
of
this Guaranty shall also inure. This Guaranty shall be binding upon Guarantor
and the successors and assigns of Guarantor, all of whom shall be bound
by the
provisions of this Guaranty. If any party hereto shall be a partnership
or a
limited liability company, the agreements and obligations on
10
the
part
of Guarantor herein contained shall remain in force and application
notwithstanding any changes in the individuals or entities composing the
partnership or the limited liability company, and the term “Guarantor” shall
include any altered or successive partnerships and any altered or successive
limited liability companies but the predecessor partnerships and their
partners,
and the predecessor limited liability companies and their members, shall
not
thereby be released from any obligations or liability hereunder.
16. Waiver
of Trial by Jury; Service of Process.
GUARANTOR
HEREBY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH GUARANTOR
AND
LENDER MAY BE PARTIES ARISING OUT OF, IN CONNECTION WITH, OR IN ANY WAY
PERTAINING TO, THIS AGREEMENT AND/OR ANY OF THE OTHER SECURITY DOCUMENTS.
IT IS
AGREED AND UNDERSTOOD THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY
JURY OF
ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING
CLAIMS
AGAINST PARTIES WHO ARE NOT PARTIES TO THIS AGREEMENT. THIS WAIVER IS KNOWINGLY,
WILLINGLY AND VOLUNTARILY MADE BY GUARANTOR, AND GUARANTOR HEREBY REPRESENTS
THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY INDIVIDUAL
TO
INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY
ITS
EFFECT. GUARANTOR FURTHER REPRESENTS AND WARRANTS THAT GUARANTOR HAS BEEN
REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS
WAIVER BY
INDEPENDENT LEGAL COUNSEL, OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED
BY
INDEPENDENT LEGAL COUNSEL SELECTED BY GUARANTOR OF GUARANTOR’S OWN FREE WILL,
AND THAT GUARANTOR HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH
COUNSEL.
GUARANTOR HEREBY IRREVOCABLY DESIGNATES CORPORATION SERVICE COMPANY AT
,
AND ITS SUCCESSORS IN OFFICE, AS THE TRUE AND LAWFUL ATTORNEY OF GUARANTOR
FOR
THE PURPOSE OF RECEIVING SERVICE OF ALL LEGAL NOTICES AND PROCESS ISSUED
BY ANY
COURT IN THE STATE OF COLORADO AS WELL AS SERVICE OF ALL PLEADINGS AND
OTHER
DOCUMENTS RELATED TO ANY LEGAL PROCEEDING OR ACTION ARISING OUT OF THE
NOTE.
GUARANTOR AGREES THAT SERVICE UPON SAID CORPORATION SERVICE COMPANY SHALL
BE
VALID REGARDLESS OF GUARANTOR’S WHEREABOUTS AT THE TIME OF SUCH SERVICE AND
REGARDLESS OF WHETHER GUARANTOR RECEIVES A COPY OF SUCH SERVICE. GUARANTOR
AGREES TO PAY ALL COURT COSTS AND REASONABLE ATTORNEY’S FEES INCURRED BY LENDER
IN CONNECTION WITH ENFORCING ANY PROVISION OF THIS
AGREEMENT.
17. Power
and Authority.
Guarantor (and its representative, executing below, if any) has full power,
authority and legal right to execute this Guaranty and to perform all its
obligations under this Guaranty.
18. Complete
Agreement; Modification; Waiver.
All
understandings, representations and agreements heretofore had with respect
to
this Guaranty are merged into this Guaranty which are incorporated herein
which
alone fully and completely expresses the agreement of Guarantor and Lender.
In
no event shall any modification or waiver of the provisions of this Guaranty
be
effective unless in writing executed by Lender. Any waiver granted by Lender
shall be applicable only in the specific instance for which it is
given.
11
19. Governing
Law.
THIS
GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE
STATE IN WHICH THE PROPERTY IS LOCATED AND APPLICABLE FEDERAL LAW.
20. Counterparts;
Construction.
This
Guaranty may be executed in any number of counterparts, all of which when
taken
together shall constitute one and the same instrument. Words of any gender
used
in this Guaranty shall be held and construed to include the other gender,
and
words in the singular shall be held and construed to include the plural,
and
words in the plural shall be held and construed to include the singular,
unless
this Guaranty or the context otherwise requires.
21. Review
by Guarantor.
GUARANTOR HAS RECEIVED COPIES OF, AND HAS HAD THE OPPORTUNITY TO REVIEW,
THE
NOTE, THE SECURITY INSTRUMENT, AND THE OTHER SECURITY DOCUMENTS REFERRED
TO IN
THIS GUARANTY. GUARANTOR HAS DISCUSSED THIS GUARANTY WITH GUARANTOR’S LEGAL
COUNSEL, AND GUARANTOR UNDERSTANDS THE NATURE AND EXTENT AND THE LEGAL
AND
PRACTICAL CONSEQUENCES OF GUARANTOR’S LIABILITY UNDER THIS
GUARANTY.
22. No
Oral
Agreement.
To the
extent allowed by law, Guarantor agrees to be bound by the terms of the
following notice:
|
NOTICE:
|
THIS
GUARANTY, THE NOTE, THE SECURITY INSTRUMENT AND THE OTHER
SECURITY
DOCUMENTS CONSTITUTE A WRITTEN AGREEMENT WHICH REPRESENTS
THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR ORAL AGREEMENTS OF THE
PARTIES.
|
|
THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES RELATING
TO THE
LOAN.
|
[SIGNATURES
BEGIN ON NEXT PAGE]
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IN
WITNESS
WHEREOF, this Guaranty has been duly executed by the undersigned as of
the day
and year first written above.
| GUARANTOR: | ||
| AMERICAN
RETIREMENT CORPORATION, a
Tennessee
corporation
|
||
| |
|
|
| By: | ||
|
|
||
|
Name:
|
||
| Title:
|
||
