PAYMENT GUARANTY
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This PAYMENT GUARANTY (this "Guaranty"), dated as of the 24th day of
August, 1999, made by BROOKDALE LIVING COMMUNITIES, INC., a Delaware
corporation, having offices at 00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxxx 00000 ("Guarantor"), for the benefit of KEY CORPORATE CAPITAL INC., a
Michigan corporation , having administrative offices at 000 Xxxxxx Xxxxxx,
Xxxxxxxxx, Xxxx 00000-0000 ("KCCI"), as the Agent (the "Agent") for the Lenders,
including KCCI, who are or hereafter become parties to the Loan Agreement
(hereinafter defined), each of which, including KCCI, is hereafter referred to
as a "Lender" or the "Lenders".
All capitalized terms appearing and not defined herein shall have the
same meanings ascribed to them in the Building Loan Agreement and/or Soft Cost
Loan Agreement, as may be amended from time to time, each of even date herewith,
(together the "Loan Agreement"), among AH Battery Park Owner, LLC, an Ohio
limited liability company (the"Borrower"), the Lenders named therein, and the
Agent.
W I T N E S S E T H:
WHEREAS, the Borrower is the actual, beneficial and record ground
lessee of a certain tract of land consisting of approximately .449 acres located
in the Borough of Manhattan, City and State of New York, known by the street
address 000 Xxxxx Xxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, which is more particularly
described in Exhibit A attached hereto (the "Land");
WHEREAS, the Borrower has requested the Lenders to make loan advances
(collectively, the "Loan") to it in the aggregate principal amount of up to
FORTY NINE MILLION ONE HUNDRED TWENTY FIVE THOUSAND AND 00/100 DOLLARS
($49,125,000.00) (the "Maximum Loan Amount"), to be used to finance Hard Costs
and Soft Costs of the Borrower's construction of the Improvements described in
the Loan Agreement, which include an independent living/assisted living complex
to be known as The Hallmark at Battery Park City containing approximately 218
units and approximately 219,615 square feet of floor area (as said term is
defined in the Zoning Resolution of the City of New York) to be built on the
Land in accordance with the Building Loan Agreement, and in compliance with the
Plans and all Requirements;
WHEREAS, the Loan will be advanced by the Lenders to the Borrower upon
the Borrower's compliance with, and subject to, the terms, conditions and
limitations of the Loan Agreement;
WHEREAS, the Loan will be evidenced by the Notes and secured by, among
other things, the Mortgage;
WHEREAS, the Guarantor is an Affiliate of the developer of the Project,
Brookdale Living Communities of New York - BPC, Inc. (the "Developer"), and both
Developer and Guarantor will derive a substantial benefit from the making of the
Loan;
WHEREAS, to induce the Lenders to make the Loan pursuant to the Loan
Agreement, to accept the Notes and to cause the Agent to accept the Mortgage,
the Borrower has agreed to procure and deliver this Guaranty to be executed by
the Guarantor and to be binding upon the Guarantor and its respective successors
and assigns;
WHEREAS, the Lenders are unwilling to extend credit to the Borrower
unless this Guaranty is executed by the Guarantor and delivered to the Agent;
and
WHEREAS, it is a condition to the obligations of the Lenders to make
the Loan to the Borrower pursuant to the Loan Agreement that this Guaranty is
executed by the Guarantor and delivered to the Agent;
NOW, THEREFORE, in consideration of the Loan to the Borrower, in order
to induce the Lenders and the Agent to execute and deliver the Loan Agreement,
the Lenders to accept the Notes, and the Agent to accept the Mortgage, and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, Guarantor, for itself, its successors and assigns, hereby
covenants and agrees with the Agent, for the benefit of the Agent and the
Lenders, and their respective successors and assigns, as follows:
1. Definitions. For purposes of this Guaranty only, the following
definitions shall apply:
"Budget" shall mean shall mean the budget delivered to, approved and
initialed by Agent on or before the Closing Date, as same may be amended (or
line items reallocated) in accordance with the Loan Agreement.
"Completion" shall mean and be deemed to have occurred upon the
occurrence of all of the following: (i) the Improvements comprising the Project
shall be fully paid and 100% complete in accordance with the Plans, all
Requirements and the requirements of the Ground Lease, all as determined by
Agent and Agent's Architect in accordance with the procedure set forth in
Section 2B.2 of the Loan Agreement; (ii) all on-site and off-site improvements,
including, without limitation, all utility services and fixtures and equipment
required for access to and operation of the Improvements shall be 100% complete;
(iii) a temporary certificate of occupancy for the full use and occupancy of the
entire Premises (and provided that Borrower shall proceed as expeditiously as
possible to secure the final Certificate of Occupancy, in any event within two
(2) years of issuance of the temporary certificate of occupancy) or its
equivalent issued by the applicable governmental authority for the Improvements
comprising the Project, and all other reasonable evidence that the City of New
York and/or the Battery Park City Authority have acknowledged the completion of
all work required by it to meet all legal requirements and the requirements
under the Ground Lease, as applicable, including, without limitation, all zoning
and building requirements; (iv) all Permits and Licenses, if any, required for
the operation of the Project as an independent living/assisted living complex
under all applicable legal requirements have been issued; (v) all of the
requirements set forth in Section 6.4 of the Building Loan Agreement for the
final disbursement of Hard Costs shall have been satisfied; (vi) the opening of
the Project shall have been scheduled to occur within thirty (30) days.
"Facility Summary Report" shall mean each facility summary report for
the Project required to be submitted by the Borrower to the Agent, which shall
be in form and substance satisfactory to Agent, shall be broken down on a line
item basis (including a line item for operating NOI) and shall include an
occupancy summary and a profit and loss summary.
"Guaranty Obligations" shall mean the prompt, absolute and
unconditional payment in full of:
(i) the aggregate outstanding principal amount of the Loan
and the amounts due to the Lenders under the Forward
Treasury Lock Agreement, which principal amount of the
Loan shall specifically include, without limitation,
any Advances of the Loan made to fund interest due on
such Loan, as calculated by the Agent upon the
occurrence of an Event of Default and acceleration of
the Notes in accordance with the provisions of the Loan
Agreement;
(ii) all interest and other charges on the Guaranty
Percentage then in effect pursuant to Section 3(a),
Section 3(b) or Section 3(c) hereof, as applicable, of
the aggregate outstanding principal amount of the Loan
and amounts due to the Lenders under the Forward
Treasury Lock Agreement, whether such interest accrues
at the regular interest rate or rates applicable
thereto or at the Default Rate, and whether such
interest and other charges accrue prior to or after the
Maturity Date, late charges, prepayment fees and
premiums, whether such interest accrues before or after
the filing of any petition under
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the Bankruptcy Code, as the same shall become due and
payable under the Loan Agreement and the Notes, and all
fees, charges and expenses and other sums now or
hereafter due to the Agent or the Lenders under the
Notes, the Loan Agreement, the Mortgage, or any other
Loan Document, including, without limitation, any and
all reasonable costs and expenses incurred by the Agent
or the Lenders in connection with the collection and
enforcement of the Notes, the Mortgage or any other
Loan Document, including, without limitation, all
reasonable attorney's fees and expenses, investigative
costs and all court costs, whether or not suit is filed
thereon, or whether at maturity, by acceleration or
otherwise.
"Guaranty Percentage" shall mean a percentage portion of the
aforementioned Guaranty Obligations determined as provided in Section 3.
"Intermediate Threshold" (which must occur no later than the twelfth
(12th) month following Completion to be effective) shall mean, and shall have
been achieved when: (i) at least six (6) months have elapsed since Completion;
(ii) Agent reasonably determining that not less than 87.5% of the units then
scheduled to be occupied under the Occupancy Schedule set forth in Exhibit H to
the Loan Agreement are then occupied and all payments are being made in
accordance with the terms of Approved Leases, and (iii) Agent reasonably
determining that the NOI of the Project on a cumulative basis for the period
from Completion through the last day covered by the most recent Facility Summary
Report submitted by Borrower and approved in writing by Agent, as set forth in
such Facility Summary Report, is no less than 87.5% of the projected NOI set
forth in the Budget (or any revised projected NOI approved by the Requisite
Lenders in writing for such respective period).
"Liquid Assets" shall mean assets in the form of cash, cash
equivalents, obligations of (or fully guarantied as to principal and interest
by) the United States or any agency or instrumentality thereof (provided the
full faith and credit of the United States supports such obligation or
guarantee), certificates of deposit issued by a commercial bank having net
assets of not less than $500,000,000, securities listed and traded on a
recognized stock exchange or traded over the counter and listed in the National
Association of Securities Dealers Automatic Quotations, liquid debt instruments
that have a readily ascertainable value and are regularly traded in a recognized
financial market, or any unused portion of any credit line maintained with a
bank which must have an Standard & Poor's rating of "A" or better, none of which
are subject to specific pledge, lien or other encumbrance.
"Loan Advances" shall mean Advances under the Building Loan Agreement
or the Soft Cost Loan Agreement.
"Loan Amount" shall mean FORTY NINE MILLION ONE HUNDRED TWENTY FIVE
THOUSAND AND 00/100 DOLLARS ($49,125,000.00) or such lesser amount as the
Borrower and the Agent agree upon in writing.
"NOI" shall mean shall mean Project Revenues, less all ordinary and
customary operating expenses actually incurred and paid by the Borrower (other
than fees due to the Manager as certified by Manager and approved by Agent), in
connection with the ownership and operation of the Project.
"Occupancy Schedule" shall mean occupancy of the Units comprising the
Project according to the following levels:
Quarter 2 following Completion: 43.75% of the Units
Quarter 3 following Completion: 55.13% of the Units
Quarter 4 following Completion: 65.63% of the Units
Quarter 5 following Completion: 76.13% of the Units
Quarter 6 following Completion: 83.13% of the Units
Quarters 7-10 following Completion: 83.13% of the Units
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"Project Revenues" shall mean all fixed rent and ancillary income
(including expense reimbursements) actually received by the Borrower in
connection with its ownership and occupancy of the Premises, as reasonably
determined by Agent based upon the most current Facility Summary Report then in
Agent's possession, and such other information as Agent may receive, including
current certified rent rolls and operating statements.
2. Guaranty. The Guarantor, as a primary obligor and not merely as
a surety, absolutely unconditionally and irrevocably guaranties the Guaranty
Obligations to the Agent and the Lenders.
3. Guaranty Percentage.
(a) 100% Guaranty. The Guaranty Percentage shall equal One Hundred
Percent (100%) of the amounts set forth in clause (i) of the definition of
Guaranty Obligations until reduced, if at all, as provided in this Section 3.
(b) 75% Guaranty. The Guaranty Percentage shall equal Seventy Five
Percent (75%) of the amounts set forth in clause (i) of the definition of
Guaranty Obligations (the "First Reduction") at such time as the following
requirements have been satisfied:
(i) at the time of the proposed reduction, there shall be
no outstanding Events of Default, or any event which
with the giving of notice and the passage of time would
constitute a default under any Loan Document; and
(ii) Completion shall have occurred (including, without
limitation, the issuance of a temporary certificate of
occupancy), and the last disbursement for Hard Costs
shall have been made and the Retainage shall have been
released, all in accordance with Section 6.4 of the
Building Loan Agreement.
(c) 50% Guaranty. At the commencement of any calendar quarter
following the First Reduction, the Borrower and the Guarantor may submit a
written request to the Agent (a "Requested Reduction Notice"), requesting a
reduction (the "Second Reduction") of the Guaranty Percentage to Fifty Percent
(50%), which Requested Reduction Notice may be submitted no more often than once
per calendar quarter, and shall be accompanied by reasonable evidence that
Guarantor has qualified for the Second Reduction. The Guaranty Percentage, upon
the determination by the Agent of the satisfaction of the following
requirements, shall equal Fifty Percent (50%). The Guaranty Percentage shall
equal Fifty Percent (50%) of the amounts set forth in clause (i) of the
definition of Guaranty Obligations when the following requirements have been
satisfied:
(i) at the time of the Requested Reduction Notice, there
shall be no outstanding Events of Default, or any event
which with the giving of notice and the passage of time
would constitute a default under any Loan Document;
(ii) the Intermediate Threshold shall have occurred, as
reasonably determined by Agent; and
(iii) all requirements for the First Reduction shall have
been, and remain, satisfied.
(d) The Guaranty Percentage shall at all times during the existence
of this Guaranty equal One Hundred Percent (100%) of the amounts set forth in
clause (ii) of the definition of Guaranty Obligations.
4. Representations, Warranties and Covenants of Guarantor. The
Guarantor hereby represents, warrants and covenants:
(a) Guarantor is a corporation duly organized and validly
existing under the laws of the State of Delaware and has full power and
authority to consummate the transactions contemplated hereby.
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(b) This Guaranty, the Completion Guaranty, the Operating
Deficit Guaranty and the Environmental Indemnity Agreement have been
duly executed and delivered by the Guarantor and constitute the valid
and binding obligations of the Guarantor and are enforceable against
the Guarantor in accordance with their respective terms.
(c) Guarantor is not insolvent (as such term is defined in
the Bankruptcy Code), and Guarantor will not be rendered insolvent by
execution of this Guaranty or any other Loan Document to which it is a
party or by the consummation of the transactions contemplated thereby.
(d) The consummation of the transactions contemplated
hereby and the performance by the Guarantor of the Guarantor's
obligations under this Guaranty, the Completion Guaranty, the Operating
Deficit Guaranty, the Environmental Indemnity Agreement or any other
Loan Document to which the Guarantor is a party will not result in any
breach of, give rise to a lien under, or constitute a default under,
any mortgage, deed of trust, lease, bank loan or credit agreement,
partnership agreement, corporate charter, by-laws or other agreement or
instrument to which the Guarantor is a party or by which it may be
bound or affected.
(e) The Financial Statements delivered by the Guarantor to
the Agent at or prior to the Closing fairly and accurately present the
financial condition of the Guarantor as of the date thereof, and no
material adverse change has occurred in the financial condition
reflected therein since the date thereof. The Financial Statements have
been prepared in accordance with sound accounting methods, principles
and standards consistently applied and do not omit facts, the omission
of which would make such Financial Statements materially misleading.
(f) Except as disclosed on Schedule 1 annexed hereto and
made a part hereof, there are no actions, suits or proceedings
involving claims in excess of $1,000,000 pending, or to the best
knowledge of the Guarantor threatened, against or affecting the
Guarantor or the Premises, or involving the validity or enforceability
of the Mortgage, or the priority of the liens thereof, at law or in
equity, before or by any Governmental Authority; and the Guarantor is
not operating under or subject to, in default of, or in violation with
respect to, any order, writ, injunction, decree or demand of any court
or any Governmental Authority involving claims in excess of $1,000,000
that reasonably could materially and adversely affect its ability to
perform its obligations hereunder.
(g) The Guarantor shall promptly provide the Agent with
written notice of any pending or threatened litigation against the
Guarantor or the Premises, with respect to which an adverse decision is
reasonably likely involving claims in excess of $1,000,000; or the
commencement against the Guarantor or the Premises of any proceedings
or investigations by a governmental or regulatory agency involving
claims in excess of $1,000,000 that reasonably could materially and
adversely affect its ability to perform its obligations hereunder.
(h) There is no default on the part of the Guarantor under
or with respect to this Guaranty, the Completion Guaranty, the
Operating Deficit Guaranty, the Environmental Indemnity Agreement or
any other Loan Document to which the Guarantor is a party, and no event
has occurred and is continuing which with the giving of notice and the
passage of time would constitute a default on the part of Guarantor
under any of the aforesaid documents.
(i) The Guarantor does not have any counterclaims, offsets
or defenses with respect to the Loan or with respect to its obligations
under this Guaranty, the Completion Guaranty, the Operating Deficit
Guaranty, the Environmental Indemnity Agreement, the Notes or any other
Loan Document to which it is a party.
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(j) The Guarantor will not join in any action, or consent
to amend, terminate or modify the organizational documents of the
Borrower without the prior written consent of the Agent.
(k) The Guarantor will promptly comply with all conditions
of this Guaranty and the other Loan Documents with which the Guarantor
is required to comply. The Guarantor will promptly and fully respond to
any inquiry of the Agent made with respect to the Loan, the Land, the
Improvements, or any of the matters covered by this Guaranty.
(l) The Guarantor will not modify or amend or terminate
(other than by full performance thereof) any Loan Document without the
prior written consent of the Agent.
(m) The Guarantor agrees to pay within ten (10) Domestic
Business Days of any written demand by the Agent to Guarantor all
expenses (including, without limitation, reasonable legal expenses) of,
or incidental to, or in any way relating to the enforcement or
protection of the rights of the Agent or the Lenders hereunder.
(n) The Guarantor is deriving or expects to derive a
financial or other advantage from each and every obligation incurred by
the Borrower to the Agent or the Lenders.
(o) The Guarantor hereby acknowledges receipt of copies of,
and hereby approves, the Plans, the Mortgage, the Loan Agreement and
the other Loan Documents.
(p) The Guarantor shall execute and deliver to the Agent,
from time to time, such other documents as shall be reasonably
necessary to give full effect to the rights and remedies granted or
provided by this Guaranty.
(q) The Guarantor shall furnish to the Agent (i) quarterly
internally-prepared Financial Statements, certified by an officer of
the Guarantor, within forty-five (45) days after the end of each
calendar quarter, (ii) annual audited Financial Statements, certified
by an officer of the Guarantor within one hundred twenty (120) days
after the end of each fiscal year of the Guarantor, (iii) quarterly
internally- prepared certificates evidencing that the Guarantor's net
worth is equal to at least $70,000,000, certified by an officer of the
Guarantor, within forty-five days after the end of each calendar
quarter, (iv) quarterly internally-prepared certificates evidencing
that the Guarantor has Liquid Assets equal to at least $5,000,000,
certified by an officer of the Guarantor, within forty-five (45) days
after the end of each calendar quarter, and (v) such other financial
information relating to the Guarantor as may be reasonably requested
from time to time by Agent.
(r) The Guarantor has implemented a program to assess,
remediate and mitigate the potential impact of the Year 2000 Issue
throughout the Guarantor's company. The Guarantor's program has been
structured to address its internal computer systems and applications,
network services operations, facilities operations and third-party
vendors and suppliers. The Guarantor believes that it is taking the
necessary steps within its control to mitigate the potential impact of
the Year 2000 Issue on the Guarantor and shall continue to do so.
(s) The Guarantor acknowledges and agrees, subject to the
limitations set forth in the succeeding sentence, that (i) in the
calculation of the aggregate outstanding principal balance of the Loan
for purposes of calculating the Guaranty Obligations hereunder said
aggregate outstanding principal balance of the Loan will not be reduced
or deemed reduced, either before or after an Event of Default, by any
payments or recoveries received or deemed received by the Lenders (or
by the Agent on behalf of the Lenders) as a result of a foreclosure or
a sale of the Premises; and (ii) the Agent and the Lenders may apply
any payments (other than payments made by the Guarantor hereunder) or
recoveries received after a default under any of the Loan Documents to
principal, interest, expenses and other sums due with respect
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to the Loan in such order as may be provided in the Loan Agreement or
the other Loan Documents, or, to the extent not so provided, in such
order as the Agent or any Lender, in its sole discretion, may elect,
regardless of the manner in which any such payments or recoveries are
allocated or reflected in any foreclosure, judgment, or deficiency or
allocation proceeding relative to the foreclosure of the Mortgage, and
any such payments or recoveries, regardless of how applied, shall not
reduce the amount of principal or other sums guaranteed hereby.
Notwithstanding the foregoing, (x) this provision shall not obligate
Guarantor to pay or reimburse Lender or Agent for any expense item for
which Lender has already received actual payment or reimbursement from
Borrower or Guarantor and (y) the liability of the Guarantor hereunder
shall not exceed the lesser of (1) the amount of the Guaranty
Obligations calculated in accordance with clause (i) of this paragraph
4(r) and (2) the amount of a deficiency judgment determined to be owing
following a foreclosure pursuant to the Loan Documents; provided,
however, that nothing herein or in any of the other Loan Documents
shall obligate the Agent or the Lenders to foreclose on collateral
before or as a condition to or as part of asserting claims under this
Guaranty.
5. Defaults. The following shall constitute a default hereunder
(each, an "Event of Default"):
(a) if the Guarantor shall (after ten (10) Domestic
Business Days have elapsed from date of written notice to Guarantor) fail to
timely perform, or cause to be timely performed, any Guaranty Obligation within
the period provided for performance by the Guarantor hereunder or by the
Borrower in the Loan Documents;
(b) if the Guarantor shall (after ten (10) Domestic
Business Days have elapsed from date of written notice to Guarantor) fail to
comply with any of the covenants made by it in this Guaranty (including, without
limitation, the provisions of Section 23 hereof) or in any other Loan Document,
including, without limitation, the Completion Guaranty, or if at any time any
representation or warranty made by the Guarantor to the Agent or the Lenders in
this Guaranty or in any other Loan Document or in any certificate or statement
delivered in connection herewith shall be false or misleading to an extent
deemed by the Agent, to be material, and, in any case, all required notices have
been given and all applicable cure periods have expired;
(c) if at any time the Guarantor shall revoke, or attempt
to revoke, this Guaranty;
(d) if at any time Guarantor's minimum net worth is not
equal to at least $70,000,000, or if at any time Guarantor's minimum liquidity
in the form of Liquid Assets is not equal to at least $5,000,000;
(e) if the Guarantor shall (i) suspend or discontinue its
business, (ii) make an assignment for the benefit of creditors, (iii) admit in
writing its inability to pay its debts as they become due, (iv) file a voluntary
petition in bankruptcy, (v) become insolvent as defined in the Bankruptcy Code,
(vi) file any petition or answer seeking for itself any reorganization,
arrangement, composition, readjustment of debt, liquidation or dissolution or
similar relief under any present or future statute, law or regulation of any
jurisdiction, (vii) petition or apply to any tribunal for any receiver,
custodian or any trustee for any substantial part of its property, (viii) be the
subject of any such proceeding commenced against it which remains undismissed
for a period of 60 days, (ix) file any answer admitting or not contesting the
material allegations of any such petition filed against it, or of any order,
judgment or decree approving such petition in any such proceeding, or (x) seek,
approve, consent to, or acquiesce in any such proceeding, or in the appointment
of any trustee, receiver, custodian, liquidator, or fiscal agent for it, or any
substantial part of its property or if an order is entered appointing any such
trustee, receiver, custodian, liquidator or fiscal agent and such order remains
in effect for 60 days; or
(f) if an order for relief is entered under the Bankruptcy
Code or any other decree or order is entered by a court of competent
jurisdiction (i) adjudicating the Guarantor bankrupt or insolvent, (ii)
approving as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Guarantor, (iii) appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of the Guarantor or of any substantial part of its property,
or (iv) ordering the winding up or liquidation of the affairs of the Guarantor
and any such decree or order continues unstayed and in effect for a period of 60
days.
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6. Remedies. Upon the occurrence of a default hereunder, in
addition to any other remedy provided for under this Guaranty or at law or in
equity, the Guarantor hereby authorizes the Agent, in the Agent's sole
discretion, at any time, to foreclose nonjudicially or judicially against any
real or personal property security it holds for the Guaranty Obligations or any
part thereof (it being understood that Guarantor is not required to secure this
Guaranty with any assets of Guarantor), or exercise any other remedy against the
Borrower, the Guarantor and any security.
7. Waiver of Election of Remedies. The Guarantor waives (to the
extent permitted by law) any right to require or compel the Agent or any Lender
to (a) proceed against the Borrower or any other guarantor; (b) proceed against
or exhaust any security for the Loan or the Guaranty Obligations; or (c) pursue
any other remedy in the Agent's or any Lender's power whatsoever; and failure of
the Agent or any Lender to do any of the foregoing shall not exonerate, release
or discharge the Guarantor from its absolute, unconditional and independent
liabilities to the Agent and the Lenders hereunder. The Guarantor hereby waives
(to the extent permitted by law) any and all legal requirements that the Agent
or any Lender shall institute any action or proceedings at law or in equity
against the Borrower or anyone else in respect of the Loan or the Loan Agreement
or any other Loan Document or resort to or seek to realize upon the security
held by the Agent or any of the Lenders, as a condition precedent to bringing an
action against the Guarantor upon this Guaranty.
8. Right of Separate Actions. The Agent may bring and prosecute a
separate action against any guarantor to enforce its liabilities hereunder,
whether or not any action is brought against any other person and whether or not
any other person is joined in any such action or actions. Nothing shall prohibit
the Agent or any Lender from exercising its rights against the Guarantor, the
Borrower, any security for the Guaranty Obligations or the Notes, or any other
person, simultaneously, jointly and/or severally. The Guarantor shall be bound
by each and every ruling, order and judgment obtained by the Agent or any Lender
against the Borrower in respect of the Loan and the Loan Documents, whether or
not the Guarantor is a party to the action or proceeding in which such ruling,
order or judgment is issued or rendered.
9. Waiver of Rights of Subrogation. The Guarantor hereby
irrevocably waives any rights to be subrogated to the rights of the Agent or any
of the Lenders with respect to the Guaranty Obligations and the Notes or any
other Loan Document. The Guarantor hereby agrees that it will not institute or
take any action seeking reimbursement against the Borrower or any other
guarantor until such time as the Agent and the Lenders shall have received
payment in full in cash in satisfaction of all the obligations of the Borrower
under the Notes and the other Loan Documents. No failure on the part of the
Agent or any Lender to exercise, and no delay in exercising, any right, remedy
or power hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise by the Agent or any Lender of any right, remedy or power
hereunder preclude any other or future exercise of any other right, remedy or
power. The foregoing provision is not intended to limit the Guarantor's rights
under the Development Agreement or the Management Agreement, provided all
relevant provisions of the Loan Agreement relative to Guarantor's exercise of
said rights are satisfied.
10. Waiver of Notice, Consent, etc.
(a) This Guaranty shall be construed as a continuing, absolute and
unconditional guaranty of payment.
(b) The Guarantor hereby waives acceptance and notice of acceptance
of this Guaranty by the Agent or any of the Lenders and notice of presentment,
demand, protest, notice of protest and of dishonor, notices of default and all
other notices relative to this Guaranty of every kind and description now or
hereafter provided by any agreement between the Borrower and the Agent or any of
the Lenders or any statute or rule of law except those specifically required by
this Guaranty.
(c) Except for any notices to Guarantor specifically required by any
of the Loan Documents, the Guarantor waives any and all notice of the creation,
renewal, extension or accrual of any of the obligations of the
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Borrower under any of the Loan Documents (with the exception of (i) changes in
the Maturity Date unless extended in accordance with Section 2A.11 of the Loan
Agreement or unless accelerated by the Agent pursuant to the terms of the Loan
Agreement, (ii) changes in the Maximum Loan Amount, and (iii) changes in the
amount of payments of principal and/or interest as scheduled), or of the
reliance by the Agent or any of the Lenders upon this Guaranty or any other Loan
Document. The obligations of the Borrower under any of the Loan Documents, and
each of them, shall conclusively be deemed to have been created, contracted, or
incurred in reliance upon this Guaranty and all dealings between the Borrower,
the Agent or any of the Lenders shall likewise be conclusively presumed to have
been made or consummated in reliance upon this Guaranty.
(d) The Guarantor hereby agrees that the terms, covenants and
provisions contained in the Loan Agreement, the Notes, the Mortgage or in any
other Loan Document may be altered, extended, modified, waived, released or
cancelled by the Agent or any of the Lenders, and the Guarantor agrees that this
Guaranty and its liability hereunder shall be in no way affected, diminished or
released by any such alteration, extension, modification, release, waiver or
cancellation (with the exception of (i) changes in the Maturity Date unless
extended in accordance with Section 2A.11 of the Loan Agreement or unless
accelerated by the Agent pursuant to the terms of the Loan Agreement, (ii)
changes in the Maximum Loan Amount, and (iii) changes in the amount of payments
of principal and/or interest as scheduled).
11. Waiver of Priority of Collateral. The Guarantor hereby agrees
that, in the event that any of its property is or may be hypothecated with
property of the Borrower, as security for any obligations of the Borrower under
any other Loan Document, any right of the Guarantor to have such other property
of the Borrower first applied to the discharge of such obligations is hereby
irrevocably waived by the Guarantor.
12. No Discharge; Remedies Cumulative. The Guarantor shall not be
discharged, released or exonerated, in any way, from its absolute, unconditional
and independent liabilities hereunder, even though any rights or defenses which
the Guarantor may have against the Agent or any of the Lenders or others may be
destroyed, diminished or otherwise affected by:
(a) any declaration by the Agent or any Lender of a default
in respect of any of the obligations of the Borrower under any of the
Loan Documents;
(b) the exercise by the Agent or any Lender of any rights
or remedies against the Borrower or any other person;
(c) the failure of the Agent or any Lender to exercise any
rights or remedies against the Borrower or any other person;
(d) the sale or enforcement of, or realization upon
(through judicial foreclosure, power of sale or any other means) any
security for any of the obligations of the Borrower under any of the
Loan Documents, or any security for any of the Guaranty Obligations,
even though (i) recourse may not thereafter be had against the Borrower
or any other person for any deficiency, or (ii) the Agent or any Lender
fails to pursue any such recourse which might otherwise be available,
whether by way of deficiency judgment following judicial foreclosure or
otherwise;
(e) any bankruptcy or reorganization of the Borrower or the
voluntary or involuntary participation by the Borrower in any
settlement or composition for the benefit of the Borrower's creditors
either in liquidation, readjustment, receivership, bankruptcy or
otherwise;
(f) the release of any other guarantor by agreement,
operation of law or otherwise; or
(g) any such action by the Agent or any Lender which would
release or limit the liability of the Guarantor to the Agent or any of
the Lenders even if the effect of that action is to deprive the
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Guarantor of the right to collect reimbursement from the Borrower for
any sums paid to the Agent or any Lender.
All rights and remedies of the Agent and the Lenders hereunder or under any of
the Loan Documents shall be cumulative and may be exercised singularly or
concurrently. The rights of the Agent and the Lenders under this Guaranty are in
addition to and not in diminution of the rights of the Agent and the Lenders
under any other Loan Document.
13. Continuing Guaranty. Subject to the terms of Section 20 hereof,
until all obligations of the Borrower to the Agent and the Lenders under the
Loan Documents are fulfilled to the satisfaction of the Agent and the Lenders
and each and every of the terms, covenants and conditions of this Guaranty are
fully performed and the Loan is fully repaid, the Guarantor shall not be
released by any act or thing which might, but for this provision, be deemed a
legal or equitable discharge of a surety, or by reason of any waiver, extension,
modification, forbearance or delay or other act or omission of the Agent or any
Lender or its failure to proceed promptly or otherwise, or by reason of any
action taken or omitted or circumstance which may or might vary the risk or
affect the rights or remedies of the Guarantor or by reason of any further
dealings between the Borrower and the Agent or any of the Lenders, whether
relating to the Loan or otherwise, and the Guarantor hereby expressly waives and
surrenders any defenses to its liability hereunder based upon any of the
foregoing acts, omissions, things or agreements or waivers of the Agent or any
of the Lenders; it being the purpose and intent of this Guaranty that the
obligations of the Guarantor hereunder are absolute and unconditional under any
and all circumstances. The Guarantor has also executed the Completion Guaranty
and the Operating Deficit Guaranty in favor of the Agent and the Lenders and (a)
payment or performance by the Guarantor of its obligations under this Guaranty
shall not decrease the Guarantor's liability under the Completion Guaranty or
the Operating Deficit Guaranty, and (b) payment or performance by the Guarantor
under the Completion Guaranty or the Operating Deficit Guaranty shall not
decrease or diminish the Guarantor's liability under this Guaranty.
14. Notices. All notices, demands, instructions and other
communications required or permitted to be given to or made upon any party
hereto or any other person shall be in writing and shall be personally delivered
or sent by registered or certified mail, postage prepaid, return receipt
requested, or telegram (with messenger delivery specified in the case of a
telegram), or by prepaid courier, and shall be deemed to be given for purpose of
this Guaranty in regard to registered or certified mail, three (3) Domestic
Business Days after mailing, and in regard to personal delivery, telegram, or
prepaid courier, on the day that such writing is delivered. Unless otherwise
specified in a notice sent or delivered in accordance with the foregoing
provisions of this Section, notices, demands, instructions and other
communications in writing shall be given to or made upon the following persons
at its addresses indicated below:
To Guarantor:
Brookdale Living Communities, Inc.
00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Xx.
Telecopy: (000) 000-0000
Brookdale Living Communities, Inc.
00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Telecopy: (000) 000-0000
To the Agent:
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KeyCorporate Capital, Inc., as Agent
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attention: Xx. Xxxxx X. Xxxxxx
Vice President
with a courtesy copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxxxxxx X. Xxxx, Esq.
with a courtesy copy to any Lender:
at its address specified in or pursuant
to the Loan Agreement
or at such other address as any of the persons identified above may from time to
time designate by written notice given as herein required. Rejection or refusal
to accept or inability to deliver because of changed addresses or because notice
of changed address was given shall be deemed a receipt of such notice. Failure
to provide a courtesy copy of any notice required hereunder shall not invalidate
any notice otherwise given in accordance with this Section.
If any day on which any notice, demand, instruction or other
communication is given or sent by any party hereto is not a Domestic Business
Day, such notice, demand, instruction or other communication shall be deemed to
have been given or sent on the Domestic Business Day next succeeding such
non-Domestic Business Day.
15. Submission to Jurisdiction. (a) The Guarantor irrevocably
submits to the non-exclusive jurisdiction of the courts of the State of New
York, the courts of the United States for the Southern District of the State of
New York, and appellate courts from any thereof, over any suit, action or
proceeding arising out of or relating to this Guaranty. The Guarantor hereby
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any such suit, action
or proceeding brought in any such court and any claim that any such suit, action
or proceeding brought in such a court has been brought in an inconvenient forum.
Without limiting the Guarantor's right to appeal any such final judgment in
accordance with applicable Requirements, the Guarantor agrees that a final
judgment in any such suit, action or proceeding brought in such a court shall be
conclusive and binding upon the Guarantor.
(b) The Guarantor hereby irrevocably appoints CT Corporation System
as its authorized agent to accept and acknowledge, on behalf of the Guarantor,
service of any and all process which may be served in any suit, action or
proceeding of the nature referred to above in any such court. The Guarantor
represents and warrants that such agent has agreed in writing to accept such
appointment and that the Guarantor has delivered to the Agent a true copy of
such designation and acceptance. Said designation and appointment shall be
irrevocable. If such agent shall cease so to act, the Guarantor covenants and
agrees that it shall irrevocably designate and appoint without delay another
such agent satisfactory to the Agent and shall promptly deliver to the Agent
evidence in writing of such other agent's acceptance of such appointment.
(c) Process may be served in any suit, action or proceeding of the
nature referred to above (i) by the mailing of copies thereof by registered or
certified air mail, postage prepaid return receipt requested, to the Guarantor
at its address set forth above or to such other address of which the Guarantor
shall have given written notice to the Agent, or (ii) without affecting the
efficacy of any service made pursuant to clause (i) above, if the Guarantor
shall not have filed an appearance within twenty-one days after the date of such
mailing, by serving a
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copy thereof upon CT Corporation System, at its office at 0000 Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, as the Guarantor's agent for service of process. The
Guarantor agrees that such service shall be deemed in every respect effective
service of process upon the Guarantor in any such suit, action or proceedings
and shall, to the fullest extent permitted by law, be taken and held to be valid
personal service upon and personal delivery to the Guarantor. Nothing in this
Section shall affect the right of the Agent to serve process in any manner
permitted by law or limit the right of the Agent to bring proceedings against
the Guarantor in the courts of any other jurisdiction or jurisdictions.
16. Entire Agreement; Modification and Waiver. This Guaranty,
together with the Completion Guaranty, the Operating Deficit Guaranty and the
Environmental Indemnity Agreement, represent the entire agreement between the
Guarantor, on the one hand, and the Agent and the Lenders, on the other hand,
with respect to the matters referred to herein and therein and no waiver or
modification hereof or thereof shall be effective unless in writing and signed
by the Agent and the Guarantor. All approvals, consents and other actions by the
Agent hereunder shall be given or taken by the Agent in accordance with the
provisions regarding Agent powers provided in the Loan Agreement (including any
required instructions or consents by any specified percentage of Lenders or all
Lenders). No Lender shall have any power to amend, discharge or terminate this
Guaranty, all such actions being within the powers of the Agent (acting on
behalf of the Lenders as provided in Article VII of the Loan Agreement). This
Guaranty, the Completion Guaranty, the Operating Deficit Guaranty and the
Environmental Indemnity Agreement are independent agreements and shall be so
construed in accordance with their respective terms. The Completion Guaranty,
the Operating Deficit Guaranty and the Environmental Indemnity Agreement are
additional security and benefit to the Agent and the Lenders and are not in lieu
of and do not in any way diminish the Guaranty Obligations of the Guarantor
hereunder. The Guarantor shall be fully liable to the Agent and the Lenders
hereunder whether or not the Agent or any Lender has or shall obtain any other
or further guaranties, security or agreements, and irrespective of whether the
Completion Guaranty, the Operating Deficit Guaranty or the Environmental
Indemnity Agreement or other or further guaranties, security or agreements are
effective or enforceable or are released in whole or in part, voluntarily or
involuntarily or by operation of law or otherwise. Neither the Agent nor any
Lender shall have any obligation to pursue or attempt to pursue any remedies
under the Completion Guaranty, the Operating Deficit Guaranty or the
Environmental Indemnity Agreement or any other or further guaranties, security
or agreement and may enforce all rights and obligations hereunder, irrespective
of the existence or nonexistence of other or further guaranties, security or
agreements.
17. Governing Law. THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES AND OTHER PERSONS BENEFITTED HEREUNDER SHALL BE CONSTRUED, ENFORCED,
AND INTERPRETED ACCORDING TO THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE IN AND PERFORMED IN THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS.
18. Successors and Assigns. This Guaranty shall be binding upon the
Guarantor and upon its successors and assigns and shall inure to the benefit of
the Agent and the Lenders and their respective successors and assigns.
19. Time of the Essence. Time shall be of the essence with regard to
the performance by the Guarantor of its obligations under this Guaranty.
20. Termination of Guaranty. This Guaranty shall terminate when all
of the Guaranty Obligations have been fully satisfied.
21. Singular and Plural. As used in this Guaranty, the singular
shall include the plural as the context requires.
22. Waiver of Trial by Jury. THE GUARANTOR, AND THE AGENT AND THE
LENDERS BY THEIR ACCEPTANCE OF THE BENEFITS HEREOF, EACH HEREBY IRREVOCABLY
WAIVE
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TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BETWEEN OR AMONG ANY OF
THEM, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, ARISING OUT OF OR IN ANY
WAY CONNECTED TO THE LOAN, THIS GUARANTY OR ANY OF THE OTHER LOAN DOCUMENTS.
23. Transfer of Property, Mergers, etc. The Guarantor hereby
covenants and agrees, that until this Guaranty is terminated in accordance with
its terms, (a) the Guarantor shall not, without the Agent's prior written
consent, directly or indirectly, convey, transfer or assign any property or
asset of any nature, whether real property, personal property or mixed, tangible
or intangible or any interest therein, for less than fair market value, if the
same would cause a reduction in Guarantor's net worth below $70,000,000 or a
reduction in Guarantor's minimum liquidity in the form of Liquid Assets below
$5,000,000, and (b) the Guarantor shall not merge or consolidate with, or sell,
assign, lease or otherwise dispose of all or substantially all of its assets to,
any other person; provided, that the Guarantor may consolidate with another
person, or merge with and into another person, or permit another person to merge
with and into the Guarantor, if the transaction complies with the requirements
of Section 4.2(m) of the Building Loan Agreement and the following requirements
are satisfied:
(i) the Agent shall have been provided by the Guarantor with such
information concerning such transaction as the Agent may
reasonably request;
(ii) no Event of Default hereunder or under the Loan Agreement, or
event which with notice and lapse of time would become such an
Event of Default, shall have occurred and be continuing;
(iii) the effectiveness and priority of the liens and security
interests created pursuant to the Loan Documents are not
impaired by reason of any such transaction; and
(iv) the resulting or surviving person (if other than the Guarantor)
shall be a corporation, partnership or limited liability
company, duly organized under the laws of the United States, any
State thereof, or the District of Columbia, and shall assume,
pursuant to a written instrument or instruments, satisfactory in
form and substance to the Agent, all of the obligations of the
Guarantor under this Guaranty and each other Loan Document to
which the Guarantor is a party.
24. Severability. If any term or provision of this Guaranty or any
application thereof shall be held to be invalid, illegal or unenforceable, the
remainder of this Guaranty and any other application of such term or provision
shall not be affected thereby.
25. Agent to Act on Behalf of Lenders, etc. The Lenders and the
Agent and their respective successors and assigns are beneficiaries of this
Guaranty, but any legal proceedings or other enforcement actions on behalf of
any Lender against the Guarantor with respect to this Guaranty shall be
undertaken and maintained by the Agent, acting on behalf and for the ratable
benefit of the Agent and the Lenders, with the proceeds of any such proceedings
or enforcement actions to be applied as provided in the Loan Documents.
26. Headings. The headings in this Guaranty are for purposes of
reference only and shall not limit or define the meaning hereof.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, this Guaranty has been executed by the undersigned
as of the date first above written.
BROOKDALE LIVING COMMUNITIES, INC.
By: /s/ Xxxx X. Xxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxx
Title: President and CEO
State of ILLINOIS )
) SS.:
County of XXXX )
On the 24th day of August, in the year 1999 before me, the undersigned, a notary
public in the State of Illinois, personally appeared Xxxx X. Xxxxxxx, personally
known to me or proved to me on the basis of satisfactory evidence to be the
individual whose name is subscribed to the within instrument and acknowledged to
me that he executed the same in his capacity, and that by his signature on the
instrument, the individual, or the person upon behalf of which the individual
acted, executed the instrument, and that such individual made such appearance
before the undersigned in the County of Xxxx, State of Illinois.
NOTARY SEAL
/s/ Xxxxx Xxxx Xxxxx
---------------------------
Notary Public (affix seal)
Schedule 1
----------
1. Complaint filed in the Supreme Court of the State of New York, Kings
County, on July 23, 1999, having Index # 25973/99, by Xxxx Xxxxxx and
Xxxxxxxxx Xxxxxx, as plaintiffs, against Brookdale Living Community,
HRH Construction Corp. and Maxim Construction Corp., as defendants,
claiming damages in the amount of $6,000,000, resulting from injuries
allegedly sustained by Xxxx Xxxxxx while working on the construction of
the Project.
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