EXHIBIT 10.4
GUARANTY
To: Brookdale Living Communities of Michigan, Inc.
c/o Brookdale Living Communities, Inc.
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
1. Guaranty of Payment. For value received and in consideration of the
acceptance by Brookdale Living Communities of Michigan, Inc., a Delaware
corporation (the "Seller"), of the Note (defined below) of AH Michigan Owner
Limited Partnership, an Ohio limited partnership (the "Purchaser"), in partial
payment of the purchase price payable by the Purchaser to the Seller pursuant to
the Purchase and Sale Agreement, dated as of the date hereof (the "Purchase
Agreement"), between the Seller and the Purchaser, AH MICHIGAN SUBORDINATED,
LLC, an Ohio limited liability company (the "Limited Partner"), and AH MICHIGAN
CGP, INC., an Ohio corporation (the "General Partner" and together with the
Limited Partner, individually, a "Guarantor" and together, the "Guarantors"),
which together own all of the partnership interests in the Purchaser, hereby
unconditionally guarantee, jointly and severally, the full and prompt payment
when due, whether by acceleration or otherwise, and at all times thereafter, of
all obligations (all such obligations being hereinafter collectively called the
"Liabilities") of the Purchaser to the Seller, howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, or now or
hereafter existing, or due or to become due, and the performance by the
Purchaser of its obligations, under or in connection with (i) the Note, dated
the date hereof (as amended, restated, extended or replaced from time to time,
the "Note"), of the Purchaser payable to the order of the Seller in the amount
of $3,044,082.12, (ii) the Purchase Agreement, and (iii) the Development
Agreement, dated as of the date hereof (as amended or restated from time to
time, the "Development Agreement"), between the Purchaser and the Seller, and
the Guarantors further agree to pay all expenses and attorneys' fees paid or
incurred by the Seller in endeavoring to collect the Liabilities, or any part
thereof, and in enforcing this Guaranty.
2. Non-Recourse Guaranty. The obligations of the Guarantors hereunder are
secured by the Collateral Assignment of Partnership Interests, dated as of the
date hereof (the "Collateral Assignment"), by the Guarantors in favor of the
Seller, and notwithstanding any provision of this Guaranty to the contrary, the
Seller's recourse for the collection of the Liabilities shall be limited solely
and exclusively to the collateral covered thereby, and no deficiency judgment
shall be brought or entered into against either Guarantor or its officers,
directors, members, partners, managers, shareholders, incorporators or agents,
and no judgment shall be subject to execution upon, or a lien against any
property of, either Guarantor or its officers, directors, members, partners,
managers, shareholders, incorporators or agents, other than the collateral
covered by the Collateral Assignment.
3. Acceleration of the Time of Payment of Amount Payable Under the Guaranty.
The Guarantors agree that, in the event of the dissolution or insolvency of the
Purchaser or either Guarantor, or the inability of the Purchaser or either
Guarantor to pay debts as they mature, or an assignment by the Purchaser or
either Guarantor for the benefit of creditors, or the institution of any
proceeding by or against the Purchaser or either Guarantor alleging that the
Purchaser or such Guarantor is insolvent or unable to pay debts as they mature,
and if such event occurs at a time when any of the Liabilities may not then be
due and payable, the Guarantors will pay to the Seller forthwith the full amount
which would be payable hereunder by the Guarantors as if all Liabilities of the
Purchaser were then due and payable.
4. Continuing Guaranty. This Guaranty is in all respects a continuing,
absolute and unconditional Guaranty (subject to the limitations set forth in
Section 2 of this Guaranty), and will remain in full force and effect
(notwithstanding, without limitation, the dissolution of either Guarantor) until
the Note has been paid in full and all obligations of the Purchaser under the
Development Agreement have been paid or performed in full, all obligations of
the Purchaser under the Purchase Agreement have been paid or performed in full
and the Development Agreement has been terminated.
5. Rescission or Return of Payment on Liabilities. The Guarantors further
agree that, if at any time all or any part of any payment theretofore applied by
the Seller to any of the Liabilities is or must be rescinded or returned by the
Seller for
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any reason whatsoever (including, without limitation, the insolvency, bankruptcy
or reorganization of the Purchaser), such Liabilities are, for the purposes of
this Guaranty, to the extent that such payment is or must be rescinded or
returned, deemed to have continued in existence, notwithstanding such
application by the Seller, and this Guaranty will continue to be effective or be
reinstated, as the case may be, as to such Liabilities, all as though such
application by the Seller had not been made.
6. Seller Permitted to Take Certain Actions. The Seller may, from time to time
(but is not obligated to), whether before or after any discontinuance of this
Guaranty, at its sole discretion and without notice to the Guarantors, take any
or all of the following actions without in any way affecting the obligations of
the Guarantors hereunder: (a) receive a security interest in any property to
secure any of the Liabilities or any obligation hereunder; (b) retain or obtain
the primary or secondary obligation of any obligor or obligors, in addition to
the Guarantors, with respect to any of the Liabilities; (c) extend or renew for
one or more periods (whether or not longer than the original period), alter or
exchange any of the Liabilities, or release or compromise any obligation of
either of the Guarantors hereunder or any obligation of any nature of any other
obligor with respect to any of the Liabilities; (d) release its security
interest in, or surrender, release or permit any substitution or exchange for,
all or any part of any property securing any of the Liabilities or any
obligation hereunder, or extend or renew for one or more periods (whether or not
longer than the original period) or release, compromise, alter or exchange any
obligations of any nature of any obligor with respect to any such property; and
(e) resort to the Guarantors for payment of any of the Liabilities, whether or
not the Seller (i) has resorted to any property of any other obligor securing
any of the Liabilities or (ii) has proceeded against any other obligor primarily
or secondarily obligated with respect to any of the Liabilities (all of the
actions referred to in preceding clauses (i) and (ii) being hereby expressly
waived by the Guarantors).
7. Application of Payments. Any amounts received by the Seller from whatsoever
source on account of the Liabilities may be applied by it toward the payment of
such of the Liabilities, and in such order of application, as the Seller may
from time to time elect.
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8. Subrogation. Until such time as this Guaranty has been discontinued and the
Seller has received payment of the full amount of all Liabilities and of all
obligations of the Guarantors hereunder, no payment made by or for the account
of the Guarantors pursuant to this Guaranty entitles the Guarantors by
subrogation or otherwise to any payment by the Purchaser or from or out of any
property of Purchaser, and the Guarantors will not exercise any right or remedy
against the Purchaser or any property of the Purchaser by reason of any
performance by the Guarantors of this Guaranty.
9. Waiver of Notice and Other Matters. The Guarantors hereby expressly waive:
(a) notice of the acceptance by the Seller of this Guaranty; (b) notice of the
existence or creation or non-payment of all or any of the Liabilities; (c)
presentment, demand, notice of dishonor, protest, and all other notices
whatsoever; and (d) all diligence in collection or protection of or realization
upon the Liabilities or any thereof, any obligation hereunder, or any guaranty
of or any security for any of the foregoing.
10. Additional Liabilities of the Purchasers Permitted. The creation or
existence from time to time of Liabilities in excess of the amount to which the
right of recovery under this Guaranty is limited is hereby authorized, without
notice to the Guarantors, and will in no way affect or impair the rights of the
Seller and the obligations of the Guarantors under this Guaranty.
11. Assignment of Liabilities. The Seller may, from time to time, whether
before or after any discontinuance of this Guaranty, without notice to the
Guarantors, assign or transfer any or all of the Liabilities or any interest
therein; and, notwithstanding any such assignment or transfer or any subsequent
assignment or transfer thereof, such Liabilities will remain Liabilities for the
purposes of this Guaranty, and each and every immediate and successive assignee
or transferee of any of the Liabilities or of any interest therein will, to the
extent of the interest of such assignee or transferee in the Liabilities, be
entitled to the benefits of this Guaranty to the same extent as if such assignee
or transferee were the Seller; provided, however, that, unless the Seller
otherwise consents in writing, the Seller has an unimpaired right, prior and
superior to that of any such assignee or transferee, to enforce this Guaranty,
for the benefit of the Seller, as to those of the Liabilities which the Seller
has not assigned or transferred.
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12. Waiver and Modifications. No delay on the part of the Seller in the
exercise of any right or remedy will operate as a waiver thereof, and no single
or partial exercise by the Seller of any right or remedy will preclude other or
further exercise thereof or the exercise of any other right or remedy; nor will
any modification or waiver of any of the provisions of this Guaranty be binding
upon the Seller except as expressly set forth in a writing duly signed and
delivered on behalf of the Seller.
13. Obligations Under Guaranty. No action of the Seller permitted hereunder
will in any way affect or impair the rights of the Seller and the obligations of
the Guarantors under this Guaranty. For the purposes of this Guaranty,
Liabilities include all obligations of the Purchaser to the Seller described in
Section 1 of this Guaranty, notwithstanding any right or power of the Purchaser
or anyone else to assert any claim or defense as to the invalidity or
unenforceability of any such obligation, and no such claim or defense will
affect or impair the obligations of the Guarantors hereunder. Subject to the
provisions of Section 2 of this Guaranty, the obligations of the Guarantors
under this Guaranty are absolute and unconditional irrespective of any
circumstance whatsoever which might constitute a legal or equitable discharge or
defense of the Guarantors. The Guarantors hereby acknowledge that there are no
conditions to the effectiveness of this Guaranty.
14. Successors. This Guaranty is binding upon the Guarantors, and upon the
heirs, legal representative, successors and assigns of the Guarantors; and to
the extent that the Purchaser or the Guarantors are either partnerships,
corporations or limited liability companies, all references herein to the
Purchaser and to the Guarantors, respectively, are deemed to include any
successor or successors, whether immediate or remote, to such partnerships,
corporations or limited liability companies.
15. Law. This Guaranty has been delivered in Chicago, Illinois, and will be
construed in accordance with and governed by the laws of the State of Illinois
(without giving effect to principles of conflicts of law).
16. Severability. Wherever possible, each provision of this Guaranty will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Guaranty is prohibited by or invalid under such
law, such provision will be
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ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Guaranty.
17. Captions. Section captions used in this Guaranty are for convenience only,
and do not affect the construction of this Guaranty.
18. Consent to Jurisdiction. To induce the Seller to accept this Guaranty, the
Guarantors irrevocably agree that, subject to the Seller's sole and absolute
election, ALL ACTIONS OR PROCEEDINGS IN ANY WAY ARISING OUT OF, FROM OR RELATED
TO THIS GUARANTY WILL BE LITIGATED IN COURTS HAVING SITUS WITHIN CHICAGO,
ILLINOIS. THE GUARANTORS HEREBY CONSENT AND SUBMIT TO THE JURISDICTION OF ANY
COURT LOCATED WITHIN CHICAGO, ILLINOIS, WAIVE PERSONAL SERVICE OF PROCESS UPON
THE GUARANTORS, AND AGREE THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY
REGISTERED MAIL DIRECTED TO THE GUARANTORS AT THE ADDRESSES STATED ON THE
SIGNATURE PAGE HEREOF AND SERVICE SO MADE WILL BE DEEMED TO BE COMPLETED UPON
ACTUAL RECEIPT.
19. Waiver of Jury Trial. THE GUARANTORS HEREBY EXPRESSLY WAIVE ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER
THIS GUARANTY OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH, AND
AGREE THAT ANY SUCH ACTION OR PROCEEDING WILL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY. THE GUARANTORS AGREE THAT THEY WILL NOT ASSERT ANY CLAIM AGAINST
THE SELLER ON ANY THEORY OF LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL,
INCIDENTAL OR PUNITIVE DAMAGES.
20. Notices. Any notices required or permitted to be sent hereunder shall be
delivered personally or by telecopier (with answer back acknowledged) or mailed,
certified mail, return receipt requested, or delivered by overnight courier
service to the following addresses, or such other addresses as shall be given by
notice delivered hereunder, and shall be deemed to have been given upon
delivery, if delivered personally, upon receipt with answer back acknowledged,
if delivered by telecopier, three (3) business days after mailing, if mailed, or
one business day after delivery to the courier, if delivery by overnight courier
service:
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If to the
Limited Partner: AH Michigan Subordinated, LLC
00 Xxxxx Xxxx Xxxxxx
Xxxxx 0000
Xxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx
Fax: (000) 000-0000
If to the
General Partner: AH Michigan CGP, Inc.
00 Xxxxx Xxxx Xxxxxx
Xxxxx 0000
Xxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx
Fax: (000) 000-0000
If to the Seller: Brookdale Living Communities
of Michigan, Inc.
c/o Brookdale Living
Communities, Inc.
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx, Xx.
Fax: (000) 000-0000
with a copy to: Brookdale Living Communities,
Inc.
00 Xxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
Fax: (000) 000-0000
and to: Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx
Fax: (000) 000-0000
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SIGNED AND DELIVERED THIS 30th day of March, 1998.
AH MICHIGAN SUBORDINATED, LLC
By: AH Michigan Investor, Inc.,
its manager
By: _______________________
Name: _____________________
Title: ____________________
AH MICHIGAN CGP, INC.
By: _______________________
Name: _____________________
Title: ____________________
Accepted:
BROOKDALE LIVING COMMUNITIES OF
MICHIGAN, INC.
By:__________________________
Name: _______________________
Title: ______________________
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October 22, 1997
LaSalle National Bank
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Re: $10,000,000 Unsecured Loan from LaSalle National Bank
to Brookdale Living Communities, Inc.
-----------------------------------------------------
Ladies and Gentlemen:
In the undersigned's capacity as General Counsel of Brookdale Living
Communities, Inc., a Delaware corporation ("Borrower"), the undersigned has
acted as counsel for Borrower in connection with, and have been requested to
deliver an opinion with respect to, the execution and delivery by Borrower of
the documents listed in Schedule 1 hereto (the "Documents") in connection with
the loan made by LaSalle National Bank a national banking association (the
"Bank"), to Borrower in the principal amount of $10,000,000.
In connection with this opinion, the undersigned has examined and is
familiar with the Documents. In addition, the undersigned has examined and
relied upon (except as otherwise set forth herein) such corporate certificates,
documents and instruments, certificates of public officials and other documents
and matters as the undersigned has deemed necessary.
Based on the foregoing, and subject to the qualifications, assumptions,
limitations, comments and exceptions stated herein, the undersigned is of the
opinion that:
1. Each of the Documents have been duly executed and delivered by Borrower.
2. To the best knowledge of the undersigned after due inquiry, there is no
action, proceeding or governmental investigation pending or threatened that
(i) questions the
validity of or challenges the Documents or any of the transactions
contemplated thereby, (ii) would have an adverse effect on the benefits
intended to be realized by Bank under the Documents, or (iii) could
reasonably be expected to have, either in any case or in the aggregate, a
materially adverse effect on the business, properties, assets, operations
or financial condition of Borrower.
3. To the best knowledge of the undersigned after due inquiry, Borrower is
not in violation of any term of its Restated Certificate of Incorporation
or By-laws or of any agreement, document or instrument to which it is a
party or by which it is bound or of any applicable law, ordinance, rule or
regulation of any governmental authority or of any applicable order,
judgment or decree of any court, arbitrator or governmental authority, the
consequences of which violation could reasonably be expected to have,
either in any case or in the aggregate, a materially adverse effect on the
business, operations, financial condition, properties or assets of
Borrower. Neither the execution and delivery nor the performance of the
Documents by Borrower will (i) contravene the Restated Certificate of
Incorporation or By-laws of Borrower in effect as of the date hereof, (ii)
to the best knowledge of the undersigned after due inquiry, violate any
provision of any order, writ, judgment, injunction, decree, determination
or award presently in effect applicable to Borrower, (iii) to the best
knowledge of the undersigned after due inquiry, result in a breach of or
constitute a default under or require the consent of any person pursuant to
any indenture or loan or credit agreement or any other material agreement,
document or instrument to which Borrower is a party as of the date hereof
or by which Borrower or Borrower's properties are bound or affected as of
the date hereof, or (iv) to the best knowledge of the undersigned after due
inquiry, result in, or require, the creation or imposition of any lien or
encumbrance (other than those in favor of Bank) upon or with respect to any
properties or assets of Borrower, pursuant to the terms of any material
agreement, document or instrument to which Borrower is a party as of the
date hereof or as of the date hereof by which Borrower or Borrower's
properties are bound or affected as of the date hereof.
October 22, 1997
Page 3
In rendering the opinions set forth herein, the undersigned has assumed,
without any independent verification or investigation, that (i) the Documents,
and all other agreements, certificates, instruments and other documents
contemplated by the Documents, constitute the valid, binding and enforceable
obligations in accordance with their respective terms of all parties thereto and
that all parties thereto (other than Borrower) have the requisite right, power
and authority to enter into and perform their respective obligations under the
Documents, and such other agreements, certificates, instruments and other
documents; (ii) all consents and waivers delivered by third parties in
connection with the Documents and the transactions contemplated thereby have
been duly authorized, executed and delivered by such third parties and have not
been rescinded in any respect; (iii) (other than with respect to the signatures
of the officers of Borrower) all signatures on agreements, certificates,
instruments and other documents which the undersigned has examined and reviewed
are genuine; and (iv) all agreements, certificates, instruments and other
documents submitted to the undersigned as copies are true and complete copies of
the originals thereof.
Certain of the opinions expressed in this letter are subject to the
following qualifications:
A. Whenever it is stated that the undersigned has assumed any matter, it is
intended to indicate that the undersigned has assumed such matter without
making any factual, legal or other inquiry or investigation, and without
expressing any opinion or conclusion of any kind, concerning such matter.
B. The opinions expressed herein are limited to the matters expressly set
forth herein, and no opinion is implied or may be inferred beyond the
matters expressly stated herein. To
October 22, 1997
Page 4
the extent the foregoing opinions express or depend on matters of fact or
the undersigned's knowledge, such opinions are based on the undersigned's
actual knowledge of such facts, without inquiry except as otherwise
specifically stated herein.
C. The undersigned expresses no opinion as to the enforceability of any of
the Documents.
The opinion addresses the law and facts as of the date hereof, and the
undersigned undertakes no obligation to inform you of any changes in the law or
any facts occurring after the date hereof.
The undersigned is a member of the bar of the State of Illinois. The
opinions set forth herein are limited to the laws of the United States of
America and the State of Illinois, and the undersigned expresses no opinion with
respect to the laws of any other state or jurisdiction or with respect to any
local, city, county or municipal laws.
The opinions set forth herein are solely for the benefit of the Bank and
its permitted assigns, and this opinion may not be quoted or reproduced in whole
or in part or otherwise referred to in any document or instrument or be
furnished to or relied upon by any other person or entity or in connection with
any transaction other than those contemplated by the Documents without the
undersigned's prior express written consent.
Very truly yours,
----------------------------------------
October 22, 1997
Page 5
Xxxxxx X. Xxxxxx
General Counsel
Schedule 1
----------
DOCUMENTS
---------
Each of the following documents are dated as of October 22, 1997:
1. Loan Agreement between Brookdale Living Communities, Inc., a Delaware
corporation ("Borrower"), and LaSalle National Bank, a national banking
association (the "Bank").
2. Note, issued by Borrower, payable to the order of the Bank in the
principal amount of $10,000,000.00.
3. Solvency and Business Purpose Affidavit from Borrower in favor of the
Bank.
