EXHIBIT 16
----------
REPAYMENT GUARANTY
THIS REPAYMENT GUARANTY ("Guaranty") is made as of June 10, 2004, by The Price
Group LLC, a California limited liability company ("Guarantor") in favor of
▇▇▇▇▇ Fargo Bank, National Association ("Lender").
R E C I T A L S
A. Pursuant to the terms of a loan agreement between The 520 Group, LLC, a
California limited liability company ("Borrower") and Lender dated as of
June 10, 2004 ("Loan Agreement"), Lender has agreed to loan to Borrower the
principal sum of Fifty Million and 00/100ths Dollars ($50,000,000.00)
("Loan") for purposes specified in the Loan Agreement.
B. The Loan Agreement provides that the Loan shall be evidenced by a
promissory note ("Note") made by Borrower payable to the order of Lender in
the principal amount of the Loan and shall be secured by a Securities
Pledge and Security Agreement dated concurrently herewith. The term "Loan
Documents" for purposes hereof shall mean the Loan Agreement, the Note and
those other documents described in the Loan Agreement as Loan Documents.
THEREFORE, to induce Lender to enter into the Loan Agreement and to make the
Loan, and in consideration thereof, Guarantor unconditionally guarantees and
agrees as follows:
1. GUARANTY. Guarantor hereby guarantees and promises to pay to Lender or
order, on demand, in lawful money of the United States, in immediately
available funds, the principal sum of Fifty Million and 00/100ths Dollars
($50,000,000.00) or so much thereof as may be due and owing under the Note
or any of the other Loan Documents together with interest and any other
sums payable under the Note or any of the other Loan Documents.
2. NET CASH LIQUIDITY. Net Cash Liquidity for Guarantor, together with
Borrower and each other "Guarantor" of the Loan, in the aggregate, shall
not at any time be less than Fifteen Million Dollars ($15,000,000.00).
3. PLRE STOCK; REGISTRATION RIGHTS. With exception of the PLRE Stock pledged
in connection with the Existing Indebtedness, Guarantor shall not, without
the prior written consent of Lender, pledge or encumber any PLRE Stock
owned by Guarantor, from time to time, to or for the benefit of any Person
other than Lender.
4. REMEDIES. If Guarantor fails to promptly perform its obligations under this
Guaranty, Lender may from time to time, and without first requiring
performance by Borrower or exhausting any or all security for the Loan,
bring any action at law or in equity or both to compel Guarantor to perform
its obligations hereunder, and to collect in any such action compensation
for all loss, cost, damage, injury and expense sustained or incurred by
Lender as a direct or indirect consequence of the failure of Guarantor to
perform its obligations hereunder, together with interest thereon at the
rate of interest applicable to the principal balance of the Note.
5. RIGHTS OF LENDER. Guarantor authorizes Lender, without giving notice to
Guarantor or obtaining Guarantor's consent and without affecting the
liability of Guarantor, from time to time to: (a) renew or extend all or
any portion of Borrower's obligations under the Note or any of the other
Loan Documents; (b) declare all sums owing to Lender under the Note and the
other Loan Documents due and payable upon the occurrence of a Default as
defined in the Loan Agreement under the Loan Documents; (c) make
non-material changes in the dates specified for payments of any sums
payable in periodic installments under the Note or any of the other Loan
Documents; (d) otherwise modify the terms of any of the Loan Documents,
except for (i) increases in the principal amount of the Note or changes in
the
--------------------------------------------------------------------------------
The 520 Group Page 1 LOAN NO. 100441
▇▇▇▇▇▇▇.▇▇ M (03/03) 3641-1-4-ALEXANJA
--------------------------------------------------------------------------------
manner by which interest rates, fees or charges are calculated under the
Note and the other Loan Documents (Guarantor acknowledges that if the Note
or other Loan Documents so provide, said interest rates, fees and charges
may vary from time to time) or (ii) advancement of the Maturity Date of the
Note where no Default has occurred under the Loan Documents; (e) take and
hold security for the performance of Borrower's obligations under the Note
or the other Loan Documents and exchange, enforce, waive and release any
such security; (f) apply such security and direct the order or manner of
sale thereof as Lender in its discretion may determine; (g) release,
substitute or add any one or more endorsers of the Note or guarantors of
Borrower's obligations under the Note or the other Loan Documents; (h)
apply payments received by Lender from Borrower to any obligations of
Borrower to Lender, in such order as Lender shall determine in its sole
discretion, whether or not any such obligations are covered by this
Guaranty; (i) assign this Guaranty in whole or in part; and (j) assign,
transfer or negotiate all or any part of the indebtedness guaranteed by
this Guaranty.
6. GUARANTOR'S WAIVERS. Guarantor waives: (a) any defense based upon any legal
disability or other defense of Borrower, any other guarantor or other
person, or by reason of the cessation or limitation of the liability of
Borrower from any cause other than full payment of all sums payable under
the Note or any of the other Loan Documents; (b) any defense based upon any
lack of authority of the officers, directors, partners or agents acting or
purporting to act on behalf of Borrower or any principal of Borrower or any
defect in the formation of Borrower or any principal of Borrower; (c) any
defense based upon the application by Borrower of the proceeds of the Loan
for purposes other than the purposes represented by Borrower to Lender or
intended or understood by Lender or Guarantor; (d) any defense of Guarantor
based upon Lender's election of any remedy against Guarantor or Borrower or
both; (e) any defense based upon Lender's failure to disclose to Guarantor
any information concerning Borrower's financial condition or any other
circumstances bearing on Borrower's ability to pay all sums payable under
the Note or any of the other Loan Documents; (f) any defense based upon any
statute or rule of law which provides that the obligation of a surety must
be neither larger in amount nor in any other respects more burdensome than
that of a principal; (g) any defense based upon Lender's election, in any
proceeding instituted under the Federal Bankruptcy Code, of the application
of Section 1111(b)(2) of the Federal Bankruptcy Code or any successor
statute; (h) any defense based upon any borrowing or any grant of a
security interest under Section 364 of the Federal Bankruptcy Code; (i) any
right of subrogation, any right to enforce any remedy which Lender may have
against Borrower and any right to participate in, or benefit from, any
security for the Note or the other Loan Documents now or hereafter held by
Lender; (j) presentment, demand, protest and notice of any kind; and (k)
the benefit of any statute of limitations affecting the liability of
Guarantor hereunder or the enforcement hereof. Guarantor agrees that the
payment of all sums payable under the Note or any of the other Loan
Documents or any part thereof or other act which tolls any statute of
limitations applicable to the Note or the other Loan Documents shall
similarly operate to toll the statute of limitations applicable to
Guarantor's liability hereunder. Without limiting the generality of the
foregoing or any other provision hereof, Guarantor expressly waives any and
all benefits which might otherwise be available to Guarantor under
California Civil Code Sections 2809, 2810, 2819, 2839, 2845, 2849, 2850,
2899 and 3433, or any of such sections.
7. GUARANTOR'S WARRANTIES. Guarantor warrants and acknowledges that: (a)
Lender would not make the Loan but for this Guaranty; (b) there are no
conditions precedent to the effectiveness of this Guaranty and this
Guaranty shall be in full force and effect and binding on Guarantor
regardless of whether Lender obtains other collateral or any guaranties
from others or takes any other action contemplated by Guarantor; (c)
Guarantor has established adequate means of obtaining from sources other
than Lender, on a continuing basis, financial and other information
pertaining to Borrower's financial condition, and the status of Borrower's
performance of obligations imposed by the Loan Documents, and Guarantor
agrees to keep adequately informed from such means of any facts, events or
circumstances which might in any way affect Guarantor's risks hereunder and
Lender has made no representation to Guarantor as to any such matters; (d)
the most recent financial statements of Guarantor previously delivered to
Lender are true and correct in all respects, have been prepared in
--------------------------------------------------------------------------------
The 520 Group Page 2 LOAN NO. 100441
▇▇▇▇▇▇▇.▇▇ M (03/03) 3641-1-4-ALEXANJA
--------------------------------------------------------------------------------
accordance with generally accepted accounting principles consistently
applied (or other principles acceptable to Lender) and fairly present the
financial condition of Guarantor as of the respective dates thereof, and no
material adverse change has occurred in the financial condition of
Guarantor since the respective dates thereof; (e) Guarantor has not and
will not, without the prior written consent of Lender, sell, lease, assign,
encumber, hypothecate, transfer or otherwise dispose of all or
substantially all of Guarantor's assets, or any interest therein, other
than in the ordinary course of Guarantor's business; (f) Guarantor is in
compliance with all laws and regulations applicable to its organization,
existence and transaction of business and has all necessary rights and
powers to guaranty as contemplated by the Loan Documents; (g) Guarantor is
authorized to execute, deliver and perform its obligations under the Loan
Documents and Other Related Documents, and such obligations shall be valid
and binding obligations of Guarantor; (h) Guarantor has delivered to Lender
all formation and organizational documents of Guarantor, and of all
Guarantors, and all such formation and organizational documents remain in
full force and effect and have not been amended or modified since they were
delivered to Lender. Guarantor shall immediately provide Lender with copies
of any amendments or modifications of the aforementioned formation or
organizational documents; (i) Guarantor's execution, delivery, and
performance under the Loan Documents and Other Related Documents do not:
(a) require any consent or approval not heretofore obtained under any
partnership agreement, operating agreement, articles of incorporation,
bylaws or other document; (b) conflict with, or constitute a breach or
default or permit the acceleration of obligations under any agreement,
contract, lease, or other document by which the Borrower is bound or
regulated; or (c) violate any statute, law, regulation or ordinance, or any
order of any court or governmental entity; (j) except as disclosed to
Lender in writing, there are no claims, actions, suits, or proceedings
pending, or to Guarantor's knowledge threatened, against Guarantor; (k) all
financial statements and information heretofore and hereafter delivered to
Lender by Guarantor, or any Guarantor, including, without limitation,
information relating to the financial condition of Guarantor, fairly and
accurately represent the financial condition of the subject thereof and
have been prepared (except as noted therein) in accordance with generally
accepted accounting principles consistently applied. Guarantor acknowledges
and agrees that Lender may request and obtain additional information from
third parties regarding any of the above, including, without limitation,
credit reports; (l) there has been no material adverse change in the
financial condition of Guarantor since the dates of the latest financial
statements furnished to Lender and, except as otherwise disclosed to Lender
in writing, Guarantor has not entered into any material transaction which
is not disclosed in such financial statements; and (m) all reports,
documents, instruments, information and forms of evidence delivered to
Lender concerning the Loan or security for the Loan or required by the Loan
Documents are accurate, correct and sufficiently complete to give Lender
true and accurate knowledge of their subject matter, and do not contain any
misrepresentation or omission.
8. SUBORDINATION. Guarantor subordinates all present and future indebtedness
owing by Borrower to Guarantor to the obligations at any time owing by
Borrower to Lender under the Note and the other Loan Documents. Guarantor
assigns all such indebtedness to Lender as security for this Guaranty, the
Note and the other Loan Documents. Guarantor agrees to make no claim for
such indebtedness until all obligations of Borrower under the Note and the
other Loan Documents have been fully discharged. Guarantor further agrees
not to assign all or any part of such indebtedness unless Lender is given
prior notice and such assignment is expressly made subject to the terms of
this Guaranty. If Lender so requests, (a) all instruments evidencing such
indebtedness shall be duly endorsed and delivered to Lender, (b) all
security for such indebtedness shall be duly assigned and delivered to
Lender, (c) such indebtedness shall be enforced, collected and held by
Guarantor as trustee for Lender and shall be paid over to Lender on account
of the Loan but without reducing or affecting in any manner the liability
of Guarantor under the other provisions of this Guaranty, and (d) Guarantor
shall execute, file and record such documents and instruments and take such
other action as Lender deems necessary or appropriate to perfect, preserve
and enforce Lender's rights in and to such indebtedness and any security
therefor. If Guarantor fails to take any such action, Lender, as
attorney-in-fact for Guarantor, is hereby authorized to do so in the name
of Guarantor. The foregoing power of attorney is coupled with an interest
and cannot be revoked.
--------------------------------------------------------------------------------
The 520 Group Page 3 LOAN NO. 100441
▇▇▇▇▇▇▇.▇▇ M (03/03) 3641-1-4-ALEXANJA
--------------------------------------------------------------------------------
9. BANKRUPTCY OF BORROWER. In any bankruptcy or other proceeding in which the
filing of claims is required by law, Guarantor shall file all claims which
Guarantor may have against Borrower relating to any indebtedness of
Borrower to Guarantor and shall assign to Lender all rights of Guarantor
thereunder. If Guarantor does not file any such claim, Lender, as
attorney-in-fact for Guarantor, is hereby authorized to do so in the name
of Guarantor or, in Lender's discretion, to assign the claim to a nominee
and to cause proof of claim to be filed in the name of Lender's nominee.
The foregoing power of attorney is coupled with an interest and cannot be
revoked. Lender or its nominee shall have the right, in its reasonable
discretion, to accept or reject any plan proposed in such proceeding and to
take any other action which a party filing a claim is entitled to do. In
all such cases, whether in administration, bankruptcy or otherwise, the
person or persons authorized to pay such claim shall pay to Lender the
amount payable on such claim and, to the full extent necessary for that
purpose, Guarantor hereby assigns to Lender all of Guarantor's rights to
any such payments or distributions; provided, however, Guarantor's
obligations hereunder shall not be satisfied except to the extent that
Lender receives cash by reason of any such payment or distribution. If
Lender receives anything hereunder other than cash, the same shall be held
as collateral for amounts due under this Guaranty. If all or any portion of
the obligations guaranteed hereunder are paid or performed, the obligations
of Guarantor hereunder shall continue and shall remain in full force and
effect in the event that all or any part of such payment or performance is
avoided or recovered directly or indirectly from Lender as a preference,
fraudulent transfer or otherwise under the Bankruptcy Code or other similar
laws, irrespective of (a) any notice of revocation given by Guarantor prior
to such avoidance or recovery, or (b) full payment and performance of all
of the indebtedness and obligations evidenced and secured by the Loan
Documents.
10. LOAN SALES AND PARTICIPATIONS; DISCLOSURE OF INFORMATION. Guarantor agrees
that Lender may elect, at any time, to sell, assign, or grant
participations in all or any portion of its rights and obligations under
the Loan Documents and this Guaranty, and that any such sale, assignment or
participation may be to one or more financial institutions, private
investors, and/or other entities, at Lender's sole discretion. Guarantor
further agrees that Lender may disseminate to any such actual or potential
purchaser(s), assignee(s) or participant(s) all documents and information
(including, without limitation, all financial information) which has been
or is hereafter provided to or known to Lender with respect to: (a) any
party connected with the Loan (including, without limitation, the
Guarantor, the Borrower, any partner of Borrower, any constituent partner
of Borrower, any other guarantor and any non-borrower trustor); and/or (b)
any lending relationship other than the Loan which Lender may have with any
party connected with the Loan. In the event of any such sale, assignment or
participation, Lender and the parties to such transaction shall share in
the rights and obligations of Lender as set forth in the Loan Documents
only as and to the extent they agree among themselves. In connection with
any such sale, assignment or participation, Guarantor further agrees that
the Guaranty shall be sufficient evidence of the obligations of Guarantor
to each purchaser, assignee, or participant, and upon written request by
Lender, Guarantor shall consent to such amendments or modifications to the
Loan Documents as may be reasonably required in order to evidence any such
sale, assignment, or participation.
Anything in this Guaranty to the contrary notwithstanding, and without the
need to comply with any of the formal or procedural requirements of this
Guaranty, including this Section, any lender may at any time and from time
to time pledge and assign all or any portion of its rights under all or any
of the Loan Documents to a Federal Reserve Bank; provided that no such
pledge or assignment shall release such lender from its obligations
thereunder.
11. ADDITIONAL, INDEPENDENT AND UNSECURED OBLIGATIONS. This Guaranty is a
continuing guaranty of payment and not of collection and cannot be revoked
by Guarantor and shall continue to be effective with respect to any
indebtedness referenced in Section 1 hereof arising or created after any
attempted revocation hereof or after the death of Guarantor (if Guarantor
is a natural person, in which event this Guaranty shall be binding upon
Guarantor's estate and Guarantor's legal representatives and heirs).
--------------------------------------------------------------------------------
The 520 Group Page 4 LOAN NO. 100441
▇▇▇▇▇▇▇.▇▇ M (03/03) 3641-1-4-ALEXANJA
--------------------------------------------------------------------------------
The obligations of Guarantor hereunder shall be in addition to and shall
not limit or in any way affect the obligations of Guarantor under any other
existing or future guaranties unless said other guaranties are expressly
modified or revoked in writing. This Guaranty is independent of the
obligations of Borrower under the Note and the other Loan Documents. Lender
may bring a separate action to enforce the provisions hereof against
Guarantor without taking action against Borrower or any other party or
joining Borrower or any other party as a party to such action. Except as
otherwise provided in this Guaranty, this Guaranty is not secured and shall
not be deemed to be secured by any security instrument unless such security
instrument expressly recites that it secures this Guaranty.
12. ATTORNEYS' FEES; ENFORCEMENT. If, following a Potential Default, any
attorney is engaged by Lender to enforce or defend any provision of this
Guaranty, or any of the other Loan Documents, or as a consequence of any
Default under the Loan Documents, with or without the filing of any legal
action or proceeding, Guarantor shall pay to Lender, immediately upon
demand all attorneys' fees and costs incurred by Lender in connection
therewith, together with interest thereon from the date of such demand
until paid at the rate of interest applicable to the principal balance of
the Note as specified therein.
13. RULES OF CONSTRUCTION. The word "Borrower" as used herein shall include
both the named Borrower and any other person at any time assuming or
otherwise becoming primarily liable for all or any part of the obligations
of the named Borrower under the Note and the other Loan Documents. The term
"person" as used herein shall include any individual, company, trust or
other legal entity of any kind whatsoever. If this Guaranty is executed by
more than one person, the term "Guarantor" shall include all such persons.
When the context and construction so require, all words used in the
singular herein shall be deemed to have been used in the plural and vice
versa. All headings appearing in this Guaranty are for convenience only and
shall be disregarded in construing this Guaranty.
14. CREDIT REPORTS. Each legal entity and individual obligated on this Guaranty
hereby authorizes Lender to order and obtain, from a credit reporting
agency of Lender's choice, a third party credit report on such legal entity
and individual.
15. GOVERNING LAW. This Guaranty shall be governed by, and construed in
accordance with, the laws of the State of California, except to the extent
preempted by federal laws. Guarantor and all persons and entities in any
manner obligated to Lender under this Guaranty consent to the jurisdiction
of any federal or state court within the State of California having proper
venue and also consent to service of process by any means authorized by
California or federal law.
16. MISCELLANEOUS. The provisions of this Guaranty will bind and benefit the
heirs, executors, administrators, legal representatives, nominees,
successors and assigns of Guarantor and Lender. The liability of all
persons and entities who are in any manner obligated hereunder shall be
joint and several. If any provision of this Guaranty shall be determined by
a court of competent jurisdiction to be invalid, illegal or unenforceable,
that portion shall be deemed severed from this Guaranty and the remaining
parts shall remain in full force as though the invalid, illegal or
unenforceable portion had never been part of this Guaranty.
17. ADDITIONAL PROVISIONS. Such additional terms, covenants and conditions as
may be set forth on any exhibit executed by Guarantor and attached hereto
which recites that it is an exhibit to this Guaranty are incorporated
herein by this reference.
18. ENFORCEABILITY. Guarantor hereby acknowledges that: (a) the obligations
undertaken by Guarantor in this Guaranty are complex in nature, and (b)
numerous possible defenses to the enforceability of these obligations may
presently exist and/or may arise hereafter, and (c) as part of Lender's
consideration for entering into this transaction, Lender has specifically
bargained for the waiver and relinquishment by Guarantor of all such
defenses, and (d) Guarantor has had the opportunity to seek
--------------------------------------------------------------------------------
The 520 Group Page 5 LOAN NO. 100441
▇▇▇▇▇▇▇.▇▇ M (03/03) 3641-1-4-ALEXANJA
--------------------------------------------------------------------------------
and receive legal advice from skilled legal counsel in the area of
financial transactions of the type contemplated herein. Given all of the
above, Guarantor does hereby represent and confirm to Lender that Guarantor
is fully informed regarding, and that Guarantor does thoroughly understand:
(i) the nature of all such possible defenses, and (ii) the circumstances
under which such defenses may arise, and (iii) the benefits which such
defenses might confer upon Guarantor, and (iv) the legal consequences to
Guarantor of waiving such defenses. Guarantor acknowledges that Guarantor
makes this Guaranty with the intent that this Guaranty and all of the
informed waivers herein shall each and all be fully enforceable by Lender,
and that Lender is induced to enter into this transaction in material
reliance upon the presumed full enforceability thereof.
19. WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS GUARANTY, AND BY ITS
ACCEPTANCE HEREOF, LENDER, HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY
JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING UNDER THE
LOAN DOCUMENTS, INCLUDING, WITHOUT LIMITATION, ANY PRESENT OR FUTURE
MODIFICATION THEREOF OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH
RESPECT TO THE LOAN DOCUMENTS (AS NOW OR HEREAFTER MODIFIED) OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT
OR TORT OR OTHERWISE; AND EACH PARTY AND LENDER HEREBY AGREES AND CONSENTS
THAT ANY PARTY TO THIS GUARANTY AND LENDER MAY FILE AN ORIGINAL COUNTERPART
OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT
OF THE PARTIES HERETO AND LENDER TO THE WAIVER OF THEIR RIGHT TO TRIAL BY
JURY.
IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the date
appearing on the first page of this Guaranty.
"GUARANTOR"
The Price Group LLC, a California limited liability
company
By:________________________________________
Name and Title
By:________________________________________
Name and Title
--------------------------------------------------------------------------------
The 520 Group Page 6 LOAN NO. 100441
▇▇▇▇▇▇▇.▇▇ M (03/03) 3641-1-4-ALEXANJA
