EXHIBIT 10.5
GUARANTY
THIS GUARANTY ("Guaranty") is executed as of January 11, 2002 by
SUNRISE DUNWOODY ASSISTED LIVING, L.P., a Georgia limited partnership, SUNRISE
COLUMBUS ASSISTED LIVING LIMITED PARTNERSHIP, a Georgia limited partnership,
SUNRISE EDINA ASSISTED LIVING, L.L.C., a Minnesota limited liability company,
SUNRISE GREENVILLE ASSISTED LIVING LIMITED PARTNERSHIP, a South Carolina limited
partnership, SUNRISE POLAND ASSISTED LIVING, L.L.C., an Ohio limited liability
company, SUNRISE AUGUSTA ASSISTED LIVING LIMITED PARTNERSHIP, a Georgia limited
partnership, SUNRISE EASTOVER ASSISTED LIVING, L.L.C., a North Carolina limited
liability company, SUNRISE XXXXXXXX ASSISTED LIVING, L.L.C., a Virginia limited
liability company, SUNRISE FALL CREEK ASSISTED LIVING, L.L.C., an Indiana
limited liability company, SUNRISE FORT XXXXX ASSISTED LIVING, L.L.C., an
Indiana limited liability company, SUNRISE SHAKER HEIGHTS ASSISTED LIVING,
L.L.C., a Virginia limited liability company, SUNRISE WILLOW LAKE ASSISTED
LIVING, L.L.C., an Indiana limited liability company, SUNRISE WOOSTER ASSISTED
LIVING, L.L.C., an Ohio limited liability company, SUNRISE FLOSSMOOR ASSISTED
LIVING, L.L.C., an Illinois limited liability company, and SUNRISE ASSISTED
LIVING INVESTMENTS, INC., a Virginia corporation ("SALII"), all having a mailing
address at c/o Sunrise Assisted Living, Inc., 0000 Xxxxxxxx Xxxxx, XxXxxx,
Xxxxxxxx 00000 (jointly and severally, hereinafter called "Guarantors"), for the
benefit of FLEET NATIONAL BANK, a national banking association having an address
at One Federal Street, 4th Floor, Mail Stop: MA DE 10304X, Xxxxxx, Xxxxxxxxxxxxx
00000, as administrative agent for the Lenders (in such capacity, together with
its successors and assigns in such capacity, the "Administrative Agent"). This
Guaranty is given in connection with a $92,000,000 loan (the "Loans") as
evidenced by certain promissory note(s) (collectively, if more than one, the
"Notes") given in connection with the Credit Agreement referred to below and
which is secured by certain mortgages dated as of even date herewith, as may be
amended from time to time (collectively, the "Mortgages") given by Guarantors in
favor of the Administrative Agent.
Capitalized terms used herein and not otherwise specifically defined
shall have the same meaning herein as in the Credit Agreement dated as of even
date herewith, as may be amended from time to time (the "Credit Agreement"),
among SUNRISE ASSISTED LIVING, INC., a Delaware corporation having an address at
0000 Xxxxxxxx Xxxxx, XxXxxx, Xxxxxxxx 00000 ("Borrower"), the institutions from
time to time who are a party thereto as "Lenders" (whether by execution of
thereof or through an Assignment and Acceptance Agreement), Administrative
Agent, and the other Agents listed therein.
RECITALS
WHEREAS, the Guarantors and Borrower are engaged in related businesses,
and each Guarantor has derived and will derive substantial direct and indirect
benefit from the making of the extensions of credit under the Credit Agreement;
NOW, THEREFORE, for value received, and to induce Lenders to extend
credit to Borrower, as provided for in the Credit Agreement and the other Loan
Documents, Guarantors hereby jointly and severally unconditionally agree as
follows:
1. GUARANTY. Each Guarantor, as a primary party and not merely as a
surety, unconditionally and irrevocably guarantees the following (the
"Guaranteed Obligations"):
A. ALL OBLIGATIONS. The prompt and full payment (and not
merely the collectability), performance and observance of all of the
obligations, terms and conditions to be paid, performed or observed by
Borrower under the Notes, the Credit Agreement, the Mortgages, the
Interest Rate Protection Agreements, and each other Loan Document, each
as the same may be hereafter amended, modified, extended, renewed or
recast, including, but not limited to the payment of $92,000,000, or so
much thereof as may be outstanding as principal, together with interest
and other charges thereon as provided for in the Notes and the Credit
Agreement.
B. CARRY. The prompt and full payment, and not merely the
collectability, when due of interest on the Loans and all other costs
of financing, owning, developing, operating, leasing, maintaining,
repairing and restoring the Facilities, including, without limitation,
the payment when due of all real estate taxes, municipal charges,
utility charges, insurance premiums, other operating expenses and
expenses of developing, marketing and leasing.
Notwithstanding any provision contained in this Agreement or any other
Loan Document to the contrary, it is the intention and agreement of each
Guarantor that the obligations of such Guarantor under this Agreement shall be
valid and enforceable against such Guarantor to the maximum extent permitted by
applicable law. Accordingly, if any provision of this Agreement creating any
obligation of any Guarantor in favor of the Administrative Agent and the Lenders
shall be declared to be invalid or unenforceable in any respect or to any
extent, it is the stated intention and agreement of such Guarantor, the
Administrative Agent and the Lenders that any balance of the obligation created
by such provision and all other obligations of such Guarantor to the
Administrative Agent and the Lenders created by other provisions of this
Agreement shall remain valid and enforceable. Likewise, if any sums which the
Administrative Agent and the Lenders may be otherwise entitled to collect from
such Guarantor under this Agreement shall be declared to be in excess of those
permitted under any law (including any federal or state fraudulent conveyance or
like statute or rule of law) applicable to such Guarantor's Guarantor
Obligations, it is the stated intention and agreement of such Guarantor to the
Administrative Agent and the Lenders, that all sums not in excess of those
permitted under such applicable law shall remain fully collectible by the
Administrative Agent and the Lenders from such Guarantor and such excess sums
shall nevertheless survive as a subordinate obligation of such Guarantor,
-2-
junior in right to the claims of general unsecured creditors, but prior to the
claims of equityholders in such Guarantor.
Upon any Event of Default under the Credit Agreement, or any of the
other Loan Documents, or if Administrative Agent has accelerated the Loans
pursuant to a right to do so under the Credit Agreement, Administrative Agent
may at its option proceed directly and at once, without further notice, against
any or all Guarantors hereunder, without proceeding against Borrower, or any
other person or other Collateral for the obligations secured by this Guaranty.
Any sums payable by Guarantors hereunder shall bear interest at the Default Rate
from the date of demand until the date paid.
If Borrower, or any Guarantor if so required, shall fail or refuse to
perform or continue performance of all of the Obligations of the Credit
Agreement on the part of Borrower to be kept and performed, then, if an Event of
Default exists on account thereof under the Credit Agreement or this Guaranty,
in addition to any other rights and remedies which Administrative Agent may have
hereunder or elsewhere, and not in limitation thereof, Administrative Agent, at
Administrative Agent's option, may exercise any or all of its rights and
remedies under the Credit Agreement and each other Loan Document.
This Guaranty shall survive and continue in full force and effect
beyond and after the payment and satisfaction of the Guaranteed Obligations and
the Obligations of Borrower in the event the Administrative Agent or Lenders are
required to disgorge or return any payment or property received as a result of
any laws pertaining to preferences, fraudulent transfers or fraudulent
conveyances.
2. WAIVERS. Each Guarantor hereby waives and relinquishes to the
fullest extent now or hereafter not prohibited by applicable law:
(a) all suretyship defenses and defenses in the nature
thereof;
(b) any right or claim of right to cause a marshalling of the
assets of Borrower or of any Collateral, or to cause Administrative
Agent to proceed against any of the other security for the Guaranteed
Obligations or the Obligations of Borrower before proceeding under this
Agreement against Guarantor, or, if there shall be more than one
Guarantor, to require Administrative Agent to proceed against any other
Guarantor or any of Guarantors in any particular order;
(c) until the full and Non-Contestable Payment (as hereinafter
defined) and satisfaction of all Obligations, all rights and remedies,
including, but not limited to, any rights of subrogation, contribution,
reimbursement, exoneration or indemnification pursuant to any
agreement, express or implied, or now or hereafter accorded by
applicable law to indemnitors, guarantors, sureties or accommodation
parties. Provided, however, unless Administrative Agent otherwise
expressly agrees in writing, such waiver by a Guarantor shall not be
effective to the extent that by virtue thereof such Guarantor's
liability under this Guaranty or under any other Loan Document is
rendered invalid, voidable, or
-3-
unenforceable under any applicable state or federal law dealing with
the recovery or avoidance of so-called preferences or fraudulent
transfers or conveyances or otherwise;
(d) notice of the acceptance hereof, presentment, demand for
payment, protest, notice of protest, or any and all notice of
nonpayment, nonperformance, nonobservance or default, or other proof or
notice of demand whereby to charge Guarantors therefor;
(e) the pleading of any Statute of Limitations as a defense to
Guarantors' obligations hereunder;
(f) the right to a trial by jury in any matter related to this
Guaranty; and
(g) the benefit of all other provisions of law which may be
validly waived.
3. CUMULATIVE RIGHTS. Administrative Agent's rights under this
Agreement shall be in addition to and not in limitation of all of the rights and
remedies of Administrative Agent under the Loan Documents. All rights and
remedies of Administrative Agent shall be cumulative and may be exercised in
such manner and combination as Administrative Agent may determine.
4. NO IMPAIRMENT. The liability of Guarantors hereunder shall in no way
be limited or impaired by, and Guarantors hereby assent to and agree to be bound
by, any amendment or modification of the provisions of the Loan Documents to or
with Lenders or Administrative Agent by Borrower or any other Guarantor or any
person who succeeds Borrower or a Guarantor as owner of the Facilities. In
addition, the liability of Guarantors under this Guaranty and the other Loan
Documents shall in no way be limited or impaired by:
(a) any extensions of time for performance required by any of
the Loan Documents;
(b) any amendment to or modification of any of the Loan
Documents;
(c) any sale or assignment of the Loans or any sale,
assignment or foreclosure of the Mortgages or any sale, transfer or
exchange of all or part of the Facilities;
(d) any exculpatory, or nonrecourse, or limited recourse,
provision in any of the Loan Documents limiting Administrative Agent's
recourse to the Facilities encumbered by the Mortgages or to any other
property or limiting Administrative Agent's rights to a deficiency
judgment against Borrower or any other person or entity;
-4-
(e) the accuracy or inaccuracy of any of the representations
or warranties made by or on behalf of Borrower or Guarantors, under any
Loan Document or otherwise;
(f) the release of Borrower or any other person or entity,
from performance or observance of any of the agreements, covenants,
terms or conditions contained in any of the Loan Documents by operation
of law, Administrative Agent's voluntary act, or otherwise;
(g) the filing of any bankruptcy or reorganization proceeding
by or against Borrower or any subsequent owner of the Facilities;
(h) the release or substitution in whole or part of any
collateral or security for the Obligations or the Guaranteed
Obligations;
(i) Administrative Agent's failure to record the Mortgages or
file any UCC financing statements, or Administrative Agent's improper
recording or filing of any thereof, or Administrative Agent's failure
to otherwise perfect, protect, secure, or insure any security interest
or lien given as security for the Obligations;
(j) the release of any other party now or hereafter liable
upon or in respect of this Guaranty or any of the other Loan Documents;
or
(k) the invalidity or unenforceability of all or any portion
of any of the Loan Documents as to Borrower or any other person or
entity.
Any of the foregoing may be accomplished with or without notice to Borrower or
any Guarantor and with or without consideration.
5. DELAY NOT WAIVER. No delay on Administrative Agent's part in
exercising any right, power or privilege hereunder or under any of the Loan
Documents shall operate as a waiver of any such privilege, power or right. No
waiver by Administrative Agent in any instance shall constitute a waiver in any
other instance.
6. WARRANTIES AND REPRESENTATIONS. Each Guarantor warrants and
represents to Lenders and Administrative Agent for the express purpose of
inducing Lenders and Administrative Agent to make the Loans and enter into the
Loan Documents, and to accept this Guaranty, that as of the date of this
Guaranty and at all times thereafter until the Loans are repaid and all
Guaranteed Obligations to Administrative Agent and Lenders have been satisfied
in full, as follows:
(a) EXISTENCE/GOOD STANDING. Each Guarantor is a limited
partnership or a limited liability company duly organized and existing
and in good standing under the laws of the jurisdiction of its
formation, has the power to own its property and to carry on its
business as now being conducted, and is duly
-5-
qualified to do business and is in good standing in each jurisdiction
in which each Facility owned by such Guarantor is located and in which
the character of the properties owned by it therein or in which the
transaction of its business makes such qualification necessary.
(b) POWER AND AUTHORITY. Each Guarantor has full power and
authority to execute and deliver this Agreement and each of the other
Loan Documents executed and delivered by it, to enter into this
Guaranty and the Security Documents, and to incur the Obligations, all
of which have been duly authorized by all proper and necessary entity
action. No consent or approval of partners or members of, or lenders
to, Guarantors, and no consent or approval of any Governmental
Authority or any third party payor on the part of Guarantors, is
required as a condition to the validity or enforceability of this
Agreement or any of the other Loan Documents executed and delivered by
any of Guarantors or to the payment or performance by Guarantors of the
Obligations.
(c) BINDING AGREEMENTS. This Guaranty and each of the other
Loan Documents executed and delivered by Guarantors have been properly
executed by Guarantors, constitute valid and legally binding
obligations of Guarantors, and are fully enforceable against Guarantors
in accordance with their respective terms.
(d) LITIGATION. There are no proceedings pending before any
court or arbitrator or before or by any Governmental Authority which,
in any one case or in the aggregate, will cause a Material Adverse
Change in any of Guarantors or affect the authority of any of
Guarantors to enter into this Guaranty or any of the other Loan
Documents executed and delivered by any of Guarantors. There is no
pending revocation, suspension, termination, probation, restriction,
limitation or non-renewal of any License, Participation Agreement or
any similar accreditation or approval organization or Governmental
Authority for healthcare providers, including, without limitation, the
issuance of any provisional License or other License with a term of
less than twelve (12) months, as a consequence of any sanctions imposed
by any Governmental Authority, nor is there any pending assessment of
any civil or criminal penalties by any Governmental Authority, the
outcome of which, if determined adversely to any of Guarantors, could
result in a Material Adverse Change in any of Guarantors. Guarantors do
not have any appeals regarding rates or reimbursements currently
pending or contemplated before any Governmental Authority or any
administrator of any third party payor or preferred provider program or
referral source, the outcome of which, if determined adversely to any
of Guarantors, could result in a Material Adverse Change in any of
Guarantors. There are no Medicare or Medicaid recoupments or
recoupments of any other third party payor being sought, requested or
claimed, against any of Guarantors in writing to, and approved by, the
Administrative Agent.
-6-
(e) NO CONFLICTING AGREEMENTS. There is (a) no provision of
any Guarantors' partnership agreement, articles of incorporation or
operating agreement and no provision of any existing mortgage,
indenture, contract or agreement binding on any of the Guarantors or
affecting its property, and (b) to the knowledge of Guarantors, no
provision of law or order of court binding upon any of Guarantors,
which would conflict with or in any way prevent the execution,
delivery, or performance of the terms of this Agreement or of any of
the other Loan Documents executed and delivered by any of Guarantors,
or which would be violated as a result of such execution, delivery or
performance, or, if so, all necessary consents have been obtained.
(f) FINANCIAL INFORMATION. All financial statements or
information hereto furnished to the Lenders with respect to Guarantors,
each Facility and Borrower is complete and correct in all material
respects and fairly presents the financial condition of Guarantors and
the financial condition of the Facilities. There are no liabilities,
direct or indirect, fixed or contingent, of any of Guarantors which are
not reflected in the their respective financial statements or in the
notes thereto. There has been no Material Adverse Change in the
financial condition or operations of any of Guarantors since the
financial statements dated December 31, 2000 (and to Guarantors'
knowledge, no such Material Adverse Change is pending), and none of
Guarantors has guaranteed the obligations of, or made any investments
in or advances to, any company, individual or other entity, except as
disclosed in such information.
(g) NO DEFAULT. None of Guarantors is in default under or with
respect to any obligation under any agreement to which such Guarantor
is a party in any respect which could result in a Material Adverse
Change. There is no Event of Default hereunder.
(h) TAXES. Guarantors have filed or have caused to have been
filed all federal, state and local tax or informational returns which
are required by law to be filed, and has paid or caused to have been
paid all taxes as shown on such returns or on any assessment received
by them, to the extent that such taxes have become due, or which are
required by law to be paid, unless and to the extent only that such
taxes, assessments and governmental charges are currently contested in
good faith and by appropriate proceedings by Guarantors and adequate
reserves therefor have been established as required under GAAP.
(i) PLACE(s) OF BUSINESS AND LOCATION OF COLLATERAL.
Guarantors warrant that the address of Guarantors' chief executive
office is as specified above and that the address of each other place
of business of any of Guarantors, are as disclosed on Schedule 4.1D in
the Credit Agreement. The Collateral and all books and records
pertaining to the Collateral are and/or will be located at such
addresses. Guarantors will immediately advise the Administrative Agent
in writing of the opening of any new place of business or the closing
of any existing
-7-
place of business of any of Guarantors, and of any change in the
location of the places where the Collateral, or any part thereof, or
the books and records concerning the Collateral, or any part thereof,
are kept or of any change in the states of organization of a Guarantor.
(j) USE; TITLE AND CONDITION OF PROPERTIES. Each Facility is
utilized principally as an assisted living facility and is consistent
with the operating characteristics of the existing portfolio of
facilities controlled by Borrower. Each Facility other than Sunrise of
Wooster (Ohio) is wholly owned in fee by Borrower or a Guarantor which
is a wholly owned subsidiary of Borrower. Guarantors have good and
marketable title to all of their properties, including, without
limitation, the Facilities and the Collateral. The Facilities and the
Collateral are free and clear of mortgages, pledges, liens, springing
liens, charges and other encumbrances other than the Permitted Liens on
the Facilities. There are no material environmental and/or structural
defects and material deferred maintenance with respect to any Facility.
(k) RECORDING. Each of the Mortgages will be effective to
create in favor of the Administrative Agent, for the benefit of the
Lenders, a legally valid and enforceable Lien on the Facilities
described therein and proceeds thereof; and when the Mortgages are
filed in the appropriate offices in the jurisdictions in which the
Facilities are located, each such Mortgage shall constitute a fully
perfected first priority Lien on, and security interest in, all right,
title and interest of the Guarantors in the Facilities and the proceeds
thereof, as security for their respective obligations (as set forth in
the relevant Mortgage), in each case prior and superior in right to any
other Person subject to those matters listed on the title insurance
policies being issued to the Administrative Agent as of the date of
recording.
(l) ERISA. With respect to any "pension plan", as defined in
Section 3(2) of ERISA, which plan is now or previously has been
maintained or contributed to by any of Guarantors and/or by any
Commonly Controlled Entity: (a) no "accumulated funding deficiency" as
defined in Code Section 412 or ERISA Section 302 has occurred, whether
or not that accumulated funding deficiency has been waived; (b) no
"reportable event" as defined in ERISA Section 4043 has occurred; (c)
no termination of any plan subject to Title IV of ERISA has occurred;
(d) neither any of Guarantors nor any Commonly Controlled Entity has
incurred a "complete withdrawal" within the meaning of ERISA Section
4203 from any multiemployer plan; (e) neither any of Guarantors nor any
Commonly Controlled Entity has incurred a "partial withdrawal" within
the meaning of ERISA Section 4205 with respect to any multiemployer
plan; (f) no multiemployer plan to which any of Guarantors or any
Commonly Controlled Entity has an obligation to contribute is in
"reorganization" within the meaning of ERISA Section 4241 nor has
notice been received by any of Guarantors or any Commonly Controlled
Entity that such a multiemployer plan will be placed in
"reorganization".
-8-
(m) GOVERNMENTAL CONSENT. Neither the nature of any of
Guarantors or of its business or properties, nor any relationship
between any of Guarantors and any other Person, nor any circumstance in
connection with the making of the Loan, or the offer, issue, sale or
delivery of the Notes is such as to require a consent, approval or
authorization of, or filing, registration or qualification with, any
Governmental Authority, on the part of any of Guarantors, as a
condition to the execution and delivery of this Agreement or any of the
other Loan Documents, the borrowing of the principal amounts of the
Loan or the offer, issue, sale or delivery of the Note 4.
(n) FULL DISCLOSURE. The financial statements that were
delivered to Lenders in connection with the Loans do not, nor does this
Guaranty, nor do any written statements furnished by Guarantors to the
Administrative Agent in connection with the making available of the
Loans, contain any untrue statement of fact or knowingly omit a
material fact necessary to make the statements contained therein or
herein not materially misleading. Guarantors have not failed to
disclose any fact to the Administrative Agent in writing which
materially adversely affects or, will or could prove to materially
adversely affect the properties, business, prospects, profits or
condition (financial or otherwise) of any of Guarantors or the ability
of any of Guarantors to perform this Guaranty or any of the other Loan
Documents.
(o) BUSINESS NAMES AND ADDRESSES. Guarantors have not
conducted business under any name other than their current names or
trade names or under the "Karrington" name and have not conducted their
business in any jurisdiction other than those listed on Schedule 4.1D
to the Credit Agreement. Guarantors intend to operate the Facilities
under the names set forth on Schedule 4.1D to the Credit Agreement.
Guarantors shall promptly notify the Administrative Agent of any change
in the name of any Facility.
(p) LICENSES AND CERTIFICATIONS. Guarantors further represent
and warrant to the Lenders that, with respect to any License they
possess or have applied for, (a) no Default or Event of Default has
occurred or is continuing under the terms of any of the Licenses, or
any condition to the issuance, maintenance, renewal and/or continuance
of any License, (b) Guarantors have paid all fees, charges and other
expenses to the extent due and payable with respect to, and have
provided all information and otherwise complied with all material
conditions precedent to, the issuance, maintenance, renewal, and
continuance of all Licenses, (c) Guarantors have not received any
notice from any Governmental Authority relating to any actual or
pending suspension, revocation, restriction, or imposition of any
probationary use, of any License, nor has any License been materially
amended, supplemented, rescinded, terminated, or otherwise modified
except as otherwise disclosed in writing to, and approved by, the
Administrative Agent, (d) Guarantors have not made any previous
assignment of any of the Licenses to any Person, and (e) no financing
statement covering any of the Licenses is on file in
-9-
any public office except financing statements in favor of the Lenders.
Without implying any limitation to the other representations and
warranties contained in this Agreement, Guarantors are not required by
any applicable Legal Requirement of any state, county or city in which
any of the Facilities is located to obtain a certificate of need to
operate any Facility as an assisted living facility or has applied for
and obtained such Certificate(s) of Need. Licenses to operate are
required in all states where the Facilities are. In New York and
Illinois, licenses must be held by a Home Healthcare Provider as of the
date hereof. After January 1, 2002 an Illinois Facility owner may apply
for a direct license, and a Home Healthcare Provider will not be
required. A list of the major Licenses for each Facility is attached as
Schedule 1.
(q) OPERATING AGREEMENTS AND MANAGEMENT CONTRACTS. Guarantors
have furnished to the Administrative Agent photocopies of all material
Operating Agreements and Management Contracts entered into with respect
to the Facilities, and all amendments, supplements and modifications
thereto including, without limitation, the Management Agreement.
Guarantors further represent and warrant to the Lenders that (a) all of
the material Operating Agreements and Management Contracts are or will
be at the time of execution and delivery thereof valid and binding on
the parties thereto and in full force and effect, (b) no Default or
Event of Default has occurred or is continuing under the terms of any
of the material Operating Agreements and Management Contracts, and no
party thereto has attempted or threatened to terminate any such
Management Contract or Operating Agreement, (c) Guarantors have not
made any previous assignment of any Operating Agreements and Management
Contracts to any Person, and (d) no financing statement covering any of
the Operating Agreements and Management Contracts is on file in any
public office, except financing statements in favor of the Lenders in
connection with the Credit Facility.
(r) PARTICIPATION AGREEMENTS AND RESIDENT AGREEMENTS.
Guarantors have furnished to the Administrative Agent, on or before the
Closing Date, Guarantors' form of Resident Agreement used with respect
to all Facilities and, if requested by the Administrative Agent after
the occurrence and during the continuance of a Default, copies of all
current, executed Resident Agreements for any or all of the Facilities.
Guarantors further covenant to the Lenders that, with respect
to the Participation Agreements, if any, (i) to the best of their
knowledge, all Participation Agreements will be at the time of
execution and delivery thereof valid and binding on the parties thereto
and in full force and effect, and (ii) all Participation Agreements
will provide for payment to the applicable Guarantor for services
rendered to residents. Guarantors represent and warrant that as of the
date hereof it has not entered into any Participation Agreement for any
Facility.
-10-
To the extent Guarantors participate or will participate in
Medicare or Medicaid payment and reimbursement programs, Guarantors
have complied and will comply with all notice and other requirements
under Title XVIII and Title XIX of the Social Security Act to enable
Guarantors to participate in the Medicare and Medicaid payment and
reimbursement programs.
(s) COMPLIANCE WITH LAWS. None of Guarantors is in violation
of any applicable laws of any Governmental Authority pertaining to
employment practices, health standards or controls, environmental and
occupational standards or controls or order of any court or arbitrator,
the violation of which, considered in the aggregate, would result in a
Material Adverse Change in any of Guarantors. Each of Guarantors are in
compliance with all accreditation standards and requirements to which
it is subject. Each of Guarantors has obtained or will obtain all
Licenses necessary to the ownership of its property or to the conduct
of its activities which, if not obtained, could materially adversely
affect the ability of any of Guarantors to conduct its activities of
operating each Facility as an assisted living facility, including,
without limitation if and as required by any Governmental Authorities
for the dispensing, storage, prescription, disposal, and use of drugs,
medications and other "controlled substances" and for the maintenance
of cafeteria and other food and beverage facilities or services or the
condition (financial or otherwise) of any of Guarantors.
(t) PRESENCE OF HAZARDOUS MATERIALS OR HAZARDOUS MATERIALS
CONTAMINATION. None of Guarantors has placed Hazardous Materials on any
real property owned, controlled or operated by any of Guarantors or for
which any of Guarantors are responsible except as described in the
following sentence. To the best of Guarantors' knowledge, no Hazardous
Materials are located on any real property owned, controlled or
operated by any of Guarantors, except for reasonable quantities of
necessary supplies for use by Guarantors in the ordinary course of its
current line of business and stored, used and disposed of in accordance
with applicable Legal Requirements, and no property owned, controlled
or operated by any of Guarantors has ever been used as a manufacturing,
storage, or dump site for Hazardous Materials nor is such property
affected by Hazardous Materials contamination.
(u) BENEFITS TO GUARANTORS. Each Person included in the term
"Guarantors" hereby represents and warrants to the Administrative Agent
that each of them will derive benefits, directly and indirectly, from
each advance under the Loan, both in their separate capacity and as a
member of the integrated group to which each such Person belongs and
because the successful operation of the integrated group is dependent
upon the continued successful performance of the functions of the
integrated group as a whole. Each Guarantor is, both before and after
giving effect to the incurrence of the Loans, will be and will continue
to be at all times, Solvent.
-11-
(v) COMPLIANCE WITH ZONING. Guarantors represent and warrant
that the use of each Facility complies with applicable zoning
ordinances, regulations and restrictive covenants affecting such
Facility, all use requirements of any Governmental Authority having
jurisdiction have been satisfied, and no violation of any law or
regulation exists with respect thereto.
(w) OTHER LIENS. Guarantors represent and warrant that except
as otherwise provided in the Loan Documents, Guarantors have made no
contract or arrangement of any kind the performance of which by the
other party thereto would give rise to a Lien on any Facility.
(x) DEFAULTS. Guarantors represent and warrant that there is
no Default or Event of Default on the part of any of Guarantors under
the Loan Documents.
(y) NOTES RECEIVABLE. SALII hereby represents and warrants
that the provisions of the Article III of the Credit Agreement are true
and correct with respect to the Notes Receivable held by SALII.
(z) SURVIVAL; UPDATES OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained in or made under or in
connection with this Guaranty and the other Loan Documents shall
survive the date of this Agreement and the Loan made hereunder. The
Lenders acknowledge and agree that any and all representations and
warranties contained in, or made under, or in connection with, this
Guaranty may be amended, changed or otherwise modified by Guarantors at
any time and from time to time after the date of this Guaranty so as to
accurately reflect the matters represented and warranted therein;
provided, that such amendments, changes and/or modifications are
disclosed in writing to the Administrative Agent. The Lenders shall
have no obligation to waive any Event of Default due to any present or
future inaccuracy of such representation or warranty or to agree to any
amendment, change or modification of any such representation or
warranty.
7. AFFIRMATIVE COVENANTS OF GUARANTORS. Until payment in full and the
performance of all of the Obligations hereunder, each Guarantor shall:
(a) FINANCIAL STATEMENTS. Furnish to the Administrative Agent:
(i) QUARTERLY STATEMENTS. Not later than forty-five
(45) days after the close of each of Guarantors' fiscal
quarters internally prepared financial statements of
Guarantors on a quarterly and year-to-date basis including a
balance sheet and rent roll as of the close of such period and
an income and expense statement for such period, certified by
the chief financial officer of Guarantor's general partner or
managing member unless such report is included in the
quarterly report of Borrower; and
-12-
(ii) ANNUAL STATEMENTS. Not later than one hundred
twenty (120) days after the close of each of Guarantors'
fiscal years, (i) a copy of the annual financial statements of
Guarantors in reasonable detail satisfactory to the
Administrative Agent, internally prepared in accordance with
GAAP, which financial statements shall include a balance sheet
of Guarantors, as at the end of such fiscal year and the
related statements of operations and retained earnings and
cash flow statements for such fiscal year in a format
acceptable to the Administrative Agent, and (ii) updated rent
rolls in a format acceptable to the Administrative Agent; and
(iii) SALII STATEMENTS. Separate financial statements
do not have to be provided by SALII so long as the information
is included in the consolidating financial statements of
Borrower being provided pursuant to the Loan Agreement.
(iv) TAX RETURNS. Not later than thirty (30) days
after the date of filing, the federal and state income tax
returns for Guarantors for the year in question as well as any
requests for extensions filed in connection therewith;
(v) PROPERTY INFORMATION. By December 1st in each
year collateral reports including annual projections for the
next fiscal year;
(vi) OTHER INFORMATION. With reasonable promptness
such additional information, reports or statements as the
Administrative Agent may from time to time reasonably request;
and
(vii) CERTIFICATION. All required financial
statements, required pursuant to sub-paragraphs (a) and (b)
above shall include the following certification:
"The undersigned as _____________ of ____________ certifies
that the financial information contained in the financial
statement dated _________, is true and complete as of this
date. This statement is provided to Fleet National Bank (the
"Bank") as administrative agent for certain Lenders for the
purpose of obtaining credit or in fulfillment of the terms and
conditions of credit already provided. Accordingly, it is
intended that the Bank may rely on this information".
(b) TAXES AND CLAIMS. Pay and discharge all taxes, assessments
and governmental charges or levies imposed upon it or any of its income
or properties prior to the date on which penalties attach thereto, and
all lawful claims which, if unpaid, might become a lien or charge upon
any of its properties; provided, however, Guarantors shall not be
required to pay any such tax, assessment, charge, levy or claim, the
payment of which is being contested in good faith and by proper
proceedings.
-13-
(c) LEGAL EXISTENCE. Maintain their existence as limited
partnerships or limited liability companies in good standing in the
states of their formation and in each jurisdiction where they are
required to register or qualify to do business.
(d) CONDUCT OF BUSINESS AND COMPLIANCE WITH LAWS. Except for
SALII, be and remain a single purpose entity which shall engage solely
in the ownership and operation of only one of the Facilities. Do or
cause to be done all things necessary to obtain, enter into, preserve
and to keep in full force and effect its material rights and its trade
names, patents, trademarks and Licenses, Participation Agreements, and
Operating Agreements and Management Contracts which are necessary for
the operation of each Facility as an adult assisted living facility as
contemplated by Guarantors, engage in and continue to engage
substantially only in the business of owning and operating an adult
assisted living facility and related services in compliance with all
applicable laws of the state in which the applicable Facility is
located or any other Governmental Authority having jurisdiction over
such Facility, and comply with all applicable Legal Requirements, and
observe the valid requirements of Governmental Authorities, and perform
the terms of all Participation Agreements to which it is a party, the
noncompliance with or the nonobservance of which might materially
interfere with the performance of its Obligations or the proper or
prudent conduct of its business or the applicable Facilities. In
addition, Guarantors covenant and agree that they will:
(i) obtain and maintain in full force and effect all
Licenses necessary to the acquisition and/or ownership and/or
operation of each Facility including, without limitation,
Licenses and other approvals related to the storage,
dispensation, use, prescription and disposal of drugs,
medications and other "controlled substances" and, to the
extent offered by Guarantors, the maintenance of cafeteria and
other food and beverage facilities or services;
(ii) administer, maintain and operate (or will cause
to be administered, maintained and operated) each Facility as
a revenue-producing assisted living facility;
(iii) to the extent Guarantors participate in any
such programs, maintain and operate each Facility to meet the
standards and requirements and to provide healthcare of such
quality and in such manner as would enable Guarantors to
participate in, and provide services in connection with,
recognized medical and healthcare insurance programs;
(iv) obtain, maintain and comply with all conditions
for the continuance of, all Licenses, including without
limitation, Licenses which may at any time be required by the
state in which the applicable Facility is located or other
appropriate governmental entity, necessary or desirable
-14-
for the operation of each Facility as an adult assisted living
facility (or independent living facility, as applicable); and
(v) to the extent Guarantors presently participate or
in the future will participate in such programs, obtain,
maintain and comply with all conditions for the continuance of
certification from each applicable Governmental Authority that
Guarantors meet all conditions for participation in the
Medicare and Medicaid programs.
(e) INSURANCE. Provide or cause to be provided to the
Administrative Agent and maintain in full force and effect at ALL times
during the term of the Loans, such policies of insurance as may be
required by the terms of the Loan Documents from a company or
companies, and in form and amounts satisfactory to the Administrative
Agent including, by way of example and not by way of limitation, at
least the following:
(i) Casualty or physical damage insurance coverage
for each Facility affording protection against loss or damage
by fire or other hazards covered by the standard all-risk fire
and hazard insurance policy with "extended coverage"
endorsement and such other risks as shall be customarily
covered with respect to projects similar in construction,
location and use as the Facilities, or as the Administrative
Agent may from time to time otherwise require in amounts
necessary to prevent the application of any co-insurance
provisions of any applicable policies up to an amount not less
than the greater of the full insurable value of the
Improvements (as defined in the Mortgages) or the aggregate
principal amount of the Obligations; no policy of insurance
shall be written such that the proceeds thereof will produce
less than the minimum coverage required by this Section by
reason of co-insurance provisions or otherwise; the term "full
insurable value" means the actual replacement cost of the
Facilities (as defined in the Mortgages) (excluding foundation
and excavation costs and costs of underground flues, pipes,
drains and other uninsurable items); and as to Facilities
naming the Administrative Agent on behalf of the Lenders as
loss payee and mortgagee;
(ii) General public liability insurance in amounts
usually carried by similar operations against claims for
bodily injury or death and property damage insurance for
claims for damage to property (including loss of use)
occurring upon, in or about the Facilities naming the
Administrative Agent on behalf of the Lenders as loss payee
thereunder, with such insurance to afford protection to the
limit of not less than $5,000,000 for the aggregate of all
occurrences during any given annual policy period for each
Facility;
-15-
(iii) Workers' compensation insurance in accordance
with the requirements of applicable law or regulation naming
the Administrative Agent on behalf of the Lenders as loss
payee thereunder;
(iv) Business interruption insurance naming the
Administrative Agent on behalf of the Lenders as additional
insured with respect to each Facility in an amount equal to at
least twelve (12) months' debt service on a portion of the
Loan (as determined by the Administrative Agent); and
(v) To the extent that healthcare professionals are
employed by any of Guarantors or the Management Company,
medical liability, malpractice and other healthcare
professional liability insurance protecting Guarantors and its
employees against claims arising from the professional
services performed by Guarantors or the Management Company and
their employees with limits of (i) not less than One Million
Dollars ($1,000,000.00) with respect to injury or death for
each person or occurrence, and (ii) not less than Three
Million Dollars ($3,000,000.00) in the aggregate for claims
made for injury or death in any one year, and an umbrella
policy insuring against such liability in an aggregate amount
of Five Million Dollars ($5,000,000.00). In addition,
Guarantors shall ensure that all healthcare providers with
whom any of Guarantors contracts to provide services at any
Facility are insured against claims arising from such services
with limits as set forth in clauses (i) and (ii) above.
Guarantors shall file with the Administrative Agent, upon its
request, a detailed list of the insurance then in effect and stating
the names of the insurance companies, the amounts and rates of the
insurance, dates of the expiration thereof and the properties and risks
covered thereby. Each policy of insurance shall (A) be issued by one or
more recognized, financially sound and responsible insurance companies
approved by the Administrative Agent and which are qualified or
authorized by the laws of the state in which the applicable Facility is
located to assume the risk covered by such policy, (B) with respect to
the insurance described under the preceding subsections (i), (ii) and
(v) have attached thereto standard noncontributing, non-reporting
mortgagee clauses in favor of and entitling the Administrative Agent on
behalf of Lenders without contribution to collect any and all proceeds
payable under such insurance, (C) provide that such policy shall not be
canceled or modified without at least thirty (30) days prior written
notice to the Administrative Agent, and (D) provide that any loss
otherwise payable thereunder shall be payable notwithstanding any act
of negligence of any of Guarantors which might, absent such agreement,
result in a forfeiture of all or a part of such insurance payment.
Unless an escrow account has been established for insurance premiums
pursuant to the provisions of a Mortgage, Guarantors shall promptly pay
all premiums within thirty (30) days prior to the payment due date.
Guarantor will provide a certificate of insurance, evidencing
Administrative Agent (on behalf of Lenders) as additional insured and
-16-
mortgagee/loss payee, prior to the effective date of coverage for all
insurance coverages outlined in (i) - (v) above and, if requested by
Administrative Agent, copies of the policies. Guarantors will
immediately give the Administrative Agent notice of any cancellation
of, or change in, any insurance policy. The Lenders shall not, because
of accepting, rejecting, approving or obtaining insurance, incur any
liability for (i) the existence, nonexistence, form or legal
sufficiency thereof, (ii) the solvency of any insurer, or (iii) the
payment of losses.
(f) FLOOD INSURANCE. If required by applicable law or
regulation, provide or cause to be provided to the Administrative Agent
a separate policy of flood insurance in the aggregate amount of the
applicable Loan or the maximum limit of coverage available with respect
to the Facilities, whichever is the lesser, from a company or companies
satisfactory to the Administrative Agent and written in strict
conformity with the Flood Disaster Protection Act of 1973, as amended,
and all applicable regulations adopted pursuant thereto. Any such
policy shall provide that the policy may not be surrendered, canceled
or substantially modified (including, without limitation, cancellation
for nonpayment of premiums) without at least thirty (30) days' prior
written notice to any and all insureds named therein, including the
Lenders.
(g) MAINTENANCE OF PROPERTIES. Keep its properties, whether
owned in fee or otherwise, or leased, including, without limitation,
all of the Facilities, in good operating condition; make all proper
repairs, renewals, replacements, additions and improvements thereto
needed to maintain such properties in good operating condition; comply
with the provisions of all leases to which it is a party or under which
it occupies property so as to prevent any loss or forfeiture thereof or
thereunder; and comply with all laws, rules, regulations and orders
applicable to its properties or business or any part thereof.
(h) MAINTENANCE OF THE COLLATERAL. Not permit anything to be
done to the Collateral which may impair the value thereof. Any of the
Lenders or an agent designated by such Lender, shall be permitted to
enter the premises of any of Guarantors and examine, audit and inspect
the Collateral at any reasonable time and from time to time without
notice. The Lenders shall not have any duty to, and Guarantors hereby
release the Lenders from, all claims of loss or damage caused by the
delay or failure to collect or enforce any of the accounts or
receivables or to preserve any rights against any other party with an
interest in the Collateral.
(i) OTHER LIENS, SECURITY INTERESTS, ETC. Keep the Collateral
and the Facilities free from all liens, security interests and claims
of every kind and nature, other than Permitted Liens; provided,
Guarantors may lease office equipment and other equipment used in the
normal course of its business for the operation of a Facility provided
the total implied cost of such leased equipment at any Facility shall
not exceed $75,000 at any one time.
-17-
(j) DEFENSE OF TITLE AND FURTHER ASSURANCES. At its expense
defend the title to the Collateral (or any part thereof), and promptly
upon request execute, acknowledge and deliver any financing statement,
renewal, affidavit, deed, assignment, continuation statement, security
agreement, certificate or other document the Administrative Agent may
reasonably require in order to perfect, preserve, maintain, protect,
continue and/or extend any lien or security interest granted to the
Lenders under this Agreement or any of the Security Documents and its
priority. Guarantors shall pay to the Administrative Agent, on demand
all taxes, costs and expenses incurred by any of the Lenders, in
connection with the preparation, execution, recording and filing of any
such document or instrument.
(k) BOOKS AND RECORDS. Keep and maintain accurate books and
records, make entries on such books and records in form reasonably
satisfactory to the Administrative Agent disclosing the Lenders'
assignment of, and security interest in and lien on, the Collateral and
all collections received by Guarantors on its accounts, furnish to the
Administrative Agent promptly upon request such information, reports,
contracts, invoices, lists of purchases of inventory (showing names,
addresses and amount owing) and other data concerning account debtors
and Guarantors' accounts and inventory and all contracts and
collection(s) relating thereto as the Administrative Agent may from
time to time specify, unless the Administrative Agent shall otherwise
consent in writing, keep and maintain all such books and records
mentioned in (a) above only at the addresses listed in Schedule 4.1D of
the Credit Agreement, and permit any person designated by any of the
Lenders to enter the premises of Borrowers and examine, audit and
inspect the books and records at any reasonable time and from time to
time.
(l) ERISA. With respect to any pension plan which any of
Guarantors and/or any Commonly Controlled Entity maintains or
contributes to, either now or in the future, that: (a) such bonding as
is required under ERISA Section 412 will be maintained; (b) as soon as
practicable and in any event within 15 days after any of Guarantors or
any Commonly Controlled Entity knows or has reason to know that a
"reportable event" has occurred or is likely to occur, Guarantors will
deliver to the Administrative Agent a certificate signed by its chief
financial officer setting forth the details of such "reportable event";
(c) neither Borrowers nor any Commonly Controlled Entity will: (i)
engage in or permit any "prohibited transaction" (as defined in ERISA
Section 406 or Code Section 4975) to occur; (ii) cause any "accumulated
funding deficiency" as defined in ERISA Section 302 and/or Code Section
412; (iii) terminate any pension plan in a manner which could result in
the imposition of a lien on the property of Borrowers pursuant to ERISA
Section 4068; (iv) terminate or consent to the termination of any
multiemployer plan; (v) incur a complete or partial withdrawal with
respect to any multiemployer plan within the meaning of ERISA Sections
4203 and 4205; and (d) within 15 days after notice is received by any
of Guarantors or any Commonly Controlled Entity that any multiemployer
plan has been or will be placed in "reorganization" within the meaning
of ERISA Section 4241, Guarantors will notify the Administrative Agent
to that
-18-
effect. Upon the Administrative Agent's request, Guarantors will
deliver to the Administrative Agent a copy of the most recent actuarial
report, financial statements and annual report completed with respect
to any "defined benefit plan", as defined in ERISA Section 3(35).
(m) CHANGE IN MANAGEMENT. There shall be no change of the
Management Company for any Facility to any manager other than XXXXX or
another Wholly Owned Subsidiary without the prior written consent of
the Administrative Agent and the Required Lenders.
(n) MANAGEMENT. (a) Subject to the terms of any Management Fee
Subordination Agreement by and among a Guarantor, XXXXX and the
Administrative Agent, signed in connection with a Facility Closing
(individually or collectively, the "Management Fee Subordination
Agreement"), Guarantors shall cause XXXXX to agree to subordinate
payment of any and all management fees under, or in connection with,
the Management Agreement (the "Management Fees") to payment of the
Obligations, in accordance with the terms and conditions of one or more
subordination agreements in form and content acceptable to the
Administrative Agent in its reasonable discretion, and not amend,
restate, supplement, terminate, cancel or otherwise modify any of the
terms or conditions of such Management Agreement, in any material
respect, without the prior written consent of the Administrative Agent,
and (b) terminate the Management Agreement upon receipt of notice from
the Administrative Agent directing Guarantors to terminate the
Management Agreement after the occurrence of an Event of Default, and,
if requested to do so by the Administrative Agent, enter into a
management agreement for the management of any Facility with an
independent manager. The Management Agreement shall be approved in
writing by the Administrative Agent prior to execution. A fully
executed copy of the Management Agreement shall be delivered to the
Administrative Agent by Guarantors promptly after it is signed.
(o) SURVEYS. Upon the Administrative Agent's request from time
to time if an Event of Default exists, Guarantors shall furnish the
Administrative Agent with surveys of the Facilities with a current
certification to the Administrative Agent by a registered land surveyor
licensed in the jurisdiction in which the Facility is located, which
survey must be satisfactory to the Administrative Agent.
(p) INSPECTIONS; COOPERATION. Guarantors shall permit the
Lenders and their duly authorized representatives upon reasonable prior
notice to enter upon and inspect any of the Facilities, to examine and
make copies of all records and books of account maintained by or on
behalf of Guarantors relating thereto and to discuss the affairs,
finances and accounts pertaining to any Facility with representatives
of Guarantors.
-19-
(q) GOVERNMENTAL SURVEYS OR INSPECTIONS. Furnish to the
Administrative Agent upon its request, within thirty (30) days of
receipt thereof, copies of any and all annual surveys or inspections
performed by any Governmental Authority or accreditation or
certification organization with respect to any Facility.
(r) COST REPORTS. Prepare and file all applicable cost reports
to all third-party payors, if any, to the extent required by any such
third-party payor and, within thirty (30) days thereafter, notify the
Administrative Agent of any settlement of any cost report disclosed to
the Administrative Agent as being open or unsettled as of the Closing
Date to the extent any such cost report would have a materially adverse
effect on Guarantors.
(s) APPRAISALS. The Administrative Agent shall have the right,
in its discretion, to require appraisals of any or all of the
Facilities, which appraisals shall be prepared by an appraiser or
appraisers designated by the Administrative Agent and shall be in all
respects reasonably acceptable to the Administrative Agent which
appraisals shall include, if deemed necessary by the Administrative
Agent, in its reasonable discretion, updated discounted cash flow
analysis, inspections of and commentary on the physical status of the
applicable Facility and an engineering review. The basis of the
appraisal calculations shown on such appraisal reports and all other
aspects of the appraisal reports must be satisfactory to the
Administrative Agent in all material respects. Guarantors shall
reimburse the Administrative Agent upon demand for all costs and
expenses incurred by any of the Lenders with respect to the preparation
and review of all future appraisals required pursuant to the terms
hereof.
(t) NOTIFICATION OF CERTAIN EVENTS, EVENTS OF DEFAULT AND
ADVERSE DEVELOPMENTS. Promptly give written notice to the
Administrative Agent who will forward a copy of the notice to the
Lenders upon obtaining knowledge of the occurrence of any of the
following:
(i) any Event of Default under the Loan Documents;
(ii) any event, development or circumstance whereby
the financial statements furnished under the Loan Documents
fail in any material respect to present fairly, in accordance
with GAAP, the financial condition and operational results of
Guarantors;
(iii) any judicial, administrative or arbitral
proceeding pending against any of Guarantors or any judicial
or administrative proceeding known by Guarantors to have been
threatened against any of them in a written communication
which threatened proceeding, if adversely decided, could cause
a Material Adverse Change in any of Guarantors;
-20-
(iv) the revocation, suspension, probation,
restriction, limitation or refusal to renew, or any
administrative procedure then in process for the revocation,
suspension, probation, restriction, limitation, or refusal to
renew, of any License, or the decertification, revocation,
suspension, probation, restriction, limitation, or refusal to
renew, or the pending, decertification, revocation,
suspension, probation, restriction, limitation, or refusal to
renew or any administrative procedure then in process for any
participation or eligibility in any third party payor program
in which any of Guarantors elects to participate, including,
without limitation, Medicare, Medicaid or other private
insurer programs or any accreditation of any of Guarantors, or
the issuance or pending issuance of any License for a period
of less than twelve (12) months, as a consequence of sanctions
imposed by any Governmental Authority, or the assessment or
pending assessment, of any civil or criminal penalties by any
Government Authority, any third party payor or any
accreditation organization or Person, which could materially
adversely affect the financial condition or operations of
Guarantors in the aggregate as determined by the
Administrative Agent, in its sole but reasonable discretion;
(v) any action, including, but not limited to, the
filing of any certificate of need application if required by
law, the amendment of any facility license or certification,
or the issuance of any new license or certification for any
Facility, under which any of Guarantors proposes (i) to
develop a new facility or service and/or (ii) eliminate,
materially expand or materially reduce any service;
(vi) any actual contingent liability of any
Guarantors of $100,000 or more per Facility;
(vii) any other development in the business or
affairs of the Guarantor results in a Material Adverse Change;
and
(viii) in each case listed in clauses (i) through
(vii), inclusive, of this Section describing in detail
satisfactory to the Administrative Agent the nature thereof
and, in the case, if any, of notification under clause (a),
the action Guarantors propose to take with respect thereto or
a statement that Guarantors intend to take no action and an
explanation of the reasons for such inaction. In addition,
Guarantors will furnish to the Administrative Agent
immediately after receipt thereof copies of all administrative
notices material to Guarantors' business and operation of any
Facility and all responses by or on behalf of Guarantors with
respect to such administrative notices.
(u) COMPLIANCE WITH ENVIRONMENTAL LAWS. If any Hazardous
Materials are used, present or generated on or in the Facilities,
Guarantors shall
-21-
use, process, distribute, handle, maintain, treat, store, dispose of
and transport such substance in compliance with all applicable
Environmental Laws.
(v) HAZARDOUS MATERIALS; CONTAMINATION. The Administrative
Agent shall have the right, in its sole but reasonable discretion, to
obtain (at Guarantors' expense) environmental reports for the
Facilities. Guarantors shall (a) give notice to the Administrative
Agent within five (5) Banking Days of any Guarantor's acquiring
knowledge of the presence of any Hazardous Materials on any property
owned or controlled by any of Guarantors or for which any of Guarantors
is responsible or of any Hazardous Materials contamination with a full
description thereof, except for reasonable quantities of necessary
supplies for use by Guarantors in the ordinary course of their current
line of business and stored, used and disposed of in accordance with
applicable Legal Requirements; (b) promptly comply with any laws
requiring special handling, maintenance, servicing, removal, treatment
or disposal of Hazardous Materials or Hazardous Materials contamination
and provide the Administrative Agent upon request with satisfactory
evidence of such compliance; (c) provide the Administrative Agent,
within thirty (30) days after a demand by the Administrative Agent,
with a bond, letter of credit or similar financial assurance evidencing
to the Administrative Agent's satisfaction that funds are available to
pay the cost of removing, treating, and disposing of such Hazardous
Materials or Hazardous Materials contamination and discharging any lien
which may be established as a result thereof on any property owned,
operated or controlled by any of Guarantors or for which any of
Guarantors are responsible; and (d) defend, indemnify and hold harmless
the Administrative Agent, the Lenders and each of their agents,
employees, trustees, successors and assigns from any and all claims
which may now or in the future (whether before or after the termination
of this Agreement) be asserted as a result of the presence of any
Hazardous Materials on or in the Facilities.
(w) PARTICIPATION IN REIMBURSEMENT PROGRAMS. In the event any
of Guarantors elects to participate in any or all plans and/or programs
for third party payment and/or reimbursement, and the revenues derived
from a single plan or program exceed ten percent (10%) of the gross
revenues of the applicable Facility, such Guarantor will continue its
participation in any and all such plans and/or programs for third party
payment and/or reimbursement from, and claims against, private insurers
or programs for payment and/or reimbursement from federal, state and
local governmental agencies and/or private or quasi-public insurers,
including, without limitation, Managed Care Plans, Medicaid and
Medicare and the Veterans Administration (as determined by Guarantors
in the good faith exercise of their prudent and commercially reasonable
business judgment). While participating in such plans, Guarantors shall
comply with any and all rules, regulations, standards, procedures and
decrees necessary to maintain Guarantors' participation in any such
third party payment or reimbursement program or plan.
-22-
(x) SUBORDINATION OF DISTRIBUTIONS AND MANAGEMENT FEES.
Subordinate, and cause the partners or members of each of Guarantors to
subordinate, all distributions of Guarantors to principal and interest
payments on the Loan. Subordinate the payment of management fees with
respect to each Facility pursuant to the terms of all Management Fee
Subordination Agreement (as the same may be modified from time to time)
by and among any of Guarantors, the Administrative Agent and the
Management Company.
(y) DEPOSITORY BANK. If the Notes have not been repaid in full
by April 1, 2002, Guarantors shall, to the extent practicable, maintain
its primary operating accounts with the Administrative Agent (as a
Lender), provided that such Lender shall agree that it will exercise
any right of set-off against such account to pay the Obligations
(unless the exercise of such right would prejudice other remedies of
the Lenders in any jurisdiction) prior to applying them to any other
indebtedness owed to such Lender and provided such Administrative Agent
or other Lender pays commercially competitive rates on Guarantors'
funds.
(z) NOTES RECEIVABLE. Comply with the provisions of Article
III of the Credit Agreement regarding the Notes Receivable held by
SALII.
8.NEGATIVE COVENANTS OF GUARANTOR. Until payment in full and the
performance of all of the Obligations, without the prior written consent of the
Administrative Agent, Guarantors will not directly or indirectly:
(a) INDEBTEDNESS. Create, issue, incur, assume, become liable
in respect of or suffer to exist any Funded Debt, except:
(i) Funded Debt of any Loan Party pursuant to any
Loan Document;
(ii) Funded Debt of any Guarantor to the Borrower or
any other Guarantor subordinated on terms satisfactory to the
Required Lenders pursuant to written agreements in form and
substance satisfactory to the Required Lenders;
(iii) unsecured Funded Debt incurred in the ordinary
course of business by Guarantors; and
(iv) Funded Debt of any Loan Party under any Interest
Rate Protection Agreement.
"Funded Debt" of any Guarantor at any time means (a)
indebtedness for borrowed money, (b) any obligations in respect of
letters of credit, banker's or other acceptances or similar obligations
issued or created for the account of any Guarantor, (c) lease
obligations which have been or should be, in accordance with GAAP,
capitalized on the books of any Guarantor, (d) all liabilities secured
by
-23-
any property owned by any Guarantor to the extent attached to any
Guarantor's interest in such property, even though such Guarantor has
not assumed or become liable for the payment thereof, and in the case
of any Guarantor (e) (i) amounts payable by a Guarantor under any
terminated or defaulted interest rate protection products or which
remain outstanding or (ii) take-out commitments (excluding a
refinancing or a commitment of a third party) or purchase contracts
including the deferred purchase price of property or services in each
instance if a Guarantor does not control the incurring obligation, (f)
(i) the amount of any guaranty of indebtedness for borrowed money or
(ii) other debt owed by Persons other than a Guarantor which is in
default and for which the creditor is pursuing payment by a Guarantor,
(g) any obligation of a Guarantor or a Commonly Controlled Entity to a
Multiemployer Plan (h) any synthetic lease obligations, and (i) other
amounts considered to be debt by all of the following: the
Administrative Agent, the Syndication Agent and the Documentation Agent
in a dollar amount to be mutually agreed upon by the Administrative
Agent and a Guarantor; but excluding trade and other accounts payable
in the ordinary course of business in accordance with customary trade
terms and which are not overdue (as determined in accordance with
customary trade practices) or which are being disputed in good faith by
a Guarantor and for which adequate reserves are being provided on the
books of a Guarantor in accordance with GAAP, all of the above whether
recourse or non-recourse, secured or unsecured.
(b) MORTGAGES AND PLEDGES. Create, incur, assume or suffer to
exist any deed of trust, mortgage, pledge, Lien or other encumbrance of
any kind upon, or any security interest in, any of its property or
assets, including the Collateral, whether now owned or hereafter
acquired, other than Permitted Liens.
(c) SALE OR TRANSFER OF ASSETS. Directly or indirectly enter
into any arrangement whereby any of Guarantors shall sell, lease,
transfer, assign or otherwise dispose of more than $50,000 of personal
property in connection with any Facility in any one year other than
sales or other disposition of assets in the ordinary course of business
for value, provided the proceeds thereof are used to pay down the Loan
or the asset sold or disposed of is replaced by one of equal or greater
value.
(d) "DUE-ON-SALE". Guarantors shall not, without the prior
written consent of the Administrative Agent, make, create, permit or
consent to any conveyance, sale, assignment or transfer of any of the
Facilities or any part thereof, other than in connection with the Loan
Documents or as otherwise provided or permitted therein.
(e) ADVANCES AND LOANS. Make loans or advances to any Person,
including, without limitation, Affiliates, partners and employees of
Guarantors.
-24-
(f) CONTINGENT LIABILITIES. Assume, guarantee, endorse,
contingently agree to purchase or otherwise become liable upon the
obligation of any Person, except by the endorsement of negotiable
instruments for deposit and collection or similar transactions in the
ordinary course of business.
(g) LICENSES. Allow any Licenses, permit, right, franchise or
privilege necessary for the ownership or operation of any Facility for
the purposes for which any Facility is intended to be used to lapse, be
suspended or be forfeited unless solely due to administrative delay by
the licensing authority.
(h) ERISA COMPLIANCE. (a) Restate or amend any Plan
established and maintained by Guarantors or any Commonly Controlled
Entity and subject to the requirements of ERISA, in a manner designed
to disqualify such Plan and its related trusts under the applicable
requirements of the Code; (b) permit any partners of Guarantors or any
Commonly Controlled Entity to materially adversely affect the qualified
tax-exempt status of any Plan or related trusts of Guarantors or any
Commonly Controlled Entity under the Code; (c) engage in or permit any
Commonly Controlled Entity to engage in any Prohibited Transaction; (d)
incur or permit any Commonly Controlled Entity to incur any Accumulated
Funding Deficiency, whether or not waived, in connection with any Plan;
(e) take or permit any Commonly Controlled Entity to take any action or
fail to take any action which causes a termination of any Plan in a
manner which could result in the imposition of a lien on the property
of Guarantors or any Commonly Controlled Entity pursuant to Section
4068 of ERISA; (f) fail to notify the Administrative Agent that notice
has been received of a "termination" (as defined in ERISA) of any
Multiemployer Plan to which any of Guarantors or any Commonly
Controlled Entity has an obligation to contribute; (g) incur or permit
any Commonly Controlled Entity to incur a "complete withdrawal" or
"partial withdrawal" (as defined in ERISA) from any Multiemployer Plan
to which any of Guarantors or any Commonly Controlled Entity has an
obligation to contribute; or (h) fail to notify the Administrative
Agent that notice has been received from the administrator of any
Multiemployer Plan to which any of Guarantors or any Commonly
Controlled Entity has an obligation to contribute that any such Plan
will be placed in "reorganization" (as defined in ERISA).
(i) SALE OF ACCOUNTS OR RECEIVABLES. Sell, discount, transfer,
assign or otherwise dispose of any of its accounts or receivables of
any Facility, such as accounts receivable, notes receivable,
installment or conditional sales agreements or any other rights to
receive income, revenues or moneys, however evidenced.
(j) AMENDMENTS; TERMINATIONS. Amend or terminate or agree to
amend or terminate any License, the Management Agreement, or any
participation agreement which exceeds 10% of the aggregate Net
Operating Income of the Facilities, or except in the ordinary course of
business any other Management Contracts and Operating Agreements which
may have been entered into by
-25-
Guarantors with respect to any Facility and which exceeds 10% of the
aggregate Net Operating Income of the Facilities, or consent to or
waive any material provisions thereof.
(k) DISTRIBUTIONS TO PARTNERS OR MEMBERS.
(a) Make any distributions of dividends of any kind
to partners or members of any of Guarantors other than
distributions to Borrower.
(b) All distributions to partners or members in any
fiscal quarter shall be disclosed to the Lenders in the
Compliance Certificate for such period.
(l) MERGERS OR ACQUISITIONS. Enter into any merger or
consolidation or amalgamation, wind up or dissolve itself (or suffer
any liquidation or dissolution), or acquire all or substantially all of
the assets of any person, firm, joint venture or corporation except to
acquire a Wholly Owned Subsidiary.
(m) PARTNERSHIP INTERESTS. Repurchase, redeem or retire any
partnership or membership interest in any of Guarantors.
(n) IMPAIRMENT OF SECURITY. Guarantors shall take no action
which shall impair in any manner the value of any of the Facilities or
the validity, priority or security of any Mortgages.
(o) CONDITIONAL SALES. Guarantors shall not incorporate in the
Improvements any property acquired under a conditional sales contract,
or lease, or as to which the vendor retains title or a security
interest, without the prior written consent of the Administrative
Agent, except as set forth in Section 7(i) above.
9. EVENTS OF DEFAULT. The occurrence of one or more of the following
events shall be "Events of Default" under this Agreement, and the terms "Event
of Default" shall mean, whenever they are used in this Guaranty, any one or more
of the following events:
(a) FAILURE TO PAY AND/OR PERFORM THE OBLIGATIONS. Guarantors
shall fail to pay and to perform any of the Guaranteed Obligations as
when due and payable in accordance with the provisions of this Guaranty
and such failure continues for five (5) calendar days after the written
notice thereof to such Guarantor by the Administrative Agent.
(b) BREACH OF REPRESENTATIONS AND WARRANTIES. Any material
representation or warranty made in this Guaranty or in any report,
certificate, opinion, financial statement or other instrument furnished
in connection with the Guaranteed Obligations or with the execution and
delivery of any of the Loan
-26-
Documents, shall prove to have been false or misleading when made (or,
if applicable, when reaffirmed) in any material respect.
(c) FAILURE TO COMPLY WITH COVENANTS. Default shall be made by
Guarantors in the due observance and performance of any covenant,
condition or agreement contained in Article 7 (Affirmative Covenants of
Guarantors) (except for Section 7(h) (Maintenance of Properties),
Section 7(g) (Maintenance of the Collateral), Section 7(i) (Other
Liens, Security Interests, etc.), Section 7(l) (ERISA)) or in Article 8
(Negative Covenants of Borrower).
(d) FAILURE TO COMPLY WITH BOOKS AND RECORDS. Default shall be
made by Guarantors in the due observance or performance of Section 7(k)
(Books and Records), which default shall remain unremedied, and
Guarantors shall cure such default promptly, but in no event more than
ten (10) days after written notice thereof to Guarantors by the
Administrative Agent.
(e) OTHER DEFAULTS. Default shall be made by Guarantors in the
due observance or performance of any other term, covenant or agreement
other than as set forth in this Article 9 (Events of Default), which
default shall remain unremedied for more than thirty (30) days after
written notice thereof to Guarantors by the Administrative Agent,
unless the nature of the failure is such that (a) it cannot be cured
within the thirty (30) day period, and (b) Guarantors institute
corrective action within the thirty (30) day period and (c) Guarantors
diligently pursue such action and complete the cure within ninety (90)
days.
(f) DEFAULT UNDER OTHER LOAN DOCUMENTS. A default shall occur
under any of the other Loan Documents, and such default is not cured
within any applicable grace period provided therein.
(g) BANKRUPTCY; REORGANIZATION.
(i) Any Guarantor shall (i) apply for or consent to
the appointment of a receiver, trustee or liquidator of itself
or any of its property, (ii) admit in writing its inability to
pay its debts as they mature, (iii) make a general assignment
for the benefit of creditors, (iv) be adjudicated a bankrupt
or insolvent, (v) file a voluntary petition in bankruptcy or a
petition or an answer seeking or consenting to reorganization
or an arrangement with creditors or to take advantage of any
bankruptcy, reorganization, insolvency, readjustment of debt,
dissolution or liquidation law or statute, or an answer
admitting the material allegations of a petition filed against
it in any proceeding under any such law, or take corporate
action for the purposes of effecting any of the foregoing, or
(vi) by any act indicate its consent to, approval of or
acquiescence in any such proceeding or the appointment of any
receiver of or trustee for any of its property, or suffer any
such receivership, trusteeship or proceeding to continue
undischarged for a period of sixty
-27-
(60) days, or (vii) by any act indicate its consent to,
approval of or acquiescence in any order, judgment or decree
by any court of competent jurisdiction or any Governmental
Authority enjoining or otherwise prohibiting the operation of
a material portion of any Guarantor's business or the use or
disposition of a material portion of any Guarantor's assets.
(ii) (i) An order for relief shall be entered in any
involuntary case brought against any Guarantor under the
Bankruptcy Code, or (ii) any such case shall be commenced
against any Guarantor and shall not be dismissed within sixty
(60) days after the filing of the petition, or (iii) an order,
judgment or decree under any other Law is entered by any court
of competent jurisdiction or by any other Governmental
Authority on the application of a Governmental Authority or of
a Person other than a Guarantor (A) adjudicating such
Guarantor bankrupt or insolvent, or (B) appointing a receiver,
trustee or liquidator of such Guarantor, or of a material
portion of such Guarantor's assets, or (C) enjoining,
prohibiting or otherwise limiting the operation of a material
portion of such Guarantor's businesses or the use or
disposition of a material portion of such Guarantor's assets,
and such order, judgment or decree continues unstayed and in
effect for a period of thirty (30) days from the date entered.
(h) JUDGMENT. Any judgment against any of Guarantors of
$250,000 or more or any attachment or other levy against any property
of any of Guarantors remain unpaid, unstayed on appeal, undischarged,
unbonded or undismissed for a period of the earlier of thirty (30) days
after such Guarantor receives notice of the same or forty-five (45)
days after the same.
(i) EXECUTION; ATTACHMENT. Any execution or attachment shall
be levied against the Collateral, or any part thereof, and such
execution or attachment shall not be set aside, discharged or stayed
within thirty (30) days after the same shall have been levied.
(j) DEFAULT UNDER OTHER BORROWINGS.
(i) Default which continues beyond any applicable
grace period shall be made under any obligation of or
guaranteed by any of Guarantors equal to or greater than
$250,000, if a notice of default has been sent to a Guarantor
(and any applicable grace period has expired) or if the effect
of such default is to accelerate the maturity of such
obligation or to permit the holder or obligee thereof to cause
such obligation to become due prior to its stated maturity.
(ii) Default shall be made under any obligation equal
to or greater than $1,000,000 of a consolidated Affiliate,
which is otherwise non-recourse to Guarantors if the holder or
obligee of such obligation has
-28-
commenced action on any of the remedies available to it under
the obligation.
(k) MATERIAL ADVERSE CHANGE. If the Administrative Agent or
the Required Lenders in their reasonable discretion determine that a
Material Adverse Change has occurred in the financial condition of any
of Guarantors.
(l) IMPAIRMENT OF POSITION. If the Administrative Agent or the
Required Lenders in their reasonable discretion determines that an
event has occurred which impairs the prospect of payment of the
Obligations and/or the aggregate value of the Facilities or the
Collateral.
(m) CHANGE IN STATUS OR OWNERSHIP. Any of Guarantors is
dissolved, merged, consolidated or reorganized, or any change occurs in
the ownership of any of Guarantors or Facilities without the prior
written consent of the Administrative Agent.
(n) ZONING. Any change in any zoning ordinance or any other
public restriction is enacted, limiting or defining the uses which may
be made of any of the Facilities or a part thereof, such that the use
of any of the Facilities, as specified herein, would be in material
violation of such restriction or zoning change.
(o) CHANGE IN MANAGEMENT. The Management Agreement is
terminated without the prior written consent of the Administrative
Agent.
(p) LICENSES. The involuntary, imposed or required revocation,
suspension, probation, restriction, limitation or refusal to renew, or
the pending revocation, suspension, probation, restriction, limitation,
of, or refusal to renew, of any License; other than in the ordinary
course of business or to the extent that Guarantors deem such action to
be, in the exercise of prudent business judgment, in the best interest
of Guarantors, the decertification, revocation, suspension, probation,
restriction, limitation, or refusal to renew, or the pending
decertification, revocation, suspension, probation, restriction,
limitation, or refusal to renew any participation or eligibility in any
third party payor program in which Guarantors elect to participate,
including, without limitation, the Medicaid or Medicare programs; or
the issuance or pending issuance of any License for a period of less
than twelve (12) months as a consequence of any sanctions imposed by
any Governmental Authority; or the assessment or pending assessment, of
any civil or criminal penalties by any Governmental Authority, any
third party payor or any accreditation organization or person.
(q) COMPLIANCE WITH LAW. Guarantors fail to comply with any
material requirement of any Governmental Authority having jurisdiction
within the time required by such Governmental Authority; or any
proceeding is commenced or action taken to enforce any remedy for a
violation of any material
-29-
requirement of a Governmental Authority or any material restrictive
covenant affecting the Property or any part thereof.
10. NOTICES. Any notice or other communication in connection with this
Guaranty shall be given in accordance with the provisions of the Credit
Agreement.
11. NO ORAL CHANGE. No provision of this Agreement may be changed,
waived, discharged, or terminated orally (in person or by telephone) or by any
other means except by an instrument in writing signed by the party against whom
enforcement of the change, waiver or discharge or termination is sought.
12. PARTIES BOUND; BENEFIT. This Agreement shall be binding upon
Guarantors and Guarantors' respective successors, assigns, heirs and personal
representatives and shall be for the benefit of Administrative Agent and
Lenders, and of any subsequent holder of their respective interests in the Loans
and of any owner of a participation interest therein. In the event the interest
of any Lender or Administrative Agent under the Loan Documents is sold or
transferred, then the liability of the Guarantors to such Lender or
Administrative Agent shall then be in favor of both Administrative Agent and
Lenders originally named herein and each subsequent holder of such
Administrative Agent's or Lender's interest therein, to the extent of their
respective interests.
13. JOINT AND SEVERAL. If at any time there is more than one (1)
Guarantor, the obligations of each Guarantor and such Guarantor's respective
successors, assigns, heirs and personal representatives shall be and remain
joint and several. Each reference to Guarantor shall include each Guarantor
separately as well as all Guarantors collectively.
14. PARTIAL INVALIDITY. Each of the provisions hereof shall be
enforceable against Guarantor to the fullest extent now or hereafter not
prohibited by applicable law. The invalidity or unenforceability of any
provision hereof shall not limit the validity or enforceability of each other
provision hereof.
15. GOVERNING LAW. This Agreement and the rights and obligations of the
parties hereunder shall in all respects be governed by and construed and
enforced in accordance with the internal laws of the Commonwealth of
Massachusetts, without giving effect to principles of conflicts of law. In
addition, the fact that portions of the Loan Documents may include provisions
drafted to conform to the laws of the states other than the Commonwealth of
Massachusetts is not intended, nor shall it be deemed, in any way to derogate
the parties' choice of law as set forth herein. Administrative Agent may enforce
its rights hereunder and under the other Loan Documents, including, but not
limited to, its rights to xxx Guarantors or to collect any outstanding
indebtedness in accordance with applicable law. It is understood and agreed that
this Guaranty and all of the other Loan Documents were negotiated, executed and
delivered in the Commonwealth of Massachusetts which Commonwealth the parties
agree has a substantial relationship to the parties and to the underlying
transactions embodied by the Loan Documents.
16. CONSENT TO JURISDICTION. Each Guarantor hereby irrevocably submits
to the nonexclusive personal jurisdiction of any Massachusetts State Court or
any Federal Court sitting
-30-
in Massachusetts over any suit, action or proceeding arising out of or relating
to this Guaranty. Each Guarantor hereby agrees and consents that in addition to
any methods of service of process provided for under applicable law, all service
of process in any such suit, action or proceeding in any Massachusetts State or
Federal Court sitting in Massachusetts may be made by certified or registered
mail, return receipt requested, directed to Guarantor at the address indicated
above and service so made shall be deemed completed five (5) days after the same
shall have been so mailed.
17. SUBORDINATION.
17.1. Any indebtedness of Borrower to Guarantor, or to any
affiliated entity, with respect to the Facilities or otherwise now or hereafter
existing together with any interest thereon shall be, and such indebtedness is,
hereby deferred, postponed and subordinated to the prior, full and
Non-Contestable Payment and satisfaction of all Obligations of Borrower to the
Administrative Agent and Lenders under the Credit Agreement, the Notes, and the
other Loan Documents. Payment and satisfaction of Obligations shall be deemed
"Non-Contestable Payment" only upon such payment and satisfaction and the
expiration of all periods of time within which a claim for the recovery of a
preferential payment, or fraudulent conveyance, or fraudulent transfer, in
respect of payments received by Administrative Agent as to the Obligations could
be filed or asserted with: (A) no such claim having been filed or asserted, or
(B) if so filed or asserted, the final, non-appealable decision of a court of
competent jurisdiction denying the claim or assertion.
17.2. At all times until the full and Non-Contestable Payment
and satisfaction of the Obligations of Borrower to Administrative Agent and
Lenders with respect to the Loan (and including interest accruing on the Note
after the commencement of a case by or against Borrower under the Bankruptcy
Code now or hereafter in effect, which interest the parties agree shall remain a
claim that is prior and superior to any claim of Guarantors or any affiliated
entity notwithstanding any contrary practice, custom or ruling in cases under
the Bankruptcy Code, as now or hereafter in effect, generally), Guarantors, and
each affiliated entity, agree not to accept any payment or satisfaction for any
kind of indebtedness of Borrower to Guarantors, or any affiliated entity, and
hereby assign such indebtedness to Administrative Agent including, but not
limited to, the right to file proofs of claim and to vote thereon in connection
with any such case under the Bankruptcy Code, as now or hereafter in effect, and
the right to vote on any plan of reorganization.
17.3. Any mortgage, security interest, lien or charge on the
Collateral, all rights therein and thereto, and on the revenue and income to be
realized therefrom, which Guarantors, or any affiliated entity, may have or
obtain as security for any loans, advances, indebtedness or costs in connection
with the construction and completion of the Improvements or in connection with
the Facilities, or otherwise, shall be, and such mortgage, security interest,
lien or charge hereby is, subordinated to the Mortgages and to the full and
Non-Contestable Payment and satisfaction of all Obligations of Borrower to the
Administrative Agent and Lenders.
-31-
17.4. In addition to the foregoing, and not in limitation
thereof, any claims of Guarantors, or any affiliated entity, of subrogation,
contribution, reimbursement, exoneration, indemnification, or reimbursement
arising out of any payment made on this Guaranty, whether such claim is based
upon an express or implied contract, or operation of law, are hereby waived
until the full and Non-Contestable Payment and satisfaction of all Obligations
of Borrower to Administrative Agent and Lenders. Provided, however, unless
Administrative Agent otherwise expressly agrees in writing, such waiver by
Guarantors shall not be effective to the extent that by virtue thereof
Guarantors' liability under this Guaranty or under any other Loan Document is
rendered invalid, voidable, or unenforceable under any applicable state or
federal law dealing with the recovery or avoidance of so-called preferences or
fraudulent conveyances or otherwise.
18. LEGAL FEES, COSTS AND EXPENSES. Guarantors further agree to pay
upon demand all costs and expenses reasonably incurred by Administrative Agent
or its successors or assigns in connection with enforcing any of the rights or
remedies of Administrative Agent, or such successors or assigns, under or with
respect to this Guaranty including, but not limited to, reasonable attorneys'
fees and the out-of-pocket expenses and disbursements of such attorneys. Any
such amounts which are not paid within fifteen (15) days of demand therefor
shall bear interest at the Default Rate from the date of demand until paid.
19. SET-OFF. Each Guarantor hereby grants to Administrative Agent and
each of the Lenders, a continuing lien, security interest and right of setoff as
security for all liabilities and obligations to Administrative Agent and the
Lenders, whether now existing or hereafter arising, upon and against all
deposits, credits, collateral and property, now or hereafter in the possession,
custody, safekeeping or control of any Lender or any entity under the control of
FleetBoston Financial Corporation and their successors and assigns or in transit
to any of them. At any time, without demand or notice (any such notice being
expressly waived by Guarantors), Administrative Agent may setoff the same or any
part thereof and apply the same to any liability or obligation of Borrower and
Guarantors even though unmatured and regardless of the adequacy of any other
collateral securing the Loans. ANY AND ALL RIGHTS TO REQUIRE ADMINISTRATIVE
AGENT TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL
WHICH SECURES THE LOANS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO
SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER OR ANY GUARANTOR, ARE
HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.
20. JURY TRIAL WAIVER. GUARANTORS, ADMINISTRATIVE AGENT AND LENDERS (BY
ACCEPTANCE OF THIS GUARANTY) MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED
HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS GUARANTY OR ANY OTHER
LOAN DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE
OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PARTY, INCLUDING, WITHOUT LIMITATION, ANY COURSE OF CONDUCT,
COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF ADMINISTRATIVE AGENT AND/OR THE
-32-
LENDERS RELATING TO THE ADMINISTRATION OF THE LOANS OR ENFORCEMENT OF THE LOAN
DOCUMENTS, AND AGREE THAT NEITHER PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION
WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.
EXCEPT AS PROHIBITED BY LAW, EACH GUARANTOR HEREBY WAIVES ANY RIGHT IT MAY HAVE
TO CLAIM OR RECOVER IN ANY LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES. EACH GUARANTOR CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF
ADMINISTRATIVE AGENT AND/OR THE LENDERS HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT ADMINISTRATIVE AGENT AND/OR THE LENDERS WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER. THIS WAIVER CONSTITUTES A
MATERIAL INDUCEMENT FOR ADMINISTRATIVE AGENT AND THE LENDERS TO ACCEPT THIS
GUARANTY AND MAKE THE LOANS.
21. RIGHT OF CONTRIBUTION. Each Guarantor hereby agrees that to the
extent that a Guarantor shall have paid more than its proportionate share of any
payment made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder which has not paid
its proportionate share of such payment. The provisions of this Section 21 shall
in no respect limit the obligations and liabilities of any Guarantor to the
Administrative Agent and the Lenders, and each Guarantor shall remain liable to
the Administrative Agent and the Lenders for the full amount guaranteed by such
Guarantor hereunder.
22. ENTIRE AGREEMENT. This Guaranty is intended by the parties as the
final, complete and exclusive statement of the transactions evidenced by this
Guaranty. All prior or contemporaneous promises, agreements and understandings,
whether oral or written, are deemed to be superceded by this Guaranty, and no
party is relying on any promise, agreement or understanding not set forth in
this Guaranty. This Guaranty may not be amended or modified except by a written
instrument describing such amendment or modification executed by Guarantor and
Administrative Agent.
23. COUNTERPARTS. This Guaranty may be executed and delivered in
counterparts, including facsimile counterpart signatures (to be followed in due
course by delivery of original signature counterparts), shall be effective when
each party has delivered its counterpart signature, and all counterparts taken
together shall be deemed a single original agreement.
*Signatures on next page*
-33-
Witness the execution and delivery hereof as an instrument under seal
as of the date set forth above.
GUARANTORS:
SUNRISE DUNWOODY ASSISTED LIVING, L.P., a
Georgia limited partnership
By Sunrise Assisted Living Investments,
Inc., its General Partner
By /s/ Xxxxx X. Xxxx
---------------------------------
Print Name Xxxxx X. Xxxx
-------------------------
Title Vice President
------------------------------
STATE OF
---------------
COUNTY OF January ___, 2002
--------------
Then personally appeared before me the above-named
_______________________, the _______________ of Sunrise Assisted Living
Investments, Inc., the General Partner of Sunrise Dunwoody Assisted Living,
L.P., and acknowledged the foregoing instrument to be such person's free act and
deed and the free act and deed of such entities for the purposes therein stated
and intending to be legally bound thereby.
------------------------------------
Notary Public
Print Name
-------------------------
My commission expires
--------------
[SEAL]
*Signatures continued on next page*
SUNRISE COLUMBUS ASSISTED LIVING LIMITED
PARTNERSHIP, a Georgia limited
partnership
By Sunrise Assisted Living Investments,
Inc., its General Partner
By /s/ Xxxxx X. Xxxx
---------------------------------
Print Name Xxxxx X. Xxxx
-------------------------
Title Vice President
------------------------------
STATE OF
---------------
COUNTY OF January ___, 2002
--------------
Then personally appeared before me the above-named
_______________________, the _______________ of Sunrise Assisted Living
Investments, Inc., the General Partner of Sunrise Columbus Assisted Living
Limited Partnership, and acknowledged the foregoing instrument to be such
person's free act and deed and the free act and deed of such entities for the
purposes therein stated and intending to be legally bound thereby.
------------------------------------
Notary Public
Print Name
-------------------------
My commission expires
--------------
[SEAL]
*Signatures continued on next page*
SUNRISE EDINA ASSISTED LIVING, L.L.C., a
Minnesota limited liability company
By Sunrise Assisted Living Investments,
Inc., its Sole Member
By /s/ Xxxxx X. Xxxx
---------------------------------
Print Name Xxxxx X. Xxxx
-------------------------
Title Vice President
------------------------------
STATE OF
---------------
COUNTY OF January ___, 2002
--------------
Then personally appeared before me the above-named
_______________________, the _______________ of Sunrise Assisted Living
Investments, Inc., the Sole Member of Sunrise Edina Assisted Living, L.L.C., and
acknowledged the foregoing instrument to be such person's free act and deed and
the free act and deed of such entities for the purposes therein stated and
intending to be legally bound thereby.
------------------------------------
Notary Public
Print Name
-------------------------
My commission expires
--------------
[SEAL]
*Signatures continued on next page*
SUNRISE GREENVILLE ASSISTED LIVING
LIMITED PARTNERSHIP, a South Carolina
limited partnership
By Sunrise Assisted Living Investments,
Inc., its General Partner
By /s/ Xxxxx X. Xxxx
---------------------------------
Print Name Xxxxx X. Xxxx
-------------------------
Title Vice President
------------------------------
STATE OF
---------------
COUNTY OF January ___, 2002
--------------
Then personally appeared before me the above-named
_______________________, the _______________ of Sunrise Assisted Living
Investments, Inc., the General Partner of Sunrise Greenville Assisted Living
Limited Partnership, and acknowledged the foregoing instrument to be such
person's free act and deed and the free act and deed of such entities for the
purposes therein stated and intending to be legally bound thereby.
------------------------------------
Notary Public
Print Name
-------------------------
My commission expires
--------------
[SEAL]
*Signatures continued on next page*
SUNRISE POLAND ASSISTED LIVING, L.L.C.,
an Ohio limited liability company
By Sunrise Assisted Living Investments,
Inc., its Sole Member
By /s/ Xxxxx X. Xxxx
---------------------------------
Print Name Xxxxx X. Xxxx
-------------------------
Title Vice President
------------------------------
STATE OF
---------------
COUNTY OF January ___, 2002
--------------
Then personally appeared before me the above-named
_______________________, the _______________ of Sunrise Assisted Living
Investments, Inc., the Sole Member of Sunrise Poland Assisted Living, L.L.C.,
and acknowledged the foregoing instrument to be such person's free act and deed
and the free act and deed of such entities for the purposes therein stated and
intending to be legally bound thereby.
------------------------------------
Notary Public
Print Name
-------------------------
My commission expires
--------------
[SEAL]
*Signatures continued on next page*
SUNRISE AUGUSTA ASSISTED LIVING LIMITED
PARTNERSHIP, a Georgia limited
partnership
By Sunrise Assisted Living Investments,
Inc., its General Partner
By /s/ Xxxxx X. Xxxx
---------------------------------
Print Name Xxxxx X. Xxxx
-------------------------
Title Vice President
------------------------------
STATE OF
---------------
COUNTY OF January ___, 2002
--------------
Then personally appeared before me the above-named
_______________________, the _______________ of Sunrise Assisted Living
Investments, Inc., the General Partner of Sunrise Augusta Assisted Living
Limited Partnership, and acknowledged the foregoing instrument to be such
person's free act and deed and the free act and deed of such entities for the
purposes therein stated and intending to be legally bound thereby.
------------------------------------
Notary Public
Print Name
-------------------------
My commission expires
--------------
[SEAL]
*Signatures continued on next page*
SUNRISE EASTOVER ASSISTED LIVING, L.L.C.,
a North Carolina limited liability
company
By Sunrise Assisted Living Investments,
Inc., its Sole Member
By /s/ Xxxxx X. Xxxx
---------------------------------
Print Name Xxxxx X. Xxxx
-------------------------
Title Vice President
------------------------------
STATE OF
---------------
COUNTY OF January ___, 2002
--------------
Then personally appeared before me the above-named
_______________________, the _______________ of Sunrise Assisted Living
Investments, Inc., the Sole Member of Sunrise Eastover Assisted Living, L.L.C.,
and acknowledged the foregoing instrument to be such person's free act and deed
and the free act and deed of such entities for the purposes therein stated and
intending to be legally bound thereby.
------------------------------------
Notary Public
Print Name
-------------------------
My commission expires
--------------
[SEAL]
*Signatures continued on next page*
SUNRISE XXXXXXXX ASSISTED LIVING, L.L.C.,
a Virginia limited liability company
By Sunrise Assisted Living Investments,
Inc., its Sole Member
By /s/ Xxxxx X. Xxxx
---------------------------------
Print Name Xxxxx X. Xxxx
-------------------------
Title Vice President
------------------------------
STATE OF
---------------
COUNTY OF January ___, 2002
--------------
Then personally appeared before me the above-named
_______________________, the _______________ of Sunrise Assisted Living
Investments, Inc., the Sole Member of Sunrise Xxxxxxxx Assisted Living, L.L.C.,
and acknowledged the foregoing instrument to be such person's free act and deed
and the free act and deed of such entities for the purposes therein stated and
intending to be legally bound thereby.
------------------------------------
Notary Public
Print Name
-------------------------
My commission expires
--------------
[SEAL]
*Signatures continued on next page*
SUNRISE FALL CREEK ASSISTED LIVING,
L.L.C., an Indiana limited liability
company
By Sunrise Assisted Living Investments,
Inc., its Sole Member
By /s/ Xxxxx X. Xxxx
---------------------------------
Print Name Xxxxx X. Xxxx
-------------------------
Title Vice President
------------------------------
STATE OF
---------------
COUNTY OF January ___, 2002
--------------
Then personally appeared before me the above-named
_______________________, the _______________ of Sunrise Assisted Living
Investments, Inc., the Sole Member of Sunrise Fall Creek Assisted Living,
L.L.C., and acknowledged the foregoing instrument to be such person's free act
and deed and the free act and deed of such entity for the purposes therein
stated and intending to be legally bound thereby.
------------------------------------
Notary Public
Print Name
-------------------------
My commission expires
--------------
[SEAL]
*Signatures continued on next page*
SUNRISE FORT XXXXX ASSISTED LIVING,
L.L.C., an Indiana limited liability
company
By Sunrise Assisted Living Investments,
Inc., its Sole Member
By /s/ Xxxxx X. Xxxx
---------------------------------
Print Name Xxxxx X. Xxxx
-------------------------
Title Vice President
------------------------------
STATE OF
---------------
COUNTY OF January ___, 2002
--------------
Then personally appeared before me the above-named
_______________________, the _______________ of Sunrise Assisted Living
Investments, Inc., the Sole Member of Sunrise Fort Xxxxx Assisted Living,
L.L.C., and acknowledged the foregoing instrument to be such person's free act
and deed and the free act and deed of such entity for the purposes therein
stated and intending to be legally bound thereby.
------------------------------------
Notary Public
Print Name
-------------------------
My commission expires
--------------
[SEAL]
*Signatures continued on next page*
SUNRISE SHAKER HEIGHTS ASSISTED LIVING,
L.L.C., a Virginia limited liability
company
By Sunrise Assisted Living Investments,
Inc., its Sole Member
By /s/ Xxxxx X. Xxxx
---------------------------------
Print Name Xxxxx X. Xxxx
-------------------------
Title Vice President
------------------------------
STATE OF
---------------
COUNTY OF January ___, 2002
--------------
Then personally appeared before me the above-named
_______________________, the _______________ of Sunrise Assisted Living
Investments, Inc., the Sole Member of Sunrise Shaker Heights Assisted Living,
L.L.C., and acknowledged the foregoing instrument to be such person's free act
and deed and the free act and deed of such entity for the purposes therein
stated and intending to be legally bound thereby.
------------------------------------
Notary Public
Print Name
-------------------------
My commission expires
--------------
[SEAL]
*Signatures continued on next page*
SUNRISE WILLOW LAKE ASSISTED LIVING,
L.L.C., an Indiana limited liability
company
By Sunrise Assisted Living Investments,
Inc., its Sole Member
By /s/ Xxxxx X. Xxxx
---------------------------------
Print Name Xxxxx X. Xxxx
-------------------------
Title Vice President
------------------------------
STATE OF
---------------
COUNTY OF January ___, 2002
--------------
Then personally appeared before me the above-named
_______________________, the _______________ of Sunrise Assisted Living
Investments, Inc., the Sole Member of Sunrise Willow Lake Assisted Living,
L.L.C., and acknowledged the foregoing instrument to be such person's free act
and deed and the free act and deed of such entity for the purposes therein
stated and intending to be legally bound thereby.
------------------------------------
Notary Public
Print Name
-------------------------
My commission expires
--------------
[SEAL]
*Signatures continued on next page*
SUNRISE WOOSTER ASSISTED LIVING, L.L.C.,
an Indiana limited liability company
By Sunrise Assisted Living Investments,
Inc., its Sole Member
By /s/ Xxxxx X. Xxxx
---------------------------------
Print Name Xxxxx X. Xxxx
-------------------------
Title Vice President
------------------------------
STATE OF
---------------
COUNTY OF January ___, 2002
--------------
Then personally appeared before me the above-named
_______________________, the _______________ of Sunrise Assisted Living
Investments, Inc., the Sole Member of Sunrise Wooster Assisted Living, L.L.C.,
and acknowledged the foregoing instrument to be such person's free act and deed
and the free act and deed of such entity for the purposes therein stated and
intending to be legally bound thereby.
------------------------------------
Notary Public
Print Name
-------------------------
My commission expires
--------------
[SEAL]
*Signatures continued on next page*
SUNRISE FLOSSMOOR ASSISTED LIVING,
L.L.C., an Indiana limited liability
company
By Sunrise Assisted Living Investments,
Inc., its Sole Member
By /s/ Xxxxx X. Xxxx
---------------------------------
Print Name Xxxxx X. Xxxx
-------------------------
Title Vice President
------------------------------
STATE OF
---------------
COUNTY OF January ___, 2002
--------------
Then personally appeared before me the above-named
_______________________, the _______________ of Sunrise Assisted Living
Investments, Inc., the Sole Member of Sunrise Flossmoor Assisted Living, L.L.C.,
and acknowledged the foregoing instrument to be such person's free act and deed
and the free act and deed of such entity for the purposes therein stated and
intending to be legally bound thereby.
------------------------------------
Notary Public
Print Name
-------------------------
My commission expires
--------------
[SEAL]
*Signatures continued on next page*
SUNRISE ASSISTED LIVING INVESTMENTS,
INC., a Virginia corporation
By /s/ Xxxxx X. Xxxx
---------------------------------
Print Name Xxxxx X. Xxxx
-------------------------
Title Vice President
------------------------------
STATE OF
---------------
COUNTY OF January ___, 2002
--------------
Then personally appeared before me the above-named
_______________________, the _______________ of Sunrise Assisted Living
Investments, Inc., and acknowledged the foregoing instrument to be such person's
free act and deed and the free act and deed of such entity for the purposes
therein stated and intending to be legally bound thereby.
------------------------------------
Notary Public
Print Name
-------------------------
My commission expires
--------------
[SEAL]
