GUARANTY
This GUARANTY ("Guaranty") is executed as of
September 29, 1998, by KRANZCO REALTY TRUST ("Guarantor"), for the benefit of
SALOMON BROTHERS REALTY CORP., a New York corporation ("Lender").
X.XX Vidalia, Inc., a Georgia corporation, XX
Xxxxxxxx, Inc., a Virginia corporation, XX Xxxxxxxxxxx, Inc., a Georgia
corporation, KR Tifton, Inc., a Georgia corporation, KR Douglasville, Inc., a
Georgia corporation, KR Circleville, Inc., an Ohio corporation, KR Snellville,
Inc., a Georgia corporation, KR Pensacola, Inc., a Florida corporation and XX
Xxxxxxxxx City, L.P., a Tennessee limited partnership (collectively,
"Borrower") are indebted to Lender with respect to a loan ("Loan") pursuant to
that certain Fixed Rate Note dated of even date herewith, payable to the order
of Lender in the original principal amount of $65,900,000 (together with all
renewals, modifications, increases and extensions thereof, the "Note"), which
is secured by the liens and security interests of two Mortgage, Assignment of
Leases and Rents, Security Agreement and Fixture Filings, two Deed of Trust,
Assignment of Leases and Rents, Security Agreement and Fixture Filings, and a
Deed to Secure Debt, Assignments of Leases and Rents, Security Agreements, and
Fixture Filings, of even date herewith (as the same may be amended, restated,
extended, or otherwise modified from time to time, collectively, the
"Mortgage"), and further evidenced, secured or governed by the other Loan
Documents (as defined in the Note); and
B.Lender is not willing to make the Loan, or
otherwise extend credit, to Borrower unless Guarantor unconditionally
guarantees payment and performance to Lender of the Guaranteed Obligations (as
herein defined); and
C.Guarantor is the owner of a direct or indirect
interest in Borrower, and Guarantor will directly benefit from Lender's making
the Loan to Borrower.
NOW, THEREFORE, as an inducement to Lender to
make the Loan to Borrower thereunder, and to extend such additional credit as
Lender may from time to time agree to extend under the Loan Documents, and for
other good and valuable consideration, the receipt and legal sufficiency of
which are hereby acknowledged, the parties do hereby agree as follows:
ARTICLE I.
NATURE AND SCOPE OF GUARANTY
1.1.Guaranty of Obligation. Guarantor hereby
irrevocably and unconditionally guarantees to Lender (and its successors and
assigns), the payment and performance of the Guaranteed Obligations as and when
the same shall be due and payable, whether by lapse of time, by acceleration of
maturity or otherwise. Guarantor hereby irrevocably and unconditionally
covenants and agrees that it is liable, for the Guaranteed Obligations as a
primary obligor, and that each Guarantor shall fully perform, each and every
term and provision hereof.
1.2.Definition of Guaranteed Obligations. As
used herein, the term "Guaranteed Obligations" shall mean the Debt (as defined
in the Note) in the event of (i) any fraud or material misrepresentation by
Borrower or Guarantor in connection with the Loan, or (ii) Borrower's failure
to make the first full payment of principal and interest due under the Note.
In addition, the Guaranteed Obligations shall also include and Guarantor shall
also be liable for, and shall indemnify, defend and hold Lender, its successors
and assigns, and their respective shareholders, employees, officers, directors,
and agents (each an "Indemnified Party") harmless from and against, any and all
loss, cost, expense, damage, claim or other obligation (including, without
limitation, reasonable attorney's fees and costs of defense) incurred or
suffered by Lender and arising out of or in connection with the matters listed
in subsections (a) through (g) below INCLUDING, WITHOUT LIMITATION, ANY
LIABILITY, LOSS, DAMAGE, CLAIM, OR OBLIGATION CAUSED BY OR RESULTING FROM THE
ORDINARY NEGLIGENCE OF ANY INDEMNIFIED PARTY.
(a)any breach of the Environmental Liabilities
Agreement executed by Borrower for the benefit of Lender, dated of even date
herewith, including the indemnification provisions contained therein;
(b)Borrower's failure to obtain Lender's prior
written consent to (i) any subordinate financing or any other encumbrance on
the Mortgaged Property (as defined in the Mortgage), or (ii) any transfer of
the Mortgaged Property or majority ownership in Borrower in violation of the
Mortgage;
(c)the misapplication by Borrower, its agents,
affiliates, officers or employees of any funds derived from the Mortgaged
Property, including security deposits, insurance proceeds and condemnation
awards, in violation of the Loan Documents;
(d)Borrower's failure to apply proceeds of rents
or any other payments in respect of the leases and other income from the
Mortgaged Property or any other collateral when received to the costs of
maintenance and operation of the Mortgaged Property and to the payment of
taxes, lien claims, insurance premiums, monthly payments of principal and
interest or escrow payments or other payments due under the Loan Documents to
the extent the Loan Documents require such proceeds to be then so applied;
(e)any litigation or other legal proceeding
related to the Debt filed by Borrower or any Guarantor or indemnitor that is
intended to delay or impair or otherwise results in delays or impairs Lender's
ability to preserve, enforce or foreclose its lien on the Mortgaged Property,
including, but not limited to, the filing of a voluntary petition concerning
Borrower under the U.S. Bankruptcy Code, in which action a claim, counterclaim,
or defense is asserted against Lender, other than any litigation or other legal
proceeding in which a final, non-appealable judgment for money damages or
injunctive relief is entered against Lender;
(f)the gross negligence or willful misconduct of
Borrower, its agents, affiliates, officers or employees which causes or results
in a material diminution, or material loss of value, of the Mortgaged Property
that is not reimbursed by insurance or which gross negligence or willful
misconduct expose Lender to claims, liability or costs of defense in any
litigation or other legal proceeding; and
(g)the seizure or forfeiture of the Mortgaged
Property, or any portion thereof, or Lender's interest therein, resulting from
criminal wrongdoing by Borrower, its agents, affiliates, officers or employees.
1.3.Nature of Guaranty. This Guaranty is an
irrevocable, absolute, continuing guaranty of payment and performance and is
not a guaranty of collection. This Guaranty may not be revoked by Guarantor
and shall continue to be effective with respect to any Guaranteed Obligations
arising or created after any attempted revocation by Guarantor and after (if
Guarantor is a natural person) Guarantor's death (in which event this Guaranty
shall be binding upon Guarantor's estate and Guarantor's legal representatives
and heirs). The fact that at any time or from time to time the Guaranteed
Obligations may be increased or reduced shall not release or discharge the
obligation of Guarantor to Lender with respect to Guaranteed Obligations.
This Guaranty may be enforced by Lender and any subsequent holder of the Note
and shall not be discharged by the assignment or negotiation of all or part of
the Note.
1.4.Guaranteed Obligations Not Reduced by Offset.
The Guaranteed Obligations and the liabilities and obligations of Guarantor to
Lender hereunder, shall not be reduced, discharged or released because or by
reason of any existing or future offset, claim or defense of Borrower, or any
other party, against Lender or against payment of the Guaranteed Obligations,
whether such offset, claim or defense arises in connection with the Guaranteed
Obligations (or the transactions creating the Guaranteed Obligations) or
otherwise.
1.5.Payment by Guarantor. If all or any part of
the Guaranteed Obligations, as limited by Section 1.2, shall not be punctually
paid when due, whether at maturity or earlier by acceleration or otherwise,
Guarantor shall, immediately upon demand by Lender, and without presentment,
protest, notice of protest, notice of non-payment, notice of intention to
accelerate the maturity, notice of acceleration of the maturity, or any other
notice whatsoever, pay in lawful money of the United States of America, the
amount due on the Guaranteed Obligations to Lender at Lender's address as set
forth herein. Such demand(s) may be made at any time coincident with or after
the time for payment of all or part of the Guaranteed Obligations, and may be
made from time to time with respect to the same or different items of
Guaranteed Obligations. Such demand shall be deemed made, given and received
in accordance with the notice provisions hereof.
0.0.Xx Duty to Pursue Others. It shall not be
necessary for Lender (and Guarantor hereby waives any rights which Guarantor
may have to require Lender), in order to enforce such payment by Guarantor,
first to (i) institute suit or exhaust its remedies against Borrower or others
liable on the Loan or the Guaranteed Obligations or any other person, (ii)
enforce Lender's rights against any collateral which shall ever have been given
to secure the Loan, (iii) enforce Lender's rights against any other guarantors
of the Guaranteed Obligations, (iv) join Borrower or any others liable on the
Guaranteed Obligations in any action seeking to enforce this Guaranty, (v)
exhaust any remedies available to Lender against any collateral which shall
ever have been given to secure the Loan, or (vi) resort to any other means of
obtaining payment of the Guaranteed Obligations. Lender shall not be required
to mitigate damages or take any other action to reduce, collect or enforce the
Guaranteed Obligations.
1.7.Waivers. Guarantor acknowledges the
provisions of the Loan Documents, and hereby waives notice of (i) any loans or
advances made by Lender to Borrower, (ii) acceptance of this Guaranty, (iii)
any amendment or extension of the Note or of any other Loan Documents, (iv) the
execution and delivery by Borrower and Lender of any other loan or credit
agreement or of Borrower's execution and delivery of any promissory notes or
other documents arising under the Loan Documents or in connection with the
Mortgaged Property, (v) the occurrence of any breach by Borrower or Event of
Default, (vi) Lender's transfer or disposition of the Guaranteed Obligations,
or any part thereof, (vii) sale or foreclosure (or posting or advertising for
sale or foreclosure) of any collateral for the Guaranteed Obligations, (viii)
protest, proof of non-payment or default by Borrower, or (ix) any other action
at any time taken or omitted by Lender, and, generally, all demands and notices
of every kind in connection with this Guaranty, the Loan Documents, any
documents or agreements evidencing, securing or relating to any of the
Guaranteed Obligations and the obligations hereby guaranteed.
1.8.Payment of Expenses. In the event that
Guarantor should breach or fail to timely perform any provisions of this
Guaranty, Guarantor shall, immediately upon demand by Lender, pay Lender all
costs and expenses (including court costs and reasonable attorneys' fees)
incurred by Lender in the enforcement hereof or the preservation of Lender's
rights hereunder. The covenant contained in this section shall survive the
payment and performance of the Guaranteed Obligations.
1.9.Effect of Bankruptcy. In the event that,
pursuant to any insolvency, bankruptcy, reorganization, receivership or other
action under any debtor relief law, or any judgment, order or decision
thereunder, Lender must rescind or restore any payment, or any part thereof,
received by Lender in satisfaction of the Guaranteed Obligations, as set forth
herein, any prior release or discharge from the terms of this Guaranty given to
Guarantor by Lender shall be without effect, and this Guaranty shall remain in
full force and effect. It is the intention of Borrower and Guarantor that
Guarantor's obligations hereunder shall not be discharged except by Guarantor's
performance of such obligations and then only to the extent of such
performance.
1.10.Deferment of Rights of Subrogation,
Reimbursement and Contribution.
(a)Notwithstanding any payment or payments made
by Guarantor hereunder, Guarantor will not assert or exercise any right of
Lender or of Guarantor against Borrower to recover the amount of any payment
made by Guarantor to Lender by way of subrogation, reimbursement, contribution,
indemnity, or otherwise arising by contract or operation of law, and Guarantor
shall not have any right of recourse to or any claim against assets or property
of Borrower, whether or not the obligations of Borrower have been satisfied,
all of such rights being herein expressly waived by Guarantor. If any amount
shall nevertheless be paid to Guarantor by Borrower prior to payment in full of
the Obligations (hereinafter defined), such amount shall be held in trust for
the benefit of Lender and shall forthwith be paid to Lender to be credited and
applied to the Obligations, whether matured or unmatured. The provisions of
this section shall survive the termination of this Guaranty, and any
satisfaction and discharge of Borrower by virtue of any payment, court order or
any applicable law.
(b)Notwithstanding the provisions of Section
1.10(a), Guarantor shall have and be entitled to (1) all rights of subrogation
otherwise provided by applicable law in respect of any payment it may make or
be obligated to make under this Guaranty and (2) all claims it would have
against Borrower in the absence of Section 1.10(a) and to assert and enforce
same, in each case on and after, but at no time prior to, the date (the
"Subrogation Trigger Date") which is 91 days after the date on which all sums
owed to Lender under the Loan Documents (the "Obligations") have been paid in
full, if and only if (x) no Event of Default of the type described in Section
22(e) or 22(f) of the Mortgage with respect to Lender has existed at any time
on and after the date of this Guaranty to and including the Subrogation Trigger
Date and (y) the existence of Guarantor's rights under this Section 1.10(b)
would not make Guarantor a creditor (as defined in the Code, as such term is
hereinafter defined) of Borrower in any insolvency, bankruptcy, reorganization
or similar proceeding commenced on or prior to the Subrogation Trigger Date.
1.11.Bankruptcy Code Waiver. It is the intention
of the parties that Guarantor shall not be deemed to be a "creditor" or
"creditors" (as defined in Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code
[the "Bankruptcy Code"]) of Borrower, by reason of the existence of this
Guaranty, in the event that Borrower, becomes a debtor in any proceeding under
the Bankruptcy Code, and in connection herewith, Guarantor hereby waives any
such right as a "creditor" under the Bankruptcy Code. This waiver is given to
induce Lender to make the Loan evidenced by the Note to Borrower. After the
Loan is paid in full and there shall be no obligations or liabilities under
this Guaranty outstanding, this waiver shall be deemed to be terminated.
1.12.Borrower. The term "Borrower" as used
herein shall include any new or successor corporation, association, partnership
(general or limited), joint venture, trust or other individual or organization
formed as a result of any merger, reorganization, sale, transfer, devise, gift
or bequest of Borrower or any interest in Borrower.
ARTICLE II.
EVENTS AND CIRCUMSTANCES NOT REDUCING
OR DISCHARGING GUARANTOR'S OBLIGATIONS
Guarantor hereby consents and agrees to each of
the following, and agrees that Guarantor's obligations under this Guaranty
shall not be released, diminished, impaired, reduced or adversely affected by
any of the following, and waives any common law, equitable, statutory or other
rights (including without limitation rights to notice) which Guarantor might
otherwise have as a result of or in connection with any of the following:
2.1.Modifications. Any renewal, extension,
increase, modification, alteration or rearrangement of all or any part of the
Guaranteed Obligations, Note, Loan Documents, or other document, instrument,
contract or understanding between Borrower and Lender, or any other parties,
pertaining to the Guaranteed Obligations or any failure of Lender to notify
Guarantor of any such action.
2.2.Adjustment. Any adjustment, indulgence,
forbearance or compromise that might be granted or given by Lender to Borrower.
2.3.Condition of Borrower or Guarantor. The
insolvency, bankruptcy, arrangement, adjustment, composition, liquidation,
disability, dissolution or lack of power of Borrower, Guarantor or any other
party at any time liable for the payment of all or part of the Guaranteed
Obligations; or any dissolution of Borrower or Guarantor, or any sale, lease or
transfer of any or all of the assets of Borrower or Guarantor, or any changes
in the shareholders, partners or members of Borrower or Guarantor; or any
reorganization of Borrower or Guarantor.
2.4.Invalidity of Guaranteed Obligations. The
invalidity, illegality or unenforceability of all or any part of the Guaranteed
Obligations, or any document or agreement executed in connection with the
Guaranteed Obligations, for any reason whatsoever, including without limitation
the fact that (i) the Guaranteed Obligations, or any part thereof, exceeds the
amount permitted by law, (ii) the act of creating the Guaranteed Obligations
or any part thereof is ultra xxxxx, (iii) the officers or representatives
executing the Note or the other Loan Documents or otherwise creating the
Guaranteed Obligations acted in excess of their authority, (iv) the Guaranteed
Obligations violate applicable usury laws, (v) Borrower has valid defenses,
claims or offsets (whether at law, in equity or by agreement) which render the
Guaranteed Obligations wholly or partially uncollectible from Borrower, (vi)
the creation, performance or repayment of the Guaranteed Obligations (or the
execution, delivery and performance of any document or instrument representing
part of the Guaranteed Obligations or executed in connection with the
Guaranteed Obligations, or given to secure the repayment of the Guaranteed
Obligations) is illegal, uncollectible or unenforceable, or (vii) the Note or
any of the other Loan Documents have been forged or otherwise are irregular or
not genuine or authentic, it being agreed that Guarantor shall remain liable
hereon regardless of whether Borrower or any other person be found not liable
on the Guaranteed Obligations or any part thereof for any reason.
2.5.Release of Obligors. Any full or partial
release of the liability of Borrower on the Guaranteed Obligations, or any part
thereof, or of any co-guarantors, or any other person or entity now or
hereafter liable, whether directly or indirectly, jointly, severally, or
jointly and severally, to pay, perform, guarantee or assure the payment of the
Guaranteed Obligations, or any part thereof, it being recognized, acknowledged
and agreed by Guarantor that Guarantor may be required to pay the Guaranteed
Obligations in full without assistance or support of any other party, and
Guarantor has not been induced to enter into this Guaranty on the basis of a
contemplation, belief, understanding or agreement that other parties will be
liable to pay or perform the Guaranteed Obligations, or that Lender will look
to other parties to pay or perform the Guaranteed Obligations.
2.6.Other Collateral. The taking or accepting of
any other security, collateral or guaranty, or other assurance of payment, for
all or any part of the Guaranteed Obligations.
2.7.Release of Collateral. Any release,
surrender, exchange, subordination, deterioration, waste, loss or impairment
(including without limitation negligent, willful, unreasonable or unjustifiable
impairment) of any collateral, property or security, at any time existing in
connection with, or assuring or securing payment of, all or any part of the
Guaranteed Obligations.
0.0.Xxxx and Diligence. The failure of Lender or
any other party to exercise diligence or reasonable care in the preservation,
protection, enforcement, sale or other handling or treatment of all or any part
of such collateral, property or security, including but not limited to any
neglect, delay, omission, failure or refusal of Lender (i) to take or prosecute
any action for the collection of any of the Guaranteed Obligations, or (ii) to
foreclose, or initiate any action to foreclose, or, once commenced, prosecute
to completion any action to foreclose upon any security therefor, or (iii) to
take or prosecute any action in connection with any instrument or agreement
evidencing or securing all or any part of the Guaranteed Obligations.
2.9.Unenforceability. The fact that any
collateral, security, security interest or lien contemplated or intended to be
given, created or granted as security for the repayment of the Guaranteed
Obligations, or any part thereof, shall not be properly perfected or created,
or shall prove to be unenforceable or subordinate to any other security
interest or lien, it being recognized and agreed by Guarantor that Guarantor is
not entering into this Guaranty in reliance on, or in contemplation of the
benefits of, the validity, enforceability, collectibility or value of any of
the collateral for the Guaranteed Obligations.
2.10.Offset. The Note, the Guaranteed
Obligations and the liabilities and obligations of Guarantor to Lender
hereunder, shall not be reduced, discharged or released because of or by
reason of any existing or future right of offset, claim or defense of Borrower
against Lender, or any other party, or against payment of the Guaranteed
Obligations, whether such right of offset, claim or defense arises in
connection with the Guaranteed Obligations (or the transactions creating the
Guaranteed Obligations) or otherwise.
2.11.Merger. The reorganization, merger or
consolidation of Borrower into or with any other corporation or entity.
2.12.Preference. Any payment by Borrower to
Lender is held to constitute a preference under bankruptcy laws, or for any
reason Lender is required to refund such payment or pay such amount to Borrower
or someone else.
2.13.Other Actions Taken or Omitted. Any other
action taken or omitted to be taken with respect to the Loan Documents, the
Guaranteed Obligations, or the security and collateral therefor, whether or
not such action or omission prejudices Guarantor or increases the likelihood
that Guarantor will be required to pay the Guaranteed Obligations pursuant to
the terms hereof, it is the unambiguous and unequivocal intention of Guarantor
that Guarantor shall be obligated to pay the Guaranteed Obligations when due,
notwithstanding any occurrence, circumstance, event, action, or omission
whatsoever, whether or not contemplated, and whether or not otherwise or
particularly described herein, which obligation shall be deemed satisfied only
upon the full and final payment and satisfaction of the Guaranteed Obligations.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
To induce Lender to enter into the Loan Documents
and extend credit to Borrower, Guarantor represents and warrants to Lender as
follows:
3.1.Benefit. Guarantor is an affiliate of
Borrower, is the owner of a direct or indirect interest in Borrower, and has
received, or will receive, direct or indirect benefit from the making of this
Guaranty with respect to the Guaranteed Obligations.
3.2.Familiarity and Reliance. Guarantor is
familiar with, and has independently reviewed books and records regarding, the
financial condition of Borrower and is familiar with the value of any and all
collateral intended to be created as security for the payment of the Note or
Guaranteed Obligations; however, Guarantor is not relying on such financial
condition or the collateral as an inducement to enter into this Guaranty.
0.0.Xx Representation by Lender. Neither Lender
nor any other party has made any representation, warranty or statement to
Guarantor in order to induce Guarantor to execute this Guaranty.
3.4.Guarantor's Financial Condition. As of the
date hereof, and after giving effect to this Guaranty and the contingent
obligation evidenced hereby, Guarantor is, and will be, solvent, and has and
will have assets which, fairly valued, exceed its obligations, liabilities
(including contingent liabilities) and debts, and has and will have property
and assets sufficient to satisfy and repay its obligations and liabilities.
3.5.Legality. The execution, delivery and
performance by Guarantor of this Guaranty and the consummation of the
transactions contemplated hereunder do not, and will not, contravene or
conflict with any law, statute or regulation whatsoever to which Guarantor is
subject or constitute a default (or an event which with notice or lapse of time
or both would constitute a default) under, or result in the breach of, any
indenture, mortgage, deed of trust, charge, lien, or any contract, agreement or
other instrument to which Guarantor is a party or which may be applicable to
Guarantor. This Guaranty is a legal and binding obligation of Guarantor and is
enforceable in accordance with its terms, except as limited by bankruptcy,
insolvency or other laws of general application relating to the enforcement of
creditors' rights.
3.6.Survival. All representations and warranties
made by Guarantor herein shall survive the execution hereof.
0.0.Xxxxxx of Documents. Guarantor has examined
the Note and all of the Loan Documents.
3.8.Litigation. Except as otherwise disclosed to
Lender, there are no proceedings pending or, so far as Guarantor knows,
threatened before any court or administrative agency which, if decided
adversely to Guarantor, would materially adversely affect the financial
condition of Guarantor or the authority of Guarantor to enter into, or the
validity or enforceability of this Guaranty.
0.0.Xxx Returns. Guarantor has filed all
required federal, state and local tax returns and has paid all taxes as shown
on such returns as they have become due. No claims have been assessed and are
unpaid with respect to such taxes.
ARTICLE IV.
SUBORDINATION OF CERTAIN INDEBTEDNESS
4.1.Subordination of All Guarantor Claims. As
used herein, the term "Guarantor Claims" shall mean all debts and liabilities
of Borrower to Guarantor, whether such debts and liabilities now exist or are
hereafter incurred or arise, or whether the obligations of Borrower thereon be
direct, contingent, primary, secondary, several, joint and several, or
otherwise, and irrespective of whether such debts or liabilities be evidenced
by note, contract, open account, or otherwise, and irrespective of the person
or persons in whose favor such debts or liabilities may, at their inception,
have been, or may hereafter be created, or the manner in which they have been
or may hereafter be acquired by Guarantor. The Guarantor Claims shall include
without limitation all rights and claims of Guarantor against Borrower (arising
as a result of subrogation or otherwise) as a result of Guarantor's payment of
all or a portion of the Guaranteed Obligations to the extent the provisions of
Section 1.4 hereof are unenforceable. Upon the occurrence and during the
continuance of an Event of Default or the occurrence of an event which would,
with the giving of notice or the passage of time, or both, constitute an Event
of Default, Guarantor shall not receive or collect, directly or indirectly,
from Borrower or any other party any amount upon the Guarantor Claims.
0.0.Xxxxxx in Bankruptcy. In the event of
receivership, bankruptcy, reorganization, arrangement, debtor's relief, or
other insolvency proceedings involving Guarantor as debtor, Lender shall have
the right to prove its claim in any such proceeding so as to establish its
rights hereunder and receive directly from the receiver, trustee or other court
custodian dividends and payments which would otherwise be payable upon
Guarantor Claims. Guarantor hereby assigns such dividends and payments to
Lender. Should Lender receive, for application upon the Guaranteed
Obligations, any such dividend or payment which is otherwise payable to
Guarantor, and which, as between Borrower and Guarantor, shall constitute a
credit upon the Guarantor Claims, then upon payment to Lender in full of the
Guaranteed Obligations, Guarantor shall become subrogated to the rights of
Lender to the extent that such payments to Lender on the Guarantor Claims have
contributed toward the liquidation of the Guaranteed Obligations, and such
subrogation shall be with respect to that proportion of the Guaranteed
Obligations which would have been unpaid if Lender had not received dividends
or payments upon the Guarantor Claims.
4.3.Payments Held in Trust. In the event that,
notwithstanding anything to the contrary in this Guaranty, Guarantor should
receive any funds, payment, claim or distribution which is prohibited by this
Guaranty, Guarantor agrees to hold in trust for Lender an amount equal to the
amount of all funds, payments, claims or distributions so received, and agrees
that it shall have absolutely no dominion over the amount of such funds,
payments, claims or distributions so received except to pay them promptly to
Lender, and Guarantor covenants promptly to pay the same to Lender.
4.4.Liens Subordinate. Guarantor agrees that any
liens, security interests, judgment liens, charges or other encumbrances upon
Borrower's assets securing payment of the Guarantor Claims shall be and remain
inferior and subordinate to any liens, security interests, judgment liens,
charges or other encumbrances upon Borrower's assets securing payment of the
Guaranteed Obligations, regardless of whether such encumbrances in favor of
Guarantor or Lender presently exist or are hereafter created or attach.
Without the prior written consent of Lender, Guarantor shall not (i) exercise
or enforce any creditor's right it may have against Borrower, or (ii)
foreclose, repossess, sequester or otherwise take steps or institute any action
or proceedings (judicial or otherwise, including without limitation the
commencement of, or joinder in, any liquidation, bankruptcy, rearrangement,
debtor's relief or insolvency proceeding) to enforce any liens, mortgages,
deeds of trust, security interests, collateral rights, judgments or other
encumbrances on assets of Borrower held by Guarantor.
ARTICLE V.
MISCELLANEOUS
5.1.Waiver. No failure to exercise, and no delay
in exercising, on the part of Lender, any right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right. The
rights of Lender hereunder shall be in addition to all other rights provided by
law. No modification or waiver of any provision of this Guaranty, nor consent
to departure therefrom, shall be effective unless in writing and no such
consent or waiver shall extend beyond the particular case and purpose involved.
No notice or demand given in any case shall constitute a waiver of the right to
take other action in the same, similar or other instances without such notice
or demand.
5.2.Notices. Any notice, demand, statement,
request or consent made hereunder shall be in writing and shall be deemed to be
received by the addressee on the day such notice is tendered to a nationally
recognized overnight delivery service or on the third day following the day
such notice is deposited with the United States Postal Service first class
certified mail, return receipt requested, in either instance, addressed to the
address, as set forth below, of the party to whom such notice is to be given,
or to such other address as either party shall in like manner designate in
writing. The addresses of the parties hereto are as follows:
Guarantor:
Kranzco Realty Trust
000 Xxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxx Xxxxxx
Lender:
Salomon Brothers Realty Corp.
Seven World Trade Center, 29th Floor
New York, New York 10048
Attn: XxxxXxxx Xxxxxx
5.3.Governing Law; Jurisdiction. This Guaranty
shall be governed by and construed in accordance with the laws of the State of
New York and the applicable laws of the United States of America. Guarantor
hereby irrevocably submits to the jurisdiction of any court of competent
jurisdiction located in the State of New York in connection with any proceeding
out of or relating to this Guaranty.
5.4.Invalid Provisions. If any provision of this
Guaranty is held to be illegal, invalid, or unenforceable under present or
future laws effective during the term of this Guaranty, such provision shall
be fully severable and this Guaranty shall be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part of this
Guaranty, and the remaining provisions of this Guaranty shall remain in full
force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its severance from this Guaranty, unless such
continued effectiveness of this Guaranty, as modified, would be contrary to the
basic understandings and intentions of the parties as expressed herein.
5.5.Amendments. This Guaranty may be amended
only by an instrument in writing executed by the party or an authorized
representative of the party against whom such amendment is sought to be
enforced.
5.6.Parties Bound; Assignment. This Guaranty
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors, assigns and legal representatives, provided, however,
that Guarantor may not, without the prior written consent of Lender, assign any
of its rights, powers, duties or obligations hereunder.
5.7.Headings. Section headings are for
convenience of reference only and shall in no way affect the interpretation of
this Guaranty.
5.8.Recitals. The recital and introductory
paragraphs hereof are a part hereof, form a basis for this Guaranty and shall
be considered prima facie evidence of the facts and documents referred to
therein.
5.9.Reserved
0.00.Xxxxxxxxx Statements: Guarantor shall
furnish or cause to be furnished to Lender the following:
(a)within ninety (90) days after the close of
each fiscal year of Guarantor, a balance sheet of Guarantor dated as of the
close of such fiscal year; and
(b)from time to time, such additional financial
statements and financial information as Lender shall reasonably require.
All balance sheets shall include, among other things, a statement of profit and
loss, disclosure of all contingent liabilities and changes in financial
condition, together with such supporting schedules and documentation as Lender
shall reasonably require. All balance sheets shall be certified by Guarantor
and by Guarantor's independent certified public accountant.
5.11.Rights and Remedies. If Guarantor becomes
liable for any indebtedness owing by Borrower to Lender, by endorsement or
otherwise, other than under this Guaranty, such liability shall not be in any
manner impaired or affected hereby and the rights of Lender hereunder shall be
cumulative of any and all other rights that Lender may ever have against
Guarantor. The exercise by Lender of any right or remedy hereunder or under
any other instrument, or at law or in equity, shall not preclude the concurrent
or subsequent exercise of any other right or remedy.
5.12.Entirety. THIS GUARANTY EMBODIES THE FINAL,
ENTIRE AGREEMENT OF GUARANTOR AND LENDER WITH RESPECT TO GUARANTOR'S GUARANTY
OF THE GUARANTEED OBLIGATIONS AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS,
AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF. THIS GUARANTY IS INTENDED BY GUARANTOR
AND LENDER AS A FINAL AND COMPLETE EXPRESSION OF THE TERMS OF THE GUARANTY, AND
NO COURSE OF DEALING BETWEEN GUARANTOR AND LENDER, NO COURSE OF PERFORMANCE, NO
TRADE PRACTICES, AND NO EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OR DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE OF ANY NATURE SHALL BE
USED TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF THIS GUARANTY
AGREEMENT. THERE ARE NO ORAL AGREEMENTS BETWEEN GUARANTOR AND LENDER.
5.13.Waiver of Right to Trial by Jury. GUARANTOR
HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY
JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH
RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THIS GUARANTY, THE MORTGAGE,
OR THE OTHER LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING
IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN
KNOWINGLY AND VOLUNTARILY BY GUARANTOR, AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY
JURY WOULD OTHERWISE ACCRUE. LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF
THIS SECTION IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY
GUARANTOR.
5.14. THIS GUARANTY HAS BEEN EXECUTED BY THE
UNDERSIGNED ON BEHALF OF GUARANTOR IN THE CAPACITY AS AN OFFICER OR TRUSTEE OF
GUARANTOR WHICH HAS BEEN FORMED AS A MARYLAND REAL ESTATE INVESTMENT TRUST
PURSUANT TO AN AMENDED AND RESTATED DECLARATION OF TRUST OF GUARANTOR, DATED
DECEMBER 11, 1997, AS AMENDED AND RESTATED, AND NOT INDIVIDUALLY, AND NONE OF
THE TRUSTEES, OFFICERS OR SHAREHOLDERS OF GUARANTOR SHALL BE BOUND OR HAVE ANY
PERSONAL LIABILITY HEREUNDER. EACH PARTY HERETO SHALL LOOK SOLELY TO THE
ASSETS OF GUARANTOR FOR SATISFACTION OF ANY LIABILITY OF GUARANTOR, AND SHALL
NOT SEEK RECOURSE OR COMMENCE AN ACTION AGAINST ANY OF THE TRUSTEES, OFFICERS
OR SHAREHOLDERS OF GUARANTOR OR ANY OF THEIR PERSONAL ASSETS FOR THE
PERFORMANCE OR PAYMENT OF ANY OBLIGATION HEREUNDER. THE FOREGOING SHALL ALSO
APPLY TO ANY FUTURE DOCUMENTS, AGREEMENTS, UNDERSTANDINGS, ARRANGEMENTS AND
TRANSACTIONS BETWEEN THE PARTIES HERETO. NOTHING SET FORTH IN THE PRECEDING
TWO SENTENCES SHALL LIMIT THE OBLIGATIONS OF GUARANTOR SET FORTH IN THIS
GUARANTY AND THE OTHER LOAN DOCUMENTS.
(Signature page follows)
EXECUTED as of the day and year first above written.
GUARANTOR:
KRANZCO REALTY TRUST
By: /s/ Xxxxxx X. Xxxxxx
____________________________
Name: Xxxxxx X. Xxxxxx
Title: Vice President
