Exhibit 10.11
FORM OF GUARANTY
THIS GUARANTY ("Guaranty") is made as of ____________, ____, by
____________________, a _____________________ ("Guarantor"), in favor of XXXXX
FARGO BANK, NATIONAL ASSOCIATION ("Agent"), as agent for itself and the other
"Lenders" referred to in the Credit Agreement (defined in Recital A below).
Capitalized terms used in this Guaranty and not otherwise defined shall have the
meanings set forth for such terms in the Credit Agreement.
R E C I T A L S
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A. Pursuant to the terms of that certain Revolving Credit
Agreement dated as of December 3, 1998 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), by and among Price
Enterprises, Inc., a Maryland corporation ("Borrower"), the Lenders named
therein, and Agent, Lenders have agreed to loan to Borrower the principal sum
of FIFTY MILLION AND NO/100THS DOLLARS ($50,000,000.00) ("Loan") for the
purposes specified in the Credit Agreement.
B. The Credit Agreement provides that the Loan shall be evidenced
by those certain Notes executed by Borrower payable to the order of Lenders.
The term "Loan Documents" for purposes of this Guaranty shall mean the Credit
Agreement, the Notes and those other documents described in the Credit
Agreement as Loan Documents.
THEREFORE, to induce Lenders to enter into the Credit Agreement and
to make the Loan, and in consideration thereof, Guarantor unconditionally
guarantees and agrees as follows:
1. GUARANTY. Guarantor hereby guarantees and promises to pay to
Lenders or order, on demand, in lawful money of the United States, in
immediately available funds, the principal sum of FIFTY MILLION AND NO/100THS
DOLLARS ($50,000,000.00) or so much thereof as may be due and owing under the
Notes or any of the other Loan Documents together with interest and any other
sums payable under the Notes or any of the other Loan Documents.
2. REMEDIES. If Guarantor fails to promptly perform its
obligations under this Guaranty, Lenders may from time to time, and without
first requiring performance by Borrower, bring any action at law or in equity
or both to compel Guarantor to perform its obligations hereunder, and to
collect in any such action compensation for all loss, cost,
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damage, injury and expense sustained or incurred by Lenders as a direct or
indirect consequence of the failure of Guarantor to perform its obligations
hereunder, together with interest thereon at the rate of interest applicable
to the principal balance of the Notes.
3. RIGHTS OF LENDERS. Guarantor authorizes Lenders, without
giving notice to Guarantor or obtaining Guarantor's consent and without
affecting the liability of Guarantor, from time to time to: (a) renew or
extend all or any portion of Borrower's obligations under the Notes or any of
the other Loan Documents; (b) declare all sums owing to Lenders under the
Notes and the other Loan Documents due and payable upon the occurrence of an
Event of Default (as defined in the Credit Agreement) under the Loan
Documents; (c) make non-material changes in the dates specified for payments
of any sums payable in periodic installments under the Notes or any of the
other Loan Documents; (d) otherwise modify the terms of any of the Loan
Documents, except for (i) increases in the principal amount of the Notes or
changes in the manner by which interest rates, fees or charges are calculated
under the Notes and the other Loan Documents (Guarantor acknowledges that if
the Notes or other Loan Documents so provide, said interest rates, fees and
charges may vary from time to time) or (ii) advancement of the Maturity Date
of the Notes where no Event of Default has occurred under the Loan Documents;
(e) take and hold security for the performance of Borrower's obligations
under the Notes or the other Loan Documents and exchange, enforce, waive and
release any such security; (f) apply such security and direct the order or
manner of sale thereof as Lenders in their discretion may determine; (g)
release, substitute or add any one or more endorsers of the Notes or
guarantors of Borrower's obligations under the Notes or the other Loan
Documents; (h) apply payments received by Lenders from Borrower to any
obligations of Borrower to Lenders, in such order as Lenders shall determine
in their sole discretion, whether or not any such obligations are covered by
this Guaranty; and (i) assign this Guaranty in whole or in part.
4. GUARANTOR'S WAIVERS. Guarantor waives: (a) any defense based
upon any legal disability or other defense of Borrower, any other guarantor
or other person, or by reason of the cessation or limitation of the liability
of Borrower from any cause other than full payment of all sums payable under
the Notes or any of the other Loan Documents; (b) any defense based upon any
lack of authority of the officers, directors, partners or agents acting or
purporting to act on behalf of Borrower or any principal of Borrower or any
defect in the formation of Borrower or any principal of Borrower; (c) any
defense based upon the application by Borrower of the proceeds of the Loan
for purposes other than the purposes represented by Borrower to Lenders or
intended or understood by Lenders or Guarantor;
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(d) any defense of Guarantor based upon Lenders' election of any remedy
against Guarantor or Borrower or both; (e) any defense based upon Lenders'
failure to disclose to Guarantor any information concerning Borrower's
financial condition or any other circumstances bearing on Borrower's ability
to pay all sums payable under the Notes or any of the other Loan Documents;
(f) any defense based upon any statute or rule of law which provides that the
obligation of a surety must be neither larger in amount nor in any other
respects more burdensome than that of a principal; (g) any defense based upon
Lenders' election, in any proceeding instituted under the Federal Bankruptcy
Code, of the application of Section 1111(b)(2) of the Federal Bankruptcy Code
or any successor statute; (h) any defense based upon any borrowing or any
grant of a security interest under Section 364 of the Federal Bankruptcy
Code; (i) any right of subrogation, any right to enforce any remedy which
Lenders may have against Borrower and any right to participate in, or benefit
from, any security for the Notes or the other Loan Documents now or hereafter
held by Lenders; (j) presentment, demand, protest and notice of any kind; and
(k) the benefit of any statute of limitations affecting the liability of
Guarantor hereunder or the enforcement hereof. Guarantor agrees that the
payment of all sums payable under the Notes or any of the other Loan
Documents or any part thereof or other act which tolls any statute of
limitations applicable to the Notes or the other Loan Documents shall
similarly operate to toll the statute of limitations applicable to
Guarantor's liability hereunder. Without limiting the generality of the
foregoing or any other provision hereof, Guarantor expressly waives any and
all benefits which might otherwise be available to Guarantor under California
Civil Code Sections 2809, 2810, 2819, 2839, 2845, 2849, 2850, 2899 and 3433,
or any of such sections.
5. GUARANTOR'S WARRANTIES. Guarantor warrants and acknowledges
that: (a) Lenders would not make the Loan but for this Guaranty; (b) there
are no conditions precedent to the effectiveness of this Guaranty and this
Guaranty shall be in full force and effect and binding on Guarantor
regardless of whether Lenders obtain other collateral or any guaranties from
others or takes any other action contemplated by Guarantor; (c) Guarantor has
established adequate means of obtaining from sources other than Lenders, on a
continuing basis, financial and other information pertaining to Borrower's
financial condition, and the status of Borrower's performance of obligations
imposed by the Loan Documents, and Guarantor agrees to keep adequately
informed from such means of any facts, events or circumstances which might in
any way affect Guarantor's risks hereunder and Lenders have made no
representation to Guarantor as to any such matters; (d) the most recent
financial statements of Guarantor previously delivered to Lenders are true
and correct in all respects, have been prepared in accordance with generally
accepted accounting
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principles consistently applied (or other principles acceptable to Lenders)
and fairly present the financial condition of Guarantor as of the respective
dates thereof, and no material adverse change has occurred in the financial
condition of Guarantor since the respective dates thereof; and (e) Guarantor
has not and will not, without the prior written consent of Lenders (such
consent not to be unreasonably withheld), sell, lease, assign, encumber,
hypothecate, transfer or otherwise dispose of all or substantially all of
Guarantor's assets, or any interest therein, other than in the ordinary
course of Guarantor's business.
6. SUBORDINATION. Guarantor subordinates all present and future
indebtedness owing by Borrower to Guarantor to the obligations at any time
owing by Borrower to Lenders under the Notes and the other Loan Documents.
Guarantor assigns all such indebtedness to Lenders as security for this
Guaranty, the Notes and the other Loan Documents. Guarantor agrees to make
no claim for such indebtedness until all obligations of Borrower under the
Notes and the other Loan Documents have been fully discharged. Guarantor
further agrees not to assign all or any part of such indebtedness unless
Lenders are given prior notice and such assignment is expressly made subject
to the terms of this Guaranty. If Requisite Lenders so request, (a) all
instruments evidencing such indebtedness shall be duly endorsed and delivered
to Agent for the benefit of Lenders, (b) all security for such indebtedness
shall be duly assigned and delivered to Agent for the benefit of Lenders, (c)
such indebtedness shall be enforced, collected and held by Guarantor as
trustee for Lenders and shall be paid over to Agent for the benefit of
Lenders on account of the Loan but without reducing or affecting in any
manner the liability of Guarantor under the other provisions of this
Guaranty, and (d) Guarantor shall execute, file and record such documents and
instruments and take such other action as Requisite Lenders deem necessary or
appropriate to perfect, preserve and enforce Lenders' rights in and to such
indebtedness and any security therefor. If Guarantor fails to take any such
action, Agent for the benefit of Lenders, as attorney-in-fact for Guarantor,
is hereby authorized to do so in the name of Guarantor. The foregoing power
of attorney is coupled with an interest and cannot be revoked.
7. BANKRUPTCY OF BORROWER. In any bankruptcy or other proceeding
in which the filing of claims is required by law, Guarantor shall file all
claims which Guarantor may have against Borrower relating to any indebtedness
of Borrower to Guarantor and shall assign to Lenders all rights of Guarantor
thereunder. If Guarantor does not file any such claim, Agent for the benefit
of Lenders, as attorney-in-fact for Guarantor, is hereby authorized to do so
in the name of Guarantor or, in Lenders' discretion, to assign the claim to a
nominee and to cause proof of claim to be filed in the name of Lenders'
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nominee. The foregoing power of attorney is coupled with an interest and
cannot be revoked. Lenders or their nominee shall have the right, in their
or its reasonable discretion, to accept or reject any plan proposed in such
proceeding and to take any other action which a party filing a claim is
entitled to do. In all such cases, whether in administration, bankruptcy or
otherwise, the person or persons authorized to pay such claim shall pay to
Agent for the benefit of Lenders the amount payable on such claim and, to the
full extent necessary for that purpose, Guarantor hereby assigns to Lenders
all of Guarantor's rights to any such payments or distributions; PROVIDED,
HOWEVER, Guarantor's obligations hereunder shall not be satisfied except to
the extent that Lenders receive cash by reason of any such payment or
distribution. If Lenders receive anything hereunder other than cash, the
same shall be held as collateral for amounts due under this Guaranty. If all
or any portion of the obligations guaranteed hereunder are paid or performed,
the obligations of Guarantor hereunder shall continue and shall remain in
full force and effect in the event that all or any part of such payment or
performance is avoided or recovered directly or indirectly from any Lender as
a preference, fraudulent transfer or otherwise under the Bankruptcy Code or
other similar laws, irrespective of (a) any notice of revocation given by
Guarantor prior to such avoidance or recovery, or (b) full payment and
performance of all of the indebtedness and obligations evidenced and secured
by the Loan Documents.
8. LOAN SALES AND PARTICIPATIONS; DISCLOSURE OF INFORMATION.
Guarantor agrees that each of the Lenders may elect, at any time, to sell,
assign, or grant participations in all or any portion of its rights and
obligations under the Loan Documents and this Guaranty, subject to the
provisions of Section 12.20 of the Credit Agreement. Guarantor further
agrees that each Lender may disseminate to any such actual or potential
purchaser(s), assignee(s) or participant(s) all documents and information
(including, without limitation, all financial information) which has been or
is hereafter provided to or known to Lender with respect to: (a) any Real
Property; (b) any Person connected with the Loan (including, without
limitation, the Guarantor and the Borrower,); and/or (c) any lending
relationship other than the Loan which such Lender may have with any Person
connected with the Loan, provided that such purchaser(s), assignee(s) or
participant(s) agree to be bound by Section 5.3 of the Credit Agreement. In
the event of any such sale, assignment or participation, Lenders and the
parties to such transaction shall share in the rights and obligations of
Lender as set forth in the Loan Documents only as and to the extent they
agree among themselves. In connection with any such sale, assignment or
participation, Guarantor further agrees that this Guaranty shall be
sufficient evidence of the obligations of Guarantor to each purchaser,
assignee, or participant, and upon written request by Agent,
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Guarantor shall consent to such amendments or modifications to the Loan
Documents as may be reasonably required in order to evidence any such sale,
assignment or participation.
9. ADDITIONAL, INDEPENDENT AND UNSECURED OBLIGATIONS. This is a
Guaranty of payment and not of collection and the obligations hereunder of
Guarantor shall be in addition to and shall not limit or in any way affect
the obligations of Guarantor under any other existing or future guaranties
unless said other guaranties are expressly modified or revoked in writing.
This Guaranty is independent of the obligations of Borrower under the Notes
and the other Loan Documents. Lenders may bring a separate action to enforce
the provisions hereof against Guarantor without taking action against
Borrower, any other guarantor or any other Person or joining Borrower, any
other guarantor or any other Person as a party to such action. Except as
otherwise provided in this Guaranty, this Guaranty is not secured and shall
not be deemed to be secured by any security instrument unless such security
instrument expressly recites that it secures this Guaranty.
10. ATTORNEYS' FEES; ENFORCEMENT. Subject to Section 12.1 of the
Credit Agreement, if any attorney is engaged by Agent or Lenders to enforce
or defend any provision of this Guaranty, or any of the other Loan Documents,
or as a consequence of any Event of Default under the Loan Documents, with or
without the filing of any legal action or proceeding, Guarantor shall pay to
Agent and/or Lenders, immediately upon demand all attorneys' fees and costs
incurred by Agent and/or Lenders in connection therewith, together with
interest thereon from the date of such demand until paid at the rate of
interest applicable to the principal balance of the Notes as specified
therein.
11. RULES OF CONSTRUCTION. The word "Borrower" as used herein
shall include both the named Borrower and any other Person at any time
assuming or otherwise becoming primarily liable for all or any part of the
obligations of the named Borrower under the Notes and the other Loan
Documents. When the context and construction so require, all words used in
the singular herein shall be deemed to have been used in the plural and vice
versa. All headings appearing in this Guaranty are for convenience only and
shall be disregarded in construing this Guaranty.
12. CREDIT REPORTS. Each legal entity and individual obligated on
this Guaranty hereby authorizes Lenders to order and obtain, from a credit
reporting agency of Lenders' choice, a third party credit report on such
legal entity and individual.
13. GOVERNING LAW. This Guaranty shall be governed by, and
construed in accordance with, the laws of the State of
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California, except to the extent preempted by Federal laws. Guarantor and
all Persons in any manner obligated to Lenders under this Guaranty consent to
the jurisdiction of any Federal or State Court within the State of California
having proper venue and also consent to service of process by any means
authorized by California or Federal law.
14. MISCELLANEOUS. The provisions of this Guaranty will bind and
benefit the heirs, executors, administrators, legal representatives,
nominees, successors and assigns of Guarantor, Agent and Lenders. The
liability of all Persons who are in any manner obligated hereunder shall be
joint and several. If any provision of this Guaranty shall be determined by a
court of competent jurisdiction to be invalid, illegal or unenforceable, that
portion shall be deemed severed from this Guaranty and the remaining parts
shall remain in full force as though the invalid, illegal or unenforceable
portion had never been part of this Guaranty.
15. ENFORCEABILITY. Guarantor hereby acknowledges that: (a) the
obligations undertaken by Guarantor in this Guaranty are complex in nature,
and (b) numerous possible defenses to the enforceability of these obligations
may presently exist and/or may arise hereafter, and (c) as part of Lenders'
consideration for entering into this transaction, Lenders have specifically
bargained for the waiver and relinquishment by Guarantor of all such
defenses, and (d) Guarantor has had the opportunity to seek and receive legal
advice from skilled legal counsel in the area of financial transactions of
the type contemplated herein. Given all of the above, Guarantor does hereby
represent and confirm to Lenders that Guarantor is fully informed regarding,
and that Guarantor does thoroughly understand: (i) the nature of all such
possible defenses, and (ii) the circumstances under which such defenses may
arise, and (iii) the benefits which such defenses might confer upon
Guarantor, and (iv) the legal consequences to such Guarantor of waiving such
defenses. Guarantor acknowledges that Guarantor makes this Guaranty with the
intent that this Guaranty and all of the informed waivers herein shall each
and all be fully enforceable by Agent and/or Lenders, and that Lenders are
induced to enter into this transaction in material reliance upon the presumed
full enforceability thereof.
16. WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS GUARANTY
AND, BY ITS ACCEPTANCE HEREOF, LENDERS, HEREBY EXPRESSLY WAIVE ANY RIGHT TO
TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (a) ARISING
UNDER THE LOAN DOCUMENTS, INCLUDING, WITHOUT LIMITATION, ANY PRESENT OR
FUTURE MODIFICATION THEREOF OR (b) IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT
TO THE LOAN DOCUMENTS (AS NOW OR HEREAFTER MODIFIED) OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE
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TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND
EACH PARTY AND LENDERS HEREBY AGREE AND CONSENT THAT ANY PARTY TO THIS
GUARANTY AND LENDERS MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES
HERETO AND LENDERS TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
17. YEAR 2000 COVENANT. Guarantor shall ensure that the following
are Year 2000 Compliant in a timely manner, but in no event later than
December 31, 1999: (a) Guarantor itself and (b) any major commercial
properties and entities in which Guarantor holds a controlling interest.
Guarantor shall further make reasonable inquiries of and request reasonable
validation that each of the following are similarly Year 2000 Compliant: (x)
all major tenants or other entities from which Guarantor receives payments;
and (y) all major contractors, suppliers, service providers and vendors of
Guarantor. As used in this paragraph, "major" shall mean properties or
entities the failure of which to be Year 2000 Compliant would have a material
adverse economic impact upon Guarantor. The term "Year 2000 Compliant" shall
mean, in regard to any property or entity, that all software, hardware,
equipment, goods or systems utilized by or material to the physical
operations, business operations or financial reporting of such property or
entity (collectively, the "systems") will properly perform date sensitive
functions before, during and after the year 2000. In furtherance of this
covenant, Guarantor shall, in addition to any other necessary actions perform
a comprehensive review and assessment of all systems of Guarantor, and shall
adopt a detailed plan, with itemized budget, for the testing, remediation,
and monitoring of such systems. Guarantor shall, within thirty business days
of Agent's written request, provide to Agent such certifications or other
evidence of Guarantor's
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compliance with the terms of this Section as Agent may from time to time
reasonably require.
IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the
date appearing on the first page of this Guaranty.
"GUARANTOR"
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