COMPLETION GUARANTY
This COMPLETION GUARANTY (this "Guaranty"), dated as of the 24th day of
August 1999, made by BROOKDALE LIVING COMMUNITIES, INC., a Delaware corporation,
having offices at 00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000
("Guarantor"), for the benefit of KEY CORPORATE CAPITAL INC,. a Michigan
corporation having administrative offices at 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxx
00000-0000 ("KCCI"), as the Agent (the "Agent") for the Lenders, including KCCI,
who are or hereafter become parties to the Loan Agreement (hereinafter defined),
each of which, including KCCI, is hereinafter referred to as a "Lender" or the
"Lenders".
All capitalized terms appearing and not defined herein shall have the
meanings ascribed to them in the Building Loan Agreement and/or the Soft Cost
Loan Agreement, as may be amended from time to time, each of even date herewith
(together, the "Loan Agreement"), among AH BATTERY PARK OWNER, LLC, an Ohio
limited liability company (the "Borrower"), the Lenders named therein, and the
Agent.
W I T N E S S E T H:
WHEREAS, the Borrower is the actual, beneficial and record ground
lessee of a certain tract of land consisting of approximately .449 acres located
in the Borough of Manhattan, City and State of New York, known by the street
address 000 Xxxxx Xxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, which is more particularly
described in Exhibit A attached hereto (the "Land");
WHEREAS, the Borrower has requested the Lenders to make loan advances
(collectively, the "Loan") to it in the aggregate principal amount of up to
FORTY NINE MILLION ONE HUNDRED TWENTY FIVE THOUSAND AND 00/100 DOLLARS
($49,125,000.00) (the "Maximum Loan Amount"), to be used to finance Hard Costs
and Soft Costs of the Borrower's construction of the Improvements described in
the Loan Agreement, which include an independent living/assisted living complex
to be known as The Hallmark at Battery Park City containing approximately 218
units and approximately 219,615 square feet of floor area (as said term is
defined in the Zoning Resolution of the City of New York) to be built on the
Land in accordance with the Building Loan Agreement, and in compliance with the
Plans and all Requirements;
WHEREAS, the Loan will be advanced by the Lenders to the Borrower upon
the Borrower's compliance with, and subject to, the terms, conditions and
limitations of the Loan Agreement;
WHEREAS, the Loan will be evidenced by the Notes and secured by, among
other things, the Mortgage;
WHEREAS, the Guarantor is an Affiliate of the developer of the Project,
Brookdale Living Communities of New York - BPC, Inc. (the "Developer"), and both
Developer and Guarantor will derive substantial benefit from the making of the
Loan;
WHEREAS, pursuant to the Loan Agreement, the Borrower is required,
among other things, to construct and achieve Completion of the Improvements and
to install certain fixtures, furnishings and equipment and other personalty in
accordance with the Plans and the terms of the Loan Agreement;
WHEREAS, to induce the Lenders to make the Loan pursuant to the Loan
Agreement, to accept the Notes and to cause the Agent to accept the Mortgage,
the Borrower has agreed to procure and deliver this
Guaranty to be executed by the Guarantor and to be binding upon the Guarantor
and its respective successors and assigns;
WHEREAS, the Lenders are unwilling to extend credit to the Borrower
unless this Guaranty is executed by the Guarantor and delivered to the Agent;
and
WHEREAS it is a condition to the obligations of the Lenders to make
advances of the Loan to the Borrower pursuant to the Loan Agreement that this
Guaranty is executed by the Guarantor and delivered to the Agent;
NOW, THEREFORE, in consideration of the Loan to the Borrower, in order
to induce the Lenders and the Agent to execute and deliver the Loan Agreement,
the Lenders to accept the Notes, and the Agent to accept the Mortgage, and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Guarantor, for itself, its successors and assigns,
hereby covenants and agrees with the Agent for the benefit of the Agent and the
Lenders, and their respective successors and assigns, as follows:
1. Guaranty. Subject to the Lenders' obligation to continue to make
advances to the extent they are secured by the Lien of the Mortgage as provided
in Section 4 hereof, the Guarantor, as a primary obligor and not merely as a
surety, absolutely, unconditionally and irrevocably guaranties to the Agent and
the Lenders (the matters hereinafter set forth in (a) through (d) of this
Section 1, and in Sections 2 and 3, shall collectively be defined as the
"Guaranty Obligations") that:
(a) The Borrower shall achieve Completion of the
Improvements on or before the Completion Date (including, without
limitation, the requirement that a temporary certificate of occupancy
be obtained), free and clear of all mechanics' liens and other charges
relating to the construction and Completion of the Improvements, in
compliance with the Plans, the applicable provisions of the Loan
Agreement and all Requirements and shall perform its obligation to
maintain either a temporary Certificate of Occupancy or permanent
Certificate of Occupancy in full force and effect at all times after
the same has been issued;
(b) The Borrower shall fully and punctually comply with the
Loan Balancing provisions of Section 2B.7(A) of the Loan Agreement;
(c) The Borrower shall fully and punctually pay and
discharge any and all costs and expenses and liabilities incurred for
or in connection with the construction, equipping, furnishing and
Completion of the Improvements, when and as the same may become due and
payable, and also pay and discharge any and all claims and demands for
labor and materials used and services rendered for or in connection
with the construction and Completion of the Improvements and/or the
installation of all items of fixtures, furnishings and equipment and
other personalty in connection therewith; and
(d) The Land, the Improvements and the installation of
fixtures, furnishings and equipment and other personalty in connection
therewith shall be and remain free and clear of any and all Liens and
claims from any and all persons or entities furnishing materials, labor
or services for or in connection with the construction, equipping,
furnishing or Completion of the Improvements and/or the installation of
all items of fixtures, furnishings and equipment and other personalty
in connection therewith, subject to (i) the Permitted Encumbrances and
any Liens permitted under the Building Loan Agreement and (ii)
Borrower's right to contest any such Liens as set forth in the Loan
Documents.
2. Indemnity, Reimbursement and Performance. For the purposes of
this Guaranty: "Completion" shall mean and be deemed to have occurred upon the
occurrence of all of the following: (i) the Improvements comprising the Project
shall be fully paid and 100% complete in accordance with the Plans, all
Requirements and the requirements of the Ground Lease, all as determined by
Agent and Agent's Architect in accordance with the procedure set forth in
Section 2B.2 of the Loan Agreement; (ii) all on-site and off-site
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improvements, including, without limitation, all utility services and fixtures
and equipment required for access to and operation of the Improvements shall be
100% complete; (iii) a temporary certificate of occupancy for the full use and
occupancy of the entire Premises (and provided that Borrower shall proceed as
expeditiously as possible to secure the final Certificate of Occupancy, in any
event within two (2) years of issuance of the temporary certificate of
occupancy) or its equivalent issued by the applicable governmental authority for
the Improvements comprising the Project, and all other reasonable evidence that
the City of New York and/or the Battery Park City Authority have acknowledged
the completion of all work required by it to meet all legal requirements and the
requirements under the Ground Lease, as applicable, including, without
limitation, all zoning and building requirements; (iv) all Permits and Licenses,
if any, required for the operation of the Project as an independent
living/assisted living complex under all applicable legal requirements have been
issued; (v) all of the requirements set forth in Section 6.4 of the Building
Loan Agreement for the final disbursement of Hard Costs shall have been
satisfied; (vi) the opening of the Project shall have been scheduled to occur
within thirty (30) days, and "Completion Date" shall mean the date that occurs
eighteen (18) calendar months after the Closing Date, subject to extension for
Force Majeure (it being expressly understood, however, that the Maturity Date
shall not be extended by reason of Force Majeure).
In the event that (a) the Borrower does not fully perform the
Guaranty Obligations, (b) the Completion of the Improvements or the installation
of all items of fixtures, furnishings and equipment and other personalty in
connection therewith are not accomplished on or before the Completion Date, or
(c) the Improvements and/or the installation of all items of fixtures,
furnishings and equipment and other personalty are not paid for in full or free
of all Liens, claims and demands upon the Completion thereof and after the
expiration of all applicable periods during which Liens therefor may be recorded
(except for the lien of the Mortgage, Permitted Encumbrances and other Liens
permitted under the Building Loan Agreement), subject to the Borrower's right to
contest any such Liens as set forth in the Loan Documents, then:
(x) The Guarantor shall, upon demand by the Agent, perform
the Guaranty Obligations, and complete or cause the completion of the
construction, furnishing and equipping of the Improvements, and/or the
installation of fixtures, furnishings and equipment and other
personalty in accordance with the Plans, all Requirements and this
Guaranty, as applicable;
(y) In the event that the Guarantor fail to commence
performance under subsection (x) immediately preceding within ten (10)
Domestic Business Days of the Agent's demand and diligently prosecute
such performance, and if the Agent shall (i) cause any construction,
furnishing or equipping of the Improvements and/or the installation of
all items of fixtures, furnishings and equipment and other personalty
in connection therewith, (ii) pay any costs in connection with the
construction, furnishing or equipping of the Improvements and/or the
installation of all items of fixtures, furnishings and equipment and
other personalty in connection therewith, or (iii) cause any such Lien,
claim or demand to be released or paid, then the Guarantor shall
promptly reimburse the Agent within ten (10) Domestic Business Days
after demand, for all sums paid and all costs and expenses incurred by
the Agent in connection therewith; and
(z) The Guarantor will fully indemnify, defend and save the
Agent and the Lenders harmless from all costs and damages (including
reasonable attorney's fees and any diminution in value or loss of
income attributable to the loss of any tenants) that the Agent or any
Lender may suffer by reason of the Guarantor's failure to promptly and
fully perform under subsections (x) and (y) above.
3. Projected Overruns/Loan Balancing. If at any time:
(a) The actual or projected cost of completing all work
represented by an individual line item of the Budget (including any Budget
Reallocations permitted under Section 2B.14 of the Building Loan Agreement), as
such cost is determined by the Agent, exceeds the amount set forth in the Budget
for such individual line item plus amounts previously deposited by the Guarantor
hereunder and/or by the Borrower under the Loan Documents with respect to such
individual line item, but not yet applied; or
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(b) The actual or projected costs associated with
construction, equipping, furnishing and achieving Completion of the
Improvements, as determined by the Agent, exceeds the sum of the undisbursed
portion of the Loan plus amounts previously deposited by the Guarantor hereunder
and/or by the Borrower under the Loan Documents, but not yet applied; or
(c) The Borrower shall fail to timely and fully comply with
its Loan balancing obligations under Section 2B.7(A) of the Building Loan
Agreement; then:
the Guarantor shall, if the Borrower shall so fail to, within ten (10) Domestic
Business Days after request by the Agent, deposit with the Agent cash in an
amount sufficient to cover such deficiency. The Agent shall hold and apply such
deposited cash for the purpose of meeting said excess costs when due, whether by
payment to the Borrower or by payment directly to the party owed such amounts.
The Lenders need not have advanced all Loan proceeds nor shall the Agent have
released Retainage or contingency amounts before making such requests. Any
determination as to estimated or actual Costs or the existence of a present or
projected deficiency or the amount of same shall be made by the Agent and the
Agent's Architect in its sole discretion.
4. Lender's Exercise of Rights Hereunder. Notwithstanding any
Lender's right to cease funding to the Borrower upon the occurrence of a default
pursuant to the terms of the Loan Agreement, in the event the Agent shall have
called upon the Guarantor under this Guaranty to complete the Improvements, and
said call upon Guarantor has not been rescinded by Agent, and provided that the
Guarantor has made whatever deposits are required by Section 1(c) or Section 3
hereof and provided further that there are no continuing uncured defaults by the
Guarantor hereunder or under any other Loan Document, the Lenders shall continue
to make Advances under the Loan Agreement (for the benefit of the Borrower and
the Guarantor) in accordance with the terms thereof, notwithstanding any default
or Event of Default by the Borrower under any Loan Document, provided that any
such Advances shall be secured, on a first priority basis (subject only to
Permitted Encumbrances and other Liens permitted under the Building Loan
Agreement), by the Lien of the Mortgage. The Guarantor covenants and agrees that
in consideration of the Lenders' making such Advances under the Loan Agreement
for the purpose of completing the Improvements, the Guarantor will comply, or
will cause the Developer and/or Borrower to comply, with all terms and
conditions of the Loan Agreement relative to any such Loan Advances to be made
by the Lenders. Nothing contained herein shall preclude the Agent's or any
Lender's right to require strict compliance with the terms of the Loan Agreement
by the Borrower.
5. Representations, Warranties and Covenants of the Guarantor. The
Guarantor hereby represents, warrants and covenants:
(a) The Guarantor is a corporation duly organized and
validly existing under the laws of the State of Delaware and has full
power and authority to consummate the transactions contemplated hereby.
(b) This Guaranty, the Payment Guaranty, the Operating
Deficit Guaranty, and the Environmental Indemnity Agreement have been
duly executed and delivered by the Guarantor and constitute the valid
and binding obligations of the Guarantor and are enforceable against
the Guarantor in accordance with their respective terms.
(c) Guarantor is not insolvent (as such term is defined in
the Bankruptcy Code), and Guarantor will not be rendered insolvent by
execution of this Guaranty or any other Loan Document to which it is a
party or by the consummation of the transactions contemplated thereby.
(d) The consummation of the transactions contemplated
hereby and the performance by the Guarantor of the Guarantor's
obligations under this Guaranty, the Payment Guaranty, the Operating
Deficit Guaranty, the Environmental Indemnity Agreement or any other
Loan Document to which the Guarantor is a party will not result in any
breach of, give rise to a lien under, or constitute a default under,
any mortgage, deed of trust, lease, bank loan or credit agreement,
partnership agreement,
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corporate charter, by-laws or other agreement or instrument to which
the Guarantor is a party or by which it may be bound or affected.
(e) The Financial Statements delivered by the Guarantor to
the Agent at or prior to the Closing fairly and accurately present the
financial condition of the Guarantor as of the date thereof, and no
material adverse change has occurred in the financial condition
reflected therein since the date thereof. The Financial Statements have
been prepared in accordance with sound accounting methods, principles
and standards consistently applied and do not omit facts, the omission
of which would make such Financial Statements materially misleading.
(f) Except as disclosed on Schedule 1 annexed hereto and
made a part hereof, there are no actions, suits or proceedings
involving claims in excess of $1,000,000 pending, or to the best
knowledge of the Guarantor threatened, against or affecting the
Guarantor or the Premises, or involving the validity or enforceability
of the Mortgage, or the priority of the liens thereof, at law or in
equity, before or by any Governmental Authority; and the Guarantor is
not operating under or subject to, in default of, or in violation with
respect to, any order, writ, injunction, decree or demand of any court
or any Governmental Authority involving claims in excess of $1,000,000
that reasonably could materially and adversely affect its ability to
perform its obligations hereunder.
(g) The Guarantor shall promptly provide the Agent with
written notice of any pending or threatened litigation against the
Guarantor or the Premises, with respect to which an adverse decision is
reasonably likely involving claims in excess of $1,000,000; or the
commencement against the Guarantor or the Premises of any proceedings
or investigations by a governmental or regulatory agency involving
claims in excess of $1,000,000 that reasonably could materially and
adversely affect its ability to perform its obligations hereunder.
(h) There is no default on the part of the Guarantor under
or with respect to this Guaranty, the Payment Guaranty, the
Environmental Indemnity Agreement or any other Loan Document to which
the Guarantor is a party, and no event has occurred and is continuing
which with the giving of notice and the passage of time would
constitute a default on the part of Guarantor under any of the
aforesaid documents.
(i) The Guarantor does not have any counterclaims, offsets
or defenses with respect to the Loan or with respect to its obligations
under this Guaranty, the Payment Guaranty, the Operating Deficit
Guaranty, the Environmental Indemnity Agreement, the Notes or any other
Loan Document to which it is a party.
(j) The Guarantor will not join in any action, or consent
to amend, terminate or modify the organizational documents of the
Borrower without the prior written consent of the Agent.
(k) The Guarantor will promptly comply with all conditions
of this Guaranty and the other Loan Documents with which the Guarantor
is required to comply. The Guarantor will promptly and fully respond to
any inquiry of the Agent made with respect to the Loan, the Land, the
Improvements, or any of the matters covered by this Guaranty.
(l) The Guarantor will not modify or amend or terminate
(other than by full performance thereof) any Loan Document without the
prior written consent of the Agent.
(m) The Guarantor agrees to pay within ten (10) Domestic
Business Days of any written demand by the Agent to Guarantors, all
expenses (including, without limitation, reasonable legal expenses) of,
or incidental to, or in any way relating to the enforcement or
protection of the rights of the Agent or the Lenders hereunder.
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(n) The Guarantor is deriving or expects to derive a
financial or other advantage from each and every obligation incurred by
the Borrower to the Agent or the Lenders.
(o) The Guarantor hereby acknowledges receipt of copies of,
and hereby approves, the Plans, the Mortgage, the Loan Agreement and
the other Loan Documents.
(p) The Guarantor shall execute and deliver to the Agent,
from time to time, such other documents as shall be reasonably
necessary to give full effect to the rights and remedies granted or
provided by this Guaranty.
(q) The Guarantor shall furnish to the Agent (i) quarterly
internally-prepared Financial Statements, certified by an officer of
the Guarantor, within forty-five (45) days after the end of each
calendar quarter, (ii) annual audited Financial Statements, certified
by an officer of the Guarantor within one hundred twenty (120) days
after the end of each fiscal year of the Guarantor, (iii) quarterly
internally-prepared certificates evidencing that the Guarantor's net
worth is equal to at least $70,000,000, certified by an officer of the
Guarantor, within forty-five days after the end of each calendar
quarter, (iv) quarterly internally-prepared certificates evidencing
that the Guarantor has Liquid Assets equal to at least $5,000,000,
certified by an officer of the Guarantor, within forty-five (45) days
after the end of each calendar quarter, and (v) such other financial
information relating to the Guarantor as may be reasonably requested
from time to time by Agent.
(r) The Guarantor has implemented a program to assess,
remediate and mitigate the potential impact of the Year 2000 Issue
throughout the Guarantor's company. The Guarantor's program has been
structured to address its internal computer systems and applications,
network services operations, facilities operations and third-party
vendors and suppliers. The Guarantor believes that it is taking the
necessary steps within its control to mitigate the potential impact of
the Year 2000 Issue on the Guarantor and shall continue to do so.
6. Defaults. The following shall constitute a default hereunder
(each, an "Event of Default"):
(a) if the Guarantor shall (after ten (10) Domestic
Business Days have elapsed from date of written notice to Guarantor)
fail to timely perform, or cause to be timely performed, any Guaranty
Obligation within the period provided for performance by the Guarantor
hereunder;
(b) if the Guarantor shall (after ten (10) Domestic
Business days have elapsed from date of written notice to Guarantor)
fail to comply with any of the covenants made by it in this Guaranty
(including, without limitation, the provisions of Section 25 hereof) or
in any other Loan Document, including, without limitation, the Payment
Guaranty, or if at any time any representation or warranty made by the
Guarantor to the Agent or the Lenders in this Guaranty or in any other
Loan Document or in any certificate or statement delivered in
connection herewith shall be false or misleading to an extent deemed by
the Agent to be material, and, in any case, all required notices have
been given and all applicable cure periods have expired;
(c) if at any time the Guarantor shall revoke, or attempt
to revoke, this Guaranty;
(d) if at any time Guarantor's minimum net worth is not
equal to at least $70,000,000, or if at any time Guarantor's minimum
liquidity in the form of Liquid Assets (as that term is defined in the
Payment Guaranty) is not equal to at least $5,000,000;
(e) if the Guarantor shall (i) suspend or discontinue its
business, (ii) make an assignment for the benefit of creditors, (iii)
admit in writing its inability to pay its debts as they become due,
(iv) file a voluntary petition in bankruptcy, (v) become insolvent as
defined in the Bankruptcy Code, (vi) file any petition or answer
seeking for itself any reorganization, arrangement, composition,
readjustment of
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debt, liquidation or dissolution or similar relief under any present or
future statute, law or regulation of any jurisdiction, (vii) petition
or apply to any tribunal for any receiver, custodian or any trustee for
any substantial part of its property, (viii) be the subject of any such
proceeding commenced against it which remains undismissed for a period
of 60 days, (ix) file any answer admitting or not contesting the
material allegations of any such petition filed against it, or of any
order, judgment or decree approving such petition in any such
proceeding, or (x) seek, approve, consent to, or acquiesce in any such
proceeding, or in the appointment of any trustee, receiver, custodian,
liquidator, or fiscal agent for it, or any substantial part of its
property or if an order is entered appointing any such trustee,
receiver, custodian, liquidator or fiscal agent and such order remains
in effect for 60 days;
(f) if an order for relief is entered under the Bankruptcy
Code or any other decree or order is entered by a court of competent
jurisdiction (i) adjudicating the Guarantor bankrupt or insolvent, (ii)
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the
Guarantor, (iii) appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator (or other similar official) of the Guarantor or
of any substantial part of its property, or (iv) ordering the winding
up or liquidation of the affairs of the Guarantor and any such decree
or order continues unstayed and in effect for a period of 60 days; or
(g) If the Guarantor shall (after ten (10) days have
elapsed from date of written notice to Guarantor) fail to make any
payment or deposit required by this Guaranty.
7. Remedies. Upon the occurrence of a default hereunder, in
addition to any other remedy provided for under this Guaranty or at law or in
equity, the Guarantor hereby authorizes the Agent, in the Agent's sole
discretion, at any time, to foreclose nonjudicially or judicially against any
real or personal property security of Borrower or Guarantor it holds for the
Guaranty Obligations or any part thereof (it being understood that Guarantor is
not required to secure this Guaranty with any assets of Guarantor), or exercise
any other remedy against the Guarantor or any security.
8. Equitable Relief; Specific Performance. The Guarantor
acknowledges and agrees that it may be impossible to measure accurately the
damages to the Lenders resulting from a breach of the Guarantor's covenant to
complete, equip and install, or to cause the completion of the construction,
equipping and installation of, the Improvements and the fixtures, furnishings
and equipment and other personalty and the failure to satisfy the Guaranty
Obligations and that such a breach will cause irreparable injury to the Lenders
and that the Lenders may not have an adequate remedy at law in respect of such
breach and, as a consequence, agrees that such covenant shall be specifically
enforceable against the Guarantor and hereby waives and agrees not to assert any
defense against an action for specific performance of such covenant. This clause
shall not prejudice any Lender's rights to assert any and all claims for damages
incurred as a result of the Guarantor's default hereunder, and the Agent, for
the ratable benefit of the Lenders, may, before, during, or after any
foreclosure of the Mortgage, hold the Guarantor liable for any deficiency
arising from the Guarantor's default hereunder and for all losses and damages
sustained and expenses incurred by reason of the Borrower or the Guarantor
failing to construct, furnish, equip and achieve timely lien-free Completion of
the Improvements, furnishings and equipment in accordance with this Guaranty and
the Loan Agreement, including, without limitation, any and all costs associated
with such Completion.
9. Waiver of Election of Remedies. The Guarantor waives (to the
extent permitted by law) any right to require or compel the Agent or any Lender
to (a) proceed against the Borrower or any other guarantor; (b) proceed against
the Collateral or any other security for the Loan or the Guaranty Obligations;
or (c) pursue any other remedy in the Agent's or any Lender's power whatsoever;
and failure of the Agent or any Lender to do any of the foregoing shall not
exonerate, release or discharge the Guarantor from its absolute, unconditional
and independent liabilities to the Agent and the Lenders hereunder. The
Guarantor hereby waives (to the extent permitted by law) any and all legal
requirements that the Agent or any Lender shall institute any action or
proceedings at law or in equity against the Borrower or anyone else in respect
of the Loan or the Loan
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Agreement or any other Loan Document or resort to or seek to realize upon the
security held by the Agent or any of the Lenders, as a condition precedent to
bringing an action against the Guarantor upon this Guaranty.
10. Right of Separate Actions. The Agent may bring and prosecute a
separate action against the Guarantor to enforce its liabilities hereunder,
whether or not any action is brought against any other person and whether or not
any other person is joined in any such action or actions. Nothing shall prohibit
the Agent or any Lender from exercising its rights against any guarantor, the
Borrower, any security for the Guaranty Obligations or the Notes, or any other
person, simultaneously, jointly and/or severally. The Guarantor shall be bound
by each and every ruling, order and judgment obtained by the Agent or any Lender
against the Borrower in respect of the Loan and the Loan Documents, whether or
not the Guarantor is a party to the action or proceeding in which such ruling,
order or judgment is issued or rendered.
11. Waiver of Rights of Subrogation. The Guarantor hereby
irrevocably waives any rights to be subrogated to the rights of the Agent or any
of the Lenders with respect to the Guaranty Obligations and the Notes or any
other Loan Document. The Guarantor hereby agrees that it will not institute or
take any action seeking reimbursement against the Borrower or any other
guarantor until such time as the Agent and the Lenders shall have received
payment in full in cash in satisfaction of all the obligations of the Borrower
under the Notes and the other Loan Documents. No failure on the part of the
Agent or any Lender to exercise, and no delay in exercising, any right, remedy
or power hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise by the Agent or any Lender of any right, remedy or power
hereunder preclude any other or future exercise of any other right, remedy or
power. The foregoing provision is not intended to limit the Guarantor's rights
under the Development Agreement or the Management Agreement, provided all
relevant provisions of the Loan Agreement relative to Guarantor's exercise of
said rights are satisfied.
12. Waiver of Notice, Consent, etc.
(a) This Guaranty shall be construed as a continuing, absolute and
unconditional guaranty of completion.
(b) The Guarantor hereby waives acceptance and notice of acceptance
of this Guaranty by the Agent or any of the Lenders and notice of presentment,
demand, protest, notice of protest and of dishonor, notices of default and all
other notices relative to this Guaranty of every kind and description now or
hereafter provided by any agreement between the Borrower and the Agent or any of
the Lenders or any statute or rule of law except those specifically required by
this Guaranty.
(c) Except for any notices to Guarantor specifically required by any
of the Loan Documents, the Guarantor waives any and all notice of the creation,
renewal, extension or accrual of any of the obligations of the Borrower under
any of the Loan Documents (with the exception of (i) changes in the interest
rate, other than fluctuations in the Prime Rate or Applicable LIBOR Rate or a
change to the Default Rate pursuant to the terms of the Notes or Loan Agreement,
(ii) changes in the Maturity Date unless extended in accordance with Section
2A.11 of the Loan Agreement or unless accelerated by the Agent pursuant to the
terms of the Loan Agreement, (iii) changes in the Maximum Loan Amount, and (iv)
changes in the amount of payments of principal and/or interest as scheduled), or
of the reliance by the Agent or any of the Lenders upon this Guaranty or any
other Loan Document. The obligations of the Borrower under any of the Loan
Documents, and each of them, shall conclusively be deemed to have been created,
contracted, or incurred in reliance upon this Guaranty and all dealings between
the Borrower, the Agent or any of the Lenders shall likewise be conclusively
presumed to have been made or consummated in reliance upon this Guaranty.
(d) The Guarantor hereby agrees that the Plans and the conditions
for advances, if any, and any other terms, covenants and provisions contained in
the Loan Agreement, the Notes, the Mortgage or in any other Loan Document may be
altered, extended, modified, waived, released or cancelled by the Agent or any
of the Lenders, and the Guarantor agrees that this Guaranty and its liability
hereunder shall be in no way affected, diminished or released by any such
alteration, extension, modification, release, waiver or cancellation (with the
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exception of (i) changes in the interest rate, other than fluctuations in the
Prime Rate or Applicable LIBOR Rate or a change to the Default Rate pursuant to
the terms of the Notes or Loan Agreement, (ii) changes in the Maturity Date
unless extended in accordance with Section 2A.11 of the Loan Agreement or unless
accelerated by the Agent pursuant to the terms of the Loan Agreement, (iii)
changes in the Maximum Loan Amount, and (iv) changes in the amount of payments
of principal and/or interest as scheduled).
13. Waiver of Priority of Collateral. The Guarantor hereby agrees
that, in the event that any of its property is or may be hypothecated with
property of the Borrower, as security for any obligations of the Borrower under
any other Loan Document, any right of the Guarantor to have such other property
of the Borrower first applied to the discharge of such obligations is hereby
irrevocably waived by the Guarantor.
14. No Discharge; Remedies Cumulative. The Guarantor shall not be
discharged, released or exonerated, in any way, from its absolute, unconditional
and independent liabilities hereunder, even though any rights or defenses which
the Guarantor may have against the Agent or any of the Lenders or others may be
destroyed, diminished or otherwise affected by:
(a) any declaration by the Agent or any Lender of a default
in respect of any of the obligations of the Borrower under any of the
Loan Documents;
(b) the exercise by the Agent or any Lender of any rights
or remedies against the Borrower or any other person;
(c) the failure of the Agent or any Lender to exercise any
rights or remedies against the Borrower or any other person;
(d) the sale or enforcement of, or realization upon
(through judicial foreclosure, power of sale or any other means) any
security for any of the obligations of the Borrower under any of the
Loan Documents, or any security for any of the Guaranty Obligations,
even though (i) recourse may not thereafter be had against the Borrower
or any other person for any deficiency, or (ii) the Agent or any Lender
fails to pursue any such recourse which might otherwise be available,
whether by way of deficiency judgment following judicial foreclosure or
otherwise;
(e) any bankruptcy or reorganization of the Borrower or the
voluntary or involuntary participation by the Borrower in any
settlement or composition for the benefit of the Borrower's creditors
either in liquidation, readjustment, receivership, bankruptcy or
otherwise;
(f) the release of any other guarantor by agreement,
operation of law or otherwise; or
(g) any such action by the Agent or any Lender which would
release or limit the liability of the Guarantor to the Agent or any of
the Lenders even if the effect of that action is to deprive the
Guarantor of the right to collect reimbursement from the Borrower for
any sums paid to the Agent or any Lender.
All rights and remedies of the Agent and the Lenders hereunder or under any of
the Loan Documents shall be cumulative and may be exercised singularly or
concurrently. The rights of the Agent and the Lenders under this Guaranty are in
addition to and not in diminution of the rights of the Agent and the Lenders
under any other Loan Document.
15. Continuing Guaranty. Subject to the terms of Section 22 hereof,
until all obligations of the Borrower to the Agent and the Lenders under the
Loan Documents are fulfilled to the satisfaction of the Agent and the Lenders
and each and every of the terms, covenants and conditions of this Guaranty are
fully performed and the Loan are fully repaid, no Guarantor shall be released by
any act or thing which might, but for this provision, be deemed a legal or
equitable discharge of a surety, or by reason of any waiver, extension,
9
modification, forbearance or delay or other act or omission of the Agent or any
Lender or its failure to proceed promptly or otherwise, or by reason of any
action taken or omitted or circumstance which may or might vary the risk or
affect the rights or remedies of the Guarantor or by reason of any further
dealings between the Borrower and the Agent or any of the Lenders, whether
relating to the Loan or otherwise, and the Guarantor hereby expressly waives and
surrenders any defenses to its liability hereunder based upon any of the
foregoing acts, omissions, things or agreements or waivers of the Agent or any
of the Lenders; it being the purpose and intent of this Guaranty that the
obligations of the Guarantor hereunder are absolute and unconditional under any
and all circumstances. The Guarantor has also executed the Payment Guaranty and
the Operating Deficit Guaranty in favor of the Agent and the Lenders and (a)
payment or performance by the Guarantor of its obligations under this Guaranty
shall not decrease the Guarantor's liability under the Payment Guaranty or the
Operating Deficit Guaranty, and (b) payment or performance by the Guarantor
under the Payment Guaranty or the Operating Deficit Guaranty shall not decrease
or diminish the Guarantor's liability under this Guaranty.
16. Notices. All notices, demands, instructions and other
communications required or permitted to be given to or made upon any party
hereto or any other person shall be in writing and shall be personally delivered
or sent by registered or certified mail, postage prepaid, return receipt
requested, or telegram (with messenger delivery specified in the case of a
telegram), or by prepaid courier, and shall be deemed to be given for purpose of
this Guaranty in regard to registered or certified mail, three (3) Domestic
Business Days after mailing, and in regard to personal delivery, telegram, or
prepaid courier, on the day that such writing is delivered. Unless otherwise
specified in a notice sent or delivered in accordance with the foregoing
provisions of this Section, notices, demands, instructions and other
communications in writing shall be given to or made upon the following persons
at its addresses indicated below:
To Guarantor:
Brookdale Living Communities, Inc.
00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Xx.
Telecopy: (000) 000-0000
Brookdale Living Communities, Inc.
00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telecopy: (000) 000-0000
To the Agent:
Key Corporate Capital Inc., as Agent
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxx
Vice President
with a courtesy copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxxxxxx X. Xxxx, Esq.
10
with a courtesy copy to any Lender:
at its address specified in or pursuant
to the Loan Agreement
or at such other address as any of the persons identified above may from time to
time designate by written notice given as herein required. Rejection or refusal
to accept or inability to deliver because of changed addresses or because notice
of changed address was given shall be deemed a receipt of such notice. Failure
to provide a courtesy copy of any notice required hereunder shall not invalidate
any notice otherwise given in accordance with this Section.
If any day on which any notice, demand, instruction or other
communication is given or sent by any party hereto is not a Domestic Business
Day, such notice, demand, instruction or other communication shall be deemed to
have been given or sent on the Domestic Business Day next succeeding such
non-Domestic Business Day.
17. Submission to Jurisdiction. (a) The Guarantor irrevocably
submits to the non-exclusive jurisdiction of the courts of the State of New
York, the courts of the United States for the Southern District of the State of
New York, and appellate courts from any thereof, over any suit, action or
proceeding arising out of or relating to this Guaranty. The Guarantor hereby
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any such suit, action
or proceeding brought in any such court and any claim that any such suit, action
or proceeding brought in such a court has been brought in an inconvenient forum.
Without limiting the Guarantor's right to appeal any such final judgment in
accordance with applicable Requirements, the Guarantor agrees that a final
judgment in any such suit, action or proceeding brought in such a court shall be
conclusive and binding upon the Guarantor.
(b) The Guarantor hereby irrevocably appoints CT Corporation System
as its authorized agent to accept and acknowledge, on behalf of the Guarantor,
service of any and all process which may be served in any suit, action or
proceeding of the nature referred to above in any such court. The Guarantor
represents and warrants that such agent has agreed in writing to accept such
appointment and that the Guarantor has delivered to the Agent a true copy of
such designation and acceptance. Said designation and appointment shall be
irrevocable. If such agent shall cease so to act, the Guarantor covenants and
agrees that it shall irrevocably designate and appoint without delay another
such agent satisfactory to the Agent and shall promptly deliver to the Agent
evidence in writing of such other agent's acceptance of such appointment.
(c) Process may be served in any suit, action or proceeding of the
nature referred to above (i) by the mailing of copies thereof by registered or
certified air mail, postage prepaid return receipt requested, to the Guarantor
at its address set forth above or to such other address of which the Guarantor
shall have given written notice to the Agent, or (ii) without affecting the
efficacy of any service made pursuant to clause (i) above, if the Guarantor
shall not have filed an appearance within twenty-one days after the date of such
mailing, by serving a copy thereof upon CT Corporation System, at its office at
0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, as the Guarantor's agent for service of
process. The Guarantor agrees that such service shall be deemed in every respect
effective service of process upon the Guarantor in any such suit, action or
proceedings and shall, to the fullest extent permitted by law, be taken and held
to be valid personal service upon and personal delivery to the Guarantor.
Nothing in this Section shall affect the right of the Agent to serve process in
any manner permitted by law or limit the right of the Agent to bring proceedings
against the Guarantor in the courts of any other jurisdiction or jurisdictions.
18. Entire Agreement; Modification and Waiver. This Guaranty,
together with the Payment Guaranty, the Operating Deficit Guaranty and the
Environmental Indemnity Agreement, represent the entire agreement between the
Guarantor, on the one hand, and the Agent and the Lenders, on the other hand,
with respect to the matters referred to herein and therein and no waiver or
modification hereof or thereof shall be
11
effective unless in writing and signed by the Agent and the Guarantor against
whom enforcement of the same is sought. All approvals, consents and other
actions by the Agent hereunder shall be given or taken by the Agent in
accordance with the provisions regarding the Agent powers provided in the Loan
Agreement (including any required instructions or consents by any specified
percentage of Lenders or all Lenders). No Lender shall have any power to amend,
discharge or terminate this Guaranty, all such actions being within the powers
of the Agent (acting on behalf of the Lenders as provided in Article VII of the
Loan Agreement). This Guaranty, the Payment Guaranty, the Operating Deficit
Guaranty and the Environmental Indemnity Agreement are independent agreements
and shall be so construed in accordance with their respective terms. The Payment
Guaranty, the Operating Deficit Guaranty and the Environmental Indemnity
Agreement are additional security and benefit to the Agent and the Lenders and
are not in lieu of and do not in any way diminish the Guaranty Obligations of
the Guarantor hereunder. The Guarantor shall be fully liable to the Agent and
the Lenders hereunder whether or not the Agent or any Lender has or shall obtain
any other or further guaranties, security or agreements, and irrespective of
whether the Payment Guaranty, the Operating Deficit Guaranty or the
Environmental Indemnity Agreement or other or further guaranties, security or
agreements are effective or enforceable or are released in whole or in part,
voluntarily or involuntarily or by operation of law or otherwise. Neither the
Agent nor any Lender shall have any obligation to pursue or attempt to pursue
any remedies under the Payment Guaranty, the Operating Deficit Guaranty, or the
Environmental Indemnity Agreement or any other or further guaranties, security
or agreement and may enforce all rights and obligations hereunder, irrespective
of the existence or nonexistence of other or further guaranties, security or
agreements.
19. Governing Law. THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES AND OTHER PERSONS BENEFITTED HEREUNDER SHALL BE CONSTRUED, ENFORCED,
AND INTERPRETED ACCORDING TO THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE IN AND PERFORMED IN THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS.
20. Successors and Assigns. This Guaranty shall be binding upon the
Guarantor and upon its respective successors and assigns and shall inure to the
benefit of the Agent and the Lenders and their respective successors and
assigns.
21. Time of the Essence. Time shall be of the essence with regard to
the performance by Guarantor of its obligations under this Guaranty.
22. Termination of Guaranty. This Guaranty shall expire when all of
the Guaranty Obligations shall have been satisfied and all statutory mechanics'
lien filing periods have expired and no notices of lien have been filed that
remain unreleased or have not been bonded off in a manner satisfactory to Agent.
23. Singular and Plural. As used in this Guaranty, the singular
shall include the plural as the context requires.
24. Waiver of Trial by Jury. THE GUARANTOR, AND THE AGENT AND THE
LENDERS BY THEIR ACCEPTANCE OF THE BENEFITS HEREOF, EACH HEREBY IRREVOCABLY
WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BETWEEN OR AMONG
ANY OF THEM, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, ARISING OUT OF OR
IN ANY WAY CONNECTED TO THE LOAN, THIS GUARANTY OR ANY OF THE OTHER LOAN
DOCUMENTS.
25. Transfer of Property, Mergers, etc. The Guarantor hereby
covenants and agrees, that until this Guaranty is terminated in accordance with
its terms, (a) the Guarantor shall not, without the Agent's prior written
consent, directly or indirectly, convey, transfer or assign any property or
asset of any nature, whether real property, personal property or mixed, tangible
or intangible or any interest therein, for less than fair market value, if the
same would cause a reduction in Guarantor's net worth below $70,000,000 or a
reduction in Guarantor's minimum liquidity in the form of Liquid Assets below
$5,000,000, and (b) the Guarantor shall not
12
merge or consolidate with, or sell, assign, lease or otherwise dispose of all or
substantially all of its assets to, any other person; provided, that the
Guarantor may consolidate with another person, or merge with and into another
person, or permit another person to merge with and into the Guarantor, if the
transaction complies with the requirements of Section 4.2(m) of the Building
Loan Agreement and the following requirements are satisfied:
(i) the Agent shall have been provided by the Guarantor with such
information concerning such transaction as the Agent may
request;
(ii) no Event of Default hereunder or under the Loan Agreement, or
event which with notice and lapse of time would become such an
Event of Default, shall have occurred and be continuing;
(iii) the effectiveness and priority of the liens and security
interests created pursuant to the Loan Documents are not
impaired by reason of any such transaction; and
(iv) the resulting or surviving person (if other than the Guarantor)
shall be a corporation, partnership or limited liability
company, duly organized under the laws of the United States, any
State thereof, or the District of Columbia, and shall assume,
pursuant to a written instrument or instruments, satisfactory in
form and substance to the Agent, all of the obligations of the
Guarantor under this Guaranty and each other Loan Document to
which the Guarantor is a party.
26. Severability. If any term or provision of this Guaranty or any
application thereof shall be held to be invalid, illegal or unenforceable, the
remainder of this Guaranty and any other application of such term or provision
shall not be affected thereby.
27. The Agent to Act on Behalf of Lenders, etc. The Lenders and the
Agent and their respective successors and assigns are beneficiaries of this
Guaranty, but any legal proceedings or other enforcement actions on behalf of
any Lender against the Guarantor with respect to this Guaranty shall be
undertaken and maintained by the Agent, acting on behalf and for the ratable
benefit of the Agent and the Lenders, with the proceeds of any such proceedings
or enforcement actions to be applied as provided in the Loan Documents.
28. Headings. The headings in this Guaranty are for purposes of
reference only and shall not limit or define the meaning hereof.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, this Guaranty has been executed by the undersigned
as of the date first above written.
BROOKDALE LIVING COMMUNITIES, INC.
By: /s/ Xxxx X. Xxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxx
Title: President and CEO
14
State of ILLINOIS )
) SS.:
County of XXXX )
On the 24th day of August, in the year 1999 before me, the undersigned, a notary
public of the State of Illinois, personally appeared Xxxx X. Xxxxxxx, personally
known to me or proved to me on the basis of satisfactory evidence to be the
individual whose name is subscribed to the within instrument and acknowledged to
me that he executed the same in his capacity, and that by his signature on the
instrument, the individual, or the person upon behalf of which the individual
acted, executed the instrument, and that such individual made such appearance
before the undersigned in the County of Xxxx, State of Illinois.
NOTARY SEAL
/s/ Xxxxx Xxxx Xxxxx
--------------------------
Notary Public (affix seal)
EXHIBIT A
LEGAL DESCRIPTION
All that certain plot, piece or parcel of land, situate, lying and being in the
Borough of Manhattan, County of New York, City and State of New York, bounded
and described as follows:
BEGINNING at the intersection of the southerly line of Xxxxxxxx Street and the
westerly line of North End Avenue;
THENCE southerly along the westerly line of North End Avenue, a distance of
196.00 feet to a point on the northerly line of Xxxxxx Street;
THENCE westerly along said northerly line of Xxxxxx Street, a distance of 100.00
feet to the division line between Parcel 20C on the west and Parcel 20B on the
east;
THENCE northerly along said division line at right angles to the preceding
course, a distance of 196.00 feet to the southerly line of Xxxxxxxx Street;
THENCE easterly along said southerly line of Xxxxxxxx Street, a distance of
100.00 feet to the point of BEGINNING.
Schedule 1
----------
1. Complaint filed in the Supreme Court of the State of New York, Kings
County, on July 23, 1999, having Index # 25973/99, by Xxxx Xxxxxx and
Xxxxxxxxx Xxxxxx, as plaintiffs, against Brookdale Living Community,
HRH Construction Corp. and Maxim Construction Corp., as defendants,
claiming damages in the amount of $6,000,000, resulting from injuries
allegedly sustained by Xxxx Xxxxxx while working on the construction of
the Project.
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