FORM OF GUARANTY AND SURETYSHIP AGREEMENT
(Payment and Completion)
THIS GUARANTY AND SURETYSHIP AGREEMENT (this "Guaranty") is
executed and delivered on this day of , 1998 by ___________________
__________________________________, a _______________________ corporation
("Guarantor") with an address at
_________________________________________________, in favor of ELDERTRUST
OPERATING LIMITED PARTNERSHIP, a Delaware limited partnership (together with its
successors and assigns, "Lender") with an address at 000 XxXxxxxx Xxxx, Xxxxx
000, Xxxxxxx Xxxxxx, Xxxxxxxxxxxx 00000, to secure certain obligations of
____________________________________________________, a
______________________________ ("Borrower"), with an address at
_________________________________________________________________________.
BACKGROUND
A. Borrower and Lender have entered into that certain
Construction and Loan Agreement, dated as of the date hereof (as the same may be
modified, renewed, extended, amended, supplemented and/or assigned from time to
time, the "Loan Agreement"), relating to the conversion of an existing building
into a ____ unit ______________________ facility (the "Project") on certain real
estate located in _________________ Township, _____________________. Capitalized
terms used herein without definition shall have the meanings ascribed to such
terms as in the Loan Agreement.
B. In connection with the Loan Agreement, Borrower has
executed and delivered a Secured Note (as modified, renewed, extended, amended,
supplemented and/or assigned from time to time, the "Note"), dated as of the
date hereof, payable to the order of the Lender in the face amount of
$_____________, a Mortgage and Security Agreement as security for the
obligations secured by the Note (as modified, renewed, extended, amended and/or
assigned from time to time, the "Mortgage"), and certain other collateral
documents identified in the Loan Agreement, all dated as of the date hereof. The
Loan Agreement, Note, Mortgage and the other collateral documents identified in
the Loan Agreement, as the same is modified, renewed, extended, amended,
supplemented and/or assigned from time to time, are sometimes collectively
referred to herein as the "Loan Documents", and individually as a "Loan
Document". The principal balance of the Note, together with all interest thereon
and all other sums payable thereunder or under the Loan Documents or secured by
the Loan Documents, is hereinafter collectively referred to as the
"Indebtedness".
C. Guarantor is an affiliate of Borrower.
D. In order to induce Lender to enter into the Loan Agreement,
Guarantor has agreed to execute and deliver this Guaranty in favor of Lender.
AGREEMENTS
In consideration of the recitals above, and for other good and
valuable consideration, and intending to be legally bound hereby, Guarantor
hereby agrees:
1. Obligations. The following guarantees and obligations (together, the
"Obligations") are undertaken by Guarantor:
(a) Guarantor hereby unconditionally and absolutely guarantees
and becomes surety to Lender for the prompt payment when due of the
Indebtedness. The obligations of Guarantor constitute a guarantee of payment and
not merely of collection, are absolute and unconditional under all circumstances
and shall not in any event be discharged, impaired, or otherwise affected except
by payment in full to Lender. Guarantor agrees that it will, within three (3)
business days after written notice from Lender that any Event of Default has
occurred under the Loan Agreement, the Note or under any other Loan Document,
pay in full directly to Lender the then existing amount of the Indebtedness.
Guarantor further agrees that any payment required hereunder will be made to
Lender regardless of whether such sums have become due by reason of the maturity
of the Note or acceleration of the Indebtedness or whether such liability
becomes barred by any statute of limitations or otherwise becomes unenforceable.
The proceeds of any amounts paid pursuant to this Guaranty will be applied first
to the payment of accrued interest, if any, on the Note, then to any other sums
payable in connection with the Note or secured by the Loan Documents, and the
balance of the proceeds will be applied to reduce the then outstanding principal
amount of the Note, whether then matured or not, in the inverse order of its
maturity.
(b) Guarantor hereby unconditionally and absolutely guarantees
and hereby agrees to be guarantor of (i) the full and timely performance of all
of Borrower's obligations under the Loan Documents, including, without
limitation, the construction and completion of the Project in strict accordance
with the Plans and Specifications, and (ii) the full and timely payment of all
contractors, subcontractors and material suppliers whose work and materials have
been or may hereafter be delivered or supplied to, or incorporated into, the
Project. Guarantor hereby unconditionally and absolutely guarantees that there
shall be no mechanics' liens, claims or other liens or charges filed against the
Project or, if they are so filed, Guarantor shall cause such liens to be timely
removed or satisfied of record within ten (10) days after notice thereof to
Guarantor. If for any reason Borrower fails to complete the construction of the
Improvements in accordance with the terms of the Loan Agreement, or if Borrower
defaults with respect to any other matter herein guaranteed, then, within five
(5) days after written notice from Lender, Guarantor will immediately assume all
responsibility for the completion of the Improvements and all obligations of
Borrower under the Loan
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Agreement and the other Loan Documents or take such other action as Lender may
request to remedy such default, or both. If Guarantor does not fully assume such
responsibility and obligations within such five (5) day period to Lender's
satisfaction, then Lender may elect, without further notice to Guarantor, to
take any action it believes necessary to complete the Improvements, but with the
further right to suspend or terminate such actions at any time. No such actions
by Lender shall release or limit the liability of Guarantor and Guarantor agrees
to repay Lender all sums expended by it in undertaking to complete such
construction, whether or not construction is actually completed.
(c) Lender shall have the right to require Guarantor to pay,
comply with and satisfy its obligations and liabilities under this Guaranty and
shall have the right to proceed immediately against Guarantor with respect
thereto, without being required to bring any proceeding or take any action of
any kind against Borrower or any other guarantor or any other person, entity or
property (including, without limitation, the Project) prior thereto, the
liability of Guarantor hereunder being, in any event, independent of and
separate from the liability of Borrower, any other guarantors and persons and
the availability of other collateral security for the Note and the Loan
Documents.
(d) This Guaranty shall be deemed to be a continuing guaranty
of Indebtedness from Lender to Borrower and of all expenses incurred by Lender
in connection therewith.
2. Cancellation. This Guaranty and all of the Obligations will be
canceled when the Indebtedness has been irrevocably and indefeasibly paid in
full and the Improvements have been constructed and completed in accordance with
the Loan Agreement; provided, however, that this Guaranty shall remain in full
force and effect for so long as such payment may be voided in bankruptcy or
other insolvency proceedings as a preference, or for any other reason or
generally set aside as a result of any action or proceedings by creditors. If
this Guaranty is canceled pursuant to this Paragraph 2 or otherwise by Lender,
Lender will, within forty-five (45) business days thereafter, xxxx the original
hereof "Canceled" and return it to Borrower.
3. Events of Default; Costs and Fees; Indemnification. Guarantor hereby
agrees that if it does not satisfy the Obligations set forth in Section 1 hereof
in accordance with the terms thereof, the same shall be an Event of Default
hereunder. Lender shall have the right, in addition to the other rights
described in this Guaranty, to collect from Guarantor all costs, fees and
expenses (including reasonable attorneys' fees) incurred by Lender in connection
with the enforcement of this Guaranty against such Guarantor, as well as
interest on the unpaid Obligations at the Default Rate set forth in the Note,
from and after the date of such Event of Default through the date of payment. In
the event of any default hereunder, Guarantor shall indemnify and defend the
Lender against, and hold Lender harmless from, all liability, damage, cost
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and expense, including, without limitation, costs of suit and attorneys' fees,
which Lender may incur by reason of such default by Guarantor.
4. Additional Remedies. Lender shall have and may exercise, in addition
to any and all rights or remedies provided herein or by law, the specific rights
and remedies, exercisable by Lender in its discretion, to xxx for and obtain
specific performance of Guarantor's covenants set forth herein, all of which
costs shall be borne by Guarantor. Lender may, at its option, proceed to enforce
this Guaranty against Guarantor without first proceeding against Borrower or any
other person and without first resorting to any security held by Lender as
security or to any other remedies, and the liability of Guarantor hereunder
shall be in no manner affected or impaired by any failure, delay, neglect,
omission or election by Lender not to realize upon or pursue any persons liable
or security for the Indebtedness or the other obligations of Borrower under the
Loan Agreement or the other Loan Documents.
5. Bankruptcy of Borrower or Guarantor. The Obligations shall not be
discharged, impaired or otherwise affected by the insolvency, bankruptcy,
liquidation, readjustment, composition, dissolution or other similar proceeding
involving or affecting Borrower or Guarantor, proceedings affecting the
ownership of either of the above through merger, consolidation or otherwise,
inconsistent orders in or claims by parties to any such proceedings or other
release of obligations by operation of law.
6. Covenants. Guarantor hereby covenants and agrees that:
(a) The Obligations shall not be released or otherwise
affected by (and hereby waives notice of) any agreement, amendment, release,
suspension, compromise, forbearance, indulgence, waiver, extension, renewal,
supplement or modification or assignment of any of the Loan Documents, or of any
obligations of Borrower to Lender;
(b) Lender may, without affecting the liability of Guarantor
under this Guaranty, (i) exchange, release or surrender any property pledged by
or on behalf of Borrower or any other guarantor of any liabilities of Borrower
to Lender, (ii) renew or change, with the consent of Borrower, the terms of any
of Borrower's liabilities to Lender, or (iii) waive any of Lender's rights or
remedies against Borrower or any other guarantor of any obligations of Borrower,
all without obtaining consent thereto from Guarantor;
(c) The Obligations shall not be reduced or affected either by
any payment made by or on behalf of any other party to the Loan Documents or by
failure of any such party to make payment;
(d) The Obligations shall be in addition to that stated in any
other guaranty of parties other than the undersigned or any other guaranty that
has been or may be hereafter given by the undersigned and shall not be reduced
or affected by any payment made under any such guaranty;
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(e) Any failure or delay by Lender to exercise any right under
this Guaranty or under any other guaranty or with respect to any of the Loan
Documents or otherwise with respect to the Indebtedness shall not be construed
as a waiver of the right to exercise the same or any other right hereunder at
any time and from time to time thereafter;
(f) The Obligations shall not be affected by any of Borrower's
liabilities to Lender in excess of the amounts guaranteed hereunder, and any
payment received by Lender from Borrower may first be credited against any such
excess liability;
(g Lender shall not, under any circumstances, be required to
exhaust remedies or proceed against Borrower, other sureties, parties, or any
other security for the Indebtedness before proceeding under this Guaranty
against the undersigned;
(h) Until all of the Obligations are indefeasibly paid in
full, under no circumstances shall Guarantor become subrogated to the claims or
liens of Lender against Borrower or any other guarantor and that all amounts due
to Lender shall have priority in right of payment over any amounts, whether or
not related to the Loan Documents or the Project, payable now or hereafter from
Borrower to Guarantor;
(i) The Obligations shall not be affected by any provision in
the Loan Documents limiting Lender's rights against Borrower to the Project or
any other Collateral, or limiting Lender's rights to a deficiency judgment
against Borrower;
(j) To the extent Guarantor controls (whether directly or
indirectly) Borrower, it will neither knowingly take or cause to be taken any
action, or permit any inaction, which will violate or cause a default or Event
of Default under any of the Loan Documents;
(k) Notice or demand hereunder by Lender shall be by hand
delivery or registered or certified mail, postage prepaid, addressed to
Guarantor at its address set forth on the first page hereof, and shall be deemed
given when hand delivered, or if mailed, upon deposit of such notice in the
United States mail;
(l) No single exercise of the power to bring any action or
institute any proceeding shall be deemed to exhaust such power, but such power
shall continue
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undiminished and may be exercised from time to time as often as Lender may elect
until all of Guarantor's liabilities and obligations hereunder have been
satisfied; and
(m) Without the prior consent of Lender, which consent shall
not be unreasonably withheld, Guarantor's liability under this Guaranty shall in
no way be released or otherwise affected by any assignment by Borrower of its
rights or obligations under any Loan Document, or by the commencement, existence
or completion of any proceeding against Borrower, or any other person or entity
or otherwise with respect to the collection of the Indebtedness; and Lender
shall be under no obligation to take any action and shall not be liable for any
action taken or any failure to take action or any delay in taking action against
Guarantor, Borrower or any other person or entity or otherwise with respect to
the Indebtedness.
7. Representations and Warranties. Guarantor hereby represents and
warrants to Lender as of the date hereof and at all times when this Guaranty
shall remain in effect:
(a) Guarantor is a _____________________ duly formed, validly
existing and in good standing under the laws of its jurisdiction of formation.
Guarantor has the power and authority to own its own property and assets and to
transact the business in which it is engaged;
(b) Guarantor has the power and authority to execute, deliver
and perform the terms and provisions of this Guaranty and Guarantor has taken
all necessary action to authorize the execution, delivery and performance of
this Guaranty. This Guaranty constitutes the authorized, valid and legal binding
obligation of Guarantor enforceable in accordance with its terms;
(c) There are no actions, suits or proceedings pending, or to
the knowledge of Guarantor, threatened, against or affecting Guarantor before
any court or before any governmental or administrative body or agency which, if
determined adversely to Guarantor, individually or in the aggregate, would have
a material adverse effect on Guarantor's business or properties;
(d) Guarantor is not in default under the provisions of any
agreement to which it is a party and Guarantor is not in violation of any
applicable provision of law or any applicable regulation of any governmental
department, commission, board, bureau, agency or instrumentality, the violation
of which would have a material adverse effect on Guarantor's business or
properties or the Project. Neither the execution and delivery of this Guaranty
nor the consummation of the transactions herein contemplated, nor compliance
with the terms and provisions hereof, (i) will violate any applicable provision
of law or any applicable regulation, or any order, writ, injunction or decree of
any court or governmental department, commission, board, bureau, agency or
instrumentality or (ii) will conflict or will be inconsistent with, or will
result in any breach of, any of the terms, covenants, conditions or provisions
of, or constitute a default under, or result in the creation of imposition of
(or the obligation to
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impose) any lien, charge or encumbrance upon any of the property or assets of
Guarantor pursuant to the terms of any indenture, franchise, license, permit,
mortgage, deed of trust, agreement or other instrument to which Guarantor is a
party or by which Guarantor may be bound, or to which Guarantor may be subject,
except as would not have a material adverse effect;
(e) Guarantor has filed all tax returns required by law to be
filed by it and has paid all taxes, assessments and other governmental charges
levied upon it and any of it respective properties, assets, income or franchises
which are due and payable, other than those presently payable without penalty or
interest;
(f) Guarantor is in compliance with all applicable provisions
of ERISA;
(g) With respect to any financial statements delivered by
Guarantor to Lender after the date of this Guaranty, all such financial
statements shall have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the period
specified and present fairly in all material respects the financial position of
Guarantor as of the date specified and the results of operations and statements
of cash flow for the period specified;
(h) Neither this Guaranty nor any other document delivered to
Lender by or on behalf of Guarantor in connection with the transactions
contemplated by the Loan Documents contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
contained in this Guaranty and in such other documents, certificates or
instruments not misleading. There is no fact (other than matter of a general
economic or political nature which do not uniquely affect Guarantor) which
materially adversely affects or in the future may (so far as such Guarantor can
foresee) materially adversely affect the business, condition (financial or
otherwise), operations, properties or prospects of Guarantor which has not been
set forth in this Guaranty; and
(i) The Indebtedness is and will be of direct benefit,
interest and advantage to Guarantor.
8. Waivers.
(a) Guarantor waives (i) any notice of Lender's intention to
act in reliance of this Guaranty, (ii) diligence, presentment, demand, protest
or notice of dishonor, extension of time of payment, nonpayment or other default
with respect to the Indebtedness, and indulgences and notices of every kind and
(iii) the commencement or prosecution of any enforcement proceeding against
Borrower or any
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other person or entity with respect to the Indebtedness or otherwise. Guarantor
hereby consents to any and all forbearances and extensions of time of payment of
the Note, and to any and all changes in terms, covenants, and conditions thereof
or of the other Loan Documents; it being the intention hereof that Guarantor
shall remain liable as a principal until the Indebtedness shall have been fully
paid and until the terms, covenants, and conditions of the Note and of the other
Loan Documents shall have been performed and observed by Borrower,
notwithstanding any act, omission, or thing which might otherwise operate as a
legal or equitable discharge of Guarantor.
(b) Guarantor agrees that the Obligations shall not be
impaired, modified, changed, released, or limited in any manner whatsoever by
any impairment, modification, change, release, or limitation of the liability of
Borrower or its estate in bankruptcy, resulting from the operation of any
present or future provision of the bankruptcy laws or other similar statute, or
from the decision of any court.
(c) Guarantor irrevocably waives all claims of waiver,
release, surrender, alteration or compromise and all defenses, set-offs,
counterclaims, recoupments, reductions, limitations or impairments.
(d) Guarantor waives the right to marshaling of Borrower's
assets, any stay of execution and the benefit of all exemption laws, to the
extent permitted by law, or any other protection granted by law to guarantors,
now or hereafter in effect with respect to any action or proceeding brought by
Lender against Guarantor.
9. Miscellaneous. The invalidity or unenforceability of any one or more
provisions of this Guaranty shall not affect any other provision. This Guaranty
will be governed by the law of the Commonwealth of Pennsylvania (but not
including the choice of law provisions thereof) and may be amended only by a
written instrument executed by Guarantor and Lender. This Guaranty is
irrevocable. The provisions of this Guaranty will bind and inure to the benefit
of the respective successors and assigns of Guarantor and Lender. Whenever the
context requires, all terms used in the singular will be construed in the plural
and vice versa, and each gender will include the other gender.
10. Assignment. This Guaranty and the obligations of Guarantor
hereunder shall not be assigned in any respect without the prior written consent
of Lender, which consent shall not be unreasonably withheld, Lender shall have
the absolute right, without Guarantor's consent or approval, to assign in whole
or in part this Guaranty and/or the other Loan Documents to any third
party(ies).
11. JURISDICTION; TRIAL BY JURY. GUARANTOR HEREBY SUBMITS AND CONSENTS
TO THE JURISDICTION OF THE COURTS OF THE COMMONWEALTH OF PENNSYLVANIA AND THE
COURTS OF THE UNITED STATES LOCATED IN THE COMMONWEALTH OF PENNSYLVANIA, IN ANY
AND ALL ACTIONS OR PROCEEDINGS ARISING
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HEREUNDER OR PURSUANT HERETO, AND IRREVOCABLY AGREES TO SERVICE OF PROCESS BY
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ITS ADDRESS SET FORTH HEREIN OR
SUCH OTHER ADDRESS AS GUARANTOR MAY DIRECT BY NOTICE TO MORTGAGEE. GUARANTOR
IRREVOCABLY AS AN INDEPENDENT COVENANT WAIVES A JURY TRIAL AND THE RIGHT THERETO
IN ANY ACTION OR PROCEEDING BETWEEN GUARANTOR AND LENDER, WHETHER HEREUNDER OR
OTHERWISE.
IN WITNESS WHEREOF, Guarantor has executed and delivered this Guaranty
as of the day and year first written above.
GUARANTOR:
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Witness:______________________ By:________________________________
Name: Name:
Title: Title:
[Corporate Seal]
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