EXHIBIT 10.19
GUARANTY OF PAYMENT (PLEDGOR)
THIS GUARANTY OF PAYMENT (PLEDGOR) (this "GUARANTY") is
executed as of August 19, 2003, by SUMMIT CARE CORPORATION, a California
corporation, SUMMIT CARE TEXAS, L.P., a Texas limited partnership, SUMMIT CARE
TEXAS MANAGEMENT, LLC, a Delaware limited liability company, SKILLED HEALTHCARE,
LLC, a Delaware limited liability company (collectively referred to as
"GUARANTOR"), for the benefit of CAPITALSOURCE FINANCE LLC, a Delaware limited
liability company, as administrative agent and collateral agent for the lenders
under the Loan Agreement, having an address at 0000 Xxxxxxx Xxxxxx, 12th Floor,
Chevy Chase, Maryland 20815 (in such capacity as Agent, referred to herein as
"LENDER").
W I T N E S S E T H :
WHEREAS, pursuant to those certain Promissory Notes each of
even date herewith given by SHG Property Resources, LLC, a Delaware limited
liability company and SHG Investments, LLC a Delaware limited liability company
(collectively, "BORROWER") in favor of the lenders under the Loan Agreement in
the original principal amount of Twenty Three Million and No/100 Dollars
($23,000,000.00) (as the same may hereafter be amended, restated, replaced,
supplemented or otherwise modified from time to time, collectively, the "NOTE"),
Borrower has become indebted, and may from time to time be further indebted, to
Lender with respect to a loan ("LOAN"), made pursuant to that certain Mezzanine
Loan Agreement, of even date herewith, between Borrower and the lenders under
the Loan Agreement (as the same may be amended, restated, replaced,
supplemented, or otherwise modified from time to time, the "LOAN AGREEMENT"),
which Loan is secured by that certain Pledge and Security Agreement of even date
herewith (as the same may be amended, restated, replaced, supplemented, or
otherwise modified from time to time, collectively, the "PLEDGE AGREEMENT"), and
further evidenced, secured or governed by other instruments and documents
executed in connection with the Loan (together with the Note, the Loan Agreement
and the Pledge Agreement are hereinafter collectively, the "LOAN DOCUMENTS");
and
WHEREAS, the lenders under the Loan Agreement are not willing
to make the Loan, or otherwise extend credit, to Borrower unless Guarantor
unconditionally guarantees payment and performance to Lender of the Guaranteed
Obligations (as herein defined); and
WHEREAS, Guarantor will directly benefit from the making of
the Loan to Borrower.
NOW, THEREFORE, as an inducement to the lenders under the Loan
Agreement to make the Loan to Borrower, and for other good and valuable
consideration, the receipt and legal sufficiency of which are hereby
acknowledged, the parties do hereby agree as follows:
ARTICLE I
NATURE AND SCOPE OF GUARANTY
1.1 GUARANTY OF PAYMENT. Guarantor hereby irrevocably and
unconditionally guarantees to Lender and its successors and assigns the full
payment and performance of all obligations of Borrower under the Loan Documents
as and when the same shall be due and payable, whether by lapse of time, by
acceleration of maturity or otherwise, either before or after maturity thereof,
and Guarantor shall be liable for, the full amount of the Debt, including,
without limitation, any costs and expenses incurred by Lender in connection with
collecting or enforcing against Guarantor the terms and provisions of this
Guaranty and enforcing all terms and provisions of the Loan Documents
(including, without limitation, all court costs and attorneys' fees and costs)
(the "GUARANTEED OBLIGATIONS"); provided, however, that notwithstanding anything
to the contrary in this Guaranty, Guarantor's liability under this Guaranty
shall be limited to its interests in and to (i) Summit Pledged Entity Interests
(as defined in the Pledge Agreement), SCTX Pledged Entity Interests (as defined
in the Pledge Agreement), SCTM Pledged Entity Interests (as defined in the
Pledge Agreement) and SH Pledged Entity Interests (as defined in the Pledge
Agreement); (ii) all other equity, membership or partnership interest
certificates, options or rights of any nature whatsoever which may be issued or
granted to Guarantor while this Agreement is in effect, other than those
relating to any subsidiary of Guarantor which is in existence as of the date
first written above but whose equity, membership or partnership interest is not
included as Pledged Entity Interests (as defined in the Pledge Agreement); and
(iii) any and all replacements, products and Proceeds (as defined in the Pledge
Agreement) of, and dividends, distributions in property, returns of capital or
other distributions made on or with respect to, any of the foregoing shares and
other equity securities and ownership interests. Guarantor hereby irrevocably
and unconditionally covenants and agrees that it is liable for the Guaranteed
Obligations as a direct and primary obligor.
1.2 INTENTIONALLY DELETED.
1.3 NATURE OF GUARANTY. This Guaranty is an irrevocable,
absolute, continuing guaranty of payment and performance and not a guaranty of
collection. This Guaranty may not be revoked by Guarantor and shall continue to
be effective with respect to any Guaranteed Obligations arising or created after
any attempted revocation by Guarantor. The fact that at any time or from time to
time the Guaranteed Obligations may be increased or reduced shall not release or
discharge the obligation of Guarantor to Lender with respect to the Guaranteed
Obligations. This Guaranty may be enforced by Lender and any subsequent holder
of the Note and shall not be discharged by the assignment or negotiation of all
or part of the Note.
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1.4 GUARANTEED OBLIGATIONS NOT REDUCED BY OFFSET. The
Guaranteed Obligations and the liabilities and obligations of Guarantor to
Lender hereunder, shall not be reduced, discharged or released because or by
reason of any existing or future offset, claim or defense of Borrower, or any
other party, against Lender or against payment of the Guaranteed Obligations,
whether such offset, claim or defense arises in connection with the Guaranteed
Obligations (or the transactions creating the Guaranteed Obligations) or
otherwise.
1.5 PAYMENT BY GUARANTOR. If all or any part of the Guaranteed
Obligations shall not be punctually paid when due, whether at demand, maturity,
acceleration or otherwise, Guarantor shall, immediately upon demand by Lender,
and without presentment, protest, notice of protest, notice of non-payment,
notice of intention to accelerate the maturity, notice of acceleration of the
maturity, or any other notice whatsoever, pay in lawful money of the United
States of America, the amount due on the Guaranteed Obligations to Lender at
Lender's address as set forth herein. Such demand(s) may be made at any time
coincident with or after the time for payment of all or part of the Guaranteed
Obligations, and may be made from time to time with respect to the same or
different items of Guaranteed Obligations. Such demand shall be deemed made,
given and received in accordance with the notice provisions hereof.
1.6 NO DUTY TO PURSUE OTHERS. It shall not be necessary for
Lender (and Guarantor hereby waives any rights which Guarantor may have to
require Lender), in order to enforce the obligations of Guarantor hereunder,
first to (a) institute suit or exhaust its remedies against Borrower or others
liable on the Loan or the Guaranteed Obligations or any other person, (b)
enforce Lender's rights against any collateral which shall ever have been given
to secure the Loan, (c) enforce Lender's rights against any other guarantors of
the Guaranteed Obligations, (d) join Borrower or any others liable on the
Guaranteed Obligations in any action seeking to enforce this Guaranty, (e)
exhaust any remedies available to Lender against any collateral which shall ever
have been given to secure the Loan, or (f) resort to any other means of
obtaining payment of the Guaranteed Obligations. Lender shall not be required to
mitigate damages or take any other action to reduce, collect or enforce the
Guaranteed Obligations.
1.7 WAIVERS. Guarantor agrees to the provisions of the Loan
Documents, and hereby waives notice of (a) any loans or advances made by Lender
to Borrower, (b) acceptance of this Guaranty, (c) any amendment or extension of
the Note, the Pledge Agreement, the Loan Agreement or of any other Loan
Documents, (d) the execution and delivery by Borrower and Lender of any other
loan or credit agreement or of Borrower's execution and delivery of any
promissory notes or other documents arising under the Loan Documents or in
connection with the Collateral, (e) the occurrence of any breach by Borrower or
an Event of Default, (f) Lender's transfer or disposition of the Guaranteed
Obligations, in accordance with the Loan Agreement, (g) sale or foreclosure (or
posting or advertising for sale or foreclosure) of any collateral for the
Guaranteed Obligations, (h) protest, proof of non-payment or default by Borrower
and (i) any other action at any time taken or omitted by Lender, and, generally,
all demands and notices of every kind in connection with this Guaranty, the Loan
Documents, any documents or agreements evidencing, securing or relating to any
of the Guaranteed Obligations.
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1.8 PAYMENT OF EXPENSES. In the event that Guarantor should
breach or fail to timely perform any provisions of this Guaranty, Guarantor
shall, immediately upon demand by Lender, pay Lender all costs and expenses
(including court costs and reasonable attorneys' fees and costs) incurred by
Lender in the enforcement hereof or the preservation of Lender's rights
hereunder. The covenant contained in this Section shall survive the payment and
performance of the Guaranteed Obligations.
1.9 EFFECT OF BANKRUPTCY. In the event that, pursuant to any
insolvency, bankruptcy, reorganization, receivership or other debtor relief law,
or any judgment, order or decision thereunder, Lender must rescind or restore
any payment, or any part thereof, received by Lender in satisfaction of the
Guaranteed Obligations, as set forth herein, any prior release or discharge from
the terms of this Guaranty given to Guarantor by Lender shall be without effect,
and this Guaranty shall remain in full force and effect. It is the intention of
Borrower and Guarantor that Guarantor's obligations hereunder shall not be
discharged except by Guarantor's performance of such obligations and then only
to the extent of such performance.
1.10 WAIVER OF SUBROGATION, REIMBURSEMENT AND CONTRIBUTION.
Notwithstanding anything to the contrary contained in this Guaranty, Guarantor
hereby unconditionally and irrevocably waives, releases and abrogates any and
all rights it may now or hereafter have under any agreement, at law or in equity
(including, without limitation, any law subrogating the Guarantor to the rights
of Lender), to assert any claim against or seek contribution, indemnification or
any other form of reimbursement from Borrower or any other party liable for
payment of any or all of the Guaranteed Obligations for any payment made by
Guarantor under or in connection with this Guaranty or otherwise.
1.11 BORROWER. The term "BORROWER" as used herein shall
include any new or successor corporation, association, partnership (general or
limited), joint venture, trust, limited liability company or other individual or
organization formed as a result of any merger, reorganization, sale, transfer,
devise, gift or bequest of Borrower or any interest in Borrower.
ARTICLE II
EVENTS AND CIRCUMSTANCES NOT REDUCING
OR DISCHARGING GUARANTOR'S OBLIGATIONS
Guarantor hereby consents and agrees to each of the following,
and agrees that Guarantor's obligations under this Guaranty shall not be
released, diminished, impaired, reduced or adversely affected by any of the
following, and waives any common law, equitable, statutory or other rights
(including without limitation rights to notice) which Guarantor might otherwise
have as a result of or in connection with any of the following:
2.1 MODIFICATIONS. Any renewal, extension, increase,
modification, alteration or rearrangement of all or any part of the Guaranteed
Obligations, the Note, the Pledge Agreement, the Loan Agreement, the other Loan
Documents, or any other document, instrument, contract or understanding between
Borrower and Lender, or any other parties, pertaining to the Guaranteed
Obligations or any failure of Lender to notify Guarantor of any such action.
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2.2 ADJUSTMENT. Any adjustment, indulgence, forbearance or
compromise that might be granted or given by Lender to Borrower or any
Guarantor.
2.3 CONDITION OF BORROWER OR GUARANTOR. The insolvency,
bankruptcy, arrangement, adjustment, composition, liquidation, disability,
dissolution or lack of power of Borrower, Guarantor or any other party at any
time liable for the payment of all or part of the Guaranteed Obligations; or any
dissolution of Borrower or Guarantor, or any sale, lease or transfer of any or
all of the assets of Borrower or Guarantor, or any changes in the shareholders,
partners or members of Borrower or Guarantor; or any reorganization of Borrower
or Guarantor.
2.4 INVALIDITY OF GUARANTEED OBLIGATIONS. The invalidity,
illegality or unenforceability of all or any part of the Guaranteed Obligations,
or any document or agreement executed in connection with the Guaranteed
Obligations, for any reason whatsoever, including without limitation the fact
that (a) the Guaranteed Obligations, or any part thereof, exceeds the amount
permitted by law, (b) the act of creating the Guaranteed Obligations or any part
thereof is ultra xxxxx, (c) the officers or representatives executing the Note,
the Loan Agreement or the other Loan Documents or otherwise creating the
Guaranteed Obligations acted in excess of their authority, (d) the Guaranteed
Obligations violate applicable usury laws, (e) the Borrower has valid defenses,
claims or offsets (whether at law, in equity or by agreement) which render the
Guaranteed Obligations wholly or partially uncollectible from Borrower, (f) the
creation, performance or repayment of the Guaranteed Obligations (or the
execution, delivery and performance of any document or instrument representing
part of the Guaranteed Obligations or executed in connection with the Guaranteed
Obligations, or given to secure the repayment of the Guaranteed Obligations) is
illegal, uncollectible or unenforceable, or (g) the Note, the Pledge Agreement,
the Loan Agreement or any of the other Loan Documents have been forged or
otherwise are irregular or not genuine or authentic, it being agreed that
Guarantor shall remain liable hereon regardless of whether Borrower or any other
Person be found not liable on the Guaranteed Obligations or any part thereof for
any reason.
2.5 RELEASE OF OBLIGORS. Any full or partial release of the
liability of Borrower on the Guaranteed Obligations, or any part thereof, or of
any co-guarantors, or any other Person now or hereafter liable, whether directly
or indirectly, jointly, severally, or jointly and severally, to pay, perform,
guarantee or assure the payment of the Guaranteed Obligations, or any part
thereof, it being recognized, acknowledged and agreed by Guarantor that
Guarantor may be required to pay the Guaranteed Obligations in full without
assistance or support of any other party, and Guarantor has not been induced to
enter into this Guaranty on the basis of a contemplation, belief, understanding
or agreement that other Persons will be liable to pay or perform the Guaranteed
Obligations, or that Lender will look to other Persons to pay or perform the
Guaranteed Obligations.
2.6 OTHER COLLATERAL. The taking or accepting of any other
security, collateral or guaranty, or other assurance of payment, for all or any
part of the Guaranteed Obligations.
2.7 RELEASE OF COLLATERAL. Any release, surrender, exchange,
subordination, deterioration, waste, loss or impairment (including without
limitation negligent, willful, unreasonable or unjustifiable impairment) of any
collateral, property or security at any time
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existing in connection with, or assuring or securing payment of, all or any part
of the Guaranteed Obligations.
2.8 CARE AND DILIGENCE. The failure of Lender or any other
party to exercise diligence or reasonable care in the preservation, protection,
enforcement, sale or other handling or treatment of all or any part of such
collateral, property or security, including but not limited to any neglect,
delay, omission, failure or refusal of Lender (a) to take or prosecute any
action for the collection of any of the Guaranteed Obligations, or (b) to
foreclose, or initiate any action to foreclose, or, once commenced, prosecute to
completion any action to foreclose upon any security therefor, or (c) to take or
prosecute any action in connection with any instrument or agreement evidencing
or securing all or any part of the Guaranteed Obligations.
2.9 UNENFORCEABILITY. The fact that any collateral, security,
security interest or lien contemplated or intended to be given, created or
granted as security for the repayment of the Guaranteed Obligations, or any part
thereof, shall not be properly perfected or created, or shall prove to be
unenforceable or subordinate to any other security interest or lien, it being
recognized and agreed by Guarantor that Guarantor is not entering into this
Guaranty in reliance on, or in contemplation of the benefits of, the validity,
enforceability, collectibility or value of any of the collateral for the
Guaranteed Obligations.
2.10 OFFSET. The Note, the Loan Agreement, the Guaranteed
Obligations and the liabilities and obligations of the Guarantor to Lender shall
not be reduced, discharged or released because of or by reason of any existing
or future right of offset, claim or defense of Borrower against Lender, or any
other Person, or against payment of the Guaranteed Obligations, whether such
right of offset, claim or defense arises in connection with the Guaranteed
Obligations (or the transactions creating the Guaranteed Obligations) or
otherwise.
2.11 MERGER . The reorganization, merger or consolidation of
Borrower into or with any other Person.
2.12 PREFERENCE . Any payment by Borrower to Lender is held to
constitute a preference under bankruptcy laws, or for any reason Lender is
required to refund such payment or pay such amount to Borrower or someone else.
2.13 OTHER ACTIONS TAKEN OR OMITTED. Any other action taken or
omitted to be taken with respect to the Loan Documents, the Guaranteed
Obligations, or the security and collateral therefor, whether or not such action
or omission prejudices Guarantor or increases the likelihood that Guarantor will
be required to pay the Guaranteed Obligations pursuant to the terms hereof, it
is the unambiguous and unequivocal intention of Guarantor that Guarantor shall
be obligated to pay the Guaranteed Obligations when due, notwithstanding any
occurrence, circumstance, event, action, or omission whatsoever, whether
contemplated or uncontemplated, and whether or not otherwise or particularly
described herein, which obligation shall be deemed satisfied only upon the full
and final payment and satisfaction of the Guaranteed Obligations.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
To induce Lender to enter into the Loan Documents and extend
credit to Borrower, Guarantor represents and warrants to Lender as follows:
3.1 BENEFIT. Guarantor is an affiliate of Borrower, is the
owner of a direct or indirect interest in Borrower, and has received, or will
receive, direct or indirect benefit from the making of this Guaranty with
respect to the Guaranteed Obligations.
3.2 FAMILIARITY AND RELIANCE. Guarantor is familiar with, and
has independently reviewed books and records regarding, the financial condition
of the Borrower and is familiar with the value of any and all collateral
intended to be created as security for the payment of the Note or Guaranteed
Obligations; however, Guarantor is not relying on such financial condition or
the collateral as an inducement to enter into this Guaranty.
3.3 NO REPRESENTATION BY LENDER. Neither Lender nor any other
party has made any representation, warranty or statement to Guarantor in order
to induce the Guarantor to execute this Guaranty.
3.4 GUARANTOR'S FINANCIAL CONDITION. As of the date hereof,
and after giving effect to this Guaranty and the contingent obligation evidenced
hereby, Guarantor is, and will be, solvent, and has and will have assets which,
fairly valued, exceed its obligations, liabilities (including contingent
liabilities) and debts, and has and will have property and assets sufficient to
satisfy and repay its obligations and liabilities.
3.5 LEGALITY . The execution, delivery and performance by
Guarantor of this Guaranty and the consummation of the transactions contemplated
hereunder do not, and will not, contravene or conflict with any law, statute or
regulation whatsoever to which Guarantor is subject or constitute a default (or
an event which with notice or lapse of time or both would constitute a default)
under, or result in the breach of, any indenture, mortgage, deed of trust,
charge, lien, or any contract, agreement or other instrument to which Guarantor
is a party or which may be applicable to Guarantor. This Guaranty is a legal and
binding obligation of Guarantor and is enforceable in accordance with its terms,
except as limited by bankruptcy, insolvency or other laws of general application
relating to the enforcement of creditors' rights.
3.6 SURVIVAL. All representations and warranties made by
Guarantor herein shall survive the execution hereof.
ARTICLE IV
SUBORDINATION OF CERTAIN INDEBTEDNESS
4.1 SUBORDINATION OF ALL GUARANTOR CLAIMS. As used herein, the
term "GUARANTOR CLAIMS" shall mean all debts and liabilities of Borrower to
Guarantor, whether such debts and liabilities now exist or are hereafter
incurred or arise, or whether the obligations of
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Borrower thereon be direct, contingent, primary, secondary, several, joint and
several, or otherwise, and irrespective of whether such debts or liabilities be
evidenced by note, contract, open account, or otherwise, and irrespective of the
Person in whose favor such debts or liabilities may, at their inception, have
been, or may hereafter be created, or the manner in which they have been or may
hereafter be acquired by Guarantor. The Guarantor Claims shall include without
limitation all rights and claims of Guarantor against Borrower (arising as a
result of subrogation or otherwise) as a result of Guarantor's payment of all or
a portion of the Guaranteed Obligations. Upon the occurrence of an Event of
Default, Guarantor shall not receive or collect, directly or indirectly, from
Borrower or any other party any amount upon the Guarantor Claims.
4.2 CLAIMS IN BANKRUPTCY. In the event of receivership,
bankruptcy, reorganization, arrangement, debtor's relief, or other insolvency
proceedings involving Guarantor as debtor, Lender shall have the right to prove
its claim in any such proceeding so as to establish its rights hereunder and
receive directly from the receiver, trustee or other court custodian dividends
and payments which would otherwise be payable upon Guarantor Claims. Guarantor
hereby assigns such dividends and payments to Lender. Should Lender receive, for
application upon the Guaranteed Obligations, any such dividend or payment which
is otherwise payable to Guarantor, and which, as between Borrower and Guarantor,
shall constitute a credit upon the Guarantor Claims, then upon payment to Lender
in full of the Guaranteed Obligations, Guarantor shall become subrogated to the
rights of Lender to the extent that such payments to Lender on the Guarantor
Claims have contributed toward the liquidation of the Guaranteed Obligations,
and such subrogation shall be with respect to that proportion of the Guaranteed
Obligations which would have been unpaid if Lender had not received dividends or
payments upon the Guarantor Claims.
4.3 PAYMENTS HELD IN TRUST. In the event that, notwithstanding
anything to the contrary in this Guaranty, Guarantor should receive any funds,
payment, claim or distribution which is prohibited by this Guaranty, Guarantor
agrees to hold in trust for Lender an amount equal to the amount of all funds,
payments, claims or distributions so received, and agrees that it shall have
absolutely no dominion over the amount of such funds, payments, claims or
distributions so received except to pay them promptly to Lender, and Guarantor
covenants promptly to pay the same to Lender.
4.4 LIENS SUBORDINATE. Guarantor agrees that any liens,
security interests, judgment liens, charges or other encumbrances upon
Borrower's assets securing payment of the Guarantor Claims shall be and remain
inferior and subordinate to any liens, security interests, judgment liens,
charges or other encumbrances upon Borrower's assets securing payment of the
Guaranteed Obligations, regardless of whether such encumbrances in favor of
Guarantor or Lender presently exist or are hereafter created or attach. Without
the prior written consent of Lender, Guarantor shall not (a) exercise or enforce
any creditor's right it may have against Borrower, or (b) foreclose, repossess,
sequester or otherwise take steps or institute any action or proceedings
(judicial or otherwise, including without limitation the commencement of, or
joinder in, any liquidation, bankruptcy, rearrangement, debtor's relief or
insolvency proceeding) to enforce any liens, mortgages, deeds of trust, security
interests, collateral rights, judgments or other encumbrances on assets of
Borrower held by Guarantor.
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ARTICLE V
MISCELLANEOUS
5.1 WAIVER. No failure to exercise, and no delay in
exercising, on the part of Lender, any right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right. The rights of
Lender hereunder shall be in addition to all other rights provided by law. No
modification or waiver of any provision of this Guaranty, nor consent to
departure therefrom, shall be effective unless in writing and no such consent or
waiver shall extend beyond the particular case and purpose involved. No notice
or demand given in any case shall constitute a waiver of the right to take other
action in the same, similar or other instances without such notice or demand.
5.2 NOTICES. Any notice, demand, statement, request or consent
made hereunder shall be in writing and shall be deemed to be received by the
addressee on the third day following the day such notice is deposited with the
United States Postal Service first class certified mail, return receipt
requested, addressed to the address, as set forth below, of the party to whom
such notice is to be given, or to such other address as either party shall in
like manner designate in writing. The addresses of the parties hereto are as
follows:
Guarantor:
Fountain View, Inc.
00000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Facsimile No.: (000) 000-0000
with a copy to: Xxxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxx Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
Lender:
CapitalSource Finance LLC
0000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxx Xxxxx, Xxxxxxxx 00000
Attention: Healthcare Finance Group, Portfolio Manager
Facsimile No. (000) 000-0000
Highbridge/Xxxxx Special Opportunities Fund, L.P.
0 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
Facsimile No. (000) 000-0000
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Fortress Credit Opportunities I, LP
1251 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Pack
Facsimile No. (000) 000-0000
with a copy to: Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
0 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Facsimile No. (000) 000-0000
with a copy to: Xxxx & Hessen LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx
Facsimile No. (000) 000-0000
5.3 GOVERNING LAW. This Guaranty shall be governed in
accordance with the State of New York and the applicable law of the United
States of America.
5.4 INVALID PROVISIONS. If any provision of this Guaranty is
held to be illegal, invalid, or unenforceable under present or future laws
effective during the term of this Guaranty, such provision shall be fully
severable and this Guaranty shall be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part of this Guaranty,
and the remaining provisions of this Guaranty shall remain in full force and
effect and shall not be affected by the illegal, invalid or unenforceable
provision or by its severance from this Guaranty, unless such continued
effectiveness of this Guaranty, as modified, would be contrary to the basic
understandings and intentions of the parties as expressed herein.
5.5 AMENDMENTS. This Guaranty may be amended only by an
instrument in writing executed by the party or an authorized representative of
the party against whom such amendment is sought to be enforced.
5.6 PARTIES BOUND; ASSIGNMENT; JOINT AND SEVERAL. This
Guaranty shall be binding upon and inure to the benefit of the parties hereto
and their respective successors, assigns and legal representatives; provided,
however, that Guarantor may not, without the prior written consent of Lender,
assign any of its rights, powers, duties or obligations hereunder. If Guarantor
consists of more than one person or party, the obligations and liabilities of
each such person or party shall be joint and several.
5.7 HEADINGS. Section headings are for convenience of
reference only and shall in no way affect the interpretation of this Guaranty.
5.8 RECITALS. The recital and introductory paragraphs hereof
are a part hereof, form a basis for this Guaranty and shall be considered prima
facie evidence of the facts and documents referred to therein.
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5.9 COUNTERPARTS. To facilitate execution, this Guaranty may
be executed in as many counterparts as may be convenient or required. It shall
not be necessary that the signature of, or on behalf of, each party, or that the
signature of all Persons required to bind any party, appear on each counterpart.
All counterparts shall collectively constitute a single instrument. It shall not
be necessary in making proof of this Guaranty to produce or account for more
than a single counterpart containing the respective signatures of, or on behalf
of, each of the parties hereto. Any signature page to any counterpart may be
detached from such counterpart without impairing the legal effect of the
signatures thereon and thereafter attached to another counterpart identical
thereto except having attached to it additional signature pages.
5.10 RIGHTS AND REMEDIES. If Guarantor becomes liable for any
indebtedness owing by Borrower to Lender, by endorsement or otherwise, other
than under this Guaranty, such liability shall not be in any manner impaired or
affected hereby and the rights of Lender hereunder shall be cumulative of any
and all other rights that Lender may ever have against Guarantor. The exercise
by Lender of any right or remedy hereunder or under any other instrument, or at
law or in equity, shall not preclude the concurrent or subsequent exercise of
any other right or remedy.
5.11 OTHER DEFINED TERMS. Any capitalized term utilized herein
shall have the meaning as specified in the Loan Agreement, unless such term is
otherwise specifically defined herein.
5.12 ENTIRETY. THIS GUARANTY EMBODIES THE FINAL AND ENTIRE
AGREEMENT OF GUARANTOR AND LENDER WITH RESPECT TO GUARANTOR'S GUARANTY OF THE
GUARANTEED OBLIGATIONS AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE
SUBJECT MATTER HEREOF. THIS GUARANTY IS INTENDED BY GUARANTOR AND LENDER AS A
FINAL AND COMPLETE EXPRESSION OF THE TERMS OF THE GUARANTY, AND NO COURSE OF
DEALING BETWEEN GUARANTOR AND LENDER, NO COURSE OF PERFORMANCE, NO TRADE
PRACTICES, AND NO EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OR DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE OF ANY NATURE SHALL BE
USED TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF THIS GUARANTY
AGREEMENT. THERE ARE NO ORAL AGREEMENTS BETWEEN GUARANTOR AND LENDER.
5.13 WAIVER OF RIGHT TO TRIAL BY JURY. GUARANTOR AND LENDER
HEREBY AGREE NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY,
AND WAIVE ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT
SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THIS GUARANTY, THE NOTE, THE LOAN
AGREEMENT, THE PLEDGE AGREEMENT, OR THE OTHER LOAN DOCUMENTS, OR ANY CLAIM,
COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF
RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY GUARANTOR AND
LENDER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE
AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. LENDER AND
GUARANTOR ARE HEREBY
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AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE
EVIDENCE OF THIS WAIVER BY GUARANTOR AND LENDER.
5.14 REINSTATEMENT IN CERTAIN CIRCUMSTANCES. If at any time
any payment of the principal of or interest under the Note or any other amount
payable by Borrower under the Loan Documents is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or reorganization of
Borrower or otherwise, Guarantor's obligations hereunder with respect to such
payment shall be reinstated as though such payment has been due but not made at
such time.
ARTICLE VI
STATE SPECIFIC PROVISIONS - CALIFORNIA
To the extent this document is enforceable in the State of
California, and notwithstanding the provisions of Section 5.3 hereof, the laws
of the State of California are held to govern this Agreement and the following
provisions shall apply:
6.1 PRINCIPLES OF CONSTRUCTION. IN THE EVENT OF ANY
INCONSISTENCIES BETWEEN THE TERMS AND CONDITIONS OF THIS ARTICLE 6 AND THE TERMS
AND CONDITIONS OF THIS SECURITY INSTRUMENT, THE TERMS AND CONDITIONS OF THIS
ARTICLE 6 SHALL CONTROL AND BE BINDING.
6.2 GUARANTOR. GUARANTOR ACKNOWLEDGES THAT IT IS GUARANTEEING
THE OBLIGATIONS OF BORROWER TO LENDER. ACCORDINGLY, GUARANTOR AGREES AS FOLLOWS:
(a) Modifications to Loan and Loan Documents. Guarantor agrees
that Lender may do any of the following without affecting the enforceability of
this Agreement:
(i) take or release additional security for any
obligation in connection with the Loan Documents;
(ii) discharge or release (by judicial or
nonjudicial foreclosure, acceptance of a deed in lieu of foreclosure or
otherwise) any party or parties liable under the Loan Documents;
(iii) accept or make compositions or other
arrangements or file or refrain from filing a claim in any bankruptcy
proceeding of Borrower, any guarantor of Borrower's obligations under
the Loan Documents or any pledgor of collateral for any person's
obligations to Lender; and
(iv) credit payments in such manner and order of
priority to principal, interest or other obligations as Lender may
determine.
(b) Waivers.
(i) Guarantor agrees that Lender's right to
enforce this Agreement is absolute and is not contingent upon the
genuineness, validity or enforceability of any
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of the Loan Documents. Guarantor waives all benefits and defenses it
may have under California Civil Code Section 2810 and agrees that
Lender's rights under this Agreement shall be enforceable even if
Borrower had no liability at the time of execution of the Loan
Documents or later ceases to be liable.
(ii) Guarantor waives all benefits and defenses
it may have under California Civil Code Section 2809 and agrees that
Lender's rights under this Agreement will remain enforceable even if
the amount secured by this Agreement is larger in amount and more
burdensome than that for which Borrower is responsible. The
enforceability of this Agreement against Guarantor shall continue until
all sums due under the Loan Documents have been paid in full and shall
not be limited or affected in any way by any impairment or any
diminution or loss of value of any security or collateral for
Borrower's obligations under the Loan Documents, from whatever cause,
the failure of any security interest in any such security or collateral
or any disability or other defense of Borrower, any guarantor of
Borrower's obligations under the Loan Documents, any other pledgor of
collateral for any person's obligations to Lender or any other person
in connection with Borrower's loan.
(iii) Guarantor waives all benefits and defenses
it may have under California Civil Code Sections 2845, 2849 and 2850,
including, without limitation, the right to require Lender to (A)
proceed against Borrower, any guarantor of Borrower's obligations under
the Loan Documents, any other pledgor of collateral for any person's
obligations to Lender or any other person in connection with Borrower's
loan, (B) proceed against or exhaust any other security or collateral
Lender may hold, or (C) pursue any other right or remedy for
Guarantor's benefit, and agrees that Lender may exercise its rights
under this Agreement or may foreclose against the Mortgaged Property
without taking any action against Borrower, Guarantor, guarantor of
Borrower's obligations under the Loan Document, any pledgor of
collateral for any person's obligations to Lender or any other person
in connection with Borrower's loan, and without proceeding against or
exhausting any security or collateral Lender holds.
(iv) Guarantor waives any rights or benefits it
may have by reason of California Code of Civil Procedure Section 580a
which could limit the amount which Lender could recover in a
foreclosure of the Mortgaged Property to the difference between the
amount owing under the Loan Documents and the fair value of the
property or interests sold at a nonjudicial foreclosure sale or sales
of any other real property held by Lender as security for the
obligations under the Loan Documents.
(v) Guarantor waives diligence and all demands,
protests, presentments and notices of protest, dishonor, nonpayment and
acceptance of this Agreement.
(c) Guarantor Informed of Borrower's Condition. Guarantor
acknowledges that it has had an opportunity to review the Loan Documents, the
value of the security for Borrower's obligations under the Loan Documents and
Borrower's financial condition and ability to satisfy its obligations to Lender.
Guarantor agrees to keep itself fully informed of all aspects of Borrower's
financial condition and the performance of Borrower's obligations to Lender and
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agrees that Lender has no duty to disclose to Guarantor any information
pertaining to Borrower or any security for Borrower's obligations under the Loan
Documents.
(d) Waiver of Estoppel Defense. Upon Borrower's default under
the Loan Documents, Lender may elect to foreclose nonjudicially on real property
given by Borrower or others as security under the Loan Documents and also to
exercise its rights under this Agreement. Guarantor acknowledges that its right
to seek reimbursement from Borrower for any amounts paid by Guarantor to Lender
under this Agreement will be eliminated if Lender elects to so foreclose on
Borrower's property. Nevertheless, Guarantor waives any such right to
reimbursement and agrees that a nonjudicial foreclosure by Lender against any
real property security owned by Borrower or others will not affect the
enforceability of this Agreement on Guarantor's interest in the Mortgaged
Property. In order to further effectuate such waiver Guarantor hereby agrees as
follows:
Guarantor waives all rights and defenses arising out of an
election of remedies by Lender, even though that election of
remedies, such as a nonjudicial foreclosure with respect to
the Mortgaged Property, has destroyed Guarantor's rights of
subrogation and reimbursement against Borrower by the
operation of Section 580d of the Code of Civil Procedure or
otherwise.
(e) Subrogation. Guarantor agrees that its rights of
subrogation and reimbursement against Borrower, its right of subrogation against
the Mortgaged Property or any other collateral or security for Lender's loan to
Borrower or the pledgor of such collateral or security and its right of
contribution from any guarantor or surety of Borrower's obligation xxxxxx the
Loan Documents shall be subordinate to Lender's rights against Borrower, in such
collateral or security, against any such pledgor and against any such guarantor
or surety. Guarantor shall have no such rights of subrogation, reimbursement or
contribution until all amounts due under the Note, the Mortgage and the other
Loan Documents have been paid in full and Lender has released, transferred or
disposed of all of its rights in any collateral or security. Guarantor waives
its rights under California Civil Code Sections 2847, 2848 and 2849 to the
extent inconsistent with the foregoing.
(f) Confirmation of Waivers. In accordance with California
Civil Code Section 2856(c), Guarantor hereby makes the following waivers:
(i) The guarantor waives all rights and defenses
that the guarantor may have because the debtor's debt is secured by
real property. This means, among other things:
(A) The creditor may collect from the
guarantor without first foreclosing on any other real
or personal property collateral pledged by the debtor
or any other person.
(B) If the creditor forecloses on any real
property collateral pledged by the debtor:
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a. The amount of the debt may be reduced only by the price for
which the collateral is sold at the foreclosure sale, even if
the collateral is worth more than the sale price.
b. The creditor may collect from the guarantor even if the
creditor, by foreclosing on the real property collateral, has
destroyed any right the guarantor may have to collect from the
debtor.
(ii) This is an unconditional and irrevocable
waiver of any rights and defenses the guarantor may have because the
debtor's debt is secured by real property. These rights and defenses
include, but are not limited to, any rights or defenses based upon
Section 580a, 580b, 580d or 726 of the California Code of Civil
Procedures.
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EXECUTED as of the day and year first above written.
SUMMIT CARE CORPORATION
By: \s\ Xxxxxx X. Xxxx
--------------------------------------
Name: Xxxxxx X. Xxxx
Title: Secretary
SUMMIT CARE TEXAS, L.P.
By: Summit Care Texas Management, LLC,
its General Partner
By: \s\ Xxxxxx X. Xxxx
-------------------------------
Name: Xxxxxx X. Xxxx
Title: Secretary
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SKILLED HEALTHCARE, LLC
By: \s\ Xxxxxx X. Xxxx
--------------------------------------
Name: Xxxxxx X. Xxxx
Title: Secretary
Address for Notices:
c/o Fountain View, Inc.
00000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
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SUMMIT CARE TEXAS MANAGEMENT, LLC
By: \s\ Xxxxxx X. Xxxx
--------------------------------------
Name: Xxxxxx X. Xxxx
Title: Secretary
Address for Notices:
c/o Fountain View, Inc.
00000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
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