Exhibit 10.3
UNLIMITED GUARANTY OF PAYMENT
THIS DOCUMENT AFFECTS AND WAIVES
IMPORTANT RIGHTS OF THE PERSON SIGNING IT.
This UNLIMITED GUARANTY OF PAYMENT is made and entered into
by KRANZCO REALTY TRUST, a Maryland real estate investment trust,
whose address is 000 Xxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx
00000 ("Guarantor"), for the benefit of SALOMON BROTHERS REALTY
CORP., a New York corporation, whose address is Seven Xxxxx Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Lender"). This Guaranty is
made with reference to the following facts:
A. Lender is considering making a loan or extending credit
accommodations (the "Loan") in the amount of Fifty Million and
No/100 Dollars ($50,000,000), to each of the entities identified
on Schedule 1 to the Loan Agreement (as defined below) (each a
"Borrower", and collectively "Borrowers") pursuant to the Loan
Agreement, dated as of February 26, 1997, among Borrowers, as
borrowers, Lender, as agent and initial lender, Guarantor, as
guarantor, and Bank Leumi, as Collateral Agent (the "Loan
Agreement").
B. The Loan is to be evidenced by, among other things, a
certain Global Promissory Note dated February 26, 1997, executed
by Borrowers (together with any modifications, extensions,
renewals or replacements thereof, the "Note").
C. Guarantor acknowledges that Lender has examined, among
other things, Borrowers' creditworthiness and ability to repay
its indebtedness under the Note and the other Loan Documents (as
defined in the Loan Agreement) and Guarantor's creditworthiness
and ability to perform the Obligations, as defined below.
D. Guarantor acknowledges that it will benefit if Lender
makes the Loan to Borrowers. Guarantor desires that Lender make
the Loan to Borrowers.
E. Lender would not make, and would not be obligated to
make, the Loan to Borrowers unless Guarantor executed this
Guaranty. This Guaranty is therefore delivered to Lender to
induce Lender to make the Loan.
NOW, THEREFORE, in exchange for good, adequate and valuable
consideration, the receipt of which Guarantor acknowledges,
Guarantor agrees as follows:
1. Definitions. For purposes of this Guaranty, the
following terms shall be defined as set forth below. In
addition, any capitalized term defined in the Loan Agreement but
not defined in this Guaranty shall have the same meaning in this
Guaranty as in the Loan Agreement.
1.1 "Borrowers." The term "Borrowers" shall refer to:
(a) the Borrowers as defined above, acting on their own behalf;
(b) any estate created by the commencement of an Insolvency
Proceeding affecting any Borrower; (c) any trustee, liquidator,
sequestrator or receiver of any Borrower or any Borrower's
property; and (d) any similar person duly appointed pursuant to
any law governing any Insolvency Proceeding.
1.2 "Insolvency Proceeding." An "Insolvency
Proceeding" means any case under Title 11 of the United States
Code or any successor statute or any other insolvency,
bankruptcy, reorganization, liquidation, or like proceeding,
whether brought under state, federal or foreign law.
1.3 "Legal Costs." Lender's "Legal Costs" shall mean
all reasonable costs and expenses incurred by Lender in any
Proceeding or in obtaining legal advice and assistance in
connection with any Proceeding or in connection with any default
by any Borrower under the Loan Documents or by Guarantor under
this Guaranty (including any breach of a representation or
warranty contained in this Guaranty), including but not limited
to reasonable attorneys' fees, disbursements and other charges
incurred by Lender's attorneys, court costs and expenses, and
charges for the services of paralegals, law clerks, and all other
personnel whose services are charged to Lender in connection with
Lender's receipt of legal services.
1.4 "Loan Documents." The "Loan Documents" are: (a)
the Note, this Guaranty, the Loan Agreement, and any other
document evidencing, or relating to any security for, the Loan or
this Guaranty, (b) any other documents or instruments relating to
any such documents executed by Borrowers or Guarantor, and (c)
any modifications, extensions, renewals or replacements of any of
the foregoing, whether or not consented to by Guarantor. If the
Loan Documents, as so defined, are modified pursuant to any
Insolvency Proceeding, then Lender may, at Lender's option, deem
the definition of Loan Documents to have been modified to reflect
any such modification, or to continue without regard to any such
modification.
1.5 "Obligations." The "Obligations" shall mean
Borrowers' obligations: (a) to fully and promptly pay all
principal, interest and other sums owed by Borrowers under the
Loan Documents at the times and according to the terms required
by the Loan Documents, without regard to any modification,
suspension or limitation of such terms not consented to by
Lender, such as a modification, suspension or limitation arising
in or pursuant to any Insolvency Proceeding affecting Borrowers
(even if any such modification, suspension or limitation causes
Borrowers' obligation to become discharged or unenforceable) and
(b) to pay all other reasonable sums expended by Lender or
Lender's designee or nominee acting on Lender's behalf in
exercising Lender's rights and remedies under the Loan Documents
with respect to the Loan, including Lender's Legal Costs relating
to the Loan and enforcement of remedies pursuant to the Loan
Documents.
1.6 "Proceeding." Any legal action, suit, arbitration
hearing or proceeding arising out of, or relating to the
interpretation or enforcement of, this Guaranty or the Loan
Documents, including: (a) an Insolvency Proceeding; and (b) any
proceeding in which Lender endeavors to realize upon any Security
or enforce any Loan Document(s) against any Borrower or
Guarantor.
1.7 "Security." The "Security" means any security or
collateral held by Lender or on Lender's behalf for the Note, the
Loan or this Guaranty, whether real or personal property,
including any mortgage, financing statement, security agreement,
and other security document or instrument of any kind securing
the Loan in whole or in part.
1.8 "State." The "State" means the State of New York.
2. Guaranty of Obligations. Guarantor unconditionally and
irrevocably guarantees Borrowers' prompt and complete payment of
all Obligations. Guarantor shall be personally liable for all
Obligations. Guarantor's liability under this Guaranty shall be
primary and not secondary. Guarantor's liability under this
Guaranty shall be in the full amount owed to Lender and any
designee or nominee acting on Lender's behalf, including any
interest, default interest, costs and fees (including, without
limitation, Legal Costs) that would have accrued under the Loan
Documents but for any Insolvency Proceeding affecting any
Borrower.
3. Changes in Loan Documents. Without notice to, or
consent by, Guarantor, and in Lender's sole and absolute
discretion and without prejudice to Lender or in any way limiting
or reducing Guarantor's liability under this Guaranty, Lender
may: (a) grant extensions of time, renewals or other indulgences
or modifications to any Borrower or any other party under any of
the Loan Documents, (b) change the rate of interest under the
Note, (c) change, amend or modify any Loan Documents, (d)
authorize the sale, exchange, release or subordination of any
Security, (e) accept or reject additional Security, (f) discharge
or release any party or parties liable under the Loan Documents,
(g) foreclose or otherwise realize on any Security, or attempt to
foreclose or otherwise realize on any Security, whether such
attempt is successful or unsuccessful, (h) accept or make
compositions or other arrangements or file or refrain from filing
a claim in any Insolvency Proceeding, (i) make other or
additional loans to any Borrower in such amount(s) and at such
time(s) as Lender may determine, (j) credit payments in such
manner and order of priority to principal, interest or other
obligations as Lender may determine in its discretion (to the
extent not otherwise dictated by the Loan Documents), and (k)
otherwise deal with any Borrower and any other party related to
the Loan or any Security as Lender may determine in its sole and
absolute discretion. Without limiting the generality of the
foregoing, Guarantor's liability under this Guaranty shall
continue even if Lender alters any obligations under the Loan
Documents in any respect or Lender's or Guarantor's remedies or
rights against any Borrower are in any way impaired or suspended
without Guarantor's consent. If Lender performs any of the
actions described in this paragraph, then Guarantor's liability
shall continue in full force and effect even if Lender's actions
impair, diminish or eliminate Guarantor's subrogation,
contribution or reimbursement rights (if any) against any
Borrower, or otherwise adversely affect Guarantor or expand
Guarantor's liability hereunder.
4. Nature of Guaranty. Guarantor's liability under this
Guaranty is a guaranty of payment of the Note and the Loan, and
is not a guaranty of collection or collectability. Guarantor's
liability under this Guaranty is not conditioned or contingent
upon the genuineness, validity, regularity or enforceability of
any of the Loan Documents. Guarantor's liability under this
Guaranty is a continuing, absolute, and unconditional obligation
under any and all circumstances whatsoever, without regard to the
validity, regularity or enforceability of any of the Obligations.
Guarantor acknowledges that Guarantor is fully obligated under
this Guaranty even if the Borrowers or any one of them had no
liability at the time of execution of the Loan Documents or later
cease to be liable under any Loan Document, whether pursuant to
Insolvency Proceedings or otherwise. Guarantor shall not be
entitled to claim, and irrevocably covenants not to raise or
assert, any defenses against the Obligations that would or might
be available to Borrowers, other than actual payment and
performance of the Obligations in full. Guarantor waives any
right to compel Lender to proceed first against Borrowers or any
Security before proceeding against Guarantor. Guarantor agrees
that if any of the Obligations are or become void or
unenforceable (because of inadequate consideration, lack of
capacity, Insolvency Proceedings, or for any other reason), then
Guarantor's liability under this Guaranty shall continue in full
force with respect to such Obligations as if they were and
continued to be legally enforceable. Guarantor also recognizes
and acknowledges that its liability under this Guaranty may be
more extensive in amount and more burdensome than that of
Borrowers. Guarantor waives any defenses to this Guaranty
arising or purportedly arising from the manner in which Lender
disburses the Loan to Borrowers or otherwise, or any waiver of
the terms of any Loan Document by Lender or other failure of
Lender to require full compliance with the Loan Documents.
Guarantor's liability under this Guaranty shall continue until
all sums due under the Loan Documents with respect to the Loan
have been paid in full. Guarantor's liability under this
Guaranty shall not be limited or affected in any way by any
impairment or any diminution or loss of value of any Security
whether caused by (a) hazardous substances, (b) Lender's failure
to perfect a security interest in any Security, (c) any
disability or other defense(s) of Borrowers or (d) any breach by
any Borrower of any representation or warranty contained in any
Loan Document. The liability of Guarantor hereunder shall in no
way be terminated, affected, modified, impaired or diminished by
reason of (v) any Borrower's and/or Guarantor's voluntary or
involuntary subjection to an Insolvency Proceeding, (w) sale of
all or substantially all of Guarantor's assets and liabilities,
(x) appointment of a trustee, receiver, liquidator, sequestrator
or conservator for all or any part of Guarantor's assets or (y)
the commencement of other similar Proceedings affecting Guarantor
or its assets, including, without limitation, the impairment,
limitation or modification of the liability of Guarantor in
bankruptcy, or of any remedy for the enforcement of the
Obligations, or Guarantor's liability under this Guaranty.
5. Waivers of Rights and Defenses. Guarantor waives any
right to require Lender to (a) proceed against Borrowers, (b)
proceed against or exhaust any Security, or (c) pursue any other
right or remedy for Guarantor's benefit. Guarantor waives, and
covenants and agrees that it will not at any time insist upon,
plead or in any manner whatsoever claim or take the benefit or
advantage of, any and all appraisal, valuation, stay, extension,
marshalling-of-assets or redemption laws, or right of homestead
or exemption, whether now or at any time hereafter in force, that
may delay, prevent or otherwise affect the performance by
Guarantor of its obligations under, or the enforcement by Lender
of, this Guaranty. Guarantor further covenants and agrees not to
set up or claim any defense, counterclaim, cross-claim, offset,
set-off, right of recoupment, or other objection of any kind to
any action, suit or proceeding in law, equity or otherwise, or to
any demand or claim that may be instituted or made by Lender
hereunder other than the defense of the actual timely performance
of the Obligations. Guarantor agrees that Lender may proceed
against Guarantor with respect to the Obligations without taking
any actions against any Borrower and without proceeding against
or exhausting any Security. Guarantor agrees that Lender may
unqualifiedly exercise in its sole discretion any or all rights
and remedies available to it against any Borrower without
impairing Lender's rights and remedies in enforcing this
Guaranty, under which Guarantor's liabilities shall remain
independent and unconditional. Guarantor agrees and acknowledges
that Lender's exercise of certain of such rights or remedies may
affect or eliminate Guarantor's right of subrogation or recovery
against Borrowers (if any) and that Guarantor may incur a
partially or totally nonreimbursable liability in performing
under this Guaranty. Without limiting the generality of any
other waivers in this Guaranty, Guarantor expressly waives any
statutory or other right that Guarantor might otherwise have to:
(i) limit Guarantor's liability after a nonjudicial foreclosure
sale to the difference between the Obligations and the fair
market value of the property or interests sold at such
nonjudicial foreclosure sale or to any other extent, (ii)
otherwise limit Lender's right to recover a deficiency judgment
after any foreclosure sale, or (iii) require Lender to exhaust
its Security before Lender may obtain a personal judgment for any
deficiency. Guarantor acknowledges and agrees that any
nonrecourse or exculpation provided for in any Loan Document, or
any other provision of a Loan Document limiting Lender's recourse
to specific Security or limiting Lender's right to enforce a
deficiency judgment against any Borrower, shall have absolutely
no application to Guarantor's liability under this Guaranty;
provided, however, that in no event shall any of the trustees,
officers or shareholders of Guarantor have any personal liability
hereunder. To the extent that Lender collects or receives any
sums or payments from any Borrower, Lender shall have the right,
but not the obligation, to apply such amounts first to that
portion of such Borrower's indebtedness and obligations to Lender
(if any) that is not covered by this Guaranty, regardless of the
manner in which any such payments and/or amounts are
characterized by the person making payment.
6. Additional Waivers. Guarantor waives diligence and all
demands, protests, presentments and notices of every kind or
nature, including notices of protest, dishonor, nonpayment,
acceptance of this Guaranty and the creation, renewal, extension,
modification or accrual of any of the Obligations. Guarantor
further waives the right to plead any and all statutes of
limitations as a defense to Guarantor's liability under this
Guaranty or the enforcement of this Guaranty. No failure or
delay on Lender's part in exercising any power, right or
privilege under this Guaranty shall impair or waive any such
power, right or privilege.
7. Full Knowledge. Guarantor acknowledges, represents and
warrants that Guarantor has had a full and adequate opportunity
to review the Loan Documents, the transaction contemplated by the
Loan Documents and all underlying facts relating to such
transaction. Guarantor represents and warrants that Guarantor
fully understands: (a) the remedies Lender may pursue against
Borrowers in the event of a default under the Loan Documents, (b)
the value (if any) of any Security, and (c) Borrowers' financial
condition and ability to perform under the Loan Documents.
Guarantor agrees that Lender has no duty, whether now or in the
future, to disclose to Guarantor any information pertaining to
any Borrower or any Security. If provided for in the Loan
Documents (including a later amendment to the Loan Documents),
then Guarantor acknowledges that its bankruptcy, insolvency or
other actions or events relating to Guarantor, as set forth in
the Loan Documents, may be events of default under the Loan
Documents.
8. Reimbursement and Subrogation Rights.
8.1 General Deferral of Reimbursement. From and
after an Event of Default under the Loan Documents (and during
the continuance thereof), Guarantor waives any right to be
reimbursed by Borrowers for any payment(s) made by Guarantor on
account of the Obligations, unless and until all Obligations have
been paid in full. Guarantor acknowledges that Guarantor has
received adequate consideration for execution of this Guaranty by
virtue of Lender's making the Loan (which benefits Guarantor),
and Guarantor does not require or expect, and is not entitled to,
any other right of reimbursement against Borrowers as
consideration for this Guaranty.
8.2 Deferral of Subrogation and Contribution.
Guarantor agrees it shall not exercise any right of subrogation
against Borrowers or Lender nor shall it exercise any right of
subrogation against any Security unless and until: (a) such right
of subrogation does not violate (or otherwise produce any result
adverse to Lender under) any applicable law, including any
bankruptcy or insolvency law; and (b) all amounts due under the
Loan Documents have been paid in full and all other performance
required under the Loan Documents has been rendered in full to
Lender (such deferral of Guarantor's subrogation and contribution
rights, the "Subrogation Deferral").
8.3 Effect of Invalidation. To the extent that a
court of competent jurisdiction determines that Guarantor's
Subrogation Deferral is void or voidable for any reason,
Guarantor agrees that Guarantor's rights of subrogation against
Borrowers or Lender and Guarantor's right of subrogation against
any Security shall at all times be junior and subordinate to
Lender's rights against Borrowers and to Lender's right, title
and interest in such Security.
8.4 Deferral After Commencement of Insolvency
Proceedings. Guarantor shall not file, assert or receive payment
on any claim, whether now existing or hereafter arising, against
any Borrower in the event of the commencement of an Insolvency
Proceeding by or against such Borrower.
9. Lender's Disgorgement of Payments. Upon payment of all
or any portion of the Obligations, Guarantor's obligations under
this Guaranty shall continue and remain in full force and effect
if all or any part of such payment is, pursuant to any Insolvency
Proceeding or otherwise, avoided or recovered directly or
indirectly from Lender as a preference, fraudulent transfer or
otherwise, irrespective of (a) any notice of revocation given by
Guarantor prior to such avoidance or recovery, or (b) payment in
full of the Loan. Guarantor's liability under this Guaranty
shall continue until all periods have expired within which Lender
could (on account of Insolvency Proceedings, whether or not then
pending, affecting any Borrower or any other person) be required
to return or repay any amount paid at any time on account of the
Obligations. If, in any Insolvency Proceeding affecting any
Borrower, any party seeks to require Lender to disgorge or repay
any payments previously made by such Borrower to Lender (a
"Disgorgement Motion"), then, within ten days after written
notice from Lender, Guarantor shall either agree to pay Lender an
amount equal to the amount sought to be disgorged or repaid (a
"Disgorgement Payment") or defend the Disgorgement Motion at
Guarantor's expense (including Legal Costs) on Lender's behalf,
all in a manner reasonably satisfactory to Lender, provided same
does not in Lender's judgment cause Lender to incur any cost,
expense, liability, or other detriment of any kind (including any
adverse effect on any other actions being taken by Lender in such
Borrower's Insolvency Proceeding).
10. Financial Information. Within five business days after
Lender's request made from time to time, Guarantor shall deliver
to Lender complete and current financial statements and tax
returns and such other financial information relating to
Guarantor as Lender may reasonably request and as have been made
public. Additionally, Guarantor represents and covenants as
follows:
(a) The sum of (i) the equity of the Guarantor as
reflected in the most recent annual report or quarterly report
filed with the Securities and Exchange Commission ("SEC") (any
such report, a "Financial Report"), (ii) depreciation and
amortization as reflected in such Financial Report and (iii) any
increase in equity from equity offerings of the Guarantor
consummated after the Closing Date, shall not be less than the
sum of (1) $133,000,000 (i.e., 95% of the current book net worth
of the Guarantor as of the Closing Date) and (2) any increase in
equity from equity offerings of the Guarantor consummated after
the Closing Date.
(b) The Guarantor shall not incur, nor permit any
Subsidiary to incur, any Debt if the ratio of Consolidated Income
Available for Debt Service to the Quarterly Service Charge for
the fiscal quarter most recently ended prior to the date on which
such additional Debt is to be incurred shall have been less than
1.75 to 1.00 on a pro forma basis after giving effect thereto and
to the application of the proceeds therefrom.
(c) The Guarantor shall not incur, nor permit any
Subsidiary to incur, any Debt if immediately after giving effect
to the incurrence of that additional Debt, the aggregate
principal amount of all outstanding Debt of the Guarantor and its
Subsidiaries, on a consolidated basis determined in accordance
with GAAP, is greater than 70% of the Guarantor's Market
Capitalization.
Set forth below are certain defined terms used in this
Section 10.
"Consolidated Income Available for Debt Service", for
any period, means Consolidated Net Income of the Guarantor and
its Subsidiaries (i) plus amounts which have been deducted for
(a) interest on Debt of the Guarantor and its Subsidiaries, (b)
provision for taxes of the Guarantor and its Subsidiaries based
on income, (c) amortization of debt discount, (d) depreciation
and amortization, (e) the effect of any non-cash charge resulting
from a change in accounting principles in determining
Consolidated Net Income for such period, (f) amortization of
deferred charges, (g) provisions for or realized losses on
properties and (h) extraordinary non-cash charges and (ii) less
amounts which have been included for gains on properties.
"Consolidated Net Income", for any period, means the
amount of consolidated net income (or loss) of the Guarantor and
its Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP.
"Debt" means any indebtedness, whether or not
contingent, in respect of (i) borrowed money evidenced by bonds,
notes, debentures or similar instruments, (ii) indebtedness
secured by any mortgage, pledge, lien, charge, encumbrance or any
security interest existing on property, (iii) the reimbursement
obligations, contingent or otherwise, in connection with any
letters of credit actually issued or amounts representing the
balance deferred and unpaid of the purchase price of any property
except any such balance that constitutes an accrued expense or
trade payable or (iv) any lease of property which would be
reflected on a consolidated balance sheet as a capitalized lease
in accordance with GAAP, in the case of items of indebtedness
under (i) through (iii) above to the extent that any such items
(other than letters of credit) would appear as a liability on a
consolidated balance sheet in accordance with GAAP, and also
includes, to the extent not otherwise included, any obligation to
be liable for, or to pay, as obligor, guarantor or otherwise
(other than for purposes of collection in the ordinary course of
business), indebtedness of another person.
"Market Capitalization", as of any date, means the sum
of (i) an amount equal to the product of (1) the outstanding
common stock of the Guarantor and (2) the current market price of
such common stock on the New York Stock Exchange, (ii) an amount
equal to the product of (a) the outstanding perpetual preferred
stock of the Guarantor and (b) the current market price of such
perpetual preferred stock and (iii) the aggregate principal
amount of Debt issued by the Guarantor and its Subsidiaries.
"Quarterly Service Charge" as of any date means the
amount which is expensed in any fiscal quarter for interest and
scheduled principal payments (but not balloon payments) on Debt.
"Subsidiary" means any entity of which the Guarantor or
one or more other Subsidiaries owns or controls, directly or
indirectly, more than 50% of the shares of Voting Stock;
provided, however, that notwithstanding the ownership of more
than 50% of the shares of Voting Stock of an entity, in the event
the Guarantor or a Subsidiary does not have the power to elect at
least a majority of the board of directors, managers or trustees
of such entity, then "Subsidiary" for purposes of the financial
statements and financial covenants shall refer only to the
portion of such entity's capitalization and results owned by the
Guarantor or such Subsidiary.
"Voting Stock" means stock having general voting power
under ordinary circumstances to elect at least a majority of the
board of directors, managers or trustees, provided that stock
that carries only the right to vote conditionally on the
happening of an event shall not be considered Voting Stock.
11. Representations and Warranties. Guarantor
acknowledges, represents and warrants as follows, and
acknowledges that Lender is relying upon the following
acknowledgements, representations and warranties by Guarantor in
making the Loan.
11.1 Incorporation; Valid Title; Liens. Guarantor is
a real estate investment trust, duly organized, validly existing
and in good standing under the laws of the State of Maryland.
Guarantor has good and marketable title to all its real property.
None of such property is subject to any lien whatsoever except as
disclosed or included as a liability in the most recent financial
statements delivered to Lender before Guarantor's execution of
this Guaranty or the title policies delivered to Lender at the
Closing.
11.2 Valid Obligation. This Guaranty constitutes a
legal, valid and binding obligation of Guarantor, enforceable in
accordance with its terms, subject to laws relating to
bankruptcy, insolvency, reorganization and creditors' rights and
to the general principles of equity.
11.3 Accuracy of Facts. To Guarantor's knowledge, the
Recitals of this Guaranty are true and correct.
11.4 Loan Documents. All Loan Documents executed by
Borrowers are fully valid, binding and enforceable against
Borrowers subject to laws relating to bankruptcy, insolvency,
reorganization and creditors' rights and to the general
principles of equity..
11.5 No Conflict. The execution, delivery and
performance of this Guaranty will not violate any provision of
any law, regulation, judgment, order, decree, determination or
award of any court, arbitrator or governmental authority, or of
any mortgage, indenture, loan or security agreement, lease,
contract or other agreement, instrument or undertaking to which
Guarantor is a party or that purports to be binding upon
Guarantor or any of Guarantor's property or assets.
11.6 No Third Party Consent Required. No consent of
any person (including, without limitation to, creditors or
stockholders or other owners of Guarantor) is required in
connection with Guarantor's execution of this Guaranty or
performance of its obligations under this Guaranty. Guarantor's
execution of, or obligations under, this Guaranty are not
contingent upon any consent, license, permit, approval or
authorization of, exemption by, notice or report to, or
registration, filing or declaration with, any governmental
authority, bureau or agency, whether local, state, federal or
foreign.
11.7 No Legal Action Pending. "Legal Action" means
any litigation, arbitration, investigation or administrative
proceeding of or before any court, arbitrator or governmental
authority, bureau or agency: (a) with respect to this Guaranty,
the Loan or any of the transactions contemplated by this Guaranty
or the Loan Agreement, or (b) against or affecting Guarantor's
property or assets. Guarantor represents and warrants that no
Legal Action is pending or, to the knowledge of Guarantor,
threatened, which, if determined adversely to Guarantor, would
have a Material Adverse Effect. Guarantor will promptly (and in
no event later than five (5) days after first becoming aware of
such Legal Action) furnish to Lender notice of any Legal Action
to which Guarantor may hereafter become a party.
11.8 Authority to Contract. Guarantor has full
corporate and/or trust power, authority and legal right to
execute, deliver and perform its obligations under this Guaranty.
Guarantor has taken all necessary corporate and legal action to
authorize this Guaranty.
11.9 Tax Returns. Guarantor has filed all tax returns
required to be filed by it except to the extent that any filing
deadline(s) have been extended in accordance with applicable law,
and has paid all taxes due on such returns and any assessments
made against it.
11.10 Guarantor's Financial Statements. Guarantor's
most recent financial statements, delivered to Lender prior to or
simultaneously with execution of this Guaranty, were prepared in
accordance with generally accepted accounting practices
consistently applied and correctly set forth the financial
condition (including, without limitation to, all material
obligations and liabilities) of Guarantor as at such date. Since
the date of such financial statements there has been no material
adverse change in the business, operations, assets or condition
of Guarantor.
11.11 Borrowers' Financial Condition. Guarantor is
fully aware of the financial condition of Borrowers. Guarantor
delivers this Guaranty based solely upon Guarantor's own
independent investigation and based in no part upon any
representation or statement by Lender. Guarantor is not relying
upon, nor expecting, Lender to furnish Guarantor any information
concerning the financial condition of Borrowers.
11.12 No Misstatements. No information, exhibit or
report furnished by Guarantor to Lender in connection with this
Guaranty contained as of the date thereof, or, if there is no
such date, the date of this Guaranty, any material misstatement
of fact or omitted to state a material fact or any fact necessary
to make the statements contained therein not materially
misleading.
11.13 No Counterclaims, Etc. As of the date hereof,
the Obligations are not subject to any counterclaims, cross-
claims, rights of recoupment, offsets or affirmative or other
defenses of any kind against Lender.
12. Consent to Jurisdiction. Guarantor agrees that any
Proceeding to enforce this Guaranty may be brought in any state
or federal court located in the State, as Lender may elect. By
executing this Guaranty, Guarantor irrevocably accepts and
submits to the nonexclusive personal jurisdiction of each of the
aforesaid courts, generally and unconditionally with respect to
any such Proceeding. Guarantor agrees not to assert any basis
for transferring jurisdiction of any such proceeding to another
court. Guarantor further agrees that a final judgment against
Guarantor in any Proceeding shall be conclusive evidence of
Guarantor's liability for the full amount of such judgment.
Guarantor hereby agrees that service of process against Guarantor
in any such action may be effected by any means permissible under
federal law or under the laws of the state in which such Action
is brought. Guarantor hereby agrees that insofar as is permitted
under applicable law, this consent to personal jurisdiction shall
be self-operative and no further instrument or action, other than
service of process in one of the manners specified in this
Guaranty, or as otherwise permitted by law, shall be necessary in
order to confer jurisdiction upon Guarantor.
13. Merger; No Conditions; Amendments. This Guaranty
contains the entire agreement among the parties with respect to
the matters set forth in this Guaranty. This Guaranty supersedes
all prior agreements among the parties with respect to the
matters set forth in this Guaranty. No course of prior dealings
among the parties, no usage of trade, and no parol or extrinsic
evidence of any nature shall be used to supplement, modify or
vary any terms of this Guaranty. This Guaranty is unconditional.
There are no unsatisfied conditions to the full effectiveness of
this Guaranty. No terms or provisions of this Guaranty may be
changed, waived, revoked or amended without Lender's prior
written consent. If any court of competent jurisdiction
determines that any provision of this Guaranty is unenforceable,
then all other provisions of this Guaranty shall remain fully
effective.
14. Legal Costs. In the event of any Proceeding between
any Borrower or Guarantor and Lender, including any Proceeding in
which Lender enforces or attempts to enforce this Guaranty,
Guarantor shall reimburse Lender for all Legal Costs of such
Proceeding.
15. Fundamental Changes. Guarantor shall not wind up,
liquidate, or dissolve its affairs or enter into any transaction
of merger or consolidation, or sell, lease, or otherwise dispose
of all or substantially all of its property or assets
("Transfer"), without repaying all indebtedness under the Loan in
full.
16. Further Assurances. Guarantor agrees to execute and
deliver such further documents, and perform such further acts, as
Lender may request to achieve the intent of the parties as
expressed in this Guaranty, provided in each case that any such
documentation is consistent with this Guaranty and with the Loan
Documents. Without limiting the requirements of this paragraph,
Guarantor agrees, upon Lender's request from time to time, to
deliver to Lender a certificate reconfirming the following (a
"Confirmation Certificate"): (a) the continued validity and
effectiveness of this Guaranty, (b) the application of this
Guaranty to specific Obligations of Borrowers, as identified by
Lender, (c) that any specified amendment(s) of the Loan Documents
do(es) not impair the continued validity and effectiveness of
this Guaranty, and (d) Guarantor has no defense, offset, claim,
counterclaim or other limitation on its liability under this
Guaranty in accordance with its terms. Nothing in this paragraph
shall be deemed to require Lender to request a Confirmation
Certificate as a condition to the continued effectiveness of this
Guaranty or of any waivers herein.
17. Supplemental Provisions.
17.1 Partnerships and Associations. If any Borrower
is a partnership or unincorporated association, then Guarantor's
liability shall not be impaired by changes in the name of such
entity or in its membership. If Guarantor is a partnership or
unincorporated association, then the withdrawal or removal of any
partner(s) or member(s) of any Borrower shall not diminish such
partner's or member's joint and several liability under this
Guaranty.
17.2 Status of Borrower. If this Guaranty defines
more than one person as Borrower, then any reference to Borrower
shall mean any one and all of them. All obligations of each such
Borrower to Lender of whatever nature are hereby guaranteed,
including each such Borrower's several as well as joint
obligations.
17.3 Maximum Guaranteed Amount. Notwithstanding
anything to the contrary in this Guaranty, if the obligations of
Guarantor under this Guaranty would otherwise be held or
determined (beyond further appeal) by a court of competent
jurisdiction in any Insolvency Proceeding or any other action or
proceeding involving any state corporate law or any state or
federal bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other law affecting the rights of
creditors generally to be void, invalid or unenforceable to any
extent on account of the amount of Guarantor's liability under
this Guaranty, then notwithstanding any other provision of this
Guaranty to the contrary, the amount of Guarantor's liability
under this Guaranty shall, without any further action by any
Guarantor, by Lender, or by any other person, be automatically
limited and reduced to the maximum amount that is valid and
enforceable as determined (beyond further appeal) in such action
or proceeding.
18. Miscellaneous.
18.1 Assignability. Lender may assign this Guaranty
together with any one or more of the Loan Documents, without in
any way affecting Guarantor's or Borrowers' liability. Upon
request in connection with any such assignment Guarantor shall
deliver a Confirmation Certificate to the transferee in a form
reasonably satisfactory to such transferee. This Guaranty shall
benefit Lender and its successors and assigns and shall bind
Guarantor and its heirs, executors, administrators, successors
and assigns.
18.2 Notices. All notices, requests and demands to be
made under this Guaranty shall be given in writing at the address
set forth on the first page hereof for each party by any of the
following means: (i) personal service; (ii) overnight delivery
service such as Federal Express (which delivery shall be deemed
complete if the delivery service attempts twice to deliver the
notice without success); or (iii) registered or certified, first
class mail, return receipt requested. A party's address may be
changed by notice to the other parties given in the same manner
as provided above. Any notice, request or demand shall be deemed
received upon personal service (or, in the case of "ii," upon
completion of two unsuccessful delivery attempts).
18.3 Governing Law. This Guaranty shall be enforced
and interpreted according to the laws of the State, disregarding
its rules on conflicts of laws.
19. Representation by Counsel. Guarantor acknowledges that
Guarantor has had the opportunity to review this document with an
attorney of Guarantor's choice before executing it. Guarantor
acknowledges that Guarantor has carefully read this Guaranty and
understood the meaning and effect of its terms before executing
it.
20. No Third-Party Beneficiaries. This Guaranty is
executed and delivered for the benefit of Lender and its heirs,
successors and assigns, and is not intended to benefit any third
party.
This Guaranty has been executed by the undersigned on behalf
of Guarantor in the capacity as an officer or trustee of
Guarantor which has been formed as a Maryland real estate
investment trust pursuant to a Declaration of Trust of Guarantor,
dated June 17, 1992, as amended and restated, and not
individually, and none of the trustees, officers or shareholders
of Guarantor shall be bound or have any personal liability
hereunder. Each party hereto shall look solely to the assets of
Guarantor for satisfaction of any liability of Guarantor, and
shall not seek recourse or commence an action against any of the
trustees, officers or shareholders of Guarantor or any of their
personal assets for the performance or payment of any obligation
hereunder. The foregoing shall also apply to any future
documents, agreements, understandings, arrangements and
transactions between the parties hereto. Nothing set forth in
the preceding two sentences shall limit the obligations of
Guarantor set forth in this Guaranty and the other Loan
Documents.
IN WITNESS WHEREOF, Guarantor has duly executed this
Guaranty as of the date indicated below.
GUARANTOR
KRANZCO REALTY TRUST
/s/ Xxxxxx X. Xxxxxx
______________________________
Name: Xxxxxx X. Xxxxxx
Title: Vice President
Date: February 26, 0000
Xxxxxxxxxxxxxx
XXXXX XX XXX XXXX )
) ss
COUNTY OF NEW YORK )
On the 26th day of February, 1997, before me personally
came Xxxxxx X. Xxxxxx to me known, who, being by me duly sworn,
did depose, acknowledge and say that he is the Vice President of
Kranzco Realty Trust, the real estate investment trust described
in and which executed the foregoing instrument; and that he
signed his name thereto by order of the trustees of said trust.
__________________________________
Notary Public
My commission expires:
_______________________
