GUARANTY OF PAYMENT OF NOTE,
RATE LOCK OBLIGATIONS, CARRYING
COSTS AND RECOURSE OBLIGATIONS
made by
BROOKDALE LIVING COMMUNITIES, INC.,
as guarantor,
in favor of
NOMURA ASSET CAPITAL CORPORATION
Dated as of June __, 1998
GUARANTY OF PAYMENT OF NOTE,
RATE LOCK OBLIGATIONS, CARRYING
COSTS AND RECOURSE OBLIGATIONS
This GUARANTY (this "Guaranty"), dated as of June __, 1998, made by
BROOKDALE LIVING COMMUNITIES, INC., a Delaware corporation, having an office at
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Guarantor"), in
favor of NOMURA ASSET CAPITAL CORPORATION, a Delaware corporation, having an
office at Two World Financial Center, Building B, New York, New York 10281-1198
(together with its successors and assigns, "Lender").
R E C I T A L S:
▇. ▇▇▇▇▇▇▇▇ to that certain Loan Agreement dated as of the date
hereof (as the same may be amended, modified, supplemented or replaced from time
to time, the "Loan Agreement") by and among AH Michigan Owner Limited
Partnership ("Borrower"), Brookdale Living Communities of Michigan, Inc.
("Manager"), and ▇▇▇▇▇▇, and also pursuant to that certain Building Loan
Agreement dated as of the date hereof between Borrower, Manager and Lender (as
the same may be amended, modified, supplemented or replaced from time to time,
the "Building Loan Agreement", and collectively with the Loan Agreement,
sometimes hereinafter referred to as the "Loan Agreements"), ▇▇▇▇▇▇ has agreed
to make a loan (the "Loan") to Borrower in an aggregate principal amount of
Twenty-Six Million Six Hundred and Twenty-Five Thousand and 00/100 Dollars
($26,625,000), subject to the terms and conditions of the Loan Agreements;
▇. ▇▇▇▇▇▇▇▇ has executed a note in the principal amount of
Twenty-Six Million Six Hundred and Twenty-Five Thousand and 00/100 Dollars
($26,625,000) (as the same may be amended, modified, restated, severed,
consolidated, renewed, replaced, or supplemented from time to time, the "Note").
The Note is secured by, inter alia, that certain mortgage (as amended from time
to time, the "Mortgage") on the Property;
C. As a condition to ▇▇▇▇▇▇'s making the Loan, ▇▇▇▇▇▇ is requiring
that Guarantor execute and deliver to Lender this Guaranty; and
▇. ▇▇▇▇▇▇▇▇▇ hereby acknowledges that Guarantor will materially
benefit from ▇▇▇▇▇▇'s agreeing to make the Loan;
NOW, THEREFORE, in consideration of the premises set forth herein
and as an inducement for and in consideration of the agreement of Lender to make
the Loan pursuant to the
1
Loan Agreements, Guarantor hereby agrees, covenants, represents and warrants to
Lender as follows:
1. Definitions.
(a) All capitalized terms used and not defined herein shall
have the respective meanings given such terms in the Loan Agreements.
(b) The term "Payment Obligations" means Borrower's
obligations under the Loan Documents to pay when due in accordance therewith the
Principal from time to time outstanding, all interest accrued thereon (including
interest at the Default Rate when applicable), the Yield Maintenance Premium,
and all other fees, expenses and other charges payable by Borrower to Lender
under the Loan Documents.
(c) The term "Rate Lock Obligations" means the obligations of
Borrower and/or Manager to pay when due all Lender's Expenses in accordance with
the Rate Lock Agreement.
(d) The term "Carry Obligations" means Borrower's obligations
to pay when due all Operating Expenses and Debt Service (whether or not
Operating Income is sufficient to pay them).
(e) The term "Recourse Obligations" means Borrower's
liabilities and obligations under the Loan Documents that may, even after the
Payment Obligations Termination Date, be enforced by actions or proceedings in
which a money judgment or a deficiency judgment is sought by Lender against
Borrower, and which is enforceable against Borrower and any or all of its assets
(without recourse being limited to the collateral securing the Debt). The
Recourse Obligations are those arising out of or in connection with the actions,
events and other matters described in clauses (e) through (h), (k), and (m) of
the second paragraph of Section 10.1 of the Loan Agreement.
(f) The term "Payment Obligations Termination Date" means the
earlier of (i) the Conversion Date or (ii) the earliest date after the first
(1st) anniversary of Substantial Completion on which the Debt Service Coverage
Ratio is at least 1.27.
(g) Intentionally deleted.
2. Guaranty.
(a) Guarantor hereby irrevocably, absolutely and
unconditionally guarantees to Lender the full, prompt and complete payment when
due (and whether by reason of acceleration of maturity or otherwise) the Payment
Obligations, the Rate Lock Obligations, the Carry Obligations and the Recourse
Obligations (collectively, the "Guarantied Obligations").
2
(b) Notwithstanding anything to the contrary contained in this
Guaranty, including, without limitation, Section 2(a) hereof, the Guarantied
Obligations and Guarantor's maximum aggregate liability under this Guaranty
shall be subject to reduction as follows:
(i) Provided no Default or Event of Default then exists
and that no default on the part of Guarantor then exists under this
Guaranty, upon Substantial Completion, the aggregate maximum liability of
Guarantor under this Guaranty with respect to the Payment Obligations
shall be reduced to (A) an amount equal to 50% of the sum of (w) the
Principal then outstanding, (x) any Advances made upon (or after)
Substantial Completion, (y) interest accrued and thereafter accruing on
the amounts described in (w) and (x) above and (z) all other fees,
expenses and other charges (including the Yield Maintenance Premium)
payable by Borrower to Lender under the Loan Documents plus (B) any sums
then or thereafter payable by Guarantor pursuant to Section 16 of this
Guaranty;
(ii) Provided no Default or Event of Default then exists
and that no default on the part of Guarantor then exists under this
Guaranty, upon the Property achieving a Debt Service Coverage Ratio (as
defined in the Loan Agreement, but using a six (6) month rather than a
12-month, period) after Substantial Completion of at least 1.0 to 1, the
aggregate maximum liability of Guarantor under this Guaranty with respect
to the Payment Obligations shall be reduced to (A) an amount equal to
twenty-five percent (25%) of the sum of (w) the Principal then
outstanding, (x) any Advances made upon (or after) Substantial Completion,
(y) interest accrued and thereafter accruing on the amounts described in
(w) and (x) above and (z) all other fees, expenses and other charges
(including the Yield Maintenance Premium) payable by Borrower to Lender
under the Loan Documents plus (B) any sums then or thereafter payable by
Guarantor pursuant to Section 16 of this Guaranty; and
(iii) Provided no Default or Event of Default then exists
and that no default on the part of Guarantor then exists under this
Guaranty, this Guaranty shall terminate with respect to the Payment
Obligations, the Rate Lock Obligations, and the Carry Obligations (except
with respect to Guarantor's liability for any sums due and payable under
this Guaranty as of the date of such termination and any sums thereafter
becoming payable pursuant to Section 16 of this Guaranty) on the Payment
Obligations Termination Date.
(iv) This Guaranty and the Guarantied Obligations
hereunder, including the Recourse Obligations, shall terminate on the
Payment Obligations Termination Date, except to the extent any such
obligations exist and are unpaid, or not performed in full, on such date.
(c) All sums payable to Lender under this Guaranty shall be
payable on demand and without reduction for any offset, claim, counterclaim or
defense.
3
(d) Guarantor hereby agrees to indemnify, defend and save
harmless Lender from and against any and all costs, losses, liabilities, claims,
causes of action, expenses and damages, including, without limitation,
reasonable attorneys' fees and disbursements, which Lender may suffer or which
otherwise may arise by reason of Borrower's failure to pay any of the Guarantied
Obligations when due, irrespective of whether such costs, losses, liabilities,
claims, causes of action, expenses or damages are incurred by Lender prior or
subsequent to (i) ▇▇▇▇▇▇'s declaring the Principal, interest and other sums
evidenced or secured by the Loan Documents to be due and payable, (ii) the
commencement or completion of a judicial or non-judicial foreclosure of the
Mortgage or (iii) the conveyance of all or any portion of the Property by
deed-in-lieu of foreclosure.
(e) Subject to Section 2(b)(i) and (ii) above, Guarantor
agrees that no portion of any sums applied (other than sums received from
Guarantor in full or partial satisfaction of its obligations hereunder), from
time to time, in reduction of the Debt shall be deemed to have been applied in
reduction of the Guarantied Obligations until such time as the Debt has been
paid in full, or Guarantor shall have made the full payment required hereunder,
it being the intention hereof that the Guarantied Obligations shall be the last
portion of the Debt to be deemed satisfied. Subject to Section 2(b)(i) and (ii)
above, any amounts paid in reduction of the Debt by Guarantor during the First
Period shall not reduce the Guarantied Obligations during the Second Period.
Subject to Section 2(b)(i) and (ii) above, any amounts paid in reduction of the
Debt by Guarantor during the Second Period shall not reduce the Guarantied
Obligations during the Third Period. For purposes of this paragraph (e), (i) the
"First Period" shall mean the period from the date hereof to Substantial
Completion, (ii) the Second Period shall mean the period from Substantial
Completion to the reduction of the Payment Obligations pursuant to Section
2(b)(iii), and (iii) the Third Period shall mean the period from the end of the
Second Period to the Payment Obligations Termination Date.
3. Representations and Warranties. Guarantor hereby represents and
warrants to Lender as follows (which representations and warranties shall be
given as of the date hereof and shall survive the execution and delivery of this
Guaranty):
(a) Organization, Authority and Execution. Guarantor is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, and has all necessary power and authority to own its
properties and to conduct its business as presently conducted or proposed to be
conducted and to enter into and perform this Guaranty and all other agreements
and instruments to be executed by it in connection herewith. This Guaranty has
been duly executed and delivered by Guarantor.
(b) Enforceability. This Guaranty constitutes a legal, valid
and binding obligation of Guarantor, enforceable against Guarantor in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally.
4
(c) No Violation. The execution, delivery and performance by
Guarantor of its obligations under this Guaranty have been duly authorized by
all necessary action, and do not and will not violate any law, regulation,
order, writ, injunction or decree of any court or governmental body, agency or
other instrumentality applicable to Guarantor, or result in a breach of any of
the terms, conditions or provisions of, or constitute a default under, or result
in the creation or imposition of any mortgage, lien, charge or encumbrance of
any nature whatsoever upon any of the assets of Guarantor pursuant to the terms
of Guarantor's certificate of incorporation or by-laws, or any mortgage,
indenture, agreement or instrument to which Guarantor is a party or by which it
or any of its properties is bound. Guarantor is not in default under any other
guaranty which it has provided to Lender.
(d) No Litigation. There are no actions, suits or proceedings
at law or at equity, pending or, to Guarantor's best knowledge, threatened
against or affecting Guarantor or which involve the validity or enforceability
of this Guaranty or with respect to which an adverse decision is reasonably
likely which would materially adversely affect the financial condition of
Guarantor or the ability of Guarantor to perform any of its obligations under
this Guaranty. Guarantor is not in default beyond any applicable grace or cure
period with respect to any order, writ, injunction, decree or demand of any
Governmental Authority which would materially adversely affect the financial
condition of Guarantor or the ability of Guarantor to perform any of its
obligations under this Guaranty.
(e) Consents. All consents, approvals, orders or
authorizations of, or registrations, declarations or filings with, all
Governmental Authorities (collectively, the "Consents") that are required in
connection with the valid execution, delivery and performance by Guarantor of
this Guaranty have been obtained or will be obtained when required.
(f) Financial Statements and Other Information. All financial
statements of Guarantor heretofore delivered to Lender are true and correct in
all material respects and fairly present the financial condition of Guarantor as
of the respective dates thereof, and no materially adverse change has occurred
in the financial conditions reflected therein since the respective dates
thereof. None of the aforesaid financial statements or any certificate or
statement furnished to Lender by or on behalf of Guarantor in connection with
the transactions contemplated hereby, and none of the representations and
warranties in this Guaranty contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
contained therein or herein not misleading in any material respect. Guarantor is
not insolvent within the meaning of the United States Bankruptcy Code or any
other applicable law, code or regulation, and the execution, delivery and
performance of this Guaranty will not render Guarantor insolvent.
(g) Consideration. Guarantor is receiving fair consideration
in return for giving this Guaranty.
4. Financial Statements. Guarantor shall deliver to Lender, (a)
within one hundred twenty (120) days after the end of each fiscal year of
Guarantor, a complete copy of
5
Guarantor's annual financial statements audited by a "big six" accounting firm
or another independent certified public accountant reasonably acceptable to
Lender, (b) within forty-five (45) days after the end of each fiscal quarter of
Guarantor, financial statements (including a balance sheet as of the end of such
fiscal quarter and a statement of income and expense for such fiscal quarter)
certified by the Chief Financial Officer or President of Guarantor and in form,
content, level of detail and scope reasonably satisfactory to Lender, and (c)
thirty (30) days after request by ▇▇▇▇▇▇, such other financial information with
respect to Guarantor as Lender may reasonably request.
5. Unconditional Character of Obligations of Guarantor.
(a) The obligations of Guarantor hereunder shall be
irrevocable, absolute and unconditional, irrespective of the validity,
regularity or enforceability, in whole or in part, of the other Loan Documents
or any provision thereof, or the absence of any action to enforce the same, any
waiver or consent with respect to any provision thereof, the recovery of any
judgment against Borrower, Guarantor or any other Person or any action to
enforce the same, any failure or delay in the enforcement of the obligations of
Borrower under the other Loan Documents or Guarantor under this Guaranty, or any
setoff, counterclaim, and irrespective of any other circumstances which might
otherwise limit recourse against Guarantor by Lender or constitute a legal or
equitable discharge or defense of a guarantor or surety. Lender may enforce the
obligations of Guarantor under this Guaranty by a proceeding at law, in equity
or otherwise, independent of any loan foreclosure or similar proceeding or any
deficiency action against Borrower or any other Person at any time, either
before or after an action against the Property or any part thereof, Borrower or
any other Person. This Guaranty is a guaranty of payment and performance and not
merely a guaranty of collection. Except as otherwise provided herein or in any
of the other Loan Documents and to the extent permitted by law, Guarantor waives
diligence, notice of acceptance of this Guaranty, filing of claims with any
court, any proceeding to enforce any provision of any other Loan Document,
against Guarantor, Borrower or any other Person, any right to require a
proceeding first against Borrower or any other Person, or to exhaust any
security (including, without limitation, the Property) for the performance of
the Guaranteed Obligations or any other obligations of Borrower, any
Non-Recourse Guarantor or any other Person, or any protest, presentment, notice
of default or other notice or demand whatsoever (except to the extent expressly
provided to the contrary in this Guaranty), and Guarantor hereby covenants and
agrees that Guarantor shall not be discharged of its obligations hereunder
except as set forth in Section 2(b) above.
(b) The obligations of Guarantor under this Guaranty, and the
rights of Lender to enforce the same by proceedings, whether by action at law,
suit in equity or otherwise, shall not be in any way affected by any of the
following:
(i) any insolvency, bankruptcy, liquidation,
reorganization, readjustment, composition, dissolution, receivership,
conservatorship, winding up or other similar proceeding involving or
affecting Borrower, the Property or any part thereof, Guarantor or any
other Person;
6
(ii) any failure by Lender or any other Person, whether
or not without fault on its part, to perform or comply with any of the
terms of the Loan Agreement, or any other Loan Documents, or any document
or instrument relating thereto;
(iii) the sale, transfer or conveyance of the Property or
any interest therein to any Person, whether now or hereafter having or
acquiring an interest in the Property or any interest therein and whether
or not pursuant to any foreclosure, trustee sale or similar proceeding
against Borrower or the Property or any interest therein;
(iv) the conveyance to Lender, any Affiliate of Lender or
▇▇▇▇▇▇'s nominee of the Property or any interest therein by a deed-in-lieu
of foreclosure;
(v) the release of Borrower or any other Person from the
performance or observance of any of the agreements, covenants, terms or
conditions contained in any of the Loan Documents by operation of law or
otherwise; or
(vi) the release in whole or in part of any collateral
for any or all Guaranteed Obligations, the Property, the Loan, or any
portion thereof.
(c) Except as otherwise specifically provided in this
Guaranty, Guarantor hereby expressly and irrevocably waives all defenses in an
action brought by ▇▇▇▇▇▇ to enforce this Guaranty based on claims of waiver,
release, surrender, alteration or compromise and all setoffs, reductions, or
impairments, whether arising hereunder or otherwise.
(d) Subject to the Intercreditor Agreement, Lender may deal
with Borrower and Affiliates of Borrower in the same manner and as freely as if
this Guaranty did not exist and shall be entitled, among other things, to grant
Borrower or any other Person such extension or extensions of time to perform any
act or acts as may be deemed advisable by ▇▇▇▇▇▇, at any time and from time to
time, without terminating, affecting or impairing the validity of this Guaranty
or the Guarantied Obligations hereunder.
(e) No compromise, alteration, amendment, modification,
extension, renewal, release or other change of, or waiver, consent, delay,
omission, failure to act or other action with respect to, any liability or
obligation under or with respect to, or of any of the terms, covenants or
conditions of, the Loan Documents or any amendment, modification or other change
of the Plans or any legal requirement shall in any way alter, impair or affect
any of the Guarantied Obligations or Lender's rights hereunder, and ▇▇▇▇▇▇▇▇▇
agrees that if any Loan Document are modified with ▇▇▇▇▇▇'s consent, the
Guaranteed Obligations shall, to the extent applicable, automatically be deemed
modified to include such modifications.
(f) Lender may proceed to protect and enforce any or all of
its rights under this Guaranty by suit in equity or action at law, whether for
the specific performance of any covenants or agreements contained in this
Guaranty or otherwise, or to take any action authorized or permitted under
applicable law, and shall be entitled to require and enforce the performance of
7
all acts and things required to be performed hereunder by Guarantor. Each and
every remedy of Lender shall, to the extent permitted by law, be cumulative and
shall be in addition to any other remedy given hereunder or now or hereafter
existing at law or in equity.
(g) No waiver shall be deemed to have been made by Lender of
any rights hereunder unless the same shall be in writing and signed by ▇▇▇▇▇▇,
and any such waiver shall be a waiver only with respect to the specific matter
involved and shall in no way impair the rights of Lender or the obligations of
Guarantor to Lender in any other respect or at any other time.
8
(h) At the option of Lender, Guarantor may be joined in any
action or proceeding commenced by Lender against Borrower or any other Person in
connection with or based upon any other Loan Documents and recovery may be had
against Guarantor in such action or proceeding or in any independent action or
proceeding against Guarantor to the extent of Guarantor's liability hereunder,
without any requirement that Lender first assert, prosecute or exhaust any
remedy or claim against Borrower or any other Person, or any security for the
obligations of Borrower or any other Person.
(i) Guarantor agrees that this Guaranty shall continue to be
effective or shall be reinstated, as the case may be, if at any time any payment
is made by Borrower or Guarantor to Lender and such payment is rescinded or must
otherwise be returned by Lender (as determined by Lender in its sole and
absolute discretion) upon insolvency, bankruptcy, liquidation, reorganization,
readjustment, composition, dissolution, receivership, conservatorship, winding
up or other similar proceeding involving or affecting Borrower or Guarantor, all
as though such payment had not been made.
(j) In the event that Guarantor shall advance or become
obligated to pay any sums under this Guaranty or in connection with the
Guarantied Obligations or in the event that for any reason whatsoever Borrower
or any subsequent owner of the Property or any part thereof is now, or shall
hereafter become, indebted to Guarantor, Guarantor agrees that (i) the amount of
such sums and of such indebtedness and all interest thereon shall at all times
be subordinate as to lien, the time of payment and in all other respects to all
sums, including principal and interest and other amounts, at any time owed to
Lender under the Loan Documents, and (ii) Guarantor shall not be entitled to
enforce or receive payment thereof until all principal, Interest and other sums
due pursuant to the Loan Documents have been paid in full. Nothing herein
contained is intended or shall be construed to give Guarantor any right of
subrogation in or under the Loan Documents or any right to participate in any
way therein, or in the right, title or interest of Lender in or to any
collateral for the Loan, notwithstanding any payments made by Guarantor under
this Guaranty, until the actual and irrevocable receipt by Lender of payment in
full of all Principal, Interest and other sums due with respect to the Loan or
otherwise payable under the Loan Documents. For as long as the Loan is
outstanding, Guarantor hereby expressly waives any and all of said rights of
subrogation, reimbursement, indemnity and recourse. Guarantor shall not be
deemed a "creditor" of the Borrower with respect to the Guarantied Obligations
as said term "creditor" is defined in the United States Bankruptcy Code, as
amended. If any amount shall be paid to Guarantor on account of such subrogation
rights at any time when any such sums due and owing to Lender shall not have
been fully paid, such amount shall be paid by Guarantor to Lender for credit and
application against such sums due and owing to Lender. Notwithstanding the
foregoing, Guarantor shall have the right to be reimbursed by Borrower for any
of Guarantor's out-of-pocket costs due Guarantor or fees pursuant to the
Management Agreement or the Development Agreement provided there is no Event of
Default under any of the Loan Documents.
(k) Guarantor's obligations hereunder shall survive a
foreclosure, deed-in-lieu of foreclosure or similar proceeding involving the
Property and the exercise by Lender of any of all of its remedies pursuant to
the Loan Documents.
9
6. Covenant.
(a) As used in this Section 6, the following terms shall have
the respective meanings set forth below:
(i) "Consolidated Subsidiaries" shall mean each
Subsidiary of Guarantor, the financial statements of which shall be (or
should have been) consolidated with the financial statements of Guarantor
in accordance with GAAP.
(ii) "GAAP" shall mean generally accepted accounting
principles, consistently applied.
(iii) "EBITDAR" means, on any quarterly measurement date,
on a trailing 3-month basis, the aggregate of total revenues less property
operating expenses and general administration expenses, all as shown on
Guarantor's income statements prepared in accordance with ▇▇▇▇ and
calculated as shown on Exhibit A attached hereto and made a part hereof.
(iv) "Guarantor's Net Cash Flow" shall mean, for a given
period, the net cash provided by operating activities of Guarantor and its
Consolidated Subsidiaries for such period, as shown in the statement of
cash flow included in Guarantor's then most recent consolidated financial
statements, determined in accordance with GAAP.
(v) "Net Worth" shall mean, as of a given date, the
value obtained by multiplying the per share value of Guarantor's common
stock, which stock trades on the NASDAQ under the symbol "BLCI" by the
number of common shares outstanding.
(vi) "Subsidiary" shall mean any Affiliate of Guarantor
that is controlled by Guarantor.
(vii) "Liquid Assets" shall mean assets in the form of
cash, cash equivalents, obligations of (or fully guarantied as to
principal and interest by) the United States or any agency or
instrumentality thereof (provided the full faith and credit of the United
States supports such obligation or guarantee), certificates of deposit
issued by a commercial bank having net assets of not less than $500
million, securities listed and traded on a recognized stock exchange or
traded over the counter and listed in the National Association of
Securities Dealers Automatic Quotations, liquid debt instruments that have
a readily ascertainable value and are regularly traded in a recognized
financial market, or any unused portion of any credit line maintained with
a bank which must have an S&P rating of "A" or better. If at any time the
credit line should be terminated or otherwise no longer be available for
Guarantor to draw down from, then Lender shall no longer include the value
of the unused portion of the credit line to calculate Guarantor's Liquid
Assets and Lender may immediately recalculate Guarantor's Liquid Assets to
determine if Guarantor satisfies the covenant in (b) below.
10
(b) Until all of the Guarantied Obligations have been paid in
full or terminated, Guarantor (i) shall maintain (A) a Net Worth in excess of
$110,000,000, (B) an EBITDAR in excess of $5,000,000 determined quarterly on a
trailing 3-month basis, and (C) Liquid Assets having a market value of at least
$5,000,000, which shall be tested on a quarterly basis, (ii) shall not sell,
pledge, mortgage or otherwise transfer any of its assets, or any interest
therein, on terms materially less favorable than would be obtained in an
arms-length transaction and (iii) shall deliver to Lender, concurrently with the
delivery of each quarterly or annual financial statement required to be
delivered by Guarantor hereunder, a certificate of the chief financial officer
of Guarantor setting forth in reasonable detail Guarantor's Net Worth, EBITDAR
and Liquid Assets, based on such financial statement.
(c) Guarantor shall not, at any time while a default in the
payment of the Guarantied Obligations has occurred and is continuing, without
the prior written consent of Lender, which consent may granted or withheld in
▇▇▇▇▇▇'s sole and absolute discretion, enter into or effectuate any transaction
with any Affiliate which would reduce the Net Worth of Guarantor below the Net
Worth set forth in Section 6(b).
7. Entire Agreement/Amendments. This instrument represents the
entire agreement between the parties with respect to the subject matter hereof.
The terms of this Guaranty shall not be waived, altered, modified, amended,
supplemented or terminated in any manner whatsoever except by written instrument
signed by ▇▇▇▇▇▇ and Guarantor.
8. Successors and Assigns. This Guaranty shall be binding upon
Guarantor, and Guarantor's successors and assigns, may not be assigned or
delegated by Guarantor and shall inure to the benefit of Lender and its
successors and assigns.
9. Applicable Law and Consent to Jurisdiction. This Guaranty was
partially negotiated in the State of New York, and accepted by ▇▇▇▇▇▇ in the
State of New York, which State the parties agree has a substantial relationship
to the parties and the underlying transaction embodied hereby, and in all
respects, this Guaranty shall be governed by, and construed in accordance with,
the substantive laws of the State of New York. Guarantor irrevocably (a) agrees
that any suit, action or other legal proceeding arising out of or relating to
this Guaranty may be brought in a court of record in the City and County of New
York or in the Courts of the United States of America located in the Southern
District of New York, (b) consents to the jurisdiction of each such court in any
such suit, action or proceeding and (c) waives any objection which it may have
to the laying of venue of any such suit, action or proceeding in any of such
courts and any claim that any such suit, action or proceeding has been brought
in an inconvenient forum. Guarantor irrevocably consents to the service of any
and all process in any such suit, action or proceeding by service of copies of
such process to Guarantor at its address provided in Section 14 hereof. Nothing
in this Section 9, however, shall affect the right of Lender to serve legal
process in any other manner permitted by law or affect the right of Lender to
bring any suit, action or proceeding against Guarantor or its property in the
courts of any other jurisdictions.
11
10. Section Headings. The headings of the sections and paragraphs of
this Guaranty have been inserted for convenience of reference only and shall in
no way define, modify, limit or amplify any of the terms or provisions hereof.
11. Severability. Any provision of this Guaranty which may be
determined by any competent authority to be prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. To the extent permitted by applicable law, Guarantor hereby
waives any provision of law which renders any provision hereof prohibited or
unenforceable in any respect.
12. WAIVER OF TRIAL BY JURY. ▇▇▇▇▇▇▇▇▇ AND ▇▇▇▇▇▇ ▇▇▇▇▇▇ 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, 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 ▇▇▇▇▇▇▇▇▇ AND ▇▇▇▇▇▇, AND IS INTENDED
TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO
A TRIAL BY JURY WOULD OTHERWISE ACCRUE. EACH PARTY IS HEREBY AUTHORIZED TO FILE
A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER
BY THE OTHER.
13. Other Guaranties. The obligations of Guarantor hereunder are
separate and distinct from, and in addition to, the obligations of Guarantor now
or hereafter arising under one or more other Guaranties, pursuant to which
Guarantor has guaranteed payment and performance of certain other obligations of
Borrower described therein.
14. Notices. All notices, demands, requests, consents, approvals or
other communications (collectively called "Notices") required or permitted to be
given hereunder to Lender or Guarantor or which are given to Lender or Guarantor
with respect to this Guaranty shall be in writing and shall be (a) sent by
United States registered or certified mail, return receipt requested, postage
prepaid, addressed as set forth below, (b) sent by national overnight courier or
delivery service, or (c) personally delivered with receipt acknowledged to such
address, or in either case, to such other address(es) as the party in question
shall have specified most recently by like Notice.
If to Lender, to:
Nomura Asset Capital Corporation
2 World Financial Center, Building B
New York, New York 10281-1198
Attn: ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇
12
with a copy to:
Dechert Price & ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
If to Guarantor, to:
Brookdale Living Communities, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
with a copy to:
Brookdale Living Communities, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
with a copy to:
Winston & ▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Notices which are given in the manner aforesaid shall be deemed to have been
given or served for all purposes hereunder (i) on the date on which such notice
shall have been personally delivered as aforesaid, (ii) on the date of delivery
by mail as evidenced by the return receipt therefor, or (iii) on the date of
failure to deliver by reason of refusal to accept delivery or changed address of
which no Notice was given.
15. Guarantor's Receipt of Loan Documents. Guarantor by its
execution hereof acknowledges receipt of true copies of all of the Loan
Documents and further acknowledges that it is familiar with said Loan Documents
and has no objections to any of the provisions therein.
16. Interest; Expenses.
(a) If Guarantor fails to pay all or any sums due hereunder
upon demand by ▇▇▇▇▇▇, the amount of such sums payable by Guarantor to Lender
shall bear interest from the date of demand until paid at the Default Rate in
effect from time to time.
13
(b) Guarantor hereby agrees to pay all costs, charges and
expenses, including, without limitation, reasonable attorneys' fees and
disbursements, that may be incurred by ▇▇▇▇▇▇ in enforcing the covenants,
agreements, obligations and liabilities of Guarantor under this Guaranty.
17. Intentionally deleted.
18. Waiver of One Action Rule; Cross Collateralization.
(a) The Loan has been made by Lender pursuant to the Master
Financing Facility Agreement. The Master Financing Facility Agreement
contemplates that one or more Other Loans made to Other Borrowers pursuant to
the Master Financing Facility Agreement will, at Lender's election, be cross
collateralized and cross defaulted with the Loan and with each other, subject to
Section (b) below. In such event, such Other Loans will be secured by the
Property and the Collateral, and the Loan will be secured by the Other
Properties and Other Collateral serving as primary security for such Other
Loans, subject to Section (b) below.
(b) Without limitation to any other right or remedy provided
to Lender in the Loan Agreements or this Guaranty or any of the other Loan
Documents, Guarantor covenants and agrees that upon the occurrence of an Event
of Default (i) Lender shall have the right to pursue all of its rights and
remedies with respect to the Loan or the Other Loans in one proceeding, or
separately and independently in separate proceedings which it, as Lender, in its
discretion, shall determine from time to time, (ii) Lender is not required to
either ▇▇▇▇▇▇▇▇ assets, sell the Property, the Collateral, or any Other
Property, or enforce or realize upon any Other Non-Recourse Guaranty, in any
inverse order of alienation, or be subjected to any "one action" or "election of
remedies" law or rule, and (iii) the exercise by Lender of any remedies against
the Property, the Collateral, any Other Property, or any Other Non-Recourse
Guaranty will not impede Lender from subsequently or simultaneously exercising
remedies against the Property, the Collateral, any other Property, or any Other
Non-Recourse Guaranty.
(c) Intentionally deleted.
(d) It is understood and agreed by the parties hereto that
upon the satisfaction or termination of the Guarantied Obligations no subsequent
default under the Other Loans shall operate to revive or otherwise reinstate
this Guaranty, other than as specifically set forth in Section 5(i) herein.
19. No Usury. Guarantor and Lender intend at all times to comply
with applicable state law or applicable United States federal law (to the extent
that it permits Lender to contract for, charge, take, reserve or receive a
greater amount of interest than under state law). If the applicable law (state
or federal) is ever judicially interpreted so as to render usurious any amount
called for under this Guaranty, or contracted for, charged, taken, reserved or
received with respect to the Guarantied Obligations, or if ▇▇▇▇▇▇'s exercise of
the option to accelerate the maturity of the Guarantied Obligations or any
prepayment by Guarantor results in Guarantor having paid any interest in excess
of that permitted by applicable law, then it is Guarantor's and Lender's express
intent that
14
all excess amounts theretofore collected by ▇▇▇▇▇▇ shall be credited against the
unpaid Guarantied Obligations (or, if the Guarantied Obligations have been or
would thereby be paid in full, refunded to Guarantor), and the provisions of the
Guaranty immediately be deemed reformed and the amounts thereafter collectible
thereunder reduced, without the necessity of the execution of any new document,
so as to comply with the applicable law, but so as to permit the recovery of the
fullest amount otherwise called for thereunder. All sums paid or agreed to be
paid to Lender for the use, forbearance or detention of the Guaranty shall, to
the extent permitted by applicable law, be amortized, prorated, allocated, and
spread throughout the full stated term of the Guaranty until payment in full so
that the rate or amount of interest on account of the Guarantied Obligations
does not exceed the maximum lawful rate from time to time in effect and
applicable to the Guarantied Obligations for so long as the Guarantied
Obligations are outstanding. Notwithstanding anything to the contrary contained
in this Guaranty, it is not the intention of Lender to accelerate the maturity
of any interest that has not accrued at the time of such acceleration or to
collect unearned interest at the time of such acceleration.
[Remainder of page intentionally left blank; signature page follows]
15
IN WITNESS WHEREOF, ▇▇▇▇▇▇▇▇▇ has executed this Guaranty as of the
date first above written.
BROOKDALE LIVING COMMUNITIES, INC.,
A Delaware corporation.
By:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
16
AGREED AND ACKNOWLEDGED
ONLY FOR SECTION 12
NOMURA ASSET CAPITAL CORPORATION
By: ______________________________________
▇▇▇▇▇▇ ▇▇▇▇▇
Director
17