UNLIMITED GUARANTY
GUARANTY, dated as of November 6, 1998 by GROVE PROPERTY TRUST, a
Maryland Real Estate Investment Trust with a business address at ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "GUARANTOR"), in favor of BANKBOSTON,
N.A. a national banking association, with an office at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "BANK"). In consideration of the Bank's giving,
in its discretion, time, credit or banking facilities or accommodations to
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (the "CUSTOMER"), the Guarantor agrees as follows:
1. GUARANTY OF PAYMENT AND PERFORMANCE. The Guarantor hereby guarantees
to the Bank the full and punctual payment when due (whether at maturity, by
acceleration or otherwise), and the performance, of all liabilities, agreements
and other obligations of the Customer to the Bank, whether direct or indirect,
absolute or contingent, due or to become due, secured or unsecured, now existing
or hereafter arising or acquired (whether by way of discount, letter of credit,
lease, loan, overdraft or otherwise) arising under or in connection with the
Revolving Credit Agreement dated of even date herewith between the Customer and
the Bank (the "CREDIT AGREEMENT") or any document, agreement and instrument
executed in connection therewith (collectively, the "OBLIGATIONS"). This
Guaranty is an absolute, unconditional and continuing guaranty of the full and
punctual payment and performance of the Obligations and not of their
collectibility only and is in no way conditioned upon any requirement that the
Bank first attempts to collect any of the Obligations from the Customer or
resort to any security or other means of obtaining their payment. Should the
Customer default in the payment or performance of any of the Obligations, the
obligations of the Guarantor hereunder shall become immediately due and payable
to the Bank, without demand or notice of any nature, all of which are expressly
waived by the Guarantor. Payments by the Guarantor hereunder may be required by
the Bank on any number of occasions.
2. GUARANTOR'S AGREEMENT TO PAY. The Guarantor further agrees to pay to
the Bank, on demand, all costs and expenses (including court costs and
reasonable legal expenses) incurred or expended by Bank in connection with the
Obligations, this Guaranty and the enforcement thereof, together with interest
on amounts recoverable under this Guaranty from the time such amounts become due
until payment, at the interest rate set forth in the Credit Agreement; provided,
that if such interest exceeds the maximum amount permitted to be paid under
applicable law, then such interest shall be reduced to such maximum permitted
amount.
3. UNLIMITED GUARANTY. The liability of the Guarantor hereunder shall be
unlimited.
4. WAIVERS BY GUARANTORS; BANK'S FREEDOM TO ACT. The Guarantor agrees
that the Obligations will be paid and performed strictly in
accordance with their respective terms regardless of any law, regulation or
order now or hereafter in effect in any jurisdiction affecting any of such terms
or the rights of the Bank with respect thereto. The Guarantor waives
presentment, demand, protest, notice of acceptance, notice of Obligations
incurred and all other notices of any kind, all defenses which may be available
by virtue of any valuation, stay, moratorium law or other similar law now or
hereafter in effect, any right to require the marshalling of assets of the
Customer, and all suretyship defenses generally. Without limiting the generality
of the foregoing, the Guarantor agrees to the provisions of any instrument
evidencing, securing or otherwise executed in connection with any Obligation and
agrees that the obligations of the Guarantor hereunder shall not be released or
discharged, in whole or in part, or otherwise affected by (i) the failure of the
Bank to assert any claim or demand or to enforce any right or remedy against the
Customer; (ii) any extensions or renewals of any Obligation; (iii) any
rescissions, waivers, amendments or modifications of any of the terms or
provisions of any agreement evidencing, securing or otherwise executed in
connection with any Obligation; (iv) the substitution or release of any entity
primarily or secondarily liable for any Obligation (including, without
limitation, the release of the Guarantor); (v) the adequacy of any rights the
Bank may have against any collateral or other means of obtaining repayment of
the Obligations; (vi) the impairment of any collateral securing the Obligations,
including without limitation the failure to perfect or preserve any rights the
Bank might have in such collateral or the substitution, exchange, surrender,
release, loss or destruction of any such collateral; or (vii) any other act or
omission which might in any manner or to any extent vary the risk of the
Guarantor or otherwise operate as a release or discharge of the Guarantor, all
of which may be done without notice to the Guarantor.
5. UNENFORCEABILITY OF OBLIGATIONS AGAINST CUSTOMER. If for any reason
the Customer has no legal existence or is under no legal obligation to discharge
any of the Obligations, or if any of the Obligations have become irrecoverable
from such Customer by operation of law or for any other reason, this Guaranty
shall nevertheless be binding on the Guarantor to the same extent as if the
Guarantor at all times had been the principal obligor on all such Obligations.
In the event that acceleration of the time for payment of the Obligations is
stayed upon the insolvency, bankruptcy or reorganization of the Customer, or for
any other reason, all such amounts otherwise subject to acceleration under the
terms of any agreement evidencing, securing or otherwise executed in connection
with any Obligation shall be immediately due and payable by the Guarantor.
6. SUBROGATION; SUBORDINATION. Until the payment and performance in full
of all Obligations and any and all obligations of the Customer to any affiliate
of the Bank, the Guarantor shall not exercise any rights against the Customer
arising as a result of payment by the Guarantor hereunder, by way of subrogation
or otherwise, and will not prove any claim in competition with the Bank or its
affiliates in respect of any payment hereunder in bankruptcy or insolvency
proceedings of any nature; until the payment and
performance of all of the Obligations and any and all Obligations of the
Customer to any affiliate of the Bank, the Guarantor will not claim any set-off
or counterclaim against the Customer in respect of any liability of the
Guarantor to the Customer; and the Guarantor waives any benefit of and any right
to participate in any collateral which may be held by the Bank or any such
affiliate. The payment of any amounts due with respect to any indebtedness of
the Customer now or hereafter held by the Guarantor is hereby subordinated to
the prior payment in full of the Obligations. The Guarantor agrees that the
Guarantor will not demand, ▇▇▇ for or otherwise attempt to collect any such
indebtedness of the Customer to the Guarantor until the Obligations shall have
been paid in full. If, notwithstanding the foregoing sentence, the Guarantor
shall collect, enforce or receive any amounts in respect of such indebtedness,
such amounts shall be collected, enforced and received by the Guarantor as
trustee for the Bank and be paid over to the Bank on account of the Obligations
without affecting in any manner the liability of the Guarantor under the other
provisions of this Guaranty.
7. SECURITY; SET-OFF. The Guarantor hereby grants to the Bank, as
security for the full and punctual payment and performance of the Guarantor's
obligations hereunder, a continuing lien on and security interest in all
securities or other property belonging to the Guarantor now or hereafter held by
the Bank and in all deposits (general or special, time or demand, provisional or
final) and other sums credited by or due from the Bank to the Guarantor or
subject to withdrawal by the Guarantor; and regardless of the adequacy of any
collateral or other means of obtaining repayment of the Obligations, the Bank is
hereby authorized at any time and from time to time during the continuance of a
Default or an event of Default, without notice to the Guarantor (any such notice
being expressly waived by the Guarantor) and to the fullest extent permitted by
law, to set off and apply such deposits and other sums against the obligations
of the Guarantor under this Guaranty, whether or not the Bank shall have made
any demand under this Guaranty and although such obligations may be contingent
or unmatured.
8. FURTHER ASSURANCES. The Guarantor agrees to do all such things and
execute all such documents, including financing statements, which may be
reasonably necessary or desirable to give full effect to this Guaranty and to
protect and preserve the rights and powers of the Bank hereunder.
9. TERMINATION; REINSTATEMENT. This Guaranty shall remain in full force
and effect until the payment in full of the Obligations. This Guaranty shall
continue to be effective or be reinstated if at any time any payment made or
value received with respect to an Obligation is rescinded or must otherwise be
returned by the Bank upon the insolvency, bankruptcy or reorganization of any
Customer, or otherwise, all as though such payment had not been made or value
received.
10. SUCCESSORS AND ASSIGNS. This Guaranty shall be binding upon the
Guarantor, and its respective heirs, trustees, successors and assigns,
and shall inure to the benefit of and be enforceable by the Bank and its
successors, transferees and assigns. Without limiting the generality of the
foregoing sentence, the Bank may assign or otherwise transfer any agreement or
any note held by it evidencing, securing or otherwise executed in connection
with the Obligations, or sell participations in any interest therein, to any
other person or entity, and such other person or entity shall thereupon become
vested, to the extent set forth in the agreement evidencing such assignment,
transfer or participation, with all the rights in respect thereof granted to the
Bank herein.
11. AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of
this Guaranty nor consent to any departure by the Guarantor therefrom shall be
effective unless the same shall be in writing and signed by the Bank. No failure
on the part of the Bank to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right.
12. NOTICES. All notices and other communications called for hereunder
shall be made in writing and, unless otherwise specifically provided herein,
shall be deemed to have been duly made or given when delivered by hand,
overnight mail or mailed first class certified mail postage prepaid, return
receipt requested, addressed as follows: if to the Guarantor, at the address set
forth beneath its respective signature hereto, and if to the Bank, at ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇, or at such address as either party may designate in writing.
13. GOVERNING LAW; CONSENT TO JURISDICTION. This Guaranty shall be
governed by, and construed in accordance with, the laws of the State of
Connecticut. The Guarantor agrees that any suit for the enforcement of this
Guaranty may be brought in the courts of the State of Connecticut or any Federal
Court sitting therein and consents to the non-exclusive jurisdiction of such
court and to service of process in any such suit being made upon the Guarantor
by mail at the addresses specified in Section 12 hereof. The Guarantor hereby
waives any objection that it may now or hereafter have to the venue of any such
suit or any such court or that such suit was brought in an inconvenient court.
14. MISCELLANEOUS. This Guaranty constitutes the entire agreement of the
Guarantor with respect to the matters set forth herein. The rights and remedies
herein provided are cumulative and not exclusive of any remedies provided by law
or any other agreement, and this Guaranty shall be in addition to any other
guaranty of the Obligations. The invalidity or unenforceability of any one or
more sections of this Guaranty shall not affect the validity or enforceability
of its remaining provisions. Captions are for the ease of reference only and
shall not affect the meaning of the relevant provisions. The meanings of all
defined terms used in this Guaranty shall be equally applicable to the singular
and plural forms of the terms defined.
15. GUARANTOR'S REPRESENTATIONS AND WARRANTIES. The Guarantor represents
and warrants to the Bank as follows:
(a) Incorporation; Good Standing. The Guarantor (i) is a
corporation duly organized, validly existing and in good standing under
the laws of its state of incorporation, (ii) has all requisite corporate
power to own its property and conduct its business as now conducted and
as presently contemplated, and (iii) is in good standing as a foreign
corporation and is duly authorized to do business in each jurisdiction
where such qualification is necessary except where a failure to be so
qualified would not have a materially adverse effect on the business,
assets or financial condition of the Guarantor.
(b) Authorization. The execution, delivery and performance of
this Guaranty and the transactions contemplated hereby and thereby (i)
are within the authority of the Guarantor, (ii) have been duly
authorized by all necessary proceedings, (iii) do not conflict with or
result in any breach or contravention of any provision of law, statute,
rule or regulation to which the Guarantor is subject or any judgment,
order, writ, injunction, license or permit applicable to the Guarantor,
(iv) do not conflict with any provision of the corporate charter or
bylaws of the Guarantor and (v) do not conflict with any agreement or
instrument binding upon the Guarantor except where such conflict would
not have a material adverse effect on the business, assets or financial
condition of the Guarantor, considered as a whole.
(c) Enforceability. The execution and deliver of this Guaranty
will result in valid and legally binding obligations of the Guarantor
enforceable against it in accordance with the respective terms and
provisions hereof except as enforceability is limited by bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors' rights and except to
the extent that availability of the remedy of specific performance or
injunctive relief is subject to general principles of equity or the
discretion of the court before which any proceeding therefor may be
brought.
(d) Financial Statements. There has been furnished to the Bank a
consolidated balance sheet of the Guarantor as at June 30, 1998, and a
consolidated statement of income of the Guarantor for the fiscal year
then ended, certified by Ernst & Young. Such balance sheet and statement
of income have been prepared in accordance with generally accepted
accounting principles and fairly present the financial condition of the
Guarantor as the close of business on the date thereof and the results
of operations for the fiscal year then ended. There are no contingent
liabilities of the Guarantor as of such date involving material amounts,
known to the Guarantor, which were not disclosed in such balance sheet
and the notes related thereto.
(e) No Material Changes, Etc. Since June 30, 1998, there has
occurred no materially adverse change in the financial condition or
business of the Guarantor as shown on or reflected in the consolidated
balance sheet of the Guarantor as at such date, or the consolidated
statement of income for the fiscal year then ended, other than changes
in the ordinary course of business that have not had any materially
adverse effect either individually or in the aggregate on the business
or financial condition of the Guarantor, taken as a whole.
16. COVENANTS. The Guarantor hereby covenants to the Bank that, so long
as any of the Obligations remain outstanding or this Guaranty remains in effect,
the Guarantor will furnish to the Bank (i) copies of the financial information
required under ss.7(a) of the Grove Credit Agreement (as defined in the Credit
Agreement) and (ii) together with such financial information, a copy of the most
recent 10K filed with the Securities and Exchange Commission detailing the
current salary and prior year bonuses (paid or deferred) of the Customer, such
financial information to be delivered on or before May 1 of each calendar year.
17. WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION. The Guarantor hereby
waives the Guarantor's right to a jury trial with respect to: (i) any action or
claim arising out of any dispute in connection with this Guaranty, any rights or
obligations hereunder or the performance of such rights and obligations; and,
(ii) any action or claim arising out of any dispute in connection with the
Credit Agreement or any document, agreement or instrument executed in connection
therewith (collectively, with the Credit Agreement and this Guaranty, the "LOAN
DOCUMENTS"). Except as prohibited by law, the Guarantor hereby waives any right
the Guarantor may have to claim or recover in any litigation referred to in the
preceding sentence any special, exemplary, punitive or consequential damages or
any damages other than, or in addition to, actual damages. The Guarantor (a)
certifies that no representative, agent or attorney of the Bank has represented,
expressly or otherwise, that the Bank would not, in the event of litigation,
seek to enforce the foregoing waivers and (b) acknowledges that the Bank have
been induced to give credit to such Customer by, among other things, the waivers
and certifications contained herein.
The Guarantor hereby further agrees that the following courts: (i) State
Court-any state or local court of the State of Connecticut; and (ii) Federal
Court-United States District Court for the District of Connecticut, or at the
option of the Bank, any court in which the Bank shall initiate legal or
equitable proceedings and which has subject matter and personal jurisdiction
over the matter and parties in controversy, shall have exclusive jurisdiction to
hear and determine any claims or disputes between the undersigned and the Bank
pertaining directly or indirectly to the Loan Documents or to any matter arising
therefrom. The Guarantor expressly submits and consents in advance to such
jurisdiction in any action or proceeding commenced in such courts, hereby
waiving personal service of the summons and complaint, or other process or
papers issued therein, and agreeing that service of such summons and complaint,
or other process or papers, may be made by registered or certified mail, return
receipt requested, addressed to the undersigned at the address set forth below.
Should the Guarantor fail to appear or answer any summons, complaint, process or
papers so served within thirty (30) days after the mailing thereof, the
Guarantor shall be deemed in default and an order and/or judgment may be entered
against the Guarantor as demanded or prayed for in such summons, complaint,
process or papers.
The exclusive choice of forum set forth in this Guaranty shall not be
deemed to preclude the enforcement of any judgment obtained in such forum or the
taking of any action under the Loan Documents to enforce the same in any
appropriate jurisdiction.
18. PREJUDGMENT REMEDY WAIVER; OTHER WAIVERS. THE GUARANTOR ACKNOWLEDGES
THAT THIS GUARANTY IS PART OF A COMMERCIAL TRANSACTION WITHIN THE MEANING OF
CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES. THE GUARANTOR HEREBY WAIVES
THE GUARANTOR'S RIGHT TO NOTICE AND PRIOR COURT HEARING OR COURT ORDER UNDER
CONNECTICUT GENERAL STATUTES SECTIONS 52-278a ET. SEQ. AS AMENDED OR UNDER ANY
OTHER STATE OR FEDERAL LAW WITH RESPECT TO ANY AND ALL PREJUDGMENT REMEDIES THE
BANK MAY EMPLOY TO ENFORCE ITS RIGHTS AND REMEDIES HEREUNDER. MORE SPECIFICALLY,
THE GUARANTOR ACKNOWLEDGES THAT THE BANK'S ATTORNEY MAY, PURSUANT TO CONN. GEN.
STAT. ss.52-278F, ISSUE A WRIT FOR A PREJUDGMENT REMEDY WITHOUT SECURING A COURT
ORDER. THE GUARANTOR ACKNOWLEDGES AND RESERVES THE GUARANTOR'S RIGHT TO NOTICE
AND A HEARING SUBSEQUENT TO THE ISSUANCE OF A WRIT FOR PREJUDGMENT REMEDY AS
AFORESAID AND THE BANK ACKNOWLEDGES THE GUARANTOR'S RIGHT TO SAID HEARING
SUBSEQUENT TO THE ISSUANCE OF SAID WRIT.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
executed and delivered as of the date first appearing above.
GROVE PROPERTY TRUST
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇