GUARANTY AGREEMENT

 

 

credit to Borrower, Guarantor hereby guarantees to Administrative Agent and Lenders the prompt and full payment and performance of the indebtedness and obligations described below in this Guaranty (collectively called the “Guaranteed Obligations”), this Guaranty being upon the following terms and conditions:

 

1. Guarantees.

 

(a)                                Guaranty of Payment.

 

(1)                                Guarantor hereby jointly and severally, unconditionally and irrevocably guarantees to Administrative Agent and Lenders the punctual payment when due, whether by lapse of time, by acceleration of maturity, or otherwise, of all principal, interest (including interest accruing after the commencement of any bankruptcy or insolvency proceeding by or against Borrower, whether or not allowed in such proceeding), fees, late charges, prepayment fees, costs, expenses, required Borrower’s Deposits, advances made before recording of the Deed of Trust (if any), and other sums of money now or hereafter due and owing, or which Borrower is obligated to pay, pursuant to (A) the terms of the Not; the Loan Agreement, the Deed of Trust, the Environmental Agreement, any application, agreement, note or other document executed and delivered in connection with any Letter of Credit, any set aside letters, any Interest Rate Protection Agreement or any other Loan Documents, including any indemnifications contained in the Loan Documents, now or hereafter existing, and (B) all renewals, extensions, refinancings, modifications, supplements or amendments of such indebtedness, or any of the Loan Documents, or any part thereof (the indebtedness described in clauses (A) and (B) above in this Section 1(a~ffl is herein collectively called the “Indebtedness”). This Guaranty covers the Indebtedness, whether presently outstanding or arising subsequent to the date hereof, including all amounts advanced by Administrative Agent or Lenders in stages or installments. The guaranty of Guarantor as set forth in this Section 1(a~ is a continuing guaranty of payment and not a guaranty of collection.

 

(ii)                                Notwithstanding the foregoing, Guarantor’s obligations hereunder for repayment of the principal owing under the Loan shall in no event exceed the Guaranteed Amount (as defined below), plus interest accrued and unpaid on the entire Indebtedness from the date the same is due until paid in full, together with all costs, expenses and attorneys’ fees incurred by Administrative Agent or Lenders. Guarantor’s obligations shall not be affected, impaired, lessened or released by loans, credits or other financial accommodations now existing or hereafter advanced by Administrative Agent or Lenders to Borrower in excess of the Guaranteed Amount. In no event shall the Guaranteed Amount be reduced as a result of (A) Borrower’s payment of the Guaranteed Obligations, or (B) Administrative Agent’s foreclosure (or any credit bid in connection with any such foreclosure) or acceptance of a deed in lieu of foreclosure for the benefit of Lenders with respect to any collateral securing the Indebtedness. The agreement of Administrative Agent and Lenders to the foregoing limitation on Guarantor’s liability shall in no way be deemed to limit or restrict the right of Administrative Agent or Lenders to apply any sums paid by Guarantor to any portion of the Loan. As used herein, “Guaranteed Amount” means Eleven Million Two Hundred Fifty Thousand Dollars ($11,250,000).

 

 

(b)                               Guaranty of Performance. Guarantor also hereby unconditionally and irrevocably guarantees to Lender the timely performance of all other Obligations under all of the Loan Documents, including, without limiting the generality of the foregoing:

 

(i)                                  that the renovation of the Improvements will be completed in accordance with the Plans and other requirements of the Loan Agreement;

 

(ii)                               that Borrower will make all deposits required under the terms of the-Loan-Agreement and the-other Loan Documents as-and when required

 

(iii) that Borrower will promptly pay in full and discharge all taxes, assessments and other charges or levies imposed upon or against or with respect to the Property or the ownership, use, occupancy or enjoyment of any portion thereof, or any utility service thereto, as the same become due and payable including all real estate taxes assessed against the Property or any part thereof;

 

(iv) that Borrower will pay, at or before the times required by the Loan Documents, the premiums on all policies of insurance required to be maintained under the terms of the Loan Documents; and

 

(v)                              that Borrower will duly and punctually perform and observe all other terms, covenants and conditions of the Not; the Loan Agreement, the Deed of Trust, the Environmental Agreement, any Interest Rate Protection Agreement and all other Loan Documents.

 

Upon demand by Lender following the occurrence of a Default, Guarantor will cause all work to the Improvements to be completed in accordance with the Plans and other requirements of the Loan Agreement and will pay all bills in connection therewith. The liability and obligations under this Section 1(b) shall not be limited or restricted by the existence of, or any terms of, the guaranty of payment under Section 1(a).

 

2.                                          Absolute, Irrevocable and Unconditional Guaranty.

 

(a)                                This Guaranty is an absolute, irrevocable and unconditional guaranty of payment and performance. This Guaranty shall be effective as a waiver of, and Guarantor hereby expressly waives, any and all rights to which Guarantor may otherwise have been entitled under any suretyship laws in effect from time to time, including any right or privilege, whether existing under statute, at law or in equity, to require Administrative Agent or Lenders to take prior recourse or proceedings against any collateral, security or Person (hereinafter defined) whatsoever.

 

(b)                               As used herein, the term “Event of Default” means the occurrence of one or more of the following events, individually or collectively:

 

(i)                                  default by Borrower in payment or performance of the Guaranteed Obligations, or any part thereof, when such indebtedness or performance becomes due,

 

 

either by its terms or as the result of the exercise of any power to accelerate;

 

(ii) the failure of Guarantor to perform completely and satisfactorily the covenants, terms and conditions of any of the Guaranteed Obligations;

 

(iii) the death, dissolution or insolvency of Guarantor, or the appointment of a conservator for Guarantor, and such Guarantor is not replaced with another Guarantor satisfactory to Administrative Agent within forty-five (45) days after the occurrence of such event;

 

(iv) the inability of Guarantor to pay debts as they mature;

 

(v) an assignment by Guarantor for the benefit of creditors;

 

(vi) the institution of any proceeding by or against Guarantor in bankruptcy or for a reorganization or an arrangement with creditors, or for the appointment of a receiver, trustee or custodian for any of them or for any of theft respective properties;

 

(vii) the determination by Administrative Agent in good faith that a material adverse change has occurred in the financial condition of Guarantor;

 

(viii) the entry of a judgment against Guarantor in an amount greater than $500,000 and such judgment remains unstayed or unbonded for a period of thirty (30) days;

 

(ix) the issuance of a writ or order of attachment, levy or garnishment against Guarantor;

 

(x) the falsity in any material respect of, or any material omission in~ any representation made to Administrative Agent or any Lender by Guarantor; and/or

 

(xi) any transfer of assets of any Guarantor, without the prior consent of Administrative Agent (except for transfers of assets for estate planning purposes valued at less than $50,000 per year per Guarantor, customary political and charitable contributions, and transfers for which Guarantor receives consideration substantially equivalent to the fair market value of the transferred asset).

 

(c)                                Upon the occurrence of any Event of Default, the Guaranteed Obligations, for purposes of this Guaranty, shall be deemed immediately due and payable at the election of Administrative Agent, and Guarantor shall, on demand and without presentment, protest, notice of protest, further notice of nonpayment or of dishonor, default or nonperformance, or notice of acceleration or of intent to accelerate, or any other notice whatsoever, without any notice having been given to Guarantor prior to such demand of the acceptance by Administrative Agent and Lenders of this Guaranty, and without any notice having been given to Guarantor prior to such demand of the creating or incurring of such indebtedness, all such notices being hereby waived by Guarantor, pay the amount due to Administrative Agent and Lenders, and pay all damages

 

 

and all costs and expenses that may arise in consequence of such Event of Default (including all attorneys’ fees and expenses, investigation costs, court costs, and any and all other costs and expenses incurred by Administrative Agent or Lenders in connection with the collection and enforcement of the Note or any other Loan Document), whether or not suit is fled thereon, or whether at maturity or by acceleration, or whether before or after maturity, or whether in connection with bankruptcy, Solvency or appeal. It shall not be necessary for Administrative Agent or Lenders, in order to enforce such payment by Guarantor, first to institute judicial or non-judicial foreclosure or pursue or exhaust any rights or remedies against Borrower or others liable on such indebtedness, or to enforce any rights against any security that shall ever have been given to secure such indebtedness, or to join Borrower or any others liable for the payment of the Guaranteed Obligations or any part thereof in any action or proceeding to enforce this Guaranty, or to resort to any other means of obtaining payment or performance of the Guaranteed Obligations; provided,, however, that nothing herein contained shall prevent Administrative Agent or Lenders from judicially or non-judicially foreclosing the Deed of Trust or from exercising any other rights or remedies under the Loan Documents, and if such foreclosure or other right or remedy is availed of, only the net proceeds there from, after deduction of all charges and expenses of every kind and nature whatsoever, shall be applied in reduction of the amount due on the Note and Deed of Trust, and neither Administrative Agent nor Lenders shall be required to institute or prosecute proceedings to recover any deficiency as a condition of payment hereunder or enforcement hereof. At any sale of the Property or other collateral given for the Indebtedness or any part thereof, whether by foreclosure or otherwise, Administrative Agent or any Lender may at its discretion purchase all or any part of the Property or collateral so. sold or offered for sale for its own account and may, in payment of the amount bid therefore, deduct such amount from the balance due it pursuant to the terms of the Note, Deed of Trust and other Loan Documents. Collection action may be taken or demand may be made against Borrower or against all parties who have signed this Guaranty or any other guaranty covering all or any part of the Guaranteed Obligations, or against any one or more of them, separately or together, without impairing the rights of Administrative Agent or Lenders against any party hereto.

 

3. Certain Agreements and Waivers by Guarantor.

 

(a)                                Guarantor hereby agrees that neither the rights or remedies of Administrative Agent or Lenders nor Guarantor’s obligations under the terms of this Guaranty shall be released, diminished, impaired, reduced or affected by any one or more of the following events, actions, facts, or circumstances, and the liability of Guarantor under this Guaranty shall~ be absolute and unconditional irrespective of:

 

(i) any limitation of liability or recourse in any other Loan Document or arising under any law;

 

(ii) any and all applicable statutes of limitations, all of which Guarantor hereby waives to the fullest extent permitted by law as a defense to any action or proceeding that may be brought by Administrative Agent or Lenders against Guarantor;

 

 

(iii) any claim or defense that this Guaranty was made without consideration or is not supported by adequate consideration;

 

(iv) the taking or accepting of any other security or guaranty for, or

right of recourse with respect to, any or all of the Guaranteed Obligations;

 

(v) any homestead exemption or any other exemption under applicable law;

 

(vi) any release, surrender, abandonment, exchange, alteration, sale or other disposition, subordination, deterioration, waste, failure to protect or preserve, impairment or loss of, or any failure to create or perfect any lien or security interest with respect to, or any other dealings with, any collateral or security at any time existing or purported, believed or expected to exist in connection with any or all of the Guaranteed Obligations, including any impairment of Guarantor’s recourse against any Person or collateral;

 

(vii) whether express or by operation of law, any partial release of the liability of Guarantor hereunder, or if one or more other guaranties are now or hereafter obtained by Administrative Agent or Lenders covering all or any part of the Guaranteed Obligations, any complete or partial release of any one or more of such guarantors under any such other guaranty, or any complete or partial release of Borrower or any other party liable, directly or indirectly, for the payment or performance of any or all of the Guaranteed Obligations;

 

(viii) the death of Borrower or the appointment of a conservator for Borrower;

 

(ix) the insolvency, bankruptcy, dissolution, liquidation, termination, receivership, reorganization, merger, consolidation, change of form, structure or ownership, sale of all assets, or lack of corporate, partnership or other power of Borrower or any other party at any time liable for the payment of any or all of the Guaranteed Obligations;

 

(x) either with or without notice to or consent of Guarantor: any renewal, extension, modification, supplement, subordination or rearrangement of the terms of any or all of the Guaranteed Obligations and/or any of the Loan Documents, including material alterations of the terms of payment (including changes in maturity date(s) and interest rate(s)) or any other terms thereof, or any waiver, termination, or release of, or consent to depart from, any of the Loan Documents or any other guaranty of any or all of the Guaranteed Obligations, or any adjustment, indulgence, forbearance, or compromise that may be granted from time to time by Administrative Agent or Lenders to Borrower, Guarantor, and/or any other Person at any time liable for the payment or performance of any or all of the Guaranteed Obligations;

 

(xi) any neglect, lack of diligence, delay, omission, failure, or refusal of

 

 

Administrative Agent or Lenders to take or prosecute (or in taking or prosecuting) any action for the collection or enforcement of any of the Guaranteed Obligations, or to foreclose or take or prosecute any action to foreclose (or in foreclosing or taking or prosecuting any action to foreclose) upon any security therefore, or to exercise (or in exercising) any other right or power with respect to any security therefore, or to take or prosecute (or in taking or prosecuting) any action in connection with any Loan Document, or any failure to sell or otherwise dispose of in a commercially reasonable manner collateral any collateral securing any or all of the guaranty obligations;     

 

(xii) any failure of Administrative Agent or Lenders to notify Guarantor of any creation, renewal, extension, rearrangement, modification, supplement, subordination, or assignment of the Guaranteed Obligations or any part thereof, or of any Loan Document, or of any release of or change in any security, or of any other action taken or refrained from being taken by Administrative Agent or Lenders against Borrower or any security or other recourse, or of any new agreement between or among Administrative Agent and/or Lenders and Borrower, it being understood that neither Administrative Agent nor any Lender shall be required to give Guarantor any notice of any kind under any circumstances with respect to or in connection with the Guaranteed Obligations, any and all rights to notice Guarantor may have otherwise had being hereby waived by Guarantor, and Guarantor shall be responsible for obtaining for itself information regarding Borrower, including any changes in the business or financial condition of Borrower, and Guarantor acknowledges and agrees that Administrative Agent and Lenders shall have no duty to notify Guarantor of any information which Administrative Agent or Lenders may have concerning Borrower;

 

(xiii) whether for any reason Administrative Agent or any Lender is required to refund any payment by Borrower to any other party liable for the payment or performance of any or all of the Guaranteed Obligations, or to pay the amount thereof to someone else;

 

(xiv) the making of advances by Administrative Agent or Lenders to protect their interest in the Property, to preserve the value of the Property or to facilitate performance of any term or covenant contained in any of the Loan Documents;

 

(xv) the existence of any claim, counterclaim, set-off or other right that Guarantor may at any time have against Borrower, Administrative Agent or any Lender or any other Person, whether or not arising in connection with this Guaranty, the Note, the Loan Agreement, or any other Loan Document;

 

(xvi) the unenforceability of all or any part of the Guaranteed Obligations against Borrower, whether because the Guaranteed Obligations exceed the amount permitted by law or violate any usury law, or because the act of creating the Guaranteed Obligations, or any part thereof is ultra vires , or because the officers or Persons creating the Guaranteed Obligations acted outside the scope of their authority, or because of a lack of validity or enforceability of or defect or deficiency in any of the Loan Documents, or because Borrower has any valid defense, claim or offset with respect thereto, or because Borrower’s obligation ceases to exist by operation of law, or because of any other reason

 

 

or circumstance, it being agreed that Guarantor shall remain liable on this Guaranty regardless of whether Borrower or any other Person be found not liable for the Guaranteed Obligations, or any part thereof, for any reason (and regardless of any joinder of Borrower or any other party in any action to obtain payment or performance of any or all of the Guaranteed Obligations);

 

(xvii) any order, ruling or plan of reorganization emanating from proceedings under Title 11 of the United States Code with respect to Borrower or any other Person, including any extension, reduction, composition, or other alteration of the Guaranteed Obligations, whether or not consented to by Administrative Agent or any Lender; (xviii) any early termination of any of the Guaranteed Obligations;

 

(xix) Administrative Agent’s enforcement or forbearance from enforcement of the Guaranteed Obligations on a net or gross basis;

 

(xx) any invalidity, irregularity or unenforceability in whole or in part (including with respect to any netting provision) of any Interest Rate Protection Agreement or any confirmation, instrument or agreement required thereunder or related thereto, or any transaction entered into thereunder, or any limitation on the liability of Borrower thereunder or any limitation on the method or terms of payment thereunder which may now or hereafter be caused or imposed in any manner whatsoever; or

 

(xxi) any other condition, event, omission, action or inaction that would in the absence of this Section 3(a) result in the release or discharge of Guarantor from the performance or observance of any obligation, covenant or agreement contained in this Guaranty or any other agreement.

 

(b) In the event any payment by Borrower or any other Person to Administrative Agent or any Lender is held to constitute a preference, fraudulent transfer or other voidable payment under any bankruptcy, insolvency or similar law, or if for any other reason Administrative Agent or any Lender is required to refund such payment or pay the amount thereof to any other party, such payment by Borrower or any other party to Administrative Agent or such Lender shall not constitute a release of Guarantor from any liability hereunder, and this Guaranty shall continue to be effective or shall be reinstated (notwithstanding any prior release, surrender or discharge by Administrative Agent or any Lender of this Guaranty or of Guarantor), as the case maybe, with respect to, and this Guaranty shall apply to, any and all amounts so refunded by Administrative Agent or any Lender or paid by Administrative Agent or any Lender to another Person (which amounts shall constitute part of the Guaranteed Obligations), and any interest paid by Administrative Agent or any Lender and any attorneys’ fees, costs and expenses paid or incurred by Administrative Agent or any Lender in connection with any such event. It is the intent of Guarantor, Administrative Agent and Lenders that the obligations and liabilities of Guarantor hereunder are absolute and unconditional under any and all circumstances and that until the Guaranteed Obligations are fully and finally paid, and not subject to refund or disgorgement, the obligations and liabilities of Guarantor hereunder shall not be discharged or released, in whole or in part, by any act or occurrence that

 

 

might, but for the provisions of this Guaranty, be deemed a legal or equitable discharge or release of a guarantor. Administrative Agent shall be entitled to continue to hold this Guaranty in its possession for the benefit of Lenders for a period of one year from the date the Guaranteed Obligations are paid in full and for so long thereafter as may be necessary to enforce any obligation of Guarantor hereunder and/or to exercise any right or remedy of Administrative Agent or Lenders hereunder.

 

(c)  If acceleration of the time for payment of any amount payable by Borrower under the Note, the Loan Agreement, or any other Loan Document is stayed or delayed by any law or tribunal, all such amounts shall nonetheless be payable by Guarantor on demand by Administrative Agent or Lenders.

 

(d)                                   Guarantor further waives: (i) any defense to the recovery by Administrative Agent or Lenders against Guarantor of any deficiency or otherwise to the enforcement of this Guaranty or any security for this Guaranty based upon the election by Administrative Agent or Lenders of any remedy against Guarantor or Borrower, including the defense to enforcement of this Guaranty (the so-called “Gradsky” defense) which, absent this waiver, Guarantor would have by virtue of an election by Administrative Agent or Lenders to conduct a non-judicial foreclosure sale (also known as a “trustee’s sale”) of any real property security for the Indebtedness, it being understood by Guarantor that any such non-judicial foreclosure sale will destroy, by operation of California Code of Civil Procedure (“CCP”) Section 580d, all rights of any party to a deficiency judgment against Borrower and, as a consequence, will destroy all rights that Guarantor would otherwise have (including the right of subrogation, the right of reimbursement, and the right of contribution) to proceed against Borrower; (ii) any defense or benefits that may be derived from CCP Sections 580a, 580b, 580d or 726, or comparable provisions of the laws of any other jurisdiction and all other anti-deficiency and one form of action defenses under the laws of California and any other jurisdiction; and (iii) any right to a fair value hearing under CCP Section 580a, or any other similar law, to determine the size of any deficiency owing (for which Guarantor would be liable -hereunder) following a non-judicial foreclosure sale.

 

(e)    Without limiting the foregoing or anything else contained in this Guaranty, Guarantor waives all rights and defenses that Guarantor may have because the Guaranteed Obligations are secured by real property. This means, among other things:

 

(i)  That Administrative Agent or Lenders may collect from Guarantor without first foreclosing on any real or personal property collateral pledged by Borrower; -and

 

(ii)  If Administrative Agent, for the benefit of Lenders, forecloses on any real property collateral pledged by Borrower: (A) the amount of the Guaranteed Obligations may be reduced only by the price for which that collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price; and

 

 

(B) Administrative Agent and/or Lenders may collect from Guarantor even if Administrative Agent, by foreclosing on the real property collateral for Lenders’ benefit, has destroyed any right Guarantor may have to collect from Borrower.

 

This is an unconditional and irrevocable waiver of any rights and defenses that Guarantor may have because the Guaranteed Obligations are secured by real property. These rights and defenses include, but are not limited to, any rights or defenses based upon Sections 580a, 580b, 580d, or 726 of the CCP. -

 

(f)                                        remedies by Administrative Agent or Lenders, even though that election of remedies, such as a non-judicial foreclosure with respect to security for a guaranteed obligation, has destroyed Guarantor’s rights of subrogation and reimbursement against Borrower by operation of Section. 580d of the CCP or otherwise.

 

(g)                         Guarantor waives Guarantor’s rights of subrogation and reimbursement, including (i) any defenses Guarantor may have by reason of an election of remedies by Administrative Agent or Lenders, and (ii) any rights or defenses Guarantor may have by reason of protection afforded to Borrower with respect to the Guaranteed Obligations pursuant to the anti-deficiency or other laws of California limiting or discharging Borrower’s obligations, including Sections 580a, 580b, 580d or 726 of the CCP.

 

(h)                         Guarantor waives any rights, defenses and benefits that may be derived from Sections 2787 to 2855, inclusive, of the California Civil Code or comparable provisions of the laws of any other jurisdiction and further waives all other suretyship defenses Guarantor would otherwise have under the laws of California or any other jurisdiction.

 

(i)                             No provision or waiver in this Guaranty shall be construed as limiting the generality of any other provision or waiver contained in this Guaranty. All of the waivers contained herein are irrevocable and unconditional and are intentionally and freely made by Guarantor.

 

4.                                               Subordination. ii for any reason whatsoever, Borrower is now or hereafter becomes indebted to Guarantor:

 

(a)                          such indebtedness and all interest thereon and all liens, security interests and rights now or hereafter existing with respect to property of