Exhibit 10.2

 

GUARANTY

 

This GUARANTY (this “Guaranty”), dated as of June 22, 2011, made by BRT REALTY
TRUST, a Massachusetts business trust (the “Company”), in favor of CAPITAL ONE,
NATIONAL ASSOCIATION, acting as agent for itself and Lenders.  Capitalized terms
not otherwise defined herein that are defined in the Loan Agreement referred to
below shall, when used herein, have the meanings specified in the Loan
Agreement.

 

PRELIMINARY STATEMENTS:

 

BRT RLOC LLC (the “Borrower”), the lenders from time to time party thereto (the
“Lenders”), Capital One, National Association, as agent for Lenders (in such
capacity, the “Agent”), BRT Realty Trust, as servicer, Capital One, National
Association, as the custodian, and Company have entered into a Loan and Security
Agreement, dated as of the date hereof (as amended, supplemented or otherwise
modified from time to time, the “Loan Agreement”), pursuant to which Lenders
will make Loans to Borrower, from time to time, secured by certain assets of
Borrower.

 

As one of the conditions to making Loans and other financial accommodations
available to Borrower under the Loan Agreement, Lenders have required that
Company guaranty the payment and performance of the obligations of Borrower to
Agent and Lenders.

 

NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Company hereby agrees as follows:

 

SECTION 1.                 Unconditional Undertaking; Enforcement.  (a)  Company
hereby unconditionally and irrevocably undertakes and agrees with and for the
benefit of Agent and Lenders, in the event that Borrower shall fail in any
manner whatsoever to pay, perform or observe any of the terms, covenants,
conditions, agreements and undertakings to be paid, performed or observed by
Borrower under the Loan Agreement or any other Transaction Document in
accordance with the terms thereof (including, without limitation, all
obligations of Borrower in respect of the payment of principal and interest on
the Loans and any other amounts and indemnities thereunder) (all such terms,
covenants, conditions, agreements and undertakings on the part of Borrower to be
paid, performed or observed being collectively called the “Guaranteed
Obligations”), when the same shall be required to be paid, performed or observed
under the Loan Agreement or such other Transaction Document (subject to any
applicable notice and/or grace period with respect to such Guaranteed
Obligations set forth in the Loan Agreement or other Transaction Document), then
Company shall guarantee and ensure that Borrower, Company or some other Person
duly and punctually pays, performs and observes each Guaranteed Obligation.  It
shall not be a condition to the accrual of the obligation of Company hereunder
to guarantee and ensure the performance or observance of any of the Guaranteed
Obligations that Agent shall have first made any request of or demand upon or
given any notice to Company or any other person or have instituted any action or
proceeding against Company or any other Person in respect thereof.  For the sake
of clarity, it is expressly acknowledged that the Guaranteed Obligations include
any recourse for non-payment or late payment of the Loans due solely to credit
reasons with respect to the related Underlying Customer.

 

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(b)           Agent may proceed to enforce the obligations of Borrower under
this Section 1 after Borrower’s failure to perform such obligations in
accordance with the terms of the Loan Agreement or such other Transaction
Document without first pursuing or exhausting any right or remedy which Agent
may have against Borrower or any other Person or with respect to any assets of
Borrower or such Person.

 

SECTION 2.                 Obligation Absolute.  Company undertakes and agrees
with and for the benefit of Agent and Lenders to ensure the performance of all
Guaranteed Obligations strictly in accordance with the terms of the Loan
Agreement and the other Transaction Documents. The obligations of Company under
this Guaranty are independent of the Guaranteed Obligations, and a separate
action or actions may be brought and prosecuted against Company to enforce this
Guaranty, irrespective of whether any action is brought against Borrower or
whether Borrower is joined in any such action or actions.  The obligations of
Company under this Guaranty shall be absolute and unconditional irrespective of:

 

(i)            any lack of validity or enforceability, as against Borrower, of
the Loan Agreement or any other Transaction Document;

 

(ii)           any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations, or any other amendment
or waiver of or any consent to departure from the Loan Agreement or any other
Transaction Document, including, without limitation, any increase in, or
addition to, the Guaranteed Obligations;

 

(iii)          any taking, exchange, release or non-perfection of any
collateral, or any taking, release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Guaranteed Obligations;

 

(iv)          any manner of application of collateral, or proceeds thereof, to
all or any of the Guaranteed Obligations, or any manner of sale or other
disposition of any collateral for all or any of the Guaranteed Obligations or
any other assets of Borrower;

 

(v)           any change, restructuring or termination of the structure or
existence of Borrower;

 

(vi)          the insolvency, bankruptcy or reorganization of Borrower, or any
stay or discharge of any of the Guaranteed Obligations in connection therewith;

 

(vii)         the credit quality, non-payment or late payment of the Loans;

 

(viii)        Agent’s election, in any proceeding instituted under Chapter 11 of
Title 11 of the United States Code (11 U.S.C. Section 101 et seq.), as amended
(the “Bankruptcy Code”) of the application of Section 1111(b)(2) of the
Bankruptcy Code;

 

(ix)           any borrowing or grant of a lien or security interest by Borrower
or any guarantor of all or part of the Guaranteed Obligations, as
debtor-in-possession, under Section 364 of the Bankruptcy Code;

 

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(x)            the disallowance, under Section 502 of the Bankruptcy Code, of
all or any portion of Agent’s or any Lender’s claims for repayment of the
Guaranteed Obligations;

 

(xi)           Agent’s or any Lender’s inability to enforce the Guaranteed
Obligations of Borrower as a result of the automatic stay provisions under
Section 362 of the Bankruptcy Code; or

 

(xii)          any other circumstance which might otherwise constitute a defense
available to, or a discharge of Borrower.

 

This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment or performance of any of the Guaranteed
Obligations is rescinded or must otherwise be returned by Agent upon the
insolvency, bankruptcy or reorganization of Borrower or otherwise, all as though
such payment had not been made.

 

SECTION 3.                 Waivers.  Company hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Guaranteed Obligations and this Guaranty and any requirement that Agent protect,
secure, perfect or insure any security interest or lien or any property subject
thereto or exhaust any right or take any action against Borrower or any other
Person or any collateral.  Company consents and agrees that neither Agent nor
any Lender shall be under any obligation to marshal any assets in favor of any
guarantor or against or in payment of any or all of the Guaranteed Obligations.

 

SECTION 4.                 Subrogation.  Company will not exercise any rights
that it may acquire by reason of any payment or performance hereunder, whether
by way of subrogation, reimbursement or otherwise until all Guaranteed
Obligations have been paid in full in cash and any commitments to provide
financing under the Transaction Documents has terminated.

 

SECTION 5.                 Financial Condition of Borrower.  Company hereby
assumes responsibility for keeping itself informed of the financial condition of
Borrower, and any and all endorsers and other guarantors of all or any part of
the Guaranteed Obligations and of all other circumstances bearing upon the risk
of nonpayment of the Guaranteed Obligations or any part thereof that diligent
inquiry would reveal, and Company hereby agrees that neither Agent nor any
Lender shall have any duty to advise Company or any other guarantor of
information known to Agent or any Lender regarding such condition or any such
circumstances.  Company hereby acknowledges familiarity with Borrower’s
financial condition and that it has not relied on any statements by Agent or any
Lender in obtaining such information.  In the event Agent or any Lender, in its
sole discretion, undertakes at any time or from time to time to provide any such
information to Company or any other guarantor, neither Agent nor any Lender
shall be under any obligation (i) to undertake any investigation with respect
thereto, (ii) to disclose any information which, pursuant to accepted or
reasonable commercial finance practices, Agent or such Lender wishes to maintain
confidential or (iii) to make any other or future disclosures of such
information, or any other information, to Company or any guarantor.

 

SECTION 6.                 Representations and Warranties.  Company hereby
represents and warrants as follows:

 

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(a)           Company is a business trust duly organized and in existence under
the laws of the Commonwealth of Massachusetts.

 

(b)           The execution, delivery and performance by Company of this
Guaranty are within Company’s limited liability company powers and have been
duly authorized by all necessary corporate action and do not contravene
(i) Company’s certificate of formation, declaration of trust or other
constituent documents or (ii) any law or contractual restriction binding on or
affecting Company.

 

(c)           No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required for
the due execution, delivery and performance by Company of this Guaranty or any
other document or instrument to be delivered in connection herewith.

 

(d)           This Guaranty is the legal, valid and binding obligation of
Company enforceable against Company in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors’ rights generally and by
general principles of equity, regardless of whether enforceability is considered
in a proceeding in equity or at law.

 

(e)           To its knowledge there are no actions, suits or proceedings
pending, or threatened in a writing received by Company, affecting Company or
any subsidiaries before any court, governmental agency or arbitrator, which may
materially adversely affect the ability of Company to perform its obligations
under this Guaranty, or which purports to affect the legality, validity or
enforceability of this Guaranty.

 

(f)            There are no conditions precedent to the effectiveness of this
Guaranty.

 

SECTION 7.                 Covenants.  Company agrees that, until the Collection
Date, Company will, unless Agent shall otherwise consent in writing, perform and
observe each covenant and undertaking applicable to it in the Loan Agreement.

 

SECTION 8.                 Amendments, etc.  No amendment or waiver of any
provision of this Guaranty, and no consent to any departure by Company herefrom,
shall in any event be effective unless the same shall be in writing and signed
by Agent and Company, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.

 

SECTION 9.                 Expenses.  Company will upon demand pay to Agent and
Lenders the amount of any and all reasonable expenses, including reasonable
attorneys’ fees and expenses, which they may incur in connection with the
exercise or enforcement of any of their respective rights or interests
hereunder.

 

SECTION 10.               Addresses for Notices.  All notices and other
communications provided for hereunder shall, unless otherwise stated herein, be
in writing (including communication by facsimile copy) and mailed, transmitted
or delivered, as to each party hereto, at its address set forth under its name
on the signature pages hereof or at such other address (including, without
limitation, an electronic mail address) as shall be designated by such party in
a written notice to

 

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the other parties hereto.  All such notices and communications shall be
effective, upon receipt, or in the case of (i) notice by mail, five (5) days
after being deposited in the United States mails, first class postage prepaid,
or (ii) notice by facsimile copy, when verbal communication of receipt is
obtained.

 

SECTION 11.               No Waiver; Remedies.  No failure on the part of Agent
or any Lender 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.  The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.

 

SECTION 12.               Continuing Agreement.  This Guaranty is a continuing
agreement and shall (i) remain in full force and effect until the later of
(x) the payment in full of the Guaranteed Obligations and all other amounts
payable under this Guaranty and (y) one year and a day after the Collection
Date, (ii) be binding upon Company, its successors and assigns, and (iii) inure
to the benefit of, and be enforceable by, Agent, Lenders and their respective
successors, transferees and assigns; provided, however, that Company may not
assign, transfer or delegate any of its rights or obligations under this
Guaranty without the prior written consent of Agent and any such attempt shall
be null and void.

 

SECTION 13.               GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF
JURY TRIAL.  (a) THIS GUARANTY, INCLUDING THE RIGHTS AND DUTIES OF THE PARTIES
HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE
GENERAL OBLIGATIONS LAWS BUT OTHERWISE WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES).

 

(a)           EACH OF THE PARTIES HERETO HEREBY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE CITY OF NEW YORK, NASSAU
COUNTY OR SUFFOLK COUNTY AND THE UNITED STATES DISTRICT COURT SITTING THEREIN
FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY.  EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY
SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING IN
THIS SECTION SHALL AFFECT THE RIGHT OF ANY PARTY TO BRING ANY ACTION OR
PROCEEDING AGAINST ANY OTHER PARTY OR ITS RESPECTIVE PROPERTIES IN THE COURTS OF
OTHER JURISDICTIONS.

 

(b)           EACH OF THE PARTIES HERETO HEREBY EXPRESSLY WAIVES ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER
THIS GUARANTY, ANY OTHER TRANSACTION DOCUMENT OR UNDER ANY AMENDMENT, INSTRUMENT
OR DOCUMENT DELIVERED OR WHICH MAY BE IN THE FUTURE DELIVERED IN CONNECTION

 

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HEREWITH OR ARISING FROM ANY BANKING OR OTHER RELATIONSHIP EXISTING IN
CONNECTION WITH THIS GUARANTY OR ANY OTHER TRANSACTION DOCUMENT AND AGREES THAT
ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT A JURY
TRIAL.

 

(continued on following page)

 

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IN WITNESS WHEREOF, Company has caused this Guaranty to be duly executed and
delivered by its officer thereunto duly authorized as of the date first above
written.

 

 

BRT REALTY TRUST

 

 

 

 

 

By:

/s/ Mark H. Lundy

 

 

Name:

Mark H. Lundy

 

 

Title:

Senior Vice President

 

 

 

 

 

60 Cutter Mill Road

 

Great Neck, N.Y. 11021

 

Attention: David Kalish

 

Facsimile No.: (516) 466-3132

 

 

Accepted as of the date hereof:

 

 

 

CAPITAL ONE, NATIONAL ASSOCIATION, as Agent

 

 

 

 

 

By:

/s/ Paul Kesicki

 

 

Name:

Paul Kesicki

 

 

Title:

Vice President

 

 

275 Broadhollow Road

Melville, New York 11747

Facsimile No.: (631) 531-2798

Telephone No.: (631) 531-2172

 

SIGNATURE PAGE TO
GUARANTY

 

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