Exhibit 10.2
AMENDED AND RESTATED GUARANTY AGREEMENT
This AMENDED AND RESTATED GUARANTY AGREEMENT amends, replaces and supersedes the
original Guaranty Agreement dated June 12, 2009. In order to induce TCF NATIONAL
BANK, a national banking corporation (the “Bank”), to make certain loans in the
amount of: (a) Thirteen Million Five Hundred Sixty Thousand Eight Hundred Twenty
and 23/100 Dollars ($13,560,820.23); and (b) Twelve Million Dollars Two Hundred
Fifty Thousand and 00/100 Dollars ($12,250,000.00) (the “Loans”); to ALC THREE,
LLC, a Wisconsin limited liability company (the “Borrower”), pursuant to an
Amended and Restated Loan Agreement dated September 30, 2010 between the
Borrower and the Bank, (the “Loan Agreement”), the obligation for repayment of
which Loans are evidenced by two (2) separate promissory notes of even date
herewith from the Borrower, as maker, to the Bank, as holder (refereed to herein
together with any and all amendments, extensions, modifications, substitutions,
replacements, refinancings, conversions or renewals thereof as the “Notes”),
which is secured by certain Collateral Documents (as defined in the Loan
Agreement) (the Loan Agreement, the Notes and the Collateral Documents are
referred to herein collectively as the “Loan Documents”); and in consideration
of all of the benefits which the undersigned guarantor will receive from the
making of the Loans, the Borrower’s parent company, ASSISTED LIVING CONCEPTS,
INC., a Nevada corporation (the “Guarantor”), hereby unconditionally, directly,
irrevocably, and absolutely covenants and agrees with the Bank, its successors
and assigns, as follows (all terms used herein shall, to the extent not defined
herein, have the meanings ascribed thereto in the Loan Agreement):
ARTICLE I
REPRESENTATIONS AND WARRANTIES OF GUARANTOR
1.1. The execution and delivery and compliance with the terms hereof will not
contravene or constitute a default under any indenture, commitment, agreement or
other instrument to which the Guarantor is a party or by which it is bound or
any existing law, rule, regulation, judgment, order or decree to which it is
subject.
1.2. The making and disbursing of the Loans, evidenced by the Notes will be of
substantial economic benefit to the Guarantor.
1.3. The making and disbursing of all or any part of the Loans evidenced by the
Notes shall constitute conclusive evidence of the reliance hereon by the Bank.

 

 

--------------------------------------------------------------------------------

 

ARTICLE II
GUARANTY
2.1. The Guarantor hereby unconditionally and irrevocably guaranties to the Bank
the performance and payment of:
(a) the Notes;
(b) interest and charges and the amount of any payments made to the Bank or
another by or on behalf of the Borrower pursuant to the Notes, which are
recovered from the Bank by a trustee, receiver, creditor or other party pursuant
to applicable federal or state law;
(c) all costs, expenses and reasonable attorneys’ fees at any time paid or
incurred in attempting to: (i) collect the Notes; (ii) enforce this Guaranty; or
(iii) realize upon any Collateral under the Collateral Documents, including
those costs, expenses and reasonable attorney fees incurred incident to any
action or proceeding brought pursuant to the United States Bankruptcy Code;
(d) the complete and timely performance by the Borrower of all of the Borrower’s
obligations and duties under all Loan Documents, including but not limited to
the obligation to maintain insurance as required by the Loan Documents; and
(e) complete and timely payment to the Bank of all damages payable to the Bank
under the Loan Documents resulting from any of the following:
(1) any act of fraud in connection with the transactions contemplated by the
Loan Documents;
(2) the negligence or fraudulent acts or omissions of the Borrower or its
officers, directors or agents;
(3) any misrepresentation of any fact or circumstance or breach of warranty
related to the Collateral under the Collateral Documents by the Borrower or the
Guarantor, or any constituent or sub-constituent (including, without limitation,
a subsidiary, parent, shareholder, partner, principal or trustee) of any of the
foregoing;
(4) the commission, or suffering to exist, of any waste with respect to the
Collateral under the Collateral Documents; and/or
(5) misapplication of (i) the proceeds of the Notes, (ii) any revenues from the
Collateral under the Collateral Documents by failing to apply the same solely to
the expenses of the Collateral after an Event of Default under any Loan
Document, or after the occurrence and during the continuance of any event which
with the giving of notice and lapse of time would constitute an Event of Default
under any Loan Document, (iii) insurance proceeds or condemnation awards, and/or
(iv) any income which was required by the Collateral Documents to be paid or
applied in a specified manner, arising, in any such case, with respect to the
Collateral under the Collateral Documents.

 

2

--------------------------------------------------------------------------------

 

All of the foregoing listed as (a) through (e) above are hereinafter referred to
collectively as “Guaranteed Obligations”.
2.2. The obligations of the Guarantor under this Guaranty Agreement shall be
absolute and unconditional and shall remain in full force and effect until the
Guaranteed Obligations have been satisfied in full, whether or not the
Guaranteed Obligations are enforceable against the Borrower. The obligations of
the Guarantor hereunder shall not be affected, modified or impaired upon the
happening from time to time of any event, including without limitation any of
the following, whether or not such event shall occur with notice to, or the
consent of, the Guarantor:
(a) the waiver, surrender, compromise, settlement, discharge, release or
termination of any or all of the obligations, covenants or agreements of the
Borrower contained in the Loan Documents or of payment, performance or
observance thereof;
(b) the failure to give notice to the Guarantor of the occurrence of a default
under this Guaranty Agreement or of an Event of Default under any of the Loan
Documents;
(c) the transfer, assignment, or mortgaging or the purported transfer,
assignment or mortgaging of all or any part of the interest of the Borrower in
the Collateral encumbered by any of the Collateral Documents or any failure of
title with respect to the Borrower’s interest in the Property or the invalidity,
unenforceability or termination of any of the Collateral Documents;
(d) the extension of the time for payment of any principal of, premium, if any,
or interest owing or payable on the Notes or of the time of performance of any
obligation, covenant or agreement under or arising out of any of the Loan
Documents or any extension or renewal of either thereof;
(e) the modification or amendment (whether material or otherwise) of any
obligation, covenant or agreement set forth in any Loan Document;
(f) the taking, or failure to take, any action referred to in any Loan Document,
or of any action under this Guaranty Agreement;
(g) any failure, omission, delay or lack of diligence on the part of the
Borrower, the Bank or any holder of either of the Notes (a “Noteholder”) in the
enforcement, assertion or exercise of any right, power or remedy conferred on
any of them under the Loan Documents, or conferred on the Bank or the Noteholder
in this Guaranty Agreement, or the inability of the Bank or the Noteholder to
enforce any provision of the Loan Documents or this Guaranty Agreement for any
other reason, or any other act or omission on the part of the Bank or the
Noteholder;

 

3

--------------------------------------------------------------------------------

 

(h) the dissolution, sale or other disposition of all or substantially all the
assets, liquidation, the marshalling of assets and liabilities, receivership,
insolvency, assignment for the benefit of creditors, bankruptcy, reorganization,
arrangement, adjustment, composition or other similar proceedings affecting the
Borrower, the Guarantor or any of the assets of any of them, or any allegation
or contest of the validity of this Guaranty Agreement or any other Collateral
Document or the disaffirmance of any Collateral Document in any such proceeding;
(i) the release of any other person in any way liable for the Guaranteed
Obligations;
(j) to the extent permitted by law, any event or action that would in the
absence of this clause, result in the release or discharge by operation of law
of the Guarantor from the performance or observance of any obligation, covenant
or agreement contained in this Guaranty Agreement; or
(k) the default or failure of the Guarantor fully to perform any of its
obligations set forth in this Guaranty Agreement.
2.3. The Guarantor waives notice of the issuance of the Notes and notice from
the Bank or any Noteholder of their acceptance of, and reliance on, this
Guaranty Agreement. The Guarantor also waives presentment, demand for payment,
protest and notice of nonpayment and relinquishes all rights and remedies
accorded by applicable law to the Guarantor (except that the Guarantor does not
waive the right of subrogation to the rights of the Bank upon payment of the
Guaranteed Obligations).
2.4. No set-off, counterclaim, reduction or diminution of any obligation or any
defense of any kind or nature (other than performance by the Guarantor of his
obligations hereunder) which the Borrower may have or assert against the Bank or
the Noteholder shall be available hereunder to the Guarantor against the Bank or
such Noteholder.
2.5. The Guarantor covenants that during the term of this Guaranty Agreement it
shall maintain an agent in Wisconsin on whom service of process may be made in
connection with any actions against the Guarantor arising under this Guaranty.
ARTICLE III
DEFAULT AND REMEDIES
3.1. The Bank or any Noteholder shall have the right, power and authority to do
all things deemed necessary or advisable to enforce the provisions of this
Guaranty Agreement and protect their interest in the Collateral Documents and,
in the event of default in the timely or complete performance or payment of any
Guaranteed Obligation, the Bank or the Noteholder may institute or appear in
such appropriate judicial proceedings as the Bank or such Noteholder shall deem
most effectual to protect and enforce any of their rights hereunder, whether for
the specific enforcement of any covenant or agreement in this Guaranty Agreement
or in aid of the exercise of any power granted herein or in any Collateral
Document, or to enforce any other proper remedy. Without limiting the generality
of the foregoing, in the event of a default in payment of any Guaranteed
Obligation when due, the Bank or the Noteholder may institute a judicial
proceeding for the collection of the sums so due and unpaid, and may prosecute
such proceeding to judgment or final decree, and may enforce the same against
the Guarantor and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Guarantor, wherever situated.

 

4

--------------------------------------------------------------------------------

 

3.2. No remedy conferred upon or reserved to the Bank or any Noteholder herein
is intended to be exclusive of any other available remedy or remedies, but each
and every such remedy shall be cumulative and shall be in addition to every
other remedy given under this Guaranty Agreement or now or hereafter existing at
law or in equity.
3.3. Each and every default in the payment or performance of any Guaranteed
Obligation shall give rise to a separate cause of action hereunder, and separate
suits may be brought hereunder as each cause of action arises. In the event of
such a default, the Bank or any Noteholder shall have the right to proceed first
and directly against the Guarantor under this Guaranty Agreement without
proceeding against any other person, without exhausting any other remedies which
it may have and without resorting to any other security held by the Bank or the
Noteholder.
3.4. The Guarantor agrees to pay all costs, expenses and fees, including all
reasonable attorneys’ fees, which may be incurred by the Bank or any Noteholder
in enforcing or attempting to enforce this Guaranty Agreement or protecting the
rights of the Bank or the Noteholder hereunder following any default on the part
of the Guarantor hereunder, whether the same shall be enforced by suit or
otherwise and unconditionally waives, in connection with any suit, action or
proceeding brought by the Bank or any Noteholder under this Guaranty Agreement,
any and every right the Guarantor may have to (i) injunctive relief, (ii) a
trial by jury, (iii) interpose any counterclaim therein and (iv) have the same
consolidated with any other or separate suit, action or proceeding.
3.5. No delay or omission to exercise any right or power accruing upon any
default, omission or failure of performance hereunder shall impair any such
right or power or shall be construed to be a waiver thereof, but any such right
or power may be exercised from time to time and as often as may be deemed
expedient.
3.6. This Guaranty Agreement is entered into by the Guarantor with the Bank for
the benefit of the Bank and any Noteholder each of whom shall be entitled to
enforce performance and observance of this Guaranty Agreement.
ARTICLE IV
GENERAL
4.1. The obligations of the Guarantor under this Guaranty Agreement shall arise
absolutely and unconditionally upon the execution, issue and delivery of the
Notes. This Guaranty Agreement is separate and independent of the Loan
Documents. Any modification, limitation or discharge of the Borrower’s liability
under any of the Collateral Documents arising out of or by virtue of any
bankruptcy, arrangement, reorganization or similar proceeding shall not modify,
limit, discharge or otherwise affect the liability of the Guarantor under this
Guaranty Agreement in any manner whatsoever.

 

5

--------------------------------------------------------------------------------

 

4.2. All moneys recovered by the Bank or any Noteholder pursuant to this
Guaranty Agreement shall be applied to the payment of the Guaranteed
Obligations. This Guaranty Agreement is entered into by the Guarantor for the
benefit of the Bank and any Noteholder, but may be enforced only in accordance
with the provisions of this Guaranty Agreement. This Guaranty Agreement shall
not be deemed to create any right in, or to be in whole or in part for the
benefit of, any person other than the Bank, Noteholder, the Guarantor, and its
permitted successors and assigns.
4.3. This Guaranty Agreement: (a) constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof; (b) may be executed in
several counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument; and (c) may be
modified only by an instrument signed by the duly authorized representatives of
the parties and only if the modification is made for the purpose of curing any
ambiguities or formal defects or making any other change which, in the opinion
of the Bank or any Noteholder, does not adversely affect the interests of the
Noteholder.
4.4. All notices, demands, consents, approvals and other communications
hereunder shall be in writing and shall be sent in accordance with Section 8.12
of the Loan Agreement.
4.5. THIS GUARANTY AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF IOWA, INDIANA AND/OR WISCONSIN, AS
APPLICABLE (AND, IF NOT MANDATORY, AS ELECTED BY THE BANK), EXCEPT TO THE EXTENT
SUPERSEDED BY FEDERAL LAW. AS A MATERIAL INDUCEMENT TO BANK TO ENTER INTO THIS
TRANSACTION, THE GUARANTOR IRREVOCABLY AGREES THAT ANY AND ALL ACTIONS OR
PROCEEDINGS IN ANY WAY, MANNER OR RESPECT ARISING OUT OF OR FROM OR RELATED TO
THIS GUARANTY AGREEMENT, MAY BE LITIGATED IN COURTS WITHIN: (A) MILWAUKEE,
WISCONSIN WHERE THE BANK’S PRINCIPAL PLACE OF BUSINESS IS LOCATED; OR (B) THE
APPLICABLE COUNTY IN WISCONSIN, IOWA OR INDIANA WHERE THE APPLICABLE FACILITY IS
LOCATED. THE GUARANTOR HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY
LOCAL, STATE OR FEDERAL COURT LOCATED WITHIN ANY OF THESE PLACES.
4.6. THE GUARANTOR HEREBY KNOWINGLY AND VOLUNTARILY WAIVES ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON OR ARISING OUT OF OR IN
CONNECTION WITH THIS GUARANTY AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS
PROVISION IS A MATERIAL INDUCEMENT TO THE BANK TO ENTER INTO THIS TRANSACTION.

 

6

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the Guarantor has executed this Guaranty Agreement and the
Bank has accepted the same, as of the 30th day of September, 2010.

                  ASSISTED LIVING CONCEPTS, INC.,
a Nevada corporation    
 
           
 
  By:   /s/ John Buono
 
John Buono, Senior Vice President,
Chief Financial Officer, Treasurer    

 

7