Document:

Exhibit 10.35

 

ASSIGNMENT OF LEASES AND RENTS

 

from

 

GLENVUE H&R PROPERTY HOLDINGS, LLC,

a Georgia limited liability company

 

to

 

THE PRIVATEBANK AND TRUST COMPANY,

an Illinois banking corporation

 

Dated as of July 2, 2012

 

 

ASSIGNMENT OF RENTS AND LEASES

 

THIS ASSIGNMENT OF RENTS AND LEASES dated as of July 2, 2012 (this “Assignment”), is executed by GLENVUE H&R PROPERTY HOLDINGS, LLC, a Georgia limited liability company (the “Assignor”), to and for the benefit of THE PRIVATEBANK AND TRUST COMPANY, an Illinois banking corporation (the “Assignee”).

 

RECITALS

 

A.                                   Pursuant to the terms of a Loan Agreement of even date herewith (the “Loan Agreement”), by and between the Assignor and the Assignee, the Assignee has agreed to make a loan to the Assignor in the principal amount of $6,600,000 (the “Loan”).  The Assignor is executing a certain Promissory Note of even date herewith (the “Note”) payable to the order of the Assignee to evidence the Loan.

 

B.                                     As is provided in the Loan Agreement, the Assignee may extend a revolving loan (the “Operator Loan”) to Glenvue H&R Nursing, LLC, a Georgia limited liability company (the “Operator”), pursuant to the “Operator Loan Documents” (as defined in the Loan Agreement).

 

C.                                     In order to secure the indebtedness described in Paragraph 2 and other obligations as set forth therein, the Assignor executed a Deed to Secure Debt, Security Agreement and Assignment of Leases and Rents of even date herewith conveying to the Assignee the real property described in Exhibit A attached hereto and made a part hereof and all buildings and other improvements located thereon (said land and improvements being hereinafter referred to collectively as the “Premises”).

 

D.                                    A condition precedent to the making of the Loan and the Operator Loan by the Assignee to the Assignor is the execution and delivery by the Assignor of this Assignment.

 

AGREEMENTS

 

FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of which are hereby acknowledged, the parties hereto mutually agree as follows:

 

1.                                       Definitions.  All capitalized terms which are not defined herein shall have the meanings ascribed thereto in the Loan Agreement.

 

2.                                       Grant of Security Interest.  The Assignor hereby presently, absolutely and irrevocably grants, sells, transfers, sets over and assigns to the Assignee, all of the right, title and interest of the Assignor in and to (i) all of the rents, revenues, issues, profits, proceeds, receipts, income, accounts and other receivables arising out of or from the Premises, including, without limitation, lease termination fees, purchase option fees and other fees and expenses payable under any lease; (ii) all leases and subleases (collectively, “Leases”), now or hereafter existing, of all or any part of the Premises together with all guaranties of any of such Leases and all security deposits delivered by tenants thereunder, whether in cash or letter of credit; (iii) all

 

 

rights and claims for damage against tenants arising out of defaults under the Leases, including rights to termination fees and compensation with respect to rejected Leases pursuant to Section 365(a) of the Federal Bankruptcy Code or any replacement Section thereof; and (iv) all tenant improvements and fixtures located on the Premises.  This Assignment is an absolute present transfer and assignment of the foregoing interests to the Assignee given to secure:

 

(a)                                  Payment by the Assignor when due of (i) the indebtedness evidenced by the Note and any and all renewals, extensions, replacements, amendments, modifications and refinancings thereof; (ii) any and all other indebtedness and obligations that may be due and owing to the Assignee by the Assignor under or with respect to the “Loan Documents” (as defined in the Loan Agreement); and (iii) all costs and expenses paid or incurred by the Assignee in enforcing its rights hereunder, including without limitation, court costs and reasonable attorneys’ fees actually incurred;

 

(b)                                 Observance and performance by the Assignor of the covenants, conditions, agreements, representations, warranties and other liabilities and obligations of the Assignor or any other obligor to or benefiting the Assignee which are evidenced or secured by or otherwise provided in the Note, this Assignment, the Loan Agreement or any of the other Loan Documents, together with all amendments and modifications thereof; and

 

(c)                                  Payment when due of (i) the Operator Loan and any and all renewals, extensions, replacements, amendments, modifications and refinancings thereof; and (ii) any and all other indebtedness and obligations that may be due and owing to the Assignee by the Operator under or with respect to the Operator Loan Documents.

 

3.                                       Representations and Warranties of Assignor.  The Assignor represents and warrants to the Assignee that:

 

(a)                                  This Assignment, as executed by the Assignor, constitutes the legal and binding obligation of the Assignor enforceable in accordance with its terms and provisions;

 

(b)                                 The Assignor is the lessor under all Leases;

 

(c)                                  There is no other existing assignment of the Assignor’s entire or any part of its interest in or to any of the Leases, or any of the rents, issues, income or profits assigned hereunder, nor has the Assignor entered into any agreement to subordinate any of the Leases or the Assignor’s right to receive any of the rents, issues, income or profits assigned hereunder;

 

(d)                                 The Assignor has not executed any instrument or performed any act which may prevent the Assignee from operating under any of the terms and provisions hereof or which would limit the Assignee in such operation; and

 

(e)                                  There are no defaults by the landlord and, to the Assignor’s knowledge, there are no material defaults by tenants, under any Leases.

 

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4.                                       Covenants of the Assignor.  The Assignor covenants and agrees that so long as this Assignment shall be in effect:

 

(a)                                  The Assignor shall not enter into any additional Leases, other than Leases which are entered into in the ordinary course of the Assignor’s business with individual patients under patient agreements;

 

(b)                                 The Assignor shall observe and perform all of the covenants, terms, conditions and agreements contained in the Leases to be observed or performed by the lessor thereunder, and the Assignor shall not do or suffer to be done anything to impair the security thereof.  The Assignor shall not (i) release the liability of any tenant under any Lease, (ii) consent to any tenant’s withholding of rent or making monetary advances and off setting the same against future rentals, (iii) consent to any tenant’s claim of a total or partial eviction, (iv) consent to a tenant termination or cancellation of any Lease, except as specifically provided therein, or (v) enter into any oral leases with respect to all or any portion of the Premises;

 

(c)                                  The Assignor shall not collect any of the rents, issues, income or profits assigned hereunder more than 30 days in advance of the time when the same shall become due, except for security or similar deposits;

 

(d)                                 The Assignor shall not make any other assignment of its entire or any part of its interest in or to any or all Leases, or any or all rents, issues, income or profits assigned hereunder, except as specifically permitted by the Loan Documents;

 

(e)                                  The Assignor shall not modify the terms and provisions of any Lease, nor shall the Assignor give any consent (including, but not limited to, any consent to any assignment of, or subletting under, any Lease, except as expressly permitted thereby) or approval required or permitted by such terms and provisions, or cancel or terminate any Lease, without the Assignee’s prior written consent;

 

(f)                                    The Assignor shall not accept a surrender of any Lease or convey or transfer, or suffer or permit a conveyance or transfer, of the premises demised under any Lease or of any interest in any Lease so as to effect, directly or indirectly, proximately or remotely, a merger of the estates and rights of, or a termination or diminution of the obligations of, any tenant thereunder; any termination fees payable under a Lease for the early termination or surrender thereof shall be paid jointly to the Assignor and the Assignee;

 

(g)                                 The Assignor shall not alter, modify or change the terms of any guaranty of any Lease, or cancel or terminate any such guaranty or do or permit to be done anything which would terminate any such guaranty as a matter of law;

 

(h)                                 The Assignor shall not waive or excuse the obligation to pay rent under any Lease;

 

(i)                                     The Assignor shall, at its sole cost and expense, appear in and defend any and all actions and proceedings arising under, relating to or in any manner connected

 

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with any Lease or the obligations, duties or liabilities of the lessor or any tenant or guarantor thereunder, and shall pay all costs and expenses of the Assignee, including court costs and reasonable attorneys’ fees actually incurred, in any such action or proceeding in which the Assignee may appear;

 

(j)                                     The Assignor shall give prompt notice to the Assignee of any notice of any default by the lessor under any Lease received from any tenant or guarantor thereunder;

 

(k)                                  The Assignor shall enforce the observance and performance of each covenant, term, condition and agreement contained in each Lease to be observed and performed by the tenants and guarantors thereunder and shall immediately notify the Assignee of any material breach by the tenant or guarantor under any such Lease;

 

(l)                                     The Assignor shall not permit any of the Leases to become subordinate to any lien or liens other than liens and conveyances securing the indebtedness secured hereby or liens for general real estate taxes not delinquent;

 

(m)                               The Assignor shall not execute hereafter any Lease unless there shall be included therein a provision providing that the tenant thereunder acknowledges that such Lease has been assigned pursuant to this Assignment and agrees not to look to the Assignee as mortgagee, mortgagee in possession or successor in title to the Premises for accountability for any security deposit required by lessor under such Lease unless such sums have actually been received in cash by the Assignee as security for tenant’s performance under such Lease; and

 

(n)                                 If any tenant under any Lease is or becomes the subject of any proceeding under the Federal Bankruptcy Code, as amended from time to time, or any other federal, state or local statute which provides for the possible termination or rejection of the Leases assigned hereby, the Assignor covenants and agrees that if any such Lease is so terminated or rejected, no settlement for damages shall be made without the prior written consent of the Assignee, and any check in payment of damages for termination or rejection of any such Lease will be made payable both to the Assignor and the Assignee.  The Assignor hereby assigns any such payment to the Assignee and further covenants and agrees that upon the request of the Assignee, it will duly endorse to the order of the Assignee any such check, the proceeds of which shall be applied in accordance with the provisions of Section 8 below.

 

5.                                       Rights Prior to Default.  Unless or until an “Event of Default” (as defined in Section 6 hereof) shall occur and be continuing, the Assignor shall have a revocable license to collect, at the time (but in no event more than 30 days in advance) provided for the payment thereof, all rents, issues, income and profits assigned hereunder, and to retain, use and enjoy the same.  Upon the occurrence of an Event of Default, the Assignor’s license to collect such rents, issues, income and profits shall immediately terminate without further notice thereof to the Assignor.  The Assignee shall have the right to notify the tenants under the Leases of the existence of this Assignment at any time.

 

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6.                                       Events of Default.  Each of the following shall constitute an “Event of Default” under this Assignment:

 

(a)                                  The Assignor fails to pay any amount payable under this Assignment when any such payment is due in accordance with the terms hereof.

 

(b)                                 The Assignor fails to perform or observe, or to cause to be performed or observed, any other obligation, covenant, term, agreement or provision required to be performed or observed by the Assignor under this Assignment; provided, however, that:

 

(i)                                     If such failure can be cured solely by the payment of money, such failure shall not constitute an Event of Default unless it shall continue for a period of five days after written notice to the Assignor;

 

(ii)                                  If such failure cannot be cured solely by the payment of money and does not pose an emergency or dangerous condition or a material threat to the security for the Loan, such failure shall not constitute an Event of Default unless it shall continue for a period of 30 days after written notice to the Assignor; and

 

(iii)                               If a failure described in (ii) above is of such a nature that it cannot reasonably be cured within such 30-day period, and if such failure is susceptible of cure, it shall not constitute an Event of Default if corrective action is instituted by the Assignor within such 30-day period and is diligently pursued and such failure is cured within 90 days after the occurrence of such failure.

 

(c)                                  The occurrence of an Event of Default under the Loan Agreement, the Note or any of the other Loan Documents.

 

7.                                       Rights and Remedies Upon Default.  At any time upon or following the occurrence and during the continuance of any Event of Default, the Assignee, at its option, may exercise any one or more of the following rights and remedies without any obligation to do so, without in any way waiving such Event of Default, without further notice or demand on the Assignor, without regard to the adequacy of the security for the obligations secured hereby, without releasing the Assignor or any guarantor of the Note from any obligation, and with or without bringing any action or proceeding to foreclose the Deed to Secure Debt or any other lien or security interest granted by the Loan Documents:

 

(a)                                  The Assignee may declare the unpaid balance of the principal sum of the Note, together with all accrued and unpaid interest thereon, immediately due and payable.

 

(b)                                 The Assignee may enter upon and take possession of the Premises, either in person or by agent or by a receiver appointed by a court, and have, hold, manage, lease and operate the same on such terms and for such period of time as the Assignee may deem necessary or proper, with full power to make from time to time all alterations, renovations, repairs or replacements thereto or thereof as may seem proper to the Assignee, to make, enforce, modify and accept the surrender of Leases, to obtain and evict tenants, to fix or modify rents, and to do any other act which the Assignee deems necessary or proper.

 

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(c)                                  The Assignee may either with or without taking possession of the Premises, demand, sue for, settle, compromise, collect, and give acquittances for all rents, issues, income and profits of and from the Premises and pursue all remedies for  enforcement of the Leases and all the lessor’s rights therein and thereunder.  This Assignment shall constitute an authorization and direction to the tenants under the Leases to pay all rents and other amounts payable under the Leases to the Assignee, without proof of default hereunder, upon receipt from the Assignee of written notice to thereafter pay all such rents and other amounts to the Assignee and to comply with any notice or demand by the Assignee for observance or performance of any of the covenants, terms, conditions and agreements contained in the Leases to be observed or performed by the tenants thereunder, and the Assignor shall facilitate in all reasonable ways the Assignee’s collection of such rents, issues, income and profits, and upon request will execute written notices to the tenants under the Leases to thereafter pay all such rents and other amounts to the Assignee.

 

(d)                                 The Assignee may make any payment or do any act required herein of the Assignor in such manner and to such extent as the Assignee may deem necessary, and any amount so paid by the Assignee shall become immediately due and payable by the Assignor with interest thereon until paid at the Default Rate and shall be secured by this Assignment.

 

8.                                       Application of Funds.  Except as otherwise provided in the Deed to Secure Debt or by applicable law, all sums collected and received by the Assignee out of the rents, issues, income and profits of the Premises following the occurrence of any one or more Events of Default shall be applied in such order as the Assignee shall elect in its sole and absolute discretion.

 

9.                                       Limitation of the Assignee’s Liability; Indemnity.  The Assignee shall not be liable for any loss sustained by the Assignor resulting from the Assignee’s failure to let the Premises or from any other act or omission of the Assignee in managing, operating or maintaining the Premises following the occurrence of an Event of Default.  The Assignee shall not be obligated to observe, perform or discharge, nor does the Assignee hereby undertake to observe, perform or discharge any covenant, term, condition or agreement contained in any Lease to be observed or performed by the lessor thereunder, or any obligation, duty or liability of the Assignor under or by reason of this Assignment.  The Assignor shall and does hereby agree to indemnify, defend (using counsel satisfactory to the Assignee) and hold the Assignee harmless from and against any and all liability, loss or damage which the Assignee may incur under any Lease or under or by reason of this Assignment and of and from any and all claims and demands whatsoever which may be asserted against the Assignee by reason of any alleged obligation or undertaking on the Assignee’s part to observe or perform any of the covenants, terms, conditions and agreements contained in any Lease; provided, however, in no event shall the Assignor be liable for any liability, loss or damage which the Assignee incurs as a result of the Assignee’s gross negligence or willful misconduct.  Should the Assignee incur any such liability, loss or damage under any Lease or under or by reason of this Assignment, or in the defense of any such claim or demand, the amount thereof, including costs, expenses and reasonable attorneys’ fees actually incurred, shall become immediately due and payable by the Assignor with interest thereon at the Default Rate and shall be secured by this Assignment.  This Assignment shall not

 

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operate to place responsibility upon the Assignee for the care, control, management or repair of the Premises or for the carrying out of any of the covenants, terms, conditions and agreements contained in any Lease, nor shall it operate to make the Assignee responsible or liable for any waste committed upon the Premises by any tenant, occupant or other party, or for any dangerous or defective condition of the Premises, or for any negligence in the management, upkeep, repair or control of the Premises resulting in loss or injury or death to any tenant, occupant, licensee, employee or stranger.  Nothing set forth herein or in the Deed to Secure Debt, and no exercise by the Assignee of any of the rights set forth herein or in the Deed to Secure Debt shall constitute or be construed as constituting the Assignee a “mortgagee in possession” of the Premises, in the absence of the taking of actual possession of the Premises by the Assignee pursuant to the provisions hereof or of the Deed to Secure Debt.

 

10.                                 No Waiver.  Nothing contained in this Assignment and no act done or omitted to be done by the Assignee pursuant to the rights and powers granted to it hereunder shall be deemed to be a waiver by the Assignee of its rights and remedies under any of the Loan Documents.  This Assignment is made and accepted without prejudice to any of the rights and remedies of the Assignee under the terms and provisions of such instruments, and the Assignee may exercise any of its rights and remedies under the terms and provisions of such instruments either prior to, simultaneously with, or subsequent to any action taken by the Assignee hereunder.  The Assignee may take or release any other security for the performance of the obligations secured hereby, may release any party primarily or secondarily liable therefor, and may apply any other security held by it for the satisfaction of the obligations secured hereby without prejudice to any of the Assignee’s rights and powers hereunder.

 

11.                                 Further Assurances.  The Assignor shall execute or cause to be executed such additional instruments (including, but not limited to, general or specific assignments of such Leases as the Assignee may designate) and shall do or cause to be done such further acts, as the Assignee may request, in order to permit the Assignee to perfect, protect, preserve and maintain the assignment made to the Assignee by this Assignment.

 

12.                                 Security Deposits.  The Assignor acknowledges that the Assignee has not received for its own account any security deposited by any tenant pursuant to the terms of the Leases and that the Assignee assumes no responsibility or liability for any security so deposited.

 

13.                                 Compliance with Law of State.

 

(a)                                  If any provision in this Assignment shall be inconsistent with any provision of the applicable laws of the State in which the Premises are located, such laws shall take precedence over the provisions of this Assignment, but shall not invalidate or render unenforceable any other provision of this Assignment that can be construed in a manner consistent with such laws.

 

(b)                                 If any provision of this Assignment shall grant to the Assignee any powers, rights or remedies prior to, upon or following the occurrence of an Event of Default which are more limited than the powers, rights or remedies that would otherwise be vested in the Assignee under applicable laws of the State in which the Premises are located in the absence of said provision, the Assignee shall be vested with the powers, rights and remedies granted by such laws to the full extent permitted by law.

 

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14.                                 Severability.  If any provision of this Assignment is deemed to be invalid by reason of the operation of law, or by reason of the interpretation placed thereon by any administrative agency or any court, the Assignee and the Assignor shall negotiate an equitable adjustment in the provisions of the same in order to effect, to the maximum extent permitted by law, the purpose of this Assignment and the validity and enforceability of the remaining provisions, or portions or applications thereof, shall not be affected thereby and shall remain in full force and effect.

 

15.                                 Successors and Assigns.  This Assignment is binding upon the Assignor and its legal representatives, successors and assigns, and the rights, powers and remedies of the Assignee under this Assignment shall inure to the benefit of the Assignee and its successors and assigns.

 

16.                                 Prior Agreements; No Reliance; Modifications.  This Assignment shall represent the entire, integrated agreement between the parties hereto relating to the subject matter of this Assignment, and shall supersede all prior negotiations, representations or agreements pertaining thereto, either oral or written.  The Assignor acknowledges it is executing this Assignment without relying on any statements, representations or warranties, either oral or written, that are not expressly set forth herein.  This Assignment and any provision hereof shall not be modified, amended, waived or discharged in any manner other than by a written amendment executed by all parties to this Assignment.

 

17.                                 Duration.  This Assignment shall become null and void at such time as the Assignor shall have paid the principal sum of the Note, together with all interest thereon, and shall have fully paid and performed all of the other obligations secured hereby and by the other Loan Documents.

 

18.                                 Governing Law.  This Assignment shall be governed by and construed in accordance with the laws of the State of Georgia. The recording of a satisfaction of the Deed to Secure Debt by the Assignee shall terminate this Asignment.

 

19.                                 Notices.  All notices, demands, requests and other correspondence which are required or permitted to be given hereunder shall be deemed sufficiently given when delivered or mailed in the manner and to the addresses of the Assignor and the Assignee, as the case may be, as specified in the Deed to Secure Debt.

 

20.                                 Captions.  The captions and headings of various Sections of this Assignment and exhibits pertaining hereto are for convenience only and are not to be considered as defining or limiting in any way the scope or intent of the provisions hereof.

 

21.                                 Gender and Number.  Any word herein which is expressed in the masculine or neuter gender shall be deemed to include the masculine, feminine and neuter genders.  Any word herein which is expressed in the singular or plural number shall be deemed, whenever appropriate in the context, to include the singular and the plural.

 

22.                                 Counterparts; Electronic Signatures.   This Assignment may be executed in any number of counterparts and by the different parties hereto on separate counterparts and each such counterpart shall be deemed to be an original, but all such counterparts shall together

 

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constitute but one and the same document.  Receipt of an executed signature page to this Assignment by facsimile or other electronic transmission shall constitute effective delivery thereof.  An electronic record of this executed Assignment maintained by the Assignee shall be deemed to be an original.

 

23.                                 Construction.  Each party to this Assignment and legal counsel to each party have participated in the drafting of this Assignment, and accordingly the general rule of construction to the effect that any ambiguities in a contract are to be resolved against the party drafting the contract shall not be employed in the construction and interpretation of this Assignment.

 

24.                                 Incorporation of Section 12.2 of Loan Agreement.  The provisions of Section 12.2 of the Loan Agreement are hereby incorporated into and made a part of this Assignment.

 

25.                                 Litigations Provisions.

 

(a)                                  Consent to Jurisdiction.  THE ASSIGNOR CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED IN CHICAGO, ILLINOIS, AND OF ANY STATE OR FEDERAL COURT LOCATED OR HAVING JURISDICTION IN THE COUNTY IN WHICH THE PREMISES ARE LOCATED, IN WHICH ANY LEGAL PROCEEDING MAY BE COMMENCED OR PENDING RELATING IN ANY MANNER TO THIS ASSIGNMENT, THE LOAN OR ANY OF THE OTHER LOAN DOCUMENTS.

 

(b)                                  Consent to Venue.  THE ASSIGNOR AGREES THAT ANY LEGAL PROCEEDING RELATING TO THIS ASSIGNMENT, THE LOAN OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT AGAINST THE ASSIGNOR IN ANY STATE OR FEDERAL COURT LOCATED IN CHICAGO, ILLINOIS, OR ANY STATE OR FEDERAL COURT LOCATED OR HAVING JURISDICTION IN THE COUNTY IN WHICH THE PREMISES ARE LOCATED.  THE ASSIGNOR WAIVES ANY OBJECTION TO VENUE IN ANY SUCH COURT AND WAIVES ANY RIGHT IT MAY HAVE TO TRANSFER OR CHANGE THE VENUE FROM ANY SUCH COURT.

 

(c)                                  No Proceedings in Other Jurisdictions.  THE ASSIGNOR AGREES THAT IT WILL NOT COMMENCE ANY LEGAL PROCEEDING AGAINST THE ASSIGNEE RELATING IN ANY MANNER TO THIS ASSIGNMENT, THE LOAN OR ANY OF THE OTHER LOAN DOCUMENTS IN ANY COURT OTHER THAN A STATE OR FEDERAL COURT LOCATED IN CHICAGO, ILLINOIS, OR IF A LEGAL PROCEEDING IS COMMENCED BY THE ASSIGNEE AGAINST THE ASSIGNOR IN A COURT IN ANOTHER LOCATION, BY WAY OF A COUNTERCLAIM IN SUCH LEGAL PROCEEDING.

 

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(d)                                  Waiver of Jury Trial.  THE ASSIGNOR HEREBY WAIVES TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATING TO THIS ASSIGNMENT, THE LOAN OR ANY OF THE OTHER LOAN DOCUMENTS.

 

[SIGNATURE PAGE(S) AND EXHIBIT(S),

IF ANY, FOLLOW THIS PAGE]

 

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IN WITNESS WHEREOF, the Assignor has executed and delivered this Assignment as of the day and year first above written.

 

	
Signed,   sealed and delivered in the presence of:
    	
GLENVUE   H&R PROPERTY HOLDINGS, LLC
    
	
 
    	
 
    
	
/s/   [ILLEGIBLE]
    	
 
    
	
Witness
    	
 
    
	
 
    	
By
    	
/s/   Christopher F. Brogdon
    
	
/s/   Ellen W. Smith
    	
 
    	
Christopher   F. Brogdon, Manager
    
	
Notary   Public
    	
 
    
	
 
    	
 
    
	
My   Commission Expires:
    	
 
    
	
 
    	
 
    
	
Jan.   30, 2016
    	
 
    
	
 
    	
 
    
	
[NOTARIAL SEAL]
    	
 
    

 

- AdCare Glenvue H&R Property Holdings, LLC Owner Loan Assignment of Leases and Rents -

- Signature Page -Exhibit 10.36

 

	
14594959.2
   06-28-12
    	
(5)
    

 

GUARANTY OF PAYMENT AND PERFORMANCE

 

THIS GUARANTY OF PAYMENT AND PERFORMANCE dated as of July 2, 2012 (this “Guaranty”), is executed by GLENVUE H&R NURSING, LLC, a Georgia limited liability company (the “Operator”), and ADCARE HEALTH SYSTEMS, INC., an Ohio corporation (“AdCare”) (the Operator and AdCare being sometimes referred to herein collectively as the “Guarantors”), jointly and severally, to and for the benefit of THE PRIVATEBANK AND TRUST COMPANY, an Illinois banking corporation (the “Lender”).

 

RECITALS

 

A.                                   The Lender has agreed to make a loan in the principal amount of $6,600,000 (the “Loan”) to Glenvue H&R Property Holdings, LLC, a Georgia limited liability company (the “Borrower”), pursuant to the terms and conditions of a Loan Agreement of even date herewith (the “Loan Agreement”) by and between the Borrower and the Lender.  The Loan is evidenced by a Promissory Note of even date herewith (the “Note”) from the Borrower to the Lender in the principal amount of $6,600,000.  All terms used and not otherwise defined herein shall have the meanings set forth in the Loan Agreement.

 

B.                                     As a condition precedent to the making of the Loan to the Borrower by the Lender and in consideration therefor, the Lender has required the execution and delivery of this Guaranty by the Guarantors.

 

C.                                     The Operator is the lessee of the Project and is deriving a benefit from the making of the Loan by the Lender, and has agreed to execute and deliver this Guaranty to the Lender.  AdCare has an ownership interest in the Borrower, either directly or indirectly through one or more intermediary entities, and, having a financial interest in the Borrower, has agreed to execute and deliver this Guaranty to the Lender.

 

AGREEMENTS

 

For good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, each Guarantor hereby agrees as follows:

 

1.                                       Guaranty of Payment.  Each Guarantor hereby unconditionally, absolutely and irrevocably guarantees, jointly and severally, the punctual payment and performance when due, whether at stated maturity or by acceleration or otherwise, of the indebtedness and other obligations of the Borrower to the Lender evidenced by the Note and any other amounts that may become owing by the Borrower under the Loan Documents (such indebtedness, obligations and other amounts are hereinafter referred to as the “Payment Obligations”).  This Guaranty is a present and continuing guaranty of payment and not of collectability, and the Lender shall not be required to prosecute collection, enforcement or other remedies against the Borrower, any Guarantor, or any other guarantor of the Payment Obligations, or to enforce or resort to any collateral for the repayment of the Payment Obligations or other rights or remedies pertaining

 

 

thereto, before calling on any Guarantor for payment.  If for any reason the Borrower shall fail or be unable to pay, punctually and fully, any of the Payment Obligations, the Guarantors shall jointly and severally pay such obligations to the Lender in full immediately upon demand.  One or more successive actions may be brought against the Guarantors, or any of them, as often as the Lender deems advisable, until all of the Payment Obligations are paid and performed in full.  The Payment Obligations and the Performance Obligations (as defined below) are referred to herein as the “Guaranteed Obligations.”

 

2.                                       Guaranty of Performance.  In addition to the guaranty of the Payment Obligations, each Guarantor hereby unconditionally, absolutely and irrevocably guarantees, jointly and severally, (i) the full and prompt performance and observance by the Borrower of each and every other obligation, undertaking, liability, promise, warranty, covenant and agreement of the Borrower in and under the terms of the Loan Documents; and (ii) the truth of each and every representation and warranty made by the Borrower in the Loan Documents or in other certificates or documents delivered in connection with the Loan (the matters described in (i) and (ii) above being collectively referred to herein as the “Performance Obligations”).

 

3.                                       Representations and Warranties.  The following shall constitute representations and warranties of each Guarantor and each Guarantor hereby acknowledges that the Lender intends to make the Loan in reliance thereon:

 

(a)                                  The Operator is a limited liability company duly organized, validly existing and in good standing under the laws of the State of  Georgia. The Operator has full power and authority to conduct its business as presently conducted, to execute and deliver the Loan Documents to which it is a party, and to perform all of its duties and obligations under the Loan Documents to which it is a party; and such execution and performance have been duly authorized by all necessary Legal Requirements.  The articles of organization and operating agreement of the Operator, each as amended to date, copies of which have been furnished to the Lender, are in effect, have not been further amended, and are the true, correct and complete documents relating to the Operator’s creation and governance.

 

(b)                                 AdCare is a corporation duly organized, validly existing and in good standing under the laws of the State of Ohio.  AdCare has full power and authority to conduct its business as presently conducted, to execute and deliver the Loan Documents to which it is a party, and to perform all of its duties and obligations under the Loan Documents to which it is a party; and such execution and performance have been duly authorized by all necessary Legal Requirements.  The articles of incorporation and bylaws of AdCare, each as amended to date, copies of which have been furnished to the Lender, are in effect, have not been further amended, and are the true, correct and complete documents relating to AdCare’s creation and governance.

 

(c)                                  Each Guarantor is not in default and no event has occurred that with the passage of time or the giving of notice will constitute a default under any agreement to which such Guarantor is a party, the effect of which will impair performance by such Guarantor of its obligations under this Guaranty.  Neither the execution and delivery of this Guaranty nor compliance with the terms and provisions hereof will violate any

 

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applicable law, rule, regulation, judgment, decree or order, or will conflict with or result in any breach of any of the terms, covenants, conditions or provisions of the articles of organization or operating agreement of the Operator, the articles of incorporation or bylaws of AdCare, any indenture, mortgage, deed of trust, instrument, document, agreement or contract of any kind that creates, represents, evidences or provides for any lien, charge or encumbrance upon any of the property or assets of any Guarantor, or any other indenture, mortgage, deed of trust, instrument, document, agreement or contract of any kind to which any Guarantor is a party or to which any Guarantor or the property of any Guarantor may be subject.

 

(d)                                 There is no litigation, arbitration, governmental or administrative proceedings, actions, examinations, claims or demands pending, or to the Guarantors’ knowledge, threatened that could adversely affect performance by any Guarantor of its obligations under this Guaranty.

 

(e)                                  Neither this Guaranty nor any statement or certification as to facts previously furnished or required herein to be furnished to the Lender by any Guarantor, contains any material inaccuracy or untruth in any representation, covenant or warranty or omits to state a fact material to this Guaranty.

 

4.                                       Continuing Guaranty.  Each Guarantor agrees that performance by such Guarantor of the obligations under this Guaranty shall be a primary obligation, shall not be subject to any counterclaim, set-off, abatement, deferment or defense based upon any claim that such Guarantor may have against the Lender, the Borrower, any other guarantor of the Guaranteed Obligations or any other person or entity, and shall remain in full force and effect without regard to, and shall not be released, discharged or affected in any way by, any circumstance or condition (whether or not such Guarantor shall have any knowledge thereof), including without limitation —

 

(a)                                  Any lack of validity or enforceability of any of the Loan Documents;

 

(b)                                 Any termination, amendment, modification or other change in any of the Loan Documents, including, without limitation, any modification of the interest rate or rates described therein;

 

(c)                                  Any furnishing, exchange, substitution or release of any collateral securing repayment of the Loan, or any failure to perfect any lien in such collateral;

 

(d)                                 Any failure, omission or delay on the part of the Borrower, any Guarantor, any other guarantor of the Guaranteed Obligations or the Lender to conform or comply with any term of any of the Loan Documents or any failure of the Lender to give notice of any Event of Default;

 

(e)                                  Any waiver, compromise, release, settlement or extension of time of payment or performance or observance of any of the obligations or agreements contained in any of the Loan Documents;

 

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(f)                                    Any action or inaction by the Lender under or in respect of any of the Loan Documents, any failure, lack of diligence, omission or delay on the part of the Lender to perfect, enforce, assert or exercise any lien, security interest, right, power or remedy conferred on it in any of the Loan Documents, or any other action or inaction on the part of the Lender;

 

(g)                                 Any voluntary or involuntary bankruptcy, insolvency, reorganization, arrangement, readjustment, assignment for the benefit of creditors, composition, receivership, liquidation, marshalling of assets and liabilities or similar events or proceedings with respect to the Borrower, any Guarantor or any other guarantor of the Guaranteed Obligations, as applicable, or any of their respective property or creditors, or any action taken by any trustee or receiver or by any court in any such proceeding;

 

(h)                                 Any merger or consolidation of the Borrower into or with any entity, or any sale, lease or transfer of any of the assets of the Borrower, any Guarantor or any other guarantor of the Guaranteed Obligations to any other person or entity;

 

(i)                                     Any change in the ownership of the Borrower, or any change in the relationship between the Borrower and any Guarantor or any other guarantor of the Guaranteed Obligations, or any termination of any such relationship;

 

(j)                                     Any release or discharge by operation of law of the Borrower, any Guarantor or any other guarantor of the Guaranteed Obligations from any obligation or agreement contained in any of the Loan Documents; or

 

(k)                                  Any other occurrence, circumstance, happening or event, whether similar or dissimilar to the foregoing and whether foreseen or unforeseen, which otherwise might constitute a legal or equitable defense or discharge of the liabilities of a guarantor or surety or which otherwise might limit recourse against the Borrower or any Guarantor to the fullest extent permitted by law.

 

5.                                       Waivers.  Each Guarantor expressly and unconditionally waives (i) notice of any of the matters referred to in Section 4 above, (ii) all notices which may be required by statute, rule of law or otherwise, now or hereafter in effect, to preserve intact any rights against the Guarantors, including, without limitation, any demand, presentment and protest, proof of notice of non-payment under any of the Loan Documents and notice of any Event of Default or any failure on the part of the Borrower, any Guarantor or any other guarantor of the Guaranteed Obligations to perform or comply with any covenant, agreement, term or condition of any of the Loan Documents, (iii) any right to the enforcement, assertion or exercise against the Borrower, any Guarantor or any other guarantor of the Guaranteed Obligations of any right or remedy conferred under any of the Loan Documents, (iv) any requirement of diligence on the part of any person or entity, (v) to the fullest extent permitted by law and except as otherwise expressly provided in this Guaranty or the other Loan Documents, any claims based on allegations that the Lender has failed to act in a commercially reasonable manner or failed to exercise the Lender’s obligation of good faith and fair dealing, (vi) any requirement to exhaust any remedies or to mitigate the damages resulting from any default under any of the Loan Documents, and (vii) any notice of any sale, transfer or other disposition of any right, title or interest of the Lender under

 

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any of the Loan Documents.  Each Guarantor agrees that such Guarantor is a guarantor and not a “surety” within the meaning of the Illinois Sureties Act, and also waives any and all rights under the Illinois Sureties Act.  Each Guarantor also waives any and all rights under O.C.G.A. Section 10-7-24 et seq. (if such Sections were to be held by a court to be applicable to this Guaranty despite the choice of Illinois law in Section 19 of this Guaranty).

 

6.                                       Subordination.  Each Guarantor agrees that any and all present and future debts and obligations of the Borrower to such Guarantor hereby are subordinated to the claims of the Lender and hereby are assigned by such Guarantor to the Lender as security for the Guaranteed Obligations and such Guarantor’s obligations under this Guaranty.

 

7.                                       Subrogation Waiver.  Until the Guaranteed Obligations are paid in full and all periods under applicable bankruptcy law for the contest of any payment by the Guarantors or the Borrower as a preferential or fraudulent payment have expired, each Guarantor knowingly, and with advice of counsel, waives, relinquishes, releases and abandons all rights and claims to indemnification, contribution, reimbursement, subrogation and payment which such Guarantor may now or hereafter have by and from the Borrower and the successors and assigns of the Borrower, for any payments made by such Guarantor to the Lender, including, without limitation, any rights which might allow the Borrower, the Borrower’s successors, a creditor of the Borrower, or a trustee in bankruptcy of the Borrower to claim in bankruptcy or any other similar proceedings that any payment made by the Borrower or the Borrower’s successors and assigns to the Lender was on behalf of or for the benefit of such Guarantor and that such payment is recoverable by the Borrower, a creditor or trustee in bankruptcy of the Borrower as a preferential payment, fraudulent conveyance, payment of an insider or any other classification of payment which may otherwise be recoverable from the Lender.

 

8.                                       Reinstatement.  The obligations of each Guarantor pursuant to this Guaranty shall continue to be effective or automatically be reinstated, as the case may be, if at any time payment of any of the Guaranteed Obligations or any Guarantor’s obligations under this Guaranty is rescinded or otherwise must be restored or returned by the Lender upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of any Guarantor or the Borrower or otherwise, all as though such payment had not been made.

 

9.                                       Financial Statements.  Each Guarantor represents and warrants to the Lender that (i) the financial statements of such Guarantor previously submitted to the Lender are true, complete and correct in all material respects, disclose all actual and contingent liabilities, and fairly present the financial condition of such Guarantor, and do not contain any untrue statement of a material fact or omit to state a fact material to the financial statements submitted or this Guaranty, and (ii) no material adverse change has occurred in the financial statements from the dates thereof until the date hereof.  Each Guarantor shall furnish to the Lender financial statements and other information as provided in Section 7.4 of the Loan Agreement.

 

10.                                 Transfers, Sales, Etc.  Each Guarantor shall not sell, lease, transfer, convey or assign any of its or his assets, unless (i) if the Guarantor is a natural person, such sale, lease, transfer, conveyance or assignment is of a non-material asset of such Guarantor and will not have a material adverse effect on such Guarantor’s financial condition, or (ii) if the Guarantor is a limited liability company, corporation, partnership or other entity, such sale, lease, transfer,

 

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conveyance or assignment will not have a material adverse effect on the business or financial condition of such Guarantor or its ability to perform its obligations hereunder.

 

11.                                 Default; Remedies.  An Event of Default shall occur hereunder if any Guarantor shall fail to pay or perform any of its covenants, agreements and obligations hereunder, or if any representation or warranty contained herein shall prove to be untrue or incorrect in any material respect.  When any Event of Default hereunder has occurred and is continuing, the Lender may exercise any of the rights and remedies provided for herein or in any of the other Loan Documents, or provided to it by law, including, without limitation, the right of setoff.

 

12.                                 Enforcement Costs and Interest.  If: (i) this Guaranty is placed in the hands of one or more attorneys for collection or is collected through any legal proceeding; (ii) one or more attorneys is retained to represent the Lender in any bankruptcy, reorganization, receivership or other proceedings affecting creditors’ rights and involving a claim under this Guaranty, or (iii) one or more attorneys is retained to represent the Lender in any other proceedings whatsoever in connection with this Guaranty, then the Guarantors shall pay to the Lender upon demand all fees, costs and expenses incurred by the Lender in connection therewith, including, without limitation, reasonable attorney’s fees, court costs and filing fees, in addition to all other amounts due hereunder.  Amounts due from a Guarantor under this Guaranty shall bear interest until paid at the Default Rate.

 

13.                                 Successors and Assigns; Joint and Several Liability.  This Guaranty shall inure to the benefit of the Lender and its successors and assigns.  This Guaranty shall be binding on each Guarantor and the heirs, legatees, successors and assigns of such Guarantor.  If this Guaranty is executed by more than one Guarantor, it shall be the joint and several undertaking of each of the undersigned.  Regardless of whether this Guaranty is executed by more than one Guarantor, it is agreed that the liability of the undersigned hereunder is several and independent of any other guarantees or other obligations at any time in effect with respect to the Guaranteed Obligations or any part thereof and that the liability of any Guarantor hereunder may be enforced regardless of the existence, validity, enforcement or non-enforcement of any such other guarantees or other obligations.

 

14.                                 No Waiver of Rights.  No delay or failure on the part of the Lender to exercise any right, power or privilege under this Guaranty or any of the other Loan Documents shall operate as a waiver thereof, and no single or partial exercise of any right, power or privilege shall preclude any other or further exercise thereof or the exercise of any other power or right, or be deemed to establish a custom or course of dealing or performance between the parties hereto.  The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies provided by law.  No notice to or demand on any Guarantor in any case shall entitle such Guarantor to any other or further notice or demand in the same, similar or other circumstance.

 

15.                                 Prior Agreements; No Reliance; Modification.  This Guaranty shall represent the entire, integrated agreement between the parties hereto relating to the subject matter hereof, and shall supersede all prior negotiations, representations or agreements pertaining thereto, either oral or written.  The Guarantors acknowledge that they are executing this Guaranty without relying on any statements, representations or warranties, either oral or written, that are not

 

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expressly set forth herein.  The terms of this Guaranty may be waived, discharged, or terminated only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought.  No amendment, modification, waiver or other change of any of the terms of this Guaranty shall be effective without the prior written consent of the Lender.

 

16.                                 Joinder.  Any action to enforce this Guaranty may be brought against any Guarantor without any joinder of the Borrower, any other Guarantor, or any other guarantor of the Guaranteed Obligations in such action.

 

17.                                 Incorporation of Recitals.  The Recitals to this Guaranty are hereby incorporated into and made a part of this Guaranty.

 

18.                                 Severability.  If any provision of this Guaranty is deemed to be invalid by reason of the operation of law, or by reason of the interpretation placed thereon by any administrative agency or any court, the Guarantors and the Lender shall negotiate an equitable adjustment in the provisions of the same in order to effect, to the maximum extent permitted by law, the purpose of this Guaranty and the validity and enforceability of the remaining provisions, or portions or applications thereof, shall not be affected thereby and shall remain in full force and effect.

 

19.                                 Applicable Law.  This Guaranty is governed as to validity, interpretation, effect and in all other respects by laws and decisions of the State of Illinois.

 

20.                                 Captions.  The captions and headings of various Sections of this Guaranty pertaining hereto are for convenience only and are not to be considered as defining or limiting in any way the scope or intent of the provisions hereof.

 

21.                                 Counterparts; Electronic Signatures.  This Guaranty may be executed in any number of counterparts and by the different parties hereto on separate counterparts and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute but one and the same document.  Receipt of an executed signature page to this Guaranty by facsimile or other electronic transmission shall constitute effective delivery thereof.  An electronic record of this executed Guaranty maintained by the Lender shall be deemed to be an original.

 

22.                                 Construction.  Each party to this Guaranty and legal counsel to each party have participated in the drafting of this Guaranty, and accordingly the general rule of construction to the effect that any ambiguities in a contract are to be resolved against the party drafting the contract shall not be employed in the construction and interpretation of this Guaranty.

 

23.                                 Notice.  All notices and other communications provided for in this Guaranty (“Notices”) shall be in writing.  The “Notice Addresses” of the parties for purposes of this Guaranty are as follows:

 

	
Guarantors:
    	
 
    	
Glenvue   H&R Nursing, LLC

Two Buckhead Plaza

3050 Peachtree Road NW, Suite 355

Atlanta, Georgia 30305
    

 

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Attention: Boyd P. Gentry
    

 

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AdCare Health Systems, Inc.

5057 Troy Road

Springfield, Ohio 45502

Attention: Boyd P. Gentry
    
	
 
    	
 
    	
 
    
	
With   a copy to:
    	
 
    	
Holt   Ney Zatcoff & Wasserman, LLP

100   Galleria Parkway, Suite 1800

Atlanta,   Georgia 30339

Attention:   Gregory P. Youra
    
	
 
    	
 
    	
 
    
	
Lender:
    	
 
    	
The PrivateBank and Trust Company

120 South LaSalle Street

Chicago, Illinois 60603

Attention:   Amy K. Hallberg
    
	
 
    	
 
    	
 
    
	
With   a copy to:
    	
 
    	
Seyfarth   Shaw LLP

131   South Dearborn Street

Suite 2400

Chicago, Illinois   60603

Attention:   Alvin L. Kruse
    

 

or such other address as a party may designate by notice duly given in accordance with this Section to the other parties.  A Notice to a party shall be effective when delivered to such party’s Notice Address by any means, including, without limitation, personal delivery by the party giving the Notice, delivery by United States regular, certified or registered mail, or delivery by a commercial courier or delivery service.  If the Notice Address of a party includes a facsimile number or electronic mail address, Notice given by facsimile or electronic mail shall be effective when delivered at such facsimile number or email address.  If delivery of a Notice is refused, it shall be deemed to have been delivered at the time of such refusal of delivery.  The party giving a Notice shall have the burden of establishing the fact and date of delivery or refusal of delivery of a Notice.

 

24.                                 Litigation Provisions.

 

(a)                                  EACH GUARANTOR CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED IN CHICAGO, ILLINOIS, AND OF ANY STATE OR FEDERAL COURT LOCATED OR HAVING JURISDICTION IN THE COUNTY IN WHICH THE PROJECT IS LOCATED, IN WHICH ANY LEGAL PROCEEDING MAY BE COMMENCED OR PENDING RELATING IN ANY MANNER TO THIS GUARANTY.

 

(b)                                  EACH GUARANTOR AGREES THAT ANY LEGAL PROCEEDING RELATING TO THIS GUARANTY MAY BE BROUGHT AGAINST SUCH GUARANTOR IN ANY STATE OR FEDERAL COURT LOCATED IN CHICAGO, ILLINOIS, OR ANY STATE OR FEDERAL COURT LOCATED OR HAVING JURISDICTION IN THE COUNTY IN WHICH THE PROJECT IS LOCATED.  EACH 

 

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GUARANTOR WAIVES ANY OBJECTION TO VENUE IN ANY SUCH COURT AND WAIVES ANY RIGHT SUCH GUARANTOR MAY HAVE TO TRANSFER OR CHANGE THE VENUE FROM ANY SUCH COURT.

 

(c)                                  EACH GUARANTOR AGREES THAT SUCH GUARANTOR WILL NOT COMMENCE ANY LEGAL PROCEEDING AGAINST THE LENDER RELATING IN ANY MANNER TO THIS GUARANTY IN ANY COURT OTHER THAN A STATE OR FEDERAL COURT LOCATED IN CHICAGO, ILLINOIS, OR IF A LEGAL PROCEEDING IS COMMENCED BY THE LENDER AGAINST SUCH GUARANTOR IN A COURT IN ANOTHER LOCATION, BY WAY OF A COUNTERCLAIM IN SUCH LEGAL PROCEEDING.

 

(d)                                  EACH GUARANTOR HEREBY WAIVES TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATING TO THIS GUARANTY.

 

[SIGNATURE PAGE(S) AND EXHIBIT(S),

IF ANY, FOLLOW THIS PAGE]

 

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IN WITNESS WHEREOF, the Guarantors have executed this Guaranty as of the date first above written.

 

	
 
    	
GLENVUE   H&R NURSING, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/ Christopher F. Brogdon
    
	
 
    	
 
    	
Christopher F. Brogdon, Manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ADCARE   HEALTH SYSTEMS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Christopher F. Brogdon
    
	
 
    	
 
    	
 
    	
Christopher   F. Brogdon
    
	
 
    	
 
    	
 
    	
Vice   Chairman and Chief Acquisition Officer
    
					

 

- AdCare Glenvue H&R Property Holdings, LLC Owner Loan Guaranty -

- Signature Page –

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