GUARANTY AND SUBORDINATION AGREEMENT
THIS GUARANTY AND SUBORDINATION AGREEMENT ("Guaranty") by and between
the undersigned signing as "Guarantor" at the end hereof ("Guarantors") and
Bennett Funding International, Ltd. ("Lender") is made the 4th day of October,
1994.
RECITALS
WHEREAS, Lender is entering into a Construction Loan Agreement and a
Construction Promissory Note - (collectively the "Agreement") with VCA South
Bend Incorporated ("Developer") bearing even date herewith; and,
WHEREAS, Lender is willing to enter into the Agreement with Developer
only if Guarantors agree to guaranty the full, timely, faithful performance of
and payment under and compliance with the Agreement and the instruments,
agreements and documents called for thereunder (collectively the "Documents").
NOW THEREFORE, in order to induce Lender to enter into the Agreement
with Developer and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, Guarantors hereby unconditionally covenant and
agree with Lender as follows:
1. Each Guarantor hereby jointly, severally and
unconditionally guaranties to Lender (a) the full, complete and punctual
performance by Developer of all the terms, covenants and conditions contained in
the Documents ("Obligations") and (b) the due and punctual payment of all sums
at any time owed by the Developer under the Documents as and when the same shall
become due and payable, whether at maturity, by acceleration or otherwise,
according to the terms of the Documents, and all losses, costs, expenses and
reasonable attorneys' fees incurred by reason of the occurrence of an Event of
Default under the Documents (herein collectively the "Indebtedness"). In case of
failure by the Developer punctually to pay the Indebtedness, each Guarantor
hereby jointly, severally and unconditionally agrees to make such payment
punctually as and when the same shall become due and payable, whether at
maturity or by acceleration or otherwise.
2. Each Guarantor hereby agrees that its obligations hereunder
shall be unconditional, irrespective of (i) the validity, regularity or
enforceability of the Indebtedness, (ii) the absence of any attempt to collect
from the Developer or any other Guarantor, (iii) whether any other action has
been instituted or taken to enforce the same, (iv) the waiver or consent by
Lender with respect to any provisions of the Documents, (v) the validity or
enforceability of the Guaranty against one or more of any other Guarantors or
(vi) any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a Guarantor.
3. Each Guarantor hereby waives diligence, presentment, demand
for payment, filing of claims with a court in the event of receivership or
bankruptcy of the Developer, protest or notice with respect to the Indebtedness
and all demands whatsoever and covenants that its obligations under this
Guaranty will not be discharged except by complete performance of the
obligations of the Developer contained in the Documents. Upon any default of the
Developer, Lender may, at its option, proceed directly and at once, without
notice, against any one or more of the Guarantors to collect and recover the
full amount of its liability hereunder, or any portion thereof, without
proceeding against the Developer, any other Guarantor or any other person, or
foreclosing upon, selling, or otherwise disposing of or collecting or applying
any property, real or personal, Lender may then hold as security for such
Indebtedness.
4. The Guarantors authorize Lender, without notice or demand
and without affecting the liability of the Guarantors hereunder, from time to
time to (a) renew, extend, accelerate or otherwise change the time for payment
of, or otherwise change the terms of the Indebtedness or any part thereof; (b)
accept partial payments on the Indebtedness; (c) take and hold security for the
payment of this Guaranty or the Indebtedness and exchange, enforce, waive and
release any such security; (d) apply such security and direct the order or
manner of sale thereof as Lender in its discretion may determine; and (e)
settle, release, compromise, collect or otherwise liquidate any Indebtedness and
any security therefor in any manner, without affecting or impairing the
obligations of each Guarantor hereunder. Lender may without notice assign this
Guaranty in whole or in part.
5. From and after the occurrence of an event of default by
Developer and until all Indebtedness of the Developer to Lender shall have been
paid in full, each Guarantor shall have no right of subrogation, and each
Guarantor waives any right to enforce any remedy which Lender now has or may
hereafter have against the Developer and any benefit of, and any right to
participate in, any security at any time held by Lender. Each Guarantor waives
all set-offs and counterclaims and all presentments, demands for performance,
notices of non-performance, protests, notices of protest, notices of dishonor,
and notices of acceptance of the Guaranty and of the existence, creation, or
incurring of new or additional Indebtedness.
6. From and after the occurrence of an Event of Default by
Developer, ( as defined in the "Agreement" ), Guarantor subordinates all
Guarantor's liens, security interests, claims and rights of any kind that
Guarantor may now have or hereafter acquire against Developer and/or Developer's
assets and property ("Developer's Property") resulting from Developer's present
and future indebtedness to Guarantor ("Subordinated Indebtedness"), and agrees
that all liens, security interests, claims and rights of any kind that Guarantor
may now have or hereafter acquire against Developer and Developer's Property
resulting from the Subordinated Indebtedness shall be subordinate, inferior and
subject to the claims and rights of Lender against Developer and/or Developer's
Property under the terms of any of the documents whether direct or contingent or
whether now or hereafter created. Guarantor grants to Lender a security interest
in the Subordinated Indebtedness, which shall be collected, enforced and
received by the holder(s) thereof for Lender and be paid over to Lender on
account of the Obligations, but without reducing or affecting in any manner the
liability of Guarantor under any of the other provisions of this Guaranty;
provided, however, that unless an event of default has occurred and is
continuing, Guarantor may retain for its own account reasonable salaries or fees
for services actually rendered or monies due. Notwithstanding anything herein to
the contrary, if any portion of the Subordinated Indebtedness becomes due and
payable prior to its stated maturity, Lender shall be entitled to receive full
performance of the Obligations before the holder(s) thereof is/are entitled to
receive any payment on the Subordinated Indebtedness, except salaries, or for
services actually rendered.
7. Guarantor will not take any action which will either (i) force the
sale of Developer's Property in order to satisfy the Subordinated Indebtedness
or (ii) affect in any manner any and all of Lender's liens, security interests,
claims or rights of any kind that Lender may now have or hereafter acquire
against Developer and/or Developer's Property. Guarantor will refrain from
taking any action which is in any way inconsistent with or in derogation of this
subordination or of the rights of Lender hereunder and covenants to perform such
further acts as necessary or appropriate to giving effect to this subordination.
Without limiting the generality of the foregoing, Guarantor will not assign any
portion of the Subordinated Indebtedness, except expressly subject to the terms
of this Guaranty; and Guarantor shall cause all evidence of the Subordinated
Indebtedness to set forth the provisions hereof or to bear a legend that it is
subject hereto.
8. This Guaranty constitutes the entire understanding of the parties
with respect to the subject matter hereof and neither this Guaranty nor any
provision hereof may be amended, terminated, changed, waived or discharged
orally, but only by an instrument in writing signed by the party against which
enforcement of the amendment, termination, change, waiver or discharge is
sought.
9. This Guaranty may be signed in any number of counterparts with the
same effect as if the signatures thereto and hereto were upon the same
instrument.
10. No failure or delay by Lender or the holder of the Construction
Promissory Note in exercising any right, power or privilege hereunder or
thereunder shall operate as a waiver thereof; nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any right, power or privilege.
11. This Guaranty shall be deemed to have been negotiated, made and
executed in Onondaga County, State of New York regardless of the order in which
the signatures of the parties shall be affixed hereto. This Guaranty and the
rights of the parties hereunder shall be interpreted, construed and enforced in
accordance with the laws and public policies of the State of New York, exclusive
of New York's Conflict of Laws rules and public policies. IN ANY ACTION TO
ENFORCE THE PROVISIONS OF THIS GUARANTY, PERSONAL JURISDICTION AND VENUE SHALL
BE IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF NEW YORK.
IN WITNESS WHEREOF, this Guaranty has been executed by the undersigned
on this 4th day of October, 1994.
ILX Incorporated
By:
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