{"id":41205,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/payment-guaranty-edison-schools-inc-and-keybank-na.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"payment-guaranty-edison-schools-inc-and-keybank-na","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/finance\/payment-guaranty-edison-schools-inc-and-keybank-na.html","title":{"rendered":"Payment Guaranty &#8211; Edison Schools Inc. and KeyBank NA"},"content":{"rendered":"<pre>                                PAYMENT GUARANTY\n\n     THIS PAYMENT GUARANTY (\"Guaranty\") is made effective as of July 21, 2000, \nby and between EDISON SCHOOLS INC., a Delaware corporation (\"Edison\"), 521 \nFifth Avenue, 15th Floor, New York, New York 10175, and KEYBANK NATIONAL \nASSOCIATION, a national banking association (the \"Bank\"), 34 Main Street, \nDayton, Ohio 45402.\n\n                                    RECITALS\n\n     A.   Pursuant to the terms and conditions contained in a Loan Agreement \ndated July 21, 2000, between Alliance Edison LLC, a Delaware limited liability \ncompany (the \"Company\"), and Bank (the \"Loan Agreement\"), Bank has agreed to \nmake the Company a construction loan in an amount not to exceed $1,620,000.00 \n(the \"Loan\") to assist the Company in constructing a charter school to be known \nas the Dayton View Academy (the \"Improvements\") upon a parcel of real estate \ncontaining approximately 5.8494 acres of land located at 1415 West Riverview \nAvenue, Dayton, Ohio 45407 (the \"Premises\"). The Company has leased the \nPremises pursuant to the terms and conditions contained in a Ground Lease \nAgreement dated as of November 23, 1999 as amended by a First Amendment to \nGround Lease dated as of July 21, 2000 (collectively, the \"Ground Lease\"), \nbetween the Dayton Metropolitan Housing Authority (\"DMHA\"), as Landlord, and \nAlliance Facilities Management, Inc., an Ohio non-profit corporation (\"AFM\"), \nas Tenant. The Ground Lease has been assigned and transferred to the Company by \nAFM pursuant to the terms and conditions contained in an Assignment and \nAssumption of Ground Lease and Lessor Consent dated as of July 21, 2000 (the \n\"Ground Lease Assignment), between AFM, as Assignor, the Company, as Assignee, \nand DMHA, as Lessor. The Premises and Improvements will be subleased to \nAlliance Community Schools, Inc., an Ohio non-profit corporation (\"ACS\"), \npursuant to the terms and conditions contained in a Sublease Agreement dated as \nof March 10, 2000, between AFM, as Sublessor, and ACS, as Sublessee, as amended \nby an Amended and Restated Sublease Agreement dated as of July 21, 2000, \nbetween the Company, as Sublessor, and ACS, as Sublessee (collectively, the \n\"Sublease\"). The Sublease has been assigned and transferred to the Company by \nAFM pursuant to the terms and conditions contained in an Assignment and \nAssumption of Sublease and Sublessee Consent and Acknowledgement dated as of \nJuly 21, 2000 (the \"Sublease Assignment\"), by and between AFM, as Assignor, the \nCompany, as Assignee, and ACS, as Sublessee.\n\n     B.   The Company has executed and delivered to Bank (i) a Promissory Note\ndated July 21, 2000 in the face amount of $1,620,000.00 (the \"Note\") as evidence\nof the Loan to be made by Bank to the Company, and (ii) an Open-End Leasehold\nMortgage, Assignment of Leases, Rents and Contracts Rights and Security\nAgreement dated July\n   2\n21, 2000 (the \"Mortgage\") in which the Company has mortgaged to Bank its \nleasehold estate in the Improvements and Premises as security for the repayment \nof the Loan.\n\n     C.   The Company has also executed and delivered to Bank (i) a Deposit \nAssignment dated July 21, 2000 (the \"Deposit Assignment\") in which the Company \nhas assigned and transferred to Bank all of its right, title and interest in \nits cash security including, but not limited to, all demand deposit accounts \n(the \"Cash Security\") which the Company maintains at Bank as security for the \nrepayment of the Loan, and (ii) an Environmental Indemnity Agreement dated July \n21, 2000 (the \"Environmental Indemnity\") in which the Company has agreed to \nindemnify Bank from certain environmental liabilities in connection with its \nleasehold estate in the Premises.\n\n     D.   The Company has also executed and delivered to Bank a Security \nAgreement dated July 21, 2000 (the \"Security Agreement\") in which the Company \nhas granted Bank a first lien security interest in (i) all accounts, accounts \nreceivable, contract rights, chattel paper, instruments, general intangibles \nand all other obligations and receivables now owned or hereafter acquired by \nthe Company (\"Receivables\"), (ii) all inventory, including, but not limited to, \nall goods, merchandise, raw materials, goods in process, finished goods and \nother tangible personal property now owned or hereafter acquired and held for \nsale or lease or to be furnished under contracts of service or to be used or \nconsumed in the Company's business (\"Inventory\"), (iii) all machinery, \nequipment, furniture, fixtures and tangible personal property of every kind and \ndescription, now owned or hereafter acquired by the Company and wherever \nlocated (\"Equipment\"), (iv) all replacements of and additions to the Equipment \n(the \"Replacements and Additions\"), and (v) all proceeds of the \nReceivables, Inventory and Equipment including, without limitation, all \ninsurance proceeds (the \"Proceeds\") as security for the repayment of the Loan. \nThe Loan Agreement, Note, Mortgage, Security Agreement, Deposit Assignment and \nEnvironmental Indemnity shall hereinafter be referred to collectively as the \n\"Loan Documents\". The term \"Collateral\" shall mean the Improvements, Premises, \nAccounts Receivable, Equipment, Replacements and Additions and Proceeds and \nCash Security.\n\n     E.   Bank has conditioned its making of the Loan to the Company upon \nreceipt of this Guaranty in which Edison unconditionally guarantees, subject to \nthe terms hereof, to Bank (i) the full and prompt repayment of all principal \nand interest payments which become due and payable to Bank upon the Loan as \nevidenced by the Note, and (ii) the full and prompt payment of all amounts, \nobligations and liabilities which become due and payable to Bank upon the Loan \nDocuments.\n\n     NOW, THEREFORE, in consideration of the mutual promises and covenants \ncontained in this Guaranty, Edison and Bank hereby agree as follows:\n\n\n                                     - 2 -\n\n\n   3\n \n\n                                   ARTICLE I.\n                         REPRESENTATIONS AND WARRANTIES\n\n     SECTION 1.1.    REPRESENTATIONS AND WARRANTIES. Edison hereby represents \nand warrants to Bank the following:\n\n          (a)  There are no actions, suits or proceedings pending or, to the\n     knowledge of Edison, threatened against or affecting Edison or involving\n     the validity or enforceability at law or in equity before any court or\n     before or by any governmental authority or any other matters which would\n     materially impair the ability of Edison to pay when due any amounts which\n     may become payable in respect of the Loan or would reasonably be expected\n     to result in any material adverse change in the business or condition of\n     Edison; to the knowledge of Edison, Edison is not in violation of any\n     applicable statute or regulation of any governmental authorities having\n     jurisdiction over Edison which would have a materially adverse effect on\n     Edison's ability to perform its obligations hereunder; and to the best\n     knowledge of Edison, Edison is not in default with respect to any order,\n     writ, injunctions, decree or demand of any court or any governmental\n     authority; and there are not, to its knowledge, any claims against Edison\n     which would have a materially adverse effect on Edison's ability to perform\n     its obligations hereunder.\n\n          (b)  The consummation of the transaction contemplated hereby and the\n     execution, delivery and performance of this Guaranty will not result in a\n     breach of, or constitute a default under any agreement or any other\n     instrument to which Edison is a party or by which Edison may be bound or\n     any applicable court or governmental order or regulation.\n\n          (c)  Any and all financial statements heretofore delivered to Bank by\n     Edison are true and correct in all material respects and fairly present the\n     financial condition of Edison as of the dates thereof, and no materially\n     adverse change has occurred in the financial conditions reflected therein\n     since the respective dates thereof.\n\n     SECTION 1.2.   COVENANTS. From the date of this Guaranty until the Loan has\nbeen fully paid as to both principal and interest, Edison shall:\n\n          (a)  Furnish Bank as soon as available, but in any event within sixty\n     (60) days after the end of each fiscal quarter of Edison, with (i) a\n     balance sheet of Edison as of the end of such fiscal quarter, (ii) a\n     statement of income and retained earnings of Edison for such fiscal\n     quarter, (iii) a cash flow statement of Edison for such fiscal quarter, and\n     (iv) such other financial information as Bank may reasonably request. These\n     financial statements shall (i) be prepared in reasonable detail, (ii) state\n     in comparative form the respective figures for the corresponding\n\n\n                                     - 3 -\n\n   4\n     date and period in the previous fiscal year, (iii) be prepared in\n     accordance with generally accepted accounting principals consistently\n     applied, subject to normal year-end adjustments, and (iv) be certified by\n     the chief financial officer of Edison.\n\n           (b) Furnish Bank as soon as available, but in any event within one\n     hundred twenty (120) days after the end of each fiscal year of Edison, with\n     (i) a balance sheet of Edison as of the end of such fiscal year, (ii) a\n     statement of income and retained earnings of Edison for such fiscal year,\n     and (iii) a cash flow statement of Edison for such fiscal year. These\n     financial statements shall (i) be prepared in reasonable detail, (ii) state\n     in comparative form the respective figures for the corresponding date and\n     period in the previous fiscal year, (iii) be prepared in accordance with\n     generally accepted accounting principles consistently applied, and (iv) be\n     audited by an independent certified public accounting firm selected by\n     Edison and reasonably acceptable to Bank.\n\n\n                                  ARTICLE II.\n                                   GUARANTY\n\n     SECTION 2.1. PAYMENT GUARANTY. Edison hereby unconditionally guarantees to \nBank the repayment of the following liabilities:     \n\n\n      (a)   The full and prompt payment of all principal and interest payments\n      which become due and payable, whether by acceleration, or otherwise, to\n      Bank from the Company upon the Loan as evidenced by the Note; and\n\n      (b)   The full and prompt payment of all amounts, obligations and\n      liabilities which become due and payable to Bank from the Company pursuant\n      to the Loan Documents including, but not limited to, all obligations to\n      Bank under the Environmental indemnity.\n\nThe term \"Liabilities\" as used in this Guaranty shall mean all liabilities as\ndescribed in Section 2.1(a) and 2.1(b) of this Guaranty. If the Company shall\nfail to pay all or any part of the Liabilities when due, whether by acceleration\nor otherwise, Edison shall pay Bank, upon Bank's written demand, the amount due\nand unpaid by the Company in a like manner as if such amount constituted the \ndirect obligation of Edison. Bank's failure to provide Edison with a written \ndemand for payment shall not be construed as a waiver of Bank's rights against \nEdison under this Guaranty. Prior to any demand upon Edison, Bank shall not \nbe required to make any demand upon or pursue or exhaust any of its rights or \nremedies against the Company or any other guarantors of the Liabilities or to \npursue or exhaust any of its rights or remedies under the Mortgage, Security \nAgreement or Deposit Assignment with respect to the Collateral. Edison shall \nhave no right of subrogation with respect to the Liabilities unless and until \nBank shall have received full payment of all Liabilities. Upon payment in full \nof the Liabilities by Edison after a default in payment by\n\n\n                                      -4-\n\n\n\n   5\nthe Company, Bank shall assign and transfer to Edison all of Bank's right, \ntitle and interest in the Loan Documents.\n\n     SECTION 2.2. TERMINATION OF GUARANTY. The obligations of Edison under this \nGuaranty shall be absolute and unconditional and shall remain in full force and \neffect until all Liabilities have been paid in full and all of the Company's \nobligations to Bank under the Loan Documents have been fully satisfied \nincluding, but not limited to, all of the Company's obligations to Bank under \nthe Environmental Indemnity. Edison acknowledges that the Company's obligations \nto Bank under the Environmental Indemnity shall survive the payment of the \nLoan. Upon termination of Edison's liability to Bank under this Guaranty, Bank \nshall either (i) provide Edison with a separate cancellation of this Guaranty, \nor (ii) return to Edison the original of this Guaranty with a notation that \nthis Guaranty has been either paid or satisfied by the payment of the \nLiabilities.\n\n     SECTION 2.3. WAIVER. Edison hereby expressly waives:\n\n          (a)  Notice from Bank that Bank has accepted and is relying upon this\n     Guaranty;\n\n          (b)  Notice from Bank that Bank has made the Loan to the Company;\n\n          (c)  Notice from Bank that the Company has defaulted in the payment of\n     principal or interest upon the Liabilities; and\n\n          (d)  Any and all set offs, counterclaims and defenses, including, but\n     not limited to, the impairment of collateral defense and the defense that\n     the Company has no personal liability to repay the Loan which either the\n     Company or Edison may have against Bank.\n\n     SECTION 2.4  CONSENT. Edison hereby expressly agrees that without its\nconsent:\n\n          (a)  The Company and Bank may modify the terms and conditions of the\n     Liabilities, including, but not limited to, extending the time for payment\n     or changing the interest rate or the amount of the principal payments due\n     upon the Loan as evidenced by the Note.\n\n          (b)  Bank may release or permit substitution of either the Collateral\n     or any additional collateral now or hereafter held by Bank as security for\n     the repayment of the Liabilities upon such terms and conditions which are\n     satisfactory to Bank in its sole discretion. Bank may release the\n     Collateral with or without any consideration being paid to Bank.\n\n                                     - 5 -\n\n\n   6\n     SECTION 2.5. ATTORNEY FEES AND COSTS. Edison shall pay all reasonable \ncosts, expenses and fees, including all reasonable attorneys' fees, which Bank \nincurs in enforcing or attempting to enforce this Guaranty following any \ndefault by Edison in the performance of its obligations as contained in this \nGuaranty.\n\n                                  ARTICLE III.\n                               GENERAL PROVISIONS\n\n     SECTION 3.1. AMENDMENTS. This Guaranty shall not be modified or amended \nexcept by a written agreement duly executed by Bank and Edison or their \nsuccessors or assigns; provided, however, Edison may not assign its obligations \nas contained in this Guaranty.\n\n     SECTION 3.2. NOTICES. Except as otherwise provided in this Guaranty, any \nnotice required or permitted to be given pursuant to this Guaranty, or in \nconnection with this Guaranty, shall be in writing and shall be deemed to have \nbeen received (i) when personally delivered, or (ii) two (2) days after \ndelivery to any national overnight courier or express mail, or (iii) three (3) \ndays after placed in the United States mail, registered or certified mail, \nreturn receipt requested, with adequate postage affixed thereto, addressed to \nBank or Edison, as the case may be, at the following addresses, or such other \naddress as either of them may from time to time designate in a notice given to \nthe other:\n\n     Bank:\n\n     KeyBank National Association\n     34 North Main Street\n     Dayton, Ohio 45402\n     Attention:  Gary R. Roan\n                 Vice President\n\n     Edison:\n\n     Edison Schools, Inc.\n     521 Fifth Avenue, 15th Floor\n     New York, New York 10175\n     Attention:  H. Christopher Whittle\n                 President, Chief Executive Officer &amp; Director\n\n     With a copy to:\n\n     Coudert Brothers\n     1114 Avenue of the Americas\n     New York, New York 10036-7703\n     Attention:  Joseph D. Farrell, Esq.\n\n\n                                     - 6 -\n\n   7\n     SECTION 3.3. ARTICLE AND SECTION HEADINGS. The headings or titles of the \nseveral articles and sections of this Guaranty shall be solely for convenience \nof reference and shall not affect the meaning, construction or effect of the \nprovisions hereof.\n\n     SECTION 3.4. INTERPRETATION. The singular form of any word used herein, \nshall include the plural, and vice versa, if applicable. The use of a word of \nany gender shall include all genders if applicable.\n\n     SECTION 3.5. CONSTRUCTION. This Guaranty and all related documents shall \nbe deemed to be contracts made and delivered in the State of Ohio, and shall be \ngoverned and construed in accordance with the laws of the State of Ohio.\n\n     SECTION 3.6. SEVERABILITY. If any provision of this Guaranty shall be held \nor deemed to be or shall, in fact, be illegal, inoperative or unenforceable, \nthe same shall not affect any other provision or provisions herein contained or \nrender the same invalid, inoperative or unenforceable to any extent whatsoever.\n\n     SECTION 3.7. COGNOVIT GUARANTY. Edison hereby authorizes any attorney at \nlaw, including any attorney retained by Bank, to appear in any court of record \nwithin the State of Ohio if this Guaranty is not paid when due, whether or not \nby acceleration, to waive issuance and service of process, to confess judgment \nagainst Edison for the amount of principal and interest then appearing due, \ntogether with costs of suit, and to release all errors and right to review. \nEdison hereby expressly (i) waives a conflict of interest in an attorney \nretained by Bank confessing judgment against Edison upon this Guaranty, and \n(ii) consents to the attorney retained by Bank in receiving a legal fee from \nBank for legal services rendered for confessing judgment against Edison upon \nthis Guaranty. A copy of this Guaranty, certified by Bank, may be filed in each \nsuch proceeding in place of filing the original as warrant of attorney.\n\n     IN WITNESS WHEREOF, Edison Schools Inc., by its duly authorized officer, \nhas executed this Payment Guaranty as of the day and year first above written.\n\n\n                                     - 7 -\n\n\n   8\nWARNING - BY SIGNING THIS PAPER, YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT\nTRIAL. IF YOU DO NOT PAY ON TIME, A COURT JUDGMENT MAY BE TAKEN AGAINST YOU\nWITHOUT YOUR PRIOR KNOWLEDGE, AND THE POWERS OF A COURT CAN BE USED TO COLLECT\nFROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR, WHETHER FOR\nRETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT,\nOR ANY OTHER CAUSE.\n\n                                        EDISON SCHOOLS INC.,\n                                        a Delaware corporation\n\n\n\n\n\n                                        By\n                                          ----------------------\n\nACCEPTED THIS 21st DAY OF JULY 2000\n\nKEYBANK NATIONAL ASSOCIATION,\na national banking association\n\n\n\nBy \/s\/ Gary R. Roan\n   --------------------------\n   Gary R. Roan\n   Vice President\n\n\n\n\n                                     - 8 -\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7412,7979],"corporate_contracts_industries":[9415],"corporate_contracts_types":[9560,9565],"class_list":["post-41205","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-edison-schools-inc","corporate_contracts_companies-keycorp","corporate_contracts_industries-financial__banks","corporate_contracts_types-finance","corporate_contracts_types-finance__guaranty"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/41205","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=41205"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41205"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41205"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41205"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}