Exhibit 10.64
GUARANTY
Project Commonly Known as
“1129 20th Street”
     THIS GUARANTY (“Guaranty”) made as of February 16, 2007, by REPUBLIC
PROPERTY LIMITED PARTNERSHIP, a Delaware limited partnership (“Republic OP”),
and REPUBLIC PROPERTY TRUST, a Maryland real estate investment trust (“Trust”;
Republic OP and Trust are hereinafter referred to collectively as “Guarantors”),
to and for the benefit of KEYBANK NATIONAL ASSOCIATION (“KeyBank”), a national
banking association, as Agent (“Agent”), and KeyBank and the other lenders now
or hereafter a party to the Loan Agreement (as hereinafter defined) (the
“Lenders”) (Agent and the Lenders, and their successors and assigns, are
hereinafter referred to collectively as the “Credit Parties”).
R E C I T A L S
     C. On or about the date hereof, Republic 20th Street LLC, a Delaware
limited liability company (“Borrower”), Agent and the Lenders entered into that
certain Construction Loan Agreement (the “Loan Agreement”) whereby the Lenders
agreed to make a secured construction loan (the “Loan”) available to Borrower in
the maximum aggregate amount at any time outstanding not to exceed the sum of
Seventy-Four Million Dollars ($74,000,000), to finance the acquisition and
development of 1129 20th Street, N.W., Washington, D.C. (the “Project”).
Capitalized terms used and not otherwise defined herein shall have the meanings
given to them in the Loan Agreement.
     D. In connection with the Loan, Borrower has executed and delivered the
Notes in favor of Lenders, payment of which is secured by (i) the Deed of Trust,
and (ii) the other Loan Documents.
     E. Guarantors will derive material financial benefit from the Loan
evidenced and secured by the Note, the Deed of Trust and the other Loan
Documents.
     F. The Credit Parties have relied on the statements and agreements
contained herein in agreeing to make the Loan. The execution and delivery of
this Guaranty by Guarantor is a condition precedent to the making of the Loan by
Lenders.
AGREEMENTS
     NOW, THEREFORE, intending to be legally bound, Guarantors, in consideration
of the matters described in the foregoing Recitals, which Recitals are
incorporated herein and made a part hereof, and for other good and valuable
consideration the receipt and sufficiency of which are acknowledged, hereby
covenant and agree for the benefit of the Credit Parties and their respective
successors, indorsees, transferees, participants and assigns as follows:
     (A) Guarantors, absolutely, unconditionally, and irrevocably guarantee:
          1. the full and prompt payment of the principal of and interest on the
Notes when due, whether at stated maturity, upon acceleration or otherwise, and
at all times thereafter, and the full and prompt payment of all sums which may
now be or may hereafter become due and owing under the Note, the Loan Agreement
and the other Loan Documents;
          2. the full, complete and punctual observance, performance and
satisfaction of all of the obligations, duties, covenants and agreements of
Borrower under the Loan Agreement and the other Loan Documents, including,
without limitation, Borrower’s covenants and agreements with respect to the
Construction and completion of the Project free of any claim for mechanics’,
materialmen’s or any other liens, and in accordance

 

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with (i) all Laws, (ii) the Plans and Specifications and (iii) the time periods
and other requirements set forth in the Loan Documents, including, without
limitation, the following:
               1. To perform, complete and pay for (or cause to be performed,
completed and paid for) the Construction and to pay all costs of said
Construction (including any and all cost overruns) and all other costs
associated with the Project (including, without limitation, the costs of any
architects’ and engineers’ fees), if Borrower shall fail to perform, complete or
pay for such work, including any sums expended in excess of the amount of
indebtedness incurred by Borrower under the Loan Agreement or with respect to
the Loan, whether or not the Construction is actually completed;
               2. If the Credit Parties exercise their right under
Section 20.1(a) of the Loan Agreement to take possession of the Project and
complete the Construction, to reimburse the Credit Parties for all costs and
expenses incurred by the Credit Parties in excess of the applicable Budget Line
Items therefor (if any) in so taking possession of the Project and completing
the Construction pursuant to the Plans and Specifications;
               3. If any mechanics’ or materialmen’s liens should be filed, or
should attach, with respect to the Project by reason of the Construction, to
immediately cause the removal of such liens, or post security against the
consequences of their possible foreclosure and procure an endorsement(s) to the
title policy insuring the Credit Parties against the consequences of the
foreclosure or enforcement of such lien(s);
               4. If any chattel mortgages, conditional vendor’s liens or any
liens, encumbrances or security interests whatsoever should be filed, or should
attach, with respect to the personal property, fixtures, attachments and
equipment delivered upon the Project and owned by Borrower, attached to the
Project or used in connection with the construction of the Improvements, to
immediately cause the removal of such lien(s) or post security against the
consequences of their possible foreclosure and procure an endorsement(s) to the
title policy insuring the Credit Parties against the consequences of the
foreclosure or enforcement of such lien(s); and
               5. Before the first to occur of (i) five (5) days after receipt
of written notice from Agent and (ii) five (5) days before the lapse of the
applicable policy of insurance, to pay the premiums for all policies of
insurance required to be furnished by Borrower pursuant to the Loan Agreement
during the Construction if such premiums are not paid by Borrower;
          3. Borrower’s obligation to keep the Loan In Balance (as more
particularly defined and described in Article 11 of the Loan Agreement) and the
full and prompt payment of all Deficiency Deposits;
          4. the full, complete and punctual observance, performance and
satisfaction of all of the other obligations, duties, covenants and agreements
of Borrower under the Loan Agreement and the Loan Documents; and
          5. the full and prompt payment of any Enforcement Costs (as
hereinafter defined in Section 7 hereof).
     All amounts due, debts, liabilities, payment obligations and other
obligations described in subsections (a) through (d) of this Section 1 are
referred to herein as the “Obligations.”
     (B) In the event of any default by Borrower in the payment or performance
of the Obligations and the expiration of any applicable cure or grace period,
Guarantors agree, on demand by Agent or the Credit Parties (which demand may be
made concurrently with notice to Borrower that Borrower is in default of its
obligations but which demand shall not require performance until expiration of
all applicable cure and grace periods), to pay and perform all the Obligations
regardless of any defense, right of setoff or claims which Borrower or any
Guarantor may have against any of the Credit Parties. Following an Event of
Default, the Credit Parties shall have the right, at their option, either
before, during or after commencing foreclosure or sale proceedings, as the case
may be, and before, during or after pursuing any other right or remedy against
Borrower or any Guarantor, to perform any and all of the Obligations by or
through any agent, contractor or subcontractor of its selection, all as the
Credit Parties in

 

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their sole discretion deem proper, and Guarantors shall indemnify and hold the
Credit Parties free and harmless from and against any and all loss, damage,
cost, expense, injury, or liability the Credit Parties may suffer or incur in
connection with the exercise of their rights under this Guaranty or the
performance of the Obligations. Furthermore, the Credit Parties shall not have
any obligation to protect or insure any collateral for the Loan, nor shall the
Credit Parties have any obligation to perfect their security interest in any
collateral for the Loan.
     During the course of any construction undertaken after an Event of Default
by the Credit Parties or any other party on behalf of the Credit Parties in
accordance with the terms of this Guaranty, Guarantors shall pay on demand any
amounts due to contractors, Subcontractors, and material suppliers and for
permits and licenses necessary or desirable in connection therewith. Guarantors’
obligations in connection with such work shall not be affected by any errors or
omissions of the General Contractor, Architect, Lender’s Consultant or any
Subcontractor or agent or employee of any of the foregoing in the design,
supervision, and performance of the work; it being understood that such risk is
assumed by Guarantors. Neither the completion of the Construction nor failure of
said party to complete the Construction shall relieve Guarantors of any
liabilities hereunder; rather, such liability shall be continuing and may be
enforced by the Credit Parties to the end that the Construction shall be timely
completed, lien-free, without loss, cost, expense, injury or liability of any
kind to the Credit Parties.
     All of the remedies set forth herein and/or provided for in any of the Loan
Documents or at law or equity shall be available to the Credit Parties, and the
choice by the Credit Parties of one such alternative over another shall not be
subject to question or challenge by Guarantors or any other Person, nor shall
any such choice be asserted as a defense, setoff, or failure to mitigate damages
in any action, proceeding, or counteraction by the Credit Parties to recover or
seeking any other remedy under this Guaranty, nor shall such choice preclude the
Credit Parties from subsequently electing to exercise a different remedy. The
parties have agreed to the alternative remedies hereinabove specified in part
because they recognize that the choice of remedies in the event of a failure
hereunder will necessarily be and should properly be a matter of good faith
business judgment, which the passage of time and events may or may not prove to
have been the best choice to maximize recovery by the Credit Parties at the
lowest cost to Borrower and/or Guarantors. It is the intention of the parties
that such good faith choice by the Credit Parties be given conclusive effect
regardless of such subsequent developments.
     (C) Each Guarantor hereby agrees that its obligations hereunder shall not
be affected or impaired by, and hereby waives and agrees not to assert or take
advantage of any defense based on:
          1. (i) any change in the amount, interest rate or due date or other
term of any of the obligations hereby guaranteed, (ii) any change in the time,
place or manner of payment of all or any portion of the obligations hereby
guaranteed, (iii) any amendment or waiver of, or consent to the departure from
or other indulgence with respect to, the Loan Agreement, any other Loan
Document, or any other document or instrument evidencing or relating to any
obligations hereby guaranteed, or (iv) any waiver, renewal, extension, addition,
or supplement to, or deletion from, or any other action or inaction under or in
respect of, the Loan Agreement, any of the other Loan Documents, or any other
documents, instruments or agreements relating to the obligations hereby
guaranteed or any other instrument or agreement referred to therein or
evidencing any obligations hereby guaranteed or any assignment or transfer of
any of the foregoing;
          2. any subordination of the payment of the obligations hereby
guaranteed to the payment of any other liability of Borrower or any other
person;
          3. any act or failure to act by Borrower or any other Person which may
adversely affect Guarantors’ subrogation rights, if any, against Borrower or any
other Person to recover payments made under this Guaranty;
          4. any nonperfection or impairment of any security interest or other
lien on any collateral, if any, securing in any way any of the obligations
hereby guaranteed or any failure on the part of the Credit Parties to ascertain
the extent or nature of any collateral or any insurance or other rights with
respect thereto, or the liability of any party liable under the Loan Documents
or the obligations evidenced or secured thereby;
          5. any application of sums paid by Borrower or any other Person with
respect to the Obligations, regardless of what liabilities of Borrower remain
unpaid;

 

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          6. any defense of Borrower, including without limitation, the
invalidity, illegality or unenforceability of any of the Obligations;
          7. either with or without notice to Guarantors, any renewal,
extension, modification, amendment or another changes in the Obligations,
including but not limited to any material alteration of the terms of payment or
performance of the Obligations;
          8. any statute of limitations in any action hereunder or for the
collection of the Note or for the payment or performance of any obligation
hereby guaranteed;
          9. the incapacity, lack of authority, death or disability of Borrower
or any other Person or entity, or the failure of the Credit Parties to file or
enforce a claim against the estate (either in administration, bankruptcy or in
any other proceeding) of Borrower or Guarantors or any other Person;
          10. the dissolution or termination of existence of Borrower,
Guarantors or any other Person;
          11. the voluntary or involuntary liquidation, sale or other
disposition of all or substantially all of the assets of Borrower or Guarantors
or any other Person;
          12. the voluntary or involuntary receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, assignment,
composition, or readjustment of, or any similar proceeding affecting, Borrower
or Guarantors or any other Person, or any of Borrower’s or any Guarantor’s or
any other Person’s properties or assets;
          13. any right or claim of right to cause a marshaling of the assets of
Borrower or Guarantors;
          14. the damage, destruction, condemnation, foreclosure or surrender of
all or any part of any collateral or the Project or any of the improvements
located thereon;
          15. the failure of the Credit Parties to give notice of the existence,
creation or incurring of any new or additional indebtedness or obligation of
Borrower or of any action or nonaction on the part of any other person
whomsoever in connection with any obligation hereby guaranteed;
          16. any failure or delay of the Credit Parties to commence an action
against Borrower or any other Person, to assert or enforce any remedies against
Borrower under the Notes or the other Loan Documents, or to realize upon any
security;
          17. any failure of any duty on the part of the Credit Parties to
disclose to Guarantors any facts they may now or hereafter know regarding
Borrower (including, without limitation Borrower’s financial condition), any
other person or entity, any collateral, or any other assets or liabilities of
such person or entity, whether such facts materially increase the risk to
Guarantors or not (it being agreed that Guarantors assume responsibility for
being informed with respect to such information);
          18. failure to accept or give notice of acceptance of this Guaranty by
the Credit Parties;
          19. failure to make or give notice of presentment and demand for
payment of any of the indebtedness or performance of any of the obligations
hereby guaranteed;
          20. failure to make or give protest and notice of dishonor or of
default to Guarantors or to any other party with respect to the indebtedness or
performance of obligations hereby guaranteed;
          21. any and all other notices whatsoever to which Guarantors might
otherwise be entitled;
          22. any lack of diligence by the Credit Parties in collection,
protection or realization upon any collateral securing the payment of the
indebtedness or performance of obligations hereby guaranteed;

 

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          23. the invalidity or unenforceability of the Note, or any of the
other Loan Documents, or any assignment or transfer of the foregoing;
          24. the compromise, settlement, release or termination of any or all
of the obligations of Borrower under the Note or the other Loan Documents;
          25. any transfer by Borrower or any other Person of all or any part of
the security encumbered by the Loan Documents;
          26. any right to require the Credit Parties to proceed against
Borrower or any other Person or to proceed against or exhaust any security held
by the Credit Parties at any time or to pursue any other remedy in the Credit
Parties’ power or under any other agreement before proceeding against Guarantors
hereunder or under any other Loan Document;
          27. the failure of the Credit Parties to perfect any security or to
extend or renew the perfection of any security;
          28. any sale or assignment of the Loan Documents, or any interest
therein; or
          29. to the fullest extent permitted by law, any other legal, equitable
or surety defenses whatsoever to which Guarantors might otherwise be entitled,
it being the intention that the obligations of Guarantors hereunder are
absolute, unconditional and irrevocable.
     Guarantors understand that the exercise by the Credit Parties of certain
rights and remedies may affect or eliminate Guarantors’ right of subrogation
against Borrower and that Guarantors may therefore incur partially or totally
nonreimbursable liability hereunder. Nevertheless, Guarantors hereby authorize
and empower the Credit Parties, their successors, endorsees and assigns, to
exercise in its or their sole discretion, any rights and remedies, or any
combination thereof, which may then be available, including, without limitation,
any remedies against Borrower with respect to the Note, it being the purpose and
intent of Guarantors that the obligations hereunder shall be absolute,
continuing, independent and unconditional under any and all circumstances.
     (D) Guarantors hereby consent and agree that the Credit Parties may at any
time, and from time to time, without thereby releasing Guarantors from any
liability hereunder and without notice to or further consent from Guarantors or
any other Person, either with or without consideration: release or surrender any
lien or other security of any kind or nature whatsoever held by them or by any
person, firm or corporation on their behalf or for their account, securing any
indebtedness or liability hereby guaranteed; substitute for any collateral so
held by them, other collateral of like kind, or of any kind; modify the terms of
the Note or the Loan Documents; extend or renew the Note for any period; grant
releases, compromises and indulgences with respect to the Note or the Loan
Documents and to any persons or entities now or hereafter liable thereunder or
hereunder; release any other guarantor, surety, endorser or accommodation party
of the Note or any other Loan Document; or take or fail to take any action of
any type whatsoever. No such action which the Credit Parties shall take or fail
to take in connection with the Note or the Loan Documents, or any of them, or
any security for the payment of the indebtedness of Borrower to the Credit
Parties or for the performance of any obligations or undertakings of Borrower or
Guarantors, nor any course of dealing with Borrower or any other Person, shall
release Guarantors’ obligations hereunder, affect this Guaranty in any way or
afford Guarantors any recourse against the Credit Parties. The provisions of
this Guaranty shall extend and be applicable to all replacements, supplements,
renewals, amendments, extensions, consolidations, restatements and modifications
of the Note and the other Loan Documents, and any and all references herein to
the Note and the other Loan Documents shall be deemed to include any such
replacements, supplements, renewals, extensions, amendments, consolidations,
restatements or modifications thereof. Without limiting the generality of the
foregoing, Guarantors acknowledge the terms of Section 24.1(c) of the Loan
Agreement and agree that this Guaranty shall extend and be applicable to each
new or replacement note delivered by Borrower pursuant thereto without notice to
or further consent from Guarantors. Guarantors acknowledge that no
representations of any kind whatsoever have been made by the Credit Parties. No
modification or waiver of any of the provisions of this Guaranty shall be
binding upon the Credit Parties except as expressly set forth in a writing duly
signed and delivered by Agent in accordance with the provisions of the Loan
Agreement.

 

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     (E) This is an absolute, present and continuing guaranty of payment,
performance and completion and not of collection. Each Guarantor agrees that
this Guaranty may be enforced by the Credit Parties without the necessity at any
time of resorting to or exhausting any other security or collateral given in
connection herewith or with the Note, Loan Agreement, Deed of Trust or any of
the other Loan Documents through foreclosure or sale proceedings, as the case
may be, under the Deed of Trust or otherwise, or resorting to any other
guaranties, and Guarantors hereby waive any right to require the Credit Parties
to join Borrower in any action brought hereunder or to commence any action
against or obtain any judgment against Borrower or to pursue any other remedy or
enforce any other right. Guarantors further agrees that nothing contained herein
or otherwise shall prevent the Credit Parties from pursuing concurrently or
successively all rights and remedies available to them at law and/or in equity
or under the Note, Loan Agreement, Deed of Trust or any other Loan Documents,
and the exercise of any of their rights or the completion of any of their
remedies shall not constitute a discharge of Guarantors’ obligations hereunder,
it being the purpose and intent of Guarantors that the obligations of Guarantors
hereunder shall be absolute, independent and unconditional under any and all
circumstances whatsoever. None of Guarantors’ obligations under this Guaranty or
any remedy for the enforcement thereof shall be impaired, modified, changed or
released in any manner whatsoever by any impairment, modification, change,
release or limitation of the liability of Borrower under the Note, Loan
Agreement, Deed of Trust or other Loan Documents or by reason of the bankruptcy
of Borrower or by reason of any creditor or bankruptcy proceeding instituted by
or against Borrower. This Guaranty shall continue to be effective or be
reinstated (as the case may be) if at any time payment of all or any part of any
sum payable pursuant to the Note, Loan Agreement, Deed of Trust or any other
Loan Document is rescinded or otherwise required to be returned by the Credit
Parties upon the insolvency, bankruptcy, dissolution, liquidation, or
reorganization of Borrower, or upon or as a result of the appointment of a
receiver, intervenor, custodian or conservator of or trustee or similar officer
for, Borrower or any substantial part of its property, or otherwise, all as
though such payment to the Credit Parties had not been made, regardless of
whether the Credit Parties contested the order requiring the return of such
payment. In the event of the foreclosure of the Deed of Trust and of a
deficiency, Guarantors hereby promise and agree forthwith to pay the amount of
such deficiency notwithstanding the fact that recovery of said deficiency
against Borrower would not be allowed by applicable law; however, the foregoing
shall not be deemed to require that the Credit Parties institute foreclosure
proceedings or otherwise resort to or exhaust any other collateral or security
prior to or concurrently with enforcing this Guaranty.
     (F) In the event any Credit Party or any holder of the Note shall assign a
Note to any other Credit Party or other entity to secure a loan from such Credit
Party or other entity to any Credit Party or such holder for an amount not in
excess of the amount which will be due, from time to time, from Borrower to such
Credit Party under such Note with interest not in excess of the rate of interest
which is payable by Borrower to such Credit Party under such Note, Guarantors
will accord full recognition thereto and agree that all rights and remedies of
such Credit Party or such holder hereunder shall be enforceable against
Guarantors by such Credit Party or other entity with the same force and effect
and to the same extent as would have been enforceable by such Credit Party or
such holder but for such assignment; provided, however, that unless such Credit
Party shall otherwise consent in writing, such Credit Party shall have an
unimpaired right, prior and superior to that of its assignee or transferee, to
enforce this Guaranty for the Credit Parties’ benefit to the extent any portion
of the Indebtedness or any interest therein is not assigned or transferred.
     (G) If: (a) following an Event of Default this Guaranty is placed in the
hands of an attorney for collection or is collected through any legal
proceeding; (b) an attorney is retained to represent the Credit Parties in any
bankruptcy, reorganization, receivership, or other proceedings affecting
creditors’ rights and involving a claim under this Guaranty; (c) following an
Event of Default an attorney is retained to provide advice or other
representation with respect to this Guaranty; or (d) an attorney is retained to
represent any one or more of the Credit Parties in any proceedings whatsoever in
connection with this Guaranty and the Credit Parties prevail in any such
proceedings, then Guarantors shall pay to the Credit Parties upon demand all
attorney’s fees, costs and expenses incurred in connection therewith (all of
which are referred to herein as “Enforcement Costs”), in addition to all other
amounts due hereunder, regardless of whether all or a portion of such
Enforcement Costs are incurred in a single proceeding brought to enforce this
Guaranty as well as the other Loan Documents.
     (H) The parties hereto intend and believe that each provision in this
Guaranty comports with all applicable local, state and federal laws and judicial
decisions. However, if any provision or provisions, or if any portion of any
provision or provisions, in this Guaranty is found by a court of law to be in
violation of any applicable local, state or federal ordinance, statute, law,
administrative or judicial decision, or public policy, and if

 

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such court should declare such portion, provision or provisions of this Guaranty
to be illegal, invalid, unlawful, void or unenforceable as written, then it is
the intent of all parties hereto that such portion, provision or provisions
shall be given force to the fullest possible extent that they are legal, valid
and enforceable, that the remainder of this Guaranty shall be construed as if
such illegal, invalid, unlawful, void or unenforceable portion, provision or
provisions were not contained therein, and that the rights, obligations and
interest of the Credit Parties or the holder of the Note under the remainder of
this Guaranty shall continue in full force and effect.
     (I) TO THE GREATEST EXTENT PERMITTED BY LAW, EACH GUARANTOR HEREBY WAIVES
ANY AND ALL RIGHTS TO REQUIRE MARSHALLING OF ASSETS BY THE CREDIT PARTIES. WITH
RESPECT TO ANY SUIT, ACTION OR PROCEEDINGS RELATING TO THIS GUARANTY (EACH, A
“PROCEEDING”), THE CREDIT PARTIES AND GUARANTORS IRREVOCABLY (A) SUBMIT TO THE
NON-EXCLUSIVE JURISDICTION OF THE LOCAL AND FEDERAL COURTS HAVING JURISDICTION
IN THE DISTRICT OF COLUMBIA, AND (B) WAIVE ANY OBJECTION WHICH IT MAY HAVE AT
ANY TIME TO THE LAYING OF VENUE OF ANY PROCEEDING BROUGHT IN ANY SUCH COURT,
WAIVE ANY CLAIM THAT ANY PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM
AND FURTHER WAIVE THE RIGHT TO OBJECT, WITH RESPECT TO SUCH PROCEEDING, THAT
SUCH COURT DOES NOT HAVE JURISDICTION OVER SUCH PARTY. NOTHING IN THIS GUARANTY
SHALL PRECLUDE THE CREDIT PARTIES FROM BRINGING A PROCEEDING IN ANY OTHER
JURISDICTION NOR WILL THE BRINGING OF A PROCEEDING IN ANY ONE OR MORE
JURISDICTIONS PRECLUDE THE BRINGING OF A PROCEEDING IN ANY OTHER JURISDICTION.
THE CREDIT PARTIES AND GUARANTORS FURTHER AGREE AND CONSENT THAT, IN ADDITION TO
ANY METHODS OF SERVICE OF PROCESS PROVIDED FOR UNDER APPLICABLE LAW, ALL SERVICE
OF PROCESS IN ANY PROCEEDING IN ANY LOCAL OR UNITED STATES COURT SITTING IN
DISTRICT OF COLUMBIA AND MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED, DIRECTED TO THE APPLICABLE PARTY AT THE ADDRESS INDICATED
BELOW, AND SERVICE SO MADE SHALL BE COMPLETE UPON RECEIPT; EXCEPT THAT IF SUCH
PARTY SHALL REFUSE TO ACCEPT DELIVERY, SERVICE SHALL BE DEEMED COMPLETE FIVE
(5) DAYS AFTER THE SAME SHALL HAVE BEEN SO MAILED.
     (J) So long as any of the Obligations remain unpaid or undischarged,
Guarantors hereby subordinate any and all indebtedness of Borrower now or
hereafter owed to Guarantors to all indebtedness of Borrower or any other
Guarantor to the Credit Parties, and agree with the Credit Parties that
(a) Guarantors shall not demand or accept any payment from Borrower or any other
Guarantor on account of such indebtedness, (b) Guarantors shall not claim any
offset or other reduction of Guarantors’ obligations hereunder because of any
such indebtedness, and (c) Guarantors shall not take any action to obtain any
interest in any of the security described in and encumbered by the Loan
Documents because of any such indebtedness; provided, however, that, if the
Credit Parties so request, such indebtedness shall be collected, enforced and
received by Guarantors as trustee for the Credit Parties and be paid over to the
Credit Parties on account of the indebtedness of Borrower to the Credit Parties,
but without reducing or affecting in any manner the liability of Guarantors
under the other provisions of this Guaranty except to the extent the principal
amount or other portion of such outstanding indebtedness shall have been reduced
by such payment. Guarantors will not, by paying any sum recoverable hereunder
(whether or not demanded by the Credit Parties) or by any means or on any other
ground, claim any set-off or counterclaim against Borrower in respect of any
liability of Guarantors to Borrower or, in proceedings under federal bankruptcy
law or insolvency proceedings of any nature, prove in competition with the
Credit Parties in respect of any payment hereunder or be entitled to have the
benefit of any counterclaim or proof of claim or dividend or payment by or on
behalf of Borrower or the benefit of any other security for any of the
Obligations hereby guaranteed which, now or hereafter, the Credit Parties may
hold or in which they may have any share. Guarantors hereby expressly waive any
right of contribution from or indemnity against Borrower, whether at law or in
equity, arising from any payments made by Guarantors pursuant to the terms of
this Guaranty, and Guarantors acknowledge that Guarantors have no right
whatsoever to proceed against Borrower or for reimbursement of any such
payments. In connection with the foregoing, Guarantors expressly waive any and
all rights of subrogation to the Credit Parties against Borrower, and Guarantors
hereby waive any rights to enforce any remedy which the Credit Parties may have
against Borrower and any rights to participate in any collateral for Borrower’s
obligations under the Loan Documents.

 

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     (K) If following an Event of Default any amounts received by the Credit
Parties from any source on account of the Loan may be utilized by the Credit
Parties for the payment and performance of the Obligations and in such order as
the Credit Parties may from time to time elect. Additionally, if the Obligations
guaranteed hereby are less than the full indebtedness evidenced by the Note, all
rents, proceeds and avails of the Project, including proceeds of realization of
the Credit Parties’ collateral and all other payments and collections, shall be
deemed applied on the indebtedness of Borrower to the Credit Parties that is not
guaranteed by Guarantors until such unguaranteed Obligations of Borrower to the
Credit Parties has been fully repaid before being applied upon the Obligations
guaranteed by Guarantors.
     (L) GUARANTORS AND THE CREDIT PARTIES (BY THEIR ACCEPTANCE HEREOF) HEREBY
WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR
DEFEND ANY RIGHT UNDER THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR RELATING
THERETO OR ARISING FROM THE LENDING RELATIONSHIP WHICH IS THE SUBJECT OF THIS
GUARANTY AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.
     (M) All notices, demands or requests provided for or permitted to be given
pursuant to this Guaranty (hereinafter in this paragraph referred to as
“Notice”) must be in writing and shall be deemed to have been properly given or
served by personal delivery or by sending same by overnight courier or by
depositing the same in the United States mail, postpaid and registered or
certified, return receipt requested, at the addresses set forth below. Each
Notice shall be effective upon being delivered personally or upon being sent by
overnight courier or upon being deposited in the United States Mail as
aforesaid. The time period in which a response to any such Notice must be given
or any action taken with respect thereto, however, shall commence to run from
the date of receipt if personally delivered or sent by overnight courier or, if
so deposited in the United States Mail, the earlier of three (3) Business Days
following such deposit and the date of receipt as disclosed on the return
receipt. Rejection or other refusal to accept or the inability to deliver
because of changed address of which no Notice was given shall be deemed to be
receipt of the Notice sent. By giving at least fifteen (15) days prior Notice
thereof, Guarantors or a Credit Party shall have the right from time to time and
at any time during the term of this Guaranty to change their respective
addresses and each shall have the right to specify as its address any other
address within the United States of America. For the purposes of this Guaranty:
The address of the Credit Parties is:
KeyBank National Association, as Agent
127 Public Square
Cleveland, Ohio 44114-1306
Attn: Real Estate Capital Services
with a copy to:
KeyBank National Association
127 Public Square
Cleveland, Ohio 44114-1306
Attn: Michael P. Szuba
Telecopy: (216) 689-4997
and to:
McKenna Long & Aldridge LLP
303 Peachtree Street, Suite 5300
Atlanta, Georgia 30308
Attn: William F. Timmons, Esq.

 

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The address of Guarantors is:
c/o Republic Property Trust
13861 Sunrise Valley Drive
Suite 410
Herndon, Virginia 20171
Attn: Gary R. Siegel
     (N) In order to induce the Lenders to make the Loan, Guarantors make the
following representations and warranties to the Credit Parties set forth in this
Section. Guarantors acknowledge that but for the truth and accuracy of the
matters covered by the following representations and warranties, the Lenders
would not have agreed to make the Loan.
          1. Each Guarantor is duly formed, validly existing and in good
standing in its state of organization and has qualified to do business and is in
good standing in any state in which it is necessary in the conduct of its
business.
          2. Each Guarantor maintains an office at the address set forth for
such party in Section 13.
          3. The Guarantors have furnished to Agent: (i) the consolidated
balance sheet of the Trust and its “Subsidiaries” (as defined in the OP Credit
Agreement) as of September 30, 2006 (the “Balance Sheet Date”) and the related
consolidated statement of income and cash flow for the calendar year then ended
certified by the chief financial or accounting officer of the Trust, and
(ii) certain other financial information relating to Guarantors. Such balance
sheet and statements have been prepared in accordance with generally accepted
accounting principles and fairly present the consolidated financial condition of
the Trust and its Subsidiaries as of such dates and the consolidated results of
the operations of the Trust and its Subsidiaries for such periods. There are no
liabilities, contingent or otherwise, of Republic OP or any of their respective
Subsidiaries involving material amounts not disclosed in said financial
statements and the related notes thereto.
          4. No Material Changes. Since the Balance Sheet Date, there has
occurred no materially adverse change in the financial condition, prospects or
business of Republic OP, the Trust and their respective Subsidiaries taken as a
whole as shown on or reflected in the consolidated balance sheet of the Trust as
of the Balance Sheet Date, or its consolidated statement of income or cash flows
for the calendar year then ended, other than changes in the ordinary course of
business that have not and could not reasonably be expected to have a Material
Adverse Change.
          5. The execution, delivery, and performance by Guarantors of this
Guaranty does not and will not contravene or conflict with (i) any Laws, order,
rule, regulation, writ, injunction or decree now in effect of any Government
Authority, or court having jurisdiction over Guarantors, (ii) any contractual
restriction binding on or affecting Guarantors or Guarantors’ property or assets
which may adversely affect Guarantors’ ability to fulfill its obligations under
this Guaranty, (iii) the instruments creating any trust holding title to any
assets included in Guarantors’ financial statements, or (iv) the organizational
or other documents of Guarantors.
          6. This Guaranty creates legal, valid, and binding obligations of
Guarantors enforceable in accordance with its terms, except as enforceability is
limited by bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting generally the enforcement of creditors’ rights and
except to the extent that availability of the remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceeding therefor may be brought.
          7. Except as disclosed in writing to the Credit Parties, there is no
action, proceeding, or investigation pending or, to the knowledge of Guarantors,
threatened or affecting any Guarantor, which may adversely affect such
Guarantor’s ability to fulfill its obligations under this Guaranty. There are no
judgments or orders for the payment of money rendered against any Guarantor for
an amount in excess of $5,000,000 which have been undischarged for a period of
ten (10) or more consecutive days and the enforcement of which is not stayed by

 

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reason of a pending appeal or otherwise. Neither Guarantor is in default under
any agreements which may materially adversely affect such Guarantor’s ability to
fulfill its obligations under this Guaranty.
          8. All statements set forth in the Recitals are true and correct.
          9. Trust conducts its business in a manner which enables it to qualify
as a real estate investment trust under, and to be entitled to the benefits of,
§856 of the Code, and has elected to be treated as and is entitled to the
benefits of a real estate investment trust thereunder.
     All of the foregoing representations and warranties shall be deemed remade
on the date of the first disbursement of Loan proceeds, on the date of each
advance of Loan proceeds, and upon any extension of the Loan pursuant to the
Loan Agreement. Guarantors hereby agree to indemnify and hold the Credit Parties
free and harmless from and against all loss, cost, liability, damage, and
expense, including attorney’s fees and costs, which the Credit Parties may
sustain by reason of the inaccuracy or breach of any of the foregoing
representations and warranties as of the date the foregoing representations and
warranties are made and are remade.
     (O) Guarantors shall deliver or cause to be delivered to the Credit Parties
all of the Guarantors financial statements to be delivered in accordance with
the terms of the Loan Agreement.
     (P) This Guaranty shall be binding upon the successors and assigns of
Guarantors and shall not be discharged in whole or in part by the death or the
dissolution of any principal in Guarantors. Notwithstanding the foregoing,
Guarantors may not assign or transfer any of their rights or obligations under
this Guaranty without the prior written consent of the Credit Parties. If more
than one party executes this Guaranty, the liability of all such parties shall
be joint and several.
     (Q) THIS GUARANTY, THE NOTE, AND ALL OTHER INSTRUMENTS EVIDENCING AND
SECURING THE LOAN SECURED HEREBY WERE DELIVERED BY GUARANTORS AND ACCEPTED BY
AGENT IN THE DISTRICT OF COLUMBIA, WHICH JURISDICTION THE PARTIES AGREE HAS A
SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND THE UNDERLYING TRANSACTIONS EMBODIED
HEREBY. IN ALL RESPECTS, INCLUDING, WITHOUT LIMITATION, MATTERS OF CONSTRUCTION
OF THE IMPROVEMENTS AND PERFORMANCE OF THIS GUARANTY AND THE OBLIGATIONS ARISING
HEREUNDER, THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE DISTRICT OF COLUMBIA APPLICABLE TO CONTRACTS MADE AND
TO BE PERFORMED IN SUCH JURISDICTION AND ANY APPLICABLE LAWS OF THE UNITED
STATES OF AMERICA.
     (R) Lenders shall be entitled to honor any request for Loan proceeds made
by Borrower and shall have no obligation to see to the proper disposition of
such advances. Guarantors agree that their respective obligations hereunder
shall not be released or affected by reason of any improper disposition by
Borrower of such Loan proceeds.
     (S) In the event of the business failure of a Guarantor or if there shall
be pending any bankruptcy or insolvency case or proceeding with respect to a
Guarantor under federal bankruptcy law or any other applicable law or in
connection with the insolvency of a Guarantor, or if a liquidator, receiver, or
trustee shall have been appointed for a Guarantor or a Guarantor’s properties or
assets, the Credit Parties may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Credit Parties allowed in any proceedings relative to such Guarantor, or any of
such Guarantor’s properties or assets, and, irrespective of whether the
indebtedness or other obligations of Borrower guaranteed hereby shall then be
due and payable, by declaration or otherwise, the Credit Parties shall be
entitled and empowered to file and prove a claim for the whole amount of any
sums or sums owing with respect to the indebtedness or other obligations of
Borrower guaranteed hereby, and to collect and receive any moneys or other
property payable or deliverable on any such claim. Guarantors covenant and agree
that upon the commencement of a voluntary or involuntary bankruptcy proceeding
by or against Borrower, Guarantors shall not seek a supplemental stay or
otherwise pursuant to 11 U.S.C. §105 or any other provision of the United States
Bankruptcy Code, as amended, or any other debtor relief law (whether statutory,
common law, case law, or otherwise) of any jurisdiction whatsoever, now or
hereafter in effect, which

 

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may be or become applicable, to stay, interdict, condition, reduce or inhibit
the ability of the Credit Parties to enforce any rights of the Credit Parties
against Guarantors by virtue of this Guaranty or otherwise.
     (T) Guarantors agree that in addition to disclosures made in accordance
with standard banking practices, any Credit Party may disclose information
obtained by such Credit Party pursuant to this Guaranty to assignees or
participants and potential assignees or participants hereunder subject to the
terms of the Loan Agreement.
     (U) This Guaranty may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same instrument.
     (V) The Guarantors covenant and agree that so long as any Loan or Note is
outstanding or any Lender has any obligation to make any Loans:
            1.      a) Guarantors will not permit Consolidated Total
Indebtedness to exceed seventy percent (70%) of Republic OP’s Gross Asset Value;
                     b) Guarantors will not permit the ratio of Adjusted
Consolidated EBITDA to Consolidated Fixed Charges, each for the sum of the two
(2) most recently ended calendar quarters, to be less than 1.45 to 1;
                     c) Guarantors will not at any time permit Republic OP’s
Consolidated Tangible Net Worth to be less than the sum of $190,000,000, plus
seventy-five percent (75%) of the sum of (a) Net Offering Proceeds plus (b) the
value of units in Republic OP or shares in the Trust issued upon the
contribution of assets to Republic OP or its Subsidiaries; and
                     d) the Guarantors will not, and will not permit their
respective Subsidiaries to, create, incur, assume, guarantee or be or remain
liable, contingently or otherwise, with respect to any secured or unsecured
recourse Indebtedness (excluding the “Obligations” (as defined in the OP Credit
Agreement)) that in the aggregate exceeds thirty percent (30%) of Gross Asset
Value of Republic OP.
          2. For the purposes of this Section 22, the following terms shall have
the meanings set forth in the OP Credit Agreement: Adjusted Consolidated EBITDA;
Consolidated Fixed Charges; Consolidated Changeable Net Worth; Consolidated
Total Indebtedness; Net Offering Proceeds; and Subsidiaries. In addition, any
definitions used in the OP Credit Agreement, the calculations of such amount
shall have the definitions set forth in the OP Credit Agreement, to the effect
that such calculations for this Guaranty shall be calculated in the same manner
as set forth in the OP Credit Agreement. In the event that the OP Credit
Agreement shall terminate or otherwise be of no force or effect, then such terms
shall have the meanings and such calculations shall be made in the same manner
as set forth in the OP Credit Agreement as immediately in effect prior to such
termination or other event. Upon the request of Agent, the Guarantors shall
enter into such amendments to this Guaranty as Agent may reasonably request to
incorporate some or all of such definitions of the OP Credit Agreement into this
Guaranty.
          3. Guarantors shall furnish to Agent each of the financial statements,
reports, compliance certificates and other items and information required under
Article 7 of the OP Credit Agreement to be delivered to the “Agent” or the
“Banks” thereunder, in the form and on the dates required by the OP Credit
Agreement to be delivered to the “Agent” or the “Banks” for so long as this
Agreement is in effect; provided that the delivery of such items to the Banks as
“Banks” and the “Agent” under the OP Credit Agreement shall satisfy the
foregoing requirement.
          4. Trust shall at all times comply with all requirements and
applicable laws and regulations necessary to maintain REIT Status and shall
continue to receive REIT Status. The common stock of Trust shall at all times be
listed for trading and be traded on the New York Stock Exchange or another
national exchange.

 

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          5. Neither Republic OP nor the Trust will, nor will Republic OP or the
Trust permit any of their respective Subsidiaries to, become a party to any
dissolution, liquidation, disposition of all or substantially all of its assets
or business, merger, reorganization, consolidation or other business combination
or agree to effect any asset acquisition, stock acquisition or other acquisition
individually or in a series of transactions which may have a similar effect as
any of the foregoing, in each case without the prior written consent of the
Required Lenders except for (i) the merger or consolidation of one or more of
the Subsidiaries of Republic OP (other than Borrower) with and into Republic OP
(it being understood and agreed that in any such event Republic OP will be the
surviving Person) and (ii) the merger or consolidation of two or more
Subsidiaries of Republic OP; provided that no such merger or consolidation shall
involve Borrower. A Subsidiary of Republic OP (other than the Borrower) may sell
all of its assets (and may effectuate such sale by merger or consolidation with
another Person, with such other Person being the surviving entity) subject to
compliance with the terms of this Guaranty, and after any such permitted sale,
may dissolve.
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     IN WITNESS WHEREOF, Guarantors have delivered this Guaranty as of the date
first written above.

                          GUARANTORS:        
 
                        REPUBLIC PROPERTY LIMITED PARTNERSHIP, a Delaware      
      limited partnership        
 
                        By:   Republic Property Trust, a Maryland real estate  
      investment trust, its sole general partner

                  By:   /s/ Gary R. Siegel       Name:   Gary R. Siegel     
Title:   Chief Operating Officer

                             (SEAL)     

            REPUBLIC PROPERTY TRUST, a Maryland real estate
investment trust
      By:   /s/ Gary R. Siegel       Name:   Gary R. Siegel      Title:   Chief
Operating Officer

                             (SEAL)