EX-10 5 ex10-4.htm

Exhibit 10.4

 

Loan No. 526618:11

 

GUARANTY AGREEMENT

THIS GUARANTY AGREEMENT (“Guaranty”), is entered into effective as of August 3,
2011 by FSP 303 EAST WACKER DRIVE LLC. and FSP 303 EAST WACKER DRIVE CORP.
(jointly and severally, “Guarantor”), in favor of JOHN HANCOCK LIFE INSURANCE
COMPANY (U.S.A.) (“Lender”), and the subsequent owners and holders of the herein
below defined Note.

RECITALS:

A. Guarantor as borrower (“Borrower”) has requested a loan (the “Loan”) from
Lender in the amount of $35,000,000.00 to be evidenced by the Mortgage Note of
even date herewith executed by FSP 303 East Wacker Drive LLC ("Borrower"),
payable to Lender in the original principal sum of $35,000,000.00 (the “Note”),
and secured by, inter alia, the Mortgage, Assignment of Leases and Rents and
Security Agreement of even date herewith executed by Borrower in favor of Lender
covering certain property in Cook County, Chicago, Illinois (the “Mortgage”);

B. Section 19 of the Note sets forth certain amounts, obligations and other
liabilities for which Borrower is fully liable to Lender (the “Recourse
Obligations”), notwithstanding limitations on Borrower’s liability pursuant to
said Section 19 of the Note; and

C. As a condition to making the Loan, Lender has required that Borrower and
Guarantor separately guarantee the payment of the Recourse Obligations and
performance of the obligations set forth in Section 1 below (the “Guaranteed
Obligations”).

AGREEMENT:

NOW, THEREFORE, as a material inducement to Lender to agree to make the Loan to
Borrower, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Guarantor hereby does irrevocably
and unconditionally warrant and represent unto and covenant with Lender as
follows:

1. Guaranty. Guarantor hereby (a) guarantees unto Lender the full and timely
payment of the amounts due, or to become due, to Lender under the Recourse
Obligations and (b) agrees with Lender to pay to Lender (i) the amounts due
under the Recourse Obligations within ten (10) business days from the date
Lender notifies Guarantor in writing of Borrower’s failure to pay the same, if
and when the same becomes due, and at the place specified in the Note for
payment and (ii) Lender’s reasonable attorneys’ fees and all court costs
incurred by Lender in enforcing or protecting any of Lender’s rights, remedies
or recourses hereunder.

2. Guarantor’s Representations and Warranties. Guarantor hereby warrants and
represents unto Lender as follows:

(a) that this Guaranty constitutes the legal, valid and binding obligation of
Guarantor and is fully enforceable against Guarantor in accordance with its
terms;

1

Loan No. 526618:11

 

(b) Guarantor is solvent and the execution of this Guaranty Agreement does not
render Guarantor insolvent. Any and all financial statements, balance sheets,
net worth statements and other financial data which have heretofore been
furnished to Lender with respect to Guarantor fairly and accurately present the
financial condition of Guarantor as of the date they were furnished to Lender
and, since that date, there has been no material adverse change in the financial
condition of Guarantor.

(c) that there are no legal proceedings or material claims or demands pending
against or, to the best of Guarantor’s knowledge threatened against, Guarantor
or any of its assets;

(d) that the execution and delivery of this Guaranty and the assumption of
liability hereunder have been in all respects authorized and approved by
Guarantor and its members; Guarantor has full authority and power to execute
this Guaranty and to perform its obligations hereunder; and

(e) that neither the execution nor the delivery of this Guaranty nor the
fulfillment and compliance with the provisions hereof will conflict with, result
in a breach of, constitute a default under or result in the creation of any
lien, charge, or encumbrance upon any property or assets of Guarantor under any
agreement or instrument to which Guarantor is now a party or by which it may be
bound.

3. Waiver. Guarantor hereby waives, to the maximum extent permitted by law, (a)
all notices of acceptance hereof, protest, demand and dishonor, presentment,
notice of nonpayment, notice of intention to accelerate maturity, notice of
acceleration of maturity and all notices and demands of any kind now or
hereafter provided for by any statute or rule of law other than the ten (10)
business day notice referred to in Paragraph 1 above, (b) any and all
requirements that Lender institute any action or proceeding, or exhaust or
attempt to enforce any or all of Lender’s right, remedies or recourses against
Borrower or anyone else or in respect of any mortgaged property or collateral
covered by any Loan Documents (as defined in the Mortgage), or join Borrower or
any other persons liable on the Recourse Obligations in any action to enforce
this Guaranty as a condition precedent to bringing an action against Guarantor
upon this Guaranty, it being expressly agreed that the liability of Guarantor
hereunder shall be primary and not secondary, (c) any defense arising by reason
of any disability, insolvency, lack of authority or power, death, insanity,
minority, dissolution or any other defense of Borrower, or any other surety,
co-maker, endorser or guarantor of the Recourse Obligations (even though
rendering same void, unenforceable or otherwise uncollectible), it being agreed
that Guarantor shall remain liable hereon regardless of whether Borrower or any
other such person be found not liable thereon for any reason, (d) all suretyship
defenses of every kind and nature and (e) any claim Guarantor might otherwise
have against Lender by virtue of Lender’s invocation of any right, remedy or
recourse permitted it hereunder or under the Loan Documents. This is a guaranty
of payment and not a guaranty of collection.

4. Subsequent Acts. Guarantor hereby agrees with Lender that (a) the payments
called for and provisions contained in the Loan Documents, including
specifically (but without limitation) the Note, may be renewed, extended,
rearranged, modified, released or canceled, (b) all or any part of any mortgaged
property and collateral for the indebtedness may be released from, and any new
or additional security may be added to, the lien and security

2

Loan No. 526618:11

interest of the Loan Documents, (c) any additional parties who may become
personally liable for repayment of the Note may hereafter be released from their
liability hereunder and thereon and (d) Lender may take, or delay in taking or
refuse to take, any and all action with reference to the Note and the other Loan
Documents (regardless of whether same might vary the risk or alter the rights,
remedies or recourses of Guarantor), including specifically (but without
limitation) the settlement or compromise of any amount allegedly due thereunder,
all without notice or consideration to or the consent of Guarantor, and no such
acts shall in any way release, diminish or affect the absolute nature of
Guarantor’s obligations and liabilities hereunder. It is the intent of Guarantor
and Lender that such obligations and liabilities hereunder are primary, absolute
and unconditional under any and all circumstances and that, until the Recourse
Obligations are fully and finally satisfied, such obligations and liabilities
shall not be discharged or released, in whole or in part, by any act or
occurrence which, but for this Paragraph 4, might be deemed a legal or equitable
discharge or release of Guarantor.

5. Remedies Cumulative. Guarantor hereby agrees with Lender that all rights,
remedies and recourses afforded to Lender by reason of this Guaranty or
otherwise are (a) separate and cumulative and may be pursued separately,
successively or concurrently, as occasion therefor shall arise, and (b)
non-exclusive and shall in no way limit or prejudice any other legal or
equitable right, remedy or recourse which Lender may have.

6. Subordination and No Subrogation. If, for any reason whatsoever, Borrower now
is or hereafter becomes indebted to Guarantor, such indebtedness and all
interest thereon, shall, at all times, be subordinate in all respects to the
Loan Documents, and Guarantor shall not be entitled to enforce or receive
payment thereof until the Recourse Obligations have been fully satisfied.
Notwithstanding anything to the contrary contained in this Guaranty or any
payments made by Guarantor hereunder, Guarantor shall not have any right of
subrogation in or under the Loan Documents or to participate in any way therein
or in any right, title or interest in and to any mortgaged property or any
collateral for the Loan, all such rights of subrogation and participation,
together with any other contractual, statutory or common law right which
Guarantor may have to be reimbursed for any payments Guarantor may make to
Lender pursuant to this Guaranty, being hereby expressly waived and released.

7. Law Governing and Severability. This Guaranty shall be governed by and
construed in accordance with the laws of the State of Illinois and is intended
to be performed in accordance with, and only to the extent permitted by, such
laws. If any provision of this Guaranty or the application thereof to any person
or circumstance, for any reason and to any extent, shall be invalid or
unenforceable, neither the remainder of this Guaranty nor the application of
such provision to any other persons or circumstances shall be affected thereby,
but rather the same shall be enforced to the greatest extent permitted by law.

8. Successors and Assigns. This Guaranty and all the terms, provisions and
conditions hereof shall be binding upon Guarantor and the Guarantor’s heirs,
legal representatives, successors and assigns and shall inure to the benefit of
Lender, its successors and assigns and all subsequent holders of the Note.

3

Loan No. 526618:11

 

9. Paragraph Headings. The paragraph headings inserted in this Guaranty have
been included for convenience only and are not intended, and shall not be
construed, to limit or define in any way the substance of any paragraph
contained herein.

10. Effect of Bankruptcy. This Guaranty shall continue to be effective or
reinstated, as the case may be, if at any time payment to Lender of all or any
part of the Recourse Obligations is rescinded or must otherwise be restored or
refunded by Lender pursuant to any insolvency, bankruptcy, reorganization,
receivership or other debtor relief proceeding involving Borrower. In the event
that Lender must rescind or restore any payment received by Lender in
satisfaction of the Recourse Obligations, as set forth herein, any prior release
or discharge of the terms of this Guaranty given to Guarantor by Lender shall be
without effect and this Guaranty shall remain in full force and effect.

11. Notices. All notices hereunder shall be given at the following address:

If to Guarantor: FSP 303 East Wacker Drive LLC, 401 Edgewater Place, Suite 200,
Wakefield, Massachusetts 01880, with a copy to FSP 303 East Wacker Drive Corp.,
401 Edgewater Place, Suite 200, Wakefield, Massachusetts 01880;

If to Lender: John Hancock Life Insurance Company (U.S.A.), Real Estate Finance
Group, 197 Clarendon Street, C-3, Boston, Massachusetts 02116, Re: Loan No.
526618:11.

All notices given hereunder shall be in writing and shall be considered properly
given if delivered either personally to such other party, or sent by nationally
recognized overnight courier delivery service or by certified mail of the United
States Postal Service, postage prepaid return receipt requested, addressed to
the other party as set forth above (or to such other address or person as either
party entitled to notice may by notice to the other party specify). Unless
otherwise specified, notices shall be deemed given as follows: (i) if delivered
personally, when delivered, (ii) if delivered by nationally recognized overnight
courier delivery service, on the day following the day such material is sent or
(iii) if delivered by certified mail, on the third day after the same is
deposited in the United States Postal Service as provided above.

12. Benefit. Guarantor warrants and represents that Guarantor has received, or
will receive, direct or indirect benefit from the execution and delivery of this
Guaranty.

13. No Representations by Lender. Neither Lender nor anyone acting on behalf of
Lender has made any representation, warranty or statement to Guarantor to induce
Guarantor to execute and deliver this Guaranty.

14. Application of Foreclosure Proceeds. In the event of any foreclosure sales
of the mortgaged property and collateral covered by the Loan Documents, the
proceeds of such sales shall be applied first to the discharge of that portion
of the indebtedness then remaining unpaid as to which Guarantor is not fully
personally liable pursuant to this Guaranty, it being the express intention of
the parties that the application of the proceeds of such foreclosure sales shall
be in such a manner as not to extinguish or reduce Guarantor’s personal
liability hereunder until all of the indebtedness as to which Guarantor is not
personally liable hereunder has been paid in full. Nothing contained in this
Paragraph 14 shall be construed to require that Lender foreclose the liens and
security interests created in the Loan Documents as a condition precedent to
bringing an action against Guarantor upon this Guaranty, or as an agreement that
Guarantor’s liability is limited to any deficiency remaining after such a
foreclosure.

4

Loan No. 526618:11

 

15. Joint and Several Liability. If more than one person is included in the
definition of Guarantor, the liability of all such persons hereunder shall be
joint and several.

EXECUTED effective as of the date first above written.

 

 

 

  FSP 303 EAST WACKER DRIVE LLC,   a Delaware limited liability company       
By:  /s/ George J. Carter   Name:
Title:  George J. Carter
President      

 

  FSP 303 EAST WACKER DRIVE CORP.,   a Delaware Corporation        By:  /s/
George J. Carter   Name:
Title:  George J. Carter
President               JOINTLY AND SEVERALLY    

 

 

 

5