Exhibit 10.4

 

GUARANTY

 

GUARANTY, dated as of November 18, 2004 (the “Guaranty”), by FIRST UNION REAL
ESTATE EQUITY AND MORTGAGE INVESTMENTS, an Ohio business trust (the
“Guarantor”), in favor of KEYBANK NATIONAL ASSOCIATION, a national banking
association having an address at 101 Federal Street, Boston, Massachusetts
02110, as the agent (KEYBANK NATIONAL ASSOCIATION, in such capacity as the
agent, hereinafter referred to as the “Agent”) for a syndicate of Lenders
(singly and collectively, the “Lenders”) as specifically provided in the Loan
Agreement (as defined below).

 

INTRODUCTORY STATEMENT

 

WHEREAS, pursuant to that certain Loan Agreement of even date herewith (as
amended, supplemented or otherwise modified from time to time, the “Loan
Agreement”) entered into by and among FT-FIN ACQUISITION LLC, a Delaware limited
liability company (the “Borrower”), the Agent and the Lenders, the Agent and the
Lenders have agreed to make a loan to the Borrower in the aggregate principal
amount of $53,000,000.00 (the “Loan”), upon the terms and subject to the
conditions set forth therein.  Capitalized terms used herein and not otherwise
defined herein, but defined in the Loan Agreement, shall have the meaning set
forth in the Loan Agreement.

 

WHEREAS, the Borrower is a subsidiary of the Guarantor and will derive
substantial economic benefit from the granting of the Loan.

 

WHEREAS, as a condition to making the Loan, the Agent and the Lenders have
required the Guarantor to execute and deliver this Guaranty, guaranteeing the
payment and performance of the Guarantied Obligations set forth below.

 

NOW THEREFORE, in consideration of the premises and in order to induce the Agent
and the Lenders to make the Loan and extend other financial accommodations under
the Loan Agreement, the Guarantor hereby agrees as follows:

 

1.                                       GUARANTY.  GUARANTOR, AS A PRIMARY
PARTY AND NOT MERELY AS A SURETY, UNCONDITIONALLY AND IRREVOCABLY GUARANTEES THE
FOLLOWING OBLIGATIONS (HEREINAFTER, THE “GUARANTEED OBLIGATIONS”):

 

A.                                       SPECIFIC OBLIGATIONS.  THE GUARANTOR
SHALL BE:

 

I.                                          LIABLE FOR ANY LOSS, DAMAGE OR
LIABILITY SUFFERED BY AGENT AND THE LENDERS, TO THE EXTENT SUCH ARISES OUT OF
ANY OF THE FOLLOWING (HEREINAFTER, A “GUARANTY EVENT”):

 

A)                                      FRAUD BY THE GUARANTOR;

 

B)                                     BREACH OF A MATERIAL WARRANTY OR MATERIAL
REPRESENTATION WITH RESPECT TO THE GUARANTOR;

 

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C)                                      BREACH OF A MATERIAL WARRANTY OR
MATERIAL REPRESENTATION BY THE GUARANTOR WITH RESPECT TO THE BORROWER, ANY
PROPERTY OWNER OR THE LOAN ARRANGEMENT;

 

D)                                     FAILURE OF THE BORROWER OR ANY PROPERTY
OWNER TO PAY WHEN DUE, PRIOR TO AN EVENT OF DEFAULT, ANY AMOUNTS FOR REAL ESTATE
TAXES OR INSURANCE PREMIUMS;

 

E)                                      MISAPPROPRIATION BY THE BORROWER OR THE
PROPERTY OWNER OF ANY INSURANCE PROCEEDS, CONDEMNATION TAKINGS OR AWARDS, OR
RENTAL OR OTHER INCOME FROM THE PROPERTY; AND

 

F)                                        IMPOSITION OF ANY TAXES, ASSESSMENTS,
IMPOSITIONS, RECORDING FEES, AND OTHER GOVERNMENTAL CHARGES WITH RESPECT TO THE
RECORDING OF THE MORTGAGE AND/OR ESTABLISHMENT, STRUCTURE AND EFFECTUATION OF
THE LOAN ARRANGEMENT.

 

II.                                       LIABLE UNDER THE ENVIRONMENTAL
INDEMNITY; AND

 

III.                                    LIABLE FOR THE AMOUNT OF ANY
DISTRIBUTIONS MADE BY THE BORROWER, FT-FIN GP OR ANY PROPERTY OWNER TO THE
GUARANTOR IN BREACH OF THE TERMS AND PROVISIONS OF THE LOAN DOCUMENTS.

 

B.                                      ADDITIONAL OBLIGATIONS.  UPON THE
OCCURRENCE OF A TRIGGER EVENT (AS DEFINED HEREUNDER), GUARANTOR, AS A PRIMARY
PARTY AND NOT MERELY AS A SURETY, UNCONDITIONALLY AND IRREVOCABLY GUARANTEES TO
THE AGENT AND THE LENDERS THE PROMPT AND FULL PAYMENT (AND NOT MERELY THE
COLLECTIBILITY), PERFORMANCE AND OBSERVANCE OF ALL OF THE OBLIGATIONS, TERMS AND
CONDITIONS TO BE PAID, PERFORMED OR OBSERVED BY THE BORROWER UNDER THE LOAN
AGREEMENT, THE NOTE AND EACH OTHER LOAN DOCUMENT, EACH AS THE SAME MAY BE
HEREAFTER AMENDED, MODIFIED, EXTENDED, RENEWED OR RECAST, INCLUDING, BUT NOT
LIMITED TO THE PAYMENT OF THE THEN OUTSTANDING PRINCIPAL TOGETHER WITH INTEREST
AND OTHER CHARGES THEREON AS PROVIDED FOR IN THE LOAN AGREEMENT.  AS USED
HEREIN, THE TERM “TRIGGER EVENT” SHALL MEAN AND REFER TO THE OCCURRENCE OF ANY
OF THE FOLLOWING EVENTS:

 

I.                                          BORROWER OR ITS MEMBER OR ANY PERSON
OR ENTITY HAVING DIRECT OR INDIRECT CONTROL OF BORROWER’S MEMBER WRONGLY
CONTESTS IN BAD FAITH OR IN ANY WAY WRONGLY INTERFERES WITH, IN BAD FAITH,
DIRECTLY OR INDIRECTLY ANY FORECLOSURE ACTION, UCC SALE AND/OR ASSIGNMENT OR
TRANSFER IN LIEU OF FORECLOSURE TRANSACTION COMMENCED BY AGENT OR ANY LENDER OR
WITH ANY OTHER ENFORCEMENT OF AGENT’S OR ANY LENDER’S RIGHTS, POWERS OR REMEDIES
UNDER THE MORTGAGE OR ANY OF THE OTHER SECURITY DOCUMENTS OR UNDER ANY DOCUMENT
EVIDENCING, SECURING OR OTHERWISE RELATING TO THE PROPERTY OR ANY PORTION OF THE
FOREGOING (WHETHER BY MAKING ANY MOTION, BRINGING ANY

 

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COUNTERCLAIM, CLAIMING ANY DEFENSE, SEEKING ANY INJUNCTION OR OTHER RESTRAINT,
COMMENCING ANY ACTION OR OTHERWISE);

 

II.                                       BORROWER OR ITS MEMBER OR ANY PERSON
OR ENTITY HAVING DIRECT OR INDIRECT CONTROL OF BORROWER’S MEMBER IN BAD FAITH
INITIATES A VOLUNTARY FILING WITH RESPECT TO BORROWER UNDER THE PROVISIONS OF
FEDERAL, STATE OR OTHER BANKRUPTCY AND INSOLVENCY LAW, OR VOTES ADVERSELY TO
AGENT’S OR ANY LENDER’S INTEREST IN AN INVOLUNTARY FILING WITH RESPECT TO
BORROWER UNDER THE PROVISIONS OF FEDERAL, STATE OR OTHER BANKRUPTCY AND
INSOLVENCY LAW;

 

III.                                    IF A CHANGE OF CONTROL SHALL OCCUR
WITHOUT THE PRIOR WRITTEN CONSENT OF THE AGENT, WHICH CONSENT (I) WILL NOT BE
UNREASONABLY WITHHELD OR DELAYED BY THE AGENT AND (II) WILL NOT BE CONDITIONED
BY THE AGENT ON THE PAYMENT OF ANY FEES OTHER THAN THE AGENT’S AND THE LENDERS’
REASONABLE COSTS ASSOCIATED THEREWITH.

 

 Upon the occurrence of any Guaranty Event or any Trigger Event, Agent may at
its option proceed directly and at once, without further notice, against
Guarantor hereunder, without proceeding against Borrower, Property Owner, or any
other person or other Collateral for the obligations secured by this Guaranty. 
Any sums payable by Guarantor hereunder shall bear interest at the Default Rate
from the date of demand until the date paid.

 

If Borrower, or Guarantor if so required, shall fail or refuse to perform or
continue performance of all of the Obligations of the Loan Agreement on the part
of Borrower to be kept and performed, then, if an Event of Default exists on
account thereof under the Loan Agreement or this Guaranty, in addition to any
other rights and remedies which Agent or any Lender may have hereunder or
elsewhere, and not in limitation thereof, Agent or any Lender, at such party’s
option, may exercise any or all of its rights and remedies under the Loan
Agreement and each other Loan Document.

 

This Guaranty shall survive and continue in full force and effect beyond and
after the payment and satisfaction of the Guaranteed Obligations and the
obligations of Borrower in the event Agent or any Lender is required to disgorge
or return any payment or property received as a result of any laws pertaining to
preferences, fraudulent transfers or fraudulent conveyances.

 

2.                                       WAIVER.  THE GUARANTOR HEREBY
ABSOLUTELY, UNCONDITIONALLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, (I) PROMPTNESS, DILIGENCE, NOTICE OF ACCEPTANCE AND ANY OTHER
NOTICE WITH RESPECT TO THIS GUARANTY, (II) PRESENTMENT, DEMAND OF PAYMENT,
PROTEST, NOTICE OF DISHONOR OR NONPAYMENT AND ANY OTHER NOTICE WITH RESPECT TO
THE GUARANTEED OBLIGATIONS, (III) ANY REQUIREMENT THAT THE AGENT PROTECT,
SECURE, PERFECT OR INSURE ANY SECURITY INTEREST OR LIEN ON ANY PROPERTY SUBJECT
THERETO OR EXHAUST ANY RIGHT OR TAKE ANY ACTION AGAINST THE BORROWER OR ANY
OTHER PERSON OR ANY COLLATERAL (OTHER THAN THE COLLATERAL PLEDGED TO THE AGENT
AND THE LENDERS PURSUANT TO THE SECURITY DOCUMENTS), (IV) ANY AND ALL RIGHT TO
ASSERT ANY DEFENSE (OTHER THAN THE DEFENSE OF INDEFEASIBLE PAYMENT), SET-OFF,
COUNTERCLAIM OR CROSS-CLAIM OF ANY NATURE WHATSOEVER WITH RESPECT TO

 

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THIS GUARANTY (EXCEPT AS OTHERWISE PROVIDED IN SECTION 20(A)(III) HEREOF), THE
OBLIGATIONS OF THE GUARANTOR HEREUNDER OR THE OBLIGATIONS OF ANY OTHER PERSON OR
PARTY RELATING TO THIS GUARANTY OR THE OBLIGATIONS OF THE GUARANTOR HEREUNDER OR
OTHERWISE WITH RESPECT TO THE GUARANTEED OBLIGATIONS IN ANY ACTION OR PROCEEDING
BROUGHT BY THE AGENT TO COLLECT THE GUARANTEED OBLIGATIONS OR ANY PORTION
THEREOF OR TO ENFORCE THE OBLIGATIONS OF THE GUARANTOR UNDER THIS GUARANTY, AND
(V) ANY OTHER ACTION, EVENT OR PRECONDITION TO THE ENFORCEMENT OF THIS GUARANTY
OR THE PERFORMANCE BY THE GUARANTOR OF THE OBLIGATIONS HEREUNDER.

 

3.                                       GUARANTY ABSOLUTE.

 

A.                                       THE GUARANTOR GUARANTEES THAT, TO THE
FULLEST EXTENT PERMITTED BY LAW, THE GUARANTEED OBLIGATIONS WILL BE PAID OR
PERFORMED STRICTLY IN ACCORDANCE WITH THEIR TERMS, REGARDLESS OF ANY LAW,
REGULATION OR ORDER NOW OR HEREAFTER IN EFFECT IN ANY JURISDICTION AFFECTING ANY
OF SUCH TERMS OR THE RIGHTS OF THE AGENT WITH RESPECT THERETO.

 

B.                                      NO INVALIDITY, IRREGULARITY,
VOIDABILITY, VOIDNESS OR UNENFORCEABILITY OF THE LOAN AGREEMENT, THE NOTE, OR
ANY OTHER LOAN DOCUMENT OR ANY OTHER AGREEMENT OR INSTRUMENT RELATING THERETO,
OR OF ALL OR ANY PART OF THE GUARANTEED OBLIGATIONS OR OF ANY SECURITY THEREFOR
SHALL AFFECT, IMPAIR OR BE A DEFENSE TO THIS GUARANTY.

 

C.                                       THIS GUARANTY IS ONE OF PAYMENT AND
PERFORMANCE, NOT COLLECTION, AND THE OBLIGATIONS OF THE GUARANTOR UNDER THIS
GUARANTY ARE INDEPENDENT OF THE GUARANTEED OBLIGATIONS, AND A SEPARATE ACTION OR
ACTIONS MAY BE BROUGHT AND PROSECUTED AGAINST THE GUARANTOR TO ENFORCE THIS
GUARANTY, IRRESPECTIVE OF WHETHER ANY ACTION IS BROUGHT AGAINST OR ANY AFFILIATE
OR SUBSIDIARY THEREOF OR WHETHER OR ANY AFFILIATE OR SUBSIDIARY THEREOF IS
JOINED IN ANY SUCH ACTION OR ACTIONS.

 

D.                                      THE LIABILITY OF THE GUARANTOR UNDER
THIS GUARANTY SHALL BE ABSOLUTE AND UNCONDITIONAL IRRESPECTIVE OF:

 

I.                                          ANY CHANGE IN THE MANNER, PLACE OR
TERMS OF PAYMENT OR PERFORMANCE, AND/OR ANY CHANGE OR EXTENSION OF THE TIME OF
PAYMENT OR PERFORMANCE OF, RENEWAL OR ALTERATION OF, ANY GUARANTEED OBLIGATION,
ANY SECURITY THEREFOR, OR ANY LIABILITY INCURRED DIRECTLY OR INDIRECTLY IN
RESPECT THEREOF, OR ANY OTHER AMENDMENT OR WAIVER OF OR ANY CONSENT TO DEPARTURE
FROM THE LOAN AGREEMENT OR THE NOTE OR ANY OTHER LOAN DOCUMENT, INCLUDING ANY
INCREASE IN THE GUARANTEED OBLIGATIONS RESULTING FROM THE EXTENSION OF
ADDITIONAL CREDIT TO THE BORROWER OR ANY SUBSIDIARY OR AFFILIATE THEREOF OR
OTHERWISE;

 

II.                                       ANY SALE, EXCHANGE, RELEASE,
SURRENDER, REALIZATION UPON ANY PROPERTY BY WHOMSOEVER AT ANY TIME PLEDGED OR
MORTGAGED TO SECURE, OR HOWSOEVER

 

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SECURING, ALL OR ANY OF THE GUARANTEED OBLIGATIONS (OTHER THAN THE COLLATERAL
PLEDGED TO THE AGENT AND THE LENDERS UNDER THE SECURITY DOCUMENTS), AND/OR ANY
OFFSET AGAINST SUCH GUARANTEED OBLIGATIONS, OR FAILURE TO PERFECT, OR CONTINUE
THE PERFECTION OF, ANY LIEN IN ANY SUCH PROPERTY, OR DELAY IN THE PERFECTION OF
ANY SUCH LIEN, OR ANY AMENDMENT OR WAIVER OF OR CONSENT TO DEPARTURE FROM ANY
OTHER GUARANTY FOR ALL OR ANY OF THE GUARANTEED OBLIGATIONS;

 

III.                                    ANY EXERCISE OR FAILURE TO EXERCISE ANY
RIGHTS AGAINST THE BORROWER OR ANY AFFILIATE OR SUBSIDIARY THEREOF OR OTHERS
(INCLUDING THE GUARANTOR);

 

IV.                                   ANY SETTLEMENT OR COMPROMISE OF ANY
GUARANTEED OBLIGATION, ANY SECURITY THEREFOR OR ANY LIABILITY (INCLUDING ANY OF
THOSE HEREUNDER) INCURRED DIRECTLY OR INDIRECTLY IN RESPECT THEREOF OR HEREOF;

 

V.                                      ANY MANNER OF APPLICATION OF COLLATERAL,
OR PROCEEDS THEREOF, TO ALL OR ANY OF THE GUARANTEED OBLIGATIONS, OR ANY MANNER
OF SALE OR OTHER DISPOSITION OF ANY COLLATERAL FOR ALL OR ANY OF THE GUARANTEED
OBLIGATIONS OR ANY OTHER ASSETS OF THE BORROWER OR ANY AFFILIATE OR SUBSIDIARY
THEREOF,

 

VI.                                   ANY CHANGE, RESTRUCTURING OR TERMINATION
OF THE EXISTENCE OF THE BORROWER OR ANY AFFILIATE OR SUBSIDIARY THEREOF;

 

VII.                                THE RELEASE OF THE BORROWER OR ANY OTHER
PARTY, OTHER THAN THE GUARANTOR, NOW OR HEREAFTER LIABLE UPON OR IN RESPECT OF
THE LOAN DOCUMENTS; OR

 

VIII.                             ANY OTHER AGREEMENTS OR CIRCUMSTANCE OF ANY
NATURE WHATSOEVER WHICH MIGHT OTHERWISE CONSTITUTE A DEFENSE AVAILABLE TO, OR A
DISCHARGE OF, THIS GUARANTY AND/OR THE OBLIGATIONS OF THE GUARANTOR HEREUNDER,
OR A DEFENSE TO, OR DISCHARGE OF, THE BORROWER OR ANY AFFILIATE OR SUBSIDIARY
THEREOF RELATING TO THIS GUARANTY OR THE OBLIGATIONS OF THE GUARANTOR HEREUNDER
OR OTHERWISE WITH RESPECT TO THE LOAN OR OTHER FINANCIAL ACCOMMODATIONS TO THE
BORROWER (OTHER THAN THE DEFENSE OF INDEFEASIBLE PAYMENT).

 

I)                                         THE AGENT MAY AT ANY TIME AND FROM
TIME TO TIME (WHETHER OR NOT AFTER REVOCATION OR TERMINATION OF THIS GUARANTY)
WITHOUT THE CONSENT OF, OR NOTICE (EXCEPT AS SHALL BE REQUIRED BY APPLICABLE
STATUTE AND CANNOT BE WAIVED) TO, THE GUARANTOR, AND WITHOUT INCURRING
RESPONSIBILITY TO THE GUARANTOR OR IMPAIRING OR RELEASING THE OBLIGATIONS OF THE
GUARANTOR HEREUNDER, APPLY ANY SUMS BY WHOMSOEVER PAID OR HOWSOEVER REALIZED TO
ANY GUARANTEED OBLIGATION REGARDLESS OF WHAT GUARANTEED OBLIGATIONS REMAIN
UNPAID.

 

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II)                                      THIS GUARANTY SHALL CONTINUE TO BE
EFFECTIVE OR BE REINSTATED, AS THE CASE MAY BE, IF CLAIM IS EVER MADE UPON THE
AGENT FOR REPAYMENT OR RECOVERY OF ANY AMOUNT OR AMOUNTS RECEIVED BY THE AGENT
IN PAYMENT OR ON ACCOUNT OF ANY OF THE GUARANTEED OBLIGATIONS AS A RESULT OF
LAWS RELATING TO PREFERENCES, FRAUDULENT TRANSFERS AND FRAUDULENT CONVEYANCES,
AND THE AGENT REPAYS ALL OR PART OF SAID AMOUNT BY REASON OF ANY JUDGMENT,
DECREE OR ORDER OF ANY COURT OR ADMINISTRATIVE BODY HAVING JURISDICTION OVER THE
AGENT OR ITS PROPERTY, OR ANY SETTLEMENT OR COMPROMISE OF ANY SUCH CLAIM
EFFECTED BY THE AGENT WITH ANY SUCH CLAIMANT (INCLUDING THE BORROWER).  IN SUCH
EVENT THE GUARANTOR AGREES THAT ANY SUCH JUDGMENT, DECREE, ORDER, SETTLEMENT OR
COMPROMISE SHALL BE BINDING UPON THE GUARANTOR, NOTWITHSTANDING ANY REVOCATION
HEREOF OR THE CANCELLATION OF ANY NOTE (INCLUDING THE NOTE) OR OTHER INSTRUMENT
EVIDENCING ANY GUARANTEED OBLIGATION, AND THE GUARANTOR SHALL BE AND REMAIN
LIABLE TO THE AGENT HEREUNDER FOR THE AMOUNT SO REPAID OR RECOVERED TO THE SAME
EXTENT AS IF SUCH AMOUNT HAD NEVER ORIGINALLY BEEN RECEIVED BY THE AGENT.

 

4.                                       CONTINUING GUARANTY. THIS GUARANTY IS A
CONTINUING ONE AND SHALL (I) REMAIN IN FULL FORCE AND EFFECT UNTIL THE
INDEFEASIBLE PAYMENT AND SATISFACTION IN FULL OF THE GUARANTEED OBLIGATIONS,
(II) BE BINDING UPON THE GUARANTOR, ITS SUCCESSORS AND ASSIGNS, AND (III) INURE
TO THE BENEFIT OF, AND BE ENFORCEABLE BY, THE AGENT AND THE LENDERS. ALL
OBLIGATIONS TO WHICH THIS GUARANTY APPLIES SHALL BE CONCLUSIVELY PRESUMED TO
HAVE BEEN CREATED IN RELIANCE HEREON.

 

5.                                       REPRESENTATIONS, WARRANTIES AND
COVENANTS. THE GUARANTOR HEREBY REPRESENTS, WARRANTS AND COVENANTS TO AND WITH
THE AGENT AND THE LENDERS THAT:

 

A.                                       THE GUARANTOR HAS THE POWER TO EXECUTE
AND DELIVER THIS GUARANTY AND TO INCUR AND PERFORM ITS OBLIGATIONS HEREUNDER;

 

B.                                      THE GUARANTOR HAS DULY TAKEN ALL
NECESSARY ACTION TO AUTHORIZE THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS
GUARANTY AND TO INCUR AND PERFORM ITS OBLIGATIONS HEREUNDER;

 

C.                                       NO CONSENT, APPROVAL, AUTHORIZATION OR
OTHER ACTION BY, AND NO NOTICE TO OR OF, OR DECLARATION OR FILING WITH, ANY
GOVERNMENTAL OR OTHER PUBLIC BODY, OR ANY OTHER PERSON, IS REQUIRED FOR THE DUE
AUTHORIZATION, EXECUTION, DELIVERY AND PERFORMANCE BY THE GUARANTOR OF THIS
GUARANTY OR THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY;

 

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D.                                      THE EXECUTION, DELIVERY AND PERFORMANCE
BY THE GUARANTOR OF THIS GUARANTY DOES NOT AND WILL NOT, WITH THE PASSAGE OF
TIME OR THE GIVING OF NOTICE OR BOTH, VIOLATE OR OTHERWISE CONFLICT WITH ANY
TERM OR PROVISION OF ANY MATERIAL AGREEMENT, INSTRUMENT, JUDGMENT, DECREE, ORDER
OR ANY STATUTE, RULE OR GOVERNMENTAL REGULATION APPLICABLE TO THE GUARANTOR OR
RESULT IN THE CREATION OF ANY LIEN UPON ANY OF ITS PROPERTIES OR ASSETS PURSUANT
THERETO;

 

E.                                       THIS GUARANTY HAS BEEN DULY AUTHORIZED,
EXECUTED AND DELIVERED BY THE GUARANTOR AND CONSTITUTES THE LEGAL, VALID AND
BINDING OBLIGATION OF THE GUARANTOR, AND IS ENFORCEABLE AGAINST THE GUARANTOR IN
ACCORDANCE WITH ITS TERMS, EXCEPT AS ENFORCEMENT THEREOF MAY BE SUBJECT TO THE
EFFECT OF ANY APPLICABLE BANKRUPTCY, INSOLVENCY, REORGANIZATION, MORATORIUM OR
SIMILAR LAW AFFECTING CREDITORS’ RIGHTS GENERALLY, AND GENERAL PRINCIPLES OF
EQUITY (REGARDLESS OF WHETHER SUCH ENFORCEMENT IS SOUGHT IN A PROCEEDING IN
EQUITY OR AT LAW); AND

 

F.                                         THE GRANTING OF THE LOAN TO THE
BORROWER WILL CONSTITUTE A MATERIAL ECONOMIC BENEFIT TO THE GUARANTOR.

 

6.                                       AFFIRMATIVE COVENANTS.  THE GUARANTOR
COVENANTS AND AGREES THAT, FROM THE DATE HEREOF AND SO LONG AS THE LOAN OR THE
OTHER GUARANTEED OBLIGATIONS REMAIN OUTSTANDING, THE GUARANTOR SHALL PAY,
PERFORM, OBSERVE AND OTHERWISE COMPLY WITH ALL OF THE AFFIRMATIVE COVENANTS SET
FORTH IN ARTICLE 7 OF THE LOAN AGREEMENT THAT HAVE BEEN MADE BY THE BORROWER
THEREIN WITH RESPECT TO THE SUBSIDIARIES OR THE LOAN PARTIES, BUT ONLY TO THE
EXTENT THAT SUCH COVENANTS WERE MADE WITH RESPECT TO THE GUARANTOR.

 

7.                                       NEGATIVE COVENANTS.  THE GUARANTOR
COVENANTS AND AGREES THAT, FROM THE DATE HEREOF AND SO LONG AS THE LOAN OR THE
OTHER GUARANTEED OBLIGATIONS REMAIN OUTSTANDING, THE GUARANTOR SHALL NOT TAKE
ANY ACTION (OR OTHERWISE SUFFER OR PERMIT TO OCCUR ANY EVENT) CONTRARY TO THE
NEGATIVE COVENANTS SET FORTH IN ARTICLE 8 OF THE LOAN AGREEMENT, AS AGREED BY
THE BORROWER THEREIN WITH RESPECT TO THE SUBSIDIARIES OR THE LOAN PARTIES, BUT
ONLY TO THE EXTENT THAT SUCH COVENANTS WERE MADE WITH RESPECT TO THE GUARANTOR.

 

8.                                       EXPENSES. THE GUARANTOR WILL, UPON
DEMAND, REIMBURSE THE AGENT FOR ANY SUMS, COSTS, AND EXPENSES WHICH THE AGENT
AND/OR THE LENDERS MAY PAY OR INCUR PURSUANT TO THE PROVISIONS OF THIS GUARANTY
OR IN ENFORCING THIS GUARANTY OR IN ENFORCING PAYMENT OF THE GUARANTEED
OBLIGATIONS OR OTHERWISE IN CONNECTION WITH THE PROVISIONS HEREOF, INCLUDING
COURT COSTS, COLLECTION CHARGES, AND REASONABLE ATTORNEYS’ FEES, TOGETHER WITH
INTEREST THEREON AS SPECIFIED IN SECTION 15 HEREOF.

 

9.                                       TERMS.

 

A.                                       ALL TERMS DEFINED IN THE UNIFORM
COMMERCIAL CODE OF THE COMMONWEALTH OF MASSACHUSETTS (AS AMENDED AND IN EFFECT
FROM TIME TO TIME, THE “UCC”) AND USED

 

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HEREIN SHALL HAVE THE MEANINGS AS DEFINED IN THE UCC, UNLESS THE CONTEXT
OTHERWISE REQUIRES.

 

B.                                      THE WORDS “INCLUDE,” “INCLUDES” AND
“INCLUDING” SHALL BE DEEMED TO BE FOLLOWED BY THE PHRASE “WITHOUT LIMITATION”.

 

C.                                       ALL REFERENCES HEREIN TO SECTIONS AND
SUBSECTIONS SHALL BE DEEMED TO BE REFERENCES TO SECTIONS AND SUBSECTIONS OF THIS
GUARANTY UNLESS THE CONTEXT SHALL OTHERWISE REQUIRE.

 

10.                                 AMENDMENTS AND MODIFICATION. NO PROVISION
HEREOF SHALL BE MODIFIED, ALTERED OR LIMITED EXCEPT BY WRITTEN INSTRUMENT
EXPRESSLY REFERRING TO THIS GUARANTY AND TO SUCH PROVISION, AND EXECUTED BY THE
PARTY TO BE CHARGED.

 

11.                                 WAIVER OF SUBROGATION RIGHTS. UNTIL SUCH
TIME AS ALL THE GUARANTEED OBLIGATIONS HAVE BEEN INDEFEASIBLY SATISFIED
(INCLUDING THE EXPIRATION OF ANY APPLICABLE VOIDABLE PREFERENCE PERIOD UNDER THE
FEDERAL BANKRUPTCY LAWS), THE GUARANTOR HEREBY WAIVES AND RELEASES ANY AND ALL
RIGHTS AND CLAIMS IT MAY NOW OR HEREAFTER HAVE OR ACQUIRE AGAINST THE BORROWER
THAT WOULD CONSTITUTE IT A “CREDITOR” OF THE BORROWER FOR PURPOSES OF THE
FEDERAL BANKRUPTCY LAWS, INCLUDING ALL RIGHTS OF SUBROGATION AGAINST THE
BORROWER AND ITS PROPERTY AND ALL RIGHTS OF INDEMNIFICATION, CONTRIBUTION AND
REIMBURSEMENT FROM THE BORROWER AND ITS PROPERTY, REGARDLESS OF WHETHER SUCH
RIGHTS ARISE IN CONNECTION WITH THIS GUARANTY, BY OPERATION OF LAW, PURSUANT TO
CONTRACT OR OTHERWISE.

 

12.                                 REMEDIES UPON DEFAULT.

 

A.                                       UPON THE OCCURRENCE AND DURING THE
CONTINUANCE OF ANY EVENT OF DEFAULT, IN ADDITION TO ANY OTHER RIGHTS AND
REMEDIES WHICH THE AGENT AND/OR THE LENDERS MAY HAVE HEREUNDER OR AT LAW, AND
NOT IN LIMITATION THEREOF, THE AGENT MAY, WITHOUT NOTICE TO OR DEMAND UPON THE
BORROWER OR THE GUARANTOR, DECLARE ANY GUARANTEED OBLIGATIONS IMMEDIATELY DUE
AND PAYABLE, AND SHALL BE ENTITLED TO ENFORCE THE OBLIGATIONS OF THE GUARANTOR
HEREUNDER.

 

B.                                      THE AGENT’S RIGHTS UNDER THIS GUARANTY
SHALL BE IN ADDITION TO, AND NOT IN LIMITATION OF, ALL OF THE RIGHTS AND
REMEDIES OF THE AGENT AND/OR THE LENDERS UNDER THE LOAN DOCUMENTS.  ALL RIGHTS
AND REMEDIES OF THE AGENT AND/OR THE LENDERS SHALL BE CUMULATIVE AND MAY BE
EXERCISED IN SUCH MANNER AND COMBINATION AS THE AGENT AND/OR THE LENDERS,
RESPECTIVELY, MAY DETERMINE.

 

13.                                 SET-OFF.  AFTER THE OCCURRENCE AND DURING
THE CONTINUANCE OF ANY EVENT OF DEFAULT, AND ACCOUNTS, DEPOSITS, BALANCES OR
OTHER SUMS CREDITED BY OR DUE FROM THE AGENT, ANY AFFILIATE OF THE AGENT OR ANY
OF THE LENDERS, OR FROM ANY AFFILIATE OF ANY OF THE LENDERS, TO THE GUARANTOR
MAY TO THE FULLEST EXTENT NOT PROHIBITED BY APPLICABLE LAW AT ANY TIME OR FROM
TIME TO TIME, WITHOUT REGARD TO THE EXISTENCE, SUFFICIENCY OR ADEQUACY OF ANY
OTHER

 

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COLLATERAL, AND WITHOUT NOTICE OR COMPLIANCE WITH ANY OTHER CONDITION PRECEDENT
NOW OR HEREAFTER IMPOSED BY STATUTE, RULE OF LAW OR OTHERWISE, ALL OF WHICH ARE
HEREBY WAIVED TO THE FULLEST EXTENT PERMITTED BY LAW, BE SET OFF, APPROPRIATED
AND APPLIED BY THE AGENT AGAINST ANY OR ALL OF THE GUARANTEED OBLIGATIONS
IRRESPECTIVE OF WHETHER DEMAND SHALL HAVE BEEN MADE, IN SUCH MANNER AS THE AGENT
IN ITS SOLE AND ABSOLUTE DISCRETION MAY DETERMINE.  WITHIN THREE (3) BUSINESS
DAYS OF MAKING ANY SUCH SET OFF, APPROPRIATION OR APPLICATION, THE AGENT AGREES
TO NOTIFY GUARANTOR THEREOF, PROVIDED THE FAILURE TO GIVE SUCH NOTICE SHALL NOT
AFFECT THE VALIDITY OF SUCH SET OFF OR APPROPRIATION OR APPLICATION.  ANY AND
ALL RIGHTS TO REQUIRE THE AGENT OR ANY OF THE LENDERS TO EXERCISE ITS RIGHTS OR
REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE LOAN, PRIOR TO
EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH ACCOUNTS, DEPOSITS, CREDITS
OR OTHER PROPERTY OF THE GUARANTOR, ARE HEREBY KNOWINGLY, VOLUNTARILY AND
IRREVOCABLY WAIVED.

 

14.                                 STATUTE OF LIMITATIONS. ANY ACKNOWLEDGMENT
OR NEW PROMISE, WHETHER BY PAYMENT OF PRINCIPAL OR INTEREST OR OTHERWISE AND
WHETHER BY THE BORROWER OR OTHERS (INCLUDING THE GUARANTOR), WITH RESPECT TO ANY
OF THE GUARANTEED OBLIGATIONS SHALL, IF THE STATUTE OF LIMITATIONS IN FAVOR OF
THE GUARANTOR AGAINST THE AGENT SHALL HAVE COMMENCED TO RUN, TOLL THE RUNNING OF
SUCH STATUTE OF LIMITATIONS AND, IF THE PERIOD OF SUCH STATUTE OF LIMITATIONS
SHALL HAVE EXPIRED, PREVENT THE OPERATION OF SUCH STATUTE OF LIMITATIONS.

 

15.                                 INTEREST. ALL AMOUNTS PAYABLE FROM TIME TO
TIME BY THE GUARANTOR HEREUNDER SHALL BEAR INTEREST AT THE DEFAULT RATE,
PROVIDED, THAT SUCH INTEREST SHALL NOT BE DUPLICATIVE OF ANY OBLIGATIONS PAYABLE
UNDER THE LOAN AGREEMENT.

 

16.                                 RIGHTS AND REMEDIES NOT WAIVED. NO ACT,
OMISSION OR DELAY BY THE AGENT SHALL CONSTITUTE A WAIVER OF ITS RIGHTS AND
REMEDIES HEREUNDER OR OTHERWISE. NO SINGLE OR PARTIAL WAIVER BY THE AGENT OF ANY
DEFAULT HEREUNDER OR RIGHT OR REMEDY WHICH IT MAY HAVE SHALL OPERATE AS A WAIVER
OF ANY OTHER DEFAULT, RIGHT OR REMEDY OR OF THE SAME DEFAULT, RIGHT OR REMEDY ON
A FUTURE OCCASION.

 

17.                                 ADMISSIBILITY OF GUARANTY.  THE GUARANTOR
AGREES THAT ANY COPY OF THIS GUARANTY SIGNED BY THE GUARANTOR AND TRANSMITTED BY
TELECOPIER FOR DELIVERY TO THE AGENT SHALL BE ADMISSIBLE IN EVIDENCE AS THE
ORIGINAL ITSELF IN ANY JUDICIAL OR ADMINISTRATIVE PROCEEDING, WHETHER OR NOT THE
ORIGINAL IS IN EXISTENCE.

 

18.                                 NOTICES. ALL NOTICES, REQUESTS AND DEMANDS
TO OR UPON THE AGENT, THE LENDERS OR THE GUARANTOR UNDER THIS GUARANTY SHALL BE
IN WRITING AND GIVEN AS PROVIDED IN THE LOAN AGREEMENT (AND WITH RESPECT TO THE
GUARANTOR, C/O THE BORROWER AT THE ADDRESS OF THE BORROWER AS SET FORTH IN THE
LOAN AGREEMENT).

 

19.                                 COUNTERPARTS. THIS GUARANTY MAY BE EXECUTED
IN ANY NUMBER OF COUNTERPARTS AND BY THE DIFFERENT PARTIES HERETO ON SEPARATE
COUNTERPARTS, EACH OF WHICH WHEN SO EXECUTED AND

 

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DELIVERED SHALL BE AN ORIGINAL AND ALL OF WHICH SHALL TOGETHER CONSTITUTE ONE
AND THE SAME AGREEMENT.

 

20.                               CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL;
ETC.

 

A.                                       ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS GUARANTY OR ANY SECURITY DOCUMENT MAY BE BROUGHT IN THE COURTS
OF THE COMMONWEALTH OF MASSACHUSETTS OR OF THE UNITED STATES OF AMERICA FOR THE
DISTRICT OF MASSACHUSETTS, AND, BY EXECUTION AND DELIVERY OF THIS GUARANTY, THE
GUARANTOR HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY
AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. THE
GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVES, IN CONNECTION
WITH ANY SUCH ACTION OR PROCEEDING, (I) TRIAL BY JURY, (II) TO THE EXTENT IT MAY
EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION, INCLUDING ANY OBJECTION
TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN
SUCH RESPECTIVE JURISDICTIONS AND (III) THE RIGHT TO IMPOSE ANY SET-OFF,
COUNTERCLAIM OR CROSS-CLAIM UNLESS SUCH SET-OFF, COUNTERCLAIM OR CROSS-CLAIM
COULD NOT, BY REASON OF ANY APPLICABLE FEDERAL OR STATE PROCEDURAL LAWS, BE
INTERPOSED, PLEADED OR ALLEGED IN ANY OTHER ACTION.

 

B.                                      THE GUARANTOR IRREVOCABLY CONSENTS TO
THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY CERTIFIED MAIL, POSTAGE PREPAID,
TO THE GUARANTOR AT ITS ADDRESS DETERMINED PURSUANT TO SECTION 18 HEREOF.

 

C.                                       NOTHING HEREIN SHALL AFFECT THE RIGHT
OF THE AGENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE GUARANTOR IN ANY
OTHER JURISDICTION.

 

D.                                      THE GUARANTOR HEREBY WAIVES PRESENTMENT,
NOTICE OF DISHONOR AND PROTESTS OF ALL INSTRUMENTS INCLUDED IN OR EVIDENCING ANY
OF THE GUARANTEED OBLIGATIONS, AND ANY AND ALL OTHER NOTICES AND DEMANDS
WHATSOEVER (EXCEPT AS EXPRESSLY PROVIDED HEREIN).

 

21.                                 GOVERNING LAW. THIS GUARANTY, THE SECURITY
DOCUMENTS AND THE GUARANTEED OBLIGATIONS SHALL BE GOVERNED IN ALL RESPECTS BY
THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS APPLICABLE

 

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TO CONTRACTS EXECUTED AND TO BE PERFORMED IN SUCH STATE, WITHOUT GIVING EFFECT
TO THE CONFLICT OF LAW PRINCIPLES THEREOF.

 

22.                                 CAPTIONS; SEPARABILITY.

 

A.                                       THE CAPTIONS OF THE SECTIONS AND
SUBSECTIONS OF THIS GUARANTY HAVE BEEN INSERTED FOR CONVENIENCE ONLY AND SHALL
NOT IN ANY WAY AFFECT THE MEANING OR CONSTRUCTION OF ANY PROVISION OF THIS
GUARANTY.

 

B.                                      IF ANY TERM OF THIS GUARANTY SHALL BE
HELD TO BE INVALID, ILLEGAL OR UNENFORCEABLE, THE VALIDITY OF ALL OTHER TERMS
HEREOF SHALL IN NO WAY BE AFFECTED THEREBY.

 

23.                                 ACKNOWLEDGMENT OF RECEIPT. THE GUARANTOR
ACKNOWLEDGES RECEIPT OF A COPY OF THIS GUARANTY AND EACH OF THE LOAN DOCUMENTS.

 

24.                                 ENTIRE AGREEMENT. THIS GUARANTY SETS FORTH
THE ENTIRE AGREEMENT AND UNDERSTANDING OF THE AGENT, THE LENDERS AND THE
GUARANTOR WITH RESPECT TO THE MATTERS COVERED HEREBY AND, BY ACCEPTING THIS
GUARANTY, THE GUARANTOR ACKNOWLEDGES THAT NO ORAL OR OTHER UNDERSTANDING,
AGREEMENTS, REPRESENTATIONS OR WARRANTIES HAVE BEEN MADE AND/OR EXIST WITH
RESPECT TO THE MATTERS COVERED BY THIS GUARANTY OR WITH RESPECT TO THE
OBLIGATIONS OF THE GUARANTOR HEREUNDER OR OTHERWISE, EXCEPT AS SPECIFICALLY SET
FORTH IN THIS GUARANTY.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the Guarantor has duly executed or caused this Guaranty to
be duly executed in The Commonwealth of Massachusetts as of the date first above
set forth.

 

 

 

FIRST UNION REAL ESTATE EQUITY
AND MORTGAGE INVESTMENTS

 

 

 

 

By:

 

 

 

 

Name:

Carolyn Tiffany

 

 

Title:

Chief Operating Officer

 

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