Exhibit 10.7 


 


Loan No. 340127


GUARANTEE
OF RECOURSE OBLIGATIONS


(Single Guarantor)


 


In consideration
of the benefits which the undersigned (herein called "Guarantor") will receive as a result of The Northwestern Mutual
Life Insurance Company ("Lender") making the above-numbered loan to TS Aventine, LLC, a Delaware limited liability company
("Borrower") evidenced by a promissory note (the "Note") of even date herewith in the original principal amount
of $21,000,000.00 and secured by a Mortgage and Security Agreement (the "Lien Instrument") covering property in the
County of Greenville, State of South Carolina (the "Property"), and as an inducement required by Lender to fund said
loan, Guarantor has agreed to guarantee:


 


		(A)	The
                                         Recourse Obligations (as such term is defined in paragraph 9 hereof); and,



 


		(B)	Following
                                         the occurrence of a Triggering Event (as such term is defined in paragraph 9 hereof),
                                         the payment of the Note and all amounts at any time owed to Lender under the other Loan
                                         Documents (as hereinafter defined) and the performance of all terms, covenants and conditions
                                         in the Loan Documents.



 


1.           Therefore,
for value received, Guarantor hereby, unconditionally and irrevocably, guarantees to Lender and its successors and assigns the
full, prompt and faithful payment of all of the Recourse Obligations, (i) notwithstanding any invalidity of, or defect or deficiency
in any Loan Documents, (ii) notwithstanding the fact that Borrower may have no personal liability for all or a portion of the
Indebtedness and Lender's recourse against Borrower and Borrower's assets may be limited, and (iii) notwithstanding any act, omission
or thing which might otherwise operate as a legal or equitable discharge of Guarantor. Guarantor shall, within five business days
from the date notice is given to Guarantor that any of the Recourse Obligations is due and owing, pay such Recourse Obligation.


 


"Loan
Documents" means the Note, the Lien Instrument, that certain Loan Application dated January 21, 2014 from Borrower to Lender
and that certain acceptance letter issued by Lender dated January 24, 2014 (together, the "Commitment"), that certain
Absolute Assignment of Leases and Rents of even date herewith between Borrower and Lender (the "Absolute Assignment"),
that certain Certification of Borrower of even date herewith, that certain Limited Liability Company Supplement dated contemporaneously
herewith, any other supplements and authorizations required by Lender and all other instruments and documents (as the same may
be amended from time to time) executed by Borrower and delivered to Lender in connection with, or as security for, the indebtedness
evidenced by the Note, except any separate environmental indemnity agreement.


 




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2.           In
addition, for value received, Guarantor hereby, unconditionally and irrevocably, guarantees to Lender and its successors and assigns
the full, prompt and faithful payment of the full amount of the principal, interest and any other sums due or to become due under
the Loan Documents (the "Indebtedness") upon and following the occurrence of a Triggering Event, it being the intention
hereof that, following the occurrence of a Triggering Event, Guarantor shall remain liable until the Indebtedness shall be fully
paid, (i) notwithstanding any invalidity of, or defect or deficiency in any Loan Document, (ii) notwithstanding the fact that
Borrower may have no personal liability for all or a portion of the Indebtedness and Lender's recourse against Borrower and Borrower's
assets may be limited, and (iii) notwithstanding any act, omission or thing which might otherwise operate as a legal or equitable
discharge of Guarantor.


 


Following
the occurrence of a Triggering Event, Guarantor shall, within five business days from the date a notice is given to Guarantor
that an Event of Default (as defined in the Lien Instrument) has occurred and is continuing, cure such Event of Default. If any
Event of Default shall not be cured by Guarantor within said five business day period, Lender may, at its option, accelerate the
Indebtedness (if operation of a stay under the federal bankruptcy code or under any other state or federal bankruptcy, insolvency
or similar proceeding, prohibits or delays acceleration of the Indebtedness as to Borrower, Guarantor agrees that Guarantor's
obligations hereunder shall not be postponed or reduced) and, within five business days from the date a written demand from Lender
is given to Guarantor, Guarantor shall cure all Events of Default and pay all of the Indebtedness, whether or not acceleration
of the Indebtedness has occurred as to Borrower.


 


3.           Any
obligations not paid when due hereunder shall bear interest from the date due until paid at the Default Rate (as defined in the
Note).  Guarantor hereby waives absolutely and irrevocably, until the Indebtedness shall have been paid in full, any right
of subrogation whatsoever to Lender's claims against Borrower and any right of indemnity, reimbursement or contribution from Borrower
with respect to any payment made or performance undertaken by Guarantor pursuant hereto.  As a matter of clarification, it
is hereby acknowledged that, in the absence of a default under the Loan Documents, the receipt by a Guarantor of direct or indirect
distributions from Borrower shall not be deemed to be prohibited by the immediately preceding sentence. If Borrower shall become
a debtor under the federal bankruptcy code or the subject of any other state or federal bankruptcy, insolvency or similar proceeding,
neither the operation of a stay nor the discharge of the Indebtedness thereunder shall affect the liability of Guarantor hereunder. 


 




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4.           Without
limiting or lessening the liability of Guarantor under this Guarantee, Lender may, without notice to Guarantor:


 


		(A)	Grant extensions of time
or any other indulgences on the Indebtedness;



 


		(B)	Take, give up, modify,
vary, exchange, renew or abstain from perfecting or taking advantage of any security for the Indebtedness; and



 


		(C)	Accept or make compositions
or other arrangements with Borrower, realize on any security, and otherwise deal with Borrower, other parties and any security
as Lender may deem expedient.



 


5.           This
Guarantee shall be a continuing guarantee, shall not be revoked by death, shall inure to the benefit of, and be enforceable by,
any subsequent holder of the Note and the Lien Instrument and shall be binding upon, and enforceable against, Guarantor and Guarantor's
heirs, legal representatives, successors and assigns.


 


6.           Except
as expressly set forth in the Loan Documents, all additional demands, presentments, notices of protest and dishonor, and notices
of every kind and nature, including those of any action or no action on the part of Borrower, Lender or Guarantor, are expressly
waived by Guarantor. This is a guarantee of payment and not of collection. Guarantor hereby waives the right to require Lender
to proceed against Borrower or any other party, or to proceed against or apply any security it may hold, waives the right to require
Lender to pursue any other remedy for the benefit of Guarantor and agrees that Lender may proceed against Guarantor without taking
any action against any other party and without proceeding against or applying any security it may hold. Lender may, at its election,
foreclose upon any security held by it in one or more judicial or non-judicial sales, whether or not every aspect of such sale
is commercially reasonable, without affecting or impairing the liability of Guarantor, except to the extent the Indebtedness shall
have been paid. Guarantor waives any defense arising out of such an election, notwithstanding that such election may operate to
impair or extinguish any right or any remedy of Guarantor against Borrower or any other security.


 


7.           Guarantor
agrees to pay reasonable attorneys' fees and all other costs and expenses which may be incurred in the enforcement of this Guarantee.


 




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8.           Any
notices, demands, requests and consents permitted or required hereunder or under any other Loan Document shall be in writing,
may be delivered personally or sent by certified mail with postage prepaid or by reputable courier service with charges prepaid.
Any notice or demand sent to Guarantor by certified mail or reputable courier service shall be addressed to Guarantor at the address
set forth opposite Guarantor's name below or such other address in the United States of America as Guarantor shall designate in
a notice to Lender given in the manner described herein. Any notice sent to Lender by certified mail or reputable courier service
shall be addressed to The Northwestern Mutual Life Insurance Company to the attention of the Real Estate Investment Department
at 720 East Wisconsin Avenue, Milwaukee, WI 53202 or at such other addresses as Lender shall designate in a notice given in the
manner described herein. Any notice given to Lender shall refer to the Loan No. set forth above. Any notice or demand hereunder
shall be deemed given when received. Any notice or demand which is rejected, the acceptance of delivery of which is refused or
which is incapable of being delivered during normal business hours at the address specified herein or such other address designated
pursuant hereto shall be deemed received as of the date of attempted delivery.


 


		9.	The
                                         following terms shall be defined as set forth below:



 


"Recourse Obligations"
means the following:


 


		(A)	Rents and other income
from the Property received by Borrower or those acting on behalf of Borrower after any default under the Loan Documents remaining
uncured prior to the Conveyance Date (as hereinafter defined), which rents and other income have not been applied to the payment
of principal and interest on the Note or to reasonable operating expenses of the Property;



 


		(B)	Amounts
                                         necessary to repair damage to the Property caused by intentional acts or omissions of
                                         Borrower or those acting on behalf of Borrower;



 


		(C)	Insurance loss proceeds
and Condemnation Proceeds (as defined in the Lien Instrument) released to Borrower but not applied in accordance with any agreement
between Borrower and Lender as to their application;



 


		(D)	The amount of insurance
loss proceeds which would have been available with respect to a casualty on the Property, but were not available due to the default
by Borrower in carrying all insurance required by Lender under the Loan Documents;



 


		(E)	Damages suffered by
Lender in connection with the Indebtedness as a result of fraud or misrepresentation by Borrower or any other person or entity
acting on behalf of Borrower;



 






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		(F)	Amounts in excess of
any rents or other revenues collected by Lender from operation of the Property from and after acceleration of the Note until the
Conveyance Date, which amounts are necessary to pay real estate taxes, special assessments and insurance premiums (to the extent
not previously deposited with Lender pursuant to the provisions of the Lien Instrument following the caption entitled "Deposits
by Mortgagor"), and amounts required to fulfill Borrower's obligations as lessor under any leases of the Property,
in each case, either paid by Lender and not reimbursed prior to, or remaining due or delinquent on, the Conveyance Date;



 


		(G)	All security deposits
under leases of the Property or any portion of the Property collected by Borrower, any agent of Borrower or any predecessor of
Borrower, and not refunded to the tenants thereunder in accordance with their respective leases, applied in accordance with such
leases or law or delivered to Lender, and all advance rents collected by Borrower, any agent of Borrower or any predecessor of
Borrower and not applied in accordance with the leases of the Property, applied for reasonable operating expenses, or delivered
to Lender;



 


		(H)	Any losses suffered
by Lender as a result of the Property not being in compliance with all applicable zoning and land use ordinances, covenants, statutes,
and regulations; and



 


		(I)	Reasonable
                                         attorneys' fees and expenses incurred to the extent suit is brought to collect any of
                                         the amounts described in subparagraphs (A) through (H) above.



 


"Conveyance
Date" means (i) the later of (a) the date on which title vests in the purchaser at the foreclosure sale of the Property pursuant
to the Lien Instrument or (b) the date on which Borrower's statutory right of redemption shall expire or be waived or (ii) the
date of the conveyance of the Property to Lender in lieu of foreclosure.


 


"Triggering
Event" means any of the following:


 


		(A)	A
                                         violation of any provision of the Lien Instrument following the caption entitled
                                         "Prohibition on Transfer/One-Time Transfer";



 


		(B)	The filing by Borrower
of a voluntary petition for relief under the federal bankruptcy code;



 




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		(C)	The
                                         filing of an involuntary petition against Borrower under the federal bankruptcy code;
                                         or



 


		(D)	Borrower shall become
the subject of any liquidation, receivership or other similar proceedings;



 


provided, however, that Guarantor
shall not be liable for any outstanding amounts due under the Indebtedness pursuant to clauses (C) and (D) above and the remedies
thereunder will not be available to Lender if:


 


		(X)	Any of the proceedings
referred to in clauses (C) and (D) above (collectively, the "Proceedings") is dismissed within ninety (90) days of being
commenced;



 


		(Y)	Despite such Proceedings,
Borrower shall, within ninety (90) days of the commencement of any such Proceedings, cure all defaults under the Loan Documents
and thereafter perform Borrower's obligations under the Loan Documents (a) within five (5) business days after the due date of
any payment required under the Loan Documents and (b) within 30 days after the date on which any other obligation under the Loan
Documents is due; or



 


		(Z)	Despite such Proceedings,
Borrower consents, stipulates or agrees to the lifting of any automatic stay and the removal of all other impediments to foreclosure
of the Lien Instrument and otherwise cooperates with Lender and takes whatever steps are necessary to lift any automatic stay
or to remove any other impediment to foreclosure and the enforcement of remedies available to Lender, thereby enabling Lender
to foreclose the Lien Instrument (or enforce its other remedies under the Loan Documents not including clauses (C) and (D) above)
within (a) ninety (90) days of the commencement of such Proceedings or (b) thirty (30) days after Borrower fails to perform an
obligation under the Loan Documents within the applicable time period for performing such obligation as set forth in clause (Y)
above.



 


10.         This
Guarantee shall be governed by and construed in all respects in accordance with the laws of the State of South Carolina without
regard to any conflict of law principles. With respect to any action, lawsuit or other legal proceeding concerning any dispute
arising under or related to this Guarantee, Guarantor hereby irrevocably consents to the jurisdiction of the courts located in
the State of South Carolina and irrevocably waives any defense of improper venue, forum nonconveniens or lack of personal jurisdiction
in any such action, lawsuit or other legal proceeding brought in any court located in the State of South Carolina. Nothing contained
herein shall affect the rights of Lender to commence an action, lawsuit or other legal proceeding against Guarantor in any other
jurisdiction.


 




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Executed as of the 3rd
day of February, 2014.


 


Mailing Address: 


	c/o Trade Street Residential, Inc.	 	TRADE STREET RESIDENTIAL, INC.,
	19950 W. Country Club Drive	 	a Maryland corporation
	Suite 800	 	 	 
	Aventura, FL 33180	 	By:	/s/ Richard Ross
	Attn: Greg Baumann,	 	Name:	Richard Ross
	Vice President and General Counsel	 	Title:	Chief Financial Officer


 




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