A DIRECT OR INDIRECT INTEREST IN
EACH BORROWER, AND EACH GUARANTOR WILL DIRECTLY BENEFIT FROM LENDER'S MAKING THE
LOAN TO BORROWERS.
D.
ALL CAPITALIZED TERMS USED BUT NOT OTHERWISE DEFINED HEREIN SHALL
HAVE THE MEANINGS ASCRIBED TO SUCH TERM IN THE LOAN AGREEMENT.
NOW, THEREFORE, AS AN INDUCEMENT TO LENDER TO MAKE THE LOAN TO BORROWERS, AND TO
EXTEND SUCH ADDITIONAL CREDIT AS LENDER MAY FROM TIME TO TIME EXTEND UNDER THE
LOAN DOCUMENTS, AND FOR $10.00 OTHER GOOD AND VALUABLE CONSIDERATION, THE
RECEIPT AND LEGAL SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE PARTIES DO
HEREBY AGREE AS FOLLOWS:
ARTICLE I
NATURE AND SCOPE OF GUARANTY
1.1
GUARANTEED OBLIGATIONS.
(A)
EACH GUARANTOR HEREBY JOINTLY AND SEVERALLY, IRREVOCABLY,
ABSOLUTELY AND UNCONDITIONALLY GUARANTEES TO LENDER THE FULL, COMPLETE AND
PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF ALL OF THE OBLIGATIONS,
DUTIES, COVENANTS AND AGREEMENTS OF BORROWERS UNDER THE LOAN AGREEMENT RELATING
TO EACH PROJECT CONTEMPLATED BY THE INITIAL RENOVATIONS, AS SHOWN ON SCHEDULE
XIII TO THE LOAN AGREEMENT, AS THE SAME MAY BE MODIFIED WITH THE REASONABLE
CONSENT OF LENDER, IF AND WHEN BORROWERS SHALL BEGIN PHYSICAL CONSTRUCTION
THEREOF (EACH SUCH PROJECT, AS AND WHEN BORROWERS HAVE ELECTED TO COMMENCE, AND
HAVE COMMENCED, PHYSICAL CONSTRUCTION THEREOF, AN "INITIAL RENOVATIONS
PROJECT"), SUBSTANTIALLY IN COMPLIANCE WITH THE APPLICABLE PLANS AND
SPECIFICATIONS, THE APPLICABLE PORTIONS OF THE INITIAL RENOVATIONS LOAN BUDGET,
THE APPLICABLE CONSTRUCTION PROGRESS SCHEDULE AND ALL APPLICABLE LEGAL
REQUIREMENTS, INCLUDING, WITHOUT LIMITATION:
(i)
to diligently commence, perform and complete (or cause to be
commenced, performed and completed) the construction of each Initial Renovations
Project in accordance with the terms of the Loan Agreement;
(ii)
to pay all costs associated with each Initial Renovations
Project, including, without limitation, all hard costs, soft costs and other
obligations, liabilities, costs and expenses incurred in connection with the
completion of each Initial Renovations Project, as the same may become due and
payable;
(iii)
to keep the Properties free and clear of all Liens or claims of
Liens arising or incurred in connection with the completion of each Initial
Renovations Project, other than Permitted Encumbrances and any such Liens being
contested pursuant to, and in accordance with, Section 3.6(b) of the Security
Instrument, and if any Liens should be filed, or should attach, with respect to
any Property by reason of the carrying out of each Initial Renovations Project,
within fifteen (15) Business Days after obtaining notice thereof (but in any
event prior to the date on which such Property or any part thereof or interest
therein may be in imminent danger of being sold, forfeited, foreclosed,
2
TERMINATED, CANCELLED OR LOST), OTHER THAN ANY SUCH LIENS BEING CONTESTED
PURSUANT TO, AND IN ACCORDANCE WITH, SECTION 3.6(B) OF THE SECURITY INSTRUMENT,
TO EITHER (A) CAUSE THE REMOVAL OF SUCH LIENS OR (B) POST SECURITY AGAINST THE
CONSEQUENCES OF THEIR POSSIBLE FORECLOSURE AND PROCURE AN ENDORSEMENT TO THE
TITLE INSURANCE POLICY INSURING LENDER AGAINST THE CONSEQUENCES OF THE
FORECLOSURE OR ENFORCEMENT OF SUCH LIENS;
(iv)
to pay the premiums