Document:

Exhibit 10.4

 

GUARANTY AGREEMENT

 

This GUARANTY AGREEMENT (this “Guaranty”) is made as of the 27th day of December, 2012, by BEHRINGER HARVARD OPPORTUNITY REIT I, INC., a Maryland corporation (“Guarantor”), in favor of (a) BANK OF AMERICA, N.A., a national banking association (“Bank of America”; and together with its successors and assigns, “Syndicated Administrative Agent”), as Administrative Agent acting for and on behalf of BANK OF AMERICA and REGIONS BANK, an Alabama banking corporation (“Regions Bank”; and Bank of America and Regions Bank, together with their respective successors and assigns, are, collectively hereafter referred to as the “Syndicated Lenders”), and (b) BANK OF AMERICA(together with its successors and assigns, “Theater Administrative Agent”), as Administrative Agent acting for and on behalf of BANK OF AMERICA (together with its successors and assigns, the “Theater Lender”) (Syndicated Lenders and Theater Lender are referred to herein, collectively, as the “Lenders”, and each, a “Lender”).

 

PRELIMINARY STATEMENTS

 

BHFS I, LLC, BHFS II, LLC, BHFS III, LLC, and BHFS IV, LLC, each a Delaware limited liability company (collectively, the “Original Syndicated Loan Borrowers”) entered into a lending transaction with Syndicated Agent and Syndicated Lenders on July 28, 2008, as evidenced by certain promissory notes (collectively, the “Original Syndicated Notes”), and governed by that certain Loan Agreement, as amended from time to time prior to the date hereof  (“Original Syndicated Loan Agreement”), whereby the Original Syndicated Loan Borrowers obtained loans from the Syndicated Lenders in the aggregate original principal amount of $57,779,019.00 (“Original Syndicated Loan”).

 

BHFS Theater, LLC, a Delaware limited liability company (“Theater Borrower”), entered into a lending transaction with Theater Administrative Agent and Theater Lender on December 10, 2010, as evidenced by that certain promissory note (“Original Theater Note”), and which Original Theater Note is governed by that certain Construction Loan Agreement (“Original Theater Loan Agreement”), whereby the Theater Borrower obtained a loan from Theater Lender in the original principal amount of $5,047,057.00 (“Original Theater Loan”).

 

Guarantor and Fairways Frisco, LP, a Texas limited partnership (“Fairways”), executed that certain Guaranty Agreement, dated July 28, 2008, as amended from time to time prior to the date hereof (“Original Syndicated Guaranty Agreement”), in favor of Bank of America, as Administrative Agent on behalf of Syndicated Lenders, guaranteeing, among other things, the repayment of the Original Syndicated Loan, as described therein.  Additionally, Guarantor and Fairways executed that certain Guaranty Agreement, dated December 10, 2010 (“Original Theater Guaranty Agreement”) in favor of Bank of America, as Administrative Agent on behalf of Theater Lender, guaranteeing the repayment of the Original Theater Loan, as described therein.  The Original Syndicated Guaranty Agreement and the Original Theater Guaranty Agreement are, collectively referred to as the “Original Guaranty Agreement”.

 

The Original Syndicated Notes matured on January 28, 2012, and as a result of such maturity, all amounts owed by Original Syndicated Loan Borrowers under the Original Syndicated Loan Agreement became due and payable on that date, after which time Original

 

1

 

Syndicated Loan Borrowers were in default.  Additionally, the Original Theater Note was accelerated and therefore deemed matured on February 14, 2012, and as a result of such maturity, all amounts owed by Theater Borrower under the Original Theater Loan Agreement became due and payable on that date, after which time Theater Borrower was in default.

 

On June 13, 2012, Original Syndicated Loan Borrowers and Theater Borrower (collectively, the “Debtors”) filed voluntary petitions for relief commencing bankruptcy cases under Chapter 11 of the United States Bankruptcy Code, jointly administered under Bankruptcy Case No. 12-41581, in the United States Bankruptcy Court for the Eastern District of Texas, Sherman Division (the “Bankruptcy Court”).  The Debtors subsequently filed Debtors Amended Joint Consolidated Plan of Reorganization (the “Plan”) in the Bankruptcy Court.  The Bankruptcy Court entered its order (“Order”) confirming the Plan on December 20, 2012, and the Plan is currently in effect in accordance with its terms.

 

Pursuant to the Plan and the Order, Syndicated Administrative Agent, Syndicated Lenders, Original Syndicated Loan Borrowers, Theater Borrower, and Behringer Harvard Frisco Square LP, a Delaware limited partnership (collectively, “Syndicated Borrowers”), have entered into, are entering into concurrently herewith, or contemplate entering into, that certain Amended and Restated Loan Agreement dated of even date herewith (herein called, as it may hereafter be modified, supplemented, restated, extended, or renewed and in effect from time to time, the “Syndicated Loan Agreement”), which Syndicated Loan Agreement sets forth the terms and conditions of a loan (the “Syndicated Loan”) to Syndicated Borrowers for the reinstatement, renewal, extension and modification of the Original Syndicated Loan.  The Syndicated Loan is secured in part by the Deeds of Trust (as defined in the Syndicated Loan Agreement), and which are referred to herein as the “Syndicated Deeds of Trust”.

 

Also, pursuant to the Plan and the Order, Theater Administrative Agent, Theater Lender and Syndicated Borrowers have entered into, are entering into concurrently herewith, or contemplate entering into, that certain Loan Modification Agreement dated of even date herewith (the “Theater Loan Modification Agreement”, and the Original Theater Loan Agreement, as modified by the Theater Loan Modification Agreement, and as the same may have hereafter be modified, supplemented, restated, extended, or renewed and in effect from time to time, the “Theater Loan Agreement”), which Theater Loan Modification Agreement modifies the terms and conditions of the Original Theater Loan (such Original Theater Loan, as modified by the Theater Loan Modification Agreement, the “Theater Loan”).  The Theater Loan is secured in part by the Original Deed of Trust (as defined in the Theater Loan Modification Agreement), and which, as modified by the Theater Loan Modification Agreement is referred to herein as the “Theater Deed of Trust”.

 

The Syndicated Loan is or will be also evidenced by those certain Reinstated, Renewal, Modification and Extension Promissory Notes dated or to be dated the date of the Syndicated Loan Agreement, issued or to be issued by Syndicated Borrowers pursuant to the Syndicated Loan Agreement in the aggregate principal amount of $26,962,923.49 (such notes, as they may hereafter be renewed, extended, supplemented, increased or modified and in effect from time to time, and all other notes given in substitution therefor in accordance with the Syndicated Loan Agreement, or in modification, renewal, or extension thereof, in whole or in part, are herein collectively called the “Syndicated Note”; this Guaranty, Syndicated Loan Agreement,

 

2

 

Syndicated Note, Syndicated Deeds of Trust, and all other documents now or hereafter securing, guaranteeing or executed by Syndicated Borrowers or Guarantor in connection with the Syndicated Loan are, as the same have been or may be amended, restated, modified or supplemented from time to time, hereafter referred to collectively as the “Syndicated Loan Documents”).

 

The Theater Loan is or will be also evidenced by the Original Theater Note, as modified by the Theater Loan Modification Agreement (such Original Theater Note, as modified by the Theater Loan Modification Agreement, and as the same may be renewed, extended, supplemented, increased or modified and in effect from time to time, and all other notes given in substitution therefor in accordance with the Theater Loan Agreement, or in modification, renewal, or extension thereof, in whole or in part, are herein collectively called the “Theater Note”; this Guaranty, Theater Loan Agreement, Theater Note, Theater Deed of Trust, and all other documents now or hereafter securing, guaranteeing or executed by Theater Borrower or Guarantor in connection with the Theater Loan are, as the same have been or may be amended, restated, modified or supplemented from time to time, hereafter referred to collectively as the “Theater Loan Documents”), and such Theater Loan Modification Agreement provides that the outstanding principal amount of the Theater Loan is $4,981,578.39.

 

The Syndicated Administrative Agent and the Theater Administrative Agent are referred to collectively herein as “Administrative Agent”; Syndicated Borrowers are referred to collectively herein as the “Borrowers” and each, a “Borrower”; the Syndicated Loan Agreement and the Theater Loan Agreement are referred to collectively herein as the “Loan Agreement”; the Syndicated Loan and the Theater Loan are referred to collectively herein as the “Loan”; the Syndicated Deeds of Trust and the Theater Deed of Trust are referred to collectively herein as the “Deed of Trust”; the Syndicated Note and the Theater Note are referred to collectively as the “Note”; the Syndicated Loan Documents and the Theater Loan Documents are referred to collectively herein as the “Loan Documents”.

 

A condition precedent to the effectiveness of the Loan Agreement is Guarantor’s execution and delivery to Administrative Agent of this Guaranty.

 

Any capitalized term used and not defined in this Guaranty shall have the meaning given to such term in the Loan Agreement.  This Guaranty is one of the Loan Documents described in the Loan Agreement.

 

STATEMENT OF AGREEMENTS

 

For good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, and as a material inducement to Lenders to enter into the Loan Agreement, Guarantor hereby guarantees to Administrative Agent and the Lenders the prompt and full payment of the indebtedness and obligations described below in this Guaranty (such indebtedness and obligations owed by Syndicated Borrowers, the “Syndicated Guaranteed Obligations”; such indebtedness and obligations owed by Theater Borrower, the “Theater Guaranteed Obligations”; the Syndicated Guaranteed Obligations and the Theater Guaranteed Obligations are referred to collectively herein as the “Guaranteed Obligations”), upon the following terms and conditions:

 

3

 

1.                                      Guaranty of Payment.

 

(a)                                 Subject to the provisions of Section 2 of this Guaranty, including the Guaranteed Obligations Cap, Guarantor hereby unconditionally and irrevocably guarantees to Administrative Agent and the Lenders the full, complete and punctual payment when due, whether by lapse of time, by acceleration of, maturity, or otherwise, of the following (collectively called, the “Indebtedness”):

 

(i)                                     the Principal Liability Amount (as defined below); plus

 

(ii)                                  the Accrued Interest Amount (as defined below); plus

 

(iii)                               the Personal Liability Amount (as defined below); plus

 

(iv)                              all costs, expenses, and other sums of money now or hereafter due and owing, arising out of or relating to the enforcement of this Guaranty.

 

This Guaranty covers the Indebtedness, whether presently outstanding or arising subsequent to the date hereof.  The guaranty of Guarantor set forth in this Section 1 is a continuing guaranty of payment and not a guaranty of collection, provided, however that Guarantor’s obligations and liability under this Guaranty shall be limited to payment only, and, with that exception, Guarantor shall have no obligation to perform under the Syndicated Loan Agreement, the Theater Loan Agreement, or any other Loan Document.  For purposes of determining Guarantor’s liability hereunder with respect to the Principal Liability Amount, to the extent any Lender receives any payments under the Note or receives any proceeds from foreclosure of or other realization upon any of the security for the Note (including proceeds from foreclosure), except as expressly provided in Section 2 of this Guaranty, such payments or proceeds shall first be applied to that portion of the Indebtedness for which Guarantor has no liability for payment, and shall then (and only after payment in full of the portion of the Obligations for which Guarantor has no liability for payment) be applied against the portion of the Indebtedness for whose payment Guarantor is liable.

 

(b)                                 Unless otherwise defined herein, the following capitalized terms when used in this Guaranty shall have the respective meanings set forth below:

 

“Accrued Interest Amount” means all accrued and unpaid interest on the Indebtedness as of the Satisfaction Date (as defined below).

 

“Demand for Payment Notice” means a writing from Administrative Agent to Guarantor setting forth all amounts owed by Guarantor under this Guaranty as of a certain date.

 

“Personal Liability Amount” means all damages, losses, costs and expenses suffered or incurred by Administrative Agent and/or either of the Lenders as a result of (i) fraud by any Borrower, Guarantor or any employee of any Borrower or Guarantor or any agent of any Borrower or Guarantor if acting at the direction of any Borrower, Guarantor or any employee or principal of Borrowers or Guarantor; (ii) any untruth or

 

4

 

inaccuracy in any material respect, which untruth or inaccuracy was known to Borrowers when delivered, of any instrument or information delivered to Administrative Agent or any Lender by or on behalf of Borrowers as a condition to or in connection with the execution of the Loan Agreement or to satisfy any condition set forth in the Loan Agreement or in any Loan Document; (iii) any representation or warranty of Borrowers that is knowingly untrue or inaccurate in any material respect or knowingly fails to include any fact or information necessary to keep the information contained therein from being materially misleading; (iv) the misapplication or misuse by Borrowers or anyone acting for or on behalf of Borrowers (in the case of an agent, at the direction of any Borrower, Guarantor, or any employee, officer, director or principal of any Borrower or Guarantor) of any insurance proceeds or condemnation awards, or any Loan proceeds, contrary to the terms of the Loan Agreement; (v) following written notice of a Default, the failure of Borrowers to apply all revenues, rents, issues, accounts, profits, accounts receivable and income of Borrowers to the normal operating expenses of any of the properties making up the Property (as defined in each Deed of Trust) (which expenses shall not include the payment of any legal fees other than those incurred by Borrower in the ordinary course of operating the Property (e.g., legal fees incurred in connection with lease negotiations) and shall expressly exclude legal fees incurred in connection with litigation or other actions against any of the Lenders, unless first approved in writing by Administrative Agent or expenses or overhead of any direct or indirect owner of Borrowers, or Guarantor) and/or any payments due under the Loan; (vi) [intentionally deleted]; (vii) all costs, expenses and fees including, but not limited to, court costs and reasonable attorneys’ fees, costs and expenses, arising in connection with any proceedings under Debtor Relief Laws applicable to Borrowers or Guarantor; (viii) failure of Borrowers to pay all taxes and general and special assessments relating to any of the properties making up the Property; and (ix) a casualty affecting any of the properties making up the Property to the extent such casualty was not covered by insurance because Borrowers failed to carry the insurance required by the Loan Documents or because Borrowers failed to pay in full the losses arising from such casualty under any plan of self-insurance of Borrowers.

 

“Principal Liability Amount” means, as of any date, 100% of the outstanding principal balance of the Loan.

 

“Satisfaction Date” means the date on which Guarantor pays to Administrative Agent, for the ratable benefit of the Lenders, the Principal Liability Amount and all other sums which are owed by Guarantor under this Guaranty as of such date.

 

2.                                      Guaranteed Obligations Cap.  Notwithstanding anything contained in this Guaranty to the contrary, the aggregate amount payable by Guarantor under this Guaranty or otherwise with respect to the Guaranteed Obligations shall be limited to and shall not exceed (i) an initial amount equal to $11,180,575.66 (such amount, as the same may be from time to time reduced as hereinafter set forth, the “Guaranteed Obligations Cap”), which such initial amount equals thirty-five percent (35%) of the aggregate principal balances of the Indebtedness as of the date of this Guaranty, and (ii) any attorneys’ fees or costs of collection permitted under Section 12 of this Guaranty.  For any voluntary payments made to reduce the Indebtedness that is in excess of payments to Administrative Agent, on behalf of any one or more of the Lenders, required by the

 

5

 

Loan Documents (“Voluntary Payments”), the Guaranteed Obligations Cap shall be reduced $1.40 for every $1.00 of Voluntary Payments made after the date of this Guaranty but on or before March 31, 2013, and, commencing April 1, 2013 and thereafter, the Guaranteed Obligations Cap shall be reduced $1.00 for every $1.00 of Voluntary Payments made by or on behalf of any of the Borrowers to Administrative Agent, on behalf of any one or more of the Lenders.  Voluntary Payments do not include (i) payments made by Borrowers due to the sale of any of the Collateral (as defined in the Loan Agreement), or (ii) any other payments made pursuant to any of the Loan Documents, including the Note. The Guaranteed Obligations shall, at no time, exceed the aggregate unpaid principal balance of the Loan plus any attorneys’ fees or costs of collection incurred by Administrative Agent, on behalf of any of the Lenders, in the enforcement or preservation of the Lenders’ rights under this Guaranty, as provided in Section 12.

 

3.                                      Primary Liability of Guarantor.

 

(a)                                 This Guaranty is an absolute, irrevocable and unconditional guaranty of payment.  Guarantor shall be liable for the payment of the Guaranteed Obligations, to the extent set forth in Section 2, as a primary obligor.  This Guaranty shall be effective as a waiver of, and Guarantor hereby expressly waives, any and all rights to which Guarantor may otherwise have been entitled under any suretyship laws in effect from time to time, including any right or privilege, whether existing under statute, at law or in equity, to require Administrative Agent, on behalf of the Lenders, to take prior recourse or proceedings against any Collateral, security or Person (hereinafter defined) whatsoever.

 

(b)                                 Liability of Guarantor for Syndicated Guaranteed Obligations.

 

(i)                                     Guarantor hereby agrees that upon the occurrence of a Syndicated Event of Default (being an “Event of Default” as defined in the Syndicated Loan Agreement), the Syndicated Guaranteed Obligations, for purposes of this Guaranty, shall be deemed immediately due and payable at the election of Syndicated Administrative Agent (with the consent of the Syndicated Lenders, as appropriate or applicable), and Guarantor shall, within 10 days after written demand therefor is given by Syndicated Administrative Agent to Guarantor as provided in Section 16 of this Guaranty and without presentment, protest, notice of protest, further notice of nonpayment or of dishonor, default or nonperformance, or notice of acceleration or of intent to accelerate, or any other notice whatsoever, without any notice having been given to Guarantor previous to such demand of the acceptance by Syndicated Administrative Agent of this Guaranty, and without any notice having been given to Guarantor previous to such demand of the creating or incurring of such Indebtedness or of such obligation to perform, all such notices being hereby waived by Guarantor, pay the full amount of the Syndicated Guaranteed Obligations then due (subject to the Guaranteed Obligations Cap as determined under Section 2 of this Guaranty) to Syndicated Administrative Agent for the account of the Syndicated Lenders, whether or not suit is filed thereon, or whether at maturity or by acceleration, or whether in connection with bankruptcy, insolvency or appeal.  It shall not be necessary for Syndicated Administrative Agent, on behalf of the Syndicated Lenders, in order to enforce such payment by Guarantor, first to institute suit or

 

6

 

pursue or exhaust any rights or remedies against Syndicated Borrowers or others liable on such Indebtedness or for performance under the Syndicated Loan Documents, or to enforce any rights against any security that shall ever have been given to secure such Indebtedness or such performance, or to join Syndicated Borrowers or any others liable for the payment of the Syndicated Guaranteed Obligations or any part thereof, in any action to enforce this Guaranty, or to resort to any other means of obtaining payment of the Syndicated Guaranteed Obligations or performance under the Syndicated Loan Documents; provided, however, that nothing herein contained shall prevent Syndicated Administrative Agent or any of the Syndicated Lenders from suing on the Syndicated Note or foreclosing the Syndicated Deeds of Trust or from exercising any other rights thereunder, and if such foreclosure or other remedy is availed of, only the net proceeds therefrom, after deduction of all charges and expenses of every kind and nature whatsoever, shall be applied in reduction of the amount due on the Syndicated Note and Syndicated Deeds of Trust, and Syndicated Administrative Agent and the Syndicated Lenders shall not be required to institute or prosecute proceedings to recover any deficiency as a condition of payment hereunder or enforcement hereof.  At any sale of the Collateral given for the Indebtedness or any part thereof, whether by foreclosure or otherwise, any Syndicated Lender may at its discretion purchase all or any part of the Collateral so sold or offered for sale for its own account and may, in payment of the amount bid therefor, deduct such amount from the balance due it pursuant to the terms of the Syndicated Note and Syndicated Deeds of Trust.

 

(ii)                                  Suit may be brought or demand may be made against Syndicated Borrowers or against all parties who have signed this Guaranty or any other guaranty covering all or any part of the Syndicated Guaranteed Obligations, or against any one or more of them, separately or together, without impairing the rights of Syndicated Administrative Agent and the Syndicated Lenders against any party hereto.

 

(c)                                  Liability of Guarantor for Theater Guaranteed Obligations.

 

(i)                                     Guarantor hereby agrees that upon the occurrence of a Theater Event of Default (being an “Event of Default” as defined in the Theater Loan Agreement), the Theater Guaranteed Obligations, for purposes of this Guaranty, shall be deemed immediately due and payable at the election of Theater Administrative Agent (with the consent of the Theater Lender, as appropriate or applicable), and Guarantor shall, within 10 days after written demand therefor is given by Theater Administrative Agent to Guarantor as provided in Section 16 of this Guaranty and without presentment, protest, notice of protest, further notice of nonpayment or of dishonor, default or nonperformance, or notice of acceleration or of intent to accelerate, or any other notice whatsoever, without any notice having been given to Guarantor previous to such demand of the acceptance by Theater Administrative Agent of this Guaranty, and without any notice having been given to Guarantor previous to such demand of the creating or incurring of such Indebtedness or of such obligation to perform, all such notices being hereby

 

7

 

waived by Guarantor, pay the full amount of the Theater Guaranteed Obligations then due (subject to the Guaranteed Obligations Cap as determined under Section 2 of this Guaranty) to Theater Administrative Agent for the account of the Theater Lender, whether or not suit is filed thereon, or whether at maturity or by acceleration, or whether in connection with bankruptcy, insolvency or appeal.  It shall not be necessary for Theater Administrative Agent, on behalf of the Theater Lender, in order to enforce such payment by Guarantor, first to institute suit or pursue or exhaust any rights or remedies against Theater Borrower or others liable on such Indebtedness or for performance under the Theater Loan Documents, or to enforce any rights against any security that shall ever have been given to secure such Indebtedness or such performance, or to join Theater Borrower or any others liable for the payment of the Theater Guaranteed Obligations or any part thereof, in any action to enforce this Guaranty, or to resort to any other means of obtaining payment of the Theater Guaranteed Obligations or performance under the Theater Loan Documents; provided, however, that nothing herein contained shall prevent Theater Administrative Agent or the Theater Lender from suing on the Theater Note or foreclosing the Theater Deed of Trust or from exercising any other rights thereunder, and if such foreclosure or other remedy is availed of, only the net proceeds therefrom, after deduction of all charges and expenses of every kind and nature whatsoever, shall be applied in reduction of the amount due on the Theater Note and Theater Deed of Trust, and Theater Administrative Agent and the Theater Lender shall not be required to institute or prosecute proceedings to recover any deficiency as a condition of payment hereunder or enforcement hereof.  At any sale of the Collateral given for the Indebtedness or any part thereof, whether by foreclosure or otherwise, any Theater Lender may at its discretion purchase all or any part of the Collateral so sold or offered for sale for its own account and may, in payment of the amount bid therefor, deduct such amount from the balance due it pursuant to the terms of the Theater Note and Theater Deed of Trust.

 

(ii)                                  Suit may be brought or demand may be made against Theater Borrower or against all parties who have signed this Guaranty or any other guaranty covering all or any part of the Theater Guaranteed Obligations, or against any one or more of them, separately or together, without impairing the rights of Theater Administrative Agent and the Theater Lender against any party hereto.

 

(d)                                 If, under Section 3(b), Syndicated Administrative Agent makes a demand for payment on Guarantor for the Syndicated Guaranteed Obligations, and, under Section 3(c), Theater Administrative Agent makes a demand for payment on Guarantor for the Theater Guaranteed Obligations, then payments made by Guarantor for the Guaranteed Obligations shall be applied to the Loan by the Administrative Agent in its sole discretion.

 

8

 

4.                                      Certain Agreements and Waivers by Guarantor.

 

(a)                                 Guarantor hereby agrees that neither the Lenders’ rights or remedies nor Guarantor’s obligations under the terms of this Guaranty shall be released, diminished, impaired, reduced or affected by any one or more of the following events, actions, facts, circumstances or rights, and the liability of Guarantor under this Guaranty shall be absolute and unconditional irrespective of:

 

(i)                                     any limitation of liability or recourse in any other Loan Document or arising under any law;

 

(ii)                                  any claim or defense that this Guaranty was made without consideration or is not supported by adequate consideration;

 

(iii)                               the taking or accepting of any other security or guaranty for, or right of recourse with respect to, any or all of the Guaranteed Obligations;

 

(iv)                              any homestead exemption or any other exemption under applicable Law;

 

(v)                                 any release, surrender, abandonment, exchange, alteration, sale or other disposition, subordination, deterioration, waste, failure to protect or preserve, impairment, or loss of, or any failure to create or perfect any lien or security interest with respect to, or any other dealings with, any collateral or security at any time existing or purported, believed or expected to exist in connection with any or all of the Guaranteed Obligations, including any impairment of Guarantor’s recourse against any Person or collateral;

 

(vi)                              whether express or by operation of law, any partial release of the liability of Guarantor hereunder, or if one or more other guaranties are now or hereafter obtained by the Lenders covering all or any part of the Guaranteed Obligations, any complete or partial release of any one or more of such guarantors under any such other guaranty, or any complete or partial release of Borrowers or any other party liable, directly or indirectly, for the payment or performance of any or all of the Guaranteed Obligations;

 

(vii)                           the death, insolvency, bankruptcy, disability, dissolution, liquidation, termination, receivership, reorganization, merger, consolidation, change of form, structure or ownership, sale of all assets, or lack of corporate, partnership or other power of Borrowers or any other party at any time liable for the payment or performance of any or all of the Guaranteed Obligations;

 

(viii)                        either with or without notice to or consent of Guarantor: any renewal, extension, modification, supplement, subordination or rearrangement of the terms of any or all of the Guaranteed Obligations and/or any of the Loan Documents, including, without limitation, material alterations of the terms of payment (including changes in maturity date(s) and interest rate(s)) or performance or any other terms thereof, or any waiver, termination, or release of,

 

9

 

or consent to departure from, any of the Loan Documents or any other guaranty of any or all of the Guaranteed Obligations, or any adjustment, indulgence, forbearance, or compromise that may be granted from time to time by Administrative Agent, on behalf of the Lenders, to Borrowers, Guarantor, and/or any other Person at any time liable for the payment or performance of any or all of the Guaranteed Obligations;

 

(ix)                              any neglect, lack of diligence, delay, omission, failure, or refusal of Administrative Agent, on behalf of the Lenders, to take or prosecute (or in taking or prosecuting) any action for the collection or enforcement of any of the Guaranteed Obligations, or to foreclose or take or prosecute any action to foreclose (or in foreclosing or taking or prosecuting any action to foreclose) upon any security therefor, or to exercise (or in exercising) any other right or power with respect to any security therefor, or to take or prosecute (or in taking or prosecuting) any action in connection with any Loan Document, or any failure to sell or otherwise dispose of in a commercially reasonable manner any collateral securing any or all of the Guaranteed Obligations;

 

(x)                                 any failure of Administrative Agent, on behalf of the Lenders, to notify Guarantor of any creation, renewal, extension, rearrangement, modification, supplement, subordination, or assignment of the Guaranteed Obligations or any part thereof, or of any Loan Document, or of any release of or change in any security, or of any other action taken or refrained from being taken by Administrative Agent, on behalf of the Lenders, against Borrowers or any security or other recourse, or of any new agreement between Administrative Agent, for the Lenders, and Borrowers, it being understood that unless otherwise expressly provided for in this Guaranty, the Lenders shall not be required to give Guarantor any notice of any kind under any circumstances with respect to or in connection with the Guaranteed Obligations, any and all rights to notice Guarantor may have otherwise had being hereby waived by Guarantor, and Guarantor shall be responsible for obtaining for itself information regarding the Borrowers, including, but not limited to, any changes in the business or financial condition of Borrowers, and Guarantor acknowledges and agrees that the Administrative Agent and the Lenders shall have no duty to notify Guarantor of any information which the Administrative Agent and the Lenders may have concerning Borrowers.

 

(xi)                              if for any reason any Lender is required to refund any payment by Borrowers to any other party liable for the payment or performance of any or all of the Guaranteed Obligations or pay the amount thereof to someone else;

 

(xii)                           the making of advances by Administrative Agent, on behalf of the Lenders, to protect the interest of the Lenders in the Property, preserve the value of the Property, or for the purpose of performing any term or covenant contained in any of the Loan Documents;

 

10

 

(xiii)                        the existence of any claim, counterclaim, set-off or other right that Guarantor may at any time have against Borrowers, Administrative Agent, any Lender, or any other Person, whether or not arising in connection with this Guaranty, the Note, the Loan Agreement, or any other Loan Document;

 

(xiv)                       the unenforceability of all or any part of the Guaranteed Obligations against all or any of the Borrowers, whether because the Guaranteed Obligations exceed the amount permitted by law or violate any usury law, or because the act of creating the Guaranteed Obligations, or any part thereof, is ultra vires, or because the officers or Persons creating the Guaranteed Obligations acted in excess of their authority, or because of a lack of validity or enforceability of or defect or deficiency in any of the Loan Documents, or because any Borrower has any valid defense, claim or offset with respect thereto, or because such Borrower’s obligation ceases to exist by operation of law, or because of any other reason or circumstance, it being agreed that Guarantor shall remain liable hereon regardless of whether such Borrower or any other Person be found not liable on the Guaranteed Obligations, or any part thereof, for any reason (and regardless of any joinder of such Borrower or any other party in any action to obtain payment or performance of any or all of the Guaranteed Obligations); or

 

(xv)                          any order, ruling or plan of reorganization emanating from proceedings under Title 11 of the United States Code with respect to Borrowers or any other Person, including any extension, reduction, composition, or other alteration of the Guaranteed Obligations, whether or not consented to by Administrative Agent and the Lenders.

 

(b)                                 In the event any payment by any Borrower or any other Person to any Lender is held to constitute a preference, fraudulent transfer or other voidable payment under any bankruptcy, insolvency or similar law, or if for any other reason any Lender is required to refund such payment or pay the amount thereof to any other party, such payment by Borrowers or any other party to any Lender shall not constitute a release of Guarantor from any liability hereunder, and this Guaranty shall continue to be effective or shall be reinstated (notwithstanding any prior release, surrender or discharge by the Lenders of this Guaranty or of Guarantor), as the case may be, with respect to, and this Guaranty shall apply to, any and all amounts so refunded by any such Lender or paid by any such Lender to another Person (which amounts shall constitute part of the Guaranteed Obligations), and any interest paid by any such Lender and any attorneys’ fees, costs and expenses paid or incurred by Lender in connection with any such event.  It is the intent of Guarantor and the Lenders that the obligations and liabilities of Guarantor hereunder are absolute and unconditional under any and all circumstances and that until the Guaranteed Obligations are fully and finally paid and performed, and not subject to refund or disgorgement, the obligations and liabilities of Guarantor hereunder shall not be discharged or released, in whole or in part, by any act or occurrence that might, but for the provisions of this Guaranty, be deemed a legal or equitable discharge or release of a guarantor.  Administrative Agent, on behalf of the Lenders, shall be entitled to continue to hold this Guaranty in its possession for the longer of (i) the period after which any performance of obligations under the Loan Agreement shall accrue, or (ii) a period of one

 

11

 

year from the date the Guaranteed Obligations are paid and performed in full and for so long thereafter as may be necessary to enforce any obligation of Guarantor hereunder and/or to exercise any right or remedy of the Lenders hereunder.

 

(c)                                  If acceleration of the time for payment of any amount payable by Borrowers under the Note, the Loan Agreement, or any other Loan Document that constitutes any of the Guaranteed Obligations is stayed or delayed by any law or tribunal, all such amounts shall nonetheless be payable by Guarantor within 10 days after written demand therefor is given by Administrative Agent to Guarantor as provided in Section 16 of this Guaranty.

 

5.                                      Reserved.

 

6.                                      Subordination.  If, for any reason whatsoever, any Borrower is now or hereafter becomes indebted to Guarantor:

 

(a)                                 such indebtedness and all interest thereon and all liens, security interests and rights now or hereafter existing with respect to property of such Borrower securing such indebtedness shall, at all times, be subordinate in all respects to the Guaranteed Obligations and to all liens, security interests and rights now or hereafter existing to secure the Guaranteed Obligations;

 

(b)                                 Guarantor shall not be entitled to enforce or receive payment, directly or indirectly, of any such indebtedness of such Borrower to Guarantor (other than trade payables or other customary expenses incurred in the ordinary course of business) until the Guaranteed Obligations have been fully and finally paid and performed;

 

(c)                                  Guarantor hereby assigns and grants to Administrative Agent, on behalf of the Lenders, a security interest in all such indebtedness and security therefor, if any, of such Borrower to Guarantor now existing or hereafter arising by reason of any payment by Guarantor in respect of the Guaranteed Obligations or the Loan, including any dividends and payments pursuant to debtor relief or insolvency proceedings referred to below.  In the event of receivership, bankruptcy, reorganization, arrangement or other debtor relief or insolvency proceedings involving such Borrower as debtor, Administrative Agent, on behalf of the Lenders, shall have the right to prove its claim in any such proceeding so as to establish its rights hereunder and shall have the right to receive directly from the receiver, trustee or other custodian (whether or not a Default shall have occurred or be continuing under any of the Loan Documents), dividends and payments that are payable upon any obligation of such Borrower to Guarantor now existing or hereafter arising, and to have all benefits of any security therefor, until the Guaranteed Obligations have been fully and finally paid and performed.If, notwithstanding the foregoing provisions, Guarantor should receive any payment, claim or distribution that is prohibited as provided above in this Section 6, Guarantor shall pay the same to Administrative Agent, on behalf of the Lenders, immediately, Guarantor hereby agreeing that it shall receive the payment, claim or distribution in trust for Administrative Agent, on behalf of the Lenders, and shall have absolutely no dominion over the same except to pay it immediately to Administrative Agent; and

 

12

 

(d)                                 Guarantor shall promptly upon request of Administrative Agent from time to time execute such documents and perform such acts as Administrative Agent may require to evidence and perfect its interest and to permit or facilitate exercise of its rights under this Section 6, including, but not limited to, execution and delivery of financing statements, proofs of claim, further assignments and security agreements, and delivery to Administrative Agent of any promissory notes or other instruments evidencing indebtedness of such Borrower to Guarantor.  All promissory notes, accounts receivable ledgers or other evidences, now or hereafter held by Guarantor, of obligations of such Borrower to Guarantor shall contain a specific written notice thereon that the indebtedness evidenced thereby is subordinated under and is subject to the terms of this Guaranty.

 

7.                                      Other Liability of Guarantor or Borrowers.  If Guarantor is or becomes liable, by endorsement or otherwise, for any indebtedness owing by Borrowers to Administrative Agent and the Lenders other than under this Guaranty, such liability shall not be in any manner impaired or affected hereby, and the rights of Administrative Agent and the Lenders hereunder shall be cumulative of any and all other rights that Administrative Agent and the Lenders may have against Guarantor.  If any Borrower is or becomes indebted to Lenders for any indebtedness other than or in excess of the Indebtedness for which Guarantor is liable under this Guaranty, any payment received or recovery realized upon such other indebtedness of such Borrower to the Lenders may, except to the extent paid by Guarantor on the Indebtedness or specifically required by law or agreement of Administrative Agent to be applied to the Indebtedness, in Administrative Agent’s sole discretion, be applied upon indebtedness of such Borrower to the Lenders other than the Indebtedness.  Notwithstanding the foregoing, it is expressly acknowledged and agreed that this Guaranty is an amendment and full restatement of the Original Guaranty Agreement as to the obligations of Guarantor only, and supersedes and replaces the Original Guaranty Agreement as it applies to Guarantor.

 

8.                                      Assigns.  This Guaranty is for the benefit of Administrative Agent and the Lenders and their successors and assigns, and in the event of an assignment of the Guaranteed Obligations, or any part thereof, the rights and benefits hereunder, to the extent applicable to the Guaranteed Obligations so assigned, may be transferred with such Guaranteed Obligations.  Guarantor waives notice of any transfer or assignment of the Guaranteed Obligations, or any part thereof, and agrees that failure to give notice of any such transfer or assignment will not affect the liabilities of Guarantor hereunder.

 

9.                                      Binding Effect.  This Guaranty is binding not only on Guarantor, but also on Guarantor’s successors and assigns.

 

10.                               Governing Law; Forum; Consent to Jurisdiction.  The validity, enforcement, and interpretation of this Guaranty, shall for all purposes be governed by and construed in accordance with the laws of the State of Texas and applicable United States federal law, and is intended to be performed in accordance with, and only to the extent permitted by, such laws.  All obligations of Guarantor hereunder are payable and performable at the place or places where the Guaranteed Obligations are payable and performable.  Guarantor hereby irrevocably submits generally and unconditionally for Guarantor and in respect of Guarantor’s property to the nonexclusive jurisdiction of any court of the State of Texas, or any United States federal court,

 

13

 

sitting in the County of Dallas, State of Texas and to the jurisdiction of any state or United States federal court sitting in the County of Dallas, State of Texas, over any suit, action or proceeding arising out of or relating to this Guaranty or the Guaranteed Obligations.  Guarantor hereby irrevocably waives, to the fullest extent permitted by law, any objection that Guarantor may now or hereafter have to the laying of venue in any such court and any claim that any such court is an inconvenient forum.  Final judgment in any such suit, action or proceeding brought in any such court shall be conclusive and binding upon Guarantor and may be enforced in any court in which Guarantor is subject to jurisdiction.  Guarantor hereby agrees and consents that, in addition to any methods of service of process provided for under applicable law, all service of process in any such suit, action or proceeding in any state court, or any United States federal court, sitting in the State of Texas may be made by certified or registered mail, return receipt requested, directed to Guarantor at the address set forth at the end of this Guaranty, or at a subsequent address of which Administrative Agent receives actual notice from Guarantor in accordance with the notice provisions hereof, and service so made shall be complete five (5) days after the same shall have been so mailed.  Nothing herein shall affect the right of Administrative Agent to serve process in any manner permitted by law or limit the right of Administrative Agent, on behalf of the Lenders, to bring proceedings against Guarantor in any other court or jurisdiction.  Guarantor hereby releases, to the extent permitted by applicable law, all errors and all rights of exemption, appeal, stay of execution, inquisition, and other rights to which Guarantor may otherwise be entitled under the laws of the United States of America or any State or possession of the United States of America now in force or which may hereinafter be enacted.  The authority and power to appear for and enter judgment against Guarantor shall not be exhausted by one or more exercises thereof or by any imperfect exercise thereof and shall not be extinguished by any judgment entered pursuant thereto.  Such authority may be exercised on one or more occasions or from time to time in the same or different jurisdiction as often as the Administrative Agent shall deem necessary and desirable.

 

11.                               Invalidity of Certain Provisions.  If any provision of this Guaranty or the application thereof to any Person or circumstance shall, for any reason and to any extent, be declared to be invalid or unenforceable, neither the remaining provisions of this Guaranty nor the application of such provision to any other Person or circumstance shall be affected thereby, and the remaining provisions of this Guaranty, or the applicability of such provision to other Persons or circumstances, as applicable, shall remain in effect and be enforceable to the maximum extent permitted by applicable law.

 

12.                               Attorneys’ Fees and Costs of Collection.  Guarantor shall pay on demand all attorneys’ fees and all other costs and expenses incurred by Administrative Agent, on behalf of the Lenders, in the enforcement of or preservation of the Lenders’ rights under this Guaranty including, without limitation, all attorneys’ fees and expenses, investigation costs, and all court costs, whether or not suit is filed hereon, or whether at maturity or by acceleration, or whether before or after maturity, or whether in connection with bankruptcy, insolvency or appeal.  Subject to the provisions of Section 2 of the Guaranty, Guarantor agrees to pay interest on any expenses or other sums due to Administrative Agent under this Section 12 that are not paid within 10 days after written demand therefor is given by Administrative Agent to Guarantor as provided in Section 16 of this Guaranty, at a rate per annum equal to the Past Due Rate.

 

14

 

13.                               Payments.  All sums payable under this Guaranty shall be paid in lawful money of the United States of America that at the time of payment is legal tender for the payment of public and private debts.

 

14.                               Controlling Agreement.  It is not the intention of Administrative Agent, the Lenders or Guarantor to obligate Guarantor to pay interest in excess of that lawfully permitted to be paid by Guarantor under applicable law.  Should it be determined that any portion of the Guaranteed Obligations or any other amount payable by Guarantor under this Guaranty constitutes interest in excess of the maximum amount of interest that Guarantor, in Guarantor’s capacity as guarantor, may lawfully be required to pay under applicable law, the obligation of Guarantor to pay such interest shall automatically be limited to the payment thereof in the maximum amount so permitted under applicable law.  The provisions of this Section 14 shall override and control all other provisions of this Guaranty and of any other agreement between Guarantor, Administrative Agent, and the Lenders.

 

15.                               Representations, Warranties, and Covenants of Guarantor.  Guarantor hereby represents, warrants, and covenants to Administrative Agent and the Lenders that (a) Guarantor owns, directly or indirectly, an interest in Borrowers and will derive a material and substantial benefit, directly or indirectly, from the making of the Loan to Borrowers and from the making of this Guaranty by Guarantor; (b) this Guaranty is duly authorized and valid, and is binding upon and enforceable against Guarantor; (c) Guarantor is not, and the execution, delivery and performance by Guarantor of this Guaranty will not cause Guarantor to be, in violation of any law or in default (or at risk of acceleration of indebtedness) under any agreement or restriction by which such Guarantor is bound or affected; (d) Guarantor is duly organized, validly existing, and in good standing under the laws of the state of its organization and has full power and authority to enter into and perform this Guaranty; (e) Guarantor will indemnify Administrative Agent and the Lenders from any loss, cost or expense as a result of any representation or warranty of Guarantor being false, incorrect, incomplete or misleading in any material respect; (f) except as disclosed to Administrative Agent in writing, there is no litigation pending or, to the knowledge of Guarantor, threatened before or by any tribunal against or affecting Guarantor that would have a material impact on Guarantor (for purposes of this subsection, “material” shall mean that the amount in controversy shall be in excess of ten percent (10%) of the Guarantor’s total assets); (g) all financial statements and such information hereafter furnished to Administrative Agent by Guarantor will, fairly and accurately present in all material respects the financial condition of Guarantor as of their dates and the results of Guarantor’s operations for the periods therein specified; (h) after giving effect to this Guaranty, Guarantor is solvent, is not engaged or about to engage in business or a transaction for which the property of Guarantor is an unreasonably small capital, and does not intend to incur or believe that it will incur debts that will be beyond its ability to pay as such debts mature; (i) neither Administrative Agent nor the Lenders have any duty at any time to investigate or inform Guarantor of the financial or business condition or affairs of Borrowers or any change therein, and Guarantor will keep fully apprised of each Borrower’s financial and business condition; (j) Guarantor acknowledges and agrees that Guarantor may be required to make payments with respect to the Guaranteed Obligations as provided in this Guaranty without assistance or support from Borrowers or any other Person; and (k) Guarantor has read and fully understands the provisions contained in the Note, the Loan Agreement, the Deed of Trust, and the other Loan Documents.  Guarantor’s representations, warranties and covenants are a material inducement to Administrative Agent and the Lenders to enter into the other Loan Documents and

 

15

 

transactions contemplated thereby and shall survive the execution hereof and any bankruptcy, foreclosure, transfer of security or other event affecting Borrowers, Guarantor, any other party, or any security for all or any part of the Guaranteed Obligations.

 

16.                               Notices.  All notices, requests, consents, demands and other communications required or which any party desires to give hereunder or under any other Loan Document shall be in writing and, unless otherwise specifically provided in such other Loan Document, shall be deemed sufficiently given or furnished if delivered by personal delivery, by courier, or by registered or certified United States mail, postage prepaid, addressed to the party to whom directed at the addresses specified in this Guaranty (unless changed by similar notice in writing given by the particular party whose address is to be changed) or by facsimile (with a confirmatory duplicate copy sent by first class United States mail), addressed to Guarantorat the address set forth at the end of this Guaranty or to Administrative Agent or the Lenders at the addresses specified for notices in the Loan Agreement (unless changed by similar notice in writing given by the particular party whose address is to be changed).  Any such notice or communication shall be deemed to have been given either at the time of personal delivery or, in the case of courier or mail, as of the date of first attempted delivery at the address and in the manner provided herein, or, in the case of facsimile, upon receipt; provided that, service of a notice required by any applicable statute shall be considered complete when the requirements of that statute are met.  Notwithstanding the foregoing, no notice of change of address shall be effective except upon actual receipt.  This Section shall not be construed in any way to affect or impair any waiver of notice or demand provided in this Guaranty or in any Loan Document or, except as expressly provided in this Guaranty, to require giving of notice or demand to or upon any Person in any situation or for any reason.

 

17.                               Cumulative Rights.  The exercise by Administrative Agent, on behalf of the Lenders, of any right or remedy hereunder or under any other Loan Document, or at law or in equity, shall not preclude the concurrent or subsequent exercise of any other right or remedy.  Administrative Agent, on behalf of the Lenders, shall have all rights, remedies and recourses afforded to the Lenders by reason of this Guaranty or any other Loan Document or by law or equity or otherwise, and the same (a) shall be cumulative and concurrent, (b) may be pursued separately, successively or concurrently against Guarantor or others obligated for the Guaranteed Obligations, or any part thereof, or against any one or more of them, or against any security or otherwise, at the sole and absolute discretion of Administrative Agent, on behalf of the Lenders, (c) may be exercised as often as occasion therefor shall arise, it being agreed by Guarantor that the exercise of, discontinuance of the exercise of or failure to exercise any of such rights, remedies, or recourses shall in no event be construed as a waiver or release thereof or of any other right, remedy, or recourse, and (d) are intended to be, and shall be, nonexclusive.  No waiver of any default on the part of Guarantor or of any breach of any of the provisions of this Guaranty or of any other document shall be considered a waiver of any other or subsequent default or breach, and no delay or omission in exercising or enforcing the rights and powers granted herein or in any other document shall be construed as a waiver of such rights and powers, and no exercise or enforcement of any rights or powers hereunder or under any other document shall be held to exhaust such rights and powers, and every such right and power may be exercised from time to time.  The granting of any consent, approval or waiver by Administrative Agent, on behalf of the Lenders, shall be limited to the specific instance and purpose therefor and shall not constitute consent or approval in any other instance or for any other purpose.  No notice to or demand on

 

16

 

Guarantor in any case shall of itself entitle Guarantor to any other or further notice or demand in similar or other circumstances.  No provision of this Guaranty or any right, remedy or recourse of Administrative Agent and the Lenders with respect hereto, or any default or breach, can be waived, nor can this Guaranty or Guarantor be released or discharged in any way or to any extent, except specifically in each case by a writing intended for that purpose (and which refers specifically to this Guaranty) executed, and delivered to Guarantor, by Administrative Agent, on behalf of the Lenders.

 

18.                               Term of Guaranty.  This Guaranty shall continue in effect until the earlier of (a) the date on which all the Guaranteed Obligations are fully and finally paid, performed and discharged or (b) the date on which the full amount of the Guaranteed Obligations Cap (plus any attorneys’ fees or other costs of collection incurred by Administrative Agent, on behalf of any of the Lenders, in the enforcement or preservation of the Lenders’ rights under this Guaranty as provided by Section 12 of this Guaranty) has been fully paid by Guarantor.

 

19.                               Financial Statements.

 

(a)                                 As used in this Section, “Financial Statements” means a balance sheet, income statement, statements of cash flow and amount and sources of contingent liabilities, a reconciliation of changes in equity and liquidity verification, and, unless Administrative Agent otherwise consents, consolidated statements if the reporting party is a holding company or a parent of a subsidiary entity.  Each party for whom Financial Statements are required is a “reporting party” and a specified period to which the required Financial Statements relate is a “reporting period”.

 

(b)                                 Guarantor shall provide or cause to be provided to Administrative Agent the following:

 

(i)                                     within one hundred twenty (120) days after the close of each fiscal year of Guarantor, annual, audited Financial Statements of Guarantor;

 

(ii)                                  within seventy-five (75) days after the close of each fiscal quarter of each fiscal year of Guarantor, quarterly, unaudited Financial Statements of Guarantor;

 

(iii)                               (A) as to the annual, audited Financial Statements referenced in Section 19(b)(i), within one hundred twenty (120) days after the close of each fiscal year of Guarantor, and (B) as to the quarterly Financial Statements referenced in Section 19(b)(ii), within seventy-five (75) days after the close of each fiscal quarter of each fiscal year of Guarantor, a Compliance Certificate for Guarantor, executed by any executive level officer of Guarantor, in the form of that attached hereto as Exhibit A (“Compliance Certificate”) evidencing Guarantor’s compliance (or noncompliance, as applicable) with the covenant in Section 19(c) of this Guaranty; and

 

(iv)                              from time to time promptly after Administrative Agent’s request, such additional information, reports and statements regarding the business

 

17

 

operations and financial condition of each reporting party as Administrative Agent may reasonably request.

 

All Financial Statements shall be in form and detail reasonably satisfactory to Administrative Agent in its good faith business judgment and shall contain or be attached to the signed and dated written certification of the reporting party in form satisfactory to Administrative Agent to certify that the Financial Statements have been prepared in accordance with GAAP (subject, in the case of quarterly Financial Statements, to normal year-end audit adjustments and the absence of footnotes) and are furnished to Administrative Agent in connection with the extension of credit by Administrative Agent and the Lenders, and fairly present in all material respects the reporting party’s financial position as of the date and for the period therein specified.  Administrative Agent agrees that the Financial Statements of Guarantor delivered to Administrative Agent in satisfaction of the conditions to closing and funding of the Loan are satisfactory as to form, detail and accounting principles used therein and Financial Statements to be provided in satisfaction of the requirements of this Guaranty shall be satisfactory to Administrative Agent as to form, detail and accounting principles if consistent with such Financial Statements.  All certifications and signatures on behalf of corporations, partnerships or other entities shall be by an authorized representative of the entity satisfactory to Administrative Agent in its good faith business judgment.  Except as provided in Section 19(b) above, all Financial Statements shall be audited or certified, as required by Administrative Agent, without any qualification or exception not acceptable to Administrative Agent in its good faith business judgment, by Deloitte Touche Tohmatsu or another independent certified public accountants acceptable to Administrative Agent, and shall contain all reports and disclosures required by generally accepted accounting principles for a fair presentation.  Acceptance of any Financial Statement by Administrative Agent, whether or not in the form prescribed herein, shall be relied upon by Administrative Agent and the Lenders in the administration, enforcement, and extension of the Guaranteed Obligations.

 

(c)                                  Guarantor covenants and agrees with Administrative Agent and the Lenders that it will maintain, as of each Test Date during the term of this Guaranty, Liquid Assets of at least $2,500,000.00.

 

(d)                                 For purposes of this Section 19, the following capitalized terms have the meanings set forth below:

 

“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

 

“Liquid Assets” means the sum of the total assets of Guarantor that are cash, cash equivalents, accounts and other highly liquid investments that are not pledged, hypothecated, subject to rights of offset or otherwise restricted (other than pursuant to customary banker’s or broker’s liens with respect to deposit or similar accounts not maintained for the purpose of providing security).

 

18

 

“Test Date” shall mean, the last day of each fiscal quarter of each fiscal year of Guarantor during the term of this Guaranty.

 

20.                               Disclosure of Information.  Lenders may sell or offer to sell the Loan or interests in the Loan to one or more assignees or participants and may disclose to any such assignee or participant or prospective assignee or participant, to Lenders’ affiliates, to any regulatory body having jurisdiction over Lenders and to any other parties as necessary or appropriate in any Lender’s reasonable judgment, any information Lenders now have or hereafter obtain pertaining to the Guaranteed Obligations, this Guaranty, or Guarantor, including, without limitation, information regarding any security for the Guaranteed Obligations or for this Guaranty, credit or other information on Guarantor, Borrowers, and/or any other party liable, directly or indirectly, for any part of the Guaranteed Obligations.  Any disclosures by Lenders or Administrative Agent pursuant to this Section 20 shall be made in compliance with the provisions of Section 7.6 of the Loan Agreement.

 

21.                               Right of Set-Off.  If Guarantor fails to pay to Administrative Agent any amount payable by Guarantor to Administrative Agent under this Guaranty and such failure continues for a period of 10 days after written demand therefor is given by Administrative Agent to Guarantor as provided in Section 16 of this Guaranty, then, at any time thereafter until such payment is made or deemed made by Guarantor, each Lender is hereby authorized with prior notice to and consent of Administrative Agent, to the fullest extent permitted by applicable law, without notice to any Person (any such notice being expressly waived by Guarantor to the fullest extent permitted by applicable law), to set off and apply any and all deposits, funds, or assets at any time held and other indebtedness at any time owing by such Lender to or for the credit or the account of Guarantor against any and all of the obligations of Guarantor now or hereafter existing under this Guaranty that are then due and payable.  Such Lender will promptly notify Guarantor after any such set-off and application made by such Lender, provided that the failure to give such notice shall not affect the validity of such set-off and application.  The rights of Lenders under this Section 21 are in addition to the other rights and remedies (including other rights of set-off) that Administrative Agent may have, on behalf of all Lenders, and every right of setoff and lien shall continue in full force and effect until such right of setoff or lien is specifically waived or released by an instrument in writing executed by Administrative Agent.  Each amount so set off and applied pursuant to this Section 21 shall constitute and be deemed to be for all purposes of this Guaranty a payment in such amount made by Guarantor under this Guaranty with respect to the Guaranteed Obligations.

 

22.                               Subrogation.  Notwithstanding anything to the contrary contained herein, Guarantor shall not have any right of subrogation in or under any of the Loan Documents or to participate in any way therein, or in any right, title or interest in and to any security or right of recourse for the Indebtedness or any right to reimbursement, exoneration, contribution, indemnification or any similar rights against any party liable for the Indebtedness, until the Indebtedness has been fully paid.  This waiver is given to induce the Lenders to make certain financial accommodations to Borrowers.

 

23.                               Further Assurances.  Guarantor at Guarantor’s expense will promptly execute and deliver to Administrative Agent upon Administrative Agent’s request all such other and further

 

19

 

documents, agreements, and instruments in compliance with or accomplishment of the agreements of Guarantor under this Guaranty.

 

24.                               No Fiduciary Relationship.  The relationship between Administrative Agent and the Lenders, on the one hand, and Guarantor, on the other hand, is solely that of lender and guarantor.  Administrative Agent and the Lenders have no fiduciary or other special relationship with or duty to Guarantor and none is created hereby or may be inferred from any course of dealing or act or omission of Administrative Agent or Lender.

 

25.                               Interpretation.  If this Guaranty is signed by more than one Person as “Guarantor”, then the term “Guarantor” as used in this Guaranty shall refer to all such Persons, jointly and severally, and all promises, agreements, covenants, waivers, consents, representations, warranties and other provisions in this Guaranty are made by and shall be binding upon each and every such Person, jointly and severally and Administrative Agent, on behalf of all Lenders, may pursue any Guarantor hereunder without being required (i) to pursue any other Guarantor hereunder or (ii) pursue rights and remedies under the Deed of Trust and/or applicable law with respect to the Property or any other Loan Documents.  The term “Administrative Agent” shall be deemed to include any subsequent administrative agent appointed under the Loan Agreement.  Whenever the context of any provisions hereof shall require it, words in the singular shall include the plural, words in the plural shall include the singular, and pronouns of any gender shall include the other gender.  Captions and headings in the Loan Documents are for convenience only and shall not affect the construction of the Loan Documents.  All references in this Guaranty to Schedules, Articles, Sections, Subsections, paragraphs and subparagraphs refer to the respective subdivisions of this Guaranty, unless such reference specifically identifies another document.  The terms “herein”, “hereof”, “hereto”, “hereunder” and similar terms refer to this Guaranty and not to any particular Section or subsection of this Guaranty.  The terms “include” and “including” shall be interpreted as if followed by the words “without limitation”.  All references in this Guaranty to sums denominated in dollars or with the symbol “$” refer to the lawful currency of the United States of America, unless such reference specifically identifies another currency.  For purposes of this Guaranty, “Person” or “Persons” shall include firms, associations, partnerships (including limited partnerships), joint ventures, trusts, corporations, limited liability companies, and other legal entities, including governmental bodies, agencies, or instrumentalities, as well as natural persons.

 

26.                               Time of Essence.  Time shall be of the essence in this Guaranty with respect to all of Guarantor’s obligations hereunder.

 

27.                               Counterparts.  This Guaranty may be executed in multiple counterparts, each of which, for all purposes, shall be deemed an original, and all of which taken together shall constitute but one and the same agreement.

 

28.                               Entire Agreement.  This Guaranty embodies the entire agreement between Administrative Agent, the Lenders and Guarantor with respect to the guaranty by Guarantor of the Guaranteed Obligations.  This Guaranty supersedes all prior agreements and understandings, if any, with respect to the guaranty by Guarantor of the Guaranteed Obligations.No condition or conditions precedent to the effectiveness of this Guaranty exist.  This Guaranty shall be effective upon execution by Guarantor and delivery to Administrative Agent.  This Guaranty may not be

 

20

 

modified, amended or superseded except in a writing signed by Administrative Agent, on behalf of the Lenders, and Guarantor referencing this Guaranty by its date and specifically identifying the portions hereof that are to be modified, amended or superseded.

 

29.                               FINAL AGREEMENT.

 

(A)          THIS GUARANTY REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

 

(B)          THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

30.                               Dispute Resolution.

 

(a)                                 Arbitration.  Except to the extent expressly provided below, any controversy, claim or dispute between or among the parties hereto, including any such controversy, claim or dispute arising out of or relating to (i) this Guaranty, (ii) any other Loan Document, (iii) any related agreements or instruments, or (iv) the transaction contemplated herein or therein (including any claim based on or arising from an alleged personal injury or business tort) (collectively, a “Dispute”), shall, upon the request of either party, be determined by binding arbitration in accordance with the Federal Arbitration Act, Title 9, United States Code (or if not applicable, the applicable state law), the then current rules for arbitration of financial services disputes of the American Arbitration Association, or any successor thereof (“AAA”), and the”Special Rules” set forth below.  In the event of any inconsistency, the Special Rules shall control.  The filing of a court action is not intended to constitute a waiver of the right of Guarantor or Lenders, including the suing party, thereafter to require submittal of the Dispute to arbitration.  Any party to this Guaranty may bring an action, including a summary or expedited proceeding, to compel arbitration of any Dispute in any court having jurisdiction over such action.  For the purposes of this Dispute Resolution Section only, the terms “party” and “parties” shall include any parent corporation, subsidiary or affiliate of Lenders involved in the servicing, management or administration of any obligation described in or evidenced by this Guaranty, together with the officers, employees, successors and assigns of each of the foregoing.

 

(b)                                 Special Rules.

 

(i)                                     The arbitration shall be conducted in the City of Dallas, Texas.

 

(ii)                                  The arbitration shall be administered by AAA, who will appoint an arbitrator; if AAA is unwilling or unable to administer or legally precluded from administering the arbitration or if AAA is unwilling or unable to enforce or legally precluded from enforcing any and all provisions of this Dispute Resolution Section, then any party to this Guaranty may substitute, without the necessity of the agreement of consent of the other party or parties, another arbitration organization that has similar procedures to AAA but that will observe and enforce

 

21

 

any and all provisions of this Dispute Resolution Section.  All Disputes shall be determined by one arbitrator; however, if the amount in controversy in a Dispute exceeds Five Million Dollars ($5,000,000), upon the request of any party, the Dispute shall be decided by three arbitrators (for purposes of this Guaranty, referred to collectively as the “arbitrator”).

 

(iii)                               All arbitration hearings will be commenced within ninety (90) days of the demand for arbitration and completed within ninety (90) days from the date of commencement; provided, however, that upon a showing of good cause, the arbitrator shall be permitted to extend the commencement of such hearing for up to an additional sixty (60) days.

 

(iv)                              The judgment and the award, if any, of the arbitrator shall be issued within thirty (30) days of the close of the hearing.  The arbitrator shall provide a concise written statement setting forth the reasons for the judgment and for the award, if any.  The arbitration award, if any, may be submitted to any court having jurisdiction to be confirmed and enforced, and such confirmation and enforcement shall not be subject to arbitration.

 

(v)                                 The arbitrator will give effect to statutes of limitations and any waivers thereof in determining the disposition of any Dispute and may dismiss one or more claims in the arbitration on the basis that such claim or claims is or are barred.  For purposes of the application of the statute of limitations, the service on AAA under applicable AAA rules of a notice of Dispute is the equivalent of the filing of a lawsuit.

 

(vi)                              Any dispute concerning this Dispute Resolution Section, including any such dispute as to the validity or enforceability of this provision, or whether a Dispute is arbitrable, shall be determined by the arbitrator; provided, however, that the arbitrator shall not be permitted to vary the express provisions of the Special Rules or the Reservation of Rights in subsection (c) below.

 

(vii)                           The arbitrator shall have the power to award legal fees and costs pursuant to the terms of this Guaranty.

 

(viii)                        The arbitration will take place on an individual basis without reference to, resort to, or consideration of any form of class or class action.

 

(c)                                  Reservations of Rights.  Nothing in this Guaranty shall be deemed to (i) limit the applicability of any otherwise applicable statutes of limitation and any waivers contained in this Guaranty, or (ii) apply to or limit the right of Administrative Agent, on behalf of the Lenders, or any Lender, (A) to exercise self help remedies such as (but not limited to) setoff, or(B) to foreclose judicially or nonjudicially against any real or personal property collateral, or to exercise judicial or nonjudicial power of sale rights, (C) to obtain from a court provisional or ancillary remedies such as (but not limited to) injunctive relief, writ of possession, prejudgment attachment, or the appointment of a receiver, or (D) to pursue rights against a party to this Guaranty in a third-party

 

22

 

proceeding in any action brought against Administrative Agent or any Lender in a state, federal or international court, tribunal or hearing body (including actions in specialty courts, such as bankruptcy and patent courts).  Administrative Agent, on behalf of the Lenders, may exercise the rights set forth in clauses (A) through (D), inclusive, and Lenders may exercise the right of setoff, before, during or after the pendency of any arbitration proceeding brought pursuant to this Guaranty.  Neither the exercise of self help remedies nor the institution or maintenance of an action for foreclosure or provisional or ancillary remedies shall constitute a waiver of the right of any party, including the claimant in any such action, to arbitrate the merits of the Dispute occasioning resort to such remedies.  No provision in the Loan Documents regarding submission to jurisdiction and/or venue in any court is intended or shall be construed to be in derogation of the provisions in any Loan Document for arbitration of any Dispute.

 

(d)                                 Conflicting Provisions for Dispute Resolution.  Except as provided in the Plan or Order, if there is any conflict between the terms, conditions and provisions of this Section and those of any other provision or agreement for arbitration or dispute resolution, the terms, conditions and provisions of this Section shall prevail as to any Dispute arising out of or relating to (i) this Guaranty, (ii) any other Loan Document, (iii) any related agreements or instruments, or (iv) the transaction contemplated herein or therein (including any claim based on or arising from an alleged personal injury or business tort).  In any other situation, if the resolution of a given Dispute is specifically governed by another provision or agreement for arbitration or dispute resolution, the other provision or agreement shall prevail with respect to said Dispute.

 

(e)                                  Jury Trial Waiver in Arbitration.  By agreeing to this Section, the parties irrevocably and voluntarily waive any right they may have to a trial by jury in respect of any Dispute.

 

31.                               Waiver of Jury Trial.  WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO ARBITRATE ANY “DISPUTE” (FOR PURPOSES OF THIS SECTION, AS DEFINED ABOVE) AS SET FORTH IN THIS GUARANTY, TO THE EXTENT ANY “DISPUTE” IS NOT SUBMITTED TO ARBITRATION OR IS DEEMED BY THE ARBITRATOR OR BY ANY COURT WITH JURISDICTION TO BE NOT ARBITRABLE OR NOT REQUIRED TO BE ARBITRATED, GUARANTOR AND ADMINISTRATIVE AGENT, ON BEHALF OF ALL LENDERS, WAIVE TRIAL BY JURY IN RESPECT OF ANY SUCH “DISPUTE” AND ANY ACTION ON SUCH “DISPUTE.” THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY GUARANTOR AND ADMINISTRATIVE AGENT, ON BEHALF OF ALL LENDERS, AND GUARANTOR AND ADMINISTRATIVE AGENT HEREBY REPRESENT THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY PERSON OR ENTITY ACTING FOR OR ON BEHALF OF ADMINISTRATIVE AGENT OR LENDERS TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO THE LOAN DOCUMENTS.  GUARANTOR AND ADMINISTRATIVE AGENT ARE EACH HEREBY AUTHORIZED TO FILE A COPY OF THIS SECTION IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER OF JURY TRIAL.  GUARANTOR FURTHER REPRESENTS AND WARRANTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING

 

23

 

OF THIS GUARANTY AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.

 

32.                               Reserved.

 

33.                               Amendment and Restatement.  The Guaranty is an amendment and restatement of the Original Guaranty Agreementonly as to the obligations of Guarantor and supersedes and replaces the Original Guaranty Agreement as it applies to Guarantor.  The Guaranty does not supersede and replace the Original Guaranty Agreement as it applies to Fairways.  The Original Guaranty Agreement is and shall remain in full force and effect as to the obligations of Fairways.

 

THE LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

24

 

IN WITNESS WHEREOF, Guarantor duly executed this Guaranty under seal as of the date first written above.

 

	
Address   of Guarantor: 

 

Behringer   Harvard Opportunity 
   REIT I, Inc. 
   15601 Dallas Parkway, Suite 600 
    	
GUARANTOR: 
    
   BEHRINGER HARVARD OPPORTUNITY 
   REIT I, INC., a Maryland corporation 
    
	
Dallas,   TX 75001 
    	
 
    
	
Attention:   Gerald J. Reihsen, III
    	
By:   
    	
 
    
	
 
    	
Name:   
    	
Michael   O’Hanlon 
    
	
 
    	
Title:   
    	
Chief   Executive Officer and President
    

 

 

EXHIBIT “A”

 

FORM OF COMPLIANCE CERTIFICATE

 

COMPLIANCE CERTIFICATE

 

To:                             Bank of America, N.A., as Administrative Agent (“Administrative Agent”)
 901 Main Street, 20th Floor
 Dallas, Texas 75202-3714
 Attention: Daniel Puls

 

Re:                             $                     Loan to BHFS II, LLC, BHFS III, LLC, and BHFS IV, LLC;

$                     Loan to BHFS Theater, LLC

 

1.                                      The undersigned certifies to Administrative Agent and the Lenders that he/she is the                                 of Behringer Harvard Opportunity REIT I, Inc. (“Guarantor’’) and that this Compliance Certificate has been prepared pursuant to the Guaranty Agreement dated as of December      , 2012 (“Guaranty”), executed by Guarantor.  Capitalized terms used herein but not otherwise defined herein shall have the meanings given to such terms in the Guaranty.

 

2.                                      The undersigned further certifies to Administrative Agent and the Lenders that (i) a review of the activities of Guarantor, as of the fiscal quarter ending                                                   (the “Reporting Period”), has been made under my supervision with a view to determining whether Guarantor has fulfilled all of its obligations during the Reporting Period under the Guaranty; (ii) Guarantor is in compliance with all covenants and provisions in the Guaranty, and no Default or Potential Default has occurred which is continuing.

 

3.                                      Pursuant to the Guaranty, the following documents are delivered to Administrative Agent with this Compliance Certificate and deemed a part of this Compliance Certificate [check appropriate box]:

 

o                                    Quarterly Financial Statements, or

 

o                                    Annual Financial Statements.

 

The Financial Statements fairly and accurately present, in all material respects, the financial condition of Guarantor and its Subsidiaries as of the Reporting Period, and have been prepared in accordance with GAAP (subject, in the case of quarterly Financial Statements, to normal year-end audit adjustments and the absence of footnotes).

 

4.                                      The undersigned further certifies to Administrative Agent and the Lenders that the following amounts and calculations made pursuant to the Guaranty are true and correct in all material respects, for the referenced Reporting Period:

 

1

 

FINANCIAL COVENANTS

 

Minimum Liquidity.  Guarantor shall maintain, as of each Test Date, Liquid Assets at least equal to $2,500,000.

 

Specify Test Date =

Actual Liquid Assets of Guarantor as of such Test Date= $

In Compliance?  Check One:  o Yes     o No

 

WITNESS the due execution of this Compliance Certificate on                              , 20      .

 

GUARANTOR:

 

BEHRINGER HARVARD OPPORTUNITY

REIT I, INC., a Maryland corporation

 

	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    

 

2Exhibit 10.5

 

REINSTATED, RENEWAL, MODIFICATION

AND EXTENSION PROMISSORY NOTE

 

[BHFS II]

 

	
$7,179,988.79
    	
December 27, 2012
    

 

FOR VALUE RECEIVED, BHFS I, LLC, a Delaware limited liability company, BHFS II, LLC, a Delaware limited liability company (“BHFS II”), BHFS III, LLC, a Delaware limited liability company, BHFS IV, LLC, a Delaware limited liability company, BHFS Theater, LLC, a Delaware limited liability company, and Behringer Harvard Frisco Square LP, a Delaware limited partnership (collectively, the “Borrowers”), hereby jointly and severally promise to pay to the order of BANK OF AMERICA, N.A., a national banking association, as Administrative Agent (together with its successor and assigns, “Administrative Agent”) for the ratable benefit of BANK OF AMERICA, N.A. (“Bank of America”) and REGIONS BANK, an Alabama banking corporation (“Regions Bank”) (Bank of America and Regions Bank, together with their respective successors and assigns, are, collectively referred to herein as the “Lenders”) in accordance with that certain Amended and Restated Loan Agreement, dated December 27, 2012, by and among Borrowers, Administrative Agent, and the Lenders (the “Loan Agreement”), without offset, in immediately available funds in lawful money of the United States of America, at the Administrative Agent’s Office as defined in the Loan Agreement, the principal sum of SEVEN MILLION ONE HUNDRED SEVENTY-NINE THOUSAND NINE HUNDRED EIGHTY-EIGHT AND SEVENTY-NINE/100 DOLLARS ($7,179,988.79) (or the unpaid balance of all principal advanced against this Note (the “Note”), if that amount is less), together with interest on the unpaid principal balance of this Note from day to day outstanding as hereinafter provided.  Any term used herein and not defined in this Note has the meaning given to the term in the Loan Agreement.

 

1.                                      Note; Interest; Payment Schedule and Maturity Date.  This Note is one of the “Notes” referred to in Loan Agreement and is entitled to the benefits thereof.  The entire principal balance of this Note then unpaid shall be due and payable at the times as set forth in the Loan Agreement.  Accrued unpaid interest shall be due and payable at the times and at the interest rate as set forth in the Loan Agreement until all principal and accrued interest owing on this Note shall have been fully paid and satisfied.  Any amount not paid when due and payable hereunder shall, to the extent permitted by applicable Law, bear interest and if applicable a late charge as set forth in the Loan Agreement.

 

2.                                      Security; Loan Documents.  The security for this Note includes one or more Deeds of Trust, Assignment of Rents and Leases, Security Agreement, Fixture Filing and Financing Statement dated July 28, 2008 (“Original Deed of Trust”), executed by BHFS II to PRLAP, Inc., Trustee for the benefit of Administrative Agent and the Lenders, such Original Deed of Trust being modified by that certain Modification of Deed of Trust, Assignment of Rents and Leases, Security Agreement, Fixture Filing and Financing Statement dated of even date herewith (the “Modification Deed of Trust”; the Original Deed of Trust as modified by the Modification Deed of Trust is hereafter referred to as the “ Deed of Trust”), and covering certain property in the City of Frisco, Collin County, Texas as more particularly described therein (the “Property”).  This Note, the Deed of Trust, the Loan Agreement and all other documents now or

 

1

 

hereafter securing, guaranteeing or executed by Borrowers or Guarantor (as defined in the Loan Agreement) in connection with the loan evidenced by this Note (the “Loan”), are, as the same have been or may be amended, restated, modified or supplemented from time to time, herein sometimes called individually a “Loan Document” and together the “Loan Documents.”

 

3.                                      Defaults.

 

(a)                                 It shall be a default (“Default”) under this Note and each of the other Loan Documents if (after giving effect to any applicable notice, grace or cure periods) there shall occur any Default under the Loan Agreement.  Upon the occurrence and during the continuation of a Default, Administrative Agent, on behalf of the Lenders, shall have the rights to declare the unpaid principal balance and accrued but unpaid interest on this Note, and all other amounts due hereunder and under the other Loan Documents, at once due and payable (and upon such declaration, the same shall be at once due and payable), to foreclose any liens and security interests securing payment hereof and to exercise any of its other rights, powers and remedies under this Note, under any other Loan Document, or at Law or in equity.

 

(b)                                 All of the rights, remedies, powers and privileges (together, “Rights”) of Administrative Agent, on behalf of the Lenders, provided for in this Note and in any other Loan Document are cumulative of each other and of any and all other Rights at Law or in equity.  The resort to any Right shall not prevent the concurrent or subsequent employment of any other appropriate Right.  No single or partial exercise of any Right shall exhaust it, or preclude any other or further exercise thereof, and every Right may be exercised at any time and from time to time.  No failure by Administrative Agent or the Lenders to exercise, nor delay in exercising any Right, including but not limited to the right to accelerate the maturity of this Note, shall be construed as a waiver of any Default or as a waiver of any Right.  Without limiting the generality of the foregoing provisions, the acceptance by Administrative Agent, on behalf of the Lenders, from time to time of any payment under this Note which is past due or which is less than the payment in full of all amounts due and payable at the time of such payment, shall not (i) constitute a waiver of or impair or extinguish the right of Administrative Agent, on behalf of the Lenders, to accelerate the maturity of this Note or to exercise any other Right at the time or at any subsequent time, or nullify any prior exercise of any such Right, or (ii) constitute a waiver of the requirement of punctual payment and performance or a novation in any respect.

 

(c)                                  If any holder of this Note retains an attorney in connection with any Default or at maturity or to collect, enforce or defend this Note or any other Loan Document in any lawsuit or in any probate, reorganization, bankruptcy, arbitration or other proceeding, or if Borrowers sue any holder in connection with this Note or any other Loan Document and does not prevail, then Borrowers agree to pay to each such holder, in addition to principal, interest and any other sums owing to Administrative Agent, on behalf of the Lenders, hereunder and under the other Loan Documents, all costs and expenses incurred by such holder in trying to collect this Note or in any such suit or proceeding, including, without limitation, attorneys’ fees and expenses, investigation costs and all court costs, whether or not suit is filed hereon, whether before or after the Maturity Date, or whether in connection with bankruptcy, insolvency or appeal, or whether collection is made against Borrowers or any guarantor or endorser or any other person primarily or secondarily liable hereunder.

 

2

 

4.                                      Heirs, Successors and Assigns.  The terms of this Note and of the other Loan Documents shall bind and inure to the benefit of the heirs, devisees, representatives, successors and assigns of the parties.  The foregoing sentence shall not be construed to permit Borrowers to assign the Loan except as otherwise permitted under the Loan Documents.  As further provided in the Loan Agreement, each Lender may, at any time, sell, transfer, or assign all on a portion of its interest in this Note, the Deed of Trust and the other Loan Documents, as set forth in the Loan Agreement.

 

5.                                      General Provisions.  Time is of the essence with respect to Borrowers’ obligations under this Note.  If more than one person or entity executes this Note as Borrower, all of said parties shall be jointly and severally liable for payment of the indebtedness evidenced hereby.  Borrowers on behalf of themselves and all sureties, endorsers, guarantors and any other party now or hereafter liable for the payment of this Note in whole or in part, hereby (a) waives, to the extent permitted by applicable Laws, demand, presentment for payment, notice of dishonor and of nonpayment, protest, notice of protest, notice of intent to accelerate, notice of acceleration and all other notices (except any notices which are specifically required by this Note or any other Loan Document or are required by applicable Law), filing of suit and diligence in collecting this Note or enforcing any of the security herefor; (b) agrees to any substitution, subordination, exchange or release of any such security or the release of any party primarily or secondarily liable hereon; (c) agrees that neither Administrative Agent nor any Lender shall be required first to institute suit or exhaust its remedies hereon against Borrowers or others liable or to become liable hereon or to perfect or enforce its rights against them or any security herefor; (d) consents to any extensions or postponements of time of payment of this Note for any period or periods of time and to any partial payments, before or after maturity, and to any other indulgences with respect hereto, without notice thereof to any of them; and (e) submits (and waives all rights to object) to non-exclusive personal jurisdiction of any state or federal court sitting in the city and county, and venue in the city or county, in which payment is to be made as specified in Section 1 of this Note, for the enforcement of any and all obligations under this Note and the Loan Documents; (f) waives the benefit of all homestead and similar exemptions as to this Note; (g) agrees that their liability under this Note shall not be affected or impaired by any determination that any security interest or lien taken by Administrative Agent, on behalf of the Lenders, to secure this Note is invalid or unperfected; and (h) hereby subordinates any and all rights against Borrowers and any of the security for the payment of this Note, whether by subrogation, agreement or otherwise, until this Note is paid in full.  A determination that any provision of this Note is unenforceable or invalid shall not affect the enforceability or validity of any other provision and the determination that the application of any provision of this Note to any person or circumstance is illegal or unenforceable shall not affect the enforceability or validity of such provision as it may apply to other persons or circumstances.  This Note may not be amended except in a writing specifically intended for such purpose and executed by the party against whom enforcement of the amendment is sought.  Captions and headings in this Note are for convenience only and shall be disregarded in construing it.  THIS NOTE, AND ITS VALIDITY, ENFORCEMENT AND INTERPRETATION, SHALL BE GOVERNED BY TEXAS LAW (WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES) AND APPLICABLE UNITED STATES FEDERAL LAW.

 

3

 

6.                                      Notices.  Any notice, request, or demand to or upon Borrowers or Administrative Agent shall be deemed to have been properly given or made when delivered in accordance with the Loan Agreement.

 

7.                                      No Usury.  It is expressly stipulated and agreed to be the intent of Borrowers, Administrative Agent and all Lenders at all times to comply with applicable state law or applicable United States federal law (to the extent that it permits a lender to contract for, charge, take, reserve, or receive a greater amount of interest than under state law) and that this Section shall control every other covenant and agreement in this Note and the other Loan Documents.  If applicable state or federal law should at any time be judicially interpreted so as to render usurious any amount called for under this Note or under any of the other Loan Documents, or contracted for, charged, taken, reserved, or received with respect to the Loan, or if the exercise by Administrative Agent, on behalf of the Lenders, of the option to accelerate the Maturity Date, or if any prepayment by Borrowers results in Borrowers having paid any interest in excess of that permitted by applicable law, then it is Administrative Agent’s and each Lender’s express intent that all excess amounts theretofore collected by Administrative Agent’s and each Lender shall be credited on the principal balance of this Note and all other indebtedness and the provisions of this Note and the other Loan Documents shall immediately be deemed reformed and the amounts thereafter collectible hereunder and thereunder reduced, without the necessity of the execution of any new documents, so as to comply with the applicable law, but so as to permit the recovery of the fullest amount otherwise called for hereunder or thereunder.  All sums paid or agreed to be paid to Lenders for the use, forbearance, or detention of the Loan shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full stated term of the Loan until payment in full so that the rate or amount of interest on account of the Loan does not exceed the maximum lawful rate from time to time in effect and applicable to the Loan for so long as the Loan is outstanding.

 

8.                                      Reinstatement, Renewal, Modification and Extension.  This Note is a reinstatement, renewal, modification, and extension, but not extinguishment or novation of, that certain Promissory Note (“First Note”), dated August 3, 2007, executed by BHFS II, payable to the order of First National Bank of Omaha, in the original principal amount of $8,939,725.00; such First Note being assigned by First National Bank of Omaha to Administrative Agent for the benefit of Lenders and modified and extended by that certain Promissory Note (“Second Note”), dated July 28, 2008, executed by BHFS II, payable to Bank of America, N.A., as Administrative Agent for the ratable benefit of Lenders, in the stated principal amount of $7,960,000.00.  Borrowers acknowledge that the liens and security interests securing the First Note and the Second Note are renewed, extended, and modified in full force to secure payment of this Note, and this Note replaces and supersedes the First Note and the Second Note in all respects.

 

THE LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

 

THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.

 

4

 

IN WITNESS WHEREOF, Borrowers have duly executed this Note as of the date first above written.

 

	
 
    	
BORROWERS:
    
	
 
    	
 
    
	
 
    	
BHFS   I, LLC, a Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Michael   O’Hanlon
    
	
 
    	
 
    	
President   and Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
BHFS   II, LLC, a Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Michael   O’Hanlon
    
	
 
    	
 
    	
President   and Chief Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
BHFS   III, LLC, a Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Michael   O’Hanlon
    
	
 
    	
 
    	
President   and Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
BHFS   IV, LLC, a Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Michael   O’Hanlon
    
	
 
    	
 
    	
President   and Chief Executive Officer
    

 

 

	
 
    	
BHFS   THEATER, LLC, a Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Michael   O’Hanlon
    
	
 
    	
 
    	
President   and Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
BEHRINGER   HARVARD FRISCO SQUARE LP,
    
	
 
    	
a   Delaware limited partnership
    
	
 
    	
 
    
	
 
    	
  By:
    	
BP-FS   GP, LLC, a Delaware limited liability company, its   general partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Michael   J. O’Hanlon, President and 
   Chief Executive Officer

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00215-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00215-of-00352.parquet"}]]