Document:

Exhibit
10.4

PREPARED BY AND
UPON

RECORDATION RETURN TO:

Thacher Proffitt & Wood LLP

Two World Financial Center

New York, New York 10281

Attn: Donald F. Simone, Esq.

INSTRUCTIONS
TO RECORDER:  INDEX THIS DOCUMENT AS AN
ASSIGNMENT OF LEASES AND RENTS

BEHRINGER HARVARD 101 SOUTH TRYON LP, as assignor

(Assignor)

To

CITIGROUP
GLOBAL MARKETS REALTY CORP., as assignee

(Assignee)

ASSIGNMENT
OF LEASES AND RENTS

	
  

  	
   

  	
  Dated:

  	
   

  	
  As of October 26, 2006

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Location:

  	
   

  	
  101 South Tryon Street

  
	
   

  	
   

  	
   

  	
   

  	
  Charlotte, North Carolina 28280

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  File No.:

  	
   

  	
  20655-00010

  

 

 

THIS
ASSIGNMENT OF LEASES AND RENTS (this “Assignment”)
dated and effective as of the 26th day of October, 2006 made by BEHRINGER HARVARD 101 SOUTH TRYON
LP, a Delaware
limited partnership, having an office at 15601 Dallas Parkway, Suite
600, Addison, Texas 75001 (“Assignor”)
to CITIGROUP GLOBAL MARKETS REALTY CORP.,
a New York corporation, having an address at 388 Greenwich Street, Floor 11,
New York, New York 10013 (together with its successors and assigns, hereinafter
referred to as “Assignee”).

W  I  T  N  E
S  S  E  T  H :

WHEREAS, Assignor is the
(i) owner of a leasehold and fee simple title to that certain parcel of real
property (the “Premises”) described in Exhibit
A attached hereto, together with the buildings, structures, fixtures,
additions, enlargements, extensions, modifications, repairs, replacements and
other improvements now or hereafter located thereon (collectively, the “Property”);

WHEREAS, Assignor and
Assignee have entered into a certain Loan Agreement dated as of the date hereof
(as amended, modified, restated, consolidated or supplemented from time to
time, the “Loan Agreement”) pursuant to
which Assignee has agreed to make a secured loan to Assignor in the maximum
principal amount of up to ONE HUNDRED FIFTY-MILLION AND 00/100 DOLLARS
($150,000,000.00) (the “Loan”);

WHEREAS, Assignor has
executed a note in such principal amount (as the same may be amended, modified,
restated, severed, consolidated, renewed, replaced, or supplemented from time
to time, the “Note”), which is secured by, inter  alia, that certain deed
of trust, assignment of leases and rents and security agreement (as amended
from time to time, the “Security Instrument”,
the Security Instrument, the Note, this Assignment and the Loan Agreement and
such other documents, as any of the same may, from time to time, be modified,
amended or supplemented, being hereinafter collectively referred to as the “Loan Documents” which Loan Documents
are incorporated herein by reference for all purposes) on the Property;

WHEREAS, it is a
condition to the obligation of Assignee to make the Loan to Assignor pursuant
to the Loan Agreement that Assignor execute and deliver this Assignment; and

WHEREAS, capitalized
terms used in this Assignment without definition have the respective meanings
assigned to such terms in the Loan Agreement or the Security Instrument, as the
case may be, the terms of each of which are specifically incorporated by
reference herein.

NOW, THEREFORE, for good
and valuable consideration, receipt of which by the parties hereto is hereby
acknowledged, and additionally for the purpose of additionally securing the
Debt, Assignor hereby assigns, transfers, conveys and sets over unto Assignee,
all right, title and interest of Assignor in and to all Leases and all Rents;

TO HAVE AND TO HOLD the
same unto Assignee, and its successors and assigns forever, upon the terms and
conditions and for the uses hereinafter set forth.

 

And
Assignor hereby further agrees as follows:

1.             Certain
Representations, Warranties and Covenants. 
Subject to the terms of the Loan Agreement, Assignor represents,
warrants and covenants to Assignee that:

(a)           The payment of the Rents to accrue
under any Lease will not be waived, released, reduced, discounted or otherwise
discharged or compromised by Assignor;

(b)           Assignor has not performed, and will
not perform, any acts, and has not executed, and will not execute, any
instrument that would prevent Assignee from exercising its rights under this
Assignment; and

(c)           Assignor hereby authorizes and
directs any tenant under any of the Leases and any successor to all or any part
of the interests of any such tenant to pay directly to the Clearing Account, in
accordance with the terms of the Loan Agreement, the Rents due and to become
due under such tenant’s Lease, and such authorization and direction shall be
sufficient warrant to the tenant to make future payments of Rents directly to
the Clearing Account in accordance with the terms of the Loan Agreement without
the necessity for further consent by Assignor.

2.             Assignment;
Deferred Exercise of Rights.

(a)           As part of the consideration for the
Debt, Assignor does hereby absolutely and unconditionally assign to Assignee
all right, title and interest of Assignor in and to all present and future
Leases and Rents, and this Assignment constitutes a present and absolute
assignment and is intended to be unconditional and not as an assignment for
additional security only.  It is further
intended that it not be necessary for Assignee to institute legal proceedings,
absent any requirements of law or regulation to the contrary, to enforce the
provisions hereof.  Assignor hereby
authorizes Assignee or its agents to collect the Rents; provided, however, that
prior to an Event of Default, and subject at all times to the requirement that
payments and deposits of Rents be made directly to the Clearing Account,
Assignor shall have a revocable license, but limited as provided in this
Assignment and in any of the other Loan Documents, to otherwise deal with, and
enjoy the rights of the lessor under, the Leases.

(b)           Upon the occurrence and during the
continuance of an Event of Default, and without the necessity of Assignee
entering upon and taking and maintaining full control of the Property in
person, by agent or by court-appointed receiver, the license referred to in
paragraph (a) above shall immediately be revoked and Assignee shall have the
right at its option, to exercise all rights and remedies contained in the Loan
Documents, or otherwise available at law or in equity.

3.             Rents
Held in Trust by Assignor.  Rents
held or received by Assignor shall be held or received by Assignor as trustee
for the benefit of Assignee only and shall immediately be deposited directly to
the Clearing Account in accordance with the terms of the Loan Agreement.

4.             Effect
on Rights Under Other Documents. 
Nothing contained in this Assignment and no act done or omitted by
Assignee pursuant to the powers and rights granted it

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hereunder shall be
deemed to be a waiver by Assignee of its rights and remedies under any of the
other Loan Documents, and this Assignment is made and accepted without
prejudice to any of the rights and remedies possessed by Assignee under the
terms of the other Loan Documents.  The
rights of Assignee under the other Loan Documents may be exercised by Assignee
either prior to, simultaneously with, or subsequent to any action taken by it
hereunder.  This Assignment is intended
to be supplementary to and not in substitution for or in derogation of any
assignment of rents or grant of a security interest contained in any of the
other Loan Documents.

5.             Event
of Default. Upon or at any time after the occurrence and during the
continuance of an Event of Default, then in addition to and without limiting
any of Assignee’s rights and remedies hereunder and under the other Loan
Documents and as otherwise available at law or in equity:

(a)           Assignee may, at its option, without
waiving such Event of Default and without regard to the adequacy of the
security for the Debt, either in person or by agent, without bringing any action
or proceeding, or by a receiver appointed by a court, without taking possession
of the Property in its own name, demand, sue for or otherwise collect and
receive all Rents, including those past-due and unpaid, for application to the
payment of the Debt in accordance with the terms of the Loan Documents, and
Assignee may enter into, and to the extent that Assignor would have the right
to do so, cancel, enforce or modify any Lease. 
The exercise by Assignee of the option granted it in this Section and the
collection of the Rents and the application thereof as herein provided shall
not be considered a waiver of any Event of Default.

(b)           Assignor hereby acknowledges and
agrees that payment of any item of Rent by a Person to Assignee as hereinabove
provided shall constitute payment in full of such item of Rent by such Person,
as fully and with the same effect as if it had been paid to Assignor.

(c)           Assignee in respect of the Leases and
Rents shall have all of the rights and remedies of a secured party under the
Uniform Commercial Code as in effect in the State in which such rights and
remedies are asserted as described in Section 12(b) to the extent of such
rights thereunder and additional rights and remedies to which a secured party
is entitled under the laws in effect in any jurisdiction where any rights and
remedies hereunder may be asserted.

6.             Application
of Rents and Proceeds.  After the
occurrence and during the continuance of an Event of Default, Rents received or
held by Assignor or Assignee shall be applied in accordance with the terms of
the Loan Documents.

7.             Attorney-in-Fact.  Upon the occurrence and during the
continuance of any Event of Default, Assignor hereby appoints Assignee the
attorney-in-fact of Assignor to take any action and execute any instruments
that Assignor is obligated, or has covenanted and agreed under the Loan
Agreement or the other Loan Documents to take or execute, which appointment as
attorney-in-fact is irrevocable and coupled with an interest.  Without limiting the generality of the
foregoing provisions of this Section 7, upon the occurrence and during the
continuance of an Event of Default, Assignor does hereby irrevocably appoint
Assignee as its attorney-in-fact with

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full power, in the
name and stead of Assignor to demand, collect, receive and give complete
acquittance for any and all of the Rents now due or that may hereafter become
due, and at Assignee’s discretion, to file any claim, to take any other action,
to institute any proceeding or to make any settlement of any claim, either in
its own name or in the name of Assignor or otherwise, which Assignee may deem
necessary or desirable in order to collect and enforce the payment of Rents.

8.             Termination.  Assignee, by the acceptance of this
Assignment, agrees that when all of the Debt shall have been paid in full, this
Assignment shall terminate, and Assignee shall execute and deliver to Assignor,
upon such termination such instruments of termination or re-assignment and
Uniform Commercial Code termination statements, all without recourse and
without any representation or warranty whatsoever, as shall be reasonably
requested by Assignor provided, that, upon the termination and release of
record of the Security Instrument, this Agreement shall automatically
terminate, and the rights assigned hereunder re-assigned to Assignor, without
the need for a termination or re-assignment of record.

9.             Expenses.  Assignor agrees to pay to Assignee all
out-of-pocket expenses (including expenses for attorneys’ fees and costs of
every kind) of, or incident to, the enforcement of any of the provisions of
this Assignment or performance by Assignee of any obligation of Assignor
hereunder which Assignor has failed or refused to perform.

10.           Further
Assurances.  Assignor agrees that,
from time to time upon the written request of Assignee, it will give, execute,
deliver, file and/or record any financing statements, notice, instrument,
document, agreement or other papers and do such other acts and things that may
be necessary and desirable to create, preserve, perfect or validate this
Assignment, to enable Assignee to exercise and enforce its rights hereunder
with respect to this Assignment or to otherwise carry out the purposes and
intent of this Assignment.

11.           No
Obligation by Assignee.  By virtue of
this Assignment, Assignee shall not be obligated to perform or discharge, nor
does it hereby undertake to perform or discharge, any obligation, duty or
liability under any of the Leases.  This
Assignment shall not operate to constitute Assignee as a lender in possession
of the Property or to place responsibility for the control, care, management or
repair of the Property upon Assignee, nor shall it operate to make Assignee
responsible or liable for any waste committed on the Property by any tenant or
other party in possession or for any dangerous or defective condition of the
Property or for any negligence in the management, upkeep, repair or control
thereof.

12.           Miscellaneous.

(a)           No failure on the part of Assignee or
any of its agents to exercise, and no course of dealing with respect to, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise by Assignee or any of
its agents of any right, power or remedy hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or
remedy.  Subject to Section 16
hereof, the remedies herein are cumulative and are not exclusive of any
remedies provided by law.

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(b)           WITH RESPECT TO MATTERS RELATING TO
THE CREATION, PERFECTION AND PROCEDURES RELATING TO THE ENFORCEMENT OF THIS
ASSIGNMENT, THIS ASSIGNMENT SHALL BE GOVERNED BY, AND BE CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED, IT
BEING UNDERSTOOD THAT, EXCEPT AS EXPRESSLY SET FORTH ABOVE IN THIS PARAGRAPH
AND TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE
STATE OF NEW YORK SHALL GOVERN ALL MATTERS RELATING TO THIS ASSIGNMENT AND THE
OTHER LOAN DOCUMENTS AND ALL OF THE INDEBTEDNESS OR OBLIGATIONS ARISING
HEREUNDER OR THEREUNDER.  ALL PROVISIONS
OF THE LOAN AGREEMENT INCORPORATED HEREIN BY REFERENCE SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, AS SET
FORTH IN THE GOVERNING LAW PROVISION OF THE LOAN AGREEMENT.

(c)           Subject to Section 16 hereof,
all rights and remedies set forth in this Assignment are cumulative, and
Assignee may recover judgment thereon, issue execution therefor, and resort to
every other right or remedy available at law or in equity, without first
exhausting and without affecting or impairing the security of any right or
remedy afforded hereby; and no such right or remedy set forth in this
Assignment shall be deemed exclusive of any of the remedies or rights granted
to Assignee in any of the Loan Documents. 
Nothing contained in this Assignment shall be deemed to limit or
restrict the rights and remedies of Assignee under the Loan Agreement or any of
the other Loan Documents.

(d)           Until the indebtedness and all other
obligations secured by the Loan Documents is paid in full, Assignor will, upon
request, deliver from time to time to Assignee executed originals to the extent
available, otherwise photocopies certified by Assignor as true, correct and
complete, of executed originals, of any and all existing Leases to which
Assignor is a party, and executed originals, or photocopies of executed
originals, so certified by Assignor, if an executed original is not available,
of all other and future Leases to which Assignor is a party, and upon request
of Assignee, will specifically transfer and assign to Assignee such other and
future Leases upon the same terms and conditions as herein contained.

(e)           Assignor represents that it:  (i) has been advised that Assignee
engages in the business of real estate financings and other real estate
transactions and investments which may be viewed as adverse to or competitive
with the business of Assignor or its affiliates; (ii) is represented by
competent counsel and has consulted counsel before executing this Assignment;
and (iii) has relied solely on its own judgment and on its counsel and
advisors in entering into the transaction(s) contemplated hereby without
relying in any manner on any statements, representations or recommendations of
Assignee or any parent, subsidiary or affiliate of Assignee.

13.           No
Oral Change.  This Assignment may not
be amended except by an instrument in writing signed by Assignor and Assignee.

14.           Successors
and Assigns.  Assignor may not assign
its rights under this Assignment except as permitted under the Loan
Agreement.  Subject to the foregoing,
this

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Assignment shall
be binding upon, and shall inure to the benefit of, Assignor and Assignee and
their respective successors and assigns.

15.           Notices.  All notices, requests and other communications
provided for herein shall be given or made in writing in the manner specified
in the Loan Agreement.

16.           Exculpation.  It is expressly agreed that recourse against
Assignor for failure to perform and observe its obligations contained in this
Assignment shall be limited as and to the extent provided in Section 10.1 of
the Loan Agreement.

17.           Counterparts.  This Assignment may be executed in any number
of counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument.

18.           Joint
and Several.  Each Person
constituting Assignor hereunder shall have joint and several liability for the
obligations of Assignor hereunder except as otherwise provided in the Loan Documents.

[NO FURTHER TEXT ON THIS PAGE]

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IN WITNESS WHEREOF, THIS
ASSIGNMENT has been executed by Assignor the day and year first above written.

	
  

  	
  BEHRINGER HARVARD 101 SOUTH TRYON LP, a

  Delaware limited partnership

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Gerald J. Reihsen, III, Secretary

  

 

 

STATE of                                           

COUNTY of                                           

I certify that the
following person(s) personally appeared before me this day, and

(check one of the following)

I
have personal knowledge of the identity of the principal(s); or

I
have seen satisfactory evidence of the principal’s identity, by a current state
or

federal
identification with the principal’s photograph in the form of

(check one of the following)

a driver’s
license, or

in the form of                                                    ;
or

a credible witness (i)
personally known to me, (ii) unaffected by this instrument and the transaction
to which it relates and (iii) who personally knows such principal(s), has sworn
to the identity of the principal(s).

Each acknowledging to me
that he or she voluntarily signed the foregoing document for the purpose stated
therein and in the capacity indicated: insert principal(s)
names(s) and title(s)  below

                                                as
                                                
of                                                 .

	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  
	
  (Official Seal)

  	
  Printed Name:

  	
   

  
	
   

  	
   

  
	
   

  	
  My commission
  expires:

  	
   

  
						

 

 

EXHIBIT A

(Legal Description)

 9Exhibit
10.5

 

GUARANTY
OF RECOURSE OBLIGATIONS

made by

BEHRINGER
HARVARD REIT I, INC.,

as Guarantor

in favor of

CITIGROUP
GLOBAL MARKETS REALTY CORP.,

as Lender

Dated as of
October 26, 2006

 

 

GUARANTY OF RECOURSE OBLIGATIONS

This GUARANTY OF
RECOURSE OBLIGATIONS (this “Guaranty”),
dated as of October 26, 2006, made by BEHRINGER HARVARD REIT I,
INC., a Maryland corporation, having an address at Behringer Harvard
Holdings, LLC, 15601 Dallas Parkway, Suite 600, Addison, Texas 75001 (“Guarantor”), in favor of CITIGROUP GLOBAL MARKETS REALTY CORP., a New York
corporation, having an address at 388 Greenwich Street, Floor 11, New York, New
York 10013 (together with its successors and assigns, hereinafter referred to
as “Lender”).

R E  C  I
T  A  L  S:

A.            Pursuant to that certain Loan Agreement, dated as of the
date hereof (as the same may be amended, modified, supplemented or replaced
from time to time, the “Loan Agreement”)
between Behringer Harvard 101 South Tryon LP, a Delaware limited partnership (“Borrower”) and Lender, Lender has
agreed to make a loan (the “Loan”) to
Borrower in the maximum principal amount of up to $150,000,000, subject to the
terms and conditions of the Loan Agreement;

B.            As a condition to Lender’s making the Loan, Lender is
requiring that Guarantor execute and deliver to Lender this Guaranty; and

C.            Guarantor hereby acknowledges that it will materially
benefit from Lender’s agreeing to make the Loan;

NOW, THEREFORE,
in consideration of the premises set forth herein and as an inducement for and
in consideration of the agreement of Lender to make the Loan pursuant to the
Loan Agreement, Guarantor hereby agrees, covenants, represents and warrants to
Lender as follows:

1.             Definitions.

(a)           All capitalized terms used and not
defined herein shall have the respective meanings given such terms in the Loan
Agreement.

(b)           The term “Guaranteed Obligations”
means Lender’s Losses arising out of or in connection with Borrower’s action or
inaction which results in the termination of the Ground Lease, Borrower’s
failure to exercise all of its options currently set forth in the Ground Lease
to extend the term of the Ground Lease to at least December 31, 2021 or
Borrower’s failure to obtain an extension of the Ground Lease to a term of at
least ten (10) years beyond the Stated Maturity Date; unless in any case,
Borrower obtains replacement parking facilities that, (A) if subject to an
agreement, lease or otherwise, grant rights to such replacement parking facilities
for a term of at least ten (10) years beyond the Stated Maturity Date (the “Replacement Parking Facilities
Agreement”), and (B) are sufficient to enable the Property to
comply with applicable Legal Requirements (including, without limitation, zoning
requirements), each of (A) and (B) as determined by Lender in its reasonable
discretion.  Borrower and Guarantor shall
be released from any further liability for the foregoing in the event that the
replacement parking facilities and the Replacement Parking Facilities Agreement
are

 

sufficient to enable the
Property to comply with applicable Legal Requirements (including, without
limitation, zoning requirements) and are otherwise satisfactory to Lender in
its reasonable discretion.

2.             Guaranty.

(a)           Guarantor hereby irrevocably,
absolutely and unconditionally guarantees to Lender the full, prompt and
complete payment when due of the Guaranteed Obligations.

(b)           All sums payable to Lender under this
Guaranty shall be payable on demand and without reduction for any offset,
claim, counterclaim or defense.

(c)           Guarantor hereby agrees to indemnify,
defend and save harmless Lender from and against any and all costs, losses,
liabilities, claims, causes of action, expenses and damages, including
reasonable attorneys’ fees and disbursements, which Lender may suffer or which
otherwise may arise by reason of Borrower’s failure to pay any of the
Guaranteed Obligations when due, irrespective of whether such costs, losses,
liabilities, claims, causes of action, expenses or damages are incurred by
Lender prior or subsequent to (i) Lender’s declaring the Principal, interest
and other sums evidenced or secured by the Loan Documents to be due and
payable, (ii) the commencement or completion of a judicial or non-judicial
foreclosure of the Mortgage or (iii) the conveyance of all or any portion of
the Property by deed-in-lieu of foreclosure.

(d)           Guarantor agrees that no portion of
any sums applied (other than sums received from Guarantor in full or partial
satisfaction of its obligations hereunder), from time to time, in reduction of
the Debt shall be deemed to have been applied in reduction of the Guaranteed
Obligations until such time as the Debt has been paid in full, or Guarantor
shall have made the full payment required hereunder, it being the intention
hereof that the Guaranteed Obligations shall be the last portion of the Debt to
be deemed satisfied.

3.             Representations and Warranties.  Guarantor hereby represents and warrants to
Lender as follows (which representations and warranties shall be given as of
the date hereof and shall survive the execution and delivery of this Guaranty):

(a)           Organization,
Authority and Execution. 
Guarantor is a corporation duly organized, validly existing and in good
standing under the laws of the State of Maryland, and has all necessary power
and authority to own its properties and to conduct its business as presently
conducted or proposed to be conducted and to enter into and perform this
Guaranty and all other agreements and instruments to be executed by it in
connection herewith.  This Guaranty has
been duly executed and delivered by Guarantor.

(b)           Enforceability.  This Guaranty constitutes a legal, valid and
binding obligation of Guarantor, enforceable against Guarantor in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors’ rights generally.

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(c)           No
Violation.  The execution,
delivery and performance by Guarantor of its obligations under this Guaranty
has been duly authorized by all necessary action, and do not and will not
violate any law, regulation, order, writ, injunction or decree of any court or
governmental body, agency or other instrumentality applicable to Guarantor, or
result in a breach of any of the terms, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of any
mortgage, lien, charge or encumbrance of any nature whatsoever upon any of the
assets of Guarantor pursuant to the terms of Guarantor’s articles of
organization / incorporation, or any mortgage, indenture, agreement or
instrument to which Guarantor is a party or by which it or any of its
properties is bound.  Guarantor is not in
default under any other guaranty which it has provided to Lender.

(d)           No
Litigation.  There are no
actions, suits or proceedings at law or at equity, pending or, to Guarantor’s
best knowledge, threatened against or affecting Guarantor or which involve or
might involve the validity or enforceability of this Guaranty or which might
materially adversely affect the financial condition of Guarantor or the ability
of Guarantor to perform any of its obligations under this Guaranty.  Guarantor is not in default beyond any
applicable grace or cure period with respect to any order, writ, injunction,
decree or demand of any Governmental Authority which might materially adversely
affect the financial condition of Guarantor or the ability of Guarantor to
perform any of its obligations under this Guaranty.

(e)           Consents.  All consents, approvals, orders or
authorizations of, or registrations, declarations or filings with, all
Governmental Authorities (collectively, the “Consents”) that are required in
connection with the valid execution, delivery and performance by Guarantor of
this Guaranty have been obtained and Guarantor agrees that all Consents
required in connection with the carrying out or performance of any of Guarantor’s
obligations under this Guaranty will be obtained when required.

(f)            Financial
Statements and Other Information. 
All financial statements of Guarantor heretofore delivered to Lender are
true and correct in all material respects and fairly present the financial
condition of Guarantor as of the respective dates thereof, and no materially
adverse change has occurred in the financial conditions reflected therein since
the respective dates thereof.  None of
the aforesaid financial statements or any certificate or statement furnished to
Lender by or on behalf of Guarantor in connection with the transactions
contemplated hereby, and none of the representations and warranties in this
Guaranty contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained therein or
herein not misleading.  Guarantor is not
insolvent within the meaning of the United States Bankruptcy Code or any other
applicable law, code or regulation and the execution, delivery and performance
of this Guaranty will not render Guarantor insolvent.

(g)           Consideration.  Guarantor is the owner, directly or
indirectly, of legal and beneficial equity interests in Borrower, and as such
will materially benefit from the making of the Loan.

4.             Financial Statements. 
Guarantor shall deliver to Lender, (a) within 120 days after the
end of each fiscal year of Guarantor, a complete copy of Guarantor’s annual
financial statements, (b) if requested by Lender, within 60 days after the
end of each fiscal 

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quarter of
Guarantor, financial statements (including a balance sheet as of the end of
such fiscal quarter and a statement of income and expense for such fiscal
quarter) certified by Guarantor and in form, content, level of detail and scope
reasonably satisfactory to Lender, and (c) 20 days after request by Lender,
such other financial information with respect to Guarantor as Lender may
reasonably request.

5.             Unconditional Character of Obligations of Guarantor.

(a)           The obligations of Guarantor
hereunder shall be irrevocable, absolute and unconditional, irrespective of the
validity, regularity or enforceability, in whole or in part, of the other Loan
Documents or any provision thereof, or the absence of any action to enforce the
same, any waiver or consent with respect to any provision thereof, the recovery
of any judgment against Borrower, Guarantor or any other Person or any action
to enforce the same, any failure or delay in the enforcement of the obligations
of Borrower under the other Loan Documents or Guarantor under this Guaranty, or
any setoff, counterclaim, and irrespective of any other circumstances which
might otherwise limit recourse against a Guarantor by Lender or constitute a
legal or equitable discharge or defense of a guarantor or surety.  Lender may enforce the obligations of
Guarantor under this Guaranty by a proceeding at law, in equity or otherwise,
independent of any loan foreclosure or similar proceeding or any deficiency
action against Borrower or any other Person at any time, either before or after
an action against the Property or any part thereof, Borrower or any other
Person.  This Guaranty is a guaranty of payment and performance and not merely a
guaranty of collection. 
Guarantor waives diligence, notice of acceptance of this Guaranty,
filing of claims with any court, any proceeding to enforce any provision of any
other Loan Document, against Guarantor, Borrower or any other Person, any right
to require a proceeding first against Borrower or any other Person, or to
exhaust any security (including, without limitation, the Property) for the performance
of the Guaranteed Obligations or any other obligations of Borrower or any other
Person, or any protest, presentment, notice of default or other notice or
demand whatsoever (except to the extent expressly provided to the contrary in
this Guaranty).

(b)           The obligations of Guarantor under
this Guaranty, and the rights of Lender to enforce the same by proceedings,
whether by action at law, suit in equity or otherwise, shall not be in any way
affected by any of the following:

(i)            any insolvency, bankruptcy, liquidation, reorganization,
readjustment, composition, dissolution, receivership, conservatorship, winding
up or other similar proceeding involving or affecting Borrower, the Property or
any part thereof, Guarantor or any other Person;

(ii)           any failure by Lender or any other Person, whether or not
without fault on its part, to perform or comply with any of the terms of the
Loan Agreement, or any other Loan Documents, or any document or instrument
relating thereto;

(iii)          the sale, transfer or conveyance of the Property or any
interest therein to any Person, whether now or hereafter having or acquiring an
interest in

 4
 

 

the Property or any interest therein and
whether or not pursuant to any foreclosure, trustee sale or similar proceeding
against Borrower or the Property or any interest therein;

(iv)          the conveyance to Lender, any Affiliate of Lender or Lender’s
nominee of the Property or any interest therein by a deed-in-lieu of
foreclosure;

(v)           the release of Borrower or any other Person from the
performance or observance of any of the agreements, covenants, terms or
conditions contained in any of the Loan Documents by operation of law or
otherwise; or

(vi)          the release in whole or in part of any collateral for any
or all Guaranteed Obligations or for the Loan or any portion thereof.

(c)           Except as otherwise specifically
provided in this Guaranty, Guarantor hereby expressly and irrevocably waives
all defenses in an action brought by Lender to enforce this Guaranty based on
claims of waiver, release, surrender, alteration or compromise and all setoffs,
reductions, or impairments, whether arising hereunder or otherwise.

(d)           Lender may deal with Borrower and
Affiliates of Borrower in the same manner and as freely as if this Guaranty did
not exist and shall be entitled, among other things, to grant Borrower or any
other Person such extension or extensions of time to perform any act or acts as
may be deemed advisable by Lender, at any time and from time to time, without
terminating, affecting or impairing the validity of this Guaranty or the
obligations of Guarantor hereunder.

(e)           No compromise, alteration, amendment,
modification, extension, renewal, release or other change of, or waiver,
consent, delay, omission, failure to act or other action with respect to, any
liability or obligation under or with respect to, or of any of the terms,
covenants or conditions of, the Loan Documents shall in any way alter, impair
or affect any of the obligations of Guarantor hereunder, and Guarantor agrees
that if any Loan Document are modified with Lender’s consent, the Guaranteed
Obligations shall automatically be deemed modified to include such
modifications.

(f)            Lender may proceed to protect and
enforce any or all of its rights under this Guaranty by suit in equity or
action at law, whether for the specific performance of any covenants or
agreements contained in this Guaranty or otherwise, or to take any action
authorized or permitted under applicable law, and shall be entitled to require
and enforce the performance of all acts and things required to be performed
hereunder by Guarantor.  Each and every
remedy of Lender shall, to the extent permitted by law, be cumulative and shall
be in addition to any other remedy given hereunder or now or hereafter existing
at law or in equity.

(g)           No waiver shall be deemed to have
been made by Lender of any rights hereunder unless the same shall be in writing
and signed by Lender, and any such waiver shall be a waiver only with respect
to the specific matter involved and shall in no way impair the rights of Lender
or the obligations of Guarantor to Lender in any other respect or at any other
time.

 5
 

 

(h)           At the option of Lender, Guarantor
may be joined in any action or proceeding commenced by Lender against Borrower
in connection with or based upon any other Loan Documents and recovery may be
had against Guarantor in such action or proceeding or in any independent action
or proceeding against Guarantor to the extent of Guarantor’s liability
hereunder, without any requirement that Lender first assert, prosecute or
exhaust any remedy or claim against Borrower or any other Person, or any
security for the obligations of Borrower or any other Person.

(i)            Guarantor agrees that this Guaranty
shall continue to be effective or shall be reinstated, as the case may be, if
at any time any payment is made by Borrower or Guarantor to Lender and such
payment is rescinded or must otherwise be returned by Lender (as determined by
Lender in its sole and absolute discretion) upon insolvency, bankruptcy,
liquidation, reorganization, readjustment, composition, dissolution,
receivership, conservatorship, winding up or other similar proceeding involving
or affecting Borrower or Guarantor, all as though such payment had not been
made.

(j)            In the event that Guarantor shall
advance or become obligated to pay any sums under this Guaranty or in
connection with the Guaranteed Obligations or in the event that for any reason
whatsoever Borrower or any subsequent owner of the Property or any part thereof
is now, or shall hereafter become, indebted to Guarantor, Guarantor agrees that
(i) the amount of such sums and of such indebtedness and all interest
thereon shall at all times be subordinate as to lien, the time of payment and
in all other respects to all sums, including principal and interest and other
amounts, at any time owed to Lender under the Loan Documents, and
(ii) Guarantor shall not be entitled to enforce or receive payment thereof
until all principal, interest and other sums due pursuant to the Loan Documents
have been paid in full.  Nothing herein
contained is intended or shall be construed to give Guarantor any right of
subrogation in or under the Loan Documents or any right to participate in any
way therein, or in the right, title or interest of Lender in or to any collateral
for the Loan, notwithstanding any payments made by Guarantor under this
Guaranty, until the actual and irrevocable receipt by Lender of payment in full
of all principal, interest and other sums due with respect to the Loan or
otherwise payable under the Loan Documents. 
If any amount shall be paid to a Guarantor on account of such
subrogation rights at any time when any such sums due and owing to Lender shall
not have been fully paid, such amount shall be paid by Guarantor to Lender for
credit and application against such sums due and owing to Lender.

(k)           Guarantor’s obligations hereunder
shall survive a foreclosure, deed-in-lieu of foreclosure or similar proceeding
involving the Property and the exercise by Lender of any of all of its remedies
pursuant to the Loan Documents and Guarantor expressly agrees that to the
extent necessary to satisfy its obligations under Section 2 hereof, it shall be
and remain liable for any deficiency remaining after foreclosure of any
Mortgage or security interest securing the Note, notwithstanding provisions of
law that may prevent the Lender from enforcing such deficiency against the
Borrower.

6.             Covenants.

(a)           As used in this Section 6, the
following terms shall have the respective meanings set forth below:

 6
 

 

(i)            “GAAP”
shall mean generally accepted accounting principles, consistently applied.

(ii)           “Liquid
Assets” shall mean assets in the form of cash, cash equivalents,
obligations of (or fully guaranteed as to principal and interest by) the United
States or any agency or instrumentality thereof (provided the full faith and
credit of the United States supports such obligation or guarantee),
certificates of deposit issued by a commercial bank having net assets of not
less than $500 million, securities listed and traded on a recognized stock
exchange or traded over the counter and listed in the National Association of
Securities Dealers Automatic Quotations, or liquid debt instruments that have a
readily ascertainable value and are regularly traded in a recognized financial
market.

(iii)          “Net Worth”
shall mean, as of a given date,  (x) the
total assets of Guarantor as of such date less (y) Guarantor’s total
liabilities as of such date, determined in accordance with GAAP.

(b)           Guarantor shall not, at any time
while a default in the payment of the Guaranteed Obligations has occurred and
is continuing, either (i) enter into or effectuate any transaction with any
Affiliate which would reduce the Net Worth of Guarantor, including the payment
of any dividend or distribution to a shareholder, or the redemption,
retirement, purchase or other acquisition for consideration of any stock in
Guarantor or (ii) sell, pledge, mortgage or otherwise transfer to any Person
any of Guarantor’s assets, or any interest therein, except for fair value.

7.             Entire Agreement/Amendments. 
This instrument represents the entire agreement between the parties with
respect to the subject matter hereof. 
The terms of this Guaranty shall not be waived, altered, modified,
amended, supplemented or terminated in any manner whatsoever except by written
instrument signed by Lender and Guarantor.

8.             Successors and Assigns. 
This Guaranty shall be binding upon Guarantor, and Guarantor’s estate,
heirs, personal representatives, successors and assigns, may not be assigned or
delegated by Guarantor and shall inure to the benefit of Lender and its
successors and assigns.

9.             Applicable Law and Consent to Jurisdiction.  This Guaranty shall be governed by, and
construed in accordance with, the substantive laws of the State of New York.  Guarantor irrevocably (a) agrees that
any suit, action or other legal proceeding arising out of or relating to this
Guaranty may be brought in a court of record in the City and County of New York
or in the Courts of the United States of America located in the Southern
District of New York, (b) consents to the jurisdiction of each such court
in any such suit, action or proceeding and (c) waives any objection which
it may have to the laying of venue of any such suit, action or proceeding in any
of such courts and any claim that any such suit, action or proceeding has been
brought in an inconvenient forum. 
Guarantor irrevocably consents to the service of any and all process in
any such suit, action or proceeding by service of copies of such process to
Guarantor at its address provided in Section 14 hereof.  Nothing in this Section 9, however,
shall affect the right of

 7
 

 

Lender to serve
legal process in any other manner permitted by law or affect the right of
Lender to bring any suit, action or proceeding against Guarantor or its
property in the courts of any other jurisdictions.

10.           Section Headings.  The
headings of the sections and paragraphs of this Guaranty have been inserted for
convenience of reference only and shall in no way define, modify, limit or amplify
any of the terms or provisions hereof.

11.           Severability.  Any
provision of this Guaranty which may be determined by any competent authority
to be prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.  To the extent permitted by applicable law,
Guarantor hereby waives any provision of law which renders any provision hereof
prohibited or unenforceable in any respect.

12.           WAIVER OF TRIAL BY JURY. 
GUARANTOR HEREBY WAIVES THE RIGHT OF TRIAL BY JURY IN ANY LITIGATION,
ACTION OR PROCEEDING ARISING HEREUNDER OR IN CONNECTION THEREWITH.

13.           Judgment.  If Lender
recovers a judgment on this Guaranty, Guarantor agrees to pay to Lender
immediately upon demand all reasonable attorneys’ fees and costs incurred by
Lender in collecting and satisfying such judgment; it being expressly
understood that such agreement by the Guarantor is absolute and unconditional
and (i) shall survive (and not merge into) the entry of any judgment and (ii)
shall not be limited regardless of the security for the Loan, and regardless of
whether the Lender exercises any available rights or remedies against any
collateral pledged as security for the Loan.

14.           Notices.  All notices,
consents, approvals and requests required or permitted hereunder (a “Notice”) shall
be given in writing and shall be effective for all purposes if either hand
delivered with receipt acknowledged, or by a nationally recognized overnight
delivery service (such as Federal Express), or by certified or registered
United States mail, return receipt requested, postage prepaid, or by facsimile
and confirmed by facsimile answer back, in each case addressed as follows (or
to such other address or Person as a party shall designate from time to time by
notice to the other party):  If to
Lender: Citigroup Global Markets Realty Corp., 388 Greenwich Street, Floor 11,
New York, New York 10013, Attention: Commercial Mortgage Finance, Telecopier
(212) 816-1299, with a copy to: Thacher Proffitt & Wood LLP, Two World
Financial Center, New York, New York 10281, Attention: Donald F. Simone, Esq.,
Telecopier: (212) 912-7751; if to Guarantor: 15601 Dallas Parkway, Suite 600,
Addison, Texas 75001, Attention: Chief Legal Counsel, Telecopier: (214)
655-1610, and 15601 Dallas Parkway, Suite 600, Addison, Texas 75001,
Telecopier: (214) 655-1610.  A notice
shall be deemed to have been given:  in
the case of hand delivery, at the time of delivery; in the case of registered
or certified mail, when delivered or the first attempted delivery on a Business
Day; or in the case of overnight delivery, upon the first attempted delivery on
a Business Day.

15.           Guarantor’s Receipt of Loan Documents.  Guarantor by its execution hereof
acknowledges receipt of true copies of all of the Loan Documents, the terms and
conditions of which are hereby incorporated herein by reference.

 8
 

 

16.           Interest; Expenses. 
If Guarantor fails to pay all or any sums due hereunder upon demand by
Lender, the amount of such sums payable by Guarantor to Lender shall bear
interest from the date of demand until paid at the Default Rate in effect from
time to time.  Guarantor hereby agrees to
pay all costs, charges and expenses, including reasonable attorneys’ fees and
disbursements, that may be incurred by Lender in enforcing the covenants,
agreements, obligations and liabilities of Guarantor under this Guaranty.

17.           State Specific Waivers. 
In the event that this Guaranty is construed in accordance with the laws
of the State of North Carolina and without limiting the generality of the
foregoing, Guarantor hereby specifically waives the benefits of N.C. Gen. Stat.
Sections 26-7 through 26-9, inclusive.

[NO FURTHER TEXT ON THIS PAGE]

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

	
  

  	
  BEHRINGER
  HARVARD REIT I, INC., a

  Maryland corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

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