Document:

Exhibit 10.5

Loan No. 10032921

 

 

 

PREPARED
BY AND UPON

RECORDATION RETURN TO:

Alston & Bird LLP

90 Park Avenue

New York, New York 10016

Attention:  Joseph P. Forte, Esq.

BEHRINGER HARVARD 945 EAST PACES
FERRY ROAD, LLC, as Borrower

(Borrower)

to

KEYBANK NATIONAL ASSOCIATION, as Lender 

(Lender)

ASSIGNMENT OF LEASES AND RENTS

Dated: As of
November 30, 2006

 

 

 

 

 

ASSIGNMENT OF LEASES AND RENTS

THIS ASSIGNMENT OF LEASES AND RENTS (this “Assignment”) made as of the 
30th day of November, 2006, by BEHRINGER
HARVARD 945 EAST PACES FERRY ROAD, LLC, a Delaware limited liability
company, as assignor, having its principal place of business c/o Behringer
Harvard Funds, 15601 Dallas Parkway, Suite 600, Addison, Texas 75001 (“Borrower”) to KEYBANK NATIONAL
ASSOCIATION, a national association, having its principal place of
business at 911 Main Street, Suite 1500, Kansas City, Missouri 64105 (together
with its successors and/or assigns, “Lender”).

W I T N E S S E T H:

WHEREAS, this Assignment is given in connection with a
loan in the principal sum of EIGHTY-TWO MILLION and No/100 DOLLARS
($82,000,000.00) (the “Loan”) made by
Lender to Borrower pursuant to that certain Loan Agreement, dated as of the
date hereof (as the same may hereafter be amended, restated, replaced,
supplemented, renewed, extended or otherwise modified from time to time, the “Loan Agreement”) and evidenced by that certain Promissory
Note, dated the date hereof, given by Borrower to Lender (as the same may
hereafter be amended, restated, replaced, supplemented, renewed, extended or
otherwise modified from time to time, the “Note”);

WHEREAS, Borrower desires to secure the payment of the
Debt (as defined in the Loan Agreement) and the performance of all of its
obligations under the Note, the Loan Agreement and the other Loan Documents;
and

WHEREAS, this Assignment is given pursuant to the Loan
Agreement, and payment, fulfillment, and performance by Borrower of its
obligations thereunder and under the other Loan Documents is secured hereby,
and each and every term and provision of the Loan Agreement and the Note,
including the rights, remedies, obligations, covenants, conditions, agreements,
indemnities, representations and warranties therein, are hereby incorporated by
reference herein as though set forth in full and shall be considered a part of
this Assignment.

NOW THEREFORE, in consideration of the making of the
Loan by Lender and the covenants, agreements, representations and warranties
set forth in this Assignment:

ARTICLE 1  —  ASSIGNMENT

Section 1.1             Property
Assigned.  Borrower hereby absolutely
and unconditionally assigns and grants to Lender the following property,
rights, interests and estates, now owned, or hereafter acquired by Borrower:

(a)           Leases.  All leases, subleases or subsubleases,
lettings, licenses, concessions or other agreements made a part thereof
(whether written or oral and whether now or hereafter in effect), pursuant to
which any Person is granted a possessory interest in, or a right to use or
occupy, all or any portion of any space in that certain lot or piece

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of land, more particularly described in Exhibit A annexed hereto
and made a part hereof, together with the buildings, structures, fixtures,
additions, enlargements, extensions, modifications, repairs, replacements and
improvements now or hereafter located thereon (collectively, the “Property”) and every modification,
amendment or other agreement relating to such leases, subleases, subsubleases,
or other agreements entered into in connection with such leases, subleases,
subsubleases, or other agreements and every guarantee of the performance and
observance of the covenants, conditions and agreements to be performed and
observed by the other party thereto, and the right, title and interest of
Borrower, its successors and assigns, therein and thereunder.

(b)           Other
Leases and Agreements.  All other
leases and other agreements, whether or not in writing, providing for the use,
enjoyment or occupancy of the Property or any portion thereof now or hereafter
made, whether made before or after the filing by or against Borrower of any
petition for relief under the Bankruptcy Code together with any extension,
renewal or replacement of the same.  This
Assignment of other present and future leases and present and future agreements
being effective without further or supplemental assignment.  The “leases” described in Subsection 1.1(a)
and the leases and other agreements described in this Subsection 1.1(b) are
collectively referred to as the “Leases.”

(c)           Rents.  All rents, rent equivalents, income, early
termination fees or payments or other termination fees or payments, thereof and
any cash or security deposited in connection therewith, receivables, revenues,
receipts, insurance proceeds, deposits and profits arising from the Leases and
renewals and replacements thereof together with all rents, rent equivalents,
income, fees, receivables, accounts, profits (including, but not limited to,
all oil and gas or other mineral royalties and bonuses), charges for services
rendered and any and all payment and consideration of whatever form or nature
received by Borrower or its agents or employees from any and all sources
relating to the use, enjoyment and occupancy of the Property whether paid or
accruing before or after the filing by or against Borrower of any petition for
relief under the Bankruptcy Code (collectively, the “Rents”).

(d)           Bankruptcy
Claims.  All of Borrower’s claims and
rights (the “Bankruptcy Claims”)
to the payment of damages arising from any rejection by a lessee of any Lease
under the Bankruptcy Code.

(e)           Lease
Guaranties.  All of Borrower’s right,
title and interest in and claims under any and all lease guaranties, letters of
credit and any other credit support (individually, a “Lease Guaranty,” collectively, the “Lease Guaranties”) given by any guarantor
in connection with any of the Leases or leasing commissions (individually, a “Lease Guarantor,” collectively, the “Lease Guarantors”) to Borrower.

(f)            Proceeds.  All proceeds from the sale or other
disposition of the Leases, the Rents, the Lease Guaranties and the Bankruptcy
Claims.

(g)           Other.  All rights, powers, privileges, options and
other benefits of Borrower as lessor under the Leases and beneficiary under the
Lease Guaranties,

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including without limitation the immediate and continuing right to make
claim for, receive and collect all Rents payable or receivable under the Leases
and all sums payable under the Lease Guaranties or pursuant thereto (and to
apply the same to the payment of the Debt or the Other Obligations), and to do
all other things which Borrower or any lessor is or may become entitled to do
under the Leases or the Lease Guaranties.

(h)           Entry.  The right, at Lender’s option, upon
revocation of the license granted herein, to enter upon the Property in person,
by agent or by court-appointed receiver, to collect the Rents.

(i)            Power
of Attorney.  Borrower’s irrevocable
power of attorney, coupled with an interest, to take any and all of the actions
set forth in Section 3.1 of this Assignment and any or all other actions
designated by Lender for the proper management and preservation of the
Property.

(j)            Other
Rights and Agreements.  Any and all
other rights of Borrower in and to the items set forth in subsections (a)
through (i) above, and all amendments, modifications, replacements, renewals
and substitutions thereof.

ARTICLE 2  —  TERMS
OF ASSIGNMENT

Section 2.1             Present
Assignment And License Back.  It is
intended by Borrower that this Assignment constitute a present, absolute
assignment of the Leases, Rents, Lease Guaranties and Bankruptcy Claims, and
not an assignment for additional security only. 
Nevertheless, subject to the terms of this Section 2.1 and the Cash
Management Agreement, Lender grants to Borrower a revocable license to collect,
receive, use and enjoy the Rents and other sums due under the Lease Guaranties
and Borrower shall hold such Rents and all sums received pursuant to any Lease
Guaranty, or a portion thereof sufficient to discharge all current sums due on
the Debt, in trust for the benefit of Lender for use in the payment of such
sums.

Section 2.2             Notice
To Lessees.  Borrower hereby
authorizes and directs the lessees named in the Leases or any other future
lessees or occupants of the Property and all Lease Guarantors to pay over to
Lender or to such other party as Lender directs all Rents and all sums due
under any Lease Guaranties upon receipt from Lender of written notice to the
effect that Lender is then the holder of this Assignment and that an Event of
Default (as defined in the Loan Agreement) exists, and to continue so to do
until otherwise notified by Lender.

Section 2.3             Incorporation
By Reference.  All representations,
warranties, covenants, conditions and agreements contained in the Loan
Agreement and the other Loan Documents as same may be modified, renewed,
substituted or extended are hereby made a part of this Assignment to the same
extent and with the same force as if fully set forth herein.

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ARTICLE 3  —  REMEDIES

Section 3.1             Remedies
of Lender.  Upon or at any time after
the occurrence of an Event of Default, the license granted to Borrower in
Section 2.1 of this Assignment shall automatically be revoked, and Lender shall
immediately be entitled to possession of all Rents and sums due under any Lease
Guaranties, whether or not Lender enters upon or takes control of the
Property.  In addition, Lender may, at
its option, without waiving such Event of Default, without regard to the
adequacy of the security for the Debt, either in person or by agent, nominee or
attorney, with or without bringing any action or proceeding, or by a receiver
appointed by a court, dispossess Borrower and its agents and servants from the
Property, without liability for trespass, damages or otherwise and exclude
Borrower and its agents or servants wholly therefrom, and take possession of
the Property and all books, records and accounts relating thereto and have,
hold, manage, lease and operate the Property on such terms and for such period
of time as Lender may deem proper and either with or without taking possession
of the Property in its own name, demand, sue for or otherwise collect and
receive all Rents and sums due under all Lease Guaranties, including those past
due and unpaid with full power to make from time to time all alterations,
renovations, repairs or replacements thereto or thereof as Lender may deem
proper and may apply the Rents and sums received pursuant to any Lease Guaranties
to the payment of the following in such order and proportion as Lender in its
sole discretion may determine, any law, custom or use to the contrary
notwithstanding:  (a) all expenses of
managing and securing the Property, including, without being limited thereto,
the salaries, fees and wages of a managing agent and such other employees or
agents as Lender may deem necessary or desirable and all expenses of operating
and maintaining the Property, including, without being limited thereto, all taxes,
charges, claims, assessments, water charges, sewer rents and any other liens,
and premiums for all insurance which Lender may deem necessary or desirable,
and the cost of all alterations, renovations, repairs or replacements, and all
expenses incident to taking and retaining possession of the Property; and (b)
the Debt, together with all costs and reasonable attorneys’ fees.  In addition, upon the occurrence of an Event
of Default, Lender, at its option, may (1) complete any construction on the
Property in such manner and form as Lender deems advisable, (2) exercise all
rights and powers of Borrower, including, without limitation, the right to
negotiate, execute, cancel, enforce or modify any Leases, obtain and evict
tenants, and demand, sue for, collect and receive all Rents from the Property
and all sums due under any Lease Guaranties, (3) require Borrower to pay
monthly in advance to Lender, or any receiver appointed to collect the Rents,
the fair and reasonable rental value for the use and occupancy of such part of
the Property as may be in possession of Borrower or (4) require Borrower to
vacate and surrender possession of the Property to Lender or to such receiver
and, in default thereof, Borrower may be evicted by summary proceedings or
otherwise.

Section 3.2             Other
Remedies.  Nothing contained in this
Assignment and no act done or omitted by Lender pursuant to the power and
rights granted to Lender hereunder shall be deemed to be a waiver by Lender of
its rights and remedies under the Loan Agreement, the Note, or the other Loan
Documents and this Assignment is made and accepted without prejudice to any of
the rights and remedies possessed by Lender under the terms thereof.  The right of Lender to collect the Debt and
to enforce any other

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security therefor held by it may be exercised by Lender either prior
to, simultaneously with, or subsequent to any action taken by it
hereunder.  Borrower hereby absolutely,
unconditionally and irrevocably waives any and all rights to assert any setoff,
counterclaim or crossclaim of any nature whatsoever with respect to the
obligations of Borrower under this Assignment, the Loan Agreement, the Note,
the other Loan Documents or otherwise with respect to the Loan in any action or
proceeding brought by Lender to collect same, or any portion thereof, or to
enforce and realize upon the lien and security interest created by this
Assignment, the Loan Agreement, the Note, or any of the other Loan Documents
(provided, however, that the foregoing shall not be deemed a waiver of Borrower’s
right to assert any compulsory counterclaim if such counterclaim is compelled
under local law or rule of procedure, nor shall the foregoing be deemed a
waiver of Borrower’s right to assert any claim which would constitute a
defense, setoff, counterclaim or crossclaim of any nature whatsoever against
Lender in any separate action or proceeding).

Section 3.3             Other
Security.  Lender may take or release
other security for the payment of the Debt, may release any party primarily or
secondarily liable therefor and may apply any other security held by it to the
reduction or satisfaction of the Debt without prejudice to any of its rights
under this Assignment.

Section 3.4             Non
Waiver.  The exercise by Lender of
the option granted it in Section 3.1 of this Assignment and the collection of
the Rents and sums due under the Lease Guaranties and the application thereof
as herein provided shall not be considered a waiver of any default by Borrower
under the Note, the Loan Agreement, the Leases, this Assignment or the other
Loan Documents.  The failure of Lender to
insist upon strict performance of any term hereof shall not be deemed to be a
waiver of any term of this Assignment. 
Borrower shall not be relieved of Borrower’s obligations hereunder by
reason of (a) the failure of Lender to comply with any request of Borrower or
any other party to take any action to enforce any of the provisions hereof or
of the Loan Agreement, the Note or the other Loan Documents, (b) the release
regardless of consideration, of the whole or any part of the Property, or (c)
any agreement or stipulation by Lender extending the time of payment or
otherwise modifying or supplementing the terms of this Assignment, the Loan
Agreement, the Note, or the other Loan Documents.  Lender may resort for the payment of the Debt
to any other security held by Lender in such order and manner as Lender, in its
discretion, may elect.  Lender may take
any action to recover the Debt, or any portion thereof, or to enforce any
covenant hereof without prejudice to the right of Lender thereafter to enforce
its rights under this Assignment.  The
rights of Lender under this Assignment shall be separate, distinct and
cumulative and none shall be given effect to the exclusion of the others.  No act of Lender shall be construed as an
election to proceed under any one provision herein to the exclusion of any
other provision.

Section 3.5             Bankruptcy.  (a) 
Upon or at any time after the occurrence of an Event of Default, Lender
shall have the right to proceed in its own name or in the name of Borrower in
respect of any claim, suit, action or proceeding relating to the rejection of
any Lease, including, without limitation, the right to file and prosecute, to
the exclusion of Borrower, any proofs of claim, complaints, motions, applications,
notices

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and other documents, in any case in respect of the lessee under such
Lease under the Bankruptcy Code.

(b)           If
there shall be filed by or against Borrower a petition under the Bankruptcy
Code, and Borrower, as lessor under any Lease, shall determine to reject such
Lease pursuant to Section 365(a) of the Bankruptcy Code, then Borrower shall
give Lender not less than ten (10) days’ prior notice of the date on which
Borrower shall apply to the bankruptcy court for authority to reject the Lease.  Lender shall have the right, but not the
obligation, to serve upon Borrower within such ten day period a notice stating
that (i) Lender demands that Borrower assume and assign the Lease to Lender
pursuant to Section 365 of the Bankruptcy Code and (ii) Lender covenants to
cure or provide adequate assurance of future performance under the Lease.  If Lender serves upon Borrower the notice
described in the preceding sentence, Borrower shall not seek to reject the Lease
and shall comply with the demand provided for in clause (i) of the preceding
sentence within thirty (30) days after the notice shall have been given,
subject to the approval of the bankruptcy court having jurisdiction over the
case and to the performance by Lender of the covenant provided for in clause
(ii) of the preceding sentence.

ARTICLE 4  —  NO
LIABILITY, FURTHER ASSURANCES

Section 4.1             No
Liability of Lender.  This Assignment
shall not be construed to bind Lender to the performance of any of the
covenants, conditions or provisions contained in any Lease or Lease Guaranty or
otherwise impose any obligation upon Lender. 
Lender shall not be liable for any loss sustained by Borrower resulting
from Lender’s failure to let the Property after an Event of Default or from any
other act or omission of Lender in managing the Property after an Event of
Default unless such loss is caused by the willful misconduct and bad faith of
Lender.  Lender shall not be obligated to
perform or discharge any obligation, duty or liability under the Leases or any
Lease Guaranties or under or by reason of this Assignment and Borrower shall,
and hereby agrees to, indemnify Lender for, and to hold Lender harmless from,
any and all liability, loss or damage which may or might be incurred under the
Leases, any Lease Guaranties or under or by reason of this Assignment and from
any and all claims and demands whatsoever, including the defense of any such
claims or demands which may be asserted against Lender by reason of any alleged
obligations and undertakings on its part to perform or discharge any of the
terms, covenants or agreements contained in the Leases or any Lease
Guaranties.  Should Lender incur any such
liability, the amount thereof, including costs, expenses and reasonable attorneys’
fees, shall be secured by this Assignment, the Security Instrument and the
other Loan Documents and Borrower shall reimburse Lender therefor immediately
upon demand and upon the failure of Borrower so to do Lender may, at its
option, declare all sums secured by this Assignment, the Security Instrument
and the other Loan Documents immediately due and payable.  This Assignment shall not operate to place
any obligation or liability for the control, care, management or repair of the
Property upon Lender, nor for the carrying out of any of the terms and
conditions of the Leases or any Lease Guaranties; nor shall it operate to make
Lender responsible or liable for any waste committed on the Property by the
tenants or any other parties, or for any dangerous or defective condition of
the Property including, without limitation, the presence of any Hazardous
Substances (as defined in the

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Environmental Indemnity), or for any negligence in the management,
upkeep, repair or control of the Property resulting in loss or injury or death
to any tenant, licensee, employee or stranger.

Section 4.2             No
Mortgagee in Possession.  (a)  Nothing herein contained shall be construed
as constituting Lender a “mortgagee in possession” in the absence of the taking
of actual possession of the Property by Lender. 
In the exercise of the powers herein granted Lender, no liability shall
be asserted or enforced against Lender, all such liability being expressly
waived and released by Borrower.

(b)           Further
Assurances.  Borrower will, at the
cost of Borrower, and without expense to Lender, do, execute, acknowledge and
deliver all and every such further acts, conveyances, assignments, notices of
assignments, transfers and assurances as Lender shall, from time to time,
reasonably require for the better assuring, conveying, assigning, transferring
and confirming unto Lender the property and rights hereby assigned or intended
now or hereafter so to be, or which Borrower may be or may hereafter become
bound to convey or assign to Lender, or for carrying out the intention or
facilitating the performance of the terms of this Assignment or for filing,
registering or recording this Assignment and, on demand, will execute and
deliver and hereby authorizes Lender to execute in the name of Borrower to the
extent Lender may lawfully do so, one or more financing statements, chattel
mortgages or comparable security instruments, to evidence more effectively the
lien and security interest hereof in and upon the Leases.

ARTICLE 5  —  MISCELLANEOUS
PROVISIONS

Section 5.1             Conflict
of Terms.  In case of any conflict
between the terms of this Assignment and the terms of the Loan Agreement, the
terms of the Loan Agreement shall prevail.

Section 5.2             No
Oral Change.  This Assignment and any
provisions hereof may not be modified, amended, waived, extended, changed,
discharged or terminated orally, or by any act or failure to act on the part of
Borrower or Lender, but only by an agreement in writing signed by the party
against whom the enforcement of any modification, amendment, waiver, extension,
change, discharge or termination is sought.

Section 5.3             General
Definitions.  All capitalized terms
not defined herein shall have the respective meanings set forth in the Loan
Agreement.  Unless the context clearly
indicates a contrary intent or unless otherwise specifically provided herein,
words used in this Assignment may be used interchangeably in singular or plural
form and the word “Borrower” shall mean “each Borrower and any subsequent owner
or owners of the Property or any part thereof or interest therein,” the word “Lender”
shall mean “Lender and any subsequent holder of the Note”, the word “Note”
shall mean “the Note and any other evidence of indebtedness secured by the “Security
Instrument,” the word “person” shall include an individual, corporation, partnership,
limited liability company, trust, unincorporated association, government,
governmental authority, and any

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other entity, “Loan Agreement”, the word “Property” shall include any
portion of the Property and any interest therein, the phrases “attorneys’ fees,”
“legal fees” and “counsel fees” shall include any and all attorney’s, paralegal
and law clerk fees and disbursements, including, but not limited to, fees and
disbursements at the pre trial, trial and appellate levels incurred or paid by
Lender in protecting its interest in the Property, the Leases and the Rents and
enforcing its rights hereunder and the word “Debt” shall mean the principal
balance of the Note with interest thereon as provided in the Note and Security
Instrument and all other sums due pursuant to the Note, the Security
Instrument, this Assignment and the other Loan Documents; whenever the context
may require, any pronouns used herein shall include the corresponding
masculine, feminine or neuter forms, and the singular form of nouns and
pronouns shall include the plural and vice versa.

Section 5.4             Inapplicable
Provisions.  If any term, covenant or
condition of this Assignment is held to be invalid, illegal or unenforceable in
any respect, this Assignment shall be construed without such provision.

Section 5.5             Governing
Law.  This Assignment shall be
governed by and construed in accordance with the laws of the state in which the
Property is located (without regard to any conflict of laws or principles) and
the applicable laws of the United States of America.

Section 5.6             Termination
of Assignment.  Upon payment in full
of the Debt, this Assignment shall become and be void and of no effect.

Section 5.7             Notices.  All notices or other written communications
hereunder shall be delivered in accordance with Section 10.6 of the Loan
Agreement.

Section 5.8             WAIVER OF TRIAL BY JURY.  BORROWER HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM, WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING
DIRECTLY OR INDIRECTLY TO THIS ASSIGNMENT, THE NOTE, OR THE OTHER LOAN
DOCUMENTS OR ANY ACTS OR OMISSIONS OF LENDER, ITS OFFICERS, EMPLOYEES,
DIRECTORS OR AGENTS IN CONNECTION THEREWITH.

Section 5.9             Exculpation.  The provisions of Section 9.3 of the Loan
Agreement are hereby incorporated by reference into this Assignment to the same
extent and with the same force as if fully set forth herein.

Section 5.10           Successors
and Assigns.  This Assignment shall
be binding upon and inure to the benefit of Borrower and Lender and their
respective successors and assigns forever.

Section 5.11           Headings,
Etc.  The headings and captions of
various paragraphs of this Assignment are for convenience of reference only and
are not to be construed as defining or limiting, in any way, the scope or
intent of the provisions hereof.

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[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, Borrower has executed this
Assignment of Leases and Rent the day and year first above written.

[SEE SEPARATE SIGN PAGE]

 

EXHIBIT A

Legal DescriptionExhibit
10.6

Loan No. 10032921

GUARANTY AGREEMENT

THIS
GUARANTY AGREEMENT (this “Guaranty”)
is executed as of November 30, 2006, by BEHRINGER HARVARD REIT I,
INC., a Maryland corporation, having an address c/o Behringer
Harvard Funds, 15601 Dallas Parkway, Suite 600, Addison, Texas 75001 (whether
one or more collectively referred to as “Guarantor”),
for the benefit of KEYBANK NATIONAL
ASSOCIATION, a national association, having an office at 911 Main
Street, Suite 1500, Kansas City, MO 64105 (together with its successors and/or
assignors “Lender”).

W I T N E S S E T H:

WHEREAS,
pursuant to that certain Promissory Note, dated the date hereof, executed by BEHRINGER HARVARD 945 EAST PACES FERRY ROAD, LLC, a Delaware
limited liability company (“Borrower”), and
payable to the order of Lender in the original principal amount of EIGHTY-TWO
MILLION and No/100 DOLLARS ($82,000,000.00) (as the same may hereafter be
amended, restated, renewed, supplemented, replaced, extended or otherwise
modified from time to time, the “Note”),
Borrower has become indebted, and may from time to time be further indebted, to
Lender with respect to a loan (the “Loan”) which is
secured by the lien and security interest of that certain Fee and Leasehold
Deed to Secure Debt and Security Agreement, dated as of the date hereof, made
by Borrower for the benefit of Lender (as the same may hereafter be amended,
restated, renewed, supplemented, replaced, extended or otherwise modified from
time to time, the “Security Instrument”),
and is further evidenced by that certain Loan Agreement, dated as of the date
hereof, between Borrower and Lender (as the same may hereinafter be amended,
modified, restated, renewed or replaced the “Loan
Agreement”) and further evidenced, secured or governed by such other
instruments and documents executed in connection with the Loan (together with
the Note, the Loan Agreement and the Security Instrument are hereinafter
collectively referred to as the “Loan Documents”);
and

WHEREAS,
Lender is not willing to make the Loan, or otherwise extend credit, to Borrower
unless Guarantor unconditionally guarantees payment and performance to Lender
of the Guaranteed Obligations (as herein defined); and

WHEREAS,
Guarantor is the owner of a direct or indirect interest in Borrower, and Guarantor
will directly benefit from Lender’s making the Loan to Borrower.

NOW,
THEREFORE, as an inducement to Lender to make the Loan to
Borrower, and to extend such additional credit as Lender may from time to time
agree to extend under the Loan Documents, and for other good and valuable
consideration, the receipt and legal sufficiency of which are hereby
acknowledged, the parties do hereby agree as follows:

 

ARTICLE I.

 

NATURE AND SCOPE OF GUARANTY

Section 1.01         Guaranty
Of Obligation. 
Guarantor hereby irrevocably and unconditionally guarantees to Lender
and its successors and assigns the payment and performance of the Guaranteed
Obligations as and when the same shall be due and payable, whether by lapse of
time, by acceleration of maturity or otherwise. 
Guarantor hereby irrevocably and unconditionally covenants and agrees
that it is liable for the Guaranteed Obligations as a primary obligor.

Section 1.02         Definition
of Guaranteed Obligations.  As used herein, the term “Guaranteed
Obligations” shall (i) mean each of the obligations of Borrower under the
Environmental Indemnity, including without limitation the indemnification
provisions contained therein, and (ii) be deemed to include, and Guarantor
shall also be liable for, and shall indemnify, defend and hold Lender harmless
from and against, any and all Losses (as hereinafter defined) incurred or
suffered by Lender and arising out of or in connection with the matters listed
below:

(a)           the misapplication
or misappropriation of Rents;

(b)           the misapplication
or misappropriation of Insurance Proceeds or Awards;

(c)           Borrower’s failure
to return or to reimburse Lender for all Personal Property (other than Personal
Property not material to the operation or value of the affected Individual
Property) taken from the Property by or on behalf of Borrower and not replaced
with Personal Property of the same utility and of the same or greater value;

(d)           any act of actual
waste or arson by Borrower, any principal, affiliate, general partner or member
thereof or by Guarantor;

(e)           any fees or
commissions paid by Borrower to any principal, affiliate, general partner or
member of Borrower or any Guarantor in violation of the terms of this Guaranty,
the other Loan Documents;

(f)            Borrower’s failure
to comply with the provisions of Section 9.4 of the Security Instrument;

(g)           any fraud, willful
misconduct or intentional material misrepresentation by Borrower, Principal,
Guarantor or any of their respective Affiliates in connection with the Loan; or

(h)           any breach or
default of any material provision of Section 4.1.30 of the Loan Agreement
(other than breaches of the requirements set forth in clauses (xii) or (xxiii)
of the definition of Special Purpose Entity).

 2
 

 

(iii)          In addition, the Guaranteed
Obligations shall also include the unpaid balance of the Debt in the event of:
(a) a voluntary breach or default under Section 5.2.10 of the Loan Agreement,
(b) Borrower or Principal filing a voluntary petition under the Bankruptcy Code
or any other Federal or state bankruptcy or insolvency law; (c) Borrower or
Principal filing an answer consenting to or otherwise acquiescing in or joining
in any involuntary petition filed against it, by any other Person under the
Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or
soliciting or causing to be solicited petitioning creditors for any involuntary
petition from any Person; (d) Borrower or Principal consenting to or
acquiescing in or joining in an application for the appointment of a custodian,
receiver, trustee, or examiner for Borrower, Principal or any portion of the
Property; or (e) Borrower or Principal making an assignment for the benefit of
creditors.

Section 1.03         Nature
of Guaranty. 
This Guaranty is an irrevocable, absolute, continuing guaranty of
payment and performance and not a guaranty of collection.  This Guaranty may not be revoked by Guarantor
and shall continue to be effective with respect to any Guaranteed Obligations
arising or created after any attempted revocation by Guarantor and after (if
Guarantor is a natural person) Guarantor’s death (in which event this Guaranty
shall be binding upon Guarantor’s estate and Guarantor’s legal representatives
and heirs).  The fact that at any time or
from time to time the Guaranteed Obligations may be increased or reduced shall
not release or discharge the obligation of Guarantor to Lender with respect to
the Guaranteed Obligations.  This
Guaranty may be enforced by Lender and any subsequent holder of the Note and
shall not be discharged by the assignment or negotiation of all or part of the
Note.

Section 1.04         Guaranteed
Obligations Not Reduced by Offset.  The Guaranteed Obligations and the
liabilities and obligations of Guarantor to Lender hereunder, shall not be
reduced, discharged or released because or by reason of any existing or future
offset, claim or defense of Borrower, or any other party, against Lender or
against payment of the Guaranteed Obligations, whether such offset, claim or
defense arises in connection with the Guaranteed Obligations (or the
transactions creating the Guaranteed Obligations) or otherwise.

Section 1.05         Payment
By Guarantor. 
If all or any part of the Guaranteed Obligations shall not be punctually
paid when due, whether at demand, maturity, acceleration or otherwise,
Guarantor shall, immediately upon demand by Lender, and without presentment,
protest, notice of protest, notice of non-payment, notice of intention to
accelerate the maturity, notice of acceleration of the maturity, or any other
notice whatsoever, pay in lawful money of the United States of America, the
amount due on the Guaranteed Obligations to Lender at Lender’s address as set
forth herein.  Such demand(s) may be made
at any time coincident with or after the time for payment of all or part of the
Guaranteed Obligations, and may be made from time to time with respect to the
same or different items of Guaranteed Obligations.  Such demand shall be deemed made, given and
received in accordance with the notice provisions hereof.

 3
 

 

Section 1.06         No
Duty To Pursue Others.  It shall not be necessary for Lender (and
Guarantor hereby waives any rights which Guarantor may have to require Lender),
in order to enforce the obligations of Guarantor hereunder, first to (i)
institute suit or exhaust its remedies against Borrower or others liable on the
Loan or the Guaranteed Obligations or any other person, (ii) enforce Lender’s
rights against any collateral which shall ever have been given to secure the
Loan, (iii) enforce Lender’s rights against any other guarantors of the
Guaranteed Obligations, (iv) join Borrower or any others liable on the
Guaranteed Obligations in any action seeking to enforce this Guaranty, (v)
exhaust any remedies available to Lender against any collateral which shall
ever have been given to secure the Loan, or (vi) resort to any other means of
obtaining payment of the Guaranteed Obligations. Lender shall not be required
to mitigate damages or take any other action to reduce, collect or enforce the
Guaranteed Obligations.

Section 1.07         Waivers.  Guarantor agrees to the provisions of the
Loan Documents, and hereby waives notice of (i) any loans or advances made by
Lender to Borrower, (ii) acceptance of this Guaranty, (iii) any amendment or
extension of the Note, the Security Instrument, the Loan Agreement or of any
other Loan Documents, (iv) the execution and delivery by Borrower and Lender of
any other loan or credit agreement or of Borrower’s execution and delivery of
any promissory notes or other documents arising under the Loan Documents or in
connection with the Property, (v) the occurrence of any breach by Borrower or
an Event of Default, (vi) Lender’s transfer or disposition of the Guaranteed
Obligations, or any part thereof, (vii) sale or foreclosure (or posting or
advertising for sale or foreclosure) of any collateral for the Guaranteed
Obligations, (viii) protest, proof of non-payment or default by Borrower, or
(ix) any other action at any time taken or omitted by Lender, and, generally,
all demands and notices of every kind in connection with this Guaranty, the
Loan Documents, any documents or agreements evidencing, securing or relating to
any of the Guaranteed Obligations and the obligations hereby guaranteed.

Section 1.08         Payment
of Expenses. 
In the event that Guarantor should breach or fail to timely perform any
provisions of this Guaranty, Guarantor shall, immediately upon demand by
Lender, pay Lender all costs and expenses (including court costs and attorneys’
fees) incurred by Lender in the enforcement hereof or the preservation of
Lender’s rights hereunder.  The covenant
contained in this Section shall survive the payment and performance of the
Guaranteed Obligations.

Section 1.09         Effect
of Bankruptcy. 
In the event that, pursuant to any insolvency, bankruptcy,
reorganization, receivership or other debtor relief law, or any judgment, order
or decision thereunder, Lender must rescind or restore any payment, or any part
thereof, received by Lender in satisfaction of the Guaranteed Obligations, as
set forth herein, any prior release or discharge from the terms of this Guaranty
given to Guarantor by Lender shall be without effect, and this Guaranty shall
remain in full force and effect. It is the intention of Borrower and Guarantor
that Guarantor’s obligations hereunder shall not be discharged except by
Guarantor’s performance of such obligations and then only to the extent of such
performance.

 4
 

 

Section 1.10         Waiver
of Subrogation, Reimbursement and Contribution.  Guarantor hereby unconditionally and
irrevocably waives, releases and abrogates any and all rights it may now or hereafter
have under any agreement, at law or in equity (including, without limitation,
any law subrogating the Guarantor to the rights of Lender), to assert any claim
against or seek contribution, indemnification or any other form of
reimbursement from Borrower or any other party liable for payment of any or all
of the Guaranteed Obligations for any payment made by Guarantor under or in
connection with this Guaranty or otherwise; provided, however, that
notwithstanding anything to the contrary contained herein, Guarantor shall have
and be entitled to (a) all rights of subrogation otherwise provided by
applicable law in respect of any payment it may make or be obligated to make
under this Guaranty and (b) all claims it would have against Borrower or any
other party and to assert and enforce same, in each case on and after, but at
no time prior to, the date which is 91 days after the date on which all sums
owed to Lender under this Guaranty and the other the Loan Documents have been
paid in full.

Section 1.11         Borrower.  The term “Borrower” as used herein shall
include any new or successor corporation, association, partnership (general or
limited), limited liability company, joint venture, trust or other individual
or organization formed as a result of any merger, reorganization, sale,
transfer, devise, gift or bequest of Borrower or any interest in Borrower.

ARTICLE
II.

EVENTS
AND CIRCUMSTANCES NOT REDUCING 

OR DISCHARGING GUARANTOR’S OBLIGATIONS

Guarantor hereby
consents and agrees to each of the following, and agrees that Guarantor’s
obligations under this Guaranty shall not be released, diminished, impaired,
reduced or adversely affected by any of the following, and waives any common
law, equitable, statutory or other rights (including without limitation rights
to notice) which Guarantor might otherwise have as a result of or in connection
with any of the following:

Section 2.01         Modifications.  Any renewal, extension, increase,
modification, alteration or rearrangement of all or any part of the Guaranteed
Obligations, the Note, the Security Instrument, the Loan Agreement, the other
Loan Documents, or any other document, instrument, contract or understanding
between Borrower and Lender, or any other parties, pertaining to the Guaranteed
Obligations or any failure of Lender to notify Guarantor of any such action.

Section 2.02         Adjustment.  Any adjustment, indulgence, forbearance or
compromise that might be granted or given by Lender to Borrower or any other
guarantor.

Section 2.03         Condition
of Borrower or Guarantor.  The insolvency, bankruptcy, arrangement,
adjustment, composition, liquidation, disability, dissolution or 

 5
 

 

lack of power of Borrower, Guarantor or any other party at any time
liable for the payment of all or part of the Guaranteed Obligations; or any
dissolution of Borrower or Guarantor, or any sale, lease or transfer of any or
all of the assets of Borrower or Guarantor, or any changes in the shareholders,
partners or members of Borrower or Guarantor; or any reorganization of Borrower
or Guarantor.

Section 2.04         Invalidity
of Guaranteed Obligations.  The invalidity, illegality or
unenforceability of all or any part of the Guaranteed Obligations, or any
document or agreement executed in connection with the Guaranteed Obligations,
for any reason whatsoever, including without limitation the fact that (i) the
Guaranteed Obligations, or any part thereof, exceeds the amount permitted by
law, (ii) the act of creating the Guaranteed Obligations or any part thereof is
ultra vires, (iii) the officers or representatives executing the Note, the
Security Instrument, the Loan Agreement or the other Loan Documents or
otherwise creating the Guaranteed Obligations acted in excess of their
authority, (iv) the Guaranteed Obligations violate applicable usury laws, (v)
the Borrower has valid defenses, claims or offsets (whether at law, in equity
or by agreement) which render the Guaranteed Obligations wholly or partially
uncollectible from Borrower, (vi) the creation, performance or repayment of the
Guaranteed Obligations (or the execution, delivery and performance of any
document or instrument representing part of the Guaranteed Obligations or
executed in connection with the Guaranteed Obligations, or given to secure the
repayment of the Guaranteed Obligations) is illegal, uncollectible or
unenforceable, or (vii) the Note, the Security Instrument, the Loan Agreement
or any of the other Loan Documents have been forged or otherwise are irregular
or not genuine or authentic, it being agreed that Guarantor shall remain liable
hereon regardless of whether Borrower or any other person be found not liable
on the Guaranteed Obligations or any part thereof for any reason.

Section 2.05         Release
of Obligors. 
Any full or partial release of the liability of Borrower on the
Guaranteed Obligations, or any part thereof, or of any co-guarantors, or any
other Person now or hereafter liable, whether directly or indirectly, jointly,
severally, or jointly and severally, to pay, perform, guarantee or assure the
payment of the Guaranteed Obligations, or any part thereof, it being
recognized, acknowledged and agreed by Guarantor that Guarantor may be required
to pay the Guaranteed Obligations in full without assistance or support of any
other party, and Guarantor has not been induced to enter into this Guaranty on
the basis of a contemplation, belief, understanding or agreement that other
parties will be liable to pay or perform the Guaranteed Obligations, or that
Lender will look to other parties to pay or perform the Guaranteed Obligations.

Section 2.06         Other
Collateral. 
The taking or accepting of any other security, collateral or guaranty,
or other assurance of payment, for all or any part of the Guaranteed
Obligations.

Section 2.07         Release
of Collateral. 
Any release, surrender, exchange, subordination, deterioration, waste,
loss or impairment (including without limitation negligent, willful,
unreasonable or unjustifiable impairment) of any collateral, property or 

 6
 

 

security at any time existing in connection with, or assuring or
securing payment of, all or any part of the Guaranteed Obligations.

Section 2.08         Care
and Diligence. 
The failure of Lender or any other party to exercise diligence or
reasonable care in the preservation, protection, enforcement, sale or other
handling or treatment of all or any part of any collateral, property or
security, including but not limited to any neglect, delay, omission, failure or
refusal of Lender (i) to take or prosecute any action for the collection of any
of the Guaranteed Obligations or (ii) to foreclose, or initiate any action to
foreclose, or, once commenced, prosecute to completion any action to foreclose
upon any security therefor, or (iii) to take or prosecute any action in
connection with any instrument or agreement evidencing or securing all or any
part of the Guaranteed Obligations.

Section 2.09         Unenforceability.  The fact that any collateral, security,
security interest or lien contemplated or intended to be given, created or
granted as security for the repayment of the Guaranteed Obligations, or any
part thereof, shall not be properly perfected or created, or shall prove to be
unenforceable or subordinate to any other security interest or lien, it being
recognized and agreed by Guarantor that Guarantor is not entering into this
Guaranty in reliance on, or in contemplation of the benefits of, the validity,
enforceability, collectibility or value of any of the collateral for the
Guaranteed Obligations.

Section 2.10         Offset.  The Note, the Loan Agreement, the Guaranteed
Obligations and the liabilities and obligations of the Guarantor to Lender
hereunder shall not be reduced, discharged or released because of or by reason
of any existing or future right of offset, claim or defense of Borrower against
Lender, or any other party, or against payment of the Guaranteed Obligations,
whether such right of offset, claim or defense arises in connection with the
Guaranteed Obligations (or the transactions creating the Guaranteed
Obligations) or otherwise.

Section 2.11         Merger.  The reorganization, merger or consolidation
of Borrower into or with any other Person.

Section 2.12         Preference.  Any payment by Borrower to Lender is held to
constitute a preference under bankruptcy laws, or for any reason Lender is
required to refund such payment or pay such amount to Borrower or someone else.

Section 2.13         Other
Actions Taken or Omitted.  Any other action taken or omitted to be taken
with respect to the Loan Documents, the Guaranteed Obligations, or the security
and collateral therefor, whether or not such action or omission prejudices Guarantor
or increases the likelihood that Guarantor will be required to pay the
Guaranteed Obligations pursuant to the terms hereof, it is the unambiguous and
unequivocal intention of Guarantor that Guarantor shall be obligated to pay the
Guaranteed Obligations when due, notwithstanding any occurrence, circumstance,
event, action, or omission whatsoever, whether contemplated or uncontemplated,
and whether or not otherwise or particularly described herein, which obligation
shall be deemed 

 7
 

 

satisfied only upon the full and final payment and satisfaction of the
Guaranteed Obligations.

ARTICLE
III.

REPRESENTATIONS AND WARRANTIES

To induce Lender to enter into the Loan Documents and
extend credit to Borrower, Guarantor represents and warrants to Lender as
follows:

Section 3.01         Benefit.  Guarantor is an affiliate of Borrower, is the
owner of a direct or indirect interest in Borrower, and has received, or will
receive, direct or indirect benefit from the making of this Guaranty with
respect to the Guaranteed Obligations.

Section 3.02         Familiarity
and Reliance. 
Guarantor is familiar with, and has independently reviewed books and
records regarding, the financial condition of the Borrower and is familiar with
the value of any and all collateral intended to be created as security for the
payment of the Note or Guaranteed Obligations; however, Guarantor is not
relying on such financial condition or the collateral as an inducement to enter
into this Guaranty.

Section 3.03         No
Representation By Lender.  Neither Lender nor any other party has made
any representation, warranty or statement to Guarantor in order to induce the
Guarantor to execute this Guaranty.

Section 3.04         Guarantor’s
Financial Condition.  As of the date hereof, and after giving
effect to this Guaranty and the contingent obligation evidenced hereby,
Guarantor is, and will be, solvent, and has and will have assets which, fairly
valued, exceed its obligations, liabilities (including contingent liabilities)
and debts, and has and will have property and assets sufficient to satisfy and
repay its obligations and liabilities as they become due.

Section 3.05         Legality.  The execution, delivery and performance by
Guarantor of this Guaranty and the consummation of the transactions
contemplated hereunder do not, and will not, contravene or conflict with any
law, statute or regulation whatsoever to which Guarantor is subject or
constitute a default (or an event which with notice or lapse of time or both
would constitute a default) under, or result in the breach of, any indenture,
mortgage, deed of trust, charge, lien, or any contract, agreement or other
instrument to which Guarantor is a party or which may be applicable to
Guarantor.  This Guaranty is a legal and
binding obligation of Guarantor and is enforceable in accordance with its
terms, except as limited by bankruptcy, insolvency or other laws of general
application relating to the enforcement of creditors’ rights.

Section 3.06         Litigation.  There are no actions, suits or proceedings at
law or in equity by or before any Governmental Authority or other agency now
pending or threatened against or affecting Guarantor which, if determined
adversely to Guarantor, could have a material adverse effect on its ability to
pay its obligations hereunder.

 8
 

 

Section 3.07         Survival.  All representations and warranties made by
Guarantor herein shall survive the execution hereof.

ARTICLE
IV.        

SUBORDINATION OF CERTAIN INDEBTEDNESS

Section 4.01         Subordination
of All Guarantor Claims.  As used herein, the term “Guarantor Claims”
shall mean all debts and liabilities of Borrower to Guarantor, whether such
debts and liabilities now exist or are hereafter incurred or arise, or whether
the obligations of Borrower thereon be direct, contingent, primary, secondary,
several, joint and several, or otherwise, and irrespective of whether such
debts or liabilities be evidenced by note, contract, open account, or
otherwise, and irrespective of the person or persons in whose favor such debts
or liabilities may, at their inception, have been, or may hereafter be created,
or the manner in which they have been or may hereafter be acquired by
Guarantor.  The Guarantor Claims shall
include without limitation all rights and claims of Guarantor against Borrower
(arising as a result of subrogation or otherwise) as a result of Guarantor’s
payment of all or a portion of the Guaranteed Obligations.  Upon the occurrence and during the
continuance of an Event of Default, Guarantor shall not receive or collect,
directly or indirectly, from Borrower or any other party any amount upon the
Guarantor Claims.

Section 4.02         Claims
in Bankruptcy. 
In the event of receivership, bankruptcy, reorganization, arrangement,
debtor’s relief, or other insolvency proceedings involving Guarantor as debtor,
Lender shall have the right to prove its claim in any such proceeding so as to
establish its rights hereunder and receive directly from the receiver, trustee
or other court custodian dividends and payments which would otherwise be
payable upon Guarantor Claims.  Guarantor
hereby assigns such dividends and payments to Lender.  Should Lender receive, for application
against the Guaranteed Obligations, any such dividend or payment which is
otherwise payable to Guarantor, and which, as between Borrower and Guarantor,
shall constitute a credit against the Guarantor Claims, then upon payment to
Lender in full of the Guaranteed Obligations, Guarantor shall become subrogated
to the rights of Lender to the extent that such payments to Lender on the
Guarantor Claims have contributed toward the liquidation of the Guaranteed
Obligations, and such subrogation shall be with respect to that proportion of
the Guaranteed Obligations which would have been unpaid if Lender had not
received dividends or payments upon the Guarantor Claims.

Section 4.03         Payments
Held in Trust. 
In the event that, notwithstanding anything to the contrary in this
Guaranty, Guarantor should receive any funds, payment, claim or distribution
which is prohibited by this Guaranty, Guarantor agrees to hold in trust for
Lender an amount equal to the amount of all funds, payments, claims or
distributions so received, and Guarantor covenants promptly to pay the same to
Lender.

Section 4.04         Liens
Subordinate. 
Guarantor agrees that any liens, security interests, judgment liens,
charges or other encumbrances upon Borrower’s assets 

 9
 

 

securing payment of the Guarantor Claims shall be and remain inferior
and subordinate to any liens, security interests, judgment liens, charges or
other encumbrances upon Borrower’s assets securing payment of the Guaranteed Obligations,
regardless of whether such encumbrances in favor of Guarantor or Lender
presently exist or are hereafter created or attach.  Without the prior written consent of Lender,
Guarantor shall not (i) exercise or enforce any creditor’s right it may have
against Borrower, or (ii) foreclose, repossess, sequester or otherwise take
steps or institute any action or proceedings (judicial or otherwise, including
without limitation the commencement of, or joinder in, any liquidation,
bankruptcy, rearrangement, debtor’s relief or insolvency proceeding) to enforce
any liens, mortgage, deeds of trust, security interests, collateral rights,
judgments or other encumbrances on assets of Borrower held by Guarantor.

ARTICLE
V.

MISCELLANEOUS

Section 5.01         Waiver.  No failure to exercise, and no delay in
exercising, on the part of Lender, any right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right.  The rights of Lender hereunder shall be in
addition to all other rights provided by law. 
No modification or waiver of any provision of this Guaranty, nor consent
to departure therefrom, shall be effective unless in writing and no such
consent or waiver shall extend beyond the particular case and purpose
involved.  No notice or demand given in
any case shall constitute a waiver of the right to take other action in the
same, similar or other instances without such notice or demand.

Section 5.02         Notices.  All notices, consents, approvals and requests
required or permitted hereunder shall be given in writing and shall be
effective for all purposes if hand delivered or sent by (a) certified or
registered United States mail, postage prepaid, return receipt requested or (b)
expedited prepaid delivery service, either commercial or United States Postal
Service, with proof of attempted delivery, and by telecopier (with answer back
acknowledged), addressed as follows (or at such other address and Person as
shall be designated from time to time by any party hereto, as the case may be,
in a written notice to the other parties hereto in the manner provided for in
this Section):

	
  Guarantor:

  	
   

  	
  c/o Behringer Harvard Funds 

  15601 Dallas Parkway, Suite 600 

  Addison, Texas 75001 

  Attention: Gerald J. Reihsen, III 

  Facsimile: 214-655-1610

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  Luce, Forward, Hamilton & Scripps LLP 

  600 West Broadway, Suite 2600 

  San Diego, CA 92101-3391 

  Attention: Darryl Steinhause, Esq. 

  Facsimile: 619-645-5340

  

 

 10
 

 

 

	
  Lender:

  	
   

  	
  KeyBank National Association 

  911 Main Street, Suite 1500 

  Kansas City, Missouri 64105 

  Attention: Servicing 

  Facsimile: 816-221-8848

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  NorthMarq Capital Inc. 

  3500 American Boulevard West, Suite 500 

  Bloomington, Minnesota 55431 

  Attention: [Karen Pribnow] 

  Facsimile:
  [                     ]

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  Alston & Bird LLP 

  90 Park Avenue 

  New York, New York 10016 

  Attention: Joseph P. Forte, Esq. 

  Facsimile: 212-210-9444

  

 

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 expedited prepaid delivery and telecopy, upon the first attempted
delivery on a Business Day.

Section 5.03         Governing
Law.  This
Guaranty shall be governed by and construed in accordance with the laws of the
state in which the Property is located (without regard to any conflict of laws
or principles) and the applicable laws of the United States of America.

Section 5.04         Invalid
Provisions. 
If any provision of this Guaranty is held to be illegal, invalid, or
unenforceable under present or future laws effective during the term of this
Guaranty, such provision shall be fully severable and this Guaranty shall be
construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part of this Guaranty, and the remaining provisions of
this Guaranty shall remain in full force and effect and shall not be affected
by the illegal, invalid or unenforceable provision or by its severance from
this Guaranty, unless such continued effectiveness of this Guaranty, as
modified, would be contrary to the basic understandings and intentions of the
parties as expressed herein.

Section 5.05         Amendments.  This Guaranty may be amended only by an
instrument in writing executed by the party or an authorized representative of
the party against whom such amendment is sought to be enforced.

 11
 

 

Section 5.06         Parties
Bound; Assignment; Joint and Several.  This Guaranty shall be binding upon and inure
to the benefit of the parties hereto and their respective successors, assigns
and legal representatives; provided, however, that Guarantor may not, without
the prior written consent of Lender, assign any of its rights, powers, duties
or obligations hereunder.  If Guarantor
consists of more than one person or party, the obligations and liabilities of
each such person or party shall be joint and several.

Section 5.07         Headings.  Section headings are for convenience of
reference only and shall in no way affect the interpretation of this Guaranty.

Section 5.08         Recitals.  The recital and introductory paragraphs
hereof are a part hereof, form a basis for this Guaranty and shall be
considered prima facie evidence of the facts and documents referred to therein.

Section 5.09         Counterparts.  To facilitate execution, this Guaranty may be
executed in as many counterparts as may be convenient or required.  It shall not be necessary that the signature
of, or on behalf of, each party, or that the signature of all persons required
to bind any party, appear on each counterpart. 
All counterparts shall collectively constitute a single instrument.  It shall not be necessary in making proof of
this Guaranty to produce or account for more than a single counterpart
containing the respective signatures of, or on behalf of, each of the parties
hereto. Any signature page to any counterpart may be detached from such
counterpart without impairing the legal effect of the signatures thereon and
thereafter attached to another counterpart identical thereto except having
attached to it additional signature pages.

Section 5.10         Rights
and Remedies. 
If Guarantor becomes liable for any indebtedness owing by Borrower to
Lender, by endorsement or otherwise, other than under this Guaranty, such
liability shall not be in any manner impaired or affected hereby and the rights
of Lender hereunder shall be cumulative of any and all other rights that Lender
may ever have against Guarantor.  The
exercise by Lender of any right or remedy hereunder or under any other
instrument, or at law or in equity, shall not preclude the concurrent or
subsequent exercise of any other right or remedy.

Section 5.11         Other
Defined Terms. 
Any capitalized term utilized herein shall have the meaning as specified
in the Loan Agreement, unless such term is otherwise specifically defined
herein.

Section 5.12         Entirety.  THIS
GUARANTY EMBODIES THE FINAL, ENTIRE AGREEMENT OF GUARANTOR AND LENDER WITH
RESPECT TO GUARANTOR’S GUARANTY OF THE GUARANTEED OBLIGATIONS AND SUPERSEDES
ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS,
WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF.  THIS GUARANTY IS INTENDED BY GUARANTOR AND
LENDER AS A FINAL AND COMPLETE EXPRESSION OF THE TERMS OF THE GUARANTY, AND NO
COURSE OF DEALING BETWEEN GUARANTOR AND 

 12
 

 

LENDER, NO COURSE OF PERFORMANCE, NO TRADE
PRACTICES, AND NO EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OR DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE OF ANY NATURE (OTHER THAN
AN AMENDMENT EXECUTED IN ACCORDANCE WITH THE PROVISIONS HEREOF OR A WRITTEN
WAIVER EXECUTED BY LENDER) SHALL BE USED TO CONTRADICT, VARY, SUPPLEMENT OR
MODIFY ANY TERM OF THIS GUARANTY AGREEMENT. 
THERE ARE NO ORAL AGREEMENTS BETWEEN GUARANTOR AND LENDER.

Section 5.13         Waiver
of Right To Trial By Jury.  GUARANTOR
HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY
JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH
RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THIS GUARANTY, THE NOTE, THE
LOAN AGREEMENT, THE SECURITY INSTRUMENT, OR THE OTHER LOAN DOCUMENTS, OR ANY
CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH.  THIS WAIVER OF RIGHT TO TRIAL BY JURY IS
GIVEN KNOWINGLY AND VOLUNTARILY BY GUARANTOR, AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY
JURY WOULD OTHERWISE ACCRUE.  LENDER IS
HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS
CONCLUSIVE EVIDENCE OF THIS WAIVER BY GUARANTOR.

Section 5.14         Cooperation.  Guarantor acknowledges that Lender and its
successors and assigns may (i) sell this Guaranty, the Note and other Loan Documents
to one or more investors as a whole loan, (ii) participate the Loan secured by
this Guaranty to one or more investors, (iii) deposit this Guaranty, the Note
and other Loan Documents with a trust, which trust may sell certificates to
investors evidencing an ownership interest in the trust assets, or (iv)
otherwise sell the Loan or interest therein to investors (the transactions
referred to in clauses (i) through (iv) are hereinafter each referred to as “Secondary Market Transaction”).  Guarantor shall cooperate with Lender in
effecting any such Secondary Market Transaction and shall cooperate to
implement all customary and reasonable requirements imposed by any Rating
Agency or potential investor involved in any Secondary Market Transaction.  Guarantor shall provide such information and
documents relating to Guarantor as Lender may reasonably request in connection
with such Secondary Market Transaction. 
In addition, Guarantor shall make available to Lender all information
concerning its business and operations that Lender may reasonably request.  Lender shall be permitted to share all such
information with the investment banking firms (or other potential investors),
Rating Agencies, accounting firms, law firms and other third-party advisory
firms involved with the Loan and the Loan Documents or the applicable Secondary
Market Transaction.  It is understood
that the information provided by Guarantor to Lender may ultimately be
incorporated into the offering documents for the Secondary Market Transaction and
thus various investors may also see some or all of the information.  Lender and all of the aforesaid third-party 

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advisors and professional firms shall be entitled to rely on the
information supplied by, or on behalf of, Guarantor in the form as provided by
Guarantor.  Lender may publicize the
existence of the Loan in connection with its marketing for a Secondary Market
Transaction or otherwise as part of its business development.  All reasonable third party costs and expenses
incurred by Guarantor in connection with Guarantor’s complying with requests
made under this Section 5.14 shall be paid by Lender.

Section 5.15         Waiver
of Suretyship Defenses.   Guarantor hereby waives the right of the
Guarantor to require any holder of the Guaranteed Obligations to take action
against the Borrower as provided in Official Code of Georgia Annotated
§10-7-24.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS
WHEREOF, the undersigned have executed this Guaranty as of the date and year
first written above.

	
  

  	
  GUARANTOR:

  
	
   

  	
   

  
	
   

  	
  [SEE SEPARATE SIGN PAGE]

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