Document:

exv10w3

EXHIBIT 10.3

AFTER RECORDING RETURN TO:

Charles C. Benedict, Esq.

Womble Carlyle Sandridge & Rice, PLLC

1201 W. Peachtree Street, Suite 3500

Atlanta, Georgia 30309

STATE OF GEORGIA

COUNTY OF FULTON

ASSIGNMENT OF LEASES AND RENTS

     THIS ASSIGNMENT OF LEASES AND RENTS (hereinafter referred to as this “Assignment”), made and
entered into this 17th day of July, 2002, by and between 1945 THE EXCHANGE, LLC, a Georgia limited
liability company (hereinafter referred to as “Borrower”), and THE OHIO NATIONAL LIFE INSURANCE
COMPANY, an Ohio corporation (hereinafter referred to as “Lender”).

W I T N E S S E T H:

     THAT FOR AND IN CONSIDERATION of the sum of Ten and No/100 Dollars ($10.00) and other good and
valuable considerations, the receipt and sufficiency whereof are hereby acknowledged, and in order
to secure the indebtedness and other obligations of Borrower hereinafter set forth, Borrower does
hereby grant, transfer and assign to Lender, its successors, successors-in-title and assigns, all
of Borrower’s right, title and interest in, to and under all of those certain leases and rental
agreements more particularly described in Exhibit “B” attached hereto and by this reference
made a part hereof, including any and all extensions, renewals and modifications thereof and
guaranties of the performance or obligations of any tenants or lessees thereunder (said leases and
agreements are hereinafter referred to collectively as the “Leases”, and said tenants and lessees
are hereinafter referred to collectively as “Tenants” or individually as a “Tenant” as the context
requires), which Leases cover portions of certain property (hereinafter referred to as the
“Premises”) located in Cobb County, Georgia, more particularly described in Exhibit “A”
attached hereto and by this reference made a part hereof; together with all of Borrower’s right,
title and interest in and to all rents, issues and profits from the Leases and from the Premises.

 

 

     TO HAVE AND TO HOLD unto Lender, its successors and assigns forever, subject to and upon the
terms and conditions set forth herein.

     This Assignment is made for the purpose of securing (a) the full and prompt payment when due,
whether by acceleration or otherwise, with such interest as may accrue thereon, either before or
after maturity thereof, of that certain Real Estate Note (hereinafter referred to as the “Note”)
dated of even date herewith, made by Borrower to the order of Lender in the principal face amount
of Four Million Nine Hundred Thousand and No/100 Dollars ($4,900,000.00), together with any
renewals, modifications, consolidations and extensions thereof; (b) the full and prompt payment and
performance of any and all obligations of Borrower to Lender under the terms of that certain Deed
to Secure Debt and Security Agreement (hereinafter referred to as the “Security Deed”) made by
Borrower in favor of Lender dated of event date herewith and conveying the Premises to secure the
indebtedness evidenced by the Note; and (c) the full and prompt payment and performance of any and
all other obligations of Borrower to Lender under any other instruments now or hereafter
evidencing, securing or otherwise relating to the indebtedness evidenced by the Note (the Note,
Security Deed and said other instruments are hereinafter referred to collectively as the “Loan
Documents”, and “Indebtedness”).

ARTICLE I

WARRANTIES AND COVENANTS

     1.01 Warranties of Borrower: Borrower hereby warrants and represents as follows:

     (a) Borrower is the sole holder of the landlord’s interest under the Leases, is
entitled to receive the rents, issues and profits from the Leases and from the Premises, and
has good right to sell, assign, transfer and set over the same and to grant to and confer
upon Lender the rights, interests, powers and authorities herein granted and conferred;

     (b) Borrower has made no assignment other than this Assignment of any of the rights of
Borrower under any of the Leases or with respect to any of said rents, issues or profits,
except for an assignment to a lender which is being paid and cancelled from the proceeds of
the Note;

     (c) Borrower has neither done any act nor omitted to do any act which might prevent
Lender from, or limit Lender in, acting under any of the provisions of this Assignment;

     (d) All Leases provide for rental to be paid monthly, in advance, and Borrower has not
accepted payment of rental under any of the Leases for more than one (1) month in advance of
the due date thereof;

     (e) There exists no default or event of default or any state of facts which would, with
the passage of time or the giving of notice, or both, constitute a default or

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event of default on the part of Borrower or by any Tenant under the terms of any of the
Leases;

     (f) Neither the execution and delivery of this Assignment or any of the Leases, the
performance of each and every covenant of Borrower under this Assignment and the Leases, or
the meeting of each and every condition contained in this Assignment, conflicts with, or
constitutes a breach or default under any agreement, indenture or other instrument to which
Borrower is a party, or any law, ordinance, administrative regulation or court decree which
is applicable to Borrower;

     (g) No action has been brought or is threatened, which would interfere in any way with
the right of Borrower to execute this Assignment and perform all of Borrower’s obligations
contained in this Assignment of Leases; and

     (h) The Leases are valid, enforceable and in full force and effect, and have not been
modified or amended, except as expressly set forth in said Exhibit “B” attached
hereto.

     1.02 Covenants of Borrower. Borrower hereby covenants and agrees as follows:

     (a) Borrower shall give Lender prompt written notice of its intention to let all or any
portion of the Premises, and all leases now or hereafter entered into will be in form and
substance subject to the prior, written approval of Lender. As an accommodation to
Borrower, Lender will approve a standard lease form. Notwithstanding the approval of a
standard lease form, Lender specifically reserves the right to approve each lease
hereinafter entered into wherein (i) the tenant occupies more than five percent (5%) of the
net leasable area of the improvements; (ii) where the lease term, excluding renewal options,
exceeds three (3) years; (iii) where the use of the premises may be different than the
standard building use regardless of length of lease term or square footage; (iv) where the
use may be potentially hazardous (x-ray laboratories, etc.); or (v) where there are
restrictions on competing stores in a shopping center or other similar project. Borrower
may deal with smaller tenants (those taking five percent [5%] of the space or less) in the
ordinary course of business without Lender’s consent. Lender shall notify Borrower within
ten (10) business days after receipt from Borrower of a request to approve a lease requiring
approval together with receipt of the required relevant information if Lender does not
approve the lease. In the event that Lender does not notify Borrower that Lender has not
approved the proposed lease within ten (10) business days, the lease shall be deemed
approved;

     (b) Borrower shall (i) fulfill, perform and observe each and every condition and
covenant of landlord or lessor contained in each of the Leases; (ii) give prompt notice to
Lender of any claim of default under any of the Leases, whether given by a Tenant to
Borrower, or given by Borrower to a Tenant, together with a complete copy of any such
notice; (iii) at no cost or expense to Lender, enforce, short of termination, the
performance and observance of each and every covenant and condition of each of the Leases to
be performed or observed by the Tenant thereunder; and (iv) appear in and

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defend any action arising out of, or in any manner connected with, any of the Leases,
or the obligations or liabilities of Borrower as the landlord thereunder, or of the Tenant
or any guarantor thereunder;

     (c) Borrower shall not, without the prior written consent of Lender (i) modify any of
the Leases; (ii) terminate the term or accept the surrender of any of the Leases; (iii)
waive or release a Tenant from the performance or observance by a Tenant of any obligation
or condition of any of the Leases; (iv) permit the prepayment of any rents under any of the
Leases for more than one (1) month prior to the accrual thereof; (v) give any consent to any
assignment or sublease by a Tenant under any of the Leases unless such Tenant remains
primarily liable on the lease and the lease is not otherwise modified; or (vi) assign its
interest in, to or under the Leases or the rents, issues and profits from the Leases and
from the Premises to any person or entity other than Lender;

     The foregoing part of this Section 1.02(c) to the contrary notwithstanding, Borrower
shall have the following rights respecting the Leases without having to obtain the prior
written consent of Lender: (w) Borrower may deal with smaller tenants (those leasing five
percent (5%) of the space or less) in the ordinary course of business, including, without
limitation, any of the matters specified above in Section 1.02(c) which would otherwise
require Lender’s consent but for this item (w); (x) as provided in the existing License
Agreement with Abrams Industries, Inc., Borrower, as landlord, may terminate the License
Agreement for the 4,210 square feet (Suite 300) by providing thirty (30) days’ prior written
notice to the Tenant but only in the event that Borrower has entered into a lease for said
space under terms approved in writing by Lender with a tenant having a business reputation
and credit worthiness approved in writing by Lender, which approvals shall not be
unreasonably withheld; (y) Borrower may give consent to any assignment by a Tenant under any
of the Leases in the event the assignment is to a new tenant having better credit than the
assigning Tenant, such new tenant, and its business reputation and credit, being subject to
the written approval of Lender which shall not be unreasonably withheld; and (z) with
respect to all Leases, Borrower may act in the ordinary course of business as market
conditions dictate and in a commercially reasonable manner subject, however, to Lender’s
right to consent to and/or approval of certain matters as set forth in this Section 1.02,
such consent and/or approval not to be unreasonably withheld.

     In addition, with respect to any written consent and/or approval of Lender pursuant to
this Section 1.02(c), Lender shall notify Borrower if Lender does not consent to or approve
such matter within ten (10) business days after receipt from Borrower of a request to
consent to or approve of any of the matters requiring Lender’s consent or approval together
with receipt of the required relevant information. In the event that Lender does not notify
Borrower that Lender has not consented to or approved the requested matter within ten (10)
business days, the requested matter shall be deemed consented to or approved by Lender.

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     (d) Borrower shall take no action which will cause or permit the estate of a Tenant
under any of the Leases to merge with the interest of Borrower in the Premises or any
portion thereof;

     (e) Borrower shall protect, indemnify and save harmless Lender from and against all
liabilities, obligations, claims, damages, penalties, causes of action, costs and expenses
(including, without limitation, attorneys’ fees and expenses) imposed upon or incurred by
Lender by reason of this Assignment and any claim or demand whatsoever which may be asserted
against Lender by reason of any alleged obligation or undertaking to be performed or
discharged by Borrower under this Assignment. In the event Lender incurs any liability,
loss or damage by reason of this Assignment, or in the defense of any claim or demand
arising out of or in connection with this Assignment, the amount of such liability, loss or
damage shall be added to the Indebtedness, shall bear interest at the default interest rate
specified in the Note from the date incurred until paid and shall be payable on demand; and

     (f) Subject to Article 1.03(a), Borrower shall authorize and direct, and does hereby
authorize and direct, each and every present and future Tenant of the whole or any part of
the Premises to pay all rentals to Lender upon receipt of written demand from Lender to so
pay the same.

     1.03 Covenants of Lender. Lender hereby covenants and agrees with Borrower as
follows:

     (a) Although this Assignment constitutes a present and current assignment of all rents,
issues and profits from the Premises, so long as there shall exist no Event of Default, as
defined in Paragraph 2.01 below, on the part of Borrower, Lender shall not demand that such
rents, issues and profits be paid directly to Lender, and Borrower shall have the right to
collect, but not more than one (1) month prior to accrual, all such rents, issues and
profits from the Premises (including, but not by way of limitation, all rental payments
under the Leases); and

     (b) Upon the payment in full of the Indebtedness, as evidenced by the recording or
filing of an instrument of satisfaction or full release of the Security Deed without the
recording of another Security Deed in favor of Lender affecting the Premises, this
Assignment shall be terminated and released of record by Lender and shall thereupon be of no
further force and effect.

ARTICLE II

DEFAULT

     2.01 Event of Default. The term, “Event of Default”, wherever used in this
Assignment, shall mean any of one or more of the following events:

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     (a) The occurrence of any “default” or “Event of Default” under any of the Loan
Documents;

     (b) The failure by Borrower duly and fully to comply with any covenant, condition or
agreement of this Assignment not cured within thirty (30) days following written notice
thereof from Lender to Borrower; or

     (c) The breach of any warranty by Borrower contained in this Assignment.

     2.02 Remedies. Upon the occurrence of any Event of Default after the expiration of
any applicable cure period, Lender may at its option, with or without notice or demand of any kind,
exercise any or all of the following remedies:

     (a) Declare any part or all of the Indebtedness to be due and payable, whereupon the
same shall become immediately due and payable;

     (b) Perform any and all obligations of Borrower under any or all of the Leases or this
Assignment and exercise any and all rights of Borrower herein and therein as fully as
Borrower itself could do, including, without limiting the generality of the foregoing;
enforcing, modifying, extending or terminating any or all of the Leases; collecting,
modifying, compromising, waiving or increasing any or all of the rents payable thereunder;
and obtaining new tenants and entering into new leases on the Premises on any terms and
conditions deemed desirable by Lender, and to the extent Lender shall incur any costs in
connection with the performance of any such obligations of Borrower, including costs of
litigation, then all such costs shall become a part of the Indebtedness, shall bear interest
from the incurring thereof at the default interest rate specified in the Note, and shall be
due and payable on demand;

     (c) In Borrower’s or Lender’s name, institute any legal or equitable action which
Lender in its sole discretion deems desirable to collect and receive any or all of the
rents, issues and profits assigned herein; and

     (d) Collect the rents, issues and profits and any other sums due under the Leases and
with respect to the Premises, and apply the same in such order as Lender in its sole
discretion may elect against (i) all costs and expenses, including reasonable attorneys’
fees, incurred in connection with the operation of the Premises, the performance of
Borrower’s obligations under the Leases and collection of the rents thereunder; (ii) all the
costs and expenses, including reasonable attorneys’ fees, incurred in the collection of any
or all of the Indebtedness, including all costs, expenses and attorneys’ fees incurred in
seeking to realize on or to protect or preserve Lender’s interest in any other collateral
securing any or all of the Indebtedness; and (iii) any or all unpaid principal and interest
on the Indebtedness.

     Lender shall have full right to exercise any or all of the foregoing remedies without regard
to the adequacy of security for any or all of the Indebtedness, and with or without the
commencement of any legal or equitable action or the appointment of any receiver or trustee, and
shall have full right to enter upon, take possession of, use and operate all or any portion of the

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Premises which Lender, in its sole discretion, deems desirable to effectuate any or all of the
foregoing remedies.

ARTICLE III

GENERAL PROVISIONS

     3.01 Successors and Assigns. This Assignment shall inure to the benefit of and be
binding upon Borrower and Lender and their respective heirs, executors, legal representatives,
successors and assigns. Whenever a reference is made in this Assignment to “Borrower” or “Lender”,
such reference shall be deemed to include a reference to the heirs, executors, legal
representatives, successors and assigns of Borrower or Lender.

     3.02 Terminology. All personal pronouns used in this Assignment, whether used in the
masculine, feminine or neuter gender, shall include all other genders, and the singular shall
include the plural, and vice versa. Titles of Articles are for convenience only and neither limit
nor amplify the provisions of this Assignment.

     3.03 Severability. If any provision of this Assignment or the application thereof to
any person or circumstance shall be invalid or unenforceable to any extent, the remainder of this
Assignment and the application of such provisions to other person or circumstances shall not be
affected thereby and shall be enforced to the greatest extent permitted by law.

     3.04 Applicable Law. This Assignment shall be interpreted, construed and enforced
according to the laws of the state wherein the Premises are situated.

     3.05 No Third Party Beneficiaries. This Assignment is made solely for the benefit of
Lender and its assigns. No Tenant under any of the Leases nor any other person shall have standing
to bring any action against Lender as the result of this Assignment, or to assume that Lender will
exercise any remedies provided herein, and no person other than Lender shall under any
circumstances be deemed to be a beneficiary of any provision of this Assignment.

     3.06 No Oral Modifications. Neither this Assignment nor any provisions hereof may be
changed, waived, discharged or terminated orally, but only by an instrument in writing signed by
the party against whom enforcement of the change, waiver, discharge or termination is sought.

     3.07 Cumulative Remedies. The remedies herein provided shall be in addition to or not
in substitution for the rights and remedies vested in Lender in any of the Loan Documents or in law
or equity, all of which rights and remedies are specifically reserved by Lender. The remedies
herein provided or otherwise available to Lender shall be cumulative and may be exercised
concurrently. The failure to exercise any of the remedies herein provided shall not constitute a
waiver thereof, or shall use of any of the remedies herein provided prevent the subsequent or
concurrent resort to any other remedy or remedies. It is intended that this clause shall be
broadly construed so that all remedies herein provided or otherwise available to Lender

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shall continue and be each and all available to Lender until the Indebtedness shall have been
paid in full.

     3.08 Cross-Default. An Event of Default by Borrower under this Assignment shall
constitute an event of Default under all other Loan Documents.

     3.09 Counterparts. This Assignment may be executed in any number of counterparts all
of which taken together shall constitute one and the same instrument, and any of the parties or
signatories hereto may execute this Assignment by signing any such counterpart.

     3.10 Further Assurances. At any time and from time to time upon request by Lender,
Borrower will make, execute and deliver or cause to be made, executed and delivered, to Lender and,
where appropriate, cause to be recorded and/or filed and from time to time thereafter to be
re-recorded and/or refiled at such time and in such offices and places as shall be deemed desirable
by Lender, any and all such other and further assignments, deeds to secure debt, mortgages, deeds
of trust, security agreements, financing statements, continuation statements, instruments of
further assurance, certificates and other documents as may, in the opinion of Lender, be necessary
or desirable in order to effectuate, complete or perfect, or to continue and preserve (a) the
obligations of Borrower under this Assignment and (b) the security interest created by this
Assignment as a first and prior security interest upon the Leases and the rents, issues and profits
from the Premises. Upon any failure of Borrower so to do, Lender may make, execute, record, file,
re-record and/or refile any and all such assignments, deeds to secure debt, mortgages, deeds of
trust, security agreements, financing statements, continuation statements, instruments,
certificates and documents for and in the name of Borrower, and Borrower hereby irrevocably
appoints Lender the agent and attorney-in-fact of Borrower so to do.

     3.11 Notices. Any and all notices, elections or demands permitted or required to be
made under this Assignment shall be in writing, signed by the party giving such notice, election or
demand and shall be delivered personally, or sent by registered or certified United States mail,
postage prepaid, to the other party at the address set forth below, or at such other address within
the continental United States of America as may have theretofore been designated in writing. The
time period in which a response to any notice, demand or request must be given, if any, shall
commence to run from the date of receipt of the notice, demand or request by the addressee thereof.
Rejection or other refusal to accept or the inability to deliver because of changed address of
which no notice was given shall be deemed to be receipt of the notice, demand or request sent. For
the purposes of this Assignment:

     The address of Lender is:

The Ohio National Life Insurance Company

One Financial Way

Cincinnati, Ohio 45242

     The address of Borrower is:

1945 The Exchange, LLC

c/o Abrams Properties, Inc.

1945 The Exchange S.E.

Suite 300

Atlanta, Georgia 30339

Attn: President

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     3.12 Modifications, Etc. Borrower hereby consents and agrees that Lender may at any
time and from time to time, without notice to or further consent from Borrower, either with or
without consideration, substitute for any collateral so held by it, other collateral equal in value
of like kind, or of any kind equal in value; agree to modification of the terms of the Note or the
Loan Documents; extend or renew the Note or any of the Loan Documents for any period; grant
releases, compromises and indulgences with respect to the Note or the Loan Documents to any persons
or entities now or hereafter liable thereunder or hereunder; or take or fail to take any action of
any type whatsoever; and no action which Lender shall take or fail to take in connection with the
Loan Documents, or any of them, or any security for the payment of the Indebtedness or for the
performance of any obligations or undertakings of Borrower, nor any course of dealing with Borrower
or any other person, shall release Borrower’s obligations hereunder, affect this Assignment in any
way or afford Borrower any recourse against Lender. The provisions of this Assignment shall extend
and be applicable to all renewals, amendments, extensions, consolidations and modifications of the
Loan Documents and the Leases, and any and all references herein to the Loan Documents or the
Leases shall be deemed to include any such renewals, amendments, extensions, consolidations or
modifications thereof.

     3.13 Reasonable Attorney’s Fees. Any reference made to the payment by Borrower to
Lender of attorney’s fees or of “reasonable attorney’s fees” shall mean and refer to the payment by
Borrower to Lender of actual attorney’s fees incurred based upon the attorney’s normal hourly rate
and the number of hours worked, and not the attorney’s fees statutorily defined in O.C.G.A. §
13-1-11.

     3.14 Non-Recourse. Section 3.06 of the Security Deed is hereby incorporated herein by
this reference as though fully set forth herein.

(Signature Page Follows)

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     IN WITNESS WHEREOF, Borrower has executed this Assignment under seal intending it to be
effective as of the day and year first above written.

	 	 	 	 	 	 	 	 	 	 

	Signed, sealed and delivered
in the presence of:	 	 	 	1945 THE EXCHANGE, LLC, a Georgia 
limited liability company	 
	 
	 	 	 	 	 	 	 	 
	/s/ [illegible]	 	 	 	By:	  Abrams Properties, Inc., a Georgia
	Unofficial Witness	 	 	 	 	  corporation, its sole member
	 
	 	 	 	 	 	 	 	 
	/s/ Catherine S. Moore
 

	 	 	 	 	 	 	 	 
	Notary Public

	 	 	 		By:	 	/s/ Melinda S. Garrett
	 

	 	 	 	 	 	 	Melinda S. Garrett, President
	[NOTARIAL SEAL]
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(CORPORATE SEAL)
	Commission Expiration Date:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	June 29, 2003
 

	 	 	 	 	 	 	 	 

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EXHIBIT “B”

LEASES

Any and all other leases and usufructs and arrangements of any sort now or hereafter affecting the
Premises and providing for or resulting in the payment of money to Borrower for the use of the
Premises or any part thereof, whether the user enjoys the Premises or any part thereof as tenant
for years, invitee, licensee, tenant at sufferance or otherwise, and irrespective of whether such
arrangements are oral or written.

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EXHIBIT 10.4

UNCONDITIONAL GUARANTY OF PAYMENT AND PERFORMANCE

     THIS GUARANTY is made as of the 17th day of July, 2002, by ABRAMS PROPERTIES, INC., a Georgia
corporation (“Guarantor”), in favor of THE OHIO NATIONAL LIFE INSURANCE COMPANY, an Ohio
corporation (“Lender”).

ARTICLE I — BACKGROUND AND AGREEMENT

     1.01 Background. Lender has agreed to make a loan (the “Loan”) in the principal
amount of $4,900,000.00 to 1945 The Exchange, LLC, a Georgia limited liability company
(“Borrower”), as evidenced by that certain real estate note (the “Note”) in the aforesaid principal
amount, made by Borrower in favor of Lender, dated as of even date; the Loan will be of direct
interest and advantage to Guarantor; and a condition to the making of the Loan is the delivery of
this Guaranty to Lender.

     1.02 Statement of Agreement. For and in consideration of the sum of $10.00 and other
valuable consideration, the receipt and sufficiency of which are hereby acknowledged by Guarantor,
and for the purpose of seeking to induce Lender to extend credit to Borrower, Guarantor does hereby
make the following guarantees to and agreements with Lender.

ARTICLE II — GUARANTEES AND INDEMNIFICATIONS

     2.01 Guaranty of Payment. Guarantor does hereby unconditionally guarantee to Lender
the full and prompt payment of any amounts or sums due under the exceptions (terms (a) through (l)
to the non-recourse or limitations of liability provisions set forth in the last paragraph
beginning on the bottom of page 3 of the Note and continuing on pages 4, 5 and 6 of the Note
through the paragraph beginning “The obligations of Maker ...” and in Paragraph 3.06 (“Non
Recourse”) of the Deed to Secure Debt and Security Agreement (the “Deed to Secure Debt”,
collectively, with the Note, the “Loan Documents”). Guarantor also does hereby unconditionally
guarantee to Lender, that in the event the Lease (the “Lease”) from Borrower to jOjA Partners, LLC
of Suite 1445, 1945 The Exchange, Atlanta, Georgia 30339 is terminated by jOjA Partners, LLC
pursuant to the Asset Management Agreement between jOjA Partners, LLC and Guarantor, Guarantor will
pay to Borrower any amounts or sums which would have been owing to Borrower through December 31,
2003 pursuant to the Lease had the Lease not been so terminated.

     2.02 Guaranty of Performance. Guarantor does hereby unconditionally guarantee to
Lender the full and prompt payment and performance of any and all obligations and indemnifications
whatsoever of and by Borrower to Lender under the terms of the Environmental Indemnification
Agreement of even date from Borrower in favor of Lender, whether such obligations now exist or
arise hereafter.

     2.03 Guaranteed Obligations. Guarantor does hereby agree that if such sums described
in Sections 2.01 and 2.02 which are now or may hereafter become due from Borrower to Lender

 

 

under the Loan Documents are not paid by Borrower in accordance with their terms for any
reason whatsoever, Guarantor will immediately make such payments. Guarantor further agrees to pay
Lender all expenses (including, without limitation, reasonable attorneys’ fees as defined in
Paragraph 3.07 of the Deed to Secure Debt) paid or incurred by Lender in endeavoring to enforce
this Guaranty.

     2.04 ADA and FHA Indemnity. Guarantor shall and hereby does unconditionally indemnify
and hold Lender harmless from and against any and all obligations, liabilities, losses, damages,
fees and expenses Lender may incur resulting from, as well as to rectify, any noncompliance with
The Americans with Disabilities Act, The Fair Housing Act of 1988 or other assessability act with
respect to the Premises or the Secured Property Improvements (as those terms are defined in the
Deed to Secure Debt).

     2.05 Exceptions to Non Recourse Indemnity, et. al. Guarantor, together with Borrower,
shall become personally liable, jointly and severally, for the entire amount of the Loan (including
all principal, interest, and other charges under the Note) in the event that Borrower (1) violates
the covenant governing the placing of subordinate financing on the Premises or the Secured Property
Improvements (as those terms are defined in the Deed to Secure Debt) or (2) violates the covenant
restricting transfers of interests in the Premises or the Secured Property Improvements or
transfers of ownership interests in Borrower, all as prohibited by the Deed to Secure Debt. The
obligations of Guarantor with respect to subparagraphs (a) through (k) in Paragraph 3.06 of the
Deed to Secure Debt, and with respect to the indemnities contained in Section 2.04 above, shall
survive the repayment and satisfaction of the Note.

     2.06 Loan Documents. The provisions of this Guaranty shall extend and be applicable
to all renewals, replacements, amendments, extensions, consolidations and modifications of the Loan
Documents, and any and all references herein to the Loan Documents or any of them shall be deemed
to include any such renewals, replacements, amendments, extensions, consolidations or modifications
thereof.

ARTICLE III — AGREEMENTS AND WARRANTIES

     3.01 Consents. Guarantor hereby consents and agrees that Lender may at any time, and
from time to time, without notice to or further consent from Guarantor, either with or without
consideration: release and surrender any property or other security of any kind or nature
whatsoever now or hereafter held by it or by any person or entity on its behalf or for its account,
securing any indebtedness or liability hereby guaranteed (the “Collateral”); substitute for any
Collateral held by or on behalf of Lender other collateral of like kind, or of any kind; make other
advances or increase the amount of the Loan; agree to modify the terms of any one or more of the
Loan Documents; extend or renew the Note for any period; grant releases, compromises and
indulgences with respect to any one or more of the Loan Documents and to any persons or entities
now or hereafter liable thereunder or hereunder; release any other guarantor or endorser of or
other person or entity liable upon the Note or any other of the Loan Documents; or take or fail to
take any action of any type whatsoever. No such action which Lender shall take or fail to take in
connection with the Loan Documents or any Collateral, nor any course of dealing with Borrower or
any other person, shall limit, impair or release Guarantor’s obligations hereunder,

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affect this Guaranty in any way or afford Guarantor any recourse against Lender. Nothing
contained in this section shall be construed to require Lender to take or refrain from taking any
action referred to herein.

     3.02 Waiver and Subordination. Guarantor hereby expressly waives any right of
contribution from or indemnity against Borrower, whether at law or in equity, arising from any
payments made by Guarantor pursuant to the terms of this Guaranty, and Guarantor acknowledges that
Guarantor has no right whatsoever to proceed against Borrower for reimbursement of any such
payments. In connection with the foregoing, Guarantor expressly waives any and all rights of
subrogation to Lender against Borrower, and Guarantor hereby waives any rights to enforce any
remedy which Lender may have against Borrower and any rights to participate in any Collateral. In
addition to and without in any way limiting the foregoing, Guarantor hereby subordinates any and
all indebtedness of Borrower now or hereafter owed to Guarantor to all indebtedness of Borrower to
Lender, and agrees with Lender that Guarantor shall not demand or accept any payment of principal
or interest from Borrower, shall not claim any offset or other reduction of Guarantor’s obligations
hereunder because of any such indebtedness and shall not take any action to obtain any of the
Collateral.

     3.03 Waiver of Defenses. Guarantor hereby waives and agrees not to assert or take
advantage of any defense based upon: (a) any incapacity, lack of authority, death or disability of
Guarantor or any other person or entity; (b) any failure of Lender to commence an action against
Borrower or any other person or entity (including, without limitation, other guarantors, if any),
or to file or enforce a claim against the estate (either in administration, bankruptcy, or any
other proceeding) of Borrower or any other person or entity, whether or not demand is made upon
Lender to file or enforce such claim; (c) any failure of Lender to give notice of the existence,
creation or incurring of any new or additional indebtedness or other obligation or of any action or
nonaction on the part of any other person or entity, in connection with the Loan Documents or any
obligation hereby guaranteed; (d) any failure on the part of Lender to ascertain the extent or
nature of the Collateral or any insurance or other rights with respect thereto, or the liability of
any party liable for the Loan Documents or the obligations evidenced or secured thereby, or any
failure on the part of Lender to disclose to Guarantor any facts it may now or hereafter know
regarding Borrower, the Collateral, or such other parties; (e) any lack of acceptance or notice of
acceptance of this Guaranty by Lender; (f) any lack of presentment, demand, protest, or notice of
demand, protest or nonpayment with respect to any indebtedness or obligations under any of the Loan
Documents; (g) any lack of notice of disposition or of manner of disposition of any Collateral; (h)
any lack of other notices to which Guarantor might otherwise be entitled; (i) failure to properly
record any document or any other lack of due diligence by Lender in creating or perfecting a
security interest in or collection, protection or realization upon any Collateral or in obtaining
reimbursement or performance from any person or entity now or hereafter liable for the Loan
Documents or any obligation secured thereby; (j) any invalidity, irregularity or unenforceability,
in whole or in part, of any one or more of the Loan Documents; (k) the inaccuracy of any
representation or other provision contained in any Loan Document; (l) any sale or assignment of the
Loan Documents, in whole or in part; (m) any sale or assignment by Borrower of the Collateral, or
any portion thereof, whether or not consented to by Lender; (n) any lack of commercial
reasonableness in dealing with Collateral; (o) any deficiencies in the Collateral or any deficiency
in the ability of Lender to collect or obtain

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performance from any
persons or entities now or hereafter liable for the payment or performance of any obligation
hereby guaranteed; (p) an assertion or claim that the automatic stay provided by 11 U.S.C. §362
(arising upon the voluntary or involuntary bankruptcy proceeding of Borrower), or any other stay
provided under any other debtor relief law (whether statutory, common law, case law or otherwise)
of any jurisdiction whatsoever, now or hereafter in effect, which may be or become applicable,
shall operate or be interpreted to stay, interdict, condition, reduce or inhibit the ability of
Lender to enforce any of its rights, whether now or hereafter acquired, which Lender may have
against Guarantor or the Collateral; (q) any modifications of the Loan Documents or any obligation
of Borrower relating to the Loan by operation of law or by action of any court, whether pursuant to
the Bankruptcy Reform Act of 1978, as amended, or any other debtor relief law (whether statutory,
common law, case law or otherwise) of any jurisdiction whatsoever, now or hereafter in effect, or
otherwise; and (r) any action, occurrence, event or matter consented to by Guarantor under Section
3.01 hereof, under any other provision hereof, or otherwise.

     3.04 Liability of Guarantor. This is a guaranty of payment and performance and not of
collection. The liability of Guarantor under this Guaranty shall be direct and immediate and not
conditional or contingent upon the pursuit of any remedies against Borrower or any other person
(including, without limitation, other guarantors, if any), nor against the Collateral. Guarantor
waives any right to require that an action be brought against Borrower or any other person or to
require that resort be had to any Collateral or to any balance of any deposit account or credit on
the books of Lender in favor of Borrower or any other person. In the event that, on account of the
Bankruptcy Reform Act of 1978, as amended, or any other debtor relief law (whether statutory,
common law, case law or otherwise) of any jurisdiction whatsoever, now or hereafter in effect,
which may be or become applicable, Borrower shall be relieved of or fail to incur any debt,
obligation or liability as provided in the Loan Documents, Guarantor shall nevertheless be fully
liable therefor. In the event of a default under the Loan Documents, Lender shall have the right
to enforce its rights, powers and remedies (including, without limitation, foreclosure of all or
any portion of the Collateral) thereunder or hereunder, in any order, and all rights, powers and
remedies available to Lender in such event shall be nonexclusive and cumulative of all other
rights, powers and remedies provided thereunder or hereunder or by law or in equity. If the
indebtedness guaranteed hereby is partially paid by reason of the election of Lender to pursue any
of the remedies available to Lender, or is otherwise partially paid, this Guaranty shall
nevertheless remain in full force and effect, and Guarantor shall remain liable for the entire
remaining unpaid balance of the indebtedness guaranteed hereby, even though any rights which
Guarantor may have against Borrower may be destroyed or diminished by the exercise of any such
remedy. Guarantor covenants and agrees that, upon the commencement of a voluntary or involuntary
bankruptcy proceeding by or against Borrower, Guarantor shall not seek or cause Borrower or any
other person or entity to seek a supplemental stay or other relief, whether injunctive or
otherwise, pursuant to 11 U.S.C. §105 or any other provision of the Bankruptcy Reform Act of 1978,
as amended, or any other debtor relief law (whether statutory, common law, case law or otherwise)
of any jurisdiction whatsoever, now or hereafter in effect, which may be or become applicable, to
stay, interdict, condition, reduce or inhibit the ability of Lender to enforce any rights of Lender
against Guarantor or the Collateral by virtue of this Guaranty or otherwise. The obligations of
Guarantor and the rights of Lender hereunder are in addition to the obligations of Guarantor and
the rights of Lender under any other guaranty or indemnity

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agreement given by Guarantor to Lender
in connection with the Loan, and payments made
hereunder shall not reduce the liabilities and obligations of Guarantor under any other such
guaranty or indemnity agreement.

     3.05 Application of Payments. Guarantor hereby authorizes Lender, without notice to
Guarantor, to apply all payments and credits received from Borrower or from Guarantor or realized
from any security to the indebtedness, obligations and undertakings of Borrower (whether or not the
same are the subject of this Guaranty) in such manner and in such priority as Lender in its sole
judgment shall determine.

     3.06 Financial Statements. Guarantor acknowledges that the Loan Documents require
that Borrower provide or cause to be provided to Lender certain financial statements of Guarantor.
Guarantor hereby agrees to provide to Lender all such financial statements in such form and at such
times as is required under the provisions of the Loan Documents.

     3.07 Warranties. Guarantor warrants and represents (a) that the execution and
delivery of this Guaranty do not violate or constitute a breach of any agreement to which Guarantor
is a party or any applicable laws, and (b) that there is no litigation, claim, action or
proceeding, pending or threatened against Guarantor which would adversely affect the financial
condition of Guarantor or the ability of Guarantor to fulfill all obligations of Guarantor
hereunder, and (c) that all financial statements heretofore delivered by Guarantor to Lender are
true and correct in all respects as of the date thereof, and no material change has occurred in the
financial condition of Guarantor since the date thereof.

     3.08 Condition of Borrower. Guarantor warrants and represents that Guarantor is fully
aware of the financial condition of Borrower and is executing and delivering this Guaranty based
solely upon Guarantor’s own independent investigation of all matters pertinent hereto, and that
Guarantor is not relying in any manner upon any representation or statement of Lender. Guarantor
warrants, represents and agrees that Guarantor is in a position to obtain, and Guarantor hereby
assumes full responsibility for obtaining, any additional information concerning the financial
condition of Borrower and any other matter pertinent hereto, and that Guarantor is not relying upon
Lender to furnish, and shall have no right to require Lender to obtain or disclose, any information
with respect to the indebtedness or obligations guaranteed hereby, the financial condition or
character of Borrower or the ability of Borrower to pay the indebtedness or perform the obligations
guaranteed hereby, the existence of any collateral or security for any or all of such indebtedness
or obligations, the existence or nonexistence of any other guaranties of all or any part of such
indebtedness or obligations, any actions or non-action on the part of Lender, Borrower or any other
person or entity, or any other matter, fact or occurrence whatsoever. By executing this Guaranty,
Guarantor acknowledges and knowingly accepts the full range of risks encompassed within a contract
of guaranty.

     3.09 Minimum Net Worth. Guarantor warrants and represents that it has as of the date
hereof and shall maintain throughout the term of the Loan a minimum net worth of $2,000,000.00.

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ARTICLE IV — GENERAL CONDITIONS

     4.01 Waiver of Rights. Guarantor hereby waives and renounces, to the fullest extent
permitted by law, all rights to the benefits of any statute of limitations and any moratorium,
reinstatement, marshalling, forbearance, valuation, stay, extension, redemption, appraisement,
exemption and homestead now or hereafter provided by the Constitution and laws of the United States
of America and of each state thereof, both as to itself and in and to all of its property, real and
personal, against the enforcement and collection of the obligations evidenced by this Guaranty.

     4.02 Communications. Unless and except as otherwise specifically provided herein, any
and all notices, elections, approvals, consents, demands, requests and responses thereto
(“Communications”) permitted or required to be given under this Guaranty shall be in writing,
signed by or on behalf of the party giving the same, and shall be deemed to have been properly
given and shall be effective upon the earlier of receipt thereof or deposit thereof in the United
States mail, postage prepaid, certified with return receipt requested, to the other party at the
address of such other party set forth hereinbelow or at such other address within the continental
United States as such other party may designate by notice specifically designated as a notice of
change of address and given in accordance herewith; provided, however, that the time period in
which a response to any Communication must be given shall commence on the date of receipt thereof;
and provided further that no notice of change of address shall be effective with respect to
Communications sent prior to the time of receipt thereof. Receipt of Communications under this
Guaranty shall occur upon actual delivery (whether by mail, telecopy transmission, messenger,
courier service, or otherwise) to Guarantor or Lender, at the address of such party set forth
hereinbelow, subject to change as provided hereinabove. An attempted delivery in accordance with
the foregoing, acceptance of which is refused or rejected, shall be deemed to be and shall
constitute receipt; and an attempted delivery in accordance with the foregoing by mail, messenger,
or courier service (whichever is chosen by the sender) which is not completed because of changed
address of which no notice was received by the sender in accordance with this provision prior to
the sending of the Communication shall also be deemed to be and constitute receipt. Any
Communication, if given to Lender, must be addressed as follows, subject to change as provided
hereinabove:

The Ohio National Life Insurance Company

One Financial Way

Cincinnati, Ohio 45242

and, if given to Guarantor, must be addressed as follows, subject to change as provided
hereinabove:

Abrams Properties, Inc.

1945 The Exchange S.E.

Suite 300

Atlanta, Georgia 30339

Attention: President

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     4.03 Irrevocability and Revival. This Guaranty shall be irrevocable by Guarantor and
shall remain in effect until all indebtedness guaranteed hereby has been completely repaid, until
Lender has no further obligation to make future advances under any of the Loan Documents, and until
all obligations and undertakings of Borrower under, by reason of, or pursuant to the Loan Documents
have been completely performed, including obligations which survive repayment of the Loan or
realization upon the Collateral. This Guaranty shall continue to be effective or be revived and
reinstated, as the case may be, in the event that any payment received by Lender of any of the
indebtedness guaranteed hereby is returned or rescinded by reason of any present or future federal,
state or other law or regulation relating to bankruptcy, insolvency or other relief of debtors or
for any other reason.

     4.04 Limit of Validity. If from any circumstances whatsoever fulfillment of any
provisions of this Guaranty, at the time performance of such provision shall be due, shall involve
transcending the limit of validity presently prescribed by any applicable usury statute or any
other applicable law, with regard to obligations of like character and amount, then ipso
facto the obligation to be fulfilled shall be reduced to the limit of such validity, so
that in no event shall any exaction be possible under this Guaranty that is in excess of the
current limit of such validity, but such obligation shall be fulfilled to the limit of such
validity. The provisions of this section shall control every other provision of this Guaranty.

     4.05 Applicable Law. This Guaranty shall be interpreted, construed and enforced
according to the laws of the State of Georgia.

     4.06 Miscellaneous. This Guaranty may not be changed orally, and no obligation of
Guarantor can be released or waived by Lender or any officer or agent of Lender, except by a
writing signed by a duly authorized officer of Lender. The provisions of this Guaranty shall be
binding upon Guarantor and the legal representatives, successors, and assigns of Guarantor and
shall inure to the benefit of Lender, and the legal representatives, successors, and assigns of
Lender. This Guaranty shall in no event be impaired by any change which may arise by reason of the
death of Borrower or Guarantor, if individuals, or by reason of the dissolution of Borrower or
Guarantor, if Borrower or Guarantor is a corporation or partnership. Guarantor has executed this
Guaranty individually and not as a partner of Borrower or any other guarantor. This Guaranty is
assignable by Lender, and any full or partial assignment hereof by Lender shall operate to vest in
the assignee all rights and powers herein conferred upon and granted to Lender and so assigned by
Lender. Guarantor expressly waives notice of transfer or assignment of this Guaranty and
acknowledges that the failure by Lender to give any such notice shall not affect the liabilities of
Guarantor hereunder. All personal pronouns used herein, whether used in the masculine, feminine or
neuter gender, shall include all other genders; and the singular shall include the plural and vice
versa. Titles of articles and sections are for convenience only and in no way define, limit,
amplify or describe the scope or intent of any provisions hereof. If Guarantor is a partnership,
all of the provisions hereof referring to Guarantor shall be construed to apply to each of the
general partners of Guarantor and of any and all further tiers of general partners in the structure
of Guarantor. This Guaranty contains the entire agreement between Guarantor and Lender relating to
the guarantying of the Loan by Guarantor and supersedes entirely any and all prior written or oral
agreements with respect thereto; and Guarantor and Lender acknowledge that there are no contemporaneous oral agreements with respect to the
subject matter hereof.

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

	 	 	 	 	 	 	 

	Signed, sealed and delivered in the
presence of:	 	 	 	ABRAMS PROPERTIES, INC., a Georgia
corporation
	 
	 	 	 	 	 	 
	/s/ [illegible]

	 	 	 	By:
	 	/s/ Melinda S. Garrett
	 

	 	 	 	 	 	 
	Unofficial Witness

	 	 	 	 	 	Melinda S. Garrett, President
	 
	 	 	 	 	 	 
	/s/ Catherine S. Moore
 

	 	 
	 	 	 	(CORPORATE SEAL)
	Notary Public
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	[NOTARIAL SEAL]
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Commission Expiration Date:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	June 29, 2003
	 	 	 	 	 	 

- 8 -

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