Exhibit 99.2
LOAN AGREEMENT
This Loan Agreement ("Agreement") dated as of September 29, 2005, is
made and entered into by and between DALLAS CITY BANK ("Lender") whose address
is 00000 Xxxxxx Xxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000; BHDGI, LTD., a Texas
limited partnership ("Borrower") with offices at 0000 Xxxxxxxx Xxxxxx, Xxxxxx,
Xxxxx 00000; and BEHRINGER HARVARD SHORT-TERM OPPORTUNITY FUND I, LP, a Texas
limited partnership (the "Guarantor").
RECITALS
Borrower and Guarantor have requested Lender to make a loan to Borrower
in the aggregate principal amount of TWO MILLION AND NO/100 DOLLARS
($2,000,000.00), more fully described in Section 1.1.(11) below (the "Loan").
Lender is willing to make the Loan to Borrower upon the terms and conditions
hereinafter set forth.
AGREEMENTS
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE 1.
DEFINITIONS
1..1. DEFINITIONS. As used in this Agreement, the following terms have
the following meanings:
(1) "Affiliate" means any Person directly or indirectly
controlling, controlled by or under common control with Borrower.
(2) "Assignment of Rents and Leases" means the Assignment of
Rents and Leases executed by Borrower for the benefit of Lender and
covering the Property, as the same may be amended, supplemented or
modified from time to time.
(3) "Business Day" means a day when Lender is open for
business.
(4) "Debt" means for any Person: (i) all indebtedness,
whether or not represented by bonds, debentures, notes or other
evidences of indebtedness, for the repayment of money borrowed; (ii) all
indebtedness representing deferred payment of the purchase price of
property or assets; (iii) all indebtedness under any lease which, in
conformity with GAAP, is required to be capitalized for balance sheet
purposes; (iv) all indebtedness under guaranties, endorsements,
assumptions or other contingent obligations, in respect of, or to
purchase or otherwise acquire, indebtedness to others; and (v) all
indebtedness secured by a Lien existing on property owned, subject to
such Lien, whether or not the indebtedness secured thereby shall have
been assumed by the owner thereof.
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(5) "Deed of Trust" means the Deed of Trust, Security
Agreement and Assignment of Rents, Leases, Incomes and Agreements
executed by Borrower to Xxxxxx Xxxxxxxx, Trustee, for the benefit of
Lender and creating a first priority lien against the Property.
(6) "Environmental Indemnity Agreement" means the
Environmental Indemnity Agreement executed by Borrower in connection
with the Loan in favor of Lender.
(7) "Event of Default" has the meaning specified in Section
8.1.
(8) "Guaranty" means the Guaranty Agreements of the
Guarantor in favor of Lender, executed by the Guarantor in connection
with the Loan, as the same may be amended, supplemented, or modified
from time to time.
(9) "Leases" means all lease agreements now or hereafter
covering or affecting any portion of the Property and all amendments,
modifications or renewals thereof, all rights, remedies and benefits
pertaining thereto.
(10) "Lien" means any lien, mortgage, security interest, tax
lien, pledge, encumbrance, or conditional sale or title retention
agreement, or any other interest in property designed to secure the
repayment of Debt or any other obligation, whether arising by agreement,
operation of law, or otherwise.
(11) "Loan" means the loan in the original principal amount
of TWO MILLION AND NO/100 DOLLARS ($2,000,00.00), to be made by Lender
to Borrower pursuant to Article 2.
(12) "Loan Agreement Rider" means the Loan Agreement Rider
executed by Borrower, Guarantor and Lender executed in connection with
the Loan, as the same may be amended, supplemented or modified from time
to time.
(13) "Loan Documents" means this Agreement, the Note, the
Guaranty, the Deed of Trust, Assignment of Rents and Leases, the
Environmental Indemnity Agreement, the Certificate of Partners, the
Unanimous Written Consents, the Loan Agreement Rider, and all other
promissory notes, pledge agreements, guaranties, deeds of trust,
security agreements, affidavits, and other instruments, documents and
agreements executed and delivered by Borrower or Guarantor pursuant to
or in connection with this Agreement and any future amendments hereto or
thereto. All such Loan Documents shall be in form, substance and content
in all respects satisfactory to Lender.
(14) "Note" means the Promissory Note executed by Borrower
payable to the order of Lender in the principal amount of the Loan and
all extensions, renewals and modifications thereof.
(15) "Obligated Party" means Borrower and/or the Guarantor,
and their successors and assigns.
(16) "Obligations" means all obligations, indebtedness and
liabilities of Borrower to Lender, now existing or hereafter created,
acquired or incurred, whether direct, indirect, primary or secondary,
related, unrelated, fixed, contingent, liquidated, unliquidated, joint,
several, or joint and several, regardless of whether such present or
future indebtedness, obligations and liabilities may, prior to their
acquisition by Borrower, be or have been in favor of some other person
or have been acquired by Borrower in a transaction with one or
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more borrowers, together with any and all renewals and extensions of
such indebtedness, obligations and liabilities, including, without
limitation, the obligations, indebtedness and liabilities of Borrower
under this Agreement, the Note and the other Loan Documents, and all
interest accruing thereon and all attorneys' fees and other expenses
incurred in the enforcement or collection thereof, and any renewal,
modification and extension thereof.
(17) "Person" means any individual, joint venture,
partnership, corporation, limited partnership, trust, association or any
other entity.
(18) "Property" means the three (3) tracts of real property
situated in Collin County, Texas, as more particularly described on
Exhibit "A" attached hereto and made a part hereof, together with all
buildings, improvements, fixtures and appurtenances to the described
properties. The term "Mortgaged Property" as defined in the Deed of
Trust shall be included within the term "Property" as used in this
Agreement.
(19) "Unanimous Written Consents" means (i) the Unanimous
Written Consent of the Partners of Borrower, executed by all of the
general and limited partners of Borrower authorizing the execution and
delivery of the Loan Documents by Xxxxx X. Xxxx, as Managing Member of
Graybird Developers, LLC, the General Partner of Borrower (ii) the
Unanimous Written Consent of the Members and Managers of Graybird
Developers, LLC, executed by all of the Members and Managers of Graybird
Developers, LLC in connection with the Loan, authorizing Xxxxx X. Xxxx,
as Managing Member of Graybird Developers, LLC, to execute and deliver
the Loan Documents on behalf of Graybird Developers, LLC and Borrower;
and (iii) the Unanimous Written Consent of the Partners of Behringer
Harvard Short-Term Opportunity Fund I, LP, executed by all of the
partners of Behringer Harvard Short-Term Opportunity Fund I, LP in
connection with the Loan, authorizing Xxxxxx Xxxxxx, as President of
Harvard Property Trust, LLC, a Delaware limited liability company, the
General Partner of Behringer Harvard Advisors II LP, a Texas limited
partnership, the General Partner of Behringer Harvard Short-Term
Opportunity Fund I, LP, to execute and deliver the Guaranty Agreement on
behalf of Behringer Harvard Short-Term Opportunity Fund I, LP.
1..2. OTHER DEFINITIONAL PROVISIONS. All definitions contained in this
Agreement are equally applicable to the singular and plural forms of the terms
defined. The words "hereof," "herein" and "hereunder" and words of similar
import referring to this Agreement refer to this Agreement as a whole and not to
any particular provision of this Agreement. Unless otherwise specified, all
article and section references pertain to this Agreement. All accounting terms
not specifically defined herein shall be construed in accordance with generally
accepted accounting principals ("GAAP").
ARTICLE 2.
LOAN
2..1. LOAN. Subject to the terms and conditions of this Agreement,
Lender agrees to make the Loan to Borrower.
2..2. THE NOTE. The obligation of Borrower to repay the Loan shall be
evidenced by the Note.
2..3. REPAYMENT OF PRINCIPAL AND INTEREST ON NOTE. Borrower shall
repay the accrued but unpaid interest and unpaid principal amount of the Loan as
more particularly described in the Note.
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2..4. USE OF PROCEEDS OF LOAN. The proceeds of the Loan shall be used
by Borrower to fund the purchase of the Property and payoff all existing debt on
the Property.
2..5. SECURITY. To secure the Loan, Borrower shall execute and deliver
to Lender the perfected first lien Deed of Trust covering the Property, which
Deed of Trust shall convey to Lender the rights, titles, equities and interests
as more particularly described therein free and clear of all liens and other
encumbrances, except taxes for the current year which are not due or payable and
those items shown in the Commitment for Title Insurance delivered to Lender and
approved by Lender. Borrower shall also execute and deliver the Assignment of
Rents and Leases.
2..6. GUARANTY. Guarantor shall guarantee the obligations of Borrower
to Lender by executing and delivering to Lender the Guaranty.
2..7. SETOFF. Upon the occurrence of an Event of Default, Lender shall
have the right to set off and apply against the Obligations in such manner as
Lender may determine, without notice to Borrower, any and all deposits (general
or special, time or demand, provisional or final) or other sums at any time
credited by or owing from Lender to Borrower. As further security for the
Obligations of Borrower, Borrower hereby grants to Lender a security interest in
all money, instruments and other property of Borrower now or hereafter held by
Lender, including, without limitation, property held in safekeeping. In addition
to Lender's right of setoff and as further security for the Obligations of
Borrower, Borrower hereby grants to Lender a security interest in all deposits
(general or special, time or demand, provisional or final) and other accounts of
Borrower now or hereafter on deposit with or held by Lender and all other sums
at any time credited by or owing from Lender to Borrower. The rights and
remedies of Lender hereunder are in addition to other rights and remedies
(including, without limitation, other rights of setoff) which Lender may have.
ARTICLE 3.
PAYMENTS
3..1. METHOD OF PAYMENT. All payments of principal, interest and other
amounts to be made by Borrower hereunder shall be made to Lender, at its office
at 00000 XXXXXX XXXXXXX, XXXXX 000, XXXXXX, XXXXX 00000, ATTENTION: XXX
XXXXXXXX, in lawful currency of the United States of America and in immediately
available funds. Whenever any payment hereunder or under the Note shall be
stated to be due on a day that is not a Business Day, such payment may be made
on the next succeeding Business Day and interest shall continue to accrue during
such extension.
3..2. PREPAYMENT. Borrower may prepay the Note in whole or in part at
any time or from time to time in part without premium or penalty but with
accrued interest to the date of prepayment on the amount so prepaid. All
prepayments shall be applied to principal in the inverse order of its stated
maturity.
ARTICLE 4.
CONDITIONS PRECEDENT
4..1. LOAN. Lender shall not be obligated to disburse all or any
portion of the Loan, unless at or prior to the time of the making of such
disbursement, the following conditions have been fulfilled:
a. Borrower and Guarantor shall have performed and complied
with all terms and conditions required by this Agreement prior to or at
the date of the making of any disbursement and shall have executed and
delivered to Lender all documents required by Lender as set forth
herein, all in form, substance and content in all respects satisfactory
to Lender.
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b. Borrower shall have delivered to Lender a Mortgagee
Policy of Title Insurance issued by First American Insurance Company
("Title Company"), in the amount of the Loan, insuring that the Deed of
Trust constitutes a valid and perfected first lien on the Property,
subject only to the exceptions approved in writing in advance by Lender.
c. Borrower shall have delivered to Lender the Unanimous
Written Consents duly adopted and approved by all of the general and
limited partners of Borrower and by all of the Members and Managers of
Graybird Developers, LLC, the sole general partner of Borrower,
authorizing Xxxxx X. Xxxx to execute and deliver this Agreement and the
other Loan Documents and to do all things required of Graybird
Developers, LLC and Borrower pursuant to the Loan Documents.
d. Guarantor shall have delivered to Lender the Unanimous
Written Consent of the Partners of Behringer Harvard Short-Term
Opportunity Fund I, LP, executed by all of the partners of Behringer
Harvard Short-Term Opportunity Fund I, LP in connection with the Loan,
authorizing Xxxxxx Xxxxxx, as President of Harvard Property Trust, LLC,
a Delaware limited liability company, the General Partner of Behringer
Harvard Advisors II LP, a Texas limited partnership, the General Partner
of Behringer Harvard Short-Term Opportunity Fund I, LP, to execute and
deliver the Guaranty Agreement and the other Loan Documents on behalf of
Behringer Harvard Short-Term Opportunity Fund I, LP.
e. Opinion of Guarantor's Counsel, executed by Xxxxxx &
Xxxxxxx, L.L.P. opining as to the due execution, delivery and
enforceability of the Loan Documents by Behringer Harvard Short-Term
Opportunity Fund I LP.
f. Borrower shall have delivered to Lender the Note
executed by Borrower.
g. Borrower shall have delivered to Lender the Guaranty
executed by the Guarantor.
h. Borrower shall have delivered to Lender duplicate
originals of the Deed of Trust.
i. Borrower shall have delivered to Lender the Assignment
of Rents and Leases executed by Borrower.
j. Borrower shall have delivered to Lender the
Environmental Indemnity Agreement executed by Borrower.
k. Borrower shall have delivered to Lender the Certificate
of Partners executed by all of the general and limited partners of
Borrower.
l. Borrower shall have delivered to Lender the Loan
Agreement Rider executed by Borrower and Guarantor.
m. Lender shall have obtained a release of all liens, if
any, on the Property and evidence that all other items reflected under
Schedule C of the Commitment for Title Insurance issued by the Title
Company have been satisfied.
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n. Borrower shall have delivered to Lender a general public
liability and umbrella policy, all issued by a carrier acceptable to
Lender in such amounts as Lender may require, with Lender listed as the
insured and loss payee thereunder.
o. Borrower and Guarantor shall have delivered to Lender
such additional documents, releases, instruments, agreements and
information as Lender may request.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES
To induce Lender to enter into this Agreement, Borrower and Guarantor
represent and warrant, each on its own behalf only, to Lender that:
5..1. FINANCIAL STATEMENTS. The financial statements, income tax
returns and information of Borrower and Guarantor delivered to Lender in
connection with the Loan are true and correct in all material respects to the
best of their knowledge, and fairly present the financial condition of Borrower
and Guarantor as of the respective dates indicated therein and the results of
operations for the respective periods indicated therein. Since the delivery of
such financial statements there has been no material adverse change in the
financial condition or operations of Borrower and/or the Guarantor. Borrower and
Guarantor have good and indefeasible title, free and clear of all liens,
encumbrances, security interests and adverse claims, to the property and assets
reflected in such financial statements, except as set forth therein.
5..2. DEFAULT. Borrower and Guarantor are not now in default in the
payment of any of their material obligations, and there exists no event,
condition or act which constitutes an Event of Default and no condition, event,
or act which with notice or lapse of time would constitute such Event of
Default.
5..3. LITIGATION AND JUDGMENTS. There is no action, suit or proceeding
before any court, governmental authority or arbitrator pending, or to the
knowledge of Borrower or Guarantor, threatened against or affecting Borrower or
Guarantor that would, if adversely determined, have a material adverse effect on
the financial condition or operations of Borrower or Guarantor or the ability of
Borrower or Guarantor to pay and perform the Obligations. There are no
outstanding judgments against Borrower or Guarantor.
5..4. ENFORCEABILITY. This Agreement constitutes, and the other Loan
Documents to which Borrower and Guarantor are parties, when delivered, shall
constitute legal, valid and binding obligations of Borrower and Guarantor,
enforceable against Borrower and Guarantor in accordance with their respective
terms, except as limited by bankruptcy, insolvency, or other laws of general
application relating to the enforcement of creditors' rights.
5..5. APPROVALS. No authorization, approval or consent of, and no
filing or registration with, any court, governmental authority or third party is
or will be necessary for the execution, delivery or performance by Borrower or
Guarantor of this Agreement and the other Loan Documents to which Borrower and
Guarantor are or may become a party or the validity or enforceability thereof.
5..6. COMPLIANCE WITH LAW. To the best of their knowledge, Borrower
and Guarantor are in compliance with all laws, including without limitation
environmental laws, rules, regulations, orders and decrees which are applicable
to Borrower or Guarantor or any of their respective properties, including
without limitation the Property.
5..7. NO ADVERSE CLAIMS. Borrower has or will acquire upon funding of
the Loan good and indefeasible title to the Property, free and clear of any Lien
or adverse claim except the Lien created to secure the Loan.
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5..8. ORGANIZATION. Borrower is duly organized, existing and in good
standing under the laws of the State of Texas and has the power and authority to
carry on the business in which it is engaged and/or proposes to engage.
5..9. POWER. Borrower and Guarantor have the power and authority to
enter into this Agreement and to execute the documents required by this
Agreement.
5..10. AUTHORIZATION. This Agreement and all things required by this
Agreement have been duly authorized by all requisite action of the partners of
Borrower and the members of Graybird Developers, LLC. The execution, performance
and delivery of this Agreement, and all other agreements and instruments
required by Lender in connection with the Loan, are not in contravention of any
of the terms of any indenture, agreement or undertaking to which Borrower or
Guarantor are a party or by which they or any of their property are bound or
affected.
5..11. LEASES. There are no leases of any kind currently affecting the
Property or any portion thereof.
ARTICLE 6.
AFFIRMATIVE COVENANTS
Borrower and Guarantor, each on its own behalf only, covenants and
agrees that, as long as the Obligations or any part thereof are outstanding,
Borrower and Guarantor will perform and observe the following positive
covenants, unless Lender shall otherwise consent in writing:
6..1. FINANCIAL STATEMENTS OF BORROWER. Borrower will furnish to
Lender:
a. As soon as available, and in any event within thirty
(30) days of filing same with the Internal Revenue Service each year, a
true and correct copy of the annual federal income tax return of
Borrower and Guarantor for the immediately preceding year, signed by
Borrower, and filed with the Internal Revenue Service.
b. As soon as available, and in any event within forty-five
(45) days after the end of each calendar quarter, beginning with the
next ensuing calendar quarter after the date of this Agreement, a copy
of a current financial report of Borrower for such calendar quarter and
cumulative for the portion of the calendar year completed, containing
balance sheets, statements of income, statements of partners' equity and
statements of change in financial position as of the end of such fiscal
year and for the period then ended, in each case setting forth in
comparative form the figures for the preceding fiscal year, all in
reasonable detail and certified as true and correct by the chief
financial officer of Borrower, prepared in accordance with GAAP.
c. As soon as available, and in any event within one
hundred twenty (120) days after the end of each calendar year, beginning
January 1, 2006, a copy of the annual financial report of Borrower for
such calendar year containing balance sheets, statements of income,
statements of partners' equity and statements of change in financial
position as of the end of such fiscal year and for the 12-month period
then ended, in each case setting forth in comparative form the figures
for the preceding fiscal year, all in reasonable detail and certified as
true and correct by the chief financial officer of Borrower, prepared in
accordance with GAAP.
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d. On or before January 31 of each year, evidence that all
ad valorem taxes or other assessments due and owing against the Property
have been paid in full.
e. Promptly, such additional financial information
concerning Borrower as Lender may request.
6..2. FINANCIAL STATEMENTS OF GUARANTOR. Lender acknowledges that
since Guarantor is a pubic entity, Guarantor's financial information is
available on-line via the internet at any time. Guarantor agrees that Lender may
access and retrieve any such financial information concerning Guarantor at any
time. Nevertheless, Guarantor agrees that if (i) such financial information of
Guarantor ceases to be available or is not accessible via the internet, or (ii)
the information Lender seeks is not available via public access means, Guarantor
will promptly furnish such financial information of Guarantor upon written
request of Lender (which include the same financial information required of
Borrower as set forth above).
6..3. PERFORMANCE OF OBLIGATIONS. Borrower will duly and punctually
pay and perform the Obligations, including without limitation, its obligations,
covenants, agreements and liabilities under this Agreement, the Note, the Deed
of Trust and the other Loan Documents.
6..4. PAYMENT OF TAXES AND CLAIMS. Borrower and Guarantor will pay or
discharge at or before maturity or before becoming delinquent (i) all taxes,
levies, assessments and governmental charges imposed on them or any of their
property, and (ii) all lawful claims for labor, material and supplies, which, if
unpaid, might become a Lien upon any of their property; provided, however, that
neither Borrower nor Guarantor shall be required to pay or discharge any tax,
levy, assessment or governmental charge which is being contested in good faith
by appropriate proceedings diligently pursued, and for which adequate reserves
have been established.
6..5. COMPLIANCE WITH LAWS. Borrower and Guarantor will comply with
all applicable laws, rules, regulations and orders of any court, governmental
authority or arbitrator.
6..6. NOTICES. Borrower will promptly notify Lender in writing of (i)
the occurrence of an Event of Default, or of any event that with notice or lapse
of time, or both, would be an Event of Default, (ii) the commencement of any
action, suit or proceeding against Borrower or any Guarantor that might have an
adverse effect on the business, financial condition of Borrower or Guarantor and
(iii) any other matter that might have an adverse effect on the business,
financial condition of Borrower or Guarantor.
6..7. FURTHER ASSURANCES. Borrower and Guarantor will execute and
deliver such further instruments as may be deemed necessary or desirable by
Lender to carry out the provisions and purposes of this Agreement and the other
Loan Documents and to preserve and perfect the Lien of Lender in the Property.
6..8. APPRAISAL. Borrower and Guarantor agree that if at any time
Lender reasonably believes the value of the Property has declined, or if for any
reason an updated appraisal is required to comply with any banking regulation or
other law, Lender may request that an updated appraisal be conducted upon the
Property by a qualified appraisal company of Lender's choosing. The cost of such
appraisal shall be borne by Borrower. Lender may in its sole discretion and
without any obligation whatsoever, advance funds necessary to pay for the
appraisal and such advances shall become part of the Obligations and secured by
the Deed of Trust and the other Loan Documents and such advance shall bear
interest at the Maximum Rate (herein defined). Borrower agrees to reimburse
Lender for any funds so advanced within ten (10) days of written request by
Lender.
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6..9. RECORDS. Borrower will keep and maintain full and accurate
accounts and records of its operations according to general accounting
principles consistently applied and will permit Lender to have access thereto,
to make examination thereof and to make audits during regular business hours.
6..10. EXECUTION OF OTHER DOCUMENTS. Borrower will promptly, upon
demand by Lender, execute all such additional agreements, contracts, indentures,
documents and instruments in connection with this Agreement as Lender, in its
sole discretion, may reasonably consider necessary.
6..11. LITIGATION AND ATTORNEY'S FEES. Borrower will pay promptly to
Lender without demand, reasonable attorney's fees, including, but not limited
to, the reasonable estimate of the allocated costs and expenses of legal counsel
and all costs and other expenses paid or incurred by Lender in collecting or
compromising the Loan or in enforcing or exercising its rights or remedies
created by, connected with or provided in this Agreement or any other agreement
or instrument required by Lender in connection with the Loan, whether or not
suit is filed.
6..12. MAINTENANCE OF EXISTENCE. Borrower will maintain and preserve
its existence and assets and all rights, franchises and other authority
necessary for the conduct of its business and will maintain and preserve its
property, equipment and facilities in good order, condition and repair. Lender
may, at reasonable times, visit and inspect any of the properties of Borrower.
6..13. REPORTS. Borrower will furnish to Lender, as soon as possible
and in any event within fifteen (15) days after Borrower knows or has reason to
know that any event or condition described in Section 8.1. herein has occurred,
a statement of the managing general partner of Borrower describing such event or
condition and the action, if any, which Borrower proposes to take with respect
thereto.
6..14. ENVIRONMENTAL CONDITION REPORTS. Borrower will give prompt
written notice to Lender of any governmental or regulatory action, of any claim
for damage or injury made or threatened and of Borrower's discovery of any
occurrence or condition on the Property or adjoining lands, which does or could
cause the presence of any hazardous materials or environmental condition to
exist on the Property which contravene the standards of any governmental or
administrative environmental protective law or regulations.
6..15. INSURANCE. Borrower will obtain and maintain general public
liability and umbrella coverage insurance policies and such other insurance
policies as may be specified by Lender, upon and relating to the Property, all
in such amounts and with such insurance carriers as may be specified by Lender
from time to time, and in accordance with the terms and provisions of the Deed
of Trust.
ARTICLE 7.
NEGATIVE COVENANTS OF BORROWER
Borrower covenants and agrees that from the date hereof until all sums
which are payable pursuant to this Agreement or the other Loan Documents, have
been paid in full, unless Lender waives compliance in writing, that Borrower
will not:
7..1. ENCUMBRANCES AND LIENS. Create, assume or suffer to exist, any
mortgage, pledge, security interest, encumbrance or Lien (other than for taxes
not delinquent and for taxes and other items being contested in good faith) on
the Property of any kind, except for the Liens held by Lender.
7..2. DISSOLUTION OR CHANGE OF OWNERSHIP. (a) Borrower shall not
dissolve or liquidate, or merge with or be consolidated into any other entity,
or attempt to do any of the same,without the prior written consent of Lender;
and (b) Borrower shall not allow, consent or permit any partner of Borrower to
sell, assign,
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transfer, convey, pledge, mortgage, encumber or grant a security interest in any
of the partnership interests in Borrower, without the prior written consent of
Lender.
ARTICLE 8.
DEFAULT
8..1. EVENT OF DEFAULT. Each of the following shall be deemed an
"Event of Default":
a. Borrower shall fail to pay when due or demanded the
Obligations of Borrower or any part thereof and such failure to pay is
not cured within five (5) days after written notice of same has been
sent to Borrower.
b. Any representation or warranty made or deemed made by
any Obligated Party in any Loan Document or in any certificate, report,
notice or financial statement furnished at any time in connection with
this Agreement shall be false, misleading or erroneous in any material
respect when made or deemed to have been made.
c. Any Obligated Party shall fail to perform, observe or
comply with any covenant, agreement or term contained in this Agreement,
the Note, the Deed of Trust or any other Loan Document (other than the
failure to pay the Obligations or any portion thereof covered by Section
8..1a above) and such failure to perform, observe or comply is not fully
cured within thirty (30) days after written notice of same is sent to
Borrower.
d. Any Obligated Party shall commence a voluntary
proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it
or a substantial part of its property or shall consent to any such
relief or to the appointment of or taking possession by any such
official in such a proceeding commenced against it or shall make a
general assignment for the benefit of creditors or shall generally fail
to pay its debts as they become due or shall take any corporate action
to authorize any of the foregoing.
e. Any involuntary proceeding shall be commenced against
any Obligated Party seeking liquidation, reorganization or other relief
with respect to it or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment
of a trustee, receiver, liquidator, custodian or other similar official
for it or a substantial part of its property, and such involuntary
proceeding shall remain undismissed and unstayed for a period of thirty
(30) days.
f. Borrower shall fail to discharge within a period of
thirty (30) days after the commencement thereof any attachment,
sequestration or similar proceeding against any of its assets or
properties.
g. Borrower shall fail to satisfy and discharge any
judgment against it within fifteen (15) days after the judgment becomes
final.
h. Borrower shall default in the payment of any of its Debt
in excess of $50,000.00 beyond any applicable grace period, or shall
default in the performance of any other material agreement binding upon
it or its property.
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i. Guarantor shall default in the payment of any of its
Debt which has an outstanding principal balance in excess of $500,000.00
beyond any applicable grace period, or shall default in the performance
of any other agreement binding upon it or its property relating to a
Debt of Guarantor in excess of $500,000.00.
j. If Borrower shall dissolve or liquidate, or merge with
or be consolidated into any other entity, or shall attempt to do any of
the same or if any partner of Borrower shall sell, assign, transfer,
convey, pledge, mortgage, encumber or grant a security interest in all
or a portion of its partnership interests in Borrower.
k. The sale, encumbrance or other unauthorized transfer of
the Property without Lender's prior written consent.
l. The occurrence of any "Event of Default" as that term is
defined in the Deed of Trust or any other Loan Document.
8..2. REMEDIES UPON DEFAULT. Upon the occurrence of an Event of
Default, Lender may without notice declare the Obligations or any part thereof
to be immediately due and payable, and the same shall thereupon become
immediately due and payable, without demand, presentment, notice of dishonor,
notice of acceleration, notice of intent to accelerate, notice of intent to
demand, or protest, which are hereby expressly waived. Upon the occurrence of
any Event of Default, Lender may exercise all rights and remedies available to
it in law or in equity, under the Loan Documents or otherwise, including,
without limitation, Lender's rights to setoff against any accounts or deposits
with Lender or any affiliate of Lender, and foreclosure of its Deed of Trust
lien against the Property.
ARTICLE 9.
MISCELLANEOUS
9..1. EXPENSES OF LENDER. Borrower agrees to pay on demand all costs
and expenses incurred by Lender in connection with the preparation, negotiation
and execution of this Agreement and the other Loan Documents and any and all
amendments, modifications and supplements thereto and the closing of the Loan,
including, without limitation, the reasonable costs and fees of Lender's legal
counsel, appraisal fees, mortgagee's policy of title insurance and endorsement
premiums, survey costs, environmental engineer fees, closing costs, and all
costs and expenses incurred by Lender in connection with the enforcement or
preservation of any rights under this Agreement or any other Loan Document,
including, without limitation, the reasonable costs and fees of Lender's legal
counsel. Borrower agrees Lender may pay these costs with the proceeds of Loan,
at its sole discretion.
9..2. WAIVER OF JURY TRIAL. IN THE EVENT LITIGATION SHOULD ARISE OUT
OF THE TRANSACTIONS CONTEMPLATED BY ANY OF THE LOAN DOCUMENTS OR ANY OTHER
MATTER RELATED THERETO WHATSOEVER OR IN CONNECTION WITH ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OR INACTIONS
BY LENDER, IT IS HEREBY STIPULATED AND AGREED BY BORROWER AND GUARANTOR THAT
THEY SHALL WAIVE AND DO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
ALL RIGHTS TO DEMAND A TRIAL OF ANY SUCH MATTER BY OR BEFORE A JURY. THIS
PROVISION IS A MATERIAL INDUCEMENT TO LENDER TO COMMIT TO MAKE THE LOAN.
9..3. NO WAIVER; CUMULATIVE REMEDIES. No failure on the part of Lender
to exercise and no delay in exercising, and no course of dealing with respect
to, any right, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege under this Agreement preclude any other or further exercise thereof or
the exercise of any other right, power or
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privilege. The rights and remedies provided for in this Agreement and the other
Loan Documents are cumulative and not exclusive of any rights and remedies
provided by law.
9..4. SUCCESSORS AND ASSIGNS. This Agreement is binding upon and shall
inure to the benefit of Lender, Borrower, Guarantor and their respective
successors and assigns, except that Borrower and Guarantor may not, except as
expressly provided herein, assign or transfer any of their rights or obligations
under this Agreement without the prior written consent of Lender.
9..5. ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other Loan
Documents embody the entire agreement among the parties hereto and supersede all
prior agreements and understandings, if any, relating to the subject matter
hereof. The provisions of this Agreement and the other Loan Documents to which
Borrower and Guarantor are a party may be amended or waived only by an
instrument in writing signed by the parties thereto.
9..6. MAXIMUM INTEREST RATE. No provision of this Agreement or the
Note or any other Loan Document shall require the payment or the collection of
interest or fees in excess of the maximum permitted by applicable law (the
"Maximum Rate"). If any excess of interest or fee in such respect is hereby
provided for, or shall be adjudicated to be so provided, in this Agreement, the
Note or the other Loan Documents, or otherwise in connection with this loan
transaction, the provisions of this Section 9.6. shall govern and prevail and
neither Borrower nor the sureties, guarantors, successors or assigns of Borrower
shall be obligated to pay the excess amount of such interest or fee or any other
excess sum paid for use, forbearance or detention of sums loaned pursuant
hereto. In the event Lender ever receives, collects or applies as interest any
such sum, such amount which would be in excess of the maximum amount permitted
by applicable law shall be applied as a payment and reduction of the principal
of the indebtedness evidenced by the Note; and, if the principal of the Note has
been paid in full, any remaining excess shall forthwith be paid to Borrower.
9..7. NOTICES. Any notice, consent or other communication required or
permitted to be given under any of the Loan Documents to Lender, Borrower or
Guarantor must be in writing and delivered in person or mailed by registered or
certified mail, return receipt requested, postage prepaid, as follows:
To Borrower: BHDGI, Ltd.., a Texas limited partnership
Attention: Xxxxx X. Xxxx
0000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
To Guarantor: Behringer Harvard Short-Term Opportunity Fund I, LP
Attn: Xxxxxx Xxxxxx
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
To Lender: Dallas City Bank
Attention: Xxx Xxxxxxxx
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
or such other address as shall be set forth in a notice from the appropriate
party given in compliance with this Section 9.7. Any such notice, consent or
other communication shall be deemed given when delivered in person or, if
mailed, when duly deposited in the United States mail.
9..8. APPLICABLE LAW. THIS AGREEMENT, THE NOTE AND THE OTHER LOAN
DOCUMENTS SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN
00
XXX XXXX XX XXXXXX, XXXXXX XXXXXX, XXXXX, AND SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
9..9. ADDITIONAL REMEDIES. The rights, powers and remedies given to
Lender hereunder and under the other Loan Documents shall be cumulative and not
alternative and shall be in addition to all rights, powers and remedies given to
Lender by law or in equity against Borrower or any other Person, including, but
not limited to, Lender's rights of setoff.
9..10. RELIEF FROM AUTOMATIC STAY. AS A MATERIAL INDUCEMENT AND AS
FURTHER CONSIDERATION TO INDUCE LENDER TO MAKE THE LOAN, BORROWER AND GUARANTOR
HEREBY STIPULATE, AGREE, CONSENT TO AND ACKNOWLEDGE THAT IN THE EVENT THAT A
PROCEEDING UNDER TITLE 11 OF THE U.S. CODE IS COMMENCED, EITHER VOLUNTARY OR
INVOLUNTARY, BY OR AGAINST BORROWER OR GUARANTOR, LENDER IS ENTITLED TO
IMMEDIATE RELIEF FROM ANY AUTOMATIC STAY IMPOSED UNDER SECTION 362 OF TITLE 11
OF THE U.S. CODE, AS AMENDED, OR OTHERWISE, ON OR AGAINST THE EXERCISE OF THE
RIGHTS AND REMEDIES OTHERWISE AVAILABLE TO LENDER, WITHOUT REQUIRING LENDER TO
FILE A MOTION FOR RELIEF FROM THE AUTOMATIC STAY. IN ADDITION TO THE FOREGOING,
BORROWER AND GUARANTOR FURTHER STIPULATE, AGREE AND ACKNOWLEDGE THAT NEITHER
BORROWER NOR GUARANTOR WILL OPPOSE OR OBJECT TO LENDER'S MOTION FOR RELIEF FROM
ANY AUTOMATIC STAY OR ANY VALUATION OF THE PROPERTY SUBJECT TO THE AUTOMATIC
STAY CONDUCTED BY LENDER.
9..11. NONWAIVER. Any forbearance or failure or delay by Lender in
exercising any right, power or remedy hereunder or in any of the other Loan
Documents shall not be deemed a waiver thereof and any single or partial
exercise of any right, power or remedy shall not preclude the further exercise
thereof. No waiver shall be effective unless it is in writing and signed by an
officer of Lender.
9..12. JURISDICTION, SERVICE OF PROCESS.
a. ANY SUIT, ACTION OR PROCEEDING AGAINST BORROWER OR
GUARANTOR WITH RESPECT TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS, OR ANY JUDGMENT ENTERED BY ANY COURT IN RESPECT OF ANY
THEREOF MAY BE BROUGHT IN THE DISTRICT COURTS OF DALLAS COUNTY, TEXAS OR
THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS, AS
LENDER (IN ITS SOLE DISCRETION) MAY ELECT, AND BORROWER AND GUARANTOR
HEREBY ACCEPT THE NONEXCLUSIVE JURISDICTION OF THOSE COURTS FOR THE
PURPOSE OF ANY SUIT, ACTION OR PROCEEDING.
b. IN ADDITION, BORROWER AND GUARANTOR HEREBY IRREVOCABLY
WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE TO THIS AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS BROUGHT IN THE STATE OF TEXAS, AND
HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM OF ANY SUIT, ACTION OR
PROCEEDING BROUGHT IN THE DISTRICT COURTS IN DALLAS COUNTY, TEXAS THAT
MAY HAVE BEEN BROUGHT IN THE INCONVENIENT FORUM. SHOULD ANY SUCH SUIT,
ACTION OR PROCEEDING BE PENDING IN MORE THAN ONE FORUM, LENDER'S CHOICE
OF FORUM SHALL BE CONCLUSIVE.
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9..13. SEVERABILITY. Should any one or more provisions of this
Agreement be determined to be illegal or unenforceable, all other provisions
nevertheless shall be effective.
9..14. TIME OF THE ESSENCE. Time is hereby declared to be of the
essence of this Agreement and of every part thereof.
9..15. INTEGRATION CLAUSE. Except for documents and instruments
specifically referenced herein, this Agreement constitutes the entire agreement
between Lender and Borrower regarding the Loan and all prior communications,
verbal or written, between Borrower and Lender shall be of no further effect or
evidentiary value.
9..16. CONSTRUCTION. The paragraph headings herein are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
9..17. AMENDMENTS. This Agreement may be amended only in written form
and signed by all parties hereto.
9..18. DOCUMENTATION. All documentation evidencing or pertaining to the
Loan shall be on Lender's standard forms or in form and content in all respects
acceptable to Lender.
9..19. CONTROLLING INTERPRETATION. The other Loan Documents delivered
pursuant to or in connection with this Agreement shall supplement and be in
addition to the terms and provisions of this Agreement. If an inconsistency of
provisions should exist between any of the Loan Documents, the interpretation of
such provision most favorable to Lender shall control, determined by Lender in
its sole discretion.
In Witness Whereof, the parties hereto have duly executed this Agreement
as of the day and year first above written.
BORROWER:
BHDGI, Ltd., a Texas limited partnership
By: Graybird Developers, LLC, a Texas limited
liability company and its sole General
Partner
By: __________________________________
Xxxxx X. Xxxx, Manager
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GUARANTOR:
Behringer Harvard Short-Term Opportunity Fund
I LP, a Texas limited partnership
By: Behringer Harvard Advisors II LP, a Texas
limited partnership, its General Partner
By: Harvard Property Trust, LLC, a Delaware
limited liability company, its General
Partner
By:__________________________________
Xxxxxx Xxxxxx, President
LENDER:
Dallas City Bank
By:_____________________________________
(Signature)
________________________________________
(Printed Name and Title)
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