EXHIBIT 10.18
LOAN 00000
XXXXXXX, XXXXX
LIMITED GUARANTY
(BHLLC)
THIS LIMITED GUARANTY ("GUARANTY") is made as of the 12TH DAY OF APRIL,
2004 by Guarantor (as hereinafter defined) for the benefit of State Farm (as
hereinafter defined).
1. DEFINITIONS. As used in this Guaranty, the following terms shall
have the meanings indicated below:
(1) The term "STATE FARM" shall mean STATE FARM LIFE
INSURANCE COMPANY, an Illinois corporation, whose address for notice
purposes is the following:
Xxx Xxxxx Xxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxx 00000
Attn: Corporate Law - Investments E-3
(2) The term "BORROWER" shall mean the following:
BEHRINGER HARVARD ENCLAVE S LP
and
BEHRINGER HARVARD ENCLAVE H LP
(3) The term "GUARANTEED INDEBTEDNESS" shall mean all Losses
(as defined below) which are attributable to the acts or omissions of
BEHRINGER HARVARD ENCLAVE S LP or BEHRINGER HARVARD ENCLAVE H LP (as
defined below) incurred by State Farm arising from or related to:
(a) Any Rents received by any of the Exculpated Parties or
Liable Parties from tenants of the Premises and not
applied to the Indebtedness or the operating expenses of
the Premises in accordance with the Loan Documents,
either within one hundred eighty (180) days prior to
such Event of Default or any time after an Event of
Default;
(b) The misapplication or misappropriation of any tenant
security deposits, advance or prepaid rents,
cancellation or termination fees or other similar sums
paid to or held by Borrower, any affiliate of the
Borrower or any other person or entity (other than State
Farm) in connection with the operation of the Premises
in violation of the Loan Documents or any leases
affecting the Premises;
(c) Any amount(s) necessary to repair or replace any damage
to or destruction of the Premises which is caused by any
willful or wanton act or omission on the part of any of
the Exculpated Parties or Liable Parties including,
without limitation, waste or any act of arson or
malicious destruction by any of the Exculpated Parties
or Liable Parties;
(c) The failure to maintain insurance as required by the
Loan Documents or any leases affecting the Premises or
the failure to timely pay insurance premiums, real
estate taxes, regular or special assessments or utility
charges affecting the Premises to the extent funds (plus
any distributions made to the Tenants-in-Common during
the period of such failure) are, or were, available from
the operation of the Premises;
(d) Any payments, dividends or distributions made by Maker
to any other Exculpated Party or other Liable Party in
violation of the terms of the Loan Documents either
within one hundred eighty (180) days prior to such Event
of Default or any time after such Event of Default;
(e) Transfers of any interest in the Premises in violation
of SECTION 3.11 of the Deed of Trust and Security
Agreement;
(f) Any insurance proceeds or condemnation awards received
by any of the Exculpated Parties or Liable Parties and
not delivered over to State Farm or used for Restoration
of the Premises in accordance with the terms of the Loan
Documents;
(g) Any fraud or willful misrepresentation of a material
fact by any of the Exculpated Parties or Liable Parties
in any document executed or presented to State Farm in
connection with the Loan; or
(h) Any use, generation, storage, release, threatened
release, discharge, disposal, or presence on, under, or
about the Premises of any materials, substances or
wastes defined or classified as hazardous or toxic under
applicable Federal, State or local laws or regulations
or arising out of or from any failure on the part of any
of the Exculpated Parties or Liable Parties to comply
with the provisions of the Environmental Indemnification
Agreement.
(4) As used herein, the term "LOSSES" means any and all
claims, suits, liabilities (including, without limitation, strict
liabilities), actions, proceedings, obligations, debts, damages
(including, without limitation, offsets and abatements of Rent), costs,
fines, penalties, charges, fees, expenses (including, without
limitation, legal fees and expenses and other costs of defense and
internal administrative fees assessed by State Farm), judgments, awards,
amounts paid in settlement of whatever kind or nature.
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(5) The term "GUARANTOR" shall mean BEHRINGER HARVARD
HOLDINGS, LLC, a Texas limited liability company.
(6) The term "LOAN DOCUMENTS" shall mean all documents
representing, evidencing and/or securing the loan in the amount of
$20,000,000.00 from State Farm to Borrower.
(7) The term "PREMISES" shall have the meaning contained in
that certain "DEED OF TRUST AND SECURITY AGREEMENT" executed by Borrower
for the benefit of State Farm dated of even date herewith.
2. OBLIGATIONS. As an inducement to State Farm to extend or
continue to extend credit and other financial accommodations to Borrower,
Guarantor, for value received, does hereby unconditionally and absolutely
guarantee the prompt and full payment and performance of the Guaranteed
Indebtedness when due or declared to be due and at all times thereafter.
3. CHARACTER OF OBLIGATIONS.
(1) This is an absolute, continuing and unconditional
guaranty of payment and not of collection and if at any time or from
time to time there is no outstanding Guaranteed Indebtedness, the
obligations of Guarantor with respect to any and all Guaranteed
Indebtedness incurred thereafter shall not be affected. This Guaranty
and the Guarantor's obligations hereunder are irrevocable and, in the
event of Guarantor's death, shall be binding upon Guarantor's estate
pursuant to PARAGRAPH 10 herein. All of the Guaranteed Indebtedness
shall be conclusively presumed to have been made or acquired in
acceptance hereof. GUARANTOR SHALL BE LIABLE, JOINTLY AND SEVERALLY,
WITH BORROWER AND ANY OTHER GUARANTOR OF ALL OR ANY PART OF THE
GUARANTEED INDEBTEDNESS.
(2) State Farm may, at its sole discretion and without
impairing its rights hereunder, (I) apply any payments on the Guaranteed
Indebtedness that State Farm receives from Borrower or any other source
other than Guarantor to that portion of the Guaranteed Indebtedness, if
any, not guaranteed hereunder and (II) apply any proceeds it receives as
a result of the foreclosure or other realization on any collateral for
the Guaranteed Indebtedness to that portion, if any, of the Guaranteed
Indebtedness not guaranteed hereunder or to any other indebtedness
secured by such collateral.
(3) Guarantor agrees that its obligations hereunder shall
not be released, diminished, impaired, reduced or affected by the
existence of any other guaranty or the payment by any other guarantor of
all or any part of the Guaranteed Indebtedness and Guarantor's
obligations hereunder shall continue until State Farm has received
payment in full of the Guaranteed Indebtedness.
(4) Guarantor's obligations hereunder shall not be released,
diminished, impaired, reduced or affected by, nor shall any provision
contained herein be deemed to be a limitation upon, the amount of credit
which State Farm may extend to Borrower, the
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number of transactions between State Farm and Borrower, payments by
Borrower to State Farm or State Farm's allocation of payments by
Borrower.
4. REPRESENTATIONS AND WARRANTIES. Guarantor hereby represents and
warrants the following to State Farm:
(1) This Guaranty directly and substantially benefits
Guarantor, and the Manager of Guarantor has determined that this
Guaranty directly and substantially benefits Guarantor; and
(2) Guarantor is familiar with, and has independently
reviewed the books and records regarding, the financial condition of
Borrower and is familiar with the value of any and all collateral
intended to be security for the payment of all or any part of the
Guaranteed Indebtedness; provided, however, Guarantor is not relying on
such financial condition or collateral as an inducement to enter into
this Guaranty; and
(3) Guarantor has adequate means to obtain from Borrower on
a continuing basis information concerning the financial condition of
Borrower and Guarantor is not relying on State Farm to provide such
information to Guarantor either now or in the future; and
(4) Guarantor has the power and authority to execute,
deliver and perform this Guaranty and any other agreements executed by
Guarantor contemporaneously herewith, and the execution, delivery and
performance of this Guaranty and any other agreements executed by
Guarantor contemporaneously herewith do not and will not violate (i) any
agreement or instrument to which Guarantor is a party, (ii) any law,
rule, regulation or order of any governmental authority to which
Guarantor is subject, or (iii) its certificate of organization and
limited liability company agreement; and
(5) Neither State Farm nor any other party has made any
representation, warranty or statement to Guarantor in order to induce
Guarantor to execute this Guaranty; and
(6) The financial statements and other financial information
regarding Guarantor heretofore and hereafter delivered to State Farm are
and shall be true and correct in all material respects and fairly
present the financial position of Guarantor as of the dates thereof, and
no adverse change has occurred in the financial condition of Guarantor
reflected in the financial statements and other financial information
regarding Guarantor heretofore delivered to State Farm since the date of
the last statement thereof; and
(7) As of the date hereof, and after giving effect to this
Guaranty and the obligations evidenced hereby, (i) Guarantor is and will
be solvent, (ii) the fair saleable value of Guarantor's assets exceeds
and will continue to exceed its liabilities (both fixed and contingent),
(iii) Guarantor is and will continue to be able to pay its debts as they
mature, and (iv) if Guarantor is not an individual, Guarantor has and
will continue to
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have sufficient capital to carry on its business and all businesses in
which it is about to engage.
5. COVENANTS. Guarantor hereby covenants and agrees with State Farm
as follows:
(1) Guarantor shall not, so long as its obligations under
this Guaranty continue, transfer or pledge any material portion of its
assets for less than full and adequate consideration; and
(2) Guarantor shall promptly furnish to State Farm at any
time and from time to time such financial statements and other financial
information of Guarantor as State Farm may reasonably require, in form
and substance reasonably satisfactory to State Farm; and
(3) Guarantor shall comply with all terms and provisions of
the Loan Documents that apply to Guarantor; and
(4) Guarantor shall promptly inform State Farm of (i) any
litigation or governmental investigation against Guarantor or affecting
any security for all or any part of the Guaranteed Indebtedness or this
Guaranty which, if determined adversely, might have a material adverse
effect upon the financial condition of Guarantor or upon such security
or might cause a default under any of the Loan Documents, (ii) any claim
or controversy which might become the subject of such litigation or
governmental investigation, and (iii) any adverse change in the
financial condition of Guarantor.
6. CONSENT AND WAIVER.
(1) Guarantor waives (i) promptness, diligence and notice of
acceptance of this Guaranty and notice of the incurring of any
obligation, indebtedness or liability to which this Guaranty applies or
may apply and waives presentment for payment, notice of nonpayment,
protest, demand, notice of protest, notice of intent to accelerate,
notice of acceleration, notice of dishonor, diligence in enforcement and
indulgences of every kind, and (ii) the taking of any other action by
State Farm, including without limitation, except as otherwise required
by the terms of the Loan Documents, giving any notice of default or any
other notice to, or making any demand on, Borrower, any other guarantor
of all or any part of the Guaranteed Indebtedness or any other party.
(2) State Farm may at any time, without the consent of or
notice to Guarantor, without incurring responsibility to Guarantor and
without impairing, releasing, reducing or affecting the obligations of
Guarantor hereunder: (i) change the manner, place or terms of payment of
all or any part of the Guaranteed Indebtedness, or renew, extend,
modify, rearrange or alter all or any part of the Guaranteed
Indebtedness; (ii) change the interest rate accruing on any of the
Guaranteed Indebtedness (including, without limitation, any periodic
change in such interest rate accruing on any of the Guaranteed
Indebtedness (including, without limitation, any periodic change in such
interest rate that occurs because such Guaranteed Indebtedness accrues
interest at a variable rate which
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may fluctuate from time to time); (iii) sell, exchange, release,
surrender, subordinate, realize upon or otherwise deal with in any
manner and in any order any collateral for all or any part of the
Guaranteed Indebtedness or this Guaranty or setoff against all or any
part of the Guaranteed Indebtedness; (iv) neglect, delay, omit, fail or
refuse to take or prosecute any action for the collection of all or any
part of the Guaranteed Indebtedness or this Guaranty or to take or
prosecute any action in connection with any of the Loan Documents; (v)
exercise or refrain from exercising any rights against Borrower or
others, or otherwise act or refrain from acting; (vi) settle or
compromise all or any part of the Guaranteed Indebtedness and
subordinate the payment of all or any part of the Guaranteed
Indebtedness to the payment of any obligations, indebtedness or
liabilities which may be due or become due to State Farm or others;
(vii) apply any deposit balance, fund, payment, collections through
process of law or otherwise or other collateral of Borrower to the
satisfaction and liquidation of the indebtedness or obligations of
Borrower to State Farm not guaranteed under this Guaranty; and (viii)
apply any sums paid to State Farm by Guarantor, Borrower or others to
the Guaranteed Indebtedness in such order and manner as State Farm, in
its sole discretion, may determine.
(3) Should State Farm seek to enforce the obligations of
Guarantor hereunder by action in any court or otherwise, Guarantor
waives any requirement, substantive or procedural, that (i) State Farm
first enforce any rights or remedies against Borrower or any other
person or entity liable to State Farm for all or any part of the
Guaranteed Indebtedness, including without limitation that a judgment
first be rendered against Borrower or any other person or entity, or
that Borrower or any other person or entity should be joined in such
cause, or (ii) State Farm first enforce rights against any collateral
which shall ever have been given to secure all or any part of the
Guaranteed Indebtedness or this Guaranty. Such waiver shall be without
prejudice to State Farm's right, at its option, to proceed against
Borrower or any other person or entity, whether by separate action or by
joinder.
(4) IN ADDITION TO ANY OTHER WAIVERS, AGREEMENTS AND
COVENANTS OF GUARANTOR SET FORTH HEREIN, GUARANTOR HEREBY FURTHER WAIVES
AND RELEASES ALL CLAIMS, CAUSES OF ACTION, DEFENSES AND OFFSETS FOR ANY
ACT OR OMISSION OF STATE FARM, ITS DIRECTORS, EMPLOYEES, REPRESENTATIVES
OR AGENTS IN CONNECTION WITH STATE FARM'S ADMINISTRATION OF THE
GUARANTEED INDEBTEDNESS, INCLUDING STATE FARM'S NEGLIGENCE OR STRICT
LIABILITY, BUT EXCLUDING THE GROSS NEGLIGENCE AND WILLFUL MISCONDUCT OF
STATE FARM.
7. OBLIGATIONS NOT IMPAIRED.
(1) Guarantor agrees that its obligations hereunder shall
not be released, diminished, impaired, reduced or affected by the
occurrence of any one or more of the following events: (i) the death,
disability or lack of corporate power of Borrower, Guarantor (except as
provided in PARAGRAPH 10 herein) or any other guarantor of all or any
part of the Guaranteed Indebtedness, (ii) any receivership, insolvency,
bankruptcy or
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other proceedings affecting Borrower, Guarantor or any other guarantor
of all or any part of the Guaranteed Indebtedness, or any of their
respective property; (iii) the partial or total release or discharge of
Borrower or any other guarantor of all or any part of the Guaranteed
Indebtedness, or any other person or entity from the performance of any
obligation contained in any instrument or agreement evidencing,
governing or securing all or any part of the Guaranteed Indebtedness,
whether occurring by reason of law or otherwise; (iv) the taking or
accepting of any collateral for all or any part of the Guaranteed
Indebtedness or this Guaranty including but not limited to a
foreclosure, judicial or non-judicial, a transfer or deed in lieu of
foreclosure or any conveyance or transfer from the Borrower; (v) the
taking or accepting of any other guaranty for all or any part of the
Guaranteed Indebtedness; (vi) any failure by State Farm to acquire,
perfect or continue any lien or security interest on collateral securing
all or any part of the Guaranteed Indebtedness or this Guaranty; (vii)
the impairment of any collateral securing all or any part of the
Guaranteed Indebtedness or this Guaranty; (viii) any failure by State
Farm to sell any collateral securing all or any part of the Guaranteed
Indebtedness or this Guaranty in a commercially reasonable manner or as
otherwise require by law; (ix) any invalidity or unenforceability of or
defect or deficiency in any of the Loan Documents; or (x) any other
circumstance which might otherwise constitute a defense available to, or
discharge of, Borrower or any other guarantor of all or any part of the
Guaranteed Indebtedness.
(2) This Guaranty shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of all or any
part of the Guaranteed Indebtedness is rescinded or must otherwise be
returned by State Farm upon the insolvency, bankruptcy or reorganization
of Borrower, Guarantor, any other guarantor of all or any part of the
Guaranteed Indebtedness, or otherwise, all as though such payment had
not been made.
(3) In the event Borrower is a corporation, joint stock
association or partnership, or is hereafter incorporated, none of the
following shall affect Guarantor's liability hereunder: (i) the
unenforceability of all or any part of the Guaranteed Indebtedness
against Borrower by reason of the fact that the Guaranteed Indebtedness
exceeds the amount permitted by law; (ii) the act of creating all or any
part of the Guaranteed Indebtedness is ultra xxxxx; or (iii) the
officers or partners creating all or any part of the Guaranteed
Indebtedness acted in excess of their authority. Guarantor hereby
acknowledges that withdrawal from, or termination of, any ownership
interest in Borrower now or hereafter owned or held by Guarantor shall
not alter, affect or in any way limit the obligations of Guarantor
hereunder.
8. ACTIONS AGAINST GUARANTOR. In the event of a default in the
payment or performance of all or any part of the Guaranteed Indebtedness when
such Guaranteed Indebtedness becomes due, whether by its terms, by acceleration
or otherwise, Guarantor shall, without notice or demand, promptly pay the amount
due thereon to State Farm, in lawful money of the United States, at State Farm's
address set forth in SUBPARAGRAPH 1(I) above. One or more successive or
concurrent actions may be brought against Guarantor, either in the same action
in which Borrower is sued or in separate actions, as often as State Farm deems
advisable. The exercise by State Farm of any right or remedy under this Guaranty
or under any other agreement
PAGE 7
or instrument, at law, in equity or otherwise, shall not preclude concurrent or
subsequent exercise of any other right or remedy. The books and records of State
Farm shall be admissible in evidence in any action or proceeding involving this
Guaranty and shall be PRIMA FACIE evidence of the payments made on, and the
outstanding balance of, the Guaranteed Indebtedness.
9. PAYMENT BY GUARANTOR. Whenever Guarantor pays any sum which is
or may become due under this Guaranty, written notice must be delivered to State
Farm contemporaneously with such payment. Such notice shall be effective for
purposes of this paragraph when contemporaneously with such payment State Farm
receives such notice either by: (a) personal delivery to the address and
designated department of State Farm identified in SUBPARAGRAPH 1(A) above, or
(b) United States mail, certified or registered, return receipt requested,
postage prepaid, addressed to State Farm at the address shown in SUBPARAGRAPH
1(A) above. In the absence of such notice to State Farm by Guarantor in
compliance with the provisions hereof, any sum received by State Farm on account
of the Guaranteed Indebtedness shall be conclusively deemed paid by Borrower.
10. DEATH OF GUARANTOR. In the event of the death of Guarantor, the
obligations of the deceased Guarantor under this Guaranty shall continue as an
obligation against Guarantor's estate as to all of the Guaranteed Indebtedness.
The terms and conditions of this Guaranty, including without limitation the
consents and waivers set forth in PARAGRAPH 6 hereof, shall remain in effect
with respect to the Guaranteed Indebtedness in the same manner as if Guarantor
had not died.
11. NOTICE OF SALE. In the event that Guarantor is entitled to
receive any notice (which shall be given to the address listed on the signature
page hereof) under the Uniform Commercial Code, as it exists in the state
governing any such notice, of the sale or other disposition of any collateral
securing all or any part of the Guaranteed Indebtedness or this Guaranty,
reasonable notice shall be deemed given in the manner set forth in SECTION 8.1
of the Deed of Trust and Security Agreement executed by Borrower to the benefit
of State Farm dated of even date herewith.
12. WAIVER BY STATE FARM. No delay on the part of State Farm in
exercising any right hereunder or failure to exercise the same shall operate as
a waiver of such right. In no event shall any waiver of the provisions of this
Guaranty be effective unless the same be in writing and signed by an officer of
State Farm, and then only in the specific instance and for the purpose given.
13. SUCCESSORS AND ASSIGNS. This Guaranty is for the benefit of
State Farm, its successors and assigns. This Guaranty is binding upon Guarantor
and Guarantor's heirs, executors, administrators, personal representatives and
successors, including without limitation any person or entity obligated by
operation of law upon the reorganization, merger, consolidation or other change
in the organizational structure of Guarantor.
14. COSTS AND EXPENSES. Guarantor shall pay on demand by State Farm
all costs and expenses, including without limitation all reasonable attorneys'
fees, incurred by State Farm in
PAGE 8
connection with the preparation, administration, enforcement and/or collection
of this Guaranty. This covenant shall survive the payment of the Guaranteed
Indebtedness.
15. SEVERABILITY. If any provision of this Guaranty is held by a
court of competent jurisdiction to be illegal, invalid or unenforceable under
present or future laws, such provision shall be fully severable, shall not
impair or invalidate the remainder of this Guaranty and the effect thereof shall
be confined to the provision held to the illegal, invalid or unenforceable.
16. NO OBLIGATION. Nothing contained herein shall be construed as an
obligation on the part of State Farm to extend or continue to extend credit to
Borrower.
17. AMENDMENT. No modification or amendment of any provision of this
Guaranty, nor consent to any departure by Guarantor therefrom, shall be
effective unless the same shall be in writing and signed by an officer of State
Farm, and then shall be effective only in the specific instance and for the
purpose for which given.
18. CUMULATIVE RIGHTS. All rights and remedies of State Farm
hereunder are cumulative of each other and of every other right or remedy which
State Farm may otherwise have at law or in equity or under any instrument or
agreement, and the exercise of one or more of such rights or remedies shall not
prejudice or impair the concurrent or subsequent exercise of any other rights or
remedies.
19. GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
20. VENUE. Federal and state courts within XXXXXX COUNTY, TEXAS
shall have jurisdiction over any and all disputes arising under or pertaining to
this Guaranty and venue for any such disputes shall be in the county where the
Premises is located.
21. COMPLIANCE WITH APPLICABLE USURY LAWS. Notwithstanding any other
provision of this Guaranty or of any instrument or agreement evidencing,
governing or securing all or any part of the Guaranteed Indebtedness, Guarantor
and State Farm by its acceptance hereof agree that Guarantor shall never be
required or obligated to pay interest in excess of the maximum nonusurious
interest rate as may be authorized by applicable law for the written contracts
which constitute the Guaranteed Indebtedness. It is the intention of Guarantor
and State Farm to conform strictly to the applicable laws which limit interest
rates, any of the aforesaid contracts for interest, if and to the extent payable
by Guarantor, shall be held to be subject to reduction to the maximum
nonusurious interest rate allowed under said law.
22. DESCRIPTIVE HEADINGS AND DEFINITIONS. The headings in this
Guaranty are for convenience only and shall not define or limit provisions
hereof. All capitalized terms used herein, but not defined herein, shall have
the same meaning as set forth in the Promissory Note.
23. GENDER. Within this Guaranty, words of any gender shall be held
and construed to include the other gender.
PAGE 9
24. ENTIRE AGREEMENT. This Guaranty contains the entire agreement
between Guarantor and State Farm regarding the subject matter hereof and
supersedes all prior written and oral agreements and understandings, if any,
regarding same; provided, however, this Guaranty is in addition to and does not
replace, cancel, modify or affect any other guaranty of Guarantor now or
hereafter held by State Farm that relates to Borrower or any other person or
entity.
EXECUTED as of the date first above written.
ADDRESS FOR GUARANTOR GUARANTOR:
0000 X. Xxxxxxxx Xxxxxxx, Suite 200 BEHRINGER HARVARD HOLDINGS, LLC,
Xxxxxx, Xxxxx 00000 a Texas limited liability company
By: /s/ Xxxxxx X. Xxxxxxx, III
---------------------------------
Xxxxxx X. Xxxxxxx, III, Secretary
STATE OF TEXAS ss.
ss.
COUNTY OF DALLAS ss.
BEFORE ME, the undersigned authority, on this day personally appeared
Xxxxxx X. Xxxxxxx, III, Secretary of BEHRINGER HARVARD HOLDINGS, LLC, a Texas
limited liability company, known to me to be the person whose name is subscribed
to the foregoing instrument, and acknowledged to me that he executed the same
for the purposes and consideration therein expressed, in the capacity therein
stated, and on behalf of said limited liability company.
/s/ Xxxxxx X. Xxxx
--------------------------------------
Notary Public, State of Texas
Xxxxxx X. Xxxx
--------------------------------------
Printed Name of Notary Public
My Commission Expires: January 8, 2006
----------------
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