EXHIBIT 10.18
GUARANTY
(Securities Laws)
THIS GUARANTY ("GUARANTY") is made as of this 18th day of August, 2006 in
favor of LASALLE BANK NATIONAL ASSOCIATION, a national banking association,
having an address at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx
00000 (together with its successors and assigns, "LENDER") by TRIPLE NET
PROPERTIES, LLC, a Virginia limited liability company, having an address at 0000
Xxxxx Xxxxxx Xxxxxx, Xxx. 000, Xxxxx Xxx, Xxxxxxxxxx 00000 ("GUARANTOR").
BACKGROUND
A. Lender has agreed to loan the principal amount of Nine Million One
Hundred Forty Six Thousand and No/100 Dollars ($9,146,000.00) ("LOAN") to NNN
Southpointe, LLC, a Delaware limited liability company, ("BORROWER"). The Loan
also will be evidenced by Borrower's promissory note to Lender of even date
herewith ("NOTE") and secured by, among other things, a mortgage, deed of trust,
deed to secure debt or similar security instrument made by Borrower to Lender
also of even date herewith ("SECURITY INSTRUMENT") which grants to Lender, among
other things, a first lien on the property described therein.
B. Guarantor will derive substantial benefit from Lender's making of the
Loan.
C. Lender requires as a condition to making the Loan that Guarantor execute
this Guaranty.
NOW, THEREFORE, to induce Lender to make the Loan, and in consideration of
the substantial benefit Guarantor will derive from the Loan, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, Guarantor hereby agrees
as follows:
ARTICLE 1
DEFINED TERMS
Section 1.01 Defined Terms. Capitalized terms used in this Guaranty and not
specifically defined in this Guaranty have the meaning provided in the Security
Instrument.
ARTICLE 2
OBLIGATION GUARANTEED
Section 2.01 Guaranty. Guarantor irrevocably and unconditionally guarantees
to Lender the prompt payment of all losses, expenses, and other liabilities
arising out of or attributable to (i) the violation of any applicable law
governing the sale of securities in connection with the structure, organization,
sale or syndication of membership interests in NNN Southpointe, LLC, or in the
sale or syndication of tenant in common ownership interests in the Property, and
(ii) the Securities Liabilities (as hereinafter defined) and any legal or other
expenses reasonably incurred by Lender, in investigating or defending the
Securities Liabilities,
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to the extent such Securities Liabilities relate to any Securities and Exchange
Commission investigation, inquiry or proceeding relating to Triple Net
Properties, LLC or any of its affiliates (collectively, the "Guaranteed
Obligations"). As used herein, the term "Securities Liabilities" shall mean any
liability, obligation or other remedy (including, without limitation, any right
of rescission in favor of any Borrower or any member of any Borrower) arising
from or related to that certain investigation by the Securities and Exchange
Commission (the "SEC") captioned "In the matter of Triple Net Properties, LLC"
(as well as any subsequent related investigation involving any affiliate of
Triple Net Properties, LLC) pursuant to which the SEC has requested information,
including financial information, from Triple Net Properties, LLC relating to
disclosure in public and private securities offerings sponsored by Triple Net
Properties and its affiliates.
Section 2.02 Continuing Obligation. This Guaranty is a continuing guaranty
and in full force and effect and will be discharged only if and when the Loan
has been paid in full, and all obligations under the Security Instrument and
other Loan Documents have been fully performed; provided, however, that
notwithstanding any of the foregoing to the contrary, this Guaranty shall remain
in full force and effect for so long as any payment hereunder may be voided in
bankruptcy proceedings as a preference or for any other reason.
Section 2.03 Direct Action Against Guarantor. Guarantor's liability under
this Guaranty is a guaranty of payment and performance and not of collection.
Lender has the right to require Guarantor to pay, comply with and satisfy its
obligations and liabilities under this Guaranty, and shall have the right to
proceed immediately against Guarantor with respect thereto, without being
required to attempt recovery first from Borrower or any other party, without
first suing on the Note or any other Loan Document and without demonstrating
that the collateral for the Loan is inadequate security or that Lender has
exercised (to any degree) or exhausted any of Lender's other rights and remedies
with respect to Borrower or any collateral for the Loan.
ARTICLE 3
GENERAL TERMS AND CONDITIONS
Section 3.01 Payments Due; Interest on Amounts Payable Hereunder. Amounts
payable to Lender under this Guaranty shall be immediately due and payable on
Lender's written demand and shall be paid without reduction by set-off, defense,
counterclaim or cross-claim. Amounts not paid within ten (10) business days of
Lender's written demand shall, at Lender's option and without prejudice to
Lender's rights for failure to pay, bear interest at the Default Rate (as
defined in the Note) from the date of Lender's demand notice until paid in full.
Interest at the lower of the Default Rate (or the maximum interest rate
permitted by applicable law) also shall accrue on any judgment obtained by
Lender in connection with the enforcement or collection of amounts due under
this Guaranty until such judgment is paid in full. If interest paid or payable
hereunder is deemed to exceed the maximum rate permitted by law, then the amount
to be paid shall be immediately reduced to such maximum rate and thereafter
computed at such maximum rate. Lender may apply all money received by Lender in
such priority and proportions as Lender may elect.
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Section 3.02 Cumulative Remedies. Guarantor acknowledges, that following an
Event of Default with respect to the Loan, Lender shall be entitled to
accelerate the Loan and exercise all other rights and remedies as have been
provided to Lender hereunder, under the other Loan Documents, by law or in
equity including without limitation enforcement of this Guaranty. All rights and
remedies are cumulative and may be exercised independently, concurrently or
successively in Lender's sole discretion and as often as occasion therefor shall
arise. Lender's delay or failure to accelerate the Loan or exercise any other
remedy upon the occurrence of an Event of Default with respect to the Loan shall
not be deemed a waiver of such right as remedy. No partial exercise by Lender of
any right or remedy will preclude further exercise thereof. Notice or demand
given to Borrower in any instance will not entitle Borrower to notice or demand
in similar or other circumstances nor constitute Lender's waiver of its right to
take any future action in any circumstance without notice or demand (except
where expressly required by this Guaranty to be given). Lender may release other
security for the Loan, may release any party liable for the Loan, may grant
extensions, renewals or forbearances with respect thereto, may accept a partial
or past due payment or grant other indulgences, or may apply any other security
held by it to payment of the Loan, in each case without prejudice to its rights
under this Guaranty and without such action being deemed an accord and
satisfaction or a reinstatement of the Loan. Lender will not be deemed as a
consequence of its delay or failure to act, or any forbearances granted, to have
waived or be estopped from exercising any of its rights or remedies.
Section 3.03 Enforcement Costs. Guarantor hereby agrees to pay, on written
demand by Lender, all costs incurred by Lender in collecting any amount payable
under this Guaranty or enforcing or protecting its rights under the Guaranty in
each case whether or not legal proceedings are commenced. Such fees and expenses
include, without limitation, reasonable fees for attorneys, paralegals and other
hired professionals, a reasonable assessment of the cost of services performed
by Lender's default management staff, court fees, costs incurred in connection
with pre-trial, trial and appellate level proceedings (including discovery and
expert witnesses), costs incurred in post-judgment collection efforts or in any
bankruptcy proceeding. Amounts incurred by Lender shall be immediately due and
payable, and shall bear interest at the Default Rate from the date of
disbursement until paid in full, if not paid in full within ten (10) business
days after Lender's written demand for payment.
Section 3.04 Unimpaired Liability. Guarantor acknowledges and agrees that
all obligations hereunder are and shall be absolute and unconditional under any
and all circumstances without regard to the validity, regularity or
enforceability of any or all of the Loan Documents or the existence of any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor or surety. Without limiting the foregoing, Guarantor
acknowledges and agrees that its liability hereunder shall in no way be
released, terminated, discharged, limited or impaired by reason of any of the
following (whether or not Guarantor has any knowledge or notice thereof): (a)
the irregularity, invalidity or unenforceability, in whole or in part, of any of
the Loan Documents against Borrower or Lender; (b) Borrower's lack of authority
or lawful right to enter into any of the Loan Documents; (c) any modification,
supplement, extension, consolidation, restatement, waiver or consent provided by
Lender with respect to any of the Loan Documents including, without limitation,
approval of a Transfer or the grant of extensions of time for payment or
performance; (d) failure to record any Loan Document or to perfect any security
interest intended to be provided thereby or otherwise
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to protect, secure or insure any collateral for the Loan; (e) Lender's failure
to exercise, or delay in exercising, any rights or remedies Lender may have
under the Loan Documents or under this Guaranty Agreement; (f) the release or
substitution, in whole or in part, of any collateral for the Loan or acceptance
of additional collateral for the Loan; (g) the release of Borrower from
performance, in whole or in part, under any of the other Loan Documents, in each
case whether by operation of law, Lender's voluntary act, or otherwise; (h) any
bankruptcy, insolvency, reorganization, adjustment, dissolution, liquidation or
other like proceeding involving or affecting Borrower, any member of Borrower,
any other Guarantor or Lender; (i) the termination or discharge of the Security
Instrument or the exercise of any power of sale or any foreclosure (judicial or
otherwise) or delivery or acceptance of a deed-in-lieu of foreclosure; (j) the
existence of any claim, setoff, counterclaim, defense or other rights which
Guarantor may have against Borrower, any member of Borrower, any other Guarantor
or Lender, whether in connection with the Loan or any other transaction; (k) the
accuracy or inaccuracy of the representations and warranties made by Guarantor
in this Guaranty; or (l) any other circumstance which might otherwise constitute
a legal or equitable discharge or defense of a guarantor.
Section 3.05 Waivers. Guarantor hereby waives and relinquishes, to the
fullest extent permitted by law: (a) all rights or claims of right to cause a
marshalling of assets or to cause Lender to proceed against any of the
collateral for the Loan before proceeding under this Guaranty against it; (b)
all rights and remedies accorded by applicable law to sureties or guarantors,
except any rights of subrogation and contribution (the exercise of which are
subject to the terms of this Guaranty); (c) the right to assert a counterclaim,
other than a mandatory or compulsory counterclaim, in any action or proceeding
brought by or against it; (d) notice of acceptance of this Guaranty and of any
action taken or omitted in reliance hereon; (e) presentment for payment, demand,
protest, notice of nonpayment or failure to perform or observe, or any other
proof, notice or demand to which it might otherwise be entitled with respect to
its obligations hereunder; and (f) all homestead or exemption rights against the
obligations hereunder and the benefits of any statutes of limitation or repose.
Section 3.06 Guarantor Bound by Judgment Against Borrower. Guarantor agrees
that it shall be bound conclusively, in any jurisdiction, by the judgment in any
action by Lender against Borrower in connection with the Loan Documents
(wherever instituted) as if Guarantor were a party to such action even if not so
joined as a party.
Section 3.07 Certain Consequences of Borrower's Bankruptcy. (a) If Borrower
shall be subject to the protection of the Bankruptcy Code or any insolvency law
the effect of which is to prevent or delay Lender from taking any remedial
action against Borrower, including the exercise of any option Lender has to
accelerate and declare the Loan immediately due and payable, Lender may, as
against Guarantor, nevertheless declare the Loan due and payable and enforce any
or all of its rights and remedies against Guarantor as provided herein.
(b) Any payment made on the Loan, whether made by Borrower or
Guarantor or any other Person, that is required to be refunded or recovered from
Lender as a preference or a fraudulent transfer or is otherwise set-aside
pursuant to the Bankruptcy Code or any insolvency or other debtor relief law
shall not be considered as a payment made on the Loan or under this Guaranty.
Guarantor's liability under this Guaranty shall continue with respect to any
such payment, or be deemed reinstated, with the same effect as if such payment
had not been received
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by Lender, notwithstanding any notice of revocation of this Guaranty prior to
such avoidance or recovery or payment in full of the Loan, until such time as
all periods have expired within which Lender could be required to return any
amount paid at any time on account of the Guaranteed Obligations.
(c) Until payment in full of the Loan (including interest accruing on
the Note after the commencement of a proceeding by or against Borrower under the
Bankruptcy Code, which interest the parties agree remains a claim that is prior
and superior to any claim of Guarantor notwithstanding any contrary practice,
custom or ruling in cases under the Bankruptcy Code generally), Guarantor agrees
not to accept any payment or satisfaction of any kind of indebtedness of
Borrower to Guarantor and hereby assigns such indebtedness to Lender, including
the right (but not the obligation) to file proof of claim and to vote in any
other bankruptcy or insolvency action, including the right to vote on any plan
of reorganization, liquidation or other proposal for debt adjustment under
Federal or state law.
Section 3.08 Subrogation and Contribution. Guarantor agrees that no payment
by it under this Guaranty shall give rise to any rights of subrogation against
Borrower or the collateral for the Loan, unless and until Lender has received
full and indefeasible payment of the Loan. If the deferral of such rights shall
be unenforceable for any reason, Guarantor agrees that its rights of subrogation
shall be junior and subordinate to Lender's rights against Borrower and the
collateral for the Loan.
Section 3.09 Subordination of Borrower's Obligations to Guarantor. Any
indebtedness of Borrower to Guarantor, now or hereafter existing, together with
any interest thereon, shall be and hereby is deferred, postponed and
subordinated to the prior payment in full of the Loan. Further, Guarantor agrees
that following the occurrence of an Event of Default, should Guarantor receive
any payment, satisfaction or security for any indebtedness owed by Borrower to
it, the same shall be delivered to Lender in the form received (endorsed or
assigned as may be appropriate) for application on account of, or as security
for, the Loan and until so delivered to Lender, shall be held in trust for
Lender as security for the Loan.
Section 3.10 Lender Transferees; Secondary Market Activities. Guarantor
acknowledges and agrees that Lender, without notice to Guarantor or Guarantor's
prior consent, may assign all or any portion of its rights hereunder in
connection with any sale or assignment of the Loan or servicing rights related
to the Loan, each grant of participations in the Loan, a transfer of the Loan as
part of a securitization of the Loan (a "SECURITIZATION") in which Lender
assigns its rights to a securitization trustee, or a contract for the servicing
of the Loan, and that each such assignee, participant or servicer shall be
entitled to exercise all of Lender's rights and remedies hereunder. Guarantor
further acknowledges that Lender may provide to third parties with an existing
or prospective interest in the servicing, enforcement, ownership, purchase,
participation or Securitization of the Loan, including, without limitation, any
rating agency rating the securities issued in respect of a Securitization or
participation of the Loan, and any entity maintaining databases on the
underwriting and performance of commercial mortgage loans, any and all
information which Lender now has or may hereafter acquire relating to the Loan,
the Property or with respect to Borrower or Guarantor, as Lender determines
necessary or desirable. Guarantor irrevocably waives all rights it may have
under applicable law, if any, to prohibit such disclosure, including, without
limitation, any right of privacy.
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Section 3.11 Financial Reports, Inspection of Records. Guarantor agrees to
furnish to Lender from time to time, by such dates as Lender may require (but no
more frequently than annually unless an Event of Default under the Security
Instrument or any other Loan Document exists, in which event Lender may require
same from time to time), Guarantor's Federal and State income tax returns, a
personal financial statement if Guarantor is an individual and a balance sheet
and statement of changes in Guarantor's financial position if Guarantor is not
an individual, in each case certified by such Guarantor as complete and
accurate. Such financial statements shall be in reasonable detail and prepared
in accordance with consistently applied accounting methods reasonably acceptable
to Lender.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Section 4.01 Intentionally Omitted.
Section 4.02 General. Guarantor individually represents and warrants that:
(a) Authority. Guarantor has the full power and authority to execute
and deliver this Guaranty and to perform its obligations hereunder.
(b) Valid and Binding Obligation. This Guaranty constitutes
Guarantor's legal, valid and binding obligation, enforceable against it in
accordance with its terms, except to the extent enforceability may be limited
under applicable bankruptcy and insolvency laws and similar laws affecting
creditors' rights generally and to general principles of equity.
(c) No Conflict with Other Agreement. Guarantor's execution, delivery
and performance of this Guaranty will not (i) violate Guarantor's organizational
documents if Guarantor is not an individual, (ii) result in the breach of, or
conflict with, or result in the acceleration of, any obligation under any
guaranty, indenture, credit facility or other instrument to which Guarantor or
any of its assets may be subject, or (iii) violate any order, judgment or decree
to which Guarantor or any of its assets is subject.
(d) No Pending Litigation. Except as otherwise disclosed to Lender, no
action, suit, proceeding or investigation currently is pending or, to the best
of Guarantor's knowledge, threatened against Guarantor which, either in any one
instance or in the aggregate, may have a material, adverse effect on Guarantor's
ability to perform its obligations under this Guaranty.
(e) Consideration. Guarantor will derive substantial benefit from the
Loan to Borrower.
ARTICLE 5
MISCELLANEOUS
Section 5.01 Notices. All notices and other communications under this
Guaranty are to be in writing and addressed in the case of Lender to the address
as set forth below and in the case
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of Guarantor, as set forth below Guarantor's signature hereto. Default or demand
notices shall be deemed to have been duly given upon the earlier of: (a) actual
receipt; (b) one (1) business day after having been timely deposited for
overnight delivery, fee prepaid, with a reputable overnight courier service,
having a reliable tracking system; (c) one (1) business day after having been
sent by telecopier (with answer back acknowledged) provided an additional notice
is given pursuant to (b); or (d) three (3) business days after having been
deposited in any post office or mail depository regularly maintained by the U.S.
Postal Service and sent by certified mail, postage prepaid, return receipt
requested, and in the case of clause (b) and (d) irrespective of whether
delivery is accepted. A new address for notice may be established by written
notice to the other parties; provided, however, that no address change will be
effective until written notice thereof actually is received by the party to whom
such address change is sent. Lender's notice address is as follows:
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Real Estate Capital Markets
Facsimile No.: (000) 000-0000
Section 5.02 Entire Agreement; Modification. This Guaranty is the entire
agreement between the parties hereto with respect to the subject matter hereof,
and supersedes and replaces all prior discussions, representations,
communications and agreements (oral or written). This Guaranty shall not be
modified, supplemented, or terminated, nor any provision hereof waived, except
by a written instrument signed by the party against whom enforcement thereof is
sought, and then only to the extent expressly set forth in such writing.
Section 5.03 Binding Effect; Joint and Several Obligations. This Guaranty
is binding upon and inures to the benefit of Guarantor, Lender and their
respective heirs, executors, legal representatives, successors, and assigns,
whether by voluntary action of the parties or by operation of law. Guarantor may
not delegate or transfer its obligations under this Guaranty. If, at any time
during the term of the Loan, there is more than one Guarantor, each Guarantor
shall be jointly and severally liable hereunder.
Section 5.04 Unenforceable Provisions. Any provision of this Guaranty which
is determined by a court of competent jurisdiction or government body to be
invalid, unenforceable or illegal shall be ineffective only to the extent of
such determination and shall not affect the validity, enforceability or legality
of any other provision, nor shall such determination apply in any circumstance
or to any party not controlled by such determination.
Section 5.05 Duplicate Originals; Counterparts. This Guaranty may be
executed in any number of duplicate originals, and each duplicate original shall
be deemed to be an original. This Guaranty (and each duplicate original) also
may be executed in any number of counterparts, each of which shall be deemed an
original and all of which together constitute a fully executed Guaranty even
though all signatures do not appear on the same document.
Section 5.06 Construction of Certain Terms. Defined terms used in this
Guaranty may be used interchangeably in singular or plural form, and pronouns
shall be construed to cover all
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genders. Article and section headings are for convenience only and shall not be
used in interpretation of this Guaranty. The words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Guaranty as a whole
and not to any particular section, paragraph or other subdivision; and the word
"section" refers to the entire section and not to any particular subsection,
paragraph of other subdivision; and "Guaranty" and each of the Loan Documents
referred to herein mean the agreement as originally executed and as hereafter
modified, supplemented, extended, consolidated, or restated from time to time.
Section 5.07 GOVERNING LAW; JURISDICTION. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS, WITHOUT
REGARD TO CONFLICTS OF LAW PRINCIPLES. INDEMNITORS HEREBY IRREVOCABLY SUBMIT TO
THE JURISDICTION OF ANY COURT OF COMPETENT JURISDICTION LOCATED IN XXX XXXX XX
XXXXXXX XXX XXXXX XX XXXXXXXX IN CONNECTION WITH ANY PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT.
Section 5.08 Intentionally Omitted
SECTION 5.09 WAIVER OF JURY TRIAL. GUARANTOR AND LENDER HERERBY AGREE NOT
TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVE ANY
RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR
HEREAFTER EXIST WITH REGARD TO THIS GUARANTY, THE NOTE, THE SECURITY INSTRUMENT
OR THE OTHER LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING
IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN
KNOWINGLY AND VOLUNTARILY BY GUARANTOR AND LENDER, AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH RIGHT TO TRIAL BY JURY
WOULD OTHERWISE ACCRUE. GUARANTOR AND LENDER EACH ARE HEREBY AUTHORIZED TO FILE
A COPY OF THIS SECTION IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER
BY EACH OTHER.
[Remainder of page is blank; signatures appear on next page.]
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IN WITNESS WHEREOF, the undersigned hereby signs, seals and delivers this
Guaranty.
TRIPLE NET PROPERTIES, LLC, a
Virginia limited liability company
By: /s/ Xxxxx Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx
Its: Chief Financial Officer
Address for Notice:
0000 Xxxxx Xxxxxx Xxxxxx, Xxx. 000
Xxxxx Xxx, Xxxxxxxxxx 00000
Fax: 000-000-0000
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