EXHIBIT 10.13
EXCEPTIONS TO NON-RECOURSE GUARANTY
This EXCEPTIONS TO NON-RECOURSE GUARANTY (this "Guaranty") is entered
into as of December 15, 2000, by HUB REALTY COLLEGE PARK I, LLC, a Maryland
limited liability company (the "Guarantor"), for the benefit of XXXXXXX XXXXX
MORTGAGE LENDING, INC., a Delaware corporation (together with its successors and
assigns, the "Lender").
RECITALS
X. Xxxxxxxx Plaza Property Trust, a Maryland real estate investment
trust (the "Borrower") has requested and Lender has agreed to make a loan in the
principal amount of $44,000,000 (the "Loan"), pursuant to a Loan and Security
Agreement, dated of even date herewith (as amended, modified or restated, the
"Loan Agreement"), between Borrower and Lender which Loan will be evidenced by a
Promissory Note, dated of even date herewith (as amended, modified, renewed or
restated, and any replacement notes therefor, collectively, the "Note"), from
Borrower to Lender and secured by, among other things, a Mortgage, Assignment of
Leases and Rents, Security Agreement and Fixture Filing, dated of even date
herewith (as amended, modified, restated, spread or consolidated, the
"Instrument"), encumbering certain real property located at Xxx Xxxxxxxx Xxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx, as more particularly described in the Instrument
(the "Property"). As used herein, the term "Loan Documents" shall mean the Note,
the Instrument, and any other documents or instruments given by Borrower or
others and accepted by Lender for the purposes of evidencing, securing, or
guaranteeing the Loan, each as amended or modified from time to time.
Capitalized terms used but not otherwise defined herein shall have the
respective meanings given thereto in the Loan Agreement.
B. Guarantor will derive substantial benefits from Lender's making the
Loan to Borrower.
C. As a condition to making the Loan to Borrower, Lender requires that
Guarantor execute this Guaranty.
NOW, THEREFORE, in order to induce Lender to make the Loan to Borrower,
and in consideration thereof, Guarantor agrees as follows:
1. As used herein, the term "Indebtedness" shall mean all obligations
evidenced by the Note or secured by the Instrument.
2. Guarantor hereby absolutely, unconditionally and irrevocably
guarantees to Lender the full and prompt payment when due, whether at maturity
or earlier, by reason of acceleration or otherwise, and at all times thereafter,
and the full and prompt performance when due, of all of the following
(collectively, the "Guaranteed Obligations"):
(a) All amounts for which Borrower is liable under Article XII of
the Loan Agreement; and
(b) All costs and expenses, including reasonable fees and out of
pocket expenses of attorneys and expert witnesses, incurred by
Lender in enforcing its rights under this Guaranty.
For purposes of determining Guarantor's liability under this Guaranty, all
payments made by Borrower with respect to the Indebtedness and all amounts
received by Lender from the enforcement of its rights under the Instrument shall
be applied first to the portion of the Indebtedness for which neither Borrower
nor Guarantor have personal liability.
Guarantor hereby promises to pay and perform, as and when due (whether by
acceleration, at maturity, or otherwise) and at all times thereafter, each and
all of the items and obligations which are stated to be guaranteed hereunder but
which are obligations for which Guarantor is primarily liable or are not
obligations of others. Guarantor hereby agrees that any such sums shall accrue
interest at the Default Rate until paid if not paid as and when due and that
such sums, together with any accrued interest thereon, shall become a part of
Guarantor's obligations hereunder.
3. The obligations of Guarantor under this Guaranty shall survive any
foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu
of foreclosure, and any release of record of the Instrument.
4. Guarantor's obligations under this Guaranty constitute an
unconditional guaranty of payment and not merely a guaranty of collection.
5. The obligations of Guarantor under this Guaranty shall be performed
without demand by Lender and shall be unconditional irrespective of the
genuineness, validity, regularity or enforceability of any of the Loan
Documents, and without regard to any other circumstance which might otherwise
constitute a legal or equitable discharge of a surety or a guarantor. Guarantor
shall be liable even if Borrower had no liability at the time of execution of
the Loan Documents, or thereafter ceases to be liable. Guarantor hereby waives
the benefit of all principles or provisions of law, statutory or otherwise,
which are or might be in conflict with the terms of this Guaranty and agrees
that Guarantor's obligations shall not be affected by any circumstances, whether
or not referred to in this Guaranty, which might otherwise constitute a legal or
equitable discharge of a surety or a guarantor. Guarantor hereby waives the
benefits of any right of discharge under any and all statutes or other laws
relating to guarantors or sureties and any other rights of sureties and
guarantors thereunder. Without limiting the generality of the foregoing,
Guarantor hereby waives, to the fullest extent permitted by law, diligence in
collecting the Indebtedness, presentment, demand for payment, protest, all
notices with respect to the Note, this Guaranty, or any other Loan Document
which may be required by statute, rule of law or otherwise to preserve Lender's
rights against Guarantor under this Guaranty, including, but not limited to,
notice of acceptance, notice of any amendment of the Loan Documents, notice of
the occurrence of any default, notice of intent to accelerate, notice of
acceleration, notice of dishonor, notice of foreclosure, notice of protest, and
notice of the incurring by Borrower of any obligation or indebtedness. Guarantor
also waives, to the fullest extent permitted by law, following an Event of
Default, all rights to require Lender to (a) proceed against Borrower or any
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other guarantor of Borrower's payment or performance with respect to the
Indebtedness (an "Other Guarantor"), (b) if Borrower or any Other Guarantor is a
partnership, proceed against any general partner of Borrower or the Other
Guarantor, (c) proceed against or exhaust any collateral held by Lender to
secure the repayment of the Indebtedness, or (d) pursue any other remedy it may
now or hereafter have against Borrower, or if Borrower is a partnership, any
general partner of Borrower.
6. Guarantor understands that the exercise by Lender of certain rights
and remedies contained in the Instrument (such as a nonjudicial foreclosure
sale) may affect or eliminate Guarantor's right of subrogation against Borrower
and that Guarantor may therefore incur a partially or totally nonreimbursable
liability under this Guaranty. Nevertheless, Guarantor hereby authorizes and
empowers Lender to exercise, in its sole and absolute discretion, any right or
remedy, or any combination thereof, which may then be available, since it is the
intent and purpose of Guarantor that its obligations under this Guaranty shall
be absolute, independent and unconditional under any and all circumstances.
Guarantor expressly waives any defense (which defense, if Guarantor had not
given this waiver, Guarantor might otherwise have) to a judgment against
Guarantor by reason of a judicial or nonjudicial foreclosure. Without limiting
the generality of the foregoing, Guarantor hereby expressly waives any and all
benefits under any applicable law which, if Guarantor had not given this waiver,
(i) would otherwise limit Guarantor's liability after a foreclosure sale to the
difference between the obligations of Guarantor under this Guaranty and the fair
market value of the property or interests sold at such nonjudicial foreclosure
sale, (ii) would otherwise limit Lender's right to recover a deficiency judgment
after a foreclosure sale, and (iii) would otherwise require Lender to exhaust
all of its security before a personal judgment could be obtained for a
deficiency. Notwithstanding any foreclosure of the lien of the Instrument,
whether by the exercise of the power of sale contained in the Instrument, by an
action for judicial foreclosure or by Lender's acceptance of a deed in lieu of
foreclosure, Guarantor shall remain bound under this Guaranty. Guarantor waives
all rights and defenses that Guarantor may have because Borrower's obligations
are secured by real property. This means, among other things:
(i) Lender may collect from Guarantor without first
foreclosing on any real or personal property collateral pledged by Borrower or
others; and
(ii) If Lender forecloses on any real property collateral
pledged by Borrower or others: (a) the amount of the debt may be reduced only by
the price for which that collateral is sold at the foreclosure sale, even if the
collateral is worth more than the sale price; and (b) Lender may collect from
Guarantor even if Lender, by foreclosing on the real property collateral, has
destroyed any right Guarantor may have to collect from Borrower.
This is an unconditional and irrevocable waiver of any rights and defenses that
Guarantor may have because Borrower's obligations are secured by real property.
7. Guarantor also waives any right or defense based upon an election of
remedies by Lender, even though such election (e.g., nonjudicial foreclosure
with respect to any collateral held by Lender to secure repayment of the
Indebtedness) destroys or otherwise impairs the subrogation rights of Guarantor
or the right of Guarantor (after payment of the obligations
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guaranteed by Guarantor under this Guaranty) to proceed against Borrower for
reimbursement, or both.
8. Guarantor shall have no right to assert or exercise, or attempt to
assert or exercise, and hereby waives any right to assert or attempt to assert
any claim for, subrogation, reimbursement, indemnification, and contribution
against Borrower and against any general partner, member or other constituent of
Borrower, and against any other person or any collateral or security for the
Indebtedness, until the Indebtedness has been indefeasibly paid and satisfied in
full, and there has expired the maximum possible period thereafter during which
any payment made by Borrower or others to Lender with respect to the
Indebtedness could be deemed a preference under the United States Bankruptcy
Code.
9. At any time or from time to time, without notice to Guarantor and
without affecting the liability of Guarantor for the Guaranteed Obligations, (a)
the time for payment of the principal of or interest on the Indebtedness may be
extended or the Indebtedness may be renewed in whole or in part; (b) the time
for Borrower's performance of or compliance with any covenant or agreement
contained in the Note, the Loan Agreement, the Instrument or any other Loan
Document, whether presently existing or hereinafter entered into, may be
extended or such performance or compliance may be waived; (c) the maturity of
the Indebtedness may be accelerated as provided in the Note, the Loan Agreement,
the Instrument, or any other Loan Document; (d) the Note, the Loan Agreement,
the Instrument, or any other Loan Document may be modified or amended by Lender
and Borrower in any respect, including, but not limited to, an increase in the
principal amount; and (e) any security for the Indebtedness may be modified,
exchanged, surrendered or otherwise dealt with or additional security may be
pledged or mortgaged for the Indebtedness.
10. Any indebtedness of Borrower held by Guarantor now or in the future
is and shall be subordinated to the Indebtedness and any such indebtedness of
Borrower shall be collected, enforced and received by Guarantor, as trustee for
Lender, but without reducing or affecting in any manner the liability of
Guarantor under the other provisions of this Guaranty.
11. If any payment by Borrower is held to constitute a preference under
any applicable bankruptcy, insolvency, or similar laws, or if for any other
reason Lender is required to refund any sums to Borrower, such refund shall not
constitute a release of any liability of Guarantor under this Guaranty. It is
the intention of Lender and Guarantor that Guarantor's obligations under this
Guaranty shall not be discharged except by Guarantor's performance of such
obligations and then only to the extent of such performance.
12. Lender may assign its rights under this Guaranty in whole or in
part and upon any such assignment, all the terms and provisions of this Guaranty
shall inure to the benefit of such assignee to the extent so assigned. The terms
used to designate any of the parties herein shall be deemed to include the
heirs, legal representatives, successors and assigns of such parties; and the
term "Lender" shall include, in addition to Lender, any lawful owner, holder or
pledgee of the Note.
13. This Guaranty and the other Loan Documents represent the final
agreement between the parties and may not be contradicted by evidence of prior,
contemporaneous or
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subsequent oral agreements. There are no unwritten oral agreements between the
parties. All prior or contemporaneous agreements, understandings,
representations, and statements, oral or written, are merged into this Guaranty
and the other Loan Documents. Guarantor acknowledges that it has received copies
of the Note and all other Loan Documents. Neither this Guaranty nor any of its
provisions may be waived, modified, amended, discharged, or terminated except by
an agreement in writing signed by the party against which the enforcement of the
waiver, modification, amendment, discharge, or termination is sought, and then
only to the extent set forth in that agreement.
14. THIS GUARANTY SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES.
15. This Guaranty has been duly authorized, executed and delivered by
Guarantor and constitutes the valid and binding obligation of Guarantor,
enforceable against Guarantor in accordance with its terms. No approval,
consent, order or authorization of any governmental authority and no
designation, registration, declaration or filing with any governmental authority
is required in connection with the execution and delivery of this Guaranty by
Guarantor. Guarantor has no defense or offset to the enforcement of this
Guaranty. The execution and delivery of this Guaranty will not violate or
contravene in any way the articles of incorporation or bylaws or partnership
agreement, articles of organization or operating agreement, as the case may be,
of Guarantor or any indenture, agreement or instrument to which Guarantor is a
party or by which it or its property may be bound, or be in conflict with,
result in a breach of or constitute a default under any such indenture,
agreement or other instrument, result in the creation or imposition of any lien,
charge or encumbrance of any nature whatsoever upon any of the property or
assets of Guarantor, except as contemplated by the provisions of the Loan
Documents, and no action or approval with respect thereto by any third person is
required.
16. GUARANTOR AND LENDER EACH (A) AGREE NOT TO ELECT A TRIAL BY JURY
WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS GUARANTY OR THE RELATIONSHIP
BETWEEN THE PARTIES AS GUARANTOR AND LENDER THAT IS TRIABLE OF RIGHT BY A JURY
AND (B) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE
EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO
TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH
THE BENEFIT OF COMPETENT LEGAL COUNSEL.
17. Guarantor hereby agrees that, (a) at all times while this Guaranty
is in effect (measured on a quarterly basis), it shall be required to maintain a
net worth (calculated in accordance with GAAP) of not less than $25,000,000 (the
"Minimum Net Worth Amount") exclusive of the capital evidenced by the HRPT
Demand Note (hereinafter defined) and (b) in addition, until the third (3rd)
anniversary of the date hereof (the "Note Expiration Date"), it shall be
required to maintain additional capital in the amount of $10,000,000 evidenced
by a demand note of even principal amount (the "HRPT Demand Note") from HRPT
Properties Trust, a Maryland real estate investment trust (together with its
successors and assigns, "HRPT"), to
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Guarantor. In the event that Guarantor's net worth shall be less than the
Minimum Net Worth Amount as of the end of any calendar quarter or the HRPT
Demand Note shall be released or terminated (except upon payment in full thereof
in cash by HRPT) prior to the Note Expiration Date, same shall constitute an
Event of Default hereunder and under the Loan Agreement unless (in the case of a
breach of the net worth covenant only) within thirty (30) days after the earlier
of (a) the date of delivery of Guarantor's financial statements for such quarter
pursuant to Section 5.1(A)(iii) of the Loan Agreement and (b) the date that
Guarantor has knowledge that its net worth as of the end of such quarter was
less than the Minimum Net Worth Amount:
(i) Guarantor shall effect a Guarantor Substitution
(hereinafter defined) pursuant to which a Replacement Guarantor (hereinafter
defined) shall assume all of Guarantor's obligations under this Guaranty in
accordance with the terms and conditions of Section 18; or
(ii) Guarantor shall deliver to Lender cash or an irrevocable,
unconditional clean sight draft letter of credit issued by a bank, and in form,
reasonably acceptable to Lender (and which shall either be an "evergreen" letter
of credit or have a term expiring not less than thirty (30) Business Days after
the Maturity Date) (a "Letter of Credit") in an amount equal to the difference
(the "Net Worth Deficiency") between (A) the Minimum Net Worth Amount and (B)
Guarantor's net worth as indicated in the applicable quarterly financial
statements. Lender, in its sole discretion, may require Guarantor to increase
such cash deposit or Letter of Credit to the extent that the Net Worth
Deficiency continues to decline in subsequent quarters. Such cash or Letter of
Credit will only be released to Guarantor when Guarantor's net worth exceeds the
Minimum Net Worth Amount for four (4) consecutive calendar quarters and provided
no Event of Default has occurred and is continuing. If not sooner returned, such
cash or Letter of Credit shall be returned to Guarantor upon payment in full of
the Loan and all other obligations by Borrower on the Maturity Date. Any cash or
Letter of Credit provided under this Section 17 shall be security for
Guarantor's obligations hereunder.
18. Guarantor, upon at least thirty (30) days notice to Lender, shall
have the one-time right, to transfer all of its obligations under this Guaranty
and under that certain Environmental Indemnity Agreement, dated of even date
herewith (the "Environmental Indemnity") to a replacement guarantor (a
"Replacement Guarantor") and have such Replacement Guarantor assume all of
Guarantor's obligations hereunder (including compliance with the provisions of
Section 17 hereof) and thereunder (such transfer and assumption, a "Guarantor
Substitution") provided and upon the conditions with respect to each such
Guarantor Substitution that:
(i) No Event of Default shall have occurred and be continuing;
(ii) Guarantor shall have delivered current annual financial
statements and quarterly financial statements for the Replacement Guarantor for
the four (4) most recent calendar quarters satisfying the requirements of
Sections 5.1(A)(i) and (iii), respectively, of the Loan Agreement and submitted
to Lender true, correct and complete copies of any and all other information and
documents of any kind reasonably requested by Lender concerning the Replacement
Guarantor and all of such financial statements and other information shall be
acceptable to Lender;
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(iii) Guarantor shall have obtained and delivered to Lender a
Rating Confirmation with respect to the Guarantor Substitution;
(iv) Guarantor shall have paid all of Lender's reasonable
costs and expenses (including, without limitation, reasonable attorney's fees
and disbursements) in connection with considering and effecting the Guarantor
Substitution, and the preparation, negotiation, execution and delivery of any
and all documents and agreements required by Lender in connection with the
Guarantor Substitution;
(v) The Replacement Guarantor's net worth as of the end of
each of the most recent four (4) calendar quarters (as indicated on the
financial statements delivered under clause (ii) above) shall equal or exceed
the Minimum Net Worth Amount and the financial condition of the Replacement
Guarantor shall otherwise be satisfactory to Lender in its sole good faith
discretion;
(vii) The Replacement Guarantor shall execute and deliver any
and all documents reasonably required by Lender in connection with the Guarantor
Substitution, each in form and substance reasonably acceptable to Lender;
(viii) Counsel to the Replacement Guarantor shall deliver to
Lender opinions in form and substance satisfactory to Lender as to such matters
as Lender and the Rating Agencies shall reasonably require, which may include
opinions as to substantially the same matters as were required with respect to
Guarantor in connection with the origination of the Loan including, without
limitation, a bankruptcy non-consolidation opinion;
(ix) In the event such Guarantor Substitution shall occur
prior to the Note Expiration Date, Guarantor shall transfer and assign all of
its right, title and interest in the HRPT Demand Note to the Replacement
Guarantor (or HRPT shall deliver a new demand note to the Replacement Guarantor
in the amount of $10,000,000);
(x) Guarantor shall not be permitted to effect more than two
(2) Guarantor Substitutions during any twenty-four (24) month period and shall
not be permitted to effect more than three (3) Guarantor Substitutions during
the entire term of the Loan.
19. This Guaranty shall not be secured by the Property, the Loan
Documents, or any other collateral of any nature which is security for the
Obligations. Without limitation, this Section 19 has priority over any provision
in this Guaranty or any of the other Loan Documents which states or implies that
the this Guaranty is so secured.
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IN WITNESS WHEREOF, Guarantor has executed and delivered this Guaranty
as of the date first written above.
GUARANTOR:
HUB REALTY COLLEGE PARK I, LLC,
a Maryland limited liability company
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: President
