Exhibit 10.8
JUNIOR MEZZANINE COMPLETION
GUARANTY
This Junior Mezzanine Completion
Guaranty (“ Guaranty ”) is entered into as of
September 22, 2006, jointly and severally by CFP Residential L.P.,
a Texas limited partnership, Kenneth Valach, an individual, J.
Ronald Terwilliger, an individual and Brian Austin, an individual
(collectively, the “ Guarantor ”) for the
benefit of Behringer Harvard Alexan Voss, LLC, a Delaware limited
liability company, and/or any subsequent holder of the Note (the
“ Lender ”).
RECITALS
A.
GC 129 Voss JM LLC, a Delaware limited liability company (the
“ Borrower ”) has requested that Lender make a
loan to Borrower in the amount of Six Million One Hundred Fifty
Three Thousand Six Hundred Eighty Nine Dollars ($6,153,689) (the
“ Loan ”). The Loan will be evidenced by
the Junior Mezzanine Promissory Note from Borrower to Lender dated
as of the date of this Guaranty (the “ Note
”). The Note will be secured by the Junior Mezzanine
Pledge and Security Agreement dated the same date as the Note made
by Borrower in favor of Lender (the “ Security
Instrument ”).
B.
The Loan is being made to finance the purchase by GC 127 Voss
Holdings LLC, a Delaware limited liability company (“
Property Owner ”), which is a wholly-owned subsidiary
of GC 128 Voss SM LLC, which is a wholly-owned subsidiary of
Borrower, of certain real property (the “ Property
”), as more particularly described in the Loan Agreement
dated as of the date of this Guaranty between Borrower and Lender
(the “ Loan Agreement ”) and to facilitate the
construction of a 376 unit apartment project on the Property to be
known as the Alexan Voss (the “ Project
).
C.
The Project is to be constructed in accordance with, and pursuant
to the terms and conditions and requirements of, the Loan Agreement
and other Loan Documents.
D.
As a condition to making the Loan to Borrower, Lender requires that
the Guarantor execute this Guaranty. Guarantor has an
economic interest in Borrower or will otherwise obtain a material
financial benefit from the Loan.
NOW, THEREFORE, in order to induce
Lender to make the Loan to Borrower, and in consideration thereof,
the Guarantor hereby agrees, unconditionally and irrevocably as
follows:
1.
Defined Terms . “ Indebtedness ”
and other capitalized terms used but not defined in this Guaranty
shall have the meanings assigned to them in the Loan
Agreement.
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2.
Guaranty .
a)
Guarantor hereby guarantees to Lender, upon written demand by
Lender, at Lender’s option and in its sole discretion, that
Guarantor will (i) complete the Project substantially in accordance
with the plans and specifications for the Project, as modified from
time to time as allowed by the Loan Agreement (the “ Plans
and Specifications ”) and in accordance with the terms
and conditions of the Loan Agreement and other Loan Documents if,
for any reason, or under any contingency, Property Owner shall
abandon construction of the Project or shall fail to complete the
Project within the construction time set forth in the Loan
Agreement and Loan Documents and (ii) pay all cost overruns for
construction of the Project to the extent Borrower or Property
Owner fails to do so; provided that Lender shall reimburse
Guarantor for all costs incurred by Guarantor in completing the
Project (provided that such completion costs are included in the
Project Budget (as defined below) to the extent such costs do not
constitute cost overruns. In the preceding sentence,
“cost overruns” means costs of constructing the Project
that, in the aggregate, exceed the amount provided in the budget
attached hereto as Exhibit “A” (the “ Project
Budget ”). All amounts reimbursed to Guarantor by
Lender in accordance with this Section 2(a) shall correspondingly
increase the amount of Loan to Borrower and shall be payable by
Borrower to Lender in accordance with the terms of the Loan
Agreement. The Project will be deemed substantially completed
in accordance with the Plans and Specifications upon the issuance
of the final certificate of occupancy, the issuance of a
certificate of substantial completion from the Property
Owner’s architect, receipt of a contractor’s release
and the receipt of lien waivers or similar evidence of payment from
the general contractor and all major subcontractors ( i.e. ,
subcontractors whose contract amount exceeds $100,000) to
Lender’s reasonable satisfaction, provided, however, that if
Senior Lender shall deem the Project substantially complete then
Lender shall deem the Project substantially complete (“
Completion ”).
b)
Without limiting the rights and remedies of Lender, if after the
occurrence of an Event of Default and after Lender has so
requested, Guarantor does not proceed with and diligently prosecute
Completion of the Project in accordance with the Loan Agreement,
then Lender may, at its option, without notice to Guarantor or
anyone else, complete the Project either before or after
commencement of foreclosure proceedings, and either on or before
the exercise of any other right or remedy of Lender against
Borrower or Guarantor, with such changes to the Plans and
Specifications that Lender deems necessary or advisable to complete
the Project and Guarantor waives any right to contest such
necessary expenditures. The amount of any and all
expenditures made by Lender for the foregoing purposes, to the
extent they exceed the unexpended portion of the Project Budget
shall bear interest from the date made until repaid to Lender, at a
rate per annum equal to the interest rate provided for in the Note
and, together with such interest, shall be due and payable by
Guarantor to Lender upon demand. Lender does not have and
shall never have any obligation to complete the Project or take
such action.
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c)
In addition to the foregoing, and notwithstanding anything to the
contrary set forth herein or in any of the Loan Documents,
Guarantor hereby further guarantees to Lender the full and prompt
payment of all principal, interest and other amounts due and owing
by Borrower under the Note, the Security Instrument and any other
Loan Document from and after the filing of a voluntary bankruptcy
or insolvency proceeding of Property Owner, or Borrower prior to
Completion.
3.
Survival . 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 Security Instrument.
4.
Guaranty of Performance and Payment .
Guarantor’s performance and payment obligations under this
Guaranty constitute a guaranty of performance and payment and not
merely a guaranty of collection.
5.
Present, Unconditional and Irrevocable Guaranty; Waivers
. The obligations of Guarantor under this Guaranty shall be
performed without demand by Lender, other than as provided herein
and shall be present, unconditional, absolute and irrevocable
irrespective of the genuineness, validity, regularity or
enforceability of the Note, the Security Instrument, or any other
Loan Document, and without regard to any other circumstance which
might otherwise constitute a legal or equitable discharge of a
surety or a guarantor. The parties intend that Guarantor
shall not be considered a “debtor” as defined in
Tex. Bus. & Com. Code
Ann., Section 9.105 , as amended (and any
successor statute thereto). This Guaranty shall be effective
as a waiver of, and Guarantor expressly waives, any and all rights
to which Guarantor may otherwise have been entitled under any
suretyship laws in effect from time to time, including (without
limitation) any rights pursuant to Rule 31 of the Texas
Rules of Civil Procedure, Section 17.001 of the Texas Civil
Practice and Remedies Code, and Chapter 34 of the Texas
Business and Commerce Code. 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 and this Guaranty which may be required by statute,
rule of law or otherwise to preserve Lender’s rights against
Guarantor under this Guaranty, including notice of acceptance,
notice of any amendment of the Loan Documents, notice of the
occurrence of any default or Event of 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, all rights to
require Lender to (a) proceed against Borrower or any 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.
Modification of Loan Documents . At any time or from
time to time and any number of times, without notice to Guarantor
and without affecting the liability of Guarantor, (a)
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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 Security
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 Security Instrument, or
any other Loan Document; (d) the Note, the Loan Agreement, the
Security Instrument, or any other Loan Document may be modified or
amended by Lender and Borrower in any respect, including 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.
7.
Joint and Several Guaranty . If more than one person
executes this Guaranty, the obligations of those persons under this
Guaranty shall be joint and several. Lender, in its
discretion, may (a) bring suit against Guarantor, or any one or
more of the Persons constituting Guarantor, and any Other
Guarantor, jointly and severally, or against any one or more of
them; (b) compromise or settle with any one or more of the Persons
constituting Guarantor, or any Other Guarantor, for such
consideration as Lender may deem proper; (c) release one or more of
the Persons constituting Guarantor, or any Other Guarantor, from
liability; and (d) otherwise deal with Guarantor and any Other
Guarantor, or any one or more of them, in any manner, and no such
action shall impair the rights of Lender to collect from Guarantor
any amount guaranteed by Guarantor under this Guaranty.
Nothing contained in this paragraph shall in any way affect or
impair the rights or obligations of Guarantor with respect to any
Other Guarantor.
8.
Subordination . Any indebtedness of Borrower held by
Guarantor now or in the future (including but not limited to
(i) all debts and liabilities of Borrower to Guarantor whether the
obligations of Borrower are direct, contingent, primary, secondary,
joint and several or otherwise, whether the obligations are
evidenced by note, contract, open account or
