This Guaranty
(“ Guaranty ”) is entered into to be effective
as of April 24, 2009, by the undersigned person(s) (the
“ Guarantor ” jointly and severally if more than
one), for the benefit of DEUTSCHE BANK BERKSHIRE MORTGAGE,
INC. , a Delaware corporation (the “ Lender
”).
A. [Borrowing
Entity] (the “ Borrower ”) has requested that
Lender make a loan to Borrower in the amount of $[Loan Amount] (the
“ Loan ”). The Loan will be evidenced by a
Multifamily Note from Borrower to Lender dated effective as of the
effective date of this Guaranty (the “ Note ”).
The Note will be secured by a Multifamily Mortgage, Deed of Trust,
or Deed to Secure Debt dated effective as of the effective date of
the Note (the “ Security Instrument ”),
encumbering the Mortgaged Property described in the Security
Instrument.
B. As a
condition to making the Loan to Borrower, Lender requires that the
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. Defined Terms. “ Indebtedness, ”
“ Loan Documents” and “ Property
Jurisdiction ” and other capitalized terms used but not
defined in this Guaranty shall have the meanings assigned to them
in the Security Instrument.
(a) Guarantor
hereby absolutely, unconditionally and irrevocably guarantees to
Lender:
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(i)
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the
full and prompt payment when due, whether at the Maturity Date or
earlier, by reason of acceleration or otherwise, and at all times
thereafter, of each of the following:
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(A)
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a
portion of the Indebtedness equal to zero percent (0%) of the
original principal balance of the Note (the “ Base
Guaranty ”); and
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(B)
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in
addition to the Base Guaranty, all other amounts for which Borrower
is personally liable under Sections 9(c), 9(d) and 9(f) of the
Note; and
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(C)
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all
costs and expenses, including reasonable Attorneys’ Fees and
Costs incurred by Lender in enforcing its rights under this
Guaranty; and
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(ii)
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the
full and prompt payment and performance when due of all of
Borrower’s obligations under Sections 18 and 51 of the
Security Instrument.
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(b) If
the Base Guaranty stated in Section 2(a)(i)(A) is
100 percent of the original principal balance of the Note,
then (i) the Base Guaranty shall mean and include the full and
complete guaranty of payment of the entire Indebtedness and the
performance of all Borrower’s obligations under the Loan
Documents; and (ii) for so long as the Base Guaranty remains
in effect (there being no limit to the duration of the Base
Guaranty unless otherwise expressly provided in this Guaranty), the
obligations guaranteed pursuant to Sections 2(a)(i)(B),
2(a)(i)(C) and Section 3 shall be part of, and not in addition
to or in limitation of, the Base Guaranty.
If the Base
Guaranty stated in Section 2(a)(i)(A) is less than
100 percent of the original principal balance of the Note,
then this Section 2(b) shall be completely inapplicable and shall
be treated as if not a part of this Guaranty.
(c) If
Guarantor is not liable for the entire Indebtedness, then all
payments made by Borrower with respect to the Indebtedness and all
amounts received by Lender from the enforcement of its rights under
the Security Instrument and the other Loan Documents (except this
Guaranty) shall be applied first to the portion of the Indebtedness
for which neither Borrower nor Guarantor has personal
liability.
3. Additional Guaranty Relating to
Bankruptcy.
(a) Notwithstanding
any limitation on liability provided for elsewhere in this
Guaranty, Guarantor hereby absolutely, unconditionally and
irrevocably guarantees to Lender the full and prompt payment when
due, whether at the Maturity Date or earlier, by reason of
acceleration or otherwise, and at all times thereafter, the entire
Indebtedness, in the event that:
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(i)
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Borrower voluntarily files for
bankruptcy protection under the United States Bankruptcy Code;
or
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(ii)
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Borrower voluntarily becomes subject
to any reorganization, receivership, insolvency proceeding, or
other similar proceeding pursuant to any other federal or state law
affecting debtor and creditor rights; or
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(iii)
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an
order of relief is entered against Borrower pursuant to the United
States Bankruptcy Code or other federal or state law affecting
debtor and creditor rights in any involuntary bankruptcy proceeding
initiated or joined in by a “ Related Party
.”
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(b) For
purposes of this Section, the term “Related Party”
means:
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(i)
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Borrower or Guarantor;
and
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(ii)
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any
person or entity that holds, directly or indirectly, any ownership
interest in or right to manage Borrower or Guarantor, including
without limitation, any shareholder, member or partner of Borrower
or Guarantor; and
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(iii)
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any
person or entity in which any ownership interest (direct or
indirect) or right to manage is held by Borrower, Guarantor or any
partner, shareholder or member of, or any other person or entity
holding an interest in, Borrower or Guarantor; and
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(iv)
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any
other creditor of Borrower that is related by blood, marriage or
adoption to Borrower, Guarantor or any partner, shareholder
or
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PAGE 2
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member of, or
any other person or entity holding an interest in, Borrower or
Guarantor.
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(c) If
Borrower, Guarantor or any Related Party has solicited creditors to
initiate or participate in any proceeding referred to in this
Section, regardless of whether any of the creditors solicited
actually initiates or participates in the proceeding, then such
proceeding shall be considered as having been initiated by a
Related Party.
4. Guarantor’s Obligations Survive Foreclosure.
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, and, in addition, the obligations of Guarantor
relating to Borrower’s obligations under Sections 18 and
51 of the Security Instrument shall survive any repayment or
discharge of the Indebtedness. Notwithstanding the foregoing, if
Lender has never been a mortgagee-in-possession of or held title to
the Mortgaged Property, Guarantor shall have no obligation under
this Guaranty relating to Borrower’s obligations under
Sections 18 and 51 of the Security Instrument after the date
of the release of record of the lien of the Security Instrument as
a result of the payment in full of the Indebtedness on the Maturity
Date or by voluntary prepayment in full.
5. Guaranty of Payment and Performance.
Guarantor’s obligations under this Guaranty constitute an
unconditional guaranty of payment and performance and not merely a
guaranty of collection.
6. No
Demand by Lender Necessary; Waivers by Guarantor. The
obligations of Guarantor under this Guaranty shall be performed
without demand by Lender and shall be unconditional regardless 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, a guarantor,
a borrower or a mortgagor. Guarantor hereby waives, to the fullest
extent permitted by applicable law:
(a)
[subsections (a) and (b) for California properties only]
any and all benefits and defenses under California Civil Code
Section 2810 and agrees that by doing so Guarantor shall be
liable even if Borrower had no liability at the time of execution
of the Note, the Security Instrument or any other Loan Document, or
thereafter ceases to be liable;
(b) any
and all benefits and defenses under California Civil Code
Section 2809 and agrees that by doing so Guarantor’s
liability may be larger in amount and more burdensome than that of
Borrower;
(c) 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, a guarantor, a borrower or a
mortgagor;
(d) the
benefits of any right of discharge under any and all statutes or
other laws relating to a guarantor, a surety, a borrower or a
mortgagor, and any other rights of a surety, a guarantor, a
borrower or a mortgagor under such statutes or laws;
(e) 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, but not limited to, 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
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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;
(f) all
rights to cause a marshalling of the Borrower’s assets or to
require Lender to (i) proceed against Borrower or any other
guarantor of Borrower’s payment or performance with respect
to the Indebtedness (an “ Other Guarantor ”),
(ii) if Borrower or any Other Guarantor is a partnership,
proceed against any general partner of Borrower or any Other
Guarantor, (iii) proceed against or exhaust any collateral
held by Lender to secure the repayment of the Indebtedness, or
(iv) pursue any other remedy it may now or hereafter have
against Borrower, or, if Borrower is a partnership, any general
partner of Borrower, [including any and all benefits under
California Civil Code Sections 2845, 2849 and 2850] [for
California properties only]; and
(g) any
right to revoke this Guaranty as to any future advances by Lender
under the terms of the Security Instrument to protect
Lender’s interest in the Mortgaged Property.
7. 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, Lender
may:
(a) extend
the time for payment of the principal of or interest on the
Indebtedness or renew the Indebtedness in whole or in
part;
(b) extend
the time for Borrower’s performance of or compliance with any
covenant or agreement contained in the Note, the Security
Instrument or any other Loan Document, whether presently existing
or hereinafter entered into, or waive such performance or
compliance;
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