EXHIBIT 10.8
LIMITED GUARANTY
THIS LIMITED GUARANTY
(“Guaranty”) is made as of December 19, 2008, by
GREGORY A. FOWLER, Trustee of the Gregory A. Fowler Living Trust
(“Guarantor”) in favor of MIREF GOVERNOR FINANCE, LLC,
a Delaware limited liability company
(“Lender”).
R E C I T A L
S
WHEREAS, Lender has agreed to loan
to FPA GOVERNOR PARK ASSOCIATES, LLC, a Delaware limited liability
company (“Borrower”) the principal sum not to exceed
Eleven Million Four Hundred Forty Thousand Dollars ($11,440,000)
(the “Loan”);
WHEREAS, the Loan shall be evidenced
by a promissory note (“Note”) of Borrower payable to
the order of Lender in the maximum principal amount of the Loan and
shall be secured by a deed of trust and absolute assignment of
rents and leases and security agreement (and fixture filing)
(“Deed of Trust”) on the real property and improvements
described in the Deed of Trust (which real property and
improvements are collectively referred to herein as the
“Property”);
WHEREAS, the Loan Documents (as
defined and described in the Note) include the Note, the Deed of
Trust, and such other documents described in the Note as
“Loan Documents” (and all capitalized terms not
otherwise defined herein shall have the meanings given to them in
the Loan Documents);
WHEREAS, the Borrower is an
affiliate of Guarantor and as a result shall directly benefit from
the making of the Loan by Lender to Borrower; and
WHEREAS, Lender is unwilling to make
the Loan unless this Guaranty is executed by Guarantor and
delivered to Lender.
NOW, THEREFORE
, to induce Lender to enter into the
Loan Documents and to make the Loan, and in consideration thereof,
Guarantor unconditionally guarantees and agrees as
follows:
1. LIMITED GUARANTY .
Guarantor hereby unconditionally, absolutely, and irrevocably
guarantees and promises to pay to Lender, on demand, in lawful
money of the United States of America, in immediately available
funds, all sums for which Borrower is now or hereafter liable to
Lender arising out of, incurred because of or related to the
occurrence of any of the following: (i) physical waste to or
of the Property or the Collateral, (ii) gross negligence,
fraud, material misrepresentation or intentional misconduct by
Borrower; (iii) failure to apply casualty insurance proceeds
to the restoration of the Property or the Collateral, or failure to
apply insurance proceeds or maintain insurance in accordance with
the terms of the Loan Documents; (iv) failure to apply tenant
security deposits or condemnation proceeds in accordance with the
terms of the Loan Documents; (v) failure after Lender has
declared a monetary event of default to pay to Lender all rents,
income and profits of and from the Property and the Collateral, net
of reasonable and customary operating expenses; (vi) breach of
or failure to perform under the environmental representations,
warranties, covenants or indemnifications agreed to in the
Hazardous Materials Indemnity; (vii) destruction or removal of
fixtures or personal property securing the Loan from the Property,
unless replaced by items of equal value; (viii) breaches of
representations or covenants
contained in the Loan Documents relating to
compliance with terrorism or money laundering laws, including
Executive Order No. 13224 on Terrorist Financing, effective
September 24, 2001 (the “Executive Order”) and
Public Law 107-56, known as the Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 (the “Patriot Act”);
(ix) willful or grossly negligent violation of applicable law,
(x) failure to pay property taxes, assessments or charges
which may create liens senior to the lien of the Deed of Trust on
all or any portion of the Property or Collateral; and
(xi) failure of Borrower to pay all amounts payable under the
Note in full, together with reasonable attorney’s fees, if
(A) Borrower transfers or encumbers the Property or Collateral
or any portion thereof in contravention of the Loan Documents,
(B) Borrower files a voluntary petition under Chapter 11 of
the Bankruptcy Code, or an involuntary bankruptcy or insolvency
proceeding is commenced against Borrower and not dismissed within
ninety (90) days of filing, (C) Borrower, Guarantor or an
affiliate thereof challenges the enforceability of the Loan
Documents or (D) Borrower violates in any material respect the
requirements set forth in Section 5.3 of the Deed of Trust
(collectively, the “Guaranteed
Obligations”).
2. REMEDIES . If
Guarantor fails to promptly perform its obligations under this
Guaranty, Lender may from time to time, and without first requiring
performance by Borrower or exhausting any or all security for the
Loan, bring any action at law or in equity or both to compel
Guarantor to perform its obligations hereunder, and to collect in
any such action compensation for all loss, cost, damage, injury and
expense sustained or incurred by Lender as a direct or indirect
consequence of the failure of Guarantor to perform its obligations
together with interest thereon at the rate of interest applicable
to the principal balance of the Note.
3. RIGHTS OF LENDER .
Guarantor authorizes Lender, without giving notice to Guarantor or
obtaining Guarantor’s consent and without affecting the
liability of Guarantor, from time to time to: (a) renew or
extend all or any portion of Borrower’s obligations under the
Note or any of the other Loan Documents (other than
Section 8.2 of the Note); (b) declare all sums owing to
Lender under the Note and the other Loan Documents due and payable
upon the occurrence of a Default (as defined in the Note) under the
Loan Documents; (c) make non-material changes in the dates
specified for payments of any sums payable in periodic installments
under the Note or any of the other Loan Documents;
(d) otherwise modify, amend, supplement or replace from time
to time the terms of any of the Loan Documents, except for
(i) increases in the principal amount of the Note or changes
in the terms and conditions by which interest rates, fees or
charges are calculated under the Note and the other Loan Documents
(Guarantor acknowledges that if the Note or other Loan Documents so
provide, said interest rates, fees and charges may vary from time
to time) or (ii) advancement of the Maturity Date of the Note
where no Default has occurred under the Loan Documents or
(iii) Section 8.2 of the Note; (e) take and hold
security for the performance of Borrower’s obligations under
the Note or the other Loan Documents and exchange, enforce, waive
and release any such security; (f) apply such security and
direct the order or manner of sale thereof as Lender in its
discretion may determine; (g) release, substitute or add any
one or more endorsers of the Note or guarantors of Borrower’s
obligations under the Note or the other Loan Documents;
(h) apply payments received by Lender from Borrower to any
obligations of Borrower to Lender, in such order as Lender shall
determine in its sole discretion, whether or not any such
obligations are covered by this Guaranty; and (i) assign this
Guaranty in whole or in part but only in connection with an
assignment to the same party of the Loan Documents.
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4. GUARANTOR’S
WAIVERS . Guarantor waives: (a) any defense based upon
any legal disability or other defense of Borrower, any other
guarantor or other person, or by reason of the cessation or
limitation of the liability of Borrower from any cause other than
full payment of all sums payable under the Note or any of the other
Loan Documents; (b) any defense based upon any lack of
authority of the officers, directors, partners or agents acting or
purporting to act on behalf of Borrower or any principal of
Borrower or any defect in the formation of Borrower or any
principal of Borrower; (c) any defense based upon the
application by Borrower of the proceeds of the Loan for purposes
other than the purposes represented by Borrower to Lender or
intended or understood by Lender or Guarantor; (d) all rights
and defenses arising out of an election of remedies made by Lender,
regardless of whether that election of remedies (such as a
nonjudicial foreclosure with respect to security for a Guaranteed
Obligation) has destroyed Guarantor’s rights of subrogation
and reimbursement against Borrower by the operation of
Section 580d of the California Code of Civil Procedure or
otherwise; (e) any defense based upon Lender’s failure
to disclose to Guarantor any information concerning
Borrower’s financial condition or any other circumstances
bearing on Borrower’s ability to pay all sums payable under
the Note or any of the other Loan Documents; (f) any defense
based upon any statute or rule of law which provides that the
obligation of a surety must be neither larger in amount nor in any
other respects more burdensome than that of a principal;
(g) any defense based upon Lender’s election, in any
proceeding instituted under the Federal Bankruptcy Code, of the
application of Section 1111(b)(2) of the Federal Bankruptcy
Code or any successor statute; (h) any defense based upon any
borrowing or any grant of a security interest under
Section 364 of the Federal Bankruptcy Code;
(i) presentment, demand, protest and notice of any kind;
(j) the benefit of any statute of limitations affecting the
liability of Guarantor hereunder or the enforcement hereof and
(k) any rights under California Code of Civil Procedure
Sections 580a and 726(b), which provide, among other things, that
(i) a creditor must file a complaint for deficiency within
three (3) months of a nonjudicial foreclosure sale or judicial
foreclosure sale, as applicable; (ii) a fair market value
hearing must be held; and (iii) the amount of the deficiency
judgment shall be limited to the amount by which the unpaid debt
exceeds the fair market value of the security, but not more than
the amount by which the unpaid debt exceeds the sale price of the
security. In addition, Guarantor waives all rights and defenses
that Guarantor may have because Borrower’s debt is secured by
real property. This means, among other things: (l) Lender may
collect from Guarantor without first foreclosing on any real or
personal property collateral pledged by Borrower; and (m) if
Lender forecloses on any real property collateral pledged by
Borrower, then (i) the amount of the debt may be reduced only
by the price for which that collateral is sold at the fore-closure
sale, even if the collateral is worth more than the sale price, and
(ii) 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. The foregoing
sentence is an unconditional and irrevocable waiver of any rights
and defenses Guarantor may have because Borrower’s debt is
secured by real property. These rights
