Exhibit 10.5
MERS MIN:
8000101-0000004159-9
INDEMNITY AGREEMENT -
BH
INDEMNITY AGREEMENT
(the “ Agreement
”) made as of the 18 th day of October, 2006 by BEHRINGER
HARVARD 1325 G STREET, LLC , a Delaware limited liability
company (“ Initial Borrower ”), having
its principal place of business c/o Behringer Harvard Funds, 15601
Dallas Parkway, Suite 600, Addison, Texas 75001, and BEHRINGER
HARVARD REIT I, INC. , a Maryland corporation having an address
c/o Behringer Harvard Funds, 15601 Dallas Parkway, Suite 600,
Addison, Texas 75001 (“ Principal ”;
Principal and Initial Borrower collectively “
Indemnitor ”), in favor of BEAR STEARNS
COMMERCIAL MORTGAGE, INC. , a New York corporation,
having an address at 383 Madison Avenue, New York, New
York 10179 (“ Lender
”).
RECITALS:
A.
Lender and Initial Borrower are parties to that certain Amended and
Restated Loan Agreement of even date herewith (the “
Loan Agreement ”). Capitalized terms not
defined herein shall have the meaning attributed to such term in
the Loan Agreement.
B.
Borrower has requested that Lender modify the Loan in the manner
set forth in the Loan Agreement and Lender is unwilling to so
modify the Loan unless Borrower and Principal agree to provide the
indemnification, representations and warranties and other matters
described in this Agreement for the benefit of Lender.
C.
Principal has a direct or indirect ownership interest in Initial
Borrower and thus will derive substantial benefit from the
modification of the Loan. Initial Borrower and Principal
enter into this Agreement to induce Lender to modify the
Loan.
D.
Initial Borrower may transfer, pursuant to Section 5.2.13 of the
Loan Agreement, some or all of its ownership interest in the
Property to one or more tenants in common, each of whom will assume
the Loan on a joint and several basis to the extent set forth in
the Loan Documents. Initial Borrower and/or any such tenants
in common that assume the Loan hereinafter referred to collectively
as the “ Borrower .”
AGREEMENT
NOW THEREFORE, in consideration of
the premises and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Indemnitor hereby
represents, warrants, covenants and agrees for the benefit of
Lender as follows:
1.
Indemnification . Indemnitor covenants and agrees at
its sole cost and expense, to protect, defend, indemnify, release
and hold Lender harmless from and against any and all Losses
(defined below) imposed upon or incurred by or asserted against
Lender and directly or indirectly arising out of or in any way
relating to any one or more of the following: (i) fraud
or
intentional misrepresentation by
Initial Borrower or any affiliate of Initial Borrower in connection
with the Loan; (ii) the removal or disposal of any portion of the
Property after an Event of Default by Initial Borrower or any
affiliate; (iii) the failure of Initial Borrower to obtain
Lender’s prior written consent to any subordinate financing
or other voluntary lien encumbering the Property that is placed on
the Property by Initial Borrower; (iv) the failure of Initial
Borrower to obtain Lender’s prior written consent to any
assignment, transfer, or conveyance of the Property or any portion
thereof by Initial Borrower as required by the Loan Agreement;
(v) Initial Borrower’s violation of any of the Special
Purpose Entity covenants and requirements contained in the Loan
Agreement or other Loan Documents other than sections (xii) and
(xxii) in the definition of Special Purpose Entity; (vi) the breach
by Initial Borrower of any representation, warranty, covenant or
indemnification provision in the Loan Agreement or the Mortgage
concerning environmental laws, hazardous substances and asbestos
and any indemnification of Lender with respect thereto in either
document; (vii) the filing by Initial Borrower of any action for
partition of the Property; (vii) any election by Initial
Borrower to terminate or not to renew the Property Management
Agreement in a manner not permitted under the Loan Agreement;
(viii) the gross negligence or willful misconduct of Initial
Borrower; (ix) the misapplication or conversion by Initial
Borrower of (A) any insurance proceeds paid by reason of any loss,
damage or destruction to the Property, (B) any awards or other
amounts received in connection with the condemnation of all or a
portion of the Property, or (C) any Rents following an Event of
Default; and (x) any election by Initial Borrower to terminate any
Tenants-In-Common Agreement without Lender’s consent.
As used herein, the term “Losses” includes any and all
claims, suits, liabilities, actions, proceedings, obligations,
debts, damages, losses, costs, expenses, diminutions in value,
fines, penalties, charges, fees, expenses, judgments, awards,
amounts paid in settlement, punitive damages, foreseeable and
unforeseeable consequential damages, of whatever kind or nature
(including but not limited to reasonable attorneys’ fees and
other costs of defense).
2.
Guaranty . (a) Principal absolutely and
unconditionally guarantees to Lender the prompt and full payment of
the Debt (as defined in the Loan Agreement) in the event that
(1) Initial Borrower files a voluntary petition under the
Bankruptcy Code or any other Federal or state bankruptcy or
insolvency law, or (2) an involuntary case is commenced
against Initial Borrower under the Bankruptcy Code or any other
Federal or state bankruptcy or insolvency law with the collusion of
Initial Borrower or any of its Affiliates.
(b)
Principal absolutely and unconditionally guarantees to Lender the
prompt and full payment of any Taxes and Insurance
Premiums.
(c)
Principal absolutely and unconditionally guarantees to Lender the
prompt and full payment of any Replacement Reserve Shortfall
payable pursuant Section 7.3 of the Loan Agreement.
(d)
Principal absolutely and unconditionally guarantees to Lender the
prompt and full payment of any recordation, mortgage or other
similar taxes payable in connection with
the Mortgage or the Assignment of
Leases or the assignment of the Mortgage or the Assignment of
Leases to Lender.
(e)
Principal absolutely and unconditionally guarantees to Lender the
prompt and full payment of any Lease Obligations Shortfall payable
pursuant Section 7.4 of the Loan Agreement.
(f)
This is a guaranty of payment and not of collection. The
obligations of Principal hereunder are and shall be absolute under
any and all circumstances, without regard to the validity,
regularity or enforceability of the Note, the Loan Agreement, the
Mortgage or the other Loan Documents. This Agreement shall
remain in full force and effect as to any modification, extension
or renewal of the Note, the Loan Agreement, the Mortgage or any of
the other Loan Documents, and notwithstanding any release or
forbearance granted by Lender with respect thereto, all of which
may be made, done or suffered without notice to or further consent
of Principal.
3.
Unimpaired Liability . The liability of Indemnitor
under this Agreement shall in no way be limited or impaired by, and
Indemnitor hereby consents to and agrees to be bound by, any
amendment or modification of the provisions of the Note, the Loan
Agreement, the Mortgage or any of the other Loan Documents.
In addition, the liability of Indemnitor under this Agreement shall
in no way be limited or impaired by (i) any extensions of
time for performance required by the Note, the Loan Agreement, the
Mortgage or any of the other Loan Documents, (ii) any sale or
transfer of all or part of the Property, (iii) any
exculpatory provision in the Note, the Loan Agreement, the
Mortgage, or any of the other Loan Documents limiting
Lender’s recourse to the Property or to any other security
for the Note, or limiting Lender’s rights to a deficiency
judgment against Indemnitor, (iv) the accuracy or inaccuracy
of the representations and warranties made by Indemnitor under the
Note, the Loan Agreement, the Mortgage or any of the other Loan
Documents or herein, (v) the release of Indemnitor or any
other person from performance or observance of any of the
agreements, covenants, terms or condition contained in the Loan
Agreement, the Mortgage, the Note or the other Loan Documents by
operation of law, Lender’s voluntary act, or otherwise, (vi)
the release or substitution in whole or in part of any
security for the Note, or (vii) Lender’s failure to
record the Loan Agreement, the Mortgage or file any UCC financing
statements (or Lender’s improper recording or filing of any
thereof) or to otherwise perfect, protect, secure or insure any
security interest or lien given as security for the Note; and, in
any such case, whether with or without notice to Indemnitors and
with or without consideration.
4.
Enforcement . Lender may enforce the obligations of
Indemnitor under this Agreement without first resorting to or
exhausting any security or collateral or without first having
recourse to the Note, the Loan Agreement, the Mortgage, or any
other Loan Documents or the Property, through foreclosure
proceedings or otherwise; provided, however, that nothing herein
shall inhibit or prevent Lender from suing on the Note,
foreclosing, or exercising any power of sale under the Loan
Agreement, the Mortgage, or exercising any other rights and
remedies thereunder or under the Loan Agreement. It is not
necessary for an Event of Default to
have occurred for Lender to exercise
its rights pursuant to this Agreement. Notwithstanding any
provision of the Note, the Loan Agreement, the Mortgage, or any of
the other Loan Documents, the obligations pursuant to this
Agreement are exceptions to any non-recourse or exculpation
provision contained therein. Indemnitor is fully and
personally liable for such obligations, and its liability is not
limited to the original or amortized principal balance of the Loan
or the value of the Property.
5.
Survival . Subject to Section 19 below, the
obligations and liabilities of Indemnitor under this Agreement
shall fully survive indefinitely notwithstanding any termination,
satisfaction, assignment, entry of a judgment of foreclosure,
exercise of any power of sale, or delivery of a deed in lieu of
foreclosure of the Mortgage.
6.
Interest . Any amounts payable to any Lender under
this Agreement shall become immediately due and payable on demand
and, if not paid within thirty (30) days of such demand
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