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Exhibit 10.15
Loan No.: 50-2859027 Hidden Lakes Apartments
SEC INDEMNITY AND GUARANTY
AGREEMENT
THIS SEC INDEMNITY AND GUARANTY
AGREEMENT (as the same may hereafter be amended, consolidated,
renewed or replaced, this " Agreement "), made as of
December 28, 2006, by NNN APARTMENT REIT, INC., a Maryland
corporation (" Indemnitor "), whose address is c/o
Triple Net Properties, LLC, 1551 North Tustin Avenue,
Suite 300, Santa Ana, California 92705, in favor of WACHOVIA
BANK, NATIONAL ASSOCIATION, a national banking association
(together with its successors and assigns, " Lender
"), whose address is Commercial Real Estate Services, 8739 Research
Drive URP — 4, NC 1075, Charlotte, North Carolina 28262.
W I T N E S S E T H:
WHEREAS, Apartment REIT Hidden
Lakes, LP, a Texas limited partnership (" Borrower
"), has obtained a loan (the " Loan ") in the
principal amount of Nineteen Million Two Hundred Eighteen Thousand
and No/100 Dollars ($19,218,000.00) from Lender; and
WHEREAS, the Loan is evidenced by
a Promissory Note (as the same may from time to time be amended,
consolidated, renewed or replaced, the " Note ")
dated of even date herewith, executed by Borrower and payable to
the order of Lender, in the stated principal amount of Nineteen
Million Two Hundred Eighteen Thousand and No/100 Dollars
($19,218,000.00), and is secured by a Deed of Trust, Security
Agreement and Fixture Filing dated of even date herewith (as the
same may from time to time be amended, consolidated, renewed or
replaced, the " Security Instrument ") from Borrower
for the benefit of Lender, encumbering that certain real property
situated in the County of Bexar, State of Texas, as more
particularly described on Exhibit "A" attached hereto
and incorporated herein by this reference, together with the
buildings, structures and other improvements now or hereafter
located thereon (the " Property ") and by other
documents and instruments (the Note, the Security Instrument and
such other documents and instruments, as the same may from time to
time be amended, consolidated, renewed or replaced, being
collectively referred to herein as the " Loan
Documents "); and
WHEREAS, as a condition to making
the Loan to Borrower, Lender has required that Indemnitor execute
and deliver this Agreement; and
WHEREAS, the extension of the Loan
to Borrower is of substantial benefit to Indemnitor and, therefore,
Indemnitor desires to execute and delivery this Agreement.
NOW, THEREFORE, to induce Lender
to extend the Loan to Borrower and in consideration of the
foregoing premises and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged,
Indemnitor hereby covenants and agrees for the benefit of Lender,
as follows:
1. Indemnity and
Guaranty . Indemnitor irrevocably and unconditionally
guarantees to Lender the prompt payment of all liabilities,
obligations, losses, damages, costs and expenses (including,
without limitation, attorneys’ fees), causes of action,
suits, claims, demands and judgments of any nature or description
whatsoever (collectively, " Costs ") arising out of
or attributable to (i) the violation of any applicable law
governing the sale of securities in connection with the structure,
organization, sale or syndication of partnership interests in
Apartment REIT Hidden Lakes, LP, or in the sale or syndication or
tenant in common ownership interest in the property and
(ii) the Securities Liabilities (as hereinafter defined) and
any legal or other expenses reasonably incurred by Lender, in
investigating or defending the Securities Liabilities, to the
extent such Securities Liabilities relate to a Securities and
Exchange Commission (" SEC ") investigation, inquiry
or proceeding relating to Triple Net Properties, LLC or any of its
affiliates. As used herein, the term " Securities
Liabilities " shall mean any liability, obligation or other
remedy (including, without limitation, any right or rescission in
favor of any Borrower or any member of any Borrower) arising from
or related to that certain investigation by the SEC captioned
"In
the matter of Triple Net Properties, LLC" (as well as any
subsequent related investigation involving any affiliate of Triple
Net Properties, LLC) pursuant to which the SEC has requested
information, including financial information, from Triple Net
Properties, LLC relating to disclosure in securities offerings
sponsored by Triple Net Properties, LLC and its affiliates.
This is a guaranty of payment and
performance and not of collection. The liability of Indemnitor
under this Agreement shall be direct and immediate and not
conditional or contingent upon the pursuit of any remedies against
Borrower or any other person (including, without limitation, other
guarantors, if any), nor against the collateral for the Loan.
Indemnitor waives any right to require that an action be brought
against Borrower or any other person or to require that resort be
made to any collateral for the Loan or to any balance of any
deposit account or credit on the books of Lender in favor of
Borrower or any other person. In the event of a default under the
Loan Documents which is not cured within any applicable grace or
cure period, Lender shall have the right to enforce its rights,
powers and remedies (including, without limitation, foreclosure of
all or any portion of the collateral for the Loan) thereunder or
hereunder, in any order, and all rights, powers and remedies
available to Lender in such event shall be non-exclusive and
cumulative of all other rights, powers and remedies provided
thereunder or hereunder or by law or in equity. If the indebtedness
and obligations guaranteed hereby are partially paid or discharged
by reason of the exercise of any of the remedies available to
Lender, this Agreement shall nevertheless remain in full force and
effect, and Indemnitor shall remain liable for all remaining
indebtedness and obligations guaranteed hereby, even though any
rights which Indemnitor may have against Borrower may be destroyed
or diminished by the exercise of any such remedy.
2. Indemnification
Procedures .
(a) If
any action shall be brought against Lender based upon any of the
matters for which Lender is indemnified hereunder, Lender shall
notify Indemnitor in writing thereof and Indemnitor shall promptly
assume the defense thereof, including, without limitation, the
employment of counsel acceptable to Lender and the negotiation of
any settlement; provided , however , that any failure
of Lender to notify Indemnitor of such matter shall not impair or
reduce the obligations of Indemnitor hereunder. Lender shall have
the right, at the expense of Indemnitor (which expense shall be
included in Costs), to employ separate counsel in any such action
and to participate in the defense thereof. In the event Indemnitor
shall fail to discharge or undertake to defend Lender against any
claim, loss or liability for which Lender is indemnified hereunder,
Lender may, at its sole option and election, defend or settle such
claim, loss or liability. The liability of Indemnitor to Lender
hereunder shall be conclusively established by such settlement,
provided such settlement is made in good faith, the amount of such
liability to include both the settlement consideration and the
costs and expenses, including, without limitation, attorneys’
fees and disbursements, incurred by Lender in effecting such
settlement. In such event, such settlement consideration, costs and
expenses shall be included in Costs and Indemnitor shall pay the
same as hereinafter provided. Lender’s good faith in any such
settlement shall be conclusively established if the settlement is
made on the advice of independent legal counsel for Lender.
(b) Indemnitor
shall not, without the prior written consent of Lender:
(i) settle or compromise any action, suit, proceeding or claim
or consent to the entry of any judgment that does not include as an
unconditional term thereof the delivery by the claimant or
plaintiff to Lender of a full and complete written release of
Lender (in form, scope and substance satisfactory to Lender in its
sole discretion) from all liability in respect of such action,
suit, proceeding or claim and a dismissal with prejudice of such
action, suit, proceeding or claim; or (ii) settle or
compromise any action, suit, proceeding or claim in any manner that
may adversely affect Lender or obligate Lender to pay any sum or
perform any obligation as determined by Lender in its sole
discretion.
(c) All
Costs shall be immediately reimbursable to Lender when and as
incurred and, in the event of any litigation, claim or other
proceeding, without any requirement of waiting for the ultimate
outcome of such litigation, claim or other proceeding, and
Indemnitor shall pay to Lender any and all Costs within ten
(10) days after written notice from Lender itemizing the
amounts thereof incurred to the date of such notice. In addition to
any other remedy available for the failure of Indemnitor to
periodically pay such Costs, such Costs, if not paid within said
ten-day period, shall bear interest at the Default Interest Rate
(as defined in the Note).
3. Reinstatement of
Obligations . If at any time all or any part of any payment
made by Indemnitor or received by Lender from Indemnitor under or
with respect to this Agreement is or must be rescinded or returned
for any reason whatsoever (including, but not limited to, the
insolvency, bankruptcy or reorganization of Indemnitor or
Borrower), then the obligations of Indemnitor hereunder shall, to
the extent of the payment rescinded or returned, be deemed to have
continued in existence, notwithstanding such previous payment made
by Indemnitor, or receipt of payment by Lender, and the obligations
of Indemnitor hereunder shall continue to be effective or be
reinstated, as the case may be, as to such payment, all as though
such previous payment by Indemnitor had never been made.
4. Waivers by
Indemnitor . To the extent permitted by law, Indemnitor hereby
waives and agrees not to assert or take advantage of:
(a) Any
right to require Lender to proceed against Borrower or any other
person or to proceed against or exhaust any security held by Lender
at any time or to pursue any other remedy in Lender’s power
or under any other agreement before proceeding against Indemnitor
hereunder;
(b) Any
defense that may arise by reason of the incapacity, lack of
authority, death or disability of any other person or persons or
the failure of Lender to file or enforce a claim against the estate
(in administration, bankruptcy or any other proceeding) of any
other person or persons;
(c) Demand,
presentment for payment, notice of nonpayment, protest, notice of
protest and all other notices of any kind, or the lack of any
thereof, including, without limiting the generality of the
foregoing, notice of the existence, creation or incurring of any
new or additional indebtedness or obligation or of any action or
non-action on the part of Borrower, Lender, any endorser or
creditor of Borrower or of Indemnitor or on the part of any other
person whomsoever under this or any other instrument in connection
with any obligation or evidence of indebtedness held by Lender;
(d) Any
defense based upon an election of remedies by Lender;
(e) Any
right or claim of right to cause a marshalling of the assets of
Indemnitor;
(f) Any
principle or provision of law, statutory or otherwise, which is or
might be in conflict with the terms and provisions of this
Agreement;
(g) Any
duty on the part of Lender to disclose to Indemnitor any facts
Lender may now or hereafter know about Borrower or the Property,
regardless of whether Lender has reason to believe that any such
facts materially increase the risk beyond that which Indemnitor
intends to assume or has reason to believe that such facts are
unknown to Indemnitor or has a reasonable opportunity to
communicate such facts to Indemnitor, it being understood and
agreed that Indemnitor is fully responsible for being and keeping
informed of the financial condition of Borrower, of the condition
of the Property and of any and all circumstances bearing on the
risk that liability may be incurred by Indemnitor hereunder;
(h) Any
lack of notice of disposition or of manner of disposition of any
collateral for the Loan;
(i) Any
invalidity, irregularity or unenforceability, in whole or in part,
of any one or more of the Loan Documents;
(j) Any
deficiencies in the collateral for the Loan or any deficiency in
the ability of Lender to collect or to obtain performance from any
persons or entities now or hereafter liable for the payment and
performance of any obligation hereby guaranteed;
(k) An
assertion or claim that the automatic stay provided by 11 U.S.C.
§362 (arising upon the voluntary or involuntary bankruptcy
proceeding of Borrower) or any other stay provided under any other
debtor relief law (whether statutory, common law, case law or
otherwise) of any jurisdiction whatsoever, now or hereafter in
effect, which may be or become applicable, shall operate or be
interpreted to stay, interdict, condition, reduce or inhibit the
ability of Lender to enforce any of its rights, whether now or
hereafter required, which Lender may have against Indemnitor or the
collateral for the Loan;
(l) Any
modifications of the Loan Documents or any obligation of Borrower
relating to the Loan by operation of law or by action of any court,
whether pursuant to the Bankruptcy Reform Act of 1978, as amended,
or any other debtor relief law (whether statutory, common law, case
law or otherwise) of any jurisdiction whatsoever, now or hereafter
in effect, or otherwise. Without limiting the generality of the
foregoing, Indemnitor expressly waives any and all rights to which
Indemnitor may otherwise have been entitled under any sur
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