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21 Guaranties in Commercial Real Estate Loan Transactions

Michael S. Kurtzon

Dykema Gossett PLLC
This article does not constitute legal advice and we do not attempt to cover all developments on the issues discussed. Rules of certain state supreme courts may consider this advertising and require us to advise you of such designation. Your comments are always welcome. © 2017 Dykema Gossett PLLC.

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I. Introduction

A guaranty is an agreement by a third party to satisfy certain obligations of a borrower under a promissory note or other documents evidencing or securing a loan. Several types of guaranties are customary in commercial real estate loan transactions. Most common are: (i) a full payment guaranty, (ii) a partial payment guaranty, (iii) a non-recourse carve-out guaranty, (iv) a guaranty of carry and operating deficits, and (v) a guaranty of completion.

II. Types of Guaranties

Full Payment Guaranty. A full payment guaranty obligates the guarantor to pay the entire principal balance of the loan if the borrower defaults in making any required payment. Payment of some or all interest on the loan also may be guaranteed.

Partial Payment Guaranty. A partial payment guaranty obligates the guarantor to pay either a fixed amount of principal or a certain percentage of the principal amount of a loan. As with a full payment guaranty, all, or part of the interest on the loan also may be guaranteed. Since, unlike a full payment guaranty, a partial payment guaranty does not guaranty repayment of the entire debt, a partial payment guaranty usually includes a guaranty of certain “nonrecourse carve-outs” as discussed below. An annotated form of Guaranty of Payment is attached as Exhibit A to this Article.

Non-Recourse Carve-Out and Springing Recourse Guaranty. Nonrecourse loans almost without exception require a guaranty of “nonrecourse carve-outs” and “springing recourse” which obligates the guarantor to pay damages resulting from certain types of borrower defaults and to pay the entire loan for other defaults. An annotated form of Guaranty of Non-Recourse Carve-Outs is attached as Exhibit B to this Article.

(a)

Springing Recourse. In a springing recourse guaranty, liability to pay the entire loan “springs” into effect if any of the following occur:

(i)	the filing of a voluntary bankruptcy by the borrower or a guarantor;

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(ii)	filing of a “collusive” bankruptcy against the borrower by a guarantor, the principals of the borrower or entities under the control of the borrower or a guarantor;
(iii)	the opposition by the borrower to a bankruptcy plan approved by the lender, or a contest to the validity of the lender’s liens in a bankruptcy proceeding;
(iv)	a prohibited transfer of the mortgaged property or of interests in the borrower, including the granting of liens on the mortgaged property or the transfer or encumbrance of ownership interests in the borrower or in entities that own or control the borrower [Guarantor Issues: (a) Cure periods for inadvertent transfers, (b) transfers of minor interests in borrower or upper tier entities and (c) non-consensual liens such as mechanics liens];
(v)	the contest or delay by the borrower of a foreclosure action [Guarantor Issues: Should actual damages apply instead of full recourse? Should there be a good faith exception?];
(vi)	the failure of the borrower to maintain its status as a single purpose entity or to comply with “separateness” covenants required by the loan documents [Guarantor Issues: Should full recourse only result if there is a substantive consolidation of the borrower’s assets with a debtor’s assets in a bankruptcy proceeding?]¹; and

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(vii)	fraud or material misrepresentation by the borrower or a guarantor [Borrower Issue: Should this be a damage issue or cause full recourse?].

(b)

Non-Recourse Carve-Outs Resulting in Damages. As opposed to springing recourse for full liability on the loan, the following matters usually result in liability only for damages:

(i)	fraud or material misrepresentation by the borrower (unless treated as a “springing recourse” event if not included as a springing recourse event);
(ii)	misapplication or improper use of rents or other operating revenues from the property following notice of a loan default (for instance, payment of project revenues to the borrower or its owner after a default) [Guarantor Issue: Permit the use of operating revenues to pay operating expenses of the project pursuant to certain lender controls.];
(iii)	failure to pay real estate taxes or other governmental impositions which create liens on the mortgaged property [Guarantor Issue: Include only if cash flow is sufficient to pay taxes but the borrower fails to pay them.];
(iv)	filing of mechanic’s liens against the mortgaged property [Guarantor Issue: Include only if cash flow is sufficient to pay liens but the borrower fails to pay them.];
(v)	failure to apply tenant security deposits as required by leases of the property;
(vi)	intentional waste, damage or destruction to the mortgaged property;
(vii)	misapplication of insurance proceeds in the event of a casualty;
(viii)	failure to pay operating expenses of the mortgaged property, to the extent cash flow is not sufficient and lender is notified [Guarantor Issue: Unfair to impose liability on guarantor for a failing project];

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(ix)	payment of legal fees incurred by lender in enforcing the loan documents [Guarantor Issue: Limit to enforcement of the guaranty, not all loan documents.]; and
(x)	removal of personal property from the premises unless replaced with similar personal property.

Courts generally have upheld enforcement of non-recourse carve-out guaranties. In Bank of America, N.A. v. Freed, 983 N.E.2d 509 (Ill. App. 2nd 2012), the Court decided a case in which the guaranty provided for full recourse if the borrower contested an enforcement action by the lender. The borrower filed an interlocutory appeal of an order appointing a receiver. The Court found that the filing of the appeal constituted the contest of an enforcement proceeding and ruled that the guarantor was liable for the entire loan. See also 111 Debt Acquisitions Holdings, LLC v. Six Ventures, Ltd., 413 F.App’x 824 (6th Cir. 2011) where the Court ruled that the loan became fully recourse to the guarantor following a voluntary bankruptcy filing by the borrower, even though the guarantor had not authorized the filing.

However, in ING Real Estate Finance (USA) LLC v. Park Avenue Hotel, LLC, 907 N.Y.S.2d 437 (Sup. Ct. 2010), the Court found in favor of the guarantors on a claim by the lender that the borrower’s failure to pay a $278,759.20 real estate tax bill within thirty (30) days after notice from the lender rendered the entire $45,000,000 loan fully recourse to the guarantors. The Court decided that the disproportionate size of the loan compared to the minimal harm from the delay in paying the tax bill meant that the parties never could have intended that the delay in paying the tax bill would result in full recourse against the guarantors.

For an interesting analysis of the effect of the general rule that a debtor cannot contract away its rights to file a bankruptcy proceeding in a pre-petition forbearance agreement requiring the borrower to appoint a lender representative as a member whose vote was necessary for a bankruptcy filing, and whether the court’s holding could extend to “springing recourse” provisions in a guaranty triggered by a bankruptcy filing, see David R. Kuney’s recent blog on “Recent Bankruptcy Cases” discussing In Re Intervention Holdings, LLC et al., Debtors, 62 Bankr. CT. Dec. 179; 2016 WL 3185516.

Guaranty of Carry and Operating Deficits. A guaranty of carry and operating deficits obligates the guarantor to pay the interest on the loan and all operating expenses of the mortgaged property to the

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extent not paid by the borrower. Operating expenses include real estate taxes, insurance premiums, maintenance and repair costs, leasing commissions, utility costs, management fees, and similar expenses.

An issue often raised by guarantors of a loan on a failing project is whether the lender should be allowed to indefinitely delay or defer an enforcement action to gain control of the property through a foreclosure or receivership, while continuing to collect interest on the loan from the guarantor – or should the guaranty terminate if the borrower tenders the property to the lender. Negotiations usually center on the following possible cut-off dates:

(a)

The date the lender obtains title to or control of the property through foreclosure or a court ordered receivership;

(b)

The date the lender obtains title to the property through a negotiated agreement for deed in lieu of foreclosure; or

(c)

A certain time period after the date the borrower tenders a deed to the property to the lender, but the parties cannot agree on a deed in lieu of foreclosure agreement (i.e. the borrower walks away from the property).

Lenders often agree to terminate a guaranty when the lender obtains title through a foreclosure or a receiver is appointed for the property (or within an agreed upon “hang over” time thereafter; but lenders rarely agree to terminate the guaranty solely on the tender of a deed. The lender may not want title to or possession of the property. The property might have serious environmental contamination or other physical problems, there might be litigation adversely affecting the property, or title could be defective. Most lenders will agree to accept a tendered deed only if certain “tender” conditions are met, customarily those that a lender would be willing to agree to in a negotiated agreement for deed in lieu of foreclosure. Exhibit C to this Article contains examples of such tender conditions.

Guaranty of Completion. A guaranty of completion obligates the guarantor to complete construction of an unfinished project pursuant to the requirements of the loan documents, or, alternatively, if the lender elects to complete the project itself, to pay the costs of completion. An annotated Guaranty of Completion is attached as Exhibit D to this Article. Most completion guaranties also guaranty the borrower’s obligation to keep the loan “in balance” during construction. The loan is deemed not “in balance” if the costs to complete exceed the undisbursed loan proceeds.

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Guaranties of completion usually permit the lender to elect either to require the guarantor to complete the project, or to itself complete the project and charge the completion costs to the guarantor. However, despite what guarantees may say, the actual remedies courts will grant are more limited. Generally, courts will not order specific performance of a completion guaranty but will limit the lender’s remedy to damages. Measuring damages can be difficult, and courts are not consistent in determining them. In Glendale Federal Sav. & Loan Assn. v. Marina View Heights Dev. Co., 135 Cal. Rptr. 802 (Ct. App. 1977), the lender contended that its damages were the cost of completing improvements the borrower failed to complete. The Court rejected the claim, deciding that “the proper measure of damages is the difference in value of the property with and without the promised performance since that is the contractual benefit of which the injured party is deprived.”² Since the evidence in the case did not establish that the improvements, had they been completed, would have increased the value of the property, the Court found that the lender had not suffered any damages.

[Guarantor Issues: (a) Guarantors often ask for the right to complete, rather than allowing the lender to complete construction. That way, they have greater control over costs and expenses than if the lender completes. Guarantors also want the lender to fund any undisbursed loan proceeds to pay for construction (the guarantor usually will not have cash available to do so, and the lender always intended to fund the loan to pay for construction). Lenders usually are unwilling to fund loan proceeds to a guarantor unless all loan defaults are cured. Guarantors argue that having to cure payment defaults transforms the guaranty into a payment guaranty. (b) Should the guaranty cover future tenant improvements or only base building construction?]

III. Other Issues

Joint and Several Liability. If there are multiple guarantors, issues may arise over whether the guaranteed obligations should be joint and several or several. Joint and several liability obligates each guarantor to be responsible for the entire guaranteed obligation. Several

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liability limits each guarantor’s liability to a stated amount or a percentage of the obligation.

In many loan structures, the borrowing entity includes a development partner that contributes development services to the venture but little equity and an equity partner that provides most of the equity. The development partner is responsible for day-to-day development and operational matters. The equity partner is the source of funds for the project but is not involved in day-to-day matters. Lenders usually require guarantors from the developer partner and the equity partner, and ask for joint and several liability for all obligation, including non-recourse carve-outs. Equity partner guarantors often object to joint and several liability for any matters over which they do not exercise direct control. For instance, if the developer partner misapplies or steals project revenues or causes the borrower to breach other covenants in the loan documents, the equity partner will resist becoming personally liable for its partner’s actions.

In some cases, guaranties allocate liability for violations of nonrecourse carve-outs to the party whose acts result in the damage. Drafting such allocations can be challenging. Lenders do not want to be required to prove in court which partner actually caused the breach, preferring to require the guarantors to make payments under the guaranty and to litigate among themselves as to the allocation of liability.

Upstream Guaranties. An “upstream” guaranty is one in which a subsidiary of a borrower guarantees its parent’s indebtedness. Depending on the specific facts, the validity of a so-called “upstream” guaranty could be challenged by unsecured creditors of the guarantor or by bankruptcy trustees as fraudulent conveyances or preferences under state or federal bankruptcy or fraudulent conveyance laws. While an analysis of the creditor’s rights in upstream guaranties is beyond the scope of this article, structures with upstream guaranties should be analyzed with the issue in mind.

The Negotiating Process. In practice, with the exception of loan agreements, guaranties usually are the most intensively negotiated loan documents in any transaction. Great care should be taken in negotiating and in drafting guaranties to ensure that the understandings of the parties are accurately reflected. Traditionally, guaranties were negotiated after lender’s counsel produced drafts of all the loan documents. Lately, however, it has become more common for

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at least some guaranty provisions to be negotiated at the term sheet or commitment stage of a loan. In particular, sophisticated borrowers are seeking agreement on non-recourse carve-outs and various other matters early on in the loan process, and many lenders are willing to negotiate such provisions up front.

Clarity in term sheets and loan commitments is necessary to avoid misunderstandings once loan documents are drafted. For example, in connection with partial payment guaranties, term sheets often merely provide that the guaranty will cover a certain percentage or a specific dollar amount of the “loan.” Often, however, whether the guaranteed amount is inclusive of principal and interest, or whether the guaranty covers principal plus interest, is left unstated. Lending officers usually assume that the guaranty covers principal plus interest. Borrowers usually feel that their liability for principal, interest and all other costs is capped. Thus, the ambiguity in a term sheet can result in arguments when the loan is documented.

IV. Conclusion

As the law on guaranties evolves, counsel for lenders and guarantors must be cognizant of the effects on their clients and the risks and liabilities resulting from new developments. Many “standard” provisions in guaranties have evolved as a response to judicial decisions and have become boilerplate. As a result, much of the language in guaranties is frozen in time and considered sacrosanct. That is not necessarily a bad thing. Nevertheless, forms of guaranties must be reviewed on a regular basis to make sure they reflect current case law and statutory requirements.

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EXHIBITS

EXHIBIT A –	FORM OF GUARANTY OF PAYMENT
EXHIBIT B -	FORM OF GUARANTY OF NON-RECOURSE CARVE-OUTS
EXHIBIT C -	TENDER REQUIREMENTS
EXHIBIT D -	FORM OF GUARANTY OF COMPLETION

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Exhibit A

FORM OF GUARANTY OF PAYMENT^*

THIS GUARANTY OF PAYMENT (as the same may be amended, supplemented or otherwise modified from time to time, “Guaranty”) is made as of _________________, 20___ by ____________________ (“Guarantor”) for the benefit of ______________________, its successors and assigns (“Lender”).

W I T N E S S E T H:

WHEREAS, [pursuant to that certain Construction Loan Agreement dated as of the date hereof between _______ (the “Borrower”) and Lender (together with all renewals, amendments, modifications, increases and extensions thereof, the “Loan Agreement”),] Lender has agreed to a loan to Borrower in the maximum principal amount of $_______ make (the “Loan”). The Loan is evidenced by that certain Promissory Note dated as of even date herewith in the principal amount of $_______ from Borrower and payable to the order of Lender (together with all renewals, amendments, modifications, increases and extensions thereof, the “Note”).

WHEREAS, the Loan is secured by that certain [Construction Mortgage/Deed of Trust] by Borrower for the benefit of Lender dated as of even date herewith (together with all renewals, modifications, increases and extensions thereof, the “Security Instrument”), which grants Lender a first priority security interest in the real property described on Exhibit A attached thereto (the “Property”). The [Loan Agreement], Note, Security Instrument, any Interest Rate Protection Agreement (as defined in the Security Instrument), and each of the other documents evidencing or securing the Loan are hereinafter referred to collectively as the “Loan Documents.”

WHEREAS, Lender is not willing to make the Loan, or otherwise extend credit, to Borrower unless Guarantor unconditionally guarantees payment and performance to Lender of the Guaranteed Obligation (as herein defined); and

WHEREAS, Guarantor is the owner of direct or indirect interest or has a financial interest in Borrower, and Guarantor will directly benefit from Lender’s making the Loan to Borrower.

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NOW, THEREFORE, as an inducement to Lender to make the Loan to Borrower and to extend such additional credit as Lender may from time to time agree to extend under the Loan Documents, and for other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, Guarantor does hereby agree as follows:

ARTICLE 1
DEFINED TERMS

Section 1.1 Defined Terms. Capitalized terms used in this Guaranty and not specifically defined in this Guaranty have the meanings provided in the Loan Agreement.

ARTICLE 2
NATURE AND SCOPE OF GUARANTY

Section 2.1 Guaranty of Obligation. [Subject to the limitations set forth in Section 2.3 below,] Guarantor hereby irrevocably and unconditionally guarantees to Lender the payment and performance of the Guaranteed Obligation (as hereinafter defined) as and when the same shall be due and payable, whether by lapse of time, by acceleration of maturity or otherwise. Guarantor hereby irrevocably and unconditionally covenants and agrees that Guarantor is liable for the Guaranteed Obligation as a primary obligor.

Section 2.2 Definition of Guaranteed Obligation. The term “Guaranteed Obligation” means the payment in full of the entire principal amount of the Loan and all interest payable on the Loan, and all other amounts owed by Borrower pursuant to the Loan Documents[, subject to the limitations set forth in Section 2.3 below].

Section 2.3 [Limitation of Liability. Notwithstanding anything hereinabove set forth to the contrary, the Guaranteed Obligation of Guarantor under this Guaranty shall be limited to:

(a)

_________ and 00/100 Dollars ($_________.00) [LIMIT TO A PERCENTAGE OF PRINCIPAL RATHER THAN DOLLAR AMOUNT], plus [interest thereon and] [CONSIDER LIMITATION TO INTEREST ON GUARANTEED PRINCIPAL ONLY AND TERMINATION OF LIABILITY ON TENDER OF DEED IN LIEU OF FORECLOSURE OR ON

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FORECLOSURE BY LENDER] Enforcement Costs (as defined in Section 3.5 below); provided, however, that:

(1)

Guarantor shall at all times have unlimited liability with respect to the guaranty of the payment and performance of the Obligations in the event of a Springing Recourse Event (as defined herein). As used herein, “Springing Recourse Event” shall mean:

(A)	The occurrence of a Prohibited Transfer (as defined in the Security Instrument), without the prior written consent of Lender;
(B)	Borrower files a voluntary petition under 11 U.S.C. § 101 *et seq., as the same may be amended from time to time (the* “Bankruptcy Code”), or a voluntary petition, complaint or application under any other present or future state or federal law regarding bankruptcy, reorganization or other relief to debtors (collectively with the Bankruptcy Code, the “Debtor Relief Laws”; any proceeding under the Bankruptcy Code or any other Debtor Relief Law is hereinafter referred to as a “Bankruptcy Proceeding”);
(C)	Any “Borrower Party” (as hereinafter defined) or an officer, director, agent, representative, entity or Person which owns or controls, directly or indirectly, Borrower or a Borrower Party or any of the foregoing, files, or joins in the filing of, an involuntary Bankruptcy Proceeding against Borrower; or Borrower or any Borrower Party solicits or causes to be solicited petitioning creditors for any involuntary Bankruptcy Proceeding against Borrower. As used herein, “Borrower Party” means any Affiliate of Borrower, Guarantor, any Affiliate of Guarantor, and any [member] [partner] of Borrower or Guarantor;
(D)	Borrower files an answer consenting to or otherwise acquiescing in or joining in any involuntary Bankruptcy Proceeding filed against it by any other Person under the Bankruptcy Code or any other Debtor Relief Law;
(E)	Borrower fails to maintain its existence as a single purpose entity in conformance with the terms and ====== 576 ====== provisions of the Security Instrument, which failure results in a bankruptcy filing or proceeding or a substantive consolidation of the assets of the Borrower with any other Person; [LIMIT TO SUBSTANTIATE CONSOLIDATION IN A BANKRUPTCY]
(F)	In any case or proceeding under the Bankruptcy Code, any other Debtor Relief Law or any other judicial proceeding, Borrower, any Borrower Party or any Affiliate of Borrower or a Borrower Party shall propose a plan of reorganization, or otherwise take any action to seek any order, pursuant to which all or any portion of the lien of the Security Instrument or any other Loan Document or the obligations of Borrower to pay the Obligations as specified in the Loan Documents is rescinded, set aside, or determined to be void or unenforceable, or any of the terms of any of the Loan Documents are modified without Lender’s consent (and in any circumstance in which this clause applies, the liability of Guarantor for the obligations set forth in the Loan Documents shall be determined as if there were no such rescission, set aside, determination of voidness or unenforceability, or modification);
(G)	Fraud, willful misrepresentation, misappropriation of funds or theft is committed by Borrower, any Borrower Party or any other Affiliate of Borrower or a Borrower Party in connection with the Loan or the Property; [MOVE TO SPECIAL DAMAGES]
(H)	Borrower, any Borrower Party or any Affiliate of Borrower or a Borrower Party asserts any claim, defense, or offset against Lender that Borrower has acknowledged to be untrue, waived or agreed not to assert, including but not limited to that the transactions contemplated by the Loan Documents establish a joint venture, partnership or other similar arrangement between Borrower and Lender; or [STRIKE OR MOVE TO SPECIAL DAMAGES]
(I)	The incurrence by Borrower of any indebtedness in violation of the terms of the Loan Documents (whether secured or unsecured, direct or contingent) other than ====== 577 ====== unsecured debt or routine trade payables incurred in the ordinary course of business in connection with the operation of the Property. [LIMIT TO VOLUNTARILY INCURRED SECURED DEBT]

(2)

Guarantor shall at all times have personal liability for the payment of the “Special Damages” (as hereinafter defined) without regard to the limitation of liability set forth above, which amount shall be due and payable to Lender on demand. As used herein, the “Special Damages” means any and all loss or damage, cost, expense, liability, claim or other obligation incurred by Lender (including attorneys’ fees for both in-house and outside counsel) arising out of or in connection with or as a result of any of the following:

(A)	Any unearned prepaid rental or other income arising with respect to the property then covered by the liens, assignments and security interests of the Loan Documents (the “Liens”) that is not paid to Lender and, in addition, any rental or other income arising with respect to the property then covered by the Liens and retained by Guarantor and/or Borrower after the earliest to occur of (i) the date on which Lender accelerates maturity of the Note, or (ii) the date on which Lender files a complaint to foreclose any of the Liens, or (iii) the date on which Lender has given to Guarantor and/or Borrower any written notice that Guarantor and/or Borrower is in default hereunder or under any of the other Loan Documents, it being understood and agreed that except as expressly set forth in the Loan Documents, Lender has no obligation to give any such notice; [PERMIT REVENUES TO BE USED TO PAY OPERATING EXPENSES]
(B)	The removal or disposal of any property covered by the Liens except as permitted by the Security Instrument; [UNLESS REPLACED WITH SUITABLE REPLACEMENT]
(C)	The misapplication by Borrower or Guarantor of (i) any proceeds paid to Borrower or Guarantor under any insurance policies by reason of damage, loss or destruction to any portion of the property covered by ====== 578 ====== the Liens (but only to the full extent of such proceeds so misapplied), or (ii) any proceeds or awards resulting from the condemnation of all or any part of the property covered by the Liens;
(D)	Failure to timely pay taxes, assessments or other charges which can create liens on any portion of the property covered by the Liens; [LIMIT TO SITUATIONS WHERE THERE IS SUFFICIENT REVENUE TO PAY THESE ITEMS]
(E)	Failure to pay any mechanic’s liens, materialmen’s liens or other liens (whether or not similar) arising due to work performed or materials furnished to any property covered by the Liens; [LIMIT TO SITUATIONS WHERE THERE IS SUFFICIENT REVENUE TO PAY THESE ITEMS]
(F)	Failure to deliver to Lender or the applicable tenant (to the extent such tenant is lawfully entitled to receive a refund of such security deposit), any security deposit (and interest thereon required to be paid by agreement or law) paid by any tenant with respect to any property covered by the Liens;
(G)	The modification or termination of any Lease without Lender’s prior written consent if and to the extent such consent is required under the Loan Documents; [ELIMINATE OR LIMIT TO MAJOR LEASE]
(H)	Any failure to fully pay and satisfy all operating expenses of the Property unless there is insufficient cash flow from the [Property/Project (as defined in the Loan Agreement)] to pay such operating expenses and Borrower or Guarantor has provided written notice to Lender that there is insufficient cash flow from the [Property/Project] to pay such operating expenses; [ELIMINATE ON THEORY THIS MAKE GUARANTY A PAYMENT GUARANTY]
(I)	Any intentional damage, destruction or waste to the Property caused by the acts or omissions of Borrower, any Borrower Party or their respective agents, employees, or contractors; provided, however, the failure to make repairs to the Property, to the extent ====== 579 ====== that income from the Property is not available to fund such repairs, shall not constitute waste;
(J)	Any material negligent or willful misrepresentation made by Borrower, any Borrower Party or any other affiliate of the Borrower in connection with the Loan Documents or the Loan; [STRIKE “MATERIAL _________________”]
(K)	Any loss or damage incurred by Lender in connection with any Rate Management Agreement, except for any Swap Obligation that constitutes an Excluded Swap Obligation; [EXCLUDE AND IF THERE IS A SWAP HAVE IT GUARANTEED SEPARATELY]
(L)	Any loss or damage incurred by Lender due to Borrower’s failure to maintain the insurance coverage required by the Security Instrument;
(M)	Any failure to maintain, repair or restore the Property covered by the Liens in accordance with the terms and provisions of the Loan Documents, to the extent that Lender is not compensated by insurance proceeds collected by Lender; and [STRIKE AS NOT FAIR IF BORROWER IS CARRYING AGREED UPON INSURANCE]
(N)	Borrower or any Borrower Party contests, delays or otherwise hinders any action taken by Lender in connection with the appointment of a receiver for the Property or the foreclosure of the liens, mortgages or other security interests created by any of the Loan Documents. [PROVIDE FOR “GOOD FAITH” CONTESTS]

ARTICLE 3
GENERAL TERMS AND CONDITIONS

Section 3.1 Nature of Guaranty. This Guaranty is an irrevocable, absolute, continuing guaranty of payment and not a guaranty of

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collection. This Guaranty may not be revoked by Guarantor and shall continue to be effective with respect to any Guaranteed Obligation existing after any attempted revocation by Guarantor (and, with respect to any individual Guarantor, after Guarantor’s death (in which event this Guaranty shall be binding upon Guarantor’s estate and Guarantor’s legal representatives and heirs). This Guaranty may be enforced by Lender and any subsequent holder of the Note and shall not be discharged by the assignment or negotiation of all or part of the Loan Documents.

Section 3.2 Guaranteed Obligation Not Reduced by Offset. The Guaranteed Obligation shall not be reduced, discharged or released because or by reason of any existing or future offset, claim or defense of Borrower or any other Person (as defined below) against Lender or against payment of the Guaranteed Obligation, whether such offset, claim or defense arises in connection with the Guaranteed Obligation (or the transactions creating the Guaranteed Obligation) or otherwise. As used in this Guaranty, “Person” shall mean any individual, corporation, partnership, joint venture, association, joint stock company, trust, trustee, estate, limited liability company, unincorporated organization, real estate investment trust, government or any agency or political subdivision thereof, or any other form of entity.

Section 3.3 No Duty To Pursue Others. Lender has the right to require Guarantor to pay, comply with and satisfy the Guaranteed Obligation under this Guaranty, and shall have the right to proceed immediately against Guarantor with respect thereto. Without limitation of the generality of the foregoing, it shall not be necessary for Lender (and Guarantor hereby waives any rights which Guarantor may have to require Lender), in order to enforce the Guaranteed Obligation against Guarantor, first to (i) institute a suit or exhaust its remedies against Borrower or others liable on the Loan or the Guaranteed Obligation or any other Person or any of the collateral for the Loan, (ii) enforce Lender’s rights against any of the collateral for the Loan, (iii) join Borrower or any others liable on the Guaranteed Obligation in any action seeking to enforce this Guaranty, (iv) demonstrate that the collateral for the Loan provides inadequate security for the Loan, or (v) resort to any other means of obtaining payment of the Guaranteed Obligation.

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intention to accelerate the maturity, or notice of acceleration of the maturity, in immediately available lawful money of the United States of America, as an addition to the Guaranteed Obligation, interest on the Guaranteed Obligation (to the extent not paid when due) at the Default Rate (as defined in the Note) until paid in full. Lender may apply all money received by Lender from Guarantor to payment or reduction of the Loan or reimbursement of Lender’s expenses, in such priority and proportions, and at such time or times as Lender may elect in its sole discretion.

Section 3.5 Enforcement Costs. Guarantor hereby agrees to pay, on written demand by Lender, all costs incurred by Lender in collecting any amount payable under this Guaranty or enforcing or protecting its rights under the Loan Documents, in each case whether or not legal proceedings are commenced (the “Enforcement Costs”). [LIMIT TO COSTS OF ENFORCING GUARANTY – NOT ALL LOAN DOCUMENTS] Such fees and expenses shall be in addition to the Guaranteed Obligation and shall include, without limitation, costs and expenses of both in-house and outside counsel, paralegals and other hired professionals, special servicing fees (including portfolio management fees), court fees, costs incurred in connection with pre-trial, trial and appellate level proceedings (including discovery and expert witnesses), costs incurred in post-judgment collection efforts or in any Bankruptcy Proceeding to the extent such costs relate to the Guaranteed Obligation or the enforcement of this Guaranty. Amounts incurred by Lender shall be immediately due and payable, and shall bear interest at the Default Rate from the date of disbursement until paid in full upon Lender’s written demand for payment. This Section 3.5 shall survive the payment in full of the Guaranteed Obligation.

Section 3.6 Cumulative Remedies. Guarantor acknowledges that, following an Event of Default, Lender is entitled to accelerate the Loan and exercise all other rights and remedies as have been provided to Lender under the Loan Documents and by law or in equity, including, without limitation, enforcement of this Guaranty. All rights and remedies of Lender are cumulative and may be exercised independently, concurrently or successively in Lender’s sole discretion and as often as occasion therefor shall arise. Lender’s delay or failure to accelerate the Loan or exercise any other remedy upon the occurrence of an Event of Default shall not be deemed a waiver of such right or remedy. No partial exercise by Lender of any right or remedy will preclude further exercise thereof. Notice or demand given to Guarantor in any instance will not entitle Guarantor to notice or demand in similar or other circumstances nor constitute Lender’s waiver of its right to take any future action in any circumstance without notice or demand. Lender may release other security for the Loan, may

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release any party liable for the Loan, may grant extensions, renewals or forbearances with respect thereto, may accept a partial or past due payment or grant other indulgences, or may apply any other security held by it to payment of the Loan, in each case without prejudice to its rights under this Guaranty and without such action being deemed an accord and satisfaction or a reinstatement of the Loan. Lender will not be deemed as a consequence of its delay or failure to act, or any forbearances granted, to have waived or be estopped from exercising any of its rights or remedies.

Section 3.7 Unimpaired Liability. Guarantor acknowledges and agrees that all obligations hereunder are and shall be absolute and unconditional under any and all circumstances without regard to the validity, regularity or enforceability of any or all of the Loan Documents or the existence of any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor or surety. Without limiting the foregoing, Guarantor acknowledges and agrees that the liability here-under shall in no way be released, terminated, discharged, limited or impaired by reason of any of the following (whether or not Guarantor has any knowledge or notice thereof):

(a)	Borrower’s or any other Person’s lack of authority or lawful right to enter into any of the Loan Documents or any officers’ or representatives’ lack of authority or right to enter into Loan Documents on its behalf, or the obligations thereunder being ultra vires;
(b)	any modification, supplement, extension, consolidation, restatement, waiver or consent provided by Lender with respect to any of the Loan Documents including, without limitation, the grant of extensions of time for payment or performance;
(c)	the failure to record any Loan Document or to perfect any security interest intended to be provided thereby;
(d)	the release, surrender, exchange, subordination, deterioration, waste, loss, impairment or substitution, in whole or in part, of any collateral for the Loan, the failure to protect, secure or insure any such collateral, the acceptance of additional collateral for the Loan or the failure of Lender or any other party to exercise diligence or reasonable care in the preservation, protection, enforcement, sale or other handling or treatment of all or any part of such collateral for the Loan;
(e)	Lender’s failure to exercise, or delay in exercising, any rights or remedies Lender may have under the Loan Documents, or under this Guaranty, or otherwise available at law or in equity, including ====== 583 ====== but not limited to any neglect, delay, omission, failure or refusal of Lender (i) to take or prosecute any action for the collection of all or any part of the Guaranteed Obligation, or (ii) to foreclose, or initiate any action to foreclose, or, once commenced, prosecute to completion any action to foreclose upon any collateral for the Loan, or (iii) to take or prosecute any action in connection with any instrument or agreement evidencing or securing all or any part of the Guaranteed Obligation;
(f)	the release of Borrower or any other Person now or hereafter party to a Loan Document from performance, in whole or in part, under any of the Loan Documents to which each is a party, in each case whether by operation of law, Lender’s voluntary act, or otherwise;
(g)	any bankruptcy, insolvency, reorganization, adjustment, dissolution, liquidation or other like proceeding involving or affecting Borrower or any other Person;
(h)	the termination or discharge of the Security Instrument or any other Loan Document or the exercise of any power of sale or any foreclosure (judicial or otherwise) or delivery or acceptance of a deed-in-lieu of foreclosure;
(i)	the existence of any claim, setoff, counterclaim, defense or other rights which Guarantor may have against Borrower, Lender or any other Person, whether in connection with the Loan or any other transaction;
(j)	the accuracy or inaccuracy of the representations and warranties made by Borrower or any other Person in any of the Loan Documents;
(k)	any adjustment, indulgence, forbearance or compromise that might be granted or given by Lender to Borrower or any other Person;
(l)	any sale, lease or transfer of any or all of the assets of Borrower or any other Person;
(m)	the Guaranteed Obligation, or any part thereof, exceeding the maximum amount permitted by law or violating any usury law;
(n)	any valid defenses, claims or offsets (whether at law, in equity or by agreement) by Borrower which render the Guaranteed Obligation wholly or partially uncollectible from Borrower, whether arising in connection with the Loan Documents or otherwise,
(o)	the illegality or unenforceability of, or the inability to collect, the Guaranteed Obligation; ====== 584 ======
(p)	any of the Loan Documents being irregular or not genuine or authentic; or
(q)	any changes (whether directly or indirectly) in the shareholders, partners or members of Borrower or the reorganization, merger or consolidation of Borrower into or with any other Person.

Section 3.8 Waivers. Guarantor hereby waives and relinquishes, to the fullest extent permitted by law: (a) all rights or claims of right to cause a marshalling of assets or to cause Lender to proceed against any of the collateral for the Loan before proceeding under this Guaranty against Guarantor or any other guarantor or indemnitor under the Loan; (b) all rights and remedies accorded by applicable law to sureties or guarantors, except any rights of subrogation and contribution (the exercise of which are subject to the terms of this Guaranty); (c) the right to assert a counterclaim, other than a mandatory or compulsory counterclaim, in any action or proceeding brought by or against Guarantor; (d) notice of acceptance of this Guaranty and of any action taken or omitted in reliance hereon; (e) presentment for payment, demand, protest, notice of nonpayment or failure to perform or observe, or any other proof, notice or demand to which they might otherwise be entitled with respect to the Guaranteed Obligation; (f) all homestead or exemption rights against the Guaranteed Obligation and the benefits of any statutes of limitation or repose; and (g) any defense based upon an election of remedies by Lender, including any election to proceed by judicial or non-judicial foreclosure of any such collateral, whether real property or personal property security, or by deed in lieu thereof, and whether or not every aspect of any foreclosure sale is commercially reasonable or any election of remedies, including remedies relating to real property or personal property security, which destroys or otherwise impairs the subrogation rights of Guarantor or the rights of Guarantor to proceed against Borrower or any other guarantor for reimbursement, or both.

Section 3.9 Waivers of Notice. Guarantor agrees to the provisions of the Loan Documents and hereby waives notice of (a) any disbursements thereunder made by Lender to Borrower, (b) any amendment or extension of the Loan Documents, (c) the execution and delivery by Borrower and Lender of any other loan or credit agreement or of Borrower’s execution and delivery of any promissory notes or other documents arising under the Loan Documents or in connection with the Property, (d) the occurrence of any Event of Default, (e) Lender’s transfer or disposition of the Guaranteed Obligation, or any part thereof, (f) the sale or foreclosure (or posting or advertising for sale or foreclosure) of the

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Property, (g) any default by Borrower or any other Person under or with respect to the Loan Documents, or (h) any other action at any time taken or omitted by Lender and, generally, all demands and notices of every kind in connection with this Guaranty and the other Loan Documents.

Section 3.10 Guarantor Bound by Judgment Against Borrower. Guarantor agrees that Guarantor shall be bound conclusively, in any jurisdiction, by the judgment in any action by Lender against Borrower in connection with the Loan Documents (wherever instituted) as if Guarantor was a party to such action even if not so joined as a party.

Section 3.11 Certain Consequences of Borrower’s Bankruptcy.

(a)

Any payment made on the Loan, whether made by Borrower or Guarantor or any other Person, that is required to be refunded or recovered from Lender as a preference or a fraudulent transfer or is otherwise set-aside pursuant to the Bankruptcy Code or under any Debtor Relief Laws shall not be considered as a payment made on the Loan or under this Guaranty. Guarantor’s liability under this Guaranty shall continue with respect to any such payment, or be deemed reinstated, with the same effect as if such payment had not been received by Lender, notwithstanding any notice of revocation of this Guaranty prior to such avoidance or recovery or payment in full of the Loan, until such time as all periods have expired within which Lender could be required to return any amount paid at any time on account of the Guaranteed Obligation.

(b)

Until payment in full of the Obligations (including interest accruing after the commencement of a proceeding by or against Borrower under the Bankruptcy Code or any other Debtor Relief Law, which interest the parties agree remains a claim that is prior and superior to any claim of Guarantor notwithstanding any contrary practice, custom or ruling in cases under any applicable Debtor Relief Law generally), Guarantor agrees not to accept any payment or satisfaction of any kind of indebtedness of Borrower to Guarantor and hereby assigns such indebtedness to Lender, including the right (but not the obligation) to file proof of claim and to vote in any other bankruptcy or insolvency action, including the right to vote on any plan of reorganization, liquidation or other proposal for debt adjustment under Federal or state law.

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any agreement, at law or in equity (including, without limitation, any law subrogating Guarantor to the rights of Lender) to assert, (a) any rights of subrogation against Borrower or the collateral for the Loan, or (b) any rights of contribution against any other guarantor of the Loan or any other Person, in each case unless and until Lender has received full and indefeasible payment of the Obligations. If the deferral of such rights shall be unenforceable for any reason, Guarantor agrees that (x) Guarantor’s rights of subrogation shall be junior and subordinate to Lender’s rights against Borrower and the collateral for the Loan, and (y) such Guarantor’s rights of contribution against any such other guarantor shall be junior and subordinate to Lender’s rights against such other guarantor.

Section 3.13 Subordination of Debt to any Guarantor.

(a)

Any indebtedness of Borrower to any Guarantor, whether now or hereafter existing, whether direct, contingent, primary, secondary, several, joint and several, or otherwise, and irrespective of whether such debts or liabilities be evidenced by note, contract, open account or otherwise, and irrespective of the person or persons in whose favor such debts or liabilities may, at their inception, have been or may hereafter be created, or the manner in which they have been or may hereafter be acquired by Guarantor, including, without limitation, all rights and claims of Guarantor against Borrower (arising as a result of subrogation or otherwise) as a result of Guarantor’s payment of all or a portion of the Guaranteed Obligation, together with any interest thereon (collectively, “Guarantor Claims”), shall be and hereby is deferred, postponed and subordinated to the prior payment in full of the Loan. Further, until payment in full of the Obligations, Guarantor agrees that should the Guarantor receive any payment, satisfaction or security for any Guarantor Claim, the same shall be delivered to Lender in the form received (endorsed or assigned as may be appropriate) for application on account of, or as security for, the Loan and until so delivered to Lender, shall be held in trust for Lender as security for the Loan.

(b)

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the Guaranteed Obligation, any dividend or payment which is otherwise payable to Guarantor and which, as between Borrower and Guarantor, shall constitute a credit against the Guarantor Claims, then, upon payment to Lender in full of the Guaranteed Obligation, Guarantor shall become subrogated to the rights of Lender to the extent that such payments to Lender on the Guarantor Claims have contributed toward the liquidation of the Guaranteed Obligation, and such subrogation shall be with respect to that portion of the Guaranteed Obligation which would have been unpaid if Lender had not received dividends or payments upon the Guarantor Claims.

(c)

Guarantor agrees that any liens, security interests, judgment liens, charges or other encumbrances upon Borrower’s assets securing payment of the Guarantor Claims shall be and remain inferior and subordinate to any liens, security interests, judgment liens, charges or other encumbrances upon Borrower’s assets securing payment of the Guaranteed Obligation, regardless of whether such encumbrances in favor of Guarantor or Lender presently exist or are hereafter created or attach. Without the prior written consent of Lender, Guarantor shall not (i) exercise or enforce any creditor’s right Guarantor may have against Borrower, or (ii) foreclose, repossess, sequester or otherwise take steps or institute any action or proceedings (judicial or otherwise, including without limitation the commencement of, or joinder in, any liquidation, bankruptcy, rearrangement, debtor’s relief or insolvency proceeding) to enforce any liens, mortgage, deeds of trust, security interests, collateral rights, judgments or other encumbrances held by Guarantor on assets of Borrower.

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issued in respect of a securitization or participation of the Loan, and any entity maintaining databases on the underwriting and performance of commercial mortgage loans, any and all information which Lender now has or may hereafter acquire relating to the Loan, the Property or with respect to Borrower or Guarantor, as Lender determines necessary or desirable. Guarantor irrevocably waives all rights Guarantor may have under applicable law, if any, to prohibit such disclosure, including, without limitation, any right of privacy. Guarantor may not assign any of Guarantor’s rights, powers, duties and obligations hereunder, or substitute another Person in lieu of Guarantor as the obligor hereunder.

Section 3.15 Financial Statements. Guarantor represents and warrants to Lender that (i) the financial statements of Guarantor previously submitted to Lender are true, complete and correct in all material respects, disclose all actual and contingent liabilities, and fairly present the financial condition of Guarantor, and do not contain any untrue statement of a material fact or omit to state a fact material to the financial statements submitted or this Guaranty, and (ii) no material adverse change has occurred in the financial statements from the dates thereof until the date hereof. Guarantor shall furnish to Lender:

(a)

[Use this section for a Guarantor who is not a natural Person (other than trusts established for estate planning purposes),] as soon as available and in no event later than [ninety (90) days] after the close of each fiscal year (a “Fiscal Year”): (A) an audited [unaudited] balance sheet for Guarantor as of the end of the Guarantor’s Fiscal Year and an audited [unaudited] statement of profit and loss for Guarantor and for Guarantor’s operations for Guarantor’s Fiscal Year, together with all supporting schedules [certified by the chief financial officer of Guarantor as true, complete and correct], and [(B) [the opinion of an independent certified public accountant acceptable to Lender stating that such materials (1) were prepared in accordance with GAAP applied on a consistent basis [or in accordance with such other principles or methods as are reasonably acceptable to Lender], (2) fairly present Guarantor’s financial condition, (3) show all material liabilities, direct and contingent, (4) fairly present the results of Guarantor’s operations, and (5) disclose the existence of any hedge and/or off-balance sheet transactions;] [HAVE LENDER PRE-APPROVE FORM OF FINANCIAL STATEMENTS]

(b)

[Use this section for a Guarantor who is a natural Person or for trusts established for estate planning purposes,] deliver to

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Lender as soon as available and in no event later than [ninety (90) days] after the close of each calendar year, a financial statement as of the end of the calendar year, certified by the Guarantor as (1) true, complete and correct, (2) fairly presenting Guarantor’s financial condition, and (3) showing all material liabilities, direct and contingent, and otherwise in a form substantially similar to the form of financial statements previously submitted to Lender by Guarantor, unless otherwise approved by Lender in writing;] [HAVE LENDER PRE-APPROVE FORM OF FINANCIAL STATEMENTS]

[(b)/(c)] within 30 days after filing, a copy of the federal income tax return filed for Guarantor for the prior calendar or Fiscal Year, as applicable, in each case prepared by a certified public accountant acceptable to Lender and certified by Borrower as being a true, complete and correct of such tax return as filed.

Section 3.16 No reliance. Guarantor agrees and acknowledges that (a) Guarantor is not entering into this Guaranty in reliance on, or in contemplation of the benefits of, the validity, enforceability, ability to collect, or value of the collateral for the Loan; (b) Guarantor may be required to pay the Guaranteed Obligation in full without assistance or support of any other party, and (c) Guarantor has not been induced to enter into this Guaranty on the basis of a contemplation, belief, understanding or agreement that other parties will be liable to pay the Guaranteed Obligation, or that Lender will look to other parties to pay or perform the Guaranteed Obligation.

Section 3.17 Termination. This Guaranty shall be automatically discharged as of the date on which the Obligations have been indefeasibly paid in full.

Section 3.18 Setoff. Guarantor hereby grants to Lender a security interest in, and Lender is hereby authorized at any time and from time to time, without prior notice to Guarantor (any such notice hereby being expressly waived by Guarantor), to set off and apply, any and all accounts and deposits (general or special, time or demand, provisional or final) at any time held by Lender, or any branch, subsidiary, or affiliate of Lender, and all other indebtedness at any time owing by Lender or any branch, subsidiary, or affiliate of Lender, to or for the credit or the account of Guarantor (including all accounts held jointly with another, but excluding any IRA or Keogh accounts, or any trust accounts for which a security interest would be prohibited by law), against any and all of the obligations of Guarantor due and payable under this Guaranty. Such security interest may be enforced, and such right of setoff may be

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exercised, by Lender irrespective of whether or not Lender shall have made any demand under this Guaranty. Lender agrees promptly to notify a Guarantor after any such setoff and application, provided that the failure to give such notice shall not affect the validity or such setoff and application. The rights of Lender under this section are in addition to other rights and remedies (including, without limitation, other rights of setoff) which Lender may have. [ELIMINATE SETOFF]

Section 3.19 Transfers; Sales, Etc. [Use this if Guarantor is an entity] Guarantor shall not sell, lease, transfer, convey or assign any of its assets, unless such sale, lease, transfer, conveyance or assignment is performed in the ordinary course of its business consistent with past practices, and will not have a material adverse effect on the business or financial condition of Guarantor or its ability to perform its obligations hereunder. Guarantor further covenants and agrees that it shall not become a party to any merger or consolidation, or, except in the ordinary course of its business consistent with past practices, acquire all or substantially all of the assets of, a controlling interest in the stock of, or a partnership or joint venture interest in, any other entity, in each case without the prior written consent of Lender. [PERMIT TRANSFERS AS LONG AS FINANCIAL COVENANTS ARE NOT BREACHED] [Use this if Guarantor is an individual] Guarantor shall not sell, lease, transfer, convey or assign any of Guarantor’s assets, unless such sale, lease, transfer, conveyance or assignment will not have a material adverse effect on the financial condition of Guarantor. [LIMIT TO MATERIAL ASSETS]

Section 3.20 [Guarantor Financial Covenants. Add any required financial covenants.]

ARTICLE 4
REPRESENTATIONS AND WARRANTIES

Section 4.1 Guarantor Due Diligence and Benefit. Guarantor represents and warrants to Lender that (a) the Loan and this Guaranty are for commercial purposes, (b) Guarantor has had adequate opportunity to review the Loan Documents, (c) Guarantor is fully aware of obligations of Borrower thereunder and of the financial condition, assets and prospects of Borrower, and (d) Guarantor is executing and delivering this Guaranty based solely upon Guarantor’s own independent investigation of the matters contemplated by clauses (a) through (c) of this Section 4.1 and in no part upon any representation, warranty or statement of Lender with respect thereto.

Section 4.2 General. Guarantor represents and warrants to Lender that:

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(a)	Authority. [If Guarantor is an individual: Guarantor has the requisite legal and mental capacity to execute and deliver this Guaranty and perform Guarantor’s obligations hereunder / If Guarantor is an entity: Guarantor has all requisite [corporate / company / partnership] authority to execute and deliver this Guaranty and perform Guarantor’s obligations hereunder.]
(b)	Valid and Binding Obligation. This Guaranty constitutes Guarantor’s legal, valid and binding obligation, enforceable against Guarantor in accordance with its terms, except to the extent enforceability may be limited under applicable bankruptcy and insolvency laws and similar laws affecting creditors’ rights generally and to general principles of equity.
(c)	No Conflict with Other Agreement. Guarantor’s execution, delivery and performance of this Guaranty will not (i) violate any of the organizational documents of Guarantor, (ii) result in the breach of, or conflict with, or result in the acceleration of, any obligation under any guaranty, indenture, credit facility or other instrument to which Guarantor, Borrower or any of their respective assets may be subject, or (iii) violate any order, judgment or decree to which Guarantor, Borrower or any of their respective assets are subject.
(d)	No Pending Litigation. No action, suit, proceeding or investigation, judicial, administrative or otherwise (including without limitation any reorganization, bankruptcy, insolvency or similar proceeding), currently is pending or, to the best of Guarantor’s knowledge, threatened against Guarantor which, either in any one instance or in the aggregate, may have a material, adverse effect on Guarantor’s ability to perform Guarantor’s obligations under this Guaranty.
(e)	Consideration. Guarantor owns a direct or indirect interest or has a financial interest in Borrower and will derive substantial benefit from the making of the Loan to Borrower.
(f)	Financial Condition. Guarantor currently is solvent and will not be rendered insolvent by providing this Guaranty. No adverse change has occurred in the financial condition of Guarantor since the date of Guarantor’s most recent financial statements submitted to Lender, other than such changes that have been disclosed in writing to Lender and acknowledged by Lender.

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ARTICLE 5
EVENT OF DEFAULT

Section 5.1 Default. Any default hereunder (after the expiration of any cure periods expressly provided for herein) shall be deemed an “Event of Default” under the [Loan Agreement and the other] Loan Documents.

ARTICLE 6
MISCELLANEOUS

Section 6.1 Notices. All notices or other written communications hereunder shall be deemed to have been properly given (a) upon delivery, if delivered in person, (b) one (1) business day after having been deposited for overnight delivery with any reputable overnight courier service, or (c) three (3) business days after having been deposited in any post office or mail depository regularly maintained by the U.S. Postal Service and sent by registered or certified mail, postage prepaid, return receipt requested, addressed to the addresses set forth below in this Section or as such party may from time to time designate by written notice to the other parties. Either party by notice to the other in the manner provided herein may designate additional or different addresses for subsequent notices or communications:

To Lender:	_______________
To Guarantor:	_______________

Section 6.2 Invalid Provisions. If any provision of this Guaranty is held to be illegal, invalid or unenforceable in whole or in part, such provision shall be fully severable; this Guaranty shall be construed and enforced as if such illegal, invalid or unenforceable provision (or portion thereof) had never comprised a part hereof; the remaining provisions hereof shall remain in full effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance therefrom; and in lieu of such illegal, invalid or unenforceable provision there shall be added automatically as a part of this Guaranty a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible to be legal, valid and enforceable.

Section 6.3 Time of the Essence. Time is of the essence with respect to this Guaranty and the performance and observance by Guarantor of each covenant, agreement, provision and term of this Guaranty.

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Section 6.4 Successors and Assigns. This Guaranty shall be binding upon Guarantor and Guarantor’s heirs, representatives, successors and assigns and shall inure to the benefit of the Lender, and its successors and assigns, except that (a) Guarantor may not assign or transfer Guarantor’s rights hereunder or any interest herein or delegate [his/her/its] duties hereunder [except, in each case, to the extent expressly permitted in the Security Instrument and/or Loan Agreement], and (b) Lender shall have the right to assign its rights hereunder [in accordance with the Security Instrument and/or Loan Agreement].

Section 6.5 JURY WAIVER. GUARANTOR AND LENDER, BY ITS ACCEPTANCE HEREOF, HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) BETWEEN OR AMONG GUARANTOR AND LENDER ARISING OUT OF OR IN ANY WAY RELATED TO THIS GUARANTY, ANY OTHER LOAN DOCUMENT, OR ANY RELATIONSHIP BETWEEN GUARANTOR AND LENDER. THIS PROVISION IS A MATERIAL INDUCEMENT TO LENDER TO PROVIDE THE LOAN DESCRIBED HEREIN AND IN THE OTHER LOAN DOCUMENTS.

Section 6.6 Governing Law. This Guaranty shall be governed by and construed in accordance with the laws of the State of __________.

Section 6.7 JURISDICTION AND VENUE. GUARANTOR HEREBY AGREES THAT ALL ACTIONS OR PROCEEDINGS INITIATED BY GUARANTOR AND ARISING DIRECTLY OR INDIRECTLY OUT OF THIS GUARANTY SHALL BE LITIGATED IN THE CIRCUIT COURT OF __________ COUNTY, __________, OR THE UNITED STATES DISTRICT COURT FOR THE __________ DISTRICT OF __________ OR, IF LENDER INITIATES SUCH ACTION, ANY COURT IN WHICH LENDER SHALL INITIATE SUCH ACTION AND WHICH HAS JURISDICTION. GUARANTOR HEREBY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED BY LENDER IN ANY OF SUCH COURTS, AND HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS AND COMPLAINT, OR OTHER PROCESS OR PAPERS ISSUED THEREIN, AND AGREES THAT SERVICE OF SUCH SUMMONS AND COMPLAINT OR OTHER PROCESS OR PAPERS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO GUARANTOR AT THE ADDRESS TO WHICH NOTICES ARE TO BE SENT PURSUANT TO THIS GUARANTY. GUARANTOR

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WAIVES ANY CLAIM THAT __________ COUNTY, __________ OR THE __________ DISTRICT OF __________ IS AN INCONVENIENT FORUM OR AN IMPROPER FORUM BASED ON LACK OF VENUE. SHOULD GUARANTOR, AFTER BEING SO SERVED, FAIL TO APPEAR OR ANSWER TO ANY SUMMONS, COMPLAINT, PROCESS OR PAPERS SO SERVED WITHIN THE NUMBER OF DAYS PRESCRIBED BY LAW AFTER THE MAILING THEREOF, GUARANTOR SHALL BE DEEMED IN DEFAULT AND AN ORDER AND/OR JUDGMENT MAY BE ENTERED BY LENDER AGAINST GUARANTOR AS DEMANDED OR PRAYED FOR IN SUCH SUMMONS, COMPLAINT, PROCESS OR PAPERS. THE EXCLUSIVE CHOICE OF FORUM FOR GUARANTOR SET FORTH IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT BY LENDER OF ANY JUDGMENT OBTAINED IN ANY OTHER FORUM OR THE TAKING BY LENDER OF ANY ACTION TO ENFORCE THE SAME IN ANY OTHER APPROPRIATE JURISDICTION, AND GUARANTOR HEREBY WAIVES THE RIGHT, IF ANY, TO COLLATERALLY ATTACK ANY SUCH JUDGMENT OR ACTION.

Section 6.8 Entire Agreement. This Guaranty embodies the entire agreement and understanding between Lender and Guarantor with respect to the subject matter hereof and supersedes all prior agreements and understandings between such parties relating to the subject matter hereof. Accordingly, this Guaranty may not be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements of the parties. There are no unwritten oral agreements between the parties.

Section 6.9 Phrases. When used in this Guaranty, the phrase “including” (or a word of similar import) shall mean “including, but not limited to,” the phrase “satisfactory to Lender” shall mean “in form and substance satisfactory to Lender in all respects,” the phrase “with Lender’s consent” or “with Lender’s approval” shall mean such consent or approval at Lender’s discretion, and the phrase “acceptable to Lender” shall mean “acceptable to Lender at Lender’s discretion”, except as provided otherwise herein. Wherever the context of this Guaranty may so require, the gender shall include the masculine, feminine and neuter, and the singular shall include the plural and vice versa. This Guaranty shall be construed as though drafted by all of the parties hereto and shall not be construed against or in favor of any party.

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parties and shall not be construed to have any effect or meaning with respect to the other content of such articles, sections, subsections or other divisions, such other content being controlling as to the agreement between Guarantor and Lender.

Section 6.11 Survival. All of the representations, warranties, covenants, and indemnities hereunder, and any modification or amendment hereof, shall survive the closing and funding of the Loan, shall not be deemed to have merged herein, and shall (except to the extent expressly provided for herein) remain as continuing representations, warranties, covenants and indemnities so long as any Obligations is outstanding.

Section 6.12 Representation by Legal Counsel. Guarantor acknowledges that Guarantor has been advised by Lender to seek the advice of legal counsel in connection with the negotiation and preparation of this Guaranty. If Guarantor has chosen not to obtain legal representation, whether due to cost considerations or for other reasons, the lack of such representation shall not furnish Guarantor with any defense to the enforcement of Lender’s rights hereunder.

Section 6.13 Injunctive Relief. Guarantor recognizes that in the event Guarantor fails to perform, observe or discharge any of Guarantor’s obligations hereunder, no remedy of law will provide adequate relief to Lender, and agrees that Lender shall be entitled to pursue temporary and permanent injunctive relief in any such case without the necessity of proving actual damages.

Section 6.14 [Loan Agreement. Guarantor hereby agrees to be bound by any covenants binding upon Guarantor in the Loan Documents and such covenants are hereby incorporated by reference as if fully set forth herein.] [CONSIDER DELETING]

Section 6.15 Modification. This Guaranty shall not be modified, supplemented, or terminated, nor any provision hereof waived, except by a written instrument signed by the party against whom enforcement thereof is sought, and then only to the extent expressly set forth in such writing.

Section 6.16 Duplicate Originals; Counterparts. This Guaranty may be executed in any number of duplicate originals, and each duplicate original shall be deemed to be an original. This Guaranty (and each duplicate original) also may be executed in any number of counterparts, each of which shall be deemed an original and all of which together constitute a fully executed Guaranty even though all signatures do not appear on the same document. Receipt of an executed signature page to this Guaranty by facsimile or other electronic transmission shall constitute effective delivery thereof.

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Section 6.17 Recitals. The recital and introductory paragraphs hereof are a part hereof, form a basis for this Guaranty and shall be considered prima facie evidence of the facts and documents referred to therein.

Section 6.18 Joint and Several Obligations. If Guarantor is a partnership, the obligations of Guarantor under this Guaranty are the joint and several obligation of each general partner thereof. Any married person signing this Guaranty agrees that recourse may be had against community property assets and against his or her separate property for the satisfaction of all obligations contained herein.

Section 6.19 Reliance. Lender would not make the Loan to the Borrower without this Guaranty. Accordingly, Guarantor intentionally and unconditionally enters into the covenants and agreements herein and understands that, in reliance upon and in consideration of such covenants and agreements, the Loan shall be made and, as part and parcel thereof, specific monetary and other obligations have been, are being and shall be entered into which would not be made or entered into but for such reliance.

Section 6.20 Waiver of Bankruptcy Stay. Guarantor covenants and agrees that upon the commencement of a voluntary or involuntary Bankruptcy Proceeding by or against Guarantor, Guarantor shall not seek a supplemental stay or otherwise pursuant to 11 U.S.C. §105 or any other provision of the Bankruptcy Code or any other Debtor Relief Law, to stay, interdict, condition, reduce or inhibit the ability of Lender to enforce any rights of Lender against Guarantor by virtue of this Guaranty or otherwise.

Section 6.21 Further Assurances. Guarantor shall, upon request by Lender, execute, with acknowledgment or affidavit if required, and deliver, any and all documents and instruments required to effectuate the provisions hereof and of any other Loan Document.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the undersigned has executed this Guaranty as of the date first above written.

	GUARANTOR:
	____________________ Name: _______________

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Exhibit B

FORM OF GUARANTY OF NON-RECOURSE CARVE-OUTS^*

THIS GUARANTY OF NON-RECOURSE CARVE-OUTS (as the same may be amended, supplemented or otherwise modified from time to time, this “Guaranty”) is made as of ______________________, 20___ by _________________________ (“Guarantor”) for the benefit of ____________________ its successors and assigns (“Lender”).

WITNESSETH:

WHEREAS, [pursuant to that certain Construction Loan Agreement dated as of the date hereof between __________ (the “Borrower”) and Lender (together with all renewals, amendments, modifications, increases and extensions thereof, the “Loan Agreement”),] Lender has agreed to make a loan to Borrower in the maximum principal amount of $__________ (the “Loan”). The Loan is evidenced by that certain Promissory Note dated as of even date herewith in the principal amount of $__________ from Borrower and payable to the order of Lender (together with all renewals, amendments, modifications, increases and extensions thereof, the “Note”);

WHEREAS, the Loan is secured by that certain [Construction Mortgage/Deed of Trust], by Borrower for the benefit of Lender dated as of even date herewith (together with all renewals, modifications, increases and extensions thereof, the “Security Instrument”), which grants Lender a first priority security interest in the real property described on Exhibit A attached thereto (the “Property”). The [Loan Agreement,] Note, Security Instrument, and each of the other documents evidencing or securing the Loan are hereinafter referred to collectively as the “Loan Documents;”

WHEREAS, Guarantor is the owner of direct or indirect interest or has a financial interest in Borrower, and Guarantor will directly benefit from Lender’s making the Loan to Borrower.

NOW, THEREFORE, as an inducement to Lender to make the Loan to Borrower and to extend such additional credit as Lender may from

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time to time agree to extend under the Loan Documents, and for other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, Guarantor does hereby agree as follows:

ARTICLE 1
DEFINED TERMS

Section 1.1 Defined Terms. Capitalized terms used in this Guaranty and not specifically defined in this Guaranty have the meanings provided in the [Security Instrument/Loan Agreement].

ARTICLE 2
NATURE AND SCOPE OF GUARANTY

Section 2.1 Guaranty of Obligation. Guarantor hereby irrevocably and unconditionally guarantees to Lender the payment and performance of the Guaranteed Obligation (as hereinafter defined) as and when the same shall be due and payable, whether by lapse of time, by acceleration of maturity or otherwise. Guarantor hereby irrevocably and unconditionally covenants and agrees that Guarantor is liable for the Guaranteed Obligation as a primary obligor.

Section 2.2 Definition of Guaranteed Obligation. As used herein, the term “Guaranteed Obligation” means (i) Guarantor’s Recourse Liabilities (as defined herein), and (ii) from and after the occurrence of any Springing Recourse Event, payment in full of the Obligations (as defined in the Security Instrument).

Section 2.3 Definition of Guarantor’s Recourse Liabilities. As used herein, the term “Guarantor’s Recourse Liabilities” means any and all loss, damage, cost, expense, liability, claim or other obligation incurred by Lender (including attorneys’ fees for both in-house and outside counsel) arising out of or in connection with or as a result of any of the following:

(a)	Any unearned prepaid rental or other income arising with respect to the property then covered by the liens, assignments and security interests of the Loan Documents (the “Liens”) that is not paid to Lender and, in addition, any rental or other income arising with respect to the property then covered by the Liens and retained by Guarantor and/or Borrower after the earliest to occur of (i) the date on which Lender accelerates maturity of the Note, or (ii) the date on which Lender files a complaint to foreclose any of the Liens, or ====== 601 ====== (iii) the date on which Lender has given to Guarantor and/or Borrower any written notice that Guarantor and/or Borrower are in default hereunder or under the other Loan Documents, it being understood and agreed that except as expressly set forth in the Loan Documents, Lender has no obligation to give any such notice;
(b)	The removal or disposal of any property covered by the Liens except as permitted by the Security Instrument;
(c)	The misapplication by Borrower or Guarantor of (i) any proceeds paid to Borrower or Guarantor under any insurance policies by reason of damage, loss or destruction to any portion of the property covered by the Liens (but only to the full extent of such proceeds so misapplied), or (ii) any proceeds or awards resulting from the condemnation of all or any part of the property covered by the Liens.
(d)	Failure to timely pay taxes, assessments or other charges which can create liens on any portion of the property covered by the Liens;
(e)	Failure to pay any mechanic’s liens, materialmen’s liens or other liens (whether or not similar) arising due to work performed or materials furnished to any property covered by the Liens;
(f)	Failure to deliver to Lender or the applicable tenant (to the extent such tenant is lawfully entitled to receive a refund of such security deposit), any security deposit (and interest thereon required to be paid by agreement or law) paid by any tenant with respect to any property covered by the Liens;
(g)	The modification or termination of any Lease without Lender’s prior written consent if and to the extent such consent is required under the Loan Documents;
(h)	Any failure to fully pay and satisfy all operating expenses of the Property unless there is insufficient cash flow from the Property to pay such operating expenses and Borrower or Guarantor has provided written notice to Lender that there is insufficient cash flow from the Property to pay operating expenses;
(i)	Any intentional damage, destruction or waste to the Property caused by the acts or omissions of Borrower or its agents, employees, or contractors; provided, however, the failure to make repairs to the Property, to the extent that income from the Property is not available to fund such repairs, shall not constitute waste;
(j)	Any material negligent or willful misrepresentation made by Borrower in connection with the Loan Documents or the Loan; ====== 602 ======
(k)	Any loss or damage incurred by Lender in connection with any Rate Management Agreement, except for any Swap Obligation that constitutes an Excluded Swap Obligation;
(l)	Any loss or damage incurred by Lender due to Borrower’s failure to maintain the insurance coverage required by the Security Instrument;
(m)	Any failure to maintain, repair or restore the Property covered by the Liens in accordance with the terms and provisions of the Loan Documents, to the extent that Lender is not compensated by insurance proceeds collected by Lender; and
(n)	Borrower or any Borrower Party contests, delays or otherwise hinders any action taken by Lender in connection with the appointment of a receiver for the Property or the foreclosure of the liens, mortgages or other security interests created by any of the Loan Documents.

This Guaranty is a “last dollar” guaranty, and accordingly, under no circumstances shall Guarantor’s liability hereunder be reduced by, from or as a result of any payment except as may be made from Guarantor’s personal funds. Furthermore, the foregoing limitation on liability shall not limit in any way the liability of Guarantor that may arise out of the obligations set forth in the Environmental Indemnity Agreement dated of even date herewith made by Guarantor and Borrower in favor of Lender.

Section 2.4 Definition of Springing Recourse Event. As used herein, the term “Springing Recourse Event” means the occurrence of any of the following:

(a)	The occurrence of a Prohibited Transfer (as defined in the Security Instrument), without the prior written consent of Lender;
(b)	Borrower files a voluntary petition under 11 U.S.C. § 101 et seq., as the same may be amended from time to time (the “Bankruptcy Code”), or a voluntary petition, complaint or application under any other present or future state or federal law regarding bankruptcy, reorganization or other relief to debtors (collectively with the Bankruptcy Code, the “Debtor Relief Laws”; any proceeding under the Bankruptcy Code or any other Debtor Relief Law is hereinafter referred to as a “Bankruptcy Proceeding”);
(c)	Any Borrower Party, or an officer, director, agent, representative, entity or Person which owns or controls, directly or indirectly, Borrower or a Borrower Party or any of the foregoing, files, or joins in the filing of, an involuntary Bankruptcy Proceeding against ====== 603 ====== Borrower; or Borrower or any Borrower Party solicits or causes to be solicited petitioning creditors for any involuntary Bankruptcy Proceeding against Borrower. As used herein, “Borrower Party” means any Affiliate of Borrower, Guarantor, any Affiliate of Guarantor, and any [member] [partner] of Borrower or Guarantor;
(d)	Borrower files an answer consenting to or otherwise acquiescing in or joining in any involuntary Bankruptcy Proceeding filed against it by any other Person under the Bankruptcy Code or any other Debtor Relief Law;
(e)	Borrower fails to maintain its existence as a single purposes entity in conformance with the terms and provisions of the Security Instrument, which failure results in a bankruptcy filing or proceeding or a substantive consolidation of the assets of the Borrower with any other Person;
(f)	In any case or proceeding under the Bankruptcy Code, any other Debtor Relief Law or any other judicial proceeding, Borrower, any Borrower Party or any other Affiliate of Borrower or a Borrower Party shall propose a plan of reorganization, or otherwise take any action to seek any order, pursuant to which all or any portion of the lien of the Security Instrument or any other Loan Document or the obligations of Borrower to pay the Obligations as specified in the Loan Documents is rescinded, set aside, or determined to be void or unenforceable, or any of the terms of any of the Loan Documents are modified without Lender’s consent (and in any circumstance in which this clause applies, the liability of Guarantor for the obligations set forth in the Loan Documents shall be determined as if there were no such rescission, set aside, determination of voidness or unenforceability, or modification);
(g)	Fraud, willful misrepresentation, misappropriation of funds, or theft is committed by Borrower, any Borrower Party or any other Affiliate of Borrower or a Borrower Party in connection with the Loan or the Property;
(h)	Borrower, any Borrower Party or any other Affiliate of Borrower or a Borrower Party asserts any claim, defense, or offset against Lender that Borrower has acknowledged to be untrue, waived or agreed not to assert, including but not limited to that the transactions contemplated by the Loan Documents establish a joint venture, partnership or other similar arrangement between Borrower and Lender; ====== 604 ======
(i)	Borrower violates any of the single purpose entity covenants contained in the Security Instrument; or
(j)	The incurrence by Borrower of any indebtedness in violation of the terms of the Loan Documents (whether secured or unsecured, direct or contingent) other than unsecured debt or routine trade payables on the ordinary course of business in connection with the operation of the Property.

ARTICLE 3
GENERAL TERMS AND CONDITIONS

Section 3.1 Nature of Guaranty. This Guaranty is an irrevocable, absolute, continuing guaranty of payment and not a guaranty of collection. This Guaranty may not be revoked by Guarantor and shall continue to be effective with respect to any Guaranteed Obligation existing after any attempted revocation by Guarantor [and, with respect to any individual Guarantor, after Guarantor’s death (in which event this Guaranty shall be binding upon Guarantor’s estate and Guarantor’s legal representatives and heirs).] This Guaranty may be enforced by Lender and any subsequent holder of the Note and shall not be discharged by the assignment or negotiation of all or part of the Loan Documents.

Section 3.2 Guaranteed Obligation Not Reduced by Offset. The Guaranteed Obligation shall not be reduced, discharged or released because or by reason of any existing or future offset, claim or defense of Borrower or any other Person (as hereinafter defined) against Lender or against payment of the Guaranteed Obligation, whether such offset, claim or defense arises in connection with the Guaranteed Obligation (or the transactions creating the Guaranteed Obligation) or otherwise. As used in this Guaranty, “Person” shall mean any individual, corporation, partnership, joint venture, association, joint stock company, trust, trustee, estate, limited liability company, unincorporated organization, real estate investment trust, government or any agency or political subdivision thereof, or any other form of entity.

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person or any of the collateral for the Loan, (ii) enforce Lender’s rights against any of the collateral for the Loan, (iii) join Borrower or any others liable on the Guaranteed Obligation in any action seeking to enforce this Guaranty, (iv) demonstrate that the collateral for the Loan provides inadequate security for the Loan, or (v) resort to any other means of obtaining payment of the Guaranteed Obligation.

Section 3.4 Payments; Interest on Amounts Payable Hereunder. If all or any part of the Guaranteed Obligation shall not be punctually paid when due (taking into account any cure periods provided under the Loan Documents), whether on demand, maturity, acceleration or otherwise, Guarantor shall pay, immediately upon demand by Lender and without presentment, protest, notice of protest, notice of non-payment, notice of intention to accelerate the maturity, or notice of acceleration of the maturity, in immediately available lawful money of the United States of America, as an addition to the Guaranteed Obligation, interest on the Guaranteed Obligation (to the extent not paid when due) at the Default Rate (as defined in the Note) until paid in full. Lender may apply all money received by Lender from Guarantor to payment or reduction of the Loan or reimbursement of Lender’s expenses, in such priority and proportions, and at such time or times as Lender may elect in its sole discretion.

Section 3.5 Enforcement Costs. Guarantor hereby agrees to pay, on written demand by Lender, all costs incurred by Lender in collecting any amount payable under this Guaranty or enforcing or protecting its rights under the Loan Documents, in each case whether or not legal proceedings are commenced. [TRY TO LIMIT TO COSTS OF ENFORCING GUARANTY – NOT ALL LOAN DOCUMENTS] Such fees and expenses shall be in addition to the Guaranteed Obligation and shall include, without limitation, costs and expenses of both in-house and outside counsel, paralegals and other hired professionals, special servicing fees (including portfolio management fees), court fees, costs incurred in connection with pre-trial, trial and appellate level proceedings (including discovery and expert witnesses), costs incurred in post-judgment collection efforts or in any Bankruptcy Proceeding to the extent such costs relate to the Guaranteed Obligations or the enforcement of this Guaranty. Amounts incurred by Lender shall be immediately due and payable, and shall bear interest at the Default Rate from the date of disbursement until paid in full upon Lender’s written demand for payment. This Section 3.5 shall survive the payment in full of the Guaranteed Obligation.

Section 3.6 Cumulative Remedies. Guarantor acknowledges that, following an Event of Default, Lender is entitled to accelerate the Loan

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and exercise all other rights and remedies as have been provided to Lender under the Loan Documents and by law or in equity, including, without limitation enforcement of this Guaranty. All rights and remedies of Lender are cumulative and may be exercised independently, concurrently or successively in Lender’s sole discretion and as often as occasion therefor shall arise. Lender’s delay or failure to accelerate the Loan or exercise any other remedy upon the occurrence of an Event of Default shall not be deemed a waiver of such right or remedy. No partial exercise by Lender of any right or remedy will preclude further exercise thereof. Notice or demand given to Guarantor in any instance will not entitle Guarantor to notice or demand in similar or other circumstances nor constitute Lender’s waiver of its right to take any future action in any circumstance without notice or demand. Lender may release other security for the Loan, may release any party liable for the Loan, may grant extensions, renewals or forbearances with respect thereto, may accept a partial or past due payment or grant other indulgences, or may apply any other security held by it to payment of the Loan, in each case without prejudice to its rights under this Guaranty and without such action being deemed an accord and satisfaction or a reinstatement of the Loan. Lender will not be deemed as a consequence of its delay or failure to act, or any forbearances granted, to have waived or be estopped from exercising any of its rights or remedies.

Section 3.7 Unimpaired Liability. Guarantor acknowledges and agrees that all obligations hereunder are and shall be absolute and unconditional under any and all circumstances without regard to the validity, regularity or enforceability of any or all of the Loan Documents or the existence of any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor or surety. Without limiting the foregoing, Guarantor acknowledges and agrees that the liability hereunder shall in no way be released, terminated, discharged, limited or impaired by reason of any of the following (whether or not Guarantor has any knowledge or notice thereof):

(a)	Borrower’s or any other Person’s lack of authority or lawful right to enter into any of the Loan Documents or any officers’ or representatives’ lack of authority or right to enter into Loan Documents on its behalf, or the obligations thereunder being ultra vires;
(b)	any modification, supplement, extension, consolidation, restatement, waiver or consent provided by Lender with respect to any of the Loan Documents including, without limitation, the grant of extensions of time for payment or performance;

(c)	the failure to record any Loan Document or to perfect any security interest intended to be provided thereby;
(d)	the release, surrender, exchange, subordination, deterioration, waste, loss, impairment or substitution, in whole or in part, of any collateral for the Loan, the failure to protect, secure or insure any such collateral, the acceptance of additional collateral for the Loan or the failure of Lender or any other party to exercise diligence or reasonable care in the preservation, protection, enforcement, sale or other handling or treatment of all or any part of such collateral for the Loan;
(e)	Lender’s failure to exercise, or delay in exercising, any rights or remedies Lender may have under the Loan Documents or under this Guaranty or otherwise available at law or in equity, including but not limited to any neglect, delay, omission, failure or refusal of Lender (i) to take or prosecute any action for the collection of all or any part of the Guaranteed Obligation, or (ii) to foreclose, or initiate any action to foreclose, or, once commenced, prosecute to completion any action to foreclose upon any collateral for the Loan, or (iii) to take or prosecute any action in connection with any instrument or agreement evidencing or securing all or any part of the Guaranteed Obligation;
(f)	the release of Borrower or any other Person now or hereafter party to a Loan Document from performance, in whole or in part, under any of the Loan Documents to which each is a party, in each case whether by operation of law, Lender’s voluntary act, or otherwise;
(g)	any bankruptcy, insolvency, reorganization, adjustment, dissolution, liquidation or other like proceeding involving or affecting Borrower or any other Person;
(h)	the termination or discharge of the Security Instrument or any other Loan Document or the exercise of any power of sale or any foreclosure (judicial or otherwise) or delivery or acceptance of a deed-in-lieu of foreclosure;
(i)	the existence of any claim, setoff, counterclaim, defense or other rights which Guarantor may have against Borrower, Lender or any other Person, whether in connection with the Loan or any other transaction;
(j)	the accuracy or inaccuracy of the representations and warranties made by Borrower or any other Person in any of the Loan Documents; ====== 608 ======
(k)	any adjustment, indulgence, forbearance or compromise that might be granted or given by Lender to Borrower or any other Person;
(l)	any sale, lease or transfer of any or all of the assets of Borrower or any other Person;
(m)	the Guaranteed Obligation, or any part thereof, exceeding the maximum amount permitted by law or violating any usury law;
(n)	any valid defenses, claims or offsets (whether at law, in equity or by agreement) by Borrower which render the Guaranteed Obligation wholly or partially uncollectible from Borrower, whether arising in connection with the Loan Documents or otherwise,
(o)	the illegality or unenforceability of, or the inability to collect, the Guaranteed Obligation;
(p)	any of the Loan Documents being irregular or not genuine or authentic; or
(q)	any changes (whether directly or indirectly) in the shareholders, partners or members of Borrower or the reorganization, merger or consolidation of Borrower into or with any other Person.

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election of remedies, including remedies relating to real property or personal property security, which destroys or otherwise impairs the subrogation rights of Guarantor or the rights of Guarantor to proceed against Borrower or any other guarantor for reimbursement, or both.

Section 3.9 Waivers of Notice. Guarantor agrees to the provisions of the Loan Documents and hereby waive notice of (a) any disbursements thereunder made by Lender to Borrower, (b) any amendment or extension of the Loan Documents, (c) the execution and delivery by Borrower and Lender of any other loan or credit agreement or of Borrower’s execution and delivery of any promissory notes or other documents arising under the Loan Documents or in connection with the Property, (d) the occurrence of any Event of Default, (e) Lender’s transfer or disposition of the Guaranteed Obligation, or any part thereof, (f) the sale or foreclosure (or posting or advertising for sale or foreclosure) of the Property, (g) any default by Borrower or any other Person under or with respect to the Loan Documents, or (h) any other action at any time taken or omitted by Lender and, generally, all demands and notices of every kind in connection with this Guaranty and the other Loan Documents.

Section 3.11 Certain Consequences of Borrower’s Bankruptcy.

(a)

Any payment made on the Loan, whether made by Borrower or Guarantor or any other Person, that is required to be refunded or recovered from Lender as a preference or a fraudulent transfer or is otherwise set-aside pursuant to the Bankruptcy Code or under Debtor Relief Laws shall not be considered as a payment made on the Loan or under this Guaranty. Guarantor’s liability under this Guaranty shall continue with respect to any such payment, or be deemed reinstated, with the same effect as if such payment had not been received by Lender, notwithstanding any notice of revocation of this Guaranty prior to such avoidance or recovery or payment in full of the Loan, until such time as all periods have expired within which Lender could be required to return any amount paid at any time on account of the Guaranteed Obligation.

(b)

Until payment in full of the Obligations (including interest accruing after the commencement of a proceeding by or against Borrower under the Bankruptcy Code or any other Debtor Relief Law, which

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interest the parties agree remains a claim that is prior and superior to any claim of Guarantor notwithstanding any contrary practice, custom or ruling in cases under any applicable Debtor Relief Law generally), Guarantor agrees not to accept any payment or satisfaction of any kind of indebtedness of Borrower to Guarantor and hereby assigns such indebtedness to Lender, including the right (but not the obligation) to file proof of claim and to vote in any other bankruptcy or insolvency action, including the right to vote on any plan of reorganization, liquidation or other proposal for debt adjustment under Federal or state law.

Section 3.12 Subrogation and Contribution. Guarantor agrees that no payment by Guarantor under this Guaranty shall give rise to, and Guarantor hereby unconditionally and irrevocably waives, releases and abrogates any and all rights Guarantor may now or hereafter have under any agreement, at law or in equity (including, without limitation, any law subrogating Guarantor to the rights of Lender) to assert, (a) any rights of subrogation against Borrower or any collateral for the Loan, or (b) any rights of contribution against any other guarantor of the Loan or any other Person, in each case unless and until Lender has received full and indefeasible payment in full of the Obligations. If the deferral of such rights shall be unenforceable for any reason, Guarantor agrees that (x) Guarantor’s rights of subrogation shall be junior and subordinate to Lender’s rights against Borrower and the collateral for the Loan, and (y) such Guarantor’s rights of contribution against any such other guarantor shall be junior and subordinate to Lender’s rights against such other guarantor.

Section 3.13 Subordination of Debt to any Guarantor.

(a)

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payment in full of the Loan. Further, until payment in full of the Obligations, Guarantor agrees that should Guarantor receive any payment, satisfaction or security for any Guarantor Claim, the same shall be delivered to Lender in the form received (endorsed or assigned as may be appropriate) for application on account of, or as security for, the Loan and until so delivered to Lender, shall be held in trust for Lender as security for the Loan.

(b)

In the event of receivership, bankruptcy, reorganization, arrangement, debtor’s relief, or other insolvency proceedings involving Guarantor as debtor, Lender shall have the right to prove its claim in any such proceeding so as to establish its rights hereunder and receive directly from the receiver, trustee or other court custodian dividends and payments which would otherwise be payable upon Guarantor Claims. Guarantor hereby assigns such dividends and payments to Lender. Should Lender receive, for application against the Guaranteed Obligation, any dividend or payment which is otherwise payable to Guarantor and which, as between Borrower and Guarantor, shall constitute a credit against the Guarantor Claims, then, upon payment to Lender in full of the Guaranteed Obligation, Guarantor shall become subrogated to the rights of Lender to the extent that such payments to Lender on the Guarantor Claims have contributed toward the liquidation of the Guaranteed Obligation, and such subrogation shall be with respect to that portion of the Guaranteed Obligation which would have been unpaid if Lender had not received dividends or payments upon the Guarantor Claims.

(c)

Guarantor agrees that any liens, security interests, judgment liens, charges or other encumbrances upon Borrower’s assets securing payment of the Guarantor Claims shall be and remain inferior and subordinate to any liens, security interests, judgment liens, charges or other encumbrances upon Borrower’s assets securing payment of the Guaranteed Obligation, regardless of whether such encumbrances in favor of Guarantor or Lender presently exist or are hereafter created or attach. Without the prior written consent of Lender, Guarantor shall not (i) exercise or enforce any creditor’s right they may have against Borrower, or (ii) foreclose, repossess, sequester or otherwise take steps or institute any action or proceedings (judicial or otherwise, including without limitation the commencement of, or joinder in, any liquidation, bankruptcy, rearrangement, debtor’s relief or insolvency proceeding) to enforce any liens, mortgage,

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deeds of trust, security interests, collateral rights, judgments or other encumbrances held by Guarantor on assets of Borrower.

Section 3.14 Lender Transferees; Secondary Market Activities; No Transfer by Guarantor. Guarantor acknowledges and agrees that Lender, without notice to Guarantor or Guarantor’s consent, may assign all or any portion of its rights hereunder in connection with any sale or assignment of the Loan or servicing rights related to the Loan, grant participations in the Loan, transfer the Loan as part of a securitization in which Lender assigns its rights to a securitization trustee, or contract for the servicing of the Loan, and that each such assignee, participant or servicer shall be entitled to exercise all of Lender’s rights and remedies hereunder. Guarantor further acknowledges that Lender may provide to third parties with an existing or prospective interest in the servicing, enforcement, ownership, purchase, participation or securitization of the Loan, including, without limitation, any rating agency rating the securities issued in respect of a securitization or participation of the Loan, and any entity maintaining databases on the underwriting and performance of commercial mortgage loans, any and all information which Lender now has or may hereafter acquire relating to the Loan, the Property or with respect to Borrower or Guarantor, as Lender determines necessary or desirable. Guarantor irrevocably waives all rights Guarantor may have under applicable law, if any, to prohibit such disclosure, including, without limitation, any right of privacy. Guarantor may not assign any of Guarantor’s rights, powers, duties and obligations hereunder, or substitute another Person in lieu of Guarantor as the obligor hereunder.

(a)

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for Guarantor’s operations for Guarantor’s Fiscal Year, together with all supporting schedules, and (B) the opinion of an independent certified public accountant acceptable to Lender stating that such materials (1) were prepared in accordance with GAAP applied on a consistent basis [or in accordance with such other principles or methods as are reasonably acceptable to Lender], (2) fairly present Guarantor’s financial condition, (3) show all material liabilities, direct and contingent, (4) fairly present the results of Guarantor’s operations, and (5) disclose the existence of any hedge and/or off-balance sheet transactions;

(b)

[Use this section for a Guarantor who is a natural Person or for trusts established for estate planning purposes,] deliver to Lender as soon as available and in no event later than [ninety (90) days] after the close of each calendar year, a financial statement as of the end of the calendar year, certified by the Guarantor as (1) true, complete and correct, (2) fairly presenting Guarantor’s financial condition, and (3) showing all material liabilities, direct and contingent, and otherwise in a form substantially similar to the form of financial statements previously submitted to Lender by Guarantor, unless otherwise approved by Lender in writing;]

Section 3.17 Termination. This Guaranty shall be automatically discharged as of the date on which the Obligations has been indefeasibly paid in full.

Section 3.18 Setoff. Guarantor hereby grants to Lender a security interest in, and Lender is hereby authorized at any time and from time

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to time, without prior notice to Guarantor (any such notice hereby being expressly waived by Guarantor), to set off and apply, any and all accounts and deposits (general or special, time or demand, provisional or final) at any time held by Lender, or any branch, subsidiary, or affiliate of Lender, and all other indebtedness at any time owing by Lender or any branch, subsidiary, or affiliate of Lender, to or for the credit or the account of Guarantor (including all accounts held jointly with another, but excluding any IRA or Keogh accounts, or any trust accounts for which a security interest would be prohibited by law), against any and all of the obligations of Guarantor due and payable under this Guaranty. Such security interest may be enforced, and such right of setoff may be exercised, by Lender irrespective of whether or not Lender shall have made any demand under this Guaranty. Lender agrees promptly to notify a Guarantor after any such setoff and application, provided that the failure to give such notice shall not affect the validity or such setoff and application. The rights of Lender under this section are in addition to other rights and remedies (including, without limitation, other rights of setoff) which Lender may have. [ELIMINATE SETOFF]

Section 3.20 [Guarantor Financial Covenants. Add any required financial covenants.]

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ARTICLE 4
REPRESENTATIONS AND WARRANTIES

Section 4.2 General. Guarantor represents and warrants to Lender that:

(a)	Authority. [If Guarantor is an individual: Guarantor has the requisite legal and mental capacity to execute and deliver this Guaranty and perform Guarantor’s obligations hereunder / If Guarantor is an entity: Guarantor has all requisite [corporate / company / partnership] authority to execute and deliver this Guaranty and perform Guarantor’s obligations hereunder.]
(b)	Valid and Binding Obligation. This Guaranty constitutes Guarantor’s legal, valid and binding obligation, enforceable against Guarantor in accordance with its terms, except to the extent enforceability may be limited under applicable bankruptcy and insolvency laws and similar laws affecting creditors’ rights generally and to general principles of equity.
(c)	No Conflict with Other Agreement. Guarantor’s execution, delivery and performance of this Guaranty will not (i) violate any of the organizational documents of Guarantor, (ii) result in the breach of, or conflict with, or result in the acceleration of, any obligation under any guaranty, indenture, credit facility or other instrument to which Guarantor, Borrower or any of their respective assets may be subject, or (iii) violate any order, judgment or decree to which Guarantor, Borrower or any of their respective assets are subject.
(d)	No Pending Litigation. No action, suit, proceeding or investigation, judicial, administrative or otherwise (including without limitation any reorganization, bankruptcy, insolvency or similar proceeding), currently is pending or, to the best of Guarantor’s knowledge, threatened against Guarantor which, either in any one instance or in the ====== 616 ====== aggregate, may have a material, adverse effect on Guarantor’s ability to perform Guarantor’s obligations under this Guaranty.
(e)	Consideration. Guarantor owns a direct or indirect interest or has a financial interest in Borrower and will derive substantial benefit from the making of the Loan to Borrower.
(f)	Financial Condition. Guarantor currently is solvent and will not be rendered insolvent by providing this Guaranty. No adverse change has occurred in the financial condition of Guarantor since the date of Guarantor’s most recent financial statements submitted to Lender, other than such changes that have been disclosed in writing to Lender and acknowledged by Lender.

ARTICLE 5
EVENT OF DEFAULT

Any default hereunder (after the expiration of any cure periods expressly provided for herein) shall be deemed an “Event of Default” under the [Loan Agreement and the other] Loan Documents.

ARTICLE 6
MISCELLANEOUS

To Lender:	_______________
To Guarantor:	_______________

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enforced as if such illegal, invalid or unenforceable provision (or portion thereof) had never comprised a part hereof; the remaining provisions hereof shall remain in full effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance therefrom; and in lieu of such illegal, invalid or unenforceable provision there shall be added automatically as a part of this Guaranty a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible to be legal, valid and enforceable.

Section 6.3 Time of the Essence. Time is of the essence with respect to this Guaranty and the performance and observance by Guarantor of each covenant, agreement, provision and term of this Guaranty.

Section 6.4 Successors and Assigns. This Guaranty shall be binding upon Guarantor and Guarantor’s heirs, legal representatives, successors and assigns and shall inure to the benefit of the Lender, and its successors and assigns, except that (a) Guarantor may not assign or transfer Guarantor’s rights hereunder or any interest herein or delegate [his/her/ its] duties, obligations and liabilities hereunder [except, in each case, to the extent expressly permitted in the Security Instrument and/or the Loan Agreement], and (b) Lender shall have the right to assign its rights hereunder [in accordance with the Security Instrument and/or the Loan Agreement].

Section 6.5 JURY WAIVER. GUARANTOR AND LENDER, BY ITS ACCEPTANCE HEREOF, HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) BETWEEN OR AMONG GUARANTORS AND LENDER ARISING OUT OF OR IN ANY WAY RELATED TO THIS GUARANTY, ANY OTHER LOAN DOCUMENT, OR ANY RELATIONSHIP BETWEEN GUARANTORS AND LENDER. THIS PROVISION IS A MATERIAL INDUCEMENT TO LENDER TO PROVIDE THE LOAN DESCRIBED HEREIN AND IN THE OTHER LOAN DOCUMENTS.

Section 6.6 Governing Law. This Guaranty shall be governed by and construed in accordance with the laws of the State of _________.

====== 618 ======

DISTRICT OF _________ OR, IF LENDER INITIATES SUCH ACTION, ANY COURT IN WHICH LENDER SHALL INITIATE SUCH ACTION AND WHICH HAS JURISDICTION. GUARANTOR HEREBY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED BY LENDER IN ANY OF SUCH COURTS, AND HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS AND COMPLAINT, OR OTHER PROCESS OR PAPERS ISSUED THEREIN, AND AGREES THAT SERVICE OF SUCH SUMMONS AND COMPLAINT OR OTHER PROCESS OR PAPERS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO GUARANTOR AT THE ADDRESS TO WHICH NOTICES ARE TO BE SENT PURSUANT TO THIS GUARANTY. GUARANTOR WAIVES ANY CLAIM THAT _________, COUNTY, _________ OR THE _________ DISTRICT OF _________ IS AN INCONVENIENT FORUM OR AN IMPROPER FORUM BASED ON LACK OF VENUE. SHOULD GUARANTOR, AFTER BEING SO SERVED, FAIL TO APPEAR OR ANSWER TO ANY SUMMONS, COMPLAINT, PROCESS OR PAPERS SO SERVED WITHIN THE NUMBER OF DAYS PRESCRIBED BY LAW AFTER THE MAILING THEREOF, GUARANTOR SHALL BE DEEMED IN DEFAULT AND AN ORDER AND/OR JUDGMENT MAY BE ENTERED BY LENDER AGAINST GUARANTOR AS DEMANDED OR PRAYED FOR IN SUCH SUMMONS, COMPLAINT, PROCESS OR PAPERS. THE EXCLUSIVE CHOICE OF FORUM FOR GUARANTOR SET FORTH IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT BY LENDER OF ANY JUDGMENT OBTAINED IN ANY OTHER FORUM OR THE TAKING BY LENDER OF ANY ACTION TO ENFORCE THE SAME IN ANY OTHER APPROPRIATE JURISDICTION, AND GUARANTORS HEREBY WAIVE THE RIGHT, IF ANY, TO COLLATERALLY ATTACK ANY SUCH JUDGMENT OR ACTION.

Section 6.9 Phrases. When used in this Guaranty, the phrase “including” (or a word of similar import) shall mean “including, but not limited

====== 619 ======

to,” the phrase “satisfactory to Lender” shall mean “in form and substance satisfactory to Lender in all respects,” the phrase “with Lender’s consent” or “with Lender’s approval” shall mean such consent or approval at Lender’s discretion, and the phrase “acceptable to Lender” shall mean “acceptable to Lender at Lender’s discretion”, except as provided otherwise herein. Wherever the context of this Guaranty may so require, the gender shall include the masculine, feminine and neuter, and the singular shall include the plural and vice versa. This Guaranty shall be construed as though drafted by all of the parties hereto and shall not be construed against or in favor of any party.

Section 6.10 Titles of Articles, Sections and Subsections. All titles or headings to articles, sections, subsections or other divisions of this Guaranty or the exhibits hereto are only for the convenience of the parties and shall not be construed to have any effect or meaning with respect to the other content of such articles, sections, subsections or other divisions, such other content being controlling as to the agreement between Guarantor and Lender.

Section 6.13 Injunctive Relief. Guarantor recognizes that in the event Guarantor fails to perform, observe or discharge any of Guarantor’s obligations hereunder, no remedy of law will provide adequate relief to Lender, and agree that Lender shall be entitled to pursue temporary and permanent injunctive relief in any such case without the necessity of proving actual damages.

====== 620 ======

Section 6.20 Waiver of Bankruptcy Stay. Guarantors covenant and agree that upon the commencement of a voluntary or involuntary Bankruptcy Proceeding by or against any Guarantor, such Guarantor shall not seek a supplemental stay or otherwise pursuant to 11 U.S.C. §105 or any other provision of the Bankruptcy Code or any other Debtor Relief Law, to stay, interdict, condition, reduce or inhibit the ability of Lender to enforce any rights of Lender against such Guarantor by virtue of this Guaranty or otherwise.

====== 621 ======

Section 6.21 Further Assurances. Guarantors shall, upon request by Lender, execute, with acknowledgment or affidavit if required, and deliver, any and all documents and instruments required to effectuate the provisions hereof and of any other Loan Document.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURE PAGE FOLLOWS]

====== 622 ======

IN WITNESS WHEREOF, the undersigned has executed this Guaranty of Non-Recourse Carve-Outs as of the date first above written.

	GUARANTOR:
	____________________ Name: _______________

====== 623 ======

Exhibit C

TENDER REQUIREMENTS

(a)

Guarantors have performed and paid all of their obligations under this Guaranty to the extent such performance or payment has been demanded from Guarantors.

(b)

Neither Borrower nor any Guarantor files a voluntary petition under the Bankruptcy Reform Act of 1978 (11 USC Section 101-1330) as now or hereafter amended or recodified (“Bankruptcy Code”), or under any other present or future state or federal law regarding bankruptcy, reorganization or other debtor relief law.

(c)

None of the Borrower nor any Guarantor files, or joins in the filing of, an involuntary petition against the Borrower or any Guarantor under the Bankruptcy Code, or under any other present or future state or federal law regarding bankruptcy, reorganization or other debtor relief law, or colludes with, solicits or causes to be solicited, petitioning creditors for any involuntary petition against the Borrower or any Guarantor, and, in each case, such involuntary petition is not dismissed within sixty (60) days after the filing thereof.

(d)

Borrower and Guarantors shall have delivered to Lender, and its officers, directors, employees, agents, successors and assigns an unconditional release of and from any and all claims, demands, obligations, liabilities, indebtednesses, breaches of contract, breaches of duty or any relationship, acts, omissions, misfeasance, malfeasance, cause or causes of action, debts, sums of money, accounts, compensations, contracts, controversies, promises, damages, costs, losses and expenses, of every type, kind, nature, description or character, and irrespective of how, why, or by reason of what facts, whether heretofore, now existing or hereafter arising, or which could, might, or may be claimed to exist, of whatever kind or name, whether known or unknown, suspected or unsuspected, liquidated or unliquidated, which in any way arise out of, are connected with or relate to any acts or occurrences on or prior to the Termination Date in connection with the Loan and/or the ownership, maintenance and operation of the Property unless caused by the gross negligence or willful misconduct of Lender as determined by a court of competent jurisdiction by a final, non-appealable order.

====== 624 ======

(e)

Borrower conveys the Property to Lender or its designee free and clear of liens other than the Permitted Encumbrances in accordance with the following conditions:

(1)	Borrower shall deliver to the Title Company (the “Escrow Agent”), a warranty deed conveying all of the Property and all improvements thereon in recordable form (the “Deed”), together with all other documents and instruments required for the conveyance of the Property, each of which shall be in recordable form and otherwise in form and substance satisfactory to Lender.
(2)	Borrower shall deliver to Escrow Agent such other documents or instruments, as may be necessary or required, in Escrow Agent’s discretion, to convey title to the Property and all other collateral for the Loan, including, without limitation, a bill of sale and assignment of contracts, to Lender or its designee, all of which shall be in form and content satisfactory to Lender.
(3)	All Carry Obligations that have accrued through the Tender Date shall have been paid to Lender.
(4)	Borrower shall deliver to Escrow Agent either (A) evidence satisfactory to Lender that all taxes (including any payments in lieu of taxes), assessments, liens and charges on or against the Property have been paid through and including the date of the conveyance of the Property (“Outstanding Charges”) or (B) such amounts necessary to pay such Outstanding Charges.
(5)	Borrower shall deliver to Escrow Agent such affidavits and other documents (including, without limitation, an “as-built” survey of the Property) as Escrow Agent may require from Borrower to issue a title insurance policy with respect to the Property and the Improvements in the name of the Lender or its designee insuring title free and clear of all title matters and liens, except only the Permitted Encumbrances, in an amount equal to the lesser of (A) the fair market value of the Property and the Improvements and (B) the maximum amount of the Loan under the Loan Agreement.
(6)	Contemporaneously with the delivery of the Deed and/or the documents required pursuant to clause (1) above, the Guarantors shall deliver, at their own cost and expense, to Escrow Agent each of the following: (A) bank checks to the order of the applicable taxing authorities in payment of all state and ====== 625 ====== local real estate transfer taxes (if applicable) on the conveyance, (B) all such returns or other forms as may be required in order to enable the Deed (or transfer of the personal property) to be recorded, each duly executed by Borrower and acknowledged before a notary public, (C) payment of all documentary stamp and recording taxes and filing fees payable in connection with the conveyance of the Property pursuant to this Exhibit A and (D) an updated Phase I Environmental Report satisfactory to Lender which, if it indicates the need for corrective work, such report shall be accompanied by a deposit made with Lender of an amount sufficient to cover the cost which will be incurred in completing such corrective work, as estimated by Lender in consultation with the environmental consultant issuing such Phase I Environmental Report.
(7)	Borrower shall deliver to Escrow Agent, an assignment in favor of Lender or its designee of all of the proceeds with respect to any claim made under any insurance policy with respect to the Property (such assignment to be in such form as the insurance company may require to recognize such assignment).
(8)	Borrower shall deliver to Escrow Agent proper evidence of the authority of Borrower and the authority of the individual signing the Deed and/or the other conveyance documents on behalf of Borrower, to transfer the Property to Lender or its designee.
(9)	Borrower shall deliver to Escrow Agent, for the benefit of Lender, all available original leases and lease files, or copies thereof (without implying that Lender has any obligation to consent to any leases), if any, including but not limited to, amendments to such leases, a certified rent roll (to the extent applicable), and all security deposits including interest thereon if required under such leases, together with assignments of all leases and security deposits, and notices to each tenant in the Property instructing tenants to forthwith pay rent directly to the Lender or its designee.
(10)	Borrower shall covenant to deliver to Lender or its designee after the Tender Date, to the extent in the possession or control of Borrower, Guarantors, or any Affiliate of any of the foregoing (to the extent not already in public records and to the extent not previously provided to Lender), all of the following with respect to the Property and personal property ====== 626 ====== (together with assignments of all of the following): (A) certificates of occupancy, plans and building department approvals with respect to the Improvements, (B) capital improvement records, unexpired warranties and guaranties, (C) all contracts then in effect pertaining to the Property, including, but not limited to, all management agreements, sales and marketing agreements, brokerage agreements, purchase contracts, consulting agreements, maintenance contracts, construction contracts, architect’s and engineer’s contracts and service contracts, and assignments with respect thereto, (D) escrow accounts and (E) other records with respect to the Property and personal property as Lender may request.
(11)	Borrower shall deliver to Escrow Agent a bill of sale (in form and content satisfactory to Lender) in favor of Lender or its designee conveying all personal property of Borrower located upon and used in connection with the operation of the Property, an assignment of all development rights and agreements, permits and warranties, together with all keys, combination to locks, plans and specifications, and all occupancy, construction and operation files related to the Property (together with a general instrument of transfer transferring the same) all to the extent any of the above exist and are in the possession or control of Borrower, Guarantors, their Affiliates.
(12)	There shall be delivered to Lender or its designee a certification from Borrower (which is subject to verification by Lender as to its accuracy) that neither Borrower nor any Person affiliated with Borrower (but excluding any third-party owner of any Unit) has entered into any management or leasing agreements or service contracts for the Property which must be assumed by Lender and which cannot be cancelled on not more than sixty (60) days’ notice without material penalty, unless in the case of a service contract the same is on market rate terms and is with a Person not affiliated with Borrower, in which event the same shall be cancellable on not more than twelve (12) months’ notice without material penalty.
(13)	There shall be delivered to Lender or its designee a certification from Borrower (which is subject to verification by Lender as to its accuracy) that there exist no expenses, whether for capital items or operating expenses, relating to the Property, which are unpaid and in respect of which Lender is obliged to ====== 627 ====== assume liability, except for expenses (a) which are due and payable for less than thirty (30) days and for which there is money available from the Property sufficient to pay the same, or (b) which Borrower is contesting (which may be due and payable for more than thirty (30) days) in good faith and for which there is money available from the Property sufficient to pay the same.

====== 629 ======

Exhibit D

FORM OF GUARANTY OF COMPLETION^*

THIS GUARANTY OF COMPLETION (as the same may be amended, supplemented or otherwise modified from time to time, this “Guaranty”) is made as of _______________, 20____ by ____________________ and ______________________ (each, a “Guarantor” and collectively, “Guarantors”) for the benefit of _________________________, its successors and assigns (“Lender”).

W I T N E S S E T H:

WHEREAS, pursuant to that certain Construction Loan Agreement dated as of the date hereof between _______ (the “Borrower”) and Lender (together with all renewals, amendments, modifications, increases and extensions thereof, the “Loan Agreement”), Lender has agreed to make a loan to Borrower in the maximum principal amount of $_______ (the “Loan”). The Loan is evidenced by that certain Promissory Note dated as of even date herewith in the principal amount of $_______ from Borrower and payable to the order of Lender (together with all renewals, amendments, modifications, increases and extensions thereof, the “Note”);

WHEREAS, the Loan is secured by that certain [Construction Mortgage/Deed of Trust], by Borrower for the benefit of Lender dated as of even date herewith (together with all renewals, modifications, increases and extensions thereof, the “Security Instrument”), which grants Lender a first priority security interest in the real property described on Exhibit A attached thereto (the “Property”). The Loan Agreement, Note, Security Instrument, and each of the other documents evidencing or securing the Loan are hereinafter referred to collectively as the “Loan Documents;”

WHEREAS, Lender is not willing to make the Loan, or otherwise extend credit, to Borrower unless Guarantors unconditionally guarantee payment and performance to Lender of the Guaranteed Obligation (as herein defined); and

WHEREAS, Guarantors are the owners of direct or indirect interests or have a financial interest in Borrower, and Guarantors will directly benefit from Lender’s making the Loan to Borrower.

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ARTICLE 1
DEFINED TERMS

Section 1.1 Defined Terms. Capitalized terms used in this Guaranty and not specifically defined in this Guaranty have the meanings provided in the Loan Agreement.

ARTICLE 2
NATURE AND SCOPE OF GUARANTY

Section 2.1 Guaranty of Obligation. Guarantors hereby irrevocably and unconditionally guarantee to Lender the payment and performance of the Guaranteed Obligation (as hereinafter defined) as and when the same shall be due and payable, whether by lapse of time, by acceleration of maturity or otherwise. Guarantors hereby irrevocably and unconditionally covenant and agree that they are liable for the Guaranteed Obligation as a primary obligor.

Section 2.2 Definition of Guaranteed Obligation. As used herein, the term “Guaranteed Obligation” means:

(a)

the prompt and complete payment and performance of the obligations of Borrower to construct and complete the Project (the “Work”), in accordance with the all requirements of the Loan Agreement, [including] the Plans [and the Lease/[Sale Contracts]], free and clear of all defects and liens and in compliance with all laws, rules, permits, requirements and regulations of any governmental authority and in accordance with the Approved Budget; and

(b)

the commencement and completion of the Work strictly in accordance with the applicable commencement dates and completion dates provided in the Loan Agreement; and

(c)

the obligation to keep the Loan in balance, as described in [Section ____] of the Loan Agreement.

====== 631 ======

Section 2.3 Remedies of Lender.

(a)

Upon the occurrence of an Event of Default by Borrower under the Loan Documents, Guarantors agree that:

(1)

If Lender elects to complete the Work, Guarantors shall, on written demand by Lender, jointly and severally pay to Lender the costs and expenses actually incurred by Lender to complete the Work or any part thereof, on a lien-free basis in accordance with the Plans (as they may be modified in accordance with the terms of the Loan Agreement), including paying any amounts due to Contractor, all subcontractors and material suppliers and for permits and licenses necessary to complete the Work or any part thereof, in excess of those amounts set forth in the Approved Budget, on a line item basis, for completion of the Work, or any part thereof. At such time as the costs and expenses incurred by Lender for any line item of the Work shown on the Approved Budget exceed the amount set forth in the Approved Budget for such line item, Guarantors shall jointly and severally pay such excess costs and expenses as incurred on written demand.

(2)

If Lender elects to require Guarantors to complete the Work, Guarantors shall, on or prior to ten (10) days’ [allow more time] after written demand by Lender, commence performance of the Guaranteed Obligation and diligently pursue performance thereof to completion. If Guarantors fail to commence and pursue diligently the performance of the Guaranteed Obligation within ten (10) days after written demand by Lender, then, either before or after pursuing any other remedy of Lender against any or all of the Guarantors or Borrower and regardless of whether Lender shall ever pursue any such other remedy, Lender shall have the right to complete the Work, or call upon any other reputable parties to complete the Work, in accordance with the Plans (as they may be modified in accordance with the terms of the Loan Agreement) and shall have the right to expend such sums as Lender in its discretion deems proper in order so to complete the Work. During the course of any construction undertaken by Lender or by any other party on behalf of Lender pursuant to this Section 2.3(a)(2), Guarantors shall jointly and severally pay on demand all costs and expenses actually incurred by Lender to complete the Work in accordance with this Section 2.3(a)(2).

====== 632 ======

Lender at any time may require Guarantors to perform or supervise the performance of such work in lieu of the Lender or any party engaged by the Lender.

(3)

With respect to the Guaranteed Obligation set forth in Section 2.2(c) herein, Guarantors agree that upon Borrower’s breach of its obligations under [Section ____] of the Loan Agreement, Guarantors will deposit the amount required pursuant to [Section ____] of the Loan Agreement with Lender upon demand therefor.

Guarantors agree to jointly and severally indemnify, defend and hold Lender harmless from and against any and all loss, damage, cost, expense, injury or liability Lender may suffer or incur in connection with any claims by Borrower, Guarantors or any third party brought as a result of the performance of the Guaranteed Obligation by Guarantors or any actions taken by Lender in accordance with Section 2.3(a)(1) or Section 2.3(a)(2) hereof. [EXCEPT OUT LENDER’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT]

Lender may elect, in Lender’s sole and absolute discretion, to pursue any one or more of the remedies set forth in Section 2.3(a)(1), (2) or (3) above, in such order as Lender shall elect. Guarantors’ obligations here-under shall not be affected by any errors or omissions of Borrower, Contractor, any architect, any engineer, or any agent or employee of any of them in the design, supervision or performance of the Work, it being understood that such risk is assumed by Guarantors. Neither the completion of the Work nor failure of said parties to complete the Work shall relieve Guarantors of any liabilities hereunder; rather, such liabilities shall be continuing, and may be enforced by Lender to the end that the Work shall be completed timely as contemplated by the Loan Agreement, [the Leases, the Sale Contracts] and the Plans, free of any liens, and without loss, expense, injury or liability of any kind to the Lender. [PROVIDE THAT GUARANTOR HAS RIGHT TO “GO FIRST” BEFORE LENDER CAN COMPLETE]

(b)

For purposes of this Section 2.3, the Work shall be deemed to be completed upon receipt by Lender of (i) a certificate of completion from the Architect attesting to [final / substantial] completion of the Work, (ii) a final certificate of occupancy with respect to the Project issued by the applicable governmental authority, [to the extent the same may be obtained prior to completion of tenant improvements on unleased space, except if such space is subsequently leased, the Guaranteed Obligation shall include the

====== 633 ======

work required to complete such tenant improvement work in accordance with the applicable Lease or Leases], [and] (iii) [estoppel certificates from such tenants under Leases at the Project as the Lender may request, evidencing acceptance of the tenants’ space in accordance with the terms of their respective Leases and indicating that no defaults have occurred such Leases, and (iv) ] construction date-down and interim mechanics’ lien endorsements to Lender’s title insurance policy, insuring the continuing validity and priority of the Security Instrument for the full amount of the Loan theretofore disbursed, excepting only such items as shall be permitted under the Loan Agreement, and insuring over mechanics’ and materialmen’s liens arising (or which may arise) from work performed and materials supplied in connection with the Work prior to the date of satisfaction of the conditions described in clauses (1) and (2) of Section 2.3(a) above. [IF LOAN AGREEMENT DEFINES COMPLETION, USE THAT DEFINITION]

[NEGOTIATED PROVISION:

(c)

Without in any way limiting the above obligations of Guarantors, Lender agrees, by acceptance of this Guaranty, that, in the event Lender shall elect the remedy provided in Section 2.3(a)(2), Lender shall make the undisbursed Loan proceeds available to Guarantors (subject to the terms and conditions of the Loan Documents, including, but not limited to, all requirements for disbursements pursuant to the Loan Agreement including, but not limited to, limitations on disbursements in excess of the Approved Budget on a line item by line item basis, and provided further that the Lender receives an endorsement satisfactory to Lender insuring that such disbursements are insured under the title insurance policy provided to the Lender pursuant to the Loan Agreement) for the purposes of completing the Work and fulfilling the other obligations of Guarantors under this Guaranty, provided that the Guarantors cure any Event of Default under the Loan Agreement or any other Loan Document which is susceptible to cure by the Borrower or the Guarantors, Guarantors deliver to Lender an endorsement to Lender’s title insurance policy insuring that advances of proceeds of the Loan pursuant to this provision shall be deemed principal advances under the Security Instrument and shall be covered by the title insurance under such title insurance policy, and

====== 634 ======

further provided the Guarantors fully, continuously and timely comply with the obligations of Guarantors under Section 2.3(a)(2) hereof. Each of the Guarantors acknowledges that such Guarantor will not be released from any of his, hers, or its obligations under this Guaranty by reason of this Section 2.3(c) and that all disbursements hereunder shall be treated for all purposes as disbursements of the Loan to the Borrower.] [TRY TO LIMIT REQUIRED CURES TO DEFAULTS RELATING TO CONSTRUCTION – NOT PAYMENT DEFAULT]

ARTICLE 3
GENERAL TERMS AND CONDITIONS

Section 3.1 Nature of Guaranty. This Guaranty is an irrevocable, absolute, continuing guaranty of payment and performance and not a guaranty of collection. This Guaranty may not be revoked by Guarantors and shall continue to be effective with respect to any Guaranteed Obligation existing after any attempted revocation by Guarantors [and, with respect to any individual Guarantor, after a Guarantor’s death (in which event this Guaranty shall be binding upon such Guarantor’s estate and such Guarantor’s legal representatives and heirs).] This Guaranty may be enforced by Lender and any subsequent holder of the Note and shall not be discharged by the assignment or negotiation of all or part of the Loan Documents.

Section 3.3 No Duty To Pursue Others. Lender has the right to require Guarantors to pay, comply with and satisfy the Guaranteed Obligation under this Guaranty, and shall have the right to proceed immediately against Guarantors, or any of them, with respect thereto. Without limitation of the generality of the foregoing, it shall not be necessary for Lender (and Guarantors hereby waive any rights which Guarantors may

====== 635 ======

have to require Lender), in order to enforce the Guaranteed Obligation against Guarantor, first to (i) institute a suit or exhaust its remedies against Borrower or others liable on the Loan or the Guaranteed Obligation or any other Person or any of the collateral for the Loan, (ii) enforce Lender’s rights against any of the collateral for the Loan, (iii) join Borrower or any others liable on the Guaranteed Obligation in any action seeking to enforce this Guaranty, (iv) demonstrate that the collateral for the Loan provides inadequate security for the Loan, or (v) resort to any other means of obtaining payment of the Guaranteed Obligation.

Section 3.4 Payments; Interest on Amounts Payable Hereunder. If all or any part of the Guaranteed Obligation shall not be punctually paid when due (taking into account any cure periods provided under the Loan Documents), whether on demand, maturity, acceleration or otherwise, Guarantors shall pay, immediately upon demand by Lender and without presentment, protest, notice of protest, notice of non-payment, notice of intention to accelerate the maturity, or notice of acceleration of the maturity, in immediately available lawful money of the United States of America, as an addition to the Guaranteed Obligation, interest on the Guaranteed Obligation (to the extent not paid when due) at the Default Rate (as defined in the Note) until paid in full. Lender may apply all money received by Lender from Guarantors to payment or reduction of the Loan or reimbursement of Lender’s expenses, in such priority and proportions, and at such time or times as Lender may elect in its sole discretion.

Section 3.5 Enforcement Costs. Guarantors hereby agree to pay, on written demand by Lender, all costs incurred by Lender in collecting any amount payable under this Guaranty or enforcing or protecting its rights under the Loan Documents, in each case whether or not legal proceedings are commenced. [TRY TO LIMIT TO COSTS OF ENFORCING GUARANTY – NOT ALL LOAN DOCUMENTS] Such fees and expenses shall be in addition to the Guaranteed Obligation and shall include, without limitation, costs and expenses of both in-house and outside counsel, paralegals and other hired professionals, special servicing fees (including portfolio management fees), court fees, costs incurred in connection with pre-trial, trial and appellate level proceedings (including discovery and expert witnesses), costs incurred in post-judgment collection efforts or in any Bankruptcy Proceeding to the extent such costs relate to the Guaranteed Obligation or the enforcement of this Guaranty. Amounts incurred by Lender shall be immediately due and payable, and shall bear interest at the Default Rate from the date of disbursement until

====== 636 ======

paid in full upon Lender’s written demand for payment. This Section 3.5 shall survive the payment in full of the Guaranteed Obligation.

Section 3.6 Cumulative Remedies. Guarantors acknowledge that, following an Event of Default, Lender is entitled to accelerate the Loan and exercise all other rights and remedies as have been provided to Lender under the Loan Documents and by law or in equity, including, without limitation enforcement of this Guaranty. All rights and remedies of Lender are cumulative and may be exercised independently, concurrently or successively in Lender’s sole discretion and as often as occasion therefor shall arise. Lender’s delay or failure to accelerate the Loan or exercise any other remedy upon the occurrence of an Event of Default shall not be deemed a waiver of such right or remedy. No partial exercise by Lender of any right or remedy will preclude further exercise thereof. Notice or demand given to a Guarantor in any instance will not entitle such Guarantor to notice or demand in similar or other circumstances nor constitute Lender’s waiver of its right to take any future action in any circumstance without notice or demand. Lender may release other security for the Loan, may release any party liable for the Loan, may grant extensions, renewals or forbearances with respect thereto, may accept a partial or past due payment or grant other indulgences, or may apply any other security held by it to payment of the Loan, in each case without prejudice to its rights under this Guaranty and without such action being deemed an accord and satisfaction or a reinstatement of the Loan. Lender will not be deemed as a consequence of its delay or failure to act, or any forbearances granted, to have waived or be estopped from exercising any of its rights or remedies.

Section 3.7 Unimpaired Liability. Guarantors acknowledge and agree that all obligations hereunder are and shall be absolute and unconditional under any and all circumstances without regard to the validity, regularity or enforceability of any or all of the Loan Documents or the existence of any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor or surety. Without limiting the foregoing, Guarantors acknowledge and agree that their liability hereunder shall in no way be released, terminated, discharged, limited or impaired by reason of any of the following (whether or not Guarantors have any knowledge or notice thereof):

(a)	Borrower’s or any other Person’s lack of authority or lawful right to enter into any of the Loan Documents or any officers’ or representatives’ lack of authority or right to enter into Loan Documents on its behalf, or the obligations thereunder being ultra vires; ====== 637 ======
(b)	any modification, supplement, extension, consolidation, restatement, waiver or consent provided by Lender with respect to any of the Loan Documents including, without limitation, the grant of extensions of time for payment or performance;
(c)	the failure to record any Loan Document or to perfect any security interest intended to be provided thereby;
(d)	the release, surrender, exchange, subordination, deterioration, waste, loss, impairment or substitution, in whole or in part, of any collateral for the Loan, the failure to protect, secure or insure any collateral for the Loan, the acceptance of additional collateral for the Loan or the failure of Lender or any other party to exercise diligence or reasonable care in the preservation, protection, enforcement, sale or other handling or treatment of all or any part of any collateral for the Loan;
(e)	Lender’s failure to exercise, or delay in exercising, any rights or remedies Lender may have under the Loan Documents or under this Guaranty or otherwise available at law or in equity, including but not limited to any neglect, delay, omission, failure or refusal of Lender (i) to take or prosecute any action for the collection of all or any part of the Guaranteed Obligation, or (ii) to foreclose, or initiate any action to foreclose, or, once commenced, prosecute to completion any action to foreclose upon any collateral for the Loan, or (iii) to take or prosecute any action in connection with any instrument or agreement evidencing or securing all or any part of the Guaranteed Obligation;
(f)	the release of any of the Guarantors from performance, in whole or in part, under this Guaranty or the release of Borrower or any other Person now or hereafter party to a Loan Document from performance, in whole or in part, under any of Loan Document to which each is a party, in each case whether by operation of law, Lender’s voluntary act, or otherwise;
(g)	any bankruptcy, insolvency, reorganization, adjustment, dissolution, liquidation or other like proceeding involving or affecting Borrower or any other Person;
(h)	the termination or discharge of the Security Instrument or any other Loan Document or the exercise of any power of sale or any foreclosure (judicial or otherwise) or delivery or acceptance of a deed-in-lieu of foreclosure; ====== 638 ======
(i)	the existence of any claim, setoff, counterclaim, defense or other rights which any Guarantor may have against Borrower, Lender or any other Person, whether in connection with the Loan or any other transaction;
(j)	the accuracy or inaccuracy of the representations and warranties made by Borrower or any other Person in any of the Loan Documents;
(k)	any adjustment, indulgence, forbearance or compromise that might be granted or given by Lender to Borrower or any other Person;
(l)	any sale, lease or transfer of any or all of the assets of Borrower or any other Person;
(m)	the Guaranteed Obligation, or any part thereof, exceeding the maximum amount permitted by law or violating any usury law;
(n)	any valid defenses, claims or offsets (whether at law, in equity or by agreement) by Borrower which render the Guaranteed Obligation wholly or partially uncollectible from Borrower, whether arising in connection with the Loan Documents or otherwise,
(o)	the illegality or unenforceability of, or the inability to collect, the Guaranteed Obligation;
(p)	any of the Loan Documents being irregular or not genuine or authentic; or
(q)	any changes (whether directly or indirectly) in the shareholders, partners or members of Borrower or the reorganization, merger or consolidation of Borrower into or with any other Person.

Section 3.8 Waivers. Guarantors hereby waive and relinquish, to the fullest extent permitted by law: (a) all rights or claims of right to cause a marshalling of assets or to cause Lender to proceed against any of the collateral for the Loan before proceeding under this Guaranty against Guarantors (or any of them) or any other guarantor or indemnitor under the Loan; (b) all rights and remedies accorded by applicable law to sureties or guarantors, except any rights of subrogation and contribution (the exercise of which are subject to the terms of this Guaranty); (c) the right to assert a counterclaim, other than a mandatory or compulsory counterclaim, in any action or proceeding brought by or against them; (d) notice of acceptance of this Guaranty and of any action taken or omitted in reliance hereon; (e) presentment for payment, demand, protest, notice of nonpayment or failure to perform or observe, or any other proof, notice or demand to which they might otherwise be entitled with respect to the Guaranteed Obligation; (f) all homestead or exemption rights against the

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Guaranteed Obligation and the benefits of any statutes of limitation or repose; and (g) any defense based upon an election of remedies by Lender, including any election to proceed by judicial or non-judicial foreclosure of any collateral for the Loan, whether real property or personal property security, or by deed in lieu thereof, and whether or not every aspect of any foreclosure sale is commercially reasonable or any election of remedies, including remedies relating to real property or personal property security, which destroys or otherwise impairs the subrogation rights of Guarantors or the rights of Guarantors to proceed against Borrower or any other guarantor for reimbursement, or both.

Section 3.9 Waivers of Notice. Guarantors agree to the provisions of the Loan Documents and hereby waive notice of (a) any disbursements thereunder made by Lender to Borrower, (b) any amendment or extension of the Loan Documents, (c) the execution and delivery by Borrower and Lender of any other loan or credit agreement or of Borrower’s execution and delivery of any promissory notes or other documents arising under the Loan Documents or in connection with the Property, (d) the occurrence of any Event of Default, (e) Lender’s transfer or disposition of the Guaranteed Obligation, or any part thereof, (f) the sale or foreclosure (or posting or advertising for sale or foreclosure) of the Property, (g) any default by Borrower under or with respect to the Loan Documents, or (h) any other action at any time taken or omitted by Lender and, generally, all demands and notices of every kind in connection with this Guaranty and the other Loan Documents.

Section 3.10 Guarantors Bound by Judgment Against Borrower. Guarantors agree that they shall be bound conclusively, in any jurisdiction, by the judgment in any action by Lender against Borrower in connection with the Loan Documents (wherever instituted) as if Guarantors were a party to such action even if not so joined as a party.

Section 3.11 Certain Consequences of Borrower’s Bankruptcy.

(a)

Any payment made on the Loan, whether made by Borrower or Guarantors or any other Person, that is required to be refunded or recovered from Lender as a preference or a fraudulent transfer or is otherwise set-aside pursuant to the Bankruptcy Code or under any Debtor Relief Laws shall not be considered as a payment made on the Loan or under this Guaranty. Guarantors’ liability under this Guaranty shall continue with respect to any such payment, or be deemed reinstated, with the same effect as if such payment had not been received by Lender, notwithstanding any notice of revocation of this Guaranty prior to such avoidance or recovery or payment in full of the Loan, until such time as all periods have expired within

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which Lender could be required to return any amount paid at any time on account of the Guaranteed Obligation.

(b)

Until payment in full of the Obligations (including interest accruing after the commencement of a proceeding by or against Borrower under the Bankruptcy Code or any other Debtor Relief Law, which interest the parties agree remains a claim that is prior and superior to any claim of Guarantors notwithstanding any contrary practice, custom or ruling in cases under any applicable Debtor Relief Law generally), Guarantors agree not to accept any payment or satisfaction of any kind of indebtedness of Borrower to Guarantors and hereby assign such indebtedness to Lender, including the right (but not the obligation) to file proof of claim and to vote in any other bankruptcy or insolvency action, including the right to vote on any plan of reorganization, liquidation or other proposal for debt adjustment under Federal or state law.

Section 3.12 Subrogation and Contribution. Each Guarantor agrees that no payment by him, her or it under this Guaranty shall give rise to, and each Guarantor hereby unconditionally and irrevocably waives, releases and abrogates any and all rights he, she or it may now or hereafter have under any agreement, at law or in equity (including, without limitation, any law subrogating him, her or it to the rights of Lender) to assert, (a) any rights of subrogation against Borrower or any collateral for the Loan, or (b) any rights of contribution against any other guarantor of the Loan or any other Person, in each case unless and until Lender has received full and indefeasible payment of the Obligations. If the deferral of such rights shall be unenforceable for any reason, such Guarantor agrees that (x) his, her or its rights of subrogation shall be junior and subordinate to Lender’s rights against Borrower and the collateral for the Loan, and (y) his, her or its rights of contribution against any such other guarantor shall be junior and subordinate to Lender’s rights against such other guarantor.

Section 3.13 Subordination of Debt to Guarantors.

(a)

Any indebtedness of Borrower to any of the Guarantors, whether now or hereafter existing, whether direct, contingent, primary, secondary, several, joint and several, or otherwise, and irrespective of whether such debts or liabilities be evidenced by note, contract, open account or otherwise, and irrespective of the person or persons in whose favor such debts or liabilities may, at their inception, have been or may hereafter be created, or the manner in which they have been or may hereafter be acquired by any of the Guarantors,

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including, without limitation, all rights and claims of any Guarantor against Borrower (arising as a result of subrogation or otherwise) as a result of any Guarantor’s payment of all or a portion of the Guaranteed Obligation, together with any interest thereon (collectively, “Guarantor Claims”), shall be and hereby is deferred, postponed and subordinated to the prior payment in full of the Loan. Further, until payment in full of the Obligations, Guarantors agree that should any of the Guarantors receive any payment, satisfaction or security for any Guarantor Claim, the same shall be delivered to Lender in the form received (endorsed or assigned as may be appropriate) for application on account of, or as security for, the Loan and until so delivered to Lender, shall be held in trust for Lender as security for the Loan.

(b)

In the event of receivership, bankruptcy, reorganization, arrangement, debtor’s relief, or other insolvency proceedings involving any of the Guarantors as debtors, Lender shall have the right to prove its claim in any such proceeding so as to establish its rights here-under and receive directly from the receiver, trustee or other court custodian dividends and payments which would otherwise be payable upon Guarantor Claims. Guarantors hereby assign such dividends and payments to Lender. Should Lender receive, for application against the Guaranteed Obligation, any dividend or payment which is otherwise payable to any of the Guarantors and which, as between Borrower and any of the Guarantors, shall constitute a credit against the Guarantor Claims, then, upon payment to Lender in full of the Guaranteed Obligation, such Guarantor or Guarantors, as applicable, shall become subrogated to the rights of Lender to the extent that such payments to Lender on the Guarantor Claims have contributed toward the liquidation of the Guaranteed Obligation, and such subrogation shall be with respect to that portion of the Guaranteed Obligation which would have been unpaid if Lender had not received dividends or payments upon the Guarantor Claims.

(c)

Guarantors agree that any liens, security interests, judgment liens, charges or other encumbrances upon Borrower’s assets securing payment of the Guarantor Claims shall be and remain inferior and subordinate to any liens, security interests, judgment liens, charges or other encumbrances upon Borrower’s assets securing payment of the Guaranteed Obligation, regardless of whether such encumbrances in favor of Guarantors or Lender presently exist or are hereafter created or attach. Without the prior written consent of Lender,

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Guarantors shall not (i) exercise or enforce any creditor’s right they may have against Borrower, or (ii) foreclose, repossess, sequester or otherwise take steps or institute any action or proceedings (judicial or otherwise, including without limitation the commencement of, or joinder in, any liquidation, bankruptcy, rearrangement, debtor’s relief or insolvency proceeding) to enforce any liens, mortgage, deeds of trust, security interests, collateral rights, judgments or other encumbrances held by Guarantors on assets of Borrower.

Section 3.14 Lender Transferees; Secondary Market Activities; No Transfer by Guarantors. Guarantors acknowledge and agree that Lender, without notice to Guarantors or Guarantors’ consent, may assign all or any portion of its rights hereunder in connection with any sale or assignment of the Loan or servicing rights related to the Loan, each grant of participations in the Loan, a transfer of the Loan as part of a securitization in which Lender assigns its rights to a securitization trustee, or a contract for the servicing of the Loan, and that each such assignee, participant or servicer shall be entitled to exercise all of Lender’s rights and remedies hereunder. Guarantors further acknowledge that Lender may provide to third parties with an existing or prospective interest in the servicing, enforcement, ownership, purchase, participation or securitization of the Loan, including, without limitation, any rating agency rating the securities issued in respect of a securitization or participation of the Loan, and any entity maintaining databases on the underwriting and performance of commercial mortgage loans, any and all information which Lender now has or may hereafter acquire relating to the Loan, the Property or with respect to Borrower or Guarantors, as Lender determines necessary or desirable. Guarantors irrevocably waive all rights they may have under applicable law, if any, to prohibit such disclosure, including, without limitation, any right of privacy. Guarantors may not assign any of their rights, powers, duties and obligations hereunder, or substitute other Persons in lieu of themselves as the obligors hereunder.

Section 3.15 Financial Statements. Each Guarantor represents and warrants to Lender that (i) the financial statements of such Guarantor previously submitted to Lender are true, complete and correct in all material respects, disclose all actual and contingent liabilities, and fairly present the financial condition of such Guarantor, and do not contain any untrue statement of a material fact or omit to state a fact material to the financial statements submitted or this Guaranty, and (ii) no material adverse change has occurred in the financial statements from the dates thereof until the date hereof. Guarantors shall furnish to Lender:

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(a)

[Use this section for a Guarantor who is not a natural Person (other than trusts established for estate planning purposes),] as soon as available and in no event later than [ninety (90) days] after the close of each fiscal year (a “Fiscal Year”): (A) an audited [unaudited] balance sheet for Guarantors as of the end of the Guarantor’s Fiscal Year and an audited [unaudited] statement of profit and loss for Guarantors and for Guarantors’ operations for Guarantors’ Fiscal Year, together with all supporting schedules [certified by the chief financial officer of Guarantors are true, complete and correct], and [(B) [the opinion of an independent certified public accountant acceptable to Lender stating that such materials (1) were prepared in accordance with GAAP applied on a consistent basis [or in accordance with such other principles or methods as are reasonably acceptable to Lender], (2) fairly present Guarantors’ financial condition, (3) show all material liabilities, direct and contingent, (4) fairly present the results of Guarantors’ operations, and (5) disclose the existence of any hedge and/or off-balance sheet transactions;]

(b)

[Use this section for a Guarantor who is a natural Person or for trusts established for estate planning purposes,] deliver to Lender as soon as available and in no event later than [ninety (90) days] after the close of each calendar year, a financial statement as of the end of the calendar year, certified by the Guarantors are (1) true, complete and correct, (2) fairly presenting Guarantors’ financial condition, and (3) showing all material liabilities, direct and contingent, and otherwise in a form substantially similar to the form of financial statements previously submitted to Lender by Guarantors, unless otherwise approved by Lender in writing;]

[(b)/(c)] within 30 days after filing, a copy of the federal income tax return filed for Guarantors for the prior calendar or Fiscal Year, as applicable, in each case prepared by a certified public accountant acceptable to Lender and certified by Borrower as being a true, complete and correct of such tax return as filed.

Section 3.16 No Reliance. Guarantors agree and acknowledge that (a) Guarantors are not entering into this Guaranty in reliance on, or in contemplation of the benefits of, the validity, enforceability, ability to collect, or value of the collateral for the Loan; (b) each Guarantor may be required to pay the Guaranteed Obligation in full without assistance or support of any other party, and (c) Guarantors have not been induced to enter into this Guaranty on the basis of a contemplation, belief,

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understanding or agreement that other parties will be liable to pay the Guaranteed Obligation, or that Lender will look to other parties to pay or perform the Guaranteed Obligation.

Section 3.17 Termination. This Guaranty shall be automatically discharged as of the date on which the Obligations have been indefeasibly paid in full.

Section 3.18 Setoff. Guarantors hereby grant to Lender a security interest in, and Lender is hereby authorized at any time and from time to time, without prior notice to Guarantors (any such notice hereby being expressly waived by Guarantors), to set off and apply, any and all accounts and deposits (general or special, time or demand, provisional or final) at any time held by Lender, or any branch, subsidiary, or affiliate of Lender, and all other indebtedness at any time owing by Lender or any branch, subsidiary, or affiliate of Lender, to or for the credit or the account of Guarantors (including all accounts held jointly with another, but excluding any IRA or Keogh accounts, or any trust accounts for which a security interest would be prohibited by law), against any and all of the obligations of Guarantors due and payable under this Guaranty. Such security interest may be enforced, and such right of setoff may be exercised, by Lender irrespective of whether or not Lender shall have made any demand under this Guaranty. Lender agrees promptly to notify Guarantors after any such setoff and application, provided that the failure to give such notice shall not affect the validity or such setoff and application. The rights of Lender under this section are in addition to other rights and remedies (including, without limitation, other rights of setoff) which Lender may have. [ELIMINATE SETOFF]

Section 3.19 Transfers; Sales, Etc. [Use this if a Guarantor is an entity] Guarantors shall not sell, lease, transfer, convey or assign any of their respective assets, unless such sale, lease, transfer, conveyance or assignment is performed in the ordinary course of their business consistent with past practices, and will not have a material adverse effect on the business or financial condition of Guarantors or their ability to perform their obligations hereunder. Guarantors further covenant and agree that they shall not become a party to any merger or consolidation, or, except in the ordinary course of their business consistent with past practices, acquire all or substantially all of the assets of, a controlling interest in the stock of, or a partnership or joint venture interest in, any other entity, in each case without the prior written consent of Lender. [PERMIT TRANSFERS AS LONG AS FINANCIAL COVENANTS ARE NOT BREACHED] [Use this if a Guarantor is an individual] Guarantors shall not sell, lease, transfer, convey or assign any of Guarantors’ assets,

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unless such sale, lease, transfer, conveyance or assignment will not have a material adverse effect on the financial condition of Guarantors.

Section 3.20 [Guarantor Financial Covenants. Add any required financial covenants.]

ARTICLE 4
REPRESENTATIONS AND WARRANTIES

Section 4.1 Guarantors Due Diligence and Benefit. Guarantors represent and warrant to Lender that (a) the Loan and this Guaranty are for commercial purposes, (b) Guarantors have had adequate opportunity to review the Loan Documents, (c) Guarantors are fully aware of obligations of Borrower thereunder and of the financial condition, assets and prospects of Borrower, and (d) Guarantors are executing and delivering this Guaranty based solely upon Guarantors’ own independent investigation of the matters contemplated by clauses (a) through (c) of this Section 4.1 and in no part upon any representation, warranty or statement of Lender with respect thereto.

Section 4.2 General. Each Guarantor represents and warrants to Lender that:

(a)	Authority. [If Guarantor is an individual: Each Guarantor has the requisite legal and mental capacity to execute and deliver this Guaranty and perform such Guarantor’s obligations here-under / If Guarantor is an entity: Each Guarantor has all requisite [corporate / company / partnership] authority to execute and deliver this Guaranty and perform such Guarantor’s obligations hereunder.]
(b)	Valid and Binding Obligation. This Guaranty constitutes each Guarantor’s legal, valid and binding obligation, enforceable against him, her or it in accordance with its terms, except to the extent enforceability may be limited under applicable bankruptcy and insolvency laws and similar laws affecting creditors’ rights generally and to general principles of equity.
(c)	No Conflict with Other Agreement. Each Guarantor’s execution, delivery and performance of this Guaranty will not (i) violate any of the organizational documents of Guarantor, (ii) result in the breach of, or conflict with, or result in the acceleration of, any obligation under any guaranty, indenture, credit facility or other instrument to which Guarantors, Borrower, or any of their respective assets may be subject, or (iii) violate any order, judgment or decree ====== 646 ====== to which Guarantors, Borrower, or any of their respective assets are subject.
(d)	No Pending Litigation. No action, suit, proceeding or investigation, judicial, administrative or otherwise (including without limitation any reorganization, bankruptcy, insolvency or similar proceeding), currently is pending or, to the best of each Guarantor’s knowledge, threatened against him, her or it which, either in any one instance or in the aggregate, may have a material, adverse effect on his, her or its ability to perform his, her or its obligations under this Guaranty.
(e)	Consideration. Each Guarantor owns a direct or indirect interest or has a financial interest in Borrower and will derive substantial benefit from the making of the Loan to Borrower.
(f)	Financial Condition. Each Guarantor currently is solvent and will not be rendered insolvent by providing this Guaranty. No adverse change has occurred in the financial condition of any Guarantor since the date of such Guarantor’s most recent financial statements submitted to Lender, other than such changes that have been disclosed in writing to Lender and acknowledged by Lender.

ARTICLE 5
EVENT OF DEFAULT

Any default hereunder (after the expiration of any cure periods expressly provided for herein) shall be deemed an “Event of Default” under the Loan Agreement and the other Loan Documents.

ARTICLE 6
MISCELLANEOUS

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To Lender:	_______________
To Guarantor:	_______________

Section 6.3 Time of the Essence. Time is of the essence with respect to this Guaranty and the performance and observance by Guarantors of each covenant, agreement, provision and term of this Guaranty.

Section 6.4 Successors and Assigns. This Guaranty shall be binding upon each Guarantor and his, her or its heirs, representatives, successors and assigns and shall inure to the benefit of the Lender, and its successors and assigns, except that (a) Guarantors may not assign or transfer their rights hereunder or any interest herein or delegate their duties hereunder except, in each case, to the extent expressly permitted in the Loan Agreement, and (b) Lender shall have the right to assign its rights hereunder in accordance with the Loan Agreement.

Section 6.5 JURY WAIVER. GUARANTORS AND LENDER, BY ITS ACCEPTANCE HEREOF, HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) BETWEEN OR AMONG GUARANTORS AND LENDER ARISING OUT OF OR IN ANY WAY RELATED TO THIS GUARANTY, ANY OTHER LOAN DOCUMENT, OR ANY RELATIONSHIP BETWEEN GUARANTORS AND LENDER. THIS PROVISION IS A MATERIAL INDUCEMENT TO LENDER TO PROVIDE THE LOAN DESCRIBED HEREIN AND IN THE OTHER LOAN DOCUMENTS.

Section 6.6 Governing Law. This Guaranty shall be governed by and construed in accordance with the laws of the State of __________.

Section 6.7 JURISDICTION AND VENUE. GUARANTORS HEREBY AGREE THAT ALL ACTIONS OR PROCEEDINGS

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INITIATED BY GUARANTORS AND ARISING DIRECTLY OR INDIRECTLY OUT OF THIS GUARANTY SHALL BE LITIGATED IN THE CIRCUIT COURT OF __________ COUNTY, __________, OR THE UNITED STATES DISTRICT COURT FOR THE __________ DISTRICT OF __________ OR, IF LENDER INITIATES SUCH ACTION, ANY COURT IN WHICH LENDER SHALL INITIATE SUCH ACTION AND WHICH HAS JURISDICTION. GUARANTORS HEREBY EXPRESSLY SUBMIT AND CONSENT IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED BY LENDER IN ANY OF SUCH COURTS, AND HEREBY WAIVE PERSONAL SERVICE OF THE SUMMONS AND COMPLAINT, OR OTHER PROCESS OR PAPERS ISSUED THEREIN, AND AGREE THAT SERVICE OF SUCH SUMMONS AND COMPLAINT OR OTHER PROCESS OR PAPERS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO GUARANTORS AT THE ADDRESS TO WHICH NOTICES ARE TO BE SENT PURSUANT TO THIS GUARANTY. GUARANTORS WAIVE ANY CLAIM THAT __________, COUNTY, __________ OR THE __________ DISTRICT OF __________ IS AN INCONVENIENT FORUM OR AN IMPROPER FORUM BASED ON LACK OF VENUE. SHOULD GUARANTORS, AFTER BEING SO SERVED, FAIL TO APPEAR OR ANSWER TO ANY SUMMONS, COMPLAINT, PROCESS OR PAPERS SO SERVED WITHIN THE NUMBER OF DAYS PRESCRIBED BY LAW AFTER THE MAILING THEREOF, GUARANTORS SHALL BE DEEMED IN DEFAULT AND AN ORDER AND/OR JUDGMENT MAY BE ENTERED BY LENDER AGAINST GUARANTORS AS DEMANDED OR PRAYED FOR IN SUCH SUMMONS, COMPLAINT, PROCESS OR PAPERS. THE EXCLUSIVE CHOICE OF FORUM FOR GUARANTORS SET FORTH IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT BY LENDER OF ANY JUDGMENT OBTAINED IN ANY OTHER FORUM OR THE TAKING BY LENDER OF ANY ACTION TO ENFORCE THE SAME IN ANY OTHER APPROPRIATE JURISDICTION, AND GUARANTORS HEREBY WAIVE THE RIGHT, IF ANY, TO COLLATERALLY ATTACK ANY SUCH JUDGMENT OR ACTION.

Section 6.8 Entire Agreement. This Guaranty embodies the entire agreement and understanding between Lender and Guarantors with respect to the subject matter hereof and supersedes all prior agreements and understandings between such parties relating to the subject matter hereof. Accordingly, this Guaranty may not be contradicted by evidence of prior,

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contemporaneous, or subsequent oral agreements of the parties. There are no unwritten oral agreements between the parties.

Section 6.12 Representation by Legal Counsel. Guarantors acknowledge that they have been advised by Lender to seek the advice of legal counsel in connection with the negotiation and preparation of this Guaranty. If Guarantors have chosen not to obtain legal representation, whether due to cost considerations or for other reasons, the lack of such representation shall not furnish Guarantors with any defense to the enforcement of Lender’s rights hereunder.

Section 6.13 Injunctive Relief. Guarantors recognize that in the event Guarantors fail to perform, observe or discharge any of their obligations hereunder, no remedy of law will provide adequate relief to Lender, and agree that Lender shall be entitled to pursue temporary and permanent injunctive relief in any such case without the necessity of proving actual damages.

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Section 6.14 Loan Agreement. Guarantors hereby agree to be bound by any covenants binding upon them in the Loan Agreement and such covenants are hereby incorporated by reference as if fully set forth herein. [CONSIDER DELETING]

Section 6.18 Joint and Several Obligations. Each Guarantor shall have joint and several liability for the obligations of Guarantors hereunder. If a Guarantor is a partnership, the obligations of such Guarantor under this Guaranty are the joint and several obligation of each general partner thereof. Any married person signing this Guaranty agrees that recourse may be had against community property assets and against his or her separate property for the satisfaction of all obligations contained herein.

Section 6.19 Reliance. Lender would not make the Loan to the Borrower without this Guaranty. Accordingly, Guarantors intentionally and unconditionally enter into the covenants and agreements herein and understand that, in reliance upon and in consideration of such covenants and agreements, the Loan shall be made and, as part and parcel thereof, specific monetary and other obligations have been, are being and shall be entered into which would not be made or entered into but for such reliance.

Section 6.20 Waiver of Bankruptcy Stay. Guarantors covenant and agree that upon the commencement of a voluntary or involuntary bankruptcy proceeding by or against any Guarantor, such Guarantor shall not seek a supplemental stay or otherwise pursuant to 11 U.S.C. §105 or any

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other provision of the Bankruptcy Code or any other Debtor Relief Law, to stay, interdict, condition, reduce or inhibit the ability of Lender to enforce any rights of Lender against such Guarantor by virtue of this Guaranty or otherwise.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the undersigned have executed this Guaranty as of the date first above written.

	GUARANTOR:
	____________________ Name: _______________
	____________________ Name: _______________

^1.	Violations of a single purpose entity and “separateness” covenants are usually springing recourse events resulting in full recourse against the guarantor. This is because if a breach of these covenants could result in a consolidation of the borrower’s assets with those of an affiliate entity which could jeopardize the lender’s position. Courts have found guarantors fully liable for even minor violations of separateness covenants in situations no one expected. In Wells Fargo Bank, N.A. v. Cherryland Mall Ltd. P’ship, 295 Mich. App. 99, 812 N.W.2d 799 (2011), rev’d on remand, 300 Mich. App. 361, 835 N.W.2d 593 (2013), the bank made a nonrecourse loan. The court held that the borrower’s default in making loan payments resulted in a breach of a separateness covenant requiring the borrower to maintain adequate capital, for its business and the court imposed full recourse on the loan to the guarantor. The ruling was upheld on appeal, a result that few attorneys expected. (Michigan subsequently enacted the Non-Recourse Mortgage Loan Act (the “NMLA”) which prohibits such covenants [characterized in the NMLA as “post-closing solvency covenants”] from being applied to create full recourse against guarantors.) Most lenders now agree that a violation of a separateness covenant will not result in full recourse to a guarantor, unless the violation results in the consolidation of the borrower’s assets with those of another entity in a bankruptcy.
^2.	Glendale Federal Sav. & Loan Assn. v. Marina View Heights Dev. Co.135 Cal. Rptr. 802, 815 (1977).
^*.	*Pro-guarantor negotiated annotations are bracketed and uppercased.*
^*.	*Pro-guarantor negotiated annotations are bracketed and uppercased.
^*.	*Pro-guarantor negotiated annotations are bracketed and uppercased.*