Exhibit 10.5
LIMITED GUARANTY
This Limited Guaranty (“Guaranty”), made and entered into as of the 14th day of March, 2012, byCarter Validus Operating Partnership, LP, a Delaware limited partnership (herein, together with its heirs, administrators, personal representatives, executors and assigns, referred to as“Guarantor”), for the benefit of American Family Life Insurance Company, a Wisconsin insurance corporation (“American Family”), whose address is Investment Division, 6000 American Parkway, Post Office Box 7430, Madison, Wisconsin 53783-0001.
R E C I T A L S
A. DC-2775 Northwoods Parkway, LLC, a Delaware limited liability company (“Borrower”), owns certain real estate located in the City of Norcross, Gwinnett County, Georgia (the land and the improvements constructed on the land hereinafter collectively referred to as the“Premises”).
B.Borrower is obtaining a first mortgage loan fromAmerican Family (the“Loan”) in the original principal amount of Three Million Three Hundred Thousand and No/100 Dollars ($3,300,000.00).
C. TheLoan is evidenced by a Promissory Note of even date herewith (“Note”) executed byBorrower, payable to the order ofAmerican Family.
D. To secure payment of theNote, Borrower has executed and delivered toAmerican Family, a Deed to Secure Debt, Assignment of Rents and Security Agreement (the“Security Deed”) of even date covering thePremises, an Assignment of Leases and Rents (the“Assignment”), andBorrower andGuarantorshave executed and delivered toAmerican Family an Environmental Indemnification Agreement (the“Environmental Indemnity”), a Brokerage Indemnification Agreement (the“Brokerage Indemnity”), and an Americans with Disabilities Act of 1990 Indemnification Agreement (the“ADA Indemnity”) all of even date. TheNote, Security Deed,Assignment, Environmental Indemnity,Brokerage Indemnity, ADA Indemnity, and the Mortgage Loan Application and Agreement fromBorrower dated February 15, 2012, and accepted byAmerican Family on February 28, 2012 (the“Loan Commitment”) and other documents securing theLoan are hereinafter collectively referred to as the“Loan Documents”.
E.Guarantor has agreed to provide thisGuaranty pursuant to the terms of theLoan Commitment, to induceAmerican Family to make theLoan toBorrower.
F.American Family, as a condition of its commitment to advance loan proceeds pursuant to theLoan Documents, has required thisGuaranty to be executed byGuarantor and delivered toAmerican Family.
NOW, THEREFORE
IN CONSIDERATION of the recitals and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,Guarantor hereby covenants and agrees withAmerican Family as follows:
1. TheLoan Documents are hereby made a part of thisGuaranty by reference with the same force and effect as if fully incorporated herein.
2.Guarantor hereby irrevocably, unconditionally, absolutely, and jointly and severally, guarantees toAmerican Family the due and prompt payment toAmerican Family, and not just the collectability, of the following:
| | (a) | anyLoss incurred byAmerican Family due to: |
| | (i) | an intentional act ofFraud; or |
| | (ii) | anyLease Modification; or |
| | (iii) | damage to or destruction of thePremises caused by any act of arson byBorrower,Guarantors or any of their affiliates or agents, or that is not covered by insurance; or |
| | (iv) | waste of thePremises due to an act or the gross negligence ofBorrower or aGuarantor; or |
| | (v) | Borrower’s misapplication or misappropriation, with respect to thePremises, of: (a) rents received from aTenant after the occurrence of and during the continuance of anEvent ofDefault under any of theLoan Documents, or (b) tenant security deposits or rents collected from aTenant in advance, or (c) insurance or condemnation proceeds; or |
| | (vi) | amounts owed toAmerican Family under theEnvironmental Indemnity,ADA Indemnity andBrokerage Indemnity; and, |
| | (b) | all unpaid property taxes which have accrued against thePremises prior to repayment of theIndebtedness; and |
| | (c) | any fees and costs including attorneys fees incurred byAmerican Family in enforcing and collecting any amounts due under theLoan Documents. |
| | (d) | allIndebtedness without limitation if: |
| | (i) | a sale or other transfer of an interest in thePremises orBorrower which is not permitted under theLoan Documents occurs; or |
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| | (ii) | a voluntary bankruptcy or insolvency proceeding involvingBorrower or anyGuarantoras debtor occurs; or |
| | (iii) | an involuntary bankruptcy or insolvency proceeding involvingBorrower or anyGuarantoras debtor occurs (other than one filed byAmerican Family) which is not dismissed within ninety (90) days of filing; or |
| | (iv) | provided anEvent of Default under theLoan Documents has occurred,Borrower or anyGuarantor attempts to prevent or delay the exercise of any ofAmerican Family’s remedies under anyLoan Document. |
As used in this Section, “Loss” shall mean any claims, suits, liabilities (including, without limitation, strict liabilities), actions, proceedings, obligations, debts, damages, losses, costs, expenses, diminutions in value, fines, penalties, charges, fees, expenses, judgments, awards, amounts paid in settlement, punitive damages, foreseeable and unforeseeable consequential damages, of whatever kind and nature (including, but not limited to, attorneys’, experts’ and consultants’ fees and expenses).
Notwithstanding anything to the contrary in theLoan Documents, and except for costs subject to indemnification under either theEnvironmental Indemnity orADA Indemnity,Guarantor shall not be liable for any operating costs of thePremises attributable to any period of time when all rents from thePremises are being paid directly to a receiver or toAmerican Family, or whenBorrower and any assignee(s) permitted under theLoan Documents or otherwise approved byAmerican Familyno longer owns thePremises, unless any such party’s lack of ownership interest results from anOwnership Interest Impairment.
Guarantor agrees and affirms that the provisions of thisGuaranty which might activateGuarantor’s guaranty of allIndebtedness represent bargained-for consideration provided byBorrowertoAmerican Family in exchange forAmerican Family’s agreement to allowBorrowerto avoid general liability for all principal and interest due under theNote. The limitation ofGuarantor’s liability under thisGuaranty shall not limitBorrower’s andGuarantor’sliabilities under theEnvironmental Indemnity,ADA Indemnity andBrokerage Indemnity.
The aggregate amount ofIndebtedness described in subsections 2(a) through 2(d), above, shall be referred to hereafter as the“Guaranteed Amount”.
The liability ofGuarantor under this Section 2 shall survive any release, termination, satisfaction or foreclosure of theSecurity Deed or the acceptance of a deed in lieu of foreclosure of theSecurity Deed. ThisGuaranty is a guaranty of payment and not merely of collection. In the event of the death of anyGuarantor, the liability of theGuarantor under this Section 2, as limited by the provisions hereof, shall continue in effect against suchGuarantor’srespective estate.
3. In case theBorrower has not paid or performed any of the items included within theGuaranteed Amount as and when they are to be paid and performed,Guarantor shall perform or
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cause the same to be performed or paid toAmerican Family. All payments required fromGuarantor hereunder shall be paid toAmerican Family in funds immediately available in Madison, Wisconsin, atAmerican Family’s address, Investment Division, 6000 American Parkway, P.O. Box 7430, Madison, Wisconsin 53783-0001, or at such other address asAmerican Family shall otherwise direct toGuarantors in writing.
4.Guarantor hereby agrees thatAmerican Family may from time to time, without affecting thisGuaranty, without notice to or consent ofGuarantor, and upon such terms and conditions asAmerican Family may deem advisable: (a) release any maker, surety or other person liable for payment of all or any part of theIndebtedness, including theGuaranteed Amount; (b) make any agreement extending or otherwise altering the time for or the terms of payment of all or any part of theIndebtedness, including theGuaranteed Amount; (c) modify, waive, compromise, release, subordinate, resort to, exercise or refrain from exercising any rightAmerican Family may have hereunder or under the otherLoan Documents with respect to theIndebtedness, including theGuaranteed Amount; (d) accept additional security or guarantees of any kind; (e) endorse, transfer or assign theLoan Documents to any other party; (f) accept fromBorrower or any other party partial payment or payments on account of theIndebtedness, including theGuaranteed Amount; (g) from time to time hereafter, further loan moneys or give or extend credit to or for the benefit ofBorrower; (h) release, settle or compromise any claim ofAmerican Family againstBorrower, or against any other person, firm or corporation whose obligation is held byAmerican Family as collateral security for theIndebtedness, including theGuaranteed Amount.
5.Guarantor hereby unconditionally and absolutely waives, to the extent permitted by applicable law: (a) any obligation on the part ofAmerican Family to protect, secure or insure any of the security given for the payment of theIndebtedness, including theGuaranteed Amount; (b) any defense based upon the invalidity or unenforceability of theIndebtedness, including theGuaranteed Amount; (c) any failure, neglect or omission to record, file, perfect or continue any liens upon or rights with respect to any of the security given for the payment of theNote; (d) notice of acceptance of thisGuaranty byAmerican Family; (e) notice of presentment, demand for payment, notice of non-performance, protest, notices of protest and notices of dishonor, notice of non-payment or partial payment; (f) notice of any defaults under theNote or in the performance of any of the covenants and agreements contained therein or in any otherLoan Document given as security for theNote; (g) any limitation or exculpation of liability on the part ofBorrower whether contained in theNote or otherwise; (h) any failure, neglect or omission on the part ofAmerican Family to realize or protect theIndebtedness, including theGuaranteed Amount, or any security given therefor; (i) any right to insist thatAmerican Family prosecute collection of theNote or resort to any instrument or security given to secure theIndebtedness, including theGuaranteed Amount, or to proceed againstBorrower or against any other guarantor or surety prior to enforcing thisGuaranty; provided, however, at its sole discretion,American Family may either in a separate action or an action pursuant to thisGuaranty pursue its remedies againstBorrower or any other guarantor or surety, without affecting its rights under thisGuaranty; (j) notice toGuarantor of the existence of or the extending toBorrower of theIndebtedness, including theGuaranteed Amount; (k) any order, method or manner of application of any payments on theIndebtedness, including theGuaranteed Amount; or (l) any right to insistAmerican Family disburse the full principal amount of theNote toBorrower or the order, method, manner or amounts disbursed under theNote.
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6.Guarantor agrees that all indebtedness, liability or liabilities now or at any time or times hereafter owing byBorrower toGuarantor are hereby subordinated to theIndebtedness, including theGuaranteed Amount. So long as no uncuredEvent of Default has occurred and is continuing under theLoan Documents beyond any applicable opportunity to cure period,Guarantor may demand, receive and accept payment from theBorrower, notwithstanding the subordination contemplated by this paragraph.Guarantor agrees that the payment of any amount or amounts byGuarantor pursuant to thisGuaranty shall not in any way entitleGuarantor, whether at law, in equity or otherwise, to any right to participate in any security held byAmerican Family for the payment of theIndebtedness, including theGuaranteed Amount, any right to direct the application or disposition of any such security or any right to direct the enforcement of any such security. Performance byGuarantor under thisGuaranty shall not entitleGuarantor to be subrogated to any of theIndebtedness, including theGuaranteed Amount, or to any security therefor, unless and until the full amount of theIndebtedness, including theGuaranteed Amount, has been fully paid.
7.Guarantor agrees that this Guaranty is executed in order to induceAmerican Family to make and disburse theLoan toBorrower and with the intent that it be relied upon byAmerican Family in making and disbursing theLoan. Disbursement of any part of theLoan without any further action or notice, shall constitute conclusive evidence of the reliance hereon byAmerican Family. ThisGuaranty shall run with theNote and otherLoan Documents and without the need for any further assignment of thisGuaranty to any subsequent holder of theNote or the need for any notice to theGuarantor thereof. Upon endorsement or assignment of theNote to any subsequent holder, said subsequent holder of theNote may enforce thisGuaranty as if said holder had been originally named asAmerican Family hereunder.
8.Guarantor consents to be sued in the State of Georgia, in accordance with the venue laws of the State of Georgia.
9. No right or remedy herein conferred upon or reserved toAmerican Family is intended to be exclusive of any other available remedy or remedies. Each and every remedy shall be cumulative and shall be in addition to every other remedy given under thisGuaranty or now or hereafter existing at law or in equity. No waiver, amendment, release or modification of thisGuaranty shall be established by conduct, custom or course of dealing, but only by an instrument in writing duly executed byAmerican Family.
10.Guarantorrepresents, warrants and covenants to American Family that (a) the financial statements of suchGuarantorheretofore delivered toAmerican Family are true and correct in all material respects and fairly present the financial condition of suchGuarantor as of the respective dates thereof, and no material adverse change has occurred in the financial condition of suchGuarantor since the date of the most recent of such financial statements of theGuarantor; (b) suchGuarantor has derived or expects to derive financial and other advantages and benefits, directly or indirectly, from the making of thisGuaranty and theGuaranteed Amount; (c) no
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representations or agreements of any kind have been made to suchGuarantor which would limit or qualify in any way the terms of thisGuaranty; (d) thisGuaranty is executed atBorrower’s request and not at the request ofAmerican Family; (e) American Family has made no representations to suchGuarantor as to the creditworthiness ofBorrower; (f) suchGuarantorhas established adequate means of obtaining fromBorrower on a continuing basis information regardingBorrower’s financial condition; (g) suchGuarantor shall keep adequately informed of any facts, events or circumstances which might in any way affect the risks of suchGuarantor under thisGuaranty; (h) American Family shall have no obligation to disclose to suchGuarantor any information or documents (financial or otherwise) heretofore or hereafter acquired byAmerican Family in the course of its relationship withBorrower; and (i) suchGuarantor shall not, without the prior written consent ofAmerican Family, cause or permit anOwnership Interest Impairment.
11.Guarantor agrees to pay all reasonable costs and expenses which may be incurred byAmerican Family in the enforcement or interpretation of thisGuaranty, including reasonable attorneys’ fees (to be determined by the court and not by a jury), and including all costs and reasonable attorneys’ fees incurred in any bankruptcy or insolvency proceeding or on appeal to one or more appellate courts. Whenever reference is made to the payment of“attorneys’ fees,”“reasonable attorneys’ fees” or words of similar import in this Guaranty, the same shall mean and refer to the payment of actual attorneys’ fees incurred based upon the attorney’s normal hourly rate and the number of hours worked, and not the statutory attorneys’ fees defined in O.C.G.A. Section 13-1-11.
12. ThisGuaranty is delivered and made in and shall in all respects be construed pursuant to the laws of the State of Georgia.
13. ThisGuaranty and each and every part hereof, shall be binding uponGuarantor and upon its successors and assigns and shall inure to the benefit of each and every future holder of theNote, including the successors and assigns ofAmerican Family.
14. Any notice which any party hereto may desire or may be required to give to any other party shall be in writing and the mailing thereof by certified mail to their respective addresses as set forth below, or to such other places any party hereto may hereafter by notice in writing designate, shall constitute service of notice hereunder.Guarantor hereby represents and warrants toAmerican Family that the mailing address of theGuarantor specified on the signature page hereof is true and correct, and untilAmerican Family shall have actually received a written notice specifying any such change of address and specifically requesting that notices be issued to such changed address,American Family may rely on the address stated as being accurate.
15. All terms used in thisGuaranty which appear inboldface type and are not defined herein shall have the meaning ascribed to such term or terms in theSecurity Deed.
16. The promises and agreements ofGuarantor herein shall be construed to be and are hereby declared to be fully binding upon and enforceable againstGuarantor in accordance with the terms hereof, and neither the death, bankruptcy, dissolution nor release of any other guarantor of or surety for payment of theIndebtedness or theGuaranteed Amount shall affect or release the liability ofGuarantor hereunder.
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17. To the extent that any provision of or obligation under thisGuaranty is deemed invalid, illegal or unenforceable in any jurisdiction, that finding shall not affect the validity, legality, and enforceability of any other provision or obligation in thisGuaranty in that jurisdiction, or the validity, legality, and enforceability of any of the provisions of or obligations under thisGuaranty in any other jurisdiction.
18.Guarantor shall not be released from its obligations under thisGuaranty except by a writing signed byAmerican Family.
19.GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE S ANY RIGHT TO TRIAL BY JURY WHICHGUARANTORS MAY HAVE IN ANY ACTION OR PROCEEDING, IN LAW OR IN EQUITY, IN CONNECTION WITH THISGUARANTY OR ANY OTHERLOAN DOCUMENT.GUARANTOR REPRESENTS AND WARRANTS THAT NO REPRESENTATIVE OR AGENT OFAMERICAN FAMILY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THATAMERICAN FAMILY WILL NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THIS JURY TRIAL WAIVER.GUARANTOR ACKNOWLEDGES THATAMERICAN FAMILYHAS BEEN INDUCED TO MAKE THELOAN BY, AMONG OTHER THINGS, THE PROVISIONS OF THIS SECTION AND THE CORRESPONDING PROVISIONS OF THENOTE, WHICH PROVISIONSGUARANTOR HAS READ AND BY WHICHGUARANTOR HEREBY AGREES TO BE BOUND.GUARANTOR ACKNOWLEDGES THAT IT HAS CONSULTED WITH AN ATTORNEY AND FULLY UNDERSTANDS THE LEGAL EFFECT OF THE PROVISIONS OF THIS SECTION.
(CONTINUED)
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IN WITNESS WHEREOF, Guarantor has executed thisGuaranty as of the day and year first above written.
| | | | | | |
| CARTER VALIDUS OPERATING |
| PARTNERSHIP, LP, a Delaware limited partnership |
| |
| By: | | Carter/Validus Mission Critical Reit, Inc., |
| | a Maryland corporation, its general partner |
| | |
| | By: | | /s/ John E. Carter |
| | | | John E. Carter, Chief Executive Officer |
| | |
| Address: | | | | 4211 West Boy Scout Blvd., Suite 500 |
| | | | | | Tampa, FL 33607 |
| | |
| STATE OF FLORIDA | | ) |
| | ) ss. |
| COUNTY OF HILLSBOROUGH | | ) |
This instrument was acknowledged before me this 13th day of March, 2012, by John E. Carter, Chief Executive Officer of Carter Validus Mission Critical Reit, Inc., General Partner of Carter Validus Operating Partnership, LP, a Delaware limited partnership, to me known to be the person who executed the foregoing instrument by virtue of the authority vested in him on behalf of said entity.
|
/s/ Elizabeth Fay |
| Elizabeth Fay |
| Notary Public, State of Florida |
| My commission expires: August 24, 2015 |
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