FILED: NEW YORK COUNTY CLERK 11/10/2011 NYSCEF DOC. NO. 37-1 INDEX NO. 650871/2010 RECEIVED NYSCEF: 11/10/2011 By order of Justice Ramos, these papers may not be taken apart of tampered with Hypo Real Estate Capital Corp., on behalf of itself and certain other lenders v. The Related Cos., L.P., et al., Index No. 650871/2010 (Motion Sequence No. 3) EXHIBIT 1 THE RELATED COMPANIES, L.P. AND PATRICK SMITH (collectively, Guarantors) to HYPO REAL ESTATE CAPITAL CORPORATION, as Agent for the ratable benefit of the Lenders (Agent) GUARANTY OF RECOURSE OBLIGATIONS Dated: As of March /,2007 84189472_7 GUARANTY OF RECOURSE OBLIGATIONS This GUARANTY OF RECOURSE OBLIGATIONS (this Guaranty) is executed by THE RELATED COMPANIES, L.P., a New York limited partnership as of March __2007 and Patrick Smith, an individual (Patrick Smith, and together with TRCLP, each, a (TRCLP), Guarantor, and collectively, Guarantors), for the benefit of HYPO REAL ESTATE CAPITAL CORPORATION (HRECC), a Delaware corporation' having an address at 622 Third Avenue, New York, New York 10017, as agent (in such capacity and together with its successors and assigns in such capacity, Agent) for the ratable benefit of the lenders party to the Loan Agreement (as hereinafter defined) from time to time (together with HRECC, collectively, Lenders and each, a Lender). WITNESSETH: WH{EREAS, pursuant to that certain Loan and Security Agreement, dated of even date herewith, by and among Base Village Owner LLC, a Delaware limited liability company (Borrower), Agent and the Lenders (together with all extensions, renewals, modifications, substitutions and amendments thereof, the Loan Agreement; capitalized terms used herein without definition shall have the meanings ascribed to them in the Loan Agreement), Agent has agreed to administer and the Lenders have agreed to make a loan'to Borrower in the principal amount of up to $520,394,080.00 (the Loan), which Loan is evidenced by one or more promissory note(s), dated of even date herewith, executed by Borrower and payable to the order of the Lenders according to their respective ratable shares of the Loan (collectively, together with all extensions, renewals, modifications, substitutions and amendments thereof, the Note); W,HEREAS, Lenders are not willing to make the Loan, or otherwise extend credit, to Borrower unless Guarantors unconditionally guaranty payment and performance to Agent for the ratable benefit of the Lenders of the Guaranteed Obligations (as defined in Section 1.1 hereof); and WHEREAS, each Guarantor is the owner of a direct or indirect interest in Borrower, and each Guarantor will directly benefit from Lenders' making the Loan to Borrower. NOW, THEREFORE, in consideration of the making of the Loan by the Lenders, the covenants, agreements, representations and warranties set forth in this Guaranty, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by Guarantors, Guarantors hereby represent, warrant, covenant and agree as follows: ARTICLE I NATURE AND) SCOPE OF GUARANTY Section 1.1. Guaranty of Obligation. (a) Guarantors hereby irrevocably, unconditionally, jointly and severally guaranty to Agent and Lender and their respective successors and assigns the payment and performance of the Guaranteed Obligations as and when the same shall be due and payable, whether by lapse of time, by acceleration of maturity or 84189472_7 otherwise. Each Guarantor hereby irrevocably and unconditionally covenants and agrees that it is liable for the Guaranteed Obligations as a primary obligor. Definition of Guaranteed Obligations. As used herein, the termi Guaranteed Obligations means (x) any Losses incurred by Lenders arising out of or in connection with any of the following in connection with the Loan and/or the Project (as defined in the Loan Agreement):. (i) fraud or material and intentional misrepresentation on the part of Borrower, either Guarantor, or any of either of their affiliates, members, partners, employees or agents (each, individually, a Borrower Party); (ii) gross negligence or willful misconduct on the part of Borrower or any other Borrower Party; (iii) willful or wrongful misapplication of Rents or other income, Security Deposits under a Lease, including any Lease Letters of Credit (or any proceeds thereunder), Gross Revenues, Insurance Proceeds, Awards, sums held in any Account, sumns payable pursuant to any Interest Rate Protection Agreement, funds paid to any Borrower Party by any Governmental Authority in connection with the Project or proceeds of the disposition of all or any portion of the Collateral required by the Loan Documents to be paid or applied in a specified manner; (iv) (v) distributions made in violation of Section 5.2.12-of the. Loan Agreement; any willful physical waste to all or any portion of the Collateral; (vi) any voluntary or collusive involuntary Transfer in violation of the Loan Agreement, including Article IX, or in violation of any other Loan Document; (vii) the voluntary or collusive involuntary incurrence of any Indebtedness by Borrower or any Borrower Party in violation of the Loan Documents; (viii) the failure to comply with the special purpose entity provisions set forth in Section 5.4 of the Loan Agreement; (ix) the failure to purchase an Interest Rate Protection Agreement- as required pursuant to Section 2.9.1 of the Loan Agreement; (x) any Embargoed Person or Prohibited Person owning or acquiring any beneficial interests in any Borrower Party; and (y) the total Debt if (1) Borrower files a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency Legal Requirement; (II) an Affiliate, officer, director, or representative which controls, directly or indirectly, Borrower files, or joins in the filing of, an involuntary petition against Borrower under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency Legal Requirement, or solicits or causes to be solicited petitioning creditors for any involuntary petition against Borrower from any Person; (111) 2 841894727I Borrower files an answer consenting to or otherwise acquiescing in or joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency Legal Requirement, or solicits or causes to be solicited petitioning creditors for any involuntary petition from any Person; (IV) any Affiliate, officer, director, or representative which controls Borrower consents to or acquiesces in or joins in an application for the appointment of a custodian, receiver, trustee, or examiner for Borrower or any portion of the Property; or. (V),Borrower, makes an assignment-for.the benefit, of.creditors, or. admits,% inwriting. or in any legal proceeding, its insolvency or inability to pay its debts as they become due. (b) The foregoing notwithstanding, (i) TRCLP shall not be liable under this Guaranty for any Losses suffered by the Lenders arising out of or in connection with any voluntary or collusive Transfer under clause (vi) above by Smith or any of Smith's Affiliates, and (ii) Smith shall* not be liable under this Guaranty for any Losses suffered by Lenders arising out of or in connection with any voluntary or collusive Transfer under clause (vi) above by TRCLP or any of TRCLP's Affiliates. Section 1.2. 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 either Guarantor and shall continue to be effective with respect to any Guaranteed Obligations arising or created after any attempted revocation by any Guarantor. The fact that at any time or from time to time the Guaranteed Obligations may be increased -or reduced shall not release or discharge the obligation of Guarantors to Agent and Lenders with respect to the Guaranteed Obligations. This Guaranty may be enforced by Agent behalf of Lenders and any subsequent holder of the Note and- shall not be discharged by the Guaranty or negotiation of all or part of the Note. Section 1.3. Guaranteed Obligations Not Reduced by Offset. The Guaranteed Obligations and the liabilities and obligations of Guarantors to Agent and Lenders hereunder 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 party against Agent and/or Lenders or against payment of the- Guaranteed Obligations, whether such offset, claim or defense arises in connection with the Guaranteed Obligations (or the transactions creating the Guaranteed Obligations) or otherwise. Section 1.4. Payment By Guarantors. If all or any part of the Guaranteed *Obligations shall not be punctually paid when due, whether at demand, maturity, acceleration or otherwise, Guarantors shall, immediately upon demand by Agent and without presentment, protest, notice of protest, notice of non-payment, notice of intention to accelerate the maturity, notice of acceleration of the maturity or any other notice whatsoever, pay in lawful money of the United States of America, the amount due on the Guaranteed Obligations to Agent at Agent's address as set forth herein. Such demand(s) may be made at any time coincident with or after the time for payment of all or part of the Guaranteed Obligations and may be made from time to time with respect to the same or different items of Guaranteed Obligations. Such demand shall be deemed made, given and received in accordance with the notice provisions hereof. Section 1.5. No Duty To Pursue Others. It shall not be necessary for Agent or Lenders (and each Guarantor hereby waives any rights which such Guarantor may have to -on 3 84189472_7 require Agent or Lenders), in order to enforce the obligations of Guarantors hereunder, first to (a) institute suit or exhaust its remedies against Borrower or others liable on the Loan or the Guaranteed Obligations or any other person, (b) enforce Agent's or Lenders' rights against any collateral which shall ever have been given to secure the Loan, (c) enforce Agent's or Lenders' rights against any other guarantors of the Guaranteed Obligations, (d) join Borrower or any others liable on the Guaranteed Obligations in any action seeking to enforce this Guaranty, (e) exhaust any.remedies,.available. to, Agent,or. Lenders-agpinst.any co.1ateral.which. s,hall,ever.:have: been given to secure the Loan, or (f) resort to any other means of obtaining payment of the Guaranteed Obligations. None of Agent or Lenders shall be required to mitigate damages or take any other action to reduce, collect or enforce the Guaranteed Obligations.. Section 1.6. Waivers. Each Guarantor agrees to the provisions of the Loan Documents and hereby waives notice of (a) any loans or advances made by Agent or Lenders to Borrower, (b) acceptance of this Guaranty, (c) any amendment or extension of the Note, the Security Instrument, the Loan Agreement or of any other Loan Documents, (d) the execution and delivery by Borrower and Agent and/or any Lenders 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, (e) the occurrence of any breach by Borrower or an Event of Default, (f) Agent's or any Lenders' transfer or disposition of the Guaranteed Obligations, or any part thereof, (g) sale or foreclosure (or posting or advertising for sale or foreclosure) of any collateral for the Guaranteed Obligations, (h) protest, proof of nonpayment or default by Borrower, or (i) any other action at any time taken or omitted by Agent or any Lender and, generally, all demands and notices of every kind in connection with this Guaranty, the Loan Documents, any documents or agreements evidencing, securing or relating to any of the Guaranteed Obligations and the obligations hereby guaranteed. Section 1.7. Payment of Expenses. In the event that any Guarantor should breach or fail to timely perform any provisions of this Guaranty, Guarantors shall, immediately upon demand by Agent, pay Agent all out-of-pocket costs and expenses (including court costs and reasonable attormeys- fees> incurred by Agent in the enforcement hereof or the preservation of Agent's and Lenders' rights- hereunder. The covenant contained in this Section shall survive the payment anct performance of the Guaranteed Obligations. Section 1.8. Effect of Bankruptcy. In the event that pursuant to any insolvency, bankruptcy, reorganization, receivership or other debtor relief law or any judgment, order or decision thereunder, Lenders must rescind or restore any payment or any part thereof received by Lenders in satisfaction of the Guaranteed Obligations, as set forth herein, any prior release or discharge from the terms of this Guaranty given to any Guarantor by Agent on Lenders' behalf or by Lenders shall be without effect and this Guaranty shall remain in full force and effect. It is the intention of Borrower and Guarantors that Guarantors' obligations hereunder shall not be discharged except by Guarantors' performance of such obligations and then only to the extent of such performance. Section 1.9. Waiver of Subrogation, Reimbursement and Contribution. Notwithstanding anything to the contrary contained in this Guaranty, until the Guaranteed Obligations are paid in fuill, Guarantors hereby, for the sole benefit of Agent and Lenders, unconditionally and irrevocably waive, release and abrogate any and all rights they may now or 4 84189)4717 hereafter have under any agreement, at law, in equity or otherwise (including, without limitation, any law subrogating either Guarantor to the rights of Agent and/or Lenders), to assert any claim against or seek contribution, indemnification or any other form of reimbursement from Borrower or any other party liable for payment of any or all of the Guaranteed Obligations for any payment made by either Guarantor under or in connection with this Guaranty or otherwise. ARTICLE II EVENTS AND CIRCUMSTANCES NOT REDUCING OR DISCHARGING GUARANTORS' OBLIGATIONS Each Guarantor hereby consents and agrees to each of the following and agrees that Guarantors' obligations under this Guaranty shall not be released, diminished, impaired, reduced or adversely affected by any of the following and waives any common law, equitable, statutory or other rights (including without limitation rights to notice) which either Guarantor mig ht otherwise have as a result of or in connection with any of the following: Section 2. 1. Modifications. Any renewal, extension, increase, modification, alteration or rearrangement of all or any part of this Guaranty, the Note, the Security Instrument, the Loan Agreement, any of the other Loan Documents or any other document, instrument, contract or understanding between Borrower and Agent and/or Lenders or any other parties pertaining to the Guaranteed Obligations or any failure of Agent or Lenders to notify either Guarantor of any such action. Section 2.2. Adjustment. Any adjustment, indulgence, forbearance or compromise that might be granted or given by Agent or Lenders to Borrower or any Guarantor. Section 2.3. Condition of Borrower or Guarantors. The insolvency, bankruptcy, arrangement, adjustment, composition, liquidation, disability, dissolution or lack of power of Borrower, either Guarantor or any other party at any time liable for the payment of all or part of the Guaranteed Obligations; or any dissolution of Borrower or either Guarantor or any sale, lease or transfer of any or all of the assets of Borrower or either Guarantor or any changes in the shareholders, partners or members of Borrower or either Guarantor; or any reorganization of Borrower or either Guarantor. Section 2.4. Invalidity of Guaranteed Obligations. The invalidity, illegality or unenforceability of all or any part of the Guaranteed Obligations or any document or agreement executed in connection with the Guaranteed Obligations for any reason whatsoever, including without limitation the fact that (a) the Guaranteed Obligations or any part thereof exceeds the amount permitted by law, (b) the act of creating the Guaranteed Obligations or any part thereof is ultra vires, (c) the officers or representatives executing the Note, the Security Instrument, the Loan Agreement or the other Loan Documents or otherwise creating the Guaranteed Obligations acted in excess of their authority, (d) the Guaranteed Obligations violate applicable usury laws, (e) the Borrower has valid defenses, claims or offsets (whether at law, in equity, by agreement or otherwise) which render the Guaranteed Obligations wholly or partially uncollectible from Borrower, (f) the creation, performance or repayment of the Guaranteed Obligations (or the execution, delivery and performance of any document or instrument representing part of the Guaranteed Obligations or executed in connection with the Guaranteed Obligations or given to 5 84189472 7 secure the repayment of the Guaranteed Obligations) is illegal, uncollectible or unenforceable, or (g) the Note, the Security Instrument, the Loan Agreement or any of the other Loan Documents have been forged or otherwise are irregular or not genuine or authentic, it being agreed that Guarantors shall remain liable hereon regardless of whether Borrower or any other person be found not liable on the Guaranteed Obligations or any part thereof for any reason. SeQction 2-5. Release of Obligors.. Any_ full. or. partiaL. release of. the, liability. of. Borrower on the Guaranteed Obligations or any part thereof, or of any co-guarantors, or any other Person now or hereafter liable, whether directly or indirectly, jointly, severally, or jointly and severally, to pay, perform, guarantee or assure the payment of the Guaranteed Obligations, or any part thereof, it being recognized, acknowledged and agreed by Guarantors that Guarantors may be required to pay the Guaranteed Obligations in full without assistance or support of any other party, and Guarantors have 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 or perform the Guaranteed Obligations, or that Agent and/or Lenders will look to other parties to pay or perform the Guaranteed Obligations. Each Guarantor agrees that such Guarantor's liability hereunder will not be released, reduced, impaired or affected by the assumption of liability by any other person (whether as guarantor or otherwise) for payment or performance under the Note or the Loan Agreement, the payment or performance by any other person (whether as guarantor or otherwise) under the Note, the Loan Agreement or any guaranty of liability thereunder, or the full or partial release from liability of Borrower or any other person now or hereafter liable for payment or performance under the Note, the Loan Agreement or any such guaranty. Each Guarantor hereby expressly waives any rights such Guarantor may have under Colorado Revised Statutes ?? 13-50-102 or 13-50-103 (or any corresponding future statute or rule of law in any jurisdiction) by reason of release of fewer than all of the guarantors of the Guaranteed Obligations. Section 2.6. Other Collateral. The taking or accepting of any other security, or guaranty, or other assurance of payment, for all or any part. of the Guaranteed Obligations. Section 2.7. Release~ of Collateral. Any release, surrender, exchange, subordination, deterioration, waste, loss or impairmnent (including without limitation negligent, willful, unreasonable or unjustifiable impairment) of any collateral, property or security at any time existing in connection with, or assuring or securing payment of, all or any part of the Guaranteed Obligations. Section 2.8. Care and Diligence. The failure of Agent and/or Lenders or any other. Person 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, property or security, including but not limited to any neglect, delay, omission, failure or refusal of Agent and/or Lenders (a) to take or prosecute any action for the collection of any of the Guaranteed Obligations or (b) to foreclose, or initiate any action to foreclose, or, once commenced, prosecute to completion any action to foreclose upon any security therefor, or (c) to take or prosecute any action in connection with any instrument or agreement evidencing or securing all or any part of the Guaranteed Obligations. -collateral 6 84189472_7 Section 2.9. Unenforceability. The fact that any collateral, security, security interest or lien contemplated or intended to be given, created or granted as security for the repayment of the Guaranteed Obligations, or any part thereof, shall not be properly perfected or created, or shall prove to be unenforceable or subordinate to any other security interest or lien, it being recognized and agreed by Guarantors that Guarantors are not entering into this Guaranty in reliance on, or in contemplation of the benefits of, the validity, enforceability, collectibility or value of any of the collateral for.the,GuaranteecL.Obligaions-, Section 2. 10. Offset. The Note, the Guaranteed Obligations and the liabilities and obligations of Guarantors to Agent and Lenders hereunder shall not be reduced, discharged or released because of or by reason of any existing or future right of offset, claim or defense of Borrower against Agent and/or Lenders, or any other party, or against payment of the Guaranteed Obligations, whether such right of offset, claim or defense arises in connection with the Guaranteed Obligations (or the transactions creating the Guaranteed Obligations) or otherwise. Section 2.11. Merger. The reorganization, merger or consolidation of Borrower into or with any other Person. Section 2.12. Preference. Any payment by Borrower to Agent and/or Lenders is held to constitute a preference under bankruptcy laws or for any reason Agent and/or any Lender is required to refund such payment or pay such amount to Borrower or someone else. Section 2.13. Other Actions-Taken or Omitted. Any other action taken or omitted to be taken with respect to the Loan Documents, the Guaranteed Obligations, or the security and collateral therefor, whether or not such action or omission prejudices either Guarantor or Lncreases the likelihood that either Guarantor will be required to pay the Guaranteed Obligations pursuant to the terms hereof, it is the unambiguous and unequivocal intention of Guarantors that Guarantors shall be obligated to pay the Guaranteed Obligations when due, notwithstanding any occurrence, circumstance, event, action, or omission whatsoever, whether contemplated or uncontemplated, and- whether or not-otherwise or particularly described herein, which obligation shall be deemed satisfied only upon the full and final payment and satisfaction of the Guaranteed Obligations. ARTICLE III REPRESENTATIONS AND WARRANTIES To induce Agent to enter into the Loan Documents and Lenders to enter into the Loan Agreement and extend credit to Borrower, each Guarantor represents and warrants to Agent and Lenders as follows: Section 3. 1. Benefit. Such Guarantor is an Affiliate of Borrower, is the owner of a direct or indirect interest in Borrower, and has received, or will receive, direct or indirect benefit from the making of this Guaranty with respect to the Guaranteed Obligations. Section 3.2. Familiarity and Reliance. Such Guarantor is familiar with, and has independently reviewed books and records regarding, the financial condition of the Borrower 7 84189472_7 w w ww w wW and is familiar with the value of any and all collateral intended to be created as security for the payment of the Note or Guaranteed Obligations; however, such Guarantor is not relying on such financial condition or the collateral as an inducement to enter into this Guaranty. Section 3.3. No Representation By Lenders. Neither Agent nor Lenders nor any other Person has made any representation, warranty or statement to such Guarantor in order to induce such .Guarantor to executc- this.-Guaranty_. Section 3.4. Guarantors' Financial Condition. As of the date hereof, and after giving effect to this Guaranty and the contingent obligation evidenced hereby, such Guarantor is and will be solvent and has and will have assets which, fairly valued, exceed its obligations, liabilities (including contingent liabilities) and debts, and has and intends to have property and assets sufficient to satisfy and repay its obligations and liabilities. Section 3.5. Legality. The execution, delivery and performance by such Guarantor of this Guaranty and the consummation of the transactions contemplated hereunder do not and will not contravene or conflict with any law, statute or regulation whatsoever to which such Guarantor is subject or constitute a default (or an event which with notice or lapse of time or both would constitute a default) under, or result in the breach of, any indenture, mortgage, charge, lien, or any contract, agreement or other instrument to which such Guarantor is a party or which may be applicable to such Guarantor. This Guaranty is a legal and binding obligation of such Guarantor and is enforceable in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to the enforcement of creditors' rights. Section 3.6. Consents. No consent, approval, authorization or order of any court or Governmental Authority or other Person is required for the execution, delivery and performance by such Guarantor of, or compliance by such Guarantor with, this Guaranty or the consummation of the transactions contemplated hereby, other than those which have been obtained by such Guarantor. Section 3. 7. Litigation There is no action, suit, proceeding or investigation (including any pertaining to any Environmental Law) pending or, to such Guarantor's knowledge, threatened against such Guarantor in any court or by or before any other Governmnental Authority, or labor ,controversy affecting such Guarantor or any of its properties, businesses, assets or revenues, which would reasonably be expected to (i) materially and adversely affect the ability of such.Guarantor to carry out the transactions contemplated by this Guaranty, (ii) materially and adversely affect the value of its property, (iii) impair the intended use and intended operation of its property or (iv) impair such Guarantor's ability to pay*its obligations in a timely manner. Section 3.8. No Plan Assets. As of the date hereof and throughout the term of the Loan (a) such Guarantor is not and will not be an "employee benefit plan," as defined in Section 3(3) of ERISA, subject to Title I of ERISA, (b) none of the assets of such Guarantor constitutes or will constitute "Plan assets" of one or more such plans within the meaning of 29 C.F.R. Section 25 10.3-101, (c) such Guarantor is not and will not be a "governmental plan" within the meaning of Section 3(32) of ERISA- and (d) transactions by or with such Guarantor 8 84189472_7 are not and will not be subject to state statutes regulating investment of, and fiduciary obligations with respect to, governmental plans. Section 3.9. Financial and Other Information. All information submitted by such Guarantor to Agent and all statements of fact made by such Guarantor in this Guaranty are accurate, complete and correct in all material respects. Without limiting the foregoing, all finanicial,reports and statements. that have been delivered -to..Agent. and/or. -the Lenders.in.respectof such Guarantor in connection with the negotiation of the Loan Documents do not contain any untrue or misleading statement of a material fact. There is no fact which such Guarantor has not disclosed to Agent in writing which materially adversely affects any of the Property or the financial condition of such Guarantor or the ability of such Guarantor to perform this Guaranty. No material adverse change has occurred in the financial conditions reflected in such financial reports and statements since the respective dates thereof Such Guarantor has not failed to disclose any material fact of which such Guarantor has knowledge that would cause any representation or warranty made herein to be materially misleading. Section 3. 10. Survival. All representations and warranties made by each Guarantor herein shall survive the execution hereof and shall be deemed to have been relied upon by Agent and Lenders notwithstanding any investigation heretofore or hereafter made by Agent or any Lender. ARTICLE IV COVENANTS Section 4. 1. Section 4.2. Intentionally Deleted. Financial Reporting. (a) Each Guarantor shall furnish Agent annually, within ninety (90) days following the end of each Fiscal Year, a complete copy of such Guarantor's annual financial statements audited by the Approved Accountant or other independent certified public accountant reasonably acceptable to Agent prepared in accordance with GAAP, including a balance sheet, income and expense statement, cash flow statement, contingent liability schedule and profit and loss statement for such Guarantor.(b) Each-Guarantor* will furnish Agent on or before the forty-fifth (45th) day after the end of each fiscal quarter (based on such Guarantor's Fiscal Year), the following items quarterly and year-to-date unaudited financial statements including a balance sheet, statement of income and expense and cash flow statement contingent liability schedule and profit and loss statement for such Guarantor for such quarter. (c) Guarantors' financial statements and items delivered pursuant to this Section 4.2 shall be accompanied by (i) in the case of TRCLP, an Officer's Certificate, and in the case of Patrick Smith, a certification (A) stating that such items are true, accurate, correct and complete and that such financial statements present fairly the financial condition and the results of operations of such Guarantor in accordance with GAAP and (B) certifying as of the date thereof whether to the best of such Borrower's knowledge there exists an event or 9 841994727 circumstance which constitutes a Default or Event of Default by such Guarantor under the Loan Documents and if such Default or Event of Default exists, the nature thereof, the period of time it has existed and the action then being taken to remedy the same and (ii) an explanation reconciling the discrepancies, if any, between unaudited financial statements and audited financial statements. (d) Each Guarantor shall. furnish.to,Agent,.-wiffiin, fiv.v(S) Business.Days after. request (or as soon thereafter as may be reasonably possible), such further detailed information with respect to the financial affairs of such Guarantor as may be reasonably requested by Agent. (e) At Agent's request, each Guarantor shall cause any of the reports delivered pursuant to this Section to also be delivered in an electronic format designated by Agent. Guarantors acknowledge the importance to Agent and Lenders of the timely delivery of each of the items required by this Section and in the event either Guarantor fails to deliver to Agent any of the above items within the time frame specified herein, such failure shall constitute an Event of Default hereunder. Section 4.3. Financial Covenants. TRCLP shall comply with each of the following financial covenants at all times: (i) (i i) TRCLP shall maintain a Net Worth of not less than $150,000,000; and TRCLP shall have Liquid Assets of not less than $30,000,000;. Section 4.4. Books and Records. Each Guarantor shall keep and maintain or will cause to be kept and maintained at its principal place of business proper and accurate books and -records, in accordance with GAAP, reflecting the financial affairs of such Guarantor and all items of income and expense of such Guarantor. Agent and its agents, attorneys and accountants shall have the right from time to time during normal business hours upon reasonable notice to the applicable Guarantor to examine and audit such books and records at the office of such Guarantor or other Person maintaining such books and records and to make such copies or extracts thereof as Agent shall desire. From and after the occurrence and during the continuance of a Default. or an. Event of Default, such Guarantor shall pay all costs and expenses incurred by Agent or any Lender to examine or audit its books and records, as Agent shall determine to be necessary or appropriate. Section 4.5. ERISA. (a) As used herein, "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended. (b) Guarantors shall not engage in any transaction which would cause any obligation, or action taken or to be taken, hereunder (or the exercise by Agent and/or Lender of any of its rights under the Note, this Agreement or the other Loan Documents) to be a non-exempt (under a statutory or administrative class exemption) prohibited transaction under ERISA. 10 84199472 7 (c) Eac h Guarantor shall deliver to Agent such certifications or other evidence from time to time throughout the term of the Loan, as reasonably requested by Agent in its sole discretion, that (A) such Guarantor is not and will not be an "employee benefit plan" as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, or a "governmental plan" within the meaning of Section 3(32) of ERISA; (B) such Guarantor is not subject to state statutes regulating investments and fiduciary obligations with respect to governmental plans; and (C) one or more.of the fallo.wing circumstances is. true:-. (i) Equity interests in such Guarantor are publicly offered securities, within the meaning of 29 C.F.R. ?2510.3-101(b)(2); (ii) Less than twenty-five percent (25%) of each outstanding class of equity interests in such Guarantor are held by "benefit plan investors" within the meaning of 29 C.F.R. ?2510.3-101(f)(2); or (iii) Such Guarantor qualifies, as an "operating company" or a "real estate operating company" within the meaning of 29 C.F.R. ?2510.3-101(c) or (e).' Section 4.6. Guaranty and Syndication. Each Guarantor agrees to execute, within ten (10) days after request therefor is made by Agent, any documents and/or estoppel certificates reasonably requested by Agent in connection with any syndication made by any Lender pursuant to Article XII of the Loan Agreement, without charge. Section 4.7. Cooperation. Each Guarantor acknowledges that Agent and/or the Lenders and their successors and assigns may (i) sell this Guaranty, the Note and other Loan Documents to one or more investors in whole or in part or (ii) participate the Loan secured by this Guaranty to one or more investors (the transactions referred to in clauses (i) and (ii) are hereinafter each referred to as "Syndication"). Guarantors shall cooperate with Agent and the Lenders in effecting any such Syndication and shall cooperate to implement all requirements imposed by any Rating Agency involved in any Syndication. Guarantors shall provide such information and documents relating to such Guarantor, Borrower, the Property and any tenants of the Improvements as Agent may reasonably request in connection with such Syndication. In addition, each Guarantor shall make available to Agent all information concerning its business and operations that Agent and the Lenders may reasonably request. Agent and the Lenders. shall. be permitted to share all such information with the participants in the Syndication. Such information- shall be.delivered to such participants on a confidential basis. - ARTICLE V SUBORDINATION OF CERTAIN INDEBTEDNESS Section 5.1. Subordination of All Guarantor Claims. As used herein, the term "Guarantor Claims" shall mean all debts and liabilities of Borrower to either Guarantor, whether such debts and liabilities now exist or are hereafter incurred or arise, or whether the obligations of Borrower thereon be 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 11 84189472_7 which they have been or may hereafter be acquired by a Guarantor. The Guarantor Claims shall include without limitation all rights and claims of either Guarantor against Borrower (arising as a result of subrogation or otherwise) as a result of such Guarantor's payment of all or a portion of the Guaranteed Obligations. After the occurrence, and during the continuance, of an Event of Default or the occurrence, and during the continuance, of an event which would, with the giving of notice or the passage of time, or both, constitute an Event of Default, no Guarantor shall receiveor.coLlect,directly..or- indirectly. from.Bnrroower-.or.aniy. other-party any. amount.upon the Guarantor Claims. Section 5.2. Claims in Bankruptcy. In the event of receivership, bankruptcy, reorganization, arrangement, debtor's relief, or other insolvency proceedings involving either Guarantor as debtor, Agent 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 the Guarantor Claims. Each Guarantor hereby assigns such dividends and payments to Agent for the benefit of the Lenders. Should Agent or any Lender receive, for application against the Guaranteed Obligations, any dividend or payment which is otherwise payable to either Guarantor and which, as between Borrower and such Guarantor, shall constitute a credit against the Guarantor Claims, then, upon payment to Agent in full of the Guaranteed Obligations, either Guarantor shall become subrogated to the rights of Agent or such Lender to the extent that such payments to Agent or such Lender on the Guarantor Claims have contributed toward the liquidation of the Guaranteed Obligations, and such subrogation shall be with respect to that proportion of the Guaranieed Obligations which would have been unpaid if Agent or such Lender had not received dividends or payments upon the Guarantor Claims. Section 5.3. Payments Held in Trust. In the event that, notwithstanding anything to the contrary in this Guaranty, either Guarantor should receive any funds-p'ayment, claim or distribution which is prohibited by this Guaranty, such Guarantor agrees to hold in trust for Agent an amount equal to the amount of all funds, payments, claims or distributions so received, and agrees that it shall.have absolutely no dominion over the amount of such funds, payments, claims or distributions so received except-to pay them promptly to Lender, and each Guarantor covenants promptly to pay the same to Agent. .Section 5.4. Liens Subordinate. Each 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 Obligations, regardless of whether such encumbrances in favor of such Guarantor or Agent or Lenders presently exist or are hereafter created or attach. Without the prior written consent of Agent, no Guarantor shall (a) exercise or enforce any creditor's right it may have against Borrower, or (b) 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, mortgages, deeds of trust, security interests, collateral rights, judgments or other encumbrances on assets of Borrower held by such Guarantor. 12 84189472_7 W W W W Section 5.5. Reinstatement in Certain Circumstances. If at any time any payment of the principal of or interest under the Note or any other amount payable by the Borrower under the Loan Documents is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of the Borrower or otherwise, Guarantors' obligations hereunder with respect to such payment shall be reinstated as though such payment has been due but not made at such time. ARTICLE VI NOTICES Section 6. 1. Notices. All notices or other written communications hereunder shall be delivered in accordance with Section 11.5 of the Loan Agreement; provided, however, that the address for Guarantors shall be: The Related Companies, L.P. 60 Columbus Circle, 19th Floor New York, New York 10023 Attention: President And to: Greenberg Traurig, LLP 200 Park Avenue New York, New York 10 166 Attention: Robert Ivanhoe, Esq. Patrick Smith c/o WestPac Investments, Inc. 132 W. Main St., Ste A Aspen, CO 81611 And-to: Gibson, Dunn & Crutcher LLP 200 Park Avenue, 47 Floor New York, New York 10 166 Attention: Andrew H. Levy, Esq. ARTICLE VII APPLICABLE LAW; WAIVER OF JURY TRIAL Section 7.1. (a) GOVERNING LAW. THIS GUARANTY WAS NEGOTIATED IN THE STATE OF NEW YORK, AND MADE BY GUARANTORS AND ACCEPTED B3Y AGENT IN THE STATE 13 841S9472 7 w~~~ W OF NEW YORK, AND THE PROCEEDS OF THE NOTE SECURED HEREBY WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS GUARANTY AND.. THE. OBLIGATIONS.. ARISING. H.EREU.NDER- SHALL, BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA. TO THE FULLEST EXTENT PERMITTED BY LAW, GUARANTORS HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVE ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS GUARANTY OR THE OTHER LOAN DOCUMENTS, AND THIS GUARANTY AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW. (b) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST AGENT, ANY LENDER OR EITHER GUARANTOR ARISING OUT OF OR RELATING TO THIS GUARANTY MAY AT AGENT'S OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, AND GUARANTORS WAIVE ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND GUARANTORS HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. Section 72 Provisions Subject to Applicable Law. All rights, powers and remedies provided in this Guaranty may be exercised only to the extent that the exercise thereof does not violate any applicable provisions of law and are intended to be limited to the extent necessary so that they will not render this Guaranty invalid, unenforceable or not entitled to be recorded, registered or filed under the provisions of any applicable law. If any term of this Guaranty or any application thereof shall be invalid, illegal or unenforceable in any respect, the remainder of this Guaranty shall be construed without such provision and this Guaranty and any other application of the term shall not be affected thereby. Section 7.3. TRIAL BY JURY. GUARANTORS, AGENT AND EACH LENDER EACH HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, SUIT, COUNTERCLAIM, CROSSCLAIM OR OTHERWISE, WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING DIRECTLY OR INDIRECTLY TO THE LOAN EVIDENCED BY THE NOTE, THE APPLICATION FOR THE LOAN EVIDENCED BY THE NOTE, THIS GUARANTY, THE NOTE OR THE OTHER LOAN DOCUMENTS, THE PROPERTY OR ANY ACTS OR OMISSIONS OF AGENT OR ANY LENDER, 14 84189472 7 AND EACH OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES OR AGENTS IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY GUARANTORS, AGENT AND EACH LENDER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. GUARANTORS, AGENT AND EACH LENDER ARE-~EACIL~HEREBY AUTHORIZEDWTO.-FILE. A- COPY OF.XHIIS. SECTION I.NiANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER. ARTICLE VIII DEFINITIONS; CONSTRUCTION All capitalized terms not defined herein shall have the respective meanings set forth in the Loan Agreement. Section 8. 1. Definitions and Construction. Unless the context clearly indicates a contrary intent or unless otherwise specifically provided herein, words used in this Guaranty may be used interchangeably in singular or plural form and the word "Guarantor" shall mean "each Guarantor" the word "Agent" shall mean "Agent and any successor Agent pursuant to the Loan Agreement", the word "Lender" shall mean "each Lender and each and any subsequent holder(s) of the Note or any part thereof' (but not future holders of the Note which are not Lenders party to the Loan Agreement), the word "Borrower" shall include any new or successor corporation, association, partnership (general or limited), limited liability company, joint venture, trust or other individual or organization formed as a result of any merger or reorganization, the word "Note" shall mean "the Note and any other evidence of indebtedness secured by the Loan Documents," the word "Property" shall include any portion of the Property and any interest therein, and the phrases "attorneys' fees", "legal fees" and "counsel fees" shall include any and all attorneys', paralegal, legal assistant and law clerk fees and disbursements for retained firms, and including, but not limited to, fees and disbursements at the pre-trial, trial and appellate levels incurred or paid by Agent or any Lender in protecting its interest in the Property, the Leases and the Rents and enforcing its rights hereunder. Wherever pursuant to this Guaranty it is provided that Guarantor shall pay any costs and expenses, such costs and expenses shall include, but not be limited to, legal fees as defined above. Whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural and vice versa. All references to sections, subsections, paragraphs, schedules and exhibits are to sections, subsections, paragraphs, schedules and exhibits in or to this Guaranty unless otherwise specified. The headings and captions of various Articles and Sections of this Guaranty are for convenience of reference only and are not to be construed as defining or limiting, in any way, the scope or intent of the provisions hereof. Unless otherwise specified, the words "hereof', "herein" and "hereunder" and words of similar import when used in this Guaranty shall refer to this Guaranty as a whole and not to any particular provision of this Guaranty. The words "includes", "including" and similar terms shall be construed as if followed by the words "without limitation". Whenever in this Guaranty any consent, approval, determination or decision of Agent is to be made by Agent, or any matter is to be satisfactory to Agent, then unless expressly provided to the contrary, such provision shall be deemed to mean that such consent, approval, determination or decision of 15 84189472_7 Agent or determination whether a matter is satisfactory shall be made by Agent in its sole and absolute discretion for any or no reason and shall be final and conclusive. In the event that a claim or adjudication is made that Agent or any Lender or its agents have acted unreasonably or unreasonably delayed (or refrained from) acting in any case where, by law or under this Guaranty or the other Loan Documents, Agent or such Lender or such agent, as the case may be, has an obligation to act reasonably or promptly, neither Agent nor such Lender nor its agents shall. be-l.iable.- for an.ymonetary.damages,.and..Guar.antors'. and/or IBartower!s.sole.remedy -shalbe limited to commencing an action seeking injunctive relief or declaratory judgment. Any action or proceeding to determine whether Agent or a Lender has acted reasonably shall be determined by an action seeking declaratory judgment. Any reference in this Guaranty or in any other Loan Document to any Loan Document shall be deemed to include references to such documents. as the same may hereafter be amended, modified, supplemented, extended, replaced and/or restated from time to time (and, in the case of any note or other instrument, to any instrument issued in substitution therefor). The parties hereto acknowledge that they were represented by counsel in connection with negotiation and drafting of this Guaranty and that this Guaranty shall not be subject to the principle of construing its meaning against the party which drafted same. ARTICLE IX MISCELLANEOUS PROVISIONS Section 9. 1. No Oral Change. This Guaranty, and any provisions hereof, may not be modified, amended, waived, extended, restated, 'changed, discharged or terminated orally or by any act or failure to act on the part of either Guarantor, Agent or any Lender, but only by an agreement in writing signed by the party against whom enforcement of any modification, amendment, waiver, extension, restatement, change, discharge or termination is sought. Agent, as agent- -for the Lenders may execute any such modification, amendment, waiver, extension, change, discharge or termination and Lenders' execution thereof shall not be required. Section 9.2. Successors and Assigns. This Guaranty shall be binding upon Guarantors and Agent and inure to the benefit of Guarantors, Agent and each Lender and their respective successors and permitted assigns forever. Section 9.3. Recitals. The reci tal 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 9.4. Rights and Remedies. If either Guarantor becomes liable for any Indebtedness owing by Borrower to Lender, by endorsement or otherwise, other than under this Guaranty, such liability shall not be in any manner impaired or affected hereby and the rights of Agent and Lender hereunder shall be cumulative of any and all other rights that Agent and/or Lender may ever have against such Guarantor. The exercise by Agent of any right or remedy hereunder or under any other instrument, or at law or in equity, shall not preclude the concurrent or subsequent exercise of any other right or remedy. Section 9.5. Entirety. THIS GUARANTY EMBODIES THE FINAL, ENTIRE AGREEMENT OF GUARANTORS, AGENT AND LENDER WITH RESPECT TO 16 8418947277 OF THE GUARANTEED OBLIGATIONS AND GUARANTY GUARANTORS' AGREEMENTS, AND ALL PRIOR COMMITMENTS, SUPERSEDES ANY REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF. THIS GUARANTY IS INTENDED BY GUARANTORS, AGENT AND LENDER AS A FINAL AND COMPLETE EXPRESSION OF THE TERMS OF THE GUARANTY, AND NO COURSE OF DEALING BETWEEN GUARANTORS..AGENT AND. LENDER,N.C.-COURS&OF PERFORMANCE, NO TRADF, PRACTICES, AND NO EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE OF ANY NATURE SHALL BE USED TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF THIS GUARANTY AGREEMENT. THERE ARE NO ORAL AGREEMENTS BETWEEN GUARANTORS, AGENT AND LENDER. Delay Not a Waiver. Neither any failure nor any delay on the part of Section 9.6. any party hereto in insisting upon strict performance of any term, condition, covenant or agreement, or exercising any right, power, remedy or privilege hereunder, or any other document or instrument entered into or delivered in connection herewith or pursuant hereto, shall operate as or constitute a waiver thereof, nor shall a single or partial exercise thereof preclude any other future exercise, or-the exercise of any other right, power, remedy or privilege. A waiver of one default with respect to any Person shall not be construed to be a waiver of any subsequent default with respect to such Person or any other Person or to impair any remedy, right or power consequent thereon. Section 9.7. No Joint Venture or Partnership; No Third Party Beneficiarie s. (a) Guarantors, Agent and Lenders intend that the relationships created hereunder and under the other Loan Documents be solely that of guarantor, agent and lenders. Nothing herein or therein is intended to create a joint venture, partnership, tenancy-in-common, or joint tenancy relationship between Guarantors and Agent or Lenders nor to grant Agent or Lenders any interest in the. Property other than that of mortgagee, assignee, secured party, beneficiary or lender.. (b) This Guaranty and the other Loan Documents are solely for the benefit of and nothing contained in this Guaranty or the other Loan Documents shall be Agent and Lenders deemed to confer upon anyone other than Agent and Lenders any right to insist upon or to enforce the performance or observance of any of the obligations contained herein or therein. All conditions to the obligations of Lenders to make Advances under the Loan Documents are imposed solely and exclusively for the benefit of Agent and Lenders and no other Person shall have standing to require satisfaction of such conditions in accordance with their terms or be entitled to assume that Agent or Lenders will refuse to make Advances in the absence of strict compliance with any or all thereof and no other-Person shall under any circumstances be deemed to be a beneficiary of such conditions, any or all of which may be freely waived in whole or in part by Agent on behalf of Lenders if, in Agent's sole discretion, Agent deems it advisable or desirable to do so. In addition, none of Agent or any Lender is the agent or representative of Guarantors and this Guaranty shall not make Agent or any Lender liable to any Person for goods delivered to or services performed by them upon the Property, or for debts or claims accruing to such parties against Borrower and there is no contractual relationship, either express or implied, 17 8418947? 7 between any Agent and/or any Lender and any Person supplying any work, labor or materials for the Improvements. Section 9.8. Limitation on Agent's Responsibility. No provision of this Guaranty shall operate to place any obligation or liability for the control, care, management or repair of the Property upon Agent or any Lender, nor shall it operate to make Agent or any Lender responsible or, liable- for.- any cmitted on. the. .Property, by-the Tenants.-or any.. other-at. Person, or for any dangerous or defective condition of the Property, or for any negligence in the management, upkeep, repair or control of the Property resulting in loss or injury or death to any Tenant, licensee, employee or stranger. Nothing herein contained shall be construed as constituting Agent or any Lender a "mortgagee in possession." Section 9.9. Joint and Several Liability, Release of Patrick Smith. (a) All covenants (both affirmative and negative) and all other obligations hereunder shall. be the joint and several obligation of each Guarantor and a default or event of default by any such Person shall be deemed a default or event of default by all Guarantors; provided that no Guarantor shall be liable for the breach of any representation or warranty set forth in Article III or any covenant set forth in Article IV by the other Guarantor; and (b) In the event that all of the direct and indirect interests of Patrick Smith or any Affiliate of Patrick Smith in the Borrower are acquired by one or more Affiliates of TRCLP in a transaction that constitutes a.Permitted Transfer under the Loan Agreement, then from and after the date on which such transfer is effective, Patrick Smith shall have no further obligations under this Guaranty. At Patrick Smith's reasonable request and sole expense, Agent shall execute such additional instruments as are necessary to confirm Patrick Smith's release of his obligationS, under this Guaranty. Section 9.10. Time of the Essence. Time is of the essence with respect to the performance by Guarantors of their obligations pursuant to this Guaranty. Section 9.11. 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 may be executed. in- several counterparts, each of which counterparts shall be deemed an original instrument and all of which together shall constitute a single Guaranty. The failure of any party hereto to execute this Guaranty, or any counterpart hereof, shall not relieve the other signatories from their obligations hereunder. [NO FURTHER TEXT ON THIS PAGE] 18 84189)472 7 IN WITNESS WHEREOF, Guarantors have duly executed this Guaranty as of the day and year first written above. GUARANTORS: THlE RELATED CONPANIES, L.P., a New York limited partnership By: The Related Realty Group, Inc., a Delaware corporation, its general partner By: Name: Title: V L Signatr Page Guaranty of Reooe Obligations 84189472 2 PATRICK SMITH Signature Page Guaranty of Recourse Obligations