EXHIBIT 99.5
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GUARANTY OF RECOURSE OBLIGATIONS
made by
BEHRINGER HARVARD REIT I, INC.
as Guarantor,
in favor of
CITIGROUP GLOBAL MARKETS REALTY CORP.
Dated as of January 24, 2006
GUARANTY OF RECOURSE OBLIGATIONS
This GUARANTY (this "GUARANTY"), dated as of January 24, 2006, made by
BEHRINGER HARVARD REIT I, INC. a Maryland corporation ("BEHRINGER REIT"), having
an address at Behringer Harvard Holdings, LLC, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ("GUARANTOR"), in favor of CITIGROUP GLOBAL MARKETS REALTY
CORP., a New York corporation (together with its successors and assigns,
hereinafter referred to as "LENDER"), having an address at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
R E C I T A L S:
A. Pursuant to that certain Loan Agreement dated as of the date
hereof (as the same may be amended, modified, supplemented or replaced from time
to time, the "LOAN AGREEMENT") between Behringer Harvard Riverview, LLC, a
Delaware limited liability company (the "BORROWER") and Lender, Lender has
agreed to make a loan (the "Loan") to Borrower in the maximum principal amount
of up to $30,250,000.00, subject to the terms and conditions of the Loan
Agreement;
B. As a condition to Lender's making the Loan, Lender is requiring
that Guarantor execute and deliver to Lender this Guaranty; and
C. Guarantor hereby acknowledges that it will materially benefit
from Lender's agreeing to make the Loan;
NOW, THEREFORE, in consideration of the premises set forth herein and as
an inducement for and in consideration of the agreement of Lender to make the
Loan pursuant to the Loan Agreement, Guarantor hereby agrees, covenants,
represents and warrants to Lender as follows:
1. DEFINITIONS.
(a) All capitalized terms used and not defined herein shall
have the respective meanings given such terms in the Loan Agreement.
(b) The term "GUARANTEED OBLIGATIONS" means (i) Borrower's
Recourse Liabilities (the "RECOURSE LIABILITY GUARANTEED OBLIGATIONS"), (ii) in
addition to and without limiting the obligations of Guarantor under this
Guaranty with respect to the Recourse Liability Guaranteed Obligations, payment
of the unpaid balance of the Debt, subject to a maximum liability limitation
under this clause (ii) of $700,000 (in the event of the occurrence of a
Springing Recourse Event this clause (ii) shall be superseded by the following
clause (iii) and the foregoing $700,000 limitation on Guarantor's liability
shall no longer apply), and (iii) from and after the date that any Springing
Recourse Event occurs, payment of the entire unpaid balance of the Debt (and
whether accrued prior to, on or after such date).
2. GUARANTY.
(a) Guarantor hereby irrevocably, absolutely and
unconditionally guarantees to Lender the full, prompt and complete payment when
due of the Guaranteed Obligations.
(b) All sums payable to Lender under this Guaranty shall be
payable on demand and without reduction for any offset, claim, counterclaim or
defense.
(c) Guarantor hereby agrees to indemnify, defend and save
harmless Lender from and against any and all costs, losses, liabilities, claims,
causes of action, expenses and damages, including reasonable attorneys' fees and
disbursements, which Lender may suffer or which otherwise may arise by reason of
Borrower's failure to pay any of the Guaranteed Obligations when due,
irrespective of whether such costs, losses, liabilities, claims, causes of
action, expenses or damages are incurred by Lender prior or subsequent to (i)
Lender's declaring the Principal, interest and other sums evidenced or secured
by the Loan Documents to be due and payable, (ii) the commencement or completion
of a judicial or non-judicial foreclosure of the Mortgage or (iii) the
conveyance of all or any portion of the Property by deed-in-lieu of foreclosure.
(d) Guarantor agrees that no portion of any sums applied
(other than sums received from Guarantor in full or partial satisfaction of its
obligations hereunder), from time to time, in reduction of the Debt shall be
deemed to have been applied in reduction of the Guaranteed Obligations until
such time as the Debt has been paid in full, or Guarantor shall have made the
full payment required hereunder, it being the intention hereof that the
Guaranteed Obligations shall be the last portion of the Debt to be deemed
satisfied.
3. REPRESENTATIONS AND WARRANTIES. Guarantor hereby represents and
warrants (as to itself) to Lender as follows (which representations and
warranties shall be given as of the date hereof and shall survive the execution
and delivery of this Guaranty):
(a) ORGANIZATION, AUTHORITY AND EXECUTION. Behringer REIT is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Maryland, and has all necessary power and authority to own
its properties and to conduct its business as presently conducted or proposed to
be conducted and to enter into and perform this Guaranty and all other
agreements and instruments to be executed by it in connection herewith. This
Guaranty has been duly executed and delivered by Guarantor.
(b) ENFORCEABILITY. This Guaranty constitutes a legal, valid
and binding obligation of Guarantor, enforceable against Guarantor in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally.
(c) NO VIOLATION. The execution, delivery and performance by
Guarantor of its obligations under this Guaranty has been duly authorized by all
necessary action, and do not and will not violate any law, regulation, order,
writ, injunction or decree of any court or governmental body, agency or other
instrumentality applicable to a Guarantor, or result in a breach of any of the
terms, conditions or provisions of, or constitute a default under, or
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result in the creation or imposition of any mortgage, lien, charge or
encumbrance of any nature whatsoever upon any of the assets of a Guarantor
pursuant to the terms of a Guarantor's articles of organization, or any
mortgage, indenture, agreement or instrument to which a Guarantor is a party or
by which it or any of its properties is bound. No Guarantor is in default under
any other guaranty which it has provided to Lender.
(d) NO LITIGATION. There are no actions, suits or
proceedings at law or at equity, pending or, to Guarantor's best knowledge,
threatened against or affecting a Guarantor or which involve or might involve
the validity or enforceability of this Guaranty or which might materially
adversely affect the financial condition of a Guarantor or the ability of a
Guarantor to perform any of its obligations under this Guaranty. No Guarantor is
in default beyond any applicable grace or cure period with respect to any order,
writ, injunction, decree or demand of any Governmental Authority which might
materially adversely affect the financial condition of Guarantor or the ability
of Guarantor to perform any of its obligations under this Guaranty.
(e) CONSENTS. All consents, approvals, orders or
authorizations of, or registrations, declarations or filings with, all
Governmental Authorities (collectively, the "CONSENTS") that are required in
connection with the valid execution, delivery and performance by Guarantor of
this Guaranty have been obtained and Guarantor agrees that all Consents required
in connection with the carrying out or performance of any of Guarantor's
obligations under this Guaranty will be obtained when required.
(f) FINANCIAL STATEMENTS AND OTHER INFORMATION. All
financial statements of Guarantor heretofore delivered to Lender are true and
correct in all material respects and fairly present the financial condition of
Guarantor as of the respective dates thereof, and no materially adverse change
has occurred in the financial conditions reflected therein since the respective
dates thereof. None of the aforesaid financial statements or any certificate or
statement furnished to Lender by or on behalf of Guarantor in connection with
the transactions contemplated hereby, and none of the representations and
warranties in this Guaranty contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
contained therein or herein not misleading. No Guarantor is insolvent within the
meaning of the United States Bankruptcy Code or any other applicable law, code
or regulation and the execution, delivery and performance of this Guaranty will
not render any Guarantor insolvent.
(g) CONSIDERATION. Guarantor is the owner, directly or
indirectly, of legal and beneficial equity interests in Borrower, and as such
will materially benefit from the making of the Loan.
4. FINANCIAL STATEMENTS. BEHRINGER REIT shall deliver to Lender,
(a) within 120 days after the end of each fiscal year of BEHRINGER REIT, a
complete copy of BEHRINGER REIT's annual financial statements, (b) if requested
by Lender, within 60 days after the end of each fiscal quarter of BEHRINGER
REIT, financial statements (including a balance sheet as of the end of such
fiscal quarter and a statement of income and expense for such fiscal quarter)
certified by BEHRINGER REIT and in form, content, level of detail and scope
reasonably satisfactory to Lender, and (c) 20 days after request by Lender, such
other financial information with respect to BEHRINGER REIT as Lender may
reasonably request.
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5. UNCONDITIONAL CHARACTER OF OBLIGATIONS OF GUARANTOR.
(a) The obligations of Guarantor hereunder shall be
irrevocable, absolute and unconditional, irrespective of the validity,
regularity or enforceability, in whole or in part, of the other Loan Documents
or any provision thereof, or the absence of any action to enforce the same, any
waiver or consent with respect to any provision thereof, the recovery of any
judgment against Borrower, a Guarantor or any other Person or any action to
enforce the same, any failure or delay in the enforcement of the obligations of
Borrower under the other Loan Documents or Guarantor under this Guaranty, or any
setoff, counterclaim, and irrespective of any other circumstances which might
otherwise limit recourse against a Guarantor by Lender or constitute a legal or
equitable discharge or defense of a guarantor or surety. Lender may enforce the
obligations of Guarantor under this Guaranty by a proceeding at law, in equity
or otherwise, independent of any loan foreclosure or similar proceeding or any
deficiency action against Borrower or any other Person at any time, either
before or after an action against the Property or any part thereof, Borrower or
any other Person. THIS GUARANTY IS A GUARANTY OF PAYMENT AND PERFORMANCE AND NOT
MERELY A GUARANTY OF COLLECTION. Guarantor waives diligence, notice of
acceptance of this Guaranty, filing of claims with any court, any proceeding to
enforce any provision of any other Loan Document, against Guarantor, Borrower or
any other Person, any right to require a proceeding first against Borrower or
any other Person, or to exhaust any security (including, without limitation, the
Property) for the performance of the Guaranteed Obligations or any other
obligations of Borrower or any other Person, or any protest, presentment, notice
of default or other notice or demand whatsoever (except to the extent expressly
provided to the contrary in this Guaranty).
(b) The obligations of Guarantor under this Guaranty, and
the rights of Lender to enforce the same by proceedings, whether by action at
law, suit in equity or otherwise, shall not be in any way affected by any of the
following:
(i) any insolvency, bankruptcy, liquidation,
reorganization, readjustment, composition, dissolution, receivership,
conservatorship, winding up or other similar proceeding involving or
affecting Borrower, the Property or any part thereof, a Guarantor or any
other Person;
(ii) any failure by Lender or any other Person,
whether or not without fault on its part, to perform or comply with any
of the terms of the Loan Agreement, or any other Loan Documents, or any
document or instrument relating thereto;
(iii) the sale, transfer or conveyance of the Property
or any interest therein to any Person, whether now or hereafter having
or acquiring an interest in the Property or any interest therein and
whether or not pursuant to any foreclosure, trustee sale or similar
proceeding against Borrower or the Property or any interest therein;
(iv) the conveyance to Lender, any Affiliate of
Lender or Lender's nominee of the Property or any interest therein by a
deed-in-lieu of foreclosure;
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(v) the release of Borrower or any other Person from
the performance or observance of any of the agreements, covenants, terms
or conditions contained in any of the Loan Documents by operation of law
or otherwise; or
(vi) the release in whole or in part of any
collateral for any or all Guaranteed Obligations or for the Loan or any
portion thereof.
(c) Except as otherwise specifically provided in this
Guaranty, Guarantor hereby expressly and irrevocably waives all defenses in an
action brought by Lender to enforce this Guaranty based on claims of waiver,
release, surrender, alteration or compromise and all setoffs, reductions, or
impairments, whether arising hereunder or otherwise.
(d) Lender may deal with Borrower and Affiliates of Borrower
in the same manner and as freely as if this Guaranty did not exist and shall be
entitled, among other things, to grant Borrower or any other Person such
extension or extensions of time to perform any act or acts as may be deemed
advisable by Lender, at any time and from time to time, without terminating,
affecting or impairing the validity of this Guaranty or the obligations of
Guarantor hereunder.
(e) No compromise, alteration, amendment, modification,
extension, renewal, release or other change of, or waiver, consent, delay,
omission, failure to act or other action with respect to, any liability or
obligation under or with respect to, or of any of the terms, covenants or
conditions of, the Loan Documents shall in any way alter, impair or affect any
of the obligations of Guarantor hereunder, and Guarantor agrees that if any Loan
Document is modified with Lender's consent, the Guaranteed Obligations shall
automatically be deemed modified to include such modifications.
(f) Lender may proceed to protect and enforce any or all of
its rights under this Guaranty by suit in equity or action at law, whether for
the specific performance of any covenants or agreements contained in this
Guaranty or otherwise, or to take any action authorized or permitted under
applicable law, and shall be entitled to require and enforce the performance of
all acts and things required to be performed hereunder by Guarantor. Each and
every remedy of Lender shall, to the extent permitted by law, be cumulative and
shall be in addition to any other remedy given hereunder or now or hereafter
existing at law or in equity.
(g) No waiver shall be deemed to have been made by Lender of
any rights hereunder unless the same shall be in writing and signed by Lender,
and any such waiver shall be a waiver only with respect to the specific matter
involved and shall in no way impair the rights of Lender or the obligations of
Guarantor to Lender in any other respect or at any other time.
(h) At the option of Lender, Guarantor may be joined in any
action or proceeding commenced by Lender against Borrower in connection with or
based upon any other Loan Documents and recovery may be had against any
Guarantor in such action or proceeding or in any independent action or
proceeding against Guarantor to the extent of Guarantor's liability hereunder,
without any requirement that Lender first assert, prosecute or exhaust any
remedy or
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claim against Borrower or any other Person, or any security for the obligations
of Borrower or any other Person.
(i) Guarantor agrees that this Guaranty shall continue to be
effective or shall be reinstated, as the case may be, if at any time any payment
is made by Borrower or a Guarantor to Lender and such payment is rescinded or
must otherwise be returned by Lender (as determined by Lender in its sole and
absolute discretion) upon insolvency, bankruptcy, liquidation, reorganization,
readjustment, composition, dissolution, receivership, conservatorship, winding
up or other similar proceeding involving or affecting Borrower or a Guarantor,
all as though such payment had not been made.
(j) In the event that Guarantor shall advance or become
obligated to pay any sums under this Guaranty or in connection with the
Guaranteed Obligations or in the event that for any reason whatsoever Borrower
or any subsequent owner of the Property or any part thereof is now, or shall
hereafter become, indebted to a Guarantor, Guarantor agrees that (i) the amount
of such sums and of such indebtedness and all interest thereon shall at all
times be subordinate as to lien, the time of payment and in all other respects
to all sums, including principal and interest and other amounts, at any time
owed to Lender under the Loan Documents, and (ii) Guarantor shall not be
entitled to enforce or receive payment thereof until all principal, interest and
other sums due pursuant to the Loan Documents have been paid in full. Nothing
herein contained is intended or shall be construed to give Guarantor any right
of subrogation in or under the Loan Documents or any right to participate in any
way therein, or in the right, title or interest of Lender in or to any
collateral for the Loan, notwithstanding any payments made by a Guarantor under
this Guaranty, until the actual and irrevocable receipt by Lender of payment in
full of all principal, interest and other sums due with respect to the Loan or
otherwise payable under the Loan Documents. If any amount shall be paid to a
Guarantor on account of such subrogation rights at any time when any such sums
due and owing to Lender shall not have been fully paid, such amount shall be
paid by Guarantor to Lender for credit and application against such sums due and
owing to Lender.
(k) Guarantor's obligations hereunder shall survive a
foreclosure, deed-in-lieu of foreclosure or similar proceeding involving the
Property and the exercise by Lender of any or all of its remedies pursuant to
the Loan Documents and Guarantor expressly agrees that to the extent necessary
to satisfy its obligations under Section 2 hereof, it shall be and remain liable
for any deficiency remaining after foreclosure of any Mortgage or security
interest securing the Note, notwithstanding provisions of applicable law that
may prevent the Lender from enforcing such deficiency against the Borrower.
6. COVENANTS.
(a) As used in this Section 6, the following terms shall
have the respective meanings set forth below:
(i) "GAAP" shall mean generally accepted accounting
principles, consistently applied.
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(ii) "LIQUID ASSETS" shall mean assets in the form of
cash, cash equivalents, obligations of (or fully guaranteed as to
principal and interest by) the United States or any agency or
instrumentality thereof (provided the full faith and credit of the
United States supports such obligation or guarantee), certificates of
deposit issued by a commercial bank having net assets of not less than
$500 million, securities listed and traded on a recognized stock
exchange or traded over the counter and listed in the National
Association of Securities Dealers Automatic Quotations, or liquid debt
instruments that have a readily ascertainable value and are regularly
traded in a recognized financial market.
(iii) "NET WORTH" shall mean, as of a given date, (x)
the total assets of a Guarantor as of such date less (y) Guarantor's
total liabilities as of such date, determined in accordance with GAAP.
(b) Guarantor shall not, at any time while a default in the
payment of the Guaranteed Obligations has occurred and is continuing, either (i)
enter into or effectuate any transaction with any Affiliate which would reduce
the Net Worth of Guarantor, including the payment of any dividend or
distribution to a shareholder, or the redemption, retirement, purchase or other
acquisition for consideration of any stock in Guarantor or (ii) sell, pledge,
mortgage or otherwise transfer to any Person any of Guarantor's assets, or any
interest therein, except for fair value.
7. ENTIRE AGREEMENT/AMENDMENTS. This instrument represents the
entire agreement between the parties with respect to the subject matter hereof.
The terms of this Guaranty shall not be waived, altered, modified, amended,
supplemented or terminated in any manner whatsoever except by written instrument
signed by Lender and Guarantor.
8. SUCCESSORS AND ASSIGNS. This Guaranty shall be binding upon
Guarantor, and Guarantor's estate, heirs, personal representatives, successors
and assigns, may not be assigned or delegated by any Guarantor, and shall inure
to the benefit of Lender and its successors and assigns.
9. APPLICABLE LAW AND CONSENT TO JURISDICTION. This Guaranty shall
be governed by, and construed in accordance with, the substantive laws of the
State of New York. Guarantor irrevocably (a) agrees that any suit, action or
other legal proceeding arising out of or relating to this Guaranty may be
brought in a court of record in the City and County of New York or in the Courts
of the United States of America located in the Southern District of New York,
(b) consents to the jurisdiction of each such court in any such suit, action or
proceeding, and (c) waives any objection which it may have to the laying of
venue of any such suit, action or proceeding in any of such courts and any claim
that any such suit, action or proceeding has been brought in an inconvenient
forum. Guarantor irrevocably consents to the service of any and all process in
any such suit, action or proceeding by service of copies of such process to
Guarantor at its address provided in Section 14 hereof. Nothing in this Section
9, however, shall affect the right of Lender to serve legal process in any other
manner permitted by applicable law or affect the right of Lender to bring any
suit, action or proceeding against Guarantor or its property in the courts of
any other jurisdictions.
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10. SECTION HEADINGS. The headings of the sections and paragraphs of
this Guaranty have been inserted for convenience of reference only and shall in
no way define, modify, limit or amplify any of the terms or provisions hereof.
11. SEVERABILITY. Any provision of this Guaranty which may be
determined by any competent authority to be prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. To the extent permitted by applicable law, Guarantor hereby
waives any provision of law which renders any provision hereof prohibited or
unenforceable in any respect.
12. WAIVER OF TRIAL BY JURY. GUARANTOR HEREBY WAIVES THE RIGHT OF
TRIAL BY JURY IN ANY LITIGATION, ACTION OR PROCEEDING ARISING HEREUNDER OR IN
CONNECTION THEREWITH.
13. Intentionally Deleted.
14. NOTICES. All notices, consents, approvals and requests required
or permitted hereunder (a "Notice") shall be given in writing and shall be
effective for all purposes if either hand delivered with receipt acknowledged,
or by a nationally recognized overnight delivery service (such as Federal
Express), or by certified or registered United States mail, return receipt
requested, postage prepaid, or by facsimile and confirmed by a successful
facsimile confirmation report, in each case addressed as follows (or to such
other address or Person as a party shall designate from time to time by notice
to the other party): If to Lender: Citigroup Global Markets Realty Corp., ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Commercial
Mortgage Finance, Telecopier (▇▇▇) ▇▇▇-▇▇▇▇, with a copy to: Sidley Austin LLP,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, Esq., Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇; if to Guarantor: ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief Legal Counsel,
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇, and ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇. A notice shall be deemed to have been given:
in the case of hand delivery, at the time of delivery; in the case of facsimile,
at the time that such facsimile is confirmed by successful confirmation report
if so confirmed on a Business Day (or otherwise, on the next Business day); in
the case of registered or certified mail, when delivered or the first attempted
delivery on a Business Day; or in the case of overnight delivery, upon the first
attempted delivery on a Business Day.
15. GUARANTOR'S RECEIPT OF LOAN DOCUMENTS. Guarantor by its
execution hereof acknowledges receipt of true copies of all of the Loan
Documents, the terms and conditions of which are hereby incorporated herein by
reference.
16. INTEREST; EXPENSES.
(a) If Guarantor fails to pay all or any sums due hereunder
upon demand by Lender, the amount of such sums payable by Guarantor to Lender
shall bear interest from the date of demand until paid at the Default Rate in
effect from time to time.
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(b) Guarantor hereby agrees to pay all costs, charges and
expenses, including reasonable attorneys' fees and disbursements, that may be
incurred by Lender in enforcing the covenants, agreements, obligations and
liabilities of Guarantor under this Guaranty.
17. Intentionally Omitted.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK. GUARANTOR'S
SIGNATURE FOLLOWS ON NEXT PAGE]
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IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the date
first above written.
BEHRINGER HARVARD REIT I, INC.,
a Maryland corporation
By:_____________________________________
Name: _______________________________
Title: ____________________________