Exhibit 99.8
FIRST AMENDMENT TO SECURITY AGREEMENT
This First Amendment to Security Agreement, dated as of March 15, 2002
(this "Amendment"), is made and entered into by and between Shelbourne
Properties II, L.P., a Delaware limited partnership ("Pledgor"), and Shelbourne
Management Company, LLC, a Delaware limited liability company ("Secured Party).
RECITALS:
WHEREAS, in consideration of the execution and delivery of that certain
Secured Promissory Note, dated as of February 14, 2002 (the "Note"), by Pledgor
in favor of Secured Party and Secured Party's execution and delivery of that
certain Purchase and Contribution Agreement, dated as of February 14, 2002 (the
"Purchase Agreement"), by and among Pledgor, Secured Party and certain other
parties, the parties hereto entered into that certain Security Agreement, dated
as of February 14, 2002 (the "Security Agreement");
WHEREAS, pursuant to that certain Joint Venture Agreement of Seattle
Landmark Joint Venture, dated as of November 24, 1986, by and between Integrated
Resources High Equity Partners, Series 85, a California limited partnership, as
predecessor by merger to Shelbourne Properties I, L.P., a Delaware limited
partnership ("Shelbourne I"), and High Equity Partners L.P. -Series 86, a
Delaware limited partnership, as predecessor by merger to Pledgor, that certain
joint venture (the "Seattle Landmark Joint Venture") was formed, and the Seattle
Landmark Joint Venture owns certain real property commonly known as the Seattle
Tower, located at 0000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx (the "Seattle
Property");
WHEREAS, pursuant to that certain Joint Venture Agreement of Tri-Columbus
Associates, dated as of September 15, 1988, by and between High Equity Partners
L.P. -Series 88, a Delaware limited partnership, as predecessor by merger to
Shelbourne Properties III, L.P., a Delaware limited partnership ("Shelbourne
III"), IR Columbus Corp., a Delaware corporation, and High Equity Partners L.P.
-Series 86, a Delaware limited partnership, as predecessor by merger to Pledgor,
that certain joint venture ("Tri-Columbus Associates") was formed, and
Tri-Columbus Associates owns certain real property commonly known as
Tri-Columbus -Volvo, located at 0000 Xxxxxxxxx Xxxxx, Xxxxxxxxxxx, Xxxx (the
"Westerville Property");
WHEREAS, Shelbourne III has acquired the interest of IR Columbus Corp. in
Tri-Columbus Associates;
WHEREAS, pursuant to that certain Joint Venture Agreement of Century Park I
Joint Venture, dated as of September 2, 1986, by and between Shelbourne I, and
High Equity Partners L.P. -Series 86, a Delaware limited partnership, as
predecessor by merger to Pledgor, that certain joint venture (the "Century Park
I Joint Venture") was formed, and the Century Park I Joint Venture owns certain
real property commonly known as Century Park I, located at 8315, 8333, 0000
Xxxxxxx Xxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx (the "San Diego Property");
WHEREAS, in lieu of Pledgor granting mortgages to Secured Party encumbering
(i) the Seattle Property, (ii) the Westerville Property and (iii) the San Diego
Property pursuant to
Section 5.6 of the Purchase Agreement, Pledgor has agreed to pledge, and grant a
security interest in, Pledgor's ownership interest to Secured Party in (i) the
Seattle Landmark Joint Venture, (ii) Tri-Columbus Associates and (iii) the
Century Park I Joint Venture to Secured Party as security for Pledgor's
obligations under the Note and the Purchase Agreement;
WHEREAS, Pledgor and Secured party desire to amend the terms of the
Security Agreement as provided in this Amendment; and
WHEREAS, the foregoing recitals are intended to be an integral part of this
Amendment.
NOW, THEREFORE, in consideration of Ten Dollars ($10.00) paid in hand the
foregoing premises and other good and valuable consideration, the receipt an
sufficiency of which are hereby acknowledged, Pledgor and Secured Party agree to
amend the Security Agreement on the date hereof in the following particulars:
1. Capitalized terms used in this Amendment and not defined herein shall
have the meaning provided in the Security Agreement.
2. Definitions. The Security Agreement is hereby amended by adding the
following definitions to Section 6.1(b):
"Joint Ventures" means collectively the following joint ventures: (i)
000 Xxxxxxxx Joint Venture, a Delaware general partnership; (ii) the
Seattle Landmark Joint Venture, a Delaware general partnership; (iii)
Tri-Columbus Associates, a Delaware general partnership; and (iv) the
Century Park I Joint Venture, a Delaware general partnership.
"Lien" means any mortgage, lien, charge, restriction, pledge, security
interest, option, lease or sublease, claim, proxy, right of any third
party, easement, encroachment or encumbrance.
"Permitted Real Property Liens" means
(a) Liens in favor of carriers, warehousemen, mechanics, materialmen and
landlords granted in the ordinary course of business for amounts not
overdue or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on Pledgor's books;
(b) Liens incurred or deposits made in the ordinary course of business in
connection with worker's compensation, unemployment insurance or other
forms of governmental insurance or benefits, or to secure performance
of tenders, statutory obligations, bids, leases or other similar
obligations (other than for borrowed money) entered into in the
ordinary course of business or to secure obligations on surety and
appeal bonds or performance bonds;
(c) judgment Liens in existence for less than 45 days after the entry
thereof or with respect to which execution has been stayed or the
payment of which is covered in full (subject to a customary
deductible) by insurance maintained with responsible insurance
companies;
(d) easements, rights-of-way, zoning restrictions, minor defects or
irregularities in title and other similar encumbrances not interfering
in any material respect with the value or use of the property to which
such Lien is attached;
(e) Liens for taxes, assessments or other governmental charges or levies
not at the time delinquent or thereafter payable without penalty or
being diligently contested in good faith by appropriate proceedings
and for which adequate reserves in accordance with GAAP shall have
been set aside on Pledgor's books; and
(f) any Liens in existence as of the date hereof and which would be shown
on a title commitment prepared by a nationally recognized title
insurance company.
"Properties" means collectively the following properties: (i) the
property commonly know as 568-578 Broadway, located at 000-000 Xxxxxxxx,
Xxx Xxxx Xxxx, Xxx Xxxx; (ii) the property commonly known as the Seattle
Tower, located at 0000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx; (iii) property
commonly known as Tri-Columbus -Volvo, located at 0000 Xxxxxxxxx Xxxxx,
Xxxxxxxxxxx, Xxxx; and (iv) the property commonly known as Century Park I,
located at 8315, 8333, 0000 Xxxxxxx Xxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx.
3. Collateral. The Security Agreement is hereby amended by deleting from
Section 6.1(b) the definition of "Collateral" in its entirety and substitution
the following in place therefore:
"Collateral" shall mean all right, title and interest in, to and under
the interests in: (i) 000 Xxxxxxxx Joint Venture, a Delaware general
partnership, the joint venture owning 000-000 Xxxxxxxx xx Xxx Xxxx Xxxx;
(ii) the Seattle Landmark Joint Venture, a Delaware general partnership,
the joint venture owning certain real property commonly known as the
Seattle Tower, located at 0000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx, (xxx)
Tri-Columbus Associates, a Delaware general partnership, the joint venture
owning certain real property commonly known as Tri-Columbus -Volvo, located
at 0000 Xxxxxxxxx Xxxxx, Xxxxxxxxxxx, Xxxx, and (iv) the Century Park I
Joint Venture, a Delaware general partnership, owning certain real property
commonly known as Century Park I, located at 8315, 8333, 0000 Xxxxxxx Xxxx
Xxxxx, Xxx Xxxxx, Xxxxxxxxxx.
4. Preservation of Status of Security. The Security Agreement is hereby
amended by adding the following new subsections (c)(iii) and (d) at the end of
Section 3.1 as follows:
(c) (iii) Other than Permitted Real Property Liens, without the prior
written consent of the Secured Party, the Pledgor will not sell, assign,
transfer, pledge or
otherwise dispose of or encumber any of its rights in or to the Collateral
or any legal or beneficial interest therein, directly or indirectly or
consent to or authorize the sale, assignment, transfer, pledge, mortgage or
other disposition of or encumbrance of any of the Properties.
(d) Other Financing Statements. The Pledgor shall not file, or suffer
to be on file, or authorize or permit to be filed or to be on file, in any
jurisdiction, any financing statement, mortgage, deed of trust or like
instrument with respect to the Collateral or any of the Properties in which
the Secured Party is not named as the sole secured party, mortgagee or
beneficiary other than Permitted Real Property Liens.
5. Additional Covenants. The Security Agreement is hereby amended by adding
the following new Section 3.4, Section 3.5 and Section 3.6 to the end of Article
III as follows:
Section 3.4 Taxes; Compliance. The Pledgor shall (a) pay or cause to
be paid when due all Taxes, assessments and governmental charges levied or
assessed or imposed upon or with respect to the Collateral or any of the
Properties or its sale or other disposition and (b) comply with or cause to
be complied with all applicable laws relating to the Collateral and each of
the Properties.
Section 3.5 Ownership and Defense of Collateral and Properties.
(a) The Pledgor shall at all times (a) have good title to, and be the
sole owner of, each asset that is Collateral, free of all of the following
(i) all Liens other than Permitted Liens, (ii) in the case of any
Collateral that is a financial asset, any adverse claim (as defined in
Section 8-102(a)(1) of the Uniform Commercial Code), and (iii) in the case
of any Collateral that is an instrument, any claim referred to in Section
3-305(1) of the Uniform Commercial Code and (b) defend the Collateral
against the claims and demands of all third Persons.
(b) The Pledgor shall at all times cause the Joint Ventures to have
good title to and be the sole owner of its respective Property free of all
Liens other than Permitted Real Property Liens.
Section 3.6 No Amendments, Etc. of Collateral. The Pledgor shall not
enter into, permit to exist, consent to or authorize any restriction with
respect to the transferability of or any rights under or in respect of the
Collateral or the Properties (other than Permitted Real Property Liens), or
any other such asset, other than restrictions arising under the Loan
Documents.
6. Except as amended by this Amendment, the Security Agreement shall
continue to remain in full force and effect.
7. This Amendment shall be governed by the laws of the State of New York,
without regard to choice of law rules.
8. This Amendment may be executed in one or more counterparts, each of
which shall constitute an original and all of which when taken together shall
constitute one binding agreement.
9. The provisions of this Amendment are severable, and if any one clause or
provision hereof shall be held invalid or unenforceable in whole or in part,
then such invalidity or unenforceability shall affect only such clause or
provision, or part thereof, and not any other clause or provision of this
Amendment.
10. This Amendment shall be deemed to constitute an amendment to the
Purchase Agreement to the extent necessary.
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IN WITNESS WHEREOF, the parties hereto have entered into this Amendment on
the date first written above.
PLEDGOR:
SHELBOURNE PROPERTIES II, L.P.
By: SHELBOURNE PROPERTIES II GP, LLC,
as General Partner
By: SHELBOURNE PROPERTIES II, INC.,
as Sole Member
By:
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Name:
Title:
SECURED PARTY:
SHELBOURNE MANAGEMENT LLC
By: PRESIDIO INVESTMENT CAPITAL COMPANY, LLC
By:
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Name:
Title:
