AMENDED AND RESTATED
LOAN ADMINISTRATION AGREEMENT
BETWEEN
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
AS LENDER
AND
MERIDIAN INDUSTRIAL TRUST, INC.
INDTENNCO LIMITED PARTNERSHIP
METRO-SIERRA LIMITED PARTNERSHIP, AND
PROGRESS CENTER/ALABAMA LIMITED PARTNERSHIP
AS BORROWER
DATED AS OF FEBRUARY 23, 1996
(LOAN NOS. 0-000-000 AND 0-000-000)
LENDER'S RIGHT TO SELL THE NOTES HEREIN DESCRIBED
MAY BE SUBJECT TO BORROWER'S RIGHT OF
FIRST NEGOTIATION DESCRIBED IN SUBSECTION 2.4
MERIDIAN INDUSTRIAL TRUST, INC.
LOAN ADMINISTRATION AGREEMENT
TABLE OF CONTENTS
(Not Part of Agreement)
Page
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1. GENERAL DEFINITIONS . . . . . . . . . . . . . . . . . . . . 2
1.1 General Terms . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Other Terms . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 2. INITIAL NOTES AND COLLATERAL DOCUMENTS;
MANDATORY PREPAYMENT . . . . . . . . . . . . . . . . . . . . 13
2.1 Notes and Collateral Documents Executed as
of the Effective Date . . . . . . . . . . . . . . . . . . . 13
2.2 Mandatory Prepayment . . . . . . . . . . . . . . . . . . . . 13
2.3 Assumption of Notes and Loan Documents . . . . . . . . . . . 13
2.4 Right of First Negotiation to Purchase Notes . . . . . . . . 14
Section 3. SECURITY POOL COVENANTS . . . . . . . . . . . . . . . . . . 15
3.1 Covenants . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.2 Delivery of Reports and Information . . . . . . . . . . . . 16
3.3 Determination of Appraised Value . . . . . . . . . . . . . . 17
3.4 Determination of Net Operating Income . . . . . . . . . . . 18
Section 4. EXCHANGE RIGHTS AND SUBSTITUTION RIGHTS IN
THE SECURITY POOL . . . . . . . . . . . . . . . . . . . . . 18
4.1 Lien Releases and Increases in the Letter of
Credit . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.2 Facilities Added to the Security Pool
and Reductions in the Letter of Credit . . . . . . . . . . . 20
4.3 Facilities Substituted into the Security Pool . . . . . . . 21
4.4 Requirements for all Properties Added to the Security Pool . 22
4.5 Letter of Credit . . . . . . . . . . . . . . . . . . . . . . 24
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Section 5. RELEASE OF FACILITIES FROM THE SECURITY POOL . . . . . . . . 24
5.1 Lien Releases . . . . . . . . . . . . . . . . . . . . . . . 24
5.2 Lien Releases Applicable to Tenant's
Exercise of Purchase Options in their Leases . . . . . . . . 26
5.3 Material Damage or Destruction . . . . . . . . . . . . . . . 26
5.4 Meridian Village Lien Release . . . . . . . . . . . . . . . 27
Section 6. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . 28
6.1 Reaffirmation of Warranties and
Representations; Survival of Warranties and
Representations. . . . . . . . . . . . . . . . . . . . . . . 28
6.2 Ownership of Metro-Sierra, Progress Center
and IndTennCo . . . . . . . . . . . . . . . . . . . . . . . 28
6.3 Mutual Benefits . . . . . . . . . . . . . . . . . . . . . . 28
6.4 Qualification as a REIT; Publicly Traded
Company . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.5 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 7. LEASING AND AGREEMENTS . . . . . . . . . . . . . . . . . . . 31
7.1 Leasing . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.2 Non-Disturbance Agreements . . . . . . . . . . . . . . . . . 33
7.3 Xxxxx'x Purchase Option . . . . . . . . . . . . . . . . . . 34
Section 8. CASUALTIES AND CONDEMNATION . . . . . . . . . . . . . . . . 35
8.1 Insurance Proceeds . . . . . . . . . . . . . . . . . . . . . 35
8.2 Additional Provisions Relating to
Condemnation . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 9. EVENT OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . 39
9.1 Definition . . . . . . . . . . . . . . . . . . . . . . . . 39
9.2 Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . 41
9.3 Acceleration . . . . . . . . . . . . . . . . . . . . . . . 42
9.4 Definition of Materiality in Certain Circumstances . . . . 43
Section 10 LIMITATION ON PERSONAL LIABILITY . . . . . . . . . . . . . 43
10.1 Limited Recourse . . . . . . . . . . . . . . . . . . . . . 43
10.2 Limitations on Non-Recourse . . . . . . . . . . . . . . . . 43
10.3 Further Limitation. . . . . . . . . . . . . . . . . . . . . 45
Section 11. WAIVERS . . . . . . . . . . . . . . . . . . . . . . . . . . 45
ii
11.1 Waiver of Subrogation and Contribution . . . . . . . . . . . 45
11.2 Obligations Independent; Waivers . . . . . . . . . . . . . . 47
11.3 Independent Access to Financial Information . . . . . . . . 49
11.4 Multiple Obligations . . . . . . . . . . . . . . . . . . . . 50
11.5 Application of Foreclosure Proceeds . . . . . . . . . . . . 50
Section 12. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . 50
12.1 Amendments and Waivers . . . . . . . . . . . . . . . . . . . 50
12.2 Independence of Covenants . . . . . . . . . . . . . . . . . 51
12.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 51
12.4 Survival of Warranties and Certain
Agreements . . . . . . . . . . . . . . . . . . . . . . . . . 51
12.5 Failure or Indulgence Not Waiver; Remedies
Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . 51
12.6 Severability . . . . . . . . . . . . . . . . . . . . . . . . 52
12.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . 52
12.8 Applicable Law . . . . . . . . . . . . . . . . . . . . . . . 52
12.9 Successors and Assigns; Subsequent Holders
of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . 52
12.10 Consent to Jurisdiction and Service of
Process; Waiver of Jury Trial . . . . . . . . . . . . . . . 53
12.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 53
12.12 Exhibits and Schedules . . . . . . . . . . . . . . . . . . . 54
Exhibit A . . . . . . . . . . . . . . . . . . . . Appraised Value
Exhibit B . . . . . . . . . . . . . . . . . Compliance Certificate
Exhibit C . . . . . . . . . . . . . . . . . Initial Security Pool
Exhibit D . . . . . . . . . . . . . . . . . . Collateral Documents
Exhibit E . . . . . . . . . . . . . . . .Notice of Deemed Approval
Exhibit F . . . . . . . . . . . . Approved Consolidation Documents
iii
Exhibit 10.17
MERIDIAN INDUSTRIAL TRUST, INC.
AMENDED AND RESTATED LOAN ADMINISTRATION AGREEMENT
THIS AMENDED AND RESTATED LOAN ADMINISTRATION AGREEMENT (this
"Agreement") is made as of the 23rd day of February, 1996 (the "Effective
Date") by and among MERIDIAN INDUSTRIAL TRUST, INC., a Maryland corporation,
METRO-SIERRA LIMITED PARTNERSHIP, a California limited partnership, PROGRESS
CENTER/ALABAMA LIMITED PARTNERSHIP, a California limited partnership, and
INDTENNCO LIMITED PARTNERSHIP, a California limited partnership
(collectively, "Borrower") in favor of THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA, a New Jersey corporation ("Lender").
RECITALS
A. Meridian Point Realty Trust VII Co., a Missouri corporation ("Trust
VII"), and its Affiliates Metro-Sierra Limited Partnership, a California
limited partnership ("Metro-Sierra") and Progress Center/Alabama Limited
Partnership, a California limited partnership ("Progress Center") and Lender
entered into a Loan Administration Agreement dated as of May 31, 1995, as
amended from time to time (the "Trust VII Loan Agreement"), whereby Lender
agreed to lend to Trust VII $41.0 million (the "Trust VII Loan").
B. Meridian Point Realty Trust VI Co., a Missouri corporation ("Trust
VI"), and its Affiliate IndTennCo Limited Partnership, a California limited
partnership and Lender entered into a Loan Administration Agreement dated as
of May 31, 1995, as amended from time to time (the "Trust VI Loan
Agreement"), whereby Lender agreed to lend to Trust VI $25.1 million (the
"Trust VI Loan", and collectively with the Trust VII Loan, the "Loan").
C. As provided in the Merger Agreement, Trust VI, Trust VII and other
applicable parties have merged into Meridian Industrial Trust, Inc. ("MIT").
This Agreement amends and restates and consolidates the Trust VI Loan
1
Agreement and the Trust VII Loan Agreement as result of such merger.
D. The Loan is evidenced in part by fifteen (15) promissory notes in
the initial aggregate principal amount of $66.1 million (collectively the
"Notes").
E. The Notes are secured by, among other things, certain first priority
and second priority Deeds of Trust and Mortgages, as applicable, each as
hereinafter defined, for the benefit of Lender. The properties encumbered by
the Deeds of Trusts or Mortgages are referred to herein as the "Security
Pool".
F. Borrower has requested that it have certain rights to sell
properties in the Security Pool for the two (2) year period following the
Effective Date and, in exchange for Lender releasing its lien on such
property, provide Lender with a letter of credit in an amount equal to the
net sales proceeds resulting from such sale. MIT thereafter desires certain
rights during such two (2) year period to acquire replacement properties, to
include such properties in the Security Pool and to reduce the letter of
credit in an amount equal to the acquisition price of such properties.
G. In addition to the acquisition of replacement properties, MIT has
requested that it have certain rights to substitute properties it hereafter
acquires into the Security Pool for the two (2) year period following the
Effective Date in consideration of Lender releasing its lien on one or more
properties then in the Security Pool.
H. Borrower and Lender desire to provide for the administration of the
Loan in respect of the matters set forth above and in respect of certain
other matters all as set forth in this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged by Borrower, Borrower and Lender
hereby agree as follows:
1. GENERAL DEFINITIONS
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1.1 GENERAL TERMS.
In addition to other capitalized terms defined herein, when used
herein the following terms shall have the following meanings:
"AFFILIATE", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control
with, that Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling", "controlled
by" and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that Person, whether through the
ownership of voting securities or by contract or otherwise.
"AGREEMENT" means this Amended and Restated Loan Administration
Agreement dated as of February 23, 1996, as it may be amended, supplemented
or otherwise modified from time to time.
"ALTA/ACSM SURVEY" means with respect to a Facility an ALTA/ACSM
Land Title Survey prepared for and certified to Lender by a registered land
surveyor approved by Lender. The ALTA/ACSM Survey shall comply with the
survey requirements set forth in the Term Sheet, as such requirements may be
amended, modified or supplemented by Lender from time to time.
"ANNUAL FINANCIALS" means audited consolidated and consolidating
annual financial statements for Borrower and its Subsidiaries for the
immediately preceding calendar year, audited by certified public accountants
approved by Lender, in form and substance satisfactory to Lender, showing all
elements of income and expenses for Borrower.
"APPRAISAL INFORMATION" means, with respect to any Facility, a
ten-year projected discounted cash flow analysis for such Facility, with
assumptions, copies of any internal or external appraisals prepared by or on
behalf of or delivered to Borrower during the preceding year, the then
current Rent Roll, revenue and expense budgets for the then
3
current calendar year, projected revenue and expense budgets for such
Facility for the next succeeding calendar year and such additional
information as Lender may request.
"APPRAISED VALUE" means, with respect to any Facility, the estimated
fair market value of such Facility as determined by Lender in its sole
discretion and, with respect to all of the Facilities, the aggregate of
values plus the amount of the Letter of Credit and the Damage Letter of
Credit, subject to SECTION 3.3 hereof. Appraised Value of a Facility shall
also include any Net Proceeds held by Lender with respect to such Facility.
For purposes of this Agreement, Lender has determined that the Appraised
Value of the Facilities as of the Closing Date is as set forth on EXHIBIT A
attached hereto and such determination will not be changed prior to March 31,
1996.
"ASBESTOS BULK SURVEY" means, with respect to a Facility, a survey,
if requested by Lender, by an asbestos consultant approved by Lender to
determine the presence of asbestos containing materials. Any Asbestos Bulk
Survey shall comply with the Asbestos Bulk Survey Scope of Work Guidelines
attached to the Term Sheet, as the same may be amended, modified or
supplemented by Lender from time to time.
"ASSIGNMENT OF AGREEMENTS" means an assignment of agreements
executed and delivered by Borrower in connection with a Facility, modified by
Lender to reflect the laws of the state where the Facility is located and
otherwise as Lender deems necessary or appropriate in its sole discretion, as
amended, supplemented, restated, or otherwise modified from time to time in
accordance with the provisions hereof or thereof.
"ASSIGNMENT OF LESSOR'S INTEREST IN LEASES" means an assignment of
lessor's interest in leases executed and delivered by Borrower in connection
with a Facility, modified by Lender to reflect the laws of the state where
the Facility is located and otherwise as Lender deems necessary or
appropriate in its sole discretion, as amended, supplemented, restated, or
otherwise modified from time to time in accordance with the provisions hereof
or thereof.
4
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"BORROWER" means collectively and where the context requires,
individually, Meridian Industrial Trust, Inc., a Maryland corporation, and
its Subsidiaries Metro-Sierra Limited Partnership, a California limited
partnership, Progress Center/Alabama Limited Partnership, a California
limited partnership, IndTennCo, a California limited partnership.
"CLOSING" or "CLOSING DATE" means May 31, 1995.
"COLLATERAL DOCUMENTS" means, collectively, the Deeds of Trust, the
Mortgages, the Assignments of Lessor's Interest in Leases, the Assignments of
Agreements, the Financing Statements and all other instruments or documents
now or hereafter granting Liens on property of Borrower or any of its
Subsidiaries for the benefit of Lender.
"COMPLIANCE CERTIFICATE" means a certificate in substantially the
form of EXHIBIT B attached hereto, satisfactory to Lender and delivered by
Borrower to Lender pursuant to this Agreement.
"CRE DEBT" means the existing loan from Citicorp Real Estate, Inc.
to Borrower, in the approximate outstanding principal amount of $4.5 million,
which loan is secured in part by a first mortgage lien on Marietta Trade
Center.
"DEBT SERVICE" means the interest payments on the Loan for the
applicable period.
"DEEDS OF TRUST" means the two (2) deeds of trust, security
agreement, and fixture filing with assignment of rents, executed and
delivered by Borrower, as "Trustor" to the benefit of Lender as "Beneficiary"
(and the two (2) Deeds to Secure Debt encumbering the Marietta Trade Center)
for each Facility, as applicable, modified to reflect the laws of the state
where the Facility is located and otherwise in a form satisfactory to Lender
and as amended,
5
supplemented, restated, or otherwise modified from time to time in accordance
with the provisions hereof or thereof.
"DUE DILIGENCE DOCUMENTS" means the following: (i) Asbestos Bulk
Survey, (ii) Environmental Site Assessment, (iii) Environmental
Questionnaire, (iv) Estoppel Certificates, (v) ALTA/ACSM Survey, (vi)
Engineering Report, (vii) Land Use Certificate, (viii) Rent Roll, (ix)
Inventory of Personal Property, (x) preliminary title report together with
copies of all underlying exceptions, (xi) three (3) years of operating
statements, (xii) site plan, (xiii) the terms of the proposed purchase,
including copies of any signed letters of intent or agreements of purchase
and sale, (xiv) an appraisal of the property prepared by a member of the
Appraisal Institute (MAI), if available, (xv) leases and, if available, lease
abstracts, (xvi) a ten-year discounted cash flow model with assumptions,
(xvii) evidence that the property is a modern industrial warehouse located in
a major market in the continental United States, (xviii) evidence that the
Acquisition Committee of the Board of Directors of Borrower has approved the
property for acquisition, and (xix) such other documents, information and
certificates as Lender may require.
"EFFECTIVE DATE" means the date of this Agreement.
"ENGINEERING REPORT" means a comprehensive structural evaluation of
a Facility prepared by a third party engineer approved by Lender. Any
Engineering Report shall comply with the Guidelines for Engineering Report
attached to the Term Sheet, as the same may be amended, modified or
supplemented by Lender from time to time.
"ENVIRONMENTAL QUESTIONNAIRE" means with respect to a Facility an
Environmental Questionnaire prepared by Borrower in the form attached to the
Term Sheet, as the same may be amended, modified or supplemented by Lender
from time to time.
"ENVIRONMENTAL SITE ASSESSMENT" means with respect to a Facility an
assessment by an environmental consultant approved by Lender to determine the
presence of hazardous material and/or wastes. Any Environmental Site
Assessment shall comply with the Environmental Site Assessment Scope of Work
Guidelines attached to the Term Sheet, as the same may
6
be amended, modified or supplemented by Lender from time to time.
"ESTOPPEL CERTIFICATE" means with respect to a Facility a duly
executed Estoppel Certificate by the applicable tenants substantially in the
form previously delivered by Lender to Borrower for execution by tenants at
the Facilities, as the same may be amended, modified or supplemented by
Lender from time to time.
"EVENT OF DEFAULT" has the meaning ascribed to such term in
SUBSECTION 9.1.
"FACILITIES" means any and all real property, (including, without
limitation, all buildings, fixtures or other improvements located thereon)
now or hereafter included in the Security Pool.
"FINANCING STATEMENTS" means, with respect to a Facility, a UCC-1
Financing Statement executed and delivered by each Borrower, as amended,
supplemented, restated, or otherwise modified from time to time in accordance
with the provisions hereof or thereof.
"FISCAL QUARTER" means the three (3) month periods ending March 31,
June 30, September 30, and December 31 for any applicable year.
"FRAUDULENT CONVEYANCE INDEMNITY AGREEMENT" means the Fraudulent
Conveyance Indemnity Agreement executed by Borrower in favor of Lender of
even date herewith.
"GAAP" means, generally accepted accounting principles set forth in
opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment
of the accounting profession, in each case, as the same are applicable to the
circumstances as of the date of determination.
"HAZARDOUS SUBSTANCES AGREEMENTS" means the Hazardous Substances
Remediation and Indemnification
7
Agreements executed and delivered by Borrower to Lender for each Facility in
a form satisfactory to Lender and as amended, supplemented, restated, or
otherwise modified from time to time in accordance with the provisions hereof
or thereof.
"INDEBTEDNESS" means the principal of and all other amounts,
payments and premiums due under the Notes, and all other indebtedness of
Borrower to Lender and additional advances under, evidenced by and/or secured
by the Loan Documents, plus interest on all such amounts.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter.
"INVENTORY OF PERSONAL PROPERTY" means a detailed inventory of
Borrower's Personal Property at or used in connection with a Facility, in
form and substance acceptable to Lender. Such inventory shall include a
detailed description, including make, model and serial numbers where
applicable, of all furniture, furnishings, fixtures and equipment necessary
for the operation of the Facility.
"LAND USE CERTIFICATE" means with respect to a Facility a Land Use
Certificate prepared by Borrower substantially in the form required by Lender
at Closing, as the same may be amended, modified or supplemented by Lender
from time to time.
"LAWS AND RESTRICTIONS" means all federal, state, regional, county,
local and other laws, regulations, orders, codes, ordinances, rules, statutes
and policies, restrictive covenants and other title encumbrances, permits and
approvals relating to the development, occupancy, ownership, management, use,
and/or operation of the applicable Facility, or otherwise affecting all or
any part of the applicable Facility, or applicable to Borrower.
"LEASE" means any and all leasehold interests, including subleases
and tenancies following attornment, now or hereafter covering any part of a
Facility.
8
"LETTER OF CREDIT" means one or more irrevocable letters of credit
in favor of Lender issued by Xxxxx Fargo Bank, N.A., or such other banking
institution approved by Lender from time to time, with an initial expiry date
no earlier than June 30, 1998. The Letter of Credit shall secure Borrower's
obligations under the Loan Documents and the Hazardous Substances Agreements.
"LENDER" means The Prudential Insurance Company of America, a New
Jersey corporation, and its successors and assigns.
"LIEN" means any mortgage, deed of trust, pledge security interest,
encumbrance, lien or charge of any kind (including any agreement to give any
of the foregoing, any conditional sale or other title retention agreement,
any financing lease in the nature thereof, and the filing of or agreement to
give any financing statement under the Uniform Commercial Code of any
jurisdiction.
"LOAN" has the meaning ascribed to such term in Recital B, which
Loan is evidenced by the Notes, as the same may be amended, supplemented or
restated from time to time.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Collateral
Documents and any other document or certificate executed and delivered by
Borrower to Lender in connection with the transactions contemplated by this
Agreement, with the exception of the Hazardous Substances Agreements.
"LOAN TO APPRAISAL RATIO" means, as of any date of determination,
the ratio, expressed as a percentage, of the outstanding principal balance of
the Loan as of such date to the most recent Appraised Value of the
Facilities.
"MARIETTA TRADE CENTER" means the Facility owned by Borrower and
located at U.S. Highway 41 and Roswell Road in Marietta, Georgia.
"MATURITY DATE" means the tenth anniversary of the Effective Date.
9
"MERGER AGREEMENT" means the Agreement and Plan of Merger by and
among Trust VI, Trust VII, MIT and Meridian Point Realty Trust IV Co., dated
May 31, 1995, setting forth the terms and conditions of the Merger
Transaction.
"MERGER TRANSACTION" means the merger by and among Trust VI, Trust
VII and other applicable parties into MIT as described in the Merger
Agreement.
"MERIDIAN VILLAGE" means the Facility owned by Borrower and located
at Guide Meridian and Telegraph Road in Bellingham, Washington.
"MORTGAGES" means the two (2) mortgages, security agreement, and
fixture filing with assignment of rents, executed and delivered by Borrower
as "Mortgagor" to the benefit of Lender as "Mortgagee", for each Facility, as
applicable, modified to reflect the laws of the state where the Facility is
located and otherwise in a form satisfactory to Lender and as amended,
supplemented, restated, or otherwise modified from time to time in accordance
with the provisions hereof or thereof.
"NET OPERATING INCOME" means, for any four (4) Fiscal Quarter
period, the gross annual income realized from operations of the Facilities in
such period, subtracting therefrom all necessary and ordinary operating
expenses for such calendar year, including, but not limited to, utilities,
administrative, cleaning, landscaping, security, repairs and maintenance,
management fees, real estate and other taxes, assessments and insurance, but
excluding therefrom, deductions for federal, state and other income taxes,
debt service expense, depreciation or amortization of capital expenditures
(including, but not limited to, tenant improvement allowances and leasing
commissions) and other similar non-cash items (all as determined in
accordance with GAAP). Upon Lender's request, Borrower shall provide Lender
with such calculations and supporting worksheets and schedules, in reasonable
detail, to support Borrower's calculation of Net Operating Income. Net
Operating Income shall include rental abatement insurance proceeds actually
received by Borrower applicable to a Facility, apportioned for the period of
the loss covered.
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"NET PROCEEDS" has the meaning ascribed to such term in SUBSECTION
8.1C.
"NET SALES PROCEEDS" means the proceeds (whether in the form of
cash or seller financing) realized from the sale of each of the Facilities
initially included in the Security Pool, less (i) all ordinary and reasonable
marketing and selling expenses paid to third parties; (ii) any repayment of
all or a portion of the then outstanding principal balance of the CRE Debt
(including prepayments of the CRE Debt from the proceeds of a sale of other
than Marietta Trade Center); and (iii) any repayment elected by Borrower of
all or any portion of one or more of the Notes, together with any applicable
Prepayment Premium.
"NOTES" has the meaning ascribed to such term in Recital B, and
consists of the fifteen (15) promissory notes of Borrower issued and
outstanding as of the Effective Date, as follows: (i) Promissory Note
(Alabama) in the original principal amount of $1,318,000, (ii) Promissory
Note (Mississippi) in the original principal amount of $4,269,000, (iii)
Promissory Note (Tennessee) in the original principal amount of $1,471,000,
(iv) Promissory Note (Texas) in the original principal amount of $397,000,
(v) Promissory Note (Washington) in the original principal amount of
$7,211,000, (vi) Promissory Note (Illinois) in the original principal amount
of $10,434,000, (vii) Promissory Note (Alabama) in the original principal
amount of $1,976,000, (viii) Promissory Note (Arkansas) in the original
principal amount of $2,491,000, (ix) Promissory Note (California) in the
original principal amount of $3,689,000, (x) Promissory Note (Georgia) in the
original principal amount of $5,030,000, (xi) Promissory Note (Michigan) in
the original principal amount of $4,359,000, (xii) Promissory Note (Nevada)
in the original principal amount of $4,886,000, (xiii) Promissory Note
(Tennessee) in the original principal amount of $3,162,000, (xiv) Promissory
Note (Texas) in the original principal amount of $10,377,000, and (xv)
Promissory Note (Washington) in the original principal amount of $5,030,000,
as each may be amended, amended and restated, supplemented or otherwise
modified from time to time.
11
"OBLIGATIONS" means all monetary and non-monetary obligations of
every nature of Borrower from time to time to be performed by Borrower under
any of the Loan Documents and the Hazardous Substances Agreements, whether
for principal, interest, fees, expenses, indemnification or otherwise.
"PARADISE MARKETPLACE" means the Facility owned by Borrower and
located at 0000 Xxxx Xxxxxxxx Xxxx in Las Vegas, Nevada.
"PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, joint stock companies, limited liability
companies, joint ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts, REITs or other organizations,
whether or not legal entities, and governments and agencies and political
subdivisions thereof.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default;
provided no Potential Event of Default shall be deemed to have occurred prior
to Lender giving Borrower notice thereof if required by any applicable Loan
Document.
"PREPAYMENT PREMIUM" means the payment owed by Borrower to Lender in
connection with the prepayment of the Loan, calculated in accordance with
each Note.
"PROCESSING FEE" means a non-refundable fee of Ten Thousand Dollars
($10,000).
"PROJECTED ANNUAL RENTAL INCOME" means the projected annual gross
rental income generated by the Facilities then in the Security Pool for the
then-current calendar year (as determined by Lender in its sole discretion
with reference to the then-current Rent Roll and with reasonable rollover and
re-tenanting assumptions), including, but not limited to, CAM (common area
maintenance) charges collected from tenants, operating expense reimbursements
and imputed interest on the Letter of Credit.
"PROJECTED DEBT SERVICE" means the projected interest payment on the
Loan for the immediately following
12
calendar year, assuming no reduction in the principal balance of the Loan, as
determined by Lender in its sole discretion.
"PROJECTED NET OPERATING INCOME" means, for the applicable calendar
year, the Projected Annual Rental Income in such calendar year, subtracting
therefrom all necessary and ordinary operating expenses for such calendar
year, including, but not limited to, utilities, administrative, cleaning,
landscaping, security, repairs and maintenance, management fees, real estate
and other taxes, assessments and insurance, but excluding therefrom,
deductions for federal, state and other income taxes, debt service expense,
depreciation or amortization of capital expenditures and other similar
non-cash items (all as determined by Lender in its sole discretion). Gross
income shall be determined in a manner consistent with GAAP. Projected Net
Operating Income may include remaining rental abatement insurance proceeds
for casualty events having already occurred.
"PROPOSED FACILITY" means a property that Borrower is proposing to
add to the Security Pool in accordance with the terms of SECTION 4 hereof.
"PROPOSED FACILITY CLOSING DOCUMENTS" means the Deeds of Trust or
Mortgages, as applicable, the Assignment of Agreements, the Assignment of
Lessor's Interest in Leases, the Financing Statement, the Hazardous
Substances Agreements, and all other instruments or documents now or
hereafter granting liens on the Proposed Facility for the benefit of Lender.
Each such document shall be substantially in the form delivered by Borrower
at Closing, modified to reflect the laws of the state where the Facility is
located and otherwise in form satisfactory to Lender. Proposed Facility
Closing Documents shall also include such endorsements to the existing Title
Policies or new Title Policies referencing the Proposed Facility as Lender
shall require in its sole discretion and legal opinions of counsel acceptable
to Lender opining on the due authorization, execution, delivery,
enforceability and such other matters as Lender shall require with respect to
the Proposed Facility Closing Documents and any other documents or agreements
executed by Borrower in connection therewith.
13
"QUARTERLY FINANCIALS" means consolidated and consolidating
quarterly financial statements for Borrower and its Subsidiaries for the
immediately preceding Fiscal Quarter, prepared in accordance with GAAP and
certified by the chief financial officer of Borrower, in form and substance
satisfactory to Lender, showing all elements of income and expenses for
Borrower.
"REIT" means real estate investment trust, as defined under
paragraph 856 of the Internal Revenue Code.
"RENT ROLL" means a certificate signed in the name of Borrower by
its president or one of its Vice Presidents setting forth a comprehensive
list of the Facilities and each of the leases pertaining thereto and
containing the following information: (i) each tenant's name and location,
(ii) the net rentable square footage covered by each lease, (iii) the annual
rental rate per square foot per tenant, (iv) the aggregate annual base rent
per tenant and for the Facilities, (v) all items of additional rent, (vi) the
term and the commencement and expiration dates of each lease and any
termination options, (vii) any option(s) to renew and/or any option(s) to
terminate granted to any tenant, (viii) the security deposit held for each
lease, (ix) any free rent, moving allowances or other tenant concessions
granted to any tenant and any obligations of such tenant assumed by Borrower,
(x) the tenant's reimbursement obligation for operating expenses (triple net,
modified gross, etc.) and (xi) any right of first refusal or any right or
option to purchase all or any portion of the Facilities granted thereunder.
The Rent Roll shall also include certified copies of all leases at the
Facility or Proposed Facility, as applicable, which have not previously been
certified to Lender.
"RELEASE PRICE" means with respect to a Facility, the product
obtained by multiplying one hundred twenty-five percent (125%) by the product
of (A) a fraction, the numerator of which is the outstanding principal
balance of the Loan and the denominator of which is the Appraised Value of
the all the Facilities, based on the most recent Appraised Values, multiplied
by (B) the Appraised Value of the Facility. For example, if the current
outstanding principal balance of the Loan was $40 million and the
14
Appraised Value of the Facilities was $100 million, then the Release Price
for a Facility with an Appraised Value of $5 million would be $2.5 million
(125% X [40/100 X $5 million]).
"SECURITY POOL" means, collectively, each Facility on which Lender
has a Lien as security for the Loan, as the same may change from time to time
in accordance with the terms and conditions hereof. The Facilities in the
Security Pool as of the date hereof are set forth on EXHIBIT C attached
hereto.
"SECURITY POOL COVENANTS" has the meaning ascribed to such term in
SUBSECTION 3.1.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, association, joint venture or other business entity of which
more than 50% of the total voting power of shares of stock or other ownership
interests entitled (without regard to the occurrence of any contingency) to
vote in the election of the Person or Persons (whether directors, managers,
trustees or other Persons performing similar functions) having the power to
direct or cause the direction of the management and policies thereof is at
the time owned or controlled, directly or indirectly, by that Person or one
or more of the other Subsidiaries of that Person or a combination thereof.
"TITLE COMPANY" means Chicago Title Insurance Company.
"TITLE POLICY" means each Lender's ALTA (Form B-1970) Lender's
Policy of title insurance in the amount of the Loan issued by the Title
Company to Lender, dated as of the time of recording of the applicable Deeds
of Trust or Mortgages, as applicable, showing Lender as insured with a first
priority lien (except as to Marietta Trade Center which shall be a second
priority lien) and title to the Facility vested fee simple in Borrower, with
such endorsements and in form acceptable to Lender in its sole discretion.
15
1.2 OTHER TERMS.
References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided. Any of the terms defined in SUBSECTION 1.1 or elsewhere in this
Agreement may, unless the context otherwise requires, be used in the singular
or the plural, depending on the reference.
2. INITIAL NOTES AND COLLATERAL DOCUMENTS;
MANDATORY PREPAYMENT
2.1. NOTES AND COLLATERAL DOCUMENTS EXECUTED AS OF THE EFFECTIVE DATE.
A. Effective as of the Effective Date, Borrower has executed and
delivered to Lender the Notes in the aggregate principal amount of $66.1
million.
B. Effective as of the Effective Date, Borrower has executed and
delivered to Lender as security for the Loan the Collateral Documents and
Hazardous Substances Agreements more particularly described in EXHIBIT D
attached hereto.
2.2 MANDATORY PREPAYMENT.
Notwithstanding any term or provision contained herein or in any of the
Notes, and as a material inducement to Lender making the Loan described
herein, if at any time the then outstanding principal amount of all Notes is
less than $20 million in the aggregate, then Borrower shall immediately
prepay all amounts under and owing with respect to the Notes and the Loan
Documents, including, without limitation, all accrued and unpaid interest
thereon and any Prepayment Premium due in connection therewith.
2.3 ASSUMPTION OF NOTES AND LOAN DOCUMENTS.
MIT, as successor-in-interest by merger to Trust VI and Trust VII hereby
confirms its assumption and agreement to perform all existing and future
obligations, terms and conditions required under the Notes and the Loan
Documents and the Hazardous Substances Agreements, including, without
16
limitation, all obligations relating to the due and punctual payment of
principal and interest under the Notes as though MIT had executed such
documents on the Closing Date, such that all of the debts, liabilities,
duties and obligations of Borrower may be enforced directly against MIT to
the same extent as if those debts and obligations had been incurred and
contracted by MIT.
2.4 RIGHT OF FIRST NEGOTIATION TO PURCHASE NOTES.
A. At any time and from time to time, and except as limited below,
Borrower shall have the rights granted in this SUBSECTION 2.4 to negotiate to
acquire the Notes. Upon Lender's election, in its sole discretion, to sell
the Notes to a third party which is not an Affiliate of Lender, Lender shall
give Borrower written notice (the "Offer Notice") setting forth the terms and
conditions (the "Offer Price") pursuant to which Lender would be willing to
sell the Notes to a third party. The Offer Price to Borrower shall not be
higher to reflect the requirement to pay the Prepayment Premium or that
Borrower is both a borrower and purchaser of the Notes. Notwithstanding the
foregoing, the Offer Price may be at a premium above or discount below par to
reflect then current market conditions, as determined by Lender, including
without limitation, that the Notes are fixed rate notes and are not
prepayable without payment of the Prepayment Premium.
B. Upon Borrower's receipt of the Offer Notice, Borrower shall have the
right to either (i) unconditionally accept in writing the Offer Price, in
which case Lender shall be bound to sell the Notes to Borrower and Borrower
shall be bound to purchase the Notes from Lender on the terms and conditions
provided in the Offer Notice (and Borrower's default on its obligation to
purchase the Notes shall be an Event of Default hereunder and without
limiting Lender's remedies, Borrower's rights under this SUBSECTION 2.4 shall
terminate); or (ii) elect to meet with Lender to attempt to arrive at a
mutually acceptable price and other terms and conditions for the acquisition
of the Notes, in which case the parties agree to negotiate in good faith to
arrive at a mutually agreeable price and other terms and conditions for the
purchase and sale of the Notes.
17
C. If within two (2) weeks after Borrower's receipt of the Offer Notice
(the "Negotiation Period") Borrower has not elected to unconditionally accept
the Offer Price and for whatever reason the parties have not otherwise agreed
on mutually acceptable terms and conditions for the purchase of the Notes,
then Lender shall be entitled, for a period of six (6) months from end of the
Negotiation Period, but not obligated, to sell or enter into a contract to
sell the Notes to a third party at such price and upon such terms and
conditions as Lender in its sole discretion shall determine, including,
without limitation, an amount and terms and conditions materially more
favorable to the prospective purchaser but consistent with the good faith
principles specified above (and close such sale within twelve (12) months
from the end of the negotiation Period). Upon Lender entering into a
contract to sell the Notes to a third party, Borrower's right of first
negotiation with respect to the Notes shall terminate subject to the right of
reoffer described in the immediately succeeding sentence. If Lender has not
entered into a contract to sell (or sold) the Notes to a third party within
six (6) months of expiration of the Negotiation Period (or having entered
into a contract within six (6) months has not thereafter closed within twelve
(12) months from the end of the Negotiation Period), Borrower's rights under
this SUBSECTION 2.4 shall again apply.
D. Borrower's rights under this SUBSECTION 2.4 are expressly conditioned
upon, at the time Borrower receives the Offer Notice, there being no Event of
Default or Potential Event of Default (unless prior to the expiration of the
Negotiation Period no Event of Default or Potential Event of Default then
exists).
E. If at any time during the term of this Agreement there is an Event of
Default or Potential Event of Default respecting any monetary obligation to
Lender in any Loan Document for a period of thirty (30) days past the date
such obligation was owing, then Borrower's rights under this SUBSECTION 2.4
shall terminate and be of no further force and effect.
F. Borrower acknowledges and agrees that the restrictions set forth in
this SUBSECTION 2.4 shall not apply to the sale of any participation interest
in the Notes (or any Note) or any transfer of the Notes
18
(or any Note) to any Affiliate of Lender.
3. SECURITY POOL COVENANTS
3.1 COVENANTS.
The following on-going covenants of Borrower (the "Security Pool
Covenants") shall be met with reference to the Facilities at each of the
following dates: (1) the date of determination as specified herein; (2) the
date of any substitution or exchange in accordance with the procedures set
forth in SECTION 4; (3) the date of any Lien Release; (4) the date of any
determination by Lender of Appraised Value; (5) the date of any lease
revision contemplated by SUBSECTION 7.1B; and (6) the date of determination
as provided in SUBSECTION 8.1C(ix).
A. The Loan to Appraisal Ratio as determined by Lender shall not exceed
50% at any time.
B. The ratio of Net Operating Income to Debt Service shall be no less
than 2.2 to 1.0, which shall be measured at the end of each Fiscal Quarter,
on an historical rolling four Fiscal Quarter basis.
C. The ratio of Projected Net Operating Income to Projected Debt
Service shall be no less than 2.2 to 1.0, which shall be measured annually at
the beginning of each calendar year commencing January 1, 1996.
D. The ratio of (i) Net Operating Income LESS all tenant improvement
costs and leasing commissions actually expended for the period and an annual
capital expenditure reserve of $.17 per square foot of leasable area of the
Facilities in the Security Pool to (ii) the Debt Service shall be no less
than 1.7 to 1.0. This ratio shall be measured at the end of each Fiscal
Quarter, on an historical rolling four Fiscal Quarter basis.
19
3.2 DELIVERY OF REPORTS AND INFORMATION.
A. Within forty-five (45) days after the close of each Fiscal Quarter,
Borrower shall deliver a Compliance Certificate to Lender, certified by the
chief financial officer of Borrower as true and correct. In addition, within
ninety (90) days after the close of each calendar year, Borrower shall
deliver to Lender the Annual Financials.
B. Within sixty (60) days following the end of each calendar year,
Borrower shall deliver the Appraisal Information for each Facility to Lender.
C. Within five (5) years after Lender's receipt of any statement,
Lender may, upon at least five (5) days' prior notice to Borrower, inspect
and make copies of Borrower's books, records and income tax returns with
respect to the Facilities, for the purpose of verifying any such statement.
At any time during the term of the Loan, upon fifteen (15) day's prior
written notice from Lender, Borrower shall submit to Lender any additional
financial information which has been reasonably requested by Lender.
D. Promptly upon their becoming available, Borrower shall deliver to
Lender copies of (a) all financial statements, reports, notices and proxy
statements sent or made available generally by Borrower to its security
holders or by any Subsidiary of Borrower to its security holders other than
Borrower or another Subsidiary of Borrower, (b) all regular and periodic
reports and all registration statements (other than on Form S-8 or a similar
form) and prospectuses, if any, filed by Borrower or any of its Subsidiaries
with any securities exchange or with the Securities and Exchange Commission
or any governmental or private regulatory authority, and (c) all press
releases and other statements made available generally by Borrower or any of
its Subsidiaries to the public concerning material developments in the
business of Borrower or any of its Subsidiaries.
E. Promptly upon receipt thereof, Borrower shall deliver to Lender final
copies of all reports submitted to Borrower
20
by independent certified public accountants in connection with each annual,
interim or special audit of the financial statements of Borrower and its
Subsidiaries made by such accountants, including, without limitation, any
comment letter submitted by such accountants to management in connection with
their annual audit.
3.3 DETERMINATION OF APPRAISED VALUE.
A. Within forty-five (45) days following receipt by Lender of full and
complete Appraisal Information for each of the Facilities, Lender shall (i)
review the Appraisal Information and determine, in its sole discretion, the
Appraised Value of each Facility and (ii) notify Borrower of its
determination of such value; provided Lender's failure to so notify Borrower
within such period shall not be deemed to be a default by Lender hereunder or
a waiver of any of the Security Pool Covenants and shall result in an
extension of the forty-five (45) day period until the date Lender notifies
Borrower of its determination of the Appraised Values. Fifteen (15) days
after the date Lender notifies Borrower of its determination of the Appraised
Value, such Appraised Value shall become effective and final for purposes of
calculating the Loan to Appraisal Ratio. For purposes of this Agreement,
Lender has determined the Appraised Value of the Facilities as of the date of
Closing and no changes shall be made in such Appraised Value prior to March
31, 1996. In addition, from and after March 31, 1996, Lender shall have the
right from time to time to cause one or more of the Facilities to be
reappraised if in Lender's reasonable judgment there has been a material
adverse change in the value of one or more of the Facilities to be
reappraised.
B. If the Marietta Trade Center is encumbered by the CRE Debt, then the
Appraised Value of such Facility shall be deemed for purposes of this
Agreement to be 80% of the difference between the property's Appraised Value
as determined by Lender and the then outstanding principal balance of the CRE
Debt.
C. The Appraised Value of Marietta Trade Center and Paradise
Marketplace shall not, for purposes of this Agreement, be included in the
calculation of Appraised Value
21
at such time as the outstanding principal balance of the Loan is less than
$30 million.
D. The Appraised Value of the Facilities shall be deemed for purposes of
this Agreement to include the amount of the Letter of Credit or any Damage
Letter of Credit as of the applicable date.
3.4 DETERMINATION OF NET OPERATING INCOME.
A. The Net Operating Income and the Projected Net Operating Income of
Marietta Trade Center and Paradise Marketplace shall not, for purposes of
this Agreement, be included in the calculation of Net Operating Income for
any of the prior four Fiscal Quarters or Projected Net Operating Income for
the applicable calendar year at such time as the outstanding principal
balance of the Loan is less than $30 million.
B. If the Marietta Trade Center is encumbered by the CRE Debt, then the
Net Operating Income and Projected Net Operating Income for such Facility
shall be deemed for purposes of this Agreement to be 80% of the difference
between the actual Net Operating Income or Projected Net Operating Income for
such property and the amount of debt service attributable to the CRE Debt,
assuming a 10% debt constant.
C. For purposes of determining Net Operating Income and Projected Net
Operating Income for purposes of this Agreement, the income of the Facilities
shall be deemed to include imputed interest equal to six percent (6%) per
annum of the amount of the Letter of Credit (or any funds held by or for the
benefit of Lender pursuant to SUBSECTION 4.2D), as adjusted from time to time.
4. EXCHANGE RIGHTS AND SUBSTITUTION RIGHTS IN THE SECURITY POOL
For the twenty-four (24) month period immediately following the Effective
Date, Borrower shall have the substitution and exchange rights set forth in
this SECTION 4. Following such twenty-four (24) month period, Borrower
22
shall have no further rights under this SECTION 4, including, without
limitation, the right to complete substitutions or exchanges previously
approved by Lender but not completed by such date.
4.1 LIEN RELEASES AND INCREASES IN THE LETTER OF CREDIT.
For the period from the Effective Date through and including the second
anniversary thereof, Borrower shall have the right to sell a Facility which
is initially included in the Security Pool and to post with Lender a Letter
of Credit in an amount (or if previously posted, increase the amount thereof
by an amount) equal to the Net Sales Proceeds, in which case Lender shall
release concurrently its Lien on the Facility sold (the "Lien Release"),
subject to satisfaction by Borrower of each and every condition precedent set
forth in SUBSECTION 4.1A.
A. The conditions precedent to Lender's obligations under this
SUBSECTION 4.1 are as follows:
(i) Lender shall have received thirty (30) days prior written notice
from Borrower of the proposed sale of the Facility for which a Lien Release
is being requested pursuant to this SUBSECTION 4.1, together with a $5,000
processing fee which shall be fully earned upon each delivery of the Lien
Release;
(ii) there shall exist no Event of Default or Potential Event of
Default;
(iii) Lender shall have determined, in its sole discretion, that
the Security Pool Covenants shall continue to be met, after giving effect to
the release of the Facility for which a Lien Release is being requested,
PROVIDED, HOWEVER, that if one or more of the Security Pool Covenants is not
satisfied and Borrower may, through the prepayment of principal outstanding
under the Loan, satisfy such Security Pool Covenant(s), then Borrower may
qualify for a Lien Release by paying down a portion of the outstanding
principal balance of the Loan which Lender determines is necessary to satisfy
the Security Pool Covenant(s) (and paying any Prepayment Premium applicable
23
thereto), PROVIDED FURTHER, HOWEVER, that Lender shall advise Borrower in
writing of its determination within fourteen (14) days after Borrower submits
to Lender in detail satisfactory to Lender, in its sole discretion,
Borrower's written analysis of the effect of the release of the Facility upon
the Security Pool Covenants;
(iv) Lender shall receive, at Borrower's sole cost and expense,
such endorsement(s) to the Title Policy as Lender may deem reasonably
necessary to ensure the Deeds of Trust or Mortgages, as applicable,
encumbering the Facilities not so released remain valid Liens against such
properties notwithstanding any such release of a Facility, subject only to
such title exceptions as were originally shown in the Title Policy; and
(v) Lender shall receive, at Borrower's sole cost and expense, a
new Letter of Credit or amendment to the existing Letter of Credit increasing
the amount of the Letter of Credit by the Net Sales Proceeds applicable to
the Facility for which the Lien is released.
B. In addition to the $5,000 processing fee applicable to a Lien
Release, Borrower shall pay, prior to any Lien being released, all costs and
expenses incurred by Lender in connection with any requested Lien Release,
including, without limitation, all reasonable legal, accounting, appraisal,
title company, recording and filing fees and costs, whether such Lien Release
is actually consummated.
C. Notwithstanding the rights granted Borrower under this SUBSECTION
4.1, Borrower will not permit the Letter of Credit (including any letter of
credit delivered to Lender in accordance with the provisions of SUBSECTION
5.3) to exceed at anytime the lesser of (A) 50% of the then outstanding
principal balance of the Loan or (B) $36 million (the "Maximum Letter of
Credit Amount"). Borrower's rights under this SUBSECTION 4.1 are expressly
conditioned upon any proposed increase in the Letter of Credit not causing
the amount of the Letter of Credit to exceed the Maximum Letter of Credit
Amount.
4.2 FACILITIES ADDED TO THE SECURITY POOL AND REDUCTIONS IN THE LETTER
OF CREDIT.
24
A. Borrower shall have the right to reduce the amount of the Letter of
Credit upon the acquisition of a Proposed Facility and the inclusion of such
Proposed Facility in the Security Pool, which shall be subject to and in
accordance with the procedures and conditions set forth in SUBSECTION 4.4.
The maximum reduction in the Letter of Credit upon the inclusion of a
Proposed Facility in the Security Pool shall be the lesser of the Proposed
Facility's Appraised Value or the acquisition cost of such property,
including normal and customary closing costs, as determined by Prudential in
its sole discretion.
B. Twenty-four (24) months following the Effective Date or earlier upon
Borrower's election to waive its rights under SECTION 4, Borrower shall pay
to Lender 62.5% of the then current amount of the Letter of Credit as a
principal repayment, subject to the Prepayment Premium and a $5,000
processing fee, and Lender shall concurrently, provided there is then no
Event of Default or Pending Event of Default, return the Letter of Credit to
Borrower.
C. If at anytime Standard & Poor's credit rating of the issuer of the
Letter of Credit falls below BBB+, then within thirty (30) days of Lender's
written notice requesting a substitute Letter of Credit, Borrower shall
deliver to Lender a substitute Letter of Credit in form and content
satisfactory to Lender, issued by an issuer with a Standard & Poor's credit
rating of at least A, and Lender will concurrently release the Letter of
Credit being replaced to Borrower.
D. Lender shall have the right, in its sole discretion, upon not less
than thirty (30) days prior written notice to Borrower, to require that
Borrower substitute cash collateral for the Letter of Credit. If Lender
elects to have cash substituted for the Letter of Credit, then the cash shall
be held by Lender or in an account at a bank qualified to do business in
California and acceptable to Lender and in which Lender is granted a first
priority security interest. Any such amount shall be deposited in an interest
bearing account with interest accruing for the benefit of Borrower. Imputed
interest on such funds at the rate of six (6%) per annum shall be included in
the
25
calculation of Net Operating Income and Projected Net Operating Income. Any
such deposit of cash shall be subject to further increases, decreases and
applications against the outstanding principal balance of the Loan
substantially in accordance with the procedures respecting the Letter of
Credit. Lender shall not assess any set-up or account fee with respect to
any funds deposited directly with Lender.
4.3 FACILITIES SUBSTITUTED INTO THE SECURITY POOL.
For the twenty-four (24) month period following the Effective Date,
Borrower shall have the right to substitute a Proposed Facility for a
Facility, and Lender shall release its Lien on the Facility then in the
Security Pool, which substitution and release shall be subject to and
accordance with the conditions and procedures set forth in SUBSECTIONS 4.3
and 4.4. In addition, Borrower shall have the right to add a Proposed
Facility to the Security Pool in accordance with the procedures set forth in
SUBSECTION 4.4 to ensure on-going compliance with the Security Pool Covenants.
A. The conditions precedent to Lender's obligations under this SUBSECTION
4.3 are as follows:
(i) Lender shall have received not less than ninety (90) days
written notice from Borrower prior to the date Borrower proposes granting a
Lien on a Proposed Facility pursuant to this SUBSECTION 4.3, together with a
Processing Fee which shall be fully earned upon submittal of such request to
Lender (and no Processing Fee shall be applied as a credit against any
subsequent Processing Fee payable hereunder);
(ii) there shall exist no Event of Default or Potential Event of
Default;
(iii) the Proposed Facility shall have sufficient Net Operating
Income and Projected Net Operating Income such that the Security Pool
Covenants continue to be satisfied and are not otherwise materially and
adversely affected, in Lender's sole discretion;
26
(iv) the Proposed Facility shall have an Appraised Value equal to
or greater than the Appraised Value of the Facility being released; and
(v) Lender shall receive, at Borrower's sole cost and expense, such
endorsement(s) to the Title Policy as Lender may deem reasonably necessary to
ensure the Deeds of Trust or Mortgages, as applicable, encumbering the
Facilities not so released remain valid Liens against such properties
notwithstanding any such release of a Facility, subject only to such title
exceptions as were originally shown in the Title Policy.
B. In addition to the Processing Fee, Borrower shall pay, on or before
the proposed substitution is completed, all costs and expenses incurred by
Lender in connection with any requested substitution, including, without
limitation, all reasonable legal, accounting, appraisal, title company,
recording and filing fees and costs, whether such substitution is actually
consummated.
4.4 REQUIREMENTS FOR ALL PROPERTIES ADDED TO THE SECURITY POOL.
A. Not less than ninety (90) days prior to the date Borrower proposes
to add a Proposed Facility to the Security Pool, Borrower shall submit a
summary report describing basic information for the Proposed Facility,
including property type and description, location, tenant mix, leasing
information, estimated value and other general information. Lender shall
then use reasonable efforts to inform Borrower within three (3) weeks after
receiving such summary report, on a non-binding basis, if such property would
be acceptable for inclusion in the Security Pool assuming it meets Lender's
then current environmental, engineering and underwriting standards and is
otherwise acceptable to Lender in its sole discretion ("Preliminary
Approval"). After Preliminary Approval of a Proposed Facility, and not less
than forty-five (45) days prior to the date Borrower proposes adding a
Proposed Facility to the Security Pool, Borrower shall submit the Due
Diligence Documents to Lender, together with a Processing Fee (PROVIDED,
HOWEVER, that Estoppel Certificates shall be submitted not less than fourteen
(14) days prior to the date Borrower proposes
27
adding a Proposed Facility to the Security Pool). All Proposed Facilities
added to the Security Pool shall meet Lender's then current environmental,
engineering and underwriting standards and otherwise be acceptable to Lender
in its sole discretion. Upon receipt of full and complete Due Diligence
Documents and such other documents as Lender shall reasonably require, and
upon confirmation by Lender that it has received all such documentation,
Lender shall have three (3) weeks to inform Borrower if such property is
acceptable for inclusion in the Security Pool. If Lender does not notify
Borrower within such three (3) week period of Lender's decision, then
Borrower shall provide Lender written notice in the form of EXHIBIT E
attached hereto. If Lender has not approved or disapproved such Proposed
Facility within seven (7) days of receipt of such notice, then the Proposed
Facility shall be deemed approved by Lender.
B. Prior to any Proposed Facility being added to the Security Pool,
Borrower shall have delivered to Lender the Proposed Facility Closing
Documents, in form and substance satisfactory to Lender.
C. Each time a Proposed Facility is added to the Security Pool in
accordance with the provisions of SUBSECTIONS 4.2, 4.3 or 5.3, Borrower shall
pay Lender a fee equal to 0.6% of the gross purchase price of the Proposed
Facility (but in no event less than $10,000); provided the Processing Fee
previously submitted to Prudential with respect to such Proposed Facility
shall be applied against the 0.6% fee. Notwithstanding the foregoing,
Borrower shall have no obligation to pay Lender the 0.6% fee with respect to
a Facility being added to the Security Pool solely for purposes of ensuring
on-going compliance with the Security Pool Covenants.
D. Borrower shall pay, on or before the addition of any Proposed
Facility to the Security Pool, all costs and expenses incurred by Lender in
connection with any request that a Proposed Facility be added to the Security
Pool, including, without limitation, all reasonable legal, accounting,
appraisal, title company, recording and filing fees and costs, whether such
Proposed Facility is actually added to the Security Pool.
28
E. Borrower's rights under SUBSECTIONS 4.1, 4.2 and 4.3 (excluding
Borrower's rights to add additional Facilities to the Security Pool to ensure
on-going compliance with the Security Pool Covenants) shall terminate and be
of no further force and effect following the earlier to occur of:
(i) the date that the sum of (a) the cumulative gross purchase
prices of properties added to the Security Pool pursuant to SUBSECTION 4.3
and (b) the initial amount of and the cumulative increases in the Letter of
Credit (without giving regard to any reductions pursuant to SUBSECTION 4.1)
exceeds $40 million (inclusive of all prior transactions of Trust VI and
Trust VII as separate entities) or if a transaction proposed under SUBSECTION
4.1 or 4.3 would cause such threshold to be exceeded; or
(ii) the date of the closing of the fourth separate transaction
whereby Borrower adds one or more Facilities to the Security Pool pursuant to
SUBSECTIONS 4.2 or 4.3.
4.5 LETTER OF CREDIT. Lender may, at its option and in addition to other
rights and remedies it may have hereunder or under any of the Loan Documents,
upon the occurrence of an Event of Default, unconditionally draw on the
Letter of Credit in any amount up to the full stated amount thereof and apply
the proceeds of such draw or draws in any manner determined by Lender,
including, at the option of Lender in its sole discretion, (i) paying down
the outstanding principal balance of one or more of the Notes (and paying any
Prepayment Premium applicable thereto), and/or (ii) paying or satisfying, in
a manner and fashion satisfactory to Lender in its sole discretion, any
obligations owing under the Notes or any one of them, whether for principal
or interest, or under any of the Loan Documents and/or under the Hazardous
Substances Agreements.
5. RELEASE OF FACILITIES FROM THE SECURITY POOL
5.1 LIEN RELEASES.
In addition to the Lien Releases executed by Lender in accordance with
the provisions of SECTION 4, Lender shall
29
also concurrently release its Liens encumbering one or more of the
Facilities, subject to the satisfaction by Borrower of each and every
condition precedent set forth in SUBSECTION 5.1A.
A. The conditions precedent to Lender's obligations under this SECTION
5 are as follows:
(i) Lender shall have received thirty (30) days prior written notice
from Borrower of the proposed partial repayment of the Loan (which shall be
in an amount required by clause (iii) below) and the identification of the
Facility or Facilities for which a Lien Release is being requested, together
with a processing fee equal to $5,000, which shall be fully earned upon
delivery of the Lien Release by Lender;
(ii) there shall exist no Event of Default or Potential Event of
Default;
(iii) Borrower shall have paid in full the Release Price
attributable to the particular Facility or Facilities for which a Lien
Release is being requested, plus payment of any applicable Prepayment Premium
attributable thereto;
(iv) the outstanding principal balance of the Loan, after giving
effect to the application of the Release Price as herein provided, shall
continue to be equal to or greater than $20 million;
(v) Borrower shall provide evidence, in form and substance
satisfactory to Lender in its sole discretion that the Security Pool
Covenants shall continue to be met, after giving effect to the release of the
Facility, PROVIDED, HOWEVER, that if one or more of the Security Pool
Covenants is not satisfied and Borrower may, through the prepayment of
principal outstanding under the Loan, satisfy such Security Pool Covenant(s),
then Borrower may qualify for a Lien Release by paying down a portion of the
outstanding principal balance of the Loan which Lender determines is
necessary to satisfy the Security Pool Covenant(s) (and paying any Prepayment
Premium applicable thereto); PROVIDED FURTHER, HOWEVER, that Lender shall
advise Borrower of its determination within fourteen (14) days after Borrower
30
submits to Lender, in detail satisfactory to Lender, in its sole discretion,
its written analysis of the effect of the release of the Facility upon the
Security Pool Covenants; and
(vi) Lender shall receive, at Borrower's sole cost and expense,
such endorsement(s) to the Title Policy as Lender may deem reasonably
necessary to insure the Deeds of Trust or Mortgages, as applicable,
encumbering the Facilities not so released remain valid liens against such
properties notwithstanding any such release of a Facility, subject only to
such title exceptions as were originally shown in the Title Policy.
B. In addition to the $5,000 processing fee applicable to a Lien
Release, Borrower shall pay, on or before the date any Lien Release is
granted, all costs and expenses incurred by Lender in connection with any
requested Lien Release, including, without limitation, all reasonable legal,
accounting, appraisal, title, recording and filing fees and costs, whether
such Lien Release is actually consummated.
C. The Release Price shall be applied first against the Note for the
state in which the Facility being released is located, with the balance
applied against such other Notes as Lender in its sole discretion shall
determine.
31
5.2 LIEN RELEASES APPLICABLE TO TENANT'S EXERCISE OF PURCHASE OPTIONS IN
THEIR LEASES.
If (i) Xxxxx'x Food & Drugs, Inc. ("Xxxxx'x") (with respect to Paradise
Marketplace), (ii) Woodbridge Group (with respect to Xxxx Tech II), (iii)
Globe Industries, Inc. (with respect to Xxxx Tech II), or (iv) Mitsubishi
Motors of America Credit, Inc. (with respect to Cypress A) exercises its
respective purchase option contained in its lease, then Borrower shall be
obligated to pay Lender the Release Price, together with the applicable
Prepayment Premium, for the applicable Facility, which payment shall be made
to Lender on or before the closing date for the transfer to such tenant of
its leased premises. Lender's obligation to execute a Lien Release in
accordance with this SUBSECTION 5.2 shall otherwise be in accordance with and
subject to the terms and conditions of SUBSECTION 5.1A (i), (iii) and (vi)
(or SUBSECTION 4.1A (i), (iii), (iv) AND (v) if applicable (provided the
execution of a Lien Release shall not constitute a waiver by Lender of any
Event of Default or Potential Event of Default that may then exist or occur
as a result of such release).
5.3 MATERIAL DAMAGE OR DESTRUCTION.
In the event of any material damage or destruction to a Facility and
provided Borrower does not intend to rebuild or restore such Facility, or
upon a material taking by any public or quasi-public authority through
condemnation, eminent domain or deed in lieu thereof, and not withstanding
anything to the contrary contained in SECTION 8 hereof, Borrower shall have
the right to elect not to repair or rebuild the Facility and to deposit with
Lender an irrevocable letter of credit in favor of Lender and otherwise in
form and content satisfactory to Lender in its sole discretion, with an
expiry date not less than thirteen (13) months from its issuance (the "Damage
Letter of Credit"). The Damage Letter of Credit shall secure Borrower's
obligations hereunder and shall be in an amount equal to the Appraised Value
of such Facility, without regard to any damage or destruction. Upon Lender's
receipt of the Damage Letter of Credit, Lender shall (i) release the Net
Proceeds to Borrower, (ii) release the Lien on the Facility so damaged,
destroyed or taken in accordance with
32
the procedures set forth in SUBSECTION 5.1A (without regard to the payment of
the Release Price or payment of the $5,000 processing fee) and (iii) permit
Borrower to add an additional Facility to the Security Pool and reduce the
Damage Letter of Credit in accordance with the procedures set forth in
SUBSECTION 4.2 (without regard to the twenty-four (24) month period referred
to therein). Borrower's rights under this SUBSECTION 5.3 must be exercised,
if at all, by Borrower delivering the Damage Letter of Credit to Lender
within one hundred twenty (120) days of the date of the damage, destruction
or taking and the exchange rights shall terminate twelve (12) months
following the delivery of the Damage Letter of Credit to Lender. At the
expiration of the twelve (12) month period referenced herein Borrower shall
pay to Lender, as a prepayment under the Notes, the outstanding and undrawn
amount of the Damage Letter of Credit, together with any applicable
Prepayment Premium. Lender may, at its option and in addition to other
rights and remedies it may have hereunder or under any of the Loan Documents,
upon the occurrence of an Event of Default, unconditionally draw on the
Damage Letter of Credit in any amount up to the full stated amount thereof
and apply the proceeds of such draw or draws in any manner determined by
Lender, including, at the option of Lender in its sole discretion, (i) paying
down the outstanding principal balance of one or more of the Notes, and/or
(ii) paying or satisfying, in a manner and fashion satisfactory to Lender in
its sole discretion, any obligations owing under the Notes or any one of
them, whether for principal or interest, or under any of the Loan Documents
and/or under the Hazardous Substances Agreements.
5.4 MERIDIAN VILLAGE LIEN RELEASE.
A. Concurrent with the execution of this Agreement, Lender shall release
its Lien on Meridian Village, subject to the following conditions:
(i) there shall exist no Event of Default or Potential Event of
Default;
(ii) Borrower shall provide evidence, in form and substance
satisfactory to Lender in its sole discretion that
33
the Security Pool Covenants shall continue to be met, after giving effect to
the release of Meridian Village;
(iii) Lender shall receive, at Borrower's sole cost and expense,
such endorsement(s) to the Title Policy as Lender may deem reasonably
necessary to insure the Deeds of Trust or Mortgages, as applicable,
encumbering the Facilities not so released remain valid liens against such
properties notwithstanding any such release of a Facility, subject only to
such title exceptions as were originally shown in the Title Policy; and
(iv) Borrower shall pay, on or before the date any Lien Release is
granted, all costs and expenses incurred by Lender in connection with any
requested Lien Release, including, without limitation, all reasonable legal,
accounting, appraisal, title, recording and filing fees and costs.
6. REPRESENTATIONS AND WARRANTIES
6.1 REAFFIRMATION OF WARRANTIES AND REPRESENTATIONS; SURVIVAL OF
WARRANTIES AND REPRESENTATIONS.
Any delivery of a Loan Document during the term of this Agreement shall
constitute (i) a warranty and representation by Borrower to Lender that there
does not then exist an Event of Default or Potential Event of Default, and
(ii) a reaffirmation as of the date of said Loan Document of the
representations and warranties of Borrower contained in this SECTION 6 and in
each Loan Document and Hazardous Substances Agreement. All representations
and warranties of Borrower contained in this Agreement shall survive the
execution, delivery and acceptance thereof by the parties hereto and the
Effective Date.
6.2 OWNERSHIP OF METRO-SIERRA, PROGRESS CENTER AND INDTENNCO.
All of the partnership interests, both limited and general, of
Metro-Sierra, Progress Center and IndTennCo are held and owned, directly or
indirectly, by MIT and shall
34
continue to be so held during the term of the Loan. In no event shall
Borrower convey, transfer or consent to transfer, whether by sale,
assignment, pledge, hypothecation, operation of law or otherwise, any direct
or indirect partnership interest in Metro-Sierra, Progress Center or
IndTennCo.
6.3 MUTUAL BENEFITS.
MIT, Metro-Sierra, Progress Center and IndTennCo (i) are engaged in
related businesses, (ii) shall each derive substantial benefit from the
ownership and operation of the Facilities, and (iii) could not enjoy and
derive such benefits without obtaining the proceeds of the Loan.
Accordingly, each of MIT, Metro-Sierra, Progress Center and IndTennCo
represents, warrants and agrees that the proceeds of the Loan shall be used
to refinance existing indebtedness which, in each case, was used for, will be
used for, and has or will directly or indirectly benefit the operations of
the Facilities, and that each of MIT, Metro-Sierra, Progress Center and
IndTennCo will derive substantial, direct and indirect benefit from the Loan.
Without limiting the generality of the foregoing, each of MIT, Metro-Sierra,
Progress Center and IndTennCo acknowledge that it would not be able to obtain
mortgage loan financing from Lender at the interest rate of the Loan and on
the same terms and conditions of the Term Sheet absent the grant of all of
the collateral provided Lender by the Loan Documents and that such proceeds
as above described shall directly and substantially benefit each of MIT,
Metro-Sierra, Progress Center and IndTennCo.
6.4 QUALIFICATION AS A REIT; PUBLICLY TRADED COMPANY.
At all times Borrower shall cause to be done all things necessary to
maintain, preserve and renew its corporate existence and qualification as a
REIT. Without limiting the foregoing and regardless of REIT laws, at all
times Borrower shall comply with the following: (i) the stock of Borrower
shall be owned by 100 or more persons; and (ii) five or fewer persons shall
not own, in the aggregate, fifty percent (50%) or more of the stock of
Borrower (by value), directly or indirectly, actually or constructively. At
all times Borrower shall cause to be done all things necessary to
35
maintain, preserve and renew its status as a publicly traded corporation
listed on the American Stock Exchange or the New York Stock Exchange and in
compliance with the rules and regulations of the Securities and Exchange
Commission.
6.5 ERISA.
A. Lender represents and warrants to Borrower that, as of the date of
this Agreement and throughout the term of the Loan, the source of funds from
which Lender extends the Loan is its General Account, which is subject to the
claims of its general creditors under state law; Lender further represents
and warrants that it meets conditions for application of the general
exemption in Section I of the Proposed Class Exemption for Certain
Transactions Involving Insurance Company General Accounts (59 Fed. Reg. 43134
(1994)) ("Class Exemption").
B. Borrower represents and warrants to Lender that, as of the date of
this Agreement and throughout the term of the Loan, (i) Borrower is not an
"employee benefit plan" as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), which is subject to Title
I of ERISA, and (ii) the assets of Borrower do not constitute "plan assets"
of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101.
C. Borrower represents and warrants to Lender that, as of the date of
this Agreement Borrower is not a "governmental plan" within the meaning of
Section 3(32) of ERISA.
D. Borrower covenants and agrees to deliver to Lender such
certifications or other evidence from time to time throughout the term of the
Loan, as requested by Lender in its sole discretion, that (i) Borrower is not
an "employee benefit plan" or a "governmental plan"; and (ii) one or more of
the following circumstances is true:
(1) Equity interests in Borrower are publicly offered securities,
within the meaning of 29 C.F.R. Section 2510.3-101(b) (2);
(2) Less than twenty-five percent (25%) of all equity interests in
Borrower are held by
36
"benefit plan investors" within the meaning of 29 C.F.R.
Section 2510.3-101(f)(2);
(3) Borrower qualifies as an "operating company" or a "real estate
operating company" within the meaning of 29 C.F.R. Section
2510.3-101(c) or (e); or
(4) No equity interest in Borrower is held directly or indirectly by
an employee benefit plan subject to ERISA.
E. Any of the following shall constitute an Event of Default entitling
Lender to exercise any and all remedies to which it may be entitled under the
Loan Documents: (i) the failure of any representation or warranty made by
Borrower under this SUBSECTION 6.5 to be true and correct in all respects,
(ii) the failure of Borrower to provide Lender with the written
certifications and evidence referred to above, or (iii) assuming that the
Class Exemption referred to in SUBSECTION 6.5A is granted in substantially
the form proposed and relying on Lender's representations in SUBSECTION 6.5A,
the consummation by Borrower of a transaction which would cause the Agreement
or any exercise of Lender's rights under the Loan Documents to constitute a
non-exempt prohibited transaction under ERISA, subjecting Lender to liability
for violation of ERISA.
F. Borrower shall indemnify, protect and defend and hold Lender harmless
from and against all loss, cost, damage and expense (including attorneys'
fees and costs incurred in the investigation, defense and settlement of
claims and losses incurred in correcting any prohibited transaction or in the
sale of a prohibited loan, and in obtaining any individual prohibited
transaction exemption under ERISA that may be reasonably required, as
determined by Lender) that Lender may incur, directly or indirectly, as a
result of a default under SUBSECTION 6.5E; provided that this SUBSECTION 6.5
shall not apply to any loss, cost or damage or expense that is the result of
the failure of representation or warranty made by Lender under this
SUBSECTION 6.5 to be true and correct in all respects. This indemnity shall
survive any termination, satisfaction or foreclosure of the Mortgage.
37
G. Anything in PARAGRAPH 4.2 of any of the Deeds of Trust or Mortgages
or elsewhere in the Loan Documents to the contrary notwithstanding, no sale,
assignment or transfer of any direct or indirect interest in Borrower shall
be permitted which would negate Borrower's representations in this SUBSECTION
6.5 or cause this Agreement (or any exercise of Lender's rights under the
Loan Documents) to constitute a violation of any provision of ERISA, as
reasonably determined by Lender.
H. Anything in PARAGRAPH 4.2 of any of the Deeds of Trust or Mortgages
or elsewhere in the Loan Documents to the contrary notwithstanding, no direct
or indirect transfer of the Property or any interest therein including a
junior lien or leasehold interest, shall be permitted which would cause this
Agreement (or any exercise of Lender's rights under the Loan Documents) to
constitute a violation of ERISA or any applicable state statute regulating a
governmental plan, as reasonably determined by Lender.
I. Anything in this Agreement to the contrary notwithstanding, not less
than fifteen (15) days before consummation of a transfer of title to any
Facility or of an interest in Borrower, or of any direct or indirect right,
title or interest in either of them, excluding transfers of publicly-traded
interests, or of the placing of any lien or encumbrance on any Facility,
Borrower shall obtain from the proposed transferee or lienholder a
representation to Lender in form and substance satisfactory to Lender that
SUBSECTION 6.5D will be true after the transfer; and further provided that
any proposed lienholder agrees that any direct or indirect transfer of its
lien or any interest herein will be governed by this SUBSECTION 6.5.
7. LEASING AND AGREEMENTS
7.1 LEASING.
A. Borrower may enter into new Leases of space in the Facilities without
the prior written consent of Lender if no Event of Default or Potential Event
of Default shall then exist, and each of the following conditions has been
satisfied: (i) the term of such new Lease, including
38
extension options, does not exceed ten (10) years; (ii) such new Lease is for
less than 50,000 gross leasable square feet for industrial properties and
less than 15,000 gross leasable square feet for retail properties; (iii) the
rental provisions contained in such new Lease are fair market rental rates
for comparable rental space in the applicable market; (iv) such new Lease is
drafted, negotiated, documented and entered into by Borrower in accordance
with Approved Manager Business Practices (as defined below); and (v) any new
Lease of space in a Facility shall not contain any option or other right to
acquire all or any part of the Facility, require Lender following any
foreclosure, transfer by deed in lieu of foreclosure or similar transfer to
undertake or be bound by any obligation to construct improvements or
otherwise expend funds which are capital in nature, except for items of
ordinary maintenance and repair, or contain an asbestos, environmental, or
hazardous substances indemnification in favor of a tenant unless such
indemnification would be extinguished by foreclosure, transfer by deed in
lieu of foreclosure, or similar transfer of the Facility. Any existing Lease
of space or new Lease of space in a Facility that complies with each of the
terms set forth in SUBSECTION 7.1A(i) through (v) inclusive shall be
hereinafter referred to as an "Approved Lease".
B. In addition, if no Event of Default or Potential Event of Default
then exists, then Borrower may, without the prior written consent of Lender,
amend or modify or alter in any manner, terminate, revise, excuse, condone,
discount, set-off, compromise or in any other manner release or discharge
tenants under any Approved Lease so long as the Security Pool Covenants
continue to be satisfied after giving affect to the amendment or
modification, any such amendment or modification is consistent with Approved
Manager Business Practices (as defined below), and any such modification or
amendment would not cause such Lease to fail to satisfy the minimum
requirements for qualification as an Approved Lease as set forth in
SUBSECTION 7.1A(i) through (v) inclusive, hereof. As used herein, "Approved
Manager Business Practices" shall mean the ordinary business practices and
procedures employed in good faith by the manager of the Facilities in
connection with the leasing of space in, and the management of, first class
industrial or retail properties, as applicable. If no Event of Default or
39
Potential Event of Default then exists, Borrower may terminate any Approved
Lease, without the consent of Prudential, if such termination is based on
Approved Manager Business Practices and if the Security Pool Covenants shall
continue to be satisfied after giving affect to the termination.
C. Borrower shall not, without the prior written consent of Lender, (1)
except as permitted by the foregoing provisions of this SUBSECTION 7.1 which
apply to Approved Leases or as may be required under the terms of any
existing Lease, lease any part of a Facility or renew or extend any Leases;
(2) except as permitted by the foregoing provisions of this SUBSECTION 7.1
which apply to Approved Leases or as may be required under the terms of any
existing Lease, terminate, amend, modify or alter in any manner any Leases,
or waive, excuse, condone, discount, set off, compromise, or in any manner
release or discharge tenants under any Leases from any obligations,
covenants, conditions and agreements by such tenants to be kept, or account
or consent to any surrender of the Leases (except as required by terms of the
Lease); (3) receive or collect any rents for a period of more than one month
in advance; (4) further assign the Leases or pledge, transfer, mortgage or
otherwise encumber or assign future payments of rents, (5) except as
permitted by the foregoing provisions of this SUBSECTION 7.1 which apply to
Approved Leases, commence an action of ejectment or summary proceedings for
dispossession of the tenants under any Leases; (6) consent to a change in the
permitted use of the premises; (7) except as permitted by the foregoing
provisions of this SUBSECTION 7.1 which apply to Approved Leases or as may be
required under the terms of any existing Lease, consent to any subletting of
a Facility or any part thereof, or to assignment of the leases by lessees
thereunder or to any assignment or further subletting by any sublessees; or
(8) undertake any action with respect to any Lease which constitutes an
Approved Lease that would cause such Lease to no longer constitute an
Approved Lease.
D. Lender's consent to the execution, amendment, modification or
termination of a Lease shall be granted or denied within five (5) business
days after Lender receives a SECOND written request for such consent (which
second written request shall be given not less than fifteen (15)
40
business days after the first such request) stating that it is a second
notice and specifying the provision of the Loan Administration Agreement
pursuant to which it is given. If Lender fails to grant or deny such consent
within the above-specified time period, such Lease or Lease amendment,
modification or termination shall be deemed to have been approved by Lender.
Lender's processing fees for each proposed Lease or Lease amendment,
modification or termination reviewed by Lender is $500, which amount shall be
payable by Lender on demand, in addition to Lender's reasonable attorneys'
fees and expenses incurred in connection with such review, whether or not
such consent is granted. No fee shall be due or payable in connection with
any execution, amendment, modification or termination of a Lease for which no
Lender review or consent is required under this SUBSECTION 7.1.
7.2 NON-DISTURBANCE AGREEMENTS.
A. For any Approved Lease and any other lease approved by Landlord in
writing (collectively, a "Qualifying Lease"), and provided that in the
negotiation of said Lease Borrower uses commercially reasonable efforts not to
agree to obtain the agreement of Lender to execute a non-disturbance agreement
with the tenant thereunder, Lender agrees to enter into an agreement with the
tenant under any Qualifying Lease (providing said tenant shall have first
executed said agreement), prepared on Lender's then current standard form of
non-disturbance and attornment agreement from time to time in effect (the
"Standard Non-Disturbance Form"), whereby Lender agrees that in the exercise of
any foreclosure remedies Lender will not disturb such tenant in its possession
of the demised premises, provided that the tenant thereunder is not then in
default under its respective Lease. Upon request of Borrower, Lender will
provide Borrower with a copy of its current Standard Non-Disturbance Form.
Notwithstanding anything in the foregoing to the contrary, Lender shall not
agree to be:
(i) liable for (a) any act, neglect, fault or omission of any prior
lessor (including Borrower) or (b) any breach of any representation or warranty
of any prior lessor (including Borrower) contained in the Lease; or
41
(ii) subject to any offsets, defenses or rights of offset (whether
arising under the Lease, at law, in equity or otherwise) which the tenant might
have against any such prior lessor (including Borrower); or
(iii) bound by any prepayment of rent for more than one (1) calendar
month; or
(iv) bound by any representation or warranty of any prior lessor
(including Borrower) pursuant to the Lease; or
(v) bound by any amendment or change in any term of the Lease or by
any waiver of any term of the Lease which was not approved in writing by
Borrower; or
(vi) liable for the return of any security deposit delivered to any
prior lessor (including Borrower) unless such security deposit shall have been
separately delivered to Lender; or
(vii) bound by any obligation to construct improvements or otherwise
expend funds which are capital in nature, except for items of ordinary
maintenance and repair; or
(viii) bound by any option or other right to acquire all or any part
of a Facility; or
(ix) bound by any asbestos, environmental or hazardous substances
indemnification in favor of a tenant.
Borrower shall pay Lender the lease review fee provided in SUBSECTION
7.1 in connection with the review of the applicable Lease and/or the preparation
of any non-disturbance agreement, in addition to Lender's reasonable attorney's
fees and expenses incurred in connection with the review and preparation,
whether or not such non-disturbance agreement is executed.
7.3 XXXXX'X PURCHASE OPTION.
Pursuant to a Fourth Amendment to Lease dated September 20, 1994, Borrower
paid to Xxxxx'x $25,000 to obtain the
42
right to cancel the purchase option contained in the Xxxxx'x lease, which
right must be exercised prior to September 19, 1995. Borrower covenants and
agrees that during its ownership of Paradise Marketplace it shall either (i)
maintain in effect a written agreement with Xxxxx'x to unconditionally
terminate Xxxxx'x purchase option for an amount not to exceed $600,000 (and
pay any option fee or other consideration necessary to extend such option),
or (ii) exercise its right to terminate Xxxxx'x purchase option by paying
Xxxxx'x the contract amount. Borrower shall provide evidence to Lender of
its compliance with the provisions of this SUBSECTION 7.3 on an on-going
basis.
8. CASUALTIES AND CONDEMNATION
8.1 INSURANCE PROCEEDS.
With respect to any loss or damage to a Facility caused by fire or other
casualty exceeding in any one instance the sum of Two Hundred Fifty Thousand
Dollars ($250,000):
A. Borrower will notify Lender in writing promptly after loss or damage
caused by fire or other casualty to all or any part of a Facility, and prior to
the making of any repairs thereto. Borrower will furnish to Lender within sixty
(60) days after such loss or damage (i) preliminary plans and specifications for
the repair and reconstruction of the Facility (the "Preliminary Plans and
Specifications"); and (ii) evidence satisfactory to Lender (1) of the cost of
repair or reconstruction in accordance with the Preliminary Plans and
Specifications, (2) that sufficient funds are available and/or committed for the
benefit of Lender, including insurance proceeds, funds provided by Borrower,
payment and performance bond, or otherwise, to complete such repair or
reconstruction, and (3) that such repair or reconstruction may be completed in
accordance with all applicable Laws and Restrictions within the time frame
described in SUBSECTION 8.1C.(v) and that all necessary permits and approvals
have been or will be obtained.
B. All insurance proceeds on account of any damage to a Facility shall be
payable to, and deposited with, Lender.
43
Lender, at its sole option, may (i) subject to SUBSECTION 8.1C, apply such
insurance proceeds in payment of the Indebtedness or in satisfaction of any
other Obligation in such order as Lender may determine, (ii) use such
insurance proceeds to repair or reconstruct the Improvements, (iii) release
such insurance proceeds to Borrower for repair or reconstruction of the
Improvements in accordance with the procedures described in SUBSECTION 8.1E,
or (iv) divide such proceeds in any manner among any such application, use or
release. No such application, use or release shall, however, extend or
postpone the due date of any installments under the Note or change the amount
of such installments or cure or waive any Event of Default or notice of Event
of Default under the Loan Documents or invalidate any act done pursuant to
such notice.
C. Notwithstanding the provisions of SUBSECTION 8.1B, if all or any part
of a Facility is damaged or destroyed (and Borrower has not made an election
under SUBSECTION 5.3 not to repair or rebuild) or any part of a Facility is
taken by any public or quasi-public authority through condemnation, eminent
domain, deed in lieu thereof, or otherwise, Lender shall make the net amount of
all insurance proceeds and condemnation awards received by Lender after
deduction of Lender's reasonable costs and expenses, if any, in collection of
the same and costs associated with Lender's review of the Preliminary Plans and
Specifications and other costs associated with disbursement of such proceeds
(the "Net Proceeds"), available for the repair and reconstruction of a Facility
(or so much thereof as was not condemned) pursuant to the procedures described
in SUBSECTION 8.1E, provided that (i) no Event of Default or Potential Event of
Default shall have occurred and shall be continuing, (ii) Borrower has complied
with the provisions of SUBSECTION 8.1A and Lender has approved in its reasonable
discretion the Preliminary Plans and Specifications, (iii) Borrower shall
proceed with the reconstruction of a Facility as nearly as possible to the
condition it was in immediately prior to the occurrence of such casualty or
taking or better (the "Occurrence") and in accordance with the Preliminary Plans
and Specifications (and any changes thereto reasonably approved by Lender) as
promptly as is practicable after the Occurrence, but in no event later than
three (3) months after the Occurrence, (iv) Lender shall be satisfied that no
44
Leases with an aggregate rentable square footage of fifty percent (50%) or
more of the total rentable square feet contained in the Facility prior to the
Occurrence, shall be terminated as a result of the Occurrence, (v) Lender
shall be satisfied that such reconstruction can be completed no later than
twelve (12) months after the Occurrence (or such longer period as may be
required in Lender's reasonable discretion, up to a maximum period of
eighteen (18) months) (vi) Lender shall be satisfied that the reconstruction
can be completed at a cost which does not exceed the Net Proceeds or, in the
event the cost of such restoration exceeds the Net Proceeds, Borrower shall
have satisfied the requirements set forth in SUBSECTION 8.1F(i) or SUBSECTION
8.1F(ii), (vii) Lender shall be satisfied that Borrower (whether with rental
loss insurance proceeds or otherwise) will continue to be able to timely pay
all payments as they become due on the Indebtedness during such period of
repair and reconstruction, (viii) Borrower shall cause such reconstruction to
be completed with due diligence as promptly as possible after commencement,
but in no event later than twelve (12) months after the Occurrence (or such
longer period as may be required in Lender's reasonable discretion, up to a
maximum period of eighteen (18) months), (ix) Lender determines that repair
or reconstruction is economically feasible and that the Security Pool
Covenants shall continue to be satisfied at all times, and (x) Borrower shall
have entered into a general construction contract acceptable in all respects
to Lender for completion of the repair or reconstruction, which contract must
include provision for a retainage of not less than ten percent (10%) until
full completion of the repair or reconstruction.
D. Lender shall be entitled to settle and adjust all insurance claims
during an Event of Default or Potential Event of Default and Lender's written
consent shall be required for any claims for damages of more than $500,000, and
Lender may deduct and retain from the proceeds of any insurance the amount of
all reasonable expenses incurred by Lender in connection with any settlement or
adjustment.
E. The Net Proceeds and any additional funds deposited by Borrower with
Lender shall constitute additional security for the Loan and shall, if the
amount is over $500,000, be deposited in an interest-bearing account. Borrower
shall
45
execute, deliver, file and/or record, at its own expense, such documents and
instruments as Lender deems necessary or advisable to grant to Lender a
perfected, first priority security interest in the Net Proceeds and such
additional funds. Lender shall pay the Net Proceeds to the Borrower from
time to time during the course of the restoration, subject to the following
terms and conditions:
(1) The work shall be administered and overseen by an architect or
engineer approved by Lender ("Architect"). Complete copies of the
final plans and specifications for the work (the "Final Plans and
Specifications"), approved by all governmental authorities whose
approval is required, and bearing the sealed and signed approval
thereof by the Architect and accompanied by the Architect's
signed estimate of the entire cost of completing the work, shall
be delivered to Borrower;
(2) Each request for payment shall be made upon seven (7) days' prior
notice to Lender and shall be accompanied by a certificate to be
made by the Architect stating that (i) all of the work completed
has been done in compliance with the Plans and Specifications, as
approved by Lender, (ii) the sum requested is justly required to
reimburse Borrower for payments by Borrower to, or is justly due
to, the contractor, subcontractors, materialmen, laborers,
engineers, architects or other persons rendering services and
materials for the work (giving a brief description of such
services and materials) and, when added to all sums previously
paid out by Lender, does not exceed the value of the work done to
the date of such certificate, and (iii) the amount of such
proceeds remaining with Lender are sufficient on completion of
the work to pay for the same in full (giving in such reasonable
detail as Lender may require an estimate of the cost of such
completion);
46
(3) Each request shall be accompanied by waivers of lien satisfactory to
Lender covering that part of the work for which payment or
reimbursement is being requested and, if required by Lender, by a
search prepared by a title company satisfactory to Lender, that
there has not been filed with respect to the Facility any
mechanics', materialmen's or other lien;
(4) The request for any payment after the work has been completed shall be
accompanied by a copy of any certificate or certificates required
by any Laws and Restrictions for legal occupancy of the
Improvements;
(5) Borrower shall deliver to Lender certified or photostatic copies of
all permits and approvals required by any Laws and Restrictions
in connection with the commencement and conduct of the work; and
(6) Borrower shall deliver to Lender a surety bond for and/or guaranty of
the payment for and completion of the work, which bond or
guaranty shall be in form and substance satisfactory to Lender
and in an amount not less than the Architect's estimate of the
entire cost of completing the work.
F. Notwithstanding anything to the contrary contained herein, or in any of
the insurance policies, all proceeds paid to Borrower under such policies shall
immediately be delivered to Lender. If the Net Proceeds exceed the costs of
completion of the restoration of a Facility, such excess proceeds shall belong
and be retained by and/or paid over to Lender to be applied against the
Indebtedness. If at any time the Net Proceeds shall not, in Lender's opinion,
be sufficient to pay in full the balance of the costs which will be incurred in
connection with the repair and reconstruction of a Facility and all payments as
they come due on the Indebtedness and all other obligations which are or may be
secured by a lien on a Facility during the reconstruction period, Borrower
shall, prior to receiving any further disbursement, either (i) complete, using
its own
47
funds and not borrowed funds, such portion of the reconstruction as shall be
sufficient to render the Net Proceeds sufficient to complete the
reconstruction, or (ii) deposit the deficiency with Lender before any further
disbursement of the Net Proceeds shall be made, which deficiency deposit
shall be held by Lender in an interest bearing special account and shall be
disbursed on the same conditions applicable to the Net Proceeds. Lender
shall remit to Borrower the balance, if any, of any such deficiency deposit
remaining after completion of the reconstruction.
8.2 ADDITIONAL PROVISIONS RELATING TO CONDEMNATION.
Borrower, immediately upon obtaining knowledge of the commencement of any
proceedings for the condemnation of an entire Facility or any material part
thereof, will notify Lender of the pendency of such proceedings. Lender may
participate in any such proceedings and Borrower from time to time will deliver
to Lender all instruments requested by Lender to permit such participation. In
the event of such condemnation proceedings, the award or compensation payable is
hereby assigned to and shall be paid to Lender. Lender shall be under no
obligation to question the amount of any such award or compensation and may
accept the same in the amount in which the same shall be paid. In any such
condemnation proceedings the Lender may be represented by counsel selected by
the Lender, the cost of such counsel to be borne by Borrower. The proceeds of
any award or compensation so received shall, at the option of Lender, either be
applied to the prepayment of the Indebtedness or be paid over to the Borrower
for restoration of the Improvements in accordance with the provisions of
SUBSECTION 8.1C. Borrower hereby unconditionally and irrevocably waives all
rights of a property owner under applicable law providing for the allocation of
condemnation proceeds between a property owner and a lien holder.
9. EVENT OF DEFAULT
9.1 DEFINITION. If one or more of the following events shall have
occurred and be continuing:
48
A. Borrower shall fail to pay within five (5) days of the date when due
any part of the Indebtedness;
B. Borrower shall be in default under any of the Security Pool Covenants;
C. Subject to SUBSECTION 9.4, Borrower shall fail to timely observe,
perform or discharge any Obligation or any material obligations on its part to
be performed or observed under any other agreement relating to a Facility
(including, without limitation, obligations under the CRE Debt) other than as
described in SUBSECTIONS 0.0X, X, X, X, X, X, X, X AND J, and any such failure
shall remain unremedied for thirty (30) days or such lesser period as may be
otherwise specified in the applicable Loan Document or agreement (the "Grace
Period") after notice to Borrower of the occurrence of such failure; provided,
however, that the Grace Period may be extended to ninety (90) days if: (a)
Lender determines in good faith that (i) such default cannot be cured within the
Grace Period but can be cured within ninety (90) days, (ii) no lien or security
interest created by the Loan Documents shall be impaired prior to the completion
of such cure, and (iii) Lender's immediate exercise of any remedies provided
hereunder or by law is not necessary for the protection or preservation of a
Facility or Lender's security interest therein, and (b) Borrower shall
immediately commence and diligently pursue the cure of such default;
D. Borrower shall fail to timely observe, perform or discharge any
provision of paragraph 4.2 of any Deed of Trust or Mortgage;
E. Borrower, as lessor or sublessor, as the case may be, shall assign the
rents or income of a Facility or any part thereof (other than to Lender) without
first obtaining the written consent of Lender;
F. Default by Borrower after the expiration of all applicable grace or
cure periods under any agreement other than the Loan Documents to which Borrower
is a party, which agreement relates to the borrowing of money by Borrower from
any Person, and such default might have a material adverse
49
effect upon the value or the operation of a Facility, or the security for the
Loan;
G. Any representation or warranty made by Borrower in, under or pursuant
to the Loan Documents was false or misleading in any material respect as of the
date on which such representation or warranty was made or deemed remade;
H. Any claim or lien shall be filed against a Facility or any part
thereof, whether or not such lien shall be prior to this Mortgage, which shall
be maintained for a period of thirty (30) days without discharge, satisfaction
or adequate bonding;
I. Any of the Loan Documents, the Hazardous Substances Agreements or the
Fraudulent Conveyance Indemnity Agreement, at any time after their respective
execution and delivery and for any reason, other than an act or omission of
Lender, shall cease to be in full force and effect or be declared null and void,
or shall cease to constitute valid and subsisting liens and/or valid and
perfected security interests in and to a Facility, or Borrower shall contest or
deny in writing that it has any further liability or obligation under any of the
Loan Documents; or
J. Default by Borrower after the expiration of all applicable grace or
cure periods, if any, under the Hazardous Substances Agreements or the
Fraudulent Conveyance Indemnity Agreement,
THEN and in any such event Lender may, by written notice delivered to
Borrower, declare Borrower to be in default. Upon the occurrence of
such event and the giving of such notice where required, the same
shall constitute an event of default (an "Event of Default").
9.2 BANKRUPTCY. It shall constitute an Event of Default and a bankruptcy
default (a "Bankruptcy Default") hereunder without the requirement of any notice
if one or more of the following events shall have occurred and be continuing:
A. Borrower, or any general partner of Borrower, any parent company of
such partner, or any other owner of a Facility or any interest therein, if other
than a Loan Party
50
(individually, an "Affected Party," collectively, the "Affected Parties"),
generally fails to pay its debts as they become due or admits in writing its
inability to pay its debts, or makes a general assignment for the benefit of
creditors;
B. Any Affected Party commences any case, proceeding or other action
seeking reorganization, arrangement, adjustment, liquidation, dissolution or
composition of it or its debts under any law relating to bankruptcy, insolvency,
reorganization or relief of debtors, or seeks to have an order for relief
entered against it as debtor, or seeks appointment of a receiver (a "Receiver"),
for it or for all of any substantial part of its property (collectively, a
"Proceeding");
C. Any Affected Party shall take any action to authorize any of the
actions set forth above in clause (2);
D. Any Proceeding is commenced against any Affected Party, and such
Proceeding (i) results in an entry of an order for relief against it which is
not fully stayed within seven (7) business days after the entry thereof, or (ii)
remains undismissed for an aggregate of forty-five (45) days (whether or not
consecutive); or
E. A Receiver shall have been appointed with respect to (i) any Affected
Party; or (ii) all or any substantial part of the property of any Affected
Party.
9.3 ACCELERATION. Upon the occurrence of a Bankruptcy Default, all of the
Indebtedness shall become immediately due and payable together with any
prepayment fee due in accordance with the terms of the Notes, without
presentment, demand, protest or notice of any kind. Upon the occurrence of any
other Event of Default, Lender may at any time declare all of the Indebtedness
to be due and payable and the same shall thereupon become immediately due and
payable, together with any prepayment fee due in accordance with the terms of
the Notes, without any further presentment, demand, protest or notice of any
kind. Upon the occurrence of an Event of Default, Lender may, in its sole
discretion, also do any of the following:
51
(i) in person, by agent, or by a Receiver, and without regard
to the adequacy of security, the solvency of Borrower or
the condition of the Facilities, enter upon and take
possession of one or more of the Facilities, or any part
thereof, in its own name and do any acts which Lender
deems necessary to preserve the value, marketability or
rentability of such Facilities; xxx for or otherwise collect the
rents, issues and profits therefrom, including those past due
and unpaid, and apply the same, less costs and expenses of
operation and collection, including reasonable attorneys'
fees, against the Indebtedness, all in such order as
Lender may determine. The entering upon and taking
possession of said property, the collection of such rents,
issues and profits and the application thereof as aforesaid
shall not cure or waive any default or notice of default hereunder
or invalidate any act done pursuant to such notice;
(ii) commence an action to foreclose one or more of the Deeds of Trust or
Mortgages in the manner provided thereunder or by law;
(iii) with respect to any Personalty (as defined in the applicable Deed
of Trust or Mortgage, proceed as to both the real and personal
property in accordance with Lender's rights and remedies in respect of
the Facility, or proceed to sell said Personalty separately and
without regard to the Land in accordance with Lender's rights and
remedies as to personal property;
(iv) deliver to Borrower a written declaration of default and demand for
sale, and a written notice of default and election to cause one or
more of the Facilities to be sold, which notice Lender shall cause to
be duly filed for record.
52
9.4 DEFINITION OF MATERIALITY IN CERTAIN CIRCUMSTANCES.
Lender hereby confirms that for purposes of SUBSECTION 9.1C of this
Agreement, an Event of Default shall not exist for any breach of a "non-material
obligation". For purposes of this SUBSECTION 9.4, a "non-material obligation"
shall mean an agreement the breach of which would not have a material adverse
effect upon the business, properties or condition (financial or otherwise) or
the operations of Borrower as a whole, or upon the Security Pool, as a whole.
Notwithstanding the foregoing, in no event shall any of the following agreements
be considered a "non-material obligation": (i) the Loan Documents, (ii) the
Hazardous Substances Agreements, (iii) the Fraudulent Conveyance Indemnity
Agreement, (iv) any obligations related to the CRE Debt, (v) any leases with
respect to any Facility, (vi) any agreement which relates to the borrowing of
money by Borrower, and (vi) any reciprocal easement agreement affecting a
Facility.
10. LIMITATION ON PERSONAL LIABILITY
THE PROVISIONS OF THIS SECTION 10 SHALL CONTROL AND SUPERSEDE ANY CONTRARY
PROVISION IN ANY LOAN DOCUMENT OR HAZARDOUS SUBSTANCES AGREEMENT RESPECTING THE
PERSONAL LIABILITY OF BORROWER.
10.1 LIMITED RECOURSE. Except as expressly set forth in SUBSECTION 10.2, the
recourse of Lender with respect to the Indebtedness shall be solely to the
property encumbered by the Deeds of Trust and/or Mortgages and any Letter of
Credit or other sums or other property then on deposit with or in which Lender
then has a security interest.
10.2 LIMITATIONS ON NON-RECOURSE. Notwithstanding anything to the contrary
contained in any Loan Document, nothing shall be deemed in any way to impair,
limit or prejudice at any time or from time to time the rights of Lender:
(i) in foreclosure proceedings or in any ancillary proceedings brought
to facilitate Lender's foreclosure on one or more Facilities or any portion
thereof;
53
(ii) to recover from Borrower damages or costs (including without
limitation reasonable attorneys fees) incurred by Lender as a result of
waste by Borrower;
(iii) to recover from Borrower any condemnation or insurance proceeds
attributable to the Property which were not paid to Lender or used to
restore in accordance with the terms of this Agreement.
(iv) to recover from Borrower any rents, profits, security deposits,
advances, rebates, prepaid rents or other similar sums attributable to the
Facilities collected by or for the Borrower following an Event of Default
and not properly applied to the reasonable fixed and operating expenses of
the applicable Facility, including payments of the Loan;
(v) to pursue the personal liability of Borrower under the provisions of
SUBSECTION 6.5 hereof, including any indemnification provisions under said
subsection;
(vi) to exercise any specific rights or remedies afforded Lender under
any other provisions of the Loan Documents that are not inconsistent
with SUBSECTION 10.1 hereof;
(vii) to recover from Borrower the amount of any unpaid taxes,
assessments, utility charges, and/or the proceeds of any purchase option
exercised by any tenant under a Lease and not paid to Lender effecting any
Facility and to collect from Borrower any sums expended by Lender necessary
to fulfill the obligations of Borrower, as lessor, under any leases
affecting the Facility prior to foreclosure;
(viii) to pursue any personal liability of Borrower under the Hazardous
Substances Agreements;
(ix) to pursue any personal liability of Borrower under the Fraudulent
Conveyance Indemnity Agreement
54
(x) executed by Borrower in favor of Lender as of the Effective Date;
to recover from Borrower all legal fees and costs (including any allocated
costs of in-house counsel to the extent not redundant with services
performed by outside counsel) and other expenses incurred by Lender in
enforcing any right it may have under the Loan Documents following an Event
of Default;
(xi) to recover from Borrower for all damages incurred by Lender as a
result of Borrower's execution, amendment, modification or termination of
any Lease without the prior written consent of Lender if such consent is
required under the terms of this Agreement; and
(xii) to recover from Borrower for all damages incurred by Lender as a
result of any material misrepresentation by Borrower in connection with
any Facility or the Loan Documents.
10.3 FURTHER LIMITATION. The agreement contained in this SECTION 10 to limit
the personal liability of Borrower shall become either null and void and of no
further force of effect (as to SUBSECTIONS i and ii) or limited as provided
below (as to SUBSECTIONS III and IV) in the event:
(i) of any breach or violation of PARAGRAPH 4.2 of any Deed of Trust or
Mortgage; or
(ii) of any fraud by Borrower in connection with the Facilities or the
Loan Documents; or
(iii) that a default shall have occurred under a Hazardous Substances
Agreement, unless prior to the expiration of any cure period relating to
such default, (i) such default shall have been duly and completely cured
and (ii) any claims by any party arising out of or relating to such
default, which are pending, threatened, or reasonably anticipated against
Borrower, or the Facility shall have been
55
duly paid, settled or waived (provided such recourse liability shall be
limited to the Appraised Value of the Facility without regard to any
environmental impairment); or
(iv) any Facility is determined to be "environmentally impaired" pursuant
to the provisions of Section 726.5 of the California Code of Civil
Procedure or any other similar state statute in the jurisdiction where the
Facility is located (provided such recourse liability in connection with
such Facility shall be limited to the Appraised Value of the Facility
without regard to any environmental impairment).
11. WAIVERS
11.1 WAIVER OF SUBROGATION AND CONTRIBUTION.
A. Each of MIT, Metro-Sierra, Progress Center and IndTennCo hereby
absolutely and irrevocably waives any and all (a) rights which it may have or
may now or hereafter acquire by way of subrogation, reimbursement or
indemnity against each other by virtue of any action taken by Lender with
respect to any of its rights or remedies under any of the Loan Documents or
otherwise (including, without limitation, by reason of any payments made by
MIT, Metro-Sierra, Progress Center or IndTennCo as the case may be, with
respect to any of the Notes), and (b) other claims or rights against each
other relating to this Agreement, the Loan Documents or any of the
obligations of each other to Lender.
B. EACH OF MIT, METRO-SIERRA, PROGRESS CENTER AND INDTENNCO
ACKNOWLEDGES AND AGREES THAT PURSUANT TO THE FOREGOING PARAGRAPH, IT HAS
WAIVED, AMONG OTHER SPECIFIC RIGHTS GRANTED TO IT AT LAW OR IN EQUITY, ITS
RIGHTS, IF ANY TO SUBROGATION, REIMBURSEMENT AND/OR INDEMNITY AGAINST EACH OF
THE OTHER BORROWERS. SUCH WAIVER INCLUDES, WITHOUT LIMITATION, A WAIVER OF
EACH OF MIT, METRO-SIERRA, PROGRESS CENTER AND INDTENNCO RIGHTS THROUGH
SUBROGATION, AFTER PAYMENT OF ITS OBLIGATIONS UNDER ANY OF THE LOAN DOCUMENTS
TO WHICH IT IS A PARTY AND THE APPLICATION OF SUCH PAYMENT
56
BY LENDER TO THE INDEBTEDNESS EVIDENCED BY ANY NOTE WITH RESPECT TO WHICH IT IS
NOT THE MAKER, TO BE SUBSTITUTED IN PLACE OF LENDER WITH RESPECT TO THE
OBLIGATIONS OF SUCH OTHER BORROWER SUCH THAT IT COULD SUCCEED TO LENDER'S
RIGHTS, REMEDIES AND/OR SECURITY RELATING TO SUCH OBLIGATIONS AND ASSERT A CLAIM
AGAINST SUCH OTHER BORROWER. CERTAIN AUTHORITIES HAVE DETERMINED THAT, IN THE
ABSENCE OF AN EFFECTIVE WAIVER, PARTICULAR ACTIONS OF A LENDER THAT IMPAIR OR
DESTROY A GUARANTOR'S OR OTHER SURETY'S SUBROGATION RIGHTS COULD PROVIDE SUCH
GUARANTOR OR OTHER SURETY WITH A DEFENSE TO THE PAYMENT AND PERFORMANCE OF ITS
OBLIGATIONS UNDER ITS GUARANTY OR OTHER SURETY OBLIGATION. BY WAY OF
EXAMPLE, BUT NOT OF LIMITATION, COURTS HAVE HELD THAT, ABSENT AN EFFECTIVE
WAIVER, A GUARANTOR OR OTHER SURETY MAY BE EXONERATED FROM ITS OBLIGATIONS
UNDER A GUARANTY OR OTHER SURETY OBLIGATION, AS APPLICABLE, IF A LENDER
COMPROMISES OR EXTINGUISHES THE GUARANTOR'S OR OTHER SURETY'S, AS THE CASE
MAY BE, SUBROGATION RIGHTS BY ELECTING TO FORECLOSE NON-JUDICIALLY, BY POWER
OF SALE, ON REAL PROPERTY SECURITY THEREBY INVOKING THE DEFICIENCY BAR OF
CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 580D. EACH OF MIT, METRO-SIERRA,
PROGRESS CENTER AND INDTENNCO AGREES THAT SUCH DEFENSES ARE INAPPLICABLE IN
LIGHT OF ITS IRREVOCABLE WAIVER OF SUBROGATION, REIMBURSEMENT AND/OR
INDEMNITY RIGHTS AGAINST EACH OTHER SET FORTH IN THE FOREGOING PARAGRAPH AND
THAT NO ACTION BY LENDER IN ENFORCING ITS RIGHTS AND REMEDIES AGAINST SUCH
OTHER BORROWER OR OTHERWISE MAY COMPROMISE OR EXTINGUISH SUCH RIGHTS BECAUSE
EACH SUCH RIGHT HAS BEEN IRREVOCABLY WAIVED BY IT HEREUNDER. EACH OF MIT,
METRO-SIERRA, PROGRESS CENTER AND INDTENNCO HEREBY ACKNOWLEDGES THAT IT HAS
BEEN NOTIFIED OF THE NATURE OF ALL OF ITS RIGHTS AND DEFENSES AS A GUARANTOR
OR SURETY AND HAS KNOWINGLY AND WITH THE ADVICE OF LEGAL COUNSEL WAIVE SUCH
RIGHTS AND DEFENSES AS SET FORTH HEREIN. EACH OF THE WAIVERS CONTAINED
HEREIN WERE SEPARATELY BARGAINED FOR.
INITIALS:
------- ------- ------- -------
57
11.2 OBLIGATIONS INDEPENDENT; WAIVERS.
A. Each of MIT, Metro-Sierra, Progress Center and IndTennCo agrees that
(i) its obligations and liabilities under any of the Loan Documents to which it
is a party are joint and several and are independent of and in addition to the
undertakings of any other Borrower pursuant to the Loan Documents to which such
other Borrower is a party, any Note(s) made and delivered by such other Borrower
in connection therewith or any other collateral security given to secure the
same, (ii) a separate action may be brought to enforce the provisions of such
Loan Documents whether any other Borrower is a party in any such action or not,
(iii) Lender may at any time, or from time to time, in its sole discretion (a)
extend or change the time of payment and/or performance and/or the manner, place
or terms of payment and/or performance of all or any of the obligations secured
by such Loan Documents; (b) exchange, release and/or surrender all or any of the
collateral security, or any part thereof, by whomsoever deposited, which is now
or may hereafter be held by the Lender in connection with all or any of such
obligations; (c) sell and/or purchase all or any such collateral at public or
private sale, or at any broker's board, in the manner permitted by law and after
giving any notice which may be required, and after deducting all costs and
expenses of every kind for collection, sale or delivery, the net proceeds of any
such sale may be applied by Lender upon all or any of such sale may be applied
by Lender upon all or any of such obligations; and (d) settle or compromise with
such other Borrower, and/or any other person liable thereon, any and all of such
obligations, and/or subordinate the payment of same, or any part thereof, to the
payment of any other debts or claims, which may at any time be due or owing to
Lender and/or any other person or corporation, and (iv) Lender shall be under no
obligation to marshal any assets in favor of MIT, Metro-Sierra, Progress Center
or IndTennCo as the case may be, or in payment of any or all of such
Obligations.
B. Each of MIT, Metro-Sierra, Progress Center and IndTennCo hereby
waives (i) presentment, demand, protest, notice of acceptance, notice of
dishonor, notice of nonperformance and any other notice with respect to any
of the obligations secured by any of the Loan Documents to
58
which it is a party and this Agreement, and promptness in commencing suit
against any party thereto or liablethereon, and/or in giving any notice to or
making any claim or demand hereunder upon it, (ii) any right to require Lender
to (a) proceed against other Borrower liable with respect to such obligations,
(b) proceed against or exhaust any security held from such other Borrower, or
(c) pursue any remedy in Lender's power whatsoever; (iii) any defense arising
by reason of any disability or other defense of such other Borrower or by reason
of the cessation from any cause whatsoever of the liability of such other
Borrower other than full payment of such obligations; (iv) any defense it may
acquire by reason of Lender's election of any remedy against it or any other
Borrower or both, including, without limitation, any defense which, absent this
waiver, it would have that its obligations and liabilities under the Loan
Documents to which it is a party could be exonerated based upon Lender's
election to foreclose on its collateral by conducting a non-judicial
foreclosure under the power of sale set forth in any Deed of Trust even
though certain of its rights may thereby be impaired or extinguished under
applicable law (including, without limitation, an anti-deficiency statutes of
the States of Arkansas, Georgia, Michigan, Nevada, Washington, Tennessee,
Alabama,
59
Illinois, Mississippi, Washington, and/or Texas; (v) without
limiting the waivers made in clause (iv) above, all rights and defenses
arising out of an election of remedies by the creditor, even though that
election of remedies, such as a nonjudicial foreclosure with respect to
security for a guaranteed obligation, has destroyed the guarantor's right of
subrogation and reimbursement against the principal by the operation of
section 280d of the California Code of Civil Procedure or otherwise; (vi) to
the fullest extent permitted by applicable law, all rights and benefits
purporting to reduce a guarantor's obligations in proportion to the principal
obligation (including, without limitation, those set forth in Section 2809 of
the California Civil Code and any similar law in the States of Arkansas,
Georgia, Michigan, Nevada, Washington, Tennessee, Alabama, Illinois,
Mississippi, Washington, and/or Texas; (vii) to the fullest extent permitted
by law, all rights and benefits under (a) Section 580a of the California Code
of Civil Procedure, and/or any other similar law in the States of Arkansas,
Georgia, Michigan, Nevada, Washington, Tennessee, Alabama, Illinois,
Mississippi, Washington, and/or Texas, purporting to limit the amount of any
deficiency judgment which might be recoverable following the occurrence of a
trustee's sale under a deed of trust, (b) Section 580b of the California Code
of Civil Procedure and/or any other similar law in the States of Arkansas,
Georgia, Michigan, Nevada, Washington, Tennessee, Alabama, Illinois,
Mississippi, Washington, and/or Texas stating that no deficiency may be
recovered on a real property purchase money obligation, (c) Section 580d of
the California Code of Civil Procedure and/or any other similar law in the
States of Arkansas, Georgia, Michigan, Nevada, Washington, Tennessee,
Alabama, Illinois, Mississippi, Washington, and/or Texas stating that no
deficiency may be recovered on a note secured by a deed of trust on real
property in case such real property is sold under the power of sale contained
in such deed of trust, and (d) Section 726 of the California Code of Civil
Procedure and/or any other similar law in the States of Arkansas, Georgia,
Michigan, Nevada, Washington, Tennessee, Alabama, Illinois, Mississippi,
Washington, and/or Texas stating that there may be but one form of action on an
indebtedness secured by real property, if such sections, or any of them, have
any application hereto or any application to the undersigned; (viii) to the
fullest extent permitted by law, (a) any defense arising as a result of Lender's
election, in any proceeding instituted under the Bankruptcy Code, of the
application of Section 1111(b)(2) of the Bankruptcy Code, (b) any defense based
on any borrowing or grant or a security interest under Section 364 of the
Bankruptcy Code, and (c) without limiting the generality of the foregoing or
any other provision hereof, all rights and benefits which might otherwise be
available to the undersigned under California Civil Code Sections 2810, 2819,
2822, 2839, 2845, 2849, 2850, 2899, and 3433, and/or any other similar law in
the States of Arkansas, Georgia, Michigan, Nevada, Washington, Tennessee,
Alabama, Illinois, Mississippi, Washington, and/or Texas; and (ix) the
benefit of any statute of limitations affecting its liability under any of
the Loan Documents to which it is a party or the enforcement thereof,
including, without limitation, any rights arising under applicable law
(including, without limitation, Section 359.5 of the California Code of Civil
Procedure).
11.3 INDEPENDENT ACCESS TO FINANCIAL INFORMATION.
60
Each of MIT, Metro-Sierra, Progress Center and IndTennCo warrants that (i)
to the extent any of the Loan Documents to which it is a party secure the
obligations of any other Borrower to Lender, such Loan Documents were executed
and/or amended at the request of such other Borrower, (ii) Lender has made no
representation to Borrower, Metro-Sierra, Progress Center or IndTennCo as to the
creditworthiness of any other Borrower, and (iii) it has established adequate
means of obtaining from each other Borrower on a continuing basis financial and
other information pertaining to such other Borrower's financial condition. Each
of MIT, Metro-Sierra, Progress Center and IndTennCo agrees to keep adequately
informed from such means as it deems appropriate of any facts, events or
circumstances which might in any way affect its risks and liabilities under such
Loan Documents and further agrees that Lender shall have no further obligation
to disclose to it information or materials required in the course of Lender's
relationship with such other Borrower.
11.4 MULTIPLE OBLIGATIONS.
Borrower understands, acknowledges and agrees that each of the Notes is a
separate and distinct legal obligation and that the execution of a single Loan
Administration Agreement and references herein to the "Loan" is for purposes of
administrative convenience only. Borrower further understands, acknowledges and
agrees that the occurrence of an Event of Default under any of the Notes or
other Loan Documents shall constitute an Event of Default under all other Notes
and other Loan Documents and shall entitle Lender to exercise all of its rights
and remedies under all of the Loan Documents, including, without limitation,
accelerating the Maturity Date of any or all of the Notes and foreclosing the
liens of any or all of the Deeds of Trust or Mortgages in such order and manner
as Lender may elect in its sole and absolute discretion.
11.5 APPLICATION OF FORECLOSURE PROCEEDS.
In the event of a foreclosure (non-judicial or judicial) of any of the
Deeds of Trust or Mortgages encumbering any of the Facilities, Borrower agrees
that
61
Lender shall have full and complete discretion to apply any proceeds from
the sale of the applicable Facility, after payment of any and all costs of
foreclosure, attorneys' and trustee's fees, and after satisfaction of the
foreclosed obligation (any such remaining proceeds being defined as the "Excess
Proceeds") to the prepayment or repayment (together with applicable Prepayment
Premium, if any) of the indebtedness evidenced by any of the other Notes
Borrower hereby irrevocably assigns, transfers and conveys to Lender any and all
of its right, title and interest in and to the Excess Proceeds and consents to
the prepayment or repayment of indebtedness hereinabove provided. Borrower
hereby waives any right to require Lender to (i) marshal any assets of Borrower
(including, without limitation, the Facilities or (ii) any right to require a
sale in inverse order of alienation in the event of foreclosure of the liens and
security interests created by the Deeds of Trust, the Mortgages or any of the
other Loan Documents.
12. MISCELLANEOUS
12.1 AMENDMENTS AND WAIVERS.
No amendment, modification, termination or waiver of any provision of this
Agreement any loan document or of the Notes, or consent to any departure by
Borrower therefrom, shall in any event be effective without the written
concurrence of Lender. No amendment, modification, termination or waiver of any
provision of any Note shall be effective without the written concurrence of the
holder of that Note. Any waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given. No
notice to or demand on Borrower in any case shall entitle Borrower to any other
or further notice or demand in similar or other circumstances. Any amendment,
modification, termination, waiver or consent effected in accordance with this
SUBSECTION 12.1 shall be binding upon each holder of the Notes at the time
outstanding, each future holder of the Notes, and, if signed by Borrower, on
Borrower. In the event of any inconsistency between the terms and conditions of
the other Loan Documents and this Agreement, the terms and conditions of this
Agreement shall control.
62
12.2 INDEPENDENCE OF COVENANTS.
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or be otherwise within the
limitations of, another covenant shall not avoid the occurrence of an Event of
Default or Potential Event of Default if such action is taken or condition
exists.
12.3 NOTICES.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telecopied, telexed or sent by United States mail or
courier service and shall be deemed to have been given when delivered in person,
receipt of telecopy or telex or four (4) days after depositing it in the United
States mail, registered or certified, with postage prepaid and properly
addressed; PROVIDED that notices to Lender shall not be effective until received
by the person to whom the correspondence is addressed. For the purposes hereof,
the addresses of the parties hereto (until notice of a change thereof is
delivered as provided in this SUBSECTION 12.3) shall be as set forth next to
each party's name on the signature pages hereof.
12.4 SURVIVAL OF WARRANTIES AND CERTAIN AGREEMENTS.
All agreements, representations and warranties made herein shall survive
the execution and delivery of this Agreement, the making of the Loans hereunder
and the execution and delivery of the Notes.
63
12.5 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES
CUMULATIVE.
No failure or delay on the part of Lender or any holder of any Note in the
exercise of any power, right or privilege hereunder or under the Notes shall
impair such power, right or privilege or be construed to be a waiver of any
default or acquiescence therein, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other right, power or privilege. All rights and remedies existing under
this Agreement and the Notes are cumulative to, and not exclusive of, any rights
or remedies otherwise available.
12.6 SEVERABILITY.
In case any provision in or obligation under this Agreement or the Notes
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
12.7 HEADINGS.
Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
12.8 APPLICABLE LAW.
THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT (EXCEPT TO THE EXTENT SUCH
OTHER LOAN DOCUMENT CONTAINS A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL
BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES.
12.9 SUCCESSORS AND ASSIGNS; SUBSEQUENT HOLDERS OF NOTES.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall
64
inure to the benefit of the parties hereto and the successors and assigns of
Lender. The terms and provisions of this Agreement shall inure to the
benefit of any assignee or transferee of the Notes, and in the event of such
transfer or assignment, the rights and privileges herein conferred upon
Lender shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions hereof. Borrower's rights
or any interest therein hereunder may not be assigned without the prior
written consent of Lender.
65
12.10 CONSENT TO JURISDICTION AND SERVICE OF PROCESS;
WAIVER OF JURY TRIAL.
All judicial proceedings arising out of or relating to this Agreement, any
Note or other Loan Document or any Obligation may be brought only in any state
or Federal court of competent jurisdiction in the State of California and by
execution and delivery of this Agreement, Borrower accepts for itself and in
connection with its properties, generally and unconditionally, the nonexclusive
jurisdiction of the aforesaid courts and waives any defense of forum non
conveniens, and irrevocably agrees to be bound by any judgment rendered thereby
in connection with this Agreement, such Note, such other Loan Document or such
Obligation; provided, however, Lender in its sole discretion shall have the
right to commence proceedings with respect to any Collateral Document (and the
Note governed by the laws of such state) in the state where the Facility secured
by such Collateral Document is located. ALL PARTIES TO THIS AGREEMENT
IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY JUDICIAL PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT, ANY NOTE OR ANY OBLIGATION. Borrower
designates and appoints Xxxxxx Xxxxxx on the date hereof, with offices at
Meridian Point Properties, 00 Xxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, XX
00000, and such other Persons as may hereafter be selected by Borrower
irrevocably agreeing in writing to so serve, as its agent to receive on its
behalf service of all process in any such proceedings in any such court, such
service being hereby acknowledged by Borrower to be effective and binding
service in every respect. A copy of any such process so served shall be mailed
by registered mail to Borrower at its address provided in the applicable
signature page hereto, except that unless otherwise provided by applicable law,
any failure to mail such copy shall not affect the validity of service of
process. If any agent appointed by Borrower refuses to accept service, Borrower
hereby agrees that service upon it by mail shall constitute sufficient notice.
Nothing herein shall affect the right to serve process in any other manner
permitted by law or shall limit the right of Lender to bring proceedings against
Borrower in the courts of any other jurisdiction.
66
12.11 COUNTERPARTS.
This Agreement and any amendments, waivers, consents or supplements may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same Agreement.
12.12 EXHIBITS AND SCHEDULES.
The exhibits and schedules annexed hereto are incorporated herein and
shall be a part of this Agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed by a duly
authorized officer of each of Borrower (or Borrower's general partner) and
Lender as of the date first above written.
MERIDIAN INDUSTRIAL TRUST, INC.
000 Xxxxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
------------------------------
17th Floor Printed Name: Xxxxxx X. Xxxxxx
--------------------
Xxx Xxxxxxxxx, XX 00000 Title: President
-----------------------------
INDTENNCO LIMITED PARTNERSHIP
By: Mem-Ind Corporation
Its General Partner
000 Xxxxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
-------------------------
17th Floor Printed Name: Xxxxxx X. Xxxxxx
----------------
Xxx Xxxxxxxxx, XX 00000 Title: President
----------------------
METRO-SIERRA LIMITED PARTNERSHIP
By: Texmet Corporation
Its General Partner
67
000 Xxxxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
-------------------------
17th Floor Printed Name: Xxxxxx X. Xxxxxx
----------------
Xxx Xxxxxxxxx, XX 00000 Title: President
-----------------------
PROGRESS CENTER/ALABAMA LIMITED
PARTNERSHIP
By: Pro-Sierra Corporation
Its General Partner
000 Xxxxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
-------------------------
17th Floor Printed Name: Xxxxxx X. Xxxxxx
----------------
Xxx Xxxxxxxxx, XX 00000 Title: President
----------------------
[Signatures continued on the next page]
68
[Signatures continued from the previous page]
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
Four Embarcadero Center By: /S/ XXXX XXX XXXXXXXX
Suite 2700 Printed Name: Xxxx xxx Xxxxxxxx
Xxx Xxxxxxxxx, XX 00000 Title: Vice-President
Attention: Vice President,
Mortgage Capital
with a copy to:
The Prudential Insurance
Company of America
Xxxx Xxxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Regional Counsel
69
EXHIBIT A
APPRAISED VALUE
Property Name: Appraised Value (000's)
INDUSTRIAL
Olive Branch 10,850
Lombard I 4,500
700 Xxxxx 1,700
900 Xxxxx 750
1090 Xxxxx 000
0000 Xxxxx 1,000
1180 Xxxxx 390
801 Xxxx 1,004
1201 Xxxxx 414
0000 X. 000xx Xxxxxx 3,150
17025 Xxxxxxx 1,700
17129 Xxxxxxx 1,800
1000 Xxxx 2,850
3400 West Lake 3,300
1815 Landmeier 1,929
0000 Xxxxx Xxx 1,394
Birmingham I 1,700
Birmingham II 1,650
Xxxx Distribution 6,600
Pontiac 2,600
Port Distribution 3,800
Xxxxxx 1,400
Valencia 4,800
Great Southwest 110 2,900
Wildwood/Pioneer 5,050
Northgate International 8,350
Valwood 20 3,350
Centreport 17 2,014
Park at Woodinville 10,500
-------
Total Industrial: $92,082
RETAIL
Seatac Village $10,761
A-1
Meridian Village 7,567
Marietta Trade Center 8,400*
Paradise Marketplace 10,200
-------
Total Retail: $36,928
*$15,000,000 value for this property is reduced by the amount of Citicorp's $4.5
million first mortgage. The remainder is then multiplied by .8 as provided in
SUBSECTION 3.3B of the Loan Administration Agreement.
A-2
LIGHT INDUSTRIAL/OFFICE
Willow Lake $3,738
Regal Row 201 1,009
Xxxx Tech II 6,500
Progress I 1,695
Progress II 2,000
8215 Building 430
Cypress A 1,400
Cypress C 1,500
-------
Total Light Industrial/Office: $18,272
-------------------------------------------------
Total Meridian Industrial Trust $147,282
B-1
EXHIBIT B
COMPLIANCE CERTIFICATE
I refer to the Loan Administration Agreement dated as of May 31, 1995
between The Prudential Insurance Company of America ("Lender"), as lender, and
Meridian Industrial Trust, Inc., a Maryland corporation, and Metro-Sierra
Limited Partnership, Progress/Center Limited Partnership and IndTennCo Limited
Partnership, collectively as borrower (as amended, supplemented or otherwise
modified from time to time, the "Loan Agreement"). Capitalized terms used in
this Certificate are used as defined in the Loan Agreement.
THE UNDERSIGNED HEREBY CERTIFIES TO LENDER THAT :
(1) I am the duly appointed Chief Financial Officer of Meridian
Industrial Trust, Inc., a Maryland corporation ("Borrower");
(2) To the best of my knowledge, each of the representations and
warranties of Borrower contained in the Loan Agreement is true, correct and
complete in all material respects as of the date of this Certificate;
(3) No Event of Default or Potential Event of Default has occurred
and is continuing under the Loan Agreement; and
(4) As of the date of this Certificate, Borrower and its subsidiaries
are in compliance with the provisions of SUBSECTION 4 of the Loan Agreement, as
supported by the computations set forth in Attachment No. 1 hereto.
Dated: _____, _____ MERIDIAN INDUSTRIAL TRUST,
By:__________________________
Title: Chief Financial Officer
B-1
B-1
MERIDIAN INDUSTRIAL TRUST, INC.
ATTACHMENT NO. 1
TO COMPLIANCE CERTIFICATE
(The Certificate attached hereto is as of ______________, and pertains
to the twelve month period from _______________ to _______________.)
1. LOAN TO APPRAISAL RATIO
[NOT TO EXCEED 50%]
(a) Indebtedness: _________
(b) Appraised Value of the _________
Facilities:
(as determined by Lender)
(c) (a)/(b) _________
2. NET OPERATING INCOME TO DEBT SERVICE
[MINIMUM RATIO: 2.2:1.0]
(a) Net Operating Income: _________
(b) Debt Service: _________
(c) (a)/(b) _________
3. PROJECTED NET OPERATING INCOME TO DEBT SERVICE
[MINIMUM RATIO: 2.2:1.0]
(a) Projected Net Operating Income: _________
(b) Projected Debt Service: _________
(c) (a)/(b) _________
B-2
B-2
4. CASH FLOW TO DEBT SERVICE
[MINIMUM RATIO: 1.7 TO 1.0]
(a) Net Operating Income: _________
(b) Tenant Improvement Costs: _________
(c) Lease Commissions: _________
(d) Capital Expenditure Reserve: _________
(17CENTS/per square foot)
(e) (a)-(b)-(c)-(d) _________
(f) Debt Service: _________
(g) (e)/(f) _________
5. LETTER OF CREDIT
[NOT TO EXCEED $36 MILLION]
(a) Letter of Credit: ________
6. AVAILABLE EXCHANGE RIGHTS
[NOT TO EXCEED $40 MILLION]
(a) Initial Amount of Letter of Credit: _________
(b) Aggregate of Increases in _________
Letter of Credit (without
regard to decreases):
(c) Appraised Value of properties _________
substituted into Security Pool
pursuant to subsection 4.3 of Loan
Administration Agreement:
B-3
B-3
(d) (a) + (b) + (c) _________
[see Available Substitution and Exchange Rights Log attached hereto]
B-4
B-4
Available Substitution and Exchange Rights Log
(a) (b) (c)
Initial Dollar Current Value of
Amount Increase Decrease Amount Substitution
Date of LC in LC in LC of LC per Sec.4.3
Sum of (a) and cumulative amount of (b) & cumulative amount of (c) is
$________. (Not to exceed $40 million).
All rights to substitute & exchange properties under Section 4.1, 4.2, and
4.3 of the Loan Administration Agreement expires on or before May 31, 1997.
C-5
B-5
EXHIBIT C
INITIAL SECURITY POOL
INDUSTRIAL STATE
Xxxx Distribution Tennessee
Pontiac Michigan
Port Distribution Arkansas
Xxxxxx Arkansas
Valencia California
Great Southwest 110 Texas
Wildwood/Pioneer Texas
Northgate International Texas
Valwood 20 Texas
Centreport 17 Texas
Park at Woodinville Washington
Olive Branch Mississippi
Lombard I Illinois
700 Xxxxx Illinois
900 Xxxxx Illinois
1090 Xxxxx Illinois
1100 Xxxxx Xxxxxxxx
0000 Xxxxx Xxxxxxxx
801 Xxxx Xxxxxxxx
0000 Xxxxx Xxxxxxxx
0000 X. 000xx Xxxxxx Xxxxxxxx
00000 Xxxxxxx Xxxxxxxx
00000 Xxxxxxx Illinois
1000 Xxxx Illinois
0000 Xxxx Xxxx Xxxxxxxx
0000 Xxxxxxxxx Xxxxxxxx
0000 Xxxxx Xxx Xxxxxxxx
Birmingham I Alabama
Birmingham II Alabama
RETAIL
Seatac Village Washington
Meridian Village Xxxxxxxxxx
Xxxxxxxx Trade Center Georgia
Paradise Marketplace Nevada
X-0
X-0
XXXXX XXXXXXXXXX/XXXXXX
Xxxxxx Xxxx Xxxxxxxxx
Regal Row 201 Texas
Xxxx Tech II Michigan
Progress I Alabama
Progress II Alabama
8215 Building Alabama
Cypress A California
Cypress C California
C-2
C-2
EXHIBIT D
COLLATERAL DOCUMENTS EXECUTED AS OF THE EFFECTIVE DATE
TRUST VI TRANSACTION
13 ENTITY LEVEL CLOSING ITEMS
.1 LOAN DOCUMENTS
1. Loan Administration Agreement
2. Promissory Note - Alabama
3. Promissory Note - Illinois
4. Promissory Note - Mississippi
5. Promissory Note - Tennessee
6. Promissory Note - Texas
7. Promissory Note - Washington
8. Contribution Agreement
9. Fraudulent Conveyance Indemnity Agreement
10. Agreement to Execute Intercreditor Agreement
11. Post-Closing Actions Agreement
B. SECURITY AND RELATED DOCUMENTS
JEFFERSON COUNTY, ALABAMA (OWNED BY TRUST VI)
12. First Mortgage, Security Agreement and Fixture Filing with
Assignment of Rents (202819)
13. First Assignment of Lessor's Interest in Leases
14. Second Mortgage, Security Agreement and Fixture Filing with
Assignment of Rents (203970)
15. Second Assignment of Lessor's Interest in Leases
16. Assignment of Agreements
17. Hazardous Substances Remediation and Indemnification Agreement
18. UCC-1 - Alabama
19. UCC-1 - Missouri
20. Land Use Certification - Birmingham I
21. Land Use Certification - Birmingham II
XXXX COUNTY, ILLINOIS (OWNED BY TRUST VI)
D-1
D-1
1. First Mortgage, Security Agreement and Fixture Filing with
Assignment of Rents (202649)
2. First Assignment of Lessor's Interest in Leases
3. Second Mortgage, Security Agreement and Fixture Filing with
Assignment of Rents (203961)
4. Second Assignment of Lessor's Interest in Leases
5. Assignment of Agreements
6. Hazardous Substances Remediation and Indemnification Agreement
7. UCC-1 - Illinois
8. UCC-1 - Missouri
9. Land Use Certification - 700 Xxxxx
10. Land Use Certification - 900 Xxxxx
11. Land Use Certification - 1090 Xxxxx
12. Land Use Certification - 1100 Xxxxx
13. Land Use Certification - 1180 Xxxxx
14. Land Use Certification - 801 Xxxx
15. Land Use Certification - 1201 Xxxxx
16. Land Use Certification - 5101 West 122nd
17. Land Use Certification - 17025 Xxxxxxx
18. Land Use Certification - 17129 Xxxxxxx
19. Land Use Certification - 1000 Xxxx
20. Land Use Certification - 3400 West Lake
21. Land Use Certification - 1815 Landmeier
22. Land Use Certification - 2375 Touhy
DUPAGE COUNTY, ILLINOIS (OWNED BY TRUST VI)
1. First Mortgage, Security Agreement and Fixture Filing with
Assignment of Rents
2. First Assignment of Lessor's Interest in Leases
3. Second Mortgage, Security Agreement and Fixture Filing with
Assignment of Rents
4. Second Assignment of Lessor's Interest in Leases
5. Assignment of Agreements
6. Hazardous Substances Remediation and Indemnification Agreement
7. UCC-1 - Illinois
8. UCC-1 - Missouri
9. Land Use Certification - Lombard I
D-2
D-2
DESOTO COUNTY, MISSISSIPPI (OWNED BY TRUST VI)
1. First Deed of Trust, Security Agreement and Fixture Filing with
Assignment of Rents (202839)
2. First Assignment of Lessor's Interest in Leases
3. Second Deed of Trust, Security Agreement and Fixture Filing with
Assignment of Rents (203940)
4. Second Assignment of Lessor's Interest in Leases
5. Assignment of Agreement
6. Hazardous Substances Remediation and Indemnification Agreement
7. UCC-1 - Mississippi
8. UCC-1 - Missouri
9. Land Use Certification - Olive Xxxxxx
XXXXXX COUNTY, TENNESSEE (OWNED BY ITC)
1. First Deed of Trust, Security Agreement and Fixture Filing with
Assignment of Rents (204188)
2. First Assignment of Lessor's Interest in Leases
3. Second Deed of Trust, Security Agreement and Fixture Filing with
Assignment of Rents (204180)
4. Second Assignment of Lessor's Interest in Leases
5. Fixture Filing (First)
6. Fixture Filing (Second)
7. Assignment of Agreement
8. Hazardous Substances Remediation and Indemnification Agreement
9. UCC-1 - California
10. UCC-1 - Tennessee
11. Land Use Certification - Willow Lake
DALLAS COUNTY, TEXAS (OWNED BY ITC)
X-0
X-0
1. First Deed of Trust, Security Agreement and Fixture Filing with
Assignment of Rents (204184)
2. First Assignment of Lessor's Interest in Leases
3. Second Deed of Trust, Security Agreement and Fixture Filing with
Assignment of Rents (204193)
4. Second Assignment of Lessor's Interest in Leases
5. Fixture Filing (First)
6. Fixture Filing (Second)
7. Assignment of Agreement
8. Hazardous Substances Remediation and Indemnification Agreement
9. UCC-1 - California
10. UCC-1 - Texas
11. Land Use Certification - Regal Row
KING AND WHATCOM COUNTIES, WASHINGTON (OWNED BY TRUST VI)
1. First Deed of Trust, Security Agreement and Fixture Filing with
Assignment of Rents (202787)
2. First Assignment of Lessor's Interest in Leases
3. Second Deed of Trust, Security Agreement and Fixture Filing with
Assignment of Rents (203945)
4. Second Assignment of Lessor's Interest in Leases
5. Assignment of Agreement
6. Hazardous Substances Remediation and Indemnification Agreement
7. UCC-1 - Missouri
8. UCC-1 - Washington
9. Land Use Certification - Meridian Village
10. Land Use Certification - Seatac Village
TRUST VII TRANSACTION
14 CLOSING DOCUMENTS
.1 LOAN/SECURITY DOCUMENTS
D-4
D-4
1. Loan Administration Agreement
2. Promissory Note - Alabama
3. Promissory Note - Arkansas
4. Promissory Note - California
5. Promissory Note - Georgia
6. Promissory Note - Michigan
7. Promissory Note - Nevada
8. Promissory Note - Tennessee
9. Promissory Note - Texas
10. Promissory Note - Washington
11. Contribution Agreement
12. Fraudulent Conveyance Indemnity Agreement
13. Post-Closing Actions Agreement
B. SECURITY AND RELATED DOCUMENTS
MADISON COUNTY, ALABAMA (OWNED BY PC/ALP)
1. First Mortgage, Security Agreement and Fixture Filing with
Assignment of Rents (204220)
2. First Assignment of Lessor's Interest in Leases
3. Second Mortgage, Security Agreement and Fixture Filing with
Assignment of Rents (204227)
4. Second Assignment of Lessor's Interest in Leases
5. Assignment of Agreement
6. Hazardous Substances Remediation and Indemnification Agreement
7. UCC-1 - Alabama
8. UCC-1 - California
9. Land Use Certification - Progress I
10. Land Use Certification - Progress II
11. Land Use Certification - 8215 Building
PULASKI COUNTY, ARKANSAS (OWNED BY TRUST VII)
1. First Deed of Trust, Security Agreement and Fixture Filing with
Assignment of Rents (202823)
2. First Assignment of Lessor's Interest in Leases
X-0
X-0
3. Second Deed of Trust, Security Agreement and Fixture Filing with
Assignment of Rents (203975)
4. Second Assignment of Lessor's Interest in Leases
5. Assignment of Agreement
6. Hazardous Substances Remediation and Indemnification Agreement
7. UCC-1 - Arkansas
8. UCC-1 - California
9. Land Use Certification - Xxxxxx
10. Land Use Certification - Port Distribution
LOS ANGELES AND ORANGE COUNTIES, CALIFORNIA (OWNED BY TRUST VII)
1. First Deed of Trust, Security Agreement and Fixture Filing with
Assignment of Rents
2. First Assignment of Lessor's Interest in Leases
3. Second Deed of Trust, Security Agreement and Fixture Filing with
Assignment of Rents
4. Second Assignment of Lessor's Interest in Leases
5. Assignment of Agreement
6. Hazardous Substances Remediation and Indemnification Agreement
7. UCC-1 - California
8. UCC-1 - Missouri
9. Land Use Certification - Cypress A
10. Land Use Certification - Cypress C
11. Land Use Certification - Valencia
12. Letter to Tenant Regarding Purchase Option - Mitsubishi Motors
XXXX COUNTY, GEORGIA (OWNED BY TRUST VII)
1. Second Deed to Secure Debt and Security Agreement with Assignment
of Rents (202623)
2. Second Assignment of Lessor's Interest in Leases
3. Third Deed to Secure Debt and Security Agreement with Assignment
of Rents (203976)
X-0
X-0
4. Third Assignment of Lessor's Interest in Leases
5. Fixture Filing (Second)
6. Fixture Filing (Third)
7. Assignment of Agreement
8. Hazardous Substances Remediation and Indemnification Agreement
9. UCC-1 - Georgia
10. UCC-1 - Missouri
11. Land Use Certification - Marietta Trade Center
12. Termination of Intercreditor Agreement
13. Subordination Agreement
OAKLAND COUNTY, MICHIGAN (OWNED BY TRUST VII)
1. First Mortgage, Security Agreement and Fixture Filing with
Assignment of Rents (202831)
2. First Assignment of Lessor's Interest in Leases
3. Second Mortgage, Security Agreement and Fixture Filing with
Assignment of Rents (203969)
4. Fixture Filing (First)
5. Fixture Filing (Second)
6. Second Assignment of Lessor's Interest in Leases
7. Assignment of Agreement
8. Hazardous Substances Remediation and Indemnification Agreement
9. UCC-1 - Michigan
10. UCC-1 - Missouri
11. Land Use Certification - Pontiac
12. Land Use Certification - Xxxx Tech
13. Letter to Tenant Regarding Purchaser Option - Globe Industries
14. Letter to Tenant Regarding Purchase Option - Woodbridge Holdings
XXXXX COUNTY, NEVADA (OWNED BY TRUST VII)
1. First Deed of Trust, Security Agreement and Fixture Filing with
Assignment of Rents (202773)
2. First Assignment of Lessor's Interest in Leases
X-0
X-0
3. Second Deed of Trust, Security Agreement and Fixture Filing with
Assignment of Rents (204142)
4. Second Assignment of Lessor's Interest in Leases
5. Assignment of Agreement
6. Hazardous Substances Remediation and Indemnification Agreement
7. UCC-1 - Missouri
8. UCC-1 - Nevada
9. Land Use Certification - Paradise Marketplace
SHELBY COUNTY, TENNESSEE (OWNED BY PC/ALP)
1. First Deed of Trust, Security Agreement and Fixture Filing with
Assignment of Rents (202796)
2. First Assignment of Lessor's Interest in Leases
3. Second Deed of Trust, Security Agreement and Fixture Filing with
Assignment of Rents (204147)
4. Second Assignment of Lessor's Interest in Leases
5. Fixture Filing (First)
6. Fixture Filing (Second)
7. Assignment of Agreement
8. Hazardous Substances Remediation and Indemnification Agreement
9. UCC-1 - California
10. UCC-1 - Tennessee
11. Land Use Certification - Xxxx
XXXXXX AND XXXXXXX COUNTIES, TEXAS (OWNED BY MS)
1. First Deed of Trust, Security Agreement and Fixture Filing with
Assignment of Rents (202804)
2. First Assignment of Lessor's Interest in Leases
3. Second Deed of Trust, Security Agreement and Fixture Filing with
Assignment of Rents (204163)
X-0
X-0
4. Second Assignment of Lessor's Interest in Leases
5. Fixture Filing (First)
6. Fixture Filing (Second)
7. Assignment of Agreement
8. Hazardous Substances Remediation and Indemnification Agreement
9. UCC-1 - California
10. UCC-1 - Texas
11. Land Use Certification - Great Southwest 110
12. Land Use Certification - Wildwood/Pioneer
13. Land Use Certification - Northgate
14. Land Use Certification - Valwood 20
15. Land Use Certification - Centreport 17
KING COUNTY, WASHINGTON (OWNED BY TRUST VII)
1. First Deed of Trust, Security Agreement and Fixture Filing with
Assignment of Rents (204235)
2. First Assignment of Lessor's Interest in Leases
3. Second Deed of Trust, Security Agreement and Fixture Filing with
Assignment of Rents (204237)
4. Second Assignment of Lessor's Interest in Leases
5. Assignment of Agreement
6. Hazardous Substances Remediation and Indemnification Agreement
7. UCC-1 - Missouri
8. UCC-1 - Washington
9. Land Use Certification - Park at Woodinville
X-0
X-0
EXHIBIT E
NOTICE OF DEEMED APPROVAL
[DATE]
SECOND NOTICE
URGENT: PROPERTY WILL BE SUBSTITUTED
INTO PRUDENTIAL COLLATERAL POOL
IF NO RESPONSE GIVEN WITHIN 7 DAYS
The Prudential Insurance Company
of America
Xxxx Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Vice President
Mortgage Capital
Re: Loan Administration Agreement by and between Meridian Industrial
Trust, Inc., as Borrower, and The Prudential Insurance Company of
America, as Lender
-----------------------------------------------------------------
Ladies and Gentlemen:
Reference is made to SUBSECTION 4.4A of the above-captioned Loan
Administration Agreement, and capitalized terms used herein are as defined
therein.
Pursuant to the Loan Administration Agreement, Lender had three (3)
weeks to inform Borrower if a proposed substitute facility described on SCHEDULE
1 was acceptable for inclusion in the Security Pool.
As of this date Lender has not informed Borrower of its approval or
disapproval of such proposed facility.
X-0
X-0
LENDER HAS SEVEN DAYS FROM RECEIPT OF THIS LETTER TO APPROVE OR
DISAPPROVE THE PROPOSED SUBSTITUTE FACILITY. FAILURE TO RESPOND WILL RESULT IN
A DEEMED APPROVAL.
MERIDIAN INDUSTRIAL TRUST, Inc.
BY: _____________________
ITS:_____________________
cc: The Prudential Insurance Company
of America
Xxxx Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Regional Counsel
X-0
X-0
SCHEDULE 1
DESCRIPTION OF PROPOSED
SUBSTITUTE FACILITY
E-3
E-3
EXHIBIT F
APPROVED CONSOLIDATION DOCUMENTS
Agreement and Plan of Merger among Trust IV, Trust VI, Trust VII and
MIT dated as of May 31, 1995.
Amended and Restated Loan Administration Agreement between Prudential
and MIT, IndTennCo, Limited Partnership, Metro-Sierra Limited Partnership and
Progress Center/Alabama Limited Partnership, dated as of May 31, 1995
("Consolidation Credit Agreement")
Articles of Incorporation of MIT dated ___________, 1995
Bylaws of MIT dated ____________, 1995
Opinion(s) of Counsel for MIT, to be dated as of the Merger Date, to
the effect that:
(a) MIT is duly organized, validly existing and in good standing in
jurisdiction of organization and is duly authorized to transact
business in all other jurisdiction where failure to be so
authorized would have a material adverse effect on MIT;
(b) The execution, delivery and performance by MIT of the
Consolidation Credit Agreement, and the assumption and
performance by MIT of the Notes and the Collateral Documents, are
within the corporate powers of MIT and have been duly authorized
by MIT;
(c) The Consolidation Credit Agreement, the Notes and the Collateral
Documents constitute legally valid and binding obligations of
MIT, enforceable against MIT in accordance with their respective
terms;
F-1
(d) All consents, authorizations and approvals required for the
execution and delivery by MIT of the Consolidation Credit
Agreement, and the assumption by MIT of the obligations under the
Notes and the Collateral Documents, have been obtained;
(e) The execution, delivery and performance by MIT of the
Consolidation Credit Agreement, and the assumption and
performance by MIT of the Notes and the Collateral Documents, do
not violate, constitute a default under or conflict with the
Articles of Incorporation or Bylaws of MIT, or any material term
of any material agreement to which MIT is a party, or any
judgment, decree, order, statute or regulation by MIT is bound or
to which any of its assets is subject, where such violation,
default or conflict would have a material adverse effect on the
financial condition or operations of MIT.
F-2
