CHANGE IN TERMS AGREEMENT
EXHIBIT 10.56.6
THIS CHANGE IN TERMS AGREEMENT (this “CIT”) is made by and between Heritage Bank of Commerce, a California banking corporation (“Bank”), with its headquarters address at 000 Xxxxxxx Xxxxxxxxx, Xxx Xxxx, Xxxxxxxxxx 00000, and Mission West Properties, Inc., a Maryland corporation (“Borrower”), with its principal address at 00000 Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000. This CIT is executed on October 31, 2011, and is made effective upon the satisfaction of all of the conditions precedent set forth herein (the “Effective Date”) at San Jose, California.
RECITALS
A. As of March 4, 2008, Bank and Borrower entered into certain agreements (the “March 2008 Loan Documents”) including but not limited to a Revolving Credit Loan Agreement (the “Loan Agreement”), pursuant to which Bank agreed, subject to the terms and conditions set forth therein, to lend up to the sum of Ten Million Dollars ($10,000,000.00) to Borrower, and pursuant to which Borrower agreed to repay the loan on or before June 15, 2009.
B. Thereafter, pursuant to a Change in Terms Agreement dated April 17, 2008 (the “April 2008 CIT”), Bank and Borrower made certain changes to the March 2008 Loan Documents, including but not limited to revising the Loan Agreement to provide for a Commitment Amount (as defined in the April 2008 CIT), to Seventeen Million Five Hundred Thousand and 00/100 Dollars ($17,500,000.00). Borrower executed an Amended and Restated Revolving Credit Note dated April 17, 2008 pursuant to the April 2008 CIT (the “Existing Note”).
C. Thereafter, pursuant to a Change in Terms Agreement dated June 5, 2009 (the “June 2009 CIT”), Bank and Borrower made certain changes to the March 2008 Loan Documents, including but to limited to revising the Loan Agreement to extend the maturity date to September 15, 2009.
D. Thereafter, pursuant to a Change in Terms Agreement dated August 20, 2009 (the “August 2009 CIT”), Bank and Borrower made certain changes to the March 2008 Loan Documents, including but to limited to revising the Loan Agreement to extend the maturity date to October 15, 2009.
E. Thereafter, pursuant to a Change in Terms Agreement dated October 13, 2009, (the “October 2009 CIT”), Bank and Borrower (i) made certain changes to the March 2008 Loan Documents, including but to limited to revising the Loan Agreement (A) to modify of the interest rate applicable to the Loan to provide a “floor” of four percent (4%) per annum, (B) to adjust the amount of the Minimum Annual Fee and the date for payment thereof, and (C) to extend the maturity date to September 15, 2011, and (ii) pursuant to the October 2009 CIT, Mission West Properties, X.X. XX, a Delaware limited partnership (“MWP XX XX”) executed, acknowledged and delivered to Bank (i) an Agreement Not to Convey or Encumber (the “Agreement Not to Encumber”) and (ii) an Accommodation Deed of Trust - Variable Interest Rate – Revolving Line of Credit (the “Existing Deed of Trust”), with respect to that certain real property owned by MWP XX XX and located at 0000 Xxxxxxx Xxxxx and 1688 – 1700 Xxxxxxx Avenue, Santa Xxxxx,
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California (the “Property”). The Agreement Not to Encumber was recorded in the Official Records, Office of the County Recorder of Santa Xxxxx County, State of California (“Official Records”) on October 19, 2009 as Document Number 20470137.
F. Thereafter, pursuant to a Change in Terms Agreement dated September 1, 2011 (the “September 2011 CIT”), Bank and Borrower made certain changes to the March 2008 Loan Documents, including but to limited to revising the Loan Agreement to extend the Termination Date (as defined in the October 2009 CIT) to September 15, 2013.
G. Borrower now desires to borrow up to Nineteen Million Dollars ($19,000,000) from Bank from time to time to meet the working capital needs of Borrower, and Bank is willing to provide such financing subject to the terms and conditions set forth in this Agreement.
AGREEMENT
In consideration of the covenants, terms and conditions set forth herein, and in consideration and for other good and valuable consideration, the parties hereto agree as set forth below.
1. Incorporation by Reference. The Recitals set forth above are true and correct and are incorporated herein by reference in this CIT, together with the March 2008 Loan Documents, the April 2008 CIT, the June 2009 CIT, the August 2009 CIT, the October 2009 CIT, the September 2011 CIT and any other documents executed by and between Bank and Borrower in connection with or after the March 2008 Loan Documents (sometimes, collectively, the “Loan Documents”). All capitalized terms not defined herein shall have the meaning given in the Loan Documents.
2. Commitment Amount. The definition of “Commitment Amount” in Section 1.1 of the Loan Agreement (as previously amended by the April 2008 CIT) is hereby deleted and replaced by the following:
“Commitment Amount” shall mean, as of any applicable date of determination, Nineteen Million Dollars ($19,000,000).”
3. Minimum Annual Fee. Section 2.9.1 of the Loan Agreement (as previously amended by the October 2009 CIT) is hereby deleted and replaced by the following:
“2.9.1 Minimum Annual Fee. The Borrower shall pay to the Bank a minimum annual fee of Nineteen Thousand and 00/100 Dollars ($19,000.00) (the “Minimum Annual Fee”). The Minimum Annual Fee shall be payable in advance, in the manner provided in Section 2.11 herein, on October 15, 2009 for the first partial year hereunder, and on September 15, 2010 and each September 15 thereafter for any subsequent year. The Minimum Annual Fee shall be pro-rated for any partial year.”
4. Conditions Precedent. The effectiveness of this CIT and Bank’s obligations hereunder are conditioned upon the satisfaction of each and all of the following conditions on or before November 15, 2011:
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(a) Borrower shall have executed and delivered this CIT to Bank;
(b) Borrower shall have executed and delivered to Bank an Amended and Restated Revolving Credit Note, which shall be in form and substance satisfactory to Bank (the “Amended Note”). All references in the Loan Agreement or herein to either the “Revolving Credit Note” or the “Note” shall refer to the Existing Note until such time as Borrower executes and delivers the Amended Note, after which time all references in the Loan Agreement to either the “Revolving Credit Note” or the “Note” shall refer to the Amended Note.
(c) Borrower shall have provided to Bank a copy of resolutions of the Board of Directors of Borrower in form and substance satisfactory to Bank in its sole and absolute discretion authorizing the execution, delivery, and performance of this CIT, the borrowing hereunder, and the Amended Note, which shall have been certified by the Secretary or Assistant Secretary of Borrower as of the date of delivery as being complete, accurate, and in effect.
(d) Borrower shall have caused MWP XX XX to have duly executed, acknowledged and delivered to Bank (i) an Agreement Supplementing and Amending Agreement Not to Convey or Encumber, amending and supplementing the Agreement Not to Encumber to reflect the increase in the maximum principal amount of the Loan to Nineteen Million Dollars ($19,000,000) (the “Amendment to Agreement Not to Encumber”), and (ii) an Accommodation Deed of Trust - Variable Interest Rate – Revolving Line of Credit (the “Replacement Deed of Trust”) with respect to the Property and securing, among other things, the Amended Note, in replacement of the Existing Deed of Trust, both of which shall be in form and substance satisfactory to Bank in its sole and absolute discretion. All references in the Loan Documents to (i) the “Agreement Not to Encumber” shall refer to the Agreement Not to Encumber until such time as MWP XX XX executes and delivers the Amendment to Agreement Not to Encumber, after which time all references in the Loan Documents to the Agreement Not to Encumber shall refer to the Agreement Not to Encumber as amended by the Amendment to Agreement Not to Encumber, and (ii) the “Deed of Trust” shall refer to the Existing Deed of Trust until such time as MWP XX XX executes and delivers the Replacement Deed of Trust, after which time all references in the Loan Documents to the “Deed of Trust” or the “Note” shall refer to the Replacement Deed of Trust.
(e) Borrower shall have caused MWP XX XX to have provided to Bank a copy of a resolutions of the general partner of MWP XX XX in form satisfactory to the Bank in its sole and absolute discretion authorizing the execution, delivery, and performance of the Amendment to Agreement Not to Encumber and the Replacement Deed of Trust.
(f) Borrower shall have caused MWP XX XX to procure and deliver to Bank and thereafter maintain a policy or policies of insurance in form and content and by an insurer or insurers satisfactory to Bank, naming Bank as Loss Payee, Mortgagee or Additional Insured (as applicable), including a clause giving Bank a minimum of thirty (30) days’ notice if such insurance is cancelled, as follows: (i) fire insurance with standard extended coverage endorsements on a fair value basis for the full insurable value covering all Improvements on the Property in an amount sufficient to avoid application of any coinsurance clause, and with a standard mortgagee clause in favor of Bank; (ii) commercial general liability insurance on an “occurrence” basis, indicating coverage satisfactory to Bank, and naming Bank as an additional
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insured; (iii) workers’ compensation insurance, issued to MWP XX XX, as may be required by applicable workers’ compensation insurance laws; (iv) any additional or different coverage as may be specified in Bank’s Agreement to Provide Insurance; and (v) any and all additional insurance that Bank in its reasonable judgment may from time to time require (including, without limitation, flood coverage), against insurable hazards which at the time are commonly insured against in the case of property similarly situated. The Bank expressly will not require earthquake insurance. Should the Property be located in an area designated by the Director of the Federal Emergency Management Agency as a special flood hazard area, MWP XX XX agrees to obtain and maintain Federal Flood Insurance, if available, for the full unpaid principal balance of the loan and any prior liens on the Property securing the loan, up to the maximum policy limits set under the National Flood Insurance Program, or as otherwise required by Bank, and to maintain such insurance for the term of the loan. Borrower shall deliver (or shall cause MWP LP to deliver) to Bank a Lender’s Loss Payable Endorsement (438BFU or CP 12-18). At Bank’s request, Borrower shall supply Bank with a counterpart original of any policy.
(g) Borrower shall have paid to Bank the Bank’s attorneys’ fees incurred in preparing this Agreement and any related documents pursuant to a separate invoice provided to Borrower.
(h) Borrower shall have paid to Bank the sum of One Thousand Five Hundred Dollars ($1,500) in order to bring its currently paid Minimum Annual Fee of Seventeen Thousand Five Hundred and 00/100 Dollars ($17,500.00) to the required total of Nineteen Thousand and 00/100 Dollars ($19,000.00).
5. Legal Effect. Except as specifically provided herein, all of the terms and conditions of the Loan Documents remain in full force and effect.
6. Integration. This CIT is an integrated agreement. Except as specifically set forth herein, and except for the Loan Documents as modified hereby, it supersedes all prior representations and agreements, if any, between the parties to this CIT. This CIT and the Loan Documents as modified hereby contain the entire and only understanding of the parties with respect to the subject matter hereof and thereof, and may not be altered, amended or extinguished, except by a writing signed by all parties.
[signatures appear on next page]
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IN WITNESS WHEREOF, the parties hereto have executed and entered into this CIT effective as of the Effective Date.
BANK:
HERITAGE BANK OF COMMERCE
a California banking corporation
By: /s/ Xxxxxxx Xxxx
Xxxxxxx Xxxx
Its: Senior Vice President / Regional Manager
BORROWER:
MISSION WEST PROPERTIES, INC.
a Maryland corporation
By: /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Its: President and Chief Operating Officer
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