EXHIBIT 99.5
LOAN NO. 950113436
ASSUMPTION OF LOAN DOCUMENTS
AND ENVIRONMENTAL INDEMNITY
THIS ASSUMPTION OF LOAN DOCUMENTS AND ENVIRONMENTAL INDEMNITY (the
"AGREEMENT") is made as of ____________ ___, 2001, by and between XXXXXXX
PROPERTIES, a California real estate investment trust ("ASSUMING PARTY"),
successor by merger to THE PEREGRINE REAL ESTATE TRUST ("PEREGRINE"), and
FREMONT INVESTMENT & LOAN, a California industrial loan association ("LENDER"),
with respect to the following Recitals:
R E C I T A L S :
A. Pursuant to that certain Loan and Security Agreement dated February
15, 1999 between Lender and Peregrine (the "LOAN AGREEMENT"), Lender previously
made a loan to Peregrine in the original principal amount of Forty-Four Million
Dollars ($44,000,000) (the "LOAN"). The Loan is evidenced by that certain
Secured Promissory Note dated February 15, 1999, in the original principal
amount of the Loan, executed by Peregrine, as maker, in favor of Lender, as
holder (the "NOTE"). All initially-capitalized terms not otherwise defined
herein shall have the meanings given such terms in the Loan Agreement.
B. The repayment of the Note and Peregrine's performance of its
obligations under the Note are secured, INTER ALIA, by the Deed of Trust and the
Assignment of Rents.
C. Assuming Party is the successor by merger to Peregrine. The parties
are entering into this Agreement in accordance with the provisions of SECTION
2.7 of the Loan Agreement.
NOW THEREFORE, in consideration of the foregoing Recitals, the mutual
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. ASSUMPTION.
Assuming Party hereby accepts and assumes the obligations and
duties of Peregrine in, to and under the Loan Documents and the
Environmental Indemnity, whether occurring before or after the date of
this Agreement. Additionally, Assuming Party acknowledges and agrees
that it holds fee simple title to each of the Projects, together with
all rights and interests appurtenant thereto, subject to the provisions
of this Agreement and the charge and lien of the Deed of Trust and the
other Loan Documents, as applicable, and otherwise subject to the terms
and conditions of the Loan Documents, and that it shall be bound by all
of the terms, conditions and covenants contained therein and herein.
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2. LENDER CONSENT.
In consideration of the foregoing assumption by Assuming Party
and upon the terms and conditions contained herein, Lender hereby
consents to assumption of the Loan by Assuming Party. It is agreed that
such consent is made solely for the benefit of Assuming Party and shall
not be deemed, nor shall the same constitute, a waiver by Lender of any
rights under the Loan Documents in the event of any transfer by
Assuming Party of any or all of the Projects. Lender acknowledges and
agrees that the modifications of Peregrine's Formation Documents and
the adoption and modification of Assuming Party's Formation Documents
evidenced by the Merger Documents (as hereinafter defined) delivered to
Lender prior to the date hereof shall not constitute a breach of the
representations and warranties set forth in SECTION 6.1 and the
covenant set forth in SECTION 7.9 relating thereto of the Loan
Agreement.
Without limiting any of the conditions set forth in the Loan
Documents relating to the disbursement of Loan proceeds (all of which
must be satisfied prior to any disbursement of Loan proceeds), Lender
agrees that, so long as the Effective Date (as hereinafter defined)
occurs on or before the Termination Date (as hereinafter defined), the
provisions of SECTION 2.6 of the Loan Agreement shall not be applicable
to One Million Seven Hundred Thirty Thousand Dollars ($1,730,000) of
Loan proceeds, which proceeds shall be used by Assuming Party to pay
(a) the cash consideration to be paid to minority shareholders of
Peregrine in the amount of One Million Three Hundred Thirty Thousand
Six Hundred Twenty-Seven Dollars ($l,330,627), and (b) such expenses in
connection with the transactions contemplated by the Merger Documents
as are reasonably approved by Lender. Except as expressly provided
herein, the provisions of SECTION 2.6 of the Loan Agreement shall
remain unmodified and in full force and effect.
3. MODIFICATION OF LOAN DOCUMENTS.
Each of the Loan Documents and the Environmental Indemnity are
hereby modified to (i) reflect the assumption set forth in this
Agreement, (ii) provide that all of the obligations under the Loan
Documents and the Environmental Indemnity are the obligations of
Assuming Party as if Assuming Party is named therein, (iii) reflect
that the Assumption Documents (as hereinafter defined) constitute Loan
Documents, and (iv) provide that any reference made in any of the Loan
Documents or the Environmental Indemnity to any of the Loan Documents
or the Environmental Indemnity shall mean such Loan Documents or the
Environmental Indemnity as amended pursuant to this Agreement.
4. REPRESENTATIONS AND WARRANTIES.
(a) Assuming Party hereby represents and warrants to Lender
that:
(i) It has full power and authority to execute, deliver
and perform its obligations under this Agreement and all other
documents and instruments (including, without limitation, the
documents and instruments set forth in SECTION 6) delivered to
Lender in connection herewith (collectively, with this
Agreement, the "ASSUMPTION DOCUMENTS")), and this Agreement
and the other Assumption
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Documents are binding upon, and enforceable against Assuming
Party in accordance with their respective terms, except as
enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or
limiting creditors' rights generally.
(ii) There is no Event of Default or Potential Default
under any of the Loan Documents (as "EVENT OF DEFAULT" and
"POTENTIAL DEFAULT" are defined therein).
(iii) Except as provided in SECTION 2 with respect to the
modification of Peregrine's Formation Documents and the
adoption and modification of Assuming Party's Formation
Documents, the representations and warranties in the Loan
Documents are as of the date hereof, and on the Effective Date
will be true, correct and complete in all material respects.
(iv) There are no offsets or defenses against the payment
of the Note or any other amounts payable under the Loan
Documents.
(v) Assuming Party is a real estate investment trust duly
formed, validly existing and in good standing under the Laws
of the State of California. Assuming Party has the full power
and authority to own and operate its properties, to carry on
its business as now conducted, to assume the obligations under
each Loan Document and the Environmental Indemnity, and to
carry out the transactions contemplated hereby and thereby.
Assuming Party does not do business under any trade name or
fictitious business name. Assuming Party has delivered to
Lender true, correct and complete copies of its Formation
Documents and such Formation Documents have not been amended
or modified except pursuant to agreements delivered to Lender
prior to the date hereof.
(vi) The execution, delivery and performance of the
Assumption Documents, and the assumption and performance by
Assuming Party of the Loan Documents and the Environmental
Indemnity and the issuance, delivery and payment of the Note
have been duly authorized by all necessary action of Assuming
Party.
(vii) The execution, delivery and performance by Assuming
Party of each of the Assumption Documents and the assumption
and performance by Assuming Party of each applicable Loan
Document and the Environmental Indemnity do not and will not
(i) violate any Law applicable to Assuming Party, the
Formation Documents of Assuming Party, or any order, judgment
or decree of any court or other Governmental Agency binding on
Assuming Party; (ii) conflict with, result in a breach of or
constitute (with the giving of notice or the passage of time
or both) a default under any Contractual Obligation of
Assuming Party; (iii) result in or require the creation or
imposition of any Lien of any nature on Assuming Party's
properties or assets other than the Liens in favor of Lender
under the Loan Documents; or (iv) require any approval or
consent of any Person under any Contractual Obligation of
Assuming Party other than consents obtained
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prior to the date hereof, all of which are in full force and
effect as of the date hereof.
(viii) The execution, delivery and performance by Assuming
Party of each of the Assumption Documents and the assumption
and performance by Assuming Party of each applicable Loan
Document and the Environmental Indemnity does not and will not
require any registration with, consent or approval of, or
notice to, or other action to, with or by, any Governmental
Agency or other Person other than the filing with the
California Secretary of State of the Financing Statement (as
hereinafter defined).
(ix) The Note, the other Loan Documents and the
Environmental Indemnity are the legally valid and binding
obligations of Assuming Party, enforceable against Assuming
Party in accordance with their respective terms, except as
enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or
limiting creditors' rights generally.
(x) There is no action, suit, proceeding or arbitration,
before or by any Governmental Agency or other Person, pending
or, to Assuming Party's best knowledge, threatened against or
affecting Assuming Party, any of the Principals or any
properties or rights of Assuming Party or any of the
Principals, which might adversely affect Lender's rights or
remedies under the Assumption Documents or the Loan Documents
or the Environmental Indemnity, the business, assets,
operations or financial condition of any such party or its
ability to perform its obligations under the Loan Documents or
the Environmental Indemnity. As of the date hereof, there are
no outstanding judgments against the Related Parties or their
property in excess of Two Hundred Fifty Thousand Dollars
($250,000) as to any individual judgment or Five Hundred
Thousand Dollars ($500,000) in the aggregate.
Upon the Effective Date, all of the representations and
warranties made by Peregrine in the Loan Documents and the
Environmental Indemnity shall be deemed made by Assuming Party with the
same form and effect as if Assuming Party had executed each of the Loan
Documents and the Environmental Indemnity. The foregoing
representations and warranties and the representations of Assuming
Party set forth in this Agreement and the Loan Documents constitute
material inducements to Lender and that, but for such representations
and warranties, Lender would not have entered into this Agreement. All
of such representations and warranties shall survive the execution and
delivery of the Assumption Documents, and any and all investigations
and inquiries made by Lender, and all shall remain true, correct and
complete and shall remain continuing obligations so long as any portion
of the Loan or any of the obligations the under Loan Documents remains
outstanding or unsatisfied.
5. NONFOREIGN ENTITY.
Section 1445 of the Internal Revenue Code of 1985, as amended
(the "INTERNAL REVENUE CODE") provides that a transferee of a U.S. real
property interest must withhold
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tax if the transferor is a foreign person. To inform Lender that the
withholding of tax will not be required in the event of the disposition
of any of the Projects pursuant to the terms of the Deed of Trust,
Assuming Party hereby certifies, under penalty of perjury, that: (a)
Assuming Party is not a foreign corporation, foreign partnership,
foreign trust or foreign estate, as those terms are defined in the
Infernal Revenue Code and the regulations promulgated thereunder; and
(b) Assuming Party's employer identification number is ____________ ;
and (a) Assuming Party's principal place of business is ____________.
It is understood that Lender may disclose the contents of this
representation to the Internal Revenue Service and that any false
statement contained herein could be punished by fine, imprisonment or
both. Assuming Party covenants and agrees to execute such further
certificates, which shall be signed under penalty of perjury, as Lender
shall reasonably require. The covenant set forth herein shall survive
the foreclosure of the lien of the Deed of Trust or acceptance of a
deed in lieu thereof.
6. CLOSING CONDITIONS.
As conditions precedent to Lender's execution and delivery of
this Agreement and to the effectiveness of the modification of the Loan
Documents set forth herein, Assuming Party at its sole cost and
expense, shall deliver to the Lender, on or before ____________, 2001
(the "TERMINATION DATE"), the following items, all of which shall be in
form and substance satisfactory to Lender:
(a) This Agreement duly executed by Assuming Party;
(b) A Memorandum of Amendment duly executed and acknowledged
by Assuming Party;
(c) UCC-1 Financing Statements, duly executed by Assuming
Party (collectively, the "FINANCING STATEMENT");
(d) Evidence of the consent of the ground lessor for each
Ground Leased Project, if any, to the merger of Peregrine into Assuming
Party and the assumption of the applicable Ground Lease by Assuming
Party;
(e) Evidence of the consent of Junior Lender to the merger of
Peregrine into Assuming Party and the assumption of the Junior Loan
Documents by Assuming Party;
(f) Copies of any and all documentation evidencing the merger
of Peregrine into Assuming Party and copies of all Assuming Party's
Formation Documents (including, without limitation, a current
California Certificate of Good Standing and evidence of Assuming
Party's authority to consummate the merger) and all amendments to
Peregrine's Formation Documents (collectively, the "MERGER DOCUMENTS")
and evidence that the merger of Peregrine into Assuming Party has been
consummated;
(g) An opinion letter from counsel to Assuming Party covering
such matters as required by, and in form acceptable to, Lender and its
counsel;
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(h) At Assuming Party's expense, a modified 111.4 Endorsement
or other assurance that the applicable Official Records reflect that
Assuming Party owns fee title to the Projects, which endorsements shall
be in form and substance reasonably satisfactory to Lender;
(i) Reimbursement to Lender of all reasonable costs and fees
(including appraisal costs and Lender's attorneys' fees and costs)
incurred by Lender in connection with this Agreement and the other
Assumption Documents and the assumption of the Loan by Assuming Party;
and
(j) Such other documents, materials or information as Lender
may reasonably require.
7. SURVIVAL.
The covenants, representations and warranties set forth herein
and in the Loan Documents shall survive the transfer of any Project and
the assumption of all of Peregrine's right, title, interest, benefits,
burdens and obligations in, to and under the Loan Documents and the
Environmental Indemnity as provided herein.
8. EVENTS OF DEFAULT.
In addition to all other matters constituting a default under
the terms of the Loan Documents, the breach or default by Assuming
Party of any term, covenant, agreement, condition, provision,
representation or warranty contained herein, and the expiration of any
applicable cure period set forth in the Loan Documents, shall also be
deemed a default under the Loan Documents.
9. AMENDMENT TO LOAN DOCUMENTS.
Notwithstanding anything to the contrary in the Note, Deed of
Trust, any other Loan Documents and the Environmental Indemnity, upon
the Effective Date, the parties hereto agree that the Note, Deed of
Trust, any other Loan Documents and the Environmental Indemnity shall
be amended in the manner and to the extent set forth herein. All
references in this Agreement to the Loan Documents or the Environmental
Indemnity shall, unless the context requires otherwise, mean the Loan
Documents or the Environmental Indemnity as amended by this Agreement.
10. EFFECT OF LOAN DOCUMENTS.
Except as specifically amended pursuant to the terms of this
Agreement, the terms and conditions of the Note, Deed of Trust, the
other Loan Documents and the Environmental Indemnity shall remain
unmodified and in full force and effect; provided, however, that such
Loan Documents and the Environmental Indemnity shall now apply to
Assuming Party as if Assuming Party was one of the original parties
thereto.
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11. GOVERNING LAW.
This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of California.
12. COUNTERPARTS.
This Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be deemed to be an
original and all of which counterparts taken together shall constitute
but one and the same instrument. Signature and acknowledgment pages may
be detached from the counterparts and attached to a single copy of this
Agreement to physically form one document, which may be recorded.
13. SUBMISSION OF AGREEMENT.
The submission of this Agreement or any of the other
Assumption Documents to Assuming Party or its agents or attorneys for
review or signature does not constitute an agreement by any of the
parties to enter into this Agreement, and this Agreement shall have no
binding force or effect until it is recorded in the Official Records
and all closing conditions are satisfied within the time period set
forth herein (the "EFFECTIVE DATE").
14. TIME OF ESSENCE.
Time is of the essence with respect to each provision of this
Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed and delivered as of the date first above written.
ASSUMING PARTY:
XXXXXXX PROPERTIES,
a California real estate investment trust
By:
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Its:
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By:
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Its:
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LENDER:
FREMONT INVESTMENT & LOAN,
a California industrial loan association
By:
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Its:
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