EXHIBIT 4-C
------------
PLEDGE AND SECURITY AGREEMENT
-----------------------------
THIS PLEDGE AND SECURITY AGREEMENT (this "AGREEMENT") is made
as of October 1, 1996, by and between XXXXXX-XXXXXXX PARTNERS, a California
general partnership ("PLEDGOR"), and THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA, a New Jersey corporation ("LENDER").
RECITALS
A. Pledgor owns certain real property located in the City of
Los Angeles, California, which real property is encumbered by a deed of
trust that secures, among other things, the repayment of the loan (the
"LOAN") evidenced by that certain Note Secured by Deed of Trust, dated as
of January 15, 1991, by Pledgor, as maker, in favor of Lender, as holder
(as amended from time to time, the "NOTE").
B. Concurrently herewith, Lender is agreeing to certain
modifications to the Loan pursuant to that certain Second Amendment to Loan
Documents and Second Amendment to Deed of Trust, dated as of even date
herewith, between Pledgor and Lender (collectively, the "LOAN MODIFICATION
DOCUMENTS"). As a condition to agreeing to the Loan Modification
Documents, Lender is requiring, among other things, that Pledgor execute
that certain Lock Box Disbursement Agreement, dated as of even date
herewith by and between Pledgor and Lender (the "LOCK BOX AGREEMENT"),
pursuant to which certain sums of Pledgor are to be deposited into the
Collateral Accounts (as defined below) from time to time.
C. Under the terms of the Lock Box Agreement, Pledgor is
required to grant Lender a security interest in the Collateral Accounts and
the funds contained in each such account as security for the payment and
performance of the obligations of Pledgor under the Loan.
NOW, THEREFORE, with reference to the foregoing Recitals (which
are incorporated herein by this reference) and for valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereby agree as follows:
AGREEMENT
SECTION 1
DEFINITIONS
1.01 CERTAIN DEFINITIONS. As used in this Agreement, the
following terms shall have the following meanings, unless the context
otherwise requires:
"COLLATERAL ACCOUNTS" shall mean, collectively, the Xxxxx Cash
Account and the Project Account.
"OBLIGATIONS" shall mean those certain obligations and
indebtedness described in SECTION 2.03 hereof.
"PLEDGED COLLATERAL" shall have the meaning given to it in
SECTION 2.02 hereof.
"XXXXX CASH ACCOUNT" shall mean deposit account no. 4807013115
in the name of Pledgor at Xxxxx Fargo Bank, N.A. and any replacements
thereof.
"PROJECT ACCOUNT" shall mean, collectively, reserve balance
account no. 0000000 and regular checking account no. 0000000 in the name of
Pledgor at U.S. Trust Company of California, N.A., and any replacements
thereof.
1.02 OTHER DEFINITIONS. Capitalized terms in this Agreement
which are not defined herein shall have the meaning assigned to such terms
in the Lock Box Agreement.
SECTION 2
TERMS
2.01 GRANT OF SECURITY INTEREST. Pledgor hereby pledges,
assigns, grants and transfers to Lender a security interest pursuant to the
California Uniform Commercial Code in the Pledged Collateral to secure the
payment and the performance by Pledgor of the Obligations.
2.02 DESCRIPTION OF COLLATERAL. The collateral that is the
subject of the security interest granted herein is (collectively, the
"PLEDGED COLLATERAL"): (a) the Collateral Accounts and all proceeds
therein; (b) all interest, dividends, income and other payments or
distributions in connection with the Collateral Accounts; (c) all
instruments, notes, certificates, contracts, contract rights, coupons and
general intangibles representing or evidencing the Collateral Accounts; and
(d) all substitutions for and proceeds of the Collateral Accounts.
2.03 INDEBTEDNESS. This Agreement secures the following
(collectively, the "OBLIGATIONS"): (a) payment and performance of all of
Pledgor's obligations under the Loan Documents (as defined in the Loan
Modification Documents); (b) any successor instrument representing all or
any part of the indebtedness of Pledgor pursuant to the Note; (c) all
further advances and credit that may be made by Lender to Pledgor pursuant
to the Loan Documents, including, but not limited to, all advances and
expenditures made by Lender for the protection, preservation, or defense of
the Pledged Collateral; (d) all liabilities of any kind, whether primary,
secondary, direct or contingent, that are now due or that may hereafter
become due from Pledgor to Lender under this Agreement; and (e) performance
by Pledgor of the obligations set forth in this Agreement.
2.04 ADVANCES. Any advances or expenditures made by Lender
under this Agreement shall be secured by the Pledged Collateral, and shall
become immediately due and payable by Pledgor to Lender with interest
thereon at fourteen percent (14%) per annum, from the date of demand until
paid.
2.05 PERFECTION OF SECURITY INTEREST. To perfect the security
interest granted herein, Pledgor shall:
(a) Immediately deliver to the possession of Lender all
notes, contracts, coupons, certificates, instruments or other property, if
any, evidencing the Pledged Collateral now owned or hereafter acquired by
Pledgor, and where appropriate, properly endorsed in blank for the benefit
of Lender;
(b) Execute and file one or more financing statements
as may be requested by Lender; and
(c) Execute and deliver such other and further
documents or take such other and further actions, and provide such
information as may be reasonably requested by Lender to perfect or continue
the perfection of the security interest granted pursuant to this Agreement.
SECTION 3
REPRESENTATIONS AND WARRANTIES
Pledgor represents and warrants to Lender that:
3.01 REPRESENTATIONS AND WARRANTIES IN LOAN MODIFICATION
DOCUMENTS. The representations and warranties contained in the Loan
Modification Documents and the Lock Box Agreement are incorporated by
reference herein as if restated in their entirety.
3.02 TITLE; NO LIENS. Pledgor has good title to the Pledged
Collateral, except to the extent that the Pledged Collateral includes
security deposits of tenants under leases currently affecting the Project,
and has not created any lien against or other security interest in the
Pledged Collateral, nor have any other liens or security interests attached
against the Pledged Collateral, except pursuant to this Agreement.
3.03 ENFORCEABLE. The security interest granted as to the
Pledged Collateral is and shall continue to be genuine, enforceable in
accordance with its terms, free from default and free from defense (except
to the extent defenses arise from actions of Lender) and conditions
precedent.
3.04 NO CONFLICT. The Pledged Collateral is duly and validly
pledged to Lender and the pledging thereof does not contravene or
constitute a default under any provision of applicable law or regulation or
any judgment, order, decree, agreement or instrument binding on Pledgor or
result in the creation of any lien upon any of the property or assets of
Pledgor other than the security interest granted pursuant to this
Agreement.
3.05 ORGANIZATION. Pledgor is a duly organized and validly
existing California general partnership.
3.06 DUE AUTHORIZATION. The execution, delivery and
performance by Pledgor of this Agreement are within Pledgor's power, have
been duly authorized by all necessary action and will not contravene, or
constitute a default under any provision of applicable law or regulation or
of any judgment, order, decree, agreement or instrument binding on Pledgor.
3.07 ENFORCEABLE. This Agreement constitutes a legal, valid
and binding obligation of Pledgor that is enforceable in accordance with
its terms.
3.08 APPROVALS. No approval, consent or authorization of or
filing or registration with any governmental authority or body is necessary
for the execution, delivery or performance by Pledgor of this Agreement or
for the performance by Pledgor of any of the terms or conditions hereof,
except for such approvals, consents or authorizations (copies of which have
been delivered to Lender) as have been obtained and are in full force and
effect. Execution and delivery of this Agreement shall be sufficient to
create a valid, first priority lien against the Pledged Collateral.
These representations and warranties shall be deemed to be
repeated at each time the composition of the Pledged Collateral shall
change.
SECTION 4
PLEDGOR'S COVENANTS
4.01 PLEDGOR'S AFFIRMATIVE COVENANTS. Pledgor covenants and
agrees to:
(a) Pay promptly upon demand by Lender, as part of the
Obligations secured hereby, all amounts expended or advanced by Lender,
including reasonable attorneys' fees and other professional fees, with
interest thereon at the rate provided in SECTION 2.04 above, for the
purpose of realizing on the Pledged Collateral after or by reason of
default by Pledgor, as more particularly described below;
(b) Provide Lender, promptly upon the occurrence of
same, written notice of any change in Pledgor's principal place of
business;
(c) Defend the Pledged Collateral against all claims of
third parties asserted against or in connection with the Pledged Collateral
or any part thereof, including any liens, encumbrances, charges, security
interests or other claims that may be asserted against or attach to the
Pledged Collateral;
(d) Advise Lender in writing of each and every material
change in Pledgor's financial or business situation that impairs,
contributes to the impairment of, or may in the future impair or contribute
to the impairment of Pledgor's ability to timely meet Pledgor's obligations
under this Agreement, the agreements referenced in the Recitals above, or
other loan documents or any other agreement with Lender, immediately upon
the occurrence of each such material change;
(e) Deposit, or cause the deposit into the Project
Account all cash interest, dividends, distributions, rollover proceeds and
any other payments received in connection with the Pledged Collateral (but
excluding any interest earned on the Xxxxx Cash Account); and
(f) Notify Lender of any attachment or other legal
process levied against any of the Pledged Collateral and any information
received by Pledgor relative to the Pledged Collateral that may in any way
affect the value of the Pledged Collateral or the rights and remedies of
Lender with respect thereto.
4.02 PLEDGOR'S NEGATIVE COVENANTS. Pledgor covenants and
agrees not to grant any security or other interest in any of the Collateral
Accounts to any party.
SECTION 5
POWER OF ATTORNEY
5.01 GRANT OF POWER-OF-ATTORNEY. Pledgor hereby irrevocably
appoints Lender with full power of substitution as its attorney-in-fact for
the purpose of carrying out the provisions of this Agreement and, while an
Event of Default is continuing, taking any action and executing any
instrument that Lender may deem necessary or advisable to accomplish the
purposes hereof. Without limiting the generality of the foregoing, subject
to the Lock Box Agreement, while an Event of Default is continuing, Lender
shall have the right and power to receive, endorse and collect all checks
and other orders for the payment of money made payable to Pledgor
representing any interest or dividends or other distribution payable in
respect of the Pledged Collateral or any part thereof and to give full
discharge for the same and to execute endorsements, assignments or other
instruments of conveyance or transfer with respect to any or all of the
Pledged Collateral. The powers of attorney granted pursuant hereto and all
authority hereby conferred are granted and conferred solely to protect
Lender's interests in the Pledged Collateral and shall not impose any duty
upon the attorney-in-fact to exercise such powers. Such powers of attorney
are coupled with an interest, which shall be irrevocable prior to the
payment in full of the Obligations and shall not be terminated prior
thereto or affected by any act of Pledgor or by operation of law,
including, but not limited to, the dissolution or termination of Pledgor,
or the occurrence of any other event, and if Pledgor or any other person or
entity should be dissolved or terminated or any other event should occur
before the payment in full of the Obligations, such attorney-in-fact shall
nevertheless be fully authorized to act under such powers of attorney as if
such dissolution, termination or other event had not occurred and
regardless of notice thereof.
SECTION 6
CERTAIN RIGHTS WITH RESPECT TO
THE PLEDGED COLLATERAL
In addition to any other rights provided hereunder, or under
any other agreement between Pledgor and Lender with respect to this subject
matter, the parties shall have the following additional rights set forth in
this Section with respect to the Pledged Collateral:
6.01 LENDER'S RIGHTS. Any dividends, distributions and
interest on the Pledged Collateral shall be deemed Pledged Collateral.
Lender shall have no duty with respect to the Pledged Collateral, except as
set forth in the Lock Box Agreement. Pledgor releases Lender from any
claims or causes of action at any time arising out of or with respect to
the Pledged Collateral or in connection with any actions taken or omitted
to be taken by Lender with respect thereto and Pledgor hereby agrees to
hold Lender harmless from any and all such claims and causes of action,
except to the extent such claim or cause of action arises from Lender's
gross negligence or wilful misconduct or breach of the Lock Box Agreement.
6.02 PLEDGOR'S RELINQUISHMENT OF RIGHT TO WITHDRAW. Pledgor
expressly acknowledges and agrees that it has no right to withdraw funds
from the Collateral Accounts, except as provided in the Lock Box Agreement,
and that all withdrawals or other disbursements from the Collateral
Accounts shall be made in strict accordance with the terms of the Lock Box
Agreement.
SECTION 7
DEFAULT
7.01 EVENTS OF DEFAULT. Only the occurrence of the following
shall constitute a default under this Agreement:
(a) If an "Event of Default" occurs under any of the
Loan Documents (as defined therein); or
(b) If Pledgor fails to perform or observe any covenant
or agreement contained herein and such default continues for a period of
three (3) business days after written notice thereof, except as provided in
subsection (f) below; or
(c) If any representation or warranty of Pledgor
contained in this Agreement is incorrect or in breach; or
(d) In the event Lender shall cease to have a first
priority security interest in the Pledged Collateral; or
(e) If Pledgor takes any action or permits any action
to be taken that may materially and irreparably impair the value of the
Pledged Collateral or the security interest created hereby; or
(f) If Pledgor fails to deposit into the Project
Account any sums required to be deposited in the Project Account by Pledgor
pursuant to the Lock Box Agreement, within one (1) business day after the
time at which Pledgor is required to deposit such sums pursuant to the Lock
Box Agreement.
7.02 LENDER'S RIGHTS UPON DEFAULT.
(a) During the continuation of any default, Lender
shall be entitled, without notice, to cease to authorize disbursements from
the Project Account for so long as the default continues, notwithstanding
any obligations of Lender to the contrary set forth in this Agreement or
any other Loan Document;
(b) In addition, during the continuation of any default
hereunder, Lender shall have all of the rights and remedies of a secured
party under the California Uniform Commercial Code or under any other
applicable law or in equity, all of which rights and remedies shall, to the
full extent permitted by law, be cumulative; provided, however, that Lender
shall not sell, take control of, or transfer the Pledged Collateral or
apply the Pledged Collateral to the Obligations unless Lender has first
delivered to Pledgor written notice of Pledgor's default hereunder, and
such default continues five (5) business days after Lender's delivery of
such notice. Without limiting the generality of the foregoing, if Lender
has delivered to Pledgor written notice of Pledgor's default hereunder and
Lender's intention to take one or more of the actions enumerated below, and
such default continues five (5) business days after Lender's delivery of
such notice, Lender shall be entitled to:
(i) to conduct a private or public sale of the
Pledged Collateral; Pledgor acknowledges and agrees that in view of the
nature of the Collateral Accounts as Pledged Collateral, no "commercially
reasonable sale" shall be required, and Lender may strictly foreclose upon
the Collateral Accounts without notice and without affecting any rights of
Lender to a deficiency;
(ii) to take control of any and all proceeds of
the Pledged Collateral;
(iii)transfer or cause to be transferred all or any
of the Pledged Collateral into the name of Lender or a nominee; and
(iv) to receive and apply in payment of the
Obligations any dividends, distributions, or other payment on the Pledged
Collateral that arise on or after the date of this Agreement.
7.03 RESCISSION OF DEFAULT NOTICES. To the extent Lender has
delivered to the Bank any default notices with respect to a default
hereunder, Lender shall withdraw such notice within five (5) business days
after receiving sufficient evidence, as determined by Lender, of Pledgor's
full and complete cure of such default. Notwithstanding the provisions of
this Section 7.03, Lender shall not be required to deliver notice to the
Bank in order to exercise its remedies as set forth in Section 7.02, except
to the extent required by law.
SECTION 8
RELEASE
8.01 RELEASE OF SECURITY INTEREST. Upon the payment and
satisfaction in full of the Obligations secured by this Agreement: (a) the
Pledged Collateral (or so much thereof as remains, if any) shall be
promptly released from the security interest created hereby; (b) Lender
shall promptly execute such reassignments and other documentation as
Pledgor may reasonably request to document such release; and (c) Lender
shall direct Bank to promptly return the Pledged Collateral (or so much
thereof as remains, if any) to the possession of Pledgor.
SECTION 9
MISCELLANEOUS
9.01 WAIVERS.
(a) All waivers of rights, powers and remedies by
Lender must be in writing. No delay, omission or failure by Lender to
exercise any right, power or remedy to which it may be entitled by reason
of any default hereunder shall impair any such right, power or remedy, nor
shall such be construed as a release by Lender of such right, power or
remedy or as a waiver of or acquiescence in any such default, unless such
default shall have been cured in accordance with the terms of this
Agreement. A waiver by Lender of any right, power or remedy in any one
instance shall not constitute a waiver of the same or any other right,
power or remedy in any other instance.
(b) The acceptance by Lender of any sum after any
default hereunder or under any Loan Document shall not constitute a waiver
of the right to require a prompt performance of all of the covenants and
conditions contained in any of the Loan Documents. The acceptance by
Lender of any sum less than the sum then due shall be deemed an acceptance
on account only and shall not constitute a waiver of the obligation of
Pledgor to pay the entire sum then due, and Pledgor's failure to pay said
entire sum due shall be and continue to be a default notwithstanding such
acceptance of such lesser amount on account, and Lender shall be entitled
at all times thereafter to exercise all rights in this instrument conferred
upon it following a default, notwithstanding the acceptance by Lender
thereafter of future sums on account.
9.02 ASSIGNMENT. The obligations created by this Agreement are
for the benefit of Lender and its successors and assigns, and in the event
of any assignment by Lender of any of the Obligations, the rights
hereunder, to the extent applicable to the Obligations so assigned, may be
transferred with the Obligations. The rights of Pledgor hereunder shall
not be assignable in any respect without the prior written consent of
Lender except as specifically authorized or required hereby. Subject to
the foregoing, this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
9.03 NOTICES. All notices, approvals, consents, requests and
demands upon the respective parties hereto shall be in writing and shall be
deemed to have been given or made when made in accordance with the Loan
Documents. Any required notice of sale, disposition or other intended
action by Lender (including, without limitation, any notice by Lender
pursuant to Section 7.02(b), above) served upon Pledgor at least five (5)
business days prior to such action shall constitute commercially reasonable
notice to Pledgor.
9.04 ATTORNEYS' FEES. In the event litigation is commenced to
enforce any of the provisions of this Agreement, to recover damages for
breach of any of the provisions of this Agreement, or to obtain declaratory
relief in connection with any of the provisions of this Agreement, the
prevailing party shall be entitled to recover reasonable attorneys' fees
and costs, whether or not such action proceeds to judgment.
9.05 CUMULATIVE REMEDIES. Lender shall have the right to
enforce one or more remedies hereunder or under applicable law,
successively or concurrently, and any such action shall not stop or prevent
Lender from pursuing any other remedy which it may have hereunder, under
the Loan Documents, under law or in equity.
9.06 SEVERABILITY. Any provision in this Agreement that is
inoperative, unenforceable, or invalid in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such inoperation,
unenforceability, or invalidity without affecting the remaining provisions
hereof or affecting the operation, enforceability, or validity of such
provision in any other jurisdiction.
9.07 CONSTRUCTION. The parties agree that each party and its
counsel have reviewed this Agreement and that any rule of construction to
the effect that ambiguities are to be resolved against the drafting parties
shall not apply in the interpretation of this Agreement.
9.08 SURVIVAL. All agreements, representations and warranties
made in this Agreement shall survive the execution of the Modification
Documents.
9.09 COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each such counterpart shall be deemed to be an
original.
9.10 GOVERNING LAW AND JURISDICTION. This Agreement shall be
governed and construed in accordance with and pursuant to the laws of the
State of California with regard to the conflicts of law principles of said
state.
9.11 HEADINGS. Section headings in this Agreement are included
for convenience of reference only and are not part of this Agreement for
any other purposes.
9.12 TIME OF THE ESSENCE. Time is of the essence of this
Agreement, and any delay in the performance of any of the terms, covenants
and conditions hereof shall be deemed a breach of the whole Agreement.
9.13 LENDER NOT A MORTGAGEE-IN-POSSESSION. Pledgor agrees that
Lender is not a mortgagee-in-possession and that this Agreement does not
create any obligation on the part of Lender to manage or operate the
Property nor does this Agreement give Lender any control over the Property.
9.14 PLEDGOR'S LIMITED RECOURSE LIABILITY. Lender agrees and
confirms with Pledgor that the provisions of Paragraph 48 of the Deed of
Trust and that portion of the Note beginning with the third (3rd) full
grammatical paragraph on page 7 of the Note and extending through the first
full grammatical paragraph on page 9 of the Note, remain in full force and
effect and are not modified, amended or altered by reason of this Agreement
and in addition, apply in full to this Agreement as if fully set forth
herein (provided, however, that for purposes of such incorporation, all
references to "Trustor" in paragraph 48 of the Deed of Trust shall refer to
"Pledgor" herein and all references to "Beneficiary" in such paragraph 48
shall refer to "Lender" herein and all references to "this Deed of Trust"
in such paragraph 48 shall refer to "this Agreement" as defined herein).
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed and delivered as of the date first above written.
PLEDGOR: XXXXXX-XXXXXXX PARTNERS,
a California general partnership
By: Carlyle Real Estate Limited Partnership-IX,
an Illinois limited partnership
General Partner
By: JMB Realty Corporation,
a Delaware corporation,
Its General Partner
By: ______________________________
Xxxxx X. Xxxxxxxxx
Vice President
By: Medical Office Buildings, Ltd.,
a Washington limited partnership,
General Partner
By: Xxxxxx Runstad Associates Limited
Partnership, a Washington limited partnership,
Its General Partner
By: Xxxxxx Runstad & Company,
a Washington corporation,
Its General Partner
By: _________________________
Xxxxxxx X. Xxxxxxx
President
LENDER: THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey
corporation
By: ________________________________________
Xxxxxxx Xxxxxx
Vice President
ACKNOWLEDGEMENT OF SECURITY INTEREST
By signing below, the undersigned acknowledge
notice of Lender's security interest in
the Collateral Accounts:
U.S. TRUST COMPANY OF CALIFORNIA, N.A.,
a national banking association
By: _______________________________
Xxxxxx Xxxxx
Vice President
XXXXX FARGO BANK, N.A., a national
banking association
By: _______________________________
Name:
Title:
SECOND AMENDMENT TO
LOAN DOCUMENTS
THIS SECOND AMENDMENT TO LOAN DOCUMENTS (this "AMENDMENT") is made as
of October 1, 1996 (the "EFFECTIVE DATE"), by and between XXXXXX-XXXXXXX
PARTNERS, a California general partnership ("BORROWER"), and THE PRUDENTIAL
INSURANCE COMPANY OF AMERICA, a corporation organized and existing under
the laws of the State of New Jersey ("LENDER").
RECITALS
A. Lender made that certain loan (the "LOAN") to Borrower, evidenced by
that certain Note Secured by Deed of Trust in the original principal amount
of Eighty-Six Million Dollars ($86,000,000) dated January 15, 1991,
executed by Borrower in favor of Lender, as amended by that certain First
Amendment to Loan Documents (the "FIRST AMENDMENT"), dated as of January
24, 1996, by and between Borrower and Lender (as so amended, the "NOTE").
The Note matured on September 30, 1996.
B. The Loan is secured by, among other things, that certain Deed of
Trust, dated January 15, 1991, executed by Borrower, as trustor, for the
benefit of Lender, as beneficiary, encumbering Borrower's leasehold
interest in certain real property (the "LAND") described in Exhibit A
thereto, together with the improvements constructed thereon (the Land and
the improvements are referred to collectively as the "PROJECT"), and
recorded on January 15, 1991, as Document No. 91-63945, in the Official
Records of Los Angeles County, California (the "OFFICIAL RECORDS"), as
amended by that First Amendment to Deed of Trust, dated as of January 24,
1996, and recorded in the Official Records on January 25, 1996, as
Instrument No. 96-146121 (as so amended, the "DEED OF TRUST").
Concurrently herewith, the Deed of Trust is being amended by that certain
Second Amendment to Deed of Trust, dated as of even date herewith, by and
between Lender and Borrower (the "SECOND AMENDMENT TO DEED OF TRUST").
C. The Loan is also secured by, among other things (i) that certain
Assignment of Lessor's Interest in Leases, dated as of January 15, 1991, by
Borrower in favor of Lender, recorded in the Official Records on January
15, 1991, as Instrument No. 91-63946, as amended by the First Amendment (as
so amended, the "ASSIGNMENT OF LEASES"), (ii) that certain Security
Agreement, dated as of January 15, 1991, by and between Borrower and
Lender, as amended by the First Amendment (as so amended, the "SECURITY
AGREEMENT"), (iii) that certain Lock Box Disbursement Agreement, dated as
of even date herewith, by and between Borrower and Lender (the "LOCK BOX
AGREEMENT"), and (iv) that certain Pledge and Security Agreement, dated as
of even date herewith, by and between Borrower and Lender (the "PLEDGE
AGREEMENT"). In addition, in connection with the Loan, Borrower and Lender
entered into that certain Hazardous Substances Remediation and
Indemnification Agreement, dated as of January 15, 1991, as amended by the
First Amendment (as so amended, the "HAZARDOUS SUBSTANCES AGREEMENT"). The
Note, the Deed of Trust, the Assignment of Leases, the Security Agreement,
the Lock Box Agreement, the Pledge Agreement and all other documents (other
than the Hazardous Substances Agreement) that evidence or secure the Loan
are referred to collectively herein as the "LOAN DOCUMENTS").
D. Borrower has requested an extension of the maturity date of the Note.
Lender has agreed to an extension of the maturity date provided certain
terms and conditions are satisfied, including the amendment of certain
terms of the Loan Documents.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals, and
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. AMENDMENTS TO NOTE. The Note is amended as follows:
a. The first grammatical paragraph of the Note is
hereby amended and restated as follows:
"For value received, the undersigned, Xxxxxx-Xxxxxxx Partners,
a California general partnership (herein called "Maker"), hereby promises
to pay to the order of THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New
Jersey corporation (herein called "Holder"), at the home office of Holder
in Newark, New Jersey or at such other place as may be designated in
writing, the principal sum of Eighty Six Million Dollars ($86,000,000) (the
"Loan") plus interest on the outstanding unpaid balance of the Loan from
the date hereof until January 9, 1996, at the rate of nine and eleven one-
hundredths percent (9.11%) per annum, from January 10, 1996, until
September 30, 1996, at the rate of ten percent (10%) per annum, and from
October 1, 1996 until the Loan is repaid at the rate of ten and five
hundred sixty-nine thousandths percent (10.569%) per annum; the principal
and interest being payable, without grace, as follows:"
b. The second grammatical paragraph of the Note is
amended and restated as follows:
"On February 10, 1991, Maker shall pay Holder the amount of
Five Hundred Fifty-Eight Thousand Eighty-One Dollars and Ten Cents
($558,081.10) in payment of interest on the outstanding principal sum from
the date after the date hereof through February 10, 1991. Beginning on the
tenth (10th) day of March 1991 and continuing on the tenth (10th) day of
each calendar month thereafter until January 10, 1996, Maker shall pay
monthly installments of principal and interest, each installment in the
amount of Six Hundred Ninety-Eight Thousand Seven Hundred Ninety-Three
Dollars and Three Cents ($698,793.03). Beginning on the 10th day of
February, 1996, and on the same day of each month thereafter to and
including September 10, 1996, Maker shall pay monthly installments of
principal and interest, each installment in the amount of Seven Hundred
Twenty-Four Thousand Eight Hundred Sixty-Five Dollars and Forty-Six Cents
($724,865.46). Beginning on the tenth (10th) day of October 1996 and on
the tenth (10th) day of each month thereafter, to and including September
10, 1997, Maker shall pay monthly installments of interest only, each
installment in the amount of Seven Hundred Twenty-Four Thousand Eight
Hundred Sixty-Five Dollars and Forty-Six Cents ($724,865.46), and on the
earlier to occur of (i) the date Borrower acquires fee ownership of the
Land, or (ii) September 30, 1997, (the "Extended Maturity Date"), the
balance of said principal sum with interest thereon at an annual rate of
ten and five thousand six hundred ninety-four thousandths percent
(10.5694%) shall become due and payable. All installments of principal and
interest of this Note shall be paid to Holder by wire transfer of
immediately available funds to such bank or place, or in such other manner,
as Holder may from time to time designate in writing to Maker, payable in
lawful money of the United States of America, at the home office of the
payee in Newark, New Jersey, or at such other place as the holder hereof
may designate in writing."
c. All references in the Note to the Deed of Trust
shall be deemed to be references to the Deed of Trust as amended by the
Second Amendment to Deed of Trust. All references in the Note to any of
the other Loan Documents shall be deemed to be references to the Loan
Documents as amended hereby. All references in the Note to the Hazardous
Substances Agreement shall be deemed to be references to the Hazardous
Substances Agreement as amended hereby.
2. AMENDMENTS TO THE OTHER LOAN DOCUMENTS. All of the Loan
Documents, other than the Note and the Deed of Trust (collectively, the
"OTHER LOAN DOCUMENTS") shall continue to secure Borrower's obligations
under the Note, as amended hereby. All references to the Note in the Other
Loan Documents shall be deemed to be references to the Note as amended
hereby. All references to the Deed of Trust in any of the Other Loan
Documents shall be deemed references to the Deed of Trust as amended by the
Second Amendment to Deed of Trust. All references to the Hazardous
Substances Agreement in any of the Other Loan Documents shall be deemed to
be references to the Hazardous Substances Agreement as amended hereby.
3. AMENDMENTS TO THE HAZARDOUS SUBSTANCES AGREEMENT. All
references to the Note in the Hazardous Substances Agreement shall be
deemed to be references to the Note as amended hereby. All references to
the Deed of Trust in the Hazardous Substances Agreement shall be deemed
references to the Deed of Trust as amended by the Second Amendment to Deed
of Trust. All references to the Other Loan Documents in the Hazardous
Substances Agreement shall be deemed to be references to the Other Loan
Documents as amended hereby.
4. LOCK BOX AGREEMENT. The Lock Box Agreement requires
Borrower to submit to Lender the Quarterly Statements (as defined in the
Lock Box Agreement). The Quarterly Statements shall be in addition to, and
not in lieu of, Borrower's reporting requirements under the other Loan
Documents.
5. PREPAYMENTS.
a. Notwithstanding anything to the contrary in any of
the Loan Documents, Borrower shall have the right to repay the Loan in full
at anytime, without payment of any prepayment fee. In addition, Borrower
shall have the right to make the principal reduction payments required
under Section 3.3.2 of the Lock Box Agreement, without payment of any
prepayment fee.
b. In the event the Loan is repaid in its entirety on
or before June 30, 1997, Borrower shall receive the Prepayment Credit (as
defined in Subsection 5.c, below) to be applied against the outstanding
principal balance of the Note on the date of such repayment.
c. The "PREPAYMENT CREDIT" shall be an amount equal to
the amount by which the interest that has accrued on the Loan from the
Effective Date until the date on which the Loan is repaid in its entirety
in accordance with this Section 5, exceeds the amount of interest that
would have accrued on the Loan during that same period had such interest
been calculated at a rate of nine percent (9%) per annum, which amount is
equal to One Hundred Seven Thousand Six Hundred Seventy Dollars ($107,670)
per month (as the same may be prorated to reflect any partial months).
6. REPRESENTATIONS AND WARRANTIES. Borrower hereby
represents, warrants and agrees to and with Lender as follows:
a. Neither the execution, delivery or performance by
Borrower of this Amendment and the Second Amendment to Deed of Trust nor
compliance by Borrower with the terms and provisions of this Amendment and
the Second Amendment to Deed of Trust (i) will contravene any provision of
any law, statute, rule or regulation or any order, writ, injunction or
decree or any court or governmental instrumentality affecting or applicable
to Borrower or the Project, or (ii) will conflict or be inconsistent with
or result in any breach of any of the terms, covenants, conditions or
provisions of, of constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any lien upon any of
the property or assets of Borrower pursuant to the terms of any indenture,
mortgage, deed of trust, credit agreement, loan agreement of any other
agreement, contract or instrument to which Borrower is a party or by which
it may be subject; or (iii) will violate or conflict with the
organizational documents of Borrower.
b. No order, consent, approval, license, authorization
or validation of, or filing, recording or registration with, or exemption
by, any governmental or public body or authority, or any subdivision
thereof, is required to authorize, or is required in connection with
(i) the execution, delivery and performance of this Amendment and the
Second Amendment to Deed of Trust, or (ii) the legality, validity, binding
effect or enforceability of this Amendment or the Second Amendment to Deed
of Trust, except to the extent any of such documents need to be filed or
recorded to evidence the restructured security interest of Lender in the
Project.
c. There are no actions, suits or proceedings pending
or, to the actual knowledge of Borrower, threatened against the Project or
Borrower which may materially and adversely affect (i) the enforceability
or priority of the Loan Documents; (ii) the ability of Borrower to perform
its obligations under this Amendment or the Second Amendment to Deed of
Trust; or (iii) the business, operations, property, assets, condition
(financially or otherwise) or prospects of Borrower with respect to the
Project.
d. To the best of Borrower's knowledge (without the
requirement of inquiry or investigation by Borrower, except that Borrower
has made inquiry of H. Xxx Xxxxxxx, Xxxxxx Xxxxx, and Xxxxx Xxxxxxxxx, who
are employed as Chairman and Chief Executive Officer of Xxxxxx Runstad &
Company and Building Manager and Chief Engineer of the Project,
respectively, provided that such individuals' knowledge with respect to the
Project is based on the investigation normally engaged in by such
individuals in the scope of their respective employment activities relating
to the Project), Borrower's operation of the Project is in compliance with
all applicable statutes, regulations and orders of, and all applicable
restrictions imposed by, all governmental bodies, domestic or foreign, in
respect of the conduct of its business and the ownership of its property,
including but not limited to the Americans with Disabilities Act (and
including applicable statutes, regulations, orders and restrictions
relating to environmental standards and controls); provided, that under
applicable law, new tenant improvement work can be performed only if the
particular tenant suite in which such work is being performed are brought
under compliance with the standards required for new construction laws
under the currently applicable handicap laws ("Handicap Standards");
provided, further, that all tenant suites which have been vacated for
occupancy by new tenants since November 30, 1989 comply with the Handicap
Standards; except such noncompliance as would not, in the aggregate, have a
material adverse effect on the business, operations, property, assets,
condition (financial or otherwise) or prospects of Borrower.
e. Borrower has not received any notice from any
insurance company of any defects or inadequacies in the Project which would
adversely affect the insurability of the Project or which would materially
increase the cost of insuring the Project beyond that which is currently
charged for the Project.
f. To the actual knowledge of Borrower, there has not
been a commencement of any action involving the (a) condemnation of any
portion of the Land or Project; (b) condemnation or relocation of any
roadways abutting the Land or Project, or (c) denial of access to the Land
from any point of access to the Land or Project; and to Borrower's actual
knowledge, no governmental authority is contemplating any condemnation
proceedings which could have an adverse effect on the use, occupancy or
enjoyment of the Land or Project.
g. To the actual knowledge of Borrower, Borrower has
paid all taxes due pursuant to any assessments against the Land or Project,
including without limitation real property taxes and assessments. No
special assessments have been imposed and are outstanding against the Land
or Project, and to the best of Borrower's knowledge after making due
inquiry, no such special assessments are contemplated by any governmental
authority or other person or entity having jurisdiction over the Land or
Project.
h. To the actual knowledge of Borrower, Borrower has
not caused, permitted or suffered any liens against the Land or Project, in
favor of any person or entity whatsoever, whether any such lien is prior or
subordinate to the lien and interest of Lender in the Land or Project.
i. To the actual knowledge of Borrower, no brokerage
fees or commissions are payable by or to any person claiming through
Borrower or Borrower's activities in connection with this Amendment or the
Second Amendment to Deed of Trust.
j. Borrower is a validly existing California general
partnership with full partnership power and authority to execute, deliver
and perform its obligations under the Loan Documents, as amended by this
Amendment and the Second Amendment to Deed of Trust, and the Hazardous
Substances Agreement, as amended by this Amendment and to conduct its
business in California.
k. The execution, delivery and performance of this
Amendment and the Second Amendment to Deed of Trust have been duly
authorized by proper corporate or partnership actions or proceedings, and
the Loan Documents, as amended by this Amendment and the Second Amendment
to Deed of Trust, and the Hazardous Substances Agreement, as amended by
this Amendment, constitute legal, valid and binding obligations of Borrower
enforceable in accordance with their respective terms.
l. Borrower has no knowledge that any building or
other improvement on the Land encroaches upon any adjacent property,
building line, setback line, side yard line, or any recorded or visible
easement (or other easement of which Borrower is aware or has reason to
believe may exist) with respect to the Land, except as shown on that
certain survey prepared by Xxxxxx & Associates, dated November 26, 1990,
and identified as Project No. 1WR10101.
m. To the actual knowledge of Borrower, there are no
material defaults under the Lease and to Borrower's actual knowledge, no
material default under any of the existing subleases for occupancy of the
Project.
n. To the actual knowledge of Borrower, (i) other than
as disclosed in the Final Report, Phase I Environmental Assessment dated
December 19, 1990 prepared by Dames and Xxxxx for Borrower, no Hazardous
Materials (as defined below) exist on, under or about the Land or Project
in violation of any Hazardous Materials Laws (as defined below), and no
Hazardous Materials have at any time been transported to or from the Land
or Project or used, generated, manufactured, stored, released or disposed
of on, under or about the Land or Project in violation of any Hazardous
Materials Laws (as defined below), the Land or Project is not in violation
of any Hazardous Materials Laws (as defined below) and there are no past,
current or, to the best knowledge of Borrower after due investigation,
threatened Hazardous Materials Claims (as defined below); (ii) no storage
tanks are located on or under the Land or Project and no storage tanks have
ever been located on or under the Land or the Project except that certain
6,000 gallon underground diesel tank referenced in that certain memorandum,
dated December 13, 1996, from Xxxxxx Xxxxxx of Xxxxxx Runstad & Company to
Xxxxx Xxxxx and Xxxx Xxxxxx.
(1) As used herein, the term "HAZARDOUS
MATERIALS" means and refers to any
(a) oil, petroleum products, flammable
substances, explosives, radioactive materials, hazardous wastes or
substances, toxic wastes or substances or any other wastes, materials or
pollutants which (i) pose a hazard to the Land or Project or to persons on
or about the Land or Project or (ii) cause the Land or Project to be in
violation of any Hazardous Materials Laws;
(b) asbestos in any form, urea formaldehyde
foam insulation, transformers or other equipment which contain dielectric
fluid containing levels of polychlorinated biphenyl, or radon gas;
(c) chemical, material or substance defined
as or included in the definition of "hazardous substances", "hazardous
wastes", "hazardous materials", "extremely hazardous waste", "restricted
hazardous waste", or "toxic substances" or words of similar import under
any applicable local, state or federal law or under the regulations adopted
or publications promulgated pursuant thereto, including, but not limited
to, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, 42 U.S.C. 9601, et seq.; the Hazardous
Materials Transportation Act, as amended, 49 U.S.C. 1801, et seq.;
the Federal Water Pollution Control Act, as amended, 33 U.S.C. 1251,
et seq.; Sections 25115, 25117, 25122.7, 25140, 25249.8, 25281, 25316,
25501, and 25316 of the California Health and Safety Code; and Article 9 or
Article 11 of Title 22 of the Administrative Code, Division 4, Chapter 20;
(d) other chemical, material or substance
that exists on the Land or Project in such amounts that it could pose a
material hazard to the health and safety of the occupants of the Land or
Project or the owners and/or occupants of property adjacent to or
surrounding the Land or Project, or any other Person coming upon the Land
or Project or adjacent property.
(2) As used herein, the term "HAZARDOUS MATERIALS
CLAIMS" means and refers to any and all enforcement, cleanup, removal,
remedial or other governmental or regulatory actions, agreements or orders
threatened, instituted or completed pursuant to any Hazardous Materials
Laws, together with any and all claims made or threatened by any third
party against Borrower, Lender or the Land or Project relating to damage,
contribution, cost recovery compensation, loss or injury resulting from the
presence, release or discharge of any Hazardous Materials.
(3) As used herein, the term "HAZARDOUS MATERIALS
LAWS" any federal, state or local laws, ordinances, regulations or policies
relating to the environment, health and safety, and Hazardous Materials
(including, without limitation, the use, handling, transportation,
production, disposal, discharge or storage thereof) or to industrial
hygiene or the environmental conditions on, under or about the Land or
Project, including, without limitation, soil, groundwater and indoor and
ambient air conditions. In addition, Borrower and Lender agree that:
(i) this Section 6 is intended as Lender's written request for information
(and Borrower's response) concerning the environmental condition of the
real property security under the terms of California Code of Civil
Procedure 726.5; and (ii) each representation and/or covenant in this
Amendment or any other Loan Document (together with any indemnity appli-
cable to a breach of any such representation and/or covenant) with respect
to the environmental condition of the Land or Project is intended by Lender
and Borrower to be an "environmental provision" for purposes of California
Code of Civil Procedure 736.
As used herein, a representation limited by the "knowledge,"
"best knowledge," actual knowledge" or other similar phrase with respect to
Borrower means to the best knowledge of Xxxxx Xxxxx and Xxxxx Xxxxxxxxx.
All representations and warranties provided herein will survive the
execution of this Amendment.
7. CERTAIN ASSURANCES REGARDING HAZARDOUS MATERIALS.
a. Subject to the exclusions set forth in Section VI
of the Hazardous Substances Agreement, Borrower shall protect, indemnify
and hold Lender, its directors, officers, employees and agents, and any
successors to Lender's interest in the Land or Project, and any other
Person who acquires any portion of the Land or Project at a foreclosure
sale or otherwise through the exercise of Lender's rights and remedies
under the Loan Documents, and any successors to any such other Person, and
all directors, officers, employees and agents of all of the aforementioned
indemnified parties, harmless from and against any and all actual or
potential claims, liabilities, damages, losses, fines, penalties,
judgments, awards, costs and expenses (including, without limitation,
reasonable attorneys' fees and costs and expenses of investigation) which
arise out of or relate in any way to any Hazardous Materials Claims or any
use, handling, production, transportation, disposal, release or storage of
any Hazardous Materials in, under or on the Land or Project whether by
Borrower or by any tenant or any other Person. All such costs, damages,
claims and expenses heretofore described and/or referred to in this
Section 7 are hereinafter referred to as "Expenses". Borrower's liability
to the aforementioned indemnified parties shall arise upon the earlier to
occur of (c) discovery of any Hazardous Materials on, under or about the
Land or Project, or (d) the institution of any Hazardous Materials Claims,
and not upon the realization of loss or damage, and Borrower shall pay to
Lender from time to time, immediately upon Lender's request, an amount
equal to such Expenses, as reasonably determined by Lender; provided,
however, no such Expense shall be voluntarily incurred unless Lender has
given Borrower three (3) business days advance written notice of such
Expense and the notice and cure period under subsection b below has
elapsed. In addition, in the event any Hazardous Material is caused to be
removed from the Land or Project by Borrower, Lender or any other Person,
the number assigned by the Environmental Protection Agency to such
Hazardous Material or any similar identification shall be solely in the
name of Borrower and Borrower shall assume any and all liability for such
removed Hazardous Material.
b. In addition to any other rights or remedies Lender
may have under this Amendment or the Loan Documents, at law or in equity,
in the event that Borrower shall fail to timely comply with any of the
provisions hereof, or in the event that any representation or warranty made
herein or in any certificate delivered after the date hereof proves to be
materially false or misleading, then, in such event Lender may, after
(1) delivering written notice to Borrower, which
notice specifically states that Borrower has failed to comply with the
provisions of this Section 7; and
(2) the expiration of the earliest to occur of
(a) the later of (A) thirty (30) days after
receipt of such notice and (B) one hundred eighty (180) days after receipt
of such notice or upon completion of cure by Borrower if Borrower shall
commence to cure such default within thirty (30) days after receipt of such
notice and shall diligently pursue such cure to completion,
(b) the cure period, if any, permitted
under the applicable law, rule, regulation or order with which Borrower
shall have failed to comply, or
(c) any shorter period in which a cure of
such violation should be commenced in order to avoid an imminent material
risk to human health,
declare an Event of Default under the Loan Documents and exercise any and
all remedies provided for therein, and/or do or cause to be done whatever
is necessary to cause the Land to comply with all Hazardous Materials Laws
and other applicable law, rule, regulation or order and the cost thereof
shall constitute an Expense hereunder and shall become immediately due and
payable without notice and with interest thereon at the rate of fourteen
percent (14%) per annum from the date of Lender's demand until paid. Upon
reasonable advance written notice, Borrower shall give to Lender and its
agents and employees access to the Land or Project for the purpose of
effecting such compliance and hereby specifically grants to Lender a
license, effective upon expiration of the applicable cure period, if any,
to do whatever is necessary to cause the Land or Project to so comply,
including, without limitation, to enter the Land or Project and remove
therefrom any Hazardous Materials.
8. LOAN BALANCE. The parties agree that the unpaid
principal indebtedness on the Note as of the date hereof is Eighty-Two
Million Two Hundred Ninety-Eight Thousand Twenty-One and 9/100 Dollars
($82,298,021.17), which sum Borrower agrees to pay to the order of Lender
pursuant to the terms of the Note as the same is modified herein.
9. RELEASE AND WAIVER.
a. In consideration for the restructuring of the Loan
as provided herein, Borrower hereby releases and forever discharges (and
irrevocably and unconditionally waives as against) Lender, its direct or
indirect subsidiaries and all of such subsidiaries' respective affiliated
companies and subsidiaries (direct and indirect), predecessors, successors
and assigns, and each of their past, present and future officers,
shareholders, directors, agents and employees, and their respective heirs,
legal representatives, legatees, successors and assigns, from all liability
arising out of or resulting from any and all claims, controversies,
actions, causes of action, demands, debts, liens, contracts, agreements,
promises, representations, warranties, torts, damages, costs, attorneys'
fees, monies due on account, obligations, judgments or liabilities of any
nature whatever at law or in equity, arising out of any agreement or
imposed by law or otherwise, from the beginning of time, whether or not
known at this time, heretofore or hereafter, anticipated or unanticipated,
suspected or claimed, fixed or contingent, whether yet accrued or not, and
whether damage has yet resulted from the same or not (collectively,
"Claims"), based on, arising out of or relating in any manner to the Loan
(prior to the date hereof), the Note, the Loan Documents, any and all
documents executed in connection with the Loan or the Loan Documents,
Lender's administration of the Loan any other agreements between Lender and
Borrower, as of the date hereof, or any oral or written communication,
correspondence or transactions between Lender or its predecessors in
interest and Borrower prior to the date hereof. Borrower acknowledges that
it may learn of circumstances bearing upon the things and items released by
this agreement for release contained in this Section 9, but it is
Borrower's intention by doing so and doing the acts called for by this
agreement for release, that this agreement for release shall be effective
as a full and final accord and satisfaction and release of each and every
thing and item released herein, whether known or unknown, future or
contingent. In furtherance of this intention, Borrower acknowledges that
Borrower is familiar with Section 1542 of the California Civil Code, which
provides as follows:
"A general release does not extent to claims which
the creditor does not know or suspect to exist in his favor at the time of
executing the release, which if know by him, must have materially affected
his settlement with the debtor."
Borrower hereby waives and releases any right or benefit which it has or
may have under Section 1542 of the California Civil Code to the full extent
that Borrower may lawfully waive all such rights and benefits pertaining
only and limited specifically to the things and items released herein.
b. Borrower hereby represents and warrants to lender
that (i) it has not assigned to any other person or entity any of its
Claims; (ii) there are no set-offs against Lender with regard to either the
Loan Documents, as amended by this Amendment and the Second Amendment to
Deed of Trust, or the Hazardous Substances Agreement as amended by this
Amendment, nor any claims or counter-claims against Lender with respect to
either the Loan Documents, as amended by this Amendment and the Second
Amendment to Deed of Trust, or the Hazardous Substances Agreement as
amended by this Amendment.
c. Without limiting the generality of the foregoing,
Borrower hereby acknowledges and agrees that there are no oral agreements
or understandings between or among any of the parties hereto with respect
to the modification of the Loan Documents, except as set forth in this
Amendment and the Second Amendment to the Deed of Trust.
d. Borrower hereby agrees that the provisions of this
Section 9 shall remain in full force and effect notwithstanding the
occurrence of an Event of Default under this Amendment or any of the Loan
Documents and the exercise by Lender of its rights and remedies hereunder
or thereunder.
10. WAIVER OF JURY TRIAL. LENDER AND BORROWER HEREBY
KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO
A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT
OF, UNDER, OR IN CONNECTION WITH, THIS AMENDMENT, THE SECOND AMENDMENT TO
DEED OF TRUST, THE NOTE OR ANY OTHER LOAN DOCUMENTS, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR
ACTIONS OF THE LENDER OR BORROWER. THIS PROVISION IS MUTUALLY AGREED TO IN
RECOGNITION OF THE COMPLEXITY OF THE LOAN AND THE MUTUAL DESIRE OF LENDER
AND BORROWER TO AVOID DELAYS IN THE RESOLUTION OF DISPUTES INVOLVING THIS
AMENDMENT. BORROWER ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR LENDER TO ENTER INTO THIS AMENDMENT.
11. NO AGREEMENT TO EXTEND OR MAKE FURTHER ADDITIONAL
ADVANCES. Nothing in this Amendment, or in any prior course of conduct,
shall be construed to obligate Lender to make any future additional
advances under the Loan or to otherwise increase the amount of the Loan or
to extend the maturity of the Loan beyond the Extended Maturity Date, and
Borrower acknowledges that Lender has made no such agreement.
12. BORROWER'S LIMITED RECOURSE LIABILITY. Lender agrees and
confirms with Borrower that the provisions of Paragraph 48 of the Deed of
Trust and that portion of the Note beginning with the third (3rd) full
grammatical paragraph on page 7 of the Note and extending through the first
full grammatical paragraph on page 9 of the Note, remain in full force and
effect and are not modified, amended or altered by reason of this Amendment
or the Second Amendment to Deed of Trust and in addition, apply in full to
this Amendment and the Second Amendment to Deed of Trust as if fully set
forth herein (provided, however, that for purposes of such incorporation,
all references to "Trustor" in paragraph 48 of the Deed of Trust shall
refer to "Borrower" herein and all references to "Beneficiary" in such
paragraph 48 shall refer to "Lender" herein and all references to "this
Deed of Trust" in such paragraph 48 shall refer to "this Amendment" and
"the Second Amendment to Deed of Trust" as defined herein).
13. SUBSEQUENT BANKRUPTCY. In the event Borrower becomes the
subject of any insolvency, bankruptcy, receivership, dissolution,
reorganization or similar proceeding, federal or state, voluntary or
involuntary, under any present or future law or act, Lender shall be
entitled to immediate and absolute lifting of any automatic stay as to the
enforcement of its remedies under the Loan Documents against the Project,
including specifically, but not limited to, the stay imposed by Section 362
of the United States Federal Bankruptcy Code, as amended. Borrower hereby
irrevocably consents to the lifting of any such automatic stay and will not
contest any motion by Lender to lift such stay. Borrower expressly
acknowledges, and agrees not to take any contrary position in any
subsequent bankruptcy proceeding, that: (i) the Project is not now and
never will be necessary to any plan of reorganization of any type; (ii)
Borrower is a single asset entity with no employees; (iii) Borrower has no
creditors other than Lender (except for a few creditors small in relation
to Lender which relate to operating expenses being paid as they come due);
and (iv) any subsequent bankruptcy filing by the Borrower to this loan
extension will be in bad faith for the sole purpose of delaying and
frustrating the legitimate efforts of Lender to enforce its rights. The
provisions of this paragraph are essential elements of Lender's
consideration for entering into this Amendment.
14. LIMITED RECOURSE. As additional consideration for the
Loan extension herein granted, Borrower hereby agrees that its obligation
to pay the Loan in full on or before its Extended Maturity Date is
independent and separate from the rights and obligations between Lender and
Borrower that may arise in connection with Borrower's rights to purchase
the Land. Should Borrower fail to acquire title to the Land by reason of
the default of Lender under any agreement with Borrower for the purchase
and sale of the Land, Borrower shall nevertheless be obligated under the
Loan Documents and this Amendment to pay and discharge the indebtedness and
Borrower's remedies against Lender shall be limited solely to those
remedies provided for in the agreement for the purchase and sale of the
Land.
15. ATTORNEY'S FEES AND EXPENSES. Borrower shall pay all of
Lender's reasonable fees, charges and expenses incurred in connection with
the negotiation and preparation of this Amendment and the Second Amendment
to Deed of Trust and the consummation of the transactions contemplated
hereby and thereby, including without limitation title insurance costs,
recording fees, reasonable attorneys' fees, and documentation costs.
16. MODIFICATION FEE. Borrower acknowledges that in
connection with modifications referenced in this Amendment, Borrower has
paid lender a fee of Five Thousand Dollars ($5,000).
17. DEFINED TERMS. Capitalized terms used, but not defined
herein, shall have the meaning provided for such terms in the Loan
Documents.
18. FULL FORCE AND EFFECT. Except as expressly amended by
the Modification Documents, the Loan Documents remain in full force and
effect without amendment.
19. COUNTERPARTS. This Amendment may be executed in multiple
counterparts, each of which shall be deemed to be an original agreement,
and all of which shall constitute one such agreement by each of the
parties.
IN WITNESS WHEREOF, Borrower and Lender have caused this
Amendment to be duly executed as of the date first written above.
BORROWER: XXXXXX-XXXXXXX PARTNERS,
a California general partnership
By: Carlyle Real Estate Limited Partnership-IX,
an Illinois limited partnership,
General Partner
By: JMB Realty Corporation,
a Delaware corporation,
Its General Partner
By: ________________________
Xxxxx X. Xxxxxxxxx
Vice President
By: Medical Office Buildings, Ltd.,
a Washington limited partnership,
General Partner
By: Xxxxxx Runstad Associates Limited
Partnership, a Washington limited partnership,
Its General Partner
By: Xxxxxx Runstad & Company,
a Washington corporation,
General Partner
By: ______________________
Xxxxxxx X. Xxxxxxx
President
LENDER: THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New
Jersey corporation
By: ___________________________________
Xxxxxxx Xxxxxx
Vice President
EXHIBIT A
---------
LEGAL DESCRIPTION
-----------------
RECORDING REQUESTED BY, AND
WHEN RECORDED RETURN TO:
O'Melveny & Xxxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
__________________________________________________________
SECOND AMENDMENT TO DEED OF TRUST
THIS SECOND AMENDMENT TO DEED OF TRUST (this
"AMENDMENT") is made as of October 1, 1996, by and between
XXXXXX-XXXXXXX PARTNERS, a California general partnership
("TRUSTOR"), and THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
a New Jersey corporation ("BENEFICIARY").
RECITALS
A. Trustor executed that certain Deed of Trust, dated
January 15, 1991, for the benefit of Beneficiary, recorded on
January 15, 1991, as Document No. 91-63945, in the Official
Records of Los Angeles County, California (the "OFFICIAL
RECORDS"), as amended by that First Amendment to Deed of
Trust, dated as of January 24, 1996, and recorded in the
Official Records on January 25, 1996, as Instrument No. 96-
146121 (as so amended, the "DEED OF TRUST").
B. The Deed of Trust secures Trustor's obligations with
respect to that certain loan (the "LOAN") made by Beneficiary
to Trustor, evidenced by that certain Note Secured by Deed of
Trust in the original principal amount of Eighty-Six Million
Dollars ($86,000,000), dated January 15, 1991, executed by
Trustor in favor of Beneficiary, as amended by that certain
First Amendment to Loan Documents (the "FIRST AMENDMENT"),
dated as of January 24, 1996, by and between Trustor and
Beneficiary (as so amended, the "NOTE"). The Note matured on
September 30, 1996. Concurrently herewith, the Note is being
amended by that certain Second Amendment to Loan Documents
(the "SECOND AMENDMENT"), dated as of even date herewith, by
and between Trustor and Beneficiary.
C. The Note is also secured by, among other things (i)
that certain Assignment Of Lessor's Interest in Leases, dated
as of January 15, 1991, by Trustor in favor of Beneficiary,
recorded in the Official Records on January 15, 1991, as
Instrument No. 91-63946, as amended by the First Amendment (as
so amended, the "ASSIGNMENT OF LEASES"), (ii) that certain
Security Agreement, dated as of January 15, 1991, by and
between Trustor and Beneficiary, as amended by the First
Amendment (as so amended, the "SECURITY AGREEMENT"), (iii)
that certain Lock Box Disbursement Agreement, dated as of even
date herewith, by and between Borrower and Lender (the "LOCK
BOX AGREEMENT"), and (iv) that certain Pledge and Security
Agreement, dated as of even date herewith, by and between
Borrower and Lender (the "PLEDGE AGREEMENT"). In addition, in
connection with the Loan, Trustor and Beneficiary entered into
that certain Hazardous Substances Remediation and
Indemnification Agreement, dated as of January 15, 1991, as
amended by the First Amendment (as so amended, the "HAZARDOUS
SUBSTANCES AGREEMENT"). The Note, the Deed of Trust, the
Assignment of Leases, the Security Agreement, the Lock Box
Agreement, the Pledge Agreement and all other documents (other
than the Hazardous Substances Agreement) that evidence or
secure the Loan are referred to collectively herein as the
"LOAN DOCUMENTS"). Concurrently herewith the Loan Documents
and the Hazardous Substances Agreement are being amended by
the Second Amendment.
D. Trustor has requested an extension of the maturity date
of the Note. Beneficiary has agreed to an extension of the
maturity date provided certain terms and conditions are
satisfied, including amending certain terms of the Loan
Documents.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing
recitals, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. MODIFICATION OF DEED OF TRUST. The Deed of
Trust
is hereby modified to provide that it secures, in addition to
any and all other obligations now or hereafter secured,
Trustor's obligations under the Loan Documents, as amended by
the Second Amendment. All references in the Deed of Trust to
any of the Loan Documents shall be deemed references to the
Loan Documents as amended by the Second Amendment. All
references in the Deed of Trust to the Hazardous Substances
Agreement shall be deemed references to the Hazardous
Substances Agreement as amended by the Second Amendment.
2. NO AMENDMENTS; CONTINUING EFFECTIVENESS.
Except
as expressly modified hereby, the Deed of Trust remains
unamended and in full force and effect.
3. COUNTERPARTS. This Amendment may be executed
in
multiple counterparts, each of which shall be deemed to be an
original, and all of which, together, shall constitute one
document.
IN WITNESS WHEREOF, Trustor and Beneficiary have
caused
this Modification to be duly executed as of the date first
written above.
TRUSTOR: XXXXXX-XXXXXXX PARTNERS,
a California general partnership
By: Carlyle Real Estate Limited
Partnership-IX,
an Illinois limited partnership,
General Partner
By: JMB Realty Corporation,
a Delaware corporation,
Its General Partner
By: ________________________
Xxxxx X. Xxxxxxxxx
Vice President
By: Medical Office Buildings, Ltd.,
a Washington limited partnership,
General Partner
By: Xxxxxx Runstad Associates
Limited
Partnership, a Washington limited partnership,
General Partner
By: Xxxxxx Runstad & Company,
a Washington corporation,
General Partner
By: ______________________
Xxxxxxx X. Xxxxxxx
President
BENEFICIARY: THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA, a New Jersey corporation
By: ___________________________________
Xxxxxxx Xxxxxx
Vice President
EXHIBIT A
---------
LEGAL DESCRIPTION
-----------------
STATE OF ____________ )
)
COUNTY OF ___________ )
On _______________, 1996, before me _________________, a
Notary Public in and for said State, personally appeared Xxxxx
X. Xxxxxxxxx, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or
the entity on behalf of which the person(s) acted, executed
the instrument.
WITNESS my hand and official seal.
____________________________________
Notary Public, State of California
STATE OF _____________ )
)
COUNTY OF _____________ )
On _______________, 1996, before me __________________, a
Notary Public in and for said State, personally appeared
Xxxxxxx X. Xxxxxxx, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or
the entity on behalf of which the person(s) acted, executed
the instrument.
WITNESS my hand and official seal.
____________________________________
Notary Public, State of California
STATE OF CALIFORNIA )
)
COUNTY OF _____________ )
On _______________, 1996, before me __________________, a
Notary Public in and for said State, personally appeared
Xxxxxxx Xxxxxx, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or
the entity on behalf of which the person(s) acted, executed
the instrument.
WITNESS my hand and official seal.
____________________________________
Notary Public, State of California
