AMENDMENT NO. 10 TO CREDIT AGREEMENT
AMENDMENT NO. 10 TO CREDIT AGREEMENT
THIS
AMENDMENT NO. 10 TO CREDIT AGREEMENT (this
“Amendment”) is dated as of July 20,
2011, by and among Cornerstone Operating Partnership, L.P., a Delaware limited partnership (the
“Administrative Borrower”), each of the “Borrowing Base Subsidiaries” party hereto
(together with the Administrative Borrower, each a “Borrower” and collectively,
“Borrowers”), the “Guarantors” signatory hereto (together with Borrowers, the “Credit
Parties”), HSH Nordbank AG, New York Branch, a German banking corporation acting through its
New York branch, as lender (together with its successors and assigns, each a “Lender” and
collectively the “Lenders”), and HSH Nordbank AG, New York Branch, a German banking
corporation acting through its New York branch, in its capacity as administrative agent for the
Lenders (in its capacity as administrative agent for the Lenders, together with any permitted
successor administrative agent, the “Administrative Agent”) and arranger. Capitalized
terms not defined herein shall have the respective meanings set forth in the Credit Agreement (as
defined below).
Recitals
WHEREAS, Borrowers, Guarantors, Lenders and Administrative Agent have entered into that
certain Credit Agreement, dated as of June 30, 2006 (the “Original Credit Agreement”), as
amended by that certain Amendment and Waiver No. 1 to Credit Agreement, dated as of July 31, 2007
(“Amendment No. 1 to Credit Agreement”), that certain Amendment No. 2 to Credit Agreement,
dated as of November 14, 2007 (“Amendment No. 2 Credit Agreement”), that certain Amendment
No. 3 to Credit Agreement, dated as of June 30, 2008 (“Amendment No. 3 to Credit
Agreement”), that certain Amendment No. 4 to Credit Agreement, dated as of June 30, 2010
(“Amendment No. 4 to Credit Agreement”), that certain Amendment No. 5 to Credit Agreement,
dated as of August 31, 2010 (“Amendment No. 5 to Credit Agreement”), that certain Amendment
No. 6 to Credit Agreement, dated as of September 30, 2010 (“Amendment No. 6 to Credit
Agreement”), that certain Amendment No. 7 to Credit Agreement, dated as of October 29, 2010
(“Amendment No. 7 to Credit Agreement”), that certain Amendment No. 8 to Credit Agreement,
dated as of November 12, 2010 (“Amendment No. 8 to Credit Agreement”) and that certain
Amendment No. 9 to Credit Agreement, dated as of November 30, 2010 (“Amendment No. 9 to Credit
Agreement”, together with the Original Credit Agreement, Amendment No. 1 to Credit Agreement,
Amendment No. 2 to Credit Agreement, Amendment No. 3 to Credit Agreement, Amendment No. 4 to Credit
Agreement, Amendment No. 5 to Credit Agreement, Amendment No. 6 to Credit Agreement, Amendment No.
7 to Credit Agreement and Amendment No. 8 to Credit Agreement, as otherwise modified, amended or
supplemented from time to time, collectively, the “Credit Agreement”);
WHEREAS, pursuant to (i) that certain Joinder Agreement dated as of November 30, 2006, among,
COP-Western Ave., LLC a California limited liability company (“COP-Western”),
COP-Goldenwest, LLC, Administrative Borrower, the Guarantors, Lenders and Administrative Agent,
(iii) that certain Joinder Agreement, dated as of January 19, 2007, among COP-Deer Valley, LLC, an
Arizona limited liability company (“COP-Deer Valley”), COP-Western, COP-Goldenwest, LLC,
Administrative Borrower, the Guarantors, Lenders and Administrative Agent,
and (iv) that certain Joinder Agreement, dated as of September 28, 2007, among COP-Pinnacle
Peak, LLC, an Arizona limited liability company (“COP-Pinnacle Peak”), COP-Western,
COP-Goldenwest, LLC, COP-Deer Valley, Administrative Borrower, the Guarantors, Lenders and
Administrative Agent, each of COP-Western, COP-Deer Valley and COP-Pinnacle Peak were joined to the
Credit Agreement and the other Financing Documents, each as a “Borrower” and as a “Borrowing Base
Subsidiary.”
WHEREAS, the payment of the Obligations and the performance of the other obligations of
Borrowers under the Credit Agreement and the other Financing Documents are secured by, amongst
other things, (i) that certain Deed of Trust, Assignment of Leases and Rents, Fixture Filing and
Security Agreement, by COP-Western, as grantor, in favor of Commonwealth Land Title Company, solely
as trustee, for the benefit of Administrative Agent, recorded as of December 1, 2006 in the
Official Records of Los Angeles County, California, as Instrument No. 2006266762, as amended by
that certain First Amendment to Recorded Documents, dated as of June 30, 2010, recorded as of July
6, 2010 in the Official Records of Los Angeles County, California as Instrument No. 20100918735 and
that certain Second Amendment to Recorded Documents, dated as of November 30, 2010, recorded as of
December 6, 2010 in the Official Records of Los Angeles County, California as Instrument No.
20101788670 (as amended and modified, from time to time, the “Western Deed of Trust”),
encumbering the property more particularly described therein (the “Western Property”), (ii)
that certain Assignment of Leases and Rents, by COP-Western, in favor of Administrative Agent,
recorded as of December 1, 2006 in the Official Records of Los Angeles County, California, as
Instrument No. 20062667663, as amended by that certain First Amendment to Recorded Documents, dated
as of June 30, 2010, recorded as of July 6, 2010 in the Official Records of Los Angeles County,
California as Instrument No. 20100918735 and that certain Second Amendment to Recorded Documents,
dated as of November 30, 2010, recorded as of December 6, 2010 in the Official Records of Los
Angeles County, California as Instrument No. 20101788670 (as amended and modified, from time to
time (the “Western Assignment”), (iii) that certain Deed of Trust, Assignment of Leases and
Rents, Fixture Filing and Security Agreement, by COP-Deer Valley, as grantor, in favor of Magnus
Title Agency, solely as trustee, for the benefit of Administrative Agent, recorded as of January
22, 2007 in the Official Records of Maricopa County, Arizona, as Instrument No. 20070081545, as
amended by that certain First Amendment to Recorded Documents, dated as of June 30, 2010, recorded
as of July 2, 2010 in the Official Records of Maricopa County, Arizona as Instrument No.
20100566186 and that certain Second Amendment to Recorded Loan Documents, dated as of November 30,
2010, recorded as of December 3, 2010 in the Official Records of Maricopa County, Arizona as
Instrument No. 201001057067 (as amended and modified, from time to time, the “Deer Valley Deed
of Trust”), encumbering the property more particularly described therein (the “Deer Valley
Property”), (iv) that certain Assignment of Leases and Rents, by COP-Deer Valley, in favor of
Administrative Agent, recorded as of January 22, 2007 in the Official Records of Maricopa County,
Arizona, as Instrument No. 20070081546, as amended by that certain First Amendment to Recorded
Documents, dated as of June 30, 2010, recorded as of July 2, 2010 in the Official Records of
Maricopa County, Arizona as Instrument No. 20100566186 and that certain Second Amendment to
Recorded Loan Documents, dated as of November 30, 2010, recorded as of December 3, 2010 in the
Official Records of Maricopa County, Arizona as Instrument No. 201001057067 (as amended and
modified, from time to time, the “Deer Valley Assignment”), and (v) that certain Deed of
Trust, Assignment of Leases and Rents, Fixture Filing and Security Agreement, by COP-Pinnacle Peak,
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as grantor, in favor of Lawyers Title Insurance Corporation, solely as trustee, for the
benefit of Administrative Agent, recorded as of October 2, 2007 in the Official Records of Maricopa
County, Arizona, as Instrument No. 20071083931, as amended by that certain First Amendment to
Recorded Documents, dated as of June 30, 2010, recorded as of July 2, 2010 in the Official Records
of Maricopa County, Arizona as Instrument No. 20100566179 and that certain Second Amendment to
Recorded Documents, dated as of November 30, 2010, recorded as of December 3, 2010 in the Official
Records of Maricopa County, Arizona as Instrument No. 20101056478 (as amended and modified, from
time to time, the “Pinnacle Peak Deed of Trust”), encumbering the property more
particularly described therein (the “Pinnacle Property”), and (vi) that certain Assignment
of Leases and Rents, by COP-Pinnacle Peak, in favor of Administrative Agent, recorded as of October
2, 2007 in the Official Records of Maricopa County, Arizona, as Instrument No. 20071083932, as
amended by that certain First Amendment to Recorded Documents, dated as of June 30, 2010, recorded
as of July 2, 2010 in the Official Records of Maricopa County, Arizona as Instrument No.
20100566179 and that certain Second Amendment to Recorded Documents, dated as of November 30, 2010,
recorded as of December 3, 2010 in the Official Records of Maricopa County, Arizona as Instrument
No. 20101056478 (as amended and modified, from time to time, the “Pinnacle Peak
Assignment”). The Western Deed of Trust, the Deer Valley Deed of Trust and the Pinnacle Peak
Deed of Trust hereafter collectively the “Existing Deeds of Trust”. The Western
Assignment, the Deer Valley Assignment and the Pinnacle Peak Assignment hereafter collectively the
“Existing Assignments.” The Western Property, the Deer Valley Property and the Pinnacle
Peak Property hereafter collectively the “Properties.”
NOW THEREFORE in consideration of the promises and mutual covenants contained herein, the
parties hereto agree as follows:
1. Amendments. Upon satisfaction of all of the conditions of effectiveness set forth
in Section 2 below, the following amendments shall take effect:
1.1 The following definitions set forth in Section 1.01 of the Loan Agreement are
hereby deleted and replaced with the following text:
““Applicable Margin” means as of any date of determination thereof, (a) for
the period of time commencing on June 1, 2011 and continuing to September 30, 2011,
three and three quarters of one percent (3.75%) and (b) for the period of time
commencing on October 1, 2011 and continuing through the term of the Loans, four
percent (4.0%).”
““Maturity Date” means December 16, 2011. Anything in this definition to
the contrary notwithstanding, if the entire principal balance of the Loans shall
become due and payable by acceleration or otherwise on or before the then Maturity
Date, then from and after such principal balance becoming due, “Maturity
Date” shall mean such earlier date.”
1.2 Section 4.04(b) of the Credit Agreement is hereby deleted in its entirety and
replaced with the following:
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“Administrative Agent shall, upon the written request and at the expense of Borrowers,
upon payment in full of the Obligations in accordance herewith, release or, if requested by
Borrowers, assign to Borrowers’ designee (without any representation or warranty by and
without any recourse against Administrative Agent and Lenders whatsoever) the Lien of the
Financing Documents if not theretofore released.”
1.3 Section 5.16 of the Credit Agreement is hereby deleted in its entirety.
1.4 Notwithstanding Section 2 of Amendment No. 9 to Credit Agreement, Borrowers shall
not be required to make the $250,000 amortization payments scheduled to be made as of July, August
and September, 2011.
2. Intentionally Omitted.
3. Effectiveness of this Amendment. The amendments set forth in Section 1
above shall not be effective or binding (without affecting the other provisions of this Amendment)
until the following conditions have been satisfied or waived in writing by Administrative Agent, in
Administrative Agent’s sole and absolute discretion (the date on which all such conditions being
satisfied or waived, the “Effective Date”):
3.1 Amendment Fee. Borrowers have paid to Administrative Agent an amendment fee (the
“Amendment Fee”) in an amount equal to fifteen thousand and 00/100ths Dollars ($15,000.00).
3.2 Execution of Documents. Administrative Agent shall have received four (4) originals of
this Amendment duly executed and delivered by each of the parties thereto
3.3 No Defaults. As of the Effective Date no Default or Event of Default shall have occurred
and be continuing.
3.4 Payment of Expenses. Borrowers shall have paid to Administrative Agent all costs and
expenses incurred in connection with this Amendment as provided in Section 9 hereof.
3.5 Representations and Warranties. The representations and warranties of the Credit Parties
set forth in Section 3 of this Amendment shall be true and correct in all material respects
on and as of the Effective Date; provided that any such representations and warranties that
by their express terms are made as of a specific date shall be true and correct in all material
respects as of such specific date.
4. Representations and Warranties. To induce Lenders and Administrative Agent to
enter into this Amendment, the Credit Parties hereby represent and warrant that:
4.1 The outstanding principal amount of the Loan as of the date hereof is $4,985,000.
4.2 The execution, delivery and performance by each Credit Party of this Amendment and any
other documents in connection herewith, or therewith, to which it is a party
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are (a) within its powers and have been duly authorized by all necessary action, (b) require
no action by or in respect of, or filing with, any Governmental Authority, any property manager or
other third party, (c) do not contravene, or constitute a breach of or default under, any provision
of applicable law or regulation, any of its constitutive documents or of any judgment, injunction,
order, decree, permit, license, note, mortgage, agreement or other instrument binding upon such
Person or any of its Subsidiaries or their respective assets and (d) do not result in the creation
or imposition of any Lien on any asset of any Credit Party or any of its Subsidiaries.
4.3 This Amendment, and such other documents and instruments executed by such Credit Party in
connection herewith, or therewith, have been duly executed and delivered by each Credit Party and
constitutes a valid and binding agreement of each Credit Party, in each case enforceable in
accordance with their respective terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization or moratorium or other similar laws relating to the
enforcement of creditors’ rights generally and by general equitable principles.
4.4 Each of the representations and warranties contained in Article III of the Credit
Agreement, as modified herein, is true and correct, in all material respects, as of the date
hereof, as though made on, and as of, the date hereof; provided that any such
representations and warranties that by their express terms are made as of a specific date shall be
true and correct in all material respects as of such specific date.
5. Covenant Regarding Sale of Properties. Without limiting the terms of Section
6 hereof, the Credit Parties specifically reaffirm the covenants and agreements set forth in
Section 5.1 of Amendment No. 9 to Credit Agreement. Borrowers shall not market any of the
Properties for sale at an amount which is less than the Appraised Value of such Property.
6. Ratification of Credit Agreement. Except as specifically amended hereby, the terms
and conditions of the Credit Agreement and the other Financing Documents are in all respects
ratified and confirmed and remain in full force and effect.
7. Governing Law. THIS AMENDMENT, IN ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL
OBLIGATION LAW OF THE STATE OF NEW YORK, SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY CONFLICTS OF LAWS PRINCIPLES THEREOF THAT WOULD
CALL FOR THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION, as more fully set forth in
Section 9.09 of the Credit Agreement, which Section 9.09 is incorporated herein
mutatis mutandis as though set forth herein in full.
8. Compliance, Release. As additional consideration for Administrative Agent and
Lenders to enter into this Amendment, the Credit Parties hereby acknowledge and agree that, as of
the date of this Amendment: (i) Administrative Agent and Lenders have fully complied with all of
their respective obligations under the Financing Documents, (ii) the Credit Parties have no
knowledge of any act or omission on the part of Administrative Agent or Lenders that constitutes a
default by Administrative Agent or Lenders under any of the Financing Documents (or that, with the
giving of notice, the passage of time, or both, would constitute a default by the Administrative
Agent or Lenders thereunder), (iii) the Credit Parties have no knowledge of any
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fact or circumstance that would prevent or prohibit Administrative Agent or Lenders from
enforcing the Financing Documents, and (iv) the Credit Parties have no claims, demands, damages,
suits, cross-complaints, causes of action or debts of any kind or nature whatsoever that can be
asserted to reduce or eliminate all or any portion of its obligation to repay the Loans or to seek
any affirmative relief from Administrative Agent or Lenders with respect to the Loans or the
Borrowing Base Properties. The Credit Parties hereby release and forever discharge, and agree to
indemnify, defend and hold harmless, Administrative Agent and Lenders and their respective agents,
servants, employees, directors, officers, trustees, beneficiaries, attorneys, branches, affiliates,
subsidiaries, successors and assigns, of and from all damages, losses, claims, demands,
liabilities, obligations, actions, suits and causes of action whatsoever, that the Credit Parties
may now have or claim to have against Administrative Agent or Lenders as of the date of this
Amendment, and whether presently known or unknown, and of every nature and extent whatsoever, on
account of or in any way concerning or arising out of the Borrowing Base Properties or the Loans,
or founded upon any of the Financing Documents, including, but not limited to, all such loss or
damage of any kind heretofore sustained or that may arise as a consequence of the dealings between
the parties up to and including the date of this Amendment. The Credit Parties acknowledge and
agree that this release is intended to extend to claims they do not know or suspect to exist. Each
of the Credit Parties acknowledges and agrees that this release is intended to extend to claims it
does not know or suspect to exist and, in that regard, hereby waives all rights and privileges
under Section 1542 of the California Civil Code which provides as follows:
“GENERAL RELEASE; EXTENT.
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER
MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”
| Cornerstone Operating Partnership, L.P. Initials |
COP-Western Ave., LLC Initials |
COP-Deer Valley, LLC Initials |
COP-Pinnacle Peak, LLC Initials |
Cornerstone Core Properties REIT, Inc., Initials |
Cornerstone Realty Advisers Initials |
9. Payment of Administrative Agent’s and Lenders’ Expenses. Borrowers agree to
reimburse Administrative Agent and Lenders for all out-of-pocket expenses incurred by
Administrative Agent and Lenders in connection with the drafting, negotiation, execution, delivery
and performance of this Amendment and all related documents, including, but not limited to,
reasonable attorneys’ fees and costs incurred by Administrative Agent and Lenders, premiums for any
endorsements to Lenders’ existing title policies, recording charges, escrow fees and all other
costs.
10. Counterparts; Integration; Effectiveness. This Amendment may be executed in
counterparts (and by different parties hereto on different counterparts), each of which shall
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constitute an original, but all of which when taken together shall constitute a single
contract. This Amendment, and the other Financing Documents constitute the entire contract among
the parties relating to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except as provided in
Section 3 hereof, this Amendment shall become effective when it shall have been executed by
the Administrative Agent and when the Administrative Agent shall have received counterparts hereof
which, when taken together, bear the signatures of each of the other parties hereto. Delivery of
an executed counterpart of a signature page of this Amendment by telecopy shall be effective as
delivery of a manually executed counterpart of this Amendment.
Signatures on the following page.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Amendment as of the
date first set forth above.
| “BORROWERS” CORNERSTONE OPERATING PARTNERSHIP, L.P. |
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| By: | Cornerstone Core Properties REIT, Inc. its General Partner |
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| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Name: | Xxxxxx X. Xxxxxx | |||
| Title: | CFO | |||
| COP-WESTERN AVE., LLC |
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| By: | Cornerstone Operating Partnership, L.P. its sole Member |
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| By: | Cornerstone Core Properties REIT, Inc. its General Partner |
|||
| By: | /s/ Xxxxxx X. Xxxxxx | |||
| Name: | Xxxxxx X. Xxxxxx | |||
| Title: | CFO | |||
signature page continues
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| COP-DEER VALLEY, LLC |
||||||
| By: | Cornerstone Operating Partnership, L.P. its sole Member |
|||||
| By: | Cornerstone Core Properties REIT, Inc. its General Partner |
|||||
| By: | /s/ Xxxxxx X. Xxxxxx | |||||
| Name: | Xxxxxx X. Xxxxxx | |||||
| Title: | CFO | |||||
| COP-PINNACLE PEAK, LLC |
||||||
| By: | Cornerstone Operating Partnership, L.P. its sole Member |
|||||
| By: | Cornerstone Core Properties REIT, Inc. its General Partner |
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| By: | /s/ Xxxxxx X. Xxxxxx | |||||
| Name: | Xxxxxx X. Xxxxxx | |||||
| Title: | CFO | |||||
| “GUARANTORS” and “RECOURSE LIABILITY PARTY” CORNERSTONE CORE PROPERTIES REIT, INC. |
||||||
| By: | /s/ Xxxxx X. Xxxxxxx | |||||
| Name: Xxxxx X. Xxxxxxx | ||||||
| Title: Chief Executive Officer of Cornerstone Core Properties REIT Title: President of Cornerstone Realty Advisors, LLC |
||||||
| CORNERSTONE REALTY ADVISORS, LLC |
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| By: | /s/ Xxxxx X. Xxxxxxx | |||||
| Name: Xxxxx X. Xxxxxxx | ||||||
| Title: Chief Executive Officer of Cornerstone Core Properties REIT Title: President of Cornerstone Realty Advisors, LLC |
||||||
| By: | /s/ | |||||
| Name: | ||||||
| Title: | ||||||
signature page continues
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| “ADMINISTRATIVE AGENT” HSH NORDBANK AG, NEW YORK BRANCH |
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| By: | /s/ Xxxxxxx Xxxxxx | |||
| Name: | Xxxxxxx Xxxxxx | |||
| Title: | Senior Vice President HSH Nordbank AG, New York Branch |
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| By: | /s/ Xxxxxxx Xxxxx | |||
| Name: | Xxxxxxx Xxxxx | |||
| Title: | Senior Vice President HSH Nordbank AG, New York Branch |
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| “LENDERS” HSH NORDBANK AG, NEW YORK BRANCH |
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| By: | /s/ Xxxxxxx Xxxxxx | |||
| Name: | Xxxxxxx Xxxxxx | |||
| Title: | Senior Vice President HSH Nordbank AG, New York Branch |
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| By: | /s/ Xxxxxxx Xxxxx | |||
| Name: | Xxxxxxx Xxxxx | |||
| Title: | Senior Vice President HSH Nordbank AG, New York Branch |
|||
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