EXHIBIT 10(h)
ASSIGNMENT OF MANAGEMENT AGREEMENT
AND SUBORDINATION OF MANAGEMENT FEES
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THIS ASSIGNMENT OF MANAGEMENT AGREEMENT AND SUBORDINATION OF MANAGEMENT
FEES (this "Assignment") is made as of the 6th day of December, 2002, by XXXXX
POST OAK LIMITED PARTNERSHIP, a Delaware limited partnership, having its
principal place of business at 000 Xxxxx Xxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx
00000 ("Borrower"), to COLUMN FINANCIAL, INC., having an address at 00 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Lender"), and is consented and agreed to by
XXXXX INTERESTS LIMITED PARTNERSHIP, a Delaware limited partnership, having its
principal place of business at 0000 Xxxx Xxx Xxxx., Xxxxx 0000 Xxxxxxx, Xxxxx
00000 ("Manager").
RECITALS:
A. Borrower by its Promissory Note of even date herewith given to Lender
(together with all extensions, renewals, modifications, substitutions and
amendments thereof, the "Note") is indebted to Lender in the principal sum of
Seventy Seven Million and No/100 Dollars ($77,000,000.00) (the "Loan") advanced
pursuant to that certain Loan Agreement of even date herewith between Borrower
and Lender (together with all extensions, renewals, modifications, substitutions
and amendments thereof, the "Loan Agreement").
B. The Loan is secured by, among other things, certain mortgages, deeds of
trust and deeds to secure debt (collectively, the "Mortgage"), dated as of the
date hereof, which grants Lender a first lien on the Properties. The Note, the
Loan Agreement, the Mortgage, this Assignment and any of the other documents
evidencing or securing the Loan or executed or delivered in connection therewith
are collectively referred to as the "Loan Documents".
C. Pursuant to that certain Letter Agreement between Borrower and Manager,
dated November 25, 2002 (collectively, the "Management Agreement") (a true and
correct copy of which Management Agreement is attached hereto as Exhibit A),
Borrower employed Manager exclusively to rent, lease, operate and manage the
Properties and Manager is entitled to certain management fees (the "Management
Fees") thereunder.
D. Lender requires as a condition to the making of the Loan that Borrower
assign the Management Agreement and that Manager subordinate its interest under
the Management Agreement to the Loan Agreement and other Loan Documents as set
forth below.
AGREEMENT
For good and valuable consideration the parties hereto agree as follows:
1. Assignment of Management Agreement. As additional collateral security
for the Loan, Borrower hereby conditionally transfers, sets over and assigns to
Lender all of Borrower's right, title and interest in and to the Management
Agreement, said transfer and assignment to automatically become a present,
unconditional assignment, at Lender's option, upon and during the continuance of
an Event of Default by Borrower under the Loan Agreement or any of the other
Loan Documents.
2. Subordination of Management Agreement. The Management Agreement and any
and all liens, rights and interests (whether xxxxxx or inchoate and including,
without limitation, all mechanic's and materialmen's liens under applicable law)
owed, claimed or held, by Manager in and to the Properties, are and shall be in
all respects subordinate and inferior to the liens and security interests
created or to be created for the benefit of Lender, and securing the repayment
of the Note and the obligations under the Loan Agreement including, without
limitation, those created under the Mortgage covering, among other things, the
Properties, and filed or to be filed of record in the public records maintained
for the recording of mortgages in the jurisdiction where the Properties are
located, and all renewals, extensions, increases, supplements, amendments,
modifications or replacements thereof.
3. Termination. At such time as the Loan is paid in full and the Mortgage
is released or assigned of record, this Assignment and all of Lender's right,
title and interest hereunder with respect to the Management Agreement shall
terminate and Lender agrees to execute a termination reflecting the same in form
and substance acceptable to Lender in all respects).
4. Estoppel. Manager represents and warrants that (a) the Letter Agreement
is in full force and effect and has not been modified, amended or assigned other
than pursuant to this Assignment, (b) neither Manager nor Borrower is in default
under any of the terms, covenants or provisions of the Letter Agreement and
Manager knows of no event which, but for the passage of time or the giving of
notice or both, would constitute an event of default under the Letter Agreement,
(c) neither Manager nor Borrower has commenced any action or given or received
any notice for the purpose of terminating the Letter Agreement and (d) the
Management Fees and all other sums due and payable to the Manager under the
Letter Agreement as of the date hereof have been paid in full.
5. Agreement by Borrower and Manager. Borrower and Manager hereby agree
that upon the occurrence of an Event of Default under the Loan Documents during
the term of this Assignment or upon the occurrence of any event which would
entitle Lender to terminate, or cause the termination of, the Management
Agreement in accordance with the terms of the Loan Documents, (a) Manager shall,
at the request of Lender, continue to perform all of Manager's obligations under
the terms of the Management Agreement with respect to the Properties for the
remainder of the term thereof so long as Manager receives compensation therefor
from Borrower or Lender, or (b) at the option of Lender exercised by written
notice to Borrower and Manager, Borrower and Manager shall immediately terminate
the Management
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Agreement and Manager shall transfer its responsibility for the management
of the Properties to a Qualified Manager selected by Lender; provided that any
such termination will not release Borrower from any obligation accruing to
Manager under the terms of the Management Agreement prior to such termination.
6. INTENTIONALLY DELETED.
7. Consent and Agreement by Manager. Manager hereby acknowledges and
consents to this Assignment and the terms and provisions of Section 9.5 of the
Loan Agreement. Manager agrees that it will act in conformity with the
provisions of this Assignment, such provisions of the Loan Agreement and
Lender's rights hereunder or otherwise related to the Management Agreement. In
the event that the responsibility for the management of the Properties is
transferred from Manager in accordance with the provisions hereof, Manager
shall, and hereby agrees to, fully cooperate in transferring its responsibility
to a new management company and effectuate such transfer no later than thirty
(30) days from the date the Management Agreement is terminated. Further, Manager
hereby agrees (a) not to contest or impede the exercise by Lender of any right
it has under or in connection with this Assignment; and (b) that it shall, in
the manner provided for in this Assignment, give at least thirty (30) days prior
written notice to Lender of its intention to terminate the Management Agreement
or otherwise discontinue its management of the Properties.
8. Lender's Agreement. So long as Borrower is not in default (continuing
beyond any applicable grace period) under this Assignment, the Note, the Loan
Agreement, the Mortgage or the other Loan Documents, Lender agrees to permit any
sums due to Borrower under the Management Agreement to be paid directly to
Borrower.
9. Further Assurances. Manager further agrees, so long as it does not incur
a material expense that is not reimbursed by Borrower, to (a) execute such
affidavits and certificates (in a form reasonably satisfactory to Manager) as
Lender shall reasonably require to further evidence the agreements herein
contained, (b) on request from Lender, furnish Lender with copies of such
information as Borrower is entitled to receive under the Management Agreement
and (c) cooperate with Lender's representative in any inspection of all or any
portion of the Properties. Borrower hereby agrees to reimburse Manager with
respect to any costs and expenses Manager incurs pursuant to this Section 9.
Manager hereby acknowledges that some, or all, permits, licenses and
authorizations necessary for the use, operation and maintenance of the
Properties (the "Permits") may be held by, or on behalf of, the Manager. By
executing this Agreement, Manager (i) agrees that it is holding or providing all
such Permits for the benefit of Borrower and (ii) hereby agrees that as security
for the repayment of the Debt by Borrower in accordance with the Loan Agreement,
to the extent permitted by applicable law, Manager hereby grants to Lender a
security interest in and to the Permits. Moreover, Manager hereby agrees that,
upon an Event of Default, it will assign the Permits to Lender if such Permits
are assignable or otherwise continue to hold such Permits for the benefit of
Lender until such time as Lender can obtain such Permits in its own name or the
name of a nominee.
10. Assignment of Proceeds. Manager acknowledges that, as further security
for the Note, Borrower has executed and delivered to Lender an Assignment of
Leases and Rents, dated as of the date hereof (the "Assignment of Leases"),
assigning to Lender, among
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other things, all of Borrower's right, title and interest in and to all of
the revenues of the Properties.
11. Manager Not Entitled to Rents. Manager acknowledges and agrees that it
is collecting and processing the Rents solely as the agent for the Borrower and
Manager has no right to, or title in, the Rents. Notwithstanding anything to the
contrary in the Management Agreement, the Manager acknowledges and agrees that
the Rents are the sole property of the Borrower, encumbered by the lien of the
Security Instrument and other Loan Documents in favor of Lender. In any
bankruptcy, insolvency or similar proceeding the Manager, or any trustee acting
on behalf of the Manager, waives any claim to the Rents other than as such Rents
may be used to pay the fees and compensation of the Manager pursuant to the
terms and conditions of the Management Agreement.
12. Governing Law. This Assignment shall be governed, construed, applied
and enforced in accordance with Section 10.3 of the Loan Agreement.
13. Notices. All notices, consents, approvals and requests required or
permitted hereunder shall be delivered in accordance with Section 10.6 of the
Loan Agreement and the following:
If to Manager: Xxxxx Interest Limited Partnership
0000 Xxxx Xxx Xxxx.
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxx Xxxxxxx
Facsimile No. 000-000-0000
14. No Oral Change. This Assignment, and any provisions hereof, may not be
modified, amended, waived, extended, changed, discharged or terminated orally or
by any act or failure to act on the part of Borrower, Lender or Manager, but
only by an agreement in writing signed by the party against whom enforcement of
any modification, amendment, waiver, extension, change, discharge or termination
is sought.
15. Liability. This Assignment shall be binding upon and inure to the
benefit of Borrower and Lender and their respective successors and assigns
forever.
16. Inapplicable Provisions. If any term, covenant or condition of this
Assignment is held to be invalid, illegal or unenforceable in any respect, this
Assignment shall be construed without such provision.
17. Headings, etc. The headings and captions of various paragraphs of this
Assignment are for convenience of reference only and are not to be construed as
defining or limiting, in any way, the scope or intent of the provisions hereof.
18. Duplicate Originals, Counterparts. This Assignment may be executed in
any number of duplicate originals and each duplicate original shall be deemed to
be an original. This Assignment may be executed in several counterparts, each of
which counterparts shall be deemed an original instrument and all of which
together shall constitute a single
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Assignment. The failure of any party hereto to execute this Assignment, or
any counterpart hereof, shall not relieve the other signatories from their
obligations hereunder.
19. Number and Gender. Whenever the context may require, any pronouns used
herein shall include the corresponding masculine, feminine or neuter forms, and
the singular form of nouns and pronouns shall include the plural and vice versa.
20. Miscellaneous. (a) Wherever pursuant to this Assignment (i) Lender
exercises any right given to it to approve or disapprove, (ii) any arrangement
or term is to be satisfactory to Lender, or (iii) any other decision or
determination is to be made by Lender, the decision of Lender to approve or
disapprove, all decisions that arrangements or terms are satisfactory or not
satisfactory and all other decisions and determinations made by Lender, shall be
in the sole and absolute discretion of Lender and shall be final and conclusive,
except as may be otherwise expressly and specifically provided herein.
(b) Wherever pursuant to this Assignment it is provided that Borrower shall
pay any costs and expenses, such costs and expenses shall include, but not be
limited to, reasonable legal fees and disbursements of Lender, whether retained
firms, the reimbursement for the expenses of in-house staff or otherwise.
21. Defined Terms. Any capitalized terms not otherwise defined herein shall
be defined as set forth in the Loan Agreement.
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IN WITNESS WHEREOF, the undersigned have executed this Assignment as of the
date and year first written above.
BORROWER:
XXXXX POST OAK LIMITED PARTNERSHIP, a Delaware
limited partnership
By: XXXXX POST OAK, INC., a Delaware
corporation, its general partner
By: /S/ Xxxxxx X. Xxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
LENDER:
COLUMN FINANCIAL, INC.
By: /S/ Xxxxxxxxx Xxxxxxx
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Name: Xxxxxxxxx Xxxxxxx
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Title: Vice President
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MANAGER:
XXXXX INTERESTS LIMITED PARTNERSHIP, a Delaware
limited partnership
By: /S/ Xxxxxx Xxxxxxx
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Name: Xxxxxx Xxxxxxx
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Title: Executive Vice President
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EXHIBIT A
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(Management Agreement)
