FIFTH AMENDMENT TO SECOND AMENDED AND RESTATED
NOTE AGREEMENT AND CONSENT
THIS FIFTH AMENDMENT TO SECOND AMENDED AND RESTATED NOTE
AGREEMENT AND CONSENT (this "AMENDMENT"), dated as of February 15, 1999, is
made by and among The Peregrine Real Estate Trust, formerly known as
Commonwealth Equity Trust and d.b.a. XxxXxxx Properties (the "COMPANY"); each
of the noteholders party to the Senior Credit Agreement (as defined below)
(individually, a "NOTEHOLDER" and, collectively, the "NOTEHOLDERS"); and The
Prudential Insurance Company of America, as Agent for the Noteholders (in
such capacity, together with its successors in such capacity, the "AGENT").
R E C I T A L S
WHEREAS, the Company, the Agent and the Noteholders are parties
to the Second Amended and Restated Note Agreement dated as of September 27,
1994 (as amended by that certain First Amendment dated as of February 16,
1995, Second Amendment dated as of December 4, 1997, Third Amendment dated as
of May 1, 1998 and Fourth Amendment dated as of June 30, 1998, the "SENIOR
CREDIT AGREEMENT");
WHEREAS, the Company and Fleet Capital Corporation ("FLEET")
are parties to the Loan and Security Agreement dated as of December 4, 1997
which constitutes the current "New Credit Line" under the Senior Credit
Agreement (the "FLEET FACILITY");
WHEREAS, concurrently herewith the Company is entering into a
new $44,000,000 credit facility with Fremont Investment & Loan (the "FREMONT
CREDIT FACILITY") and applying a portion of the borrowings under such
facility to payment in full of all amounts outstanding under the Fleet
Facility and to a portion of the principal amount outstanding under the
Senior Credit Agreement, as described more fully herein;
WHEREAS, the Company has requested that the Agent and the
Noteholders release all of their right, title, claim and interest in and to
any and all Collateral as set forth in the Senior Credit Agreement and the
other Documents, and that the Senior Credit Agreement be amended to provide
that (i) the Net Cash Proceeds from the refinancing of existing debt or sale
of certain property of the Company will not be applied to mandatorily prepay
the Notes until such time as an aggregate of $10.0 million of such Net Cash
Proceeds has been applied to the Fremont Credit Facility, which amounts so
applied may be reborrowed under the Fremont Credit Facility, and (ii) that
interest payments on the Notes will be made in kind by the Company if the
Company does not achieve positive Net Cash Flow (as hereinafter defined) in
applicable periods;
WHEREAS, concurrently herewith the Agent has executed and
delivered to the Company termination agreements with respect to all documents
granting the Agent and Noteholders a security interest in any property of the
Company and reconveyance agreements with respect to the various deeds of
trust and other security agreements and financing statements
evidencing the liens in favor of the Agent and Noteholders on the Company's
property to release such liens; and
WHEREAS, in consideration for the Agent's and the Noteholders'
agreement to the foregoing, concurrently herewith the Company has made an
optional pre-payment to the Noteholders in the aggregate amount of
$10,000,000 to be applied to the Notes pursuant to the terms set forth in
SECTION 2.7 of the Senior Credit Agreement.
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company, the
Agent and the Noteholders agree as follows:
1. DEFINED TERMS. Capitalized terms used but not defined
in this Amendment shall have the meanings assigned to such terms in the
Senior Credit Agreement.
2. WAIVER, CONSENT AND RELEASE OF COLLATERAL. The Agent
and the Noteholders hereby release and terminate any and all of their right,
title, claim and interest in and to any and all Collateral securing the Notes
and consent to the execution and delivery by the Company of the Fremont
Credit Facility and the terms thereof, including without limitation the
provisions of SECTION 7.12 thereof (provided, however, that such consent is
not a waiver by the Agent and the Noteholders of their right to make demand
for payment in full of the Obligations on the Maturity Date, exercise any of
their rights and remedies with respect thereto, or receive payment of the
obligations on the Maturity Date) and the grant of security interests, making
of liens and incurrence of indebtedness by the Company pursuant to the terms
of the Fremont Credit Facility.
3. AMENDMENT TO ARTICLE I OF THE SENIOR CREDIT AGREEMENT.
(a) Article I of the Senior Credit Agreement is hereby amended
by adding the following defined terms in the appropriate alphabetical
order:
"Fremont Credit Facility" means the $44,000,000 credit
facility provided to the Company by Fremont Investment & Loan
pursuant to the Loan and Security Agreement dated as of
February 15, 1999.
"Mandatory Prepayments" shall have the meaning set forth in
SECTION 2.4(b)(i).
"Net Cash Flow" means, for any three (3) consecutive month
period, all actual revenues received by Company from the operation
of the Projects on a gross basis less the actual expenses incurred
by Company in the ordinary course of business and approved by the
Lender (as defined in the Fremont Credit Facility), connection
with the operation of the Projects, including, without limitation,
interest payments on the New Credit Facility, other debt
(excluding the Notes) and adequate reserves for future payments
for each Project acceptable to the Lender (as defined in the
Fremont Credit Facility).
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"Notes Receivable" means all of Company's interest in any
notes, instruments, and documents and all receivables and rights
to payment evidenced thereby, together with all leases, master
leases, trust deeds, mortgages, rent assignments, guarantees and
contingent obligations to which Company may look for payment
therefor, and other collateral or security for any of the
foregoing.
"Project" and "Projects" shall have the meanings ascribed
thereto in the Loan and Security Agreement dated as of
February 15, 1999, by and between Company and Fremont Investment &
Loan, as in effect on the date hereof.
"Property" means any and all real or personal property now
owned or hereafter acquired by the Company.
"Property Sales" shall have the meaning set forth in
SECTION 2.4(b)(i).
"Senior Permitted Liens" shall mean any Lien securing the
New Credit Line and the Senior Mortgage Liens."
(b) SECTION 1.56 of the Senior Credit Agreement is hereby
amended to read in its entirety as follows:
"1.56 "Net Cash Proceeds" means, (a) with respect to
the sale or refinancing of any asset, all cash payable to
Company as a result of such sale or refinancing after payment
of (i) all reasonable and customary closing costs not payable
to Company or any Affiliate or insider of Company, including,
brokerage commissions, appraisal fees, recording fees,
attorneys' fees, title insurance premiums, inspection report
charges, prepayment penalties payable to senior lienholders,
escrow credits in favor of the purchaser or financier,
customary prorations, transfer taxes, escrow fees, points and
other loan fees, (ii) amounts required to be paid pursuant to
the terms of any indebtedness secured by Senior Permitted Liens
on such asset, (iii) Allowed Secured Real Property Tax Claims
on such asset, (iv) permitted deposits into the Tax Reserve
Account, (v) any and all fees incurred by Agent, Collateral
Agent and Noteholders in connection with such sale or
refinancing and (vi) in connection with a refinancing, any and
all hard and soft costs of the construction of improvements
located on the real property securing such refinancing
indebtedness which improvements are financed by such
refinancing indebtedness, and (b) with respect to the grant by
Company of an option to purchase real property at the time such
funds are not refundable by CET, all cash payable to Company as
a result of such grant after payment of all reasonable and
customary closing costs not payable to Company or any Affiliate
or insider of Company."
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(c) SECTION 1.60 of the Senior Credit Agreement is hereby
amended to read in its entirety as follows:
"1.60 "New Credit Line" means the line of credit provided to the
Company pursuant to the Loan and Security Agreement dated as of
February 15, 1999 between the Company and Fremont Investment &
Loan, as the same may be amended, modified, renewed, refunded,
replaced or refinanced from time to time, in whole or in part, so
long as none of the foregoing results in an increase in the Loan
Amount (as defined in the Fremont Credit Facility)."
4. AMENDMENT TO SECTION 2.3(b) OF THE SENIOR CREDIT
AGREEMENT. SECTION 2.3(b) of the Senior Credit Agreement is hereby amended to
read in its entirety as follows:
"(b) Payment of Interest; Interest Deferral Notes.
Interest on the Notes is payable quarterly commencing October 1,
1994. Interest shall be computed on the basis of a 360 day
year/actual days elapsed. If (i) Company does not achieve
positive Net Cash Flow for the most recent three month consecutive
period of the Company for which financial statements are available
preceding the applicable interest payment date or (ii) the Company
is otherwise prohibited from making an interest payment on the
Notes pursuant to the provisions of SECTION 7.12 of the New Credit
Line as in effect on the date hereof, Company shall, in lieu of
paying interest on the Notes in cash, execute and deliver to each
Noteholder on or before any interest payment date, one or more
promissory notes in the form of the promissory note attached
hereto as EXHIBIT C (each of which shall be an "Interest Deferral
Note") in a principal amount equal to the sum of interest due to
such Noteholder on such interest payment date and maturing on the
Maturity Date. Each Interest Deferral Note shall bear interest at
a rate of 8.5% per annum and, on overdue payments, at the Default
Rate as provided in SECTION 2.3(d). If, upon occurrence of the
events set forth in this SECTION 2.3(b), Company delivers Interest
Deferral Notes to any Noteholder, Company shall deliver Interest
Deferral Notes to all Noteholders and shall not pay cash interest
to any Noteholder."
5. AMENDMENT TO SECTION 2.4(b) OF THE SENIOR CREDIT
AGREEMENT. SECTION 2.4(b) of the Senior Credit Agreement is hereby amended to
read in its entirety as follows:
"2.4(b) MANDATORY PREPAYMENTS.
(i) Except as provided in SECTION
2.4(b)(ii) or SECTION 2.4(b)(iii) on the Release Dates (as
defined below), Company shall pay to the Noteholders on a pro
rata basis (i) eighty percent (80%) of the Net Cash Proceeds of
(A) any sale of Property under and as permitted by SECTION 6.6,
(B) any grant of an option to purchase Property under and as
permitted by SECTION 6.7, (C) any Refinancing Indebtedness
incurred under and as permitted by SECTION 6.8, (D) any new
financing or refinancing secured by a lien on the Property
(other than the
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New Credit Line), and (E) any principal payment or prepayment
on account of any Note Receivable (such sales, the "PROPERTY
SALES" and, such payments, the "MANDATORY PREPAYMENTS");
provided, that Company shall retain a portion of Net Cash
Proceeds sufficient, in Company's reasonable business judgment,
to satisfy any federal, state, or local tax liability of
Company arising from any such asset disposition. Any excess of
such retained funds remaining after payment of all such tax
liabilities shall be deemed Net Cash Proceeds, eighty percent
(80%) of which shall be paid to Noteholders as provided herein.
The payments required by this SECTION 2.4(b) shall be made on
the following dates (the "RELEASE DATES"): (i) those dates on
which the aggregate Net Cash Proceeds that have been received
from the transactions or events described in this SECTION
2.4(b) and have not been paid to Agent in accordance with this
SECTION 2.4(b) exceeds $100,000, and (ii) those dates 30 days
after the end of each fiscal quarter, if any Net Cash Proceeds
have been received during such fiscal quarter and have not been
paid to Agent in accordance with this SECTION 2.4(b). Prior to
the Release Dates, Company may retain such Net Cash Proceeds
but may not withdraw or otherwise use such proceeds for any
purpose other than prepayments in accordance with this SECTION
2.4(b).
(ii) Notwithstanding the requirements of SECTION
2.4(b)(i), Company shall not be required to make any Mandatory
Prepayment to Agent on behalf of Noteholders from the first
$10,000,000 of Net Cash Proceeds from any sale or refinancing of
any asset, so long as such Net Cash Proceeds are applied to repay
and reduce amounts outstanding under the New Credit Line which
amounts once applied may be reborrowed in accordance with the
terms of the New Credit Line. Following such application of the
first $10,000,000 of Net Cash Proceeds from property sales, Net
Cash Proceeds shall be distributed as set forth in SECTION
2.4(b)(i).
(iii) Notwithstanding the requirements of SECTION
2.4(b)(i), the Company shall not be required to make any Mandatory
Prepayment to Agent on behalf of the Noteholders if on the
applicable Release Date the Company is prohibited from making such
payment pursuant to the provisions of SECTION 7.12 of the New
Credit Line as in effect on the date hereof, provided that the
Company shall be required to make such payment promptly at such
time as such payment is permitted pursuant to SECTION 7.12 of the
New Credit Line as in effect on the date hereof."
6. AMENDMENT TO SECTION 2.4(d) OF THE SENIOR CREDIT
AGREEMENT. SECTION 2.4(d) of the Senior Credit Agreement is hereby amended to
read in its entirety as follows:
"(d) Payment Obligations Not Excused. Company's use of
Net Cash Proceeds from the sale or refinancing of any Property or
Note Receivable shall not excuse, defer or delay Company's
obligations to make any payments required under this Agreement,
the Notes or the other Documents."
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7. DELETION OF CERTAIN SECTIONS OF THE SENIOR CREDIT
AGREEMENT. Each of SECTIONS 2.8, 2.9, 2.10, 5.13, 7.1(o), 7.1(p), 7.1(q) AND
8.3(b)(v) of the Senior Credit Agreement is hereby amended to read in its
entirety as follows:
"Reserved."
8. AMENDMENT TO SECTION 5.12 OF THE SENIOR CREDIT AGREEMENT.
SECTION 5.12 of the Senior Credit Agreement is hereby amended to read in its
entirety as follows:
"Leases. Company shall comply in all material respects
with all of its obligations under all leases existing on the Effective Date
of Plan or thereafter entered into by it with respect to real property.
Company shall provide Agent and Noteholders with a copy of each notice of
default or termination received by Company under any lease which represents
more than 20% of the net rentable square footage of any real property with
respect to which Company is the lessor, immediately upon receiving any such
notice, and deliver to Agent and Noteholders a copy of each notice of default
or termination sent by Company under any lease simultaneously with its
delivery of such notice under such lease, and shall notify Agent, not later
than thirty (30) days prior to the date of the expiration of the term of any
lease, of Company's intention either to renew or not renew any such lease,
and, if Company shall intend to renew such lease, the terms and conditions of
renewal of any such lease. Upon Agent's or any Noteholder's request, Company
shall use its best efforts to obtain and deliver to Agent for the benefit of
Noteholders, an estoppel certificate, in form and substance satisfactory to
Noteholders, executed by such tenants as Noteholders may specify, certifying,
among other things, that Company is not in default under such lease, the
amount of rent payable under such lease, the term of such lease, and disclose
any extra-contractual rent adjustments or discounts, and any purchase,
extension or termination options."
9. AMENDMENT TO ADD SECTION 5.14 TO THE SENIOR CREDIT
AGREEMENT. A new SECTION 5.14 is hereby added to the Senior Credit Agreement,
which section shall read as follows:
"Section 5.14 NOTICES AND ACTIONS REGARDING FREMONT CREDIT
FACILITY. Company shall promptly provide the Noteholders with
notice of the occurrence of any Potential Default or Event of
Default under the Fremont Credit Facility (as each such term is
defined in the Fremont Credit Facility. In addition, in seeking
any waiver of any such Event of Default under the Fremont Credit
Facility, Company shall use reasonable efforts to obtain a waiver
of the provisions of Section 7.12 of the Fremont Credit Facility
with respect to such Event of Default."
10. AMENDMENT TO SECTION 6.4(b) OF THE SENIOR CREDIT
AGREEMENT. SECTION 6.4(b) of the Senior Credit Agreement is hereby amended to
read in its entirety as follows:
"(b) Company has paid in cash the entire principal amount
of all Interest Deferral Notes delivered to Noteholders and all
accrued interest thereon; and"
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11. AMENDMENT TO SECTION 6.5(f) OF THE SENIOR CREDIT
AGREEMENT. SECTION 6.5(f) of the Senior Credit Agreement is hereby amended to
read in its entirety as follows:
"(f) Indebtedness incurred under the New Credit Line,"
12. AMENDMENT TO SECTIONS 6.6 AND 6.7 OF THE SENIOR CREDIT
AGREEMENT. SECTIONS 6.6 and 6.7 of the Senior Credit Agreement are hereby
amended to read in their entirety as follows:
"6.6 SALES OF PROPERTY. So long as no Event of Default
has occurred and is continuing, Company may sell Property,
provided:
(a) Eighty percent (80%) of all Net Cash Proceeds from any sale
of Property is paid to Noteholders pursuant to SECTION 2.4(b); and
(b) Without limiting SECTION 6.6(a), with respect to sales of
any asset, whether or not it is Property, in which Company provides
seller financing, (i) the assets or Property are sold to a financially
responsible purchaser (as determined by Board of Directors of Company in
accordance with commercially reasonable standards), (ii) the note,
security documents and other collateral are in form and substance
satisfactory to Noteholders and (iii) such sale is for a purchase price
no less than the fair market value of such Property as determined by an
independent appraisal satisfactory to Board of Directors of Company or
such other method satisfactory to Noteholders.
6.7 PURCHASE OPTIONS. So long as no Event of Default
has occurred and is continuing, Company may grant options to
purchase Company's real property, provided eighty percent (80%) of
all Net Cash Proceeds from any grant of an option to purchase real
property that is Property is paid to Noteholders pursuant to
SECTION 2.4."
13. AMENDMENT TO SECTION 7.3 OF THE SENIOR CREDIT AGREEMENT.
SECTION 7.3 of the Senior Credit Agreement is hereby amended to read in its
entirety as follows:
"7.3 OTHER REMEDIES. Upon the occurrence of any Event of
Default in addition to the remedies listed in SECTION 7.1 upon the
earlier of a Notice of Acceleration or acceleration of the
Obligations: (a) Agent and/or Noteholders may file an action
against Company in any court having jurisdiction, in their own
names or in the name of Agent and Noteholders; and/or (b) Agent
and Noteholders shall have all rights, powers and remedies
available under each of the Documents and applicable law,
including, exercising any or all of the rights of a beneficiary
pursuant to applicable law. All rights, powers and remedies of
Agent or Noteholders in connection with each of the Documents may
be exercised at any time or from time to time, are cumulative and
not exclusive, and shall be in addition to any other rights,
powers or remedies provided by law or equity."
14. AMENDMENT TO SECTION 8.3(b)(vi) OF THE SENIOR CREDIT
AGREEMENT. SECTION 8.3(b)(vi) of the Senior Credit Agreement is hereby amended
to read in its entirety as follows:
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" (vi) Upon the request of Majority Noteholders after the
occurrence of an Event of Default, Agent shall exercise other
remedies under the Documents, including commencement of or actions
in court proceedings."
15. FORM OF INTEREST DEFERRAL NOTE. The Form of Interest
Deferral Note attached to the Senior Credit Agreement as Exhibit C shall be
amended to read in its entirety as set forth in Annex A attached hereto.
16. REPRESENTATIONS AND WARRANTIES. Each of the parties hereto
represents and warrants that (a) the execution, delivery and performance of this
Amendment have been duly authorized by all necessary corporate action on behalf
of such party and (b) this Amendment constitutes the legal, valid and binding
obligation of such party. The Company represents and warrants to the Agent and
the Noteholders that prior to and after giving effect to this Amendment, no
Default or Event of Default has or shall have occurred and be continuing.
17. EFFECT OF AMENDMENT. The Senior Credit Agreement is
modified only by the express provisions of this Amendment, and shall otherwise
remain in full force and effect and is hereby ratified and confirmed by the
Company in all respects.
18. WAIVER OF SHAREHOLDER AND TRUSTEE LIABILITY. This
Amendment is made by the undersigned, not individually, but in his capacity
as Chief Executive Officer of the Company and Trustee under that certain
Restated Declaration of Trust of the Company, and is hereby made a part
hereof, and is enforceable only against, and is payable out of, the Company
property held thereunder, and any and all personal liability of the Trustees,
their duly authorized agents, and the shareholders of the Company is
expressly waived.
19. ENTIRE AGREEMENT. This Amendment constitutes the complete
agreement of the parties with respect to the subject matters referred to in this
Amendment and supersedes all prior or contemporaneous negotiations, promises,
covenants, agreements or representations of every nature whatsoever with respect
to such subject matters, all of which become merged and finally integrated into
this Amendment.
20. ADDITIONAL ASSURANCES. The parties agree that they shall
take such actions and execute and deliver such documents as are reasonably
required to effectuate the purposes of this Amendment, including, without
limitation, executing and delivering such reconveyance and termination
documentation as is required to release any and all liens securing the
obligations under the Senior Credit Agreement.
21. SUCCESSORS AND ASSIGNS. This Amendment shall be binding
upon and inure to the benefit of the parties to this Amendment and their
respective successors and permitted assigns.
22. GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AMENDMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
CALIFORNIA. EACH OF THE PARTIES TO THIS AMENDMENT HEREBY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE CENTRAL
DISTRICT OF CALIFORNIA
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AND OF ANY CALIFORNIA STATE COURT SITTING IN LOS ANGELES, CALIFORNIA, FOR THE
PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AMENDMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AMENDMENT. EACH OF THE
PARTIES TO THIS AMENDMENT IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY
CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
23. WAIVER OF JURY TRIAL. EACH OF THE PARTIES TO THIS
AMENDMENT HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AMENDMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
24. COUNTERPARTS. This Amendment may be executed in any
number of counterparts, all of which taken together shall constitute one and
the same instrument and any of the parties to this Amendment may execute this
Amendment by signing any such counterpart.
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IN WITNESS WHEREOF, the parties have caused this Amendment to be
duly executed and delivered as of the day and year first above written.
COMPANY
--------
THE PEREGRINE REAL ESTATE TRUST,
(aka Commonwealth Equity Trust, and d.b.a.
XxxXxxx Properties)
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: CAO
AGENT
-----
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
NOTEHOLDERS
-----------
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
GATEWAY RECOVERY TRUST
By: The Prudential Insurance Company of
America, Asset Manager
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
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WEYERHAEUSER COMPANY MASTER RETIREMENT TRUST
By: TCW Special Credits,
Its Investment Manager
By: TCW Asset Management Company,
Its Managing General Partner
By: /s/ Xxxxxxx Xxxxxx
----------------------------------
Name: Xxxxxxx Xxxxxx
Title: Authorized Signatory
By: /s/ Xxxxxxx Xxxxx
---------------------------------
Name: Xxxxxxx Xxxxx
Title: Authorized Signatory
TCW SPECIAL CREDITS FUND IV
By: TCW Special Credits,
Its General Partner
By: TCW Asset Management Company,
its Managing General Partner
By: /s/ Xxxxxxx Xxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxx
Title: Authorized Signatory
By: /s/ Xxxxxxx Xxxxx
---------------------------------
Name: Xxxxxxx Xxxxx
Title: Authorized Signatory
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TCW SPECIAL CREDITS PLUS FUND
By: TCW Special Credits,
Its General Partner
By: TCW Asset Management Company, its
Managing General Partner
By: /s/ Xxxxxxx Xxxxxx
------------------------------
Name: Xxxxxxx Xxxxxx
Title: Authorized Signatory
By: /s/ Xxxxxxx Xxxxx
------------------------------
Name: Xxxxxxx Xxxxx
Title: Authorized Signatory
TCW SPECIAL CREDITS TRUST IV
By: Trust Company of the West, Trustee
By: /s/ Xxxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxx
Title: Authorized Signatory
By: /s/ Xxxxxxx Xxxxx
-----------------------------------
Name: Xxxxxxx Xxxxx
Title: Authorized Signatory
TCW SPECIAL CREDITS TRUST IVA
By: Trust Company of the West, Trustee
By: /s/ Xxxxxxx Xxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxx
Title: Authorized Signatory
By: /s/ Xxxxxxx Xxxxx
-----------------------------------
Name: Xxxxxxx Xxxxx
Title: Authorized Signatory
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OCM REAL ESTATE OPPORTUNITIES FUND A, L.P.
By: Oaktree Capital Management, LLC,
Its General Partner
By: /s/ Xxxxxxx Xxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Principal
By: /s/ Xxxxxxx Xxxxx
------------------------------------
Name: Xxxxxxx Xxxxx
Title: Managing Director & General
Counsel
OCM REAL ESTATE OPPORTUNITIES FUND B, L.P.
By: Oaktree Capital Management, LLC,
Its General Partner
By: /s/ Xxxxxxx Xxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Principal
By: /s/ Xxxxxxx Xxxxx
------------------------------------
Name: Xxxxxxx Xxxxx
Title: Managing Director & General
Counsel
WEYERHAEUSER REAL ESTATE OPPORTUNITIES
SEPARATE ACCOUNT
By: Oaktree Capital Management, LLC,
Its Investment Manager
By: /s/ Xxxxxxx Xxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Principal
By: /s/ Xxxxxxx Xxxxx
------------------------------------
Name: Xxxxxxx Xxxxx
Title: Managing Director & General
Counsel
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Item No. _____________________
ANNEX A
[FORM OF]
INTEREST DEFERRAL NOTE
$__________________________ Sacramento, California
Dated as of __________, 19___
FOR VALUE RECEIVED, the undersigned, The Peregrine Real Estate
Trust, formerly known as Commonwealth Equity Trust and d.b.a. XxxXxxx
Properties, a California Real Estate Investment Trust ("Maker"), promises to
pay to the order of_________________or its successors and assigns ("Holder")
at its offices at____________________, or at such other place as the Holder
hereof may designate, the principal sum of _________________ DOLLARS ($
_____________), in lawful money of the United States of America and in
immediately available funds, with interest thereon prior to default at the
rate of eight and one-half percent (8.5%) per annum (computed on the basis of
a 360 day year, actual days elapsed).
For the period commencing on the date hereof and ending on the
Maturity Date (the "PIK Period"), interest accruing hereunder shall be paid
quarterly, in arrears, on the last day of each calendar quarter (the "Payment
Date"). Unless an Event of Default has occurred and is continuing during the
PIK Period, if (i) Maker does not achieve positive Net Cash Flow for the
Maker's most recent fiscal quarter for which financial statements are
available preceding the applicable interest Payment Date or (ii) Maker is
otherwise prohibited from making an interest payment on this Interest
Deferral Note (this "Note") pursuant to the provisions of SECTION 7.12 of the
New Credit Line as in effect on March __, 1999, Maker shall, in lieu of
paying interest accrued hereunder in cash, execute and deliver to Holder, on
or before such Payment Date, an Interest Deferral Note in the principal
amount equal to the sum of the interest and other monies then due and payable
to Holder on such Payment Date and maturing on the Maturity Date (as defined
hereinafter).
Notwithstanding any provision contained herein or any other
agreement between Maker and Holder to the contrary, the entire balance due
hereunder, including principal, accrued interest, and any other sums owing
hereunder, shall be due and payable, in full on the earlier of the following
dates (the "Maturity Date"): (a) October 1, 2000 and (b) the first Payment
Date following a fiscal quarter of Maker in which Maker would have achieved
positive Net Cash Flow after giving pro forma effect to the payment of this
Note and on which Maker is not otherwise prohibited from making such payment
pursuant to the provisions of SECTION 7.12 of the New
Item No. _____________________
Credit Line as in effect on March __, 1999. Payments of principal made by
Maker to Holder on account of this Note may not be reborrowed.
This Note may be prepaid, in whole or in part, as provided in
that certain Second Amended and Restated Note Agreement, as amended (the
"Note Agreement"). Any prepayment shall be applied against principal and
interest installments hereunder in the manner set forth in the Note Agreement.
Maker, for itself and its legal representatives, successors and
assigns, and all endorsers, guarantors, or any others who may at any time
become liable for payment hereunder, hereby waives presentment, demand,
protest, notice of dishonor, notice of non-payment, notice of maturity,
presentment for the purposes of accelerating maturity, and diligence in
collection.
Maker agrees to pay all fees and costs of expenses incurred by
or on behalf of the Holder hereof in the collection or enforcement of this
Note as provided in SECTION 8.2 of the Note Agreement.
This Note is made pursuant to and in connection with the Note
Agreement, and is subject to all of the terms thereof. All capitalized terms
that are not defined herein shall have the meanings as set forth in the Note
Agreement.
Maker's failure to make timely payment of any installment of
principal or other sums due hereunder, or the occurrence of any Event of
Default under the Note Agreement shall constitute a default under this Note.
Upon the occurrence of a default hereunder, regardless of the cause therefor,
Holder may immediately declare the entire balance of this Note to be
immediately due and payable and exercise any and all of the rights and
remedies available under the Note Agreement and applicable law. From and
after the occurrence of a Default hereunder or an Event of Default under the
Note Agreement, the unpaid principal balance hereunder shall, at Holder's
option, bear interest at the Default Rate specified in the Note Agreement.
Any installment or principal or interest that is not paid when due hereunder
shall be added to the principal balance hereof and shall thereafter bear
interest, at Holder's option, at the Default Rate until paid.
In no contingency or event whatsoever shall the aggregate of
all amounts deemed interest hereunder and charged or collected by Holder or
any holder hereof exceed the highest rate permissible under any law which a
court of competent jurisdiction shall, in a final determination, deem
applicable hereto. In the event that such a court determines that Holder has
charged or received interest hereunder in excess of the highest applicable
rate, the rate in effect hereunder shall automatically be reduced to the
maximum rate permitted by applicable law and Holder shall apply all interest
paid in excess of the maximum lawful rate to the principal balance of this
Note. It is the intent of the parties hereto that Maker not pay or contract
to pay, and that Holder not receive or contract to receive, directly or
indirectly in any manner whatsoever, interest in excess of that which may be
paid by Maker to Holder under applicable law.
This Note shall be governed by and construed in accordance with
the laws of the State of California, except to the extent Holder has greater
rights or remedies under federal law,
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Item No. _____________________
in which case such choice of California law shall not be deemed to deprive
Holder of such rights and remedies as may be available under federal law.
If any provision of this Note or the application hereof to any
person or circumstance shall, for any reason or to any extent, be invalid or
unenforceable, neither the remainder of this Note nor the application of such
provision to any other person or circumstance shall be affected thereby, but
rather the same shall be enforced to the greatest extent permitted by law,
except that if such provision relates to the payment of any monetary sum,
then Holder may, at its option, declare the entire indebtedness evidenced
hereby immediately due and payable.
IN WITNESS WHEREOF, the undersigned Maker has executed this
Note as of the day and year set forth on the first page hereof.
THE PEREGRINE REAL ESTATE TRUST,
Formerly known as Commonwealth Equity
Trust and d.b.a. XxxXxxx Properties, a
California Real Estate Investment Trust
By: ____________________________________
Its:
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