EXHIBIT 10.1
MEZZANINE LOAN SALE AGREEMENT
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(MGM Mezzanine Loan)
THIS MEZZANINE LOAN SALE AGREEMENT (this "Agreement") is entered into as of
the 30th day of July, 1998, by and among CREDIT SUISSE FIRST BOSTON MORTGAGE
CAPITAL LLC, a Delaware limited liability company, having an address of 00
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx Xxxx, Telefax Number:
(000) 000-0000, and WILSHIRE REAL ESTATE PARTNERSHIP L.P., a Delaware limited
partnership, having an address of 0000 X.X. Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxx
00000, Attention: Xxxxxxxx Xxxxxxxxxx, Telefax Number: (000) 000-0000 (the
"Buyer").
RECITALS:
A. The Seller originated that certain mezzanine loan (the "Loan") to MP-
Colorado Place Mezzanine, LLC, a Delaware limited liability company (the
"Borrower"), which is evidenced, inter alia, by that certain Note dated October
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17, 1997, executed by the Borrower and payable to the order of the Seller in the
principal amount of $66,000,000 (as amended, modified or supplemented, the
"Note") and that certain Loan Agreement, dated as of October 17, 1997 (as
amended, modified or supplemented, the "Loan Agreement"), between the Seller and
the Borrower. The Loan is secured, inter alia, by the pledge of certain equity
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interests in Colorado Place Partners, LLC (the "Company") and MP-Colorado Place
Manager I, Inc. (the "Managing Member") pursuant to that certain Pledge
Agreement, dated as of October 17, 1997, executed by the Borrower, as borrower,
the Seller, as mezzanine lender, and Xxxxxxx Xxxxxx Partners Colorado Place, as
stock owner (as amended, modified or supplemented, the "Pledge Agreement"). The
Seller entered into that certain Intercreditor Agreement dated October 17, 1997,
relating to the Loan (the "Intercreditor Agreement"). (The Note, Loan Agreement,
the Pledge Agreement, the Intercreditor Agreement, the Mezzanine Deposit
Agreement (defined below) and any other document or agreement now or hereafter
executed by the Borrower or any other person securing, evidencing or otherwise
relating to the Loan being collectively referred to herein as the "Loan
Documents.")
B. The Company is the owner of that certain office and retail property
known as the MGM Plaza in the City of Santa Xxxxxx, County of Los Angeles, State
of California (the "Mortgaged Property").
C. The Seller, as lender under the Note, has advanced to the Borrower the
principal sum of $66,000,000 of which $66,000,000 remains outstanding as of the
date hereof. The Borrower is not entitled to receive any future advances under
the Loan.
D. The Buyer desires to purchase from the Seller and the Seller desires to
sell to the Buyer all of the Seller's right, title, and interest in the Loan.
E. The Buyer desires to engage First Union National Bank (the "Servicer"),
and the Servicer has agreed, to service the Loan under and in accordance with
the terms of the Servicing
Agreement, dated as of November 1, 1997, between the Seller, as owner, and the
Servicer, as servicer, as amended by the Acknowledgment Agreement dated as of
December 29, 1997, between the Servicer and the Seller (the "Servicing
Agreement"), which is attached as Exhibit A hereto, and to act as the
"Administrative Agent" as defined in that certain Mezzanine Deposit Agreement,
dated as of October 17, 1997 (as amended, modified or supplemented, the
"Mezzanine Deposit Agreement"), between the Seller, the Company and Banc One
Mortgage Capital Markets, as administrative agent.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby covenant, agree, represent and warrant as
follows:
ARTICLE I
PURCHASE AND SALE OF LOAN
Section 1.1 Purchase and Sale. The Seller hereby sells to the Buyer,
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without recourse, and the Buyer hereby purchases from the Seller, the Loan. The
Buyer hereby acknowledges that it will have no right to or interest in the Exit
Fee (as defined in the Loan Agreement) and "Loan," as used herein, shall not
include the Exit Fee.
Section 1.2 Payment of Purchase Price. (a) No later than 2:00 p.m. New
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York Time on the date of this Agreement, the Buyer, by wire transfer in
immediately available funds to the Seller's account set forth below, shall pay
to the Seller the purchase price (the "Purchase Price") for the Loan, in an
amount equal to $66,288,213.75, representing the outstanding balance of the Loan
and interest accrued thereon. Conveyance of the Loan and delivery of the
documents required to be delivered by the Seller to the Buyer pursuant to
Section 1.3 shall be made by the Seller on the date hereof against payment of
the Purchase Price by the Buyer.
(b) Seller's wire instructions are as follows:
Bank: Citibank NYC
ABA No.: 000000000
Account No.: 00000000
Account: Credit Suisse First Boston Corp.
Attention: Xxxxx Xxxxxxx
(000) 000-0000
Section 1.3 Assignment of Loan Documents. In connection with the purchase
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and sale contemplated hereby, on and as of the date hereof, the Seller hereby
assigns and transfers to the Buyer, all of its right, title and interest as
mezzanine lender in and to the Loan Documents (exclusive of rights to the Exit
Fee), and the Buyer hereby accepts said assignment, and assumes all obligations
of the Seller as mezzanine lender under the Loan Documents arising from and
after the date hereof. Also in connection with the purchase and sale
contemplated hereby, on the date hereof, the Seller shall deliver to or at the
direction of the Buyer the following documents or instruments with respect to
the Loan:
(a) the original Note endorsed by the Seller, without recourse, in
blank or to the order of the Buyer;
(b) originals of all Loan Documents, including without limitation the
stock certificate for shares of the Managing Member and stock power (in blank);
and
(c) forms UCC-3's assigning to the Buyer all UCC-1 Financing
Statements filed with respect to the Pledge Agreement.
The Buyer shall be solely responsible for recording, at its expense,
the assignment to the Buyer of any applicable assignments of collateral
documents.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE BUYER
Section 2.1. Representations of the Buyer. The Buyer hereby represents and
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warrants to the Seller that, as of the date of this Agreement, the Buyer is a
limited partnership, duly organized, validly existing and in good standing under
the laws of the State of Delaware, and that the Buyer is duly authorized to
purchase the Loan and has the right to purchase the Loan without the consent of
any third party. The Buyer hereby further represents to the Seller that the
Buyer is a sophisticated investor and its decision to purchase the Loan, other
than the representations of the Seller set forth in this Agreement, is based
upon the Buyer's own independent evaluation of the Loan, including all related
documentation and collateral. The Buyer acknowledges that it has been provided a
copy of, and is familiar with, the Loan Documents and all other documents
relating to the Loan. In entering into this Agreement, the Buyer has not relied
upon any oral or written information provided by the Seller or its personnel or
agents, other than the representations in this Agreement. The Buyer acknowledges
that no employee or representative of the Seller has been authorized to make,
and that the Buyer has not relied upon, any statements or representations or
warranties other than those specifically contained in this Agreement.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANT OF THE SELLER
Section 3.1. Representations and Warranties of the Seller. The Seller
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hereby represents and warrants to the Buyer as the date hereof that:
(a) the Seller is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware; the
Seller has full power and authority and has taken all necessary action to
consummate the transactions contemplated hereby;
(b) the Seller is the sole owner and holder of the Loan free and clear
of any liens arising through the Seller and has the right to sell and assign the
Loan without the consent any third party, or if required, such consent has been
obtained; consummation of the transactions contemplated by this Agreement will
not violate any law or regulation or, to the Seller's knowledge, other agreement
applicable to the Seller;
(c) the outstanding principal balance of Loan as of the date hereof is
$66,000,000;
(d) the Note, the Loan Agreement, the Mezzanine Deposit Agreement and
the other Loan Documents are the legal, valid and binding obligation of the
Borrower, enforceable against the Borrower in accordance with their terms,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the enforcement of creditors'
rights generally, or by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law);
(e) since the date thereof, none of the Loan Documents has been
modified, altered, satisfied, cancelled, subordinated or rescinded in any
manner; no portion of the collateral securing the Loan has been released from
the lien created by the Loan Documents, and the Seller has furnished to the
Seller a true and complete copy of the Loan Documents, including any amendments
thereto or modifications thereof;
(f) all payments required to be made by the Borrower to the Seller
pursuant to the Loan Documents to the date hereof have been made;
(g) to the Seller's actual knowledge, there is no material default,
material breach or material violation nor event of acceleration existing under
the Loan Documents and, to the Seller's actual knowledge, no event (other than
payments due but not yet delinquent) which, with the passage of time or with
notice and the expiration of any grace or cure period, would and does constitute
a default, breach, violation or event of acceleration;
(h) the Seller has no knowledge that any material representations or
material warranties made by the Borrower in the Loan Documents are untrue in any
material respect;
(i) there is no right of defense or counterclaim to the Loan
(including the defense of usury), nor will the operation of any of the terms of
the Loan Documents, or the exercise of any rights thereunder, render any of the
Loan Documents unenforceable, in whole or in part (excluding provisions relating
to default interest, yield maintenance charges or prepayment premiums, the
unenforceability of which provisions will not affect the enforceability of the
remaining provisions of the Loan Documents), or subject to any right of defense
or counterclaim (including the defense of usury or the violation of any
applicable disclosure or consumer credit laws), except in such case as
enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium
or other laws affecting the enforcement of creditors' rights generally or by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law), and to the Seller's knowledge
no such right of rescission, offset, abatement, diminution, defense or
counterclaim has been asserted with respect thereto; and
(j) the Option (as defined in that certain Option Agreement dated as
of October 17, 1997 (the "Option Agreement"), between Credit Suisse First Boston
Mortgage Capital LLC and the Company) has been exercised, the Subordinate Note
(as defined in the Option Agreement) has been cancelled and the lien of the Deed
of Trust (as defined in the Option Agreement) has been released.
Section 3.2. Covenant of the Seller. The Seller agrees that, within sixty
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(60) days after the date hereof, it will obtain and provide to the Buyer,
written confirmation from Fitch IBCA, Inc., Standard & Poor's Ratings Services,
and Xxxxx'x Investor Services (the "Rating Agencies") that the transfer of the
Loan to Wilshire Real Estate Investment Trust or to Wilshire Financial Services
Group Inc, or to any Affiliate (as defined in the Intercreditor Agreement) of
either such entity ("Wilshire"), and the holding of the Loan by Wilshire would
not cause any Rating Agency to qualify, downgrade or withdraw any of the current
ratings on the Credit Suisse First Boston Mortgage Securities Corp. Commercial
Mortgage Pass-Through Certificates, Series 1997-C2.
Section 3.3. Notice of Breach; Cure and Repurchase.
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(a) If the Buyer discovers the occurrence of any Breach (as defined below), the
Buyer shall have the right to give written notice to the Seller of such Breach,
provided the Buyer delivers such written notice to the Seller no later than the
Last Notice Date (as defined below). The term "Last Notice Date" with respect
to any Breach shall mean the earlier of (i) the date ninety (90) days after the
Buyer discovers such Breach and (ii) the date which is eighteen months after the
date hereof. For the purposes hereof, each of the following shall be a
"Breach"; (A) any material breach of any representations contained in Section
3.1 hereof; (B) the failure of the Seller to deliver any document required to be
delivered pursuant to Section 1.3 hereof, and (C) any material breach of the
covenant contained in Section 3.2 hereof. Notwithstanding the foregoing, but
subject to the terms of Section 3.3(e), the Buyer shall have the right to pursue
all other remedies for a Breach at law or in equity, including, without
limitation, the right to xxx for damages.
(b) Within 90 days of the receipt of the notice pursuant to Section
3.3(a) above with respect to a Breach, the Seller shall either (at Seller's
option) (i) repurchase the Loan (a "Repurchase") at the Repurchase Price
(defined below) or (ii) cure such breach to the Buyer's reasonable satisfaction
or, in the case of a breach under Section 3.3(a)(B), deliver such document. Upon
any such Repurchase of the Loan by the Seller, the Buyer shall, at the Seller's
expense, execute and deliver such instruments of transfer or assignment
presented to it by the Seller, in each case without recourse, as shall be
necessary to vest in the Seller all right, title and interest transferred to the
Buyer hereunder in the Loan and the Loan Documents (including any property
acquired in respect thereof or proceeds of any insurance policy with respect
thereto), and shall deliver the Loan Documents to the Seller or its designee
upon payment of the Repurchase Price. "Repurchase Price" means the excess of
(i) the sum of (A) the outstanding principal balance of the Loan as of the date
hereof and (B) the Buyer's pro-rata share of interest payable on the Loan for
the month in which the Repurchase occurs, calculated on the basis of actual days
over a 360-day year, over (ii) the sum of (A) all principal repayments made in
respect of the Loan after the date hereof and (B) any amount otherwise due and
payable under the Loan which has been waived or forgiven by the Buyer.
(c) If the Buyer demands cure of a Breach under Section 3.3(b) above
which the Seller is otherwise obligated to cure, and the Seller is unable to
cure the Breach due to circumstances beyond the Seller's control, the Seller
shall give notice to the Buyer of such inability, and in that event the Buyer,
as the Buyer's sole remedy, may either (i) waive such Breach or (ii)
within thirty (30) days after delivery of the Seller's notice, require the
Seller to effect the Repurchase in lieu of such cure.
(d) In the event that any litigation is commenced which alleges facts
which, in the judgment of the Seller, could constitute a breach of any of the
Seller's representations and warranties under this Agreement relating to the
Loan, the Seller hereby reserves the right to conduct or participate in the
defense of such litigation at its sole expense.
(e) The Buyer shall have no right, after the Last Notice Date, to make
any claim that a Breach has occurred or otherwise to pursue any remedies for a
Breach, and, accordingly, the Seller's liability for any Breach shall terminate
on the day after the Last Notice Date except with respect to claims made prior
to such date. Furthermore, if the Buyer, without the prior written consent of
the Seller (which consent shall not be withheld unreasonably) modifies the Note,
Loan Agreement or other Loan Documents (other than a Permitted Loan Document
Modification (defined below)), or waives any material obligation of the Borrower
in respect of the Loan (other than a Permitted Loan Document Modification or a
One-Time Waiver (defined below)) or the collateral for the Loan or releases any
collateral for the Loan (except for a release of collateral required by
condemnation or other action by governmental authority pursuant to applicable
law), then the Seller shall have no further obligations for any Breach.
"Permitted Loan Document Modification" shall mean a written modification to the
Loan Agreement or any other Loan Document, (i) which does not adversely affect
the liens and other security interests under the Pledge Agreement and other Loan
Documents, (ii) which does not diminish, release, impair or otherwise adversely
affect the security for the Loan or subject any guaranty or any other Loan
Document to any right of defense or counterclaim in favor of any party to such
Loan Document, other than the Buyer or the Seller, (iii) which does not waive
any economic obligation (other than a One-Time Waiver) of the Borrower, any
guarantor or any other party to the Loan Documents and (iv) a true and complete
fully executed counterpart of which has been delivered to the Seller prior to
the earlier of (A) the thirtieth (30th) day after execution of such modification
and (B) thirty (30) days prior to the date of any Repurchase under this
Agreement. "One-Time Waiver" shall mean a waiver by the Buyer of a right, power
or remedy under any Loan Document for a particular instance which shall not have
the effect of waiving or impairing such right, power or remedy in any other
instance and which does not have a material adverse effect on the security for
the Loan.
ARTICLE IV
SERVICING OF THE LOAN
Section 4.1. Servicing of the Loan. Contemporaneously herewith, the Seller
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shall assign to the Buyer its rights under the Servicing Agreement with respect
to the Loan and recognize the Servicer as administrative agent under the
Mezzanine Deposit Agreement pursuant to the Assignment, Assumption, Recognition
and Amendment Agreement dated the date hereof, among the Seller, the Buyer and
the Servicer.
ARTICLE V
MISCELLANEOUS
Section 5.1. Brokers. Each party represents to the other that no broker,
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finder or financial advisor is entitled to any brokerage, finder's or other fee
or commission from the other in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of such party. If
any broker's fees, finder's fees, commissions, or similar payments are due to
any person in connection with this Agreement, or the transactions contemplated
hereby, such fees, commissions, or similar payments shall be the sole
responsibility of the party who had dealings with the person to whom they are
due. The Seller and the Buyer shall have no liability for any brokerage,
finder's or other fee or commission in connection with this transaction. This
Section 5.1 shall survive the closing of the transaction contemplated hereby.
Section 5.2. Governing Law. THE PARTIES AGREE THAT THE STATE OF NEW YORK
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HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION
EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITATION, MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND
PERFORMED IN SUCH STATE AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA.
Section 5.3. Modification and Waiver in Writing. No modification,
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amendment, extension, discharge, termination or waiver of any provision of this
Agreement shall in any event be effective unless the same shall be in a writing
signed by the party against whom enforcement is sought, and then such waiver or
consent shall be effective only in the specific instance, and for the purpose,
for which given.
Section 5.4. Notices. (a) All notices, consents, approvals and requests
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required or permitted hereunder shall be given in writing and shall be effective
for all purposes if hand delivered or sent by (i) hand delivery, with proof of
attempted delivery, (ii) certified or registered United States mail, postage
prepaid, (iii) expedited prepaid delivery service, either commercial or United
States Postal Service, with proof of attempted delivery, or (iv) by telecopier
(with electronic confirmation of receipt) provided that such telecopied notice
must also be delivered by one of the means set forth in clause (i), clause (ii)
or clause (iii) above, addressed to the address for the recipient set forth on
the first page hereof, or at such other address and person as shall be
designated from time to time by any party hereto, as the case may be, in a
written notice to the other parties hereto in the manner provided for in this
Section 5.4.
(b) A notice shall be deemed to have been given: (i) in the case of
hand delivery, at the time of delivery; (ii) in the case of registered or
certified mail, when delivered or the first attempted delivery on a business
day; (iii) in the case of expedited prepaid delivery, upon the first attempted
delivery on a business day; or (iv) in the case of telecopier, upon receipt of
electronic confirmation of receipt, provided that such telecopied notice was
also delivered as required in
this Section 5.4. A party receiving a notice which does not comply with the
technical requirements for notice of this Section 5.4 may elect to waive any
deficiencies and treat the notice as having been properly given.
Section 5.5. Beneficiaries. Nothing in this Agreement, express or implied,
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is intended for or shall confer upon any other person any legal or equitable
rights, benefits, claims or remedies of any nature whatsoever or by reason of
this Agreement or any provisions contained herein, it being the intention of the
parties hereto that this Agreement, the obligations and statements of
responsibilities hereunder, and all other conditions and provisions hereof are
for the sole and exclusive benefit of the Seller and the Buyer, and their
successors and permitted assigns, and for the benefit of no other person.
Section 5.6. Limitation of Damages. In no event shall either party hereto
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be liable to the other in contract (with the exception of enforcing the terms of
this Agreement), tort, strict liability or any other course of action for any
consequential, incidental or speculative damages arising out of this Agreement
or the subject matter hereof.
Section 5.7. Expenses. Except as other provided in this Agreement, each
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party hereto agrees to pay all costs, fees and expenses which it has incurred in
connection with or incidental to the matters contained in this Agreement,
including without limitation any fees and disbursements to its accountants and
counsel.
Section 5.8. Protection of Confidential Information. The Buyer and the
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Seller shall not divulge to any party, without the other party's prior written
consent, the Purchase Price paid by the Buyer for the Loan or any other terms of
this Agreement, except to the extent it is appropriate or required for the Buyer
or the Seller, as applicable, to do so in working with legal counsel, auditors,
taxing authorities or other federal or state governmental agencies or in
connection with a merger or acquisition or if otherwise required by law or court
order.
Section 5.9. Headings. The headings in this Agreement are included herein
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for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
Section 5.10. Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable laws, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
Section 5.11. Counterparts. This Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument.
Section 5.12. Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter contained
in this Agreement and supersedes all prior agreements, understandings and
negotiations between the parties.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized representatives, all as of the day and
year first above written.
SELLER:
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CREDIT SUISSE FIRST BOSTON MORTGAGE
CAPITAL LLC
By:
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Name:
Title:
BUYER:
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WILSHIRE REAL ESTATE PARTNERSHIP L.P.
By: Wilshire Real Estate Investment Trust,
Inc., as general partner
By:
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Name:
Title:
