FIRST AMENDMENT TO LOAN AGREEMENT AND AMENDMENT TO OTHER LOAN DOCUMENTS
FIRST AMENDMENT TO LOAN
AGREEMENT AND AMENDMENT TO OTHER LOAN DOCUMENTS
THIS FIRST AMENDMENT TO LOAN
AGREEMENT AND AMENDMENT TO OTHER LOAN DOCUMENTS (this “Amendment”) made
as of the 10th day of
July, 2008, by and among XXXXXXX XXXXXXX AS TRUSTEE OF THE
XXXXXXX XXXXXXX LIVING TRUST U/D/T DATED SEPTEMBER 15, 1989, a trust
established under the laws of the State of California (the “Trust”), MERCO GROUP-ROOSEVELT BUILDING,
LLC, a California limited liability company (“Merco”; Merco and Trust are
hereinafter referred to individually as a “Borrower” and collectively as
“Borrowers”), XXXXXXX
XXXXXXX, a resident of the State of Florida (“Xxxxxxx Xxxxxxx”), KEYBANK NATIONAL ASSOCIATION,
a national banking association (“KeyBank”), and KEYBANK NATIONAL ASSOCIATION,
a national banking association, as Agent for the Banks (the
“Agent”).
W
I T N E S S E T H:
WHEREAS, Borrowers, Agent and
KeyBank entered into that certain Loan Agreement dated as of January 30,
2007 (the “Loan Agreement”); and
WHEREAS, Borrowers and Xxxxxxx
Xxxxxxx have requested that the Agent and KeyBank make certain modifications to
the terms of the Loan Agreement; and
WHEREAS, the Agent and KeyBank
have agreed to make such modifications subject to the execution and delivery by
Borrowers and Xxxxxxx Xxxxxxx of this Amendment.
NOW, THEREFORE, for and in
consideration of the sum of TEN and NO/100 DOLLARS ($10.00), and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto do hereby covenant and agree as
follows:
1. Definitions. All
the terms used herein which are not otherwise defined herein shall have the
meanings set forth in the Loan Agreement.
2. Modification of the Loan
Agreement. Borrowers, Xxxxxxx Xxxxxxx, KeyBank and Agent do
hereby modify and amend the Loan Agreement as follows:
(a) By
deleting in its entirety the definition of “Acknowledgment” appearing in §1.1 of
the Loan Agreement, and inserting in lieu thereof the following:
“Acknowledgment. Collectively,
(i) that certain Acknowledgment dated as of January 30, 2007 executed by MMPI in
favor of Agent, and (ii) that certain Acknowledgment dated as of July 10, 2008
executed by South Alameda in favor of Agent.”
(b) By
deleting in its entirety the definition of “Assignment of Interests” appearing
in §1.1 of the Loan Agreement, and inserting in lieu thereof the
following:
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“Assignment of
Interests. Collectively, (i) those certain Assignments of
Interests dated as of January 30, 2007 by each Borrower in favor of Agent, and
(ii) that certain Assignment of Interests dated as of July 10, 2008 from Xxxxxx
Xxxxxxx and Xxxxxxx Xxxxxxx in favor of Agent.”
(c) By
deleting in its entirety the definition of “Change of Control” appearing in §1.1
of the Loan Agreement, and inserting in lieu thereof the following:
“Change of
Control. A Change of Control shall exist in the event that
Xxxxxxx Xxxxxxx shall fail to own at least eighty (80%) economic, voting and
other beneficial interests in Merco free of any lien, encumbrance or other
adverse claim, shall fail to be the sole manager of Merco, or shall fail to
control the management and policies of Merco.”
(d) By
deleting in its entirety the definition of “Collateral” appearing in §1.1 of the
Loan Agreement, and inserting in lieu thereof the following:
“Collateral. All of
the property rights and interests of the Borrowers, Guarantor, Xxxxxx Xxxxxxx,
an individual resident of the State of Florida, and Xxxxxxx Xxxxxxx, an
individual resident of the State of Florida, that are subject to the security
interests and liens created by the Security Documents.”
(e) By
deleting in its entirety the definition of “Guarantor” appearing in §1.1 of the
Loan Agreement, and inserting in lieu thereof the following:
“Guarantor. Xxxxxxx
Xxxxxxx and South Alameda, individually or collectively, as the case may
be.”
(f) By
deleting in its entirety the definition of “Guaranty” appearing in §1.1 of the
Loan Agreement, and inserting in lieu thereof the following:
“Guaranty. Collectively,
(i) the Unconditional Guaranty of Payment and Performance dated as of January
30, 2007 made by Xxxxxxx Xxxxxxx in favor of the Agent and the Banks, and (ii)
the Unconditional Guaranty of Payment and Performance dated as of July 10, 2008
made by South Alameda in favor of Agent and the Banks.”
(g) By
deleting in its entirety the definition of “Maturity Date” appearing in §1.1 of
the Loan Agreement, and inserting in lieu thereof the following:
“Maturity
Date. September 30, 2008, or such earlier date on
which the Loans shall become due and payable pursuant to the terms
hereof.”
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(h) By adding
the following at the end of the definition of “Market Value” appearing in
§1.1 of the Loan Agreement:
“; provided, however, that the
computation of Market Value shall also take into account any stock splits or
reverse splits, or shares issued in connection with dividends or other similar
transactions, undertaken by MMPI after the date of this
Agreement. For example, if the Market Value as of the date of
purchase of MMPI common stock is $5.00 per share and MMPI subsequently executes
a 2:1 reverse stock split as to shares of its common stock such that the trading
price of such shares increases by 100%, the Market Value measurement set forth
herein shall divide such trading price by two to account for such reverse
split.”
(i) By
inserting the following definition of “Xxxxxxx Xxxxxxx” in §1.1 of the Loan
Agreement, as follows:
“Xxxxxxx
Xxxxxxx. Xxxxxxx Xxxxxxx, a resident of the State of
Florida.”
(j) By
inserting the following definition of “South Alameda” in §1.1 of the Loan
Agreement, as follows:
“South
Alameda. 000 Xxxxx Xxxxxxx Corporation, a Florida
corporation.”
(k) By
inserting the following definition of “South Alameda Contract” in §1.1 of the
Loan Agreement, as follows:
“South Alameda
Contract. That certain Standard Offer, Agreement and Escrow
Instructions for Purchase of Real Estate dated March 13, 2008 between MMPI and
Xxxxxx Holdings, LLC, as amended and reinstated by Amendment and Reinstatement
of Purchase and Sale Agreement dated June 27, 2008 between Meruelo Xxxxxx - 0000
Xxx Xxxxxxxx Xxxx LLC (as seller) and Xxxxxx Holdings, LLC (as buyer), pursuant
to which Xxxxxx Holdings, LLC has agreed to purchase the South Alameda Property,
and any attachments, schedules or exhibits thereto, as such purchase and sale
agreement may be modified or amended from time to time, or any other agreement
pursuant to which South Alameda shall hereafter agree to sell the South Alameda
Property.”
(l) By
inserting the following definition of “South Alameda Indebtedness” in to §1.1 of
the Loan Agreement, as follows:
(m) “South Alameda
Indebtedness” means any Indebtedness secured by a Lien encumbering the
South Alameda Property.” By inserting the following definition of “South Alameda
Property” in §1.1 of the Loan Agreement, as follows:
“South Alameda
Property. The property located at 0000 Xxxxx Xxx Xxxxxxxx
Xxxx, Xxx Xxxxxxx, Xxxxxxxxxx.”
(n) By
inserting the following definition of “South Alameda Transaction” in §1.1 of the
Loan Agreement, as follows:
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“South Alameda
Transaction. The transaction pursuant to which South Alameda
acquired the South Alameda Property from a subsidiary of MMPI.”
(o) By
deleting §2.5(a) of the Loan Agreement in its entirety, and inserting in lieu
thereof the following new §2.5(a):
“(a) Each
Base Rate Loan shall bear interest for the period commencing with the Drawdown
Date thereof and ending on the date on which such Base Rate Loan is repaid at
the per annum rate equal to the sum of the Base Rate plus one percent
(1.00%).”
(p) By
deleting § 2.9 of the Loan Agreement, and inserting in lieu thereof the
following:
Ҥ2.9. Extension
of Maturity Date. The Borrowers shall have the one-time right
and option to extend the Maturity Date to October 31, 2008, upon satisfaction of
the following conditions precedent, which must be satisfied prior to the
effectiveness of any extension of the Maturity Date:
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(i)
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Extension
Request. The Borrowers shall deliver written notice of
such request (the “Extension Request”) to the Agent not later than the
date which is ten (10) days prior to the Maturity Date (as determined
without regard to such extension). Any such Extension Request
shall be irrevocable and binding on the
Borrowers.
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(ii)
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Payment of Extension
Fee. The Borrowers shall pay to the Agent for the pro rata accounts
of the Banks in accordance with their respective Commitments an extension
fee in an amount equal to twenty-five (25) basis points on the Outstanding
principal balance of the Loans as of the Maturity Date (as determined
without regard to such extension), which fee shall, when paid, be fully
earned and non-refundable under any
circumstances.
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(iii)
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Principal
Reduction. The Borrowers shall have paid to the Agent on
or before the Maturity Date, for the pro rata accounts of the Banks in
accordance with their respective Commitments, the sum of $15,000,000, to
be applied by Agent against the outstanding principal balance of the
Loans; provided, however, that no such payment shall have been made by
sale or other disposition of the Collateral (other than the South Alameda
Property).
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(iv)
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No
Default. On the date the Extension Request is given and
on the Maturity Date (as determined without regard to such extension)
there shall exist no Default or Event of
Default.
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(v)
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Representations and
Warranties. The representations and warranties made by
the Borrowers and the Guarantor in the Loan Documents or otherwise made by
or on behalf of the Borrowers and the Guarantor in connection therewith or
after the date thereof shall have been true and correct in all material
respects when made and shall also be true and correct in all material
respects on the date the Extension Request is given and on the Maturity
Date (as determined without regard to such extension) except to the extent
such representations and warranties expressly relate to an earlier
date.
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(vi)
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Pledged
Stock. There is an effective Registration Statement
covering the resale of the Pledged Stock and all blue sky filings required
for the resell of the Pledged Stock have been made and are
effective.”
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(q) By
deleting §3.2 of the Loan Agreement in its entirety.
(r) By
deleting §4.16 of the Loan Agreement in its entirety, and inserting in lieu
thereof the following new §4.16:
Ҥ4.16
Representative
of Borrowers. Each of Borrowers
hereby appoints Xxxxxxx Xxxxxxx as its agent, attorney in fact and
representative for the purpose of making Requests for Loans, Conversion
Requests, payment and prepayment of Loans, the giving and receipt of notices by
and to Borrowers under this Agreement and all other purposes incidental to any
of the foregoing. Each Borrower agrees that any action taken by
Xxxxxxx Xxxxxxx as the agent, attorney-in fact and representative of such
Borrower shall be binding on such Borrower to the same extent as if directly
taken by such Borrower.”
(s) By
deleting §6.1(a) of the Loan Agreement in its entirety, and inserting in lieu
thereof the following new §6.1(a):
“(a) Incorporation; Good
Standing, Etc. Merco is a California limited liability company
duly organized pursuant to its operating agreement and articles of organization
and amendments thereto filed with the Secretary of the State of California and
is validly existing and in good standing under the laws of the State of
Delaware. The Trust is a trust duly organized pursuant to its trust
agreement and is validly existing and in good standing under the laws of the
State of California. Xxxxxxx Xxxxxxx is a resident of the State of
Florida, residing at 0000 Xxxxxxxx Xxx Xxxx, Xxxxx Xxxxxx,
Xxxxxxx 00000. Xxxxxxx Xxxxxxx maintains an office in
California at 000 Xxxxxxxx Xxxxxx, Xxx Xxxxxxx,
Xxxxxxxxxx 00000. South Alameda is corporation duly
organized pursuant to its bylaws and articles of incorporation and amendments
thereto filed with the Secretary of State of the State of Florida and is validly
existing and in good standing under the laws of the State of
California. Each Borrower and Guarantor (i) has all requisite power
to own its properties and interests and conduct its business as now conducted
and as presently contemplated, and (ii) is in good standing as a
foreign entity and is duly authorized to do business in each other jurisdiction
where a failure to be so qualified in such other jurisdiction could have a
Material Adverse Effect.”
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(t) By
deleting §7.2 of the Loan Agreement in its entirety, and inserting in lieu
thereof the following new §7.2:
Ҥ7.2 Maintenance
of Office. Each Borrower and South Alameda will maintain its
chief executive office at 761 Terminal Street, Building 1, 2nd Floor,
Xxx Xxxxxxx, Xxxxxxxxxx 00000, or at such other place in the United
States of America as such Borrower and South Alameda shall designate upon prior
written notice to the Agent and the Banks, where notices, presentations and
demands to or upon the Borrowers in respect of the Loan Documents may be given
or made. Xxxxxxx Xxxxxxx will maintain its residence at 0000 Xxxxxxxx
Xxx Xxxx, Xxxxx Xxxxxx, Xxxxxxx 00000, or at such other place in the
United States of America as Xxxxxxx Xxxxxxx shall designate upon prior written
notice to the Agent and the Banks, where notices, presentations and demands to
or upon the Xxxxxxx Xxxxxxx in respect of the Loan Documents may be given or
made.”
(u) By adding
the following as a new Section 7.16 to the Loan Agreement:
“7.16 Reinstatement of Refunded
Payments. If, for any reason, any payment to Lender of any of
the Obligations is required to be refunded by Agent or the Banks to Borrowers,
or paid or turned over to any other person, including, without limitation, by
reason of the operation of bankruptcy, reorganization, receivership or
insolvency laws or similar laws of general application relating to creditors’
rights and remedies now or hereafter enacted, Borrowers agree to pay to Agent
and the Banks on demand an amount equal to the amount so required to be
refunded, paid or turned over (the “Turnover Payment”), the obligations of
Borrowers shall not be treated as having been discharged by the original payment
to Agent or the Banks giving rise to the Turnover Payment, and this Agreement
and the Notes and the other Loan Documents shall be treated as having remained
in full force and effect for any such Turnover Payment so made by Agent and the
Banks, as well as for any amounts not theretofore paid to Agent and the Banks on
account of such obligations.”
(v) By
deleting §12.1(r) of the Loan Agreement in its entirety, and inserting in lieu
thereof the following new §12.1(r):
“(r) the
Market Value of the common stock of MMPI shall at any time be less than $1.50
per share;”
(w) By
inserting new §12.1(y) into the Loan Agreement, as follows:
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“(y) if
the South Alameda Transaction (as defined in the First Amendment to Loan
Agreement and Amendment to Other Loan Documents dated July 10, 2008 is set aside
for any reason and Borrowers have not, within ten (10) days thereafter either
(i) made a payment to Lender for application to the outstanding principal
balance of the Loans in the amount of $15,000,000 from a source other than the
Collateral, or (ii) provided, or caused South Alameda to provide, to Lender
additional Collateral satisfactory to Agent having a value of at least
$15,000,000 and executed or caused South Alameda to execute such amendments to
the Security Documents as Agent may reasonably require to reflect the pledge of
such additional Collateral to Agent, together with such other documents,
instruments and opinions of counsel as Agent may reasonably
require.”
3. Base Rate
Loans. Notwithstanding anything to the contrary in the Loan
Agreement or the other Loan Documents, all Loans shall be Base Rate Loans and
bear interest at the Base Rate; it being acknowledged and agreed by Borrowers
that in no event shall Borrowers be permitted to obtain or maintain any LIBOR
Rate Loans from and after the date of this Amendment.
4. Application of
Distributions. Notwithstanding anything to the contrary in the
Loan Agreement, the Cash Collateral Agreement or the other Loan Documents,
Distributions (as defined in the Assignment of Interests) shall, at Agent’s
option, be paid into the Interest Reserve established by §2.11 of the Loan
Agreement, or be applied by Agent as a partial prepayment of the Loans in
accordance with §3.5 of the Loan Agreement. Borrowers acknowledge and agree that
nothing contained in this Amendment shall modify Borrowers’ obligations under
the Loan Documents to promptly pay, or cause MMPI to promptly pay, Distributions
into the Collateral Account (as defined in the Cash Collateral
Agreement).
5. Modification and Extension
Fee. Borrowers, Xxxxxxx Xxxxxxx, KeyBank and Agent hereby
acknowledge and agree Borrowers shall pay to Agent on behalf of the Banks a
modification and extension fee in the amount of One Hundred Sixty Five Thousand
and no/100 Dollars($165,000.00) (the “Modification and Extension Fee”). The
Modification and Extension Fee shall be fully earned when paid and
non-refundable under any circumstances.
6. Payment of Interest and
Legal Fees. Borrowers, Xxxxxxx Xxxxxxx, KeyBank and Agent
hereby acknowledge and agree Borrowers shall pay to Agent on behalf of the Banks
all accrued but unpaid interest due under the Note (including interest at the
Default Rate) and the other Loan Documents (the “Unpaid Interest”), together
with all legal fees and expenses accrued but unpaid by Borrowers under the Loan
Agreement and the other Loan Documents (the “Legal Fees”). Such payments shall
be due and payable by wire transfer of immediately available funds to a bank
account designated by KeyBank on the date hereof.
7. References to Loan Agreement
and Other Loan Documents. All references in the Loan Documents
to the Loan Agreement and other Loan Documents shall be deemed a reference to
the Loan Agreement and such other Loan Documents as modified and amended
herein.
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8. Acknowledgment of Borrowers
and Xxxxxxx Xxxxxxx. Borrowers and Xxxxxxx Xxxxxxx hereby
acknowledge, represent and agree that the Loan Documents, as modified and
amended herein, remain in full force and effect and constitute the valid and
legally binding obligation of Borrowers and Xxxxxxx Xxxxxxx, as applicable,
enforceable against Borrowers and Xxxxxxx Xxxxxxx in accordance with their
respective terms, and that the execution and delivery of this Amendment and any
other documents in connection therewith do not constitute, and shall not be
deemed to constitute, a release, waiver or satisfaction of Borrowers’ or Xxxxxxx
Xxxxxxx’x obligations under the Loan Documents.
9. Representations and
Warranties. Borrowers and Xxxxxxx Xxxxxxx represent and
warrant to Agent and KeyBank as follows:
(a) Authorization. The
execution, delivery and performance of this Amendment and the transactions
contemplated hereby (i) are within the authority of Borrowers, (ii) have been
duly authorized by all necessary proceedings on the part of the Borrowers, (iii)
do not and will not conflict with or result in any breach or contravention of
any provision of law, statute, rule or regulation to which any of the Borrowers
or Xxxxxxx Xxxxxxx is subject or any judgment, order, writ, injunction, license
or permit applicable to any of the Borrowers or Xxxxxxx Xxxxxxx, (iv) do not and
will not conflict with or constitute a default (whether with the passage of time
or the giving of notice, or both) under any provision of the Governing Documents
of, or any agreement or other instrument binding upon any such Person or any of
its properties (including, without limitation, the Collateral), and (v) do
not and will not result in or require the imposition of any lien or other
encumbrance on any of the properties, assets or rights of any of the Borrowers
or Xxxxxxx Xxxxxxx, other than the liens and encumbrances created by the Loan
Documents.
(b) Enforceability. The
execution and delivery of this Amendment are valid and legally binding
obligations of Borrowers and Xxxxxxx Xxxxxxx enforceable in accordance with the
respective terms and provisions hereof, except as enforceability is limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors’ rights and except to the
extent that availability of the remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding
therefor may be brought.
(c) Approvals. The
execution, delivery and performance of this Amendment and the transactions
contemplated hereby do not require the approval or consent of any Person or the
authorization, consent, approval of or any license or permit issued by, or any
filing or registration with, or the giving of any notice to, any court,
department, board, commission or other governmental agency or authority other
than those already obtained.
(d) Reaffirmation. Borrowers
and Xxxxxxx Xxxxxxx reaffirm and restate as of the date hereof each and every
representation and warranty made by the Borrowers, Xxxxxxx Xxxxxxx and their
respective Subsidiaries in the Loan Documents or otherwise made by or on behalf
of such Persons in connection therewith except for representations or warranties
that expressly relate to an earlier date.
10. No
Default. By execution hereof, the Borrowers and Xxxxxxx
Xxxxxxx certify that each of the Borrowers and Xxxxxxx Xxxxxxx is and will be in
compliance with all covenants under the Loan Documents after the execution and
delivery of this Amendment, and that no Default or Event of Default exists after
giving effect to this Amendment.
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11. Waiver of Claims.
Borrowers and Xxxxxxx Xxxxxxx acknowledge, represent and agree that none of such
Persons has any defenses, setoffs, claims, counterclaims or causes of action of
any kind or nature whatsoever with respect to the Loan Documents, the
administration or funding of the Loan or with respect to any acts or omissions
of Agent or KeyBank, or any past or present officers, agents or employees of
Agent or KeyBank, and each of such Persons does hereby expressly waive, release
and relinquish any and all such defenses, setoffs, claims, counterclaims and
causes of action, if any.
12. Ratification. Except
as hereinabove set forth, all terms, covenants and provisions of the Loan
Agreement and the other Loan Documents remain unaltered and in full force and
effect, and the parties hereto do hereby expressly ratify and confirm the Loan
Agreement and the other Loan Documents as modified and amended
herein. Nothing in this Amendment or any other document delivered in
connection herewith shall be deemed or construed to constitute, and there has
not otherwise occurred, a novation, cancellation, satisfaction, release,
extinguishment or substitution of the indebtedness evidenced by the Notes or the
other obligations of Borrowers and Xxxxxxx Xxxxxxx under the Loan
Documents.
13. Effective
Date. This Amendment shall be deemed effective and in full
force and effect as of the date hereof upon satisfaction of each of the
following conditions: (a) the execution and delivery of this Amendment by
Borrowers, Xxxxxxx Xxxxxxx, Agent and KeyBank, (b) the delivery to Agent of the
Unconditional Guaranty of Payment and Performance from South Alameda, in form
and substance satisfactory to Agent, (c) the delivery to Agent of the Assignment
of Interests by Xxxxxx Xxxxxxx and Xxxxxxx Mereulo, in form and substances
satisfactory to Agent, (d) the delivery to Agent of an Acknowledgement of the
foregoing Assignment of Interests executed by South Alameda, in form and
substance satisfactory to Agent, and (e) receipt by KeyBank of the Unpaid
Interest, Legal Fees and the Modification and Extension Fee.
14. Amendment as Loan
Document. This Amendment shall constitute a Loan
Document.
15. Counterparts. This
Amendment may be executed in any number of counterparts which shall together
constitute but one and the same agreement.
16. MISCELLANEOUS. THIS
AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF CALIFORNIA. This Amendment shall be binding upon and shall
inure to the benefit of the parties hereto and their respective permitted
successors, successors-in-title and assigns as provided in the Loan
Agreement.
[Remainder
of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the
parties hereto have hereto set their hands and affixed their seals as of the day
and year first above written.
BORROWERS:
XXXXXXX
XXXXXXX AS TRUSTEE OF THE XXXXXXX XXXXXXX LIVING TRUST U/D/T DATED SEPTEMBER 15,
1989
/s/ Xxxxxxx
Xxxxxxx (SEAL)
Xxxxxxx
Xxxxxxx as Trustee of the Xxxxxxx Xxxxxxx Living Trust U/D/T dated September 15,
1989
MERCO GROUP-ROOSEVELT BUILDING,
LLC, a California limited liability company
By: /s/ Xxxxxxx
Xxxxxxx (SEAL)
Xxxxxxx
Xxxxxxx as Trustee of the Xxxxxxx Xxxxxxx Living Trust U/D/T dated September 15,
1989, as Managing Member and Manager
XXXXXXX
XXXXXXX:
/s/ Xxxxxxx
Xxxxxxx (SEAL)
XXXXXXX
XXXXXXX, a resident of the State of Florida
[SIGNATURES
CONTINUE ON FOLLOWING PAGE]
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BANKS:
KEYBANK
NATIONAL ASSOCIATION
individually
and as Agent
By:/s/ Xxxxx X.
Xxxxxx
Name:
Xxxxx X.
Xxxxxx
Title: Senior Vice
President
