SECOND AMENDMENT TO LOAN AGREEMENT
This SECOND AMENDMENT TO LOAN AGREEMENT (this “Amendment”) dated as of August 8, 2014 (the “Effective Date”), by and among ONE PARK BOULEVARD, LLC, a Delaware limited liability company, having offices at 120 Vantis, Suite 350, Aliso Viejo, California 92656 (“Borrower”), SUNSTONE PARK LESSEE, LLC, a Delaware limited liability company, having offices at 120 Vantis, Suite 350, Aliso Viejo, California 92656 (“Operating Lessee”; Borrower and Operating Lessee are each sometimes referred to as a “Loan Party” and collectively as “Loan Parties”), MUFG UNION BANK, N.A. (f/k/a Union Bank, N.A.), a national banking association, having an office at 230 Park Avenue, New York, New York 10169, as agent for Lenders (as defined in the Loan Agreement (as defined below)) (in its capacity as agent, together with its permitted successors and assigns, “Agent”), MUFG UNION BANK, N.A., a national banking association, having an office at 230 Park Avenue, New York, New York 10169, as a Lender (“Union Bank”), CIBC INC., a Delaware corporation, having offices at 425 Lexington Avenue, 4th Floor, New York, New York 10017, as a Lender (“CIBC”), and COMPASS BANK, an Alabama banking corporation, having offices at 8333 Douglas Avenue, Suite 505, Dallas, Texas 75225, Attention: Commercial Real Estate Lending, as a Lender (“Compass”).
W I T N E S S E T H:
WHEREAS, Loan Parties and Aareal Capital Corporation (“ACC”), as the initial Agent and the initial Lender (as joined into by Union Bank (as successor-in- interest to PB (USA) Realty Corporation), CIBC, Compass and Aareal Bank AG, a German banking corporation (“ABAG”), as Lenders), entered into that certain Loan Agreement dated as of April 15, 2011, as amended by that certain First Amendment to Loan Agreement dated as of July 17, 2012 (the “First Amendment”) (as so amended, the “Existing Loan Agreement”; capitalized terms used herein and not otherwise defined herein shall have the respective meanings given to them in the Existing Loan Agreement, as amended hereby), pursuant to which ACC agreed to make a loan to Borrower in the original principal amount of $240,000,000, of which amount $229,449,512.56 remains outstanding as of the date hereof (the “Existing Loan”);
WHEREAS, in connection with the Existing Loan, in addition to the Existing Loan Agreement, Loan Parties and Sponsors entered into other Loan Documents (as defined in the Existing Loan Agreement) (the “Existing Loan Documents”; the Existing Loan Documents, as amended by the Modification Documents (as defined below), the “Loan Documents”);
WHEREAS, immediately prior to the execution of this Amendment, (a) each of ACC and ABAG assigned all of its respective interest under the Existing Loan Agreement and the Existing Loan Documents as a Lender in portions to each of Union Bank and Compass pursuant to those certain Assignments and Acceptances dated as of the date hereof and (b) ACC resigned as Agent pursuant to Section 9.13(a) of the Existing Loan Agreement (the Loan Parties and the Lenders at the time having waived any notice requirements set forth in said Section 9.13(a) with respect to such resignation) and the Requisite Lenders appointed Union Bank as successor Agent to ACC, in each case, pursuant to that certain letter dated as of the date hereof from ACC to Requisite Lenders, and acknowledged and agreed to by Requisite Lenders and Loan Parties, such that (i) Union Bank, CIBC and Compass currently constitute all Lenders and (ii) Union Bank constitutes the sole Agent;
WHEREAS, the parties hereto desire to enter into this Amendment (i) to confirm ACC’s resignation as Agent and the appointment of Union Bank as Agent, (ii) to reflect each of ACC’s and ABAG’s assignment of all of its interest under the Existing Loan Agreement as a Lender in portions to each of Union Bank, CIBC and Compass and (iii) to amend the Existing Loan Agreement in other respects (the Existing Loan Agreement, as amended by this Amendment, the “Loan Agreement”); and
WHEREAS, in connection with the amendment of the Existing Loan Agreement, Loan Parties, Sponsors, Hilton Management, Lenders and/or Agent are, concurrently herewith, entering into the following documents and agreements, all dated as of the date hereof: (i) a Second Substitute Promissory Note made by Borrower in favor of Union Bank in the principal amount of $76,483,170.90; (ii) a Second Substitute Promissory Note made by Borrower in favor of CIBC in the principal amount of $76,483,170.77; (iii) a Second Substitute Promissory Note made by Borrower in favor of Compass in the principal amount of $76,483,170.89; (iv) a First Amendment to Leasehold and Subleasehold Deed of Trust, Security Agreement, Financing Statement, Fixture Filing and Assignment of Rents and Assignment of Leases and Rents among Loan Parties and Agent; (v) an Omnibus Amendment and Reaffirmation of Loan Documents among Loan Parties, Sponsors and Agent; (vi) a second Loan Fee Letter between Borrower and Agent (the “Supplemental Fee Letter”); and (vii) a Reaffirmation of Manager Subordination and Cooperation Agreement between Hilton Management and Agent, and acknowledged and agreed to by Loan Parties (all of the foregoing, collectively, the “Modification Documents”).
NOW, THEREFORE, for and in consideration of the mutual covenants herein contained and other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged by the parties hereto, Loan Parties, Agent and Lenders do hereby agree as follows:
ARTICLE I.
AMENDMENT TO THE EXISTING LOAN AGREEMENT
SECTION 1.1 Agent. The parties hereto consent, acknowledge and agree that as of the date hereof ACC has resigned as Agent (the Loan Parties and Lenders having waived any notice requirements set forth in Section 9.13(a) of the Existing Loan Agreement with respect to such resignation) and Union Bank has been designated as the successor Agent to ACC.
SECTION 1.2 Definitions.
(a) The following definitions set forth in Section 1.1 of the Existing Loan Agreement are amended to include the First Amendment, this Amendment and the Modification Documents, as applicable: (i) “Loan Agreement”; (ii) “Loan Documents” (including in any document defined in such definition); and (iii) “Security Documents” (including in any document defined in such definition).
(b) The following definitions set forth in Section 1.1 of the Existing Loan Agreement are amended as follows:
(i)The definition of “Authorized Agent Representative” is amended by deleting the text “Joseph Kelly” therefrom and replacing it with the text “Lisa Miller”.
(ii)Clause (b) of the definition of “Cash Sweep Condition” is amended by deleting the text “1.40:1.00” therefrom and replacing it with the text “1.35:1.00”.
(iii)The definition of “Eligible Assignee” is amended by inserting the text “not on a Government List,” immediately prior to the text “not an Affiliate of Loan Parties or Sponsor” therein.
(iv)The definition of “Permitted Encumbrances” is amended by inserting the following text at the end of such definition: “and (vii) the ENA”.
(c) The following definitions set forth in Section 1.1 of the Existing Loan Agreement are amended and restated in their entirety by the following:
“LIBOR” means, (a) the average rate of interest per annum equal to the London Interbank Offered Rate or LIBOR promulgated by the Intercontinental Exchange Benchmark Administration Ltd. (“ICE”, or the successor thereto if ICE is no longer making a London Interbank Offered Rate available) for the equivalent LIBOR Rate Period as published by Bloomberg (or such other commercially available source providing quotations of ICE LIBOR as designated by Agent from time to time) at approximately 11:00 a.m. (London time) two (2) Business Days before the first day of the applicable LIBOR Rate Period for a period of time comparable to the applicable LIBOR Rate Period, (b) if the foregoing method is not available and no such rate is ascertainable as of 11:00 a.m. (London time) on such determination date, Agent shall request the principal London office of any four (4) major reference banks in the London interbank market selected by Agent to provide such bank’s offered quotation (expressed as a percentage per annum) to prime banks in the London interbank market for deposits in U.S. Dollars for a period of time equivalent to the applicable LIBOR Rate Period as of 11:00 a.m. (London time) on such determination date for the amounts of not less than $1,000,000 and if at least two (2) such offered quotations are so provided, LIBOR shall be the arithmetic mean of such quotations; and if fewer than two (2) such quotations are so provided, Agent shall request any three major banks in New York City selected by Agent to provide such bank’s rate (expressed as a percentage per annum) for loans in U.S. Dollars to leading European banks for a period of time equivalent to the applicable LIBOR Rate Period as of approximately 11:00 a.m. (New York City time) on the applicable determination date for amounts of not less than $1,000,000 and if at least two (2) such rates are so provided, LIBOR shall be the arithmetic mean of such rates or (c) if the foregoing methods are not available and no such rate is ascertainable, then at a rate reasonably determined by Agent.
“LIBOR Rate Period” means for any Loan Portion, each period for the computation of Interest on a Loan Portion at a LIBOR Rate. Subject to Section 2.3(e), each LIBOR Rate Period shall have a duration of one (1), three (3) or
six (6) month(s) (in each case, subject to general availability), as selected by Borrower in accordance with Section 2.3(a) and/or Section 2.3(c), or such other period as Borrower and Lenders shall agree. Notwithstanding the foregoing, in the case of a LIBOR Rate Period which would otherwise end after the date which is the Maturity Date, such LIBOR Rate Period shall have a duration equal to the period commencing on the effective date of such LIBOR Rate Period and ending on and including the Maturity Date. Each LIBOR Rate Period shall commence with respect to any outstanding principal of the Loan, on any date selected by Borrower in accordance with Section 2.3; provided, however, that notwithstanding anything in this definition of LIBOR Rate Period to the contrary, (i) if any LIBOR Rate Period would otherwise end on a day which is not a LIBOR Banking Day, such LIBOR Rate Period shall be extended to the next succeeding LIBOR Banking Day, unless the result of such extension would be to carry such LIBOR Rate Period over into another calendar month, in which event such LIBOR Rate Period shall end on the immediately preceding LIBOR Banking Day and (ii) any LIBOR Rate Period that begins on the last LIBOR Banking Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such LIBOR Rate Period) shall end on the last LIBOR Banking Day of the calendar month during which the LIBOR Rate Period would otherwise expire (e.g., one (1), three (3) or six (6) month(s)).
“Loan Fee Letter” means that certain Loan Fee Letter dated as of August 8, 2014 between Agent and Borrower.
“Loan Parties’ Certificate” means that certain Loan Parties’ Certificate dated as of August 8, 2014 made by Loan Parties in favor of Agent.
“Margin” means two and one-quarter of one percent (2.25%) per annum.
“Maturity Date” means August 8, 2019, or such earlier date as the entire principal amount of the Loan shall become due and payable by acceleration or otherwise pursuant to the terms of the Loan Documents.
“Note” means, individually or collectively, as the context may require, (i) that certain Second Substitute Promissory Note made by Borrower in favor of Union Bank in the principal amount of $76,483,170.90, (ii) that certain Second Substitute Promissory Note made by Borrower in favor of CIBC Inc. in the principal amount of $76,483,170.77 and (iii) that certain Second Substitute Promissory Note made by Borrower in favor of Compass Bank in the principal amount of $76,483,170.89, in each case dated as of August 8, 2014.
“Permitted Prepayment Date” means August 8, 2015.
“Requisite Lenders” means, at any time, non-Defaulting Lenders having Commitments representing at least sixty six-percent (66%) of the total Commitments of all non-Defaulting Lenders at such time and, provided there are
two (2) or more non-Defaulting Lenders at such time, not less than two (2) Lenders.
(d) The following definitions are added to Section 1.1 of the Existing Loan Agreement in alphabetical order (and such terms shall also have such definitions in this Amendment):
“Basel III” has the meaning set forth in Section 2.12(b) hereof.
“ENA” means that certain Exclusive Negotiating Agreement dated as of April 10, 2012 between the San Diego Unified Port District and Borrower.
“Union Bank” means MUFG Union Bank, N.A., its successors or assigns by merger, consolidation, sale of all or substantially all of its assets or interests in one or a series of related transactions or other corporate reorganization.
(e) The following definitions from Section 1.1 of the Existing Loan Agreement are deleted in their entirety and all references to such terms in the Existing Loan Agreement and the Existing Loan Documents are deleted in their entirety: “Debt Service Coverage Ratio”, “Default DSCR”, “Default DSCR Letter of Credit”, “Par Prepayment Date”, “Prepayment Fee” and “Reference Banks”. In connection therewith:
(i)The text “Default DSCR or” is deleted in its entirety from the definition of “Spread Maintenance Premium” in the Existing Loan Agreement;
(ii)The text “Prepayment Fee or other” or “the Prepayment Fee or other,” as applicable, is deleted in its entirety from (a) the first sentence of Section 2.4(f) of the Existing Loan Agreement, (b) the last sentence of Section 2.6 of the Existing Loan Agreement, (c) the first sentence of Section 2.12(e) of the Existing Loan Agreement, (d) the second sentence of Section 6.12(h) of the Existing Loan Agreement, and (e) the first sentence of Section 6.13(c)(i) of the Existing Loan Agreement;
(iii)The last sentence of Section 2.4(f) of the Existing Loan Agreement is deleted in its entirety;
(iv)The last sentence of Section 2.4(g) of the Existing Loan Agreement is deleted in its entirety;
(v)The text “without a Prepayment Fee,” is deleted in its entirety from the first sentence of Section 2.12(g) of the Existing Loan Agreement;
(vi)The last sentence of Section 3.2(a) of the Existing Loan Agreement is deleted in its entirety;
(vii)Clause (ii) of Section 6.1(c) of the Existing Loan Agreement is amended and restated in its entirety by the following text: “(ii) intentionally omitted”;
(viii)The text “the Prepayment Fee (unless an Event of Default shall then be continuing, in which event the Prepayment Fee shall be due and payable) or any other” is deleted
in its entirety from Section 6.13(c)(iv) of the Existing Loan Agreement and replaced with the text “any”;
(ix)The first parenthetical of Section 7.2 of the Existing Loan Agreement is amended and restated in its entirety by the following text: “(including, with respect to any acceleration prior to the Permitted Prepayment Date, the Spread Maintenance Premium applicable thereto)”; and
(x)The text “Debt Service Coverage Ratio” and “Default DSCR Letter of Credit,” is deleted in its entirety from Section 9.5(b)(ii)(A) of the Existing Loan Agreement.
SECTION 1.3 Reversion to One-Month LIBOR Rate. Section 2.3(d) of the Existing Loan Agreement is amended and restated in its entirety by the following text:
“(d)Reversion to One-Month LIBOR Rate. If an Authorized Loan Parties’ Representative fails to timely notify an Authorized Agent Representative in accordance with Section 2.3(a)(i), (c) or (e) of Borrower’s election of a LIBOR Rate or Base Rate for any Loan Portion with an expiring LIBOR Rate Period or fails to provide all of the information required by Section 2.3(c) or (e) for the election of a LIBOR Rate, the Applicable Interest Rate on such Loan Portion shall, provided that no Event of Default shall then exist, automatically upon the expiration of such LIBOR Rate Period convert to a LIBOR Rate having a LIBOR Rate Period of one (1) month or, if such one-month LIBOR Rate Period would end after the Maturity Date, a LIBOR Rate Period having a duration equal to the period commencing upon the expiration of such expiring LIBOR Rate Period and ending on and including the Maturity Date, subject to the proviso in the definition of “LIBOR Rate Period” herein.”.
SECTION 1.4 Manner of Payment. The second sentence of Section 2.5(a) of the Existing Loan Agreement is amended and restated in its entirety by the following text:
“Such sums shall be payable by wire transfer to the credit of Agent, at Union Bank, N.A., ABA # 122 000 496, Account # 77070196431, Account Name: CLO Wire Transfer Clearing, Reference: One Park Boulevard, LLC, or to such other account or address as Agent may from time to time designate in writing to Borrower.”.
SECTION 1.5 Increased Costs and Capital Adequacy.
(a) Clause (i) of Section 2.12(b) of the Existing Loan Agreement is amended and restated in its entirety by the following text:
“(i) any change after the date hereof in the general application of any law, rule, regulation or guideline adopted or arising out of (y) the June 2006 report of the Basel Committee on Banking Regulations and Supervisory Practices entitled “Basel II: International Convergence of Capital Measurement and Capital Standards: a Revised Framework - Comprehensive Version”, or (z) the reports and supporting documentation of the Basel Committee on Banking Supervision commonly referred to as the Basel III accord (“Basel III”), in each case together
with any amendments thereto, or any change in the interpretation or administration thereof by any domestic or foreign Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof,”.
(b) The penultimate sentence of Section 2.12(b) of the Existing Loan Agreement is amended and restated in its entirety by the following text:
“Notwithstanding the foregoing, any change based on the reports and supporting documentation of Basel III, together with any amendments thereto, shall not be deemed to have occurred on or prior to the date hereof.”.
SECTION 1.6 Interest Rate Protection Agreement.
(a) Borrower shall keep in full force and effect the Interest Rate Protection Agreement existing as of the date hereof with Commonwealth Bank of Australia that expires on April 15, 2015 (Transaction ID 700217) (the “Existing Interest Rate Protection Agreement”).
(b) Prior to or concurrently with the expiration of the Existing Interest Rate Protection Agreement or any Subsequent Interest Rate Protection Agreement, Borrower shall enter into, and satisfy all conditions precedent to the effectiveness of, one or more subsequent Interest Rate Protection Agreements (collectively, the “Subsequent Interest Rate Protection Agreement”) in an aggregate notional amount equal to one-half (i.e., 50%) of the then outstanding principal amount of the Loan for a minimum term of at least one (1) year commencing on the expiration date of the Existing Interest Rate Protection Agreement or such Subsequent Interest Rate Protection Agreement and which otherwise satisfy the requirements of Section 2.7(a) of the Existing Loan Agreement, provided that, with respect to the requirements set forth in Section 2.7(a)(i) of the Existing Loan Agreement, any such Subsequent Interest Rate Protection Agreement shall protect Borrower against upward fluctuations of an Applicable Interest Rate which is LIBOR (as distinguished from the LIBOR Rate) applicable to a LIBOR Rate Period of one (1) month (as opposed to three (3) months) in excess of the amount which would cause the LIBOR Rate to exceed four and one-quarter percent (4.25%) (as opposed to three and three-quarter percent (3.75%)) per annum for a minimum of at least one (1) year. If any Subsequent Interest Rate Protection Agreement expires prior to the Maturity Date, Borrower shall, prior to or concurrently with the expiration of such Subsequent Interest Rate Protection Agreement, enter into a new Subsequent Interest Rate Protection Agreement that otherwise satisfies the requirements of Section 2.7(a) of the Existing Loan Agreement, as modified by this Section 1.6(b). For the avoidance of ambiguity, and subject to Section 2.7(e) of the Existing Loan Agreement, Borrower shall maintain an Interest Rate Protection Agreement in full force and effect until the Maturity Date and Borrower’s failure to maintain an Interest Rate Protection Agreement pursuant to this Section 1.6(b) during the term of the Loan shall, subject to the provisions of Section 2.7(c) of the Existing Loan Agreement, be deemed to be a breach of Borrower’s obligation to maintain an Interest Rate Protection Agreement pursuant to Section 2.7 of the Existing Loan Agreement.
SECTION 1.7 Letters of Credit. The third sentence of Section 3.6(c) of the Existing Loan Agreement is amended and restated in its entirety by the following text:
“Any such application to the Obligations after an Event of Default which occurs prior to the Permitted Prepayment Date shall be subject to the Spread Maintenance Premium to the extent of the principal reduction and further, only to the extent that in such circumstances the Spread Maintenance Premium would otherwise be payable under the terms of this Loan Agreement.”.
SECTION 1.8 Patriot Act. Section 5.33 of the Existing Loan Agreement is amended by inserting the following text after the text “whether directly or indirectly” therein:
“(but excluding any Person who owns an indirect interest in a Loan Party as a result of ownership of an interest in any Person that is listed on a public exchange in the United States of America and subject to regulation by the United States Securities and Exchange Commission)”.
SECTION 1.9 Ground Lease. The second sentence of Section 5.37 of the Existing Loan Agreement is amended and restated in its entirety by the following text:
“Subject to the conditions set forth in Section 8 of the Ground Lease, the Ground Lease permits the interest of Borrower thereunder to be encumbered by a mortgage.”.
SECTION 1.10 Proof of Required Insurance to Agent. The first sentence of Section 6.11(c) of the Existing Loan Agreement is amended by inserting the following text at the end thereof:
“; provided, further, however, that in the event that Loan Parties notify Agent that Loan Parties are unable to deliver certified copies of such Insurance Policies to Agent, Loan Parties shall make certified copies of such Insurance Policies available for review by Agent at the named insured’s corporate office”.
SECTION 1.11 Debt Service Coverage Ratio. Section 6.33 of the Existing Loan Agreement is amended and restated in its entirety by the following text: “Intentionally Omitted.”. All references in the Existing Loan Agreement to said Section
6.33 shall be disregarded.
SECTION 1.12 Event of Default. Clause (vi) of Section 7.1(o) of the Existing Loan Agreement is amended and restated in its entirety by the following text: “(vi) intentionally omitted;”.
SECTION 1.13 Assignments and Participations. Clause (a) of Section 8.1 of the Existing Loan Agreement is amended by inserting the following text after the text “, in which case the prior unanimous consent of all Lenders shall be required” therein:
“) (provided further that in no event shall Agent consent to any such assignment, sale, negotiation, pledge or hypothecation by any Lender to any Person that is on a Government List)”.
SECTION 1.14 Replacement of Agent. (a) In Section 1.1 of the Existing Loan Agreement, the definition of “Aareal” is deleted in its entirety, and (b)(i) in Sections 6.10(h)(z), 8.8, 9.2(e), 9.3, 10.11 of the Existing Loan Agreement and (ii) in Schedules 2.7 and 8.5 of the Existing Loan Agreement, the text “Aareal” and “Aareal Bank AG”, as applicable, in each place that it appears, is amended and restated with the text “Union Bank”.
SECTION 1.15 Notice Addresses.
(a) The addresses for notices to Loan Parties set forth in Section 10.11 of the Existing Loan Agreement are amended to be the following:
c/o Hilton Worldwide, Inc.
7930 Jones Branch Drive, Suite 1100
McLean, Virginia 22102
Attention: Treasurer with
a copy to:
c/o Hilton Worldwide, Inc.
7930 Jones Branch Drive, Suite 1100
McLean, Virginia 22102
Attention: General Counsel and a
copy to:
c/o Sunstone Hotel Investors, Inc.
120 Vantis, Suite 350
Aliso Viejo, California 92656
Attention: Finance Department and a
copy to:
Latham & Watkins LLP
12670 High Bluff Drive
San Diego, California 92130
Attention: Bruce P. Shepherd, Esq.
(b) The addresses for notices to Agent and Union Bank (as assignee of each of ACC’s and ABAG’s interest as Lender) set forth in Section 10.11 of the Existing Loan Agreement are amended to be the following:
MUFG Union Bank, N.A.
230 Park Avenue
New York, New York 10169
Attention: Portfolio Management with
a copy to:
(prior to January 1, 2015)
Kaye Scholer LLP
425 Park Avenue
New York, New York 10022
Attention: Warren J. Bernstein, Esq.
(on or after January 1, 2015)
Kaye Scholer LLP
250 West 55th Street
New York, New York 10019
Attention: Warren J. Bernstein, Esq.
SECTION 1.16 Amortization Exhibit. Exhibit C of the Existing Loan Agreement is amended and restated in its entirety by Exhibit C attached hereto.
SECTION 1.17 Insurance Requirements. Schedule 6.11 of the Existing Loan Agreement is amended as follows:
(a) Clause (C) of Section (a)(i) of said Schedule 6.11 is amended by deleting the text “Twenty-Five Thousand Dollars ($25,000)” therein and replacing it with the following text: “Fifty Thousand Dollars ($50,000)”.
(b) Section (a)(x) of said Schedule 6.11 is amended by deleting the text “$25,000” therein and replacing it with the following text: “Five Hundred Thousand Dollars ($500,000)”.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
Each Loan Party hereby represents and warrants to Agent and Lenders as follows:
SECTION 2.1 Due Execution. This Amendment and the Modification Documents to which each Loan Party is a party, have been duly executed and delivered, and all necessary actions have been taken to authorize each Loan Party to perform its obligations hereunder and thereunder.
SECTION 2.2 Enforceability. This Amendment and the Modification Documents to which each Loan Party is a party, constitute legal, valid and binding obligations of each Loan Party, subject to principles of equity, bankruptcy, insolvency and other laws generally affecting creditors’ rights and enforcement of debtors’ obligations.
SECTION 2.3 No Violation. The consummation of the transactions contemplated in the Existing Loan Agreement and the Existing Loan Documents, as amended hereby and by the Modification Documents, respectively, the execution and delivery of this Amendment, the Modification Documents to which each Loan Party is a party, and all other agreements and instruments to be executed by each Loan Party in connection herewith and therewith, and the performance by each Loan Party of its obligations hereunder and thereunder, do not and will not (a) violate any Legal Requirement currently in effect, (b) result in a breach of any of the terms,
conditions or provisions of, or constitute a default under any mortgage, deed of trust, indenture, agreement, permit, franchise, license, note or instrument to which any Loan Party is a party or by which it or any of its properties is bound to the extent that any such breach is reasonably likely to result in a Material Adverse Effect, (c) result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any of the assets of any Loan Party (except as contemplated by the Loan Agreement and by the other Loan Documents) or (d) violate any provision of any organizational documents of any Loan Party. No Loan Party is in default with respect to any Legal Requirement currently in effect relating to its formation or organization.
SECTION 2.4 Consents. All consents, approvals, orders or authorizations of, or registrations, declarations or filings with, or other actions with respect to or by, any Governmental Authority or any party to any Permitted Encumbrances that are required in connection with the valid execution, delivery and performance of this Amendment and the Modification Documents and performance by each Loan Party of the Existing Loan Agreement and the other Existing Loan Documents, each as amended hereby and by the Modification Documents, respectively, have been obtained and are in full force and effect.
SECTION 2.5Representations and Warranties.
(a) All of the representations and warranties set forth in the Existing Loan Agreement and Existing Loan Documents, each as amended hereby and by the Modification Documents, respectively, are true and correct in all material respects as of the date hereof as if made on and as of the date hereof, except representations and warranties made as of a specified date.
(b) For purposes of re-making such representations, Section 5.20 of the
Existing Loan Agreement is amended and restated in its entirety to read as follows:
“Loan Parties have not dealt with any brokers or “finders” in connection with that certain Second Amendment to Loan Agreement dated as of August 8, 2014 among Loan Parties, Agent and Lenders.”.
(c) For purposes of re-making such representations, Section 5.26 of the Existing Loan Agreement is amended and restated in its entirety to read as follows:
“Neither Loan Party is a party to any collective bargaining agreement other than the Agreement between Borrower and the International Union of Operating Engineers Local 501 dated as of September 1, 2010. The Agreement between Borrower and Unite Here Local #30 (“Unite Here”) effective as of February 3, 2010 has expired. Property Manager is negotiating with Unite Here to enter into a new CBA (the “New CBA”). Except with respect to the negotiations of the New CBA, there are no material grievances, disputes or controversies with any union or any other organization of employees at the Premises, including employees of Loan Parties, or threats of strikes, work stoppages or any asserted pending demands for collective bargaining by any union or organization.”.
(d) For purposes of re-making such representations, the first and second sentence of Section 5.34 of the Existing Loan Agreement are amended and restated in their entirety to read as follows:
“The rent roll for the Premises dated as of August 6, 2014, heretofore delivered by Borrower to Agent (the “Rent Roll”), is true, correct and complete (in all material respects). As of August 8, 2014, there are no Leases with respect to the Premises other than the Leases that are set forth on the Rent Roll.”.
(e) For purposes of re-making such representations, Sections 5.33 and 5.37 of the Existing Loan Agreement shall be deemed amended pursuant to Section 1.8 and Section 1.9 of this Amendment.
SECTION 2.6 Offsets, Defenses and Counterclaims. No Loan Party has any offsets, defenses or counterclaims against its obligations under the Existing Loan Agreement or the Existing Loan Documents, as amended hereby and by the Modification Documents, respectively, as of the Effective Date, any and all such offsets, defenses and counterclaims, if any, being waived by Loan Parties.
Solely for the purposes of this Article II, the term “Existing Loan Documents” shall mean, collectively, the Existing Loan Agreement, the Note, the Deed of Trust, the Assignment of Leases and Rents, the Assignment of Agreements, the Environmental Indemnity, the Recourse Liability ��Agreement, the Loan Fee Letter, the Loan Parties’ Certificate, the UCC Financing Statements, the Manager SNDA, any Lender Interest Rate Protection Agreement and any Account Agreements, in each case, without giving effect to this Amendment or the Modification Documents.
ARTICLE III.
MISCELLANEOUS
SECTION 3.1 ENA. Agent and Lenders acknowledge that Agent and Lenders consented to the ENA and the terms and conditions therein pursuant to (and for the avoidance of ambiguity, subject to the conditions set forth in) that certain letter agreement dated as of June 13, 2012 from Borrower to the then Agent and Lenders (the “Consent Letter”) and that the Consent Letter remains in full force and effect. In furtherance of the foregoing, Agent and Lenders acknowledge that the Park Parcel Lease Amendment (as defined in the ENA) will become effective upon satisfaction of the conditions precedent thereto set forth in the ENA and in the Consent Letter.
SECTION 3.2 UCC Financing Statements. Loan Parties authorize Agent to file UCC Financing Statements describing Collateral to perfect Agent’s security interest in the Collateral, and Agent may describe the Collateral as “all personal property” or “all assets” or describe specific items of Collateral. All UCC Financing Statements filed before the date of this Amendment were authorized by Loan Parties and are hereby ratified.
SECTION 3.3 Earthquake Insurance. Agent acknowledges and agrees that as of the date hereof Loan Parties’ have obtained, and currently maintain, earthquake insurance with a limit in the amount of $25,000,000, and that as of the date hereof such $25,000,000 limit is acceptable to Agent.
SECTION 3.4 Interest Payment. Loan Parties, Agent and Lenders acknowledge and agree that immediately prior to the execution of this Amendment Borrower is making a payment to ACC, as Agent, in the aggregate amount of $51,896.38 (the “Partial Stub Period Interest”), $34,608.78 of which shall be paid to ACC, as a Lender, and $17,287.60 of which shall be paid to ABAG, as a Lender, in each case, on account of Interest accruing from August 1, 2014 through and including August 8, 2014 on the principal amount of the Loan being assigned by ACC and ABAG, respectively, to Compass and Union Bank, and that Borrower shall have no further payment obligation with respect to the Partial Stub Period Interest.
SECTION 3.5 No Other Amendments. Except as amended hereby and by the Modification Documents, the Existing Loan Agreement and the Existing Loan Documents, respectively, shall remain unmodified and in full force and effect.
SECTION 3.6 Ratification. Each Loan Party ratifies and reaffirms its obligations, indemnities and covenants made under the Existing Loan Agreement and the Existing Loan Documents, each as amended hereby and by the Modification Documents, respectively.
SECTION 3.7 Waiver. This Amendment is not, and shall not be construed to be, a waiver or approval of or consent to any other matter or transaction, or a waiver of any Default or Event of Default of any Loan Party or any of the rights and remedies of Agent or Lenders under the Loan Agreement and the Loan Documents or otherwise.
SECTION 3.8 Headings, Etc. The headings and captions of various Sections of this Amendment have been inserted for convenience only and are not to be construed as defining, modifying, limiting or amplifying, in any way, the scope or intent of the provisions hereof.
SECTION 3.9 Entire Agreement. The Loan Agreement and the other Loan Documents represent the entire agreement between the parties with respect to the subject matter thereof.
SECTION 3.10 Recitals. The recitals of this Amendment constitute a part of this Amendment.
SECTION 3.11 Governing Law. This Amendment shall be governed by, and construed in accordance with, the substantive laws of the State of New York. Loan Parties, Agent and Lenders irrevocably (a) agree that any suit, action or other legal proceeding arising out of or relating to this Amendment or the Modification Documents may be brought in the Courts of the United States of America located in the Southern District of New York or in a state court of record in New York County, New York, (b) consent to the jurisdiction of each such court in any such suit, action or proceeding and (c) waive any objection which it may have to the laying of venue of any such suit, action or proceeding in any of such courts and any claim that any such suit, action or proceeding has been brought in an inconvenient forum. Loan Parties irrevocably consent to the service of any and all process in any such suit, action or proceeding by service of copies of such process to Loan Parties at their address provided in Section 10.11 of the Loan Agreement. Nothing in this Section 3.11, however, shall affect the right of Agent to serve legal process in any other manner permitted by law or affect the right of Agent to bring any suit, action or proceeding against Loan Parties or their property in the courts of any other jurisdictions.
SECTION 3.12 Counterparts. This Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument. A copy of an executed counterpart of this Amendment that is transmitted by facsimile or email in .PDF or .TIF (or other similar) format shall constitute an original for all purposes.
[Remainder of Page Intentionally Left Blank; Signatures to Follow]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective duly authorized officers as of the day and year first above written.
LOAN PARTIES: ONE PARK BOULEVARD, LLC, a Delaware limited liability company |
By: | /s/ Bryan A. Giglia | |
| Name: Bryan A. Giglia Title: Authorized Signatory | |
SUNSTONE PARK LESSEE, LLC, a Delaware limited liability company |
By: | /s/ Bryan A. Giglia | |
| Name: Bryan A. Giglia Title: Authorized Signatory | |
[Signatures continue on the following page]
AGENT: MUFG UNION BANK, N.A., a national banking association, as Agent |
By: | /s/ Andrew E. Woodtli | |
| Name: Andrew E. Woodtli Title: Senior Director | |
[Signatures continue on the following page]
LENDERS: MUFG UNION BANK, N.A., a national banking association |
By: | /s/ Andrew E. Woodtli | |
| Name: Andrew E. Woodtli Title: Senior Director | |
CIBC INC., a Delaware corporation |
By: | | |
| Name: Title: | |
COMPASS BANK, an Alabama banking corporation |
By: | | |
| Name: Title: | |
LENDERS: MUFG UNION BANK, N.A., a national banking association |
By: | | |
| Name: Title: | |
CIBC INC., a Delaware corporation |
By: | /s/ John Lindathal | |
| Name: John Lindathal Title: Managing Director | |
COMPASS BANK, an Alabama banking corporation |
By: | | |
| Name: Title: | |
LENDERS: MUFG UNION BANK, N.A., a national banking association |
By: | | |
| Name: Title: | |
CIBC INC., a Delaware corporation |
By: | | |
| Name: Title: | |
COMPASS BANK, an Alabama banking corporation |
By: | /s/ Don Byerly | |
| Name: Don Byerly Title: Senior Vice President | |
EXHIBIT C
Required Amortization Payments
[See Attached]
| | | | | | | |
Principal | Interest
Rate | Term
(Months) | Monthly
Payment | | | | |
229,449,512.56 | 6.00% | 360 | 1,375,665.76 | | | | |
| | | | | | | |
Month | Beginning | Monthly | | Principal | Ending | Yearly | % |
| Balance | Payment | Interest | Reduction | Balance | Reduction | Amortized |
9/1/2014 | 229,449,512.56 | 1,375,665.76 | 1,147,247.56 | 228,418.20 | 229,221,094.36 | | |
10/1/2014 | 229,221,094.36 | 1,375,665.76 | 1,146,105.47 | 229,560.29 | 228,991,534.07 | | |
11/1/2014 | 228,991,534.07 | 1,375,665.76 | 1,144,957.67 | 230,708.09 | 228,760,825.98 | | |
12/1/2014 | 228,760,825.98 | 1,375,665.76 | 1,143,804.13 | 231,861.63 | 228,528,964.35 | | |
1/1/2015 | 228,528,964.35 | 1,375,665.76 | 1,142,644.82 | 233,020.94 | 228,295,943.41 | | |
2/1/2015 | 228,295,943.41 | 1,375,665.76 | 1,141,479.72 | 234,186.04 | 228,061,757.37 | | |
3/1/2015 | 228,061,757.37 | 1,375,665.76 | 1,140,308.79 | 235,356.97 | 227,826,400.40 | | |
4/1/2015 | 227,826,400.40 | 1,375,665.76 | 1,139,132.00 | 236,533.76 | 227,589,866.64 | | |
5/1/2015 | 227,589,866.64 | 1,375,665.76 | 1,137,949.33 | 237,716.43 | 227,352,150.21 | | |
6/1/2015 | 227,352,150.21 | 1,375,665.76 | 1,136,760.75 | 238,905.01 | 227,113,245.20 | | |
7/1/2015 | 227,113,245.20 | 1,375,665.76 | 1,135,566.23 | 240,099.53 | 226,873,145.67 | Year 1 Total | |
8/1/2015 | 226,873,145.67 | 1,375,665.76 | 1,134,365.73 | 241,300.03 | 226,631,845.64 | 2,817,666.92 | 1.2% |
9/1/2015 | 226,631,845.64 | 1,375,665.76 | 1,133,159.23 | 242,506.53 | 226,389,339.11 | | |
10/1/2015 | 226,389,339.11 | 1,375,665.76 | 1,131,946.70 | 243,719.06 | 226,145,620.05 | | |
11/1/2015 | 226,145,620.05 | 1,375,665.76 | 1,130,728.10 | 244,937.66 | 225,900,682.39 | | |
12/1/2015 | 225,900,682.39 | 1,375,665.76 | 1,129,503.41 | 246,162.35 | 225,654,520.04 | | |
1/1/2016 | 225,654,520.04 | 1,375,665.76 | 1,128,272.60 | 247,393.16 | 225,407,126.88 | | |
2/1/2016 | 225,407,126.88 | 1,375,665.76 | 1,127,035.63 | 248,630.13 | 225,158,496.75 | | |
3/1/2016 | 225,158,496.75 | 1,375,665.76 | 1,125,792.48 | 249,873.28 | 224,908,623.47 | | |
4/1/2016 | 224,908,623.47 | 1,375,665.76 | 1,124,543.12 | 251,122.64 | 224,657,500.83 | | |
5/1/2016 | 224,657,500.83 | 1,375,665.76 | 1,123,287.50 | 252,378.26 | 224,405,122.57 | | |
6/1/2016 | 224,405,122.57 | 1,375,665.76 | 1,122,025.61 | 253,640.15 | 224,151,482.42 | | |
7/1/2016 | 224,151,482.42 | 1,375,665.76 | 1,120,757.41 | 254,908.35 | 223,896,574.07 | Year 2 Total | |
8/1/2016 | 223,896,574.07 | 1,375,665.76 | 1,119,482.87 | 256,182.89 | 223,640,391.18 | 2,991,454.46 | 1.3% |
9/1/2016 | 223,640,391.18 | 1,375,665.76 | 1,118,201.96 | 257,463.80 | 223,382,927.38 | | |
10/1/2016 | 223,382,927.38 | 1,375,665.76 | 1,116,914.64 | 258,751.12 | 223,124,176.26 | | |
11/1/2016 | 223,124,176.26 | 1,375,665.76 | 1,115,620.88 | 260,044.88 | 222,864,131.38 | | |
12/1/2016 | 222,864,131.38 | 1,375,665.76 | 1,114,320.66 | 261,345.10 | 222,602,786.28 | | |
1/1/2017 | 222,602,786.28 | 1,375,665.76 | 1,113,013.93 | 262,651.83 | 222,340,134.45 | | |
2/1/2017 | 222,340,134.45 | 1,375,665.76 | 1,111,700.67 | 263,965.09 | 222,076,169.36 | | |
3/1/2017 | 222,076,169.36 | 1,375,665.76 | 1,110,380.85 | 265,284.91 | 221,810,884.45 | | |
4/1/2017 | 221,810,884.45 | 1,375,665.76 | 1,109,054.42 | 266,611.34 | 221,544,273.11 | | |
5/1/2017 | 221,544,273.11 | 1,375,665.76 | 1,107,721.37 | 267,944.39 | 221,276,328.72 | | |
6/1/2017 | 221,276,328.72 | 1,375,665.76 | 1,106,381.64 | 269,284.12 | 221,007,044.60 | | |
7/1/2017 | 221,007,044.60 | 1,375,665.76 | 1,105,035.22 | 270,630.54 | 220,736,414.06 | Year 3 Total | |
8/1/2017 | 220,736,414.06 | 1,375,665.76 | 1,103,682.07 | 271,983.69 | 220,464,430.37 | 3,175,960.81 | 1.4% |
9/1/2017 | 220,464,430.37 | 1,375,665.76 | 1,102,322.15 | 273,343.61 | 220,191,086.76 | | |
10/1/2017 | 220,191,086.76 | 1,375,665.76 | 1,100,955.43 | 274,710.33 | 219,916,376.43 | | |
11/1/2017 | 219,916,376.43 | 1,375,665.76 | 1,099,581.88 | 276,083.88 | 219,640,292.55 | | |
12/1/2017 | 219,640,292.55 | 1,375,665.76 | 1,098,201.46 | 277,464.30 | 219,362,828.25 | | |
1/1/2018 | 219,362,828.25 | 1,375,665.76 | 1,096,814.14 | 278,851.62 | 219,083,976.63 | | |
2/1/2018 | 219,083,976.63 | 1,375,665.76 | 1,095,419.88 | 280,245.88 | 218,803,730.75 | | |
3/1/2018 | 218,803,730.75 | 1,375,665.76 | 1,094,018.65 | 281,647.11 | 218,522,083.64 | | |
4/1/2018 | 218,522,083.64 | 1,375,665.76 | 1,092,610.42 | 283,055.34 | 218,239,028.30 | | |
5/1/2018 | 218,239,028.30 | 1,375,665.76 | 1,091,195.14 | 284,470.62 | 217,954,557.68 | | |
6/1/2018 | 217,954,557.68 | 1,375,665.76 | 1,089,772.79 | 285,892.97 | 217,668,664.71 | | |
7/1/2018 | 217,668,664.71 | 1,375,665.76 | 1,088,343.32 | 287,322.44 | 217,381,342.27 | Year 4 Total | |
8/1/2018 | 217,381,342.27 | 1,375,665.76 | 1,086,906.71 | 288,759.05 | 217,092,583.22 | 3,371,847.15 | 1.5% |
9/1/2018 | 217,092,583.22 | 1,375,665.76 | 1,085,462.92 | 290,202.84 | 216,802,380.38 | | |
10/1/2018 | 216,802,380.38 | 1,375,665.76 | 1,084,011.90 | 291,653.86 | 216,510,726.52 | | |
11/1/2018 | 216,510,726.52 | 1,375,665.76 | 1,082,553.63 | 293,112.13 | 216,217,614.39 | | |
12/1/2018 | 216,217,614.39 | 1,375,665.76 | 1,081,088.07 | 294,577.69 | 215,923,036.70 | | |
1/1/2019 | 215,923,036.70 | 1,375,665.76 | 1,079,615.18 | 296,050.58 | 215,626,986.12 | | |
2/1/2019 | 215,626,986.12 | 1,375,665.76 | 1,078,134.93 | 297,530.83 | 215,329,455.29 | | |
3/1/2019 | 215,329,455.29 | 1,375,665.76 | 1,076,647.28 | 299,018.48 | 215,030,436.81 | | |
4/1/2019 | 215,030,436.81 | 1,375,665.76 | 1,075,152.18 | 300,513.58 | 214,729,923.23 | | |
5/1/2019 | 214,729,923.23 | 1,375,665.76 | 1,073,649.62 | 302,016.14 | 214,427,907.09 | | |
6/1/2019 | 214,427,907.09 | 1,375,665.76 | 1,072,139.54 | 303,526.22 | 214,124,380.87 | | |
7/1/2019 | 214,124,380.87 | 1,375,665.76 | 1,070,621.90 | 305,043.86 | 213,819,337.01 | Year 5 Total | |
8/1/2019 | 213,819,337.01 | 1,375,665.76 | 1,069,096.69 | 306,569.07 | 213,512,767.94 | 3,579,815.28 | 1.6% |
