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ASSIGNMENT OF LEASES
SHORT HILLS ASSOCIATES
200 East Long Lake Road
Bloomfield Hills, Michigan 48304
(Assignor)
and
METROPOLITAN LIFE INSURANCE COMPANY
One Madison Avenue
New York, New York 10010
(Assignee)
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Dated: As of April 15, 1999
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ASSIGNMENT OF LEASES
DEFINED TERMS
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Execution Date: As of April 15, 1999
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Loan: A first mortgage loan in an amount of $270,000,000.00 from Assignee to
Assignor
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Assignor & Address: Short Hills Associates, a New Jersey general partnership
200 East Long Lake Road
Bloomfield Hills, Michigan 48304
Attention: Treasurer
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Assignee & Address: Metropolitan Life Insurance Company,
a New York corporation
200 Park Avenue, 12th Floor
New York, New York 10166
Attention: Senior Vice-President
Real Estate
and: Metropolitan Life Insurance Company
One Madison Avenue
New York, New York 10010-3690
Attention: Vice-President and Investment Counsel
Real Estate Investments
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Note: Two Promissory Notes executed by Assignor in favor of Assignee in the
respective principal amounts of $200,000,000.00 and $70,000,000.00 dated as of
the Execution Date, together with all extensions, renewals, modifications,
restatements and amendments thereof (collectively, the "Note").
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Mortgage: Mortgage, Security Agreement and Fixture Filing dated as of the
Execution Date, executed by Assignor to secure repayment of the Note, together
with all extensions, renewals, modifications, restatements and amendments
thereof. The Mortgage will be recorded in the records of the County in which the
Property (defined below) is located.
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THIS ASSIGNMENT OF LEASES (this "Agreement") is entered into by Assignor
as of the Execution Date in favor of Assignee and affects the Land described in
Exhibit A attached to this Agreement. Capitalized terms which are not defined in
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this Agreement shall have the respective meanings set forth in the Mortgage.
R E C I T A L S
A. Assignee has loaned or will loan to Assignor the Loan which is
evidenced by the Note. The payment of the Note is secured by the Mortgage which
encumbers Assignor's interest in the real property described in Exhibit A
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attached to this Agreement (the "Land") and Assignor's interest in the
improvements and personal property and equipment situated on the Land (the
"Improvements"; collectively with the Land, the "Property"); and
B. Assignor desires to absolutely, presently and unconditionally assign to
Assignee all of its right, title and interest in and to (i) all leases which now
exist that affect the Property, including, without limitation, the leases
referred to in Exhibit B attached to this Agreement and more particularly
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described in the certified rent roll of even date herewith delivered by Assignor
to Assignee (the "Rent Roll"), (ii) all leases entered into after the date of
this Agreement, (iii) all lease extensions, modifications, amendments,
expansions and renewals of the leases described in (i) and (ii), and (iv) all
guarantees of tenants' obligations and extensions, modifications, amendments and
renewals of any guarantees of any of the leases. The documents described in this
Recital B are collectively referred to as the "Leases".
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NOW THEREFORE, in consideration of the Recitals and for good and
valuable consideration, Assignor agrees with Assignee and its successors and
assigns as follows:
1. Payment of Note. Assignor desires to secure (a) the timely payment of
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the principal of and interest on the Note and all other indebtedness secured by
the Mortgage; and (b) the full compliance with the terms, conditions, covenants
and agreements contained in the Note, the Mortgage and the other documents
executed by Assignor in connection with the Loan.
2. Present and Absolute Assignment of Leases. Assignor absolutely,
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presently and unconditionally grants and assigns to Assignee all of Assignor's
right, title and interest in and to the Leases. This grant includes without
limitation: (a) all rent payable under the Leases; (b) all tenant security
deposits held by Assignor pursuant to the Leases; (c) all additional rent
payable under the Leases; (d) all proceeds of insurance payable to Assignor
under the Leases and all awards and payments on account of any taking or
condemnation; and (e) all claims, damages and other amounts payable to Assignor
in the event of a default under or termination of any of the Leases, including
without limitation all of Assignor=s claims to the payment of damages arising
from any rejection by a tenant of any Lease under the Bankruptcy Code as amended
from time to time. All of the items referred to in this Section 2 are
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collectively referred to in this Agreement as the "Income".
3. No Cancellation or Modification of Leases. Assignor covenants and
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agrees that it shall not, without the express written consent of Assignee, (a)
enter into or extend any Lease unless the Lease complies with the Leasing
Guidelines which are attached to the Mortgage as Exhibit B, or (b) cancel or
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terminate any Leases (except in the case of a default) unless Assignor has
entered into new Leases covering all of the premises of the Leases being
terminated or surrendered, or unless in compliance with the Leasing Guidelines,
or (c) modify or amend any Leases in any material way or reduce the rent or
additional rent, unless in compliance with the Leasing Guidelines, or (d)
consent to an assignment of the tenant's interest or to a subletting of any
Lease unless the tenant
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remains liable under the Lease following the assignment or subletting, unless
in compliance with the Leasing Guidelines, or (e) accept payment of advance
rents or security deposits in an amount in excess of one month's rent, or (f)
enter into any options to purchase the Property.
If any of these acts described in this Section 3 are done without the
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consent of Assignee, at the option of Assignee, they shall constitute a breach
of the terms of this Agreement and of the Mortgage.
4. Specific Covenants of Assignor. Assignor covenants and agrees:
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(a) To perform fully all material obligations, duties, and
agreements of landlord under the Leases;
(b) To deposit all security deposits delivered by tenants in
connection with the Leases in accordance with applicable law;
(c) At Assignor's sole cost and expense, to appear in and
defend any action or proceeding arising under the Leases or which is
connected with the obligations, duties or liabilities of landlord, tenant
or any guarantor and to pay all costs and expenses of Assignee, including
reasonable attorneys' fees, in any action or proceeding in which Assignee
may appear in connection with this Assignment;
(d) If Assignor fails to make any payment or to do any acts
required by this Agreement, then if an Event of Default exists Assignee
may in its sole discretion and without further notice to Assignor perform
Assignor's obligations under the Leases as Assignee may deem necessary, at
Assignor's cost and expense. These acts may include without limitation
appearing in and defending any proceeding connected with the Leases,
including without limitation any proceedings of any tenants under the
Bankruptcy Code. No action by Assignee shall release Assignor from its
obligation under this Agreement. Assignor irrevocably appoints Assignee
its true and lawful attorney to exercise it rights under this Agreement if
an Event of Default exists, which appointment is coupled with an interest
and with full power of substitution;
(e) To pay immediately upon demand all sums expended by
Assignee under this Agreement, together with interest at the Default Rate
(as defined in the Note). These expenditures shall be secured by the
Mortgage;
(f) If a petition under the Bankruptcy Code shall be filed by
or against Assignor and Assignor, as landlord, shall determine to reject
any lease pursuant to Bankruptcy Code section 365(a), then Assignee
shall have the right, but not the obligation, to demand that Assignor
assume and assign the lease to Assignee and Assignor shall provide
adequate assurance of future performance under the lease; and
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(g) Assignee's rights under this Agreement may be exercised
either independently of or concurrently with any other right in this
Agreement, the Mortgage or in any other document securing the Note. No
action taken by Assignee under this Agreement shall cure or waive any
default nor affect any notice under the Mortgage.
5. Leasing of Property. Assignor covenants and agrees upon request to
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confirm in writing the assignment to Assignee of all subsequent Leases of the
Property upon the terms set forth in this Agreement. Notwithstanding the
preceding sentence, the terms and provisions of this Agreement shall apply
automatically to any Leases entered into after the Execution Date.
6. Representations and Warranties. Assignor makes the following
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representations and warranties in connection with the Leases:
(a) There are no leases or occupancy agreements affecting the
Property except the leases and amendments listed on the Rent Roll and
Assignor has delivered to Assignee true, correct and complete copies of
all leases, including amendments (collectively, "Existing Leases") and all
guaranties and amendments of guaranties given in connection with the
Existing Leases (the "Guaranties").
(b) All Existing Leases and Guaranties are in full force and
effect in all material respects without any oral or written modification
except as set forth in writing in the copies delivered to Assignee.
(c) Assignor has received no notices of defaults by Assignor
under the Existing Leases and Guaranties and, to the best knowledge of
Assignor, there are no defaults by any tenants under the Existing Leases
or any guarantors under the Guaranties except as heretofore disclosed in
writing to Assignee by letter dated March 24, 1999 from Steven E. Eder,
Senior Vice President and Treasurer of The Taubman Company (the "Manager's
Letter").
(d) To the best knowledge of Assignor, none of the tenants now
occupying 10% or more of the Property or having a current lease affecting
10% or more of the Property is the subject of any bankruptcy,
reorganization or insolvency proceeding or any other debtor-creditor
proceeding.
(e) Except only for rent and additional rent for the current
month, Assignor has not accepted under any of the Leases any payment of
advance rent, additional rent or security deposit in an amount that is
more than one month's rent and additional rent, except as heretofore
disclosed in writing to Assignee in the Manager's Letter.
(f) Assignor has deposited all security deposits delivered in
connection with the Existing Leases in accordance with applicable law.
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(g) No tenant under any Existing Lease has asserted in writing
any defense, set-off or counterclaim with respect to its tenancy or its
obligations under its lease, and, to the best of Assignor's knowledge, no
such defense, set-off or counterclaim exists, except as heretofore
disclosed in writing to Assignee in the Manager's Letter.
(h) There are no material unfulfilled landlord obligations due
to tenants for tenant improvements, moving expenses or rental concessions
or other matters, and all material credits required to be paid or
contributed by Assignor under the Existing Leases have been paid or
contributed in full, except as heretofore disclosed in writing to Assignee
in the Manager's Letter.
(i) None of the Leases, Income or Rents and Profits have been
assigned, pledged, hypothecated or otherwise encumbered or transferred by
Assignor except to the extent provided in the Loan Documents.
(j) Intentionally Omitted.
(k) Assignor has not done any act which might prevent Assignee
from exercising its rights under this Agreement.
7. License to Collect Monies Until Default by Assignor. So long as no
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Event of Default (as defined in the Mortgage) exists (a "Default"), Assignor
shall have a license to receive and use all Income. Upon the occurrence of a
Default, whether or not legal proceedings have commenced, and without regard to
waste, adequacy of security for the Secured Indebtedness or solvency of
Assignor, the license herein granted shall automatically expire and terminate,
without notice by Assignee (any such notice being hereby expressly waived by
Assignor). Assignee shall thereupon and thereafter have all right, power and
authority to exercise and enforce any and all of its rights and remedies as
provided herein, under any of the other Loan Documents or by law or in equity.
Such rights and remedies shall expressly include the right to exercise and
enjoy, in Assignee's sole and absolute discretion, all of the rights, powers and
benefits under the Leases assigned to Assignee hereunder, it being understood
and agreed that Assignee shall not be liable, and Assignor shall at all times
remain solely liable, to the tenants to perform any and all duties or
obligations owing to such tenants under the Leases, unless Assignee shall elect,
in its sole and absolute discretion, to undertake such duties or obligations. If
the Default is cured by Assignor, the license to receive and use all Income
shall be reinstated.
8. Entry by Assignee and Receiver. If a Default exists, Assignee is
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authorized either in person or by agent, with or without bringing any action or
proceeding or having a receiver appointed by a court, (a) to enter upon, take
possession of, manage and operate the Property and collect the Income, and (b)
to make, enforce, modify, and accept the surrender of the Leases. Assignee is
authorized to take these actions either with or without taking possession of the
Property. In connection with this entry, Assignor authorizes Assignee to perform
all acts necessary for the operation and maintenance of the Property. Assignee
may sue for or otherwise collect all Income, including those past due and
unpaid, and apply the Income, less costs and expenses of operation and
collection, including reasonable attorneys' fees, to the indebtedness secured by
the Mortgage in such
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order as Assignee may determine. Assignee's exercise of its rights under this
Section 8 shall not be deemed to cure or waive any Default.
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9. Indemnification. Assignor shall indemnify Assignee against and hold it
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harmless from any and all liability, claims, loss or damage which it may incur
under the Leases or under this Agreement except for Assignee's negligence or
wilful misconduct.
10. Mortgagee in Possession. To the fullest extent permitted by law,
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neither the assignment of Income to Assignee nor the exercise by Assignee of any
of its rights or remedies under this Agreement, including without limitation,
the entering into possession or the appointment of a receiver shall be deemed to
make Assignee a "mortgagee-in-possession" or otherwise liable with respect to
the Property. Although Assignee has the right to do so, it shall not be
obligated to perform any obligation under the Leases by reason of this
Agreement. To the fullest extent permitted by law, neither this Agreement nor
any action or inaction on the part of Assignee shall constitute an assumption on
the part of Assignee of any obligation or liability under any of the Leases.
11. Reconveyance and Termination. Upon the payment in full of the Loan, as
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evidenced by the recording of an instrument of full reconveyance of the
Mortgage, this Agreement shall be void and of no effect.
12. Tenants Entitled to Rely on Assignee's Requests. Assignor irrevocably
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authorizes and directs the tenants and their successors, upon receipt of any
written request of Assignee stating that a Default exists, to pay to Assignee
the Income due and to become due under the Leases. Assignor agrees that the
tenants shall have the right to rely upon any such statement without any
obligation to inquire as to whether a Default actually exists and regardless of
any claim of Assignor to the contrary. Assignor agrees that it shall have no
claim against the tenants for any Income paid by the tenants to Assignee. Upon
the curing of all Defaults, Assignee shall give written notice to the tenants to
recommence paying the rents to Assignor.
13. Successors and Assigns. This Agreement shall be binding upon the
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successors and assigns of Assignor and shall inure to the benefit of and be
enforceable by Assignee, its successors and assigns and any trustee appointed
for the benefit of the holder of the Note. If more than one person, corporation,
partnership or other entity shall execute this Agreement, then the obligations
of the parties executing the Agreement shall be joint and several.
14. Exculpation. The provisions of Section 9.01 of the Mortgage are
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incorporated herein by this reference to the fullest extent as if the text of
such section were set forth in its entirety herein.
15. Notices. All notices pursuant to this Agreement shall be given in
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accordance with the Notice provision of the Mortgage, which is incorporated into
this Agreement by this reference.
16. Governing Law. This Agreement and the rights and obligations of the
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parties under this Agreement shall in all respects be governed by, and construed
and enforced in accordance with, the laws of the State in which the Property is
located, without regard to conflict of laws principles.
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17. Miscellaneous. This Agreement may be modified, amended, waived, or
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terminated only by an instrument in writing signed by the party against which
enforcement of such modification, amendment, waiver, or termination is sought.
No failure or delay in exercising any of these rights shall constitute a waiver
of any Default. Assignor, at its expense, will execute all documents and take
all action that Assignee from time to time may reasonably request to preserve
and protect the rights provided under this Agreement. The headings in this
Agreement are for convenience of reference only and shall not expand, limit or
otherwise affect the meanings of the provisions. This Agreement may be executed
in several counterparts, each of which shall be an original, but all of which
shall constitute one document.
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IN WITNESS WHEREOF, this Assignment of Leases is executed as of the
Execution Date.
SHORT HILLS ASSOCIATES, a New
Jersey general partnership
By: The Taubman Realty Group Limited
Partnership, a Delaware limited
partnership, its general partner
By: /s/ Steven Eder
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Name: Steven Eder
Title: Authorized Signatory
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