Exhibit 99.2
PROMISSORY NOTE
DEFINED TERMS
Execution Date: November 6, 2003 City and State of Signing: Los
Angeles, California
Loan Amount: $146,250,000.00 Interest Rate: 4.73% per annum
Borrower: MAGUIRE PROPERTIES--ONE CAL PLAZA, LLC, a Delaware limited liability
company
Borrower's Address:
Maguire Properties--One Cal Plaza, LLC
555 W. Fifth Street, Suite 5000
Los Angeles, California 90013
Attention: Richard I. Gilchrist
With a copy to:
Paul S. Rutter, Esq.
Gilchrist & Rutter Professional Corp.
1299 Ocean Avenue, Suite 900
Santa Monica, California 90401
Holder: METROPOLITAN LIFE INSURANCE COMPANY, a New York corporation
Holder's Address: Metropolitan Life Insurance Company
10 Park Avenue
Morristown, New Jersey 07962
Attn: Senior Vice President, Real Estate Investments
and:
Metropolitan Life Insurance Company
333 South Hope Street, Suite 1150
Los Angeles, California 90071
Attention: Director and O.I.C.
and:
Metropolitan Life Insurance Company
400 South El Camino Real, Eighth Floor
San Mateo, California 94402
Attention: Associate General Counsel
Maturity Date: December 1, 2010 Advance Date: The date funds are
disbursed to Borrower.
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Interest Only Period: The period from Principal and Interest Installment
the Advance Date and ending on November Date: December 1, 2007.
30, 2007.
Monthly Installment: Equal monthly Permitted Prepayment Period: During
installments of principal and interest the 90 day period prior to the
at the Interest Rate each in the amount Maturity Date, Borrower may prepay
of $815,440.67. the Loan (in whole but not in part)
without a Prepayment Fee on 30 days'
The Monthly Installment is based upon prior written notice. In addition,
an amortization period of 26 years, as commencing on November 1, 2006,
measured from the Principal and Borrower may prepay the Loan (in whole
Interest Installment Date. but not in part) with a Prepayment Fee
on 30 days' prior written notice.
Liable Parties: Maguire Properties, L.P., a Maryland limited partnership
Address of Liable Parties:
555 W. Fifth Street, Suite 5000
Los Angeles, California 90013
Attention: Richard I. Gilchrist
With a copy to:
Paul S. Rutter, Esq.
Gilchrist & Rutter Professional Corp.
1299 Ocean Avenue, Suite 900
Santa Monica, California 90401
Late Charge: An amount equal to four cents ($.04) for each dollar that is
overdue.
Default Rate: An annual rate equal to the Interest Rate plus four percentage
points (400 basis points).
Note: This Promissory Note.
Deed of Trust: Deed of Trust, Security Agreement, and Fixture Filing dated as of
the Execution Date granted by Borrower to the Trustee named in the Deed of Trust
for the benefit of Holder. Loan Documents: This Note, the Deed of Trust and any
other documents related to this Note and/or the Deed of Trust and all renewals,
amendments, modifications, restatements and extensions of these documents.
Guaranty: Guaranty of Recourse Obligations dated as of the Execution Date and
executed by Liable Parties.
Unsecured Indemnity Agreement: Unsecured Indemnity Agreement dated as of the
Execution Date and executed by Borrower and Liable Parties in favor of Holder.
The Unsecured Indemnity Agreement and the Guaranty are not Loan Documents and
shall survive repayment of the Loan or other termination of the Loan Documents.
FOR VALUE RECEIVED, Borrower promises to pay to the order of
Holder at Holder's Address or such other place as Holder may from time to time
designate, the Loan Amount with interest payable in the manner described below,
in money of the United States of America that at the time of payment shall be
legal tender for payment of all obligations.
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Capitalized terms which are not defined in this Note shall
have the meanings set forth in the Deed of Trust.
1. Payment of Principal and Interest. Principal and
interest under this Note shall be payable as follows:
(a) Interest on the funded portion of the Loan
Amount at the Interest Rate for the period from the Advance Date through the
last day of the month in which the Advance Date occurs shall be paid in advance
on the Advance Date, and thereafter shall accrue at the Interest Rate and shall
be paid in arrears on the first day of the second calendar month following the
Advance Date and on the first day of each calendar month thereafter through the
first day of November, 2007;
(b) Commencing on the Principal and Interest
Installment Date and on the first day of each calendar month thereafter, to and
including the first day of the calendar month immediately preceding the Maturity
Date, Borrower shall pay the Monthly Installment; and
(c) On the Maturity Date, a final payment in the
aggregate amount of the unpaid principal sum evidenced by this Note, all accrued
and unpaid interest, and all other sums evidenced by this Note or secured by the
Deed of Trust and/or any other Loan Documents as well as any future loans or
advances under the Deed of Trust that may be made to or on behalf of Borrower by
Holder following the Advance Date (collectively, the "Secured Indebtedness"),
shall become immediately payable in full.
Borrower acknowledges and agrees that a substantial portion of
the original Loan Amount shall be outstanding and due on the Maturity Date.
Interest shall be calculated on a daily basis of the actual
number of days elapsed over a 360-day year.
2. Application of Payments. At the election of Holder,
and to the extent permitted by law, all payments shall be applied in the order
selected by Holder to any expenses, prepayment fees, late charges, escrow
deposits and other sums due and payable under the Loan Documents, and to unpaid
interest at the Interest Rate or at the Default Rate, as applicable. The balance
of any payments shall be applied to reduce the then unpaid Loan Amount.
3. Security. This Note is secured by the Deed of Trust
and other instruments. This Note shall evidence, and the Deed of Trust shall
secure, the Secured Indebtedness.
4. Late Charge. If any payment of interest, any payment
of a Monthly Installment or any payment of a required escrow deposit is not paid
within seven (7) days of the due date, Holder shall have the option to charge
Borrower the Late Charge. The Late Charge is for the purpose of defraying the
expenses incurred in connection with handling and processing delinquent payments
and is payable in addition to any other remedy Holder may have. Unpaid Late
Charges shall become part of the Secured Indebtedness and shall be added to any
subsequent payments due under the Loan Documents.
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5. Acceleration Upon Default. At the option of Holder,
if Borrower fails to pay any sum specified in this Note within seven (7) days
after the due date or if an Event of Default occurs, the Secured Indebtedness,
and all other sums evidenced and/or secured by the Loan Documents, including
without limitation any applicable prepayment fees (collectively, the
"Accelerated Loan Amount") shall become immediately due and payable.
6. Interest Upon Default. The Accelerated Loan Amount
shall bear interest at the Default Rate which shall never exceed the maximum
rate of interest permitted to be contracted for under the laws of the State. The
Default Rate shall commence upon the occurrence of an Event of Default and shall
continue until all defaults are cured.
7. Limitation on Interest. The agreements made by
Borrower with respect to this Note and the other Loan Documents are expressly
limited so that in no event shall the amount of interest received, charged or
contracted for by Holder exceed the highest lawful amount of interest
permissible under the laws applicable to the Loan. If at any time performance of
any provision of this Note or the other Loan Documents results in the highest
lawful rate of interest permissible under applicable laws being exceeded, then
the amount of interest received, charged or contracted for by Holder shall
automatically and without further action by any party be deemed to have been
reduced to the highest lawful amount of interest then permissible under
applicable laws. If Holder shall ever receive, charge or contract for, as
interest, an amount which is unlawful, at Holder's election, the amount of
unlawful interest shall be refunded to Borrower (if actually paid) or applied to
reduce the then unpaid Loan Amount. To the fullest extent permitted by
applicable laws, any amounts contracted for, charged or received under the Loan
Documents included for the purpose of determining whether the Interest Rate
would exceed the highest lawful rate shall be calculated by allocating and
spreading such interest to and over the full stated term of this Note.
8. Prepayment. Borrower shall not have the right to
prepay all or any portion of the Loan Amount at any time during the term of this
Note except as expressly set forth in the Defined Terms. If Borrower provides
notice of its intention to prepay, the Accelerated Loan Amount shall become due
and payable on the date specified in the prepayment notice.
9. Prepayment Fee.
(a) Any tender of payment by Borrower or any
other person or entity of the Secured Indebtedness, other than as expressly
provided in the Loan Documents, shall constitute a prohibited prepayment. If a
prepayment of all or any part of the Secured Indebtedness is made (i) following
an Event of Default and an acceleration of the Maturity Date, (ii) as the result
of the application of money to the principal of the Loan after a casualty or
condemnation, or (iii) in connection with a purchase of the Property or a
repayment of the Secured Indebtedness at any time before, during or after, a
judicial or non-judicial foreclosure or sale of the Property, then to compensate
Holder for the loss of the investment, Borrower shall pay an amount equal to the
Prepayment Fee (as hereinafter defined). Notwithstanding the foregoing, Borrower
shall have the right to prepay this Note in full at any time within 90 days of
the Maturity Date upon thirty (30) days' prior written notice without paying the
Prepayment Fee.
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(b) The "Prepayment Fee" shall be the Prepayment
Ratio (as hereafter defined) multiplied by the difference between (x) and (y),
where (x) is the present value of all remaining payments of principal and
interest including the outstanding principal due on the Maturity Date,
discounted at the rate which, when compounded monthly, is equivalent to the
Treasury Rate compounded semi-annually, plus 25 basis points (0.25%), and (y) is
the amount of the principal then outstanding.
(c) The "Treasury Rate" shall be the annualized
yield on securities issued by the United States Treasury having a maturity equal
to the remaining stated term of this Note, as quoted in the Federal Reserve
Statistical Release [H. 15 (519)] under the heading "U.S. Government Securities
- - Treasury Constant Maturities" for the date on which prepayment is being made.
If this rate is not available as of the date of prepayment, the Treasury Rate
shall be determined by interpolating between the yield on securities of the next
longer and next shorter maturity. If the Treasury Rate is no longer published,
Holder shall select a comparable rate. Holder will, upon request, provide an
estimate of the amount of the Prepayment Fee two (2) weeks before the date of
the scheduled prepayment.
(d) The "Prepayment Ratio" shall be a fraction,
the numerator of which shall be the amount of principal being prepaid, and the
denominator of which shall be the principal then outstanding.
10. Waiver of Right to Prepay Note Without Prepayment
Fee. Borrower acknowledges that Holder has relied upon the anticipated
investment return under this Note in entering into transactions with, and in
making commitments to, third parties and that the tender of any prohibited
prepayment shall, to the extent permitted by law, include the Prepayment Fee.
Borrower agrees that the Prepayment Fee represents the reasonable estimate of
Holder and Borrower of a fair average compensation for the loss that may be
sustained by Holder as a result of a prohibited prepayment of this Note and it
shall be paid without prejudice to the right of Holder to collect any other
amounts provided to be paid under the Loan Documents.
BORROWER EXPRESSLY (A) WAIVES ANY RIGHTS IT MAY HAVE UNDER
CALIFORNIA CIVIL CODE SECTION 2954.10 TO PREPAY THIS NOTE, IN WHOLE OR IN PART,
WITHOUT FEE OR PENALTY, UPON ACCELERATION OF THE MATURITY DATE OF THIS NOTE, AND
(B) AGREES THAT IF, FOR ANY REASON, A PREPAYMENT OF THIS NOTE IS MADE, UPON OR
FOLLOWING ANY ACCELERATION OF THE MATURITY DATE OF THIS NOTE BY HOLDER ON
ACCOUNT OF ANY DEFAULT BY BORROWER UNDER ANY LOAN DOCUMENT, INCLUDING BUT NOT
LIMITED TO ANY TRANSFER, FURTHER ENCUMBRANCE OR DISPOSITION WHICH IS PROHIBITED
OR RESTRICTED BY THE DEED OF TRUST, THEN BORROWER SHALL BE OBLIGATED TO PAY
CONCURRENTLY THE PREPAYMENT FEE SPECIFIED IN SECTION 9. BY INITIALING THIS
PROVISION IN THE SPACE PROVIDED BELOW, BORROWER AGREES THAT HOLDER'S AGREEMENT
TO MAKE THE LOAN AT THE INTEREST RATE AND FOR THE TERM SET FORTH IN THIS NOTE
CONSTITUTES ADEQUATE CONSIDERATION FOR THIS WAIVER AND AGREEMENT.
BORROWER'S INITIALS: /s/ R.I.G.
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11. Liability of Borrower. Upon the occurrence of an
Event of Default, except as provided in this Section 11, Holder will look solely
to the Property and the security under the Loan Documents for the repayment of
the Loan and will not enforce a deficiency judgment against Borrower or the
general partners, the limited partners, or the members of Borrower, if any.
However, nothing contained in this section shall limit the rights of Holder to
enforce any policies of insurance or to proceed against Borrower and the general
partners of Borrower and/or the Liable Parties, if any, (i) to enforce any
Leases entered into by Borrower or its affiliates as tenant, guarantees, or
other agreements entered into by Borrower in a capacity other than as borrower;
(ii) to recover damages for fraud, material misrepresentation, material breach
of warranty or physical waste; (iii) to recover any Condemnation Proceeds or
Insurance Proceeds or other similar funds which have been misapplied by Borrower
or which, under the terms of the Loan Documents, should have been paid to
Holder; (iv) to recover any tenant security deposits, tenant letters of credit
or other deposits or fees paid to Borrower that are part of the collateral for
the Loan or prepaid rents for a period of more than 30 days which have not been
delivered to Holder; (v) to recover Rents and Profits received by Borrower after
the first day of the month in which an Event of Default occurs and prior to the
date Holder acquires title to the Property which have not been applied to the
Loan or in accordance with the Loan Documents to operating and maintenance
expenses of the Property; (vi) to recover damages, costs and expenses arising
from, or in connection with any breach of a covenant contained in Article 6 of
the Deed of Trust or the Unsecured Indemnity Agreement; (vii) to recover all
amounts due and payable pursuant to Sections 11.6 and 11.7 of the Deed of Trust
and any amount expended by Holder in connection with a foreclosure or trustee's
sale under the Deed of Trust; (viii) to recover damages arising from Borrower's
failure to comply with Section 8.1 of the Deed of Trust pertaining to ERISA;
(ix) to recover any damages, costs, expenses or liabilities, including
attorneys' fees, incurred by Holder and arising from any breach of any order,
consent decree or settlement relating to the cleanup of Hazardous Materials, or
any other "environmental provision" (as defined in California Code of Civil
Procedure Section 736, as such Section may be amended from time to time)
relating to the Property or any portion thereof; and/or (x) in accordance with
California Code of Civil Procedure Section 726.5, as such Section may be amended
from time to time to limit the right of Holder to waive the security of the Deed
of Trust as to any parcel of Real Property that is "environmentally impaired" or
is an "affected parcel" (as such terms are defined in such Section), and as to
any Personal Property attached to such parcel, and thereafter to exercise
against Borrower, to the extent permitted by such Section 726.5, the rights and
remedies of an unsecured creditor, including reduction of Holder's claim against
Borrower to judgment, and any other rights and remedies permitted by law
(provided, however, that this clause (x) shall not be applicable if such
impairment occurred during the period of time that Holder owned the Property,
unless and to the extent that any impairment results from any act or omission of
Borrower or its agents, employees or invitees during such period that Holder
owned the Property, or results from the material aggravation of the Hazardous
Material condition after the transfer of the Property to Borrower). If Holder
exercises the rights and remedies of an unsecured creditor in accordance with
the preceding clause (x), Borrower promises to pay to Holder, on demand by
Holder following such exercise, all amounts owed to Holder under any Loan
Document, and Borrower agrees that it and its general partners, if any, will be
personally liable for the payment of all such sums.
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The limitation of liability set forth in this Section 11 shall
not apply and the Loan shall be fully recourse in the event that prior to the
indefeasible repayment in full of the Secured Indebtedness, Borrower commences a
voluntary bankruptcy or insolvency proceeding or an involuntary bankruptcy or
insolvency proceeding is commenced against Borrower and is not dismissed within
ninety (90) days of filing. In addition, this agreement shall not waive any
rights which Holder would have under any provisions of the U.S. Bankruptcy Code
to file a claim for the full amount of the Secured Indebtedness or to require
that the Property shall continue to secure all of the Secured Indebtedness.
12. Waiver by Borrower. Borrower and others who may
become liable for the payment of all or any part of this Note, and each of them,
waive diligence, demand, presentment for payment, notice of nonpayment, protest,
notice of dishonor and notice of protest, notice of intent to accelerate and
notice of acceleration and specifically consent to and waive notice of any
amendments, modifications, renewals or extensions of this Note, including the
granting of extension of time for payment, whether made to or in favor of
Borrower or any other person or persons.
13. Exercise of Rights. No single or partial exercise by
Holder, or delay or omission in the exercise by Holder, of any right or remedy
under the Loan Documents shall waive or limit the exercise of any such right or
remedy. Holder shall at all times have the right to proceed against any portion
of or interest in the Property in the manner that Holder may deem appropriate,
without waiving any other rights or remedies. The release of any party under
this Note shall not operate to release any other party which is liable under
this Note and/or under the other Loan Documents or under the Unsecured Indemnity
Agreement.
14. Fees and Expenses. If Borrower defaults under this
Note, Borrower shall be personally liable for and shall pay to Holder, in
addition to the sums stated above, the costs and expenses of enforcement and
collection, including a reasonable sum as an attorney's fee. This obligation is
not limited by Section 11.
15. No Amendments. This Note may not be modified or
amended except in a writing executed by Borrower and Holder. No waivers shall be
effective unless they are set forth in a writing signed by the party which is
waiving a right. This Note and the other Loan Documents are the final expression
of the lending relationship between Borrower and Holder and there is no
unwritten agreement with respect to the subject matter of the Loan.
16. Governing Law. This Note is to be construed and
enforced in accordance with the laws of the State in which the Property is
located.
17. Construction. The words "Borrower" and "Holder" shall
be deemed to include their respective heirs, representatives, successors and
assigns, and shall denote the singular and/or plural, and the masculine and/or
feminine, and natural and/or artificial persons, as appropriate. The provisions
of this Note shall remain in full force and effect notwithstanding any changes
in the shareholders, partners or members of Borrower. If more than one party is
Borrower, the obligations of each party shall be joint and several. The captions
in this Note are inserted only for convenience of reference and do not expand,
limit or define the scope or intent of any section of this Note.
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18. Notices. All notices, demands, requests and consents
permitted or required under this Note shall be given in the manner prescribed in
the Deed of Trust.
19. Time of the Essence. Time shall be of the essence
with respect to all of Borrower's obligations under this Note.
20. Severability. If any provision of this Note should be
held unenforceable or void, then that provision shall be deemed separable from
the remaining provisions and shall not affect the validity of this Note, except
that if that provision relates to the payment of any monetary sum, then Holder
may, at its option, declare the Secured Indebtedness (together with the
Prepayment Fee) immediately due and payable.
IN WITNESS WHEREOF, Borrower has executed this Note as of the Execution
Date.
MAGUIRE PROPERTIES - ONE CAL PLAZA, LLC
a Delaware limited liability company
By: Maguire Properties, L.P.,
a Maryland limited partnership, Its
Member
By: Maguire Properties, Inc., a
Maryland corporation, Its
General Partner
By: /s/ Richard I. Gilchrist
---------------------------
Richard I. Gilchrist
President and Co-Chief
Executive Officer
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