Exhibit 10.8
ASSUMPTION AND MODIFICATION AGREEMENT
SENIOR MEZZANINE LOAN
THIS ASSUMPTION AND MODIFICATION AGREEMENT - SENIOR MEZZANINE LOAN
("AGREEMENT") is dated as of April 14, 2004 ("EFFECTIVE DATE"), among FLEET
NATIONAL BANK ("Lender"), having an address at 100 Federal Street, Boston,
Massachusetts 02110, Attn: Real Estate Division; BRE/PARK PLACE MEZZANINE,
L.L.C., a Delaware limited liability company ("ORIGINAL BORROWER"), having an
address at c/o Blackstone Real Estate Advisors, 345 Park Avenue, 32nd Floor, New
York, New York 10154, and MP - PARK PLACE SENIOR MEZZANINE, LLC, a Delaware
limited liability company ("NEW BORROWER"), having an address at 333 South Grand
Avenue, Suite 400, Los Angeles, California 90071. New Borrower's taxpayer
identification number is 20-0896248. Original Borrower and New Borrower are
hereinafter sometimes collectively referred to as "BORROWER PARTIES".
PRELIMINARY STATEMENT
A. Original Borrower is the sole member of BRE/Park Place L.L.C., a
Delaware limited liability company ("ORIGINAL PROPERTY OWNER"), which is the
current fee simple owner of that certain real property ("LAND") and the
buildings and improvements thereon ("IMPROVEMENTS"), located at 3333, 3337 and
3345-3355 Michelson Drive, in Irvine, Orange County, California (the Land and
the Improvements are hereinafter sometimes collectively referred to as the
"PROJECT").
B. Lender is the current owner and holder of a loan ("LOAN") in the
original principal amount of $26,500,000.00 made pursuant to that certain
Mezzanine Loan and Security Agreement, dated as of September 18, 2002, between
German American Capital Corporation ("ORIGINAL LENDER") and Original Borrower,
as amended by that certain First Amendment to Mezzanine Loan and Security
Agreement and Other Loan Documents, dated as of September 30, 2002 (the "FIRST
AMENDMENT"), between Original Lender and Original Borrower (as amended, from
time to time, the "LOAN AGREEMENT"), which is evidenced by a Mezzanine Note,
dated as of September 18, 2002, in the principal amount of $26,500,000.00,
executed by Original Borrower in favor of Original Lender, as amended by the
First Amendment (as amended, from time to time, the "NOTE"), and secured by,
among other things, that certain Pledge and Security Agreement, dated as of
September 18, 2002, made by Original Borrower in favor of Original Lender, as
amended by the First Amendment (as amended, from time to time, the "ORIGINAL
SECURITY INSTRUMENT" and, collectively with the Loan Agreement, the Note, and
any and all other documents evidencing, securing or in any manner relating to
the Loan, as more particularly described in Exhibit A attached hereto, the "LOAN
DOCUMENTS").
C. The Loan and the Loan Documents were assigned by Original Lender to
Lender pursuant to that certain Omnibus Assignment of Mezzanine Loan and
Mezzanine Loan Documents dated as of October 21, 2002, between Original Lender
and Lender.
D. New Borrower is the sole member of Maguire Properties - Park Place,
LLC, a Delaware limited liability company ("NEW PROPERTY OWNER"), which desires
to purchase the Property from the Original Property Owner.
E. In connection with such purchase of the Project by New Property
Owner, Original Property Owner desires to assign and New Property Owner desires
to assume all of the obligations of Original Property Owner under the Loan
Documents (Mortgage) and Original Borrower desires to assign and New Borrower
desires to assume all of the obligations of Original Borrower under the Loan
Documents.
F. A sale of Original Borrower's direct or indirect interests in the
Project to, and the assumption of the Loan by, a third party without the consent
of the holder is prohibited by the terms of the Original Security Instrument and
the terms of the Loan Agreement.
G. Subject to the terms and conditions of this Agreement, the Lender
has agreed to consent to the following requested actions (the "REQUESTED
ACTIONS"): (i) Original Property Owner selling its interest in the Project to
New Property Owner, (ii) New Property Owner assuming all of Original Property
Owner's obligations under the Loan Documents (Mortgage) (as defined in the Loan
Agreement), (iii) New Borrower assuming all of Original Borrower's obligations
under the Loan Documents, (iv) Lender recognizing New Borrower as the "Borrower"
under the Loan and Loan Documents, and (v) New Borrower pledging its one hundred
percent (100%) membership interest in New Property Owner (the "New Property
Owner Interests") as additional collateral for the Loan.
H. All terms not defined herein shall have the meaning set forth in the
Loan Agreement.
In consideration of $10.00 paid by each of the parties to the other,
the mutual covenants set forth below, and other good and valuable consideration,
receipt and sufficiency of which are acknowledged, the parties agree as follows:
ARTICLE I
ACKNOWLEDGMENTS, WARRANTIES AND REPRESENTATIONS
1.1. ORIGINAL BORROWER REPRESENTATIONS. As a material inducement to
Lender to enter into this Agreement and to consent to the Requested Actions,
Original Borrower acknowledges, warrants, represents and agrees to and with
Lender as follows:
(a) Authority of Original Borrower. Original Borrower is a
duly organized, validly existing limited liability company in good standing
under the laws of the State of Delaware and is duly authorized to transact
business in the State of California. David Z. Hirsh is a Vice President of
Original Borrower. David Z. Hirsh, acting alone, without the joinder of any
other manager, member or officer of Original Borrower or any other party has the
power and authority to execute this Agreement on behalf of and to duly bind
Original Borrower under this Agreement. The execution and delivery of, and
performance under, this Agreement by Original Borrower has been duly and
properly authorized pursuant to all requisite company action and will not (i)
violate any provision of any law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award presently in effect having
applicability to Original Borrower or the certificate of formation or the
operating agreement or any other organizational document of Original Borrower
that would materially impair the status of Original Borrower or its ability to
operate its business, or (ii) result in a breach of or constitute or cause a
default under any
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indenture, agreement, lease or instrument to which Original Borrower or Original
Property Owner is a party or by which the Project or the Collateral (as defined
in the Loan Agreement) may be bound or affected that would materially impair the
Project, the Collateral or Original Borrower's ability to operate its business.
(b) Compliance with Laws. To Original Borrower's knowledge,
all permits, licenses or other evidences of authority to use and operate the
Project as it is presently being operated and as contemplated by the Loan
Documents are current, valid and in full force and effect. Neither Original
Borrower nor Original Property Owner has received any written notice from any
governmental entity claiming that Original Property Owner or the Project is not
presently in compliance with any laws, ordinances, rules and regulations bearing
upon the use and operation of the Project.
(c) Rent Roll. The Rent Roll ("RENT ROLL") attached hereto and
made a part hereof as EXHIBIT C is a true, complete and accurate summary of all
tenant leases ("LEASES") affecting the Project as of the date of this Agreement.
(d) Leases. The Leases are the only leases affecting the
Project and are currently in full force and effect. Neither Original Borrower
nor Original Property Owner has been notified in writing of any uncured landlord
default under any of the Leases; there are no leasing broker's or finder's
commissions of any kind due or to become under any Lease or the Project except
as may be applicable to future lease renewals or expansions; the rents and
security deposits under the Leases shown on the Rent Roll are true and correct
in all material respects; Neither Original Borrower nor Original Property Owner
has received any rents prepaid more than one month in advance or given any
concessions for free or reduced rent under the Leases not disclosed on the Rent
Roll and will not accept any prepaid rents for more than one month in advance.
Except as specified on the Rent Roll, all tenants at the Project are currently
in possession of their leased premises and are operating businesses from their
leased premises.
(e) REA's. The REAs affecting the Project are currently in
full force and effect. Each of Original Borrower and Original Property Owner is
unaware of any uncured default under any of the REAs by any party thereto and
all sums payable by Original Property Owner under the REAs have been paid in
full.
(f) Title to Project and Collateral and Legal Proceedings.
Original Property Owner is the current fee simple owner of the Project free and
clear of all liens, restrictions, claims, pledges, encumbrances, changes or
rights of third parties, other than those permitted under the Loan Agreement.
Original Borrower is the current owner of 100% of the membership interests in
the Original Property Owner (the "Original Property Owner Interests"), free and
clear of all liens, restrictions, claims, pledges, encumbrances, changes or
rights of third parties, other than those in favor of Lender. There are no
pending or to Original Borrower's current actual knowledge threatened suits,
judgments, arbitration proceedings, administrative claims, executions or other
legal or equitable actions or proceedings against Original Borrower, Original
Property Owner, Collateral or the Project that if decided adversely to Original
Borrower or Original Property Owner would have a material adverse affect on
Original Borrower, Original Property Owner, the Collateral or the Project; or
any pending or threatened condemnation proceedings or annexation proceedings
affecting the Project; or any agreements to convey any
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portion of the Project or the Collateral, or any rights thereto to any person or
entity not disclosed in this Agreement, including, without limitation, any
government or governmental agency.
1.2. ACKNOWLEDGMENTS, WARRANTIES AND REPRESENTATIONS OF NEW BORROWER.
As a material inducement to Lender to enter into this Agreement and to consent
to the Requested Actions, New Borrower acknowledges, warrants, represents and
agrees to and with Lender as follows:
(a) Authority of New Borrower.
(i) New Borrower. New Borrower is a duly organized,
validly existing limited liability company in good standing under the laws of
the State of Delaware and is duly authorized to transact business in the State
of California. MP-Park Place Junior Mezzanine, LLC, a Delaware limited liability
company ("MP JUNIOR"), the sole member of New Borrower, acting alone without the
joinder of any other member or manager of New Borrower or any other party, has
the power and authority to execute this Agreement on behalf of and to duly bind
New Borrower under this Agreement and the Loan Documents. The execution and
delivery of, and performance under, this Agreement by New Borrower has been duly
and properly authorized pursuant to all requisite company action and will not
(i) violate any provision of any law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award presently in effect having
applicability to New Borrower or the certificate of formation or the operating
agreement of New Borrower or any other organizational document of New Borrower,
or (ii) result in a breach of or constitute or cause a default under any
indenture, agreement, lease or instrument to which New Borrower is a party or by
which the Project or the Collateral may be bound or affected.
(ii) MP Junior. MP Junior is a duly organized,
validly existing limited liability company in good standing under the laws of
the State of Delaware and, if required by California law, is authorized to
transact business in the State of California. Maguire Properties, L.P., a
Maryland limited partnership ("MAGUIRE LP") is the sole member of MP Junior. MP
Junior, acting alone without the joinder of any other member or manager of MP
Junior or any other party, has the power and authority to execute this Agreement
on behalf of and to duly bind MP Junior under this Agreement and the Loan
Documents. The execution and delivery of, and performance under, this Agreement
and the Loan Documents by MP Junior, has been duly and properly authorized
pursuant to all requisite company action and will not (i) violate any provision
of any law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award presently in effect having applicability to MP Junior or
the certificate of formation or the operating agreement of MP Junior or any
other organizational document of MP Junior, or (ii) result in a breach of or
constitute or cause a default under any indenture, agreement, lease or
instrument to which MP Junior is a party or by which the Project or the
Collateral may be bound or affected.
(iii) Maguire LP. Maguire LP is a duly organized,
validly existing limited partnership in good standing under the laws of the
State of Maryland and, if required by California law, is authorized to transact
business in the State of California. Maguire Properties, Inc., a Maryland
corporation ("MAGUIRE INC.") is the general partner of Maguire LP. Maguire Inc.,
acting alone without the joinder of any other partner of Maguire LP or any other
party, has the power and authority to execute this Agreement and Loan Documents
on behalf of and to duly
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bind Maguire LP under this Agreement and the Loan Documents. The execution and
delivery of, and performance under, this Agreement and Loan Documents by Maguire
LP, has been duly and properly authorized pursuant to all requisite partnership
action and will not (i) violate any provision of any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award presently in
effect having applicability to Maguire LP or the certificate of limited
partnership agreement or the limited partnership of Maguire LP or any other
organizational document of Maguire LP, or (ii) result in a breach of or
constitute or cause a default under any indenture, agreement, lease or
instrument to which Maguire LP is a party or by which the Project or the
Collateral may be bound or affected.
(iv) Maguire Inc. Maguire Inc. is a duly organized,
validly existing corporation in good standing under the laws of the State of
Maryland and, if required by California law, is authorized to transact business
in the State of California. The execution and delivery of, and performance
under, this Agreement and the Loan Documents by Maguire Inc., as the sole
general partner of Maguire LP, has been duly and properly authorized pursuant to
all requisite corporate action and will not (i) violate any provision of any
law, rule, regulation, order, writ, judgment, injunction, decree, determination
or award presently in effect having applicability to Maguire Inc. or the
articles of incorporation or bylaws of Maguire Inc. or any other organizational
document of Maguire Inc., or (ii) result in a breach of or constitute or cause a
default under any indenture, agreement, lease or instrument to which Maguire
Inc. is a party or by which the Project or the Collateral may be bound or
affected.
(b) Financial Statements. The financial statements and other
information ("FINANCIAL STATEMENTS") of New Property Owner, New Borrower,
Maguire LP and Maguire Inc. which have been previously delivered to Lender are
true, complete and accurate in every material respect and accurately represent
the financial condition of New Property Owner, New Borrower, Maguire LP and
Maguire Inc. as of the date thereof. There has not been any material adverse
change to the financial condition of New Property Owner, New Borrower, Maguire
LP or Maguire Inc. between the date of the Financial Statements and the date of
this Agreement. New Borrower also acknowledges and agrees to cause New Property
Owner, Maguire LP and Maguire Inc. to timely comply with all financial
requirements set forth in the Loan Documents. New Borrower acknowledges that the
Financial Statements have been provided to Lender to induce Lender to enter into
this Agreement and are being relied upon by Lender for such purposes.
(c) Bankruptcy Proceedings. None of New Borrower or any of the
entities described in Section 1.2(a) (collectively, "RELATED ENTITIES"), has
been a party to any Debtor Proceeding (as hereinafter defined) within seven (7)
years prior to the date of this Agreement.
(d) Defaults on Other Indebtedness. None of New Property
Owner, New Borrower, MP Junior, Maguire LP nor Maguire Inc. has materially
defaulted under its or their respective obligations with respect to any material
indebtedness, and, with respect to immaterial defaults by New Property Owner,
New Borrower, MP Junior, Maguire LP or MP Junior with respect to any material
indebtedness, such immaterial defaults have been cured prior to the date of this
Agreement.
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(e) Title to Project and Legal Proceedings. There are no
pending or, to the best of New Borrower's knowledge, threatened suits,
unsatisfied judgments, arbitration proceedings, administrative claims,
executions or other legal or equitable actions or proceedings against New
Borrower, New Property Owner, Maguire LP, the Collateral or the Project.
(f) Ownership following Transfers. New Borrower is and shall
remain the owner of the New Property Owner Interests, free and clear of all
liens, restrictions, claims, pledges, encumbrances, charges or rights of third
parties, other than those in favor of Lender under the Loan Documents.
Contemporaneously with the effectiveness of this Agreement, the New Property
Owner Interests shall constitute and be deemed to be the "Pledge Collateral"
under the Loan Agreement and the other Loan Documents, the Security Instrument
shall be deemed to be the "Pledge" under the Loan Agreement and the other Loan
Documents and the member power executed by Mezzanine Borrower on or about the
date hereof with respect to the New Property Owner Interests (the "New Member
Power") shall be deemed to be the "Member Power" under the Loan Agreement and
the other Loan Documents, and all references in the Loan Agreement to the terms
"Pledged Collateral", "Pledge" and "Member Power" shall hereinafter mean the New
Property Owner Interests, the Security Instrument and the New Member Power,
respectively.
(g) Certificates. The New Borrower represents, warrants,
covenants and agrees that the New Property Owner Interests are not represented
or otherwise evidenced by any certificate of other instrument other than the
certificates previously delivered to Lender, and in the event that the New
Property Owner Interests become evidenced by certificates or instruments other
than the certificates previously delivered to Lender, the New Borrower shall
immediately deliver to Lender such certificates or instruments together with
assignments appropriate to transfer such certificates or instruments, duly
executed in blank.
(h) New Borrower's Organizational Documents. New Borrower is a
Single Purpose Entity as such term is defined in the Loan Agreement. New
Borrower is not in violation and will not violate of any of the terms,
covenants, conditions or other provisions of its organizational documents or the
Single Purpose Entity requirements set forth in the Loan Agreement.
(i) Assets of New Borrower. The only assets of New Borrower
are the New Property Owner Interests together with any and all rights associated
therewith and Cash or Cash Equivalents.
(j) Management of Project. Upon completion of the Requested
Actions, Maguire LP will manage the Project in accordance with the terms of that
certain Property Management and Leasing Agreement dated as of the Effective Date
hereof between New Property Owner and Maguire LP (the "NEW MANAGEMENT
AGREEMENT"). All references to the term "Management Agreement" and "Manager" in
the Loan Agreement and the other Loan Documents shall hereinafter mean and refer
to the New Management Agreement, and Maguire LP, respectively. New Borrower
covenants and agrees to comply with all terms and conditions of the Loan
Documents concerning the management of the Project, including without limitation
the obligation to obtain Lender's consent to the management of the Property by
any entity other than Maguire LP or a Qualified Manager.
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(k) Bona Fide Sale. The Requested Actions represent a bona
fide sale, transfer or conveyance for cash or equivalent consideration.
(l) New Borrower Parties' Interests. Except for the assumption
of the (Mortgage) by New Property Owner, the Loan by New Borrower and the Junior
Tier Mezzanine Loan by MP Junior, none of New Borrower, New Property Owner, MP
Junior nor Maguire LP are obtaining a loan to finance its interest in New
Property Owner, the Project, New Borrower or MP Junior, respectively, or
pledging its interest in New Property Owner, the Project, New Borrower or MP
Junior, respectively, to any party.
1.3. ACKNOWLEDGMENTS, WARRANTIES AND REPRESENTATIONS OF BORROWER
PARTIES. As a material inducement to Lender to enter into this Agreement and to
consent to Requested Actions, each of the Borrower Parties as to itself, only,
acknowledges, warrants, represents and agrees to and with Lender as follows:
(a) Indebtedness. As of April 13, 2004, the outstanding
principal balance of the Loan was $26,500,000, outstanding late charges total $0
and outstanding default interest totals $0. By its execution hereof, Lender
represents and warrants to New Borrower that to Lender's actual knowledge, (i)
the foregoing amounts are correct and there are no reserve balances held by
Lender; (ii) all interest and principal payments due under the Loan Documents
through and including March 15, 2004 have been paid and the next payment of
interest and principal is due on April 15, 2004, (iii) Lender has not issued any
written notices of default to Original Borrower which have not been cured, (iv)
all fees and costs due under the Loan Documents have been paid. As of March 15,
2004, the outstanding principal balance of the Mortgage Loan was $123,000,000,
outstanding late charges total $0 and outstanding default interest totals $0.
(b) Loan Documents. Original Borrower represents that the Loan
Documents constitute valid and legally binding obligations of Original Borrower
enforceable against Original Borrower in accordance with their terms but subject
to the terms of the release provisions contained in Section 1.4 hereof. New
Borrower represents that from and after the date hereof, the Loan Documents
constitute valid and legally binding obligations of New Borrower enforceable
against New Borrower in accordance with their terms. Borrower Parties have no
defenses, setoffs, claims, counterclaims or causes of action of any kind or
nature whatsoever against Lender or any of Lender's predecessors in interest,
and any subsidiary or affiliate of Lender and all of the past, present and
future officers, directors, contractors, employees, agents, servicers,
attorneys, representatives, participants, successors and assigns of Lender and
Lender's predecessors in interest (collectively, "LENDER PARTIES") or with
respect to (i) the Loan, (ii) the Loan Documents, (iii) the "Debt" and the
"Obligations" (as defined in the Loan Agreement), (iv) any other documents or
instruments now or previously evidencing, securing or in any way relating to the
Loan, (v) the administration or funding of the Loan or (vi) the development,
operation or financing of the Project or (vii) the Collateral. To the extent any
of Borrower Parties would be deemed to have any such defenses, setoffs, claims,
counterclaims or causes of action, any such Borrower Party knowingly waives and
relinquishes them. New Borrower acknowledges that it has received copies of all
of the Loan Documents and that it has read and approved each and every Loan
Document.
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(c) Bankruptcy. Each of the Borrower Parties has no current
intent to (i) file any voluntary petition under any Chapter of the Bankruptcy
Code, Title 11, U.S.C.A. ("BANKRUPTCY CODE"), or in any manner to seek any
proceeding for relief, protection, reorganization, liquidation, dissolution or
similar relief for debtors ("DEBTOR PROCEEDING") under any local, state, federal
or other insolvency law or laws providing relief for debtors or (ii) directly or
indirectly to cause any involuntary petition under any Chapter of the Bankruptcy
Code to be filed against any of Borrower Parties, or (iii) directly or
indirectly to cause the Collateral, the Project or any portion or any interest
of any of Borrower Parties in the Collateral or the Project to become the
property of any bankrupt estate or the subject of any Debtor Proceeding.
(d) No Default. To Original Borrower's knowledge and to New
Borrower's actual knowledge, except as specified below, no event, fact or
circumstance has occurred or failed to occur which constitutes, or with the
lapse or passage of time, giving of notice or both, could constitute a default
or "EVENT OF DEFAULT" as such term is defined in the Loan Agreement.
Notwithstanding the foregoing, New Borrower does not make any representations or
warranties regarding the organizational documents or status of Original Borrower
or the truth or accuracy of any document or information submitted by Original
Borrower to Original Lender or Lender; however, New Borrower does not have any
actual knowledge that any document or information submitted is materially
misleading or materially inaccurate.
(e) Transfer of Property. Contemporaneously with the execution
and delivery of this Agreement, Original Property Owner has assigned, conveyed
and transferred to New Property Owner all of Original Property Owner's right,
title and interest in and to the Project.
(f) Further Assurances. Each of Borrower Parties shall execute
and deliver to Lender such agreements, instruments, documents, financing
statements and other writings as may be reasonably requested from time to time
by Lender to perfect and to maintain the perfection of Lender's security
interest in and to the Collateral and to consummate the transactions
contemplated by or in the Loan Documents and this Agreement.
1.4. REAFFIRMATIONS AND RELEASE. Original Borrower reaffirms, solely
for the benefit of Lender, the truth and accuracy in all material respects of
all representations and warranties set forth the Loan Documents as if made on
the date hereof except that the Rent Roll referenced in the Loan Agreement shall
mean and refer to the Rent Roll attached hereto. New Borrower, to the best of
its actual knowledge, restates, affirms and confirms the truth and accuracy of
all representations and warranties set forth in the Loan Documents as if made on
the date hereof. Original Borrower acknowledges and agrees that nothing
contained in this Agreement or the Loan Documents, nor the Requested Actions,
shall release or relieve Original Borrower from its obligations, agreements,
duties, liabilities, covenants and undertakings under the Loan Documents arising
prior to the date hereof, provided, however, by its execution hereof, Lender on
behalf of itself and all Lender Parties hereby releases Original Borrower and
its members, managers, officers, agents, employees and contractors for any acts
or events occurring or obligations first arising under the Loan Documents from
and after the date hereof (with the exception of the Environmental Indemnity,
the provisions for the release of Original Borrower being set forth in the
Reaffirmation of Environmental Indemnity being executed in connection herewith).
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ARTICLE II
COVENANTS OF BORROWER PARTIES
Each of the Borrower Parties as to itself only, covenants and agrees
with Lender that:
2.1. ASSUMPTION AND MODIFICATION OF LOAN. New Borrower hereby assumes
the indebtedness due under the Note and the other Loan Documents and all of
Original Borrower's other obligations, as grantor, mortgagor, borrower, trustor,
indemnitor, guarantor, or maker, as the case may be, under the Loan Documents to
the same extent as if New Borrower had signed such instruments. New Borrower
agrees to comply with and be bound by all the terms, covenants and agreements,
conditions and provisions set forth in the Loan Documents. The New Borrower
acknowledges and agrees that from and after the effectiveness of this Agreement
that the Loan Documents shall be modified and amended as follows: (i) New
Borrower shall be the "Borrower", "Mezzanine Borrower", "Senior Tier Mezzanine
Borrower", "Pledgor", "Debtor", "Indemnitor", "Party B", "Grantor", "Debtor",
and "Assignor", as applicable, under any Loan Documents in which Original
Borrower was the "Borrower", "Mezzanine Borrower", ", "Senior Tier Mezzanine
Borrower", "Pledgor", "Debtor", "Indemnitor", "Party B", "Grantor", "Debtor", or
"Assignor", as applicable, and all provisions of the Loan Documents previously
applicable to Original Borrower shall apply to New Borrower (other than with
respect to the existing Environmental Indemnity (Mezzanine) and the
Reaffirmation of the Environmental Indemnity (Mezzanine)), (ii) Maguire LP shall
be the "Guarantor" under ay Loan Documents in which Original Indemnitor (as
hereinafter defined) was the "Guarantor" and all provisions of the Loan
Documents previously applicable to Original Indemnitor shall apply to Maguire LP
(other than with respect to the existing Recourse Guaranty (Mezzanine), the
Reaffirmation of the Recourse Guaranty (Mezzanine) and the Reaffirmation of
Recourse Guaranty (Mortgage)), (iii) New Property Owner shall be the "Mortgage
Borrower" under any Loan Document in which Original Property Owner was the
"Mortgage Borrower" and all provisions of the Loan Documents previously
applicable to Original Property Owner shall apply to New Property Owner (other
than with respect to the existing Environmental Indemnity (Mortgage) and the
Reaffirmation of the Environmental Indemnity (Mortgage)), (iv) MP Junior shall
be the "Junior Tier Mezzanine Borrower" under any Loan Document in which
BRE/Park Place Junior Mezzanine L.L.C. (Original Junior Tier Mezzanine
Borrower") was the "Junior Tier Mezzanine Borrower" and all provisions of the
Loan Documents previously applicable to Original Junior Tier Mezzanine Borrower
shall apply to MP Junior, (v) the "Mezzanine Borrower LLC Agreement" shall mean
that certain Limited Liability Company Agreement of MP - Park Place Senior
Mezzanine, LLC dated as of April __, 2004, as such may be amended, restated,
replaced, supplemented or otherwise modified from time to time to the extent
permitted pursuant to the Loan Agreement, (iv) the "Environmental Indemnity
(Mezzanine)" shall be deemed to also include the New Environmental Indemnity
(Mezzanine) and the Reaffirmation of Environmental Indemnity (Mezzanine), as the
same may be amended, supplemented, restated or otherwise modified from time to
time, (vii) the "Environmental Indemnity (Mortgage)" shall be deemed to also
include that certain Environmental Indemnity dated as of even date herewith
executed by New Property Owner in favor of Mortgage Lender and that certain
Reaffirmation of Environmental Indemnity Agreement dated as of even date
herewith executed by Original Property Owner in favor of Mortgage Lender (the
"Reaffirmation of Environmental Indemnity (Mortgage)"), as the same may be
amended, supplemented, restated or otherwise modified from time to time, (viii)
the
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"Recourse Guaranty (Mezzanine)" shall be deemed to also include the New Recourse
Guaranty ("Mezzanine") and the Reaffirmation of Recourse Guaranty ("Mezzanine"),
as the same may be amended, supplemented, restated or otherwise modified from
time to time, (ix) the "Recourse Guaranty (Mortgage)" shall be deemed to also
include that certain Guaranty of Recourse Obligations dated as of even date
herewith executed by Maguire LP in favor of Mortgage Lender and that certain
Reaffirmation of Guaranty of Recourse Obligations dated as of even date herewith
executed by Original Indemnitor in favor of Mortgage Lender ("the "Reaffirmation
of Recourse Guaranty (Mortgage)"), as the same may be amended, supplemented,
restated or otherwise modified from time to time, and (x) Exhibit "J" to the
Loan Agreement is hereby amended by deleting such Exhibit "J" in its entirely
and inserting in lieu thereof Exhibit "J" attached to this Agreement.
2.2. ASSUMPTION FEE. Simultaneously with or prior to the execution
hereof, any or both of Borrower Parties (pursuant to an agreement between them)
shall pay to or has paid Lender: (i) a transfer fee equal to $132,500,000, which
is 0.50% of the outstanding principal balance of the Loan; (ii) an
administration fee equal to $125.00; and (iii) a credit review fee equal to
$100.00; each of which Borrower Parties agree are fees for new consideration and
are not interest charged in connection with the Loan.
2.3. RELEASE AND COVENANT NOT TO SUE. Each of the Borrower Parties, on
behalf of itself and all of its respective heirs, successors and assigns, hereby
remises, releases, acquits, satisfies and forever discharges Lender Parties from
any and all manner of debts, accountings, bonds, warranties, representations,
covenants, promises, contracts, controversies, agreements, liabilities,
obligations, expenses, damages, judgments, executions, actions, inactions,
claims, demands and causes of action of any nature whatsoever, at law or in
equity, known or unknown, either now accrued or subsequently maturing, which any
of Borrower Parties now has or hereafter can, shall or may have by reason of any
matter, cause or thing, from the beginning of the world to and including the
Effective Date, including, without limitation, matters arising out of or
relating to (a) the Loan, including, but not limited to, its administration or
funding, (b) the Loan Documents, (c) the Debt and the Obligations and as
otherwise described in the Loan Documents, (d) the Indebtedness described in
Section 1.3 hereof, and (e) the Project or its development, financing and
operation, and (f) the Collateral. Each of the Borrower Parties, for itself and
all of its respective heirs, successors and assigns, covenants and agrees never
to institute or cause to be instituted or continue prosecution of any suit or
other form of action or proceeding of any kind or nature whatsoever against any
of Lender Parties by reason of or in connection with any of the foregoing
matters, claims or causes of action arising during the period from the beginning
of the world to the Effective Date. As further consideration for the agreements
herein contained, Borrower Parties hereby agree, represent and warrant that the
matters released in this Agreement are not limited to matters which are known or
disclosed, and Borrower Parties hereby waive any and all rights and benefits
with respect to any matters arising out of or relating to any matter, cause or
thing, from the beginning of the world to and including the Effective Date,
including without limitation matters arising out of or relating to (i) the Loan,
including, but not limited to, its administration or funding, (ii) the Loan
Documents, (iii) the "Indebtedness" and the "Obligations" described in the Loan
Documents, and (d) the Project or its development, financing and operation which
Borrower Parties now have, or in the future may have, and (v) the Collateral,
conferred upon Borrower Parties by virtue of the provisions of Section 1542 of
the Civil Code of the State of California which provides as follows:
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A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR
AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY
HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH
THE DEBTOR.
In this connection, Borrower Parties hereby agree, represent, and warrant that
they realize and acknowledge that factual matters now unknown to one or more of
the Borrower Parties may have given or may hereafter give rise to causes of
action, claims, demands, debts, controversies, damages, costs, losses and
expenses which are presently unknown, unanticipated and unsuspected, and
Borrower Parties further agree, represent and warrant that the release herein
contained has been negotiated and agreed upon in light of that realization and
that Borrower Parties nevertheless hereby intend to release, discharge and
acquit all parties so released from any such unknown claims.
2.4. SAME INDEBTEDNESS; PRIORITY OF LIENS NOT AFFECTED. This Agreement
and the execution of other documents contemplated hereby do not constitute the
creation of a new debt or the extinguishment of the debt evidenced by the Loan
Documents, nor will they in any way affect or impair the liens and security
interests created by the Loan Documents (other than the liens and security
interest encumbering the Original Property Owner Interests), which New Borrower
acknowledges to be valid and existing liens and security interests in the
Collateral. New Borrower agrees that the lien and security interests created by
the Loan Documents (other than with respect to the Original Property Owner
Interests) continue to be in full force and effect, unaffected and unimpaired by
this Agreement or by the transfer of the Project or any collateral described in
financing statements filed in connection with the Loan Documents and that said
liens and security interests shall so continue in their perfection and priority
until the debt secured by the Loan Documents is fully discharged.
2.5. PAYMENT OF TRANSACTION COSTS AND EXPENSES. Any or both of Borrower
Parties (pursuant to an agreement between them) shall pay at the time of
execution of this Agreement by Lender: (a) the legal fees and disbursements of
Lender's counsel, McKenna Long & Aldridge LLP, in connection with the
preparation of this Agreement and the transactions contemplated in this
Agreement; and (b) the costs of obtaining a Lender's "Eagle 9" insurance policy
insuring the collateral pledged to Lender pursuant to the Security Instrument as
affected by this Agreement, (c) the costs of obtaining a "Mezzanine Endorsement"
to New Property Owner's title insurance policy, in form and substance reasonably
satisfactory to Lender, and (d) all other costs and expenses incident to the
preparation, execution and recordation of this Agreement and the New Documents
and the consummation of the transaction contemplated hereby.
ARTICLE III
ADDITIONAL PROVISIONS
3.1. CONSENT OF LENDER. Subject to the terms of this Agreement, Lender
hereby consents to the Requested Actions. Borrower Parties agree that this
Agreement shall not be deemed an agreement by Lender to consent to any other
transfer or conveyance of the Project or direct or indirect interest in the
Project or assumption of the Loan, the Loan (Mortgage) or the
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Junior Tier Mezzanine Loan, or a consent to any secondary financing or secondary
encumbrance on the Project, New Borrower or any interests in New Property Owner
or New Borrower except the existing Junior Tier Mezzanine Loan.
3.2. UCC FILINGS. Each of the Borrower Parties hereby grants and
confirms unto Lender a first lien priority interest in all the Collateral (as
such term is defined in the Security Instrument) to the maximum extent permitted
by the Uniform Commercial Code ("UCC"). Each of the Borrower Parties hereby
further consents to the filing of any financing statements or UCC forms required
to be filed in the applicable states or any other applicable filing office
(collectively "FILINGS") in order to perfect said interest and, notwithstanding
anything contained in any of the Loan Documents to the contrary, in accordance
with the UCC, as amended subsequent to the making of the Loan, said Filings may
be made by Lender without the consent or signature of either of the Borrower
Parties.
3.3. ADDITIONAL DOCUMENTS. Contemporaneously with the execution and
delivery of this Agreement and as a condition to the effectiveness of this
Agreement and as a material inducement to Lender to enter into this Agreement:
(a) Borrower Parties hereby authorize Lender to file and/or record UCC Financing
Statements for filing with the state of organization of New Borrower and/or file
UCC Amendments amending the existing Financing Statements for filing with the
Delaware Secretary to add New Borrower as an additional debtor and to add the
New Property Owner Interests as additional Collateral; (b) New Borrower shall
have executed and delivered a Pledge and Security Agreement pursuant to which
New Borrower grants Lender a security interest in the New Property Owner
Interests (the "Security Instrument"), (c) Blackstone Real Estate Partners III,
LP, Blackstone Real Estate Partners III T.E.1 LP, Blackstone Real Estate
Partners III T.E.2 LP, Blackstone Real Estate Partners III T.E.3, LP, Blackstone
Real Estate Holdings III LP and Blackstone Real Estate Partners III F.F., L.P.,
each a Delaware limited partnership (collectively, "ORIGINAL INDEMNITOR") shall
have executed and delivered to Lender a Reaffirmation of Guaranty of Recourse
Obligations (the "Reaffirmation of Recourse Guaranty (Mezzanine)"); (d) Original
Borrower shall have executed and delivered to Lender a Reaffirmation of
Environmental Indemnity (the "Reaffirmation of Environmental Indemnity
(Mezzanine)"), (e) New Borrower shall have executed and delivered to Lender an
Environmental Indemnity (the "New Environmental Indemnity (Mezzanine)"); (f)
Maguire LP shall have executed and delivered to Lender a Guaranty of Recourse
Obligations (the "New Recourse Guaranty (Mezzanine)"); (g) Maguire LP shall have
executed and delivered to Lender a Manager's Consent; and (h) Lender and New
Borrower shall have entered into a Lock Box Agreement; all in form and content
reasonably acceptable to Lender (the documents, instruments and agreements
described in (a) - (h) above, together with any other documents, instruments or
agreements executed in connection with the foregoing are hereinafter referred to
collectively as the "New Documents").
3.4. REFERENCES TO LOAN DOCUMENTS. All references to the term "LOAN
DOCUMENTS" in the Loan Agreement and the other Loan Documents shall hereinafter
mean and refer to: (i) all of the Loan Documents described therein; (ii) this
Agreement; and (iii) any and all other agreements, documents and other
instruments evidencing, securing or in any manner related to the documents
executed in connection with or otherwise pertaining to this Agreement,
including, without limitation, the New Documents.
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ARTICLE IV
MISCELLANEOUS PROVISIONS
4.1. NO LIMITATION OF REMEDIES. No right, power or remedy conferred
upon or reserved to or by Lender in this Agreement is intended to be exclusive
of any other right, power or remedy conferred upon or reserved to or by Lender
under this Agreement, the Loan Documents or at law, but each and every remedy
shall be cumulative and concurrent, and shall be in addition to each and every
other right, power and remedy given under this Agreement, the Loan Documents or
now or subsequently existing at law.
4.2. NO WAIVERS. Except as otherwise expressly set forth in this
Agreement, nothing contained in this Agreement shall constitute a waiver of any
rights or remedies of Lender under the Loan Documents or at law. No delay or
failure on the part of any party hereto in the exercise of any right or remedy
under this Agreement shall operate as a waiver, and no single or partial
exercise of any right or remedy shall preclude other or further exercise thereof
or the exercise of any other right or remedy. No action or forbearance by any
party hereto contrary to the provisions of this Agreement shall be construed to
constitute a waiver of any of the express provisions. Any party hereto may in
writing expressly waive any of such party's rights under this Agreement without
invalidating this Agreement.
4.3. SUCCESSORS OR ASSIGNS. Whenever any party is named or referred to
in this Agreement, the heirs, executors, legal representatives, successors,
successors-in-title and assigns of such party shall be included. All covenants
and agreements in this Agreement made by a party hereto shall bind and inure to
the benefit of the heirs, executors, legal representatives, successors,
successors-in-title and assigns of such party, whether so expressed or not,
provided, however, the provisions of this Section 4.3 shall not be deemed or
construed to (a) permit, sanction, authorize or condone the assignment of all or
any part of the Project of the Collateral or any of New Property Owner's or New
Borrower's rights, title or interests in and to the Project or the Collateral,
except as expressly authorized in the Loan Documents; or (b) confer any right,
title, benefit, cause of action or remedy upon any person or entity not a party
hereto, which such party would not or did not otherwise possess.
4.4. CONSTRUCTION OF AGREEMENT. Each party hereto acknowledges that it
has participated in the negotiation of this Agreement and no provision shall be
construed against or interpreted to the disadvantage of any party hereto by any
court or other governmental or judicial authority by reason of such party having
or being deemed to have structured, dictated or drafted such provision. Each of
the Borrower Parties at all times has had access to an attorney in the
negotiation of the terms of and in the preparation and execution of this
Agreement. Each of the Borrower Parties has had the opportunity to review and
analyze this Agreement for a sufficient period of time prior to execution and
delivery. No representations or warranties have been made by or on behalf of
Lender, or relied upon by Borrower Parties, pertaining to the subject matter of
this Agreement, other than those set forth in this Agreement. All prior
statements, representations and warranties, if any, are totally superseded and
merged into this Agreement, which represent the final and sole agreement of the
parties with respect to the subject matters. All of the terms of this Agreement
were negotiated at arm's length, and this Agreement was prepared and executed
without fraud, duress, undue influence or coercion of any kind exerted by
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any of the parties upon the others. The execution and delivery of this Agreement
is the free and voluntary act of each of the Borrower Parties.
4.5. INVALID PROVISION TO AFFECT NO OTHERS. If, from any circumstances
whatsoever, fulfillment of any provision of this Agreement or any related
transaction at the time performance of such provision shall be due, shall
involve transcending the limit of validity presently prescribed by any
applicable usury statute or any other applicable law, with regard to obligations
of like character and amount, then ipso facto, the obligation to be fulfilled
shall be reduced to the limit of such validity. If any clause or provision
operates or would prospectively operate to invalidate this Agreement, in whole
or in part, then such clause or provision only shall be deemed deleted, as
though not contained, and the remainder of this Agreement shall remain operative
and in full force and effect.
4.6. NOTICES. Except as otherwise specifically provided to the
contrary, any and all notices, elections, approvals, consents, demands, requests
and responses ("COMMUNICATIONS") permitted or required to be given under this
Agreement and the Loan Documents shall not be effective unless in writing,
signed by or on behalf of the party giving the same, and sent by certified or
registered mail, postage prepaid, return receipt requested, or by hand delivery
or overnight courier service (such as Federal Express), to the party to be
notified at the address of such party set forth below or at such other address
within the continental United States as such other party may designate by notice
specifically designated as a notice of change of address and given in accordance
with this Section. Any Communications shall be effective upon the earlier of
their receipt or three days after mailing in the manner indicated in this
Section. Receipt of Communications shall occur upon actual delivery but if
attempted delivery is refused or rejected, the date of refusal or rejection
shall be deemed the date of receipt. Any Communication, if given to Lender, must
be addressed as follows, subject to change as provided above:
Fleet National Bank
100 Federal Street
Boston, Massachusetts 02110
Attn: Real Estate Division
With a copy to: Fleet National Bank
115 Perimeter Center Place, N.E.,
Suite 500
Atlanta, Georgia 30346
Attn: Jay Johns
With a copy to: McKenna Long & Aldridge LLP
303 Peachtree Street, Suite 5300
Atlanta, Georgia 30308
Attn: Jess A. Pinkerton, Esq.
and, if given to Original Borrower, must be addressed as follows,
notwithstanding any other address set forth in the Loan Documents to the
contrary, subject to change as provided above:
BRE/Park Place Mezzanine L.L.C.
c/o Blackstone Real Estate Advisors
14
345 Park Avenue, 32nd Floor
New York, New York 10154
Attn: Frank D. Cohen
Telephone: 212-583-5804
Facsimile: 212-583-5419
With a copy to: Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017-3954
Attn: Gregory J. Ressa, Esq.
Telephone: 212-455-7430
Facsimile: 212-455-2502
and, if given to New Borrower, must be addressed as follows, subject to change
as provided above:
MP - Park Place Senior Mezzanine,
LLC
333 South Grand Avenue, Suite 400
Los Angeles, California 90071
Attn: Robert F. Maguire III & Mark
T. Lammas, Esq.
Telephone: 213-626-3300
Facsimile: 213-687-4758
With a copy to: Munger, Tolles & Olson LIP
355 South Grand Avenue, Suite 3500
Los Angeles, California 90071
Attn: Jeffrey A. Heintz, Esq.
Telephone: 213-683-9185
Facsimile: 213-683-5185
4.7. GOVERNING LAW. This Agreement shall be interpreted, construed and
enforced in accordance with the laws of the State of New York.
4.8. HEADINGS; EXHIBITS. The headings of the articles, sections and
subsections of this Agreement are for the convenience of reference only, are not
to be considered a part of this Agreement and shall not be used to construe,
limit or otherwise affect this Agreement.
4.9. MODIFICATIONS. The terms of this Agreement may not be changed,
modified, waived, discharged or terminated orally, but only by an instrument or
instruments in writing, signed by the Party against whom the enforcement of the
change, modification, waiver, discharge or termination is asserted.
4.10. TIME OF ESSENCE; CONSENTS. Time is of the essence of this
Agreement and the Loan Documents. Any provisions for consents or approvals in
this Agreement shall mean that such consents or approvals shall not be effective
unless in writing and executed by Lender.
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4.11. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, and all such
counterparts together shall constitute one and the same instrument.
4.12. WAIVER OF TRIAL BY JURY. LENDER, BORROWER PARTIES AND ALL PERSONS
CLAIMING BY, THROUGH OR UNDER IT, HEREBY EXPRESSLY, KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT TO TRAIL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION (I) ARISING UNDER THIS AGREEMENT, THE SECURITY INSTRUMENT, THE
NOTE OR ANY OTHER LOAN DOCUMENT, INCLUDING, WITHOUT LIMITATION, ANY PRESENT OR
FUTURE MODIFICATION THEREOF OR (II) IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO
THIS AGREEMENT, THE SECURITY INSTRUMENT, THE NOTE OR ANY OTHER LOAN DOCUMENT (AS
NOW OR HEREAFTER MODIFIED) OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO
OR THERETO, IN EACH CASE WHETHER SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
IS NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT
OR OTHERWISE; AND BORROWER HERBY AGREES AND CONSENTS THAT AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION MAY BE FILED WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT HERETO TO THE WAIVER OF ANY RIGHT TO TRIAL BY JURY.
LENDER AND BORROWER PARTIES ACKNOWLEDGE THAT THEY HAVE CONSULTED WITH LEGAL
COUNSEL REGARDING THE MEANING OF THIS WAIVER AND ACKNOWLEDGE THAT THIS WAIVER IS
AN ESSENTIAL INDUCEMENT FOR THE MAKING OF THE LOAN. THIS WAIVER SHALL SURVIVE
THE REPAYMENT OF THE LOAN.
4.13. NO THIRD PARTY BENEFICIARIES. The representations, warranties and
covenants of the Original Borrower are solely for the benefit of Lender and
nothing contained herein or the Reaffirmation of Environmental Indemnity, or the
Reaffirmation of Guaranty of Recourse Obligations shall be deemed to confer upon
anyone other than Lender any right to rely upon, insist upon or enforce the
performance of or observance of any of the obligations contained therein.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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The parties have executed and delivered this Agreement as of the day
and year first above written.
LENDER:
FLEET NATIONAL BANK
By:/s/ Jay G Johns
---------------------
Name: Jay G Johns
Title: Director
ORIGINAL BORROWER:
BRE/PARK PLACE MEZZANINE L.L.C., a
Delaware limited liability company
By: /s/ David Hirsch
------------------------------
Name: David Z. Hirsh
Title: Vice President
NEW BORROWER:
MP - PARK PLACE SENIOR MEZZANINE, LLC, a
Delaware limited liability company
By: MP-Park Place Junior Mezzanine, LLC, a
Delaware limited liability company, its
sole member
By: Maguire Properties, L.P., a Maryland
limited partnership, its sole member
By: Maguire Properties, Inc., a
Maryland corporation, its general
partner
By: /s/ Mark Lammas
------------------------------
Name: Mark T. Lammas
Title: Secretary
19