LEASE RESERVE AND INTEREST CARRY GUARANTEE
Exhibit 99.2
LEASE RESERVE AND INTEREST CARRY
GUARANTEE (this “Guarantee”) made as
of the 29th day of September, 2008 by ▇▇▇▇▇▇▇ PROPERTIES, L.P., a Maryland
limited partnership (“Guarantor”), having
an office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
in favor of EUROHYPO AG, NEW YORK BRANCH, having its principal office at 1114
Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as Administrative Agent for
the Lenders referred to below (in such capacity, together with its successors in
such capacity, the “Administrative
Agent”).
W I T N E S S E T H:
WHEREAS, ▇▇▇▇▇▇▇ PARTNERS-PLAZA LAS
▇▇▇▇▇▇▇, LLC, a Delaware limited liability company (“Borrower”), certain
lenders (collectively, the “Lenders”), the
Administrative Agent and ▇▇▇▇▇ Fargo Bank, N.A., as Syndication Agent and as a
Lender, are parties to a Loan Agreement dated as of the date hereof (said Loan
Agreement, as modified, amended, supplemented and in effect from time to time,
being herein called the “Loan Agreement”; and,
except as otherwise herein expressly provided, all terms defined in the Loan
Agreement are being used herein as defined therein), which Loan Agreement
provides, among other things, for Loans to be made by the Lenders to Borrower in
an aggregate principal amount not exceeding $100,000,000 in connection with the
Project, such Loans to be (i) evidenced by, and repayable with interest thereon
in accordance with, various Notes to be executed and delivered to the respective
order of the Lenders and (ii) secured by, among other things, the Mortgage;
capitalized terms used but not separately defined herein shall have the meanings
ascribed to such terms in the Loan Agreement;
WHEREAS, Guarantor owns one hundred
percent (100%) of the ownership in Borrower and as a result shall directly
benefit from the making of the Loans by the Lenders to Borrower;
and
WHEREAS, the Lenders are unwilling to
make the Loans unless this Guarantee is executed by Guarantor and delivered to
the Administrative Agent and the Lenders.
NOW, THEREFORE, in order to induce the
Lenders to make the Loans, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Guarantor hereby
agrees to guarantee the Guaranteed Obligations (as hereinafter defined) upon the
following terms:
Section
1. Guarantee.
1.01. Guarantee.
(a) Guarantor
hereby absolutely, unconditionally and irrevocably assumes liability for, and
hereby guarantees payment to Administrative Agent (on behalf of Lenders) of
Borrower’s obligations under Section 4.7 and Section 4.8 of the
Loan Agreement, including without limitation, Borrower’s obligations (subject to
the applicable limits set forth in said Section) to (i) deposit with
Administrative Agent the Defaulting Tenant Lease Reserve Amount with respect to
any applicable Defaulting Tenant (or, in lieu of such deposit, to deliver to
Administrative Agent a Collateral Letter of Credit in the amount of the
applicable Defaulting
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Tenant
Lease Reserve Amount), (ii) deposit with Administrative Agent the applicable
Defaulting Tenant Interest Reserve Amount with respect to any applicable
Defaulting Tenant (or, in lieu of such deposit, to deliver to Administrative
Agent a Collateral Letter of Credit in the amount of the applicable Defaulting
Tenant Interest Reserve Amount), (iii) deposit the Monthly East West Tenant
Improvement Amount into the Leasing Reserve Fund pursuant to Section 4.8(1) of the
Loan Agreement, and (iv) deposit the Monthly McCormicks Rent Credit Amount into
the Leasing Reserve Fund pursuant to Section 4.8(1) of the
Loan Agreement. These foregoing obligations shall apply regardless of
whether the Defaulting Tenant, East West or McCormicks shall be a debtor in any
bankruptcy or insolvency proceeding or shall have made in any such proceeding
any election to assume or reject its lease, and the obligations in clauses (i)
and (ii) above shall apply regardless of whether Borrower shall have exercised
any right to terminate or modify the applicable Defaulting Tenant’s lease
following any default by the Defaulting Tenant thereunder.
(b) Without
limiting the other obligations of Guarantor hereunder, if the Administrative
Agent (or its designee) shall acquire the Project upon a foreclosure under the
Deed of Trust, a transfer in lieu of foreclosure, or otherwise, as a result of
the failure of the Borrower to pay the Loans and all other amounts due thereon
in full upon the Maturity Date (whether at scheduled maturity, by acceleration
or otherwise), and if there shall occur at any time thereafter any default by
any Defaulting Tenant (as such term is defined in the Loan Agreement as
supplemented herein) under its lease during the remaining term thereof (as in
effect on the date hereof or pursuant to any modification entered into prior to
any such foreclosure, transfer in lieu of foreclosure or other acquisition), but
prior to the applicable Defaulting Tenant Cut-Off Date (as hereinafter defined),
then Guarantor shall pay to the Administrative Agent for the benefit of the
Lenders an amount in cash equal to the sum of (A) the Applicable Portion (as
hereinafter defined) of the applicable Defaulting Tenant Lease Reserve Amount
with respect to such Defaulting Tenant and (B) the Applicable Portion of the
applicable Defaulting Tenant Interest Reserve Amount with respect to such
Defaulting Tenant, which amounts shall not be applied to reduce any remaining
balance of the Loans and shall not be held in any reserve fund established under
the Loan Agreement. IT IS AGREED THAT SUCH PAYMENT SHALL
BE RETAINED BY THE ADMINISTRATIVE AGENT (ON BEHALF OF THE LENDERS) AS LIQUIDATED
DAMAGES TO COMPENSATE THE ADMINISTRATIVE AGENT AND THE LENDERS FOR THE LOSSES,
DAMAGES, COSTS AND EXPENSES THAT THEY HAVE INCURRED OR ARE ANTICIPATED TO INCUR
AS A RESULT OF THE DEFAULTING TENANT’S DEFAULT UNDER ITS LEASE (WHICH LOSSES AND
DAMAGES MAY INCLUDE, WITHOUT LIMITATION, LOSSES, COSTS AND EXPENSES THAT MAY BE
INCURRED WITH RESPECT TO THE RETENANTING OR IMPROVEMENT OF THE APPLICABLE
DEFAULTING TENANT’S PREMISES AND LOSSES THAT MAY BE INCURRED IN CONNECTION WITH
A SALE OR OTHER DISPOSITION OF THE PROJECT FOLLOWING A FORECLOSURE SALE, DEED IN
LIEU OF FORECLOSURE OR OTHER EXERCISE OF REMEDIES). THE PARTIES
ACKNOWLEDGE AND AGREE THAT THE ACTUAL LOSSES, DAMAGES, COSTS AND EXPENSES OF THE
ADMINISTRATIVE AGENT AND THE LENDERS IN SUCH EVENT WOULD BE EXTREMELY DIFFICULT
OR IMPRACTICABLE TO DETERMINE. AFTER NEGOTIATION, THE PARTIES HAVE
AGREED THAT, CONSIDERING ALL THE CIRCUMSTANCES EXISTING ON THE DATE OF THIS
AGREEMENT, THE LIQUIDATED DAMAGES AMOUNT AS DETERMINED IN ACCORDANCE WITH THE
FOREGOING IS A REASONABLE ESTIMATE OF THE LOSSES, DAMAGES, COSTS AND EXPENSES
THAT THE ADMINISTRATIVE AGENT AND THE
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LENDERS
WOULD INCUR ON ACCOUNT OF ANY SUCH DEFAULT BY A DEFAULTING TENANT, AND THAT SUCH
LIQUIDATED DAMAGES AMOUNT IS NOT INTENDED AS A FORFEITURE OR
PENALTY. GUARANTOR IRREVOCABLY WAIVES ANY RIGHTS AS AGAINST THE OWNER
OF THE PROPERTY FOR CONTRIBUTION, REIMBURSEMENT, RECOUPMENT, SUBROGATION OR
OTHERWISE (INCLUDING, WITHOUT LIMITATION, ANY RIGHTS ON ACCOUNT OF EQUITABLE
PRINCIPLES), ON ACCOUNT OF THE PAYMENT OF ANY SUCH LIQUIDATED DAMAGES AMOUNT
DESCRIBED IN THIS SECTION 1.01(b).
As used
in this Section 1.01(b), the following terms shall have the meanings set forth
below:
(A) “Applicable Portion”
means the percentage of the applicable Defaulting Tenant Lease Reserve Amount
and Defaulting Tenant Interest Reserve Amount set forth as follows:
(I) During
the period commencing on the Defaulting Tenant Burn-Off Commencement Date and
ending on the last day of the fifteen (15) month period thereafter, the
Applicable Portion shall equal one hundred percent (100%).
(II) During
the period commencing on the first day of the sixteen (16) month period
commencing on the Defaulting Tenant Burn-Off Commencement Date and ending on the
last day of the eighteen (18) month period thereafter, the Applicable Portion
shall equal seventy-five percent (75%).
(III) During
the period commencing on the first day of the nineteen (19) month period
commencing on the Defaulting Tenant Burn-Off Commencement Date and ending on the
last day of the twenty-one (21) month period thereafter, the Applicable Portion
shall equal fifty percent (50%).
(IV) During
the period commencing on the first day of the twenty-two (22) month period
commencing on the Defaulting Tenant Burn-Off Commencement Date and ending on the
Defaulting Tenant Cut-Off Date, the Applicable Portion shall equal twenty-five
percent (25%).
(V) Following
the Defaulting Tenant Cut-Off Date, the Applicable Portion shall equal zero
percent (0%).
(B) “Defaulting
Tenant” has the meaning set forth in the Loan Agreement, provided however, that
if East West or ▇▇▇▇▇▇ ▇▇▇ has failed to make a scheduled lease payment
(regardless of whether any cure or grace period applicable thereto has expired)
under its lease at any time prior to the Defaulting Tenant Cut-Off Date, then
such tenant shall be a Defaulting Tenant hereunder regardless of whether the
45-day period with respect to such failure, as set forth in the definition of
“Monetary Lease Default” in the Loan Agreement, has expired prior to the
Defaulting Tenant Cut-Off Date, so long as such 45 day period with respect to
such failure expires either prior to, on or subsequent to the Defaulting Tenant
Cut-Off Date. Further, for purposes of measuring when East West or
▇▇▇▇▇▇ ▇▇▇ has become a Defaulting Tenant for purposes of the periods set forth
in the definition of “Applicable Portion,” such tenant shall be deemed to have
become a Defaulting Tenant upon its original failure to make a scheduled lease
payment (regardless of whether any cure or grace period applicable thereto has
expired) under its lease, regardless of when the 45-day period with respect to
such failure, as set forth in the
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definition
of “Monetary Lease Default” in the Loan Agreement, expires, so long as such 45
day period with respect to such failure does expire. Accordingly, as
an example, if East West or Fannie were to fail to make a scheduled lease
payment under its lease during the period described in clause (I) of the
definition of “Applicable Portion,” and the 45-day period with respect to such
failure, as set forth in the definition of “Monetary Lease Default” in the Loan
Agreement, expires during the period described in clause (II) of the definition
of “Applicable Portion,” the default shall be deemed to have occurred during the
period described in clause (I) of such definition, so that the relevant
Applicable Portion on account of such default shall be the 100% portion stated
in clause (I).
(C) “Defaulting Tenant Burn-Off
Commencement Date” means the date on which the Project has been
transferred pursuant to a foreclosure or transfer in lieu of
foreclosure.
(D) “Defaulting Tenant Cut-Off
Date” means the last day of the twenty-four (24) month period commencing
on such Defaulting Tenant Burn-Off Commencement Date.
(c) Without
limiting the other obligations of Guarantor hereunder, if the Administrative
Agent (or its designee) shall acquire the Project upon a foreclosure under the
Deed of Trust, a transfer in lieu of foreclosure, or otherwise, as a result of
the failure of the Borrower to pay the Loans and all other amounts due thereon
in full upon the Maturity Date (whether at scheduled maturity, by acceleration
or otherwise), and if at such time there remains any unpaid amount of the
Outstanding East West Bank TI Obligation under the East West Lease (as in effect
on the date hereof or pursuant to any modification entered into prior to any
such foreclosure, transfer in lieu of foreclosure or other acquisition) or any
unpaid amount of the Outstanding McCormicks Rent Credit Obligation under the
McCormicks Lease (as in effect on the date hereof or pursuant to any
modification entered into prior to any such foreclosure, transfer in lieu of
foreclosure or other acquisition), then Guarantor shall pay to the
Administrative Agent for the benefit of the Lenders an amount in cash equal to
the remaining balance of the Outstanding East West Bank TI Obligation and the
Outstanding McCormicks Rent Credit Obligation at such time, which amount shall
not be applied to reduce any remaining balance of the Loans and shall not be
held in any reserve fund established under the Loan Agreement. IT IS AGREED THAT SUCH PAYMENT SHALL
BE RETAINED BY THE ADMINISTRATIVE AGENT (ON BEHALF OF THE LENDERS) AS LIQUIDATED
DAMAGES TO COMPENSATE THE ADMINISTRATIVE AGENT AND THE LENDERS FOR THE LOSSES,
DAMAGES, COSTS AND EXPENSES THAT THEY HAVE INCURRED OR ARE ANTICIPATED TO INCUR
AS A RESULT OF THE OBLIGATIONS THAT WILL BE OWED TO EAST WEST AND MCCORMICKS,
UPON OR FOLLOWING ANY ACQUISITION OF THE PROJECT UPON A FORECLOSURE UNDER THE
DEED OF TRUST, A TRANSFER IN LIEU OF FORECLOSURE, OR OTHERWISE, ON ACCOUNT OF
THE UNPAID AMOUNTS OF THE OUTSTANDING EAST WEST BANK TI
OBLIGATION AND THE
OUTSTANDING MCCORMICKS RENT CREDIT OBLIGATION (WHICH LOSSES AND DAMAGES MAY
INCLUDE, WITHOUT LIMITATION, LOSSES THAT MAY BE INCURRED IN CONNECTION WITH THE
DISPOSITION OF THE PROJECT FOLLOWING A FORECLOSURE SALE, DEED IN LIEU OF
FORECLOSURE OR OTHER EXERCISE OF REMEDIES). THE PARTIES ACKNOWLEDGE
AND AGREE THAT THE ACTUAL LOSSES, DAMAGES, COSTS AND EXPENSES OF THE
ADMINISTRATIVE AGENT AND THE LENDERS IN SUCH EVENT WOULD BE EXTREMELY DIFFICULT
OR IMPRACTICABLE TO DETERMINE. AFTER NEGOTIATION, THE PARTIES HAVE
AGREED THAT, CONSIDERING ALL THE
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CIRCUMSTANCES
EXISTING ON THE DATE OF THIS GUARANTY, THE LIQUIDATED DAMAGES AMOUNT AS
DETERMINED IN ACCORDANCE WITH THE FOREGOING IS A REASONABLE ESTIMATE OF THE
LOSSES, DAMAGES, COSTS AND EXPENSES THAT THE ADMINISTRATIVE AGENT AND THE
LENDERS WOULD INCUR ON ACCOUNT OF OBLIGATIONS THAT WILL BE OWED TO EAST WEST AND
MCCORMICKS UPON OR FOLLOWING ANY ACQUISITION OF THE PROJECT UPON A FORECLOSURE
UNDER THE DEED OF TRUST, A TRANSFER IN LIEU OF FORECLOSURE, OR OTHERWISE, ON
ACCOUNT OF THE UNPAID AMOUNTS OF THE OUTSTANDING EAST WEST BANK TI OBLIGATION
AND THE OUTSTANDING MCCORMICKS RENT CREDIT OBLIGATION, AND THAT SUCH LIQUIDATED
DAMAGES AMOUNT IS NOT INTENDED AS A FORFEITURE OR PENALTY. GUARANTOR
IRREVOCABLY WAIVES ANY RIGHTS AS AGAINST THE OWNER OF THE PROPERTY FOR
CONTRIBUTION, REIMBURSEMENT, RECOUPMENT, SUBROGATION OR OTHERWISE (INCLUDING,
WITHOUT LIMITATION, ANY RIGHTS ON ACCOUNT OF EQUITABLE PRINCIPLES), ON ACCOUNT
OF THE PAYMENT OF ANY SUCH LIQUIDATED DAMAGES AMOUNT DESCRIBED IN THIS SECTION
1.01(c).
(d) Guarantor
acknowledges and agrees that the Administrative Agent, for the benefit of the
Lenders, may assign all rights, claims and causes of action against Guarantor
arising under Sections 1.01(a), (b) or (c) to any Person who acquires the Loans,
or to any Person who acquires the interest of Borrower in and to the Project
encumbered pursuant to the Deed of Trust upon foreclosure or transfer in lieu of
foreclosure under the Deed of Trust or otherwise, or to any Person who acquires
the interest of Borrower in and to the Project encumbered pursuant to the Deed
of Trust following any such foreclosure or transfer in lieu of foreclosure under
the Deed of Trust, and that such Persons may assign such rights, claims and
causes of action to their respective successors and assigns.
The
foregoing obligations guaranteed pursuant to this Section 1.01 are,
collectively, the “Guaranteed
Obligations.”
1.02. Obligations
Unconditional. The obligations of Guarantor under this
Guarantee are absolute and unconditional, irrespective of the value,
genuineness, validity, regularity or enforceability of the Loan Documents, or
any substitution, release or exchange of any other guaranty of or security for
any of the Guaranteed Obligations or the Loan, and, to the fullest extent
permitted by Applicable Law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section 1.02 that the
obligations of Guarantor hereunder shall be absolute and unconditional under any
and all circumstances and shall not be released, discharged or in any way
affected or impaired by any thing, event, happening, matter, circumstance or
condition whatsoever (whether or not Guarantor shall have any knowledge or
notice thereof or shall consent thereto). In furtherance of the
foregoing and without limiting the generality thereof, Guarantor agrees as
follows:
(a) This
Guarantee is a guaranty of payment and performance when due and not of
collection.
(b) The
obligations of Guarantor hereunder are independent of the obligations of the
Borrower, Operating Lessee or Guarantor under the other Loan Documents to which
they are a party and the obligations of any other guarantor of the obligations
of the Borrower or
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Operating
Lessee under the Loan Documents, and a separate action or actions may be brought
and prosecuted against Guarantor whether or not any action is brought against
the Borrower or Operating Lessee and whether or not the Borrower or Operating
Lessee is joined in any such action or actions.
(c) Payment,
performance or completion by Guarantor, or any other guarantor, of a portion,
but not all, of the Guaranteed Obligations shall in no way limit, affect, modify
or abridge Guarantor’s liability for any portion of the Guaranteed Obligations
which has not been paid, performed or completed. Without limiting the
generality of the foregoing, if Administrative Agent (or any of the Lenders) is
awarded a judgment in any suit brought to enforce Guarantor’s covenant to pay,
perform or complete a portion of the Guaranteed Obligations, such judgment shall
not be deemed to release Guarantor from its covenant to pay, perform or complete
the portion of the Guaranteed Obligations that is not the subject of such
suit.
(d) The
Administrative Agent on behalf of the Lenders (subject to the terms of the Loan
Documents), upon such terms as it deems appropriate, without notice or demand
and without affecting the validity or enforceability of this Guarantee or giving
rise to any reduction, limitation, impairment, discharge or termination of
Guarantor’s liability hereunder, from time to time may (i) renew, extend,
accelerate, increase the rate of interest on, or otherwise change the time,
place, manner or terms of payment or performance under the Loan Documents, (ii)
settle, compromise, release or discharge, or accept or refuse any offer of
performance with respect to, or substitutions for, the Guaranteed Obligations or
any Loan Document and/or subordinate the payment of the same to the payment of
any other obligations; (iii) request and accept other guaranties of any of the
Borrower’s or Operating Lessee’s obligations under the Loan Documents and take
and hold security for the payment or performance of this Guarantee or the Loan
Documents; (iv) release, surrender, exchange, substitute, compromise, settle,
rescind, waive, alter, subordinate or modify, with or without consideration, any
security for payment or performance of the Borrower’s or Operating Lessee’s
obligations under the Loan Documents, any other guaranties of the Loan, or any
other obligation of any Person (including any other guarantor) with respect to
the Loan; (v) enforce and apply any security now or hereafter held by or for the
benefit of Administrative Agent and the Lenders in respect of this Guarantee or
the Loan and direct the order or manner of sale thereof, and to bid at any such
sale, or exercise any other right or remedy that Administrative Agent or the
Lenders may have against any such security, in each case as in its discretion
may determine consistent with any applicable security agreement, including
foreclosure on any such security pursuant to one or more judicial or nonjudicial
sales, even though such action operates to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of the Guarantor against
the Borrower or Operating Lessee or any security for the Guaranteed Obligations;
and (vi) exercise any other rights available to it under the Loan
Documents. Guarantor authorizes Administrative Agent (on behalf of
the Lenders) at any time in its discretion to direct the order and manner of any
sale of all or any part of any security now or later held for the Guaranteed
Obligations or this Guarantee, and to bid to at any such sale, to apply any
payments or recoveries from the Borrower, Operating Lessee, Guarantor or any
other source, and any proceeds of any security, to the Guaranteed Obligations in
such manner, order and priority as Administrative Agent (on behalf of the
Lenders) may elect (whether or not those obligations are guaranteed by this
Guarantee or secured at the time of the application). Administrative
Agent may take any of the foregoing actions upon any terms and conditions as
Administrative Agent may elect, without giving notice to Guarantor or obtaining
the consent of Guarantor and without affecting the liability of Guarantor to
Administrative Agent or the Lenders.
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(e) Except
as expressly provided in Sections 1.02(c) and
1.02(d), this
Guarantee and the obligations of Guarantor hereunder shall be valid and
enforceable and shall not be subject to any reduction, limitation, impairment,
discharge or termination for any reason (other than payment in full of the
outstanding Loan, together with all other amounts due to the Administrative
Agent and the Lenders under the Loan Documents or performance in full of the
Guaranteed Obligations), including, without limitation, the occurrence of any of
the following, whether or not Guarantor shall have had notice or knowledge of
any of them: (i) any failure or omission to assert or enforce or agreement or
election not to assert or enforce, or the stay or enjoining, by order of court,
by operation of law or otherwise, of the exercise or enforcement of, any claim
or demand or any right, power or remedy (whether arising under the Loan
Documents, at law, in equity or otherwise) with respect to the Guaranteed
Obligations or the Loan Documents, or with respect to any other guaranty of or
security for the payment or performance of the Guaranteed Obligations or the
Loan; (ii) any rescission, waiver, amendment or modification of, or any consent
to departure from, any of the terms or provisions (including without limitation
provisions relating to events of default) of the Loan Documents, or of any other
guaranty or security for the Guaranteed Obligations or the Loan, in each case
whether or not in accordance with the terms of the Loan Documents or any
agreement relating to such other guaranty or security; (iii) any Loan Document,
at any time being found to be illegal, invalid or unenforceable with respect to
the Borrower or Operating Lessee; (iv) the application of payments received from
any source (other than payments received pursuant to this Guarantee or the other
Loan Documents or from the proceeds of any security for the Guaranteed
Obligations or the Notes except to the extent such security also serves as
collateral for indebtedness other than the Guaranteed Obligations or the Notes)
to the payment of indebtedness other than the Loan, even though Administrative
Agent and/or the Lenders might have elected to apply such payment to any part or
all of the Loan; (v) Administrative Agent’s consent to the change,
reorganization or termination of the ownership structure or existence of the
Borrower or Operating Lessee or any of their Affiliates and to any corresponding
restructuring of the Loan, including, without limitation, the Guaranteed
Obligations; (vi) any failure to perfect or continue perfection of a security
interest in any collateral which secures any of the Loan, including, without
limitation, the Guaranteed Obligations; (vii) any defenses, set-offs or
counterclaims that the Borrower or Operating Lessee may assert against
Administrative Agent or any of the Lenders in respect of the Loan, including,
without limitation, the failure of consideration, breach of warranty, payment,
statute of frauds, statute of limitations, accord and satisfaction and usury,
other than payment or performance of such obligations under the Loan Documents
to the extent encompassed in the Guaranteed Obligations; (viii) the acquisition
or transfer of title to the Project to Administrative Agent, any of the Lenders,
any Affiliate of the Lenders or any designee of Administrative Agent or the
Lenders (including, without limitation, any purchaser through foreclosure, deed
in lieu or otherwise) and (ix) any act or event which might otherwise discharge,
reduce, limit or modify Guarantor’s obligations under this Guarantee; any
waiver, extension, modification, forbearance, delay or other act or omission of
Administrative Agent or the Lenders, or their failure to proceed promptly or
otherwise as against the Borrower, Operating Lessee, Guarantor or any security;
any action, omission or circumstance which might increase the likelihood that
Guarantor may be called upon to perform under this Guarantee or which might
affect the rights or remedies of Guarantor as against the Borrower or Operating
Lessee; any dealings occurring at any time between the Borrower or Operating
Lessee and Administrative Agent or any Lender, whether relating to the
Guaranteed Obligations or otherwise; and any other act or thing or omission, or
delay to do any other act or thing, which may or might in any manner or to any
extent vary the risk of Guarantor as an obligor in respect of the Guaranteed
Obligations.
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1.03. Waivers by
Guarantor. To the fullest extent permitted by applicable Law,
Guarantor hereby waives, for the benefit of Administrative Agent and the
Lenders:
(a) any
right to require Administrative Agent or the Lenders, as a condition of payment
or performance by Guarantor, to (i) proceed against the Borrower, Operating
Lessee, any other guarantor of the Guaranteed Obligations, any Defaulting
Tenant, East West, McCormicks or any other Person, (ii) proceed against or
exhaust any security held from the Borrower, Operating Lessee, any other
guarantor, any Defaulting Tenant, East West, McCormicks or any other Person,
(iii) proceed against or have resort to any balance of any deposit account or
credit on the books of the Lenders in favor of the Borrower, Operating Lessee,
any Defaulting Tenant, East West, McCormicks or any other Person, or (iv) pursue
any other remedy in the power of Administrative Agent or any of the Lenders
whatsoever;
(b) any
defense arising by reason of the incapacity, lack of authority or any disability
or other defense of the Borrower, Operating Lessee, any Defaulting Tenant, East
West or McCormicks, including, without limitation, any defense based on or
arising out of the lack of validity or the unenforceability of the Guaranteed
Obligations or any agreement or instrument related thereto or by reason of the
cessation of the liability of the Borrower or Operating Lessee, any Defaulting
Tenant, East West or McCormicks from any cause other than payment and
performance in full of the Guaranteed Obligations;
(c) any
defense based upon any statute or rule of law which provides that the obligation
of a surety must be neither larger in amount nor in other respects more
burdensome than that of the principal;
8
(e) (i)
any principles or provisions of law, statutory or otherwise, which are or might
be in conflict with the terms of this Guarantee and any legal or equitable
discharge of Guarantor’s obligations hereunder (other than payment, performance
and completion of the Guaranteed Obligations or the Loan in full), (ii) the
benefit of any statute of limitations affecting Guarantor’s liability hereunder
or the enforcement hereof, (iii) any rights to set-offs, recoupments and
counterclaims and (iv) promptness, diligence and any requirement that
Administrative Agent or any of the Lenders protect, secure, perfect or insure
any security interest or lien or any property subject thereto;
(f) notices,
demands, presentments, protests, notices of protest, notices of dishonor and
notices of any action or inaction, notices of default under the other Loan
Documents or any agreement or instrument related thereto, notices of any
renewal, extension or modification of the Guaranteed Obligations or any
agreement related thereto, notices of any extension of credit to the Borrower or
Operating Lessee and any right to consent to any thereof;
(g) any
release, discharge, modification, impairment or limitation of the liability of
the Borrower or Operating Lessee, any Defaulting Tenant, East West or McCormicks
to Administrative Agent or the Lenders, whether consented to by Administrative
Agent or the Lenders, consensual or arising by operation of law or any
proceedings in bankruptcy or reorganization, or from any other
cause;
(h) any
defense based on any rejection or disaffirmance of the Guaranteed Obligations,
or any part thereof, or any security held therefor, in any such proceedings in
bankruptcy or reorganization;
(i) any
defense based on any action taken or omitted by Administrative Agent or the
Lenders in any proceedings in bankruptcy or insolvency involving the Borrower or
Operating Lessee, any Defaulting Tenant, East West or McCormicks, including any
election to have their claim allowed as being secured, partially secured or
unsecured, any extension of credit by Administrative Agent or the Lenders to the
Borrower or Operating Lessee, any Defaulting Tenant, East West or McCormicks in
any proceedings in bankruptcy or insolvency, and taking and holding by
Administrative Agent or the Lenders of any security for any such extension of
credit; and
(j) any
defense or benefits that may be derived from or afforded by law which limit the
liability of or exonerate guarantors or sureties, or which may conflict with the
terms of this Guarantee, other than payment or performance of such obligations
under the Loan Documents.
1.04 Additional
Waivers. Without implying that this Guarantee is intended to
be governed by the laws of any state other than the state of New York, and
without limiting any of the other provisions and waivers set forth in this
Guarantee, Guarantor further agrees as follows:
9
(b) Guarantor
understands and acknowledges that if Administrative Agent forecloses judicially
or nonjudicially against any real property security for the Borrower’s or
Operating Lessee’s obligations, such foreclosure could impair or destroy any
right or ability that Guarantor may have to seek reimbursement, contribution, or
indemnification for any amounts paid by Guarantor under this
Guarantee. Guarantor further understands and acknowledges that in the
absence of this waiver such potential impairment or destruction of Guarantor’s
rights, if any, may entitle Guarantor to assert a defense to this Guarantee
based on Code of Civil Procedure §580d as interpreted in Union Bank ▇.
▇▇▇▇▇▇▇, (1968) 265 CA 2d 40, 71 CR 64, on the grounds, among others,
that a lender
should be estopped from pursuing a guarantor because Administrative Agent’s
election to foreclose may impair or destroy the subrogation, reimbursement,
contribution, or indemnification rights of Guarantor. By execution of
this Guarantee, Guarantor intentionally, freely, irrevocably, and
unconditionally: (i) waives and relinquishes that defense and agrees
that Guarantor will be liable under this Guarantee even though Administrative
Agent had foreclosed judicially or nonjudicially against any real or personal
property collateral for Borrower’s or
Operating Lessee’s obligations; (ii) agrees that Guarantor will not assert that
defense in any action or proceeding in which Administrative Agent or any Lender
seeks to enforce this Guarantee; and (iii) acknowledges and agrees that the
rights and defenses waived by Guarantor in this Guarantee include any right or
defense that Guarantor may have or be entitled to assert based on or arising out
of any one or more of Code of Civil Procedure §§580a, 580b, 580d, or 726, or
Civil Code §2848.
(c) Guarantor
intentionally, freely, irrevocably and unconditionally waives and relinquishes
all rights which may be available to it under any provision of California law or
under any California judicial decision, including, without limitation, Section
580a and 726(b) of the California Code of Civil Procedure, to limit the amount
of any deficiency judgment or other judgment which may be obtained against
Guarantor under this Guarantee to not more than the amount by which the unpaid
obligations of Borrower under the Loan Documents guaranteed hereby plus all
other indebtedness due from Borrower under the
Loan
Documents exceeds the
10
fair
market value or fair value of any real or personal property securing said
obligations of Borrower under the Loan Documents and any other indebtedness due
from Borrower
under the Loan
Documents, including, without limitation, all rights to an appraisement
of, judicial or other hearing on, or other determination of the value of said
property. Guarantor acknowledges and agrees that, as a result of the
foregoing waiver, Administrative Agent and the Lenders may be entitled to
recover from Guarantor an amount which, when combined with the value of any real
or personal property foreclosed upon by Administrative Agent (or the proceeds of
the sale of which have been received by Administrative Agent or the Lenders) and
any sums collected by Administrative Agent and the Lenders from Borrower or other
persons, might exceed the amount of the obligations of Borrower under the Loan
Documents guaranteed hereby plus all other indebtedness due from Borrower under the
Loan
Documents.
(d) Guarantor
waives all rights and defenses that Guarantor may have because Borrower’s debt
is secured by real property; this means, among other things: (i)
Administrative Agent and the Lenders may collect from Guarantor without first
foreclosing on any real or personal property collateral pledged by Borrower or
Operating Lessee; and (ii) if Administrative Agent or the Lenders foreclose on
any real property collateral pledged by Borrower or Operating Lessee:
(A) the amount of the Obligations may be reduced only by the price for
which that collateral is sold at the foreclosure sale, even if the collateral is
worth more than the sale price; and (B) Administrative Agent and the Lenders may
collect from Guarantor even if Administrative Agent, by foreclosing on the real
property collateral, has destroyed any right Guarantor may have to collect from
Borrower or Operating Lessee. This is an unconditional and
irrevocable waiver of any rights and defenses Guarantor may have because the
Guaranteed Obligations are secured by real property. These rights and
defenses include, but are not limited to, any rights or defenses based upon
Section 580a, 580b, 580d, or 726 of the California Code of Civil
Procedure. Guarantor specifically waives any right to a fair value
hearing, and any and all other rights it may have under Section 580a of the
California Code of Civil Procedure.
(e) Guarantor
waives all rights and defenses arising out of an election of remedies by
Administrative Agent and the Lenders, even though that election of remedies,
such as a nonjudicial foreclosure with respect to security for the Guaranteed
Obligations, has destroyed Guarantor’s rights of subrogation and reimbursement
against the principal by the operation of Section 580d of the California Code of
Civil Procedure or otherwise.
(f) Guarantor
waives all rights and defenses which might otherwise be available to Guarantor
under any guarantor, suretyship or other defenses under any law of the state of
California, including, without limitation, California Civil Code Sections 2787
to 2855, inclusive, 2899 and 3433, and California Code of Civil Procedure
Section 359.5.
(g) Guarantor
agrees that if the maturity of any Guaranteed Obligation is accelerated by
bankruptcy, insolvency or otherwise, such maturity shall also be deemed
accelerated for the purpose of this Guarantee without demand on or notice to
Guarantor, and, to the fullest extent permitted by applicable Law, Guarantor
hereby waives any such demand or notice.
1.05. Reinstatement. The
obligations of Guarantor under this Section 1 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of the Borrower, Operating Lessee or Guarantor in respect of the
Guaranteed Obligations is rescinded or must be otherwise restored by any holder
of the Guaranteed Obligations, whether as a result of any proceedings in
bankruptcy or insolvency or otherwise; and Guarantor agrees that
11
it will
indemnify Administrative Agent and the Lenders on demand for all reasonable
costs and expenses (including, without limitation, reasonable fees and expenses
of counsel) incurred by Administrative Agent or any of the Lenders in connection
with such rescission or restoration, including any such costs and expenses
incurred in defending against any claim alleging that such payment constituted a
preference, fraudulent transfer or similar payment under any bankruptcy,
insolvency or similar law.
1.06. Guarantor’s Rights of
Subrogation, Contribution, Etc. To the fullest extent
permitted by applicable Law, Guarantor hereby waives, until the later of (a) the
indefeasible payment, performance and completion in full of the Guaranteed
Obligations and (b) the indefeasible payment in full of the Loan and all other
amounts due under the Loan, any claim, right or remedy, direct or indirect, that
Guarantor now has or may hereafter have against the Borrower, Operating Lessee
or any of their assets in connection with this Guarantee or the performance by
Guarantor of its obligations hereunder, in each case whether such claim, right
or remedy arises in equity, under contract, by statute, under common law or
otherwise and, including without limitation, (i) any right of subrogation,
reimbursement or indemnification that Guarantor now has or may hereafter have
against the Borrower or Operating Lessee, (ii) any right to enforce, or to
participate in, any claim, right or remedy that Administrative Agent or the
Lenders now have or may hereafter have against the Borrower or Operating Lessee,
and (iii) any benefit of, and any right to participate in, any collateral or
security now or hereafter held by or on behalf of Administrative Agent and/or
any of the Lenders. In addition, until the Loan and all other amounts
due under the Loan Documents have been indefeasibly paid in full, Guarantor
shall withhold exercise of any right of contribution which Guarantor may have
against any other guarantor of the Loan or the Guaranteed
Obligations. Each Guarantor further agrees that, to the extent the
waiver or agreement to withhold the exercise of its right of subrogation,
reimbursement, indemnification and contribution as set forth herein is found by
a court of competent jurisdiction to be void or voidable for any reason, any
rights of subrogation, reimbursement or indemnification Guarantor may have
against the Borrower or Operating Lessee or against any collateral or security,
and any rights of contribution Guarantor may have against any such other
guarantor, shall be junior and subordinate to any rights Administrative Agent
and/or any of the Lenders may have against the Borrower or Operating Lessee, to
all right, title and interest Administrative Agent and/or any of the Lenders may
have in any such collateral or security, and to any right Administrative Agent
and/or any of the Lenders may have against such other guarantor. If
any amount shall be paid to the Guarantor on account of any such subrogation,
reimbursement, indemnification or contribution rights at any time when (A) all
Guaranteed Obligations shall not have been paid, performed and completed in
full, or (B) the entire outstanding Loan and all other amounts due under the
Loan Documents shall not have been paid in full, such amount shall be held in
trust for Administrative Agent (on behalf of the Lenders) and shall forthwith be
paid over to Administrative Agent (on behalf of the Lenders) to be credited and
applied against the Guaranteed Obligations, whether matured or unmatured, in
accordance with the terms hereof.
1.07. Subordination of Other
Obligations. Any indebtedness of the Borrower or Operating
Lessee now or hereafter held by Guarantor is hereby subordinated in right of
payment to the Loan and to the payment, performance and completion of the
Guaranteed Obligations, and any such indebtedness of the Borrower, Operating
Lessee to Guarantor collected or received by Guarantor after an Event of Default
has occurred and is continuing shall be held in trust for Administrative Agent
(on behalf of the Lenders) and shall forthwith be paid over to Administrative
Agent (on behalf of the Lenders) to be credited and applied against the
12
Guaranteed
Obligations but without affecting, impairing or limiting in any manner the
liability of Guarantor under any other provision of this Guarantee.
1.08. Remedies.
(a) Guarantor
agrees that, as between Guarantor and Administrative Agent and the Lenders, the
obligations of the Borrower under any of the Loan Documents may be declared to
be forthwith due and payable as provided in the Loan Documents (and shall be
deemed to have become automatically due and payable in the circumstances therein
provided) for purposes of Section 1.01 hereof
notwithstanding any stay, injunction or other prohibition preventing the
enforcement of such obligations as against the Borrower; and that, in the event
of such declaration (or such obligation being deemed to have become
automatically due and payable), such obligations (whether or not enforceable as
against the Borrower) to the extent they constitute part of the Guaranteed
Obligations shall forthwith become due by Guarantor for purposes of Section 1.01
hereof. Administrative Agent (on behalf of the Lenders) may bring and
prosecute a separate action against Guarantor to enforce the Guaranteed
Obligations under this Guarantee, whether or not any action is brought against
the Borrower or any other Person and whether or not the Borrower, Operating
Lessee or any other Person is joined in any such action or actions.
(b) All
of the remedies set forth in this Guarantee and/or provided for in any of the
Loan Documents or at law or in equity shall be equally available to
Administrative Agent (on behalf of the Lenders), and the choice by
Administrative Agent (on behalf of the Lenders) of one such alternative over
another shall not be subject to question or challenge by Guarantor or any other
Person, nor shall any such choice be asserted as a defense, setoff, or failure
to mitigate damages in any action, proceeding, or counteraction by
Administrative Agent (on behalf of the Lenders) to recover or seek any other
remedy under this Guarantee, nor shall any such choice preclude Administrative
Agent (on behalf of the Lenders) from subsequently electing to exercise a
different remedy.
1.09. Post-Default
Interest. Guarantor hereby agrees that in the event it shall
fail to pay in full any amount owing by it hereunder within five (5) Business
Days following delivery of a written demand by the Administrative Agent for
payment of such amount, it shall be obligated to pay interest at the Default
Rate in respect of any such amount for each day during the period from and
including the due date thereof to but excluding the date the same shall be paid
in full, such interest to be payable upon demand of Administrative Agent; provided, however, that payment
under this Section
1.09 shall not be in duplication of any payment made by Guarantor or the
Borrower pursuant to the Loan Documents.
1.10. Continuing
Guarantee. This Guarantee is a continuing guaranty and shall
remain in effect until the earlier of (i) all of the Guaranteed Obligations
shall have been paid, performed and completed in full or (ii) the Loan have been
paid in full; including, without limitation, in either case, the payment of any
and all reasonable expenses which might be incurred by Administrative Agent or
the Lenders in enforcing any of its rights hereunder (which expense shall be
included within the meaning of Guaranteed Obligations) and all interest due
pursuant to Section
1.09.
1.11. Enforceability;
Etc. Administrative Agent (on behalf of the Lenders) or any
other or subsequent beneficiary of this Guarantee may enforce the obligations
undertaken by Guarantor hereunder.
13
1.12. Assumption of Risk Regarding
Borrower’s Financial Condition. Before signing this Guarantee,
Guarantor investigated the financial condition and business operations of the Borrower,
Operating Lessee, ▇▇▇▇▇▇ Mae, East West, the Project encumbered by the Mortgage,
and such other matters as Guarantor deemed appropriate to assure itself of the Borrower’s and
Operating Lessee’s ability to discharge its obligations under the Loan Documents and of the
ability of ▇▇▇▇▇▇ ▇▇▇ and East West to discharge their obligations under their
respective leases. Guarantor assumes full responsibility for
keeping fully informed of the financial condition of the Borrower, Operating
Lessee, ▇▇▇▇▇▇ Mae and East West and all other circumstances affecting the
Borrower’s and Operating Lessee’s ability to perform its obligations to
Administrative Agent and the Lenders and of the ability of
▇▇▇▇▇▇ ▇▇▇ and East West to discharge their obligations under their respective
leases, and agrees that neither Administrative Agent nor any Lender will
have any duty to report to Guarantor any information which it receives about the
Borrower’s, Operating Lessee’s, ▇▇▇▇▇▇ Mae’s or East West’s financial condition
or any circumstances bearing on the Borrower’s, Operating Lessee’s, ▇▇▇▇▇▇ Mae’s
or East West’s ability to perform.
Section
2. Representations and
Warranties. Guarantor hereby represents and warrants to
Administrative Agent and the Lenders that:
2.01. Existence. Guarantor: (i) is
a limited partnership duly organized and validly existing under the laws of the
state of Maryland; (ii) has as its sole general partner the REIT (as defined
below), (iii) has all requisite partnership power, and has all material
governmental licenses, authorizations, consents and approvals necessary to own
its assets and carry on its business as now being or as proposed to be
conducted; and (iv) is qualified to do business in all jurisdictions in
which the nature of the business conducted by it makes such qualification
necessary.
2.02. No
Breach. None of the execution and delivery of this Guarantee,
the consummation of the transactions herein contemplated or compliance with the
terms and provisions hereof will conflict with or result in a breach of, or
require any consent under, the organizational documents pursuant to which
Guarantor is organized, or any applicable law or regulation, or any order, writ,
injunction or decree of any court or governmental authority or agency, or any
agreement or instrument to which Guarantor is a party or by which it is bound or
to which it is subject, or constitute a default under any such agreement or
instrument, or result in the creation or imposition of any lien upon any of the
revenues or assets of Guarantor pursuant to the terms of any such agreement or
instrument.
2.03. Action. Guarantor
has all necessary organizational power and authority, as the case may be, to
execute, deliver and perform its obligations under this Guarantee; the
execution, delivery and performance by Guarantor of this Guarantee have been
duly authorized by all necessary organizational action, as the case may be, on
its part; and this Guarantee has been duly and validly executed and delivered by
Guarantor and constitutes its legal, valid and binding obligation, enforceable
in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws of general application
affecting the enforcement of creditors’ rights.
2.04. Approvals. No
authorizations, approvals or consents of, and no filings or registrations with,
any governmental or regulatory authority or agency are necessary for the
14
execution,
delivery or performance by Guarantor of this Guarantee or for the validity or
enforceability hereof.
2.05. Financial
Condition. The 10-Q filed with the United States Securities
and Exchange Commission by ▇▇▇▇▇▇▇ Properties, Inc., a Maryland corporation (the
“REIT”), with
respect to the quarter ending as of June 30, 2008, is materially complete and
correct and fairly presents the financial condition of Guarantor and the REIT as
at the date of such filing. As of the date of such filing, Guarantor
and the REIT had no material contingent liabilities, liabilities for taxes,
unusual forward or long-term commitments or unrealized or anticipated losses
from any unfavorable commitments, except as referred to or reflected or provided
for in said balance sheet. Since the date of such filing, there has
been no material adverse change in Guarantor’s or the REIT’s financial
condition.
2.06. Litigation. Except
as disclosed to Administrative Agent and the Lenders in writing prior to the
date of this Guarantee, there are no legal or arbitration proceedings or any
proceedings by or before any Governmental Authority, now pending or (to the
knowledge of Guarantor) threatened against Guarantor which, if adversely
determined, could have a material adverse effect on Guarantor’s financial
condition or ability to enter into or comply with its obligations
hereunder.
2.07. Taxes. Guarantor
has filed all Federal income tax returns and all other material tax returns and
information statements that are required to be filed by it and has paid all
taxes due pursuant to such returns or pursuant to any assessment received by
Guarantor.
Section
3. Covenants. Guarantor
covenants to Administrative Agent and each Lender that, until the payment,
performance and completion in full of the Guaranteed Obligations:
3.01. Existence,
Etc. Guarantor will preserve and maintain its corporate,
limited liability company or partnership existence, as the case may be, and all
of its other material rights, privileges and franchises necessary for the
maintenance of its existence and the conduct of its affairs; and comply with the
requirements of all applicable laws, rules, regulations and orders of
governmental or regulatory authorities. Guarantor will not amend or
permit the amendment of its organizational documents to permit the REIT to no
longer be the sole general partner of Guarantor, or otherwise permit to occur
any transfer or other transaction whereby the REIT is no longer the sole general
partner of Guarantor, without in each case the consent of Administrative
Agent.
3.02. Reports.
(a) Within
forty-five (45) days after the end of each calendar quarter,(i) Guarantor shall
furnish to Administrative Agent (for delivery to the Lenders) quarterly
financial statements (including a balance sheet, income statement and cash flow
statement) for Guarantor prepared in accordance with GAAP (and including all
appropriate and customary notes), and certificates executed by the chief
financial officer of the REIT and Guarantor stating that each such quarterly
statement presents fairly the financial condition of Guarantor and has been
prepared in accordance with general accepted accounting
principles. Such financial reports shall include a balance sheet for
such quarter and a detailed operating statement (showing quarterly activity and
year-to-date), and (ii) Guarantor shall furnish to Administrative Agent a
covenant
15
compliance
certificate executed by the chief financial officer of Guarantor certifying that
Guarantor complies with the financial covenants set forth in Section 3.04 below;
and
(b) Within
ninety (90) days after the end of each calendar year, the Guarantor shall
furnish certified annual financial statements (or if such financial statements
are consolidated with others, such consolidated financial statements) (in form
reasonably satisfactory to Administrative Agent) of the Guarantor for each such
fiscal year, audited by a “big four” accounting firm or other independent
certified public accountant acceptable to Administrative Agent and in the form
acceptable to Administrative Agent, including a balance sheet and statement of
profit and loss setting forth in comparative form figures for the preceding
fiscal year, prepared in accordance with GAAP. Guarantor’s financial
statements shall be accompanied by a certificate executed by the chief financial
officer of Guarantor stating that such annual financial statement presents
fairly the financial condition and the results of operations of Guarantor and
has been prepared in accordance with general accepted accounting principles;
and
(c) from
time to time such other information regarding the financial condition,
operations, business or prospects of Guarantor or the REIT, as Administrative
Agent may
reasonably request.
Notwithstanding
the foregoing, in lieu of the financial statements and certification of
Guarantor described above, Administrative Agent shall accept the
financial statements and certifications of the REIT of the exact type described
above with respect to Guarantor, so long as (i) except for a liability on the
balance sheet and an expense on the income statement of the REIT representing
the interests of minority limited partners in Guarantor that are not owned by
the REIT, the balance sheet and income statement of the REIT would, in
accordance with GAAP, be identical to that of Guarantor; (ii) each such
financial statement is accompanied by the unqualified opinion of the REIT’s
outside auditors to the effect that such financial statements comply with the
requirements in clause (i) above and identifying the respects, if any, in which
any item on the financial statements of the REIT would need to be adjusted in
order to reflect the proper treatment or amount of such item in accordance with
GAAP for Guarantor; and (iii) there is no change in the structure or ownership
of Guarantor that Administrative Agent concludes in reasonable
discretion would require the delivery of financial statements by Guarantor
itself in order to enable Administrative Agent and the Lenders to evaluate the
financial condition of Guarantor. With respect to any financial
statements of the REIT that the Administrative Agent is required to accept in
accordance with the foregoing, if the REIT files its quarterly and annual 10-K
and 10-Q filings with the Securities and Exchange Commission within the dates on
which Guarantor’s quarterly and annual financial statements are required to be
delivered pursuant to Sections 3.02(a) and (b) above, and if such filings
include financial statements for the REIT (in the case of the annual such
statements, audited as required pursuant to Section 3.02(b)) and certificates of
the REIT’s chief financial officer to the effect set forth in Sections 3.02(a)
and (b), then Administrative Agent shall accept, in lieu of the delivery of the
financial statements of the REIT in accordance with said Sections, the posting
of such quarterly and annual 10-K and 10-Q filings on the website for the REIT,
▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇,
on the dates on which such filings are made with the Securities and Exchange
Commission, it being understood that the Administrative Agent and the
Lenders shall be
entitled to rely on the financial statements included in such filings and on the
certifications with respect thereto set forth therein, to the same degree that
it would have been entitled to rely thereon had the financial statements and
certifications with respect thereto contained therein been delivered to
Administrative Agent (on
16
behalf of
the Lenders) in
accordance with Sections 3.02(a) and (b). Notwithstanding the
foregoing, nothing in this paragraph shall be deemed to limit the requirement of
Guarantor to deliver the financial covenant compliance certificate required
pursuant to Section 3.02(a)(ii) above.
3.03. Litigation. Guarantor
will promptly give Administrative Agent notice of any material legal or arbitral
proceedings, and of any material proceedings by or before any governmental or
regulatory authority or agency, affecting Guarantor.
3.04. Financial
Covenants.
(a) Tangible Net
Worth. Guarantor shall at all times maintain Tangible Net
Worth of not less than $500,000,000.
(b) Maximum Leverage
Ratio. Guarantor shall not permit the Leverage Ratio computed
for any fiscal quarter to exceed seventy-five percent (75%).
(c) Fixed Charge Coverage
Ratio. Guarantor shall not permit the Fixed Charge Coverage
Ratio computed for any fiscal quarter to be less than 1.00 to 1.00.
(d) Interest Coverage
Ratio. Guarantor shall not permit the Interest Coverage Ratio
computed for any fiscal quarter to be less than 1.05 to 1.00.
(e) Net Liquid
Assets. Guarantor shall at all times maintain Net Liquid
Assets of not less than $50,000,000.
(f) For
the purposes of this Section 3.04, the
following terms have the meanings set forth below:
(i) “Adjusted EBITDA” means, for
any Real Property or Person for any period, EBITDA of or attributable to such
Real Property or Person for such period adjusted to exclude (a) the effects
of all extraordinary, unusual or non-recurring non-cash gains, non-cash losses,
non-cash charges or expenses and (b) cash expenses up to an aggregate
amount of approximately $30,000,000 incurred in connection with Guarantor’s
review of strategic alternatives undertaken by the board of directors of the
REIT (primarily, but not limited to, investment banking fees and costs, legal
fees and costs, professional fees and costs and other fees and costs incurred by
the special committee of the REIT) and costs incurred in connection with the
resulting management changes (primarily, but not limited to, contractual
severance obligations for former executives, exit costs and expenses related to
Guarantor’s leases at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ and other
related costs and expenses).
(ii) “Annualized Net Operating
Income” means, for any Real Property for any fiscal quarter, the product
of (a) Net Operating Income attributable to such Real Property for such
fiscal
17
quarter
(adjusted to include Net Operating Income for new leases commenced in such
quarter) multiplied by (b) four.
(iii) Applicable Capitalization
Rate” means, with respect to any Real Property of a type set forth below,
the percentage set forth below for such type of Real Property:
|
Office
Real Property:
|
5.375%
|
|
Retail
Real Property:
|
5.375%
|
|
Hotel
Real Property:
|
7.50%
|
(iv) “Asset Value” means, at any
date of determination, (a) in the case of any Real Property (other than any
Development Property or Other Real Property), (i) the Annualized Net
Operating Income attributable to such Real Property for the fiscal quarter most
recently ended less all management fees payable to an unaffiliated property
manager in respect of such Real Property during such period, divided by
(ii) the Applicable Capitalization Rate (based on the relevant asset type),
provided, however, that in the case of any Real Property (other than any
Development Property or Other Real Property) in which the General Partner or any
of its Subsidiaries has acquired any direct or indirect interest (including
through the acquisition of Equity Interests) during the fiscal quarter of
determination, “Asset Value” for such fiscal quarter shall be the lesser of
(1) the Annualized Net Operating Income for such Real Property divided by
the Applicable Capitalization Rate and (2) the purchase price of such Real
Property, and (b) in the case of any Development Property or Other Real
Property, the most recently appraised value (such appraisal to have been
conducted within the last twelve months) of such Development Property or Other
Real Property or, in the absence of any such appraisal, the book value of such
Development Property or Other Real Property. At any date of
determination, in no case will Asset Value for the applicable fiscal quarter for
any Real Property be less than the net book value of such Real Property,
provided, however, that the Asset Value for any Real Property shall never be
less than zero.
(v) “Capitalized Leases” means all
leases that have been or should be, in accordance with GAAP, recorded as
capitalized leases.
(vi) “Cash Equivalents” means any of
the following, having a maturity of not greater than 90 days from the date of
issuance thereof: (a) readily marketable direct obligations of
the government of the United States or any agency or instrumentality thereof or
obligations unconditionally guaranteed by the full faith and credit of the
Government of the United States, (b) insured certificates of deposit of or
time deposits with any commercial bank that is a member of the Federal Reserve
System, issues (or
18
the
parent of which issues) commercial paper rated as described in clause (c) below,
is organized under the laws of the United States or any State thereof and has
combined capital and surplus of at least $1,000,000,000 or (c) commercial
paper in an aggregate amount of not more than $50,000,000 per issuer outstanding
at any time, issued by any corporation organized under the laws of any state of
the United States and rated at least “Prime-I” (or the then equivalent grade) by
▇▇▇▇▇’▇ Investors Services or “A-1” (or the then equivalent grade) by Standard
and Poor’s Rating Group, a division of ▇▇▇▇▇▇-▇▇▇▇ Companies Inc.
(vii) “CMBS” means commercial
mortgage backed securities.
(viii) “Consolidated” refers to the
consolidation of accounts in accordance with GAAP.
(ix) “Debt” of any Person means,
without duplication for purposes of calculating financial ratios, (a) all
indebtedness for borrowed money, (b) all Obligations of such Person for the
deferred purchase price of property or services other than trade payables
incurred in the ordinary course of business and not overdue by more than 60
days, (c) all Obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all Obligations of such Person
created or arising under any conditional sale or other title retention agreement
with respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (e) all Obligations
of such Person as lessee under Capitalized Leases, (f) all Obligations of
such Person under acceptance, letter of credit or similar facilities,
(g) all Obligations of such Person to purchase, redeem, retire, defease or
otherwise make any payment in respect of any Equity Interests in such Person or
any other Person (other than Preferred Interests that are issued by any General
Partner or Subsidiary thereof and classified as either equity or minority
interests in accordance with GAAP) or any warrants, rights or options to acquire
such capital stock, valued, in the case of Redeemable Preferred Interests, at
the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid
dividends, (h) all Obligations of such Person in respect of Hedge
Agreements, valued at the amount that would be payable by any Person or any of
its Subsidiaries to its counterparty to such Hedge Agreement, (i) all
Guarantee Obligations of such Person, (j) all Synthetic Debt of such Person and
(k) all indebtedness and other payment Obligations referred to in
clauses (a) through (j) above of another Person secured by (or for which
the holder of such Debt has an existing right, contingent or otherwise, to be
secured by) any Lien on property (including, without limitation, accounts and
contract rights) owned by such Person, even though
19
such
Person has not assumed or become liable for the payment of such indebtedness or
other payment Obligations.
(x) “Debt for Borrowed Money” of
any Person means the sum of (i) all items that, in accordance with GAAP,
would be classified as indebtedness on a Consolidated balance sheet of such
Person, (ii) all Synthetic Debt of such Person at such date and
(iii) all Mortgage Financings in the form of Preferred Interests; provided,
however, that in the case of the General Partner and its Subsidiaries “Debt for
Borrowed Money” shall also include, without duplication, the JV Pro Rata Share
of Debt for Borrowed Money for each Joint Venture; provided, further, that Debt
for Borrowed Money shall not include indebtedness to the extent such
indebtedness is secured by an effective Lien on cash or Cash Equivalents in a
manner that is intended to secure such indebtedness.
(xi) “Development Property” means
all Real Property listed on Schedule 1 (as such list is updated from time to
time by General Partner to reflect the ongoing status of the Real Property held
by General Partner and its Subsidiaries); and, as to any future acquisitions of
Real Property, properties classified as development properties, properties
classified as intended for repositioning, or identified as undeveloped land or
land held for sale or similar designation on a Consolidated balance sheet of the
General Partner and its Subsidiaries (it being understood that with respect to
Real Property that includes a developed portion, “Development Property” shall
refer to that portion of the Real Property intended for future
development).
(xii) “EBITDA” means, for any Real
Property or Person for any period, the sum of (i) net income (or net loss),
(ii) interest expense, (iii) income tax expense,
(iv) depreciation expense and (v) amortization expense, in each case
of or attributable to such Real Property or Person and determined in accordance
with GAAP for such period, including, in the case of any Joint Venture, the JV
Pro Rata Share of the EBITDA of such Joint Venture for such period.
(xiii) “Equity Interests” means, with
respect to any Person, shares of capital stock of (or other ownership or profit
interests in) such Person, warrants, options or other rights for the purchase or
other acquisition from such Person of shares of capital stock of (or other
ownership or profit interests in) such Person, securities convertible into or
exchangeable for shares of capital stock of (or other ownership or profit
interests in) such Person or warrants, rights or options for the purchase or
other acquisition from such Person of such shares (or such other interests), and
other ownership or profit interests in such Person (including, without
limitation, partnership, member or trust interests therein), whether
20
voting or
nonvoting, and whether or not such shares, warrants, options, rights or other
interests are authorized or otherwise existing on any date of
determination.
(xiv) “Fixed Charge Coverage Ratio”
means, for any period of four consecutive fiscal quarters, the ratio of (a)
Adjusted EBITDA to (b) the sum of (i) interest (including capitalized interest,
but excluding interest to be funded from interest reserves for Permitted
Construction Financing) and interest funded from interest reserves designated
for such purposes payable in cash on, and amortization of debt discount in
respect of, all Debt for Borrowed Money plus (ii) scheduled principal repayments
of all Debt for Borrowed Money payable plus (iii) all dividends payable on any
Preferred Interests, in each case, of or by the General Partner and its
Subsidiaries and determined on a Consolidated basis for such
period.
(xv) “General Partner” means ▇▇▇▇▇▇▇
Properties, Inc., a Maryland corporation and general partner of ▇▇▇▇▇▇▇
Properties, L.P., a Maryland limited partnership.
(xvi) “Guarantee Obligations” means,
with respect to any Person, any Obligation or arrangement of such Person to
guarantee or intended to guarantee any Debt, leases, dividends or other payment
Obligations (“primary
obligations”) of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly, including,
without limitation, (a) the direct or indirect guarantee, endorsement (other
than for collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of the Obligation
of a primary obligor, (b) the Obligation to make take-or-pay or similar
payments, if required, regardless of nonperformance by any other party or
parties to an agreement or (c) any Obligation of such Person, whether or not
contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or
supply funds (A) for the purchase or payment of any such primary obligation
or (B) to maintain working capital or equity capital of the primary obligor
or otherwise to maintain the net worth or solvency of the primary obligor,
(iii) to purchase property, assets, securities or services primarily for
the purpose of assuring the owner of any such primary obligation of the ability
of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the holder of such primary
obligation against loss in respect thereof. The amount of any
Guarantee Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made (or, if less, the maximum amount of such primary obligation
for which such Person may be liable pursuant to the terms of the instrument
evidencing such Guarantee
21
Obligation)
or, if not stated or determinable, the maximum reasonably anticipated liability
in respect thereof (assuming such Person is required to perform thereunder), as
determined by such Person in good faith.
(xvii) “Hotel Real Property” means
Real Property that operates or is intended to be operated as a hotel, motel or
other lodging for transient use of rooms or is a structure from which a hotel,
motel or other lodging for transient use of rooms is operated or intended to be
operated.
(xviii) “Interest Coverage Ratio”
means, for any period of four consecutive fiscal quarters, the ratio of (a)
Adjusted EBITDA to (b) interest (including capitalized interest, but excluding
interest to be funded from interest reserves for Permitted Construction
Financing) and interest funded from interest reserves designated for such
purposes payable on, and amortization of debt discount in respect of, all Debt
for Borrowed Money, in each case, of or by the Guarantor and its Subsidiaries
and determined on a Consolidated basis for such period, provided that for
purposes of this clause (b), interest shall include, in the case of any Joint
Venture, its JV Pro Rata Share of the interest of such Joint Venture for such
period.
(xix) “Joint Venture” means any joint
venture (a) in which the General Partner or any of its Subsidiaries holds
any Equity Interest, (b) that is not a Subsidiary of the General Partner or
any of its Subsidiaries and (c) the accounts of which would not appear on
the Consolidated financial statements of the General Partner.
(xx) “JV Pro Rata Share” means, with
respect to any Joint Venture at any time, the fraction, expressed as a
percentage, obtained by dividing (a) the total value of all Equity
Interests in such Joint Venture held by the General Partner and any of its
Subsidiaries by (b) the total value of all outstanding Equity Interests in
such Joint Venture at such time.
(xxi) “Leverage Ratio” means the
ratio, expressed as a percentage, of (a) Debt for Borrowed Money of the
General Partner and its Subsidiaries to (b) Total Asset Value, in each case
as at the end of the most recently ended fiscal quarter of the General
Partner.
(xxii) “Lien” means any lien, security
interest or other charge or encumbrance of any kind, or any other type of
preferential arrangement, including, without limitation, the lien or retained
security title of a conditional vendor and any easement, right of way or other
encumbrance on title to real property.
22
(xxiii) “Limited Recourse Carve-Outs”
means customary carve-outs to Non-Recourse Debt such as, for example, personal
recourse of the borrower for fraud, misrepresentation, bankruptcy,
misapplication of cash, waste, environmental claims and liabilities and other
circumstances customarily excluded by lenders from exculpation provisions and/or
included in separate indemnification agreements in non-recourse financings of
real estate.
(xxiv) “Liquid Assets” means the sum
of cash and Cash Equivalents to the extent not encumbered by any
Lien.
(xxv) “Mortgage Financing” means the
issuance of CMBS or other commercial mortgage financing, mezzanine financing,
Preferred Interests and similar Real Property related financing entered into by
any Subsidiary of Guarantor that is directly or indirectly collateralized by, or
in the case of Preferred Interests, that directly or indirectly derive their
value from, Real Property or, in each case, but without duplication, any
Refinancing Debt incurred to refinance such Mortgage Financing.
(xxvi)
“Net Liquid Assets”
means the Consolidated Liquid Assets of the Guarantor and its Subsidiaries at
such time.
(xxvii) “Net Operating Income” means,
with respect to any Real Property for any period, the total rental and other
income from the operation of such Real Property for such period, after deducting
all expenses and other proper charges incurred by the Guarantor in connection
with the operation and maintenance of such Real Property during such period,
including, without limitation, management fees, real estate taxes and bad debt
expenses, but before payment or provision for debt service charges; income taxes
and depreciation, amortization and other non-cash expenses, in each case for
such period, all as determined in accordance with GAAP.
(xxviii) “Non-Recourse Debt” means Debt
with respect to which recourse for payment is limited to (a) any building(s) or
parcel(s) of Real Property or any related assets encumbered by a Lien securing
such Debt and/or (b) the general credit of any property-level owning Subsidiary
and/or the Equity Interests therein, it being understood that the instruments
governing such Debt may include Limited Recourse Carve-Outs.
(xxix) “Obligation” means, with
respect to any Person, any payment, performance or other obligation of such
Person of any kind, including, without limitation, any liability of such-Person
on any claim, whether or not the right of any creditor to payment in respect of
such claim is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, disputed, undisputed, legal, equitable, secured or unsecured, and
whether or not such
23
claim is
discharged, stayed or otherwise affected by any proceeding.
(xxx) “Office Real Property” means
Real Property (exclusive of any Development Property) that is an office building
or a structure from which commercial businesses operate.
(xxxi) “Other Real Property” means
Real Property that is neither Hotel Real Property nor Office Real Property nor
Retail Real Property.
(xxxii) “Permitted Construction
Financing” means Non-Recourse Debt incurred to finance the construction
or improvement of a Development Property.
(xxxiii) “Preferred Interests” means,
with respect to any Person, Equity Interests issued by such Person that are
entitled to a preference or priority over any other Equity Interests issued by
such Person upon any distribution of such Person’s property and assets, whether
by dividend, or upon liquidation.
(xxxiv) “Real Property” means all
right, title and interest of Person in and to any land and any improvements
located thereon, together with all equipment, furniture, materials, supplies and
personal property in which such Person has an interest now or hereafter located
on or used in connection with such land and improvements, and all appurtenances,
additions, improvements, renewals, substitutions and replacements thereof now or
hereafter acquired by such Person.
(xxxv) “Redeemable” means, with
respect to any Equity Interest, any such Equity Interest that (a) the issuer has
undertaken to redeem at a fixed or determinable date or dates, whether by
operation of a sinking fund or otherwise, or upon the occurrence of a condition
not solely within the control of the issuer or (b) is redeemable at the option
of the holder.
(xxxvi) “Refinancing Debt” means, with
respect to any Debt, any Debt extending the maturity of, or refunding or
refinancing, in whole or in part, such Debt.
(xxxvii) “Retail Real Property” means
Real Property that is operated primarily or is intended to be operated primarily
as a retail-complex or retail center.
(xxxviii) “Subsidiary” of any Person
means any corporation, partnership, joint venture, limited liability company,
trust or estate of which (or in which) more than 50% of (a) the issued and
outstanding capital stock having ordinary voting power to elect a majority of
the board of directors of such corporation (irrespective of whether at the time
capital stock of any other class
24
or
classes of such corporation shall or might have voting power upon the occurrence
of any contingency), (b) the interest in the capital or profits of such
partnership, joint venture or limited liability company or (c) the beneficial
interest in such trust or estate, in each case is at the time directly or
indirectly owned or controlled by such Person, by such Person and one or more of
its other Subsidiaries or by one or more of such Person’s other
Subsidiaries.
(xxxix) “Synthetic Debt” means the
monetary obligation of a Person under (a) a so-called synthetic,
off-balance sheet or tax retention lease, or (b) an agreement for the use
or possession of property creating obligations that do not appear on the balance
sheet of such Person (excluding operating leases) but which upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).
(xl) “Tangible Net Worth” means the
amount by which Consolidated total tangible assets exceeds Consolidated total
liabilities, in each case, of the Guarantor and its Subsidiaries.
(xli) “Total Asset Value” means, on
any date of determination, the sum of the Asset Values for all Real Property at
such date; provided, that, with
respect to any real property owned (and for this purpose being deemed to
constitute “Real Property”), directly or indirectly, by a Joint Venture, Total
Asset Value shall include the JV Pro Rata Share of the Asset Value for such Real
Property.
3.05. Change in
Control. Guarantor shall not permit any Change in Control to
occur.
3.06. Inspection of Books and
Records; Discussions. Guarantor shall keep proper books of
records and account in which full, true and correct entries in conformity with
GAAP and all Applicable Law shall be made of all dealings and transactions in
relation to its business and activities; and shall permit representatives of
Administrative Agent and any Lender, upon
reasonable advance written notice (except while an Event of Default exists),
during normal business hours, to examine and make abstracts from any of its
books and records, and to discuss the business, operations, properties and
financial and other condition of Guarantor and subsidiaries of Guarantor with
officers and employees of Guarantor and subsidiaries of Guarantor and with its
independent certified public accountants.
3.07. Disposition of
Assets. Except as may otherwise be permitted under the Loan
Agreement, Guarantor shall not at any time enter into any transaction providing
for the sale, transfer, encumbrance, pledge, mortgage or other disposition of
any of its assets (or the future income therefrom), or otherwise dispose of any
of its property (whether by assignment, gift or creation of a trust or
otherwise), other than for fair value and provided that such sale, transfer,
encumbrance, pledge mortgage or other disposition would not reasonably be
expected to
25
have a
material adverse effect on Guarantor’s financial condition or ability to perform
its obligations hereunder.
3.08. Loan Agreement
Covenants. Guarantor shall comply with all of the Borrower’s
covenants set forth in the Loan Agreement to the extent they apply to Guarantor
expressly (i.e., such covenants whereby the Borrower has agreed that Guarantor
will take or not take some action), or that apply to Guarantor as a “Restricted
Party.”
3.09. Payment Obligations of
Guarantor. Guarantor shall, and will cause each of its
subsidiaries to, pay, discharge or otherwise satisfy at or before maturity or
before they become delinquent, as the case may be, all its recourse Debt
obligations of whatever nature, where such failure to so pay, discharge or
satisfy would, in the aggregate with all such failures, reasonably be expected
to have a material adverse effect on Guarantor’s financial condition or ability
to perform its obligations hereunder, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of Guarantor.
3.10. Maintenance of Property
Interest; Insurance. Guarantor shall, and will cause each of
its subsidiaries to, (a) keep and maintain all property material to the conduct
of its business in good working order and condition, casualty, condemnation and
ordinary wear and tear excepted, and promptly repair or replace such property
following any damage thereto in each case where the failure to do so would, in
the aggregate, reasonably be expected to have a material adverse effect on
Guarantor’s financial condition or ability to perform its obligations hereunder,
and (b) subject to Section 3.1 of the
Loan Agreement, maintain, with financially sound and reputable insurance
companies, insurance in such amounts and against such risks as are customarily
maintained by companies engaged in the same or similar businesses operating in
the same or similar locations where the failure to do so would, in the
aggregate, reasonably be expected to have a material adverse effect on
Guarantor’s financial condition or ability to perform its obligations
hereunder.
3.11. Transactions with
Affiliates. Guarantor shall not enter into or permit any
subsidiary of Guarantor to enter into any transaction (including, without
limitation, the purchase, sale or exchange of property or the rendering of any
service) with any Affiliate of Guarantor other than at arm’s-length rates and
terms.
Section
4. No
Waiver. No failure on the part of Administrative Agent or the
Lenders to
exercise, no delay in exercising, and no course of dealing with respect to, any
right or remedy hereunder will operate as a waiver, thereof; nor will any single
or partial exercise or any right or remedy hereunder preclude any other or
further exercise thereof or the exercise of any other right or
remedy.
Section
5. Miscellaneous.
5.01. GOVERNING
LAW; SUBMISSION TO JURISDICTION. THIS GUARANTEE WAS
NEGOTIATED IN THE STATE OF NEW YORK, AND MADE BY GUARANTOR AND ACCEPTED BY
ADMINISTRATIVE AGENT AND LENDERS IN THE STATE OF NEW YORK, WHICH STATE THE
PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE
UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF
26
CONSTRUCTION,
VALIDITY AND PERFORMANCE, THIS GUARANTEE AND THE OBLIGATIONS ARISING HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE AND ANY
APPLICABLE LAW OF THE UNITED STATES OF AMERICA. TO THE FULLEST EXTENT
PERMITTED BY LAW, GUARANTOR HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY
CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS GUARANTEE,
AND THIS GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.
ANY
LEGAL SUIT, ACTION OR PROCEEDING AGAINST ADMINISTRATIVE AGENT, ANY LENDER OR
GUARANTOR ARISING OUT OF OR RELATING TO THIS GUARANTEE MAY AT ADMINISTRATIVE
AGENT’S OPTION (WHICH DECISION SHALL BE MADE BY THE MAJORITY LENDERS) BE
INSTITUTED IN ANY FEDERAL OR STATE COURT IN ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND
GUARANTOR WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON
VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND
GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN
ANY SUIT, ACTION OR PROCEEDING. GUARANTOR DOES HEREBY DESIGNATE AND
APPOINT:
CT
CORPORATION SYSTEM
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
AS
ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND
ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY
FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS
UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE MAILED OR
DELIVERED TO GUARANTOR IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY
RESPECT EFFECTIVE SERVICE OF PROCESS UPON GUARANTOR IN ANY SUCH SUIT, ACTION OR
PROCEEDING IN THE STATE OF NEW YORK. GUARANTOR (A) SHALL GIVE PROMPT
NOTICE TO ADMINISTRATIVE AGENT OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT
HEREUNDER, (B) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE
AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT
AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF
PROCESS), AND (C) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED
AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT
LEAVING A SUCCESSOR.
Nothing
in this Section
5.01 shall affect the right of the Administrative Agent or any Lender to
serve legal process in any other manner permitted by law or affect the right of
the
27
Administrative
Agent or any Lender to bring any suit, action or proceeding against Guarantor or
the property of any Guarantor in the courts of any other
jurisdiction.
|
5.02.
|
Notices.
|
(i) All
notices, requests, demands, statements, authorizations, approvals, directions,
consents and other communications provided for herein shall be given or made in
writing and shall be deemed sufficiently given or served for all purposes as of
the date (a) when hand delivered (provided that delivery shall be evidenced by a
receipt executed by or on behalf of the addressee), (b) three (3) days
after being sent by postage pre-paid registered or certified mail, return
receipt requested, (c) one (1) Business Day after being sent by reputable
overnight courier service (with delivery evidenced by written receipt) or (d)
with a simultaneous delivery by one of the means in (a), (b) or (c) by
facsimile, when sent, with confirmation and a copy sent by first class mail, in
each case addressed to the intended recipient at the “Address for Notices”
specified below; or, as to any party, at such other address as shall be
designated by such party in a notice to each other party. Unless
otherwise expressly provided herein or in the Loan Documents, Guarantor shall
only be required to send notices, requests, demands, statements, authorizations,
approvals, directions, consents and other communications to the Administrative
Agent on behalf of all of the Lenders.
(ii) Notices
and other communications to the Lenders hereunder may be delivered or furnished
by electronic communications pursuant to procedures approved by the
Administrative Agent. The Administrative Agent or Guarantor may, in
its discretion, agree to accept notices and other communications to it hereunder
by electronic communications pursuant to procedures approved by it; provided
that approval of such procedures may be limited to particular notices or
communications.
Addresses for Notices:
If to Guarantor:
▇▇▇▇▇▇▇
Properties, L.P.
c/▇
▇▇▇▇▇▇▇ Properties, Inc.
▇▇▇ ▇.
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇
Lammas
Facsimile
No.: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇, Castle & ▇▇▇▇▇▇▇▇▇
LLP
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, Esq.
Telecopier No.: (▇▇▇)
▇▇▇-▇▇▇▇
If to Administrative
Agent:
Eurohypo AG, New York
Branch
1114 Avenue of the
Americas
▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇)
▇▇▇-▇▇▇▇
With copies to:
Eurohypo AG, New York
Branch
1114 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇
Attention: Head of Portfolio
Operations
Telecopier No.: (▇▇▇)
▇▇▇-▇▇▇▇
- and
-
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Esq.
Telecopier No.: (▇▇▇)
▇▇▇-▇▇▇▇
Any
person shall have the right to specify, from time to time, as its address or
addresses for purposes of this Guarantee, any other address or addresses upon
giving notice thereof to each other person then entitled to receive notices or
other instruments hereunder at least fifteen (15) days before such change of
address is to become effective.
5.03. Expenses. If
any suit or other proceeding is instituted by Administrative Agent (on behalf of
the Lenders) to enforce this Guarantee (or any portion hereof), Guarantor shall
pay, upon demand, all of the reasonable costs and expenses (including, without
limitation, reasonable attorneys’ fees and disbursements) reasonably incurred by
Administrative Agent and/or the Lenders, in each case to the extent provided in
Section 11.13
of the Loan Agreement; provided, however, that such
costs and expenses shall not be in duplication of any costs and expenses paid by
the Borrower. The obligations of Guarantor under this Section 5.03 shall
survive the expiration, release or termination of this Guarantee.
5.04. Amendments,
Etc. The terms of this Guarantee may be waived, modified and
amended only by an instrument in writing duly executed by Guarantor and
Administrative Agent (with any required consent of the Lenders pursuant to the
Loan Agreement). Any such waiver, modification or amendment shall be
binding upon Administrative Agent, each Lender, each holder of any of the Notes
and Guarantor.
5.05. Successors and
Assigns. This Guarantee shall be binding upon and inure to the
benefit of the respective successors and assigns of Guarantor, Administrative
Agent, Lenders and any holder of any of the Notes (provided, however, that
Guarantor shall not assign or transfer its rights or obligations hereunder
without the prior written consent of Administrative Agent and the Lenders
pursuant to the Loan Agreement).
5.06. Guarantor Event of
Default. Any one or more of the following events shall
constitute a “Guarantor Event of Default” under this Guarantee:
29
(b) Guarantor
shall default in the performance of any of its obligations under Section 3.02 or 3.04; or
(c) [Reserved];
or
(d) An
“Event of Default” as defined in the Loan Agreement arising out of any
occurrence or event, which by its express terms applies to Guarantor (either by
reference to “Guarantor” or to a “Restricted Party”), described in Sections 10.5, 10.11 and 10.12 of the Loan
Agreement; or
(e) Any
default under any of the other terms, covenants or conditions of this Guarantee
and such default shall continue for ten (10) days after notice from
Administrative Agent to Guarantor in the case of any default which can be cured
by the payment of a sum of money, or for thirty (30) days after notice from
Administrative Agent in the case of any other default; provided, however, that if such
non-monetary default is susceptible of cure but cannot reasonably be cured
within such thirty (30) day period and provided further that Guarantor shall
have commenced to cure such default within such thirty (30) day period and
thereafter diligently and expeditiously proceeds to cure the same, such thirty
(30) day period shall be extended for such time as is reasonably necessary for
Guarantor in the exercise of due diligence to cure such default, such additional
period not to exceed sixty (60) days; or
(f) The
occurrence of an “Event of Default” under (as such term is defined in) any other
guaranty delivered by Guarantor to Administrative Agent for the benefit of the
Lenders in connection with the Loan.
5.07. Headings. The
captions and section headings appearing herein are included solely for
convenience of reference and are not intended to affect the interpretation of
any provision of this Guarantee.
5.08. Counterparts. This
Guarantee may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument and either of the parties
hereto may execute this Guarantee by signing any such counterpart.
5.09. Severability. If
any provision of this Guarantee shall be held by any court of competent
jurisdiction to be unlawful, void or unenforceable for any reason as to any
Person or circumstance, such provision or provisions shall be deemed severable
from and shall in no way affect the enforceability and validity of the remaining
provisions of this Guarantee.
5.10. WAIVER OF JURY
TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, GUARANTOR,
ADMINISTRATIVE AGENT AND THE LENDERS EACH HEREBY WAIVES ANY RIGHT TO TRIAL BY
JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH
REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING
IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS
GIVEN KNOWINGLY AND VOLUNTARILY BY GUARANTOR, ADMINISTRATIVE AGENT AND THE
LENDERS, AND IS
30
INTENDED
TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO
A TRIAL BY JURY WOULD OTHERWISE ACCRUE. EACH PARTY IS HEREBY
AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE
EVIDENCE OF THIS WAIVER.
5.11 Unsecured
Guaranty. Guarantor’s
obligations under this Guaranty are not intended to be, and are not, secured by
the Lien created by the Deed of Trust or any other Security Documents, or by any
other lien, encumbrance or security interest.
[signature
page follows]
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IN
WITNESS WHEREOF, Guarantor has caused this Guarantee to be duly executed and
delivered as of the day and year first above written.
▇▇▇▇▇▇▇
PROPERTIES, L.P.,
a
Maryland limited partnership
By:
▇▇▇▇▇▇▇ Properties, Inc.,
a Maryland corporation,
its General Partner
By: /s/ ▇▇▇▇ ▇.
Lammas
Name: ▇▇▇▇ ▇.
Lammas
Its: Executive Vice
President
32
Development
Properties
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇. and ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. (Lantana ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇)
▇▇▇▇▇ Von
Karman Blvd. (Washington Mutual Campus, Irvine, California)
Park
Place II, Irvine, California
Glendale
Center – Phase II, Glendale, California
▇▇▇ ▇.
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
PacWest
Land Parcel, Orange County, California
▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇)
Stadium
Towers II, Anaheim, California
▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
Brea
Corporate Place (approx. 10.2 acres of development potential), Brea,
California
Brea
Financial Commons (approx. 4.0 acres of development potential), Brea,
California
San Diego
Tech Center (site area supporting approx. 1.2 million square feet of development
potential), ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
33