SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM 10-K / A1
AMENDMENT TO APPLICATION OR REPORT
FILED PURSUANT TO SECTION 12, 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
CATELLUS DEVELOPMENT CORPORATION
(Exact name of registrant as specified in charter)
The undersigned registrant hereby amends the following items,
financial statements, exhibits or other portions of the Annual Report on
Form 10-K for the fiscal year ended December 31, 1993 to add exhibit 4.11
as set forth in the pages attached hereto:
Item 14. Exhibits, Financial Statements and Schedules and
Reports on Form 8-K
(a)(3) Exhibits
4.11 Loan Agreement dated February 16, 1994
between the Registrant and Prudential
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this amendment to be signed on its behalf by
the undersigned, thereunto duly authorized.
CATELLUS DEVELOPMENT CORPORATION
(Registrant)
By: /s/ David A. Smith
------------------------
Date: March 31, 1994 David A. Smith
Senior Vice President and Chief
Financial Officer
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a)(1) and (a)(2) Financial Statements and Financial Statement
Schedules
See Index to Financial Statements and Financial Statement Schedules at
F-1 herein.
All other Schedules are omitted because they are not applicable or the
required information is shown in the financial statements or notes thereto.
(a)(3) Exhibits
<TABLE>
<CAPTION>
Exhibit
No. Description
- ------- -----------
<C> <S> <C>
3.1 Form of Restated Certificate of Incorporation of the Registrant (1)
3.1A Amendment to Restated Certificate of Incorporation of the
Registrant (10)
3.3 Form of Certificate of Designations, Preferences and Rights of
$3.25 Series A Cumulative Convertible Preferred Stock (2)
3.4 Form of Restated By-Laws (3)
3.5 Form of Certificate of Designations, Preferences and Rights of
$3.625 Series B Cumulative Convertible Exchangeable Preferred
Stock (9)
4.1 Form of stock certificate representing Common Stock (1)
4.2 13 1/2% Convertible Debenture of the Registrant due December 28,
1994 (4)
4.3 Credit Agreement dated December 17, 1988, as amended December 28,
1989, between the Registrant and The Prudential Insurance Company
of America ("Prudential") (1)
4.4 Term Loan Agreement dated December 6, 1988 between Security Pacific
National Bank ("Security Pacific") and the Registrant (1)
4.5 Revolving Credit Agreement dated as of December 6, 1988 between
Security Pacific and the Registrant (1)
4.6 Loan Agreement dated as of December 29, 1989 between the Registrant
and The Chase Manhattan Bank, N.A. ("Chase") (1)
4.7 Amended and Restated Loan Agreement dated December 31, 1990 between
Chase and the Registrant (5)
4.8 Extension and Modification Agreement dated November 6, 1991 between
Chase and the Registrant (6)
4.9 Form of stock certificate representing $3.75 Series A Cumulative
Convertible Preferred Stock (2)
4.10 Form of stock certificate representing $3.625 Series B Cumulative
Convertible Exchangeable Preferred Stock (10)
4.11 Loan Agreement dated as of February 16, 1994 between the Registrant
and Prudential *
10.1 Exploration Agreement and Option to Lease dated December 28, 1989
between the Registrant and Santa Fe Pacific Minerals Corporation
(1)
10.2 Agreement to Exchange Real Property dated as of December 29, 1989
("Exchange Agreement") between the Registrant and The Atchison,
Topeka and Santa Fe Railway Company ("ATSF") (1)
10.2A First Amendment to Exchange Agreement dated December 4, 1990
between the Registrant and ATSF (5)
10.3 Long-Term Stockholders Agreement dated as of December 29, 1989
among the Registrant, Bay Area Real Estate Investment Associates
L.P. ("BAREIA"), Olympia & York SF Holdings Corporation ("O&Y") and
Itel Corporation ("Itel") (1)
10.4 Registration Rights Agreement dated as of December 29, 1989 among
the Registrant, BAREIA, O&Y and Itel (1)
10.6 Restated Tax Allocation and Indemnity Agreement dated December 29,
1989 among the Registrant and certain of its subsidiaries and Santa
Fe Pacific Corporation ("SFP") (1)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
- ------- -----------
<C> <S> <C>
10.7 State Tax Allocation and Indemnity Agreement dated December 29,
1989 among the Registrant and certain of its subsidiaries and SFP
(1)
10.8 Executive Employment Agreement dated April 1, 1989 between Vernon
B. Schwartz and the Registrant(4)
10.9 Registrant's Annual Performance Bonus Program (4)
10.10 Registrant's Stock Purchase Program (4)
10.11 Registrant's Profit Sharing & Savings Plan and Trust (4)
10.12 Registrant's Long-Term Incentive Compensation Program (4)
10.12A Registrant's Long-Term Incentive Compensation Program, as amended
and restated effective February 27, 1992 (3)
10.13 Registrant's Incentive Stock Compensation Plan (4)
10.14 Management Agreement between ATSF and Catellus Management
Corporation dated December 1, 1990 (5)
10.15 Termination, Substitution and Guarantee Agreement between ATSF and
the Registrant dated December 21, 1990 (5)
10.16 Registrant's Stock Option Plan (5)
10.17 Development Agreement dated April 1, 1991 between the Registrant
and the San Francisco Board of Supervisors (7)
10.18 Development Agreement dated May 9, 1983, by and between the City of
San Diego and the Registrant (5)
10.19 Owner Participation Agreement dated June 16, 1983, by and between
Redevelopment Agency of The City of San Diego and the Registrant
(5)
10.20 Development Agreement dated October 30, 1991, by and between The
Southern California Rapid Transit District and the Registrant (6)
10.21 Executive Stock Option Plan (3)
10.21A Amended and Restated Executive Stock Option Plan (10)
10.22 Amended and Restated Development Agreement between the City of
Fremont and the Registrant effective March 19, 1992 (3)
10.22A First Amendment to Amended and Restated Development Agreement
between the City of Fremont and the Registrant effective July 1,
1993 (10)
10.23 First Amendment to Development Agreement between the Southern
California Rapid Transit District ("RTD") and the Registrant (3)
10.24 Letter Agreement dated June 30, 1992 between RTD and the Registrant
(3)
10.25 Agreement dated as of January 14, 1993 between the Registrant and
BAREIA (8)
10.26 Form of First Amendment to Registration Rights Agreement among the
Registrant, BAREIA, O&Y and Itel(8)
10.27 Form of Stockholders Agreement among the Registrant, BAREIA, O&Y
and Itel (8)
10.28 Agreement dated February 22, 1994 between Registrant and Vernon B.
Schwartz (10)
21.1 Subsidiaries of Registrant (3)
23.1 Consent of Independent Accountants (10)
23.2 Consent of Independent Real Estate Appraisers (10)
24.1 Powers of Attorney from directors with respect to the filing of the
Form 10-K (10)
</TABLE>
The Registrant has omitted instruments with respect to long-term debt
where the total amount of the securities authorized thereunder does not
exceed 10 percent of the assets of the Registrant and its subsidiaries on a
consolidated basis. The Registrant agrees to furnish a copy of such
instrument to the Commission upon request.
Management's contracts and compensatory plans - Exhibits 10.9, 10.11,
10.12A, 10.13, 10.16, 10.21A and 10.28 are current management contracts or
compensatory plans.
<PAGE>
(b) Reports on Form 8-K
During the quarter ended December 31, 1993, the Registrant filed a
Current Report on Form 8-K dated October 19, 1993 to file, under Item 5,
the Company's earnings release for the quarter and nine months ended
September 30, 1993.
- --------------------------
* Filed with this Form 10-K/A1.
(1) Incorporated by reference to Exhibit of the same number of the
Registration Statement on Form 10 (Commission File No. 0-18694) as
filed with the Commission on July 18, 1990 ("Form 10").
(2) Incorporated by reference to Exhibit of the same number on the Form 8
constituting a Post-Effective Amendment No. 1 to the Form 8-A as filed
with the Commission on February 19, 1993.
(3) Incorporated by reference to Exhibit of the same number of
Registration Statement on Form S-3 (Commission File No. 33-56082) as
filed with the Commission on December 21, 1992 ("Form S-3").
(4) Incorporated by reference to Exhibit of the same number of the Form 8
constituting Post-Effective Amendment No. 1 to the Form 10 as filed
with the Commission on November 20, 1990.
(5) Incorporated by reference to Exhibit of the same number on the Form
10-K for the year ended December 31, 1990.
(6) Incorporated by reference to Exhibit of the same number on the Form
10-K for the year ended December 31, 1991.
(7) Incorporated by reference to Exhibit of the same number on the Form
10-K for the year ended December 31, 1990, referred to therein as
"Development Agreement dated February 19, 1991 between the Registrant
and the San Francisco Board of Supervisors".
(8) Incorporated by reference to Exhibit of the same number of Amendment
No. 2 to Form S-3 as filed with the Commission on February 4, 1993.
(9) Incorporated by reference to Exhibit of the same number on the Form
10-Q for the quarter ended September 30, 1993.
(10) Incorporated by reference to Exhibit of the same number on the Form
10-K for the year ended December 31, 1993.
<PAGE>
<TABLE>
INDEX TO EXHIBITS
-----------------
<CAPTION>
Exhibit
No. Description Page
- ------- ---------- ----
<C> <S> <C>
3.1 Form of Restated Certificate of Incorporation of the
Registrant (1)
3.1A Amendment to Restated Certificate of Incorporation of the
Registrant (10)
3.3 Form of Certificate of Designations, Preferences and Rights of
$3.25 Series A Cumulative Convertible Preferred Stock (2)
3.4 Form of Restated By-Laws (3)
3.5 Form of Certificate of Designations, Preferences and Rights of
$3.625 Series B Cumulative Convertible Exchangeable Preferred
Stock (9)
4.1 Form of stock certificate representing Common Stock (1)
4.2 13 1/2% Convertible Debenture of the Registrant due December 28,
1994 (4)
4.3 Credit Agreement dated December 17, 1988, as amended December 28,
1989, between the Registrant and The Prudential Insurance Company
of America ("Prudential") (1)
4.4 Term Loan Agreement dated December 6, 1988 between Security
Pacific National Bank ("Security Pacific") and the Registrant (1)
4.5 Revolving Credit Agreement dated as of December 6, 1988 between
Security Pacific and the Registrant (1)
4.6 Loan Agreement dated as of December 29, 1989 between the
Registrant and The Chase Manhattan Bank, N.A. ("Chase") (1)
4.7 Amended and Restated Loan Agreement dated December 31, 1990
between Chase and the Registrant (5)
4.8 Extension and Modification Agreement dated November 6, 1991
between Chase and the Registrant (6)
4.9 Form of stock certificate representing $3.75 Series A Cumulative
Convertible Preferred Stock (2)
4.10 Form of stock certificate representing $3.625 Series B Cumulative
Convertible Exchangeable Preferred Stock (10)
4.11 Loan Agreement dated as of February 16, 1994 between the
Registrant and Prudential *
10.1 Exploration Agreement and Option to Lease dated December 28,
1989 between the Registrant and Santa Fe Pacific Minerals
Corporation (1)
10.2 Agreement to Exchange Real Property dated as of December 29,
1989 ("Exchange Agreement") between the Registrant and
The Atchison, Topeka and Santa Fe Railway Company ("ATSF") (1)
10.2A First Amendment to Exchange Agreement dated December 4, 1990
between the Registrant and ATSF (5)
10.3 Long-Term Stockholders Agreement dated as of December 29, 1989
among the Registrant, Bay Area Real Estate Investment
Associates L.P. ("BAREIA"), Olympia & York SF Holdings
Corporation ("O&Y") and Itel Corporation ("Itel") (1)
10.4 Registration Rights Agreement dated as of December 29, 1989
among the Registrant,BAREIA, O&Y and Itel (1)
10.6 Restated Tax Allocation and Indemnity Agreement dated
December 29, 1989 among the Registrant and certain of its
subsidiaries and Santa Fe Pacific Corporation ("SFP") (1)
10.7 State Tax Allocation and Indemnity Agreement dated
December 29, 1989 among the Registrant and certain of its
subsidiaries and SFP (1)
10.8 Executive Employment Agreement dated April 1, 1989 between
Vernon B. Schwartz and the Registrant(4)
10.9 Registrant's Annual Performance Bonus Program (4)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description Page
- ------ ----------- ----
<C> <S> <C>
10.10 Registrant's Stock Purchase Program (4)
10.11 Registrant's Profit Sharing & Savings Plan and Trust (4)
10.12 Registrant's Long-Term Incentive Compensation Program (4)
10.12A Registrant's Long-Term Incentive Compensation Program,
as amended and restated effective February 27, 1992 (3)
10.13 Registrant's Incentive Stock Compensation Plan (4)
10.14 Management Agreement between ATSF and Catellus Management
Corporation dated December 1, 1990 (5)
10.15 Termination, Substitution and Guarantee Agreement between
ATSF and the Registrant dated December 21, 1990 (5)
10.16 Registrant's Stock Option Plan (5)
10.17 Development Agreement dated April 1, 1991 between the
Registrant and the San Francisco Board of Supervisors (7)
10.18 Development Agreement dated May 9, 1983, by and between
the City of San Diego and the Registrant (5)
10.19 Owner Participation Agreement dated June 16, 1983, by
and between Redevelopment Agency of The City of San Diego
and the Registrant (5)
10.20 Development Agreement dated October 30, 1991, by and between
The Southern California Rapid Transit District and the
Registrant (6)
10.21 Executive Stock Option Plan (3)
10.21A Amended and Restated Executive Stock Option Plan (10)
10.22 Amended and Restated Development Agreement between the City
of Fremont and the Registrant effective March 19, 1992 (3)
10.22A First Amendment to Amended and Restated Development
Agreement between the City of Fremont and the Registrant
effective July 1, 1993 (10)
10.23 First Amendment to Development Agreement between the Southern
California Rapid Transit District ("RTD") and the
Registrant (3)
10.24 Letter Agreement dated June 30, 1992 between RTD and the
Registrant (3)
10.25 Agreement dated as of January 14, 1993 between the Registrant
and BAREIA (8)
10.26 Form of First Amendment to Registration Rights Agreement
among the Registrant, BAREIA, O&Y and Itel (8)
10.27 Form of Stockholders Agreement among the Registrant, BAREIA,
O&Y and Itel (8)
10.28 Agreement dated February 22, 1994 between Registrant and
Vernon B. Schwartz (10)
21.1 Subsidiaries of Registrant (3)
23.1 Consent of Independent Accountants (10)
23.2 Consent of Independent Real Estate Appraisers (10)
24.1 Powers of Attorney from directors with respect to the
filing of the Form 10-K (10)
</TABLE>
The Registrant has omitted instruments with respect to long-term debt
where the total amount of the securities authorized thereunder does not
exceed 10 percent of the assets of the Registrant and its subsidiaries on a
consolidated basis. The Registrant agrees to furnish a copy of such
instrument to the Commission upon request.
Management's contracts and compensatory plans - Exhibits 10.9, 10.11,
10.12A, 10.13, 10.16, 10.21A and 10.28 are current management contracts or
compensatory plans.
- ----------------
* Filed with this Form 10-K/A1.
(1) Incorporated by reference to Exhibit of the same number of the
Registration Statement on Form 10 (Commission File No. 0-18694)
as filed with the Commission on July 18, 1990 ("Form 10").
(2) Incorporated by reference to Exhibit of the same number on the Form 8
constituting a Post-Effective Amendment No.
1 to the Form 8-A as filed with the Commission on February 19, 1993.
(3) Incorporated by reference to Exhibit of the same number of Registration
Statement on Form S-3 (Commission File
No. 33-56082) as filed with the Commission on December 21, 1992 ("Form
S-3").
(4) Incorporated by reference to Exhibit of the same number of the Form 8
constituting Post-Effective Amendment No. 1
to the Form 10 as filed with the Commission on November 20, 1990.
(5) Incorporated by reference to Exhibit of the same number on the Form
10-K for the year ended December 31, 1990.
(6) Incorporated by reference to Exhibit of the same number on the Form
10-K for the year ended December 31, 1991.
(7) Incorporated by reference to Exhibit of the same number on the Form
10-K for the year ended December 31, 1990, referred to therein as
"Development Agreement dated February 19, 1991 between the Registrant
and the San Francisco Board of Supervisors".
(8) Incorporated by reference to Exhibit of the same number of Amendment
No. 2 to Form S-3 as filed with the Commission on February 4, 1993.
(9) Incorporated by reference to Exhibit of the same number on the Form
10-Q for the quarter ended September 30, 1993.
(10) Incorporated by reference to Exhibit of the same number on the Form
10-K for the year ended December 31, 1993.
LOAN AGREEMENT
by and between
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
and
CATELLUS DEVELOPMENT CORPORATION
February 16, 1994
<TABLE>
TABLE OF CONTENTS
<CAPTION>
Page
<C> <S> <C>
1. GLOSSARY 1
2. THE LOAN 6
3. SECURITY FOR THE LOAN AND ADDITIONAL CREDIT
SUPPORT 7
(a) First Mortgage and/or Deed of Trust 7
(b) Assignment of Leases and Rents 8
(c) Letters of Credit for Certain Defects 8
4. BORROWER'S REPRESENTATIONS AND WARRANTIES 8
5. ADDITIONAL COVENANTS AND AGREEMENTS OF BORROWER 12
6. RELEASE OF MORTGAGED PROPERTY 20
(a) Special Property and Option Property 20
(b) Release of Santa Fe Center or South Bay Center21
(c) Additional Releases up to $30,000,000 21
(d) Additional Conditions for Release 22
(e) Service Fee 24
(f) Prepayment Premium 25
(g) No Reborrowing 25
(h) Special Rules for Release of San Diego Baggage
Building 25
(i) Prepayment in Excess of Allocated Loan Amount 26
(j) Lender's Approval or Disapproval of Release
Requests 26
7. SUBSTITUTION OF PROPERTIES 26
(a) General 26
(b) Substitution of Additional Properties 26
(c) Required Deliveries for Properties that Borrower
Proposes to Add to the Mortgaged Property 27
(d) Additional Conditions for Substitution 30
(e) Determination of Lender 36
(f) Service Fee 36
(g) Allocated Loan Amounts following Substitution 37
(h) Determination of Market Value and Net Operating
Income 37
8. ACCELERATION FOR MATERIAL MISSTATEMENTS 37
9. DUE ON SALE, ENCUMBRANCE, ETC. 38
10. LIMITATION OF LIABILITY 41
12. COVENANT REGARDING FUNDED DEBT 43
12. ASSIGNMENT OF WARRANTIES 45
13. EVENTS OF DEFAULT 45
14. LENDER'S REMEDIES UPON DEFAULT 47
15. APPROVAL OF MAJOR LEASES; SUBORDINATION,
NON-DISTURBANCE AND ATTORNMENT; ETC. 48
16. MISCELLANEOUS PROVISIONS 49
(a) Indemnity 50
(b) Rights of Third Parties 51
(c) Assignment 51
(d) Successors and Assigns Included in Parties 53
(e) Headings 53
(f) Invalid Provisions to Affect No Others 53
(g) Number and Gender 53
(h) Amendments 53
(i) Notices 53
(j) Governing Law 54
(k) No Waivers 54
(l) Time of Essence 55
(m) Survival of Covenants, Representations and
Warranties 55
(n) Limitation on Interest 55
(o) Attorney's Fees 55
(p) Estoppel Certificates 56
(q) Confidentiality 56
(r) Entire Agreement; No Oral Agreement 58
</TABLE>
<PAGE>
TABLE OF CONTENTS
(cont'd.)
<TABLE>
LIST OF EXHIBITS
<CAPTION>
Exhibit Title Page
<C> <S> <C>
A-1 Note A-1
A-2 Note A-2
A-3 Note A-3
B-1 Note B-1
B-2 Note B-2
C-1 Note C-1
C-2 Note C-2
D Form of Borrower's Officer's Certificate
E Survey Requirements
F Guidelines for Hazardous Materials Report
G Hazard Insurance Instructions
H Guidelines for Engineering Report
I Asbestos Bulk Survey Survey of Work
J Form of Subordination, Non-Disturbance and
Attornment Agreement
</TABLE>
<TABLE>
SCHEDULES
<CAPTION>
Schedule Title Page
<S> <C>
A Properties
B Special Property
C List of Major Tenants
D Option Property
</TABLE>
<PAGE>
LOAN AGREEMENT
This Loan Agreement is made and entered into this
16th day of February, 1994 (hereinafter sometimes referred to
as the "Closing Date") by and between The Prudential Insurance
Company of America ("Lender") and Catellus Development
Corporation ("Borrower"), with reference to the following
facts:
A. Borrower and Lender have executed the
Amended and Restated First Mortgage Loan Commitment dated
December 2, 1993 (the "Amended Commitment") for the loan by
Lender to Borrower and the borrowing by Borrower of the
Loan (as hereinafter defined). Among the Loan Documents
(as defined therein) contemplated by the Amended Commitment
is this agreement (the "Loan Agreement", as referred to
therein and herein).
B. Concurrent with the execution and delivery
of this Loan Agreement the Loan is being made at the
Closing (as defined therein) pursuant to the Amended
Commitment.
C. The Loan is secured by, inter alia, a
first deed of trust or first mortgage, as the case may be,
on those properties set forth on Schedule A hereto, as such
schedule may be amended from time to time (individually, a
"Property" and collectively, the "Properties").
D. Lender and Borrower desire to set forth
herein the terms of the Loan not set forth in one or more
of the other Loan Documents, the security for the Loan,
terms under which certain Properties may be released from
the lien of the deed of trust or mortgage, as the case may
be, and certain other matters related to the foregoing.
In consideration of the foregoing recitals, and
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows:
1. GLOSSARY.
The following terms used in this Loan Agreement
shall have the definitions set forth below:
(a) "Additional Properties" shall have the
meaning set forth in Section 7(b).
(b) "Allocated Loan Amount" when used herein
with respect to a Property (other than an Additional
Property) shall mean the amount set forth with respect to
such Property in the column on Schedule A entitled
"Allocated Loan Amount" or, with respect to more than one
Property (other than an Additional Property), the total of
such amounts with respect to such Properties and when used
with respect to an Additional Property shall be the amount
of the Loan allocated to such Additional Property by Lender
as provided in Section 7(g). In the case of Note C only,
the monthly payments of principal by Borrower shall be
applied monthly to reduce the Allocated Loan Amount of the
South Bay Center; in the case of Note A and Note B, there
shall be no reduction in the Allocated Loan Amounts of any
Properties on account of the monthly amortization of such
Notes.
(c) "Annual Debt Service" shall mean as to Note
A the level monthly payment of principal and interest on such
Note multiplied by 12 and as to Notes B and C shall mean the
total of the level monthly payments of principal and interest
on such Notes multiplied by 12.
(d) "Assignment of Leases" shall mean the
Assignment of Lessor's Interest in Leases given to Lender as
security for the Loan.
(e) "Borrower" shall mean Catellus Development
Corporation, a Delaware corporation.
(f) "Closing Date" shall mean the date of this
Loan Agreement.
(g) "Debt Service" shall mean the periodic
payments of principal and interest as required under the
Notes.
(h) "Deed of Trust" shall mean the several
Deed of Trust, Security Agreement, Fixture Filing and
Assignment of Rents granting Lender a first priority
security interest in the Mortgaged Property located in the
states of Arizona, California, Colorado and Oregon,
respectively.
(i) "Event of Default" shall mean the
occurrence of any of the events specified in Section 13,
subject to any notice requirements and grace periods
specified in said Section 13.
(j) "Ground Leased Properties" shall mean
those Properties shown on Schedule A designated "Ground
Leased" and for which Borrower holds the lessor's interest
under a ground lease.
(k) "Improvements" shall mean any and all
structures located on the Properties (including the
Additional Properties), but excluding any structures located
on Ground Leased Properties if such structures are owned by
the Tenant(s).
(l) "Lender" shall mean The Prudential
Insurance Company of America and any other successor
Owner/Servicing Agent (as such term is defined in
Section 16(c) of this Agreement).
(m) "Loan" shall mean the loan described in
Section 2 hereof.
(n) "Loan Documents" shall mean the Notes, the
Deed of Trust, the Mortgage, the Assignment of Leases, this
Loan Agreement and any other documents setting forth the
terms of, evidencing or given as security for, the Loan,
including without limitation the letters of credit and the
side letters referred to in Section 3(c) of this Agreement,
the Hazardous Substances Remediation and Indemnification
Agreement of even date herewith executed by Borrower in
favor of Lender (the "Hazardous Substances Agreement"), the
side letter regarding Borrower's representations and
warranties of even date herewith, Borrower's disclosure
letter, and the side letter regarding title and survey.
(o) "Major Lease" shall mean each lease for
which the lessee is a Major Tenant.
(p) "Major Tenant" shall mean each tenant so
designated on Schedule C to this Loan Agreement and any
tenant under any lease executed or renewed subsequent to
the date hereof that provides for (a) in the case of a
Ground Leased Property, rent for the first year (including
actual base rent (excluding rental concessions, if any) and
projected percentage rent) of at least $500,000, or (b) in
the case of a Non-Ground Leased Property, the leasing by a
single tenant of either (i) at least 50,000 square feet or
(ii) 80% or more of the net rentable space in a building
containing a total of at least 20,000 rentable square feet.
(q) "Market Value" of a Mortgaged Property or
an Approved Property shall be the fair market value as
determined by Lender in its sole discretion in accordance
with Section 7(h); provided that Lender may elect to obtain
at Borrower's expense, after consultation with Borrower,
outside appraisals in connection with its valuation of such
properties.
(r) "Mortgage" shall mean the several
Mortgage, Security Agreement, Fixture Filing and Assignment
of Rents granting Lender a first priority security interest
in the Mortgaged Property located in the states of
Illinois, Kansas and Oklahoma, respectively.
(s) "Mortgaged Property" shall mean
individually each and collectively all the Property which
is subject to the lien of the Deed of Trust or Mortgage.
(t) "Net Operating Income" (or "NOI") shall
be determined by Lender based upon the following general
definition, but subject to adjustment by Lender due to the
factors referred to in Section 7(h): gross income from
operations of the Mortgaged Property from all sources
(including base rent, percentage rent, management
supervisory fees, service fees or charges, rental insurance
proceeds actually collected, license fees, and including
additional rent derived from operating expense, common area
maintenance and tax escalation pass through provisions),
less normal and customary operating expenses (such as
property taxes, insurance, cleaning, utilities,
administrative expenses, repairs and maintenance) and an
aggregate allowance for management fees, leasing
commissions, tenant allowances and reserves for
replacements set forth below:
<TABLE>
<CAPTION>
Total Percentage
Type of Property Allowance
<S> <C> <S> <C> <S><C>
Ground Lease
No Participation
Short Term Lease (10 years or less) 3%
No Participation
Long Term Lease (In excess of 10 years) 1%
Participation
Short Term Lease (10 years or less) 3%
Participation
Long Term Lease (In Excess of 10 years) 1%
</TABLE>
<TABLE>
<CAPTION>
Total Percentage
Type of Property Allowance
<S> <C> <C>
Buildings
Multi-tenant shopping centers,
retail, incubator, low-rise
office and R&D 9%
South Bay Center 7%
Santa Fe Center 8%
Industrial Warehouse and Manufacturing
3 tenants or less and a long term
lease (in excess of 7 years) 3%
Industrial Warehouse and Manufacturing,
short term leases (7 years or less) 8%
</TABLE>
Except for the reserve for replacements, NOI shall be
calculated without deducting amounts expended or set aside
for capital improvements and replacements, debt service and
depreciation or amortization. NOI shall be accounted for on
a cash basis in accordance with generally accepted accounting
principles.
In any case herein where Net Operating Income is calculated on
a monthly basis to determine NOI, the expense for property
taxes and insurance shall be deemed to be one-twelfth of the
annual property taxes and insurance. In calculating Net
Operating Income for all purposes under this Loan Agreement,
rental income shall be included only from tenants whose leases
and credit worthiness are satisfactory to Lender, it being
understood that the length of term remaining is a factor that
Lender may deem significant for such purpose. If a petition
in bankruptcy has been filed by or against any Major Tenant,
or if a receiver, trustee or liquidator has been appointed for
the benefit of the creditors of any Major Tenant, Lender may
exclude such Major Tenant's scheduled rent obligation from the
calculation of Net Operating Income.
(u) "Non-Ground Leased Properties" shall mean
all Mortgaged Properties other than Ground Leased
Properties.
(v) "Non-Material Defect" shall mean any
Engineering Defect, Asbestos Defect or Environmental Defect
as defined in Section 3(c).
(w) "Non-Material Title Defect" shall have
the meaning set forth in Section 3(c)(4).
(x) "Notes" shall mean Note A, Note B, and
Note C, which evidence Borrower's obligation to repay the
Loan.
(y) "Option Property" shall mean the
Mortgaged Property which is referred to on Schedule D.
(z) "Personal Property" shall mean personal
property of the Borrower located in or upon the Mortgaged
Property.
(aa) "Property" shall mean the parcels of
real property which are referred to on Schedule A.
(bb) "Release" shall mean the release of a
Mortgaged Property from the lien of the Deed of Trust or
Mortgage in accordance with the provisions of Section 6.
(cc) "Remaining Portfolio" shall mean the
Mortgaged Property continuing to be subject to the lien of
the Deed of Trust or Mortgage after a Release or
Substitution.
(dd) "Removed Properties" shall mean the
Properties removed pursuant to Section 7 in connection with
a Release and Substitution.
(ee) "Santa Fe Center" shall mean the office
building located at 224 South Michigan Avenue, Chicago,
Illinois and the land on which it is situated.
(ff) "South Bay Center" shall mean the office
building located at 2540-2590 North First Street, San Jose,
California and the land on which it is situated.
(gg) "Special Property" shall mean the
Mortgaged Property referred to on Schedule B.
(hh) "Substitution" shall mean the addition
of Additional Properties to the Mortgaged Properties
concurrently with the Release of Mortgaged Properties as
permitted in Section 7 of this Loan Agreement.
2. THE LOAN.
(a) The amount of the Loan ("Loan Amount")
will be $280,000,000. The Loan shall be evidenced by three
notes: "Note A", "Note B", and "Note C". The Notes are
being executed and delivered concurrently with this Loan
Agreement at the Closing contemplated by the Amended
Commitment. Note A is in the original principal amount of
$216,700,000, on the terms and provisions of Exhibit A.
Note B is in the original principal amount of $53,300,000,
on the terms and provisions of Exhibit B. Note C is in the
original principal amount of $10,000,000, on the terms and
provisions of Exhibit C. In the event the Loan closes
prior to March 1, 1994, then the amount of interest
accruing from the date of disbursement of the Loan through
and including February 28, 1994 shall be paid to Lender on
April 1, 1994, which interest shall be paid in addition to
the first regular monthly installments of principal and
interest on the Notes due on April 1, 1994. By executing
and delivering the Notes, Borrower agrees to repay the Loan
in accordance with the terms of the Notes.
(b) Notwithstanding Section 2(a) above,
Borrower acknowledges and agrees that, for Lender's
administrative purposes, (i) Note A is actually represented
by three Notes, "Note A-1" in the original principal amount
of $108,350,000, "Note A-2" in the original principal
amount of $98,350,000 and "Note A-3" in the original
principal amount of $10,000,000 (all three of such
promissory notes being hereafter referred to as Category A
Notes), (ii) Note B is actually represented by two Notes,
"Note B-1" in the original principal amount of $26,650,000
and "Note B-2" in the original principal amount of
$26,650,000 (both of such promissory notes being hereafter
referred to as Category B Notes), and (iii) Note C is
actually represented by two Notes, "Note C-1" in the
original principal amount of $5,000,000 and "Note C-2" in
the original principal amount of $5,000,000 (both of such
promissory notes being hereafter referred to as Category C
Notes). The seven promissory notes described above bear
interest at varying rates. Whenever in this Loan Agreement
Borrower is required or permitted to make a payment or
prepayment of principal and/or interest on any of Note A,
Note B and/or Note C, such payment or prepayment shall be
allocated by Lender to all Notes within the same category
in proportion to the outstanding principal balance of each
Note in that category. By way of example and not by way of
limitation, a prepayment of principal on Note A shall be
allocated proportionately among Note A-1, Note A-2 and
Note A-3.
(c) Notwithstanding Lender's right, pursuant
to Section 16(c) of this Agreement, to sell, assign,
syndicate, transfer or negotiate or grant or sell
participations in the "Loan Transaction" (as defined in
such section), there shall be only one holder of each and
all of the Notes at all times during the term of the Loan.
3. SECURITY FOR THE LOAN AND ADDITIONAL
CREDIT SUPPORT.
Prior to or concurrently with the execution and
delivery of this Loan Agreement, Borrower shall have
executed and delivered to Lender each of the following
documents and delivered such documents and each of the
following other items:
(a) First Mortgage and/or Deed of Trust. The
Mortgages and Deeds of Trust securing the Notes and
creating valid first lien(s) upon the fee simple estate in
the land and, if owned by Borrower, the improvements
comprising the Mortgaged Property. Notwithstanding
anything contained herein or in the Loan Documents, none of
Borrower's obligations under or pursuant to the Hazardous
Substances Agreement shall be secured by the lien of a Deed
of Trust or Mortgage.
(b) Assignment of Leases and Rents. An
Assignment of Lessor's Interest in Leases in form and
substance satisfactory to Lender which shall create a
present first priority assignment to Lender of all present
and future leases of all or any part of the Mortgaged
Property, all guaranties thereof and all rents and other
sums payable thereunder.
(c) Letters of Credit for Certain Defects.
Concurrently with the execution of this Loan Agreement,
Borrower shall deliver to Lender unconditional, irrevocable
letters of credit issued by a bank or banks acceptable to
Lender and otherwise in form and substance acceptable to
Lender in its sole and absolute discretion as follows:
(1) A letter of credit in the amount of
$150,000 for Mortgaged Property subject to engineering
defects ("Engineering Defects"). Said letter of credit
shall be governed by an Agreement Regarding Engineering
Defects between Borrower and Lender of even date herewith.
(2) A letter of credit in the amount of
$92,500 for Mortgaged Property subject to asbestos defects
("Asbestos Defects"). Said letter of credit shall be
governed by an Agreement Regarding Asbestos Defects between
Borrower and Lender of even date herewith.
(3) A letter of credit in the amount of
$60,000 for Mortgaged Property subject to environmental
defects ("Environmental Defects"). Said letter of credit
shall be governed by an Agreement Regarding Environmental
Defects between Borrower and Lender of even date herewith.
(4) A letter of credit in the amount of
$3,000,000 for Mortgaged Property that sustained damage in
the January 17, 1994 Northridge earthquake. Said letter of
credit shall be governed by an Agreement Regarding
Earthquake Damage between Borrower and Lender of even date
herewith.
4. BORROWER'S REPRESENTATIONS AND WARRANTIES.
In consideration of and as an inducement for
Lender to make the Loan to Borrower, Borrower hereby makes
the following representations and warranties to Lender:
(a) Each of the Recitals set forth above is
true and correct;
(b) Borrower is a corporation duly organized
and validly existing under the laws of the State of
Delaware; Borrower is duly qualified to do business as a
foreign corporation in each state in which such
qualification is required by law; and Borrower has full
power and authority to make the representations, warranties
and covenants set forth herein and to enter into and
execute this Loan Agreement and each of the Loan Documents;
(c) This Loan Agreement and all of the Loan
Documents have been duly authorized and executed by
Borrower and constitute the valid, legal and binding
obligations of Borrower, enforceable against Borrower in
accordance with their respective terms;
(d) Borrower has not dealt with any person,
firm or corporation who is or may be entitled to any
brokerage commission, finder's fee or other like payment in
connection with the Amended Commitment (and any of the
agreements constituting or which comprised the Original
Commitment as defined in the Amended Commitment) or
Lender's agreement herein to make or Lender's making of the
Loan to Borrower that will in any way be binding upon or
constitute a liability of Lender. Borrower hereby
indemnifies Lender against, and agrees to defend Lender and
hold Lender harmless from, any and all loss, cost,
liability or expense (including reasonable attorneys' fees)
which may be incurred by Lender by reason of any claim made
by any person for such brokerage commission, finder's fee
or other like payment, other than any claim based upon or
arising out of the actions of Lender;
(e) Borrower is not in default under any
contract, agreement or commitment to which Borrower is a
party or by which Borrower is bound, which default would
have a material adverse effect on Borrower's ability to
perform its obligations under this Loan Agreement or any of
the Loan Documents. The execution and delivery of this
Loan Agreement and all of the Loan Documents, the
consummation of the transactions contemplated hereby or
thereby, and compliance with the terms and conditions
hereof or thereof will not: (i) violate any existing
order, writ, injunction or decree of any court or
governmental agency to which Borrower is subject; or
(ii) conflict or be inconsistent with, or result in any
breach of, any of the terms, covenants, conditions or
provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, instrument, document,
commitment, agreement or contract of any kind to which
Borrower is a party or by which Borrower may be bound;
(f) Neither this Loan Agreement nor any of
the other Loan Documents nor any other document, financial
statement, credit information, certificate or statement
furnished to Lender by or on behalf of Borrower in
connection with the Loan (including without limitation
those furnished under, pursuant to, or in respect of the
Original Commitment or the Amended Commitment) contains any
factual statement which is untrue in any material respect
or omits to state a fact material to this Loan Agreement or
the Loan;
(g) The amounts to be received by Lender as
interest payments under the Notes shall constitute lawful
interest and shall be neither usurious nor illegal under
the present laws of the State of California or any other
applicable laws;
(h) All representations and warranties made
by Borrower in this Loan Agreement or in any certificate or
other document delivered to Lender by or on behalf of
Borrower in connection with this Loan Agreement (including
without limitation those furnished under, pursuant to, or
in respect of the Amended Commitment) shall be deemed to
have been relied upon by Lender, notwithstanding any
investigation heretofore or hereafter made by Lender or on
Lender's behalf, and Borrower hereby acknowledges such
reliance by Lender in making the Loan. All of such
representations and warranties shall survive the recording
of the Deed of Trust and/or the Mortgage and the
disbursement of all sums contemplated hereby;
(i) Borrower declares and certifies, under
penalty of perjury, that: (1) Borrower's U.S. Taxpayer I.D.
Number is 94-2953477; (2) the business address of Borrower
is 201 Mission Street, 30th Floor, San Francisco,
California 94105 ; (3) Borrower is not a "foreign person"
within the meaning of Sections 1445 and 7701 of the
Internal Revenue Code of 1986, as amended (the "Code"); and
(4) Borrower understands that the information and
certification contained in this Section 4(i) may be
disclosed to the Internal Revenue Service and that any
false statement contained herein could be punished by fine,
imprisonment or both. Borrower agrees to provide Lender
with a new certification containing the provisions of this
Section 4(i) immediately upon any change in such
information.
(j) Borrower represents and warrants with
respect to compliance with ERISA and state statutes on
government plans that:
(1) Borrower represents and warrants to
Lender that, as of the date hereof and throughout the term
of the Loan, (a) Borrower is not an "employee benefit plan"
as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), which is
subject to Title I of ERISA, and (b) the assets of Borrower
do not constitute "plan assets" of one or more such plans
within the meaning of 29 C.F.R. Section 2510.3-101.
(2) Borrower represents and warrants to
Lender that, as of the date of the Loan and throughout the
term of the Loan, (a) Borrower is not a "governmental plan"
within the meaning of Section 3(32) of ERISA, (b)
transactions by or with Borrower are not subject to state
statutes or other applicable law regulating investments of,
transactions with, and fiduciary obligations with respect
to governmental plans, and (c) transactions by or with
Borrower will not be treated as a transaction with or
involving a governmental plan.
(3) Borrower covenants and agrees to
deliver to Lender such certifications or other evidence on
the Closing Date and from time to time throughout the term
of the Loan (but not more frequently than annually), as
requested by Lender in its sole discretion, that
(i) Borrower is not an "employee benefit plan" or a
"governmental plan"; (ii) Borrower is not subject to state
statutes regulating governmental plans; and (iii) one or
more of the following circumstances is true: (x) equity
interests in Borrower are publicly offered securities,
within the meaning of 29 C.F.R. Section 2510.3-101(b)(2); (y)
less than 25 percent of all equity interests in Borrower are
held by "benefit plan investors" within the meaning of 29
C.F.R. Section 2510.3- 101(f)(2); or (z) Borrower qualifies
as an "operating company" or a "real estate operating company"
within the meaning of 29 C.F.R. Sections 2510.3-101(c) or (e).
(4) Any of the following shall
constitute an Event of Default under the Loan, entitling
Lender to exercise any and all remedies to which it may be
entitled under this Loan Agreement or any of the Loan
Documents: (i) the failure of any representation or
warranty made by Borrower under this Section 4(j) to be
true and correct in all respects, (ii) the failure of
Borrower to provide Lender with the written certifications
and evidence referred to above, or (iii) the consummation
by Borrower of a transaction which would cause this Loan
Agreement or any exercise of Lender's rights under the Loan
Documents or the repayment of the 1988 Loan (as defined in
the Amended Commitment) to constitute a non-exempt
prohibited transaction under ERISA or a violation of a
state statute or other applicable law regulating
governmental plans, subjecting Lender to liability for
violation of ERISA or such state statute or other
applicable law.
(5) Borrower shall indemnify Lender and
defend and hold Lender harmless from and against all loss,
cost, damage and expense (including, without limitation,
attorneys' fees and costs incurred in the investigation,
defense and settlement of claims and losses incurred in
correcting any prohibited transaction or in the sale of a
prohibited loan, and in obtaining any individual prohibited
transaction exemption under ERISA that may be required, in
Lender's sole discretion) that Lender may incur, directly
or indirectly, as a result of any such material default
under the immediately preceding paragraph. This indemnity
shall survive any termination, satisfaction or foreclosure
of the Deed of Trust and/or Mortgage and shall not be
subject to the limitation on personal liability as set
forth in Section 11.
(k) Borrower represents and warrants that,
except as disclosed to Lender in writing, none of the
Mortgaged Properties suffered any material damage as a
result of the January 17, 1994 Northridge earthquake and
its aftershocks.
5. ADDITIONAL COVENANTS AND AGREEMENTS OF
BORROWER.
In consideration of and as an inducement to
Lender to make the Loan to Borrower, Borrower hereby
covenants and agrees with Lender as follows:
(a) Subject to Article III, Paragraph J of
the Deed of Trust and the Mortgage, Borrower shall pay, or
cause to be paid, all taxes, assessments and other similar
charges which are assessed, levied, confirmed, imposed or
which become a lien upon or against the Mortgaged Property
or any portions thereof, or which become payable with
respect thereto or with respect to the occupancy, use or
possession of the Mortgaged Property before such taxes,
assessments and other similar charges become delinquent,
and within ninety (90) days of the delinquency date of each
tax statement (or as soon thereafter as such become
available), Borrower shall deliver to Lender receipted tax
bills or other written evidence in form and substance
satisfactory to Lender confirming the payment of such
taxes, assessments and other charges.
(b) Borrower shall duly and punctually
perform, observe and comply with all of the terms,
provisions, conditions, covenants and agreements to be
performed, observed, and complied with by Borrower under
this Loan Agreement and the Loan Documents, and Borrower
shall not suffer or permit any default to exist under this
Loan Agreement or any of the Loan Documents.
(c) Borrower shall keep the Mortgaged
Property free and clear of all liens, encumbrances and
other title defects of every nature or description, whether
arising from taxes or assessments, from charges for labor,
materials, supplies or services, or otherwise, except for
such liens, encumbrances and other title defects which
Lender shall have specifically approved in writing in
connection with the Closing. Notwithstanding the
foregoing, Borrower shall have the right to contest in good
faith the validity of any such lien, encumbrance or charge,
provided Borrower shall first deposit with Lender a bond or
other security satisfactory to Lender in such amount as
Lender shall reasonably require, but not more than one
hundred fifty percent (150%) of the amount of such lien if
such amount is ascertainable, and if not ascertainable, one
hundred fifty percent (150%) of Lender's estimate of the
cost to Borrower if an adverse judgment is rendered in any
action or proceeding to enforce such lien, encumbrance or
charge, and provided further, that Borrower shall
thereafter diligently proceed to cause such lien,
encumbrance or charge to be removed and discharged.
(d) Borrower shall pay, on demand by Lender,
as such charges are incurred and promptly after billing and
as to charges billed at or shortly before Closing, on or
before the Closing Date Lender's consultants' fees, title
company premiums and charges, survey costs, recording fees
and taxes, fees and expenses of Lender's in-house and
outside counsel (which may include counsel in California
and counsel in each other jurisdiction where the Mortgaged
Property is located) and all of Lender's other costs and
expenses pertaining to the Loan, including, without
limitation, the Application, the Original Commitment and
all amendments thereto, including the Amended Commitment,
the review and analysis of documents and other matters
affecting the Eligible Properties, the Approved Properties,
and the Disapproved Properties (as each such term was used
in the Original Commitment as from time to time amended),
or the Mortgaged Properties, whether submitted under
Paragraphs 4 or 6 of, or otherwise in connection with the
Original Commitment or the Amended Commitment, and any
advice which Lender may wish to obtain in connection
therewith and the preparation, negotiation and review of
the Loan Documents, or the documents relating to the
extension of the 1988 Loan and the modification of the 1990
Loan, each as contemplated in the Amended Commitment. It
is the intent of this Section that Borrower shall make such
payments so that Lender shall not be required to advance
any money apart from loan funds in connection with the
closing of this Loan.
(e) Borrower acknowledges that Lender will
continue to incur out-of-pocket costs and expenses
(including, but not limited to, the cost of appraisers,
title insurance endorsements and in-house and outside
attorneys' fees and expenses) following the Closing Date in
the ordinary course of its administration of the Loan, in
connection with any Release or Substitution, in connection
with the analysis of Mortgaged Property subject to Non-
Material Defects, and in connection with Lender's
determination in its sole and exclusive discretion whether
or not to enter into, and the negotiation and carrying out
of, any modifications and amendments of this Loan Agreement
and other Loan Documents which Borrower may request.
Borrower shall pay such costs and fees and expenses from
time to time during the term of the Loan promptly upon
receipt of a statement therefor.
(f) Borrower shall promptly notify Lender in
writing of the institution of any action, suit or
proceeding at law or in equity against Borrower affecting
the Properties or any portion thereof that would have a
material adverse effect on Borrower's ability to perform
its obligations under this Loan Agreement or any of the
Loan Documents.
(g) Borrower shall protect, defend and
indemnify Lender and hold Lender harmless from and against
any and all loss, cost, liability or expense (including
court costs and in-house and outside attorneys' fees)
arising out of or relating to Lender's entering into or
carrying out the terms of this Loan Agreement or Lender's
being the holder of the Notes or the Deeds of Trust and
Mortgages, or relating to any injury or damage to any
person or property occurring on or about the Properties;
provided, however, that (i) Borrower shall not be liable
for any indemnity obligation herein if and to the extent
that such indemnity obligation arises or is increased as a
result of Lender's assignment or participation of all or
any portion of its interest in the Loan as provided in
Section 16(c) below, and (ii) the foregoing indemnity shall
not apply with respect to any intentional tort, willful
misconduct or act of gross negligence which Lender is
determined by the judgment of a court of competent
jurisdiction (sustained on appeal, if any) to have
committed.
(h) At no expense to Lender, Borrower shall
keep and maintain or cause to be kept and maintained the
Mortgaged Property, including the parking, recreational and
landscaped portions thereof, in good order and condition,
and Borrower shall promptly make or cause to be made all
necessary structural and non-structural repairs to the
Mortgaged Property. Borrower shall not diminish or
materially alter the Improvements in a manner which would
adversely affect the value of the Mortgaged Property, and
shall not erect any new buildings, structures or building
additions on the Mortgaged Property in a manner that would
adversely affect the value or materially change the use of
the Mortgaged Property, without the prior written consent
of Lender. Borrower shall provide Lender with written
notice of any material damage to or destruction of the
Mortgaged Property or any portion thereof within five (5)
business days of such occurrence.
(i) At no expense to Lender, Borrower shall
comply with and shall use its best efforts to cause all
occupants of the Mortgaged Property to comply with all
federal, state and local laws, rules, regulations and
orders with respect to the discharge, generation, removal,
transportation, storage and handling of hazardous or toxic
wastes or substances, pay immediately when due the cost of
removal of any such wastes or substances, and keep the
Mortgaged Property free of any lien imposed pursuant to
such laws, rules, regulations and orders. In the event
Borrower fails to do so, Lender may declare this Loan
Agreement, the Mortgage, Deed of Trust and other Loan
Documents to be in default; provided, that with respect to
the act or omission of any unaffiliated third party,
Borrower shall not be declared in default without first
having been notified by Lender of any such violation and
given a reasonable opportunity to cure such violation. In
addition, Borrower hereby grants Lender and its employees
and agents an irrevocable and non-exclusive license,
subject to the rights of tenants, to enter the Mortgaged
Property to conduct testing and to remove the hazardous
wastes or substances, upon expiration of the applicable
cure period under this Loan Agreement, and the costs of
such testing and removal shall immediately become due to
Lender and shall be secured by the Deed of Trust and the
Mortgage. Borrower shall indemnify Lender and hold Lender
harmless from and against all loss, cost, damage and
expense (including, without limitation, in-house and
outside attorneys' fees and costs incurred in the
investigation, defense and settlement of claims) that
Lender may incur as a result of or in connection with the
assertion against Lender of any claim relating to the
presence or removal of any hazardous waste or substance
referred to in this paragraph, or compliance with any
federal, state or local laws, rules, regulations or orders
relating thereto; provided, however, that (i) Borrower
shall not be liable for any indemnity obligation herein if
and to the extent that such indemnity obligation arises or
is increased as a result of Lender's assignment or
participation of all or any portion of its interest in the
Loan as provided in Section 16(c) below, and (ii) the
foregoing indemnity shall not apply with respect to any
intentional tort, willful misconduct or act of gross
negligence which Lender is determined by the judgment of a
court of competent jurisdiction (sustained on appeal, if
any) to have committed.
(j) Borrower shall not install or permit to
be installed in the Mortgaged Property friable asbestos or
any substance containing asbestos and deemed hazardous by
federal, state or local laws, rules, regulations or orders
respecting such material. With respect to any such
material currently present in the Mortgaged Property,
Borrower shall promptly comply with, and shall use its best
efforts to cause all occupants of the Mortgaged Property to
comply with, such federal, state or local laws, rules,
regulations or orders, at Borrower's expense. If Borrower
shall fail to so comply, Lender may declare this Loan
Agreement and the other Loan Documents to be in default.
Borrower shall indemnify Lender and hold Lender harmless
from and against all loss, cost, damage and expense
(including, without limitation, in-house and outside
attorneys' fees and costs incurred in the investigation,
defense and settlement of claims) that Lender may incur as
a result of or in connection with the assertion against
Lender of any claim relating to the presence or removal of
any asbestos substance referred to in this paragraph, or
compliance with any federal, state or local laws, rules,
regulations or orders relating thereto; provided, however,
that (i) Borrower shall not be liable for any indemnity
obligation herein if and to the extent that such indemnity
obligation arises or is increased as a result of Lender's
assignment or participation of all or any portion of its
interest in the Loan as provided in Section 16(c) below,
and (ii) the foregoing indemnity shall not apply with
respect to any intentional tort, willful misconduct or act
of gross negligence which Lender is determined by the
judgment of a court of competent jurisdiction (sustained on
appeal, if any) to have committed.
(k) At no expense to Lender, Borrower shall
obtain and maintain or cause to be obtained and maintained
the policies of insurance required by the respective Deeds
of Trust and Mortgages during the entire term of the Loan,
for the benefit of Borrower and Lender.
In the event of any insured property loss, the
payment for such loss shall be made directly to Lender and,
at Lender's option (except as otherwise specifically set
forth herein or with respect to loss relating to a
Mortgaged Property as specifically set forth otherwise in
the Deed of Trust or Mortgage to which such Mortgaged
Property is subject), may be either used to effect
restoration of the loss or applied in payment of the
respective Notes, whether or not then due and payable, in
the order of priority provided below. Notwithstanding the
foregoing, Lender shall permit the application of insurance
proceeds to restoration of the Mortgaged Property affected
by such insured loss to as good or better condition as
existed prior to the loss, in accordance with plans and
specifications approved by Lender in its reasonable
discretion, provided that: (a) the amount of the loss
caused by such casualty is not more than 30% of the Loan
Amount Allocated to the particular Mortgaged Property; (b)
there is no default by Borrower under any of the Loan
Documents at the time of such application; (c) the insurer
does not deny liability to any named insured; (d) any Major
Tenant or its successors, assigns or replacements, as the
case may be, whose lease permits termination thereof as a
result of such insured loss, agrees in writing to continue
its lease; (e) rental loss insurance is available to offset
fully any abatement of rent to which any tenants of the
Mortgaged Property may be entitled as a result of such
loss; and (f) in Lender's judgment, restoration can be
completed by March 1, 2002.
If Lender elects or is required to apply insurance
proceeds to restoration, (i) the proceeds shall be held by
Lender in an interest-bearing account and may, at Lender's
election, be disbursed in installments by Lender or by a
disbursing agent ("Depository") selected by Lender and whose
fees and expenses shall be paid by Borrower, (ii) Borrower
shall upon demand by Lender from time to time deposit with
Lender or Depository, in a mutually acceptable interest-
bearing account, the amount of any deductible under such
insurance coverage and such amounts in excess of the amount
from time to time on deposit as may be necessary to complete
such restoration, and (iii) the insurance proceeds shall be
disbursed from time to time as restoration progresses
satisfactorily in Lender's reasonable judgment, based upon
receipt of appropriate lien waivers, a certificate of the
architect or engineer in charge of the work, the form and
content of such certificate to be reasonably satisfactory to
Lender, and title insurance protection against mechanic's and
materialmen's liens. If Borrower shall fail to complete the
restoration of the Property or an Event of Default occurs
prior to full disbursement of the insurance proceeds, any
undisbursed portion (including accrued interest thereon) may,
at Lender's option, be applied to the respective Notes,
whether or not then due as provided below, and such
application shall be deemed to be a prepayment of the
outstanding principal balance of the Loan and shall be subject
to a prepayment premium computed in accordance with the next
sentence, except that no such prepayment premium shall be due
(x) in the event that such prepayment is attributable to the
application of insurance proceeds where Borrower has fulfilled
the requirements of clauses (b) through (f) inclusive in the
immediately preceding paragraph, and such prepayment is
attributable solely to the exercise by Lender of its rights by
reason of clause (a) in the preceding paragraph with respect
to use of insurance proceeds or (y) in the event, and only to
the extent, the total of all prepayments (other than under
such clause (a)) attributable to insurance proceeds under this
Section 5(k) and condemnation awards under Article V,
Paragraph B of the Deed of Trust and of the Mortgage does not
exceed $2,000,000. If the Mortgaged Property with respect to
which the insurance proceeds, or in the case of a condemnation
(as referred to in Article V of the Deed of Trust and of the
Mortgage), the Transerred Property, is South Bay Center, the
prepayment shall be applied to and the prepayment premium
shall be calculated on the basis that the prepayment is first
of Note C and after full prepayment of Note C, then as to any
excess a prepayment of Note B, and after full prepayment of
Note B, then as to any excess a prepayment of Note A, or if
the Mortgaged Property with respect to which the insurance
proceeds are paid or condemnation award is paid is Santa Fe
Center, the prepayment shall be applied to and the prepayment
premium shall be calculated on the basis that the prepayment
is of Note B, and after full prepayment of Note B, then as to
any excess a prepayment of Note A, and in all other instances
of insurance proceeds or condemnation awards, the prepayment
shall be applied to and the prepayment premium shall be
calculated on the basis that the prepayment is of Note A.
Notwithstanding the foregoing, so long as there is
then existing no default on the part of Borrower under the
Deed of Trust, in the event of a casualty which damages only
one Mortgaged Property and repair of the damage will cost less
than $250,000, the insurance proceeds with respect to such
casualty shall be paid to Borrower on the condition that
Borrower shall receive such funds in trust to be applied to
the cost of repair and Borrower by receiving such funds shall
covenant to complete such repair with such funds and such
additional funds as Borrower shall expend or cause to be
expended and Borrower shall cause any and all liens in
connection with such repair to be discharged of record within
thirty days of filing.
In the case of any casualty that results in the
application of insurance proceeds or condemnation awards to
the prepayment of the Loan, the Allocated Loan Amount for the
Mortgaged Property that is the subject of such casualty shall
be reduced by the amount of principal of the Loan prepaid by
Borrower.
(l) Borrower shall furnish Lender (i) within 120
days after the close of each fiscal year of Borrower, with a
copy of the Form 10-K of Borrower filed with the Securities
and Exchange Commission ("SEC") for such year, or if Borrower
is no longer required to file such form, with an annual
financial statement of Borrower containing at least a balance
sheet as at the end of such year, operating statement for such
year, and a statement of sources and uses of funds for such
year, each audited by and with the report of an independent
certified public accountant, and (ii) at the time they are
furnished to the SEC, copies of each quarterly report of
Borrower on Form 10-Q and all Current Reports of Borrower on
Form 8-K to the SEC. Additionally, Borrower shall provide
Lender with prompt notice of any and all other reports to and
filings (other than Borrower's filings of preliminary proxy
statements and Borrower's responses to SEC comments on
filings) with the SEC which the public is legally entitled to
examine and which the Borrower from time to time makes,
whether or not required to do so by applicable law or
regulation; provided, that Borrower shall not be required to
provide Lender with copies of such other reports to and
filings with the SEC unless Lender shall request copies
thereof from Borrower.
(m) At any time after an Event of Default by
Borrower under any of the Loan Documents, at the election of
Lender, Borrower shall make monthly deposits on account of
real estate taxes, assessments levied against the Mortgaged
Property and insurance premiums equal to one-twelfth of the
annual charges estimated by Lender therefor or such greater
amount as may be reasonably necessary under the circumstances
existing at the time Lender makes such election in order to
accumulate with Lender sufficient funds to pay such taxes,
assessments and premiums 30 days prior to their respective due
dates. Any such funds paid by Borrower to Lender shall be
held by Lender in an interest-bearing account selected by
Lender, and the interest on such funds shall, at the election
of Lender, either be applied to the payment of real estate
taxes, assessments or insurance premiums or be paid over to
Borrower.
(n) Borrower shall not operate or permit the
Mortgaged Property to be operated as a cooperative or
condominium building or buildings in which the tenants or
occupants participate in the ownership, control or
management of the Mortgaged Property or any part thereof,
as tenant stockholders or otherwise; provided, that the
foregoing shall not prohibit Borrower from operating any
Mortgaged Property that contains multi-tenant common areas.
(o) Within ninety (90) days following the end
of each calendar year beginning with calendar year 1994,
Borrower shall furnish Lender with a current rent roll on a
Property-by-Property basis containing each tenant's name,
the rentable square footage of the premises, the monthly
rental rate, the monthly rent, all items of additional
rent, the term, the commencement and expiration dates, any
option to renew and any option to terminate with respect to
all Leases affecting the Mortgaged Property and a current
report of any tenant delinquencies under any leases or
tenancies, certified by an executive officer of Borrower.
6. RELEASE OF MORTGAGED PROPERTY.
Without requiring substitution of collateral,
Lender will at Borrower's request release ("Release") such
of the Mortgaged Property as Borrower designates in such
request, provided that the conditions set forth in this
Section 6 are satisfied at the time of such Release.
(a) Special Property and Option Property. At
the Borrower's written request delivered to Lender
("Release Request") from time to time and upon compliance
with the requirements of clause (d) (other than the
requirements of clauses (d)(3) and (d)(4)) and clause (e)
below with respect to each Release Request, and upon
prepayment to Lender of (1) a principal prepayment in the
amount of the greater of (A) the Allocated Loan Amount of
such Mortgaged Property designated for Release in such
Release Request or (B) in the case of (x) a Release Request
in connection with a sale to a non-Affiliate of Borrower,
the gross sales price of the Mortgaged Property designated
for Release in such Release Request less the total of
customary expenses of sale incurred, the federal and state
income taxes, if any, due with respect to such sale by
Borrower, and the prepayment premium due hereunder with
respect to such prepayment of principal, and (y) any other
Release Request under this clause (a), one hundred percent
(100%) of the Market Value of the Mortgaged Property
designated in such Release Request, less the prepayment
premium due under the Notes with respect to such prepayment
of principal, together with (2) a prepayment premium in
connection with each such prepayment under (1) above on the
amount payable under (1) above (such prepayment premium to
be calculated as provided in clause (f) below), Lender
shall execute and deliver to the Trustee under the
applicable Deed of Trust a request for reconveyance from
the applicable Deed of Trust (or a release from the
Mortgage with respect to any Special Property or any Option
Property which is subject to a Mortgage) of the Special
Property or the Option Property which is being sold
pursuant to the exercise of the tenant's option on such
Option Property existing on the date of Closing, as the
case may be, as specified in such Release Request.
(b) Release of Santa Fe Center or South Bay
Center. Upon receipt by Lender (i) of a Release Request at
any time or times prior to March 1, 1996 (time being of the
essence) and upon compliance with the requirements of
clause (d) (other than the requirements of clause (d)(2))
and clause (e) below with respect to each Release Request,
(ii) payment of (1) a principal prepayment in the amount of
one hundred ten percent (110%) if prepayment is made before
March 1, 1995 (time being of the essence) and one hundred
twenty percent (120%) if prepayment is made thereafter
(time being of the essence) of the Allocated Loan Amount
with respect to the Mortgaged Property which is the subject
of such Release Request and (2) a prepayment premium on the
amount payable under subsubclause (1) above, calculated in
accordance with Note B as a principal payment of Note B,
Borrower shall be entitled to the release of South Bay
Center and Santa Fe Center, respectively; provided that the
release of South Bay Center shall also require the
additional prepayment of the entire balance of principal
and accrued interest of Note C and a prepayment premium on
such prepayment of principal of Note C.
(c) Additional Releases up to $30,000,000.
Subject to the limitation set forth in the last sentence of
this clause (c), in addition to the Releases which are made
under clauses (a) or (b) hereof, and the Mortgaged Properties
which become Removed Properties under Section 7 below, upon
receipt by Lender (i) of a Release Request at any time or
times and upon compliance with the requirements of clauses (d)
and (e) below with respect to each Release Request, and upon
prepayment to Lender of (1) a principal prepayment in the
amount of the greater of (A) one hundred ten percent (110%) of
the Allocated Loan Amount of such Mortgaged Property
designated for Release in such Release Request or (B) in the
case of (x) a Release Request in connection with a sale to a
non-Affiliate of Borrower, the gross sales price of the
Mortgaged Property designated for Release in such Release
Request less the total of customary expenses of sale incurred,
the federal and state income taxes, if any, due with respect
to such sale by Borrower, and the prepayment premium due
hereunder with respect to such prepayment of principal, and
(y) any other Release Request under this clause (c), one
hundred percent (100%) of the Market Value of the Mortgaged
Property designated in such Release Request, less the
prepayment premium due under the Notes with respect to such
prepayment of principal, together with (2) a prepayment
premium in connection with each such prepayment under (1)
above on the amount payable under (1) above (such prepayment
premium to be calculated as provided in clause (f) below).
Borrower shall not be entitled to the release pursuant to this
clause (c) of Mortgaged Properties having an aggregate
Allocated Loan Amount exceeding $30,000,000.
(d) Additional Conditions for Release. As to
each Release Request Borrower shall have satisfied each of
the following conditions:
(1) No Default. At the time of
delivering to Lender a Release Request and immediately
following a Release pursuant thereto, Borrower shall not be
in default with respect to its obligations under this Loan
Agreement or under any of the other Loan Documents or in
any material respect under any other material agreement or
instrument binding on the Mortgaged Property or Borrower's
interest therein; provided, that the foregoing requirement
shall not be applicable to any default which would be cured
by effecting the Release requested by Borrower in the
Release Request.
(2) Valuations. For purposes of
determination of the Market Value in connection with such
Release Request (to the extent applicable under clauses
(a), (b), or (c) above), if requested by Lender, Borrower
shall have delivered to Lender market appraisals with
respect to each Mortgaged Property which is the subject of
such Release Request, such appraisals performed by
independent appraisers selected by Lender after
consultation with Borrower.
(3) Financial Information. In the event
of a Release Request under clauses (b) or (c) above,
Borrower shall have supplied Lender with the following
financial information in form and substance satisfactory to
Lender:
(i) an unaudited pro forma
consolidated condensed balance sheet of Borrower as of the
last day of the full calendar month preceding the Release
("Financial Statement Date"), accompanied by a certificate
signed by the chief financial officer of Borrower to the
effect that the historical financial information contained
in the unaudited pro forma consolidated condensed balance
sheet of Borrower was prepared in accordance with generally
accepted accounting principles consistently applied, and
reflects all adjustments necessary for a fair presentation
of the information contained therein;
(ii) such additional financial data
and information regarding Borrower as Lender may reasonably
request.
(4) Adverse Financial Change. The
current financial statements of Borrower submitted under
Section 6(d)(3) above, confirm that the net worth of
Borrower before such Release (other than a Release under
clause (a) above) is, and after such Release will be, not
more than twenty percent (20%) less than such net worth as
reflected in the financial statement delivered to Lender by
Borrower pursuant to Paragraph 4.N.(iv) of the Amended
Commitment.
(5) Protection Against Bankruptcy.
There shall not have been filed by or against Borrower a
petition in bankruptcy or a petition or answer seeking
assignment for the benefit of creditors, the appointment of
a receiver, trustee or liquidator with respect to Borrower
or any substantial portion of Borrower's property,
reorganization, arrangement, liquidation or dissolution or
similar relief under the Federal Bankruptcy Laws or any
state law.
(6) Representations and Warranties.
Lender shall be satisfied that the representations and
warranties contained in Section 4(b), (c) and (e) of this
Agreement are true and correct as of the date of the
Release, that the Borrower is not in breach of any covenant
or agreement contained in Section 5 or elsewhere in this
Loan Agreement or in the other Loan Documents as of the
date of the Release, and that no condition exists as of the
date of the Release under Section 5 or elsewhere in this
Loan Agreement or in the other Loan Documents which with
the giving of notice or the passage of time, or both, would
constitute a breach of any representation, warranty,
covenant or agreement in any of the Loan Documents.
(7) Borrower's Officer's Certificate.
The chief executive officer or chief financial officer of
Borrower shall certify to Lender that (i) Borrower is duly
formed, validly existing and in good standing,
(ii) Borrower is not in breach or default with respect to
its obligations under this Loan Agreement or any of the
other Loan Documents or in any material respect with
respect to any material agreement to which Borrower is a
party affecting or binding the Mortgaged Property, and
(iii) such other matters as are set forth in the form of
certificate attached hereto as Exhibit D.
(8) Title Insurance Policy. At the time
of the Release, Borrower shall have obtained commitments
satisfactory to Lender for endorsements to its then-
existing title insurance policies, issued by a company or
companies satisfactory to Lender, insuring that the
validity and priority of the liens of the Deed of Trust and
Mortgage are not impaired as a result of the Release and
insuring as to such other matters related to the Release as
Lender may in its reasonable discretion require.
(9) Amendment of Loan Documents.
Borrower shall have executed and delivered to Lender such
documents as Lender may reasonably require amending the
Loan Documents, each in form and substance satisfactory to
Lender, reflecting the Release.
(10) No Pending or Threatened Action.
At the time of the Release, there shall be no pending or
threatened action seeking to challenge the legality,
validity, priority or enforceability of Lender's Mortgage
and/or Deed of Trust.
(11) Opinion of Counsel. Upon the
written request of Lender, Borrower shall deliver to
Lender, at the time of the Release Request, an opinion, in
form and from counsel reasonably acceptable to Lender,
covering such matters related to the Release as Lender
shall reasonably request.
(12) Access. Ingress to and egress from
all portions of the Mortgaged Property which are adjacent
to property released by Lender shall be over fully-
dedicated public roads or by private easements satisfactory
to Lender.
(13) Subdivision Approval. At
Borrower's expense, Borrower shall obtain any subdivision
approval and such other evidence reasonably satisfactory to
Lender that the remaining Mortgaged Property that is
adjacent to any property that is being released shall be in
compliance with all applicable laws, ordinances, rules and
regulations relating to the subdivision of real property;
provided, that if Borrower otherwise qualifies for a
Release pursuant to this Section 6, Lender shall execute
tentative, final and/or parcel maps and other documents
necessary to comply with the California Subdivision Map Act
or equivalent laws of other jurisdictions.
(e) Service Fee. Prior to or concurrently with
the delivery of any Release Request, Borrower shall have paid
to Lender a service fee of one half of one percent (0.5%) of
the Allocated Loan Amount with respect to, (with a minimum
such fee of $15,000 and a maximum fee of $50,000 per) each
Mortgaged Property requested to be released. Additionally,
promptly upon receipt of an invoice therefor, Borrower shall
pay Lender's in-house and outside attorneys' fees and costs
and Lender's other out-of-pocket expenses relating to such
Release.
(f) Prepayment Premium. With respect to any
prepayment under clauses (a) or (c) hereof, (i) if the
Mortgaged Property which is the subject of the Release Request
is South Bay Center, the prepayment shall be applied to and
the prepayment premium shall be calculated on the basis that
the prepayment is first of Note C and after full prepayment of
Note C, then as to any excess a prepayment of Note B, and
after full prepayment of Note B, then as to any excess a
prepayment of Note A, (ii) if the Mortgaged Property which is
the subject of the Release Request is Santa Fe Center, the
prepayment shall be applied to and the prepayment premium
shall be calculated on the basis that the prepayment is of
Note B, and after full prepayment of Note B, then as to any
excess a prepayment of Note A, and (iii) and if the Mortgaged
Property which is the subject of the Release Request is
neither Santa Fe Center nor South Bay Center, the prepayment
shall be applied to and the prepayment premium shall be
calculated on the basis that the prepayment is of Note A, and
after full prepayment of Note A, then as to any excess a
prepayment of Note B, and after full prepayment of Note B,
then as to any excess a prepayment of Note C.
(g) No Reborrowing. Amounts repaid or
prepaid may not be reborrowed by Borrower.
(h) Special Rules for Release of San Diego
Baggage Building. Pursuant to an Amended and Restated
Development Agreement by and between Borrower and the City
of San Diego dated as of April 1993 (the "Development
Agreement"), Borrower is obligated to transfer, on or
before December 7, 1997, fee title to the "Baggage
Building" (as such term is defined in the Development
Agreement) to the City of San Diego or its designee free
from the lien of the Deed of Trust. The Allocated Loan
Amount for the Baggage Building parcel (identified as a
part of Parcel No. CA0731752 in Schedule A hereof) is zero.
Subject to compliance with the provisions of the
Development Agreement relating to such transfer, Borrower
shall be permitted to obtain a release of the Baggage
Building parcel, for the purpose of conveying such parcel
to the City of San Diego in accordance with the Development
Agreement, without any prepayment of principal, prepayment
premium or service fee. Notwithstanding the foregoing,
Borrower shall be required to pay all title insurance
premiums, Lender's in-house and outside attorneys' fees and
costs and Lender's other out-of-pocket costs incurred in
connection with the release of the Baggage Building.
(i) Prepayment in Excess of Allocated Loan
Amount. In the event of a prepayment in excess of the
Allocated Loan Amount with respect to a Mortgaged Property
in connection with the Release of such Mortgaged Property,
the excess shall be credited against and in reduction of
the Allocated Loan Amount of such of the other Mortgaged
Properties as Lender shall designate in its sole and
absolute discretion.
(j) Lender's Approval or Disapproval of
Release Requests. In the case of any Release Request
delivered by Borrower under this Section 6, Lender shall
approve or disapprove such Release Request within
thirty (30) days of receiving such Release Request and all
documents and information required to be provided to Lender
in connection therewith. Following the receipt of Lender's
approval of any Release Request, Borrower shall have a
reasonable period of time, not to exceed thirty (30) days,
within which to effect the approved Release.
7. SUBSTITUTION OF PROPERTIES.
(a) General. In addition to the release of
Mortgaged Property pursuant to Section 6, Borrower may
release Mortgaged Property by substitution (herein
"Substitution") if Borrower shall deliver to Lender a
Release Request with respect to such Mortgaged Property,
and shall fulfill all of the conditions of this Section 7.
(b) Substitution of Additional Properties.
Borrower shall add to the Mortgaged Property additional
Properties ("Additional Properties) in accordance with the
following rules:
(1) Borrower shall submit to the Lender
along with the Release Request a request for substitution
which shall identify the Additional Property.
(2) Such Additional Property at the time
of Substitution must be, in Lender's sole and absolute
opinion: (i) substantially identical to or better in
quality than (with respect to such factors as age of
improvements, quality of tenants, type of use and location)
the Removed Properties, (ii) located in the States of
Arizona, California, Illinois or Oregon, (iii) have a
Market Value and a Net Operating Income equal to or greater
than the Market Value and the Net Operating Income of the
Removed Property, and (iv) occupied in all material
respects with Improvements which are less than five years
old at the time the Release Request is submitted;
(3) In Lender's sole and absolute opinion at
the time of delivery of such Release Request and at the
time of the Release and Substitution the Net Operating
Income of the Mortgaged Property other than Santa Fe Center
and South Bay Center included in the Mortgaged Property is
at least one hundred twenty-five percent (125%) of the
Annual Debt Service on Note A and the Net Operating Income
of Santa Fe Center and South Bay Center is at least one
hundred thirty percent (130%) of the Annual Debt Service of
Notes B and C.
(4) no more than one Release and
Substitution shall be made within any period of twelve
consecutive months.
(5) there shall be no Release and
Substitution permitted with respect to any Mortgaged
Property or Mortgaged Properties if the aggregate Allocated
Loan Amounts of all Removed Properties pursuant to this
Section 7 and Sections 8 and 9 would exceed $30,000,000.
(c) Required Deliveries for Properties that
Borrower Proposes to Add to the Mortgaged Property.
Concurrently with the delivery to Lender of any Release
Request and proposed Substitution pursuant to this
Section 7, Borrower shall supply Lender with the following
items with respect to each proposed Additional Property:
(1) Survey. A current as-built survey
("Survey"), in triplicate, dated not more than 30 days
before the date of the Release Request and not more than
180 days before the date of Substitution and which meets
the requirements set forth on Exhibit E.
(2) Inventory of Personal Property. A
detailed inventory of Borrower's Personal Property located
on the Additional Properties, including make, model and
serial number.
(3) As-Built Plans and Specifications.
A certified complete set of the as-built plans and
specifications for any improvements located on the
Additional Properties to the extent Borrower possesses such
plans and specifications. Lender and Borrower agree that
Borrower may not possess as-built plans and specifications
for certain of the Improvements located on Additional
Properties and that Borrower will not be required to have
as-built plans and specifications created for such
Improvements. All as-built plans and specifications held
by Borrower will be available in its regional offices for
review by Lender and by appraisers engaged by Borrower
and/or Lender in connection with the Substitution.
(4) Asbestos Report. A comprehensive
asbestos report, prepared by a licensed engineer or
asbestos consultant acceptable to Lender, prepared in
accordance with the guidelines set forth on Exhibit I,
stating that the Improvements located on the Additional
Properties do not contain any asbestos or, if asbestos is
present, describing its form, extent and condition and
analyzing (including cost and time factors) recommended
methods of removal or abatement. The asbestos report must
be satisfactory to Lender in all respects. In lieu of the
foregoing asbestos report, as to any of the Improvements
which were constructed after January 1, 1983, Lender will
accept:
(i) a certification from Borrower's
architect for such Improvements, certifying that no
asbestos-containing materials were specified in the Final
Specifications for the Improvements and that based upon
said architect's observations during the construction of
the Improvements, no asbestos-containing materials were
used by the general contractor and its subcontractors in
constructing the Improvements; and
(ii) a certification from Borrower's
contractor that no asbestos-containing materials were used
by said contractor or any of its subcontractors during the
construction of the Improvements;
provided, that if Borrower cannot obtain both of the
certifications required in (i) and (ii) above after making
diligent efforts to do so, Lender will accept, in lieu of
one of such certifications, a substantially identical
certification from Borrower.
(5) Hazardous Materials Report. A
comprehensive hazardous materials report, prepared by a
licensed engineer or qualified environmental consultant
acceptable to Lender, prepared in accordance with the
guidelines set forth in Exhibit F, which states that the
Additional Property, the Personal Property located thereon
and the users and occupants thereof do not contain, use or
discharge any hazardous or toxic materials, wastes or
substances, or, if present, describing such substances and
uses and whether the use and disposal of such substances
complies with applicable laws and regulations governing use
and disposal of such substances, and if such substances are
not being lawfully used or disposed of, then analyzing
(including cost and time factors) the recommended methods
of remediation. Lender may retain, at Borrower's expense,
technical consultants to review the results of such report.
In addition, Borrower hereby agrees that Lender and/or its
technical consultants may contact and confer with
Borrower's consultant without Borrower's knowledge,
approval or consent. The comprehensive hazardous materials
report must be satisfactory to Lender in all respects.
(6) Building Condition and Engineering
Report. Borrower shall retain, at its expense, the
services of independent third-party engineer(s), pre-
approved by Lender and duly licensed in the States in which
the Additional Properties are located, to provide an
independent evaluation of each Additional Property. Such
study shall be prepared in accordance with the guidelines
set forth in Exhibit H and any other similar requirements
which Lender deems necessary. If the engineer determines
that it is appropriate to do so, Borrower shall also
furnish a report of all sub-surface soil conditions from an
approved soils engineer including a test boring report for
each site prepared by a recognized test laboratory. Both
reports must be satisfactory to Lender in all respects.
(7) Compliance with Zoning, Building and
Other Laws. Evidence in the form of governmental
certifications, affirmative title insurance (if available)
and/or an opinion of counsel acceptable to Lender, that the
Additional Properties and the uses thereof comply with all
applicable zoning, building and land use laws, ordinances,
rules, regulations and other similar restrictions, and that
there is no action or proceeding pending before any court,
quasi-judicial body or administrative agency relating
thereto. Borrower shall also furnish to Lender permanent
and unconditional certificates of occupancy, temporary
certificates of occupancy, and all other certificates,
permits, licenses and other items relating to such
compliance (or their equivalents) which are required by or
have been obtained from any board, agency or department,
whether governmental or otherwise, to the extent the
foregoing items either (i) are within Borrower's possession
or (ii) may be obtained by Borrower without unreasonable
effort or expense in the reasonable judgment of Lender.
(8) Insurance. A certificate of
insurance satisfactory to Lender confirming the insurance
coverages required under Section 5(k) and conforming to the
requirements of Exhibit G.
(9) Title Commitment. A commitment for
or preliminary title report with respect to the Title
Insurance Policy required under Section 7(d)(16) below with
respect to the Additional Properties together with complete
copies of all recorded easements, covenants, restrictions
and other matters affecting title to the Additional
Properties which are raised as exceptions in the commitment
or preliminary title report.
(10) UCC Searches. UCC searches against
the Additional Properties and Borrower.
(11) Elevator Adequacy Report. For each
Additional Property in excess of five stories, an elevator
adequacy report, prepared by a nationally recognized
elevator manufacturer or engineering firm, covering the
recommended size, capacity, travel, and speed of the
elevators necessary to adequately service the Improvements,
and percentage of population that can be moved within a
five-minute period during peak traffic load and maximum
established waiting period for riders.
(d) Additional Conditions for Substitution.
Borrower shall have satisfied each of the following
additional conditions:
(1) No Default. At the time of a
request for a Substitution and immediately following a
Substitution, Borrower shall not be in default with respect
to its obligations under this Loan Agreement or under any
of the other Loan Documents or in any material respect
under any other material agreement or instrument binding on
the Mortgaged Property or Borrower's interest therein;
provided, that the foregoing requirement shall not be
applicable to any default which would be cured by effecting
the release and substitution requested by Borrower in the
Release Request.
(2) Valuations. For purposes of
determining the Market Values and Net Operating Income
required under Section 7(b)(2)(iii) above, the Market Value
and Net Operating Income of each proposed Removed Property
and each proposed Additional Property shall be determined
by Lender. If requested by Lender, Borrower shall have
delivered to Lender market appraisals with respect to each
of such Properties performed by independent appraisers
selected by Lender after consultation with Borrower.
(3) Financial Information. Borrower
shall have supplied Lender with the following financial
information in form and substance satisfactory to Lender:
(i) an unaudited pro forma
consolidated condensed balance sheet of Borrower as of the
last day of the full calendar month preceding the
Substitution ("Financial Statement Date"), accompanied by a
certificate signed by the chief financial officer of
Borrower to the effect that the historical financial
information contained in the unaudited pro forma
consolidated condensed balance sheet of Borrower was
prepared in accordance with generally accepted accounting
principles consistently applied, and reflects all
adjustments necessary for a fair presentation of the
information contained therein;
(ii) such additional financial data
and information regarding Borrower as Lender may reasonably
request.
(4) Leases. Borrower shall have
delivered to Lender duplicate originals or copies of all
leases, renewals and modifications thereof of all or any
part of the Additional Property, certified by Borrower.
(5) Rent Roll. Borrower shall have
delivered to Lender a current rent roll on a Property-by-
Property basis verifying that the Mortgaged Property are
only subject to unexpired Leases previously or concurrently
submitted to Lender and containing the tenant's name, the
rentable square footage of the premises, the annual rental
rate, the annual rent, all items of additional rent, the
term, the commencement and expiration dates, any option to
renew and any option to terminate with respect to all
Leases affecting the Mortgaged Property and a current
report of any tenant delinquencies under any leases or
tenancies, certified by an executive officer of Borrower.
(6) Legal Capacity. Borrower shall have
delivered to Lender evidence that Borrower and the persons
executing any new Loan Documents relating to the
Substitution on its behalf have the legal capacity and
authority to do so. Borrower shall submit certified copies
of its certificate of incorporation, by-laws and the
resolution(s) of its board of directors authorizing the
Substitution, together with current appropriate good
standing certificates and incumbency certificates for the
persons designated to execute any such new Loan Documents
on behalf of Borrower. At the election of Borrower,
Borrower may satisfy the requirements of this paragraph (6)
by providing Lender with a Secretary's Certificate stating
that (i) there have been no changes in Borrower's
certificate of incorporation and by-laws since the date
such items were last delivered to Lender, (ii) the
Substitution has been authorized by all necessary corporate
action, and (iii) the person(s) executing any documents on
behalf of Borrower have the authority to do so.
(7) Separate Lot. If requested by
Lender with respect to the Removed Properties and the
Additional Properties that are the subject of any release
and substitution, Borrower shall deliver to Lender evidence
satisfactory to Lender that each of such Properties
constitutes a separate lot and is assessed and taxed
separately by taxing authorities.
(8) Title. Title to the Additional
Properties and the Personal Property located thereon shall
be satisfactory in all respects to Lender. Such title
shall be good and marketable and free and clear of all
leases, liens, encumbrances, security interests,
restrictions, easements and other defects which are not
acceptable to Lender.
(9) Leasing of the Mortgaged Property.
At the time of Substitution, there shall be in full force
and effect with tenants in occupancy and tenants not in
default leases of the Additional Properties approved by
Lender which produce monthly Net Operating Income
sufficient to fulfill the requirements of Section
7(b)(2)(iii).
(10) Damage, Destruction or
Condemnation. With respect to any Additional Property,
such Property shall not have suffered any unrepaired
material damage by fire or other casualty, and shall not
have become, in whole or in part, the subject of any
condemnation action or proceeding or the exercise of the
power of eminent domain. Notwithstanding the foregoing,
Lender shall permit to be added to the Mortgaged Property
any Property that (a) suffers any casualty or partial
condemnation so long as the tenant(s) remain in possession
and are paying rent as required under their lease(s)
without reduction because of the casualty or partial
condemnation, or (b) suffers a casualty loss not in excess
of $100,000, provided that in the case of either (a) or (b)
Borrower or the tenant in possession unconditionally agrees
to restore the Property and Lender is assured to its
reasonable satisfaction that sufficient funds are available
(including insurance proceeds and funds of Borrower or
tenant, as the case may be) to restore the Property.
(11) Inspection of Improvements.
Lender's architectural and engineering staff shall have
completed a physical inspection of the Improvements on the
Additional Property, the results of which are satisfactory
to Lender.
(12) Adverse Financial Change. The
current audited or certified financial statements of
Borrower submitted under Section 7(d)(3) above, confirm
that the net worth of Borrower before such Release is, and
after such Release will be, not more than twenty percent
(20%) less than such net worth as reflected in the
financial statement delivered to Lender by Borrower
pursuant to Paragraph 4.N.(iv) of the Amended Commitment.
(13) Protection Against Bankruptcy.
There has not been filed by or against Borrower a petition
in bankruptcy or a petition or answer seeking assignment
for the benefit of creditors, the appointment of a
receiver, trustee or liquidator with respect to Borrower or
any substantial portion of Borrower's property,
reorganization, arrangement, liquidation or dissolution or
similar relief under the Federal Bankruptcy Laws or any
state law.
(14) Representations and Warranties.
Lender shall be satisfied that all representations and
warranties contained in Section 4(b), (c) and (e) of this
Agreement are true and correct as of the date of the
Substitution, that the Borrower is not in breach of any
covenant or agreement contained in Section 5 or elsewhere
in this Loan Agreement or in the other Loan Documents as of
the date of the Substitution, and that no condition exists
as of the date of the Substitution under Section 5 or
elsewhere in this Loan Agreement or in the other Loan
Documents which with the giving of notice or the passage of
time, or both, would constitute a breach of any
representation, warranty, covenant or agreement in any of
the Loan Documents.
(15) Borrower's Officer's Certificate.
The chief executive officer or chief financial officer of
Borrower shall certify to Lender that (i) Borrower is duly
formed, validly existing and in good standing,
(ii) Borrower is not in breach or default with respect to
its obligations under this Loan Agreement or any of the
other Loan Documents or in any material respect with
respect to any material agreement to which Borrower is a
party affecting or binding the Mortgaged Property, and
(iii) such other matters as are set forth in the form of
certificate attached hereto as Exhibit D.
(16) Title Insurance Policy. At the
time of Substitution, Borrower shall have obtained
commitments satisfactory to Lender for ALTA title insurance
policies (collectively "Title Insurance Policy"), issued by
a company or companies satisfactory to Lender, in the
amount of the aggregate Allocated Loan Amount of the
Additional Properties, and which shall insure that:
a. Lender's Deed of Trust and Mortgage is a
valid first lien on Borrower's unencumbered fee simple estate
in the Additional Properties subject only to the title
exceptions approved by Lender;
b. Ingress and egress to the Additional
Properties is by public road, deeded right-of-way or easement
included as part of the Additional Properties and approved by
Lender;
c. Borrower is current in the payment of
all applicable state and local taxes, charges and assessments
affecting the Additional Properties, including but not limited
to, real estate and school taxes and water, sewer and utility
charges.
The Title Insurance Policy shall contain CLTA Endorsements
Nos. 100, 103.7, 104.6, 104.7, 116, 116.1 and 123.2 (modified
to include parking requirements, if available), or their
equivalents in other states, if available, and such other
endorsements as Lender deems necessary or advisable. No title
indemnities shall be established in connection with the
issuance of the Title Insurance Policy without Lender's prior
consent. Upon Lender's request, Borrower shall arrange for
co-insurance and/or reinsurance, with companies satisfactory
to Lender, in order to comply with Lender's current single
risk limitation guidelines for title insurance companies,
treating each Mortgaged Property as a single loan for policy
reinsurance limits. All reinsurance policies shall include
direct access agreements. Lender may in its sole discretion
agree to accept endorsements to existing policies of title
insurance rather than new policies of title insurance if it
determines that such endorsements provided equivalent
assurances of the validity and priority of its Mortgage.
(17) Owner's Affidavit. Borrower shall
have delivered to Lender an Owner's Affidavit executed by
Borrower affirming, among other things, that:
a. All costs and expenses of all labor,
materials, supplies and equipment used in construction of the
Improvements located on the Additional Properties (except for
costs of tenant improvements in the ordinary course of
business) have been paid in full except as otherwise stated
and provided for in the affidavit (provided such exceptions,
if any, are approved by Lender);
b. No bankruptcy or insolvency proceedings
have been instituted by or against Borrower or, to the best of
Borrower's knowledge, any Major Tenant (other than of the
Property for which a Release is sought);
c. Except for permitted non-conforming uses
and violations previously disclosed by Borrower, governmental
entities or Chicago Title Insurance Company in writing to and
approved by Lender in its sole discretion, the Additional
Properties and the use thereof comply in all material respects
with all applicable federal, state and local laws, ordinances,
building codes, rules and regulations pertaining to zoning,
building and environmental matters;
d. There is no action or proceeding before
any court, quasi-judicial body or administrative agency
relating to the validity of the Loan or the proposed or actual
use of the Additional Properties (except proceedings initiated
by Borrower and seeking to increase the intensity of permitted
uses for certain of the Properties) and all rights to appeal
any decision rendered in any such action or proceeding have
expired;
e. Neither Borrower nor, to the best of
Borrower's knowledge (having made no investigation other than
the receipt of reports required herein), any tenant or prior
occupant or owner of the Additional Properties has stored or
discharged any hazardous or toxic wastes or substances on the
Mortgaged Property in violation of the provisions of
Section 5(i) hereof; and
f. None of the Additional Properties has
suffered any unrepaired damage as a result of any casualty or
is subject to any pending or (to the knowledge of the
Borrower) threatened condemnation, or if such not be the case,
identifying the parcels as to which such statement is not
correct and specifying how Borrower proposes to satisfy
Section 7(d)(10).
(18) Tenant Estoppel Certificates.
Borrower shall provide to Lender properly executed Tenant
Estoppel Certificates in the form heretofore provided by
Lender to Borrower from tenants of Additional Properties
which in the aggregate comprise not less than eighty
percent (80%) of the gross rent roll of such Additional
Properties, and shall provide Borrower's landlord estoppel
certificate in a form substantially identical to the Tenant
Estoppel Certificates with respect to each other tenant of
the Additional Properties, but Borrower shall not be
required to provide Tenant Estoppel Certificates from any
other tenants of the Mortgaged Property.
(19) Amendment of Loan Documents.
Borrower shall have executed and delivered to Lender such
documents as Lender may require amending the Loan
Documents, each in form and substance satisfactory to
Lender, reflecting the Substitution.
(20) No Pending or Threatened Action.
At the time of the Substitution, there shall be no pending
or threatened action seeking to challenge the legality,
validity, priority or enforceability of Lender's Mortgage
and/or Deed of Trust.
(21) Additional Deliveries. Borrower
shall deliver to Lender in connection with a request for
Substitution of Additional Property pursuant to this
Section 7 such additional documents and other items of
information with respect to the proposed Additional
Property and the proposed Removed Property as Lender shall
request in order to enable it to determine whether the
Release and Substitution complies with the requirements of
this Section 7.
(e) Determination of Lender. After the
delivery of each of the items referred to in clauses (c)
and (d) hereof with respect to the proposed Additional
Property and the Removed Property, Lender shall then have
up to 90 days to consider such information, determine in
its sole and absolute discretion whether the proposed
Additional Property fulfills the requirements of this
Section 7 and approve or disapprove such proposed
Additional Property, and at the end of such period of
determination to deliver to Borrower its letter of approval
or disapproval of the addition of such Additional Property
as collateral and the release of the Removed Property as
provided in this Section 7. Following the receipt of
Lender's approval of any proposed Substitution, Borrower
shall have a reasonable period of time, not to exceed
thirty (30) days, within which to effect the approved
Substitution.
(f) Service Fee. Prior to or concurrently with
the delivery of any Release Request and request for
Substitution as herein provided, Borrower shall have paid to
Lender (i) a service fee of one-half of one percent (0.5%) of
the Allocated Loan Amount with respect to (with a minimum such
fee of $15,000 and a maximum fee of $50,000 per) each
Mortgaged Property requested to be released. Additionally,
promptly upon receipt of an invoice therefor, Borrower shall
pay Lender's in-house and outside attorneys' fees and costs
and Lender's other out-of-pocket expenses relating to such
Release.
(g) Allocated Loan Amounts following
Substitution. The Allocated Loan Amounts for the Removed
Property shown on Schedule A shall be deemed to be the
Allocated Loan Amount for the Additional Property from and
after the date of the Substitution and Release.
(h) Determination of Market Value and Net
Operating Income. In determining Market Value and Net
Operating Income, Lender shall be entitled to adjust the
amounts which are used in such calculation as provided above
for such variables as the Lender determines are appropriate
for it to consider as a prudent institutional investor in real
estate. Those variables include, but are not limited to, the
discount rate, projected rates of growth or decline in rents
and expenses, the current fair market rental rates for the
Mortgaged Property and Additional Property, as the case may
be, the vacancy rates of the Mortgaged Property and in the
relevant markets where the Mortgaged Property and Additional
Property are located, and the rate at which existing tenancies
are expected to expire, the rollover and other costs
associated with tenant vacancies, rental concessions, the
credit-worthiness of tenants, the difference in contract rents
versus market rents, and the reserves which are prudent for
replacements.
8. ACCELERATION FOR MATERIAL MISSTATEMENTS. In
the event Lender determines that a material misrepresentation
exists with respect to one or more of the Mortgaged Properties
(referred to individually and collectively as to all Mortgaged
Properties as to which at such time Lender elects to declare
the Loan due and payable by reason of such a
misrepresentation, "Misrepresented Property"), it shall have
the right to declare the Loan due and payable and an Event of
Default shall exist unless either (i) such Misrepresented
Property is eligible for Release under Section 6 or Release
and Substitution under Section 7 and Borrower both (a) within
15 days after Lender declares such default delivers a Release
Request and within a reasonable time thereafter (not to exceed
30 days) fulfills the other requirements under Section 6 for a
Release of such Misrepresented Property or delivers a Release
Request of the Misrepresented Property as a proposed Removed
Property and a notice of the proposed Additional Property to
be substituted for the Misrepresented Property (and within
thirty (30) days after the delivery of such Release Request
and such notice Borrower fulfills the other requirements under
Section 7 for a Release of the Misrepresented Property and the
Substitution of the proposed Additional Property designated in
such notice, and (b) completes such Release or Release and
Substitution within thirty (30) days following written notice
by Lender to Borrower that all conditions to such Release or
Release and Substitution have been satisfied or waived (time
being of the essence of this and other time periods in this
Section 8), or (ii) such Release or Release and Substitution
does not fulfill the requirements of Section 6 or Section 7
(which requirements include without limitation all the fees
and charges and all the limitations on the amount of Releases
or Releases and Substitutions which may occur) as the case may
be, but within 15 days after Lender records such notice of
default Borrower pays to Lender a prepayment equal to the
greater of (c) the Allocated Loan Amount for such
Misrepresented Property, or (d) one hundred percent (100%) of
the Market Value for such Misrepresented Property less the
prepayment premium due hereunder with respect to such
prepayment of principal, in either case together with a
prepayment premium and the service fees calculated as though
the Misrepresented Property was a Mortgaged Property being
released in accordance with Section 6 or Section 7, as the
case may be, and the out-of-pocket expenses of Lender in
connection with such Misrepresented Property, and such release
shall not be permitted if either (x) the Allocated Loan
Amounts of all Mortgaged Properties released (without
substitution) under Section 6(c), Section 9, and this
Section 8 would exceed $30,000,000, or (y) the Allocated Loan
Amounts of all Mortgaged Properties which are Removed
Properties under Section 7, Section 9 and this Section 8 would
exceed $30,000,000. Nothing in this Section 8 shall prevent
Lender from asserting its rights under Section 10 to recover a
deficiency judgment with respect to a material
misrepresentation, if and to the extent that any deficiency
realized by Lender was the result of misrepresentations
relating to the Misrepresented Property. This Section 8 shall
not be applicable with respect to Lender's rights regarding,
including without limitation, the right to accelerate the Loan
by reason of, other material misrepresentations.
9. DUE ON SALE, ENCUMBRANCE, ETC.
(a) In the event Borrower, without the prior
written consent of Lender, shall sell, convey, alienate,
mortgage or encumber any Mortgaged Property or any part
thereof, or any interest therein, or shall be divested of its
title or any interest therein in any manner or way, whether
voluntary or involuntary (including without limitation, a
condemnation or inverse condemnation of all or any part of, or
any interest in, a Mortgaged Property), or in the event of any
merger, consolidation or dissolution affecting Borrower or a
"transfer of control of the voting stock in Borrower," as
defined below, whereby control of the management and operation
of any Mortgaged Property, following such merger,
consolidation or dissolution affecting Borrower or transfer of
control of the voting stock in Borrower, is no longer in
Borrower or a Permitted Transferee (as such term is defined
below), but excluding those leases (subject to compliance with
the provisions of Section 15 below), easements, licenses and
interests of a similar nature to leases, easements and
licenses however denominated in each case made in the ordinary
course of business, then in any of such events, the entire
outstanding principal balance of the Loan, together with all
accrued interest and the prepayment premium calculated in
accordance with the Notes, shall become immediately due and
payable at the option of Lender.
(b) Notwithstanding the foregoing, (i) in the
event of a condemnation or inverse condemnation of less than
all of the Mortgaged Property the entire balance of principal
of the Loan shall not thereby become due and payable but only
that portion which along with the prepayment premium payable
with respect thereto shall equal the award (net of reasonable
cost of recovery) recoverable for such condemnation or inverse
condemnation (in the event such condemnation or inverse
condemnation is of less than a fee interest in an entire
Mortgaged Property, there is no disturbance of rent paying
tenants of such Mortgaged Property and there is no diminution
of Net Operating Income or Market Value of such Mortgaged
Property the award may be used by Borrower to pay for
restoration of any damage to the Mortgaged Property and not
applied to prepayment of the Loan); and (ii) to the extent
that such aggregate prepayments under this Section 9(b) and
with respect to Mortgaged Properties which are the subject of
any condemnation or inverse condemnation do not exceed
$2,000,000 there shall be no prepayment premium.
(c) A "transfer of control of the voting stock
in Borrower" requiring the consent of Lender under this
Section 9 shall mean the issuance and/or sale by Borrower
(other than a distribution to the public pursuant to an
effective registration statement under the Securities Act of
1933, as amended) of a "controlling interest" in Borrower to a
"person" or "group of persons", other than a Permitted
Transferee. "Permitted Transferee" shall mean the California
Public Employees' Retirement System, Bay Area Real Estate
Investments Associates, L.P., a California limited
partnership, Itel Corporation, a Delaware corporation, Olympia
& York Developments Limited, an Ontario corporation, Paul
Reichmann, Ralph Reichmann or Albert Reichmann or an Affiliate
of any of the foregoing; provided that, at the time of
issuance or sale of a controlling interest, no person shall be
a Permitted Transferee if that person or any of its respective
"Material Affiliates" (as defined below) is the subject of
bankruptcy, insolvency, reorganization, dissolution,
liquidation or similar proceedings under the laws of any
jurisdiction foreign or domestic. As used herein (w)
"controlling interest" shall mean the "beneficial ownership"
of at least 51% of the issued and outstanding shares of the
voting stock of Borrower: (x) "beneficial ownership," "person"
and "group of persons" shall have the meanings set forth in
Rule 13d-3 under the Securities Exchange Act of 1934, as
amended; (y) "Affiliate" of any person shall mean any
corporation, partnership, joint venture, or other entity which
controls such person or in which such person has a controlling
interest or which is under common control with such person;
and (z) "Material Affiliate" of any person shall mean any
Affiliate other than any corporation, partnership, joint
venture, or other entity in which such person has a
controlling interest or which is under common control with
such person, where such person's or its Affiliate's ownership
interest in such corporation, partnership, joint venture or
other entity does not represent ten percent (10%) or more of
the assets of such person or such Affiliate, as the case may
be.
(d) In the event of acceleration of the Note's
maturity date under this Section 9 because of the sale,
conveyance, alienation, mortgaging or other encumbering of one
or more Mortgaged Properties (collectively, the "Transferred
Property") without Lender's consent, Lender agrees to
reinstate the Loan if there is no Event of Default existing or
event existing which with notice and grace period would be an
Event of Default if either (i) all the Transferred Property is
eligible for Release under Section 6 or Release and
Substitution under Section 7 and Borrower both (a) within 15
days after Lender declares such default delivers a Release
Request and thereafter, within a reasonable period of time
(not to exceed 30 days), fulfills the other requirements under
Section 6 for a Release of such Transferred Property or,
within such 15-day period, delivers a Release Request of the
Transferred Property as a proposed Removed Property and a
notice of the proposed Additional Property to be substituted
for the Transferred Property and within thirty (30) days after
the delivery of such Release Request and such notice Borrower
fulfills the other requirements under Section 7 for a Release
of the Transferred Property and the Substitution of the
proposed Additional Property designated in such notice, and
(b) completes such Release or Release and Substitution within
thirty (30) days following written notice by Lender to
Borrower that all conditions to such Release or Release and
Substitution have been satisfied or waived (time being of the
essence of this and other time periods in this Section 9), or
(ii) such Release or Release and Substitution does not fulfill
the requirements of Section 6 or Section 7 (which requirements
include without limitation all the fees and charges and all
the limitations on the amount of Releases or Releases and
Substitutions which may occur) as the case may be, but all of
the following conditions are satisfied: (v) any such sale,
conveyance, alienation, mortgaging or other encumbering was
inadvertent, in that no officer of Borrower with knowledge of
this Loan Agreement had advance knowledge of such sale,
conveyance, alienation, mortgaging or other encumbering,
(w) the Allocated Loan Amount(s) with respect to such
Transferred Property, when added to the Allocated Loan Amounts
of all other Mortgaged Property previously released pursuant
to this clause (ii), is less than or equal to $5,000,000,
(x) Borrower pays to Lender within 15 days after Lender
declares such default an amount equal to the greater of
(1) the Allocated Loan Amount(s) for such Transferred
Property, or (2) one hundred percent (100%) of the Market
Value for the Transferred Property, in either case less the
prepayment premium due hereunder with respect to such
prepayment of principal, in either case together with a
prepayment premium and the service fees calculated as though
the Transferred Property was a Mortgage Property being
released in accordance with Section 7 and the out-of-pocket
expenses of Lender in connection with such Transferred
Property, (y) the aggregate Allocated Loan Amounts of (i) all
Mortgaged Properties released (without substitution) under
Section 6(c), Section 8, and this Section 9 does not exceed
$30,000,000, and (ii) all Mortgaged Properties which are
Removed Properties under Section 7, Section 8 and this
Section 9 does not exceed $30,000,000, and (z) Borrower shall
have availed itself of the benefits of this clause (ii) not
more than once previously during the entire term of the Loan.
(e) The Borrower understands and agrees that in the
event of acceleration of the Loan's maturity date pursuant to
this Section 9, Borrower will pay the Holder of the Note all
of the unpaid principal with all accrued interest then due
together with all sums due to date of payment provided for in
the prepayment clause set forth in the Note. Borrower, by
placing its initials below as provided for by Section 2954.10
of the California Civil Code, acknowledges and agrees that the
Holder of the Note would not enter into this lending
transaction without the Borrower's agreement set forth above.
_______________________________
Borrower's Initials
10. LIMITATION OF LIABILITY.
In the event of an acceleration of the indebtedness
evidenced by the Notes upon an event of default thereunder or
under this Loan Agreement or any other Loan Document, Lender
shall not enforce any deficiency judgment against Borrower
(hereinafter referred to as the "Exculpated Party") with
respect to any and all obligations of Borrower under this Loan
Agreement, the Notes, the Deeds of Trust, the Mortgages, and
the other Loan Documents in excess of the amount realized upon
foreclosure against (or sale, pursuant to power of sale, of)
any and all security therefor; provided, however, that nothing
contained herein or in any other Loan Document shall (a) limit
Lender's other rights and remedies against the Exculpated
Party hereunder or thereunder, either at law or in equity, or
(b) relieve Exculpated Party from personal liability and
responsibility (i) under Section 4(j) (being the section with
respect to ERISA) of this Loan Agreement, including the
indemnification provisions under said Section 4(j), (ii) for
waste committed by Exculpated Party with respect to any
Mortgaged Property, (iii) for any security deposits of tenants
not turned over to Lender upon foreclosure or sale pursuant to
power of sale, (iv) for insurance proceeds and condemnation
awards received by Exculpated Party and not turned over to
Lender or used by Exculpated Party for restoration or repair
of the Mortgaged Property which was damaged or affected, (v)
for any rents or other income from any Mortgaged Property
received by Exculpated Party after an Event of Default or
event which with notice or grace period, or both, would be an
Event of Default under this Loan Agreement or the other Loan
Documents and not applied to the fixed and operating expenses
of such Mortgaged Property, (vi) for unpaid taxes,
assessments, and/or utility charges with respect to a
Mortgaged Property, (vii) for any sums expended by Lender in
fulfilling the obligations of Exculpated Party, as lessor,
under any leases of a Mortgaged Property and for which
obligations either perfrmance was due at the time of
acceleration of the indebtedness by Lender or became due
thereafter prior to foreclosure sale other than during
possession of such Mortgaged Property by a receiver appointed
in the foreclosure action or otherwise appointed at the
request of Lender, (viii) under the Hazardous Substances
Remediation and Indemnification Agreement of even date
herewith and (ix) under any materially false representation
and warranty by Exculpated Party delivered under Paragraph
6.E. of the Amended Commitment. Notwithstanding the
foregoing, this agreement not to pursue recourse liability
SHALL BECOME NULL AND VOID and shall be of no further force
and effect in the event:
(a) that there shall be any event occur (other
than an involuntary lien or transfer made without Borrower's
consent) which entitled, and the Lender elected, to declare
the entire Loan due and payable under the Due on Sale or
Encumbrance Section in this Loan Agreement (Section 9 above)
and the Loan was not reinstated pursuant to the terms of such
Section (Section 9 above); or
(b) of any fraud or material misrepresentation
by Borrower in connection with any Mortgaged Property, the
Loan Documents, the Amended Commitment, the Original
Commitment (including the Application), the Borrower, or any
other information furnished to Lender at or before the Closing
pursuant to the Amended Commitment, the Original Commitment
(including the Application) or the Loan Documents; provided
that as to reports containing a material misrepresentation
where such reports were prepared by, and submitted to Lender
under the names of, independent contractors (such as, but
without limitation, surveyors and environmental consultants),
it shall be deemed a material misrepresentation by Borrower
only if Borrower was aware of, or was aware of facts or
circumstances which would cause a reasonable person to
determine the existence of, such material misrepresentation;
and provided further, that in the case of a Misrepresented
Property released pursuant to Section 8 above, Borrower shall
have recourse liability to Lender if and only to the extent
that any deficiency realized by Lender was the result of
misrepresentations relating to such Misrepresented Property.
11. COVENANT REGARDING FUNDED DEBT.
(i) Borrower covenants that on December 31 of
each year during the term of the Loan, the ratio (the "Funded
Debt Ratio") of Funded Debt (defined below) to Tangible Gross
Worth (defined below) of Borrower shall not exceed the
Applicable Percentages as defined below. For the calendar
years 1994 through 1996, inclusive, the Applicable Percentage
shall be 75%; for calendar years 1997 and 1998, the Applicable
Percentage shall be 80%; and for all calendar years after
1998, the Applicable Percentage shall be 85%. "Tangible Gross
Worth" means the sum of all Funded Debt and all shareholders'
equity less goodwill intangibles booked as a result of any
change in control or ownership, calculated on a historical
cost basis. "Funded Debt" shall mean any obligation payable
more than one year from the date of the creation thereof,
which under generally accepted accounting principles
consistently applied is shown on the balance sheet as a
liability excluding liabilities such as security deposits and
option deposits for which Borrower has set aside a
corresponding cash reserve, and reserves for deferred income
taxes and other reserves and including without limitation,
capitalized lease obligations and any obligation, regardless
of its term, renewable pursuant to the terms thereof or
pursuant to the terms of a revolving credit or similar
agreement effective for more than one year after the date of
the creation of such obligation or of any such agreement;
provided however, the portion of a revolving credit agreement
with an annual "clean up" requirement shall not be considered
Funded Debt.
(ii) In the event that Borrower shall, on
December 31 of any calendar year, fail to satisfy the
applicable Funded Debt Ratio test of clause (i) above, then
Borrower shall not be in default under this Loan Agreement and
the other Loan Documents, unless Borrower fails to satisfy the
requirements set forth in clause (iii) below for the
immediately following calendar year; provided, however, that
if Borrower fails to satisfy the requirements set forth in
clause (iii) below for such immediately following calendar
year, then at Lender's option an Event of Default shall exist
hereunder; and provided further, that if Borrower exceeds the
Funded Debt Ratio limitations of either clauses (iv) or (v)
below, then at Lender's option an Event of Default shall exist
hereunder notwithstanding compliance with the provisions of
clause (iii) below.
(iii) In the event that Borrower shall, on
December 31 of any calendar year, fail to satisfy the
applicable Funded Debt Ratio test of clause (i) above, then
during such immediately following calendar year, Borrower
shall not incur any Funded Debt or other indebtedness for
borrowed money (collectively, "Debt") except in strict
compliance with the following limitations:
(a) In connection with any loan commitment
previously obtained for construction and development purposes,
where Borrower is obligated to complete construction under
such loan commitment, Borrower may continue to incur Debt
under such loan commitment (but not exceeding the amount of
such commitment on December 31 of the preceding calendar year)
solely for the purpose of completing construction work in
progress.
(b) The aggregate amount of all Debt
incurred for construction and development purposes (other than
Debt described in subclause (a) above) shall not exceed
$150,000,000. The construction and development Debt described
in subclauses (a) and (b) hereof is hereafter collectively
referred to as "Project Debt."
(c) Borrower shall at no time have incurred
aggregate Debt (other than Project Debt and any Debt secured
by a first lien on real property) exceeding $50,000,000.
(d) Notwithstanding compliance with
subclauses (a), (b) and (c) above, any Debt (of any type or
character whatsoever) maturing during such immediately
following calendar year may be refinanced, extended or renewed
only in an amount equal to the principal balance thereof at
maturity plus reasonable costs actually incurred by Borrower
of refinancing, extending or renewing the loan.
(iv) In no event and at no time during such
calendar years shall the Funded Debt Ratio exceed: for the
calendar years 1994 through 1996, inclusive, 80%; for calendar
years 1997 and 1998, 85%; and for all calendar years after
1998, 90%.
(v) In the event that the Funded Debt Ratio of
Borrower shall on December 31, 1996 exceed the Applicable
Percentage, then in no event and at no time during calendar
year 1997 shall the Funded Debt Ratio exceed 80%; and in the
event that the Funded Debt Ratio of Borrower shall on
December 31, 1998 exceed the Applicable Percentage, then in no
event and at no time during calendar year 1999 shall the
Funded Debt Ratio exceed 85%.
12. ASSIGNMENT OF WARRANTIES.
(a) Borrower does hereby assign, pledge,
transfer and set over to Lender all of its rights, title
and interest in and to all warranties as to the
construction of the Improvements. Notwithstanding that the
foregoing is a present and executed assignment, Lender
confers upon Borrower the authority to take such steps as
from time to time may be necessary or advisable to avail
Borrower of the benefits of such warranties, subject,
however, to the right of Lender to revoke such authority at
any time it its sole discretion upon an Event of Default
and so long as such Event of Default remains uncured.
(b) Borrower agrees as follows:
(1) Borrower hereby irrevocably
constitutes and appoints Lender as its attorney-in-fact to
demand, receive and enforce Borrower's rights with respect
to the warranties, to give appropriate receipts, releases
and satisfactions for and on behalf of Borrower and to do
any and all acts in the name of Lender with the same force
and effect as if Borrower had accomplished such act itself.
(2) This assignment shall be binding
upon and inure to the benefit of the parties hereto and
their assigns and successors permitted under Section 9 and
Section 16(c) hereof.
(3) This assignment shall remain in full
force and effect until the Loan is paid in full and the
lien of the Deed of Trust and Mortgage shall have been
released, in which event this assignment shall become null
and void and of no further force or effect.
13. EVENTS OF DEFAULT.
All obligations of Lender under this Loan
Agreement shall terminate without further notice or demand,
at Lender's option, upon the occurrence of any of the
following "Events of Default" (provided, however, that
Borrower shall automatically be in default under this Loan
Agreement and all obligations of Lender hereunder shall
automatically terminate, without the necessity for any
action or election by Lender, upon the occurrence of any of
the events of default described in Paragraphs (b) and (c)
of this Section 13 and the expiration of any applicable
cure period provided therein):
(a) Borrower's failure in the due, prompt and
complete observance and performance of any condition,
covenant or obligation of Borrower set forth herein or in
any Note, any Deed of Trust, any Mortgage or any of the
other Loan Documents, for a period of ten (10) calendar
days after written notice to Borrower from Lender
specifying the nature thereof; provided, however, that
Borrower shall not be in default under this Paragraph (a)
if: (i) such failure is curable but cannot be cured by the
payment of money alone within said ten (10) day period; and
(ii) Borrower commences curing the default within said ten
(10) day period and pursues the same to completion with
reasonable diligence;
(b) The making of an assignment for the
benefit of creditors by Borrower or the voluntary
appointment of a receiver, custodian, liquidator or trustee
in bankruptcy of the property of Borrower, or the filing by
Borrower of a petition in bankruptcy or other similar
proceeding under any law for the relief of debtors;
(c) The filing against Borrower of a petition
in bankruptcy or other similar proceedings under any law
for the relief of debtors, or the involuntary appointment
of a receiver, custodian, liquidator or trustee in
bankruptcy of the property of Borrower, which petition or
appointment is not discharged or vacated within sixty (60)
calendar days after the filing or making thereof;
(d) Any representation or warranty made by
Borrower to Lender with respect to the Properties or the
financial condition or credit standing of Borrower, or any
representation or warranty of Borrower contained in this
Loan Agreement, was materially false or misleading at the
time such was made; and
(e) Any representation or warranty made by
American National Bank and Trust Company of Chicago
("American National"), as trustee under Trust Agreement
dated April 30, 1982 and known as Trust No. 55109 (the
"Land Trust"), contained in the Mortgage recorded
substantially contemporaneously with the execution of this
Agreement in the real property records of Cook County,
Illinois, was materially false or misleading at the time
such representation or warranty was made; provided, that
Borrower shall be deemed to have cured any such breach if
(i) Borrower furnishes to Lender evidence satisfactory to
Lender that the Land Trust has been dissolved or otherwise
terminated and Borrower, in addition to beneficially owning
the Mortgaged Property subject to such Mortgage, has become
the owner of legal title to such Mortgaged Property, and
(ii) such breach has not affected or impaired the validity
or priority of the lien of such Mortgage which would have
existed but for such breach.
(f) Any other occurrence which is
specifically defined elsewhere in this Loan Agreement to be
an Event of Default.
14. LENDER'S REMEDIES UPON DEFAULT.
(a) If any of the Events of Default set forth
in Section 13 hereof shall occur and Borrower fails or
refuses to cure the same within the express time period (if
any) herein provided, Lender may, at Lender's option and
without prior notice or demand, and in addition to any
other rights of Lender hereunder or under the Notes, the
Deeds of Trust, the Mortgages, or any of the other Loan
Documents:
(1) Declare the unpaid principal balance
and all accrued but unpaid interest under the Notes to be
immediately due and payable, provided, however, that Lender
may advance funds subsequent to the happening of any one or
more such Events of Default without thereby waiving any of
Lender's rights to demand payment in full of the Notes by
reason thereof and without liability to make any other or
further advances; and
(2) Take possession of the Properties
(if not already in Lender's possession) or any portion
thereof, and perform any and all actions necessary for the
maintenance thereof, but Lender shall not be liable for the
payment of any expenses incurred in connection therewith or
for the performance or nonperformance of any other
obligations of Borrower, and all sums expended by Lender
for any of such purposes shall be deemed paid to Borrower
and secured by the Deeds of Trust and all other documents
and instruments securing the Loan.
(b) At the option of Lender, any default by
Borrower under this Loan Agreement or in the performance of
any of Borrower's covenants, agreements and obligations
contained herein shall constitute a default under the
Notes, the Deeds of Trust and the other Loan Documents to
the same extent as though the Notes had, by their own
terms, become due and payable at maturity and payment
thereof had been refused. In such event Lender may,
without liability to Borrower, assert and exercise any and
all rights and remedies provided for herein or in the
Notes, the Deeds of Trust or the other Loan Documents, or
otherwise as may be provided by applicable law. All of
Lender's rights and remedies hereunder may be asserted
concurrently or successively from time to time (either
before or after commencement of foreclosure proceedings or
before or after the exercise of any other remedy of Lender)
until the Notes, including all accrued but unpaid interest
thereon, together with all other indebtedness of Borrower
to Lender under this Loan Agreement and all of the other
Loan Documents, has been paid in full. Without limiting
the generality of the foregoing, Borrower and Lender agree
that the Loan will be secured by multiple Deeds of Trust
and/or Mortgages recorded in multiple counties within a
single State and in multiple States, and that Lender may
exercise its rights and remedies under such Deeds of Trust
and/or Mortgages concurrently or successively from time to
time in such order as Lender may in its sole discretion
determine.
15. APPROVAL OF MAJOR LEASES; SUBORDINATION,
NON-DISTURBANCE AND ATTORNMENT; ETC.
Borrower shall not renew, cancel or modify any
existing Major Lease or execute any new Major Lease except
subject to Lender's prior written consent, which shall be
given or denied in accordance with this Section 15.
(a) Lender shall have fifteen (15) business
days to approve or disapprove any proposed renewal,
modification or cancellation of a Major Lease or any
proposed new Major Lease (the "Approval Period"). The
Approval Period shall commence, in the case of a renewal,
modification or new Major Lease, upon receipt by both
Lender and (except with respect to the service fee in
item (iii) below) its Special Counsel of (i) a copy of the
final lease, renewal or amendment, as the case may be,
(ii) such financial and other information regarding the
tenant as Lender shall have specified from time to time to
be submitted with such requests by notice to Borrower,
(iii) a $1,000 service fee per Major Lease with respect to
which Lender's approval is requested, and (iv) if requested
by the tenant, a subordination, non-disturbance and
attornment agreement ("SNDAA") in the form of Exhibit J
hereto executed by Borrower and the tenant for execution by
Lender if it approves said agreement. The Approval Period
for a request to cancel a Major Lease shall commence upon
receipt of a written request for approval together with a
reasonably detailed explanation thereof. During the
Approval Period, Borrower shall promptly supply Lender with
any additional information that Lender may reasonably
request. Lender may disapprove any such renewal,
modification or cancellation of, or SNDAA with respect to,
a Major Lease or new Major Lease by stating the reason(s)
therefor in writing to Borrower, which disapproval shall be
final in the exercise of Lender's reasonable judgment.
Lender's failure to disapprove in writing any proposed
renewal, modification or cancellation of, or SNDAA with
respect to, a Major Lease or new Major Lease during the
Approval Period shall be conclusively deemed to be Lender's
approval thereof. Notwithstanding the foregoing, Borrower
may in the exercise of its business judgment give notices
of default (including so-called "Three-Day Notices") to
Major Tenants without the prior consent of Lender, but may
not thereafter institute legal action to terminate any
Major Lease without Lender's prior consent as provided
herein.
(b) Borrower, on behalf of a non-Major
Tenant, may also request that Lender provide a SNDAA within
twenty (20) business days of Lender's and its Special
Counsel's (except with respect to the service fee in
item (iii) below) receipt of (i) a copy of the fully
executed lease with respect to which a SNDAA is requested,
(ii) such financial and other information regarding the
tenant as Lender reasonably shall have specified from time
to time to be submitted with such requests by notice to
Borrower, (iii) a $1,000 service fee for each SNDAA and
(iv) a SNDAA executed by Borrower and the tenant for
execution by Lender if it approves said agreement requested
under this Section 15(b).
(c) Any SNDAA agreements given by Lender
under (a) or (b) above shall be on Lender's standard form,
provided from time to time to Borrower, and shall be
limited to cover only the tenants' rights as lessees and
not as holders of any options to purchase or rights of
first refusal.
(d) In addition to the service fees payable
under (a) and (b) above, Borrower shall reimburse Lender
promptly upon demand for its Special Counsel's fees and
expenses in connection with services Lender requests said
Special Counsel to perform related to the consents
requested in (a) and (b) above.
16. MISCELLANEOUS PROVISIONS.
The following conditions shall be applicable
throughout the term of this Loan Agreement:
(a) Indemnity. Borrower hereby indemnifies
Lender, its directors, officers, agents and employees and,
except as provided in this Section 16(a), any person or
entity who is an assignee or participant of Lender or
acquires any interest in the Loan pursuant to Section 16(c)
below (collectively, the "Indemnitees") against, and holds
the Indemnitees harmless from, any and all losses, damages
(whether general, punitive or otherwise), liabilities,
claims, causes of action (whether legal, equitable or
administrative), judgments, court costs and legal or other
expenses (including in-house and outside attorneys' fees)
which the Indemnitees may suffer or incur from any third
party claimant (other than a participant) as a direct or
indirect consequence of: (a) the Indemnitees' performance
of this Loan Agreement or any of the Loan Documents,
including, without limitation, Indemnitees' exercise or
failure to exercise any rights, remedies or powers in
connection with this Loan Agreement or any of the Loan
Documents, including, without limitation, any failure of
any representation or warranty of Borrower to be true and
correct and any failure by Borrower to satisfy any
condition; (b) any claim or cause of action of any kind by
any person or entity to the effect that an Indemnitee is in
any way responsible or liable for any act or omission by
Borrower, whether on account of any theory of derivative
liability or otherwise; (c) any act or omission by
Borrower, any contractor, subcontractor or material
supplier, engineer, architect or other person or entity,
except an Indemnitee, with respect to any of the
Properties; or (d) any claim or cause of action of any kind
by any person or entity which would have the effect of
denying Lender the full benefit or protection of any
provision of this Loan Agreement or the Loan Documents. If
any action is brought against Indemnitee(s), such
Indemnitee(s) shall promptly notify Borrower in writing of
the institution of such action, and Borrower shall assume
the defense of such action, including the employment of
counsel reasonably satisfactory to Lender and the payment
of expenses relating to such defense. An Indemnitee's
rights of indemnity shall not be directly or indirectly
limited, prejudiced, impaired or eliminated in any way by
any finding or allegation that the Indemnitee's conduct is
active, passive or subject to any other classification or
that the Indemnitee is directly or indirectly responsible
under any theory of any kind, character or nature for any
act or omission by Borrower or any other person or entity,
except the Indemnitee. Notwithstanding the foregoing,
(i) Borrower shall not be obligated to indemnify any
Indemnitee with respect to any intentional tort, willful
misconduct or act of gross negligence which such Indemnitee
is determined by the judgment of a court of competent
jurisdiction (sustained on appeal, if any) to have
committed, and (ii) Borrower shall not be liable for any
indemnity obligation herein if and to the extent that such
indemnity obligation arises or is increased as a result of
Lender's assignment or participation of all or any portion
of its interest in the Loan as provided in Section 16(c)
below. Borrower shall pay any indebtedness arising under
said indemnity to an Indemnitee immediately upon demand by
the Indemnitee. Borrower's duty to indemnify the
Indemnitees shall survive the repayment in full and
cancellation of the Note and the release and reconveyance
or partial release and reconveyance of the Deed of Trust
and Mortgage.
(b) Rights of Third Parties. All conditions
to the obligations of Lender hereunder are imposed solely
and exclusively for the benefit of Lender, and no other
person shall have standing to require satisfaction of such
conditions in accordance with their terms or be entitled to
assume that Lender will make or refuse to make advances in
the absence of strict compliance with any or all thereof,
and no other person shall, under any circumstances, be
deemed to be a beneficiary of such conditions, any and all
of which may be freely waived in whole or in part by Lender
at any time if in its sole discretion it deems it desirable
to do so.
(c) Assignment.
(i) Except as provided in Section 9, Borrower may
not assign this Loan Agreement or any of its rights or
obligations hereunder without the prior written consent of
Lender.
(ii) Lender shall have the right at any time to
sell, assign, syndicate, transfer or negotiate or grant or
sell participations in all or any portion of Lender's
interests in this Loan Agreement, the Loan, any letters of
credit which Lender may have received or is entitled to
receive under this Loan Agreement or the Loan Documents
(collectively, the "Loan Transaction") to one or more banks,
or other institutions and individual investors to be selected
by Lender (collectively an "assignment"), and any such
assignees and/or participants may further assign or
subparticipate their interests in the Loan Transaction;
provided however, that notwithstanding such an assignment and
so long as an Event of Default has not occurred and remains
uncured, either Lender or an Experienced Institutional
Investor (which term shall include, but not be limited to,
Goldman Sachs Mortgage Company and any of its Affiliates)
shall be the Owner/Servicing Agent (provided, that any party
that is not an Experienced Institutional Investor that is
appointed Owner/Servicing Agent during the existence of an
Event of Default shall be permitted to continue in such
capacity following the cure of such Event of Default). Lender
agrees that, as long as it retains a fifty percent (50%) or
greater interest in the Loan, it shall be the Owner/Servicing
Agent, unless it is unable to act as Owner/Servicing Agent due
to regulatory requirements or is relieved of such
responsibility by the vote or other affirmative act of the
assignees of and/or participants in the Loan. For purposes of
this Section 16(c)(ii), the term "Owner/Servicing Agent" shall
mean Lender or another Experienced Institutional Investor
properly designated which is the agent of the owners or
participants owning or holding interests in the Loan
Transaction (and which, unless the Owner/Servicing Agent is
Lender, must own an interest [irrespective of the size of that
interest] in the Loan Transaction) and is empowered to perform
all administrative functions with respect to the Loan
Transaction nd to grant consents and approvals which by the
express terms of this Loan Agreement or the Loan Documents are
reserved to Lender or the holder of the respective Notes;
provided nothing herein shall restrict the right to require
the Owner/Servicing Agent to inform and keep informed holders
of interests in the Loan Transaction before and after granting
consents or approvals or to require that changes or
modifications of the Loan Transaction shall require the
approval of all or any portion of the holders as may be
specified by Lender and the respective assignees in the
documentation with respect to the assignments of interests in
the Loan Transaction. For purposes of this Section 16(c)(ii),
the term "Experienced Institutional Investor" shall mean any
commercial, trust or savings bank, savings and loan
association, insurance company, real estate investment trust,
pension fund, educational institution, charitable organization
or other investor that is generally considered by the
financial community to be an institutional investor and is
actively involved in making and servicing commercial real
estate loans on a national basis or generally in the areas
where the Mortgaged Properties are located. With regard to an
Experienced Institutional Investor that typically or
customarily acts or invests through an advisor or other
consultant, where such advisor or consultant exercises
discretionary asset management control over all or any portion
of the assets of such Experienced Institutional Investor, the
term Experienced Institutional Investor shall include such
advisor or consultant. For purposes of this Section
16(c)(ii), the term "Event of Default" shall mean any default
under the Loan Documents with respect to which a notice of
default has been recorded pursuant to California Civil Code
Section 2924. The foregoing provisions of this paragraph
shall not in any way limit the statutory or regulatory
provisions regarding the assignment of the Loan Transaction
which may be applicable to Lender, any participant or any
subparticipant. To the extent that rights and obligations
with respect to the Loan have been assigned by it, Lender or
such an assignee or participant shall be deemed to have
thereby relinquished its rights and be released from its
obligations under the Loan Documents, but such an assignment
or participation prior to Closing shall not release Lender
from its obligations under this Loan Agreement.
(d) Successors and Assigns Included in
Parties. Except as otherwise specifically provided in this
Agreement, whenever in this Loan Agreement one of the
parties hereto is named or referred to, the heirs, legal
representatives, successors and assigns of such parties
shall be included and all covenants and agreements
contained in this Loan Agreement by or on behalf of the
Borrower or Lender shall bind and inure to the benefit of
their respective heirs, legal representatives, successors
and assigns, whether so expressed or not.
(e) Headings. The headings of the sections,
paragraphs and subdivisions of this Loan Agreement are for
convenience of reference only, and are not to be considered
a part hereof and shall not limit or otherwise affect any
of the terms hereof.
(f) Invalid Provisions to Affect No Others.
If fulfillment of any provision hereof or of any of the
Loan Documents, or any transaction related thereto at the
time performance of any such provision shall be due, shall
involve transcending the limit of validity prescribed by
law, then, ipso facto, the obligation to be fulfilled shall
be reduced to the limit of such validity. If any term of
this Loan Agreement, or the application thereof to any
person or circumstances, shall, to any extent, be invalid
or unenforceable, the remainder of this Loan Agreement, or
the application of such term to persons or circumstances
other than those as to which it is invalid or
unenforceable, shall not be affected thereby, and each term
of this Loan Agreement shall be valid and enforceable to
the fullest extent permitted by law.
(g) Number and Gender. Whenever the singular
or plural number, masculine or feminine or neuter gender is
used herein, it shall equally include the other.
(h) Amendments. Neither this Loan Agreement
nor any provision hereof may be changed, waived, discharged
or terminated orally, but only by an instrument in writing
signed by the party against whom enforcement of the change,
waiver, discharge or termination is sought.
(i) Notices. All written notices of any kind
which either party hereto may be required or may desire to
serve on the other party in connection with this Loan
Agreement shall be served (as an alternative to personal
service) by registered or certified mail, by United States
Express Mail, by Federal Express or other reliable
overnight courier service, or by facsimile. Any such
notice or demand to be served by registered or certified
mail shall be deposited in the United States mail with
fully prepaid postage thereon and return receipt requested,
addressed as follows:
To Borrower: Catellus Development Corporation
201 Mission Street, 30th Floor
San Francisco, California 94105
Facsimile (415) 974-4613
Attn: General Counsel
To Lender in The Prudential Insurance Company
duplicate: of America
2029 Century Park East, Suite 3700
Los Angeles, California 90067
Facsimile (310) 201-0445
Attn: Regional Counsel
and
Prudential Mortgage Capital Company
2029 Century Park East, Suite 3700
Los Angeles, California 90067
Facsimile (310) 277-1552
Attn: Managing Vice President
Service of any such notice or demand so made by mail shall be
deemed complete on the earlier of: (i) the date of actual
delivery as shown by the addressee's registry or certification
receipt; or (ii) the expiration of the third business day
after the date of mailing. Any notice or demand so made by
facsimile shall be deemed complete upon confirmation of its
receipt. Either party hereto may from time to time, by notice
in writing served upon the other in the manner set forth
above, designate a different address, facsimile number or
person to whom all such notices or demands are thereafter to
be addressed.
(j) Governing Law. This Loan Agreement shall
be governed by, and construed in accordance with, the laws
of the State of California applicable to contracts to be
performed in that State.
(k) No Waivers. No delay or omission by
Lender in exercising any right or power arising from any
default by Borrower shall be construed as a waiver of such
default or as an acquiescence therein, nor shall any single
or partial exercise of such right or power preclude any
further exercise thereof or the exercise of any other right
or power arising from any default by Borrower, and any such
delay, omission or single or partial exercise shall be
deemed not to be a waiver of Lender's rights hereunder, but
shall be deemed to have been pursuant to this Loan
Agreement and not in modification hereof. No waiver of any
breach of any of the covenants or conditions of this Loan
Agreement shall be construed to be a waiver of or an
acquiescence in or a consent to any previous or subsequent
breach of the same or any other covenant or condition.
(l) Time of Essence. Time is of the essence
in this Loan Agreement.
(m) Survival of Covenants, Representations
and Warranties. All of Borrower's covenants,
representations and warranties contained herein shall
survive the Closing and shall terminate only upon the
discharge of all of Borrower's obligations under all of the
Loan Documents.
(n) Limitation on Interest. All agreements
between Borrower and Lender are expressly limited so that
in no contingency or event whatsoever, whether by reason of
advancement of the proceeds of the Loan, acceleration of
maturity of the unpaid principal balance of the Loan, or
otherwise, shall the amount paid or agreed to be paid to
Lender for the use, forbearance or detention of the money
to be advanced hereunder exceed the highest lawful rate
permissible under applicable usury laws. If, from any
circumstances whatsoever, fulfillment of any provision
hereof or the Notes, Deed of Trust and Mortgage securing
the Notes or any other agreement referred to herein, at the
time performance of such provision shall be due, shall
involve transcending the limit of validity prescribed by
law which a court of competent jurisdiction may deem
applicable hereto, then ipso facto, the obligation to be
fulfilled shall be reduced to the limit of such validity,
and if from any circumstances Lender shall ever receive as
interest an amount which would exceed the highest lawful
rate, such amount which would be excessive interest shall
be applied to the reduction of the unpaid principal balance
of the Notes (without the payment of any prepayment
premium) and not to the payment of interest. This
provision shall control every other provision of all
agreements between the Borrower and Lender.
(o) Attorney's Fees. In the event of any
litigation between Borrower and Lender with respect to the
Loan Documents or otherwise in connection with the Loan,
the prevailing party in such lawsuit shall be entitled to
recover its attorneys' fees from the losing party.
(p) Estoppel Certificates. Borrower shall at
any time and from time to time (but not more frequently than
once each month during the first six months of the Loan and
not more than twice in any year thereafter), upon not less
than ten (10) days prior notice by the Lender or any
participant in or assignee of an interest in the Loan (the
"Requesting Party"), execute, acknowledge and deliver to the
Requesting Party a statement in writing certifying that the
Loan Agreement, this Deed of Trust, the Notes secured thereby,
and the other Loan Documents are unmodified and in full force
and effect (or if there have been modifications, that the same
are in full force and effect as modified and stating the
modifications), the dates to which interest and principal
payments under the respective Notes have been paid, confirming
the principal balance of the respective Notes and stating
whether or not to the best knowledge of Borrower, there is any
default on the part of Lender or Event of Default on the part
of Borrower in connection with the Loan or the Loan Documents,
and if so, specifying each such default or Event of Default,
as the case may be, of which Borrower has knowledge. Any such
statement delivered pursuant to this provision may be relied
upon by any prospective purchaser of any interest in the Loan.
(q) Confidentiality. Lender shall have the right
at any time to furnish one or more assignees or
participants or potential assignees or participants with
any and all information concerning Borrower, the
Properties, the Mortgaged Property or otherwise relating to
this Loan Agreement, the other Loan Documents, the Amended
Commitment, the Original Commitment or the Loan which has
been supplied by or on behalf of Borrower to Lender or
which has been obtained by Lender; provided that such
assignees, participants or potential assignees or
participants, and any subparticipants of such parties,
agree to be bound by the provisions of this Section 16(q)
(except that the requirement in this provided clause shall
not apply to the initial marketing of interests in the Loan
so long as the Property information is descriptive of
categories of Mortgaged Property and does not identify
specific property information and so long as the
information with respect to Borrower is available to the
public); provided further that Lender shall not furnish to
any such assignees or participants or potential assignees
or participants financial information concerning Borrower
or the Mortgaged Property that Borrower has specifically
identified to Lender in writing as being non-public, unless
Borrower shall have consented to the release of such
information pursuant to the terms of any confidentiality
agreement or other agreement. Borrower agrees to supply
all reasonably requested information and to execute and
deliver all such instruments and take all such further
action as Lender may reasonably request in connection with
such assignment and participation arrangements, including
without limitation causing opinions of counsel and other
documents with respect to the transactions contemplated
hereby that have been or are to be delivered to Lender to
be addressed and delivered to the assignees and
participants designated by Lender.
(r) Entire Agreement; No Oral Agreement. This provision
is also a notice pursuant to Kansas Statutes Annotated Section
16-118(b):
THIS LOAN AGREEMENT, INCLUDING WITHOUT LIMITATION, THE
EXHIBITS ATTACHED HERETO AND MADE A PART HEREOF AND THE LOAN
DOCUMENTS REFERRED TO HEREIN, INCLUDING WITHOUT LIMITATION,
THE DEEDS OF TRUST, MORTGAGES AND ASSIGNMENTS OF LESSOR'S
INTEREST IN LEASES: (i) COLLECTIVELY AND INCLUSIVELY SET FORTH
THE ENTIRE AND FINAL AGREEMENT BETWEEN THE PARTIES HERETO
(INCLUDING ALL NON-STANDARD TERMS) REGARDING THE LOAN AND THE
FINANCIAL ACCOMMODATIONS REFERRED TO HEREIN, (ii) FULLY
SUPERSEDES ANY AND ALL PRIOR AGREEMENTS OR UNDERSTANDINGS
BETWEEN THE PARTIES HERETO PERTAINING TO THE SUBJECT MATTER
HEREOF, WHETHER ORAL OR WRITTEN, AND (iii) MAY NOT BE
CONTRADICTED BY ANY EVIDENCE OF ANY PRIOR ORAL AGREEMENT OR
ANY CONTEMPORANEOUS ORAL AGREEMENT BETWEEN LENDER AND
BORROWER. BY SIGNING THIS LOAN AGREEMENT LENDER AND BORROWER
AFFIRM THAT NO UNWRITTEN ORAL CREDIT AGREEMENT EXISTS BETWEEN
THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have
executed this Loan Agreement as of the date first above
written.
LENDER: THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA
By: /s/ Luis R. Sanchez
Name: Luis R. Sanchez
Title: Vice President
BORROWER: CATELLUS DEVELOPMENT CORPORATION
By: /s/ Douglas Stimpson
Name: Douglas Stimpson
Title: Vice President Finance
LC933430.018/49+
<PAGE>
EXHIBIT A-1
DO NOT DESTROY THIS NOTE: When paid, this Note, and the Deeds of
Trust securing it, must be surrendered to the Trustee under the
Deeds of Trust for cancellation before reconveyance will be made.
PROMISSORY NOTE
(Note A-1)
$108,350,000 Los Angeles, California
Loan No. 6100516 February 16, 1994
FOR VALUE RECEIVED, the undersigned, Catellus Development
Corporation, a Delaware corporation ("Maker"), having an address at
201 Mission Street, 30th Floor, San Francisco, California 94105,
PROMISES TO PAY TO THE ORDER OF THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA ("Prudential"), a New Jersey corporation authorized to do
business in the State of California (Prudential and its successors
and assigns who become holders of this Note are hereinafter
collectively referred to as "Holder"), by Federal wire transfer to
Prudential at Morgan Guaranty Trust Company, 23 Wall Street, New
York, New York 10019, Account No. 050-54-493, referencing Loan
No. 6100516, or at such other place as Holder may from time to time
designate, the principal sum of One Hundred Eight Million Three
Hundred Fifty Thousand Dollars ($108,350,000), together with
interest thereon from the date of this Note through the date paid at
a rate per annum equal to the Interest Rate.
1. Definitions. For the purpose of this Note, the
following terms shall have the meanings set forth below.
Capitalized terms not otherwise defined herein shall have the
meanings ascribed to such terms in the Deeds of Trust.
(a) "Closing" means the date upon which the proceeds
of the Loan are disbursed by Prudential to Maker.
(b) "Deeds of Trust" means collectively those certain
documents entitled "Deed of Trust, Security Agreement, Fixture
Filing with Assignment of Rents," of even date herewith, executed by
Maker as "Trustor" to the benefit of Prudential as "Beneficiary,"
and those certain documents entitled "Mortgage" of even date
herewith, executed by Maker as "Mortgagor" to the benefit of
Prudential as "Mortgagee," all as security for repayment of this
Note.
(c) "Event of Default" shall have the meaning given in
the Loan Agreement.
(d) "Interest Rate" means a rate of interest per annum
of eight and seventy-five hundredths percent (8.75%).
(e) "Late Charge(s)" means either the "Per Diem Late
Charge" or the "Monthly Late Charge" (or both), as such terms are
defined in Paragraph 4 below.
(f) "Loan" means that certain loan from Prudential to
Maker in the aggregate principal amount of $280,000,000 evidenced by
this Note, a "Note A-2" in the original principal amount of
$98,350,000, a "Note A-3" in the original principal amount of
$10,000,000, a "Note B-1" in the original principal amount of
$26,650,000, a "Note B-2" in the original principal amount of
$26,650,000, a "Note C-1" in the original principal amount of
$5,000,000, and a "Note C-2" in the original principal amount of
$5,000,000, each of even date herewith and each payable to
Beneficiary or its order, and all modifications, renewals or
extensions thereof.
(g) "Loan Agreement" means that certain Loan Agreement
between Maker and Prudential of even date herewith governing the
terms of the Loan.
(h) "Loan Documents" means this Note, the Deeds of
Trust, all of the Assignments of Lessor's Interest in Leases, the
Security Agreement and all other documents now or hereafter
governing, securing or executed in connection with the Loan.
(i) "Maturity Date" means March 1, 2004.
(j) "Prepayment Amount" means the amount of the
Principal Balance prepaid on a Prepayment Date.
(k) "Prepayment Date" means any date, prior to the
Maturity Date, upon which all or any portion of the Principal
Balance is prepaid.
(l) "Prepayment Premium" shall have the meaning set
forth in Paragraph 6(a).
(m) "Principal Balance" means the principal balance of
this Note from time to time outstanding.
(n) "Secondary Interest Rate" means a rate of interest
per annum of thirteen and seven-tenths percent (13.7%).
2. Payments. On the first day of April 1994 and continuing
on the first day of each calendar month thereafter through and
including the first day of February 2004 (each such first day of the
month being referred to herein as a "Monthly Due Date"), monthly
installments of principal and interest in the amount of $890,792.63
shall be due and payable, with the entire unpaid Principal Balance
plus accrued interest and all other amounts payable under the Loan
Documents being due and payable in full on the Maturity Date. In
the event the Loan closes prior to March 1, 1994, then the amount of
interest accruing on this Note from the date of disbursement through
and including February 28, 1994 shall be paid to Lender on April 1,
1994, which interest shall be paid in addition to the first regular
monthly installment of principal and interest on this Note due on
April 1, 1994.
3. Treatment of Payments. All payments due under this Note
or the Loan Documents shall be paid by Maker in lawful money of the
United States of America by wire transfer on the date such payment
is due. All such payments shall be made without deduction for any
present or future taxes, levies, imposts, deductions, charges or
withholdings (other than U.S., state or local income taxes assessed
or levied against or payable by Holder based upon Holder's net
income), which amounts shall be paid by Maker. Payments from Maker
to Holder under this Note shall be applied first to any expense
reimbursements under the Loan Documents, then to any Late Charges,
then to accrued and unpaid interest and the balance to the Principal
Balance and any Prepayment Premium due thereon.
4. Late Charges and Secondary Interest.
(a) If any monthly principal and/or interest payment is
not paid in full on or before the Monthly Due Date for such payment,
then a daily late charge calculated by multiplying the amount of the
monthly payment by a fraction, the numerator of which is 25% and the
denominator of which is 365 (the "Per Diem Late Charge") shall be
assessed for each day that such payment is not paid from (and
including) the first day after such Monthly Due Date to (and
including) the date upon which such payment is made; provided,
however, that if any such monthly principal and/or interest payment,
together with all accrued Per Diem Late Charges, is not made in full
on or before the fifteenth day immediately following such Monthly Due
Date, a late charge equal to 4% of the monthly principal and/or
interest payment (the "Monthly Late Charge") shall be deemed to be
immediately assessed and shall be immediately due and payable. The
Monthly Late Charge shall be payable in lieu of and not in addition to
any Per Diem Late Charges that shall have accrued during the two-week
period immediately preceding the assessment of the Monthly Late
Charge.
(b) Maker acknowledges and agrees that its failure to
make timely payments will result in Holder incurring additional
expense in servicing the Loan, and that it is extremely difficult
and impractical to ascertain the extent of such damages and that the
Late Charge represents a fair and reasonable estimate, considering
all of the circumstances existing on the date of the execution of
this Note, of the costs that Holder will incur by reason of such
late payment. Acceptance of any Late Charge shall not constitute a
waiver of the default with respect to the late payment, and shall
not prevent Holder from exercising any of the other rights or
remedies available hereunder or at law or in equity.
(c) Maker further acknowledges and agrees that during
the time that any payment of principal, interest or other amount due
under this Note shall be delinquent, Holder will incur additional
costs and expenses attributable to its loss of use of the money due
and to the adverse impact on Holder's ability to meet its other
obligations and avail itself of other opportunities. Maker agrees
that it is extremely difficult and impractical to ascertain the
extent of such expenses, and Maker therefore agrees that, upon five
(5) days after written notice of such delinquency has been given by
Prudential to Maker, interest at the Secondary Interest Rate shall
accrue on any delinquent payments of principal, interest or other
amounts due under this Note or any Loan Document from the date such
payments were due and for so long as non-payment continues,
regardless of whether or not there has been an acceleration of the
maturity of the Loan.
5. Event of Default and Secondary Interest. The occurrence
of an "Event of Default" under any Loan Document shall constitute an
Event of Default under this Note. Upon the occurrence of an Event
of Default (including without limitation the failure of the Maker to
observe the provisions of Article IV, Paragraph B of the Deeds of
Trust), Holder, at its option may elect to declare the Principal
Balance together with all unpaid accrued interest, any Prepayment
Premium and any other sums evidenced or secured by this Note or any
Loan Document, to be immediately due and payable, without further
presentment, demand, protest or notice of any kind, by so notifying
Maker in writing, and if Holder so elects the outstanding principal
balance of this Note shall commence to bear interest at the
Secondary Interest Rate from the date of such election until paid in
full.
6. Prepayment.
(a) If for any reason the Principal Balance or any
portion thereof is prepaid (whether by operation of law,
acceleration or otherwise) on a date prior to the Maturity Date,
Maker shall pay to Holder as liquidated damages, immediately upon
demand, together with the subject Prepayment Amount and any unpaid
accrued interest, a Prepayment Premium calculated in accordance with
Exhibit A attached hereto.
(b) Maker shall have the right voluntarily to prepay
all or any portion of the Principal Balance, together with accrued
interest thereon, provided that Maker gives Holder not less than
thirty (30) days prior written notice of its intention to prepay,
and delivers to Holder, on or before the Prepayment Date, the
Prepayment Premium as required above, together with the Prepayment
Amount and all accrued interest and other sums due under the Loan
Documents. In the event Borrower makes a partial prepayment as
permitted herein, the outstanding principal balance following such
prepayment shall be reamortized, and the monthly payment under this
Note recalculated, by Lender in its reasonable discretion, based
upon an amortization period equal to 300 months minus the number of
whole calendar months which have elapsed from the date of
disbursement of the Loan through and including the date of
prepayment. By way of example and not by way of limitation, if a
prepayment is made on July 15, 1996, the outstanding principal
balance following such prepayment shall be reamortized over 272
months. In no event shall the Maturity Date be affected by any such
prepayment, reamortization and change in monthly payment.
(c) Maker agrees that (i) the Prepayment Premium
represents the reasonable estimate of Holder and Maker of a fair
average compensation for the loss that may be sustained by Holder
due to the payment of any of the Principal Balance prior to the
Maturity Date; (ii) the Prepayment Premium shall be paid without
prejudice to the right of Holder to collect any other amounts
provided to be paid hereunder; and (iii) Holder shall not be
obligated to actually reinvest the Prepayment Amount in any Treasury
or other specific obligations as a condition to receiving the
Prepayment Premium.
(d) Notwithstanding anything to the contrary in this
Paragraph 6, Maker shall have the right, upon giving Holder not less
than thirty (30) days prior written notice of its intention to
prepay, to prepay this Note and all other sums owed to Holder by
Maker under the Loan (including, but not limited to, all sums owed
on Note B, all sums owed on Note C and all other payments and
charges due under all of the other Loan Documents), in full at any
time after November 30, 2003, without the payment of any Prepayment
Premium.
(e) Maker hereby expressly waives any right it may
have under California Civil Code 2954.10 to prepay this Note, in
whole or in part, without prepayment charge, upon acceleration of
the Maturity Date of this Note, and agrees that if for any reason a
prepayment of any or all of this Note is made, whether voluntarily
or following any acceleration of the Maturity Date of this Note by
Holder, then Maker shall pay the Prepayment Premium calculated
pursuant to Paragraph 6(a). By initialing this provision in the
space provided below, Maker hereby declares that the Holder's
agreement to make the Loan at the Interest Rate and for the term set
forth in this Note constitutes adequate consideration, given
individual weight by Maker, for this waiver and agreement.
INITIALS OF MAKER: ____________________
7. Security. This Note is secured, among other security,
by the Deeds of Trust and the other Loan Documents, which contain
provisions for the acceleration of the maturity of this Note upon
the occurrence of certain described events.
8. Holder's Rights; No Waiver by Holder. The rights,
powers and remedies of Holder under this Note shall be in addition
to all rights, powers and remedies given to Holder under the Loan
Documents and any other agreement or document securing or evidencing
the Loan or by virtue of any statute or rule of law, including, but
not limited to, the California Uniform Commercial Code. All such
rights, powers and remedies shall be cumulative and may be exercised
successively or concurrently in Holder's sole discretion without
impairing Holder's security interest, rights or available remedies.
Any forbearance, failure or delay by Holder in exercising any right,
power or remedy shall not preclude further exercise thereof, and
every right, power or remedy of Holder shall continue in full force
and effect until such right, power or remedy is specifically waived
in a writing executed by Holder. Maker waives any right to require
the Holder to proceed against any Person or to exhaust all or any
part of the Property or to pursue any remedy in Holder's power.
9. Maker's Waivers.
(a) Except as otherwise expressly provided in the Loan
Agreement, Maker and any endorsers of this Note, and each of them,
hereby waive diligence, demand, presentment for payment, notice of
non-payment, protest and notice of protest, and specifically consent
to and waive notice of any renewals or extensions of this Note,
whether made to or in favor of Maker or any other person or persons.
Maker and any endorsers of this Note expressly waive all right to
the benefit of any statute of limitations and any moratorium,
reinstatement, marshalling, forbearance, extension, redemption, or
appraisement now or hereafter provided by the Constitution and the
laws of the United States and of any state thereof, as a defense to
any demand against Maker or any such endorsers, to the fullest
extent permitted by law.
(b) Maker hereby waives any right to trial by jury
with respect to any action or proceeding brought by Holder or any
other person relating to (i) the Loan, or (ii) the Loan Documents.
(c) Maker hereby agrees that this Note constitutes a
written consent to waiver of trial by jury pursuant to the
provisions of California Code of Civil Procedure Section 631 and
Maker does hereby constitute and appoint Holder its true and lawful
attorney-in-fact, which appointment is coupled with an interest, and
Maker does hereby authorize and empower Holder, in the name, place
and stead of Maker, to file this Note with the clerk or judge of any
court of competent jurisdiction as statutory written consent to
waiver of trial by jury.
10. Transfers by Holder. This Note or any interest in this
Note and the Loan Documents may be hypothecated, transferred or
assigned by Holder only in accordance with Section 16(c) of the Loan
Agreement.
11. Amendment. This Note may be amended or modified only
by an instrument in writing which by its express terms refers to
this Note and which is duly executed by the party sought to be bound
thereby.
12. Successors and Assigns. This Note shall be binding
upon and inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, personal
representatives, successors and permitted assigns.
13. Governing Law. This Note shall be governed by and
construed in accordance with the laws of the State of California.
14. Time. Time is of the essence with respect to each and
every term and provision of this Note.
15. Usury. Notwithstanding any provision herein, the total
liability for payments in the nature of interest shall not exceed
the applicable limits imposed by any applicable state or federal
interest rate laws. If any payments in the nature of interest,
additional interest, and other charges made hereunder are held to be
in excess of the applicable limits imposed by any applicable state
or federal laws, it is agreed that any such amount held to be in
excess shall be considered payment of principal and the Principal
Balance shall be reduced by such amount in the inverse order of
maturity so that the total liability for payments in the nature of
interest, additional interest and other charges shall not exceed the
applicable limits imposed by any applicable state or federal
interest rate laws in compliance with the desires of Holder and
Maker.
16. Notices. All notices, consents and other
communications required or permitted by this Note shall be in
writing and shall be given in the manner set forth in Section 16(i)
of the Loan Agreement.
17. Attorneys' Fees. The undersigned agrees to pay all
costs, including reasonable attorneys' fees and expenses, incurred
by Holder in enforcing payment or collection of this Note or the
terms of any Loan Document, whether or not suit is filed.
18. Limitation on Personal Liabilities.
In the event of an acceleration of the indebtedness
evidenced by this Note upon an event of default thereunder or under
the Deed of Trust, Holder shall not enforce any deficiency judgment
against Maker (hereinafter referred to as the "Exculpated Party")
with respect to any and all obligations evidenced by this Note, in
excess of the amount realized upon foreclosure against (or sale,
pursuant to power of sale, of) any and all security therefor;
provided, however, that nothing contained herein or in any other
Loan Document shall (a) limit Holder's other rights and remedies
against the Exculpated Party hereunder or thereunder, either at law
or in equity, or (b) relieve Exculpated Party from personal
liability and responsibility (i) under the ERISA Section of the
Deeds of Trust, including the indemnification provisions under said
Section, (ii) for waste committed by Exculpated Party with respect
to any Mortgaged Property (as such term is defined in the Deeds of
Trust), (iii) for any security deposits of tenants not turned over
to Holder upon foreclosure or sale pursuant to the power of sale
contained in the Deeds of Trust, (iv) for insurance proceeds and
condemnation awards received by Exculpated Party and not turned over
to Holder or used by Exculpated Party for restoration or repair of
the Mortgaged Property which was damaged or affected, (v) for any
rents or other income from any Mortgaged Property received by
Exculpated Party after an Event of Default or event which with
notice or grace period, or both, would be an Event of Default under
the Loan Documents and not applied to the fixed and operating
expenses of such Mortgaged Property, (vi) for unpaid taxes,
assessments, and/or utility charges with respect to a Mortgaged
Property, (vii) for any sums expended by Holder in fulfilling the
obligations of Exculpated Party, as lessor, under any leases of a
Mortgaged Property and for which obligations either performance was
due at the time of acceleration of the indebtedness by Holder or
became due thereafter prior to foreclosure sale other than during
possession of such Mortgaged Property by a receiver appointed in the
foreclosure action or otherwise appointed at the request of Holder,
(viii) under the Hazardous Substances Remediation and
Indemnification Agreement between Maker and Prudential of even date
herewith and (ix) under any materially false representation and
warranty by Exculpated Party delivered under Paragraph 6.E. of the
Amended and Restated First Mortgage Loan Commitment between Maker
and Prudential dated December 2, 1993 (the "Amended Commitment").
Notwithstanding the foregoing, this agreement not to pursue recourse
liability SHALL BECOME NULL AND VOID and shall be of no further
force and effect in the event:
(a) that there shall be any event occur (other than an
involuntary lien or transfer made without Maker's consent) which
entitled, and the Holder elected, to declare the entire Loan due and
payable under the Due on Sale or Encumbrance provisions in
Article IV, Paragraph B of the Deeds of Trust and the Loan was not
reinstated pursuant to the terms of such Paragraph; or
(b) of any fraud or material misrepresentation by
Maker in connection with any Mortgaged Property, the Loan Documents,
the Amended Commitment, the Original Commitment, including the
Application (as such terms are defined in the Amended Commitment),
the Maker, or any other information furnished to Prudential at or
before the Closing pursuant to the Amended Commitment, the Original
Commitment (including the Application) or the Loan Documents;
provided that as to reports containing a material misrepresentation
where such reports were prepared by, and submitted to Prudential
under the names of independent contractors (such as, but without
limitation, surveyors and environmental consultants), it shall be
deemed a material misrepresentation by Maker only if Maker was aware
of, or was aware of facts or circumstances which would cause a
reasonable person to determine the existence of, such material
misrepresentation.
19. Use of Terms. Maker acknowledges and agrees that, for
Prudential's administrative purposes, the Loan is evidenced by a
total of seven Promissory Notes: (i) Note A is actually represented
by three Notes, "Note A-1" in the original principal amount of
$108,350,000, "Note A-2" in the original principal amount of
$98,350,000 and "Note A-3" in the original principal amount of
$10,000,000 (all three of such promissory notes being hereafter
referred to as Category A Notes), (ii) Note B is actually
represented by two Notes, "Note B-1" in the original principal
amount of $26,650,000 and "Note B-2" in the original principal
amount of $26,650,000 (both of such promissory notes being hereafter
referred to as Category B Notes), and (iii) Note C is actually
represented by two Notes, "Note C-1" in the original principal
amount of $5,000,000 and "Note C-2" in the original principal amount
of $5,000,000 (both of such promissory notes being hereafter
referred to as Category C Notes). The seven promissory notes
described above bear interest at varying rates. Whenever in any of
the Loan Documents Maker is required or permitted to make a payment
or prepayment of principal and/or interest on any of Note A, Note B
and/or Note C, such payment or prepayment shall be allocated by the
Holder to all Notes within the same category in proportion to the
outstanding principal balance of each Note in that category. By way
of example and not by way of limitation, a prepayment of principal
on Note A shall be allocated proportionately among Note A-1, Note A-
2 and Note A-3.
IN WITNESS WHEREOF, Maker has caused this Note to be executed
and delivered effective as of the date first written above.
MAKER:
CATELLUS DEVELOPMENT CORPORATION,
a Delaware corporation
By:
Name: Douglas Stimpson
Title: Vice President Finance
<PAGE>
EXHIBIT A
PREPAYMENT PRIVILEGE
Subject to the provisions of the Loan Agreement, if all
or any portion of this Note is prepaid for any reason,
whether voluntarily or involuntarily, or after acceleration
by Holder upon a default by Maker under the Loan Documents,
Maker shall pay a prepayment premium equal to the greater of
(1) or (2) (hereinafter called the "Prepayment Premium")
where:
(1) is the product of (a) one quarter of one
percent (0.25%) of the Prepayment Amount multiplied by
(b) the quotient of (i) the number of full months remaining
to maturity of the Note as of the Prepayment Date divided by
(ii) the number of full months comprising the term of the
Note; and,
(2) is an amount equal to the Present Value of the
Note (as hereinafter defined) less the amount of principal
being prepaid including accrued interest, if any, calculated
as of the Prepayment Date.
Holder shall notify Maker of the amount and basis of
determination of the Prepayment Premium. On or before the
Prepayment Date, Maker shall pay to Holder the Prepayment
Premium together with the Prepayment Amount and all accrued
interest and other sums due under the Loan. Holder shall not
be obligated to accept any prepayment of the principal
balance of this Note unless such prepayment is accompanied
by the Prepayment Premium and all accrued interest and other
sums due under the Loan.
For the purposes of determining the Prepayment Premium,
the following terms shall have the following meanings:
The "Treasury Rate" is the semi-annual yield on the
Treasury Constant Maturity Series with maturity equal to the
remaining term of the Note, for the week prior to the
Prepayment Date, as reported in Federal Reserve Statistical
Release H.15 - Selected Interest Rates, conclusively
determined by the Holder on the Prepayment Date. The rate
will be determined by linear interpolation between the
yields reported in Release H.15, if necessary. (In the
event Release H.15 is no longer published, Holder shall
select a comparable publication to determine the Treasury
Rate.)
The "Discount Rate" is the rate which, when compounded
monthly, is equivalent to the Treasury Rate, when compounded
semi-annually.
The "Present Value of the Note" shall be determined by
discounting all scheduled payments of principal and interest
remaining to maturity of the Note, attributed to the
Prepayment Amount, at the Discount Rate. If prepayment
occurs on a date other than a Monthly Due Date, the actual
number of days remaining from the Prepayment Date to the
Monthly Due Date will be used to discount within this
period.
Maker agrees that Holder shall not be obligated
actually to reinvest the amount prepaid in any Treasury
obligations as condition precedent to receiving the
Prepayment Premium.<PAGE>
EXHIBIT A-2
DO NOT DESTROY THIS NOTE: When paid, this Note, and the Deeds of
Trust securing it, must be surrendered to the Trustee under the
Deeds of Trust for cancellation before reconveyance will be made.
PROMISSORY NOTE
(Note A-2)
$98,350,000 Los Angeles, California
Loan No. 6100519 February 16, 1994
FOR VALUE RECEIVED, the undersigned, Catellus Development
Corporation, a Delaware corporation ("Maker"), having an address at
201 Mission Street, 30th Floor, San Francisco, California 94105,
PROMISES TO PAY TO THE ORDER OF THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA ("Prudential"), a New Jersey corporation authorized to do
business in the State of California (Prudential and its successors
and assigns who become holders of this Note are hereinafter
collectively referred to as "Holder"), by Federal wire transfer to
Prudential at Morgan Guaranty Trust Company, 23 Wall Street, New
York, New York 10019, Account No. 050-54-493, referencing Loan
No. 6100519, or at such other place as Holder may from time to time
designate, the principal sum of Ninety-Eight Million Three Hundred
Fifty Thousand Dollars ($98,350,000), together with interest thereon
from the date of this Note through the date paid at a rate per annum
equal to the Interest Rate.
1. Definitions. For the purpose of this Note, the
following terms shall have the meanings set forth below.
Capitalized terms not otherwise defined herein shall have the
meanings ascribed to such terms in the Deeds of Trust.
(a) "Closing" means the date upon which the proceeds
of the Loan are disbursed by Prudential to Maker.
(b) "Deeds of Trust" means collectively those certain
documents entitled "Deed of Trust, Security Agreement, Fixture
Filing with Assignment of Rents," of even date herewith, executed by
Maker as "Trustor" to the benefit of Prudential as "Beneficiary,"
and those certain documents entitled "Mortgage" of even date
herewith, executed by Maker as "Mortgagor" to the benefit of
Prudential as "Mortgagee," all as security for repayment of this
Note.
(c) "Event of Default" shall have the meaning given in
the Loan Agreement.
(d) "Interest Rate" means a rate of interest per annum
of eight and sixty-five hundredths percent (8.65%).
(e) "Late Charge(s)" means either the "Per Diem Late
Charge" or the "Monthly Late Charge" (or both), as such terms are
defined in Paragraph 4 below.
(f) "Loan" means that certain loan from Prudential to
Maker in the aggregate principal amount of $280,000,000 evidenced by
this Note, a "Note A-1" in the original principal amount of
$108,350,000, a "Note A-3" in the original principal amount of
$10,000,000, a "Note B-1" in the original principal amount of
$26,650,000, a "Note B-2" in the original principal amount of
$26,650,000, a "Note C-1" in the original principal amount of
$5,000,000, and a "Note C-2" in the original principal amount of
$5,000,000, each of even date herewith and each payable to
Beneficiary or its order, and all modifications, renewals or
extensions thereof.
(g) "Loan Agreement" means that certain Loan Agreement
between Maker and Prudential of even date herewith governing the
terms of the Loan.
(h) "Loan Documents" means this Note, the Deeds of
Trust, all of the Assignments of Lessor's Interest in Leases, the
Security Agreement and all other documents now or hereafter
governing, securing or executed in connection with the Loan.
(i) "Maturity Date" means March 1, 2004.
(j) "Prepayment Amount" means the amount of the
Principal Balance prepaid on a Prepayment Date.
(k) "Prepayment Date" means any date, prior to the
Maturity Date, upon which all or any portion of the Principal
Balance is prepaid.
(l) "Prepayment Premium" shall have the meaning set
forth in Paragraph 6(a).
(m) "Principal Balance" means the principal balance of
this Note from time to time outstanding.
(n) "Secondary Interest Rate" means a rate of interest
per annum of thirteen and seven-tenths percent (13.7%).
2. Payments. On the first day of April 1994 and continuing
on the first day of each calendar month thereafter through and
including the first day of February 2004 (each such first day of the
month being referred to herein as a "Monthly Due Date"), monthly
installments of principal and interest in the amount of $801,907.03
shall be due and payable, with the entire unpaid Principal Balance
plus accrued interest and all other amounts payable under the Loan
Documents being due and payable in full on the Maturity Date. In
the event the Loan closes prior to March 1, 1994, then the amount of
interest accruing on this Note from the date of disbursement through
and including February 28, 1994 shall be paid to Lender on April 1,
1994, which interest shall be paid in addition to the first regular
monthly installment of principal and interest on this Note due on
April 1, 1994.
3. Treatment of Payments. All payments due under this Note
or the Loan Documents shall be paid by Maker in lawful money of the
United States of America by wire transfer on the date such payment
is due. All such payments shall be made without deduction for any
present or future taxes, levies, imposts, deductions, charges or
withholdings (other than U.S., state or local income taxes assessed
or levied against or payable by Holder based upon Holder's net
income), which amounts shall be paid by Maker. Payments from Maker
to Holder under this Note shall be applied first to any expense
reimbursements under the Loan Documents, then to any Late Charges,
then to accrued and unpaid interest and the balance to the Principal
Balance and any Prepayment Premium due thereon.
4. Late Charges and Secondary Interest.
(a) If any monthly principal and/or interest payment is
not paid in full on or before the Monthly Due Date for such payment,
then a daily late charge calculated by multiplying the amount of the
monthly payment by a fraction, the numerator of which is 25% and the
denominator of which is 365 (the "Per Diem Late Charge") shall be
assessed for each day that such payment is not paid from (and
including) the first day after such Monthly Due Date to (and
including) the date upon which such payment is made; provided,
however, that if any such monthly principal and/or interest payment,
together with all accrued Per Diem Late Charges, is not made in full
on or before the fifteenth day immediately following such Monthly Due
Date, a late charge equal to 4% of the monthly principal and/or
interest payment (the "Monthly Late Charge") shall be deemed to be
immediately assessed and shall be immediately due and payable. The
Monthly Late Charge shall be payable in lieu of and not in addition to
any Per Diem Late Charges that shall have accrued during the two-week
period immediately preceding the assessment of the Monthly Late
Charge.
(b) Maker acknowledges and agrees that its failure to
make timely payments will result in Holder incurring additional
expense in servicing the Loan, and that it is extremely difficult
and impractical to ascertain the extent of such damages and that the
Late Charge represents a fair and reasonable estimate, considering
all of the circumstances existing on the date of the execution of
this Note, of the costs that Holder will incur by reason of such
late payment. Acceptance of any Late Charge shall not constitute a
waiver of the default with respect to the late payment, and shall
not prevent Holder from exercising any of the other rights or
remedies available hereunder or at law or in equity.
(c) Maker further acknowledges and agrees that during
the time that any payment of principal, interest or other amount due
under this Note shall be delinquent, Holder will incur additional
costs and expenses attributable to its loss of use of the money due
and to the adverse impact on Holder's ability to meet its other
obligations and avail itself of other opportunities. Maker agrees
that it is extremely difficult and impractical to ascertain the
extent of such expenses, and Maker therefore agrees that, upon five
(5) days after written notice of such delinquency has been given by
Prudential to Maker, interest at the Secondary Interest Rate shall
accrue on any delinquent payments of principal, interest or other
amounts due under this Note or any Loan Document from the date such
payments were due and for so long as non-payment continues,
regardless of whether or not there has been an acceleration of the
maturity of the Loan.
5. Event of Default and Secondary Interest. The occurrence
of an "Event of Default" under any Loan Document shall constitute an
Event of Default under this Note. Upon the occurrence of an Event
of Default (including without limitation the failure of the Maker to
observe the provisions of Article IV, Paragraph B of the Deeds of
Trust), Holder, at its option may elect to declare the Principal
Balance together with all unpaid accrued interest, any Prepayment
Premium and any other sums evidenced or secured by this Note or any
Loan Document, to be immediately due and payable, without further
presentment, demand, protest or notice of any kind, by so notifying
Maker in writing, and if Holder so elects the outstanding principal
balance of this Note shall commence to bear interest at the
Secondary Interest Rate from the date of such election until paid in
full.
6. Prepayment.
(a) If for any reason the Principal Balance or any
portion thereof is prepaid (whether by operation of law,
acceleration or otherwise) on a date prior to the Maturity Date,
Maker shall pay to Holder as liquidated damages, immediately upon
demand, together with the subject Prepayment Amount and any unpaid
accrued interest, a Prepayment Premium calculated in accordance with
Exhibit A attached hereto.
(b) Maker shall have the right voluntarily to prepay
all or any portion of the Principal Balance, together with accrued
interest thereon, provided that Maker gives Holder not less than
thirty (30) days prior written notice of its intention to prepay,
and delivers to Holder, on or before the Prepayment Date, the
Prepayment Premium as required above, together with the Prepayment
Amount and all accrued interest and other sums due under the Loan
Documents. In the event Borrower makes a partial prepayment as
permitted herein, the outstanding principal balance following such
prepayment shall be reamortized, and the monthly payment under this
Note recalculated, by Lender in its reasonable discretion, based
upon an amortization period equal to 300 months minus the number of
whole calendar months which have elapsed from the date of
disbursement of the Loan through and including the date of
prepayment. By way of example and not by way of limitation, if a
prepayment is made on July 15, 1996, the outstanding principal
balance following such prepayment shall be reamortized over 272
months. In no event shall the Maturity Date be affected by any such
prepayment, reamortization and change in monthly payment.
(c) Maker agrees that (i) the Prepayment Premium
represents the reasonable estimate of Holder and Maker of a fair
average compensation for the loss that may be sustained by Holder
due to the payment of any of the Principal Balance prior to the
Maturity Date; (ii) the Prepayment Premium shall be paid without
prejudice to the right of Holder to collect any other amounts
provided to be paid hereunder; and (iii) Holder shall not be
obligated to actually reinvest the Prepayment Amount in any Treasury
or other specific obligations as a condition to receiving the
Prepayment Premium.
(d) Notwithstanding anything to the contrary in this
Paragraph 6, Maker shall have the right, upon giving Holder not less
than thirty (30) days prior written notice of its intention to
prepay, to prepay this Note and all other sums owed to Holder by
Maker under the Loan (including, but not limited to, all sums owed
on Note B, all sums owed on Note C and all other payments and
charges due under all of the other Loan Documents), in full at any
time after November 30, 2003, without the payment of any Prepayment
Premium.
(e) Maker hereby expressly waives any right it may
have under California Civil Code 2954.10 to prepay this Note, in
whole or in part, without prepayment charge, upon acceleration of
the Maturity Date of this Note, and agrees that if for any reason a
prepayment of any or all of this Note is made, whether voluntarily
or following any acceleration of the Maturity Date of this Note by
Holder, then Maker shall pay the Prepayment Premium calculated
pursuant to Paragraph 6(a). By initialing this provision in the
space provided below, Maker hereby declares that the Holder's
agreement to make the Loan at the Interest Rate and for the term set
forth in this Note constitutes adequate consideration, given
individual weight by Maker, for this waiver and agreement.
INITIALS OF MAKER: ____________________
7. Security. This Note is secured, among other security,
by the Deeds of Trust and the other Loan Documents, which contain
provisions for the acceleration of the maturity of this Note upon
the occurrence of certain described events.
8. Holder's Rights; No Waiver by Holder. The rights,
powers and remedies of Holder under this Note shall be in addition
to all rights, powers and remedies given to Holder under the Loan
Documents and any other agreement or document securing or evidencing
the Loan or by virtue of any statute or rule of law, including, but
not limited to, the California Uniform Commercial Code. All such
rights, powers and remedies shall be cumulative and may be exercised
successively or concurrently in Holder's sole discretion without
impairing Holder's security interest, rights or available remedies.
Any forbearance, failure or delay by Holder in exercising any right,
power or remedy shall not preclude further exercise thereof, and
every right, power or remedy of Holder shall continue in full force
and effect until such right, power or remedy is specifically waived
in a writing executed by Holder. Maker waives any right to require
the Holder to proceed against any Person or to exhaust all or any
part of the Property or to pursue any remedy in Holder's power.
9. Maker's Waivers.
(a) Except as otherwise expressly provided in the Loan
Agreement, Maker and any endorsers of this Note, and each of them,
hereby waive diligence, demand, presentment for payment, notice of
non-payment, protest and notice of protest, and specifically consent
to and waive notice of any renewals or extensions of this Note,
whether made to or in favor of Maker or any other person or persons.
Maker and any endorsers of this Note expressly waive all right to
the benefit of any statute of limitations and any moratorium,
reinstatement, marshalling, forbearance, extension, redemption, or
appraisement now or hereafter provided by the Constitution and the
laws of the United States and of any state thereof, as a defense to
any demand against Maker or any such endorsers, to the fullest
extent permitted by law.
(b) Maker hereby waives any right to trial by jury
with respect to any action or proceeding brought by Holder or any
other person relating to (i) the Loan, or (ii) the Loan Documents.
(c) Maker hereby agrees that this Note constitutes a
written consent to waiver of trial by jury pursuant to the
provisions of California Code of Civil Procedure Section 631 and
Maker does hereby constitute and appoint Holder its true and lawful
attorney-in-fact, which appointment is coupled with an interest, and
Maker does hereby authorize and empower Holder, in the name, place
and stead of Maker, to file this Note with the clerk or judge of any
court of competent jurisdiction as statutory written consent to
waiver of trial by jury.
10. Transfers by Holder. This Note or any interest in this
Note and the Loan Documents may be hypothecated, transferred or
assigned by Holder only in accordance with Section 16(c) of the Loan
Agreement.
11. Amendment. This Note may be amended or modified only
by an instrument in writing which by its express terms refers to
this Note and which is duly executed by the party sought to be bound
thereby.
12. Successors and Assigns. This Note shall be binding
upon and inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, personal
representatives, successors and permitted assigns.
13. Governing Law. This Note shall be governed by and
construed in accordance with the laws of the State of California.
14. Time. Time is of the essence with respect to each and
every term and provision of this Note.
15. Usury. Notwithstanding any provision herein, the total
liability for payments in the nature of interest shall not exceed
the applicable limits imposed by any applicable state or federal
interest rate laws. If any payments in the nature of interest,
additional interest, and other charges made hereunder are held to be
in excess of the applicable limits imposed by any applicable state
or federal laws, it is agreed that any such amount held to be in
excess shall be considered payment of principal and the Principal
Balance shall be reduced by such amount in the inverse order of
maturity so that the total liability for payments in the nature of
interest, additional interest and other charges shall not exceed the
applicable limits imposed by any applicable state or federal
interest rate laws in compliance with the desires of Holder and
Maker.
16. Notices. All notices, consents and other
communications required or permitted by this Note shall be in
writing and shall be given in the manner set forth in Section 16(i)
of the Loan Agreement.
17. Attorneys' Fees. The undersigned agrees to pay all
costs, including reasonable attorneys' fees and expenses, incurred
by Holder in enforcing payment or collection of this Note or the
terms of any Loan Document, whether or not suit is filed.
18. Limitation on Personal Liabilities.
In the event of an acceleration of the indebtedness
evidenced by this Note upon an event of default thereunder or under
the Deed of Trust, Holder shall not enforce any deficiency judgment
against Maker (hereinafter referred to as the "Exculpated Party")
with respect to any and all obligations evidenced by this Note, in
excess of the amount realized upon foreclosure against (or sale,
pursuant to power of sale, of) any and all security therefor;
provided, however, that nothing contained herein or in any other
Loan Document shall (a) limit Holder's other rights and remedies
against the Exculpated Party hereunder or thereunder, either at law
or in equity, or (b) relieve Exculpated Party from personal
liability and responsibility (i) under the ERISA Section of the
Deeds of Trust, including the indemnification provisions under said
Section, (ii) for waste committed by Exculpated Party with respect
to any Mortgaged Property (as such term is defined in the Deeds of
Trust), (iii) for any security deposits of tenants not turned over
to Holder upon foreclosure or sale pursuant to the power of sale
contained in the Deeds of Trust, (iv) for insurance proceeds and
condemnation awards received by Exculpated Party and not turned over
to Holder or used by Exculpated Party for restoration or repair of
the Mortgaged Property which was damaged or affected, (v) for any
rents or other income from any Mortgaged Property received by
Exculpated Party after an Event of Default or event which with
notice or grace period, or both, would be an Event of Default under
the Loan Documents and not applied to the fixed and operating
expenses of such Mortgaged Property, (vi) for unpaid taxes,
assessments, and/or utility charges with respect to a Mortgaged
Property, (vii) for any sums expended by Holder in fulfilling the
obligations of Exculpated Party, as lessor, under any leases of a
Mortgaged Property and for which obligations either performance was
due at the time of acceleration of the indebtedness by Holder or
became due thereafter prior to foreclosure sale other than during
possession of such Mortgaged Property by a receiver appointed in the
foreclosure action or otherwise appointed at the request of Holder,
(viii) under the Hazardous Substances Remediation and
Indemnification Agreement between Maker and Prudential of even date
herewith and (ix) under any materially false representation and
warranty by Exculpated Party delivered under Paragraph 6.E. of the
Amended and Restated First Mortgage Loan Commitment between Maker
and Prudential dated December 2, 1993 (the "Amended Commitment").
Notwithstanding the foregoing, this agreement not to pursue recourse
liability SHALL BECOME NULL AND VOID and shall be of no further
force and effect in the event:
(a) that there shall be any event occur (other than an
involuntary lien or transfer made without Maker's consent) which
entitled, and the Holder elected, to declare the entire Loan due and
payable under the Due on Sale or Encumbrance provisions in
Article IV, Paragraph B of the Deeds of Trust and the Loan was not
reinstated pursuant to the terms of such Paragraph; or
(b) of any fraud or material misrepresentation by
Maker in connection with any Mortgaged Property, the Loan Documents,
the Amended Commitment, the Original Commitment, including the
Application (as such terms are defined in the Amended Commitment),
the Maker, or any other information furnished to Prudential at or
before the Closing pursuant to the Amended Commitment, the Original
Commitment (including the Application) or the Loan Documents;
provided that as to reports containing a material misrepresentation
where such reports were prepared by, and submitted to Prudential
under the names of independent contractors (such as, but without
limitation, surveyors and environmental consultants), it shall be
deemed a material misrepresentation by Maker only if Maker was aware
of, or was aware of facts or circumstances which would cause a
reasonable person to determine the existence of, such material
misrepresentation.
19. Use of Terms. Maker acknowledges and agrees that, for
Prudential's administrative purposes, the Loan is evidenced by a
total of seven Promissory Notes: (i) Note A is actually represented
by three Notes, "Note A-1" in the original principal amount of
$108,350,000, "Note A-2" in the original principal amount of
$98,350,000 and "Note A-3" in the original principal amount of
$10,000,000 (all three of such promissory notes being hereafter
referred to as Category A Notes), (ii) Note B is actually
represented by two Notes, "Note B-1" in the original principal
amount of $26,650,000 and "Note B-2" in the original principal
amount of $26,650,000 (both of such promissory notes being hereafter
referred to as Category B Notes), and (iii) Note C is actually
represented by two Notes, "Note C-1" in the original principal
amount of $5,000,000 and "Note C-2" in the original principal amount
of $5,000,000 (both of such promissory notes being hereafter
referred to as Category C Notes). The seven promissory notes
described above bear interest at varying rates. Whenever in any of
the Loan Documents Maker is required or permitted to make a payment
or prepayment of principal and/or interest on any of Note A, Note B
and/or Note C, such payment or prepayment shall be allocated by the
Holder to all Notes within the same category in proportion to the
outstanding principal balance of each Note in that category. By way
of example and not by way of limitation, a prepayment of principal
on Note A shall be allocated proportionately among Note A-1, Note A-
2 and Note A-3.
IN WITNESS WHEREOF, Maker has caused this Note to be executed
and delivered effective as of the date first written above.
MAKER:
CATELLUS DEVELOPMENT CORPORATION,
a Delaware corporation
By:
Name: Douglas Stimpson
Title: Vice President Finance
<PAGE>
EXHIBIT A
PREPAYMENT PRIVILEGE
Subject to the provisions of the Loan Agreement, if all
or any portion of this Note is prepaid for any reason,
whether voluntarily or involuntarily, or after acceleration
by Holder upon a default by Maker under the Loan Documents,
Maker shall pay a prepayment premium equal to the greater of
(1) or (2) (hereinafter called the "Prepayment Premium")
where:
(1) is the product of (a) one quarter of one
percent (0.25%) of the Prepayment Amount multiplied by
(b) the quotient of (i) the number of full months remaining
to maturity of the Note as of the Prepayment Date divided by
(ii) the number of full months comprising the term of the
Note; and,
(2) is an amount equal to the Present Value of the
Note (as hereinafter defined) less the amount of principal
being prepaid including accrued interest, if any, calculated
as of the Prepayment Date.
Holder shall notify Maker of the amount and basis of
determination of the Prepayment Premium. On or before the
Prepayment Date, Maker shall pay to Holder the Prepayment
Premium together with the Prepayment Amount and all accrued
interest and other sums due under the Loan. Holder shall not
be obligated to accept any prepayment of the principal
balance of this Note unless such prepayment is accompanied
by the Prepayment Premium and all accrued interest and other
sums due under the Loan.
For the purposes of determining the Prepayment Premium,
the following terms shall have the following meanings:
The "Treasury Rate" is the semi-annual yield on the
Treasury Constant Maturity Series with maturity equal to the
remaining term of the Note, for the week prior to the
Prepayment Date, as reported in Federal Reserve Statistical
Release H.15 - Selected Interest Rates, conclusively
determined by the Holder on the Prepayment Date. The rate
will be determined by linear interpolation between the
yields reported in Release H.15, if necessary. (In the
event Release H.15 is no longer published, Holder shall
select a comparable publication to determine the Treasury
Rate.)
The "Discount Rate" is the rate which, when compounded
monthly, is equivalent to the Treasury Rate, when compounded
semi-annually.
The "Present Value of the Note" shall be determined by
discounting all scheduled payments of principal and interest
remaining to maturity of the Note, attributed to the
Prepayment Amount, at the Discount Rate. If prepayment
occurs on a date other than a Monthly Due Date, the actual
number of days remaining from the Prepayment Date to the
Monthly Due Date will be used to discount within this
period.
Maker agrees that Holder shall not be obligated
actually to reinvest the amount prepaid in any Treasury
obligations as condition precedent to receiving the
Prepayment Premium.
<PAGE>
EXHIBIT A-3
DO NOT DESTROY THIS NOTE: When paid, this Note, and the Deeds of
Trust securing it, must be surrendered to the Trustee under the
Deeds of Trust for cancellation before reconveyance will be made.
PROMISSORY NOTE
(Note A-3)
$10,000,000 Los Angeles, California
Loan No. 6100520 February 16, 1994
FOR VALUE RECEIVED, the undersigned, Catellus Development
Corporation, a Delaware corporation ("Maker"), having an address at
201 Mission Street, 30th Floor, San Francisco, California 94105,
PROMISES TO PAY TO THE ORDER OF THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA ("Prudential"), a New Jersey corporation authorized to do
business in the State of California (Prudential and its successors
and assigns who become holders of this Note are hereinafter
collectively referred to as "Holder"), by Federal wire transfer to
Prudential at Morgan Guaranty Trust Company, 23 Wall Street, New
York, New York 10019, Account No. 050-54-493, referencing Loan
No. 6100520, or at such other place as Holder may from time to time
designate, the principal sum of Ten Million Dollars ($10,000,000),
together with interest thereon from the date of this Note through
the date paid at a rate per annum equal to the Interest Rate.
1. Definitions. For the purpose of this Note, the
following terms shall have the meanings set forth below.
Capitalized terms not otherwise defined herein shall have the
meanings ascribed to such terms in the Deeds of Trust.
(a) "Closing" means the date upon which the proceeds
of the Loan are disbursed by Prudential to Maker.
(b) "Deeds of Trust" means collectively those certain
documents entitled "Deed of Trust, Security Agreement, Fixture
Filing with Assignment of Rents," of even date herewith, executed by
Maker as "Trustor" to the benefit of Prudential as "Beneficiary,"
and those certain documents entitled "Mortgage" of even date
herewith, executed by Maker as "Mortgagor" to the benefit of
Prudential as "Mortgagee," all as security for repayment of this
Note.
(c) "Event of Default" shall have the meaning given in
the Loan Agreement.
(d) "Interest Rate" means a rate of interest per annum
of eight and ninety-three hundredths percent (8.93%).
(e) "Late Charge(s)" means either the "Per Diem Late
Charge" or the "Monthly Late Charge" (or both), as such terms are
defined in Paragraph 4 below.
(f) "Loan" means that certain loan from Prudential to
Maker in the aggregate principal amount of $280,000,000 evidenced by
this Note, a "Note A-1" in the original principal amount of
$108,350,000, a "Note A-2" in the original principal amount of
$98,350,000, a "Note B-1" in the original principal amount of
$26,650,000, a "Note B-2" in the original principal amount of
$26,650,000, a "Note C-1" in the original principal amount of
$5,000,000, and a "Note C-2" in the original principal amount of
$5,000,000, each of even date herewith and each payable to
Beneficiary or its order, and all modifications, renewals or
extensions thereof.
(g) "Loan Agreement" means that certain Loan Agreement
between Maker and Prudential of even date herewith governing the
terms of the Loan.
(h) "Loan Documents" means this Note, the Deeds of
Trust, all of the Assignments of Lessor's Interest in Leases, the
Security Agreement and all other documents now or hereafter
governing, securing or executed in connection with the Loan.
(i) "Maturity Date" means March 1, 2004.
(j) "Prepayment Amount" means the amount of the
Principal Balance prepaid on a Prepayment Date.
(k) "Prepayment Date" means any date, prior to the
Maturity Date, upon which all or any portion of the Principal
Balance is prepaid.
(l) "Prepayment Premium" shall have the meaning set
forth in Paragraph 6(a).
(m) "Principal Balance" means the principal balance of
this Note from time to time outstanding.
(n) "Secondary Interest Rate" means a rate of interest
per annum of thirteen and seven-tenths percent (13.7%).
2. Payments. On the first day of April 1994 and continuing
on the first day of each calendar month thereafter through and
including the first day of February 2004 (each such first day of the
month being referred to herein as a "Monthly Due Date"), monthly
installments of principal and interest in the amount of $83,440.81
shall be due and payable, with the entire unpaid Principal Balance
plus accrued interest and all other amounts payable under the Loan
Documents being due and payable in full on the Maturity Date. In
the event the Loan closes prior to March 1, 1994, then the amount of
interest accruing on this Note from the date of disbursement through
and including February 28, 1994 shall be paid to Lender on April 1,
1994, which interest shall be paid in addition to the first regular
monthly installment of principal and interest on this Note due on
April 1, 1994.
3. Treatment of Payments. All payments due under this Note
or the Loan Documents shall be paid by Maker in lawful money of the
United States of America by wire transfer on the date such payment
is due. All such payments shall be made without deduction for any
present or future taxes, levies, imposts, deductions, charges or
withholdings (other than U.S., state or local income taxes assessed
or levied against or payable by Holder based upon Holder's net
income), which amounts shall be paid by Maker. Payments from Maker
to Holder under this Note shall be applied first to any expense
reimbursements under the Loan Documents, then to any Late Charges,
then to accrued and unpaid interest and the balance to the Principal
Balance and any Prepayment Premium due thereon.
4. Late Charges and Secondary Interest.
(a) If any monthly principal and/or interest payment is
not paid in full on or before the Monthly Due Date for such payment,
then a daily late charge calculated by multiplying the amount of the
monthly payment by a fraction, the numerator of which is 25% and the
denominator of which is 365 (the "Per Diem Late Charge") shall be
assessed for each day that such payment is not paid from (and
including) the first day after such Monthly Due Date to (and
including) the date upon which such payment is made; provided,
however, that if any such monthly principal and/or interest payment,
together with all accrued Per Diem Late Charges, is not made in full
on or before the fifteenth day immediately following such Monthly Due
Date, a late charge equal to 4% of the monthly principal and/or
interest payment (the "Monthly Late Charge") shall be deemed to be
immediately assessed and shall be immediately due and payable. The
Monthly Late Charge shall be payable in lieu of and not in addition to
any Per Diem Late Charges that shall have accrued during the two-week
period immediately preceding the assessment of the Monthly Late
Charge.
(b) Maker acknowledges and agrees that its failure to
make timely payments will result in Holder incurring additional
expense in servicing the Loan, and that it is extremely difficult
and impractical to ascertain the extent of such damages and that the
Late Charge represents a fair and reasonable estimate, considering
all of the circumstances existing on the date of the execution of
this Note, of the costs that Holder will incur by reason of such
late payment. Acceptance of any Late Charge shall not constitute a
waiver of the default with respect to the late payment, and shall
not prevent Holder from exercising any of the other rights or
remedies available hereunder or at law or in equity.
(c) Maker further acknowledges and agrees that during
the time that any payment of principal, interest or other amount due
under this Note shall be delinquent, Holder will incur additional
costs and expenses attributable to its loss of use of the money due
and to the adverse impact on Holder's ability to meet its other
obligations and avail itself of other opportunities. Maker agrees
that it is extremely difficult and impractical to ascertain the
extent of such expenses, and Maker therefore agrees that, upon five
(5) days after written notice of such delinquency has been given by
Prudential to Maker, interest at the Secondary Interest Rate shall
accrue on any delinquent payments of principal, interest or other
amounts due under this Note or any Loan Document from the date such
payments were due and for so long as non-payment continues,
regardless of whether or not there has been an acceleration of the
maturity of the Loan.
5. Event of Default and Secondary Interest. The occurrence
of an "Event of Default" under any Loan Document shall constitute an
Event of Default under this Note. Upon the occurrence of an Event
of Default (including without limitation the failure of the Maker to
observe the provisions of Article IV, Paragraph B of the Deeds of
Trust), Holder, at its option may elect to declare the Principal
Balance together with all unpaid accrued interest, any Prepayment
Premium and any other sums evidenced or secured by this Note or any
Loan Document, to be immediately due and payable, without further
presentment, demand, protest or notice of any kind, by so notifying
Maker in writing, and if Holder so elects the outstanding principal
balance of this Note shall commence to bear interest at the
Secondary Interest Rate from the date of such election until paid in
full.
6. Prepayment.
(a) If for any reason the Principal Balance or any
portion thereof is prepaid (whether by operation of law,
acceleration or otherwise) on a date prior to the Maturity Date,
Maker shall pay to Holder as liquidated damages, immediately upon
demand, together with the subject Prepayment Amount and any unpaid
accrued interest, a Prepayment Premium calculated in accordance with
Exhibit A attached hereto.
(b) Maker shall have the right voluntarily to prepay
all or any portion of the Principal Balance, together with accrued
interest thereon, provided that Maker gives Holder not less than
thirty (30) days prior written notice of its intention to prepay,
and delivers to Holder, on or before the Prepayment Date, the
Prepayment Premium as required above, together with the Prepayment
Amount and all accrued interest and other sums due under the Loan
Documents. In the event Borrower makes a partial prepayment as
permitted herein, the outstanding principal balance following such
prepayment shall be reamortized, and the monthly payment under this
Note recalculated, by Lender in its reasonable discretion, based
upon an amortization period equal to 300 months minus the number of
whole calendar months which have elapsed from the date of
disbursement of the Loan through and including the date of
prepayment. By way of example and not by way of limitation, if a
prepayment is made on July 15, 1996, the outstanding principal
balance following such prepayment shall be reamortized over 272
months. In no event shall the Maturity Date be affected by any such
prepayment, reamortization and change in monthly payment.
(c) Maker agrees that (i) the Prepayment Premium
represents the reasonable estimate of Holder and Maker of a fair
average compensation for the loss that may be sustained by Holder
due to the payment of any of the Principal Balance prior to the
Maturity Date; (ii) the Prepayment Premium shall be paid without
prejudice to the right of Holder to collect any other amounts
provided to be paid hereunder; and (iii) Holder shall not be
obligated to actually reinvest the Prepayment Amount in any Treasury
or other specific obligations as a condition to receiving the
Prepayment Premium.
(d) Notwithstanding anything to the contrary in this
Paragraph 6, Maker shall have the right, upon giving Holder not less
than thirty (30) days prior written notice of its intention to
prepay, to prepay this Note and all other sums owed to Holder by
Maker under the Loan (including, but not limited to, all sums owed
on Note B, all sums owed on Note C and all other payments and
charges due under all of the other Loan Documents), in full at any
time after November 30, 2003, without the payment of any Prepayment
Premium.
(e) Maker hereby expressly waives any right it may
have under California Civil Code 2954.10 to prepay this Note, in
whole or in part, without prepayment charge, upon acceleration of
the Maturity Date of this Note, and agrees that if for any reason a
prepayment of any or all of this Note is made, whether voluntarily
or following any acceleration of the Maturity Date of this Note by
Holder, then Maker shall pay the Prepayment Premium calculated
pursuant to Paragraph 6(a). By initialing this provision in the
space provided below, Maker hereby declares that the Holder's
agreement to make the Loan at the Interest Rate and for the term set
forth in this Note constitutes adequate consideration, given
individual weight by Maker, for this waiver and agreement.
INITIALS OF MAKER: ____________________
7. Security. This Note is secured, among other security,
by the Deeds of Trust and the other Loan Documents, which contain
provisions for the acceleration of the maturity of this Note upon
the occurrence of certain described events.
8. Holder's Rights; No Waiver by Holder. The rights,
powers and remedies of Holder under this Note shall be in addition
to all rights, powers and remedies given to Holder under the Loan
Documents and any other agreement or document securing or evidencing
the Loan or by virtue of any statute or rule of law, including, but
not limited to, the California Uniform Commercial Code. All such
rights, powers and remedies shall be cumulative and may be exercised
successively or concurrently in Holder's sole discretion without
impairing Holder's security interest, rights or available remedies.
Any forbearance, failure or delay by Holder in exercising any right,
power or remedy shall not preclude further exercise thereof, and
every right, power or remedy of Holder shall continue in full force
and effect until such right, power or remedy is specifically waived
in a writing executed by Holder. Maker waives any right to require
the Holder to proceed against any Person or to exhaust all or any
part of the Property or to pursue any remedy in Holder's power.
9. Maker's Waivers.
(a) Except as otherwise expressly provided in the Loan
Agreement, Maker and any endorsers of this Note, and each of them,
hereby waive diligence, demand, presentment for payment, notice of
non-payment, protest and notice of protest, and specifically consent
to and waive notice of any renewals or extensions of this Note,
whether made to or in favor of Maker or any other person or persons.
Maker and any endorsers of this Note expressly waive all right to
the benefit of any statute of limitations and any moratorium,
reinstatement, marshalling, forbearance, extension, redemption, or
appraisement now or hereafter provided by the Constitution and the
laws of the United States and of any state thereof, as a defense to
any demand against Maker or any such endorsers, to the fullest
extent permitted by law.
(b) Maker hereby waives any right to trial by jury
with respect to any action or proceeding brought by Holder or any
other person relating to (i) the Loan, or (ii) the Loan Documents.
(c) Maker hereby agrees that this Note constitutes a
written consent to waiver of trial by jury pursuant to the
provisions of California Code of Civil Procedure Section 631 and
Maker does hereby constitute and appoint Holder its true and lawful
attorney-in-fact, which appointment is coupled with an interest, and
Maker does hereby authorize and empower Holder, in the name, place
and stead of Maker, to file this Note with the clerk or judge of any
court of competent jurisdiction as statutory written consent to
waiver of trial by jury.
10. Transfers by Holder. This Note or any interest in this
Note and the Loan Documents may be hypothecated, transferred or
assigned by Holder only in accordance with Section 16(c) of the Loan
Agreement.
11. Amendment. This Note may be amended or modified only
by an instrument in writing which by its express terms refers to
this Note and which is duly executed by the party sought to be bound
thereby.
12. Successors and Assigns. This Note shall be binding
upon and inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, personal
representatives, successors and permitted assigns.
13. Governing Law. This Note shall be governed by and
construed in accordance with the laws of the State of California.
14. Time. Time is of the essence with respect to each and
every term and provision of this Note.
15. Usury. Notwithstanding any provision herein, the total
liability for payments in the nature of interest shall not exceed
the applicable limits imposed by any applicable state or federal
interest rate laws. If any payments in the nature of interest,
additional interest, and other charges made hereunder are held to be
in excess of the applicable limits imposed by any applicable state
or federal laws, it is agreed that any such amount held to be in
excess shall be considered payment of principal and the Principal
Balance shall be reduced by such amount in the inverse order of
maturity so that the total liability for payments in the nature of
interest, additional interest and other charges shall not exceed the
applicable limits imposed by any applicable state or federal
interest rate laws in compliance with the desires of Holder and
Maker.
16. Notices. All notices, consents and other
communications required or permitted by this Note shall be in
writing and shall be given in the manner set forth in Section 16(i)
of the Loan Agreement.
17. Attorneys' Fees. The undersigned agrees to pay all
costs, including reasonable attorneys' fees and expenses, incurred
by Holder in enforcing payment or collection of this Note or the
terms of any Loan Document, whether or not suit is filed.
18. Limitation on Personal Liabilities.
In the event of an acceleration of the indebtedness
evidenced by this Note upon an event of default thereunder or under
the Deed of Trust, Holder shall not enforce any deficiency judgment
against Maker (hereinafter referred to as the "Exculpated Party")
with respect to any and all obligations evidenced by this Note, in
excess of the amount realized upon foreclosure against (or sale,
pursuant to power of sale, of) any and all security therefor;
provided, however, that nothing contained herein or in any other
Loan Document shall (a) limit Holder's other rights and remedies
against the Exculpated Party hereunder or thereunder, either at law
or in equity, or (b) relieve Exculpated Party from personal
liability and responsibility (i) under the ERISA Section of the
Deeds of Trust, including the indemnification provisions under said
Section, (ii) for waste committed by Exculpated Party with respect
to any Mortgaged Property (as such term is defined in the Deeds of
Trust), (iii) for any security deposits of tenants not turned over
to Holder upon foreclosure or sale pursuant to the power of sale
contained in the Deeds of Trust, (iv) for insurance proceeds and
condemnation awards received by Exculpated Party and not turned over
to Holder or used by Exculpated Party for restoration or repair of
the Mortgaged Property which was damaged or affected, (v) for any
rents or other income from any Mortgaged Property received by
Exculpated Party after an Event of Default or event which with
notice or grace period, or both, would be an Event of Default under
the Loan Documents and not applied to the fixed and operating
expenses of such Mortgaged Property, (vi) for unpaid taxes,
assessments, and/or utility charges with respect to a Mortgaged
Property, (vii) for any sums expended by Holder in fulfilling the
obligations of Exculpated Party, as lessor, under any leases of a
Mortgaged Property and for which obligations either performance was
due at the time of acceleration of the indebtedness by Holder or
became due thereafter prior to foreclosure sale other than during
possession of such Mortgaged Property by a receiver appointed in the
foreclosure action or otherwise appointed at the request of Holder,
(viii) under the Hazardous Substances Remediation and
Indemnification Agreement between Maker and Prudential of even date
herewith and (ix) under any materially false representation and
warranty by Exculpated Party delivered under Paragraph 6.E. of the
Amended and Restated First Mortgage Loan Commitment between Maker
and Prudential dated December 2, 1993 (the "Amended Commitment").
Notwithstanding the foregoing, this agreement not to pursue recourse
liability SHALL BECOME NULL AND VOID and shall be of no further
force and effect in the event:
(a) that there shall be any event occur (other than an
involuntary lien or transfer made without Maker's consent) which
entitled, and the Holder elected, to declare the entire Loan due and
payable under the Due on Sale or Encumbrance provisions in
Article IV, Paragraph B of the Deeds of Trust and the Loan was not
reinstated pursuant to the terms of such Paragraph; or
(b) of any fraud or material misrepresentation by
Maker in connection with any Mortgaged Property, the Loan Documents,
the Amended Commitment, the Original Commitment, including the
Application (as such terms are defined in the Amended Commitment),
the Maker, or any other information furnished to Prudential at or
before the Closing pursuant to the Amended Commitment, the Original
Commitment (including the Application) or the Loan Documents;
provided that as to reports containing a material misrepresentation
where such reports were prepared by, and submitted to Prudential
under the names of independent contractors (such as, but without
limitation, surveyors and environmental consultants), it shall be
deemed a material misrepresentation by Maker only if Maker was aware
of, or was aware of facts or circumstances which would cause a
reasonable person to determine the existence of, such material
misrepresentation.
19. Use of Terms. Maker acknowledges and agrees that, for
Prudential's administrative purposes, the Loan is evidenced by a
total of seven Promissory Notes: (i) Note A is actually represented
by three Notes, "Note A-1" in the original principal amount of
$108,350,000, "Note A-2" in the original principal amount of
$98,350,000 and "Note A-3" in the original principal amount of
$10,000,000 (all three of such promissory notes being hereafter
referred to as Category A Notes), (ii) Note B is actually
represented by two Notes, "Note B-1" in the original principal
amount of $26,650,000 and "Note B-2" in the original principal
amount of $26,650,000 (both of such promissory notes being hereafter
referred to as Category B Notes), and (iii) Note C is actually
represented by two Notes, "Note C-1" in the original principal
amount of $5,000,000 and "Note C-2" in the original principal amount
of $5,000,000 (both of such promissory notes being hereafter
referred to as Category C Notes). The seven promissory notes
described above bear interest at varying rates. Whenever in any of
the Loan Documents Maker is required or permitted to make a payment
or prepayment of principal and/or interest on any of Note A, Note B
and/or Note C, such payment or prepayment shall be allocated by the
Holder to all Notes withinthe same category in proportion to the
outstanding principal balance of each Note in that category. By way
of example and not by way of limitation, a prepayment of principal
on Note A shall be allocated proportionately among Note A-1, Note A-
2 and Note A-3.
IN WITNESS WHEREOF, Maker has caused this Note to be executed
and delivered effective as of the date first written above.
MAKER:
CATELLUS DEVELOPMENT CORPORATION,
a Delaware corporation
By:
Name: Douglas Stimpson
Title: Vice President Finance
<PAGE>
EXHIBIT A
PREPAYMENT PRIVILEGE
Subject to the provisions of the Loan Agreement, if all
or any portion of this Note is prepaid for any reason,
whether voluntarily or involuntarily, or after acceleration
by Holder upon a default by Maker under the Loan Documents,
Maker shall pay a prepayment premium equal to the greater of
(1) or (2) (hereinafter called the "Prepayment Premium")
where:
(1) is the product of (a) one quarter of one
percent (0.25%) of the Prepayment Amount multiplied by
(b) the quotient of (i) the number of full months remaining
to maturity of the Note as of the Prepayment Date divided by
(ii) the number of full months comprising the term of the
Note; and,
(2) is an amount equal to the Present Value of the
Note (as hereinafter defined) less the amount of principal
being prepaid including accrued interest, if any, calculated
as of the Prepayment Date.
Holder shall notify Maker of the amount and basis of
determination of the Prepayment Premium. On or before the
Prepayment Date, Maker shall pay to Holder the Prepayment
Premium together with the Prepayment Amount and all accrued
interest and other sums due under the Loan. Holder shall not
be obligated to accept any prepayment of the principal
balance of this Note unless such prepayment is accompanied
by the Prepayment Premium and all accrued interest and other
sums due under the Loan.
For the purposes of determining the Prepayment Premium,
the following terms shall have the following meanings:
The "Treasury Rate" is the semi-annual yield on the
Treasury Constant Maturity Series with maturity equal to the
remaining term of the Note, for the week prior to the
Prepayment Date, as reported in Federal Reserve Statistical
Release H.15 - Selected Interest Rates, conclusively
determined by the Holder on the Prepayment Date. The rate
will be determined by linear interpolation between the
yields reported in Release H.15, if necessary. (In the
event Release H.15 is no longer published, Holder shall
select a comparable publication to determine the Treasury
Rate.)
The "Discount Rate" is the rate which, when compounded
monthly, is equivalent to the Treasury Rate, when compounded
semi-annually.
The "Present Value of the Note" shall be determined by
discounting all scheduled payments of principal and interest
remaining to maturity of the Note, attributed to the
Prepayment Amount, at the Discount Rate. If prepayment
occurs on a date other than a Monthly Due Date, the actual
number of days remaining from the Prepayment Date to the
Monthly Due Date will be used to discount within this
period.
Maker agrees that Holder shall not be obligated
actually to reinvest the amount prepaid in any Treasury
obligations as condition precedent to receiving the
Prepayment Premium.
<PAGE>
EXHIBIT B-1
DO NOT DESTROY THIS NOTE: When paid, this Note, and the Deeds of
Trust securing it, must be surrendered to the Trustee under the
Deeds of Trust for cancellation before reconveyance will be made.
PROMISSORY NOTE
(Note B-1)
$26,650,000 Los Angeles, California
Loan No. 6100517 February 16, 1994
FOR VALUE RECEIVED, the undersigned, Catellus Development
Corporation, a Delaware corporation ("Maker"), having an address at
201 Mission Street, 30th Floor, San Francisco, California 94105,
PROMISES TO PAY TO THE ORDER OF THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA ("Prudential"), a New Jersey corporation authorized to do
business in the State of California (Prudential and its successors
and assigns who become holders of this Note are hereinafter
collectively referred to as "Holder"), by Federal wire transfer to
Prudential at Morgan Guaranty Trust Company, 23 Wall Street, New
York, New York 10019, Account No. 050-54-493, referencing Loan
No. 6100517, or at such other place as Holder may from time to time
designate, the principal sum of Twenty-Six Million Six Hundred Fifty
Thousand Dollars ($26,650,000), together with interest thereon from
the date of this Note through the date paid at a rate per annum
equal to the Interest Rate.
1. Definitions. For the purpose of this Note, the following
terms shall have the meanings set forth below. Capitalized terms not
otherwise defined herein shall have the meanings ascribed to such
terms in the Deeds of Trust.
(a) "Closing" means the date upon which the proceeds of
the Loan are disbursed by Prudential to Maker.
(b) "Deeds of Trust" means collectively those certain
documents entitled "Deed of Trust, Security Agreement and Fixture
Filing with Assignment of Rents," of even date herewith, executed by
Maker as "Trustor" to the benefit of Prudential as "Beneficiary,"
and those certain documents entitled "Mortgage" of even date
herewith, executed by Maker as "Mortgagor" to the benefit of
Prudential as "Mortgagee," all as security for repayment of this
Note.
(c) "Event of Default" shall have the meaning given in
the Loan Agreement.
(d) "Interest Rate" means a rate of interest per annum
of eight and seventy-five hundredths percent (8.75%).
(e) "Late Charge(s)" means either the "Per Diem Late
Charge" or the "Monthly Late Charge" (or both), as such terms are
defined in Paragraph 4 below.
(f) "Loan" means that certain loan from Prudential to
Maker in the aggregate principal amount of $280,000,000 evidenced by
this Note, a "Note A-1" in the original principal amount of
$108,350,000, a "Note A-2" in the original principal amount of
$98,350,000, a "Note A-3" in the original principal amount of
$10,000,000, a "Note B-2" in the original principal amount of
$26,650,000, a "Note C-1" in the original principal amount of
$5,000,000, and a "Note C-2" in the original principal amount of
$5,000,000, each of even date herewith and each payable to
Beneficiary or its order, and all modifications, renewals or
extensions thereof.
(g) "Loan Agreement" means that certain Loan Agreement
between Maker and Prudential of even date herewith governing the
terms of the Loan.
(h) "Loan Documents" means this Note, the Deeds of
Trust, all of the Assignments of Lessor's Interest in Leases, the
Security Agreement and all other documents now or hereafter
governing, securing or executed in connection with the Loan.
(i) "Maturity Date" means March 1, 2004.
(j) "Prepayment Amount" means the amount of the
Principal Balance prepaid on a Prepayment Date.
(k) "Prepayment Date" means any date, prior to the
Maturity Date, upon which all or any portion of the Principal
Balance is prepaid.
(l) "Prepayment Premium" shall have the meaning set
forth in Paragraph 6(a).
(m) "Principal Balance" means the principal balance of
this Note from time to time outstanding.
(n) "Secondary Interest Rate" means a rate of interest
per annum of thirteen and seven-tenths percent (13.7%).
2. Payments. On the first day of April 1994 and continuing
on the first day of each calendar month thereafter through and
including the first day of February 2004 (each such first day of the
month being referred to herein as a "Monthly Due Date"), monthly
installments of principal and interest in the amount of $266,353.07
shall be due and payable, with the entire unpaid Principal Balance
plus accrued interest and all other amounts payable under the Loan
Documents being due and payable in full on the Maturity Date. In
the event the Loan closes prior to March 1, 1994, then the amount of
interest accruing on this Note from the date of disbursement through
and including February 28, 1994 shall be paid to Lender on April 1,
1994, which interest shall be paid in addition to the first regular
monthly installment of principal and interest on this Note due on
April 1, 1994.
3. Treatment of Payments. All payments due under this Note
or the Loan Documents shall be paid by Maker in lawful money of the
United States of America by wire transfer on the date such payment
is due. All such payments shall be made without deduction for any
present or future taxes, levies, imposts, deductions, charges or
withholdings All such payments shall be made without deduction for
any present or future taxes, levies, imposts, deductions, charges or
withholdings (other than U.S., state or local income taxes assessed
or levied against or payable by Holder based upon Holder's net
income), which amounts shall be paid by Maker. Payments from Maker
to Holder under this Note shall be applied first to any expense
reimbursements under the Loan Documents, then to any Late Charges,
then to accrued and unpaid interest and the balance to the Principal
Balance and any Prepayment Premium due thereon.
4. Late Charges and Secondary Interest.
(a) If any monthly principal and/or interest payment is
not paid in full on or before the Monthly Due Date for such payment,
then a daily late charge calculated by multiplying the amount of the
monthly payment by a fraction, the numerator of which is 25% and the
denominator of which is 365 (the "Per Diem Late Charge") shall be
assessed for each day that such payment is not paid from (and
including) the first day after such Monthly Due Date to (and
including) the date upon which such payment is made; provided,
however, that if any such monthly principal and/or interest payment,
together with all accrued Per Diem Late Charges, is not made in full
on or before the fifteenth day immediately following such Monthly Due
Date, a late charge equal to 4% of the monthly principal and/or
interest payment (the "Monthly Late Charge") shall be deemed to be
immediately assessed and shall be immediately due and payable. The
Monthly Late Charge shall be payable in lieu of and not in addition to
any Per Diem Late Charges that shall have accrued during the two-week
period immediately preceding the assessment of the Monthly Late
Charge.
(b) Maker acknowledges and agrees that its failure to
make timely payments will result in Holder incurring additional
expense in servicing the Loan, and that it is extremely difficult
and impractical to ascertain the extent of such damages and that the
Late Charge represents a fair and reasonable estimate, considering
all of the circumstances existing on the date of the execution of
this Note, of the costs that Holder will incur by reason of such
late payment. Acceptance of any Late Charge shall not constitute a
waiver of the default with respect to the late payment, and shall
not prevent Holder from exercising any of the other rights or
remedies available hereunder or at law or in equity.
(c) Maker further acknowledges and agrees that during
the time that any payment of principal, interest or other amount due
under this Note shall be delinquent, Holder will incur additional
costs and expenses attributable to its loss of use of the money due
and to the adverse impact on Holder's ability to meet its other
obligations and avail itself of other opportunities. Maker agrees
that it is extremely difficult and impractical to ascertain the
extent of such expenses, and Maker therefore agrees that, upon five
(5) days after written notice of such delinquency has been given by
Prudential to Maker, interest at the Secondary Interest Rate shall
accrue on any delinquent payments of principal, interest or other
amounts due under this Note or any Loan Document from the date such
payments were due and for so long as non-payment continues,
regardless of whether or not there has been an acceleration of the
maturity of the Loan.
5. Event of Default and Secondary Interest. The occurrence
of an "Event of Default" under any Loan Document shall constitute an
Event of Default under this Note. Upon the occurrence of an Event
of Default (including without limitation the failure of the Maker to
observe the provisions of Article IV, Paragraph B of the Deeds of
Trust), Holder, at its option may elect to declare the Principal
Balance together with all unpaid accrued interest, any Prepayment
Premium and any other sums evidenced or secured by this Note or any
Loan Document, to be immediately due and payable, without further
presentment, demand, protest or notice of any kind, by so notifying
Maker in writing, and if Holder so elects the outstanding principal
balance of this Note shall commence to bear interest at the
Secondary Interest Rate from the date of such election until paid in
full.
6. Prepayment.
(a) If for any reason the Principal Balance or any
portion thereof is prepaid (whether by operation of law,
acceleration or otherwise) on a date prior to the Maturity Date,
Maker shall pay to Holder as liquidated damages, immediately upon
demand, together with the subject Prepayment Amount and any unpaid
accrued interest, a Prepayment Premium calculated in accordance with
Exhibit A attached hereto.
(b) Maker shall have the right voluntarily to prepay
all or any portion of the Principal Balance, together with accrued
interest thereon, provided that Maker gives Holder not less than
thirty (30) days prior written notice of its intention to prepay,
and delivers to Holder, on or before the Prepayment Date, the
Prepayment Premium as required above, together with the Prepayment
Amount and all accrued interest and other sums due under the Loan
Documents. In the event Borrower makes a partial prepayment as
permitted herein, the outstanding principal balance following such
prepayment shall be reamortized, and the monthly payment under this
Note recalculated, by Lender in its reasonable discretion, based
upon an amortization period equal to 180 months minus the number of
whole calendar months which have elapsed from the date of
disbursement of the Loan through and including the date of
prepayment. By way of example and not by way of limitation, if a
prepayment is made on July 15, 1996, the outstanding principal
balance following such prepayment shall be reamortized over 152
months. In no event shall the Maturity Date be affected by any such
prepayment, reamortization and change in monthly payment.
(c) Maker agrees that (i) the Prepayment Premium
represents the reasonable estimate of Holder and Maker of a fair
average compensation for the loss that may be sustained by Holder
due to the payment of any of the Principal Balance prior to the
Maturity Date; (ii) the Prepayment Premium shall be paid without
prejudice to the right of Holder to collect any other amounts
provided to be paid hereunder; and (iii) Holder shall not be
obligated to actually reinvest the Prepayment Amount in any Treasury
or other specific obligations as a condition to receiving the
Prepayment Premium.
(d) Notwithstanding anything to the contrary in this
Paragraph 6, Maker shall have the right, upon giving Holder not less
than thirty (30) days prior written notice of its intention to
prepay, to prepay this Note and all other sums owed to Holder by
Maker under the Loan (including, but not limited to, all sums owed
on Note B, all sums owed on Note C and all other payments and
charges due under all of the other Loan Documents), in full at any
time after November 30, 2003, without the payment of any Prepayment
Premium.
(e) Maker hereby expressly waives any right it may
have under California Civil Code 2954.10 to prepay this Note, in
whole or in part, without prepayment charge, upon acceleration of
the Maturity Date of this Note, and agrees that if for any reason a
prepayment of any or all of this Note is made, whether voluntarily
or following any acceleration of the Maturity Date of this Note by
Holder, then Maker shall pay the Prepayment Premium calculated
pursuant to Paragraph 6(a). By initialing this provision in the
space provided below, Maker hereby declares that the Holder's
agreement to make the Loan at the Interest Rate and for the term set
forth in this Note constitutes adequate consideration, given
individual weight by Maker, for this waiver and agreement.
INITIALS OF MAKER: ____________________
7. Security. This Note is secured, among other security,
by the Deeds of Trust and the other Loan Documents, which contain
provisions for the acceleration of the maturity of this Note upon
the occurrence of certain described events.
8. Holder's Rights; No Waiver by Holder. The rights,
powers and remedies of Holder under this Note shall be in addition
to all rights, powers and remedies given to Holder under the Loan
Documents and any other agreement or document securing or evidencing
the Loan or by virtue of any statute or rule of law, including, but
not limited to, the California Uniform Commercial Code. All such
rights, powers and remedies shall be cumulative and may be exercised
successively or concurrently in Holder's sole discretion without
impairing Holder's security interest, rights or available remedies.
Any forbearance, failure or delay by Holder in exercising any right,
power or remedy shall not preclude further exercise thereof, and
every right, power or remedy of Holder shall continue in full force
and effect until such right, power or remedy is specifically waived
in a writing executed by Holder. Maker waives any right to require
the Holder to proceed against any Person or to exhaust all or any
part of the Property or to pursue any remedy in Holder's power.
9. Maker's Waivers.
(a) Except as otherwise expressly provided in the Loan
Agreement, Maker and any endorsers of this Note, and each of them,
hereby waive diligence, demand, presentment for payment, notice of
non-payment, protest and notice of protest, and specifically consent
to and waive notice of any renewals or extensions of this Note,
whether made to or in favor of Maker or any other person or persons.
Maker and any endorsers of this Note expressly waive all right to
the benefit of any statute of limitations and any moratorium,
reinstatement, marshalling, forbearance, extension, redemption, or
appraisement now or hereafter provided by the Constitution and the
laws of the United States and of any state thereof, as a defense to
any demand against Maker or any such endorsers, to the fullest
extent permitted by law.
(b) Maker hereby waives any right to trial by jury
with respect to any action or proceeding brought by Holder or any
other person relating to (i) the Loan, or (ii) the Loan Documents.
(c) Maker hereby agrees that this Note constitutes a
written consent to waiver of trial by jury pursuant to the
provisions of California Code of Civil Procedure Section 631 and
Maker does hereby constitute and appoint Holder its true and lawful
attorney-in-fact, which appointment is coupled with an interest, and
Maker does hereby authorize and empower Holder, in the name, place
and stead of Maker, to file this Note with the clerk or judge of any
court of competent jurisdiction as statutory written consent to
waiver of trial by jury.
10. Transfers by Holder. This Note or any interest in this
Note and the Loan Documents may be hypothecated, transferred or
assigned by Holder only in accordance with Section 16(c) of the Loan
Agreement.
11. Amendment. This Note may be amended or modified only
by an instrument in writing which by its express terms refers to
this Note and which is duly executed by the party sought to be bound
thereby.
12. Successors and Assigns. This Note shall be binding
upon and inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, personal
representatives, successors and permitted assigns.
13. Governing Law. This Note shall be governed by and
construed in accordance with the laws of the State of California.
14. Time. Time is of the essence with respect to each and
every term and provision of this Note.
15. Usury. Notwithstanding any provision herein, the total
liability for payments in the nature of interest shall not exceed
the applicable limits imposed by any applicable state or federal
interest rate laws. If any payments in the nature of interest,
additional interest, and other charges made hereunder are held to be
in excess of the applicable limits imposed by any applicable state
or federal laws, it is agreed that any such amount held to be in
excess shall be considered payment of principal and the Principal
Balance shall be reduced by such amount in the inverse order of
maturity so that the total liability for payments in the nature of
interest, additional interest and other charges shall not exceed the
applicable limits imposed by any applicable state or federal
interest rate laws in compliance with the desires of Holder and
Maker.
16. Notices. All notices, consents and other
communications required or permitted by this Note shall be in
writing and shall be given in the manner set forth in Section 16(i)
of the Loan Agreement.
17. Attorneys' Fees. The undersigned agrees to pay all
costs, including reasonable attorneys' fees and expenses, incurred
by Holder in enforcing payment or collection of this Note or the
terms of any Loan Document, whether or not suit is filed.
18. Limitation on Personal Liabilities.
In the event of an acceleration of the indebtedness
evidenced by this Note upon an event of default thereunder or under
the Deed of Trust, Holder shall not enforce any deficiency judgment
against Maker (hereinafter referred to as the "Exculpated Party")
with respect to any and all obligations evidenced by this Note, in
excess of the amount realized upon foreclosure against (or sale,
pursuant to power of sale, of) any and all security therefor;
provided, however, that nothing contained herein or in any other
Loan Document shall (a) limit Holder's other rights and remedies
against the Exculpated Party hereunder or thereunder, either at law
or in equity, or (b) relieve Exculpated Party from personal
liability and responsibility (i) under the ERISA Section of the
Deeds of Trust, including the indemnification provisions under said
Section, (ii) for waste committed by Exculpated Party with respect
to any Mortgaged Property (as such term is defined in the Deeds of
Trust), (iii) for any security deposits of tenants not turned over
to Holder upon foreclosure or sale pursuant to the power of sale
contained in the Deeds of Trust, (iv) for insurance proceeds and
condemnation awards received by Exculpated Party and not turned over
to Holder or used by Exculpated Party for restoration or repair of
the Mortgaged Property which was damaged or affected, (v) for any
rents or other income from any Mortgaged Property received by
Exculpated Party after an Event of Default or event which with
notice or grace period, or both, would be an Event of Default under
the Loan Documents and not applied to the fixed and operating
expenses of such Mortgaged Property, (vi) for unpaid taxes,
assessments, and/or utility charges with respect to a Mortgaged
Property, (vii) for any sums expended by Holder in fulfilling the
obligations of Exculpated Party, as lessor, under any leases of a
Mortgaged Property and for which obligations either performance was
due at the time of acceleration of the indebtedness by Holder or
became due thereafter prior to foreclosure sale other than during
possession of such Mortgaged Property by a receiver appointed in the
foreclosure action or otherwise appointed at the request of Holder,
(viii) under the Hazardous Substances Remediation and
Indemnification Agreement between Maker and Prudential of even date
herewith and (ix) under any materially false representation and
warranty by Exculpated Party delivered under Paragraph 6.E. of the
Amended and Restated First Mortgage Loan Commitment between Maker
and Prudential dated December 2, 1993 (the "Amended Commitment").
Notwithstanding the foregoing, this agreement not to pursue recourse
liability SHALL BECOME NULL AND VOID and shall be of no further
force and effect in the event:
(a) that there shall be any event occur (other than an
involuntary lien or transfer made without Maker's consent) which
entitled, and the Holder elected, to declare the entire Loan due and
payable under the Due on Sale or Encumbrance provisions in
Article IV, Paragraph B of the Deeds of Trust and the Loan was not
reinstated pursuant to the terms of such Paragraph; or
(b) of any fraud or material misrepresentation by
Maker in connection with any Mortgaged Property, the Loan Documents,
the Amended Commitment, the Original Commitment, including the
Application (as such terms are defined in the Amended Commitment),
the Maker, or any other information furnished to Prudential at or
before the Closing pursuant to the Amended Commitment, the Original
Commitment (including the Application) or the Loan Documents;
provided that as to reports containing a material misrepresentation
where such reports were prepared by, and submitted to Prudential
under the names of independent contractors (such as, but without
limitation, surveyors and environmental consultants), it shall be
deemed a material misrepresentation by Maker only if Maker was aware
of, or was aware of facts or circumstances which would cause a
reasonable person to determine the existence of, such material
misrepresentation.
19. Use of Terms. Maker acknowledges and agrees that, for
Prudential's administrative purposes, the Loan is evidenced by a
total of seven Promissory Notes: (i) Note A is actually represented
by three Notes, "Note A-1" in the original principal amount of
$108,350,000, "Note A-2" in the original principal amount of
$98,350,000 and "Note A-3" in the original principal amount of
$10,000,000 (all three of such promissory notes being hereafter
referred to as Category A Notes), (ii) Note B is actually
represented by two Notes, "Note B-1" in the original principal
amount of $26,650,000 and "Note B-2" in the original principal
amount of $26,650,000 (both of such promissory notes being hereafter
referred to as Category B Notes), and (iii) Note C is actually
represented by two Notes, "Note C-1" in the original principal
amount of $5,000,000 and "Note C-2" in the original principal amount
of $5,000,000 (both of such promissory notes being hereafter
referred to as Category C Notes). The seven promissory notes
described above bear interest at varying rates. Whenever in any of
the Loan Documents Maker is required or permitted to make a payment
or prepayment of principal and/or interest on any of Note A, Note B
and/or Note C, such payment or prepayment shall be allocated by the
Holder to all Notes within the same category in proportion to the
outstanding principal balance of each Note in that category. By way
of example and not by way of limitation, a prepayment of principal
on Note A shall be allocated proportionately among Note A-1, Note A-
2 and Note A-3.
IN WITNESS WHEREOF, Maker has caused this Note to be executed
and delivered effective as of the date first written above.
MAKER:
CATELLUS DEVELOPMENT CORPORATION,
a Delaware corporation
By:
Name: Douglas Stimpson
Title: Vice President Finance
<PAGE>
EXHIBIT A
PREPAYMENT PRIVILEGE
Subject to the provisions of the Loan Agreement, if all
or any portion of this Note is prepaid for any reason,
whether voluntarily or involuntarily, or after acceleration
by Holder upon a default by Maker under the Loan Documents,
Maker shall pay a prepayment premium equal to the greater of
(1) or (2) (hereinafter called the "Prepayment Premium")
where:
(1) is the product of (a) one quarter of one
percent (0.25%) of the Prepayment Amount multiplied by
(b) the quotient of (i) the number of full months remaining
to maturity of the Note as of the Prepayment Date divided by
(ii) the number of full months comprising the term of the
Note; and,
(2) is an amount equal to the Present Value of the
Note (as hereinafter defined) less the amount of principal
being prepaid including accrued interest, if any, calculated
as of the Prepayment Date.
Holder shall notify Maker of the amount and basis of
determination of the Prepayment Premium. On or before the
Prepayment Date, Maker shall pay to Holder the Prepayment
Premium together with the Prepayment Amount and all accrued
interest and other sums due under the Loan. Holder shall not
be obligated to accept any prepayment of the principal
balance of this Note unless such prepayment is accompanied
by the Prepayment Premium and all accrued interest and other
sums due under the Loan.
For the purposes of determining the Prepayment Premium,
the following terms shall have the following meanings:
The "Treasury Rate" is the semi-annual yield on the
Treasury Constant Maturity Series with maturity equal to the
remaining term of the Note, for the week prior to the
Prepayment Date, as reported in Federal Reserve Statistical
Release H.15 - Selected Interest Rates, conclusively
determined by the Holder on the Prepayment Date. The rate
will be determined by linear interpolation between the
yields reported in Release H.15, if necessary. (In the
event Release H.15 is no longer published, Holder shall
select a comparable publication to determine the Treasury
Rate.)
The "Discount Rate" is the rate which, when compounded
monthly, is equivalent to the Treasury Rate, when compounded
semi-annually.
The "Present Value of the Note" shall be determined by
discounting all scheduled payments of principal and interest
remaining to maturity of the Note, attributed to the
Prepayment Amount, at the Discount Rate. If prepayment
occurs on a date other than a Monthly Due Date, the actual
number of days remaining from the Prepayment Date to the
Monthly Due Date will be used to discount within this
period.
Maker agrees that Holder shall not be obligated
actually to reinvest the amount prepaid in any Treasury
obligations as condition precedent to receiving the
Prepayment Premium.
<PAGE>
EXHIBIT B-2
DO NOT DESTROY THIS NOTE: When paid, this Note, and the Deeds of
Trust securing it, must be surrendered to the Trustee under the
Deeds of Trust for cancellation before reconveyance will be made.
PROMISSORY NOTE
(Note B-2)
$26,650,000 Los Angeles, California
Loan No. 6100521 February 16, 1994
FOR VALUE RECEIVED, the undersigned, Catellus Development
Corporation, a Delaware corporation ("Maker"), having an address at
201 Mission Street, 30th Floor, San Francisco, California 94105,
PROMISES TO PAY TO THE ORDER OF THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA ("Prudential"), a New Jersey corporation authorized to do
business in the State of California (Prudential and its successors
and assigns who become holders of this Note are hereinafter
collectively referred to as "Holder"), by Federal wire transfer to
Prudential at Morgan Guaranty Trust Company, 23 Wall Street, New
York, New York 10019, Account No. 050-54-493, referencing Loan
No. 6100521, or at such other place as Holder may from time to time
designate, the principal sum of Twenty-Six Million Six Hundred Fifty
Thousand Dollars ($26,650,000), together with interest thereon from
the date of this Note through the date paid at a rate per annum
equal to the Interest Rate.
1. Definitions. For the purpose of this Note, the following
terms shall have the meanings set forth below. Capitalized terms not
otherwise defined herein shall have the meanings ascribed to such
terms in the Deeds of Trust.
(a) "Closing" means the date upon which the proceeds of
the Loan are disbursed by Prudential to Maker.
(b) "Deeds of Trust" means collectively those certain
documents entitled "Deed of Trust, Security Agreement and Fixture
Filing with Assignment of Rents," of even date herewith, executed by
Maker as "Trustor" to the benefit of Prudential as "Beneficiary,"
and those certain documents entitled "Mortgage" of even date
herewith, executed by Maker as "Mortgagor" to the benefit of
Prudential as "Mortgagee," all as security for repayment of this
Note.
(c) "Event of Default" shall have the meaning given in
the Loan Agreement.
(d) "Interest Rate" means a rate of interest per annum
of eight and sixty-five hundredths percent (8.65%).
(e) "Late Charge(s)" means either the "Per Diem Late
Charge" or the "Monthly Late Charge" (or both), as such terms are
defined in Paragraph 4 below.
(f) "Loan" means that certain loan from Prudential to
Maker in the aggregate principal amount of $280,000,000 evidenced by
this Note, a "Note A-1" in the original principal amount of
$108,350,000, a "Note A-2" in the original principal amount of
$98,350,000, a "Note A-3" in the original principal amount of
$10,000,000, a "Note B-1" in the original principal amount of
$26,650,000, a "Note C-1" in the original principal amount of
$5,000,000, and a "Note C-2" in the original principal amount of
$5,000,000, each of even date herewith and each payable to
Beneficiary or its order, and all modifications, renewals or
extensions thereof.
(g) "Loan Agreement" means that certain Loan Agreement
between Maker and Prudential of even date herewith governing the
terms of the Loan.
(h) "Loan Documents" means this Note, the Deeds of
Trust, all of the Assignments of Lessor's Interest in Leases, the
Security Agreement and all other documents now or hereafter
governing, securing or executed in connection with the Loan.
(i) "Maturity Date" means March 1, 2004.
(j) "Prepayment Amount" means the amount of the
Principal Balance prepaid on a Prepayment Date.
(k) "Prepayment Date" means any date, prior to the
Maturity Date, upon which all or any portion of the Principal
Balance is prepaid.
(l) "Prepayment Premium" shall have the meaning set
forth in Paragraph 6(a).
(m) "Principal Balance" means the principal balance of
this Note from time to time outstanding.
(n) "Secondary Interest Rate" means a rate of interest
per annum of thirteen and seven-tenths percent (13.7%).
2. Payments. On the first day of April 1994 and continuing
on the first day of each calendar month thereafter through and
including the first day of February 2004 (each such first day of the
month being referred to herein as a "Monthly Due Date"), monthly
installments of principal and interest in the amount of $264,781.58
shall be due and payable, with the entire unpaid Principal Balance
plus accrued interest and all other amounts payable under the Loan
Documents being due and payable in full on the Maturity Date. In
the event the Loan closes prior to March 1, 1994, then the amount of
interest accruing on this Note from the date of disbursement through
and including February 28, 1994 shall be paid to Lender on April 1,
1994, which interest shall be paid in addition to the first regular
monthly installment of principal and interest on this Note due on
April 1, 1994.
3. Treatment of Payments. All payments due under this Note
or the Loan Documents shall be paid by Maker in lawful money of the
United States of America by wire transfer on the date such payment
is due. All such payments shall be made without deduction for any
present or future taxes, levies, imposts, deductions, charges or
withholdings All such payments shall be made without deduction for
any present or future taxes, levies, imposts, deductions, charges or
withholdings (other than U.S., state or local income taxes assessed
or levied against or payable by Holder based upon Holder's net
income), which amounts shall be paid by Maker. Payments from Maker
to Holder under this Note shall be applied first to any expense
reimbursements under the Loan Documents, then to any Late Charges,
then to accrued and unpaid interest and the balance to the Principal
Balance and any Prepayment Premium due thereon.
4. Late Charges and Secondary Interest.
(a) If any monthly principal and/or interest payment is
not paid in full on or before the Monthly Due Date for such payment,
then a daily late charge calculated by multiplying the amount of the
monthly payment by a fraction, the numerator of which is 25% and the
denominator of which is 365 (the "Per Diem Late Charge") shall be
assessed for each day that such payment is not paid from (and
including) the first day after such Monthly Due Date to (and
including) the date upon which such payment is made; provided,
however, that if any such monthly principal and/or interest payment,
together with all accrued Per Diem Late Charges, is not made in full
on or before the fifteenth day immediately following such Monthly Due
Date, a late charge equal to 4% of the monthly principal and/or
interest payment (the "Monthly Late Charge") shall be deemed to be
immediately assessed and shall be immediately due and payable. The
Monthly Late Charge shall be payable in lieu of and not in addition to
any Per Diem Late Charges that shall have accrued during the two-week
period immediately preceding the assessment of the Monthly Late
Charge.
(b) Maker acknowledges and agrees that its failure to
make timely payments will result in Holder incurring additional
expense in servicing the Loan, and that it is extremely difficult
and impractical to ascertain the extent of such damages and that the
Late Charge represents a fair and reasonable estimate, considering
all of the circumstances existing on the date of the execution of
this Note, of the costs that Holder will incur by reason of such
late payment. Acceptance of any Late Charge shall not constitute a
waiver of the default with respect to the late payment, and shall
not prevent Holder from exercising any of the other rights or
remedies available hereunder or at law or in equity.
(c) Maker further acknowledges and agrees that during
the time that any payment of principal, interest or other amount due
under this Note shall be delinquent, Holder will incur additional
costs and expenses attributable to its loss of use of the money due
and to the adverse impact on Holder's ability to meet its other
obligations and avail itself of other opportunities. Maker agrees
that it is extremely difficult and impractical to ascertain the
extent of such expenses, and Maker therefore agrees that, upon five
(5) days after written notice of such delinquency has been given by
Prudential to Maker, interest at the Secondary Interest Rate shall
accrue on any delinquent payments of principal, interest or other
amounts due under this Note or any Loan Document from the date such
payments were due and for so long as non-payment continues,
regardless of whether or not there has been an acceleration of the
maturity of the Loan.
5. Event of Default and Secondary Interest. The occurrence
of an "Event of Default" under any Loan Document shall constitute an
Event of Default under this Note. Upon the occurrence of an Event
of Default (including without limitation the failure of the Maker to
observe the provisions of Article IV, Paragraph B of the Deeds of
Trust), Holder, at its option may elect to declare the Principal
Balance together with all unpaid accrued interest, any Prepayment
Premium and any other sums evidenced or secured by this Note or any
Loan Document, to be immediately due and payable, without further
presentment, demand, protest or notice of any kind, by so notifying
Maker in writing, and if Holder so elects the outstanding principal
balance of this Note shall commence to bear interest at the
Secondary Interest Rate from the date of such election until paid in
full.
6. Prepayment.
(a) If for any reason the Principal Balance or any
portion thereof is prepaid (whether by operation of law,
acceleration or otherwise) on a date prior to the Maturity Date,
Maker shall pay to Holder as liquidated damages, immediately upon
demand, together with the subject Prepayment Amount and any unpaid
accrued interest, a Prepayment Premium calculated in accordance with
Exhibit A attached hereto.
(b) Maker shall have the right voluntarily to prepay
all or any portion of the Principal Balance, together with accrued
interest thereon, provided that Maker gives Holder not less than
thirty (30) days prior written notice of its intention to prepay,
and delivers to Holder, on or before the Prepayment Date, the
Prepayment Premium as required above, together with the Prepayment
Amount and all accrued interest and other sums due under the Loan
Documents. In the event Borrower makes a partial prepayment as
permitted herein, the outstanding principal balance following such
prepayment shall be reamortized, and the monthly payment under this
Note recalculated, by Lender in its reasonable discretion, based
upon an amortization period equal to 180 months minus the number of
whole calendar months which have elapsed from the date of
disbursement of the Loan through and including the date of
prepayment. By way of example and not by way of limitation, if a
prepayment is made on July 15, 1996, the outstanding principal
balance following such prepayment shall be reamortized over 152
months. In no event shall the Maturity Date be affected by any such
prepayment, reamortization and change in monthly payment.
(c) Maker agrees that (i) the Prepayment Premium
represents the reasonable estimate of Holder and Maker of a fair
average compensation for the loss that may be sustained by Holder
due to the payment of any of the Principal Balance prior to the
Maturity Date; (ii) the Prepayment Premium shall be paid without
prejudice to the right of Holder to collect any other amounts
provided to be paid hereunder; and (iii) Holder shall not be
obligated to actually reinvest the Prepayment Amount in any Treasury
or other specific obligations as a condition to receiving the
Prepayment Premium.
(d) Notwithstanding anything to the contrary in this
Paragraph 6, Maker shall have the right, upon giving Holder not less
than thirty (30) days prior written notice of its intention to
prepay, to prepay this Note and all other sums owed to Holder by
Maker under the Loan (including, but not limited to, all sums owed
on Note B, all sums owed on Note C and all other payments and
charges due under all of the other Loan Documents), in full at any
time after November 30, 2003, without the payment of any Prepayment
Premium.
(e) Maker hereby expressly waives any right it may
have under California Civil Code 2954.10 to prepay this Note, in
whole or in part, without prepayment charge, upon acceleration of
the Maturity Date of this Note, and agrees that if for any reason a
prepayment of any or all of this Note is made, whether voluntarily
or following any acceleration of the Maturity Date of this Note by
Holder, then Maker shall pay the Prepayment Premium calculated
pursuant to Paragraph 6(a). By initialing this provision in the
space provided below, Maker hereby declares that the Holder's
agreement to make the Loan at the Interest Rate and for the term set
forth in this Note constitutes adequate consideration, given
individual weight by Maker, for this waiver and agreement.
INITIALS OF MAKER: ____________________
7. Security. This Note is secured, among other security,
by the Deeds of Trust and the other Loan Documents, which contain
provisions for the acceleration of the maturity of this Note upon
the occurrence of certain described events.
8. Holder's Rights; No Waiver by Holder. The rights,
powers and remedies of Holder under this Note shall be in addition
to all rights, powers and remedies given to Holder under the Loan
Documents and any other agreement or document securing or evidencing
the Loan or by virtue of any statute or rule of law, including, but
not limited to, the California Uniform Commercial Code. All such
rights, powers and remedies shall be cumulative and may be exercised
successively or concurrently in Holder's sole discretion without
impairing Holder's security interest, rights or available remedies.
Any forbearance, failure or delay by Holder in exercising any right,
power or remedy shall not preclude further exercise thereof, and
every right, power or remedy of Holder shall continue in full force
and effect until such right, power or remedy is specifically waived
in a writing executed by Holder. Maker waives any right to require
the Holder to proceed against any Person or to exhaust all or any
part of the Property or to pursue any remedy in Holder's power.
9. Maker's Waivers.
(a) Except as otherwise expressly provided in the Loan
Agreement, Maker and any endorsers of this Note, and each of them,
hereby waive diligence, demand, presentment for payment, notice of
non-payment, protest and notice of protest, and specifically consent
to and waive notice of any renewals or extensions of this Note,
whether made to or in favor of Maker or any other person or persons.
Maker and any endorsers of this Note expressly waive all right to
the benefit of any statute of limitations and any moratorium,
reinstatement, marshalling, forbearance, extension, redemption, or
appraisement now or hereafter provided by the Constitution and the
laws of the United States and of any state thereof, as a defense to
any demand against Maker or any such endorsers, to the fullest
extent permitted by law.
(b) Maker hereby waives any right to trial by jury
with respect to any action or proceeding brought by Holder or any
other person relating to (i) the Loan, or (ii) the Loan Documents.
(c) Maker hereby agrees that this Note constitutes a
written consent to waiver of trial by jury pursuant to the
provisions of California Code of Civil Procedure Section 631 and
Maker does hereby constitute and appoint Holder its true and lawful
attorney-in-fact, which appointment is coupled with an interest, and
Maker does hereby authorize and empower Holder, in the name, place
and stead of Maker, to file this Note with the clerk or judge of any
court of competent jurisdiction as statutory written consent to
waiver of trial by jury.
10. Transfers by Holder. This Note or any interest in this
Note and the Loan Documents may be hypothecated, transferred or
assigned by Holder only in accordance with Section 16(c) of the Loan
Agreement.
11. Amendment. This Note may be amended or modified only
by an instrument in writing which by its express terms refers to
this Note and which is duly executed by the party sought to be bound
thereby.
12. Successors and Assigns. This Note shall be binding
upon and inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, personal
representatives, successors and permitted assigns.
13. Governing Law. This Note shall be governed by and
construed in accordance with the laws of the State of California.
14. Time. Time is of the essence with respect to each and
every term and provision of this Note.
15. Usury. Notwithstanding any provision herein, the total
liability for payments in the nature of interest shall not exceed
the applicable limits imposed by any applicable state or federal
interest rate laws. If any payments in the nature of interest,
additional interest, and other charges made hereunder are held to be
in excess of the applicable limits imposed by any applicable state
or federal laws, it is agreed that any such amount held to be in
excess shall be considered payment of principal and the Principal
Balance shall be reduced by such amount in the inverse order of
maturity so that the total liability for payments in the nature of
interest, additional interest and other charges shall not exceed the
applicable limits imposed by any applicable state or federal
interest rate laws in compliance with the desires of Holder and
Maker.
16. Notices. All notices, consents and other
communications required or permitted by this Note shall be in
writing and shall be given in the manner set forth in Section 16(i)
of the Loan Agreement.
17. Attorneys' Fees. The undersigned agrees to pay all
costs, including reasonable attorneys' fees and expenses, incurred
by Holder in enforcing payment or collection of this Note or the
terms of any Loan Document, whether or not suit is filed.
18. Limitation on Personal Liabilities.
In the event of an acceleration of the indebtedness
evidenced by this Note upon an event of default thereunder or under
the Deed of Trust, Holder shall not enforce any deficiency judgment
against Maker (hereinafter referred to as the "Exculpated Party")
with respect to any and all obligations evidenced by this Note, in
excess of the amount realized upon foreclosure against (or sale,
pursuant to power of sale, of) any and all security therefor;
provided, however, that nothing contained herein or in any other
Loan Document shall (a) limit Holder's other rights and remedies
against the Exculpated Party hereunder or thereunder, either at law
or in equity, or (b) relieve Exculpated Party from personal
liability and responsibility (i) under the ERISA Section of the
Deeds of Trust, including the indemnification provisions under said
Section, (ii) for waste committed by Exculpated Party with respect
to any Mortgaged Property (as such term is defined in the Deeds of
Trust), (iii) for any security deposits of tenants not turned over
to Holder upon foreclosure or sale pursuant to the power of sale
contained in the Deeds of Trust, (iv) for insurance proceeds and
condemnation awards received by Exculpated Party and not turned over
to Holder or used by Exculpated Party for restoration or repair of
the Mortgaged Property which was damaged or affected, (v) for any
rents or other income from any Mortgaged Property received by
Exculpated Party after an Event of Default or event which with
notice or grace period, or both, would be an Event of Default under
the Loan Documents and not applied to the fixed and operating
expenses of such Mortgaged Property, (vi) for unpaid taxes,
assessments, and/or utility charges with respect to a Mortgaged
Property, (vii) for any sums expended by Holder in fulfilling the
obligations of Exculpated Party, as lessor, under any leases of a
Mortgaged Property and for which obligations either performance was
due at the time of acceleration of the indebtedness by Holder or
became due thereafter prior to foreclosure sale other than during
possession of such Mortgaged Property by a receiver appointed in the
foreclosure action or otherwise appointed at the request of Holder,
(viii) under the Hazardous Substances Remediation and
Indemnification Agreement between Maker and Prudential of even date
herewith and (ix) under any materially false representation and
warranty by Exculpated Party delivered under Paragraph 6.E. of the
Amended and Restated First Mortgage Loan Commitment between Maker
and Prudential dated December 2, 1993 (the "Amended Commitment").
Notwithstanding the foregoing, this agreement not to pursue recourse
liability SHALL BECOME NULL AND VOID and shall be of no further
force and effect in the event:
(a) that there shall be any event occur (other than an
involuntary lien or transfer made without Maker's consent) which
entitled, and the Holder elected, to declare the entire Loan due and
payable under the Due on Sale or Encumbrance provisions in
Article IV, Paragraph B of the Deeds of Trust and the Loan was not
reinstated pursuant to the terms of such Paragraph; or
(b) of any fraud or material misrepresentation by
Maker in connection with any Mortgaged Property, the Loan Documents,
the Amended Commitment, the Original Commitment, including the
Application (as such terms are defined in the Amended Commitment),
the Maker, or any other information furnished to Prudential at or
before the Closing pursuant to the Amended Commitment, the Original
Commitment (including the Application) or the Loan Documents;
provided that as to reports containing a material misrepresentation
where such reports were prepared by, and submitted to Prudential
under the names of independent contractors (such as, but without
limitation, surveyors and environmental consultants), it shall be
deemed a material misrepresentation by Maker only if Maker was aware
of, or was aware of facts or circumstances which would cause a
reasonable person to determine the existence of, such material
misrepresentation.
19. Use of Terms. Maker acknowledges and agrees that, for
Prudential's administrative purposes, the Loan is evidenced by a
total of seven Promissory Notes: (i) Note A is actually represented
by three Notes, "Note A-1" in the original principal amount of
$108,350,000, "Note A-2" in the original principal amount of
$98,350,000 and "Note A-3" in the original principal amount of
$10,000,000 (all three of such promissory notes being hereafter
referred to as Category A Notes), (ii) Note B is actually
represented by two Notes, "Note B-1" in the original principal
amount of $26,650,000 and "Note B-2" in the original principal
amount of $26,650,000 (both of such promissory notes being hereafter
referred to as Category B Notes), and (iii) Note C is actually
represented by two Notes, "Note C-1" in the original principal
amount of $5,000,000 and "Note C-2" in the original principal amount
of $5,000,000 (both of such promissory notes being hereafter
referred to as Category C Notes). The seven promissory notes
described above bear interest at varying rates. Whenever in any of
the Loan Documents Maker is required or permitted to make a payment
or prepayment of principal and/or interest on any of Note A, Note B
and/or Note C, such payment or prepayment shall be allocated by the
Holder to all Notes within the same category in proportion to the
outstanding principal balance of each Note in that category. By way
of example and not by way of limitation, a prepayment of principal
on Note A shall be allocated proportionately among Note A-1, Note A-
2 and Note A-3.
IN WITNESS WHEREOF, Maker has caused this Note to be executed
and delivered effective as of the date first written above.
MAKER:
CATELLUS DEVELOPMENT CORPORATION,
a Delaware corporation
By:
Name: Douglas Stimpson
Title: Vice President Finance
<PAGE>
EXHIBIT A
PREPAYMENT PRIVILEGE
Subject to the provisions of the Loan Agreement, if all
or any portion of this Note is prepaid for any reason,
whether voluntarily or involuntarily, or after acceleration
by Holder upon a default by Maker under the Loan Documents,
Maker shall pay a prepayment premium equal to the greater of
(1) or (2) (hereinafter called the "Prepayment Premium")
where:
(1) is the product of (a) one quarter of one
percent (0.25%) of the Prepayment Amount multiplied by
(b) the quotient of (i) the number of full months remaining
to maturity of the Note as of the Prepayment Date divided by
(ii) the number of full months comprising the term of the
Note; and,
(2) is an amount equal to the Present Value of the
Note (as hereinafter defined) less the amount of principal
being prepaid including accrued interest, if any, calculated
as of the Prepayment Date.
Holder shall notify Maker of the amount and basis of
determination of the Prepayment Premium. On or before the
Prepayment Date, Maker shall pay to Holder the Prepayment
Premium together with the Prepayment Amount and all accrued
interest and other sums due under the Loan. Holder shall not
be obligated to accept any prepayment of the principal
balance of this Note unless such prepayment is accompanied
by the Prepayment Premium and all accrued interest and other
sums due under the Loan.
For the purposes of determining the Prepayment Premium,
the following terms shall have the following meanings:
The "Treasury Rate" is the semi-annual yield on the
Treasury Constant Maturity Series with maturity equal to the
remaining term of the Note, for the week prior to the
Prepayment Date, as reported in Federal Reserve Statistical
Release H.15 - Selected Interest Rates, conclusively
determined by the Holder on the Prepayment Date. The rate
will be determined by linear interpolation between the
yields reported in Release H.15, if necessary. (In the
event Release H.15 is no longer published, Holder shall
select a comparable publication to determine the Treasury
Rate.)
The "Discount Rate" is the rate which, when compounded
monthly, is equivalent to the Treasury Rate, when compounded
semi-annually.
The "Present Value of the Note" shall be determined by
discounting all scheduled payments of principal and interest
remaining to maturity of the Note, attributed to the
Prepayment Amount, at the Discount Rate. If prepayment
occurs on a date other than a Monthly Due Date, the actual
number of days remaining from the Prepayment Date to the
Monthly Due Date will be used to discount within this
period.
Maker agrees that Holder shall not be obligated
actually to reinvest the amount prepaid in any Treasury
obligations as condition precedent to receiving the
Prepayment Premium.
<PAGE>
EXHIBIT C-1
DO NOT DESTROY THIS NOTE: When paid, this Note, and the Deeds of
Trust securing it, must be surrendered to the Trustee under the
Deeds of Trust for cancellation before reconveyance will be made.
PROMISSORY NOTE
(Note C-1)
$5,000,000 Los Angeles, California
Loan No. 6100518 February 16, 1994
FOR VALUE RECEIVED, the undersigned, Catellus Development
Corporation, a Delaware corporation ("Maker"), having an address at
201 Mission Street, 30th Floor, San Francisco, California 94105,
PROMISES TO PAY TO THE ORDER OF THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA ("Prudential"), a New Jersey corporation authorized to do
business in the State of California (Prudential and its successors
and assigns who become holders of this Note are hereinafter
collectively referred to as "Holder"), by Federal wire transfer to
Prudential at Morgan Guaranty Trust Company, 23 Wall Street, New
York, New York 10019, Account No. 050-54-493, referencing Loan
No. 6100518, or at such other place as Holder may from time to time
designate, the principal sum of Five Million Dollars ($5,000,000),
together with interest thereon from the date of this Note through
the date paid at a rate per annum equal to the Interest Rate.
1. Definitions. For the purpose of this Note, the following
terms shall have the meanings set forth below. Capitalized terms not
otherwise defined herein shall have the meanings ascribed to such
terms in the Deeds of Trust.
(a) "Closing" means the date upon which the proceeds of
the Loan are disbursed by Prudential to Maker.
(b) "Deeds of Trust" means collectively those certain
documents entitled "Deed of Trust, Security Agreement, Fixture
Filing with Assignment of Rents," of even date herewith, executed by
Maker as "Trustor" to the benefit of Prudential as "Beneficiary,"
and those certain documents entitled "Mortgage" of even date
herewith, executed by Maker as "Mortgagor" to the benefit of
Prudential as "Mortgagee," all as security for repayment of this
Note.
(c) "Event of Default" shall have the meaning given in
the Loan Agreement.
(d) "Interest Rate" means a rate of interest per annum
of eight and seventy-five hundredths percent (8.75%).
(e) "Late Charge(s)" means either the "Per Diem Late
Charge" or the "Monthly Late Charge" (or both), as such terms are
defined in Paragraph 4 below.
(f) "Loan" means that certain loan from Prudential to
Maker in the aggregate principal amount of $280,000,000 evidenced by
this Note, a "Note A-1" in the original principal amount of
$108,350,000, a "Note A-2" in the original principal amount of
$98,350,000, a "Note A-3" in the original principal amount of
$10,000,000, a "Note B-1" in the original principal amount of
$26,650,000, a "Note B-2" in the original principal amount of
$26,650,000, and a "Note C-2" in the original principal amount of
$5,000,000, each of even date herewith and each payable to
Beneficiary or its order, and all modifications, renewals or
extensions thereof.
(g) "Loan Agreement" means that certain Loan Agreement
between Maker and Prudential of even date herewith governing the
terms of the Loan.
(h) "Loan Documents" means this Note, the Deeds of
Trust, all of the Assignments of Lessor's Interest in Leases, the
Security Agreement and all other documents now or hereafter
governing, securing or executed in connection with the Loan.
(i) "Maturity Date" means July 1, 1997.
(j) "Prepayment Amount" means the amount of the
Principal Balance prepaid on a Prepayment Date.
(k) "Prepayment Date" means any date, prior to the
Maturity Date, upon which all or any portion of the Principal
Balance is prepaid.
(l) "Prepayment Premium" shall have the meaning set
forth in Paragraph 6(a).
(m) "Principal Balance" means the principal balance of
this Note from time to time outstanding.
(n) "Secondary Interest Rate" means a rate of interest
per annum of thirteen and seven-tenths percent (13.7%).
2. Payments. On the first day of April 1994 and continuing
on the first day of each calendar month thereafter through and
including the first day of June 1997 (each such first day of the
month being referred to herein as a "Monthly Due Date"), monthly
installments of principal and interest in the amount of $144,566.03
shall be due and payable, with the entire unpaid Principal Balance
plus accrued interest and all other amounts payable under the Loan
Documents being due and payable in full on the Maturity Date. In
the event the Loan closes prior to March 1, 1994, then the amount of
interest accruing on this Note from the date of disbursement through
and including February 28, 1994 shall be paid to Lender on April 1,
1994, which interest shall be paid in addition to the first regular
monthly installment of principal and interest on this Note due on
April 1, 1994.
3. Treatment of Payments. All payments due under this Note
or the Loan Documents shall be paid by Maker in lawful money of the
United States of America by wire transfer on the date such payment
is due. All such payments shall be made without deduction for any
present or future taxes, levies, imposts, deductions, charges or
withholdings (other than U.S., state or local income taxes assessed
or levied against or payable by Holder based upon Holder's net
income), which amounts shall be paid by Maker. Payments from Maker
to Holder under this Note shall be applied first to any expense
reimbursements under the Loan Documents, then to any Late Charges,
then to accrued and unpaid interest and the balance to the Principal
Balance and any Prepayment Premium due thereon.
4. Late Charges and Secondary Interest.
(a) If any monthly principal and/or interest payment is
not paid in full on or before the Monthly Due Date for such payment,
then a daily late charge calculated by multiplying the amount of the
monthly payment by a fraction, the numerator of which is 25% and the
denominator of which is 365 (the "Per Diem Late Charge") shall be
assessed for each day that such payment is not paid from (and
including) the first day after such Monthly Due Date to (and
including) the date upon which such payment is made; provided,
however, that if any such monthly principal and/or interest payment,
together with all accrued Per Diem Late Charges, is not made in full
on or before the fifteenth day immediately following such Monthly Due
Date, a late charge equal to 4% of the monthly principal and/or
interest payment (the "Monthly Late Charge") shall be deemed to be
immediately assessed and shall be immediately due and payable. The
Monthly Late Charge shall be payable in lieu of and not in addition to
any Per Diem Late Charges that shall have accrued during the two-week
period immediately preceding the assessment of the Monthly Late
Charge.
(b) Maker acknowledges and agrees that its failure to
make timely payments will result in Holder incurring additional
expense in servicing the Loan, and that it is extremely difficult
and impractical to ascertain the extent of such damages and that the
Late Charge represents a fair and reasonable estimate, considering
all of the circumstances existing on the date of the execution of
this Note, of the costs that Holder will incur by reason of such
late payment. Acceptance of any Late Charge shall not constitute a
waiver of the default with respect to the late payment, and shall
not prevent Holder from exercising any of the other rights or
remedies available hereunder or at law or in equity.
(c) Maker further acknowledges and agrees that during
the time that any payment of principal, interest or other amount due
under this Note shall be delinquent, Holder will incur additional
costs and expenses attributable to its loss of use of the money due
and to the adverse impact on Holder's ability to meet its other
obligations and avail itself of other opportunities. Maker agrees
that it is extremely difficult and impractical to ascertain the
extent of such expenses, and Maker therefore agrees that, upon five
(5) days after written notice of such delinquency has been given by
Prudential to Maker, interest at the Secondary Interest Rate shall
accrue on any delinquent payments of principal, interest or other
amounts due under this Note or any Loan Document from the date such
payments were due and for so long as non-payment continues,
regardless of whether or not there has been an acceleration of the
maturity of the Loan.
5. Event of Default and Secondary Interest. The occurrence
of an "Event of Default" under any Loan Document shall constitute an
Event of Default under this Note. Upon the occurrence of an Event
of Default (including without limitation the failure of the Maker to
observe the provisions of Article IV, Paragraph B of the Deeds of
Trust), Holder, at its option may elect to declare the Principal
Balance together with all unpaid accrued interest, any Prepayment
Premium and any other sums evidenced or secured by this Note or any
Loan Document, to be immediately due and payable, without further
presentment, demand, protest or notice of any kind, by so notifying
Maker in writing, and if Holder so elects the outstanding principal
balance of this Note shall commence to bear interest at the
Secondary Interest Rate from the date of such election until paid in
full.
6. Prepayment.
(a) If for any reason the Principal Balance or any
portion thereof is prepaid (whether by operation of law,
acceleration or otherwise) on a date prior to the Maturity Date,
Maker shall pay to Holder as liquidated damages, immediately upon
demand, together with the subject Prepayment Amount and any unpaid
accrued interest, a Prepayment Premium calculated in accordance with
Exhibit A attached hereto.
(b) Maker shall have the right voluntarily to prepay
all or any portion of the Principal Balance, together with accrued
interest thereon, provided that Maker gives Holder not less than
thirty (30) days prior written notice of its intention to prepay,
and delivers to Holder, on or before the Prepayment Date, the
Prepayment Premium as required above, together with the Prepayment
Amount and all accrued interest and other sums due under the Loan
Documents. In the event Borrower makes a partial prepayment as
permitted herein, the outstanding principal balance following such
prepayment shall be reamortized, and the monthly payment under this
Note recalculated, by Lender in its reasonable discretion, based
upon an amortization period equal to 40 months minus the number of
whole calendar months which have elapsed from the date of
disbursement of the Loan through and including the date of
prepayment. By way of example and not by way of limitation, if a
prepayment is made on July 15, 1996, the outstanding principal
balance following such prepayment shall be reamortized over 12
months. In no event shall the Maturity Date be affected by any such
prepayment, reamortization and change in monthly payment.
(c) Maker agrees that (i) the Prepayment Premium
represents the reasonable estimate of Holder and Maker of a fair
average compensation for the loss that may be sustained by Holder
due to the payment of any of the Principal Balance prior to the
Maturity Date; (ii) the Prepayment Premium shall be paid without
prejudice to the right of Holder to collect any other amounts
provided to be paid hereunder; and (iii) Holder shall not be
obligated to actually reinvest the Prepayment Amount in any Treasury
or other specific obligations as a condition to receiving the
Prepayment Premium.
(d) Maker hereby expressly waives any right it may
have under California Civil Code 2954.10 to prepay this Note, in
whole or in part, without prepayment charge, upon acceleration of
the Maturity Date of this Note, and agrees that if for any reason a
prepayment of any or all of this Note is made, whether voluntarily
or following any acceleration of the Maturity Date of this Note by
Holder, then Maker shall pay the Prepayment Premium calculated
pursuant to Paragraph 6(a). By initialing this provision in the
space provided below, Maker hereby declares that the Holder's
agreement to make the Loan at the Interest Rate and for the term set
forth in this Note constitutes adequate consideration, given
individual weight by Maker, for this waiver and agreement.
INITIALS OF MAKER: ____________________
7. Security. This Note is secured, among other security,
by the Deeds of Trust and the other Loan Documents, which contain
provisions for the acceleration of the maturity of this Note upon
the occurrence of certain described events.
8. Holder's Rights; No Waiver by Holder. The rights,
powers and remedies of Holder under this Note shall be in addition
to all rights, powers and remedies given to Holder under the Loan
Documents and any other agreement or document securing or evidencing
the Loan or by virtue of any statute or rule of law, including, but
not limited to, the California Uniform Commercial Code. All such
rights, powers and remedies shall be cumulative and may be exercised
successively or concurrently in Holder's sole discretion without
impairing Holder's security interest, rights or available remedies.
Any forbearance, failure or delay by Holder in exercising any right,
power or remedy shall not preclude further exercise thereof, and
every right, power or remedy of Holder shall continue in full force
and effect until such right, power or remedy is specifically waived
in a writing executed by Holder. Maker waives any right to require
the Holder to proceed against any Person or to exhaust all or any
part of the Property or to pursue any remedy in Holder's power.
9. Maker's Waivers.
(a) Except as otherwise expressly provided in the Loan
Agreement, Maker and any endorsers of this Note, and each of them,
hereby waive diligence, demand, presentment for payment, notice of
non-payment, protest and notice of protest, and specifically consent
to and waive notice of any renewals or extensions of this Note,
whether made to or in favor of Maker or any other person or persons.
Maker and any endorsers of this Note expressly waive all right to
the benefit of any statute of limitations and any moratorium,
reinstatement, marshalling, forbearance, extension, redemption, or
appraisement now or hereafter provided by the Constitution and the
laws of the United States and of any state thereof, as a defense to
any demand against Maker or any such endorsers, to the fullest
extent permitted by law.
(b) Maker hereby waives any right to trial by jury
with respect to any action or proceeding brought by Holder or any
other person relating to (i) the Loan, or (ii) the Loan Documents.
(c) Maker hereby agrees that this Note constitutes a
written consent to waiver of trial by jury pursuant to the
provisions of California Code of Civil Procedure Section 631 and
Maker does hereby constitute and appoint Holder its true and lawful
attorney-in-fact, which appointment is coupled with an interest, and
Maker does hereby authorize and empower Holder, in the name, place
and stead of Maker, to file this Note with the clerk or judge of any
court of competent jurisdiction as statutory written consent to
waiver of trial by jury.
10. Transfers by Holder. This Note or any interest in this
Note and the Loan Documents may be hypothecated, transferred or
assigned by Holder only in accordance with Section 16(c) of the Loan
Agreement.
11. Amendment. This Note may be amended or modified only
by an instrument in writing which by its express terms refers to
this Note and which is duly executed by the party sought to be bound
thereby.
12. Successors and Assigns. This Note shall be binding
upon and inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, personal
representatives, successors and permitted assigns.
13. Governing Law. This Note shall be governed by and
construed in accordance with the laws of the State of California.
14. Time. Time is of the essence with respect to each and
every term and provision of this Note.
15. Usury. Notwithstanding any provision herein, the total
liability for payments in the nature of interest shall not exceed
the applicable limits imposed by any applicable state or federal
interest rate laws. If any payments in the nature of interest,
additional interest, and other charges made hereunder are held to be
in excess of the applicable limits imposed by any applicable state
or federal laws, it is agreed that any such amount held to be in
excess shall be considered payment of principal and the Principal
Balance shall be reduced by such amount in the inverse order of
maturity so that the total liability for payments in the nature of
interest, additional interest and other charges shall not exceed the
applicable limits imposed by any applicable state or federal
interest rate laws in compliance with the desires of Holder and
Maker.
16. Notices. All notices, consents and other
communications required or permitted by this Note shall be in
writing and shall be given in the manner set forth in Section 16(i)
of the Loan Agreement.
17. Attorneys' Fees. The undersigned agrees to pay all
costs, including reasonable attorneys' fees and expenses, incurred
by Holder in enforcing payment or collection of this Note or the
terms of any Loan Document, whether or not suit is filed.
18. Limitation on Personal Liabilities.
In the event of an acceleration of the indebtedness
evidenced by this Note upon an event of default thereunder or under
the Deed of Trust, Holder shall not enforce any deficiency judgment
against Maker (hereinafter referred to as the "Exculpated Party")
with respect to any and all obligations evidenced by this Note, in
excess of the amount realized upon foreclosure against (or sale,
pursuant to power of sale, of) any and all security therefor;
provided, however, that nothing contained herein or in any other
Loan Document shall (a) limit Holder's other rights and remedies
against the Exculpated Party hereunder or thereunder, either at law
or in equity, or (b) relieve Exculpated Party from personal
liability and responsibility (i) under the ERISA Section of the
Deeds of Trust, including the indemnification provisions under said
Section, (ii) for waste committed by Exculpated Party with respect
to any Mortgaged Property (as such term is defined in the Deeds of
Trust), (iii) for any security deposits of tenants not turned over
to Holder upon foreclosure or sale pursuant to the power of sale
contained in the Deeds of Trust, (iv) for insurance proceeds and
condemnation awards received by Exculpated Party and not turned over
to Holder or used by Exculpated Party for restoration or repair of
the Mortgaged Property which was damaged or affected, (v) for any
rents or other income from any Mortgaged Property received by
Exculpated Party after an Event of Default or event which with
notice or grace period, or both, would be an Event of Default under
the Loan Documents and not applied to the fixed and operating
expenses of such Mortgaged Property, (vi) for unpaid taxes,
assessments, and/or utility charges with respect to a Mortgaged
Property, (vii) for any sums expended by Holder in fulfilling the
obligations of Exculpated Party, as lessor, under any leases of a
Mortgaged Property and for which obligations either performance was
due at the time of acceleration of the indebtedness by Holder or
became due thereafter prior to foreclosure sale other than during
possession of such Mortgaged Property by a receiver appointed in the
foreclosure action or otherwise appointed at the request of Holder,
(viii) under the Hazardous Substances Remediation and
Indemnification Agreement between Maker and Prudential of even date
herewith and (ix) under any materially false representation and
warranty by Exculpated Party delivered under Paragraph 6.E. of the
Amended and Restated First Mortgage Loan Commitment between Maker
and Prudential dated December 2, 1993 (the "Amended Commitment").
Notwithstanding the foregoing, this agreement not to pursue recourse
liability SHALL BECOME NULL AND VOID and shall be of no further
force and effect in the event:
(a) that there shall be any event occur (other than an
involuntary lien or transfer made without Maker's consent) which
entitled, and the Holder elected, to declare the entire Loan due and
payable under the Due on Sale or Encumbrance provisions in
Article IV, Paragraph B of the Deeds of Trust and the Loan was not
reinstated pursuant to the terms of such Paragraph; or
(b) of any fraud or material misrepresentation by
Maker in connection with any Mortgaged Property, the Loan Documents,
the Amended Commitment, the Original Commitment, including the
Application (as such terms are defined in the Amended Commitment),
the Maker, or any other information furnished to Prudential at or
before the Closing pursuant to the Amended Commitment, the Original
Commitment (including the Application) or the Loan Documents;
provided that as to reports containing a material misrepresentation
where such reports were prepared by, and submitted to Prudential
under the names of independent contractors (such as, but without
limitation, surveyors and environmental consultants), it shall be
deemed a material misrepresentation by Maker only if Maker was aware
of, or was aware of facts or circumstances which would cause a
reasonable person to determine the existence of, such material
misrepresentation.
19. Use of Terms. Maker acknowledges and agrees that, for
Prudential's administrative purposes, the Loan is evidenced by a
total of seven Promissory Notes: (i) Note A is actually represented
by three Notes, "Note A-1" in the original principal amount of
$108,350,000, "Note A-2" in the original principal amount of
$98,350,000 and "Note A-3" in the original principal amount of
$10,000,000 (all three of such promissory notes being hereafter
referred to as Category A Notes), (ii) Note B is actually
represented by two Notes, "Note B-1" in the original principal
amount of $26,650,000 and "Note B-2" in the original principal
amount of $26,650,000 (both of such promissory notes being hereafter
referred to as Category B Notes), and (iii) Note C is actually
represented by two Notes, "Note C-1" in the original principal
amount of $5,000,000 and "Note C-2" in the original principal amount
of $5,000,000 (both of such promissory notes being hereafter
referred to as Category C Notes). The seven promissory notes
described above bear interest at varying rates. Whenever in any of
the Loan Documents Maker is required or permitted to make a payment
or prepayment of principal and/or interest on any of Note A, Note B
and/or Note C, such payment or prepayment shall be allocated by the
Holder to all Notes within the same category in proportion to the
outstanding principal balance of each Note in that category. By way
of example and not by way of limitation, a prepayment of principal
on Note A shall be allocated proportionately among Note A-1, Note A-
2 and Note A-3.
IN WITNESS WHEREOF, Maker has caused this Note to be executed
and delivered effective as of the date first written above.
MAKER:
CATELLUS DEVELOPMENT CORPORATION,
a Delaware corporation
By:
Name: Douglas Stimpson
Title: Vice President Finance
<PAGE>
EXHIBIT A
PREPAYMENT PRIVILEGE
Subject to the provisions of the Loan Agreement, if all
or any portion of this Note is prepaid for any reason,
whether voluntarily or involuntarily, or after acceleration
by Holder upon a default by Maker under the Loan Documents,
Maker shall pay a prepayment premium equal to the greater of
(1) or (2) (hereinafter called the "Prepayment Premium")
where:
(1) is the product of (a) one quarter of one
percent (0.25%) of the Prepayment Amount multiplied by
(b) the quotient of (i) the number of full months remaining
to maturity of the Note as of the Prepayment Date divided by
(ii) the number of full months comprising the term of the
Note; and,
(2) is an amount equal to the Present Value of the
Note (as hereinafter defined) less the amount of principal
being prepaid including accrued interest, if any, calculated
as of the Prepayment Date.
Holder shall notify Maker of the amount and basis of
determination of the Prepayment Premium. On or before the
Prepayment Date, Maker shall pay to Holder the Prepayment
Premium together with the Prepayment Amount and all accrued
interest and other sums due under the Loan. Holder shall not
be obligated to accept any prepayment of the principal
balance of this Note unless such prepayment is accompanied
by the Prepayment Premium and all accrued interest and other
sums due under the Loan.
For the purposes of determining the Prepayment Premium,
the following terms shall have the following meanings:
The "Treasury Rate" is the semi-annual yield on the
Treasury Constant Maturity Series with maturity equal to the
remaining term of the Note, for the week prior to the
Prepayment Date, as reported in Federal Reserve Statistical
Release H.15 - Selected Interest Rates, conclusively
determined by the Holder on the Prepayment Date. The rate
will be determined by linear interpolation between the
yields reported in Release H.15, if necessary. (In the
event Release H.15 is no longer published, Holder shall
select a comparable publication to determine the Treasury
Rate.)
The "Discount Rate" is the rate which, when compounded
monthly, is equivalent to the Treasury Rate, when compounded
semi-annually.
The "Present Value of the Note" shall be determined by
discounting all scheduled payments of principal and interest
remaining to maturity of the Note, attributed to the
Prepayment Amount, at the Discount Rate. If prepayment
occurs on a date other than a Monthly Due Date, the actual
number of days remaining from the Prepayment Date to the
Monthly Due Date will be used to discount within this
period.
Maker agrees that Holder shall not be obligated
actually to reinvest the amount prepaid in any Treasury
obligations as condition precedent to receiving the
Prepayment Premium.
<PAGE>
EXHIBIT C-2
DO NOT DESTROY THIS NOTE: When paid, this Note, and the Deeds of
Trust securing it, must be surrendered to the Trustee under the
Deeds of Trust for cancellation before reconveyance will be made.
PROMISSORY NOTE
(Note C-2)
$5,000,000 Los Angeles, California
Loan No. 6100522 February 16, 1994
FOR VALUE RECEIVED, the undersigned, Catellus Development
Corporation, a Delaware corporation ("Maker"), having an address at
201 Mission Street, 30th Floor, San Francisco, California 94105,
PROMISES TO PAY TO THE ORDER OF THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA ("Prudential"), a New Jersey corporation authorized to do
business in the State of California (Prudential and its successors
and assigns who become holders of this Note are hereinafter
collectively referred to as "Holder"), by Federal wire transfer to
Prudential at Morgan Guaranty Trust Company, 23 Wall Street, New
York, New York 10019, Account No. 050-54-493, referencing Loan
No. 6100522, or at such other place as Holder may from time to time
designate, the principal sum of Five Million Dollars ($5,000,000),
together with interest thereon from the date of this Note through
the date paid at a rate per annum equal to the Interest Rate.
1. Definitions. For the purpose of this Note, the following
terms shall have the meanings set forth below. Capitalized terms not
otherwise defined herein shall have the meanings ascribed to such
terms in the Deeds of Trust.
(a) "Closing" means the date upon which the proceeds of
the Loan are disbursed by Prudential to Maker.
(b) "Deeds of Trust" means collectively those certain
documents entitled "Deed of Trust, Security Agreement, Fixture
Filing with Assignment of Rents," of even date herewith, executed by
Maker as "Trustor" to the benefit of Prudential as "Beneficiary,"
and those certain documents entitled "Mortgage" of even date
herewith, executed by Maker as "Mortgagor" to the benefit of
Prudential as "Mortgagee," all as security for repayment of this
Note.
(c) "Event of Default" shall have the meaning given in
the Loan Agreement.
(d) "Interest Rate" means a rate of interest per annum
of eight and sixty-five hundredths percent (8.65%).
(e) "Late Charge(s)" means either the "Per Diem Late
Charge" or the "Monthly Late Charge" (or both), as such terms are
defined in Paragraph 4 below.
(f) "Loan" means that certain loan from Prudential to
Maker in the aggregate principal amount of $280,000,000 evidenced by
this Note, a "Note A-1" in the original principal amount of
$108,350,000, a "Note A-2" in the original principal amount of
$98,350,000, a "Note A-3" in the original principal amount of
$10,000,000, a "Note B-1" in the original principal amount of
$26,650,000, a "Note B-2" in the original principal amount of
$26,650,000, and a "Note C-1" in the original principal amount of
$5,000,000.
(g) "Loan Agreement" means that certain Loan Agreement
between Maker and Prudential of even date herewith governing the
terms of the Loan.
(h) "Loan Documents" means this Note, the Deeds of
Trust, all of the Assignments of Lessor's Interest in Leases, the
Security Agreement and all other documents now or hereafter
governing, securing or executed in connection with the Loan.
(i) "Maturity Date" means July 1, 1997.
(j) "Prepayment Amount" means the amount of the
Principal Balance prepaid on a Prepayment Date.
(k) "Prepayment Date" means any date, prior to the
Maturity Date, upon which all or any portion of the Principal
Balance is prepaid.
(l) "Prepayment Premium" shall have the meaning set
forth in Paragraph 6(a).
(m) "Principal Balance" means the principal balance of
this Note from time to time outstanding.
(n) "Secondary Interest Rate" means a rate of interest
per annum of thirteen and seven-tenths percent (13.7%).
2. Payments. On the first day of April 1994 and continuing
on the first day of each calendar month thereafter through and
including the first day of June 1997 (each such first day of the
month being referred to herein as a "Monthly Due Date"), monthly
installments of principal and interest in the amount of $144,332.53
shall be due and payable, with the entire unpaid Principal Balance
plus accrued interest and all other amounts payable under the Loan
Documents being due and payable in full on the Maturity Date. In
the event the Loan closes prior to March 1, 1994, then the amount of
interest accruing on this Note from the date of disbursement through
and including February 28, 1994 shall be paid to Lender on April 1,
1994, which interest shall be paid in addition to the first regular
monthly installment of principal and interest on this Note due on
April 1, 1994.
3. Treatment of Payments. All payments due under this Note
or the Loan Documents shall be paid by Maker in lawful money of the
United States of America by wire transfer on the date such payment
is due. All such payments shall be made without deduction for any
present or future taxes, levies, imposts, deductions, charges or
withholdings (other than U.S., state or local income taxes assessed
or levied against or payable by Holder based upon Holder's net
income), which amounts shall be paid by Maker. Payments from Maker
to Holder under this Note shall be applied first to any expense
reimbursements under the Loan Documents, then to any Late Charges,
then to accrued and unpaid interest and the balance to the Principal
Balance and any Prepayment Premium due thereon.
4. Late Charges and Secondary Interest.
(a) If any monthly principal and/or interest payment is
not paid in full on or before the Monthly Due Date for such payment,
then a daily late charge calculated by multiplying the amount of the
monthly payment by a fraction, the numerator of which is 25% and the
denominator of which is 365 (the "Per Diem Late Charge") shall be
assessed for each day that such payment is not paid from (and
including) the first day after such Monthly Due Date to (and
including) the date upon which such payment is made; provided,
however, that if any such monthly principal and/or interest payment,
together with all accrued Per Diem Late Charges, is not made in full
on or before the fifteenth day immediately following such Monthly Due
Date, a late charge equal to 4% of the monthly principal and/or
interest payment (the "Monthly Late Charge") shall be deemed to be
immediately assessed and shall be immediately due and payable. The
Monthly Late Charge shall be payable in lieu of and not in addition to
any Per Diem Late Charges that shall have accrued during the two-week
period immediately preceding the assessment of the Monthly Late
Charge.
(b) Maker acknowledges and agrees that its failure to
make timely payments will result in Holder incurring additional
expense in servicing the Loan, and that it is extremely difficult
and impractical to ascertain the extent of such damages and that the
Late Charge represents a fair and reasonable estimate, considering
all of the circumstances existing on the date of the execution of
this Note, of the costs that Holder will incur by reason of such
late payment. Acceptance of any Late Charge shall not constitute a
waiver of the default with respect to the late payment, and shall
not prevent Holder from exercising any of the other rights or
remedies available hereunder or at law or in equity.
(c) Maker further acknowledges and agrees that during
the time that any payment of principal, interest or other amount due
under this Note shall be delinquent, Holder will incur additional
costs and expenses attributable to its loss of use of the money due
and to the adverse impact on Holder's ability to meet its other
obligations and avail itself of other opportunities. Maker agrees
that it is extremely difficult and impractical to ascertain the
extent of such expenses, and Maker therefore agrees that, upon five
(5) days after written notice of such delinquency has been given by
Prudential to Maker, interest at the Secondary Interest Rate shall
accrue on any delinquent payments of principal, interest or other
amounts due under this Note or any Loan Document from the date such
payments were due and for so long as non-payment continues,
regardless of whether or not there has been an acceleration of the
maturity of the Loan.
5. Event of Default and Secondary Interest. The occurrence
of an "Event of Default" under any Loan Document shall constitute an
Event of Default under this Note. Upon the occurrence of an Event
of Default (including without limitation the failure of the Maker to
observe the provisions of Article IV, Paragraph B of the Deeds of
Trust), Holder, at its option may elect to declare the Principal
Balance together with all unpaid accrued interest, any Prepayment
Premium and any other sums evidenced or secured by this Note or any
Loan Document, to be immediately due and payable, without further
presentment, demand, protest or notice of any kind, by so notifying
Maker in writing, and if Holder so elects the outstanding principal
balance of this Note shall commence to bear interest at the
Secondary Interest Rate from the date of such election until paid in
full.
6. Prepayment.
(a) If for any reason the Principal Balance or any
portion thereof is prepaid (whether by operation of law,
acceleration or otherwise) on a date prior to the Maturity Date,
Maker shall pay to Holder as liquidated damages, immediately upon
demand, together with the subject Prepayment Amount and any unpaid
accrued interest, a Prepayment Premium calculated in accordance with
Exhibit A attached hereto.
(b) Maker shall have the right voluntarily to prepay
all or any portion of the Principal Balance, together with accrued
interest thereon, provided that Maker gives Holder not less than
thirty (30) days prior written notice of its intention to prepay,
and delivers to Holder, on or before the Prepayment Date, the
Prepayment Premium as required above, together with the Prepayment
Amount and all accrued interest and other sums due under the Loan
Documents. In the event Borrower makes a partial prepayment as
permitted herein, the outstanding principal balance following such
prepayment shall be reamortized, and the monthly payment under this
Note recalculated, by Lender in its reasonable discretion, based
upon an amortization period equal to 40 months minus the number of
whole calendar months which have elapsed from the date of
disbursement of the Loan through and including the date of
prepayment. By way of example and not by way of limitation, if a
prepayment is made on July 15, 1996, the outstanding principal
balance following such prepayment shall be reamortized over 12
months. In no event shall the Maturity Date be affected by any such
prepayment, reamortization and change in monthly payment.
(c) Maker agrees that (i) the Prepayment Premium
represents the reasonable estimate of Holder and Maker of a fair
average compensation for the loss that may be sustained by Holder
due to the payment of any of the Principal Balance prior to the
Maturity Date; (ii) the Prepayment Premium shall be paid without
prejudice to the right of Holder to collect any other amounts
provided to be paid hereunder; and (iii) Holder shall not be
obligated to actually reinvest the Prepayment Amount in any Treasury
or other specific obligations as a condition to receiving the
Prepayment Premium.
(d) Maker hereby expressly waives any right it may
have under California Civil Code 2954.10 to prepay this Note, in
whole or in part, without prepayment charge, upon acceleration of
the Maturity Date of this Note, and agrees that if for any reason a
prepayment of any or all of this Note is made, whether voluntarily
or following any acceleration of the Maturity Date of this Note by
Holder, then Maker shall pay the Prepayment Premium calculated
pursuant to Paragraph 6(a). By initialing this provision in the
space provided below, Maker hereby declares that the Holder's
agreement to make the Loan at the Interest Rate and for the term set
forth in this Note constitutes adequate consideration, given
individual weight by Maker, for this waiver and agreement.
INITIALS OF MAKER: ____________________
7. Security. This Note is secured, among other security,
by the Deeds of Trust and the other Loan Documents, which contain
provisions for the acceleration of the maturity of this Note upon
the occurrence of certain described events.
8. Holder's Rights; No Waiver by Holder. The rights,
powers and remedies of Holder under this Note shall be in addition
to all rights, powers and remedies given to Holder under the Loan
Documents and any other agreement or document securing or evidencing
the Loan or by virtue of any statute or rule of law, including, but
not limited to, the California Uniform Commercial Code. All such
rights, powers and remedies shall be cumulative and may be exercised
successively or concurrently in Holder's sole discretion without
impairing Holder's security interest, rights or available remedies.
Any forbearance, failure or delay by Holder in exercising any right,
power or remedy shall not preclude further exercise thereof, and
every right, power or remedy of Holder shall continue in full force
and effect until such right, power or remedy is specifically waived
in a writing executed by Holder. Maker waives any right to require
the Holder to proceed against any Person or to exhaust all or any
part of the Property or to pursue any remedy in Holder's power.
9. Maker's Waivers.
(a) Except as otherwise expressly provided in the Loan
Agreement, Maker and any endorsers of this Note, and each of them,
hereby waive diligence, demand, presentment for payment, notice of
non-payment, protest and notice of protest, and specifically consent
to and waive notice of any renewals or extensions of this Note,
whether made to or in favor of Maker or any other person or persons.
Maker and any endorsers of this Note expressly waive all right to
the benefit of any statute of limitations and any moratorium,
reinstatement, marshalling, forbearance, extension, redemption, or
appraisement now or hereafter provided by the Constitution and the
laws of the United States and of any state thereof, as a defense to
any demand against Maker or any such endorsers, to the fullest
extent permitted by law.
(b) Maker hereby waives any right to trial by jury
with respect to any action or proceeding brought by Holder or any
other person relating to (i) the Loan, or (ii) the Loan Documents.
(c) Maker hereby agrees that this Note constitutes a
written consent to waiver of trial by jury pursuant to the
provisions of California Code of Civil Procedure Section 631 and
Maker does hereby constitute and appoint Holder its true and lawful
attorney-in-fact, which appointment is coupled with an interest, and
Maker does hereby authorize and empower Holder, in the name, place
and stead of Maker, to file this Note with the clerk or judge of any
court of competent jurisdiction as statutory written consent to
waiver of trial by jury.
10. Transfers by Holder. This Note or any interest in this
Note and the Loan Documents may be hypothecated, transferred or
assigned by Holder only in accordance with Section 16(c) of the Loan
Agreement.
11. Amendment. This Note may be amended or modified only
by an instrument in writing which by its express terms refers to
this Note and which is duly executed by the party sought to be bound
thereby.
12. Successors and Assigns. This Note shall be binding
upon and inure to the benefit of the parties hereto and their
respective heirs, executors, administrators, personal
representatives, successors and permitted assigns.
13. Governing Law. This Note shall be governed by and
construed in accordance with the laws of the State of California.
14. Time. Time is of the essence with respect to each and
every term and provision of this Note.
15. Usury. Notwithstanding any provision herein, the total
liability for payments in the nature of interest shall not exceed
the applicable limits imposed by any applicable state or federal
interest rate laws. If any payments in the nature of interest,
additional interest, and other charges made hereunder are held to be
in excess of the applicable limits imposed by any applicable state
or federal laws, it is agreed that any such amount held to be in
excess shall be considered payment of principal and the Principal
Balance shall be reduced by such amount in the inverse order of
maturity so that the total liability for payments in the nature of
interest, additional interest and other charges shall not exceed the
applicable limits imposed by any applicable state or federal
interest rate laws in compliance with the desires of Holder and
Maker.
16. Notices. All notices, consents and other
communications required or permitted by this Note shall be in
writing and shall be given in the manner set forth in Section 16(i)
of the Loan Agreement.
17. Attorneys' Fees. The undersigned agrees to pay all
costs, including reasonable attorneys' fees and expenses, incurred
by Holder in enforcing payment or collection of this Note or the
terms of any Loan Document, whether or not suit is filed.
18. Limitation on Personal Liabilities.
In the event of an acceleration of the indebtedness
evidenced by this Note upon an event of default thereunder or under
the Deed of Trust, Holder shall not enforce any deficiency judgment
against Maker (hereinafter referred to as the "Exculpated Party")
with respect to any and all obligations evidenced by this Note, in
excess of the amount realized upon foreclosure against (or sale,
pursuant to power of sale, of) any and all security therefor;
provided, however, that nothing contained herein or in any other
Loan Document shall (a) limit Holder's other rights and remedies
against the Exculpated Party hereunder or thereunder, either at law
or in equity, or (b) relieve Exculpated Party from personal
liability and responsibility (i) under the ERISA Section of the
Deeds of Trust, including the indemnification provisions under said
Section, (ii) for waste committed by Exculpated Party with respect
to any Mortgaged Property (as such term is defined in the Deeds of
Trust), (iii) for any security deposits of tenants not turned over
to Holder upon foreclosure or sale pursuant to the power of sale
contained in the Deeds of Trust, (iv) for insurance proceeds and
condemnation awards received by Exculpated Party and not turned over
to Holder or used by Exculpated Party for restoration or repair of
the Mortgaged Property which was damaged or affected, (v) for any
rents or other income from any Mortgaged Property received by
Exculpated Party after an Event of Default or event which with
notice or grace period, or both, would be an Event of Default under
the Loan Documents and not applied to the fixed and operating
expenses of such Mortgaged Property, (vi) for unpaid taxes,
assessments, and/or utility charges with respect to a Mortgaged
Property, (vii) for any sums expended by Holder in fulfilling the
obligations of Exculpated Party, as lessor, under any leases of a
Mortgaged Property and for which obligations either performance was
due at the time of acceleration of the indebtedness by Holder or
became due thereafter prior to foreclosure sale other than during
possession of such Mortgaged Property by a receiver appointed in the
foreclosure action or otherwise appointed at the request of Holder,
(viii) under the Hazardous Substances Remediation and
Indemnification Agreement between Maker and Prudential of even date
herewith and (ix) under any materially false representation and
warranty by Exculpated Party delivered under Paragraph 6.E. of the
Amended and Restated First Mortgage Loan Commitment between Maker
and Prudential dated December 2, 1993 (the "Amended Commitment").
Notwithstanding the foregoing, this agreement not to pursue recourse
liability SHALL BECOME NULL AND VOID and shall be of no further
force and effect in the event:
(a) that there shall be any event occur (other than an
involuntary lien or transfer made without Maker's consent) which
entitled, and the Holder elected, to declare the entire Loan due and
payable under the Due on Sale or Encumbrance provisions in
Article IV, Paragraph B of the Deeds of Trust and the Loan was not
reinstated pursuant to the terms of such Paragraph; or
(b) of any fraud or material misrepresentation by
Maker in connection with any Mortgaged Property, the Loan Documents,
the Amended Commitment, the Original Commitment, including the
Application (as such terms are defined in the Amended Commitment),
the Maker, or any other information furnished to Prudential at or
before the Closing pursuant to the Amended Commitment, the Original
Commitment (including the Application) or the Loan Documents;
provided that as to reports containing a material misrepresentation
where such reports were prepared by, and submitted to Prudential
under the names of independent contractors (such as, but without
limitation, surveyors and environmental consultants), it shall be
deemed a material misrepresentation by Maker only if Maker was aware
of, or was aware of facts or circumstances which would cause a
reasonable person to determine the existence of, such material
misrepresentation.
19. Use of Terms. Maker acknowledges and agrees that, for
Prudential's administrative purposes, the Loan is evidenced by a
total of seven Promissory Notes: (i) Note A is actually represented
by three Notes, "Note A-1" in the original principal amount of
$108,350,000, "Note A-2" in the original principal amount of
$98,350,000 and "Note A-3" in the original principal amount of
$10,000,000 (all three of such promissory notes being hereafter
referred to as Category A Notes), (ii) Note B is actually
represented by two Notes, "Note B-1" in the original principal
amount of $26,650,000 and "Note B-2" in the original principal
amount of $26,650,000 (both of such promissory notes being hereafter
referred to as Category B Notes), and (iii) Note C is actually
represented by two Notes, "Note C-1" in the original principal
amount of $5,000,000 and "Note C-2" in the original principal amount
of $5,000,000 (both of such promissory notes being hereafter
referred to as Category C Notes). The seven promissory notes
described above bear interest at varying rates. Whenever in any of
the Loan Documents Maker is required or permitted to make a payment
or prepayment of principal and/or interest on any of Note A, Note B
and/or Note C, such payment or prepayment shall be allocated by the
Holder to all Notes within the same category in proportion to the
outstanding principal balance of each Note in that category. By way
of example and not by way of limitation, a prepayment of principal
on Note A shall be allocated proportionately among Note A-1, Note A-
2 and Note A-3.
IN WITNESS WHEREOF, Maker has caused this Note to be executed
and delivered effective as of the date first written above.
MAKER:
CATELLUS DEVELOPMENT CORPORATION,
a Delaware corporation
By:
Name: Douglas Stimpson
Title: Vice President Finance<PAGE>
<PAGE>
EXHIBIT A
PREPAYMENT PRIVILEGE
Subject to the provisions of the Loan Agreement, if all
or any portion of this Note is prepaid for any reason,
whether voluntarily or involuntarily, or after acceleration
by Holder upon a default by Maker under the Loan Documents,
Maker shall pay a prepayment premium equal to the greater of
(1) or (2) (hereinafter called the "Prepayment Premium")
where:
(1) is the product of (a) one quarter of one
percent (0.25%) of the Prepayment Amount multiplied by
(b) the quotient of (i) the number of full months remaining
to maturity of the Note as of the Prepayment Date divided by
(ii) the number of full months comprising the term of the
Note; and,
(2) is an amount equal to the Present Value of the
Note (as hereinafter defined) less the amount of principal
being prepaid including accrued interest, if any, calculated
as of the Prepayment Date.
Holder shall notify Maker of the amount and basis of
determination of the Prepayment Premium. On or before the
Prepayment Date, Maker shall pay to Holder the Prepayment
Premium together with the Prepayment Amount and all accrued
interest and other sums due under the Loan. Holder shall not
be obligated to accept any prepayment of the principal
balance of this Note unless such prepayment is accompanied
by the Prepayment Premium and all accrued interest and other
sums due under the Loan.
For the purposes of determining the Prepayment Premium,
the following terms shall have the following meanings:
The "Treasury Rate" is the semi-annual yield on the
Treasury Constant Maturity Series with maturity equal to the
remaining term of the Note, for the week prior to the
Prepayment Date, as reported in Federal Reserve Statistical
Release H.15 - Selected Interest Rates, conclusively
determined by the Holder on the Prepayment Date. The rate
will be determined by linear interpolation between the
yields reported in Release H.15, if necessary. (In the
event Release H.15 is no longer published, Holder shall
select a comparable publication to determine the Treasury
Rate.)
The "Discount Rate" is the rate which, when compounded
monthly, is equivalent to the Treasury Rate, when compounded
semi-annually.
The "Present Value of the Note" shall be determined by
discounting all scheduled payments of principal and interest
remaining to maturity of the Note, attributed to the
Prepayment Amount, at the Discount Rate. If prepayment
occurs on a date other than a Monthly Due Date, the actual
number of days remaining from the Prepayment Date to the
Monthly Due Date will be used to discount within this
period.
Maker agrees that Holder shall not be obligated
actually to reinvest the amount prepaid in any Treasury
obligations as condition precedent to receiving the
Prepayment Premium.<PAGE>
<PAGE>
EXHIBIT D
OWNER'S AFFIDAVIT
I, Douglas Stimpson, in my capacity as Vice
President Finance of Catellus Development Corporation, a
Delaware corporation ("Catellus"), hereby certify to The
Prudential Insurance Company of America, a New Jersey
corporation ("Prudential"), as required under Section 6.B. and
6.I. of that certain Amended and Restated First Mortgage Loan
Commitment dated December 2, 1993 (the "Commitment"), that:
1. Except as disclosed on Schedule 1 attached
hereto and incorporated herein by this reference, all costs
and expenses of all labor, materials, supplies and equipment
used in the construction of the Improvements have been paid in
full;
2. Catellus has paid for and Catellus is the
owner or lessee of all furniture, furnishings, fixtures and
equipment (other than tenants' property) set forth on
Schedule 2 attached hereto and incorporated herein by this
reference, which Schedule describes the Personal Property (as
defined in Paragraph 3.B. of the Commitment), free and clear
of any security interests or liens;
3. No bankruptcy or insolvency proceedings have
been instituted by or against Catellus;
4. Except for permitted non-conforming uses and
violations previously disclosed by Catellus, Chicago Title
Insurance Company or governmental entities in writing to and
approved by Prudential in its sole discretion, each Mortgaged
Property and the use thereof comply in all material respects
with all applicable federal, state and local laws, ordinances,
building codes, rules and regulations pertaining to zoning and
building;
5. There is no action or proceeding before any
court, quasi-judicial body or administrative agency (i) in
which Catellus is a party (and has been served) or, to the
best knowledge of Catellus, with respect to which Catellus
would be bound by the judgment or decision, and which, if
adversely determined might materially adversely affect the
financial condition of Catellus, or (ii) relating to the
validity of the Loan or the proposed or actual use of each
Mortgaged Property (except proceedings initiated by Catellus
and seeking to increase the intensity of permitted uses for
certain of the Mortgaged Properties) and all rights to appeal
any decision rendered in any such action or proceeding have
expired;
6. Except as disclosed in writing by Catellus to
Prudential prior to the date hereof, none of the Mortgaged
Properties has suffered any unrepaired damage as a result of
any casualty or is subject to any pending or, to the best
knowledge of Catellus, threatened condemnation;
7. With respect to each Lease, to the best
knowledge of Catellus, and except as disclosed in Schedule C,
the statements made in each of the Tenant Estoppel
Certificates delivered to Prudential are and remain true and
correct as though executed on the date of Closing, and, to the
best knowledge of Catellus, after due inquiry of Catellus
asset managers, there is no bankruptcy or insolvency
proceeding pending by or against any Major Tenant; and
8. There has been no change in the condition of
any Mortgaged Property from that reflected in the Surveys
delivered to and approved by Prudential under Paragraph 4.A of
the Commitment.
All capitalized terms used herein and not otherwise
defined herein shall have the respective meanings ascribed to
such terms in the Commitment.
IN WITNESS WHEREOF, the undersigned officer of
Catellus signed this Owner's Affidavit as of the 16th day of
February, 1994.
____________________________
Douglas Stimpson
Vice President Finance
<PAGE>
SCHEDULE 1
Outstanding Costs and Expenses for Labor, Materials, Supplies
and Equipment
<PAGE>
SCHEDULE 2
Personal Property
<PAGE>
EXHIBIT E
SURVEY REQUIREMENTS
The Survey shall be prepared for and certified to
Prudential by a registered land surveyor approved by
Prudential. The Survey shall comply with the minimum detail
requirements for land title surveys as adopted by the
American Land Title Association and American Congress on
Surveying and Mapping, adopted in 1986, and shall show the
following items, whether covered by the foregoing minimum
detail requirements or not:
1. All courses and distances of the boundaries
of the Property.
2. The location of all improvements on the
Property with the dimensions in relation to lot and building
lines. If recorded covenants or restrictions, recorded
plats or zoning ordinances require a building to be set back
specified distances from street or property lines, the
Survey must show measured distances from said building to
said line.
3. Locations of all rights-of-way, water
courses, drains, sewers, utility easements, driveways and
roads which serve the Property or to which the Property are
subject, and all other easements listed in the title
insurance policy to be provided pursuant to this Commitment.
4. The names and widths of streets, with the
distance from the nearest corner to the beginning point of
the Property.
5. The names of adjoining owners on all sides
of the Property.
6. The total acreage or square foot area of
the Property and the paved parking area and the total number
of all parking spaces.
7. Interior lines and facts sufficient to
insure contiguity if the Property is composed of several
parcels.
8. Certification by the surveyor that the
Property, as described in the survey, does not constitute an
illegal subdivision of land under applicable state, county
or municipal laws or ordinances.
9. Certification as to whether or not the
Property lies within a flood zone as determined by the
United States Department of Housing and Urban Development.
If the Property lies within a flood zone, the certification
should reflect the flood zone classification.
10. The political subdivision, county and such
other notations as will accurately locate the property
surveyed.
11. The following form of survey
certification:
FORM OF SURVEY CERTIFICATION
I hereby state to The Prudential Insurance Company
of America (or subsidiary if applicable), its successors and
assigns and (Name of Title Insurance Co.), that this is a
true and correct survey of (Land lot, etc.
and street address) and shows the true and correct location
of the buildings and improvements situated on such land and
all easements, rights-of-way, setback lines, and similar
restrictions of record. The buildings and improvements do
not overhang or encroach upon any easements or rights-of-way
of others, and there are no encroachments either way across
the property lines. The property surveyed contains
acres and is not located within a flood plain
area as determined by the United States Department of
Housing and Urban Development. The property surveyed does
not constitute an illegal subdivision of land under
applicable state, county or municipal law or ordinance.
I hereby state that this Survey was prepared by
(State name of surveyor and qualification) and
was made in accordance with "minimum detail requirements for
ALTA/ACSM Land Title Surveys," jointly established and
adopted by ALTA and ACSM in 1986; and meets the accuracy
requirements of a Class Survey, as defined therein.
By: _______________________________
(Seal)
Registration No.____________________
Dated:_________________________ <PAGE>
<PAGE>
EXHIBIT F
GUIDELINES FOR HAZARDOUS MATERIALS REPORT
SCOPE OF WORK
The Real Estate Security will be surveyed by an
environmental consultant approved by Prudential. The
objective of the survey is to determine whether there is any
environmental contamination present on the Real Estate
Security, or whether such contamination is likely to occur
in the future because of on-site or nearby activities or
problems. The survey should indicate the extent of any
problems and describe possible remedial measures. In
addition, the consultant shall acknowledge in its report
that The Prudential Insurance Company of America will be
relying on the survey in consideration of financing the Real
Estate Security.
PHASE I - SITE INVESTIGATION
A. Historical Review
Identify any prior uses or activities at or near
the site which might have created any environmental
problems. Sources of information and supporting
documentation may include, but are not necessarily limited
to:
1. Area Plat Book
2. Title Search or assessor records
3. Topographic Maps
4. Aerial Photos
5. Construction Documents
6. Environmental Inquiries
a. Federal, State and Local
Environmental Authorities
- record of environmental permits
(owner and tenants)
- record of environmental violations or
other incidents
- status of any past or present
environmental issues or remedial plans
- record of all of the above for all
abutting properties
- groundwater sampling data near the
project site
- location of sites undergoing or
otherwise subject to remediation programs within one mile of
the subject site. This shall include reference to the
Federal CERCLIS and NPL lists, and appropriate state lists.
- environmental regulations or
requirements that may be relevant to this transaction (e.g.,
ECRA in New Jersey)
- locations of nearby landfill or
hazardous waste disposal sites
- general groundwater flow direction
and condition in the vicinity of the sites.
Identify any "regional" groundwater
problems.
- possible environmental constraints on
the use of the property including but not limited to:
wetlands
floodplain
coastal zone
sole source aquifer
aquifer recharge area
nearby environmentally sensitive sites
b. Local Fire Officials
- record of underground tank
installation, removals, ruptures, leaks or other incidents
- record of fires involving toxic
substances
c. Local Health Authorities
- record of any health-related
environmental issues pertaining to the property
d. OSHA
- record of any worker or
workplace-related environmental incidents
e. Local Water and Sewer Authorities
- source of water for the Property
- location of nearby water supply wells
indicate whether the groundwater is used as a source of
potable water.
- record of any drinking water
contamination problems, either at the Property or the
immediate vicinity
- method of sewage disposal
B. Site Inspection
1. Interview Property owner, Property manager,
maintenance personnel and tenants, and review available
files for:
a. any past or present environmental
incidents, violation notices, or environmental litigation.
b. any past or present use, storage,
handling and disposal of any hazardous materials including
petroleum, chemicals, pesticides and asbestos. Provide a
copy of the "right to know" (hazard communication) and SARA
Title III filings.
c. record of required environmental
permits by owner and/or tenants.
d. waste generated and disposal methods
used.
e. waste water generated and disposal
methods used. Specify the presence of sanitary sewer
connections, septic systems, dry wells etc.
2. Visual Inspection for:
a. storage or handling of hazardous
materials in tanks, drums or containers.
b. evidence of illegal dumping of
hazardous materials, debris or construction materials.
c. extensive use of fill from source of
unknown origin.
d. evidence of soil, surface water
and/or groundwater contamination (e.g., staining,
distressed vegetation).
e. potential for contaminated storm
water drainage from adjacent properties.
f. evidence of underground waste
disposal (sumps, floor drains).
g. any environmental concerns surfaced
as the result of the Historical Review.
h. any environmental concerns resulting
from the handling of hazardous materials of nearby
properties (e.g., gas stations, manufacturing plants) -
consider at least a 1/4 mile radius.
3. Underground and Above-Ground Storage Tanks
and Other Equipment
a. Provide an inventory of all storage
tanks, including size, location, installation date,
contents, tank material, etc.
b. Provide a record of any tank leak
tests and results.
c. Verify all tank permits and
registrations.
d. Conduct physical inspection of above
ground tanks, process equipment and piping systems to the
extent possible.
e. Document the presence of any
cathodic protection system, leak detection system or other
means of equipment protection, and compare with regulatory
requirements.
f. Describe and evaluate any spill
prevention or containment measures including SPCC plan if
available.
g. Determine all prior tank removals or
repairs. Explain the reasons for the removal or repair, and
whether or not any contaminated soil or groundwater was
removed or remediated. The absence of post-excavation
sampling may require a phase II investigation.
h. Indicate any plans for future tank
removals or repairs.
i. Tank testing or subsurface
investigation may be required at Prudential's discretion,
based on available data.
4. Polychlorinated Biphenyls (PCBs)
a. Document the location and owner of
all transformers or capacitors that contain PCBs.
b. Verify that all PCB equipment (i.e.,
contains any PCBs) including all transformers present on the
property, is in compliance with all federal, state and local
laws and regulations.
c. Visually inspect PCB equipment and
determine whether there are any leaks or other hazards.
d. Determine whether all oil-filled
transformers have been classified by PCB testing (mandatory
for non-utility owned transformers) or other acceptable
alternative.
e. Verify that the PCB transformers
located near (provide distance) commercial buildings have
been properly registered with the building owner and are
subject to an appropriate inspection program.
5. Radon
Conduct radon testing at all residential
properties. Test other properties as appropriate,
determined by the type of property, and the likelihood
(regional experience) of the presence of radon.
6. Abutting and/or Nearby Upgradient
Properties
To the extent feasible and possible, consider the
potential that current or prior off-site activities may
result in an environmental impact. This shall include:
a. abutting properties. The presence
of a gasoline service station or facility handling a
significant quantity of hazardous materials adjacent to the
property shall normally constitute a basis for a phase II
investigation.
b. nearby (at least within 1/4 mile)
upgradient properties handling hazardous materials.
c. properties with known problems
within one mile upgradient of the property.
7. Asbestos
a. Determine whether the presence of
asbestos is suspected or confirmed at the Property (evaluate
any available asbestos survey).
b. Examine available building records
for an indication of the presence of asbestos.
c. Determine whether there is an
Operations and Maintenance plan (O&M) in effect.
d. If an asbestos bulk survey is
required it shall be conducted consistent with the
Prudential Realty Group Asbestos Bulk Survey Scope of Work.
A "phase I" or "limited" survey is not acceptable.
C. Report Requirements
1. The consultant shall acknowledge that
Prudential will be relying on this report in consideration
of financing of the subject property. Alternatively, the
survey report shall be addressed to Prudential, as well as
the borrower.
2. Upon completion of Phase I, an evaluation
of the environmental issues associated with the Property and
a recommendation regarding the need for a subsurface
investigation shall be made by the consultant. Conclusions
and recommendations shall be summarized in an executive
summary at the front of the report.
3. The consultant's final phase I report shall
also include but not be limited to:
a. narrative description of the
Property and the surrounding area
b. site plans and location maps
indicating all referenced locations
c. site photographs
d. a discussion of all environmental
issues identified
e. a description of all applicable
state and local regulatory requirements
f. limitations of the report with
explanations (e.g., limited access)
4. Any recommendation for a subsurface
investigation shall include, as a minimum:
a. reasons leading to the
recommendation
b. recommended method(s) of subsurface
exploration
c. number, depth, and location of
borings and wells required
d. any remote sensing techniques (i.e.,
soil gas survey, ground penetrating radar, etc.) to be
utilized, and potential limitations of results so obtained
e. substances and parameters to be
tested for by laboratory analysis and the rationale for this
decision (e.g., products handled on this or adjacent
property)
f. projected time schedule for
submission of the phase II results
g. cost estimate for all work
recommended
PHASE II - SUBSURFACE INVESTIGATION
A. General Comments
1. The requirement for a subsurface
investigation shall be established by Prudential A&E staff.
2. The subsurface investigation will normally
include at least three monitoring wells so that the
direction of groundwater flow can be identified. If it is
concluded that the direction of flow can be determined by
other means (e.g., existing data on a nearby site), or is
not necessary for the analysis, then this requirement can be
removed or reduced.
3. Analysis of groundwater samples shall be
based on the phase I results, but at least one sample shall
normally be analyzed for priority pollutants with additional
library search unless waived by A&E staff.
4. All analyses of metals will provide both
total and dissolved results unless otherwise authorized by
A&E staff.
5. The use of composite sampling must be
specifically authorized by A&E staff.
6. The laboratory used for sample analysis
shall be certified by any regulatory agency having
jurisdiction, if applicable.
7. All residual materials from the subsurface
investigation shall be disposed of by the consultant in an
appropriate manner, consistent with all regulatory
requirements.
B. The consultant's final Phase II report
shall include:
1. conclusions about environmental condition
of the site.
2. site plans and location maps indicating all
referenced locations, including soil boring and monitoring
wells
3. site photographs if not provided in the
Phase I report
4. documentation and support data
5. evolution of all data. This shall be
related to state and local regulatory requirements and any
actual, "suggested," or "guidance" action levels for
reporting or cleaning up soil and groundwater contamination.
Any state groundwater quality standards must be specifically
referenced.
6. groundwater level and direction of flow
7. uncertainties relating to available data
8. recommendations for additional site
investigation with projected costs
9. recommendations for remedial measures, if
required
10. estimated length of time and cost of
remediation
<PAGE>
EXHIBIT G
HAZARD INSURANCE INSTRUCTIONS
A. A duplicate original insurance policy
delivered prior to Closing shall meet the following minimum
requirements:
1. The Applicant must be named as the Insured;
2. The Property must be identified as the
insured property;
3. The proper amount(s) of coverage must be
indicated;
4. Prudential must be named as lender/loss
payee under a standard noncontributory clause at the address
designated in subparagraph 5(c) below; and
5. The policy must be endorsed to include the
following provisions:
(a) Relating to typical waiver
provisions in commercial leases:
"This Company may require from the Insured
an assignment of all rights of recovery against any party
for loss to the extent that payment therefor is made by this
Company, but this Company shall not acquire any rights of
recovery which the Insured has expressly waived prior to
loss, nor shall such waiver affect the Insured's rights
under this policy"; and
(b) "This policy contains a replacement
cost provision with waiver of depreciation, all as more
particularly set forth in Section ___ on Page ____ hereof";
and
(c) "It is hereby understood and agreed
that this Company will give THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA, Deed of Trust Loan Insurance and Tax Division,
P.O. Box 10082, Van Nuys, California 91410-0082, with a copy
to The Prudential Realty Group, 2029 Century Park East,
Suite 3600, Los Angeles, California 90067, Attention: Law
Department, at least 30 days' written notice prior to
material change in/or cancellation of this policy."
B. If the policy involved is a Blanket Policy,
then Prudential must receive a certificate of insurance
providing the following:
1. A copy of the policy certified to be
a true copy by an authorized signatory of the insurance
company; and
2. An original Certificate of
Insurance, addressed to Prudential covering the same
information as is required in Section A above.
<PAGE>
EXHIBIT H
GUIDELINES FOR ENGINEERING REPORT
The third-party engineer should conduct a
comprehensive structural evaluation of the Mortgaged
Properties including, but not just limited to:
1. Reviewing the soil investigation report in
general, and analyze the liquefaction potential in
particular.
2. Reviewing the design loan calculations
ascertaining all concurrent vertical (dead and live) and
horizontal (earthquake or wind, whichever is greater) loads
are considered.
3. Preparing an opinion of probable maximum
loss (PML) to the project building in the event of a major
earthquake based on the following factors: type and quality
of construction; configuration, age and condition of the
building; structural design; local geology, seismicity and
site earthquake history.
4. Advising the borrower as well as the lender
under which/what building code the building was designed; if
the project building was not designed to the latest Uniform
Building Code, please advise how to structurally upgrade
together with associated cost estimate.
5. Preparing a dynamic analysis for buildings
over 240 feet in height, regardless of the age of the
project building.
6. Preparing a detailed review of anchoring
system for non-structural items, such as exterior wall
(stone, glass, aluminum, etc.), major mechanical equipment,
piping, etc.
7. Performing a general engineering inspection
and review of the project building, including roofing,
pavement, mechanical, electrical, plumbing and life safety
systems, etc.
<PAGE>
EXHIBIT I
THE PRUDENTIAL REALTY GROUP
ASBESTOS BULK SURVEY
SURVEY OF WORK
The Real Estate Security will be surveyed by a
qualified asbestos consultant approved by Prudential. The
objective of the survey is to determine whether there are any
asbestos-containing materials present on the Real Estate
Security. The survey should indicate the extent of any such
materials and describe possible remedial measures. In
addition, the consultant shall acknowledge in its report that
The Prudential Insurance Company of America will be relying on
the survey in consideration of financing the Real Estate
Security.
I. SAMPLING
A. The inspector conducting the sampling shall
be identified, and the details of his training and experience
shall be submitted to Prudential. The inspector must be
accredited by all agencies asserting jurisdiction.
B. Define homogeneous areas for purposes of
sampling. In defining a homogeneous area, uniformity in color
and texture are key criteria. The consultant may consider
functional space as criteria but this may not always be
necessary or appropriate. Discretion shall be exercised when
defining homogenous areas, giving consideration to all factors
which could reduce the number of samples required. This might
include construction practices utilized, available building
specifications and as-built drawings, and the type of
materials under consideration.
C. Areas of specific items not accessible for
bulk sampling because of limited access or requirement for
destructive sampling shall be explained in the survey report.
D. Surfacing material (including sprayed on
fireproofing and textured paint) shall be sampled in a
statistically random manner, that is representative of each
homogeneous area, as follows:
1. At least 3 bulk samples shall be collected
from each homogeneous area that is 1,000 sq. ft. or less.
2. At least 5 bulk samples shall be collected
from each homogeneous area that is greater than 1,000 sq. ft.
but less than or equal to 5,000 sq. ft.
3. At least 7 bulk samples shall be collected
from each homogeneous area that is greater than 5,000 sq. ft.
E. Thermal system insulation shall be sampled as
follows:
1. Except as provided in paragraphs 2 through 4
below, collect, in a randomly distributed manner, at least
three bulk samples from each homogeneous area of thermal
system insulation.
2. Collect at least one bulk sample from each
homogeneous area of patched thermal system insulation if the
patched section is less than 6 linear or square feet (patched
areas greater than 6 feet should be treated as separate
homogeneous areas).
3. In a manner sufficient to determine whether
the material is ACM or not ACM, collect bulk samples from each
insulated mechanical system where cement or plaster is used on
fittings such as tees elbows or valves.
4. Bulk samples are not required to be collected
from any homogeneous area where the accredited inspector has
determined that the thermal system insulation is fiberglass,
rubber or other material which does not contain asbestos.
F. Miscellaneous material suspected of
containing asbestos shall be sampled as follows:
In a manner sufficient to determine whether material
is ACM or not ACM, collect bulk samples from each homogeneous
area of miscellaneous material suspected of containing
asbestos. The sampling protocol used must be justified.
G. If it is anticipated that more than 250
samples will be required, the sampling plan must be reviewed
with Prudential A&E.
H. If there is evidence of significant
disturbance to suspected ACM, or if ACM is located in the air
handling system, representative airborne asbestos
concentrations may be required after consultation with the
Property owner and Prudential A&E staff.
I. Unless specifically directed by Prudential,
sampling of roofing material is not included in this scope of
work.
II. ANALYSIS
A. If the project schedule allows, a portion of
the samples can be retained for a second round of analysis to
reduce costs. This should only be done if the material within
a homogeneous area is expected to be ACM. A final
determination that any material is not ACM requires analysis
of all samples.
B. Bulk samples shall be analyzed for asbestos
using NVLAP certified laboratories. AIHA certification is
recommended.
C. Bulk samples shall be analyzed by PLM
(polarized light microscopy), using the "Interim Method for
the Determination of Asbestos in Bulk Insulation Samples"
found at Appendix A to Subpart F in 40 CFR Part 763. Samples
shall not be composited for analysis.
D. Use TEM analysis for 10% (but at least one)
of the samples from each homogeneous area of vinyl tile if
otherwise indicated by PLM not to contain greater than 1%
asbestos. The analysis of vinyl tile shall be done using the
Chatfield method currently under consideration by ASTM. No
other bulk sampling shall be conducted by TEM or SEM without
the approval of the A&E staff of the Prudential Realty Group.
E. Provide quantitative results of analyses for
samples found to be ACM (i.e., greater than one percent
asbestos by weight). Results of analyses for other samples
shall be reported as "less than one percent" unless the state
or local regulatory requirements in the project area require
otherwise.
F. The name and address of each laboratory
performing an analysis, the date of analysis, and the name and
signature of the person performing the analysis shall be
submitted.
III. ASSESSMENT
Provide a written assessment of all ACM on the
property indicating:
A. Location, description and results of all
samples and the assumptions made regarding homogeneous areas.
B. Delineation of survey limitations, including
inaccessible areas, and an evaluation of the significance of
these uncertainties to the overall assessment.
C. Location, type and amount of the asbestos
containing materials.
D. Condition of the materials, specifying:
1. Friability
2. Type of damage (e.g., flaking, blistering,
water damage or other signs of physical damage)
3. Severity of damage (e.g., major flaking,
severely torn jackets, as opposed to occasional flaking, minor
tears to jackets)
4. Extent or spread of damage over large areas
or large percentage or the homogeneous area
E. Whether the material is accessible for
removal.
F. The potential that the material may be
disturbed. If possible, this should reference a discussion
with building management regarding maintenance practices and
possible renovations.
G. Known or suspected causes of damage (e.g.,
air erosion, vandalism, vibration, water).
H. Preventive measures which might eliminate the
reasonable likelihood that undamaged ACM might become damaged.
I. Any immediate hazard presented by the ACM.
J. Any hazards that might result from the
continued presence of any ACM in a building.
K. Results of air sampling if available.
L. The estimated costs for removal and an
Operation and Maintenance (O&M) plan. For properties that
have ACM and are proposed to be subject to a program of
encapsulation, enclosure or other acceptable form of
abatement, the cost of that program should also be provided.
Cost estimates should be qualified with regard to the level of
detail and margin of error.
M. Estimated costs should also be provided
(separately) for restoration to pre-removal conditions. Cost
estimates should be qualified with regard to the level of
detail and margin of error.
N. Estimated time required for abatement.
O. State or local asbestos requirement affecting
decisions regarding abatement.
IV. DEVIATIONS
All deviations from this scope of work must have
prior approval from the Prudential Realty Group Architects and
Engineers.
<PAGE>
EXHIBIT J
RECORDING REQUESTED BY:
WHEN RECORDED MAIL TO:
The Prudential Insurance Company of America
2029 Century Park East, Suite 3700
Los Angeles, California 90067
Attention: Regional Counsel
SPECIFIC ASSIGNMENT, SUBORDINATION
NON-DISTURBANCE AND ATTORNMENT AGREEMENT
THIS AGREEMENT is entered into this day
of , 1991, by and among
, a ("Tenant"), , ("Borrower") and
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a corporation
organized and existing under the laws of the State of New Jersey
("Lender").
RECITALS
A. Tenant is the lessee and Borrower is the current
lessor under that certain lease dated by and
between , as landlord, and Tenant, as
tenant, as amended (said lease as so amended hereinafter referred
to as the "Lease") demising certain premises more particularly
described in the Lease.
B. Lender has made, or will make, to Borrower a loan
(the "Loan") evidenced by a Note Secured by Deed of Trust in the
face amount of ($ ) (the "Note") and
secured by, among other things, a certain Deed of Trust to be
executed by Borrower for the benefit of Lender (the "Deed of
Trust") which will encumber Borrower's interest in certain real
property located in County, and more
particularly described in Exhibit "A" attached hereto and
incorporated herein by reference thereto (the ("Property"). The
Property includes the premises covered by the Lease.
C. Lender has required the execution of this Agreement
by Borrower and Tenant as a condition precedent to Lender making
the Loan.
D. Tenant acknowledges, as its consideration for
entering into this Agreement, that Tenant will benefit by Lender
making the Loan to Borrower and that Tenant will benefit by
entering into an agreement with Lender concerning their
relationship in the event of foreclosure of the Deed of Trust by
Lender.
<PAGE>
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, and in order to induce Lender to make the Loan,
Tenant, Borrower, and Lender hereby agree and covenant as
follows:
1. Borrower does hereby absolutely and presently grant,
transfer, and assign to Lender the Lease and all existing and
future rents and other sums payable under the Lease and any
separate guarantees of the Lease or any obligations thereunder.
2. Until written demand is made by Lender to Tenant, all
rents and other sums payable under the Lease shall be paid to
Borrower.
3. Tenant and Borrower agree for the benefit of Lender
that:
(a) Tenant shall not pay and Borrower shall not
accept, any rent or additional rent more than one month in
advance of the regular rental installment date; and
(b) Tenant and Borrower will not enter into any
agreement for the cancellation, surrender, termination, amendment
or modification of the Lease without Lender's prior written
consent.
4. Tenant and Lender hereby agree that upon recordation
of the Deed of Trust on the Property for the benefit of Lender
the Lease and all the provisions of the Lease, [including without
limitation, Tenant's [purchase option] [and] [right of first
refusal] contained in Paragraph [s.] of the Lease,] shall
automatically thereafter be subject and subordinate in all
respects to the Deed of Trust and to all renewals, modifications,
replacements, substitutions, rearrangements and or extensions
thereof.
5. If the interests of Borrower in the Property are
acquired by Lender or other party ("Purchaser") by foreclosure,
deed in lieu of foreclosure or any other method in connection
with the enforcement of the Deed of Trust:
(a) If Tenant shall not then be in default in the
payment of rent or other sums due under the Lease or be otherwise
in default under the Lease, Lender agrees that the Lease and the
possessory rights of Tenant thereunder shall continue in full
force and effect and shall not be terminated or disturbed except
in accordance with the terms of the Lease or this Agreement;
(b) Tenant agrees to attorn to Lender (or
Purchaser) as its lessor; Tenant shall be bound under all of the
terms, covenants and conditions of the Lease for the balance of
the term thereof remaining, including any renewal options which
are exercised in accordance with the terms of the Lease;
(c) The interests so acquired shall not merge
with any other interests of Lender in the Property if such merger
would result in termination of the Lease; and
(d) Tenant agrees that its [right of first
refusal] [and] [option to purchase] shall be of no further force
and effect.
The provisions of this paragraph 5 shall be effective and self-
operative without the execution of any other instrument.
6. If the interests of Borrower in the Property are
acquired by Lender (or Purchaser) by foreclosure, deed in lieu of
foreclosure or any other method, Lender (or Purchaser) shall be
bound to Tenant under all of the terms, covenants and conditions
of the Lease, and Tenant shall, from and after Lender's (or
Purchaser's) acquisition of the interests of Borrower in the
Property, have the same remedies against Lender (or Purchaser)
for the breach of the Lease the Tenant would have had under the
Lease against Borrower if Lender (or Purchaser) had not succeeded
to the interests of Borrower; provided however, that Lender (or
Purchaser) shall not be:
(a) liable for any misrepresentation, act or
omission of any prior landlord (including the Borrower); or
(b) subject to any offsets or defenses which the
Tenant might have against any prior landlord (including the
Borrower); or
(c) liable to Tenant for any security deposit
paid to any prior landlord (including the Borrower) which
security deposit was not transferred to Lender or Purchaser; or
(d) bound by any rent or additional rent which
the Tenant might have paid for more than the current month to any
prior landlord (including the Borrower); or
(e) bound by any material amendment or material
modification of the Lease made without its consent; or
(f) bound by any obligation by Borrower to third
parties, whether under an assignment of lease, sublease or other
agreement (including the Lease), which obligations were assumed
by Borrower as an inducement to or in consideration of Tenant's
leasing space in the Property.
Borrower agrees that it will remain liable to Tenant and Tenant
agrees to look solely to Borrower for all Lease obligations,
duties or liabilities which are not expressly assumed by Lender
pursuant to this Paragraph 6.
7. This Agreement shall inure to the benefit of and be
binding upon the parties hereto, any Purchaser, and their
respective heirs, successors and assigns. Upon recording the
full reconveyance of the Deed of Trust, this Agreement shall
become null and void and be of no further effect.
8. Any notice, request, demand, instruction or other
communication to be given to any party hereunder shall be in
writing and shall be delivered by hand, or sent by certified
mail, postage prepaid, return receipt requested, as follows:
To Tenant:
To Borrower:
To Lender: The Prudential Insurance Company
of America
The Prudential Realty Group
2029 Century Park East, Suite 3700
Los Angeles, CA 90067
Attention: Regional Counsel
The addresses and addressees for the purpose of this paragraph
may be changed by giving written notice of such change in the
manner herein provided for giving notice.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
[Tenant] ,
By:
[Borrower] ,
By:
[Lender] THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By:
<PAGE>
TRANCHE A PROPERTIES 01/26/94 SCHEDULE A
06:09 PM
- -A- OFFICE PROPERTIES
<TABLE>
<CAPTION>
ALLOCATED
LOAN
CATELLUS PROPERTY NRA AMOUNT
# PARCEL NO. NAME & ADDRESS CITY STATE (SQFT) (000'S)
<C> <S> <C> <S> <C> <S> <C> <C>
1 CA0592501 Commercenter I, II NewportBeach CA 45542 1035
2 CA0591451 1801 Edinger Santa Ana CA 50394 660
Southern CA/Orange Cty Subtotals 95936 1695
1 CA0374803, 9121,9131,9201,9211
04,05,& 06 Oakdale Northridge CA 216945 14000
1 CA0670021,
22,23 Discovery Park Sacramento CA 43405 960
2 CA0670020 Point West Plaza Sacramento CA 52375 2080
Sacramento Subtotals 95780 3040
1 OR0510001 Raleighwest Executive
Building Portland OR 55380 1520
Subtotal Office Tranche A 464041 20255
</TABLE>
<TABLE>
<CAPTION>
-A- INDUSTRIAL PROPERTIES
ALLOCATED
LOAN
CATELLUS PROPERTY NRA AMOUNT
# PARCEL NO. NAME & ADDRESS CITY STATE (SQFT) (000'S)
<C> <S> <C> <S> <C> <C>
1 AZ0131001 7821 East Acoma Phoenix AZ 12043 300
2 AZ0130901 3315 Buckeye Rd. Phoenix AZ 123427 1125
3 AZ0130701 302 E. University Phoenix AZ 77406 1200
4 AZ0131307 402 N. 44th Ave. Phoenix AZ 221327 2060
5 AZ0131403 2404 S. Wilson Tempe AZ 93366 1300
6 AZ0131406 Broadway Ind. Park Tempe AZ 133291 2475
Arizona Subtotals 660860 8460
1 CA0591052 E. Hunter Anaheim CA 173056 5100
2 CA0590551 2100 E. Valencia Dr. Fullerton CA 268254 6750
3 CA0591252 Mailing & Marketing Orange CA 38793 1350
4 CA0591251 230 W. Blueridge Orange CA 106302 3030
5 CA0591402,
439 & 440 McFadden Center Santa Ana CA 182355 6200
6 CA0591553 CALIF.CONNECTION
(WAS US PLYWOOD) Tustin CA 39440 675
7 CA0592601 14352 Franklin Tustin CA 65910 1650
Southern CA/Orange Cty Subtotals 874110 24755
1 CA0373101 16400 Trojan Way La Mirada CA 220000 4575
2 CA0370130 Greenleaf & Busch SantaFe Sprg CA 165606 4125
3 CA0372060 455l&4575 Loma Vista Vernon CA 106059 2550
4 CA0372062 4530 Loma Vista Vernon CA 47000 1500
5 CA0372079 CMD Ind. Park Vernon CA 222656 4900
6 CA0713526 Jurupa Road Ontario CA 405864 7820
Southern CA/LA Cty Subtotals 1167185 25470
1 CA0010526 Spec. Warehouse Livermore CA 76800 1500
2 CA0010527 Transwestern Livermore CA 92022 1800
3 CA0010511,
12 & 13 29995, 59 & 0001
Ahern Street Union City CA 220109 4950
4 CA0010510 2900 Faber St. Union City CA 126144 3700
Northern CA Subtotals 515075 11950
1 CA0732101 Kearny Mesa San Diego CA 193009 5180
2 CA0730451
& 19 8820-9050 Kenmar San Diego CA 198070 5925
San Diego Subtotals 391079 11105
1 KS1770151 Fleming Warehouse Topeka KS 70266 450
1 OK1090551
& 352 Oklahoma City Ware. OklahomaCity OK 210829 1350
Subtotal Industrial Tranche A 3889404 83540
</TABLE>
TRANCHE A PROPERTIES 01/26/94 SCHEDULE A
06:09 PM
- -A- R & D PROPERTIES
<TABLE>
<CAPTION>
ALLOCATED
LOAN
CATELLUS PROPERTY NRA AMOUNT
# PARCEL NO. NAME & ADDRESS CITY STATE (SQFT) (000'S)
<C> <S> <C> <S> <C> <C>
1 AZ0131002 Redfield/Gelding Scottsdale AZ 50300 1125
1 CA0591504 Spec. R & D/3M Tustin CA 69763 3000
2 CA0591552 1361 E. Valencia Tustin CA 75900 2625
3 CA0592101 Beckman #1 & 2 Fullerton CA 164280 5365
4 CA0592153 Beckman #3 Fullerton CA 50000 1200
Southern CA/Orange Cty Subtotals 359943 12190
1 CA0670024 Commerce Circle Sacramento CA 110500 1500
Subtotal R & D Tranche A 520743 14815
</TABLE>
<TABLE>
<CAPTION>
- -A- RETAIL PROPERTIES
ALLOCATED
LOAN
CATELLUS PROPERTY NRA AMOUNT
# PARCEL NO. NAME & ADDRESS CITY STATE (SQFT) (000'S)
<C> <S> <C> <S> <C> <S> <C> <C>
1 CA0010251 Berkeley Depot Bldg Berkeley CA 3695 525
2 CA0374301 Topanga-Erwin S.C. Woodland Hills CA 83862 5250
Subtotal Retail Tranche A 87557 5775
</TABLE>
<TABLE>
<CAPTION>
- -A- MISCELLANEOUS PROPERTIES
ALLOCATED
LOAN
CATELLUS PROPERTY NRA AMOUNT
# PARCEL NO. NAME & ADDRESS CITY STATE (SQFT) (000'S)
<C> <S> <C> <S> <C> <S> <C> <C>
1 CA0371952 3060 E. 44th St. Vernon CA 50000 600
2 CA0372055 4330 District Blvd. Vernon CA 15288 150
3 CA0372057 4350 District Blvd. Vernon CA 14014 75
4 CA0372059 4410 District Blvd. Vernon CA 4600 150
5 CA0372070 4700 Dist. St. Vernon CA 10600 300
6 CA0372074 5035 Gifford Ave. Vernon CA 76560 825
7 CA0372075 5030 Gifford Ave. Vernon CA 19950 300
8 CA0372076 4801 E. 50th St. Vernon CA 48315 375
Vernon Subtotals 239327 2775
1 CA0731752 1020 Kettner (1) San Diego CA 43637 700
Subtotal Misc. Tranche A 282964 3475
</TABLE>
NOTES: (1) For the purposes of a partial release of the Baggage
Building pursuant to Section 6(h) of the Loan Agreement, the Allocated Loan
Amount for the Baggage Building shall be 0 and and the entire Allocated
Loan Amount shall be deemed to apply to the remaining portion of this
parcel (i.e. the Depot Building)
<PAGE>
TRANCHE A PROPERTIES 01/26/94 SCHEDULE A
06:47 PM
<TABLE>
<CAPTION>
- -A- GROUND LEASE PROPERTIES
GROSS ALLOCATED
LAND LOAN
CATELLUS PROPERTY AREA AMOUNT
# PARCEL NO. NAME & ADDRESS CITY STATE (ACRES) (000'S)
<C> <S> <C> <S> <C> <S> <C> <C>
1 CA0370225 Greenleaf & Busch SantaFe Sprg CA 3.04 795
1 CA0374801 Jrass Corporation Northridge CA 2.02 975
2 CA0374802 N & K Dem Northridge CA 1.56 1100
3 CA0374813 Western System Northridge CA 3.19 2015
4 CA0374814 Oakdale Assoc. Northridge CA 3.23 1940
5 CA0374815 Valley Assoc. Northridge CA 3.5 2480
6 CA0374816 W & K Investment Northridge CA 3.82 1535
7 CA0374823 W & K Investment Northridge CA 0.68 80
8 CA0374824 W & K Investment Northridge CA 1.13 210
9 CA0374825
& 26 Katell Properties Northridge CA 1.36 250
10 CA0374827
& 28 W & K Investment Northridge CA 1.66 310
11 CA0374829 W & K Investment Northridge CA 1.11 190
12 CA0374830 W & K Investment Northridge CA 1.34 165
13 CA0374831 W & K Investment Northridge CA 1.34 165
14 CA0374832 W & K Investment Northridge CA 1.11 140
15 CA0374833
& 34 W & K Investment Northridge CA 2.1 825
16 CA0374835,
36 & 37 W & K Investment Northridge CA 2.47 540
17 CA0374838 W & K Investment Northridge CA 0.99 125
18 CA0374839 W & K Investment Northridge CA 5.57 2055
19 CA0374840 W & K Investment Northridge CA 5.28 1830
20 CA0374841 W & K Investment Northridge CA 5.62 1525
Northridge Subtotals 49.08 18455
1 CA0731705,
06,07,
12&51 Misc. Parcels (1) San Diego CA 5.55 9100
2 CA0731704
& 29 Bennet/Misc. (2) San Diego CA 1.03 2875
3 CA0731701 Ace Parking San Diego CA 1.56 2825
4 CA0731703 Travelodge San Diego CA 0.11 175
5 CA0731714 Ace Parking San Diego CA 1.6 2825
6 CA0731901 Ace Parking San Diego CA 0.69 1500
San Diego Subtotals 10.54 19300
Subtotal Tranche A Ground Leases 62.66 38550
</TABLE>
NOTES: (1) CA0731706 is a non-ground leased parcel owned in fee and
consists of a 938 sf bldg. CA0731751 is a non-ground leased parcel owned
in fee and consists of a 5,950 sf bldg.
(2) CA0731704 is a non-ground leased parcel owned in fee and
consists of a 5,950 sf bldg.
<PAGE>
TRANCHE B PROPERTIES 01/26/94 SCHEDULE A
06:09 PM
<TABLE>
<CAPTION>
- -B- OFFICE PROPERTIES
ALLOCATED
LOAN
CATELLUS PROPERTY NRA AMOUNT
# PARCEL NO. NAME & ADDRESS CITY STATE (SQFT) (000'S)
<C> <S> <C> <S> <C> <S> <C> <C>
1 CA0591151 Global Van Lines Orange CA 40000 2000
2 CA0591152 Global Van Lines Orange CA 35000 1075
3 CA0850025,
26,27,28
29&30 South Bay Center San Jose CA 424192 42650
4 IL0311251 Santa Fe Center Chicago IL 374700 20650
Office Subtotal 873892 66375
- -B- INDUSTRIAL PROPERTIES
ALLOCATED
LOAN
CATELLUS PROPERTY NRA AMOUNT
# PARCEL NO. NAME & ADDRESS CITY STATE (SQFT) (000'S)
1 AZ0131405 Microage Building Tempe AZ 111337 1940
- -B- RETAIL PROPERTIES
ALLOCATED
LOAN
CATELLUS PROPERTY NRA AMOUNT
# PARCEL NO. NAME & ADDRESS CITY STATE (SQFT) (000'S)
1 CA0010195 Granada Shop. Ctr. Livermore CA 66342 3665
2 CO0310101 Belcaro Shop. Ctr. Denver CO 100223 5200
Retail Subtotals 166565 8865<PAGE>
TRANCHE B PROPERTIES 01/26/94 SCHEDULE A
06:47 PM
- -B- GROUND LEASE PROPERTIES
GROSS ALLOCATED
LAND LOAN
CATELLUS PROPERTY AREA AMOUNT
# PARCEL NO. NAME & ADDRESS CITY STATE (ACRES) (000'S)
1 CA0010173 Storage Investor Oakland CA 2.27 825
2 CA0010194 Pacific Racing
GOLDEN GATE FIELDS Albany CA 125.00 9150
3 CA0130001 Macerich N.W.Ass. Walnut Creek CA 2.06 925
4 CA0850017 Murphy Square Sunnyvale CA 1.45 435
5 CA0850031 O'Donnell, Brigham San Jose CA 7.99 830
6 CA0850032 O'Donnell, Brigham San Jose CA 4.94 715
7 CA0850042 Orchard # 703 San Jose CA 15.84 830
8 CA0850043 Orchard # 702 San Jose CA 16.71 915
9 CA0850044 Orchard # 701 San Jose CA 24.29 1560
Northern CA Tranche B GL Subtotals 200.55 16185
1 CA0370011 Wickes/
Midtown Shopping Los Angeles CA 12.97 3955
2 CA0370050 Donald Miller Pomona CA 3.52 675
3 CA0370051 A&M Investment Pasadena CA 0.78 355
4 CA0370052 Ambrose Properties Long Beach CA 6.98 3225
5 CA0370059 McMillan Funeral Gardena CA 0.42 225
6 CA0370146 Shoemaker Assoc. Cerritos CA 18.24 5000
7 CA0590020 Yorba Investors Yorba Linda CA 6.21 1100
8 CA0590125 Griffith Brothers/
VILLA PARK Orange CA 2.02 750
9 CA0592102 Imperial Bonita Fullerton CA 4.25 1245
10 CA0592103 U.S. Life Insurance/
PLAZA IMPERIAL Fullerton CA 3.49 800
11 CA0650127 Elsinore Investment Lake Elsinore CA 0.76 145
12 CA0650801 B.C. Systems Blythe CA 13.079 200
13 CA0710214,
1518 &
1544-49 Lockheed S.Bernardino CA 5139.55 1275
14 CA0710625 Bank of S.Bernardino S.Bernardino CA 1.37 525
15 CA0730002 Harris Farms Inc./
CA MULTIMODAL San Diego CA 7.54 750
Southern CA Tranche B GL Subtotals 221.179 20225
Tranche B Ground Lease Subtotals 5421.729 36410
Aggregate Tranche A & B Totals 280000<PAGE>
SCHEDULE B
</TABLE>
<TABLE>
<CAPTION>
15-Feb-94
CATELLUS PROPERTY YEAR NRA
# PARCEL NO. NAME & ADDRESS CITY STATE BUILT (SQFT)
<C> <S> <C> <S> <C> <S> <C>
1 CA0371952 3060 E. 44th Street Vernon CA 1951 50,000
2 CA0372055,56 4330 District Blvd. Vernon CA 1938 15,288
3 CA0372057 4350 District Blvd. Vernon CA 1937 14,014
4 CA0372059 4410 District Blvd. Vernon CA 1980 4,600
5 CA0372070 4700 Dist. St. Vernon Ca 1980 10,600
6 CA0372074 5035 Gifford Ave. Vernon CA 1942 76,560
7 CA0372075 5030 Gifford Ave. Vernon CA 1948 19,950
8 CA0372076 4801 E. 50th St. Vernon CA 1937 48,315
9 CA0731704 820 West A. St. San Diego CA 1945 10,000
10 CA0731706 1302 Kettner Blvd San Diego CA 1940 938
11 CA0731751 1256-68 Kettner San Diego CA 1960 5,000
12 CA0731752 1020 Kettner San Diego CA 1915 43,637
13 CA0591553 Calif. Connection/
U.S. Plywood Tustin CA 1966 39,440
GROUND LEASE PROPERTIES
GROSS
LAND
CATELLUS PROPERTY YEAR AREA
# PARCEL NO. NAME & ADDRESS CITY STATE BUILT (ACRES)
1 CA0731703, Additional San
05,07,12,29 Diego Parcels San Diego CA N/A 4.74
2 CA0731701, Ace Parking &
14,901 Familian Corp San Diego CA N/A 3.45<PAGE>
SCHEDULE C
</TABLE>
<TABLE>
MAJOR TENANT LIST
<CAPTION>
LEASE
LEASED AREA EXPIRATION
# PARCEL NUMBER TENANT NAME (SF) DATE
<C> <S> <C> <S> <C> <C>
1 AZ0130701 Leprino Foods 54,027 10/94
2 AZ0130901 Thakco 56,617 10/93
3 AZ0131307 Total Warehousing 171,193 8/95
4 CA0010510 Winterlia Inc. 126,144 6/02
5 CA0010512 Advo Systems Inc. 86,496 5/95
6 CA0010527 Transwestern 92,022 2/98
7 CA0370130 Bradshaw Int'l 94,850 7/95
8 CA0370130 CA Business Int'l 70,756 12/93
9 CA0372062 Michael Caruso 47,000 12/99
10 CA0372076 Griffith Micro 48,315 6/94
11 CA0373101 Tuftex Carpet 220,000 2/96
12 CA0374805 St. Ives Labs 53,292 7/02
13 CA0590551 North American Phillip 143,904 4/96
14 CA0590551 Sunclipse Inc. 57,000 4/96
15 CA0590551 Biz E Associates 59,616 11/95
16 CA0591251 Apace Moving 106,302 4/96
17 CA0591252 Mailing & Marketing 38,793 8/96
18 CA0591504 MN Mining & Mtg. 69,763 8/96
19 CA0591552 Scan Tron Corp 75,226 2/96
20 CA0591553 California Connection 39,440 12/94
21 CA0592153 Creative Products 50,000 7/97
22 CA0592101 Beckman Industries 64,280 5/00
23 CA0713526 Brokowsky 405,864 3/99
24 KS1770151 Graphic Promotion 70,366 12/96
25 OK1090551 Commercial Warehouse 207,229 9/94
26 CA0010195 Lucky Stores 28,498 11/99
27 AZ0131405 Microage Computer 111,337 6/95
28 CA0591151 Global Van Lines 40,000 2/96
29 CA0591152 Global Van Lines 35,000 2/96
30 CA0850026,27,
28,30 BT Tymnet 282,514 4/97
31 IL0311251 Sara Lea Bakery 80,550 5/01
</TABLE>
<TABLE>
MAJOR GROUND LEASE TENANTS
<CAPTION>
LEASED AREA LEASE TERM
# PARCEL NUMBER TENANT NAME (ACRES) (YEARS)
<C> <S> <C> <S> <C> <C>
1 CA0010194 Ladbroke Racing Corp. 234.00 27
2 CA0370052 Ambrose 6.98 53
3 CA0370146 Alondra Shoemaker 11.25 45
4 CA0374813 Western System Fin. 3.19 55
5 CA0374814 Oakdale Assoc. 3.23 55
6 CA0374815 Valley Assoc. 3.49 55
7 CA0374816 Lot 17 Assoc. 3.82 55
8 CA0710214 Lockheed Calif. Co. 5,139.00 50
9 CA0850042 Orchard Invest. Prop. 15.84 55
10 CA0850043 Orchard Invest. Prop. 16.71 55
11 CA0850044 Orchard Invest. Prop. 24.29 55
</TABLE>
<TABLE>
<PAGE>
SCHEDULE D
OPTION PROPERTIES
<CAPTION>
CATELLUS
PARCEL NO. LEASE NO. TENANT
<S> <C> <C> <S>
AZ0131405 1304 Microage Computer Centers
CA0010527 1607 Transwestern Polymers
CA0372074 90957 Academy Tent and Canvas
CA0592101 3701 Beckman Industrial Corporation
CA0731703 3477 Travelodge
CA0591251 3709 Apace
</TABLE>
