MORTGAGE LOAN MODIFICATION AGREEMENT
Between
HIGH CASH PARTNERS, L.P.,
a Delaware limited partnership
and
RESOURCES ACCRUED MORTGAGE INVESTORS 2 L.P.,
a Delaware limited partnership
MORTGAGE LOAN MODIFICATION AGREEMENT
THIS MORTGAGE LOAN MODIFICATION AGREEMENT (the "Modification Agreement")
is made this 21st day of December, 2000, between HIGH CASH PARTNERS, L.P., a
Delaware limited partnership (the "Borrower"), and RESOURCES ACCRUED MORTGAGE
INVESTORS 2 L.P., a Delaware limited partnership (the "Lender").
R E C I T A L S :
A. The Borrower owns certain real property, improvements and personal
property which is commonly known as Sierra Marketplace and located at South
Virginia Street and East ▇▇▇▇▇ ▇▇▇▇, Reno, Nevada (as more specifically
described in the Deed of Trust (as defined below) and hereafter called the
"Property");
B. The Property is encumbered by a mortgage loan (the "Loan") as
evidenced by a Deed of Trust, Assignment of Rents, Fixture Filing and Security
Agreement among the Borrower as trustor, First Commercial Title, Inc., as
trustee and the Lender, as beneficiary dated February 10, 1989, and recorded on
February 13, 1989, in Book 2866, Page 42, as Document No.1304601, in the
Official Records of Washoe County, Nevada (the "Deed of Trust") and an
Assignment of Leases and Rents given by the Borrower in favor of the Lender
dated February 10, 1989, and recorded on February 13, 1989, in Book 2866, Page
88, as Document No. 1304602, in the Official Records of Washoe County, Nevada
(the "Assignment"). The Deed of Trust and Assignment secure that certain
Registered Note dated February 10, 1989 in the original principal amount of
$6,500,000 made by the Borrower and given to Lender (the "Note"). The original
principal amount of the Note, together will all accrued and unpaid interest,
late charges, default interest, attorneys fees and other costs and expenses due
and payable under the Note and Loan Documents is referred to herein as the
"Indebtedness". The Note, Deed of Trust, Assignment and other documents
evidencing and securing the Indebtedness are hereinafter referred to as the
"Loan Documents";
C. The Maturity Date of the Loan is February 28, 2001, and Borrower
has requested Lender, and Lender has agreed, to forbear in the exercise of its
rights and remedies under the Loan Documents in the event the Loan is not
satisfied in full on or prior to the Maturity Date, upon the terms and
conditions of this Modification Agreement; and
D. Lender and Borrower have agreed to enter into this Modification
Agreement to memorialize their understanding regarding their respective rights
and obligations in respect of the pending maturity of the Loan.
A G R E E M E N T:
IN CONSIDERATION of the mutual agreements herein contained, the benefits
to be derived by the parties therefrom and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
ARTICLE I
CAPITALIZED TERMS; RECITALS; RATIFICATION
1.1 Capitalized Terms. Capitalized Terms used herein and not otherwise
defined shall have the meanings ascribed to them in the Loan Documents.
1.2. Recitals. The foregoing recitals are hereby affirmed by the parties
as true and correct and are incorporated herein
by this reference.
1.3. Ratification. Borrower hereby acknowledges and agrees, subject to
the satisfaction of each of the conditions precedent set forth herein and the
other terms and conditions contained herein, that the Loan Documents are hereby
reaffirmed, ratified and modified as provided in this Modification Agreement as
of the date hereof. All of the property securing the Loan including, without
limitation, the Property, shall remain in all respects subject to the liens,
charges, security interests, and encumbrances of the Deed of Trust, the
Assignment and the other Loan Documents, as modified and amended pursuant to
this Modification Agreement, and nothing herein contained, and nothing done
pursuant hereto, shall affect or be construed to affect the liens, charges,
security interest, or encumbrances of, or warranties of title in, or conveyance
effected by the Deed of Trust, the Assignment or the other Loan Documents, as
modified and amended pursuant to this Modification Agreement, or the priority
thereof over other liens, charges, security interests, encumbrances or
conveyances, all of which shall continue to secure, in the same manner, in the
same priority and to the same extent set forth therein, the payment and
performance of all Obligations (as hereinafter defined) arising under the Loan
Documents, as modified and amended pursuant to this Modification Agreement, and
all of same are hereby affirmed, extended, carried forward, ratified and
confirmed and shall for all purposes be deemed in full force and effect. The
execution and acceptance of this Modification Agreement by Lender shall not be
deemed or otherwise construed as (i) a waiver, modification, restriction or
limitation of any of Lender's rights, remedies, recourses and benefits, except
as provided in this Modification Agreement, arising under the Note, Deed of
Trust, the Assignment and/or the other Loan Documents by operation of law or
otherwise, or of Lender's right otherwise to demand full, complete and strict
performance of the obligations arising under any of the Loan Documents
(collectively, the "Obligations"), or (ii) a precedent with respect to Lender's
consent requested or to be requested by Borrower or Guarantor (as defined
herein) or any other person or entity to any future modification of any of the
Loan Documents, and Lender shall be under no obligation, express or implied, to
consent to any such future modification.
ARTICLE II
CONSIDERATION; MODIFICATION TERMS;
AMENDMENTS TO LOAN DOCUMENTS
2. Consideration and Modified Terms. Lender agrees to forbear in the
exercise of its rights and remedies under the Loan Documents in the event the
Loan is not satisfied on or prior to the Maturity Date. Borrower and Lender
agree that the consideration for the agreement of Lender to forbear, and the
terms and conditions upon which such agreement is conditioned, are as follows:
2.1 Loan Extension; Costs. For and in consideration for
entering into this Modification Agreement, Borrower hereby agrees to pay
Lender upon the full execution of
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this Modification Agreement by Borrower and Lender all reasonable costs
paid or incurred by Lender in connection with this Modification Agreement,
including without limitation, title insurance premiums, search fees,
recording costs and Lender's attorney's fees, in an amount not to exceed
$20,000.
2.2 Modification Terms. Subject to the satisfaction of each of
the conditions precedent set forth herein and the other terms and
conditions contained herein, the parties hereto agree that the terms of
the modification of the Loan shall be as follows:
2.2.1 Conveyance Documents; Release Terms. The Borrower agrees to
deposit a grant deed, ▇▇▇▇ of sale, assignment of leases and other
documents called for by Article IV herein (the "Conveyance Documents") and
Lender agrees to deposit an executed counterpart to the assignment of
leases with Post & ▇▇▇▇▇▇▇, LLP (the "Escrow Agent") to be held in escrow
in accordance with the terms and conditions of this Modification
Agreement, and that certain Agreement for Deed attached hereto as Exhibit
"A".
The Conveyance Documents will be held in escrow by Escrow Agent and
will not be released to the Lender or its designee until the earlier of
the following events (a "Release Event"):
(i) In the event Borrower or any affiliate of Borrower
takes any action or omits to take any action, in bad faith, which is
intended to hinder, impede or delay the exercise by Lender of its
rights, powers or remedies under this Modification Agreement and the
same is not cured within ten (10) days after notice to Borrower by
Lender; provided, however, that the commencement by Borrower of an
action against Lender to seek to enforce the terms and provisions of
this Modification Agreement shall not constitute a Release Event in
the event Borrower determines, in its good faith judgment, that
Lender is in breach of the terms and provisions of this Modification
Agreement; provided, further, however, that the terms and conditions
of that certain Unconditional Limited Guaranty shall not be affected
by the foregoing in the event it is determined by final adjudication
of a court of competent jurisdiction that such civil action was
commenced in bad faith with the intent to hinder, impede or delay
the exercise by Lender of its rights, powers or remedies under this
Modification Agreement.;
(ii) On any day on or after March 1, 2002 upon the closing
date of the sale or other conveyance of the Property: (a) in the
event the Lender identifies a bona fide third party purchaser to
acquire the Property, or (b) for any other reason deemed necessary
by Lender in its reasonable discretion acting in good faith to avoid
a material economic disadvantage to the Lender (i.e., the
participation in a "roll-up" or other form of reorganization of
Lender or similar transfer of the Property, but excluding payment of
the Expense Distribution (as defined herein) or other monetary
amounts due Borrower pursuant to the terms of this Modification
Agreement); and
(iii) March 1, 2003.
2.2.2 Management Agent. The Borrower agrees to retain Kestrel
Management LP (the "Managing Agent") to manage the Property commencing
January 2, 2001, pursuant to
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the terms and conditions of the management agreement attached hereto as
Exhibit B (the "Management Agreement"); such Managing Agent shall not be
terminated by Borrower pursuant to the terms of the Management Agreement
or otherwise, without the prior consent of Lender, which consent shall not
be unreasonably withheld, unless due to: (a) the willful misconduct or
gross negligence of Managing Agent as determined by final adjudication of
a court of competent jurisdiction, or (b) the failure of Managing Agent to
remit to Borrower the financial information within the control of Managing
Agent reasonably necessary to enable Borrower to file its Form 10-K or
10-KSB, and Form 10-Q with the Securities and Exchange Commission on a
timely basis after five (5) business days prior written notice from
Borrower to Managing Agent detailing with specificity the information
required and affording Managing Agent the opportunity to provide such
information within such five (5) business day period. Any successor
managing agent appointed by Borrower must be approved by Lender in its
reasonable discretion. Lender agrees that until March 1, 2001, the
Property shall be managed in accordance with the Plan (as such term is
defined in the Management Agreement), and thereafter pursuant to a Plan(s)
approved by Lender. As of March 1, 2001, the Borrower hereby agrees that:
(i) Managing Agent shall transmit (and upon request of Lender, Borrower
will so instruct Managing Agent to transmit) all Gross Operating Cash Flow
(as such term is defined in the Management Agreement) to the Lender,
except for those funds that Borrower may otherwise be entitled to in
accordance with Section 2.2.3 and Article VI herein (as to which Lender
shall instruct Managing Agent to remit to Borrower), and (ii) Managing
Agent will not be required to obtain the consent of Owner to lease the
Property, provided such leasing is conducted to the standards of other
similarly situated properties of the same type and class in the area in
which the Property is located, including rental rates, tenant improvement
allowances and leasing commissions. Borrower agrees to sign as landlord
all leases for the Property within five (5) business days after receipt
from Managing Agent until a Release Event has occurred, provided that such
leases are within the leasing parameters set forth above.
2.2.3 Distribution of Net Operating Income. Net Operating Income
(as defined herein) generated by the Property shall be disbursed as
follows:
(i) Prior to March 1, 2001. Provided no Event of Default
(as such term is defined in the Loan Documents) has occurred and is
continuing, 100% of the Net Operating Income allocable to the period
prior to March 1, 2001 shall be distributed to the Borrower;
(ii) On and After March 1, 2001. Provided no Event of
Default has occurred and is continuing, $100,000 (or such
proportional amount in the event the Property is not owned by the
Borrower for a full calendar year) of the Net Operating Income
allocable to the period on or after March 1, 2001 shall be
distributed to Borrower annually (the "Expense Distribution"), and
the remaining Net Operating Income shall be paid to the Lender. The
Expense Distribution shall be paid to the Borrower in equal monthly
installments to the extent of available Net Operating Income
commencing April 1, 2001, and each month thereafter until such time
as a Release Event has occurred and the Conveyance Documents have
been delivered to Lender. Net Operating Income received by the
Lender shall be applied first to current interest at 11.22%, next to
accrued and unpaid interest, and the remaining to principal due
under the Note. After delivery of the Conveyance Documents to
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Lender in accordance with the terms hereof, all of Borrower's right,
title and interest to the Property, including without limitation Net
Operating Income, shall terminate, and all Net Operating Income
thereafter shall be the property of the Lender.
(iii) Loan Documents; No Default. The Management Agreement
shall obligate the Managing Agent to use good faith efforts to
comply with the terms and provisions of the Loan Documents (except
to the extent such provisions of the Loan Documents are not
susceptible to performance except by Borrower itself), and any act
or omission of the Managing Agent that otherwise would result in an
Event of Default under the Loan Documents shall not be deemed an
Event of Default for the purposes of this Modification Agreement.
Further, the occurrence of the scheduled maturity date of February
28, 2001, and the failure of Borrower to make any monetary payments
due under the Loan shall not be an Event of Default for the purposes
of this Modification Agreement or under the Loan Documents.
(iv) Definitions.
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(a) "Net Operating Income" shall mean all revenues
derived from the ownership and operation of the Property and the
interim investment of accumulated funds minus all Operating
Expenses; excluding however Net Condemnation Proceeds and Net
Casualty Proceeds (as defined in the Deed of Trust), and proceeds
from the sale of the Property.
(b) "Operating Expenses" shall mean expenditures of all
kinds made with respect to the operation of the Property in the
normal course of business including, but not limited to,
expenditures for taxes, insurance, repairs, replacements,
maintenance, management fees, salaries, advertising expenses,
professional fees, wages and utility costs, amounts payable with
respect to the Property under or with respect to any Permitted
Encumbrances and for capital expenditures required to comply with
legal requirements applicable to the Property or Leases or
amendments thereto, but expressly excluding any debt service on the
Note.
2.2.4 Appraisal. Pursuant to, and in accordance with the terms of
the Note, the Lender hereby requests, and the Borrower hereby agrees, to
engage Greenwich Realty Advisors to perform an appraisal of the Property
to determine the Excess Payment (as such term is defined in the Note), if
any, due under the terms of the Note. In the event the appraisal indicates
a value which requires an Excess Payment be made by the Borrower to the
Lender, the Borrower shall make such payment within fifteen (15) days
after the determination of such amount as evidenced by Lender's written
demand, which absent manifest error, shall be conclusive as to the amount
owed. Borrower's failure to timely make such payment shall be a default
hereunder, without further notice from Lender or any opportunity to cure,
and shall result in the immediate release of the Conveyance Documents to
Lender upon Lender's demand made to Escrow Agent.
Upon performance by Borrower of its obligations under this Section
2.2.4, Lender shall have no further appraisal rights pursuant to the Note.
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2.2.5 Prepayment; Payment after Maturity Date. Notwithstanding any
other provision set forth in the Loan Documents:
(i) The Borrower shall have the right to prepay the
Loan in full in accordance with the terms and conditions of the Loan
Documents on any day prior to March 1, 2001; and
(ii) The Borrower shall have the right to satisfy the Loan
in full in accordance with the terms and conditions of the Loan
Documents after February 28, 2001 and prior to March 1, 2003 for a
price, to be paid in cash, equal to the sum of: (a) the then unpaid
principal balance of the Loan and all accrued and unpaid interest
and other charges due under the Loan, and (b) as additional
interest, 66% of any value in excess of (a) above, provided the
Lender has not otherwise notified the Borrower in writing that it
has entered into a contract to sell or otherwise convey the Property
pursuant to Section 2.2.1(ii) herein.
In the event that the Loan is satisfied in full as provided in this
Section 2.2.5, the Conveyance Documents shall have no force or effect and
shall be released from escrow and returned to Borrower, and Lender shall
so instruct Escrow Agent.
2.2.6 Unconditional Limited Guaranty. As for the inducement for
the Lender to enter into this Modification Agreement, the Borrower agrees
to deliver to the Lender, together with the execution and delivery of this
Modification Agreement, the Unconditional Limited Guaranty executed by
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ("Guarantor") in the form attached hereto as Exhibit C,
with the understanding the Lender would not enter into this Modification
Agreement without the due execution and delivery of such agreement to
Lender.
2.2.7 Release. The Borrower and Lender agree to exchange the
Release attached hereto as Exhibit D together with the execution and
delivery of this Modification Agreement.
2.2.8 Amendments to Loan Documents.
(i) Junior Encumbrances. Notwithstanding Paragraph 2 of
the Deed of Trust, no Junior Encumbrances shall be permitted.
Paragraph 62 of the Deed of Trust is hereby deleted in its entirety;
(ii) Leases. The first two sentences of Paragraph 12 of
the Deed of Trust shall be deleted in their entirety and amended to
provided that no new Lease for the Property shall be executed by
Trustor and any existing lease shall not be modified or canceled, in
each case, without the prior written consent of Beneficiary, which
consent shall not be unreasonably withheld or delayed. The third
sentence of Paragraph 12 of the Deed of Trust is hereby deleted in
its entirety;
(iii) Appraisal Right. Upon Borrower's compliance with
Section 2.2.4 herein, the third paragraph on page 2 of the Note is
hereby deleted in its entirety; and
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(iv) Additional Interest. The requirement that Borrower
pay Additional Interest (as such term is defined in the Note) is
hereby deleted.
ARTICLE III
CONDITIONS PRECEDENT
3. Conditions Precedent. The following shall be conditions precedent
to the effectiveness of this Modification Agreement.
3.1 Documents. Borrower and Guarantor shall have executed,
acknowledged and delivered to Lender this Modification Agreement, and each
and every document called for herein, including, without limitation, the
Agreement for Deed and Conveyance Documents, the Unconditional Limited
Guaranty, and Mutual Release;
3.2 UCC Financing Statements. Borrower shall have executed and
delivered to Lender UCC financing statements for filing with the Secretary
of State's office in the States of Delaware, Nevada and New York and the
Deed Records of Washoe County, Nevada;
3.3 Insurance on the Property. Borrower shall have delivered,
or caused to be delivered, to Lender, in form and substance satisfactory
to Lender, evidence of insurance coverage on the Property, and the
improvements and personal property located thereon, in accordance with the
provisions of the Deed of Trust, together with evidence in form and
substance satisfactory to Lender, that all insurance premiums due to
maintain such insurance have been paid in full and that no delinquencies
exist with respect to the same;
3.4 Taxes, Charges, Impositions and Assessments. Borrower shall
have delivered, or caused to be delivered, to Lender, evidence, in form
and substance satisfactory to Lender, that all fiscal year 2000 - 2001
taxes, charges, and impositions then due and payable, and all taxes,
charges, impositions and assessments for all prior years relating to the
Property have been paid in full, and that no delinquencies exist with
respect to the same, including without limitation, any and all penalties,
late charges and interest accrued thereon;
3.5 Borrower's Authority Documents. Borrower shall have
delivered to Lender all the relevant formation and organizational
documents of Borrower and each of the general partners of Borrower,
including, without limitation, copies of all resolutions authorizing the
consummation of the transactions contemplated by this Modification
Agreement and such other evidence of partnership authority as reasonably
requested by Lender (which may include an opinion of counsel)
("Partnership Authority"), certificates of good standing, certificates of
existence and all other certificates which can be obtained from the
Secretary of State's office in the jurisdiction in which the entity was
organized, and where it is doing business, and evidence that all such
formation documents remain in full force and effect and have not been
amended or modified since they were delivered to Lender; and
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3.6 Legal Opinion. Borrower shall provide to Lender an opinion
of legal counsel in form and content reasonably satisfactory to Lender.
In the event evidence of Partnership Authority is not delivered to Lender
on or before February 27, 2001 (as such time may be extended upon the mutual
agreement of Borrower and Lender), this Modification Agreement shall terminate,
the Conveyance Documents, the Unconditional Limited Guaranty and all other
documents contemplated hereunder shall be of no force or effect and shall be
returned to Borrower and Guarantor, respectively, and neither party shall have
any further rights or obligations hereunder or thereunder, and the rights and
obligations of the parties hereto shall be governed by the terms and conditions
of the Loan Documents as if this Modification Agreement was never executed.
Notwithstanding the foregoing, the term of the Management Agreement shall
commence January 2, 2001.
ARTICLE IV
CLOSING
4. Closing. The Borrower and the Lender agree that in the event a Release
Event occurs the transfer of the Property will be consummated as follows:
4.1 Closing Date. The transfer of the Property will close on
the date (hereafter called the "Closing Date") after a Release Event has
occurred under Section 2.2.1 herein and designated by Lender with seven
(7) business days advance notice to Borrower and Escrow Agent, but no
later than March 1, 2003; provided that in the event Lender fails to
deliver such notice to Borrower and Escrow Agent within the time frame
contemplated above, Borrower shall have the right at anytime after April
1, 2003 to forward such notice to Lender and Escrow Agent instructing
Escrow Agent to record the Deed and otherwise deliver the Conveyance
Documents to Lender .
4.2 Borrower's Deliveries. Simultaneously with the execution
and delivery of this Modification Agreement, the Borrower will deliver or
cause to be delivered to the Escrow Agent the following items (all
documents will be duly executed and acknowledged where required but not
dated):
4.2.1 Deed. A grant deed (the "Deed") in the form of
Schedule "A" attached hereto;
4.2.2 ▇▇▇▇ of Sale. A ▇▇▇▇ of sale and assignment (the "▇▇▇▇
of Sale") in the form of Schedule "B" attached hereto;
4.2.3 Lease Assignment. An assignment of leases (the
"Lease Assignment") in the form of Schedule "C" attached hereto;
4.2.4 Owner's Affidavit. An affidavit in the form of
Schedule "D" attached hereto;
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4.2.5 Non-Foreign Affidavit. An affidavit in the form of
Schedule "E" attached hereto;
4.2.6 Tenant Notice. A notice to each tenant of the Property
in the form of Schedule "F" attached hereto; and
4.2.7 Additional Documents. Such additional documents
pertaining to the authority of Borrower to convey the Property
and/or state transfer tax forms as might be reasonably requested by
the title company recording the Deed to consummate the transfer of
the Property to the Lender.
4.3 Possession. Possession of the Property, subject to the
rights of tenants in possession, will be delivered by the Borrower to
the Lender on or before the close of business on the Closing Date.
Effective on the acceptance of the Deed by the Lender, beneficial
ownership and the risk of loss of the Property will pass from the
Borrower to the Lender.
ARTICLE V
PROPERTY INFORMATION; INSPECTION
5. Information; Inspection. At any time and from time to time upon
reasonable prior notice by Lender to Borrower prior to the Closing Date, the
Lender will have the right, at its sole cost and expense and subject to the
rights of tenants in possession, to inspect the Property, to conduct such
environmental and engineering studies of the Property as the Lender deems
appropriate and to inspect the books, records, contracts, titles, leases,
accounts and all other information in the possession of the Borrower or the
Borrower's agents relating to the Property. Within five (5) days after the date
the Borrower executes this Modification Agreement, the Borrower agrees: (a) to
deliver to Managing Agent, to the extent in its possession, and (b) to instruct
Colliers Nevada Management, LLC, the current managing agent for the Property,
and ▇▇▇▇ & Company, the Borrower's independent accounting firm, to deliver to
Managing Agent, to the extent in their possession, copies of the following
documents and records relating to the Property:
5.1 Financial Information. Income and expense statements for the
calendar years ending 1998 and 1999 and, to the extent available, monthly
statements for the current year; and copies of all books, records,
journals, checks, bank statements, bank deposit slips, account
reconciliations, invoices, receipts, supporting documentation for payroll,
payroll taxes and employee benefits and similar items which are in the
possession of the Borrower for the current and two (2) most recent full
calendar years;
5.2 Service Contracts. All service, maintenance, brokerage,
advertising, construction, repair, renovation or other contracts,
arrangements or agreements and all correspondence relating thereto, if any
(the "Service Contracts");
5.3 Insurance. All policies of insurance covering the Property
together with copies of all claims asserted or settlements effected
thereunder during the current and two (2) most recent full calendar years,
if any;
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5.4 Insurance Notices. All notices of deficiencies received
from insurance companies or any board of underwriters, if any;
5.5 Occupancy Leases. A copy of all leases and agreements giving
any person a current right to use or occupy any part of the Property (if
any), together with all amendments and correspondence relating thereto; a
listing of all security or other deposits paid to the Borrower by tenants
in occupancy of the Property (the "Leases");
5.6 Tax Bills. The current tax ▇▇▇▇(s) or notice(s), as well as
copies of the two (2) immediately preceding years' tax bills and any
notices of proposed increases or changes in the assessed value of the
Property or applicable tax rates and any protests, complaints or appeals
filed with respect thereto during the last two (2) years;
5.7 Licenses; Permits. All existing licenses, all heating,
ventilating, boiler, building and other permits, authorizations,
approvals, certificates and similar items, and all existing certificates
of occupancy and similar documents required in connection with the
maintenance or operation of the Property, if any;
5.8 Government Reports. All existing agreements, reports,
correspondence and notices received by the Borrower from any federal,
state, county, city or other governmental agency, if any;
5.9 Engineering Reports. All existing soil, geological,
environmental, engineering, architectural and other tests and reports; and
5.10 Surveys; Plans; Specifications. All existing surveys, plans,
specifications and drawings.
ARTICLE VI
CLOSING ADJUSTMENTS
6. Closing Adjustments. All receipts and disbursements of the Property
will be prorated for the purposes of determining Net Operating Income for
purposes of Section 2.2.3 herein so that, except as otherwise specifically
provided in this Article VI, the Borrower will bear all expenses with respect to
the Property which are incurred prior to March 1, 2001.
6.1 Prorated Items. The following items will be apportioned
between the Lender and the Borrower as of 11:59 pm on February 28, 2001,
based upon the period(s) for which the item is allocable, regardless of
when actually paid or payable:
6.1.1 Rents; Revenues. All rents and other revenues from
the operation of the Property received by the Borrower, if any, and
the CAM charges and tax reimbursements payable by the tenants of the
Property;
6.1.2 Service Contracts. Amounts paid or payable under the
Service Contracts and similar agreements relating to the operation
of the Property, if any;
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6.1.3 Receipt Taxes. Gross income, occupancy, general
excise, gross receipts and other taxes, if any, payable on account
of any rents or other income derived from the Property, but
excluding state and federal income taxes payable by the Borrower;
6.1.4 Property Taxes. All real and personal property taxes,
ad valorem taxes and special assessments, if any, whether payable in
installments or not, for the fiscal year 2000 - 2001 which
prorations will be based on the tax rate and assessed valuation
available on such date;
6.1.5 Insurance. Premiums on all existing and prepaid
insurance policies; and
6.1.6 Utility Charges. All utility charges.
6.2 Items Not Prorated. The following items will not be
apportioned between the Borrower and the Lender:
6.2.1 Tenant Deposits. All security and othe deposits
which are required to be refunded to tenants of the Property will be
transferred by the Borrower to the Lender, if any, on the date the
Deed is delivered to Lender;
6.2.2 Property Taxes. All real and personal property taxes,
ad valorem taxes and installments of special assessments, if any,
for fiscal years which end on or before February 28, 2001 will be
paid by the Borrower;
6.2.3 Other Deposits. All deposits paid by or for the
account of the Borrower in connection with utilities, equipment
leases or other services relating to the management or operation of
the Property will be refunded to the Borrower on the Closing Date;
and
6.2.4 Employee Costs. All employee wages, bonuses, social
security and other payroll taxes, workers' compensation insurance
premiums and fringe benefits, if any, with respect to all employees
whose wages are charged to the operation of the Property, including,
without implied limitation, accrued benefits which are not utilized
prior to March 1, 2001, such as vacation, sick leave and severance
pay shall be considered an Operating Expense for the period prior to
March 1, 2001 and shall be paid by the Borrower from funds other
than post March 1, 2001 Net Operating Income and the Lender will
have no obligation to employ any employee of the Borrower after
March 1, 2001.
6.3 Accounts Payable. All sums due for accounts payable which
are owing or incurred in connection with the Property for periods prior to
March 1, 2001 shall be considered an Operating Expense for the period
prior to March 1, 2001 and shall be paid by the Borrower from funds other
than post March 1, 2001 Net Operating Income, regardless of when invoiced.
All accounts payable which can be readily identified and quantified as of
March 1, 2001 will be paid by the Borrower on March 1, 2001.
11
6.4 Accounts Receivable. All account receivable balances which
were earned and attributable to the period prior to March 1, 2001 shall be
considered revenue for the period prior to March 1, 2001 for the purposes
of determining pre-March 1, 2001 Net Operating Income, regardless of when
received; provided, however, that any amounts received on or after March
1, 2001 from tenants of the Property other than those attributable to
common area maintenance charges ("CAM Charges") shall be applied first to
post March 1, 2001 charges outstanding, with the remainder, if any,
applied to pre March 1, 2001 charges, which shall be promptly paid to
Borrower. CAM Charges paid by tenants related to periods prior to March 1,
2001 shall be treated as Net Operating Income allocable to the period
prior to March 1, 2001 shall be distributed to Borrower.
6.5 Post-Closing Adjustments. Notwithstanding anything contained
in this Article VI to the contrary, if, during the period ending one
hundred eighty (180) days after March 1, 2001, either the Borrower or the
Lender discovers any error in computation of any proration, adjustment,
credit or debit as hereinabove set forth, such proration, adjustment,
credit or debit will be promptly adjusted as of March 1, 2001 without
interest thereon and the party obligated to make reimbursement as a result
of the correction of such error will promptly pay to the other party such
amount as is determined to be due. On the date which is one hundred eighty
(180) days after March 1, 2001 all prorations, adjustments, debits and
credits will be deemed final, excepting only matters theretofore raised by
the parties which have not been finally resolved.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF BORROWER
7. Borrower Representations; Warranties. The representations and
warranties contained in this Article VII are not intended to replace or limit in
any manner any warranty provided under the Loan Documents. The Lender will be
entitled to rely on the following representations and warranties of the Borrower
notwithstanding the Lender's inspection and investigation of the Property. The
Lender has entered into this Modification Agreement on the condition that the
Borrower make the following representations and warranties, which are a material
inducement to the Lender's willingness to enter into and perform this
Modification Agreement in reliance on such representations and warranties. The
Borrower represents and warrants to the Lender, as of the date hereof, as
follows:
7.1 Borrower Status. The Borrower is a limited partnership,
properly organized, validly existing and in good standing under the laws
of the State of Delaware and is qualified to conduct business in Nevada;
the Borrower is qualified to own and operate the Property and to conduct
business as now being conducted by the Borrower; the persons executing
this Modification Agreement on behalf of the Borrower are fully authorized
to execute, deliver and perform the terms of this Modification Agreement
on behalf of the Borrower;
7.2 Borrower Authority. Subject to Article III herein, and in
particular except as may be contemplated in, the evidence of Partnership
Authority delivered to Lender, the execution of this Modification
Agreement by the Borrower, the performance by the Borrower of the
Borrower's obligations hereunder, and the transfer of the Property does
not require the consent or approval of any third party; neither this
12
Modification Agreement nor anything provided to be done hereunder
(including, without implied limitation, the transfer of the Property to
the Lender) violates or will violate any contract, document,
understanding, agreement or instrument to which the Borrower is a party;
7.3 Binding Effect. This Modification Agreement constitutes
the legal, valid and binding obligation of the Borrower enforceable in
accordance with its terms, except as limited by bankruptcy, insolvency,
general principles of equity or other laws of general application relating
to the enforcement of creditors' rights;
7.4 Financial Status. The Borrower has not: (a) made a general
assignment for the benefit of creditors; (b) filed any voluntary petition
in bankruptcy; (c) to its knowledge, suffered the filing of an involuntary
petition in bankruptcy; (d) suffered the appointment of a receiver to take
possession of all or any part of the Borrower's assets; (e) suffered the
attachment or other judicial seizure of all or any part of the Borrower's
assets; (f) admitted in writing an inability to pay debts as they come
due; or (g) made an offer of settlement, extension or composition to
creditors generally;
7.5 Validity of Loan Documents. The Loan Documents are in
all respects the legal, valid and binding obligations of Borrower
enforceable in accordance with their respective terms, except as limited
by bankruptcy, insolvency, general principles of equity or other laws of
general application relating to the enforcement of creditors' rights, and
grant to the Lender a direct, valid and enforceable lien on, and security
interest in and to, the Property;
7.6 Defenses or Counterclaims. As of the date hereof, Borrower
has no defenses, offsets or counterclaims as against the indebtedness
evidenced and secured by the Note and the other Loan Documents, as amended
by this Modification Agreement. Lender has performed each and every one of
its obligations to Borrower under the Loan Documents, as amended hereby.
Lender is not in default of any of its obligations to Borrower under the
Note, the Loan Agreement or any other Loan Documents, as amended hereby;
7.7 Pending Litigation. There are no actions, suits or
proceedings pending or to Borrower's actual knowledge, threatened against
or affecting the Borrower or the Property, or involving the validity or
enforceability of any of the Loan Documents or the priority of the lien
thereof, at law or in equity, or before any governmental or administrative
agency; and
7.8 Leases. It has previously delivered to the Lender copies of all
Leases for the Property in its possession. To Borrower's knowledge, the
Leases are in full force and effect. Borrower has not received any notice
from any tenant indicating that Borrower is in default under the terms and
conditions of the Leases (which default remains uncured) and Borrower has
not sent notice of default to any tenant under the terms and conditions of
the Leases.
Whenever reference is made herein to the knowledge of Borrower,
reference is made only to the actual knowledge of the individual signing
hereto on behalf of Borrower.
13
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES OF LENDER
8. Lender's Representations; Warranties. The Lender represents and
warrants to the Borrower as follows:
8.1 Existence. The Lender is a limited partnership, properly
organized, validly existing and in good standing under the laws of the
State of Delaware. The persons executing this Modification Agreement on
behalf of the Lender are fully authorized to execute, deliver and perform
the terms of this Modification Agreement on behalf of the Lender;
8.2 Lender Authority. The execution of this Modification
Agreement by the Lender, and the performance by the Lender of the Lender's
obligations hereunder, does not require the consent or approval of any
third party; neither this Modification Agreement nor anything provided to
be done hereunder (including, without implied limitation, the transfer of
the Property to the Lender) violates or will violate any contract,
document, understanding, agreement or instrument to which the Lender is a
party or by which the Lender might be bound; and
8.3 Binding Effect. This Modification Agreement constitutes the
legal and binding obligation of the Lender enforceable in accordance with
its terms, except as limited by bankruptcy, insolvency, general principles
of equity or other laws of general application relating to the enforcement
of creditors' rights.
ARTICLE IX
BORROWER OBLIGATIONS
9. Borrower Agreements. The Borrower agrees to perform or cause to be
performed the following agreements for a period up to and including the Closing
Date:
9.1 Covenant to Cooperate. The Borrower agrees to use its
reasonable efforts to cooperate in all material respects with the Managing
Agent in the operation of the Property.
9.2 Leases; Contracts. After the date of this Modification
Agreement, the Borrower will not enter into any new Lease or Service
Contract or amend, modify or terminate any existing Lease or Service
Contract, if any, without the prior written consent of the Lender which
consent shall not be unreasonably withheld or delayed.
9.3 Information Releases. The Borrower will not issue or cause
to be issued any announcement, press release or other statement concerning
this Modification Agreement or the possible transfer of the Property to
the persons employed at the Property, tenants of the Property, the press
or the general public without the prior written approval of the Lender,
except for the Borrower's limited partners and Securities and Exchange
Commission ("SEC") reporting requirements which the Borrower agrees to
14
submit to Lender at least five (5) days prior to its filing of such
reports for its review and comment, if any, provided, however, absent
manifest error, Lender will not comment on such SEC documents.
9.4 Cooperation and Further Assurance. After the Closing Date,
the Borrower will assist the Lender in an orderly transfer of the Property
so that the change of ownership can be accomplished with minimum
interference to the efficient operation of the Property. At any time from
time to time, the Borrower shall execute any and all documents reasonably
requested by the Lender to carry out the intent of this Modification
Agreement, including endorsement (without recourse) of any check or other
instrument rightfully belonging or to be delivered to the Lender
hereunder; provided the same shall be at no material cost to Borrower.
9.5 Voluntary Agreement. The Borrower acknowledges that the
Borrower is represented by legal counsel of the Borrower's choice, is
fully aware of the terms contained in this Modification Agreement and has
voluntarily and without coercion or duress of any kind entered into this
Modification Agreement and the documents executed in connection with this
Modification Agreement.
9.6 Absolute Conveyance. The Borrower agrees that: (a) the
conveyance of the Property to the Lender, if and when the same occurs
pursuant to the terms of this Modification Agreement, will be an absolute
conveyance of all the Borrower's right, title and interest in and to the
Property in fact as well as in form subject only to the Loan Documents and
other exceptions set forth in the Deed; (b) the Deed, ▇▇▇▇ of Sale, Lease
Assignment and other conveyance documents are not intended to be a
mortgage, trust conveyance, deed of trust or security instrument of any
kind; (c) the consideration for such conveyance is exactly as recited in
this Modification Agreement; and (d) after the Closing Date, the Borrower
will have no further interest (including rights of redemption) or claims
in, to or against the Property or to the proceeds or profits that might be
derived therefrom, except as expressly set forth in Section 6.4 herein.
9.7 Indemnification. The Borrower agrees to indemnify and hold
the Lender harmless from and against any and all liabilities, claims,
demands, losses, damages, costs and expenses (including, without implied
limitation, reasonable attorneys, fees and litigation expenses), actions
or causes of action, arising out of or relating to any breach of any
covenant or agreement or the incorrectness or inaccuracy of any
representation and warranty of the Borrower contained in this Modification
Agreement or contained in any other document delivered to the Lender by
the Borrower. The foregoing indemnity shall terminate on the Closing Date.
ARTICLE X
COVENANT NOT TO ▇▇▇; CONDITIONS SUBSEQUENT
10. Covenant Not to ▇▇▇. Subject to the provisions set forth in this
Modification Agreement, Lender agrees to accept conveyance (or cause its
designee to accept the conveyance) of the Property on the Closing Date (if any),
and Lender hereby covenants not to ▇▇▇ Borrower for principal or interest or
other sums due under the Note, which covenant not to ▇▇▇ will be effective
15
provided Borrower does not become the subject of any bankruptcy proceedings on
or before one (1) year from the date the Lender obtains title to the Property,
and has not perpetrated any fraud upon Lender. Notwithstanding any implication
to the contrary, nothing contained in this Modification Agreement modifies or
impairs the non-recourse provisions of the Loan Documents, including without
limitation, Section 4 of the Note, Section 64 of the Deed of Trust and Section
13.15 of this Modification Agreement (except as set forth in such Section
13.15). The Release to be delivered by the Lender in accordance with Section 2
of this Modification Agreement will be void ab initio and will be of no force or
effect if any one or more of the events described in this paragraph or in
Sections 10.1 through 10.3 of this Modification Agreement occurs. On the
occurrence of such event, the Lender will have the right to unilaterally
reinstate the obligations of the Borrower under the Loan Documents and abrogate
the Release by service of written notice to the Borrower. On the exercise of
such right by the Lender, the Lender will be entitled to exercise all of the
Lender's rights and remedies under the Loan Documents, at law or in equity,
subject to the provisions of the Loan Documents. The conditions subsequent are
as follows:
10.1 Litigation. The Borrower or any person claiming by or
through the Borrower ever commences, joins in, assists, cooperates in or
participates as an adverse party or as an adverse witness (subject to
compulsory legal process which requires testimony) in any suit or other
proceeding against the Lender or any person named by the Lender in the
Release (a "Released Lender Party") relating to the Indebtedness, the Loan
Documents, this Modification Agreement, the Property or the conveyance of
the Property by the Borrower to the Lender, other than an action commenced
by Borrower pursuant to Section 2.2.1(i) herein; or
10.2 Avoidance. The Deed, ▇▇▇▇ of Sale or any other document
evidencing a conveyance of any part of the Property to the Lender is ever
rendered void or rescinded by operation of law, or by order of any state
or federal court of competent jurisdiction by reason of an order arising
out of any claim or proceeding initiated or commenced in favor of,
against, on behalf of, or in concert with, directly or indirectly, the
Borrower or any person claiming by or through the Borrower; or
10.3 No Release. The release of any Released Lender Party is ever
rendered void, rescinded or adjudicated unenforceable by operation of law
or by order of any state or federal court of competent jurisdiction, by
reason of an order arising out of any claim or proceeding initiated or
commenced in favor of, against, on behalf of, or in concert with, directly
or indirectly, the Borrower or any person claiming by or through the
Borrower.
ARTICLE XI
CONSENT TO RELIEF
11. Consent to Relief. As a material inducement to the Lender to enter
into this Modification Agreement, the Borrower hereby covenants and agrees that,
in consideration of the recitals, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, in the event the
Borrower (by its own action, or the action of any of its partners) shall, on or
before the date on which the Indebtedness evidenced and secured by the Loan
Documents is paid in full, (i) file with any bankruptcy court of competent
jurisdiction or be the subject of any petition under Title 11 of the U.S. Code,
as amended, (ii) be the subject of any order
16
for relief issued under such Title 11 of the U.S. Code, as amended, (iii) file
or be the subject of any petition seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief under any
present or future federal or sate act or law relating to bankruptcy, insolvency,
or other relief from debtors, (iv) have sought or consented to or acquiesced in
the appointment of any trustee, receiver, conservator, or liquidator, (v) be the
subject of any order, judgment or decree entered by any court of competent
jurisdiction approving a petition filed against such party for any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any present or future federal or state act
or law relating to bankruptcy, insolvency, or relief for debtors, the Lender
shall thereupon be entitled to relief from any automatic stay imposed by Section
362 of Title 11 of the U.S. Code, as amended, or otherwise (the "Automatic
Stay"), on or against the exercise of the rights and remedies otherwise
available to the Lender as provided in the Loan Documents, as hereby amended,
and as otherwise provided by law. Furthermore, the Borrower has waived and does
hereby waive (i) any and all rights to continue the Automatic Stay in effect and
(ii) any and all rights to oppose proceedings filed by the Lender seeking relief
from the Automatic Stay.
ARTICLE XII
NO MERGER
12. No Merger. The parties acknowledge and agree that notwithstanding
the Release contemplated by this Modification Agreement, all of the Loan
Documents will remain in full force and effect after the transactions
contemplated by this Modification Agreement have been consummated. The parties
further acknowledge and agree that the interests of the Lender in the Property
created by all of the conveyances provided for herein will not merge with the
interests of the Lender in the Property created by the Loan Documents. It is the
express intention of each of the parties (and all of the conveyances provided
for herein will so recite) that such interests of the Lender in the Property
will not merge, but be and remain at all times separate and distinct,
notwithstanding any union of said interests in the Lender at any time by
purchase, termination or otherwise and that the liens held by the Lender against
the Property created by certain of the Loan Documents will remain at all times
valid and continuous liens against the Property. The Lender has specifically
reserved the right to assert all claims held by the Lender against the
collateral described in the Loan Documents from time to time after the Closing
Date subject, however, to the terms of this Modification Agreement and the
Release.
ARTICLE XIII
MISCELLANEOUS
13. Miscellaneous. It is further agreed as follows:
13.1 Time. Time is of the essence of each provision of this
Modification Agreement.
13.2 Notices. Any notice, payment, demand or communication
required or permitted to be given by any provision of this Modification
Agreement will be in writing, shall be delivered by Federal Express or
similar overnight courier, by hand or sent by registered or certified mail
and will be deemed to have been given upon receipt or refusal to
17
accept, directed to the following addresses or to such other or additional
addresses as any party might designate by written notice to the other
party:
To Borrower:
c/o Pembroke Companies, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Proskauer Rose LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esquire
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
To Lender:
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Post & ▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. Post, Esquire
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
13.3 Brokerage. The parties represent and warrant each to the
other that the transactions hereby contemplated are made without liability
for any finder's, realtor's, broker's, agent's or other similar
commission. The parties mutually agree to indemnify and hold each other
harmless from claims for commissions asserted by any party as a result of
dealings claimed to give rise to such commissions.
13.4 Entire Agreement. This Modification Agreement constitutes
the entire and final agreement between the parties and there are no
agreements, understandings, warranties or representations between the
parties except as set forth herein. This Modification Agreement
supersedes, in all respects, all other prior written or oral agreements
between the parties relating to the subject matter of this Modification
Agreement and there are no agreements, understandings, warranties or
representations between the Lender and the Borrower except as set forth in
this Modification Agreement or the documents to be delivered by the
parties on the date hereof.
18
13.5 Binding Effect. This Modification Agreement will inure
to the benefit of and bind the respective successors and permitted assigns
of the parties.
13.6 Negation of Partnership. The relationship between the
Borrower and the Lender is that of debtor and creditor. Nothing contained
in this Modification Agreement will be deemed to create a partnership or
joint venture between the Borrower and the Lender, or between the Lender
and any other party, or to cause the Lender to be liable or responsible in
any way for the actions, liabilities, debts or obligations of the
Borrower.
13.7 Severability. If any clause or provision of this
Modification Agreement is determined to be illegal, invalid or
unenforceable under any present or future law by the final judgment of a
court of competent jurisdiction, the remainder of this Modification
Agreement will not be affected thereby. It is the intention of the parties
that if any such provision is held to be illegal, invalid or
unenforceable, there will be added in lieu thereof a provision as similar
in terms to such provision as is possible and be legal, valid and
enforceable.
13.8 Headings. Paragraphs or other headings contained in this
Modification Agreement are intended for ease in reference and are not
intended to affect the meaning or interpretation of this Modification
Agreement.
13.9 Counterpart Execution. This Modification Agreement may be
executed in counterparts, each of which will be deemed an original
document, but all of which will constitute a single document. This
document will not be binding on or constitute evidence of a contract
between the parties until such time as a counterpart of this document has
been executed by each party and a copy thereof delivered to the other
party to this Modification Agreement.
13.10 Governing Law. This Modification Agreement will be
interpreted and construed under the internal laws of the State of New York
regardless of the domicile of any party, and will be deemed for such
purposes to have been made, executed and performed in New York County, New
York. All claims, disputes and other matters in question arising out of or
relating to this Modification Agreement or the breach thereof, will be
decided by proceedings instituted and litigated in a court of competent
jurisdiction sitting in New York County, New York.
13.11 Jury Trial Waiver. BORROWER AND LENDER HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED
UPON, OR RELATED TO, THE SUBJECT MATTER OF THIS MODIFICATION AGREEMENT AND
THE BUSINESS RELATIONSHIP BETWEEN THE PARTIES. THIS WAIVER IS KNOWINGLY,
INTENTIONALLY AND VOLUNTARILY MADE BY THE BORROWER AND LENDER AND BORROWER
AND LENDER ACKNOWLEDGE THAT NEITHER PARTY NOR ANY PERSON ACTING ON BEHALF
OF BORROWER OR LENDER, RESPECTIVELY HAVE MADE ANY REPRESENTATIONS OF FACT
TO THE OTHER TO INCLUDE THIS WAIVER OF TRIAL BY JURY OR HAS TAKEN ANY
ACTIONS WHICH IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. BORROWER AND LENDER
EACH ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO
THIS
19
TRANSACTION, THAT EACH PARTY HAS ALREADY RELIED ON THIS WAIVER IN ENTERING
INTO THIS MODIFICATION AGREEMENT AND THE OTHER RELATED DOCUMENTS AND THAT
EACH PARTY WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE
DEALINGS. BORROWER AND LENDER FURTHER ACKNOWLEDGE THAT THEY HAVE BEEN
REPRESENTED (OR HAVE HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING
OF THIS MODIFICATION AGREEMENT AND THE OTHER RELATED DOCUMENTS AND THE
MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL.
13.12 Enforcement. In the event any party hereto fails to perform
any of its obligations under this Modification Agreement or in the event a
dispute arises concerning the meaning or interpretation of any provision
of this Modification Agreement, the defaulting party or the party not
prevailing in such dispute (as determined by a court of competent
jurisdiction), as the case may be, shall pay any and all costs and
expenses incurred by the other party in enforcing or establishing its
rights hereunder, including without limitation, court costs and reasonable
attorneys' fees.
13.13 Survival. All representations and warranties of the Borrower
and the Lender contained in this Modification Agreement and in the
documents to be delivered by the Borrower on the date hereof will survive
the Closing Date, the closing of the transfer of the Property and the
other transactions contemplated by this Modification Agreement for a
period of one (1) year after the Closing Date.
13.14 Amendment. Neither this Modification Agreement nor any of
the provisions hereof can be changed, waived, discharged or terminated,
except by an instrument in writing signed by the party against whom
enforcement of the change, waiver, discharge or termination is sought.
13.15 Exculpation. Notwithstanding anything to the contrary
contained herein, this Modification Agreement and all other agreements and
instruments contemplated hereby (other than the Unconditional Limited
Guaranty) are subject to the provisions of the Loan Documents limiting the
personal liability of the Borrower or the partners (limited and general)
in the Borrower and their legal ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇,
successors or assigns of any such partners and any partner, officer,
director, shareholder or employee of any such partner and any other
principal of the Borrower, disclosed or undisclosed (the "Exculpated
Parties") and providing that no deficiency or other money judgment shall
be taken or entered against the Exculpated Parties , all as set forth in
the Section 64 of the Deed of Trust, which provisions are made a part
hereof as though set forth at length herein to the same extent as if this
Modification Agreement and all such other agreements and instruments were
one of the "Other Security Documents" referenced therein. In furtherance
of the foregoing, Lender hereby acknowledges that it shall have no
recourse to any cash generated from the Property allocable to the period
prior to March 1, 2001 and, so long as Borrower is in compliance with its
obligations under this Modification Agreement, the Expense Distribution
(notwithstanding whether such cash proceeds have been distributed to its
partners or not). Furthermore, in no event shall Lender have any recourse
to the Pembroke Companies, Inc., or its officers, directors or
shareholders.
20
EXECUTED on the dates hereafter specified, effective as of the date first
above written.
BORROWER:
HIGH CASH PARTNERS, L.P.
By: Pembroke HCP, LLC,
as managing general partner
WITNESS: By: Pembroke Companies, Inc.,
managing member
By:
--------------------------- ----------------------
Name:
Title:
LENDER:
RESOURCES ACCRUED MORTGAGE
WITNESS: INVESTORS 2 L.P.,
a Delaware limited partnership
By: RAM Funding, Inc.,
Its managing general partner
By:
--------------------------- -------------------------------
Its: ----------------------President
21
EXHIBIT A
Form of Agreement for Deed
--------------------------
22
AGREEMENT FOR DEED
THIS AGREEMENT FOR DEED, made and entered into as of this 21st day of
December, 2000, by and among HIGH CASH PARTNERS, L.P. a Delaware limited
partnership (the "Borrower"), RESOURCES ACCRUED MORTGAGE INVESTOR 2 L.P., a
Delaware limited partnership (the "Lender") and POST & ▇▇▇▇▇▇▇, LLP, a New York
limited liability partnership (the "Escrow Agent"). Capitalized terms used
herein and not otherwise defined shall have the meanings ascribed to them in
that certain Modification Agreement (the "Modification Agreement") by and among
the Borrower and the Lender dated as of the date hereof.
W I T N E S S E T H: That,
----
WHEREAS, the Borrower owns certain real property, improvements and
personal property which is commonly known as Sierra Marketplace and located at
South Virginia Street and East ▇▇▇▇▇ ▇▇▇▇, Reno, Nevada (the "Property").
WHEREAS, the Property is encumbered by a mortgage loan (the "Loan") as
evidenced by a Deed of Trust, Assignment of Rents, Fixture Filing and Security
Agreement among the Borrower, as trustor, First Commercial Title, Inc., as
trustee and the Lender, as beneficiary dated February 10, 1989, and recorded on
February 13, 1989, in Book 2866, Page 42, as Document No. 1304601, in the
Official Records of Washoe County, Nevada (the "Deed of Trust") and an
Assignment of Leases and Rents given by Borrower in favor of the Lender dated
February 10, 1989, and recorded on February 13, 1989, in Book 2866, Page 88, as
Document No. 1304602, in the Deed Records of Washoe County, Nevada (the
"Assignment"). The Deed of Trust and Assignment secure that certain Registered
Note dated February 10, 1989 in the original principal amount of $6,500,000 made
by the Borrower and given to the Lender (the "Note"). The original principal
amount of the Note, together will all accrued and unpaid interest, late charges,
default interest, attorneys fees and other costs and expenses due and payable
under the Note and Loan Documents is referred to herein as the "Indebtedness".
The Note, Deed of Trust, Assignment and other documents evidencing and securing
the Indebtedness are hereinafter referred to as the "Loan Documents".
WHEREAS, the Maturity Date of the Loan is February 28, 2001, and Borrower
has requested Lender, and Lender has agreed, to forbear in the exercise of its
rights and remedies under the Loan Documents in the event the Loan is not
satisfied in full on or prior to the Maturity Date, upon the terms and
conditions set forth in the Modification Agreement.
WHEREAS, the parties hereto desire to enter into a written escrow
agreement outlining the actions to be taken in connection with the delivery of
the Conveyance Documents into and out of escrow as contemplated by the
Modification Agreement.
NOW, THEREFORE, for and in consideration of the agreements and the mutual
covenants set forth herein, and the sum of TEN DOLLARS ($10.00), and other good
and valuable consideration, the receipt and sufficiency of is hereby
acknowledged, the parties
23
hereto, intending to be legally bound, hereby agree as follows:
1. Acknowledgement of Receipt. Escrow Agent does hereby acknowledge
receipt of: (i) the Grant Deed executed by the Borrower, in recordable form, to
be dated on the day on which the conveyance shall occur in accordance with the
terms and conditions of the Modification Agreement (the "Closing Date"),
conveying the Property from the Borrower to the Lender, (ii) the ▇▇▇▇ of Sale to
be dated as of the Closing Date executed by the Borrower conveying the
Personality from the Borrower to the Lender, (ii) the Lease Assignment, to be
dated as of the Closing Date executed by Borrower assigning the Leases to the
Lender, (iv) an Owner's Affidavit given by Borrower, (v) a FIRPTA Affidavit, and
(vi) a State of Nevada Transfer Tax Declaration to be dated as of the Closing
Date (and Lender agrees to pay the taxes and fees, if any, imposed upon or as a
result of such conveyance (and Lender hereby agrees to indemnify, defend and
hold harmless Borrower from and against any and all claims and demands, losses,
damages, costs and expenses, including reasonable attorney fees, arising out of
the payment or nonpayment of all such taxes and fees)) (the foregoing
hereinafter collectively referred to as the "Conveyance Documents"); and Escrow
Agent hereby agrees to hold and distribute the Escrow Documents with a $250.00
fee received from the Lender for the purpose of recording the Escrow Documents
(the "Funds") pursuant to the terms hereof.
2. Conditions and Actions. At such time as a Release Event has
occurred and the Lender or Borrower has notified Escrow Agent (and Lender or
Borrower as the circumstances may require) of such event in accordance with
Article IV of the Modification Agreement, Escrow Agent shall take the following
actions on the Closing Date:
2.1 (i) fill in the Closing Date in all places required in
the Conveyance Documents, (ii) record the executed original of the Grant Deed in
the real property records of Washoe County, Nevada and (iii) deliver the
original ▇▇▇▇ of Sale and Lease Assignment to Lender;
2.2 disburse the Funds in payment of the recording fees relating
to the Grant Deed;
2.3 deliver photocopies of the other Conveyance Documents to the
Lender and photocopies of all Conveyance Documents to Borrower; and
2.4 Upon receipt of a file marked copy of the recorded Grant
Deed, deliver copies of all the Conveyance Documents to the Lender and the
Borrower.
3. Liability. In performing any of its duties hereunder, Escrow Agent
shall not incur any liability to anyone for any damages, losses, or expenses,
except for its gross negligence, willful default or breach of trust, and it
shall accordingly not incur any such liability with respect to: (i) any action
taken or omitted in good faith upon advice of its legal counsel given with
respect to any questions relating to the duties and responsibilities of Escrow
Agent under this Agreement, or (ii) any action taken or omitted in reliance upon
any instrument, including any written notice or instruction provided for in this
Agreement, not
24
only as to its due execution and the validity and effectiveness of its
provisions, but also as to the truth and accuracy of any information contained
therein, which Escrow Agent shall in good faith believe to be genuine, to have
been signed or presented by a proper person or persons, and to conform with the
provisions of this Agreement.
4. Discharge of Duties. Notwithstanding the provisions hereof, in the
event of a dispute between the Borrower and the Lender sufficient in the sole
discretion of Escrow Agent to justify its doing so, Escrow Agent shall then be
entitled at any time to tender into the registry or custody of any court of
competent jurisdiction the Escrow Documents, together with such legal pleadings
as it may deem appropriate, and thereupon be discharged from all further duties
and liabilities under this Agreement. Any such legal action may be brought in
such court as Escrow Agent shall determine to have jurisdiction thereof. Escrow
Agent shall be indemnified, saved and held harmless by the non-prevailing party
in any such dispute (as determined by a court of competent jurisdiction) for all
of its expenses, costs and reasonable attorneys' fees incurred in connection
with said legal action.
5. Judicial, Non-Judicial or Administrative Action. If Escrow Agent is
made a party to any judicial, non-judicial or administrative action, hearing or
process based on acts of any of the other parties hereto and not on any
malfeasance or negligence of Escrow Agent in performing its duties hereunder and
which seeks to recover or direct distribution or release of the Escrow
Documents, the expenses, costs and reasonable attorneys' fees incurred by Escrow
Agent in responding to such action, hearing or process shall be paid by the
non-prevailing party in any such dispute (as determined by a court of competent
jurisdiction) and such party or parties hereby indemnify, and shall save and
hold Escrow Agent harmless from said expenses, costs and fees so incurred.
6. Representations and Warranties of the Borrower.
6.1. The Borrower hereby acknowledges and agrees that, until such
time as the Closing Date shall occur, all liabilities and obligations of the
Borrower to the Lender under the Loan Documents, as modified by the Modification
Agreement, shall remain in full force and effect, and shall not be released,
impaired, diminished or in any other way modified or amended as a result of the
execution and delivery of this Agreement or by the agreements and undertakings
of the parties contained herein.
6.2. The Borrower hereby acknowledges and agrees that, effective
upon the delivery of the Grant Deed, the conveyance of the Property to the
Lender shall be an absolute conveyance of all of the Borrower's right, title and
interest in and to the Property and is not now intended to be, nor shall it ever
be, construed as being a deed of trust, mortgage, trust conveyance, or other
security agreement of any nature whatsoever, and that neither Borrower nor
anyone claiming by, through or under the Borrower shall have any further
interest (including specifically, but without implied limitation, any rights of
redemption) or claims in and to the Property or to the rents, issues or profits
and other proceeds that may be derived therefrom, of any kind whatsoever. Upon
the delivery of the Grant Deed, the Borrower shall not retain, nor be given, any
right to occupy, redeem, encumber or purchase the Property.
25
6.3. Immediately following the delivery of the Grant Deed
pursuant to the terms of this Agreement, the Borrower will deliver possession of
the Property to the Lender.
6.4. This Agreement and the Conveyance Documents were reviewed by
the general partner of the Borrower, who acknowledges and agrees that it: (i)
understands fully the terms of this Agreement and the Conveyance Documents and
the consequences of the issuance hereof and thereof; (ii) has been afforded an
opportunity to have this Agreement and the Conveyance Documents reviewed by its
attorneys and to discuss all such documents with such attorneys and other
consultants as it may wish; and (iii) has entered into this Agreement and
executed and issued the Conveyance Documents of its own free will and accord and
without threat or duress.
6.5. The Borrower shall execute and deliver to the Lender at
Lender's expense such other documents and instruments and perform such further
acts as reasonably requested by the Lender to effectuate the transactions
contemplated hereby provided the same do not result in any material additional
liability to Borrower, including without limitation, obtaining necessary
consents to an assignment of any permits and licenses relating to the Property.
7. Notice. Wherever any notice is required or permitted hereunder,
such notice shall be in writing and shall be delivered by hand or sent by
registered or certified mail, return receipt requested, or national overnight
delivery service to the addresses set out below or at such other addresses as
are specified by written notice delivered in accordance herewith:
To Borrower:
c/o Pembroke Companies, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Proskauer Rose LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esquire
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
26
To Lender:
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
To Escrow Agent:
Post & ▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. Post, Esquire
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Notice mailed as hereinabove provided shall be deemed received by the party to
whom it is addressed upon delivery when delivered by hand or upon receipt when
mailed or sent by next day overnight delivery service as set forth above.
Refusal to accept delivery or inability to deliver because of changed address
shall be deemed receipt. A notice given by an attorney on behalf of either party
shall be deemed to be proper notice.
8. Brokerage Commissions. Each party represents to the other that no
broker has been involved in this transaction. It is agreed that if any claims
for brokerage commissions or fees are ever made against the Borrower or the
Lender in connection with this transaction, all such claims shall be handled and
paid by the party whose actions or alleged commitments form the basis of such
claim, and the party against whom the claim is made shall indemnify and hold
harmless the others from and against any and all such claims or demands,
including without limitation, reasonable attorneys' fees, with respect to any
brokerage fees or agents' commissions or other compensation asserted by any
person, firm or corporation in connection with the Agreement or the transactions
contemplated hereby.
9. Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, personal representatives, successors and assigns. Any
and all rights granted to any of the parties hereto may be exercised by their
agents or personal representatives.
10. Time is of the Essence. Time is of the essence of this Agreement.
11. No Merger. There shall be no merger of the estate, interest, title,
and lien of the Lender in and to the Property created and arising by this
Agreement, or by the delivery by the Borrower of the Grant Deed or any of the
other Conveyance Documents into escrow, with any other interests or claims the
Lender, or any affiliate or subsidiary of the Lender, has or may have in and to
the Property by reason of the fact that the Lender or any such affiliate or
subsidiary may own or hold (a) the estate, interest, title and lien created by
any other mortgage, deed to secure debt, deed of trust, or other real property
security interest, including, without limitation, any interest created by those
documents listed in recitals hereinabove, or (b) the fee estate in the Property
or any interest in such fee estate; and no
27
merger shall occur unless and until the Lender shall execute a written statement
or instrument effecting such merger and shall duly record the same.
12. Governing Law. This Agreement is governed by and is to be
construed under the laws of the State of New York.
13. Amendments. This Agreement may be amended only by a written
instrument executed by all of the parties hereto.
14. Payment In Full. Upon the Lender's receipt of payment in full of
the Loan, the Lender will promptly deliver this Agreement to the Borrower, and
instruct Escrow Agent to deliver the Conveyance Documents to the Borrower;
provided, however, in the event there is then pending a bankruptcy proceeding
filed by or against the Borrower, then the Lender shall deliver this Agreement
and instruct the Escrow Agent to deliver the Conveyance Documents to Borrower 95
days after dismissal or conclusion of such bankruptcy case.
15. Termination. This Agreement shall terminate ( the "Termination
Date") upon the earlier to occur of: (i) the completion of the actions of Escrow
Agent under Section 2 hereof, or (ii) 12:00 noon, New York time on July 1, 2003,
unless there is then pending a bankruptcy proceeding filed by or on behalf of
the Borrower in which event this Agreement shall be terminated 95 days after
dismissal or conclusion of such bankruptcy case. At such time, if the Conveyance
Documents have not been previously delivered to Lender, Escrow Agent shall
deliver the Conveyance Documents to the Borrower and deliver the Funds to the
Lender. Notwithstanding anything contained in this paragraph to the contrary,
this Agreement shall remain in full force and effect if on the Termination Date
there is pending any litigation between the parties regarding the subject matter
of this Agreement.
16. Counterparts. This Agreement may be executed in any number of
counterparts, each of which, when executed and delivered, shall be an original,
but all of which shall together constitute one and the same instrument, and the
several signature pages may be collected and annexed to one or more counterparts
to form a complete counterpart.
[The remainder of this page left intentionally blank.]
28
IN WITNESS WHEREOF, each of the parties hereto has signed and sealed this
Agreement as of the date and year first above written.
BORROWER:
HIGH CASH PARTNERS, L.P.,
a Delaware limited partnership
By: Pembroke HCP, LLC,
as managing general partner
By: Pembroke Companies, Inc.,
managing member
By:
---------------------------
Name:
Title:
LENDER:
RESOURCES ACCRUED MORTGAGE
INVESTORS 2 L.P.,
a Delaware limited partnership
By: RAM Funding, Inc.,
Its managing general partner
By:
--------------------------------
Its: ---------------------- President
ESCROW AGENT:
POST & ▇▇▇▇▇▇▇, LLP
By:
--------------------------------
A Partner
29
EXHIBIT B
Form of Management Agreement
30
MANAGEMENT AGREEMENT
AGREEMENT, made as of the 2nd day of January, 2001, by and between HIGH
CASH PARTNERS, L.P., a Delaware limited partnership ("Owner"), with offices
located at c/o Pembroke Companies, Inc., ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇, and KESTREL MANAGEMENT LP, a Delaware limited partnership (the
"Managing Agent"), with offices located at Five ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
W I T N E S S E T H:
WHEREAS, Owner owns the land and buildings known as the Sierra Marketplace
located on the southeast corner of South Virginia Street and ▇▇▇▇ ▇▇▇▇ in the
City of Reno, Washoe County, Nevada (collectively referred to herein as the
"Project") and
WHEREAS, the Managing Agent and its managerial personnel and affiliates
are experienced in managing and operating first class commercial space; and
WHEREAS, the Owner desires to retain the Managing Agent to operate and
manage the Project on behalf of the Owner, and the Managing Agent desires to be
so retained, all in accordance with the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the Owner and the Managing Agent hereby agree as follows:
1. Retention of the Managing Agent. Pursuant to the terms
provided herein and subject to the limitations and conditions herein set forth,
the Owner hereby appoints the Managing Agent, and the Managing Agent hereby
accepts the appointment, as the managing and operating agent of the Project with
authority to manage the day-to-day operations of the Project on behalf of the
Owner.
2. Performance of Services and Payment Therefor. During the
term of this Agreement, on behalf of the Owner, the Managing Agent shall perform
the services described in this Agreement and pay all expenses required to be
paid in connection therewith, all of which shall, if reasonable, and except as
otherwise specifically provided herein, be paid from "Gross Proceeds" and be an
"Expense" (both as defined in Section 4(b)(xii)); provided, however, that to the
extent funds are not available either from Gross Proceeds or the Owner, the
Managing Agent shall not be obligated to pay said Expenses.
3. Term. The rights and obligations of the Managing Agent
hereunder shall commence on the date hereof and shall continue unless sooner
terminated as hereinafter provided, on March 1, 2003 (the "Expiration Date").
4. The Managing Agent's Duties.
(a) Except as otherwise directed from time to time by the Owner,
the Managing Agent (1) shall perform or cause to be performed, all of the
Owner's obligations
31
as landlord (sometimes referred to herein as "Landlord") to the tenants
("Tenant" or "Tenants") under the space leases for the Project ("Space Lease")
that are capable of being performed by persons other than the Landlord and (2)
shall not perform or cause to be performed any act, the performance of which
would cause a default under a Space Lease or would permit a Tenant to validly
claim a reduction in rent, a termination of its Space Lease or any other remedy
under its Space Lease. The obligations of the Managing Agent hereunder shall be
limited by the availability of funds with which to perform such obligations, and
the Managing Agent shall have no obligation to advance funds or to perform any
act or obligation if sufficient funds are not available for such purposes.
(b) In pursuance, but without limiting the generality of the
foregoing, on behalf of the Owner, the Managing Agent shall, except as otherwise
directed from time to time by the Owner, perform the following services:
(i) Operate the Project in a first-class manner and
shall undertake to provide such services as are then customarily provided by
operators of similar type projects of comparable class and standing to the
Project in the same market area;
(ii) Apply sound administrative, accounting, budgeting,
operational, sales, advertising, personnel and purchasing policies and practices
in such a manner as will maximize the revenues, profitability and value of the
Project consistent with the terms and conditions of this Agreement;
(iii) Use its reasonable efforts to obtain the compliance
of Tenants with regard to their obligations under their Space Leases. The
Managing Agent shall not have the right, on behalf of the Owner, to enter into
new Space Leases or to cancel, renew, extend or amend any existing or new Space
Lease, without, in each case, the prior written approval of the Owner. Unless
otherwise specifically directed by the Owner, all Space Leases shall be in
accordance with the leasing standards then in effect and be on the approved
Owner's standard lease form or Managing Agent's form if approved in writing by
the Owner. All such leases and/or lease modifications shall be executed by the
Owner;
(iv) Diligently review all leases, subleases and
assignments of leases for space in the Project by a Tenant occupying space in
the Project or a prospective tenant and submit the same to Owner for review,
approval and execution;
(v) Upon the request of the Owner, provide copies of all
Space Leases, subleases and assignments then in effect and/or shall deliver to
the Owner, and to any persons designated by the Owner, a schedule of all then
existing Space Leases, which schedule shall provide such information concerning
such Space Leases and the Tenants as the Owner shall reasonably request;
(vi) Supervise and be solely responsible for the hiring,
directing, promoting, discharging and the work of (1) all personnel located on-
site and performing managerial and supervisory services in or about the Project
and (2) all personnel performing on-site operating and service functions in
connection with the Project (the personnel described in (1) and (2) above,
collectively referred to herein as "Project Employees"). All
32
of the Project Employees shall be employees of the Managing Agent. The Owner
reserves the right to approve in its reasonable discretion all Project
Employees, if so desired. The total aggregate compensation, including fringe
benefits and severance obligations, payable with respect to Project Employees
shall constitute an Expense of the Project and shall be paid from Gross
Proceeds. The Managing Agent shall prepare the payroll for all Project
Employees, and shall pay all wages, salaries, taxes and benefits to or in
respect of all Project Employees, all of which shall constitute an Expense of
the Project. Commencing March 1, 2001, the Managing Agent may from time to time
assign one or more of its other employees to the Project on a temporary basis to
function as a Project Employee of the Project. The reasonable aggregate
compensation payable to such Project Employees while assigned to the Project and
on Project business shall be an Expense of the Project;
(vii) The Managing Agent shall receive, consider, evaluate
and keep complete records with respect to, and, except as specifically limited
by other provisions of this Agreement, shall handle, compromise or settle, the
complaints of all Tenants or users of any of the services or facilities of the
Project; provided, however, the Managing Agent is not authorized to, and shall
not compromise or settle, or make any payment with respect to, any such
complaint without the prior written consent of the Owner if such compromise,
settlement or payment: (a) would, prior to March 1, 2001, reduce Gross Proceeds
or increase Expenses of the Project, or (b) could, on or after March 1, 2001,
not be payable out of Gross Proceeds;
(viii) The Managing Agent shall(a) enter into contracts for
services furnished to the Project such as electricity, gas, water, telephone,
cleaning, elevator and boiler maintenance, heating and air conditioning
maintenance and all other necessary utilities and services, (b) enter into
leases for personal property necessary for the management and operation of the
Project and (c) purchase all utilities, services, material and supplies as are
required to be rendered or supplied to the Tenants pursuant to their Space
Leases or any common operating agreement; provided, however, that, unless
approved in the Plan, any contract or other agreement which exceeds the amount
approved in the Plan or if not approved in the Plan and requires the payment of
$10,000 or more must have prior written approval of the Owner; provided, further
however, that the Managing Agent shall not be required to obtain the Owner's
prior approval of, nor its signature on, any such agreement which in the
reasonable determination of the Managing Agent results from a condition of an
emergency nature. The Managing Agent shall promptly notify the Owner of any said
emergency and the agreement which was executed without the Owner's approval.
Notwithstanding the foregoing, the Managing Agent may not
enter into any such contract or other agreements without the prior approval of
the Owner, which conflicts with the limits of liability provision in Section
9(e) hereof;
(ix) The Managing Agent shall cause all repairs
("Repairs") to be made regardless of the extent or nature of the Repair, if the
Repair is necessary to keep all parts of the Project in good condition to the
extent the Repair is not required to be made by the Tenants pursuant to their
Space Leases or any common operating agreement. Unless approved by the Owner or
otherwise approved in the Plan, the Managing Agent shall not make or permit to
be made any Repairs to the Project (except such Repairs as may be
33
required to comply with the "Legal Requirements" (as defined in Section
4(b)(xiv)) or to prevent loss of insurance described in Section 8(a) hereof) in
a manner that would, in the Owner's reasonable judgment, impair the value or
utility of the Project, or that would permit any Tenant to claim a reduction in
rent or other charges, a termination of its Space Lease or claim any other
remedy pursuant to its Space Lease. Notwithstanding the foregoing, in the event
that the Managing Agent reasonably determines that an emergency condition exists
in or about the Project of a nature that requires immediate Repairs to be made
to preserve and protect the Project and assure its continued operation, the
Managing Agent is authorized to take all reasonable steps to make all
expenditures necessary to repair and correct such emergency conditions, whether
or not these emergency repairs have been provided for in the Plan. All Repairs
shall be expeditiously completed in a good and workmanlike manner in conformance
with plans and specifications, if any, therefor and shall be in compliance with
all Legal Requirements and shall conform to requirements of all Space Leases,
and any mortgage or agreement affecting the Project including the requirements
of all insurance policies affecting the Project;
(x) Unless approved in the Plan or otherwise approved by the
Owner, the Managing Agent shall not perform, or permit to be performed, any
Landlord preparation work as required by any Space Lease ("Landlord Preparation
Work"), and shall not permit any Tenant improvements permitted or required by
any Space Lease ("Tenant Improvements") (except such Tenant Improvements as may
be required to comply with the Legal Requirements) to be made, in a manner that
would impair the value or utility of the Project or that would permit any Tenant
to claim a reduction in rent or other charges, a termination of its Space Lease
or claim any other remedy pursuant to its Space Lease;
(xi) If the replacement and/or restoration of fixtures,
equipment and other ordinary Project capital replacement items or improvements
which are not Landlord Preparation Work, Tenant Improvements or Repairs
(collectively, "Capital Replacements") becomes necessary or desirable and is
approved subject to the conditions contained in this Agreement including,
without limitation, the Capital Replacements required to be made in order to
comply with any Legal Requirement or the requirements of any Space Lease, and
any other agreement or mortgage affecting the Project hereunder, the Managing
Agent shall include in the Monthly Statement (as defined in Section 6(b)) for
the month in which the Capital Replacement occurs the cost therefor. Unless made
as a result of a condition which in the reasonable determination of the Managing
Agent is of an emergency nature, prior to March 1, 2001, the Managing Agent
shall not make, or cause to be made, any Capital Replacements without first
obtaining the written approval of the Owner. Prior to March 1, 2001, the
Managing Agent shall promptly notify the Owner of said emergency and the
agreement which was executed without the Owner's approval. All Capital
Replacements shall be made, or caused to be made, by the Managing Agent
expeditiously, in a good and workmanlike manner, in conformance with any plans
and specifications, if any, therefor and in compliance with all Legal
Requirements and the requirements of the Space Leases, and any mortgage or
agreement affecting the Project, including the requirements of any insurance
policies affecting the Project;
(xii) The Managing Agent shall collect, on behalf of the
Owner, all
34
Gross Proceeds and shall deposit all such Gross Proceeds along with any monies
furnished by the Owner as working funds and all other monies received by the
Managing Agent relating to the Project in a separate non-commingled interest
bearing account maintained at Fleet Bank (the "Bank Account"), held in the name
of the Managing Agent as agent for the Project. "Gross Proceeds" shall mean all
amounts collected by the Managing Agent from or in connection with the
management and operation of the Project or are in any way incidental to the
foregoing (other than any security deposits), including, without limitation,
base rents, percentage rents, and all additional charges collected and pursuant
to the Space Leases, and all other additional amounts collected under the Space
Leases, attributable to common area maintenance charges, real estate taxes and
other operating expenses and assessments (collectively, "Escalators"),
condemnation awards, insurance proceeds and real estate tax refunds and rebates
of other operating expenses. All Gross Proceeds collected and any and all items
paid by the Managing Agent arising by virtue of the management of the Project
shall be deposited to and paid from the Bank Account. The Managing Agent shall
use Gross Proceeds to pay all expenses (collectively "Expenses") relating to the
management, operation, leasing, maintenance and administration of the Project,
including any compensation payable to the Managing Agent pursuant to Section 7
hereof, other than expenses, which pursuant to the terms of this Agreement, are
payable by the Managing Agent from its own funds. The excess, if any, of Gross
Proceeds over Expenses ("Gross Operating Cash Flow") for any calendar month
shall be paid in the manner set forth in Section 6(b) hereof;
(xiii) The Managing Agent shall cause to be paid, out of
Gross Proceeds, as required for the operation of the Project, on or before the
last day on which they may be paid without penalty, all taxes (including real
estate taxes or other taxes billed together with real estate taxes),
assessments, levies, fees, water, sewer and other utility rents and charges and
all other governmental charges, and all fines, penalties and court
disbursements, that are imposed or levied upon, or assessed against or measured
by, the Project or any portion thereof. If any amount levied or assessed against
the Project, or any part thereof, or payable in connection with the operation of
the Project, becomes due and payable and may legally be paid in installments,
the Managing Agent shall pay such amount in installments.
(xiv) The Managing Agent shall comply with, and shall cause
the Project to comply with, all laws, codes, ordinances, regulations and other
governmental rules now or hereafter in force (collectively, the "Legal
Requirements") that are applicable to the Project or the occupancy, use or
condition thereof, including, without limitation, the curing of any violation of
any Legal Requirements. If such compliance necessitates the making of any
Repairs, then the Managing Agent shall comply with the provisions set forth in
Section 4(b)(viii) and (ix) hereof, and if such compliance necessitates the
making of any Capital Replacements, then the Managing Agent shall follow the
procedures set forth in Section 4(b)(xi) hereof; provided, however, that, in the
case of an emergency or failure to comply promptly with (including to cure any
violation of) any Legal Requirement which (a) shall expose the Owner to criminal
liability or (b) shall constitute an event of default under any Space Lease and
any mortgage or other agreement affecting the Project, the Managing Agent shall
cause compliance or the curing of the violation without awaiting the Owner's
consent and shall promptly inform the Owner of any action taken or being taken
by it in connection
35
with such compliance or cure. Unless otherwise directed by the Owner, the
Managing Agent shall, to the extent the Managing Agent deems appropriate, in
consultation with the Owner, protest or litigate to final decision in the
appropriate court or forum the application of any alleged Legal Requirement or
the violation of any Legal Requirement adversely affecting the Project. Prior to
March 1, 2001, no settlement shall be entered into in any matter without the
Owner's written consent. On or after March 1, 2001, no settlement shall be
entered into in any matter without the Owner's written consent if such
settlement would result in any cost to Owner, not otherwise payable out of Gross
Proceeds.
(xv) Use its reasonable efforts to prevent any liens,
charges or encumbrances (collectively, "Liens") from being filed against the
Project which arise from any maintenance, repairs, alterations, improvements,
renewals or replacements in or to the Project. The Managing Agent shall use its
best efforts to cause the prompt release of any Liens (other than a lien
resulting from any action taken by the Owner, or taken by the Managing Agent at
the Owner's written direction);
(xvi) Give prompt notice to the Owner of any defaults by
any of the Tenants under their Space Leases and shall, unless notified in
writing to the contrary by the Owner, institute in its own name or in the name
of the Owner, any necessary legal actions or proceedings to collect all charges,
rents, other Gross Proceeds and monetary damages from the Tenants or other
persons in possession or to cancel or terminate any Space Lease or to dispossess
the Tenants or other persons in possession on grounds of nonpayment of any
amount due (or on grounds of any other failure to perform) under the applicable
Space Lease or otherwise enforce the provisions of the Space Leases. Prior to
March 1, 2001, no settlement shall be entered into in any matter without the
Owner's written approval. On or after March 1, 2001, no settlement shall be
entered into in any matter without the Owner's written approval, if such
settlement would result in any cost to Owner, not otherwise payable out of Gross
Proceeds;
(xvii) Shall advertis and promote the business of the
Project (and shall institute and supervise a leasing and marketing program);
provided, however, that, prior to March 1, 2001, unless otherwise provided for
by the Owner, the Managing Agent shall not, without the Owner's approval,
expend, or commit to expend for such activities more than the amount approved in
the Plan therefor;
(xviii) Subject to compliance with the provisions of the
Space Leases and any mortgage or agreement affecting the Project, if it deems
such action reasonable, contest in good faith any tax, assessment, levy,
attachment, charge, fee, Legal Requirement or lien relating to the Project which
it believes to be unjustified; provided, however, that such contest shall not
(a) subject the Project or any part thereof or any proceeds therefrom to the
risk of sale or forfeiture, (b) interfere with the use of occupancy of the
Project or (c) subject the Owner to the risk of any criminal or civil liability.
(xix) To the extent required to be obtained or maintained
by the Owner of the Project, obtain and maintain, on behalf of the Owner, all
licenses, permits and approvals necessary or desirable for the use, operation,
maintenance and management of the Project;
36
(xx) Keep the Owner informed of any significant change in
the rules and regulations relating to the use, operation and maintenance of the
Project, including any change in any Legal Requirements;
(xxi) Collect all security deposits entitled to be received
by the Landlord under the Space Leases and shall promptly deposit the same in
the Bank Account or such other account as may be required by the Space Leases
and shall maintain said accounts pursuant to local law;
(xxii) Promptly after receipt thereof, deliver to the Owner
a copy of any notice or other communication received by the Managing Agent from
any public official or agency, or any Tenant under any of the Space Leases
relating to any matter that would constitute (with or without the giving of
notice or the passage of time, or both) a default under any Space Lease or any
mortgage or other agreement affecting the Project;
(xxiii) Within forty-five (45) days following the
Commencement Date of this Agreement and annually thereafter, prepare, a Leasing
and Operating Plan (the "Plan") for the Project covering the period from the
Commencement Date through the Expiration Date of the first fiscal year and each
fiscal year thereafter, which Plan shall be prepared in a manner which will
enable the Project to be operated by the Managing Agent as a first-class
commercial property, with such expenditure to be payable out of anticipated
Gross Proceeds. Such Plan through March 1, 2001, will be in effect only upon
Owner's written approval; and
(xxiv) Use good faith efforts to comply with the terms and
provisions of the loan documents to which Owner is the borrower, and Resources
Accrued Mortgage Investors, 2 L.P. is the lender (the "Loan Documents") (except
to the extent such provisions of the Loan Documents are not susceptible to
performance by a person other than Owner itself).
5. Condemnation and Casualty. In the event all or any portion of
the Project (i) is damaged as a result of fire or other casualty (a "Casualty")
or (ii) taken or condemned in any eminent domain, condemnation, compulsory
acquisition or like proceeding by any competent authority for any public or
quasi-public use or purpose (a "Condemnation"), the Managing Agent shall give
the Owner prompt written notice thereof. The Owner, or the Managing Agent shall
not have any obligation to restore, repair, rebuild, alter, replace, or modify
the Project or any part thereof affected by a Casualty or Condemnation.
6. Fiscal Matters.
--------------
(a) The Managing Agent shall provide for appropriate accounting
and cost control systems and personnel to be maintained at the Managing Agent's
general offices to allow Managing Agent to maintain the books of account of the
Project and to prepare and transmit the statements and reports required pursuant
to this Section and the other reports, etc., as reasonably requested by Owner.
In addition, the Managing Agent shall cause, if
37
required by law, such personnel to prepare and file all necessary reports with
respect to withholding taxes, social security taxes, unemployment insurance,
disability insurance, the Fair Labor Standards Acts and all other applicable
laws and regulations and all other statements and reports pertaining to labor
employed on the Managing Agent's payroll in or about the Project. The Managing
Agent shall also cause such personnel to prepare and file all necessary reports
and returns with respect to sales taxes, use taxes, personal property taxes and
all other taxes relating to the Project. The Managing Agent shall establish and
supervise all bookkeeping and clerical services in connection with the operation
of the Project. The Managing Agent shall be solely responsible and liable for,
and shall bear and timely pay, all costs and expenses incurred in connection
with this Section 6(a), and commencing on and after March 1, 2001 shall be
reimbursed, from Gross Proceeds for such reasonable costs and expenses. The
Owner, and its independent accounting firm shall have the right and privilege of
examining said books and records at any reasonable time, the cost of which shall
be paid by Owner. All books and records relating to the Project shall be
retained for a period of at least four (4) years following the fiscal year to
which they pertain or for such longer period of time as is consistent with
industry standards.
(b) On or prior to the 20th day of each calendar month during
the term hereof, the Managing Agent shall render to the Owner, a statement (the
"Monthly Statement") reporting the income and expenses for the immediately
preceding calendar month including a comparison to the Plan. Together with the
Monthly Statement, the Managing Agent shall include such other reasonable
information requested by the Owner and shall simultaneously wire transfer to the
Owner or its designee the if Gross Operating Cash Flow for the immediately
preceding month .
(c) The Managing Agent shall, promptly following the Owner's
request therefor, render to the Owner, and to such persons as may be reasonably
designated by the Owner, any other statements or reports, and provide access to
such additional information, reasonably requested by the Owner in order for
Owner to comply with its Securities and Exchange Commission and tax reporting
requirements.
(d) At the Owner's request, an audit or review of the Project
books and records shall be performed by a firm of independent certified public
accountants selected by the Owner. Any costs and expenses incurred in connection
therewith shall be paid by Owner; provided, however, that, if such audit or
review reveals that the Managing Agent has misappropriated any funds, then the
Managing Agent shall be responsible and liable for, and shall bear and timely
pay, all costs and expenses in connection with such audit or review and shall
not be paid or reimbursed by the Owner or from Gross Proceeds for such costs and
expenses.
7. Management Fee. In full consideration for the services of
the Managing Agent hereunder the Managing Agent shall be entitled to receive the
Management Fee. The Management Fee for each calendar month during the term
hereof shall be separately computed, invoiced and paid to the Managing Agent
from the Bank Account prior to the end of such calendar month in an amount equal
to 3.0% of the collected Gross Proceeds less any amounts included in Gross
Proceeds which represent condemnation awards, insurance proceeds, real estate
tax refunds and rebates of other operating expenses or sales or rent taxes
38
collected on behalf of taxing authorities.
8. Insurance.
(a) After March 1, 2001, Managing Agent shall be responsible
for procuring to the extent reasonably available, all insurance policies
required to be procured with respect to the Project under the Space Leases or
any other agreement or mortgage affecting the Project or which are provided for
in the Plan, said premiums to be considered an expense of the Project. All
liability insurance policies maintained with respect to the Project shall
include the Managing Agent as an additional named insured and certificates of
insurance evidencing such coverage shall be provided to Owner and its mortgage
lender by Managing Agent.
(b) The Managing Agent shall obtain and maintain throughout the
term of this Agreement, a fidelity bond in an amount of $1,000,000 for the full
protection of the interests of the Owner, the Owner and the Managing Agent.
(c) The Owner shall give to the Managing Agent, and the
Managing Agent shall give to the Owner, appropriate notice of any claims made
against the Project, the Owner or the Managing Agent, and the Managing Agent
shall cooperate fully with the Owner and with any insurance carrier to the end
that all such claims will be promptly investigated and defended.
9. Indemnity and Related Matters.
-----------------------------
(a) The Owner agrees to indemnify and hold the Managing Agent
free and harmless from any liability, including any costs and expenses incident
thereto, for injury to persons or damage to property by reason of any cause
whatsoever, in or about the Project, as a result of the performance of this
Agreement by the Managing Agent, its agents, employees or independent
contractors, irrespective of whether negligence on the part of the Managing
Agent, its agents, employees or independent contractors is alleged.
(b) Except as otherwise provided in this Agreement, the Owner
agrees to reimburse the Managing Agent for any money which the Managing Agent is
required to pay out for any reason whatsoever whether the payment is for, or the
result of (i) costs, charges or debts incurred or assumed by the Managing Agent
in connection with the operation of the Project, or (ii) judgments, settlements
or expenses in defense of any claim, civil or criminal action, proceeding,
charge or prosecution made, instituted or maintained against the Managing Agent
or employees, agents or connection with the Project.
(c) Notwithstanding the foregoing or anything else contained
herein to the contrary, the Owner shall not reimburse the Managing Agent or be
liable to indemnify and hold the Managing Agent harmless from any liability or
cost described in Section 9(a) and (b) and not covered by insurance, which
results from, (i) the willful misconduct, gross negligence or criminal conduct
of the Managing Agent or employees, agents, or independent contractors of the
Managing Agent, (ii) any breach of this Agreement by Managing Agent, or (iii)
any act of agent which is outside the scope of Managing Agent's authority under
this Agreement, and the Managing Agent shall indemnify the Owner and Owner (and
each
39
partner therein, any legal representative, heir, estate, successor or assign of
any such partner or any officer, director, shareholder or partner in any such
partner and any other principal of the Owner or the Owner whether disclosed or
undisclosed) against such liabilities and costs, including reasonable legal fees
and any other costs and expenses incident thereto.
(d) The Owner agrees to defend promptly and diligently, at the
Owner's expense, any claim, action or proceeding brought against the Managing
Agent and the Owner, jointly or severally, arising out of or connected with any
of the matters referred to in Section 9(a) and (b), unless covered by Section
9(c) and to hold harmless and fully indemnify the Managing Agent from any
judgment, liability, loss or settlement on account thereof.
(e) Notwithstanding anything to the contrary contained in this
Agreement, neither the Owner, nor any partner in the Owner, nor any legal
representative, heir, estate, successor or assign of any such partner or any
officer, director, shareholder or partner in any such partner nor any other
principal in Owner whether disclosed or undisclosed, shall have any personal
liability with respect to the performance by the Owner of any of its obligations
under this Agreement. If any breach shall occur by the Owner hereunder, the
Managing Agent shall proceed solely against the Project and shall not seek or
claim recourse against the Owner or any other person or party hereinabove named
or referred to in this Section 9(e) as being exculpated from personal liability
(including, without limitation, any claim to the Expense Distribution, as such
term is defined in the Loan Documents).
10. Default and Termination. It shall be an event of default ("Event of
Default") or a cause for termination hereunder if any one or more of the
following events shall occur:
(a) If either party (the "Defaulting Party") shall breach or
fail to perform any term, covenant or condition contained in this Agreement;
(b) If any Party shall voluntarily or involuntarily be
dissolved; apply for or consent to the appointment of a receiver, trustee or
liquidator of all or a substantial part of its assets; file a voluntary petition
in bankruptcy or otherwise voluntarily avail itself of any federal or state laws
for the relief of debtors; admit in writing its inability to pay its debts as
they become due; make a general assignment for the benefit of creditors; file a
petition or an answer seeking reorganization or arrangement with creditors or to
take advantage of any insolvency law or file an answer admitting the material
allegations of any petition filed against it in any bankruptcy, reorganization
or insolvency proceeding; if an order, judgment or decree shall be entered by
any court of competent jurisdiction, on the application of any one or more
creditors of such Defaulting Party, adjudicating it bankrupt or insolvent or
approving a petition seeking reorganization or appointing a receiver, trustee or
liquidator of all or a substantial part of its assets, and such order, judgment
or decree shall become final; or if within 60 days after the commencement of any
proceeding against the Defaulting Party seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under the
present or any future applicable federal, state or other bankruptcy or
insolvency statute or law, such proceeding shall not have been dismissed;
(c) If Managing Agent shall assign or transfer by operation of
law or otherwise
40
all of its rights under this Agreement without first obtaining Owner's written
approval;
(d) If Managing Agent shall act outside the authoritie
established hereunder;
(e) Upon the occurrence of an Event of Default, the non-
defaulting party ("Non-Defaulting Party") shall have the right to terminate this
Agreement (i) if the Event of Default is non-monetary in nature and the
Defaulting Party fails to remedy any such Event of Default within twenty (20)
days after its receipt of notice of default; provided, however, that if such
Event of Default cannot reasonably be remedied within said period, then such
additional period as may reasonably be required to remedy the same will be
granted to the Defaulting Party, if the Defaulting Party shall promptly commence
and use its reasonable efforts to remedy the default upon receipt of the
Non-Defaulting Party's notice and shall continue therewith with due diligence,
or (ii) if the Event of Default is monetary in nature and the Defaulting Party
does not cure such Event of Default within five (5) business days after its
receipt of notice of such default. Notwithstanding the foregoing, in the event
of the failure by Managing Agent to remit to Owner the financial information
within the control of Managing Agent reasonably necessary for Owner to file its
Form 10-K or 10-KSB, and Form 10-Q with the Securities and Exchange Commission
on a timely basis after five (5) business days prior written notice to Managing
Agent detailing with specificity the information required and affording Managing
Agent the opportunity to provide such information within such five (5) business
day period, Owner shall have the right to terminate this Agreement immediately
thereafter;
(f) Notwithstanding any provision contained herein to the
contrary, if after a Condemnation or Casualty, the Owner elects not to undertake
a restoration of the Project, the Owner shall have the right to terminate this
Agreement without penalty upon thirty (30) days prior notice to the Managing
Agent; provided, however, if the Owner so elects to terminate this Agreement,
the Managing Agent, if requested by the Owner, shall assist the Owner in
completing and filing any claim forms required to be completed and filed, and in
complying with any other procedures required to be complied with, in order to
enable the Owner to receive any Condemnation award or insurance proceeds the
Owner is entitled to receive in connection with any such Casualty or
Condemnation, and the Owner shall pay the Managing Agent a reasonable fee, to be
agreed upon between the Owner and the Managing Agent, for so assisting the
Owner;
(g) No termination of this Agreement, by operation of law or
otherwise, shall relieve the parties hereto of their obligations hereunder
accruing prior to the date of the termination of this Agreement, including,
without limitation, any obligations to indemnify any person pursuant to Section
9 hereof;
(h) Upon any termination of this Agreement, whether pursuant
to Section 10, by operation of law or otherwise, the Managing Agent shall
forthwith (i) surrender and deliver to the Owner, or its designee, all Gross
Proceeds of the Project and other monies of the Project on and in any Bank
Account, including any amounts in the Bank Account, (ii) deliver to the Owner,
or its designee, as received any monies which would be Gross Proceeds under this
Agreement but received after such termination, (iii) deliver to the Owner, or
its designee, all materials and supplies, keys, contracts and documents, and
such other accounting papers
41
and records pertaining to this Agreement as the Owner, or its designee, shall
request, including all books and records maintained for the Project, and (iv)
confirm the assignment to the Owner, or its designee, of any and all rights the
Managing Agent may have in and to any existing contracts, licenses and permits
relating to the operation and maintenance of the Project, as the Owner, or its
designee, shall require. The Managing Agent hereby grants a power of attorney
(coupled with an interest) to the Owner, or its designee, to endorse any checks
received in connection with the Project, and hereby assigns to the Owner, or its
designee, effective upon the date of such termination, any and all existing
contracts, licenses and permits relating to the operation and management of the
Project;
(i) The terms of this Article shall not be deemed to impair the
right of any party to exercise any right or remedy, whether for damages,
injunction, specific performance or otherwise, upon any breach or termination
hereof;
(j) Within fifteen (15) days of any termination of this
Agreement, the Managing Agent shall render to Owner, or its designee, , a full
accounting to the date of termination, of all monies received by the Managing
Agent in connection herewith;
(k) This Agreement shall terminate upon thirty (30) days written
notice to Managing Agent upon a sale of the Project.
11. Notices. All notices, consents, approvals or other communications
provided for in this Agreement to be given by the Managing Agent to the Owner
shall be in writing and shall be personally served or sent by recognized
overnight courier (e.g. FedEx):
TO THE OWNER:
c/o Pembroke Companies, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
All notices, consents, approvals or other communications provided for
in this Agreement to be given by the Owner to the Managing Agent shall be in
writing and shall be personally served or sent by recognized overnight courier
(e.g. FedEx):
TO THE MANAGING AGENT:
▇/▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
12. Relationship and Further Actions.
--------------------------------
(a) The Managing Agent and the Owner intend that this Agreement
establish no relationship between them other than that of Managing Agent and
Owner, respectively. The Managing Agent and the Owner shall not be construed as
joint ventures or partners of each
42
other and neither shall have the power to bind or obligate the other except as
set forth in this Agreement.
(b) The parties hereto agree to execute all contracts,
agreements and documents and to take all actions necessary to comply with the
provisions of this Agreement and the intent hereof.
13. Applicable Law. The interpretation, validity and performance of
this Agreement shall be governed by the laws of the State of New York without
giving effect to the conflict of laws or principles thereof. If any of the terms
and provisions hereof shall be held invalid or unenforceable for any reason,
such invalidity or unenforceability shall in no event affect any of the other
terms or provisions hereof, all such other terms and provisions to be valid and
enforceable to the fullest extent permitted by law.
14. Successors and Assigns.
(a) The Managing Agent shall not assign or in any manner
sell or transfer any of its rights and interests in their entirety as Managing
Agent hereunder without the prior written approval of the Owner.
(b) The terms, provisions, covenants, undertakings, agreements,
obligations and conditions of this Agreement shall be binding upon and shall
inure to the benefit of the successors and the permitted assigns of the parties
hereto.
15. Hazards. Owner agrees to provide Managing Agent with any
information Owner may have regarding Hazards in the Property. Hazards shall
include, but are not limited to, asbestos, PCB transformers, other toxic or
hazardous substances, underground storage tanks, and health and safety hazards.
Managing Agent shall notify Owner if Managing Agent becomes aware of any Hazards
in, on or about the Property. Owner understands that Managing Agent is not a
licensed or qualified expert on Hazards. Therefore, Managing Agent shall not be
responsible for discovering Hazards, in, on or about the Property, causing the
Property to comply with laws regarding Hazards, or supervising technical work on
Hazards. Owner understands that the laws regarding the disclosure of Hazards to
tenants, buyers and other persons may be ambiguous and subject to conflicting
interpretations. Therefore, if Hazards are discovered in, on or about the
Property and Managing Agent in good faith disagrees with Owner's instructions
regarding such disclosures, then Managing Agent may terminate this Agreement
upon sixty (60) days written notice to Owner.
16. General Provisions.
------------------
(a) The Owner represents that it has full power and authority
to execute this Agreement and to be bound by and perform the terms hereof. The
Managing Agent represents it has full power and authority to execute this
Agreement and be bound by and perform the terms hereof. On request, each party
shall furnish the other evidence of such authority.
43
(b) Any change to or modification of this Agreement or any
waiver of any provision hereof must be in writing signed by both parties hereto.
This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original. The captions for each Section are intended for
convenience only.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement effective the day and year first above written.
Owner:
HIGH CASH PARTNERS, L.P.
By: Pembroke HCP, LLC, General Partner
By: Pembroke Companies, Inc., Member
By:
------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
Managing Agent:
KESTREL MANAGEMENT LP
By: Kestrel Management Corporation,
Its general partner
By: ------------------------------
Name:
Title:
44
EXHIBIT C
Form of Unconditional Guaranty
45
UNCONDITIONAL LIMITED GUARANTY
WHEREAS, HIGH CASH PARTNERS, L.P., a Delaware limited partnership (the
"Borrower") owns certain real property, improvements and personal property which
is commonly known as Sierra Marketplace and located at South Virginia Street and
East ▇▇▇▇▇ ▇▇▇▇, Reno, Nevada (the "Premises");
WHERAS, the Premises is encumbered by a mortgage loan (the "Loan") as
evidenced by a Deed of Trust, Assignment of Rents, Fixture Filing and Security
Agreement among the Borrower, as trustor, First Commercial Title, Inc., as
trustee and RESOURCES ACCRUED MORTGAGE INVESTORS 2 L.P., a Delaware limited
partnership (the "Lender"), as beneficiary dated February 10, 1989, and recorded
on February 13, 1989, in Book 2866, Page 42, as Document No.1304601, in the
Official Records of Washoe County, Nevada (the "Deed of Trust") and an
Assignment of Leases and Rents given by the Borrower in favor of the Lender
dated February 10, 1989, and recorded on February 13, 1989, in Book 2866, Page
88, as Document No. 1304602, in the Official Records of Washoe County, Nevada
(the "Assignment"). The Deed of Trust and Assignment secure that certain
Registered Note dated February 10, 1989 in the original principal amount of
$6,500,000 made by the Borrower and given to the Lender (the "Note"). The
original principal amount of the Note, together will all accrued and unpaid
interest, late charges, default interest, attorneys fees and other costs and
expenses due and payable under the Note and Loan Documents is referred to herein
as the "Indebtedness". The Note, Deed of Trust, Assignment and other documents
evidencing and securing the Indebtedness are hereinafter referred to as the
"Loan Documents";
WHEREAS, the Maturity Date of the Loan is February 28, 2001, and Borrower
has requested Lender, and Lender has agreed, to forbear in the exercise of its
rights and remedies under the Loan Documents in the event the Loan is not
satisfied in full on or prior to the Maturity Date, upon the terms and
conditions of that certain Modification Agreement of even date hereof between
Borrower and Lender (the "Modification Agreement");
WHEREAS, as a condition to, and in consideration of the Lender entering
into the Modification Agreement with the Borrower, the Lender has required that
the undersigned (hereinafter called "Guarantor") guaranty the payment of the
"Guarantied Indebtedness" (as defined below); and
WHEREAS, Guarantor is a principal of the managing member of the managing
general partner of the Borrower, and believes it is in the best interest of the
Borrower to enter into the Modification Agreement and will derive substantial
benefit in the event the Modification Agreement is entered into between the
Borrower and the Lender;
NOW, THEREFORE, in consideration of $10.00 and other good and valuable
considerations, the receipt and adequacy of which are hereby acknowledged,
Guarantor hereby agrees as follows:
1. THE GUARANTY. The guaranty of Guarantor hereunder is as follows:
46
1.1. Guaranty of Payment. Subject to Paragraph 1.2 below,
Guarantor unconditionally guaranties only the due and punctual payment to the
Lender of the entire principal amount of the Note, together with all interest
thereon and all other fees and expenses due and payable under the Loan Documents
(such amount, as so limited, is herein called the "Guarantied Indebtedness"), in
the event, and only in the event, either a "Bankruptcy Case" or "Common Law
Civil Action" (as hereinafter defined) has been filed or instituted.
1.2 Conditions and Termination.
1.2.1 Provided that at the time of the occurrence of the first to
occur of: (a) the conveyance of the Premises by grant deed and the conveyance of
all rents, leases, and profits and all other portions of the Premises by
assignments, bills of sale, and other appropriate instruments, all given by the
Borrower to the Lender or its designee in accordance with the Modification
Agreement, or (b) at the election of the Lender, the conveyance of the Premises
through foreclosure of the Deed of Trust (collectively, the "Conveyance
Events"), no "Bankruptcy Case" (as hereinafter defined) or "Common Law Civil
Action" (as hereinafter defined) has been filed or instituted, then the
liability of Guarantor under this Guaranty shall cease and terminate without
need for any further act or agreement of the Lender, and at such time the Lender
shall execute and deliver such documents and writings as Guarantor may
reasonably request to confirm and evidence such termination.
1.2.2 For the avoidance of doubt, it is the intention of the
parties that, notwithstanding any other provisions of this Guaranty to the
contrary, the liability of Guarantor under this Guaranty shall cease and
terminate without need for any further act or agreement of the Lender upon the
occurrence of any of the following events, and at such time the Lender shall
execute and deliver such documents and writings as Guarantor may reasonably
request to confirm and evidence such termination:
(a) Guarantor, within thirty (30) days after demand therefor
from the Lender, causes the Borrower to convey the Premises to the Lender or its
designee (including by not objecting to the delivery of the deed and other
conveyance documents out of escrow) without the Lender having been hindered,
impeded or delayed by a Bankruptcy Case or a Common Law Civil Action;
(b) The Lender sells the Premises at a foreclosure sale pursuant
to the Deed of Trust without having been hindered, impeded or delayed by a
Bankruptcy Case or a Common Law Civil Action;
(c) A condemnation of all or substantially all of the Premises
occurs and the proceeds thereof are disbursed in accordance with the Loan
Documents;
(d) All or substantially all of the Premises are destroyed
by casualty and the insurance proceeds payable with respect thereto are
disbursed in accordance with the Loan Documents; or
47
(e) A sale, conveyance or other disposition of all or
substantially all of the Premises and the payment and disbursement of the
proceeds of such disposition in accordance with the Loan Documents.
1.2.3 Unless there is pending either a Bankruptcy Case or a
Common Law Civil Action, if by April 1, 2003 the Lender has not acquired title
to the Premises as contemplated by the Modification Agreement, then Guarantor
may cause the Borrower to convey the Premises and other collateral to the Lender
as provided in Paragraph 1.2.1 above, and thereupon the liability of Guarantor
under this Guaranty shall cease and terminate without need for any act or
agreement of the Lender, and at such time the Lender shall execute and deliver
such documents and writings as Guarantor may reasonably request to confirm and
evidence such termination.
1.2.4. As used in this Guaranty, the term "Bankruptcy Case" shall
mean a reorganization, liquidation or other similar bankruptcy proceeding under
Title 11 of the United States Code or under any other federal or state debtor
relief laws or the re-opening of any bankruptcy proceeding, in any case
instituted by the Borrower or on behalf of the Borrower by Guarantor or his
affiliates or instituted against the Borrower at the instance of Guarantor or
his affiliates, excluding, however: (a) any proceeding instituted by the limited
partners of the Borrower in their own name or derivatively on behalf of the
Borrower and not otherwise instituted at the instance of Guarantor or his
affiliates, and (b) any proceeding instituted by the general partner of Borrower
as a result of or in response to a proceeding instituted by the limited partners
of the Borrower seeking to compel the general partner of the Borrower to
commence a Bankruptcy Case and not otherwise instituted at the instance of
Guarantor or his affiliates.
1.2.5. As used in this Guaranty, the term "Common Law Civil Action"
means any suit or other proceeding instituted or filed by the Borrower or on
behalf of the Borrower by Guarantor or his affiliates or instituted by any third
party at the instance of Guarantor to hinder, impede or delay the exercise by
the Lender against the Borrower or any of them or the Premises of any rights or
remedies available to the Lender at law, in equity, by agreement or otherwise,
excluding, however: (a) any proceeding instituted by the limited partners of the
Borrower in their own name or derivatively on behalf of the Borrower not
otherwise instituted at the instance of Guarantor or his affiliates, and (b) any
proceeding instituted by the general partner of Borrower as a result of or in
response to a proceeding instituted by the limited partners of the Borrower
seeking to compel the general partner of the Borrower to commence a Common Law
Civil Action Case and not otherwise instituted at the instance of Guarantor or
his affiliates.
1.2.6. As used in this Guaranty in the context of a Bankruptcy Case
or a Common Law Civil Action, the term "Guarantor" shall include, in addition to
Guarantor, any owners of all or any portion of or interest in the Premises which
are controlled by Guarantor, or any general partner in the Borrower or in which
Guarantor is the managing general partner.
48
1.2.7. As used in this Section 18, the term "Premises" shall mean
and refer to the Premises as defined in the Loan Documents, as the same may have
been reduced or altered as a result of condemnation proceedings or any sale or
other disposition of a part thereof to which the Lender shall have consented.
1.3. Guaranty of Payment; Not Collection. Guarantor hereby agrees
that this Guaranty is a guaranty of payment and not of collection, and that his
obligations under this Guaranty shall be primary, absolute and unconditional,
irrespective of and unaffected by:
(a) the lack of genuineness, validity, regularity,
enforceability or any future amendment of or change in Note or any of the Loan
Documents or any agreement or instrument to which the Borrower and/or Guarantor
are or may be a party (including without limitation this Guaranty);
(b) the absence of any action to enforce the Note or any of the
Loan Documents or the waiver or consent by the Lender with respect to any
provisions thereof;
(c) the existence, value of condition of any security for
the Guarantied Indebtedness or any action or the absence of any action by the
Lender with respect thereof (including without limitation the release thereof);
or
(d) any other action or circumstances which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
it being agreed by Guarantor that his obligations under this Guaranty shall not
be discharged except by payment as provided herein. Guarantor shall be regarded
as, and shall be in the same position as, a principal debtor with respect to the
Guarantied Indebtedness.
1.4. Waivers. Guarantor hereby waives and agrees not to assert
or take advantage of any defense based upon failure of the Lender to commence an
action against the Borrower. In addition, Guarantor expressly waives all rights
he may have now or in the future under any statute, or at common law, or at law
or in equity, or otherwise, to compel the Lender to proceed in respect of the
Guarantied Indebtedness against the Borrower, or any other party or against any
security for the payment of the Guarantied Indebtedness before proceeding
against, or as a condition to proceeding against Guarantor. Guarantor agrees
that any notice or directive given at any time to the Lender which is
inconsistent with the waivers in the immediately preceding sentences shall be
void and may be ignored by the Lender, and, in addition, may not be pleaded or
introduced as evidence in any litigation relating to this Guaranty for the
reason that such pleading or introduction would be at variance with the written
terms of this Guaranty, unless the Lender has specifically agreed otherwise in
writing, signed by a duly authorized officer. It is agreed between Guarantor and
the Lender that the foregoing waivers are of the essence of the Loan and that,
but for this Guaranty and such waivers, the Lender would decline to enter into
the Modification Agreement and consummate the actions contemplated thereby.
1.5. Payment by Guarantor. Guarantor shall, within ten (10)
business days after demand in writing therefor shall have been made by the
Lender to Guarantor, pay to the Lender the amount of any and all outstanding and
unpaid Guarantied Indebtedness due and
49
owing the Lender pursuant to the terms of this Guaranty. Payment by Guarantor
shall be made to the Lender at the address indicated below for the giving of
notice to the Lender or at any other address that may be specified in writing
from time to time by the Lender.
1.6. Enforcement of Guaranty. The Lender may proceed to exercise
any right or remedy which it may have against any property, real or personal, as
a result of any lien or security interest it may have to secure all or any
portion of the Guarantied Indebtedness, including but not limited to the real
and personal property covered by the Loan Documents, it being agreed that in no
event shall the Lender have any obligation to (but may at its option) proceed
against the Borrower or any other person or entity or any such real or personal
property before seeking satisfaction from Guarantor under this Guaranty.
1.7. Additional Waivers. In addition to the waivers contained in
paragraph 1.4 above, Guarantor waives, and agrees that he will not at any time
insist upon, plead or in any manner whatever claim or take the benefit or
advantage of, any and all appraisal, valuation, stay, extension,
marshalling-of-assets or redemption laws, or right of homestead or exemption,
whether now or at any time hereafter in force, which may delay, prevent or
otherwise affect the performance by Guarantor of his obligations under, or the
enforcement by the Lender of this Guaranty. Guarantor hereby waives diligence,
presentment and demand (whether for non-payment or protest or of acceptance,
maturity, extension of time, change in nature or form of the Guarantied
Indebtedness, acceptance of further security, release of security, composition
or agreement arrived at as to the amount of or the terms of the Guarantied
Indebtedness, notice of adverse change in the Borrower's financial condition and
any other fact which might materially increase the risk to Guarantor), with
respect to any of the Guarantied Indebtedness, and all other demands whatsoever,
and waive the benefit of all provisions of law which are or might be in conflict
with the terms of this Guaranty, except to the extent that this Guaranty may
otherwise specify the giving of notice. Guarantor represents and warrants and
agrees that, as of the date of this Guaranty, his obligations under this
Guaranty are not subject to any counterclaims, offsets or defenses against the
Lender of any kind. Guarantor further agrees that his obligations under this
Guaranty shall not be subject to any counterclaims, offsets or defense against
the Lender or against the Borrower of any kind which may arise in the future,
other than the defense that Guarantor has satisfied his obligations hereunder in
full.
1.8. Benefit of Guaranty. The provisions of this Guaranty are
for the benefit of the Lender and nothing herein contained shall impair as
between the Borrower and the Lender the obligations of the Borrower under the
Note and the other Loan Documents, or under any other agreements, documents,
instruments or certificates which may be delivered under or pursuant to any of
the Loan Documents or in connection with the Loan.
1.9. Modification of Loan, Etc. At any time and from time to
time, without the consent of or notice to Guarantor, without incurring any
liability to Guarantor and without impairing or releasing the obligations of
Guarantor under this Guaranty, the Lender may:
50
(a) Change or extend the manner, place or terms of payment of
or renew or alter all or any portion of the Loan, other than the manner, place
and terms of payment of the Guarantied Indebtedness;
(b) Take any action under or in respect of the Note or any of
the other Loan Documents in the exercise of any remedy, power or privilege
contained therein or available to the Lender at law, equity or otherwise, or
waive or refrain from exercising any such remedies, powers or privileges;
(c) Amend or modify in any respect the Note, the Modification
Agreement or the other Loan Documents, but the Lender may not amend or modify
the manner, place and terms of payment of the Guarantied Indebtedness;
(d) Extend or waive the time for the Borrower's or any other
person's or party's performance of or compliance with, any term, covenant or
agreement on its part to be performed or observed under the Note, the
Modification Agreement or other Loan Documents, or waive such performance or
compliance or consent to a failure of or departure from such performance or
compliance, but the Lender may not extend or waive the manner, place and terms
of payment of the Guarantied Indebtedness;
(e) Sell, exchange, release, dispose of or otherwise deal with
any property pledged, mortgaged or conveyed, or in which the Lender has been
granted a lien or security interest, to secure any indebtedness of the Borrower
to the Lender;
(f) Release any guarantor, surety or anyone else who may be
liable in any manner for the payment and collection of any amounts owed by the
Borrower to the Lender while continuing to hold liable any other guarantor not
specifically released in writing; and
(g) Apply any sums by whomever paid or however realized to
any amounts owing by the Borrower to the Lender in such manner as the Lender
shall determine in its sole discretion.
1.10. Reinstatement. This Guaranty shall remain in full force and
effect and continue to be effective should any petition be filed by or against
the Borrower under the Bankruptcy Reform Act of 1978, as at any time amended (or
under any substitute or successor legislation relating to the same general
subject matter), for liquidation or reorganization, should the Borrower become
insolvent or make an assignment for the benefit of creditors or a receiver or
trustee be appointed for all or any significant part of the Borrower's assets,
and shall continue to be effective or be reinstated, as the case may be, if at
any time payment of the Guarantied Indebtedness, or any part thereof, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by the Lender whether as a "preferential transfer",
"voidable preference", fraudulent conveyance, or otherwise, all as though such
reduction, repayment or restoration by the Lender had not been made.
1.11. Subrogation. So long as any Indebtedness to Lender remains
unpaid, Guarantor hereby waives, to the fullest extent possible, as against the
Borrower and its assets
51
any and all rights, whether at law, in equity, by agreement or otherwise, to
subrogation, indemnity, reimbursement, contribution, or any other similar claim,
cause of action or remedy that otherwise would arise out of Guarantor's
performance of his obligations to the Lender under this Guaranty. The preceding
waiver is intended by Guarantor and the Lender to be for the benefit of the
Borrower, and the waiver shall be enforceable by the Borrower or any of its
successors or assigns as an absolute defense to any action by Guarantor against
the Borrower or its assets which arises out of Guarantor having made any payment
to the Lender with respect to any of the liabilities guarantied hereunder.
2. REPRESENTATIONS AND WARRANTIES. Full reliance by the Lender upon the
following representations and warranties is acknowledged:
2.1. Representations and Warranties of Guarantor. Guarantor
represents and warrants to the Lender as follows:
(a) To the best of Guarantor's knowledge, the Borrower is a
limited partnership duly organized, validly existing and in good standing under
the laws of the State of Delaware, and is duly qualified to do business and in
good standing as a foreign limited partnership in the State of Nevada.
(b) Guarantor has full power, authority and legal right to enter
into this Guaranty and to perform his obligations under the terms hereof.
(c) Guarantor has duly executed and delivered this Guaranty.
This Guaranty constitutes a legal, valid and binding obligation of Guarantor,
enforceable against him in accordance with the terms of this Guaranty, except as
limited by bankruptcy, insolvency, general principles of equity or other laws of
general application relating to the enforcement of creditors' rights.
(d) No authorization, consent, approval, exemption, permit
or license of, or filing with, any governmental or public body or authority is
required to authorize, or is otherwise required in connection with, the valid
execution or delivery by Guarantor of this Guaranty, or the performance of
Guarantor's obligations hereunder, except such as have been obtained and are in
full force and effect. All conditions required to the execution and delivery
hereof and performance hereunder have been satisfied on or before the date
hereof.
(e) Guarantor is not a party to, or otherwise bound by or
subject to, any agreement or instrument, the observance of the terms and
provisions of which would materially impair Guarantor's ability to perform his
obligations under, and to be bound by, this Guaranty. Neither the execution and
delivery by Guarantor of this Guaranty, nor compliance by Guarantor with the
terms and provisions of this Guaranty, will conflict with, constitute a default
under, or result in a breach of, any of the terms, conditions or provisions of,
any law or decree or any regulation, order, writ, injunction, determination or
award of any court, arbitrator or governmental department, commission, board,
bureau, agency or instrumentality (domestic or foreign), or any agreement or
instrument to which Guarantor is a party or by which he or any of his properties
may be affected.
52
(f) Guarantor has a personal net worth (exclusive of spouse)
in excess of Two Million Dollars as determined by sound accounting principles,
consistently applied.
(g) There is no action, suit, proceeding or investigation
pending, or to the best knowledge of Guarantor threatened, against or affecting
Guarantor at law, in equity, in admiralty or before any arbitrator of any kind
or before any governmental department, commission, board, bureau, agency or
instrumentality (domestic or foreign) which, in the opinion of Guarantor, is
likely to result in any material adverse change in the property or assets, or in
the condition (financial or otherwise) of Guarantor, or materially impair his
ability to perform his obligations under this Guaranty.
3. CONTINUING GUARANTY. Guarantor agrees that this Guaranty is a
continuing guaranty and shall remain in full force and effect until the payment
in full of the Guarantied Indebtedness, subject to the provisions of Section 1.2
herein..
4. NO ASSIGNMENT BY LENDER. The Lender shall not assign its rights
nor delegate its duties under this Guaranty.
5. FURTHER ASSURANCE. Guarantor agrees, upon the written request of
the Lender, to execute and deliver to the Lender from time to time any
additional instruments or documents reasonably considered necessary by the
Lender or its counsel to cause this Guaranty to be, become or remain valid and
effective in accordance with its terms.
6. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Guarantor set forth in this Guaranty shall survive for so long
as all or any portion of the Guarantied Indebtedness remains unpaid, or until
this Guaranty is no longer in effect.
7. ENTIRE AGREEMENT: AMENDMENT. This Guaranty together with the
Modification Agreement (and the documents to be delivered in conjunction
therewith) contains the entire agreement between the parties with respect to the
subject matter hereof and supersedes all prior agreements relating to such
subject matter (including but not by way of limitation, any commitment,
modification or term letter which the Lender may have given to the Borrower or
Guarantor) and cannot be amended or supplemented as to Guarantor, except by a
written agreement signed by Guarantor and the Lender.
8. HEADINGS. The headings in this Guaranty are for convenience only
and are not part of the substance of this Guaranty.
9. SEVERABILITY. In the event that any one or more the provisions
contained in this Guaranty shall be determined to be invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision or provisions in every other respect and of
the remaining provisions of this Guaranty shall not be in any way impaired.
10. COUNTERPARTS. This Guaranty may be executed in counterparts which
together shall constitute the same instrument.
53
11. NOTICES. All notices, requests, demands and other communications
under or in connection with this Guaranty shall be in writing, shall be
delivered by federal express or similar overnight courier service, by hand or
sent by registered or certified mail to the following addresses, and shall be
deemed to have been given upon receipt or refusal to accept:
If to Lender:
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Post & ▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. Post
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Guarantor:
c/o Pembroke Companies, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Proskauer Rose LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
The above addresses may be changed by either the Lender or
Guarantor by writing to the other addressed as above.
12. BINDING EFFECT. This Guaranty shall bind and inure to the benefit
of the parties and their respective heirs, permitted successors, delegees and
assigns.
54
13. NON-WAIVER. The failure of the Lender to enforce any right or
remedy hereunder, or promptly to enforce any such right or remedy, shall not
constitute a waiver thereof, nor give rise to any estoppel against the Lender,
nor excuse the Guarantor from his obligations hereunder. Any waiver of any such
right or remedy must be in writing and signed by the Lender.
14. INITIATION OF SUIT. Any suit initiated by the Lender against
Guarantor under or in connection with this Guaranty may be brought in any state
or federal court in the state referred to under the paragraph "Governing Law" in
any court in such state having jurisdiction over the subject matter hereof.
Guarantor hereby submits himself to the jurisdiction of any such court and
agrees that service of process against him in any such action may be effected by
any means permissible under federal law or under the laws of such state. The non
prevailing party (as determined by a court of competent jurisdiction) agrees to
pay all expenses (including reasonable attorneys' fees and all out-of-pocket
costs and disbursements) which may be reasonably incurred by the prevailing
party in the event of the initiation of any suit under or in connection with
this Guaranty.
15. ADDITIONAL COLLATERAL. In the event any other guarantor shall
furnish a letter of credit or other collateral to the Lender as additional
collateral for the indebtedness of the Borrower to the Lender, whether
heretofore or hereafter, such additional collateral shall not diminish or modify
Guarantor's liability to the Lender hereunder unless the Lender shall otherwise
specifically agree in writing.
16. GOVERNING LAW. The terms of this Guaranty have been negotiated,
and this Guaranty has been executed and delivered, in the State of New York, and
it is the intention of the parties that this Guaranty be construed and enforced
in accordance with the laws of such State.
17. INDEPENDENT OBLIGATIONS; EXCULPATORY LANGUAGE. The liability of
Guarantor to the Lender under this Guaranty shall not be affected, impaired,
diminished or limited by any provisions of the other Loan Documents which in any
way limit or exculpate the personal liability of Guarantor.
IN WITNESS WHEREOF, Guarantor has executed and delivered this Guaranty
under seal as of December 21, 2000.
WITNESS:
------------------------- ------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
55
STATE OF NEW YORK }
} ss.:
COUNTY OF NEW YORK }
On this--- day of , in the year 2000, before me, the undersigned, a Notary
Public in and for said County and State, personally appeared ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual that executed the within instrument.
WITNESS my hand and official seal.
------ ------------------------------------
[SEAL] Notary Public
56
EXHIBIT D
Form of Release
57
49
MUTUAL RELEASE
--------------
THIS MUTUAL RELEASE (the "Agreement") is entered into effective the 21st
day of December, 2000 between HIGH CASH PARTNERS, L.P., a Delaware limited
partnership (the "Borrower") and RESOURCES ACCRUED MORTGAGE INVESTORS 2 L.P., a
Delaware limited partnership (the "Lender"). Unless otherwise defined in this
Agreement, capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to such terms in that certain Modification Agreement dated
as of the date hereof between the Borrower and the Lender (the "Modification
Agreement").
W I T N E S S E T H :
WHEREAS, the Borrower is the owner of the Property described in the
Modification Agreement;
WHEREAS, the Lender is the holder of the Loan Documents described in the
Modification Agreement evidencing and securing the payment by the Borrower of
certain Indebtedness owing to the Lender;
WHEREAS, the Maturity Date of the Loan is February 28, 2001, and Borrower
has requested Lender, and Lender has agreed, to forbear in the exercise of its
rights and remedies under the Loan Documents in the event the Loan is not
satisfied in full on or prior to the Maturity Date, upon the terms and
conditions set forth in the Modification Agreement; and
WHEREAS, the parties desire to provide for the release of each other from
any further performance, obligations or claims under the Loan Documents after a
Release Event.
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, the benefits to be derived by the parties therefrom and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:
1. Release of Lender Parties. Effective on the Closing Date in accordance
with the provisions set forth in the Modification Agreement, the Borrower hereby
releases, acquits and forever discharges the Lender and its subsidiaries,
affiliates, partners, members, managers, shareholders, directors, officers,
agents, employees, servants, attorneys and representatives, as well as the
respective heirs, personal representatives, successors and assigns of any and
all of them (hereafter collectively called the "Released Lender Parties") from
any and all loss, damages, claims, demands, debts, actions, causes of action,
suits, contracts, agreements, obligations, accounts, defenses, offsets against
the Indebtedness and liabilities of any kind or character whatsoever, known or
unknown, suspected or unsuspected, in contract or in tort, at law or in equity,
which the Borrower ever had, now has, or might hereafter have against the
Released Lender Parties, jointly or severally, for or by reason of any matter,
cause or thing whatsoever occurring prior to the Closing Date, which relates to,
in whole or in part, directly or indirectly: (a) the Indebtedness; (b) the Loan
Documents; or (c) the Property. In addition, the Borrower agrees not to
commence, join in, prosecute or participate in any suit or other proceeding in a
position which is adverse to any of the Released Lender Parties arising directly
or indirectly from any of the foregoing matters.
44
2. Release of Borrower Parties. Effective on the Closing Date, the Lender
hereby releases, acquits and forever discharges the Borrower and the Borrower's
subsidiaries, affiliates, partners, members, managers, shareholders, directors,
officers, agents, employees, servants, attorneys and representatives, as well as
the respective heirs, personal representatives, successors and assigns or any
and all of them (hereafter collectively called the "Released Borrower Parties")
for principal or interest due under the Note, which release will be effective
provided Borrower does not become the subject of any bankruptcy proceedings on
or before one (1) year from the Closing Date, and has not, perpetrated any fraud
upon Lender. Notwithstanding any implication to the contrary, nothing contained
in this Agreement modifies or impairs the non-recourse provisions of the Loan
Documents, including without limitation, Section 4 of the Note, Section 64 of
the Deed of Trust and Section 13.15 of the Modification Agreement.
3. Reliance. The Borrower and the Lender represent and warrant to each
other that this Agreement is executed and delivered by each of them after advice
by legal counsel and is based on each party's respective independent analysis of
the facts and circumstances which currently exist with respect to the matters
covered by this Agreement. It is specifically acknowledged by the Borrower and
the Lender that such facts might hereafter prove to be different from the facts
which are now known or believed to exist. The Borrower and the Lender expressly
assume the risk that any state of facts affecting the Loan Documents, the
Borrower or the Lender might be different from those thought to exist by such
party or might hereafter change. The parties expressly agree that the terms of
this Agreement will be binding in all respects notwithstanding any such mistake
of existing facts or subsequent change of facts relating to the Loan Documents,
the Borrower or the Lender, and that this Agreement will not be subject to
termination or rescission for any reason whatsoever.
4. Conditions Subsequent. The release accorded to the Released Borrower
Parties by paragraph 2 of this Agreement will be void ab initio and will be of
no force or effect if any one or more of the events described in paragraphs 4.1
through 4.3 of this Agreement occurs. On the occurrence of such event, the
Lender will have the right to unilaterally reinstate the obligations of the
Borrower under the Loan Documents and abrogate the release of the Released
Borrower Parties by service of written notice to the Borrower. On the exercise
of such right by the Lender, the Lender will be entitled to exercise all of the
Lender's rights and remedies under the Loan Documents, at law or in equity,
subject to the provisions of the Loan Documents. The conditions subsequent are
as follows:
4.1 Litigation. The Borrower or any person claiming by or
through the Borrower ever commence, join in, assist, cooperate in or participate
as an adverse party or as an adverse witness (subject to compulsory legal
process which requires testimony) in any suit or other proceeding against the
Lender or any Released Lender Party relating to the Indebtedness, the Loan
Documents, the Modification Agreement, the Property or the conveyance of the
Property by the Borrower to the Lender; or
4.2 Avoidance. Any Conveyance Document is ever rendered void
or rescinded by operation of law, or by order of any state or federal court of
competent jurisdiction by reason of an order arising out of any claim or
proceeding initiated or commenced in favor of, against, on behalf of, or in
concert with, directly or indirectly, the Borrower or any person claiming by or
through the Borrower; or
45
4.3 No Release. The release of any Released Lender Party set
forth in paragraph 1 of this Agreement is ever rendered void, rescinded or
adjudicated unenforceable by operation of law or by order of any state or
federal court of competent jurisdiction, by reason of an order arising out of
any claim or proceeding initiated or commenced in favor of, against, on behalf
of, or in concert with, directly or indirectly, the Borrower or any person
claiming by or through the Borrower.
5. No Merger. The parties acknowledge and agree that notwithstanding the
release of the Released Borrower Parties contemplated by this Agreement, all of
the Loan Documents will remain in full force and effect. The parties further
acknowledge and agree that the interests of the Lender in the Property created
by all of the Conveyance Documents will not merge with the interests of the
Lender in the Property created by the Loan Documents. It is the express
intention of each of the parties that such interests of the Lender in the
Property will not merge, but be and remain at all times separate and distinct,
notwithstanding any union of said interests in the Lender at any time by
purchase, termination or otherwise and that the liens held by the Lender against
the Property created by certain of the Loan Documents will remain at all times
valid and continuous liens against the Property. The Lender has specifically
reserved the right to assert all claims held by the Lender against the
collateral described in the Loan Documents from time to time after the Closing
Date subject, however, to the terms of the Modification Agreement and this
Agreement.
6. Entire Agreement. This Agreement and the Modification Agreement (and
the documents to be delivered in conjunction therewith) constitutes the entire
agreement between the Borrower and the Lender and supersedes all prior
agreements and understandings relating to the subject matter of this Agreement.
There are no agreements, understandings, restrictions, warranties or
representations relating to the subject matter of this Agreement other than
those set forth in this Agreement, the Modification Agreement or the documents
to be delivered by the parties on the date hereof. This instrument is not
intended to have any legal effect whatsoever, or to be a legally binding
agreement, or any evidence thereof, until this Agreement has been signed by and
an executed counterpart unconditionally delivered to both parties to this
Agreement.
7. Construction. This Agreement will be construed, enforced and governed
in accordance with the laws of the State of New York. All pronouns and any
variations contained in this Agreement will be deemed to refer to the masculine,
feminine or neuter gender thereof or to the plurals of each, as the identity of
the person or persons or the context requires. The descriptive headings
contained in this Agreement are for ease in reference and are not intended to
describe, interpret, define or limit the scope, extent or intent of this
Agreement or any provision contained herein.
8. Forum. All actions or proceedings with respect to this Agreement may be
instituted in any state or federal court sitting in New York County, New York,
and by execution and delivery of this Agreement, the parties irrevocably and
unconditionally submit to the jurisdiction (both subject matter and personal) of
each such court and irrevocably and unconditionally waive: (a) any objection
that the parties might now or hereafter have to the venue of any of such courts;
and (b) any claim that any action or proceeding brought in any such court has
been brought in an inconvenient forum.
9. Severability. If any one or more of the provisions contained in this
Agreement are for any reason held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or
46
unenforceability will not affect the remaining provisions of this Agreement, and
this Agreement will be construed as if such invalid, illegal or unenforceable
provision or provisions had never been contained herein.
10. Binding Effect. This Agreement will be binding on, inure to the
benefit of and be enforceable by the parties to this Agreement and their
respective heirs, personal representatives, successors and assigns.
11. Counterpart Execution. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective on the date first set forth above.
BORROWER:
HIGH CASH PARTNERS, L.P.,
a Delaware limited partnership
By: Pembroke HCP, LLC,
as managing general partner
By: Pembroke Companies, Inc.,
managing member
By:
---------------------------
Name:
Title:
LENDER:
RESOURCES ACCRUED MORTGAGE
INVESTORS 2 L.P.,
a Delaware limited partnership
By: RAM Funding, Inc.,
managing general partner
By:
-----------------------------
Its: ------------------- President
47
SCHEDULE "A"
WHEN RECORDED MAIL THIS DEED AND,
UNLESS OTHERWISE SHOWN BELOW,
MAIL TAX STATEMENTS TO:
Post & ▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. Post
SPACE ABOVE THIS LINE FOR RECORDER'S USE
--------------------------------------------------------------------------------
A.P.N. ----------------------
GRANT DEED IN LIEU OF FORECLOSURE
This undersigned grantor(s) declare(s)
Documentary transfer tax is $ -0-
--------------
( ) computed on full value of property conveyed, or
(X ) computed on full value less value of liens and encumbrances remaining at
time of sale.
( ) Unincorporated area: ( ) City of , and
----------------------------------
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
HIGH CASH PARTNERS, L.P., a Delaware limited partnership with an address c/o
Pembroke Companies, Inc., ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
"Grantor"
hereby GRANTS to RESOURCES ACCRUED MORTGAGE INVESTORS 2 L.P., a Delaware limited
partnership, "Grantee"
the real property in the County of Washoe, State of Nevada, as more particularly
described on Schedule A attached hereto, together with all the improvements
thereon and the appurtenances thereunto belonging, and quitclaims unto Grantee,
without implied limitation, all of Grantor's rights, title and interest, if any,
in and to the following: (a) all privileges, rights, easements, hereditaments
and appurtenances thereunto belonging; (b) all right, title and interest in and
to any streets, alleys, ramps, passages, abutter's rights and other
rights-of-way appurtenant thereto; (c) all water, mineral and other subsurface
rights; and (d) all buildings, improvements, fixtures and related facilities,
together with all systems, facilities, machinery, equipment and conduits to
provide fire protection, security, heat, exhaust, ventilation, air conditioning,
electrical power, light, plumbing, refrigeration, gas, sewer, water,
communication and other services to the property herein described or any part
thereof.
This Grant Deed is executed, delivered and accepted as a deed in lieu of
foreclosure of, and not as additional security for, that certain Deed of Trust,
Assignment of Rents, Fixture Filing and Security Agreement (the "Deed of Trust")
dated February 10, 1989 and recorded on February 13, 1989 in Book 2866, Page 42,
as Document No. 1304601, of the records of Washoe County, State of Nevada. The
Grantor acknowledges and agrees that the conveyance of the above described
premises to the Grantee is an absolute conveyance of all right, title, and
interest, including any equity or right of redemption, in and to the above
described property in substance as well as in form and is not intended as a
mortgage, trust conveyance of any type. The Grantor further acknowledges that
this conveyance is freely and fairly made.
48
It is the intention of the Grantor and the Grantee that the lien created
by the Deed of Trust will not merge into the fee title acquired by the Grantee
pursuant to this Grant Deed. No such merger will occur until such time as the
Grantee executes a written instrument specifically effecting such merger and
duly records the same.
TOGETHER with all singular hereditaments and appurtenances thereto
belonging, or in any way appertaining, the reversions, remainder and remainders,
rents, issues and profits thereof, and all estate, right, title, interest, claim
and demand whatsoever of the Grantor, either in law or equity, of, in and to the
above bargained premises, with the hereditaments and appurtenances;
TO HAVE AND TO HOLD said described and bargained premises, with the
appurtenances, unto the Grantee, its successors and assigns forever. The Grantor
for itself does covenant, grant, bargain and agree to and with the Grantee, its
successors and assigns, that at the time of the ensealing and delivery of these
presents, the Grantor is well seized of the premises above conveyed and has good
right, full power and authority to grant, bargain, sell, quitclaim and convey
the same in manner as aforesaid, and that the same are free, clear and
discharged of and from all former grants, bargains, sales, charges, taxes,
judgments, mortgages, taxes, assessments, restrictions, liens and encumbrances
of whatever nature created by, through or under Grantor, subject only to those
validly existing encumbrances, easement, conditions and restrictions relating to
the premises as now reflected by the land records of the County of Washoe,
Nevada.
Dated --------------------- Signature of Grantor
State of ------------------ ) HIGH CASH PARTNERS, L.P.,
County of ----------------- ) a Delaware limited partnership
On ------------- ------, 2000 before me, By: Pembroke HCP, LLC,
-----------------------------, personally as managing general partner,
appeared --------------------------------
----------------- personally known to me By: Pembroke Companies, Inc.,
(or proved to me on the basis of managing member
satisfactory evidence) to be the person
whose name is subscribed to the within By: ---------------------
instrument and acknowledged to me that he Name:
executed the same in his authorized Title:
capacity and that by his signature on the
instrument the person, or the entity
upon behalf of which the person(s) acted,
executed the instrument.
Witness my hand and official seal.\
Signature --------------------------
49
SCHEDULE "B"
▇▇▇▇ OF SALE
------------
For good and valuable consideration, the receipt of which is hereby
acknowledged, High Cash Partners, L.P., a Delaware limited partnership ("High
Cash"), hereby quitclaims, and assigns to Resources Accrued Mortgage Investors 2
L.P., a Delaware limited partnership ("Ram 2"): (i) all personal property owned
by High Cash and used in conjunction with the operation of the Premises (as
defined herein); (ii) all fixtures, machinery, equipment and furnishings, to the
extent the same constitute personal property, all contract rights, and all other
personal property, including all licenses, permits, certificates, rights to the
use of names and logos and other intangible property in each case owned by High
Cash and used in connection with the real property or improvements thereon
located at South Virginia Street and ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇, and more
particularly described in Exhibit A hereto (the "Premises"); (iii) all site
plans, surveys, soil and substrata studies, architectural renderings, plans and
specifications, engineering plans and studies, floor plans, landscape plans and
other plans, diagrams and studies of any kind owned by High Cash which relate to
the Premises or the improvements thereon; and (iv) all claims, judgments,
remedies, damages and causes of action pertaining to the Premises or the
property conveyed hereby, except as any of the foregoing may be retained by High
Cash against RAM 2, the managing agent for the Premises or their respective
affiliates (the "Property").
TO HAVE AND TO HOLD, the same unto the RAM 2, its successors and assigns,
forever.
Dated --------------------- HIGH CASH PARTNERS, L.P.,
a Delaware limited partnership
State of ------------------ ) By: Pembroke HCP, LLC,
County of ----------------- ) as managing general partner,
By: Pembroke Companies, Inc.,
managing member
On ------------- ------, 2000 before me,
-----------------------------, personally By: ---------------------
appeared -------------------------------- Name:
----------------- personally known to me Title:
(or proved to me on the basis of
satisfactory evidence) to be the person
whose name is subscribed to the within
instrument and acknowledged to me that he
executed the same in his authorized
capacity and that by his signature on the
instrument the person, or the entity
upon behalf of which the person(s) acted,
executed the instrument.
Witness my hand and official seal.\
Signature --------------------------
SCHEDULE "C"
ASSIGNMENT OF LEASES
--------------------
KNOW ALL MEN BY THESE PRESENTS:
THIS ASSIGNMENT is made effective the --- day of --------, 200-, by HIGH
CASH PARTNERS, L.P., a Delaware limited partnership (the "Assignor"), in favor
of RESOURCES ACCRUED MORTGAGE INVESTORS 2 L.P., a Delaware limited partnership
(the "Assignee"').
W I T N E S S E T H :
WHEREAS, by Grant Deed of even date herewith, the Assignor did grant,
bargain, sell and convey to the Assignee the following described real property
located in Washoe County, Nevada:
See Exhibit "A" attached hereto and incorporated herein by this reference.
TOGETHER WITH, among other things, all buildings, improvements and
fixtures thereon commonly known as Sierra Marketplace located at South Virginia
Street and East ▇▇▇▇▇ ▇▇▇▇, Reno, Nevada (the "Property"); and
WHEREAS, the Assignor is the owner of those certain leases and occupancy
agreements, whether written or oral, with tenants as described at Schedule "1"
attached as a part hereof (the "Occupancy Leases"), together with certain
deposits made by such tenants as described at Schedule "2" attached as a part
hereof (the "Tenant Deposits"), all Occupancy Leases and Tenant Deposits being
with respect to some portion of the Property; and
WHEREAS, the Assignor desires to assign, transfer and convey to the
Assignee all of the respective rights and benefits of the Assignor in and to the
Occupancy Leases and Tenant Deposits and the obligations of the Assignor
thereunder.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the benefits to be derived by the parties herefrom and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Assignor does hereby quitclaim and assign to the Assignee all
right, title and interest of Assignor in and to the Occupancy Leases and the
Tenant Deposits, together with all and singular the rights, titles, interests,
privileges and benefits thereunder or thereto in any manner belonging;.
This Assignment of Leases is executed, delivered and accepted as a
conveyance in lieu of foreclosure of, and not as additional security for, that
certain Deed of Trust, Assignment of Rents, Fixture Filing and Security
Agreement (the "Deed of Trust") dated February 10, 1989 and recorded on February
13, 1989 in Book 2866, Page 88, as Document No. 1304602 of the records of Washoe
County, State of Nevada. It is the intention of the Assignor to transfer
absolute title to the Occupancy Leases and Tenant Deposits to the Assignee free
from any equity of redemption by the Assignor.
It is the intention of the Assignor and the Assignee that the liens
created by the Deed of Trust will not merge into the fee title acquired by the
Assignee pursuant to this Assignment of Leases until
such time as the Assignee executes and records a written instrument releasing
the Deed of Trust or otherwise specifically effecting such merger.
IN WITNESS WHEREOF the Assignor has SIGNED AND DELIVERED this instrument
the day and year first written above.
ASSIGNOR:
State of ------------------ ) HIGH CASH PARTNERS, L.P.,
County of ----------------- ) a Delaware limited partnership
On ------------- ------, 2000 before me, By: Pembroke HCP, LLC,
-----------------------------, personally as managing general partner,
appeared --------------------------------
----------------- personally known to me By: Pembroke Companies, Inc.,
(or proved to me on the basis of managing member
satisfactory evidence) to be the person
whose name is subscribed to the within By: ---------------------
instrument and acknowledged to me that he Name:
executed the same in his authorized Title:
capacity and that by his signature on the
instrument the person, or the entity
upon behalf of which the person(s) acted,
executed the instrument.
Witness my hand and official seal.\
Signature --------------------------
ACCEPTANCE OF ASSIGNMENT
------------------------
The foregoing Assignment is hereby accepted by the Assignee. The Assignee
hereby assumes and agrees to perform all of the terms, covenants and conditions
of the lessor under the Occupancy Leases which accrue after the date of this
Assignment. In addition, the Assignee hereby assumes the liability, if any, to
refund the Tenant Deposits described at Schedule "2" to this Assignment.
Assignee agrees to indemnify, defend and hold harmless Assignor from and
against any and all claims that arise under the Occupancy Leases that relate to
periods on or after the date hereof.
IN WITNESS WHEREOF, the Assignee has duly executed this Acceptance of
Assignment this ---- day of 200-.
ASSIGNEE:
RESOURCES ACCRUED MORTGAGE
INVESTORS 2 L.P.,
State of ------------------ ) a Delaware limited partnership
County of ----------------- )
By: RAM Funding, Inc.,
managing general partner
On ------------- ------, 200- before me,
-----------------------------, personally By: ---------------------
appeared -------------------------------- Its: --------- President
----------------- personally known to me
(or proved to me on the basis of
satisfactory evidence) to be the person
whose name is subscribed to the within
instrument and acknowledged to me that he
executed the same in his authorized
capacity and that by his signature on the
instrument the person, or the entity
upon behalf of which the person(s) acted,
executed the instrument.
Witness my hand and official seal.\
Signature --------------------------
SCHEDULE "1"
Description of Occupancy Leases
-------------------------------
[TO BE INSERTED]
SCHEDULE "2"
Description of Tenant Deposits
------------------------------
[TO BE INSERTED]
SCHEDULE "D"
OWNER'S AFFIDAVIT AS TO
MECHANIC'S LIENS, POSSESSION
AND CREDITOR'S RIGHTS
TO: Lawyers Title Insurance Corporation
-------------
RE: Commitment No. -------------
----------------------------------------------, being duly sworn, deposes
and says:
1. I am the ----------------------- of Pembroke Companies, Inc., the managing
member of Pembroke HCP, LLC, the managing general partner of High Cash
Partners, L.P., a Delaware limited partnership, (hereinafter "High Cash")
and authorized to make this affidavit on behalf of High Cash.
2. To the actual knowledge of the undersigned signatory, High Cash has not
granted any leases or rights of possession in and to the premises
described in the above-referenced commitment to insure (the "Property")
other than to those parties referenced on Schedule A attached hereto.
3. To the actual knowledge of the undersigned signatory, High Cash has not
ordered nor has any knowledge of any work on the Property which is ongoing
or which has been completed within the last 180 days other than that which
may have been performed for normal maintenance of the Property.
4. No proceedings in bankruptcy have ever been instituted by or against High
Cash, and High Cash has never made an assignment for the benefit of
creditors (except pursuant to the loan documents by and between High Cash
and Resources Accrued Mortgage Investors 2 L.P.).
5. The Borrower has made, executed and delivered that certain Grant Deed (the
"Deed") of even date herewith, which conveyed the Property to the Lender.
The Affiants acknowledge that the deed is an absolute conveyance of all
right, title and interest in and to the Property and that High Cash has
delivered actual possession of the Property to the Lender. The Deed was
given voluntarily by High Cash without any fraud, misrepresentation,
duress or undue influence whatsoever, or any misunderstanding on the part
of High Cash. The Deed is intended and understood to be an absolute
conveyance and an unconditional sale, with full extinguishment of High
Cash's equity of redemption, and with full release of all of High Cash's
right, title and interest of every character and nature in and to the
Property.
6. This affidavit is made for the purposes of inducing Lawyers Title
Insurance Corporation to issue its policies of title insurance with
respect to the Property without exception to mechanic liens, rights of
parties in possession and creditor's rights. Whenever the context so
requires, the singular number includes the plural and the masculine
includes the feminine. Any reference in this Affidavit to "High Cash"
shall not include any managing agent of High Cash or any lessee of the
Property or any other person purporting to act on behalf of High Cash.
Whenever reference is made herein to the knowledge of the undersigned
signatory, reference is made only to the actual knowledge of such person
based solely upon a review of
High Cash's files in the undersigned signatory's possession, without any
independent investigation being made by High Cash.
Dated --------------------- HIGH CASH PARTNERS, L.P.,
a Delaware limited partnership
State of ------------------ ) By: Pembroke HCP, LLC,
County of ----------------- ) as managing general partner,
By: Pembroke Companies, Inc.,
managing member
On ------------- ------, 2000 before me,
-----------------------------, personally By: ---------------------
appeared -------------------------------- Name:
----------------- personally known to me Title:
(or proved to me on the basis of
satisfactory evidence) to be the person
whose name is subscribed to the within
instrument and acknowledged to me that he
executed the same in his authorized
capacity and that by his signature on the
instrument the person, or the entity
upon behalf of which the person(s) acted,
executed the instrument.
Witness my hand and official seal.\
Signature --------------------------
SCHEDULE "A"
LEASES
------
SCHEDULE "E"
AFFIDAVIT OF
NON-FOREIGN STATUS
------------------
Sierra Marketplace
STATE OF NEVADA )
) ss:
COUNTY OF WASHOE )
Section 1445 of the Internal Revenue Code provides that a transferee of a
United States real property interest must withhold tax if the transferrer is a
foreign person. To inform RESOURCES ACCRUED MORTGAGE INVESTORS 2 L.P., a
Delaware limited partnership, and its successors and assigns (collectively, the
"Lender"), that the withholding of tax is not required on the disposition of a
United States real property interest by HIGH CASH PARTNERS, L.P., a Delaware
limited partnership (the "Borrower"), the undersigned hereby certifies as
follows:
1. The Borrower is not a foreign corporation foreign partnership, foreign
trust or foreign estate (as those terms are defined in the Internal Revenue Code
and Income Tax Regulations);
▇ ▇▇▇ ▇▇▇▇▇▇▇▇'▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ employer identification number is
▇▇-▇▇▇▇▇▇▇; and
3. The Borrower's office address is c/o Pembroke Companies, Inc., ▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
The Affiants understand that this certification may be disclosed to the
Internal Revenue Service by the Lender and that any false statement contained
herein could be punished by fine, imprisonment, or both.
Under penalties of perjury the Affiants declares that the Affiant has
examined this certification and to the best of the Affiant's knowledge and
belief it is true, correct and complete and the Affiant further declares that
the Affiant has the authority to sign this document.
[Remainder of this page left intentionally blank]
Dated --------------------- HIGH CASH PARTNERS, L.P.,
a Delaware limited partnership
State of ------------------ ) By: Pembroke HCP, LLC,
County of ----------------- ) as managing general partner,
By: Pembroke Companies, Inc.,
managing member
On ------------- ------, 2000 before me,
-----------------------------, personally By: ---------------------
appeared -------------------------------- Name:
----------------- personally known to me Title:
(or proved to me on the basis of
satisfactory evidence) to be the person
whose name is subscribed to the within
instrument and acknowledged to me that he
executed the same in his authorized
capacity and that by his signature on the
instrument the person, or the entity
upon behalf of which the person(s) acted,
executed the instrument.
Witness my hand and official seal.\
Signature --------------------------
SCHEDULE "F"
NOTICE TO TENANTS
------------
Dear -----------------:
This letter shall serve to inform you that High Cash Partners, L.P. has
transferred title to Sierra Marketplace to Resources Accrued Mortgage Investors
2 L.P. This means that: (a) the new owner holds the security deposit you made in
the amount of $------------- and assumed responsibility to you for any return of
the security deposit pursuant to your lease; (b) the new owner assumed the prior
owner's position as landlord under your lease for obligations accruing after
--------------; and (c) your rental payments are to be made payable to and all
payments, notices or other communications from you to the landlord are to be
made to the new owner as follows:
c/o Kestrel Management
--------------------
--------------------
--------------------
--------------------
Sincerely,
HIGH CASH PARTNERS, L.P.
By: Pembroke HCP, LLC,
as managing general partner,
By: Pembroke Companies, Inc.,
managing member
By: -----------------------------
Name:
Title: