EXHIBIT 4-D
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(Carlyle-XV)
MODIFICATION AND EXTENSION AGREEMENT
THIS AGREEMENT is made as of September 19, 1996, between AETNA
LIFE INSURANCE COMPANY, a Connecticut corporation ("AETNA"), and
▇▇▇▇▇▇▇/▇▇▇▇▇▇ PARTNERS-SOUTH TOWER, a California limited partnership
("MTP-SOUTH TOWER LP").
1. Aetna is the holder of that indebtedness of MTP-South
Tower LP (the "LOAN") evidenced and secured by, among other instruments
and agreements:
a. that $200,000,000 Promissory Note dated
November 26, 1984 (as at any time heretofore amended, extended, restated
or replaced, the "NOTE"), by MTP-South Tower LP (then known as ▇▇▇▇▇▇▇
Partners - ▇▇▇▇▇▇▇ Properties - South Tower) payable to the order of The
Aetna Casualty and Surety Company, a Connecticut corporation ("AETNA
CASUALTY AND SURETY");
b. that Deed of Trust, Assignment of Rents and Security
Agreement dated as of November 26, 1984 (as at any time heretofore
amended, extended, restated or replaced, the "DEED OF TRUST"), by
MTP-South Tower LP (then known as ▇▇▇▇▇▇▇ Partners - ▇▇▇▇▇▇▇ Properties -
South Tower), as Trustor, to Ticor Title Insurance Company of California,
as Trustee, for the benefit of Aetna Casualty and Surety, as Beneficiary,
and recorded November 28, 1984 as Instrument Number ▇▇-▇▇▇▇▇▇▇ in the
Official Records of Los Angeles County, California; and
c. that California Assignment of Rents and Leases dated as
of November 26, 1984 (as at any time heretofore amended, extended,
restated or replaced, the "ASSIGNMENT OF RENTS"), by MTP-South Tower LP
(then known as ▇▇▇▇▇▇▇ Partners - ▇▇▇▇▇▇▇ Properties - South Tower), as
assignor, to Aetna Casualty and Surety, as assignee, and recorded November
28, 1984 as Instrument Number ▇▇-▇▇▇▇▇▇▇ in the Official Records of Los
Angeles County, California.
2. The Deed of Trust encumbers, with first lien priority, that
improved real property in Los Angeles, California more particularly
described in Exhibit A to the Deed of Trust (the "PROJECT"), which
improvements include, without limitation, the 45-story office building
project now known as the "IBM Tower" located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
together with associated subterranean parking and a garage penthouse
structure, and the "X-2 Garage" located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇.
3. Aetna Casualty and Surety assigned and transferred its
interest under the Note, the Deed of Trust and the Assignment of Rents to
Aetna pursuant to that Assignment dated October 29, 1986 and recorded on
December 4, 1986 as Instrument Number ▇▇-▇▇▇▇▇▇▇ in the Official Records
of Los Angeles County, California.
4. As of December 1, ▇▇▇▇, ▇▇▇-▇▇▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇▇ and CB
Commercial Real Estate Group, Inc., as Agent for Aetna, entered into that
Lockbox Agreement (as heretofore supplemented and amended, the "LOCKBOX
AGREEMENT") providing for the deposit of all Gross Receipts (as defined
therein) into Aetna's "DEPOSIT ACCOUNT" (as defined and provided for
therein) and certain other matters.
5. The Loan matured on December 1, 1994 and has not been repaid.
6. Prior to the execution and delivery of this Agreement,
International Business Machines Corporation ("IBM"), the only limited
partner in MTP-South Tower LP, transferred its limited partnership
interest in MTP-South Tower LP to ▇▇▇▇▇▇▇ Partners-Bunker Hill, Ltd., one
of the general partners of MTP-South Tower LP.
7. MTP-South Tower LP and Aetna now wish to provide for, subject
to the payment to Aetna of $2,000,000 from equity contributions (as
provided for herein) and the satisfaction of certain other conditions
precedent to the "Effective Date" provided for herein, an extension of the
scheduled maturity date of the Loan, until September 1, 2003, and for
certain other modifications to the terms and conditions of the instruments
and agreements evidencing and securing the Loan (collectively, the "Loan
Documents," including but not limited to the Note, the Deed of Trust, the
Assignment of Rents and the Lockbox Agreement).
8. In connection with such conditional modification of the Loan
Documents, simultaneously herewith, Aetna and MTP-South Tower LP have
caused certain recording instructions dated as of even date herewith (the
"RECORDING INSTRUCTIONS") to be issued to Chicago Title Company ("CHICAGO
TITLE") providing for the transmittal of this Agreement and the other
instruments and agreements described below to Chicago Title and the
subsequent closing of the transactions provided for herein upon receipt of
the $2,000,000 payment described above and the satisfaction of certain
other conditions precedent, prior to the expiration or sooner termination
of the Recording Instructions.
9. Accordingly, as of even date herewith, the parties are
executing the following instruments and agreements and are transmitting
same to Chicago Title pursuant to the Recording Instructions:
a. this Agreement between Aetna and MTP-South Tower LP,
with the appended Acknowledgment and Agreement executed by the direct and
indirect general partners of MTP-South Tower LP;
b. that Allonge to Promissory Note dated as of even date
herewith (the "ALLONGE"), between MTP-South Tower LP and Aetna, amending
the Note;
c. that Amendment to Deed of Trust, Assignment of Rents
and Security Agreement and to California Assignment of Rents and Leases
and Fixture Filing dated as of even date herewith (the "AMENDMENT TO
SECURITY DOCUMENTS"), between MTP-South Tower LP and Aetna, amending the
Deed of Trust and the Assignment of Rents;
d. that Environmental Indemnity dated as of even date
herewith (the "ENVIRONMENTAL INDEMNITY AGREEMENT"), by MTP-South Tower LP
to and for the benefit of Aetna, providing for certain additional
covenants of MTP-South Tower LP in connection with the Project;
e. that Acknowledgment Agreement (▇▇▇▇▇ Fargo Center
Project Agreements) dated as of even date herewith (the "CENTER
ACKNOWLEDGMENT AGREEMENT"), by MTP-South Tower LP and ▇▇▇▇▇▇▇ Partners -
▇▇▇▇▇▇▇ Properties Phase I, a California limited partnership (the "PHASE I
OWNER"), in favor of Aetna;
f. that Agreement of Property Manager dated as of even
date herewith (the "PROPERTY MANAGER'S AGREEMENT"), by ▇▇▇▇▇▇▇/▇▇▇▇▇▇
Partners-Development, Ltd., a California limited partnership
("MTP-DEVELOPMENT"), and MTP-South Tower LP in favor of Aetna; and
g. that Consent to Lease Amendment (▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇)
dated as of even date herewith (the "▇▇▇▇▇▇ ▇▇▇▇▇▇ CONSENT"), between
Aetna and MTP-South Tower LP, providing for the approval by Aetna of (i)
that Third Amendment to Lease dated as of March 1, 1996 between MTP-South
Tower LP, as Landlord, and ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇, as Tenant, and (ii)
that Termination Agreement dated as of March 1, 1996 among MTP-South Tower
LP, the general partners of MTP-South Tower LP and ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇.
The instruments and agreements described in this Recital H executed by
each party are being (promptly upon full execution thereof) transmitted to
Chicago Title pursuant to the terms and conditions of the Recording
Instructions, and this Agreement and such other instruments and agreements
shall become effective only if and when same are delivered to the parties
in accordance with the terms and conditions of this Agreement prior to the
expiration or sooner termination of the Recording Instructions. The Loan
Documents, if and when amended as of the Effective Date by this Agreement,
the Allonge, the Amendment to Security Documents and the Environmental
Indemnity, are sometimes collectively referred to herein as the "AMENDED
LOAN DOCUMENTS."
IN CONSIDERATION of the recitals and agreements set forth herein,
and for other valuable consideration, the receipt and adequacy of which is
hereby acknowledged, MTP-South Tower LP and Aetna agree that the Loan
Documents shall be supplemented and modified as follows:
1. TRANSACTIONS ON EFFECTIVE DATE AND LLC CONVERSION.
1.1 CONDITIONS PRECEDENT TO EFFECTIVE DATE. Among the
conditions precedent to the Effective Date provided for herein, prior to
the expiration or sooner termination of the Recording Instructions:
1.1.1one or more of the Equity Owners (as defined in
Section 1.5 below) of MTP-South Tower (as defined below) must have made
capital contributions totalling $2,000,000 in accordance with Section 1.7
below, which sum must have been deposited with Chicago Title pursuant to
the Recording Instructions, for disbursement to Aetna on the Effective
Date provided for herein in accordance with this Agreement and the
Recording Instructions; and
1.1.2the Investment Committee of Aetna must have approved
the execution and delivery of this Agreement and the transactions provided
for herein, and Aetna must have provided Chicago Title with written
confirmation of such Investment Committee approval.
IF FOR ANY REASON SUCH TRANSACTIONS AND THE OTHER CONDITIONS PRECEDENT
PROVIDED FOR IN SECTION 10.2 BELOW HAVE NOT BEEN SATISFIED PRIOR TO THE
EXPIRATION OR SOONER TERMINATION OF THE RECORDING INSTRUCTIONS, THEN THIS
AGREEMENT AND THE OTHER INSTRUMENTS AND AGREEMENTS EXECUTED AS OF EVEN
DATE HEREWITH BY AETNA AND MTP-SOUTH TOWER LP SHALL BE NULL AND VOID, AND
NEITHER PARTY SHALL HAVE ANY LIABILITY OR OBLIGATION HEREUNDER OR
THEREUNDER. The Recording Instructions provide, among other things, that
any of the general partners of MTP-South Tower LP or Aetna may, each
acting unilaterally and with or without cause, terminate the Recording
Instructions at any time after September 26, 1996, time being of the
essence. Without limiting the generality of the foregoing, the parties
acknowledge that if the Recording Instructions are terminated prior to the
Effective Date provided for herein, the Loan Documents shall remain in
full force and effect, unmodified by the matters provided for in this
Agreement, and Aetna reserves the right, without limitation, to claim and
enforce the imposition of interest at the default rate provided for in the
Note for the period from December 1, 1994 until the Note and all other
obligations of MTP-South Tower LP to Aetna under the Loan Documents are
paid in full. The foregoing acknowledgments of MTP-South Tower LP and
Aetna shall survive the expiration or sooner termination of the Recording
Instructions.
1.2 EFFECTIVE DATE. This Agreement shall become effective only
on the date of the Closing of certain transactions provided for in this
Agreement, which Closing is described in Section 10.1 below and is subject
to satisfaction of the conditions precedent provided for in Section 1.1
above and in Section 10.2 below. The date of such Closing (as publicly
evidenced by the recording by Chicago Title, in accordance with the
Recording Instructions, of the Amendment to Security Documents in the
Official Records of Los Angeles County) is herein referred to as the
"EFFECTIVE DATE," as provided for in Section 10.1.
1.3 CONSENT TO EQUITY TRANSACTION. Aetna hereby consents to
the transfer by IBM of its interest in MTP-South Tower described in
Recital F above.
1.4 CONVERSION TO LIMITED LIABILITY COMPANY. The general
partners of MTP-South Tower LP plan to cause a limited liability company
to be formed under California law, to be named ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Partners-South Tower, LLC ("MTP-SOUTH TOWER LLC"), and to cause MTP-South
Tower LLC to succeed by operation of law to all of the assets and
liabilities of MTP-South Tower LP. If MTP-South Tower LLC is formed and
succeeds to the assets and liabilities of MTP-South Tower LP, whether
before or after the Effective Date, Aetna consents to such formation and
succession, provided that:
1.4.1all of the general partners of MTP-South Tower LP
must be the managing members of MTP-South Tower LLC;
1.4.2within five days following such formation and
succession, MTP-South Tower LLC:
1.4.2.1 must duly execute, acknowledge and
deliver to Aetna an Amendment to Deed of Trust and Acknowledgement
Agreement in the form of Exhibit D attached hereto (the "MTP-SOUTH
TOWER LLC ACKNOWLEDGMENT");
1.4.2.2 must duly execute and deliver to Aetna a
Uniform Commercial Code Fixture Filing in the form of Exhibit E attached
hereto (the "MTP-SOUTH TOWER LLC FIXTURE FILING");
1.4.2.3 must duly execute and deliver to Aetna
two Uniform Commercial Code Financing Statements in the forms set forth on
Exhibit F attached hereto (the "MTP-SOUTH TOWER LLC FINANCING
STATEMENTS");
and
1.4.2.4 must cause Chicago Title to record the
MTP-South Tower LLC Acknowledgment and the MTP-South Tower LLC Fixture
Filing, and to issue a further endorsement to Aetna's title insurance
policy referred to in Section 9.3, confirming that record title to the
Project has vested in MTP-South Tower LLC and that the Aetna continues to
hold a first lien thereon, with no loss of priority -- all premiums, fees
and charges in connection therewith shall be paid by MTP-South Tower LLC,
as Approved Operating Costs hereunder; and
1.4.2.5 must execute such additional instruments
as Aetna may reasonably require to evidence the assumption by MTP-South
Tower LLC, subject to the provisions of Section 11.8 below, of all of the
obligations and liabilities of MTP-South Tower LP hereunder and to confirm
the liens and interests of Aetna on the assets of MTP-South Tower LLC in
accordance with the terms of the Amended Loan Documents.
If MTP-South Tower LLC is so organized and succeeds to the interest of
MTP-
South Tower LP, the failure to comply with the provisions of Section 1.4.1
and Section 1.4.2 above shall constitute a breach of this Agreement with
respect to MTP-South Tower LP.
1.5 MTP-SOUTH TOWER; EQUITY OWNERS. As used herein, "MTP-SOUTH
TOWER" shall mean and refer to MTP-South Tower LP or MTP-South Tower LLC
as the successor in interest to MTP-South Tower LP, as applicable, and the
partners of MTP-South Tower LP or the members of MTP-South Tower LLC, as
the case may be, are herein collectively referred to as the "EQUITY
OWNERS" of MTP-South Tower and each is herein individually referred to as
a "EQUITY OWNER" of MTP-South Tower. Without limiting the generality of
the foregoing, after the date MTP-South Tower LLC succeeds to the interest
of MTP-South Tower LP, the provisions of Section 11.8 shall apply to the
liability of MTP-South Tower LLC, as "MTP-South Tower" thereunder, and to
the members of MTP-South Tower LLC, as "Equity Owners" thereunder.
1.6 APPLICATION OF PRE-CLOSING PAYMENTS. Subject to the
disclaimers set forth in the last paragraph of Section 1.1 above (in the
event the Effective Date does not occur for any reason):
1.6.1 Aetna and MTP-South Tower agree that all payments
received by Aetna on each "Disbursement Date" under the Lockbox Agreement
during the period from December 1, 1994 (the scheduled maturity date of
the Loan under the existing Loan Documents) through September 20, 1996
(the most recent Disbursement Date for a disbursement by Agent under the
Lockbox Agreement) shall be credited and accounted for as of each such
Disbursement Date during such period as follows: (i) first, to the
reimbursement of then unpaid legal and other expenses of Aetna
reimbursable by MTP-South Tower pursuant to the terms of the Loan
Documents (during such period, the total amount of such reimbursements was
$443,892.30); (ii) second, to then accrued unpaid interest on the Loan at
the rate of thirteen percent (13%) per annum, the applicable interest rate
during such period under the existing Loan Documents, through such date;
and (iii) third, any excess to principal reduction on such date. As a
result of the foregoing, Aetna and MTP-South Tower acknowledge, affirm and
agree that as of September 20, 1996: (i) interest on the Loan has been
paid through that date, (ii) the principal balance of the Loan is One
Hundred Eighty-Nine Million Sixty Thousand Three Hundred Seven and 69/100
Dollars ($189,060,307.69) on that date, and (iii) the balance in the
Deposit Account on that date is approximately $3,000 (the minimum balance
maintained therein) plus any deposits posted thereto since September 18,
1996.
1.6.2 During the period following September 20, 1996
through the Effective Date, any payments received by Aetna in accordance
with the Lockbox Agreement on each Disbursement Date thereunder shall be
credited and accounted for in the same manner, as follows: (i) first, to
reimbursement of any then unpaid reimbursable expenses of Aetna under the
terms of the Lockbox Agreement and the other Loan Documents, (ii) second,
to then accrued unpaid interest on the Loan at the rate of thirteen
percent (13%) per annum through such date, and (iii) third, any remaining
balance to reduction of the principal balance of the Loan on such date.
1.7 ADDITIONAL PAYMENT AT CLOSING. On the Effective Date,
MTP-South Tower must also pay to Aetna the sum of Two Million
Dollars ($2,000,000), which sum shall be applied on the Effective Date in
accordance with Section 1.8 to certain obligations of MTP-South Tower. In
connection therewith, MTP-South Tower covenants, agrees, represents and
warrants to Aetna:
1.7.1 that said sum shall be contributed to the equity of
MTP-South Tower by one or more of its Equity Owners;
1.7.2 that no portion of said sum shall have been obtained
from Project rents or other Gross Receipts (as defined in the Lockbox
Agreement), from other pre-Closing assets of MTP-South Tower, or from
indebtedness of MTP-South Tower, whether owed to such Equity Owner or
Owners or to any other person; and
1.7.3 that no Equity Owner making such contribution to the
capital of MTP-South Tower shall have any right to receive any return on
or return of such sum at any time prior to the repayment in full of the
Loan and all other obligations of MTP-South Tower to Aetna.
As provided for in Section 10.1, the payment provided for in this
Section 1.7 shall be made through Chicago Title pursuant to the Recording
Instructions, which provide for the simultaneous (i) release of fully
executed counterparts of this Agreement and the other instruments and
agreements provided for herein to the parties, and (ii) the application of
such sum in accordance with the provisions of Section 1.8 below.
1.8 APPLICATION OF FUNDS AT CLOSING. On the Effective Date,
the $2,000,000 payment by MTP-South Tower pursuant to Section 1.7, shall
be released by Chicago Title pursuant to the Recording Instructions and
applied or disbursed by Aetna for obligations of MTP-South Tower as
follows:
1.8.1 $88,800 shall be applied by Chicago Title for the
title insurance premium for the policy or endorsement and recording fees
provided for in Section 9.3 below;
1.8.2 $388,934 shall be disbursed to MTP-Development as
payment in full of all previously held-back leasing commissions owed by
MTP-South Tower, which sum shall be paid by MTP-South Tower to
MTP-Development in satisfaction of all such obligations (and MTP-South
Tower hereby represents and warrants that such sum (of which $258,514 was
50% of the commission earned in connection with the February 6, 1995 lease
to The Los Angeles Unified School District, $51,176 was 50% of the
commission earned plus certain other fees earned in connection with the
March 8, 1995 lease to Finova Capital Corporation, and $79,244 was 100% of
the commission earned in connection with the July 10, 1995 lease to The
Boston Consulting Group) represents the full amount of all accrued leasing
commissions and other fees owed by MTP-South Tower to MTP-Development as
of the date of this Agreement); and
1.8.3 following the disbursements described above, the
balance of such $2,000,000 shall be disbursed to Aetna, and shall be
applied by Aetna:
1.8.3.1 first, for reimbursable costs of Aetna,
to the extent not disbursed to Aetna from the Deposit Account pursuant to
the terms of the Lockbox Agreement prior to the Effective Date, including,
without limitation, such sums as required to reimburse Aetna's legal fees
and expenses in connection with the Loan for the period following
March 31, 1996 (the last date for which such fees and expenses were
reimbursed by Aetna as provided in Section 1.6 above) through the
Effective Date (without limitation with respect to fees and expenses for
subsequent periods, such fees and expenses for the period from April 1,
1996 through August 31, 1996 were approximately $51,200); and
1.8.3.2 the remaining amount shall credited by
Aetna on the Effective Date to reduction of the principal balance of the
Loan.
1.9 ESTABLISHMENT OF PROJECT RESERVE ACCOUNT.
1.9.1 In addition to the existing Deposit Account and the
existing "TAX AND INSURANCE ESCROW" (as defined and provided for in the
Lockbox Agreement), in connection with the transactions provided for
herein, Aetna has established a new deposit account, Account No.
12336-21673 (the "PROJECT RESERVE") with Bank of America N.T. & S.A., in
the name of Agent, as agent for Aetna. As used in this Agreement and in
the Lockbox Agreement, "AGENT" means CB Commercial Real Estate Group, Inc.
or such other entity as may be designated by Aetna from time-to-time, in
accordance with Section 13 of the Lockbox Agreement (and Aetna hereby
agrees to not so designate as its Agent an entity which, directly or
through affiliates, owns, manages or is developing a competing office
building project in downtown Los Angeles), to act as Aetna's agent with
respect to the Deposit Account, the Tax and Insurance Escrow and the
Project Reserve pursuant to this Agreement and the Lockbox Agreement, as
supplemented and modified by the provisions of this Agreement (unless the
context requires otherwise, references herein to the "LOCKBOX AGREEMENT"
shall mean and refer to the existing Lockbox Agreement as so supplemented
and modified). Until the Loan and all other obligations of MTP-South
Tower under this Agreement and the other Amended Loan Documents have been
paid in full, MTP-South Tower shall remain obligated to reimburse the
reasonable fees and costs of Aetna's Agent, which fees shall not be
limited to the current fees of Agent specified in the Lockbox Agreement
(such fees and costs shall be paid out of Operating Receipts as defined in
Section 6.2.1) in accordance with Section 7.2.1.3 below). The Project
Reserve shall be the property of Aetna and shall be exclusively controlled
by Agent for Aetna for the purposes provided for in this Agreement.
1.9.2 Absent Default (as defined in Section 8.14.1) under
the Amended Loan Documents, in which event Aetna shall have the rights and
remedies provided for in Section 6.4.2, the Project Reserve shall be used:
(i) to fund Approved Capital Costs (as defined in Section 5.2.2.1 below)
for the Project (including tenant improvement costs and leasing
commissions), in accordance with Section 7.3 below; and (ii) to provide
working capital for the Project (in addition to the provision for $250,000
of working capital in section 6(b) of the Lockbox Agreement) -- as
provided for in the first paragraph of Section 7.2.1 below, if the balance
on deposit in the Deposit Account is insufficient therefor, funds in the
Project Reserve may be transferred to the Deposit Account for disbursement
to pay or permit payment of Approved Operating Costs (as defined in
Section 7.2.1.4), Fixed Rate Interest (as defined in Section 2.2.1 below)
and certain other obligations which have been approved in advance by
Aetna.
1.9.3 The amount of the maximum balance to be maintained
in the Project Reserve at any time in accordance with this Agreement (the
"PROJECT RESERVE MAXIMUM BALANCE") shall equal $3,000,000 or such lesser
sum as Aetna and MTP-South Tower may mutually agree upon in writing;
provided, however, that at any time following the designation of any such
lesser sum, MTP-South Tower shall have the right, by notice to Aetna and
Agent, to specify that the Project Reserve Maximum Balance again be the
sum of $3,000,000 (whereupon the Project Reserve shall be funded to such
increased Project Reserve Maximum Balance amount only to the extent of
subsequent disbursement of Operating Receipts pursuant to Section 7.2.1.7,
i.e., no party shall be responsible for funding such increased amount).
2. EXTENSION AND INTEREST.
ref EXTENSION; EXTENSION FEE. The scheduled "Maturity Date"
provided for in Paragraph 1(h) of the Note, in paragraph a. on page 2 of
the Deed of Trust, and in any other provision of the Loan Documents, i.e.,
December 1, 1994, is hereby extended until September 1, 2003, at which
time the entire unpaid principal balance of the Loan, all accrued but
unpaid interest on the Loan (including both Fixed Rate Interest and
Participation Interest, as provided for below), and any other unpaid
amounts owed to Aetna in accordance with the terms of the Amended Loan
Documents, shall be immediately due and payable. In consideration of such
extension, MTP-South Tower shall pay to Aetna a fee (the "EXTENSION FEE")
of Five Hundred Thousand Dollars ($500,000), which sum shall be paid to
Aetna out of disbursements of Operating Receipts pursuant to Section
7.2.1.9 below.
2.2 INTEREST. In consideration of Aetna's agreement to extend
the scheduled maturity date of the Loan, as provided for in Section 2.1
above, and to reduce the fixed rate of interest payable on the Loan, as
provided for in Section 2.2.1 below, MTP-South Tower has agreed that Aetna
shall also be entitled to Participation Interest, as provided for in
Section 2.2.2.1 below.
2.2.1FIXED RATE INTEREST. Effective from and after the
Effective Date, until the Loan has been repaid in full, the rate of fixed
interest which shall accrue on the outstanding unpaid balance of the Loan
shall be decreased to ten percent (10%) per annum ("FIXED RATE INTEREST"),
payable monthly in arrears in accordance with the Note, as amended by the
Allonge (the "AMENDED NOTE"); provided, however, during the time that any
installment of principal or interest payable under the Amended Note is
delinquent, interest at the rate of twelve percent (12%) per annum shall
accrue and be due and payable on the total of all unpaid principal plus
all arrearages of interest past due under the Amended Note; provided
further, however, that if there is a maximum legal rate of interest
applicable to the Amended Note, the total interest payable on account of
the Amended Note shall not exceed interest at such maximum rate permitted
by law. Such changes in the fixed interest rate shall only be effective
from and after the Effective Date; any unpaid accrued interest on the Loan
for the period prior to the Effective Date, at the rate of thirteen
percent (13%) per annum, shall be payable at such rate on the next date
interest is due following the Effective Date in accordance with the terms
of the Amended Note.
2.2.2PARTICIPATION INTEREST.
2.2.2.1 As more particularly provided for in the
Allonge, at the maturity of the Loan (including acceleration and
prepayment) other than upon Early Repayment in accordance with Section 3.1
below, MTP-South Tower shall also be obligated to pay Aetna additional
interest (as more particularly defined in the Allonge, "PARTICIPATION
INTEREST") equal to fifty percent (50%) of the amount, if any, by which
the sum of:
2.2.2.1.1 the "Fair Market Value" of the
Project (as defined and provided for in the Allonge, and determined by
appraisal in accordance with the Allonge, except in connection with an
"Arms-Length Sale" of the Project in accordance with Section 4.4 below),
less an amount equal to one percent (1%) of such sum as an allowance for
assumed commissions and other closing costs (except in connection with an
Arms-Length Sale of the Project, in which case the amount of closing costs
shall be based on the actual closing costs, as provided for in Section 4.4
below), plus
2.2.2.1.2 all other assets of MTP-South Tower
(other than the Excluded Assets provided for in Section 8.12 below) plus
all amounts on deposit in the Deposit Account, in the Project Reserve and
in the Tax and Insurance Escrow, to the extent not required to pay or
provide for then-accrued obligations of MTP-South Tower for (i) Fixed Rate
Interest and all other sums then due Aetna under the Amended Loan
Documents (other than principal, Yield Maintenance Payment (as defined in
Section 3.3 below) and Participation Interest), (ii) property taxes on the
Project, (iii) Approved Operating Costs, and (iv) Approved Capital Costs,
exceeds the sum of the then-outstanding principal balance of the
Loan plus the amount of any Yield Maintenance Payment then due and
payable; provided, however, that the amount of Participation Interest due
and payable to Aetna pursuant to this Agreement and the Amended Note shall
not exceed the "MAXIMUM PARTICIPATION INTEREST AMOUNT" as defined and
provided for in the Allonge.
2.2.2.2 The Participation Interest provided for
herein and in the Allonge equals a share (50%) of the entire unencumbered
value of the Project and such other amounts, and is not limited to a share
of any appreciation in such value; by way of example:
2.2.2.2.1 if Participation Interest was to
become due prior to any principal reduction of the Loan, and if the
aggregate value (determined as provided for in Section in by ref above) of
the Project plus such other assets (not including the Excluded Assets) and
the amounts on deposit in the Deposit Account, in the Project Reserve and
in the Tax and Insurance Escrow (to the extent not required to pay or
provide for then-accrued obligations of MTP-South Tower, as provided for
in Section 2.2.2.1.2 above) then exceeded the principal balance of the
Loan by $1,000,000, and no Yield Maintenance Payment was then due, then
the amount of Participation Interest then due would equal $500,000; and
2.2.2.2.2 if instead Participation Interest
was to become due later, during which period (i) the principal balance of
the Loan had been reduced by $5,000,000 and (ii) the aggregate value of
the Project plus such other assets (not including the Excluded Assets) and
the amounts on deposit in the Deposit Account, in the Project Reserve and
in the Tax and Insurance Escrow (to the extent not required to pay or
provide for then-accrued obligations of MTP-South Tower, as provided for
in Section 2.2.2.1.2 above) had increased (from the amount described in
the preceding example) by $6,000,000, and no Yield Maintenance Payment was
due, then such aggregate value would exceed the then-current Loan balance
by $12,000,000 and the amount of Participation Interest then due would
equal $6,000,000.
3. PAYMENT OF THE LOAN.
3.1 EARLY REPAYMENT. At any time during the period (the
"PERMITTED PREPAYMENT PERIOD") from the Effective Date through and
including September 1, 1999, if not then in Default under the Amended Loan
Documents, MTP-South Tower shall have the right, without the consent of
Aetna, to prepay the Loan in full or in part, and in connection with such
voluntary cash repayment of the Loan on or before said date ("EARLY
REPAYMENT"), Aetna hereby agrees that no Participation Interest shall be
due or payable in connection with any Early Repayment.
3.2 AMOUNTS DUE AT MATURITY. At the scheduled maturity date of
the Loan or the earlier date of acceleration of the obligations evidenced
and secured by the Amended Loan Documents, or upon the repayment of the
Loan in full, upon such event ("MATURITY"), in addition to accrued Fixed
Rate Interest and any other unsatisfied obligations of MTP-South Tower to
Aetna under the Amended Loan Documents, the following amounts shall be due
and payable to Aetna by MTP-South Tower:
3.2.1 any Yield Maintenance Payment (to the extent
provided for in the Allonge or in Section 3.3 below); and
3.2.2 Participation Interest (except on Early Repayment,
and subject to the provisions set forth in Section 4.2 with respect to a
Deferred Obligation in connection with a refinancing of the Loan).
3.3 YIELD MAINTENANCE PAYMENT. MTP-South Tower shall also be
obligated to pay Aetna the "YIELD MAINTENANCE PAYMENT" (as defined in the
Allonge) in the amount provided for in the Allonge, (a) upon any
acceleration of the maturity of the Loan following March 1, 2000 by reason
of an Event of Default under the Amended Loan Documents, and (b) upon any
full or partial prepayment of the Loan after March 1, 2000, except with
respect to (i) principal payments made from monthly disbursements of
Operating Receipts, as provided for in Section 7.2.1.10 below,
(ii) Additional Loan Advance Repayments in accordance with Section 3.4.1,
or (iii) principal payments made from the proceeds of condemnation awards
or insurance recoveries, as provided for in Section 4.1.2.2, made after
said date. No Yield Maintenance Payment shall be due or payable upon any
full or partial prepayment of the Loan at any time on or before March
1, 2000, regardless of whether or not an Event of Default then exists
under
the Amended Loan Documents.
3.4 REPAYMENT OF ADDITIONAL LOAN ADVANCES.
3.4.1ADDITIONAL LOAN ADVANCE REPAYMENTS. The provisions
of this Section 3.4 shall apply only if Aetna has made any Additional Loan
Advance pursuant to Section 7.4 below. In such event, on the September
1st immediately following the date of the first Additional Loan Advance,
and on each subsequent September 1st until the Loan has been repaid in
full (each an "ADJUSTMENT DATE"), MTP-South Tower shall be required to
make a partial principal payment on the Loan (an "ADDITIONAL LOAN ADVANCE
REPAYMENT"), from the proceeds of equity contributions by one or more of
the Equity Owners of MTP-South Tower in accordance with Section 3.4.2
below, equal to the lesser of:
3.4.1.1 the amount, if any, by which (i) the
outstanding principal balance of the Loan on such Adjustment Date exceeds
(ii) the amount of the applicable Maximum Principal Balance (defined
below) provided for in Exhibit A for such Adjustment Date (i.e., no
Additional Loan Advance Repayment shall be due on an Adjustment Date if
the outstanding principal balance of the Loan is then less than or equal
to the amount of the Maximum Principal Balance provided for on such date
in Exhibit A); or
3.4.1.2 the sum of (i) the aggregate amount of all
Additional Loan Advances made by Aetna pursuant to Section 7.4 below
during the twelve month period (herein referred to as a "LOAN YEAR") prior
to such Adjustment Date (e.g., on September 1, 1998, the aggregate amount
of such Additional Loan Advances made during the Loan Year between
September 1, 1997 through August 31, 1998), plus (ii) the aggregate amount
of all disbursements to MTP-South Tower in accordance with Section 7.2.1.8
during the (same) Loan Year prior to such Adjustment Date.
As more specifically provided for in Exhibit A attached hereto and
incorporated herein by reference, the "Maximum Principal Balance" for each
Loan Year specified therein shall be reduced by the amount of any
principal
payments by MTP-South Tower following the Effective Date, other than:
(i) principal payments made from monthly disbursements of Operating
Receipts, as provided for in Section 7.2.1.10, (ii) Additional Loan
Advance Repayments in accordance with Section 3.4.1, or (iii) principal
payments made from the proceeds of condemnation awards or insurance
recoveries, as provided for in Section 4.1.2.2. Such reduction of the
Maximum Principal Balance for the current and each subsequent Loan Year
shall become effective immediately upon receipt of any such principal
payment. All references in this Agreement to any "MAXIMUM PRINCIPAL
BALANCE" shall mean the applicable amount shown on Exhibit A as same may
be so reduced following any such principal payment. Any such Additional
Loan Advance Repayment pursuant to this Section 3.4.1 shall be due and
payable on the first business day immediately following the applicable
Adjustment Date. Any such Additional Loan Advance Repayment received by
Aetna from MTP-South Tower shall be applied to reduction of the principal
balance of the Loan. No Yield Maintenance Payment shall be due or payable
in connection with any such Additional Loan Advance Repayment.
3.4.2EQUITY CONTRIBUTIONS. MTP-South Tower covenants and
agrees as follows with respect to each such Additional Loan Advance
Repayment:
3.4.2.1 that the amount of any such Additional Loan
Advance Repayment shall be contributed to the equity of MTP-South Tower on
or immediately before the applicable Adjustment Date by one or more of its
Equity Owners and said sum shall be used to make such Additional Loan
Advance Repayment to Aetna;
3.4.2.2 that no portion of the amount of such
Additional Loan Advance Repayment shall be obtained from Project rents or
other Gross Receipts (as defined in the Lockbox Agreement), from other
assets of MTP-South Tower (other than any Excluded Assets), or from
indebtedness of MTP-South Tower, whether owed to such Equity Owner or
Owners or to any other person; and
3.4.2.3 that no Equity Owner making such
contribution to the capital of MTP-South Tower shall have any right to
receive any return on or return of such sum at any time prior to the
repayment in full of the Loan and all other obligations of MTP-South Tower
to Aetna (except a right to participate in any disbursement made to
MTP-South Tower in accordance with Section 3.4.3 and Section 7.2.1.8).
3.4.3PERMITTED EQUITY DISTRIBUTIONS. If (a) MTP-South
Tower makes any Additional Loan Advance Repayments following the Effective
Date, (b) on any subsequent Disbursement Date (as defined in Section
7.2.1) during the same or any subsequent Loan Year, the balance of the
Loan becomes less than the Maximum Principal Balance as provided for in
Section 3.4.1 and the schedule attached as Exhibit A for the September 1st
next following such Disbursement Date, and (c) no Default then exists,
then MTP-South Tower shall be entitled to disbursements, up to the amount
of any such Additional Loan Advance Repayments (without interest), of
excess Operating Receipts (as defined in Section 6.2.1) disbursed on such
Disbursement Date in accordance with the terms and conditions of (and at
the priority provided for in) Section 7.2.1.8 below, and any amount so
disbursed to MTP-South Tower may, notwithstanding any other provision of
this Agreement, be distributed or paid by MTP-South Tower to its Equity
Owners; provided, however, that the right to receive such disbursements
pursuant to Section 7.2.1.8 shall terminate on the earliest of (i) the
Maturity of the Loan, (ii) September 1, 2003, or (iii) the date any
Deferred Obligation is created pursuant to Section 4.2. An example of the
operation of Section 3.4.1 and the operation of Section 7.2.1.8 is
attached hereto as Exhibit C.
4. CAPITAL EVENTS.
4.1 PAYMENTS UPON RECEIPT OF CAPITAL PROCEEDS. In the event of
a refinancing of the Loan or the receipt of other Capital Receipts (as
defined in Section 6.2.2 below) by MTP-South Tower (except in connection
with a sale of the Project, which shall be governed by Section 4.4 below,
but including, without limitation, receipt of any insurance proceeds or
condemnation proceeds, to the extent not required to repair or restore the
Project), then:
4.1.1 MTP-South Tower shall be obligated to pay Aetna an
amount (not to exceed the aggregate amount owed to Aetna, including but
not limited to accrued unpaid Fixed Rate Interest, the unpaid balance of
the Loan, any Yield Maintenance Payment and any Participation Interest)
equal to 100% of the amount of net proceeds therefrom ("NET CAPITAL
PROCEEDS"), after payment of or provision for the customary and reasonable
costs associated with such refinancing or other capital event, as
reasonably approved by Aetna ("CAPITAL TRANSACTION COSTS"), including,
without limitation, (i) reasonable legal fees, appraisal costs, points and
other closing costs reasonably associated therewith, or (ii) any costs
payable out of any insurance proceeds or condemnation proceeds as
reasonably required to repair or restore the Project.
4.1.2 As provided for in Section 6.2 below, all such
proceeds received by MTP-South Tower (before deduction or provision for
Capital Transaction Costs) shall constitute "Capital Receipts" and must be
immediately deposited in Aetna's Deposit Account upon receipt by MTP-South
Tower. Agent shall disburse such Capital Receipts from the Deposit
Account as follows:
4.1.2.1 Following Aetna's reasonable approval of
such Capital Transaction Costs and in accordance with a disbursement
schedule proposed by MTP-South Tower and reasonably approved by Aetna at
the time of such capital event, from such Capital Receipts funds shall be
disbursed to MTP-South Tower, in installments, to the extent required to
permit MTP-South Tower to pay Capital Transaction Costs. In the event of
condemnation or casualty, absent the existence of an Event of Default,
Aetna shall permit insurance proceeds or condemnation payments to be
applied to the reasonable costs of any necessary repair and restoration of
the Project, and Aetna's approval of such repair or restoration costs
shall not be unreasonably withheld, delayed or conditioned. Any or all
Capital Transaction Costs may be paid or disbursed by an escrow holder or
other third party (other than MTP-South Tower or its affiliates) in
connection with a sale, refinancing or other event giving rise to Capital
Receipts, in which event (i) disbursements for such Capital Transaction
Costs shall be made by such escrow holder or other third party, and not by
Agent, and (ii) the approval by Aetna of a settlement statement or similar
instrument describing such costs shall constitute Aetna's approval of such
Capital Transaction Costs for purposes of this Agreement.
4.1.2.2 The entire amount of Net Capital Proceeds
(i.e., all Capital Receipts after payment of or provision for Capital
Transaction Costs to be disbursed to MTP-South Tower pursuant to
Section 4.1.2.1), shall be disbursed to Aetna, to be applied by Aetna to
reduction of the principal amount of the Loan plus any Yield Maintenance
Payment with respect to such principal payment (as provided for in
Section 3.3, no Yield Maintenance Payment shall be due in connection with
such principal payments made from the proceeds of condemnation awards or
insurance recoveries).
4.1.2.3 If the amount of Net Capital Proceeds
paid to Aetna in accordance with Section 4.1.2.2 is sufficient to repay
the entire principal balance of the Loan and any Yield Maintenance Payment
associated therewith, then the Loan shall mature and all other amounts due
at Maturity, as provided for in Section 3.2 above, shall be due and
payable, and:
4.1.2.3.1 Aetna shall apply such excess amount
of Net Capital Proceeds, after repayment pursuant to Section 4.1.2.2 of
the entire principal balance of the Loan and any Yield Maintenance Payment
associated therewith:
(1) first, to Fixed Rate Interest and
any other accrued unpaid obligations of MTP-South Tower under the Amended
Loan Documents other than Participation Interest, and
(2) second, (except in connection with
Early Repayment) to Participation Interest.
4.1.2.3.2 To the extent such excess amount of
Net Capital Proceeds is insufficient to pay all of such obligations owed
to Aetna under the Amended Loan Documents, including (except in connection
with Early Repayment) all Participation Interest, then MTP-South Tower
shall be obligated to immediately pay Aetna all such amounts, subject,
however, to the provisions of Section 4.2 regarding deferral of the
obligation to pay unpaid Participation Interest upon certain refinancings.
4.2 SUBORDINATION OF PARTICIPATION INTEREST ON REFINANCING. In
the event that MTP-South Tower refinances the Loan, to the extent that the
net proceeds of such refinancing (after payment of or provision for the
Capital Transaction Costs and funding any Qualified Reserves and/or
Qualified Set-Asides (as defined in Section 4.2.8.5 and Section 4.2.8.6
below, respectively) required by the first lien lender) plus all amounts
in the Project Reserve are sufficient (and are applied) to repay the
entire outstanding principal balance of the Loan, plus any Yield
Maintenance Payment associated therewith, and to pay all accrued unpaid
Fixed Rate Interest and all other obligations to Aetna under the Amended
Loan Documents, but are not sufficient to repay in full all Participation
Interest then due Aetna (i.e., in the event of Early Repayment, for which
no Participation Interest is due, the provisions of this Section 4.2 shall
not apply), then Aetna shall permit MTP-South Tower to repay the unpaid
balance of such Participation Interest (which balance shall be determined
and fixed as of the date (the "REFINANCING DATE") of such refinancing and
repayment of the principal balance of the Loan), plus Fixed Rate Interest
on such unpaid balance from the Refinancing Date until repaid (the
"DEFERRED OBLIGATION"), over a three year period subject to the terms and
conditions of this Section 4.2.
4.2.1 The Deferred Obligation shall remain a secured debt
obligation of MTP-South Tower, as part of the Loan and evidenced and
secured by the Amended Loan Documents (and subject, without limitation, to
the limitation on the liability of MTP-South Tower and its Equity Owners
in accordance with Section 11.8), as the Amended Loan Documents are
further amended as provided for in this Section 4.2.
4.2.2 The lien of the Amended Loan Documents securing the
Deferred Obligation shall be subordinated by Aetna to the lien of the
instruments and agreements evidencing and securing the new financing
obtained by MTP-South Tower to refinance the Loan, pursuant to a
subordination agreement reasonably acceptable to Aetna.
4.2.3 The Deferred Obligation, including all accrued
unpaid interest thereon, shall be due and payable on the earlier of
(i) September 1, 2006 or (ii) the third anniversary of the Refinancing
Date, regardless of the availability of funds for such repayment.
4.2.4 During the three year period following the
Refinancing Date, however, the Deferred Obligation shall be repaid out of,
and only to the extent of (i) 100% of Operating Receipts (as defined in
Section 6.2.1) remaining after payment or provision for (a) operating
costs, including taxes and insurance and a working capital reserve not to
exceed $250,000, (b) capital expenditures, including funding a Qualified
Reserve therefor not to exceed $3 million, and (c) debt service on the
first lien loan, and (ii) 100% of any Net Capital Proceeds (as defined in
Section 4.1.1) remaining after any required repayment of such first lien
loan.
4.2.5 The Deposit Account and lockbox requirements of the
Lockbox Agreement, as supplemented and modified by this Agreement, shall
continue to apply to provide for such application of funds to operating
expenses, including taxes and insurance and a working capital reserve not
to exceed $250,000, and capital expenditures, including funding a reserve
therefor not to exceed $3 million, and other approved obligations of
MTP-South Tower, including debt service on the first lien loan, and
payment of the Deferred Obligation; provided, however, that if the first
lien lender requires that MTP-South Tower provide such lender with a
similar lockbox or deposit account arrangement, then Aetna agrees to
consent to same provided that such documents, in form and substance
reasonably acceptable to Aetna, provide for direct payments to Aetna for
the Deferred Obligation from all excess funds as provided for herein.
4.2.6 Following the date that the balance of the Loan
(other than the Deferred Obligation) is repaid, Aetna shall have no
obligation to make any Additional Loan Advances and there shall be no
further disbursements to MTP-South Tower in connection therewith pursuant
to Section 7.2.1.8.
4.2.7 Aetna also agrees to reasonably cooperate to
accommodate the reasonable requests of the first lien lender in connection
with amendments to the Amended Loan Documents and agreements subordinating
the liens thereof to the liens of the instruments and agreements
evidencing and securing the first lien loan.
4.2.8 The economic terms of the new first lien loan to
which any Deferred Obligation is to be subordinated (the "NEW LOAN") shall
be subject to the prior approval of Aetna, in its reasonable discretion
(as such standard is provided for in Section 5.4), unless the following
conditions are satisfied, in which event Aetna will be deemed to have
approved such economic terms (and any amendment of such economic terms
shall similarly remain subject to the prior approval of Aetna, in its
reasonable discretion):
4.2.8.1 the maturity date of the New Loan must be
not less than five years;
4.2.8.2 the interest rate of the New Loan must be a
market rate of interest, taking into account points and fees;
4.2.8.3 the New Loan must be non-amortizing or have
an amortization schedule of not less than 25 years (level payment), with
no additional principal payments required before maturity;
4.2.8.4 no kicker, participating or other contingent
interest must be due or payable under the New Loan prior to the repayment
in full of the Deferred Obligation;
4.2.8.5 if the lender with respect to the New Loan
requires reserves for capital expenditures to be funded or maintained out
of disbursements from Operating Receipts, then (i) the maximum amount of
such capital reserve must not exceed $3,000,000 (in addition to a working
capital reserve of not more than $250,000 and any reserve for Project
property taxes and/or insurance premiums), and after the Refinancing Date
the Project Reserve Maximum Balance shall be reduced by the amount of the
required balance in such capital reserve (so that the aggregate amount of
both (in addition to a working capital reserve not to exceed $250,000 and
a reserve for Project property taxes and insurance) does not exceed the
sum of $3,000,000), and (ii) Aetna must have a lien on such reserve
subordinate only to any lien thereon securing the New Loan (such reserve
meeting the foregoing conditions is herein referred to as a "QUALIFIED
RESERVE");
4.2.8.6 if in addition to any Qualified Reserve, the
lender with respect to the New Loan requires any amounts be set-aside from
the proceeds of the New Loan, then (i) such set-asides must be used to
fund a Qualified Reserve or be held to fund Project costs (including
capital costs, operating expenses and debt service) over a period not to
exceed three years (and Aetna will not unreasonably withhold its approval
of a longer period), (ii) any amounts released from such set-asides not
used for such purposes must be included in Operating Receipts for
disbursement in accordance with this Agreement, and (iii) Aetna must have
a lien on any such set-aside funds subordinate only to any liens thereon
securing the New Loan (such set-asides meeting the foregoing conditions
are herein referred to as "QUALIFIED SET-ASIDES"); and
4.2.8.7 if the proceeds of the New Loan are to be
disbursed in installments, then the net proceeds of any such future
advances, to the extent not applied to Project operating or capital costs
or held in a Qualified Set-Aside for such Project costs, must be applied
to the Deferred Obligation when received by MTP-South Tower.
4.2.9 The obligation of Aetna to commit to such
subordination and deferral of unpaid Participation Interest shall be
subject to the following conditions:
4.2.9.1 the Loan and all other obligations of
MTP-South Tower to Aetna (other than Participation Interest) must have
been repaid in full;
4.2.9.2 to the extent that the net proceeds of the
New Loan (after payment of reasonable and customary closing costs
(including, without limitation, reasonable attorneys fees, points, swap
costs, and title insurance premiums) and funding any Qualified Reserves
and Qualified Set-Asides required by the first lien lender) plus all
amounts in the Project Reserve (but excluding amounts in the Tax and
Insurance Escrow, the Deposit Account or the Operating Account) exceed the
amount required to satisfy such other Loan obligations to Aetna, the
excess amount must have been applied to pay Participation Interest;
4.2.9.3 amendments to the Amended Loan Documents,
and agreements subordinating the liens thereof to the instruments and
agreements securing the New Loan, must be acceptable to Aetna, in its
reasonable discretion;
4.2.9.4 the economic terms of the New Loan must have
been approved, or deemed approved, by Aetna as provided for in
Section 4.2.8;
4.2.9.5 the first lien lender must have consented to
all documents and the transactions provided for therein;
ce to t the closing of such transactions must occur
on or before September 1, 2003, the scheduled maturity date of the Loan
(subject to any extension of that date by written express amendment of the
Amended Loan Documents);
4.2.9.7 all instruments and agreements must be duly
executed and delivered by all parties;
4.2.9.8 Aetna must receive opinions of counsel to
MTP-South Tower as Aetna may reasonably request;
4.2.9.9 Aetna must have received an endorsement to
its title insurance policy, confirming the second lien priority of the
instruments and agreements evidencing and securing the Deferred
Obligation;
and
4.2.9.10 MTP-South Tower must reimburse all of
Aetna's reasonable costs and expenses in connection with negotiating,
documenting and closing the transactions provided for in this Section 4.2
(including, without limitation, reasonable attorneys' fees and costs).
4.3 RIGHT OF FIRST OFFER. In connection with any sale or other
disposition of the Project by MTP-South Tower, MTP-South Tower must comply
with the terms of this Section 4.3. If MTP-South Tower desires to sell or
otherwise dispose of the Project, then MTP-South Tower must offer to sell
the Project to Aetna, which offer shall be in writing (the "OFFER") and
shall specify the purchase price and any other material economic terms
upon which MTP-South Tower would be willing to sell the Project; without
limiting the foregoing: (i) unless otherwise specified in the Offer, the
Project shall include the Excluded Assets provided for herein, and (ii)
the Offer must specify the terms of any post-closing property management
contract with MTP-Development or any other affiliate of MTP-South Tower
(as used herein, an "AFFILIATE" of MTP-South Tower means any person or
entity which is controlled by, controls or is under common control with
MTP-South Tower or any of the Equity Owners of MTP-South Tower) -- absent
such specification, there shall be no such affiliate contract.
4.3.1 If Aetna accepts such Offer in writing within
thirty (30) days following its receipt, or accepts any Revised Offer (as
defined below) within seven (7) business days following its receipt,
MTP-South Tower and Aetna shall proceed in good faith to document and
close such sale as soon as possible, in accordance with such Offer or
Revised Offer, as applicable, and at such closing, the Project shall be
sold to Aetna or its nominee subject to the matured Loan, i.e., all
accrued unpaid Fixed Rate Interest, the entire principal balance, any
Yield Maintenance Payment associated therewith, Participation Interest
(except on Early Repayment), and all other amounts payable under the
Amended Loan Documents shall be deducted in the determination of the
portion of the purchase payable to MTP-South Tower at the closing of such
sale of the Project to Aetna or its nominee. The amount of Participation
Interest, if any, shall be calculated in the same manner as provided for
in Section 4.6 below (i.e., based on (i) the purchase price, plus (ii)
amounts in the Deposit Account, in the Project Reserve and in the Tax and
Insurance Escrow, plus (iii) all cash and other assets of MTP-South Tower
other than the Excluded Assets), except that no closing costs shall be
payable at such closing or deductible in such calculation of Participation
Interest then due. At such closing, property taxes, operating expenses
and current rents shall be prorated. Aetna and MTP-South Tower shall be
obligated to close such sale within thirty (30) days following the date
Aetna accepts the applicable Offer or Revised Offer, and in such event,
solely for the purpose of determining whether or not any Yield Maintenance
Payment or Participation Interest is then due, provided MTP-South Tower
diligently proceeds to close such sale to Aetna, such sale shall be deemed
to have occurred on the date Aetna accepts the Offer or Revised Offer, as
applicable.
4.3.2 If Aetna declines or fails to accept an Offer within
such thirty (30) day period, or if Aetna declines or fails to accept a
Revised Offer within the seven business day period provided for below,
then MTP-South Tower shall have the right at any time during the following
nine months to close the sale of the Project in an Arms-Length Sale (as
provided for in Section 4.4 below) provided that the purchase price and
other material economic terms of such sale are no more favorable to the
buyer than the purchase price and other material economic terms declined
or so deemed declined by Aetna, and in such event Aetna shall have no
approval rights with respect to such Arms-Length Sale (provided that the
other "arms-length" requirements of Section 4.4 are satisfied); provided,
however:
4.3.2.1 that at any time during such nine month
period following Aetna's rejection or deemed rejection of an Offer,
MTP-South Tower shall have the right to submit a revised offer to Aetna (a
"REVISED OFFER"), which Aetna must accept, if at all, within seven (7)
business days following its receipt;
4.3.2.2 that Aetna's failure to accept any such
Offer or Revised Offer from MTP-South Tower shall not affect the right of
Aetna to approve or reject any sale or other disposition of the Project
which is not an Arms-Length Sale in accordance with Section 4.5
(including, without limitation, Aetna's rights in connection with certain
transactions in accordance with Paragraph 17 of the Note); and
4.3.2.3 that the references herein to MTP-South
Tower's rights within the nine month period described shall not be
construed to extend the date of Maturity of the Loan.
4.4 ARMS-LENGTH SALE OF PROJECT. In the event of an
Arms-Length Sale (as defined below) the Loan shall be due and payable and,
except in the case of Early Repayment (when no Participation Interest is
due hereunder), the amount of Participation Interest related to the value
of the Project shall be determined with reference to the amount of the net
proceeds of such sale, as provided for in Section 4.5 (in all other cases,
the amount of Participation Interest attributable to the value of the
Project shall be determined by appraisal, as more particularly provided
for in Section 2.2.2.1 and in the Allonge). As used herein, a sale of the
Project shall constitute an "ARMS-LENGTH SALE" only if:
4.4.1 the purchase price and the other material economic
terms of such sale are no more favorable to the buyer than those contained
in an Offer or any Revised Offer made by MTP-South Tower to Aetna in
accordance with Section 4.3, which Offer and any Revised Offer have been
declined by Aetna (or been deemed to have been declined by Aetna in
accordance with Section 4.3.2) within nine months preceding the date of
closing of such sale;
4.4.2 following such sale, if MTP-Development or any other
affiliate of MTP-South Tower is to continue to manage the Project, the
management fee payable to such affiliated entity is not more than the
management fee now payable by MTP-South Tower to MTP-Development, i.e., 2-
1/2% of Project revenues;
4.4.3 if following such sale MTP-Development or any other
affiliate of MTP-South Tower is to continue to provide leasing agent
services at the Project, the leasing commissions payable to such entity
are not more than the leasing commissions payable to MTP-Development under
its contract with MTP-South Tower as of the date of this Agreement; and
4.4.4 all other aspects of such sale are with unaffiliated
entities, including but not limited to any sales commissions payable in
connection with such sale, and none of MTP-South Tower or any of the
Equity Owners of MTP-South Tower or any affiliate of any of them retains
or receives any direct or indirect interest in the buyer or in the Project
following such sale.
Notwithstanding any other provision of this Agreement, MTP-South Tower
shall not be required to obtain the consent of Aetna to an Arms-Length
Sale of the Project.
4.5 PROCEEDS OF SALE OF PROJECT. In the event of any sale or
other disposition of the Project, whether or not same qualifies as an
Arms-Length Sale hereunder (this Section, however, shall not be deemed to
be a consent to any transfer other than in accordance with Section 5.1
hereof), upon such sale or other disposition ("SALE"):
4.5.1 The Loan and all other obligations of MTP-South
Tower to Aetna under the Amended Loan Documents shall be immediately due
and payable, and all of such obligations must be paid to Aetna regardless
of the amount of the net proceeds of such sale (except in the case of
Participation Interest payable in connection with an Arms-Length Sale, as
provided for in Section Documents relating to the assignment of the
Partnership's interest in the ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Building to O&Y Plaza Corp.
("Assignee") are incorporated herein by reference to the Partnership's
report for October 15, 1994 on Form 8K dated November 15, 1994.
Lockbox and forbearance agreements related to the mortgage note
secured
by the ▇▇▇▇▇ Fargo Building are incorporated herein by reference to the
Partnership's report for December 31, 1994 on Form 10-K (File No. 0-16111)
dated March 27, 1995.
Modification to Reserve Escrow Agreement relating to the ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ Building is hereby incorporated by reference to the Partnership's
Report for June 30, 1995 on Form 10-Q (File No. 0-16111) dated August 9,
1995.
The Partnership Interest Purchase Agreement related to the sale of
the Partnership's interest in ▇▇▇▇▇▇▇▇▇ Mall is hereby incorporated herein
by reference to the Partnership's report for June 30, 1995 on Form 8-K
dated July 24, 1995.
Documents relating to the operating agreement of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Partners-South Tower, L.L.C. are filed herewith.
Modification to Reserve Escrow Agreement dated December 4, 1996
relating to the ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ dated December 4, 1996 are
filed herewith.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Partnership has duly caused this report to be
signed
on its behalf by the undersigned, thereunto duly authorized.
CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XV
By: JMB Realty Corporation
Corporate General Partner
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Senior Vice President
Date: March 21, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.
JMB Realty Corporation
Corporate General Partner
▇▇▇▇ ▇. ▇▇▇▇▇▇*
▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman and
Chief Financial Officer
▇▇▇▇▇ ▇▇, ▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇*
▇▇▇▇ ▇. ▇▇▇▇▇, President and Director
Date:March 21, 1997
H. ▇▇▇▇▇ ▇▇▇▇▇▇*
H. ▇▇▇▇▇ ▇▇▇▇▇▇, Chief Executive Officer
Date:March 21, 1997
▇▇▇▇▇ ▇. ▇▇▇▇*
▇▇▇▇▇ ▇. ▇▇▇▇, Chief Operating Officer
Date:March 21, 1997
▇▇▇▇▇▇ ▇. ▇▇▇▇
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Senior Vice President
Principal Accounting Officer
Date: March 21, 1997
A. ▇▇▇ ▇▇▇▇▇*
A. ▇▇▇ ▇▇▇▇▇, Director
Date: March 21, 1997
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇*
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Executive Vice President
and Director
Date: March 21, 1997
*By: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Pursuant to a Power of Attorney
▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇, Attorney-in-Fact
March 21, 1997