RECORDING REQUESTED BY AND
AFTER RECORDING RETURN TO:
Midland Loan Services, Inc.
10851 Mastin
Overland Park, Kansas 66210
Attention: Shay Janssen
Loan No 94-0950186
CONSENT
-------
AND ASSUMPTION AGREEMENT
------------------------
WITH RELEASE AND MODIFICATION OF LOAN DOCUMENTS
-----------------------------------------------
This Consent and Assumption Agreement With Release and Modification
of
Loan Documents (this "Agreement") is
entered into as of June 6, 2005, by and
---------
among Deer Valley Financial Center, LLC,
Huntington Company, L.L.C. and Geneva
Company, L.L.C., each an Arizona limited
liability company, and Metzger Deer
Valley, LLC, a Delaware limited liability
company (collectively, "Seller"), with
------
an address c/o Hannay Investment
Properties, Inc., Attn: R. Craig Hannay, 22601
North 19th Avenue, Suite 218, Phoenix,
Arizona 85027; R. Craig Hannay ("Seller's
--------
Principal"), with the same address as
Seller; A&B Deer Valley LLC, as to a
---------
24.78% undivided interest, ABP Deer Valley
LLC, as to a 21.49% undivided
interest and WDCI Deer Valley LLC, as to a
53.73% undivided interest, each a
Delaware limited liability company, as
Tenants in Common (individually and
collectively, "Buyer"), with an address c/o
A & B Properties, Inc., Attn:
-----
Norbert Buelsing, 822 Bishop Street,
Honolulu, Hawaii 96813; Alexander &
Baldwin, Inc., a Hawaii corporation
("Buyer's Principal"), with the same address
-----------------
as Buyer; and Midland Loan Services, Inc.,
a Delaware corporation, as
Attorney-in-Fact for Wells Fargo Bank N.A.,
formerly known as Wells Fargo Bank
Minnesota, N.A. as trustee for the
registered holders of Credit Suisse First
Boston Mortgage Securities Corp.,
Commercial Mortgage Pass-Through Certificates,
Series 2003-C5 (collectively referred to
herein as "Lender"), with an address of
------
10851 Mastin, Overland Park, Kansas
66210.
RECITALS
--------
A.
Seller is the owner of certain real property located in
Maricopa County, Arizona, commonly known as
22601 North 19th Avenue, Phoenix,
Arizona, which real property is more
particularly described in Exhibit A
---------
attached hereto and incorporated herein by
reference. Such real property,
together with all improvements, fixtures
and personal property located thereon
is collectively referred to as the
"Property".
--------
B.
Lender is the owner and holder of certain documents (the
"Loan Documents") evidencing and securing a
loan (the "Loan") made by PNC Bank,
--------------
National Association ("Original Lender"),
to Seller, which Loan was assigned by
---------------
Original Lender to Lender by an Assignment
of Loan Documents (the "Assignment"),
----------
dated September 30, 2003, and recorded
March 16, 2004, in the office of the
County Recorder in and for Maricopa County,
Arizona (the "Recording Office"). In
----------------
addition to the Assignment, the Loan
Documents include, without limitation, the:
(i) Promissory
Note (the "Note") dated as of September 18, 2003,
----
in the original principal amount of $11,625,000.00, executed
by Seller, as maker, in favor of Original Lender, and
endorsed by Original Lender to Lender;
(ii)
Deed of Trust, Security Agreement, Assignment of Leases and
Rents and Fixture Filing (the "Security Instrument") dated as
-------------------
of September 18, 2003, executed by Seller in favor of Original
Lender, filed for record September 18, 2003, in the Recording
Office as Document No. 20031312703, and assigned by Original
Lender to Lender by the Assignment;
(iii)
Assignment of Leases and Rents (the "Assignment of Leases")
--------------------
dated as of September 18, 2003, executed by Seller in favor of
Original Lender, filed for record September 18, 2003, in the
Recording Office as Document No. 20031312704, and assigned by
Original Lender to Lender by the Assignment;
(iv)
Non-Recourse Indemnification Agreement (the "Indemnity") dated
---------
as of September 18, 2003, executed by Seller's Principal in
favor of Original Lender, and assigned to Lender by the
Assignment;
(v) Spouse
Certificate (the "Spouse Certificate") dated as of
------------------
September 16, 2003, executed by Kristen Kay Hannay, the
Seller's Principal's spouse, in favor of Original Lender, and
assigned to Lender by the Assignment;
(vi)
Environmental Indemnity Agreement (the "Environmental
-------------
Indemnity") dated as of September 18, 2003, executed by Seller
---------
and Seller's Principal in favor of Original Lender, and
assigned to Lender by the Assignment;
(vii)
Estoppel, Subordination and Consent of Manager (the
"Management Subordination") dated as of September 18, 2003,
------------------------
executed by Hannay Investment Properties, Inc., an Arizona
corporation, in favor of Original Lender, and assigned to
Lender by the Assignment;
(viii)
Borrower's Certificate (the "Borrower Certificate") dated as
--------------------
of September 18, 2003, executed by Seller in favor of Original
Lender, and assigned to Lender by the Assignment;
(ix)
Security Agreement and Lock Box Agreement (the "Lock Box
--------
Agreement") dated as of September 18, 2003, executed by Seller
---------
in favor of Original Lender, and assigned to Lender by the
Assignment;
(x) Tenant
Improvement and Leasing Commission Escrow Agreement
(the "TILC Agreement") dated as of September 18, 2003,
--------------
executed by Seller in favor of Original Lender, and assigned
to Lender by the Assignment;
(xi)
Capital Improvement Escrow Agreement (the "CIE Agreement")
-------------
dated as of September 18, 2003, executed by Seller in favor of
Original Lender, and assigned to Lender by the Assignment;
(xii)
Security Agreement for Letter of Credit (the "Security
--------
Agreement") dated as of September 18, 2003, executed by Seller
---------
in favor of Original Lender, and assigned to Lender by the
Assignment;
(xiii)
Blackboard Campuswide Escrow Agreement (the "Blackboard
----------
Agreement") dated as of September 18, 2003, executed by Seller
---------
in
favor of Original Lender, and assigned to Lender by the
Assignment;
(xiv)
Arizona UCC-1 Financing Statement executed by Deer Valley
Financial Center, LLC, Huntington Company, L.L.C., Geneva
Company, L.L.C and Metzger Deer Valley, LLC, in favor of
Original Lender, recorded September 18, 2003, in the Recording
Office as Document No. 20031312705, and assigned by Original
Lender to Lender by UCC Financing Statement Amendment recorded
May 12, 2004, in the Recording Office;
(xv)
Arizona UCC-1 Financing Statement executed by Deer Valley
Financial Center, LLC, Huntington Company, L.L.C. and Geneva
Company, L.L.C., in favor of Original Lender, filed September
24, 2003, in the office of the Arizona Secretary of State as
instrument No. 200312790519, and assigned by Original Lender
to Lender by UCC-3 Financing Statement Amendment filed March
22, 2004, in the office of the Arizona Secretary of State; and
(xvi)
Delaware UCC-1 Financing Statement executed by Metzger Deer
Valley, LLC, in favor of Original Lender, filed September 24,
2003, in the office of the Delaware Secretary of State as
instrument No. 3259656 0, and assigned by Original Lender to
Lender by UCC-3 Financing Statement Amendment filed March 22,
2004, in the office of the Delaware Secretary of State.
C.
Midland Loan Services, Inc. services the Loan for Lender, as
master servicer, pursuant to that certain
Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement") dated as
of December 1, 2003.
-------------------------------
D.
Seller and Buyer's members have entered into a Acquisition
Agreement (Deer Valley Financial Center)
(the "Purchase Agreement") dated
------------------
February 10, 2005, the buyer's rights and
obligations to acquire the Property
under which were assigned by Buyer's
members to Buyer by an Assignment of
Acquisition Agreement, dated May 20, 2005.
Pursuant to the Purchase Agreement,
the Property is to be transferred to Buyer,
and Buyer is to assume the Loan
(the "Transfer and Assumption"), and Seller
and Buyer have requested that Lender
-----------------------
consent to the Transfer and Assumption.
E.
Without the prior consent of the Lender, the Transfer and
Assumption would constitute a default under
the Original Loan Documents. Subject
to the terms and conditions of this
Agreement, Lender has agreed to consent to
the Transfer and Assumption.
F. With
respect to Seller and Seller Principal, the term "Loan
----
Documents" as used hereinafter shall mean
the Original Loan Documents. With
---------
respect to Buyer and Buyer Principal, the
term "Loan Documents" as used
--------------
hereinafter shall mean collectively the
Original Loan Documents (except to the
extent amended or replaced pursuant to this
Agreement), this Agreement, and all
other documents, instruments and agreements
executed by Buyer or Buyer Principal
in connection with the Loan or the Transfer
and Assumption.
AGREEMENT
---------
NOW, THEREFORE, for good and valuable consideration, the receipt
and
adequacy of which is hereby acknowledged,
the parties agree as follows:
1.
Consent to Transfer. Subject to satisfaction of all of the
-------------------
conditions contained herein, Lender
consents to the Transfer and Assumption.
This consent is strictly limited to the
Transfer and Assumption described in
this Agreement. This Agreement shall not
constitute a waiver or modification
of any requirement of obtaining Lender's
consent to any future transfer of the
Property or any portion thereof or interest
therein, nor shall it constitute a
modification of the terms, provisions, or
requirements in the Loan Documents in
any respect except as expressly provided
herein. Buyer specifically acknowledges
that any subsequent transfer of any
interest in any of the Property or interest
in Buyer in violation of the Loan Documents
shall be a default thereunder. The
Loan Documents are hereby ratified and,
except as expressly modified in this
Agreement, remain unmodified and are in
full force and effect.
2. Loan
Information. The parties hereto agree that as of the
----------------
date hereof:
(a) The outstanding
principal balance of the Note is
$11,409,858.14.
(b) The interest rate
of the Note is a fixed rate of 6.2% per
annum.
(c) The maturity date
of the Note is October 1, 2013.
(d) The following
listed payments are due and payable on the
first day of each and every calendar month:
o $71,199.52
principal and interest installments;
o $30,512.81
tax
escrow deposits;
o $3,134.98
insurance
escrow deposits;
o $2,110.00
replacement reserve escrow deposits;
and
o $15,000.00
tenant improvements reserve escrow
deposits.
(e) The current
balance of each escrow account held by Lender
with
respect to the Loan Note is:
o $148,406.24
tax
escrow account;
o $19,228.11
insurance
escrow account;
o $11,275.92
replacement reserve escrow account;
and
o $42,414.69
tenant
improvements reserve escrow
account.
(f) All required
payments due through June 1, 2005, under
the Loan Documents have been paid.
(g) There are no
defenses or claims of setoffs with
respect to any sums or amounts owing under the Loan
Documents.
(h) Lender is the current owner and
holder of the Loan
Documents.
(i) There is no
existing Event of Default (as defined in
the Loan Documents) or event or condition that, with
the giving of notice or passage of time or both,
would constitute an Event of Default.
3.
Conditions. In addition to any other conditions set
----------
forth herein or required by Lender, the
following are conditions precedent that
must be satisfied prior to the closing of
the Transfer and Assumption (the
"Closing"):
-------
(a) The execution,
acknowledgment, delivery and
recordation of this Agreement by all of the parties
concurrently with the Closing.
(b) The execution,
delivery and recordation or filing, as
applicable, of one or more new financing statements,
or
amendments to existing financing statements as
required by Lender at Closing.
(c) Buyer's delivery
to Lender of satisfactory evidence that
all insurance over the Property required by the Loan
Documents (the "Required Insurance") is in full force and
------------------
effect as of the Closing, with all required premiums
paid, and contains a mortgagee's clause (the "Mortgagee's
-----------
Clause") satisfactory to Lender in favor of Wells Fargo
------
Bank Minnesota, N.A.
as trustee for the registered
holders of Credit Suisse First Boston Mortgage Securities
Corp., Commercial Mortgage Pass-Through Certificates,
Series 2003-C5 and/or assigns, c/o Midland Loan Services,
Inc., Master Servicer, Post Office Box 419127, Kansas
City, Missouri 64141-6127; re: Loan Number 94-0950186.
(d) Lender's receipt
of a satisfactory Title Endorsement
(hereinafter defined).
(e) The full release
and reconveyance of any other liens
or monetary encumbrances against the Property.
(f)
Lender's receipt of
all of the Required Payments
(hereinafter defined).
(g) Lender's receipt
of a new Non-Recourse Indemnification
Agreement (the "New Indemnity") executed by Buyer's
-------------
Principal in form and substance acceptable to Lender.
(h) Lender's receipt
of a new Environmental Indemnity
Agreement (the "New Environmental Indemnity")
---------------------------
executed by Buyer and Buyer's Principal in form and
substance acceptable to Lender.
(i) Lender's receipt
of a new Borrower's Certificate (the
"New Borrower Certificate") executed by Buyer in form
------------------------
and substance acceptable to Lender.
(j) Lender's receipt
of an Assignment and Subordination
of Management Agreement (the "Management Assignment")
---------------------
executed by Buyer and Hannay Investment Properties,
Inc., an Arizona corporation ("Agent") in form and
substance acceptable to Lender.
(k) Lender's receipt
of a Tenants-In-Common Agreement
(the "TIC Agreement") executed by Buyer in form and
-------------
substance satisfactory to Lender.
4.
Fees, Payment and Expenses. Buyer and/or Seller covenants and
--------------------------
agrees to pay to Lender at Closing the
following (the "Required Payments"):
-----------------
(a) $114,098.58, as an
assumption fee for Lender's
consent to the Transfer and Assumption of the Loan
(the "Assumption Fee").
--------------
(b) $N/A, as Lender's
fee for Financial Reports on the
Buyer (the "Reports Fee").
-----------
(c) $11,733.10 for
insurance reserve payment.
(d) $1,100.00 for
inspection fees.
(e) (N/A).
(f) Lender's counsel's
fees and costs.
5.
Title Endorsement. At Closing, Buyer shall (a) cause Chicago
-----------------
Title Insurance Company to issue such
endorsement to Lender's mortgagee's title
insurance policy (Policy No. 2302681) in
such form as Lender may require
("Title Endorsement"), including showing
that the Buyer is the owner of the
-----------------
Property, changing the effective date of
such title policy to the date of the
Closing, and showing that the Loan
Documents are in a first lien position, and
(b) pay the cost of the Title Endorsement,
any escrow, filing or recording fees
applicable to this transaction, and
Lender's costs and expenses incurred in
connection with this Agreement or this
transaction, including Lender's
attorneys' fees, if any, incurred in
connection with this Agreement or this
transaction.
6.
Buyer's Assumption of Loan; Financing Statements. Buyer
------------------------------------------------
hereby expressly assumes the obligation to
pay the unpaid balance due and owing
on the Loan, all interest thereon as
provided in the Note, and all other
obligations under the Loan Documents, with
the same force and effect as if Buyer
had been specifically named therein as the
original maker, borrower or grantor,
as applicable. Without limiting the
generality of the foregoing, Buyer expressly
assumes the obligation to pay all Loan
installments as they become due and to
observe all obligations of the Loan
Documents. Buyer's assumption of the
foregoing obligations (a) is absolute,
unconditional and is not subject to any
defenses, waivers, claims or offsets, (b)
shall not be affected or impaired by
any agreement, condition, statement or
representation of any person or entity
other than Lender. Buyer expressly agrees
that it has read, approved and will
comply with and be bound by all of the
terms, conditions, and provisions
contained in the Loan Documents. Buyer
specifically agrees that if the Note
is recourse, Lender's remedies shall not in
any respect or extent be limited
solely to the Property or any other
collateral securing the Loan.
Buyer hereby authorizes Lender to file one or more new
financing
statements, or amendments to existing
financing statements, covering fixtures
and personal property collateral included
in the Property and covered by the
security agreement contained in the Loan
Documents, without signature of Buyer
where permitted by law. Buyer hereby
confirms that it grants Lender a security
interest in all fixtures and personal
property collateral described in the Loan
Documents.
7.
Environmental Matters. Buyer agrees, at its sole cost
---------------------
and expense, to keep or cause the Property
to be kept free of any hazardous,
toxic or infectious substance, material,
gas or waste, including, without
limitation, asbestos, petroleum products
and underground storage tanks, which is
or becomes regulated by any governmental
authority with jurisdiction over the
Property or Buyer, or which has been
identified as a toxic cancer-causing, or
other hazardous substance (collectively the
"Hazardous Materials"), and to
-------------------
remove or take remedial action with regard
to any Hazardous Materials released
into the environment at, on or near the
Property, provided that:
(a) Any such removal
or remedial action shall be
undertaken in a manner so as to minimize any impact
on tenants of the Property.
(b) Buyer shall
indemnify Lender for any action taken by
Buyer to comply with this requirement.
(c) In the event Buyer
fails to fully comply with this
requirement and fails to cure such failure within 30
days after Lender gives written notice to Buyer,
Lender may, at its sole option, declare the Loan
immediately due and payable and/or cause the
Hazardous Materials to be removed from the Property
and add all costs incurred in affecting the removal
to the balance of the Loan. Buyer grants to Lender
and its agents and employees access to the Property
and the license to remove such Hazardous Materials.
(d) All
representations and warranties of Buyer set forth
herein are in addition to and not in lieu of the New
Environmental Indemnity, referred to above.
8.
Environmental Indemnification. Supplementing the terms of the
-----------------------------
Loan Documents, Buyer acknowledges and
agrees that it will reimburse, defend,
indemnify and hold Lender, its officers,
agents, loan servicers and employees
harmless from and against any and all
liabilities, claims, damages, penalties,
expenditures, losses or charges (including,
but not limited to, all costs of
investigation, monitoring, legal fees,
remedial response, removal, restoration
or permit acquisition) which may now or in
the future be undertaken, suffered,
paid, awarded, assessed or otherwise
incurred as a result of:
(a) any Hazardous
Materials existing on, in, above or
under the Property at the time of execution of this
Agreement or at any time in the future;
(b) any investigation,
monitoring, cleanup, removal,
restoration, remedial response or remedial work
undertaken with regard to Hazardous Materials on, in,
above or under the Property.
All representations, warranties, covenants, agreements and
indemnities
of Buyer in Section 7 and/or Section 8
hereof shall not be affected by any
investigation by or on behalf of Lender or
by any information Lender may have or
obtain with respect thereto, and are in
addition to and not in lieu of the New
Environmental Indemnity referred to above
executed by Buyer and Buyer's
Principal being delivered to Lender at the
Closing.
9. No
Representations of Lender. The parties hereto agree that
----------------------------
(a) Lender has made no representations or
warranties, either express or implied
regarding the Property and has no
responsibility whatsoever with respect to the
Property, its condition, or its use,
occupancy or status, and (b) no claims
relating to the Property, its condition, or
its use, occupancy or status, will
be asserted against Lender or its agents,
employees, professional consultants,
affiliated entities, successors or assigns,
either affirmatively or as a
defense.
10.
Modification of Loan Documents. Commencing with the
------------------------------
installment payment due on June 1, 2005,
the scheduled monthly payment under
Section 2 of the TILC Agreement is
increased from the original payment of
$8,334.00 to a payment of $15,000.00, and
the Maximum Escrow Amount in Section
24.(a) of the CIE Agreement is increased
from $50,628.00 to $78,000.00.
11. Seller's
Representations and Warranties. Seller hereby
---------------------------------------
represents and warrants that:
(a) Seller is the
owner of the Property and is duly
authorized to execute, deliver and perform this
Agreement.
(b) Any court or
third-party approvals necessary for
Seller to enter into this Agreement have been
obtained.
(c) The entities
and/or persons executing this Agreement
on behalf of Seller are duly authorized to execute
and deliver this Agreement.
(d) This Agreement and
the Loan Documents are in full
force and effect and the transactions contemplated
therein constitute valid and binding obligations of
Seller, enforceable against Seller in accordance with
their terms, and have not been modified either orally
or in writing.
(e) Lender has not
waived any requirements of the Loan
Documents nor any of Lender's rights thereunder.
(f) There is no
existing Event of Default or event or
condition that, with the giving of notice or passage
of time or both, would constitute an Event of
Default.
(g) All taxes and
assessments applicable to the Property
that are due and payable as of the Closing have been
paid.
(h) The next payment
for real property taxes applicable
to the Property is due on or before October 1, 2005.
(i) All
representations and warranties in the Purchase
Agreement are true and correct.
(j) All
representations and warranties referred to herein
shall be true as of the date of this Agreement and
Closing and shall survive Closing.
Lender is entitled to rely, and has relied,
upon these representations and
warranties in the execution and delivery of
this Agreement and all other
documents and instruments executed and
delivered by Lender in connection with
this Agreement.
12. Buyer's
Representations and Warranties. Buyer hereby
--------------------------------------
represents and warrants that:
(a) Buyer is duly
authorized to execute, deliver and
perform this Agreement.
(b) Any court or
third-party approvals necessary for
Buyer to enter into this Agreement have been
obtained.
(c) The entities
and/or persons executing this Agreement
on behalf of Buyer are duly authorized to execute and
deliver this Agreement.
(d) This Agreement,
the New Environmental Indemnity, the
New Borrower's Certificate, the Management Assignment
and the Loan Documents are in full force and effect
and the transactions contemplated therein constitute
valid and binding obligations of Buyer, enforceable
against Buyer in accordance with their terms and have
not been modified either orally or in writing.
(e) There is no
existing Event of Default or event or
condition that, with the giving of notice or passage
of time or both, would constitute an Event of
Default.
(f) All taxes and
assessments applicable to the Property
that are due and payable as of the Closing have been
paid.
(g) The next payment
for real property taxes applicable
to the Property is due on or before October 1, 2005.
(h) All
representations and warranties in the Purchase
Agreement are true and correct.
(i) There is no
bankruptcy, receivership or insolvency
proceeding pending or threatened against Buyer.
(j) Buyer does not
have any intention to do any of the
following prior to the Closing or within the 180 days
following the Closing: (i) seek entry of any order
for relief as debtor and a proceeding under the Code
(hereinafter defined), (ii) seek consent to or not
contest the appointment of a receiver or trustee for
itself or for all or any part of its property, (iii)
file a petition seeking relief under any bankruptcy,
arrangement, reorganization or other debtor relief
laws, or (iv) make a general assignment for the
benefit of its creditors.
(k) All of the
Required Insurance is in full force and
effect, with all required premiums paid, and contains
the required Mortgagee's Clause.
(l) All
representations and warranties referred to herein
shall be true as of the date of this Agreement and
Closing and shall survive Closing.
Lender is entitled to rely, and has relied,
upon these representations and
warranties in the execution and delivery of
this Agreement and all other
documents and instruments executed and
delivered by Lender in connection with
this Agreement.
13.
Buyer's Principal's
Representations and Warranties. Buyer's
--------------------------------------------------
Principal hereby represents and warrants
that:
(a) Buyer's Principal
is duly authorized to execute,
deliver and perform this Agreement.
(b) Any court or
third-party approvals necessary for
Buyer's Principal to enter into this Agreement have
been obtained.
(c)
The entities and/or
persons executing this Agreement
on behalf of Buyer's Principal are duly authorized to
execute and deliver this Agreement.
(d) This Agreement,
the New Indemnity and the New
Environmental Indemnity are in full force and effect
and the transaction contemplated therein constitu
