Document:

exh10_164.htm

	
Exhibit 10.16.4

	  
	
RECORDING REQUESTED BY AND

WHEN RECORDED MAIL TO:

Bingham McCutchen LLP

One State Street

Hartford, Connecticut 06103

Attention: Frank A. Appicelli, Esq.

	  

SPACE ABOVE LINE RESERVED FOR OFFICIAL RECORDER’S USE

 

DEED OF TRUST, SECURITY AGREEMENT

AND FIXTURE FILING

 

By

 

MISSION WEST PROPERTIES, L.P. I

as Grantor

 

to

 

First American Title Insurance Company

as Trustee

 

for the benefit of

 

HARTFORD LIFE INSURANCE COMPANY

and

HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY

collectively, as Beneficiary

 

THIS SECURITY INSTRUMENT IS ALSO A FIXTURE FILING UNDER SECTION 9502(b) OF THE CALIFORNIA COMMERCIAL CODE

 

  

  

  

Hartford Loan No. BHM0J5QN8

 

DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING

 

This Deed of Trust, Security Agreement and Fixture Filing (this “Deed of Trust”) is executed as of August 4, 2010 by MISSION WEST PROPERTIES, L.P. I, a Delaware limited partnership (“Grantor”), whose address for notice hereunder is c/o Mission West Properties, Inc., 10050 Bandley Drive, Cupertino, California 95014, to FIRST AMERICAN TITLE INSURANCE COMPANY, Trustee (“Trustee”), whose address for notice hereunder is 1737 North First Street, Suite 500, San Jose, California 95112, for the benefit of HARTFORD LIFE INSURANCE COMPANY and HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY, each a Connecticut corporation (collectively, “Beneficiary”), whose address for notice hereunder is c/o Hartford Investment Management Company, 55 Farmington Avenue, Hartford, Connecticut 06105.

 

ARTICLE 1.

 

 

DEFINITIONS

 

Section 1.1. Definitions.

 

(a) As used herein, the following terms shall have the following meanings:

 

“Borrower” means, collectively, Grantor and Mission West Properties, L.P.

 

“Collateral” means:  (a) the real property described in Exhibit A, together with any greater estate therein as hereafter may be acquired by Grantor (collectively, the “Land”); (b) all buildings, structures and other improvements, now or at any time situated, placed or constructed upon the Land (collectively, the “Improvements”); (c) all materials, supplies, equipment, apparatus and other items of personal property now owned or hereafter acquired by Grantor and now or hereafter attached to, installed in or used in connection with any of the Collateral, and water, gas, electrical, storm and sanitary sewer facilities and all other utilities whether or not situated in easements (collectively, the “Fixtures”); (d) all right, title and interest of Grantor in and to all goods, accounts, general intangibles, instruments, documents, chattel paper and all other personal property of any kind or character, including such items of personal property as defined in the UCC, now owned or hereafter acquired by Grantor and now or hereafter located at or used in connection with, arising from or otherwise related to the Collateral or which may be used in or relating to the planning, development, financing or operation of the Collateral (collectively, the “Personal Property”), including insurance proceeds, contract rights, trademarks, goodwill, trade names, licenses and/or franchise agreements, rights of Grantor under leases of Fixtures or other personal property or equipment, inventory, all refundable, returnable or reimbursable fees, deposits or other funds or evidences of credit or indebtedness deposited by or on behalf of Grantor with any Governmental Authorities, boards, corporations, providers of utility services, public or private, including all refundable, returnable or reimbursable tap fees, utility deposits, commitment fees and development costs, furniture, furnishings, equipment, machinery, building materials, construction materials, signage, computer equipment, leasehold improvements, devices, interior improvements, appurtenances, electronic data processing

 

  

  

  

 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 equipment, telecommunications equipment and other fixed assets, all Proceeds (as defined in the UCC) thereof and all additions to, substitutions for, replacements of or accessions to any of the foregoing items and all attachments, components, parts (including spare parts) and accessories, whether installed thereon or affixed thereto, all regardless of whether the same are located at the Property or are located elsewhere (including in warehouses or other storage facilities or in the possession of or on the premises of a bailee, vendor or manufacturer) for purposes of manufacture, storage, fabrication or transportation; (e) all reserves, escrows or impounds required under the Loan Agreement and all deposit accounts maintained by Grantor with respect to the Collateral; (f) all plans, specifications, shop drawings and other technical descriptions prepared for construction, repair or alteration of the Improvements, and all amendments and modifications thereof (collectively, the “Plans”); (g) all leases, subleases, licenses, concessions, occupancy agreements or other agreements (written or oral, now or at any time in effect) which grant a possessory interest in, or right to use or occupy, all or any part of the Collateral (collectively, the “Leases”); (h) all guaranties and other surety arrangements (written or oral, now or at any time in effect) of, for or otherwise relating to any of the Leases (collectively, the “Lease Guaranties”), together with any security and other deposits now or hereafter given to secure, or otherwise relating to, the Leases or the Lease Guaranties; (i) all minimum, percentage and other rentals paid or payable by any tenant, licensee, concessionaire, occupant or other user of all or any portion of the Collateral, whether pursuant to a Lease or otherwise (collectively, “Tenants”), all amounts paid or payable by Tenants pursuant to escalation or other adjustment provisions in their respective Leases or on account of maintenance or service charges, taxes, assessments, insurance, utilities, air conditioning and heating, and other administrative, management, operating and leasing expenses for the Collateral, all awards hereafter made to Grantor in any bankruptcy, insolvency or reorganization case or proceeding with respect to any Lease or Lease Guaranty, and all royalties, issues, profits, revenues, income, and other money and benefits paid or payable by Tenants or arising in connection with any Lease or Lease Guaranty (collectively, the “Rents”); (j) all other agreements (written or oral, now or at any time in effect), including construction contracts, architects' agreements, engineers' contracts, utility contracts, maintenance agreements, management agreements, service contracts, and leases, licenses, and occupancy agreements in favor of Grantor as tenant, licensee, or occupant, and all permits, licenses, approvals, certificates and entitlements in any way relating to the development, construction, use, occupancy, operation, maintenance, enjoyment, acquisition or ownership of the Collateral (collectively, the “Property Agreements”); (k) all rights, privileges, tenements, hereditaments, rights-of-way, easements, appendages and appurtenances appertaining to the foregoing, and all right, title and interest, if any, of Grantor in and to any streets, ways, alleys, strips or gores of land adjoining the Land or any part thereof, now existing or hereafter arising; (l) all accessions, replacements and substitutions for any of the foregoing and all proceeds thereof; (m) all insurance policies, unearned premiums therefor and proceeds from such policies insuring the Collateral now or hereafter acquired by Grantor; (n) all mineral, water, oil and gas rights now or hereafter acquired and relating to all or any part of the Collateral; and (o) all of Grantor's right, title and interest in and to any awards, remunerations, reimbursements, settlements or compensation heretofore made or hereafter to be made by any Governmental Authority pertaining to the Land, the Improvements, the Fixtures or the Personal Property. As used in this Deed of Trust, the term “Collateral” shall mean all or, where the context permits or requires, any portion of the above or any interest therein.

 

  

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“Loan” means the loan in the aggregate principal amount of FORTY MILLION and 00/100 Dollars ($40,000,000.00) to be made by Beneficiary to Borrower pursuant to the Loan Agreement and evidenced by the Note.

 

“Loan Documents” means:  (a) the Fixed Rate Term Loan Agreement of even date herewith executed by Borrower and Beneficiary (the “Loan Agreement”); (b) the Note; (c) the Carveout Indemnity Agreement of even date herewith executed by the Carveout Indemnitor (as defined therein) in favor of Beneficiary; (d) this Deed of Trust; (e) all other documents now or hereafter executed by Grantor, Borrower, or any other person or entity to evidence or secure the payment or the performance of the Obligations or otherwise executed in connection with the documents described in the foregoing items (a) through (d); and (f) all amendments, modifications, renewals, restatements, extensions, substitutions and replacements of any of the foregoing items.

 

“Note” means, collectively, (i) the Promissory Note dated as of the Funding Date, in the stated principal amount of $30,000,000.00, executed by Borrower and payable to the order of Hartford Life Insurance Company, a Connecticut corporation, and (ii) the Promissory Note dated as of the Funding Date, in the stated principal amount of $10,000,000.00, executed by Borrower and payable to the order of Hartford Life and Accident Insurance Company, a Connecticut corporation; each of which matures on September 1, 2030.

 

“Obligations” means:  (a) all principal and all interest, fees, expenses, charges, reimbursements, and other amounts due under or secured by the Loan Documents; (b) all principal, interest and other amounts which may hereafter be loaned by Beneficiary, its successors or assigns, to or for the benefit of Borrower, Grantor or any other Borrower Party, when evidenced by a promissory note or other instrument which, by its terms, is governed or secured by the Loan Documents; and (c) all other indebtedness, obligations, covenants, and liabilities, now or hereafter existing, of any kind of Borrower, Grantor or any other Borrower Party to Beneficiary under documents which recite that they are intended to be secured by this Deed of Trust.

 

“Permitted Encumbrances” means the outstanding liens, easements, restrictions, security interests and other exceptions to title set forth in the policy of title insurance insuring the lien of this Deed of Trust, together with the liens and security interests in favor of Beneficiary created by the Loan Documents, none of which, individually or in the aggregate, materially interferes with the benefits of the security intended to be provided by this Deed of Trust, materially and adversely affects the value of the Collateral, impairs the use or operations of the Collateral or impairs Grantor's ability to pay its obligations in a timely manner.

 

“Property” means the Land and the Improvements.

 

“UCC” means the Uniform Commercial Code of the State of California or, if the creation, perfection and enforcement of any security interest herein granted is governed by the laws of a state other than the State of California, then, as to the matter in question, the Uniform Commercial Code in effect in that state.

 

  

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(b) Capitalized terms not otherwise defined in this Deed of Trust shall have the meanings ascribed to such terms in the Loan Agreement.

 

Section 1.2. General Construction.  Unless otherwise noted, all “Article” and “Section” references shall be to Articles or Sections of this Deed of Trust.  All uses of the word “including” shall mean “including, without limitation” unless the context shall indicate otherwise.  Unless otherwise specified, the words “hereof,” “herein” and “hereunder” and words of similar import when used in this Deed of Trust shall refer to this Deed of Trust as a whole and not to any particular provision of this Deed of Trust.  Unless otherwise specified, all meanings attributed to defined terms herein shall be equally applicable to both the singular and plural forms of the terms so defined.  All references to the Loan Documents shall mean such document as it is constituted as of the date hereof, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

 

 

 

ARTICLE 2.

 

 

GRANT

 

Section 2.1. Grant.  To secure the full and timely payment and performance of the Obligations, Grantor GRANTS, BARGAINS, SELLS, and CONVEYS the Collateral to Trustee (subject, however, to the Permitted Encumbrances), TO HAVE AND TO HOLD, IN TRUST, WITH POWER OF SALE, and Grantor does hereby bind itself, its successors and assigns to WARRANT AND FOREVER DEFEND the title to the Collateral unto Trustee.

 

ARTICLE 3.

 

 

WARRANTIES, REPRESENTATIONS AND COVENANTS

 

Grantor warrants, represents and covenants to Beneficiary as follows:

 

Section 3.1. Title to Collateral and Lien of this Instrument.  Grantor owns the Collateral free and clear of any liens, claims or interests, except the Permitted Encumbrances. This Deed of Trust creates valid, enforceable first priority liens and security interests against the Collateral.

 

Section 3.2. First Lien Status.  Grantor shall preserve and protect the first priority lien and security interest status of this Deed of Trust and the other Loan Documents.  If any lien or security interest other than the Permitted Encumbrances is asserted against the Collateral, Grantor shall promptly, and at its expense, give Beneficiary a detailed written notice of such lien or security interest (including origin, amount and such other information as Beneficiary may request), and shall either (i) pay the underlying claim in full or take such other action so as to cause it to be released, or (ii) contest the same in compliance with the requirements of the Loan Agreement (including the requirement of providing a bond or other security satisfactory to Beneficiary).

 

Section 3.3. Payment and Performance.  Grantor shall pay and perform the Obligations in full when they are required to be performed.  Grantor hereby irrevocably authorizes Beneficiary to apply any and all amounts received by Beneficiary in repayment of

 

  

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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     amounts due under the Loan Documents first to amounts which are not guaranteed pursuant to the terms of any guaranty and then to amounts which are guaranteed pursuant to the terms of any guaranty.  Grantor hereby waives any and all rights it has or may have under Section 2822 of the California Civil Code which provides that if a guarantor is “liable upon only a portion of an obligation and the principal provides partial satisfaction of the obligation, the principal may designate the portion of the obligation that is to be satisfied.”

 

Section 3.4. Replacement of Fixtures and Personal Property.  Grantor shall not, without the prior written consent of Beneficiary (which may be granted or withheld in Beneficiary’s sole and absolute discretion), permit any of the Fixtures or Personal Property to be removed at any time from the Land or Improvements, unless the removed item is removed temporarily for maintenance and repair or, if removed permanently, is obsolete and is replaced by an article of equal or better suitability and value, owned by Grantor subject to the liens and security interests of this Deed of Trust and the other Loan Documents, and free and clear of any other lien or security interest except such as may be first approved in writing by Beneficiary prior to acquisition by Grantor.

 

Section 3.5. Maintenance of Rights of Way, Easements and Licenses.  Grantor shall maintain all rights of way, easements, grants, privileges, licenses, certificates, permits, entitlements, and franchises necessary for the use of the Collateral and will not, without the prior consent of Beneficiary (which may be granted or withheld in Beneficiary’s sole and absolute discretion), consent to any public restriction (including any zoning ordinance) or private restriction as to the use of the Collateral.  Grantor shall comply with all restrictive covenants affecting the Collateral, and all Legal Requirements, including zoning ordinances, environmental laws and other public or private restrictions as to the use of the Collateral.

 

Section 3.6. Inspection.  Grantor shall permit Beneficiary and/or Trustee, and their agents, representatives and employees, upon reasonable prior notice to Grantor, to inspect the Collateral and conduct such environmental and engineering studies as Beneficiary may require, provided that such inspections and studies shall not materially interfere with the use and operation of the Collateral.  The costs relating to such activities shall be paid by Beneficiary unless (i) Beneficiary has a good faith basis for suspecting that Grantor is not in material compliance with its warranties, covenants and agreements relating to the physical condition of the Collateral and/or compliance with laws (including environmental laws), (ii) the examination of such books and records reveals that financial information submitted to Beneficiary by Grantor or anyone on behalf of Grantor is materially inaccurate, or (iii) an Event of Default exists (or is discovered as a result of any such inspection or review), in which case the reasonable third party fees and expenses relating to such activities shall be paid by Grantor within the Demand Period.

 

Section 3.7. Other Covenants.  All of the covenants in the Loan Agreement are incorporated herein by reference and, together with covenants in this Article 3 shall be covenants running with the Property.  The covenants set forth in the Loan Agreement include, among other provisions:  (a) the prohibition against the further sale, transfer or encumbering of any of the Collateral, (b) the obligation to pay when due all taxes on the Collateral or assessed against Beneficiary with respect to the Loan, (c) the right of Beneficiary to inspect the Collateral, (d) the obligation to keep the Collateral insured in accordance with the Loan Agreement, (e) the obligation to comply with all legal requirements (including environmental laws), (f) the 

 

  

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obligation to maintain the Collateral in good condition, and promptly repair any damage or casualty, and (g) except as otherwise permitted under the Loan Agreement, the obligation of Grantor to obtain Beneficiary's written consent prior to entering into, modifying or taking other actions with respect to Leases.

 

Section 3.8. Condemnation Awards and Insurance Proceeds.

 

(a) Condemnation Awards.  Grantor assigns to Beneficiary all awards and compensation for any condemnation or other taking, or any purchase in lieu thereof, and authorizes Beneficiary to collect and receive such awards and compensation and to give proper receipts and acquittances therefor, subject to the terms of the Loan Agreement.

 

(b) Insurance Proceeds.  Grantor assigns to Beneficiary all proceeds of any insurance policies insuring against loss or damage to the Collateral.  Grantor authorizes Beneficiary to collect and receive such proceeds, to give proper receipts and acquittances therefor, and authorizes and directs the issuer of each of such insurance policies to make payment for all such losses directly to Beneficiary, instead of to Grantor and Beneficiary jointly, subject to the terms of the Loan Agreement.

 

ARTICLE 4.

 

 

DEFAULT AND FORECLOSURE

 

Section 4.1. Remedies.  If an Event of Default exists, Beneficiary may, at Beneficiary's election and by or through Trustee or otherwise, exercise any or all of the following rights, remedies and recourses:

 

(a) Acceleration.  Declare the Obligations to be immediately due and payable, without further notice, presentment, protest, notice of intent to accelerate, notice of acceleration, demand or action of any nature whatsoever (each of which hereby is expressly waived by Grantor), whereupon the same shall become immediately due and payable and, immediately upon the occurrence of an Event of Default, interest shall accrue on the outstanding principal balance of the Note at the Default Rate.

 

(b) Entry on Collateral.  Enter the Collateral and take exclusive possession thereof and of all books, records and accounts relating thereto.  If Grantor remains in possession of the Collateral after an Event of Default and without Beneficiary's written consent  (to be issued or withheld in Beneficiary’s sole and absolute discretion), Beneficiary may invoke any legal remedies to dispossess Grantor.

 

(c) Operation of Collateral.  Hold, lease, develop, manage, operate or otherwise use the Collateral upon such terms and conditions as Beneficiary may deem reasonable under the circumstances (including making such repairs, alterations, additions and improvements and taking other actions, from time to time, as Beneficiary deems necessary or desirable), and apply all Rents and other amounts collected by Beneficiary or, as applicable, Trustee in connection therewith in accordance with the provisions of Section 4.7.

 

  

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(d) Foreclosure and Sale.  To the greatest extent permitted by law, sell or offer for sale the Collateral in such portions, order and parcels as Beneficiary may determine, with or without having first taken possession of same, to the highest bidder for cash at public auction.  Such sale shall be made in accordance with the laws of the State of California relating to the sale of real estate or by Article 9 of the UCC relating to the sale of collateral after default by a debtor (as such laws now exist or may be hereafter amended or succeeded), or by any other present or subsequent articles or enactments relating to same. With respect to any notices required or permitted under the UCC, Grantor agrees that five (5) days' prior written notice shall be deemed commercially reasonable.  At any such sale (i) whether made under the power herein contained, the UCC, any other legal requirement or by virtue of any judicial proceedings or any other legal right, remedy or recourse, it shall not be necessary for Trustee to be physically present at or to have constructive possession of the Collateral (Grantor shall deliver to Trustee any portion of the Collateral not actually or constructively possessed by Trustee immediately upon demand by Trustee), and the title to and right of possession of any such property shall pass to the purchaser thereof as completely as if Trustee had been actually present and delivered to purchaser at such sale, (ii) each instrument of conveyance executed by Trustee shall contain a general warranty of title binding upon Grantor, (iii) each recital contained in any instrument of conveyance made by Trustee shall conclusively establish the truth and accuracy of the matters recited therein, including nonpayment of the Obligations, advertisement and conduct of such sale in the manner provided herein and otherwise by law, and appointment of any successor Trustee hereunder, (iv) any prerequisites to the validity of such sale shall be conclusively presumed to have been performed, (v) the receipt of Trustee or other party making the sale shall be a sufficient discharge to the purchaser or purchasers for its or their purchase money and no such purchaser or purchasers, or its or their assigns or personal representatives, shall thereafter be obligated to see to the application of such purchase money or be in any way answerable for any loss, misapplication or nonapplication thereof, and (vi) to the fullest extent permitted by law, Grantor shall be completely and irrevocably divested of all of its right, title, interest, claim, equity, equity of redemption, and demand whatsoever, either at law or in equity, in and to the property sold and such sale shall be a perpetual bar both at law and in equity against Grantor, and against all other persons claiming or to claim the property sold or any part thereof, by, through or under Grantor.  Beneficiary may be a purchaser at such sale and if Beneficiary is the highest bidder, may credit the portion of the purchase price that would be distributed to Beneficiary against the Obligations in lieu of paying cash.  Any proceeds of any such sale or disposition shall not cure any Event of Default or reinstate any Obligation for purposes of 2924c of the California Civil Code.

 

(e) Receiver.  Make application to a court of competent jurisdiction for, and obtain from such court as a matter of strict right and without notice to Grantor or regard to the adequacy of the Collateral for the repayment of the Obligations, the appointment of a receiver of the Collateral, and Grantor irrevocably consents to such appointment.  Any such receiver shall have all the usual powers and duties of receivers in similar cases, including the full power to rent, maintain and otherwise operate the Collateral upon such terms as may be approved by the court, and shall apply such Rents in accordance with the provisions of Section 4.7.

 

(f) Other.  Exercise all other rights, remedies and recourses granted under the Loan Documents or otherwise available at law or in equity (including an action for specific 

 

  

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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               performance of any covenant contained in the Loan Documents, or a judgment on the Note either before, during or after any proceeding to enforce this Deed of Trust).

 

Section 4.2. Separate Sales.  The Collateral may be sold in one or more parcels and in such manner and order as Trustee, in its sole and absolute discretion, may elect; and the right of sale arising out of any Event of Default shall not be exhausted by any one or more sales.

 

Section 4.3. Remedies Cumulative, Concurrent and Nonexclusive.  Beneficiary shall have all rights, remedies and recourses granted hereunder and in the Loan Documents and available at law or equity (including the UCC), which rights (a) shall be cumulative and concurrent, (b) may be pursued separately, successively or concurrently against Grantor or others obligated under the Note and the other Loan Documents, or against the Collateral, or against any one or more of them, at the sole discretion of Beneficiary, (c) may be exercised as often as occasion therefor shall arise, and the exercise or failure to exercise any of them shall not be construed as a waiver or release thereof or of any other right, remedy or recourse, and (d) are intended to be, and shall be, nonexclusive.  No action by Beneficiary or Trustee in the enforcement of any rights, remedies or recourses hereunder, under the Loan Documents or otherwise at law or equity shall be deemed to cure any Event of Default.  To the extent permitted by law, Grantor hereby waives and releases all procedural errors, defects and imperfections in any proceedings instituted by Trustee or Beneficiary under the terms of this Deed of Trust, the Note and the other Loan Documents.

 

Section 4.4. Release of and Resort to Collateral.  Beneficiary may release, regardless of consideration and without the necessity for any notice to or consent by the holder of any subordinate lien on the Collateral, any part of the Collateral without, as to the remainder, in any way impairing, affecting, subordinating or releasing the lien or security interests created in or evidenced by the Loan Documents or their stature as a first and prior lien and security interest in and to the Collateral.  For payment of the Obligations, Beneficiary may resort to any other security in such order and manner as Beneficiary may elect.

 

Section 4.5. Waiver of Redemption, Notice and Marshalling of Assets.  To the fullest extent permitted by law, Grantor hereby irrevocably and unconditionally waives and releases (a) all benefit that might accrue to Grantor by virtue of any present or future statute of limitations or law or judicial decision exempting the Collateral from attachment, levy or sale on execution or providing for any appraisement, valuation, stay of execution, exemption from civil process, redemption or extension of time for payment, (b) all notices of any Event of Default or of Beneficiary’s or, as applicable, Trustee's election to exercise or its actual exercise of any right, remedy or recourse provided for under the Loan Documents or at law or in equity, and (c) any right to a marshalling of assets (including any rights provided by California Civil Code Sections 2899 and 3433) or a sale in inverse order of alienation.

 

Section 4.6. Discontinuance of Proceedings.  If Beneficiary shall have proceeded to invoke any right, remedy or recourse permitted under the Loan Documents and shall thereafter elect to discontinue or abandon it for any reason, Beneficiary shall have the unqualified right to do so and, in such an event, Grantor and Beneficiary shall be restored to their former positions with respect to the Obligations, the Loan Documents, the Collateral and otherwise, and the rights, remedies, recourses and powers of Beneficiary shall continue as if the 

 

  

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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           right, remedy or recourse had never been invoked, but no such discontinuance or abandonment shall waive any Event of Default which may then exist or the right of Beneficiary thereafter to exercise any right, remedy or recourse under the Loan Documents for such Event of Default.

 

Section 4.7. Application of Proceeds.  The proceeds of any sale of, and the Rents and other amounts generated by the holding, operating, insuring, leasing, management, operation or other use of the Collateral, shall be applied by Beneficiary or Trustee (or the receiver, if one is appointed) in the following order unless otherwise required by applicable law:

 

(a) to the payment of the costs and expenses of taking possession of the Collateral and of holding, using, leasing, repairing, improving and selling the same, including (1) trustee's and receiver's fees and expenses, (2) court costs, (3) attorneys' and accountants' fees and expenses, (4) costs of advertisement, and (5) the payment of all ground rent, real estate taxes and assessments, except any taxes, assessments, or other charges subject to which the Collateral shall have been sold;

 

(b) to the payment of all amounts (including interest at the Default Rate), other than the unpaid principal balance of the Note and accrued but unpaid interest, which may be due to Beneficiary under the Loan Documents;

 

(c) to the payment and performance of the remainder of the Obligations in such manner and order of preference as Beneficiary in its sole discretion may determine; and

 

(d) the balance, if any, to the payment of the persons legally entitled thereto.

 

Section 4.8. Occupancy After Foreclosure.  The purchaser at any sale pursuant to Section 4.1(d) shall become the legal owner of the Collateral.  All occupants of the Collateral shall, at the option of such purchaser, become tenants of the purchaser at the sale and shall deliver possession thereof immediately to the purchaser upon demand.  It shall not be necessary for the purchaser at said sale to bring any action for possession of the Collateral other than the statutory action of forcible detainer in any court having jurisdiction over the Collateral.

 

Section 4.9. Additional Advances and Disbursements; Costs of Enforcement.

 

(a) If Grantor shall fail, refuse or neglect to make any payment or perform any act required by the Loan Documents and such failure constitutes an Event of Default, then without notice to or demand upon Grantor or any other Person, and without waiving or releasing any other right, remedy or recourse Beneficiary may have because of such Event of Default, Beneficiary may (but shall not be obligated to) make such payment or perform such act for the account of and at the expense of Grantor, provided that any such action by or on behalf of Beneficiary of such non-performance or breach shall not be deemed to cure any such Event of Default.  All sums advanced and expenses incurred at any time by Beneficiary under this Section 4.9, or otherwise under this Deed of Trust or any of the other Loan Documents or applicable law, shall be payable within the Demand Period, and shall bear interest from the expiration of the Demand Period to and including the date of reimbursement, computed at the Default Rate, and all such sums, together with interest thereon, shall be secured by this Deed of Trust.

 

  

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(b) Prior to the expiration of the applicable Demand Period, Grantor shall pay, or at Beneficiary’s option, reimburse Beneficiary and Trustee for, all expenses (including reasonable attorneys' fees and expenses) of or incidental to the perfection and enforcement of this Deed of Trust and the other Loan Documents, or the enforcement, compromise or settlement of the Obligations or any claim under this Deed of Trust and the other Loan Documents, or for defending or asserting the rights and claims of Beneficiary in respect thereof, by litigation or otherwise.  Such expenses shall include reasonable expenses (including the reasonable fees and expenses of legal counsel for Beneficiary) incurred in connection with (i) the preservation and enforcement of Beneficiary's liens and security interests under this Deed of Trust, (ii) the protection, exercise or enforcement of Beneficiary's rights with respect to the Property including Beneficiary's rights to (1) collect or take possession of the Property and the proceeds thereof, (2) hold the Property, (3) prepare the Property for sale or other disposition and (4) sell or otherwise dispose of the Property, and (iii) the assertion, protection, exercise or enforcement of Beneficiary's rights in any proceeding under the United States Bankruptcy Code, including the preparation, filing and prosecution of (1) proofs of claim, (2) motions for relief from the automatic stay, (3) motions for adequate protection, and (4) complaints, answers and other pleadings in adversary proceedings by or against Beneficiary or relating in any way to the Property.  The duties and obligations of Beneficiary under this Section 4.9(b) are in addition to, and not in lieu of, Beneficiary’s duties and obligations under Section 9.5 of the Loan Agreement.

 

Section 4.10. No Mortgagee-in-Possession.  Neither the enforcement of any of the remedies under this Article 4, the assignment of the Leases and Rents under Article 5, the security interests under Article 6, nor any other remedies afforded to Beneficiary under the Loan Documents, at law or in equity shall cause Beneficiary or Trustee to be deemed or construed to be a mortgagee-in-possession of the Collateral, to obligate Beneficiary or Trustee to lease the Collateral or attempt to do so, or to take any action, incur any expense, or perform or discharge any obligation, duty or liability whatsoever under any of the Leases or otherwise.

 

ARTICLE 5.

 

 

ASSIGNMENT OF LEASES AND RENTS

 

Section 5.1. Assignment.  Grantor acknowledges and confirms that it has executed and delivered to Beneficiary an Assignment of Leases and Rents of even date (the “Assignment of Leases and Rents”), intending that such instrument create a present, absolute assignment to Beneficiary of, among other things, the Leases, Lease Guaranties and Rents.  Without limiting the intended benefits or the remedies provided under the Assignment of Leases and Rents, Grantor hereby assigns to Beneficiary, as further security for the Obligations, the Leases, Lease Guaranties and Rents.  Upon the occurrence of any Event of Default, Beneficiary shall be entitled to exercise any or all of the remedies provided in the Assignment of Leases and Rents and in Article 4 hereof, including the right to have a receiver appointed.  If any conflict or inconsistency exists between the assignment of Leases, Lease Guaranties and Rents in this Deed of Trust and the absolute assignment of Leases, Lease Guaranties and Rents in the Assignment of Leases and Rents, the terms of the Assignment of Leases and Rents shall control.

 

Section 5.2. No Merger of Estates.  So long as any part of the Obligations remain unpaid and undischarged, the fee and leasehold estates to the Collateral shall not merge, 

 

  

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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               but shall remain separate and distinct, notwithstanding the union of such estates either in Grantor, Beneficiary, any lessee or any third party by purchase or otherwise.

 

ARTICLE 6.

 

 

SECURITY AGREEMENT

 

Section 6.1. Security Agreement.  This Deed of Trust shall constitute a security agreement under Article 9 of the UCC in each applicable jurisdiction with respect to the Personal Property, which shall be deemed to include any and all fixtures and personal property included in the description of the Personal Property, now owned or hereafter acquired by Grantor, which might otherwise be deemed “personal property” and all accessions thereto and the proceeds thereof.  Grantor has granted and does hereby grant Beneficiary a security interest in the Personal Property and in all additions and accessions thereto, renewals and replacements thereof and all substitutions therefor and proceeds thereof for the purpose of securing all Obligations now or hereafter secured by this Deed of Trust. The following provisions relate to such security interest:

 

(a) The Personal Property includes all now existing or hereafter acquired or arising equipment, inventory, accounts, chattel paper, instruments, documents, deposit accounts, investment property, letter-of-credit rights, commercial tort claims, supporting obligations and general intangibles now or hereafter used or procured for use in the Collateral or otherwise relating to the Collateral.  If Grantor shall at any time acquire a commercial tort claim relating to the Collateral, Grantor shall promptly notify Beneficiary in a writing signed by Grantor of the brief details thereof and grant to Beneficiary a security interest therein and in the proceeds thereof.

 

(b) Grantor hereby irrevocably authorizes Beneficiary at any time and from time to time to file in any filing office in any UCC jurisdiction any initial financing statements and amendments thereto that (a) indicate the collateral as “all assets used or procured for use or otherwise relating to” the Collateral or words of similar effect, or as being of equal or lesser scope or in greater detail, and to indicate the Collateral as defined, or in a manner consistent with the term as defined, in this Deed of Trust and (b) contain any other information required by part 5 of Article 9 of the UCC of any such filing office for the sufficiency or filing office acceptance of any initial financing statement or amendment, including whether Grantor is an organization, the type of organization and any organizational identification number issued to Grantor.  Grantor agrees to provide any such information to Beneficiary promptly upon request.  Grantor also ratifies its authorization for Beneficiary to have filed in any filing office in any UCC jurisdiction any like initial financing statements or amendments thereto if filed prior to the date hereof.  Grantor shall pay to Beneficiary, from time to time, within the Demand Period, any and all costs and expenses incurred by Beneficiary in connection with the filing of any such initial financing statements and amendments, including attorneys’ fees and all disbursements.  Such costs and expenses shall bear interest at the Default Rate from the expiration of the Demand Period until the date repaid by Grantor, and such costs and expenses, together with such interest, shall be part of the Obligations and shall be secured by this Deed of Trust.

 

  

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(c) Grantor shall any time and from time to time take such steps as Beneficiary may reasonably request for Beneficiary to obtain “control” of any Personal Property for which control is a permitted or required method to perfect, or to insure priority of, the security interest in such Personal Property granted herein.

 

(d) Upon the occurrence of an Event of Default, Beneficiary shall have the rights and remedies of a secured party under the UCC as well as all other rights and remedies available at law or in equity or under this Deed of Trust.

 

(e) It is intended by Grantor and Beneficiary that this Deed of Trust be effective as a financing statement filed with the applicable real estate records as a fixture filing covering the Collateral.  A description of the Land which relates to the Personal Property is set forth in Exhibit A attached hereto.  Grantor is the record owner of the Land.  Grantor is a Delaware limited partnership with an organizational identification number, issued by the Secretary of State of the State of Delaware, of 2500587.

 

(f) Terms defined in the UCC and not otherwise defined in this Deed of Trust shall have the same meanings in this Article as are set forth in the UCC.  In the event that a term is used in Article 9 of the UCC and also in another Article of the UCC, the term used in this Article is that used in Article 9.  The term “control,” as used in this Article, has the meaning given in Sections 9-104, 9-105, 9-106 or 9-107 of Article 9, as applicable.

 

ARTICLE 7.

 

 

CONCERNING THE TRUSTEE

 

Section 7.1. Certain Rights.  With the approval of Beneficiary, Trustee shall have the right to select, employ and consult with legal counsel.  Trustee shall have the right to rely on any instrument, document or signature authorizing or supporting any action taken or proposed to be taken by Trustee hereunder, believed by Trustee in good faith to be genuine.  Trustee shall be entitled to reimbursement for actual, reasonable expenses incurred by Trustee in the performance of Trustee’s duties.  Grantor shall, from time to time, pay the compensation due to Trustee hereunder and reimburse Trustee for, and indemnify, defend and save Trustee harmless against, all liability and reasonable expenses which may be incurred by Trustee in the performance of Trustee’s duties, including those arising from the joint, concurrent, or comparative negligence of Trustee; however, Grantor shall not be liable under such indemnification to the extent such liability or expenses result solely from Trustee's gross negligence or willful misconduct hereunder. Grantor's obligations under this Section 7.1 shall not be reduced or impaired by principles of comparative or contributory negligence.

 

Section 7.2. Retention of Money.  All moneys received by Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated in any manner from any other moneys (except to the extent required by law), and Trustee shall be under no liability for interest on any moneys received by Trustee hereunder.

 

  

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Section 7.3. Successor Trustees.  If Trustee or any successor Trustee shall die, resign or become disqualified from acting in the execution of this trust, or Beneficiary shall desire to appoint a substitute Trustee, Beneficiary shall have full power to appoint one or more substitute Trustees and, if preferred, several substitute Trustees in succession who shall succeed to all the estates, rights, powers and duties of Trustee.  Such appointment may be executed by any authorized agent of Beneficiary, and as so executed, such appointment shall be conclusively presumed to be executed with authority, valid and sufficient, without further proof of any action.

 

Section 7.4. Perfection of Appointment.  Should any deed, conveyance or instrument of any nature be required from Grantor by any successor Trustee to more fully and certainly vest in and confirm to such successor Trustee such estates, rights, powers and duties, then, upon request by such Trustee, all such deeds, conveyances and instruments shall be made, executed, acknowledged and delivered and shall be caused to be recorded and/or filed by Grantor.

 

Section 7.5. Trustee Liability.  In no event or circumstance shall Trustee or any substitute Trustee hereunder be personally liable under or as a result of this Deed of Trust, either as a result of any action by Trustee (or any substitute Trustee) in the exercise of the powers hereby granted or otherwise.

 

ARTICLE 8.

 

 

MISCELLANEOUS

 

Section 8.1. Notices.  Any notice required or permitted to be given under this Deed of Trust shall be in writing and either shall be mailed by certified mail, postage prepaid, return receipt requested, or sent by overnight air courier service, or personally delivered to a representative of the receiving party.  All such communications shall be mailed, sent or delivered, addressed to the party for whom it is intended at its address set forth on the first page of this Deed of Trust.  Any communication so addressed and mailed shall be deemed to be given on the earliest of (a) when actually delivered, (b) on the first Business Day after deposit with an overnight air courier service, if such deposit is timely and appropriate in accordance with the requirements of such courier service for next business day delivery, or (c) on the third Business Day after deposit in the United States mail, postage prepaid, in each case to the address of the intended addressee, and any communication so delivered in person shall be deemed to be given when receipted for by, or actually received by, Beneficiary, Trustee or Grantor, as the case may be.  Any party may designate a change of address by written notice to the other by giving at least ten (10) days prior written notice of such change of address.

 

Section 8.2. Covenants Running with the Property.  All Obligations contained in this Deed of Trust are intended by Grantor, Beneficiary  and Trustee to be, and shall be construed as, covenants running with the Property.  As used herein, “Grantor” shall refer to the party named in the first paragraph of this Deed of Trust and to any subsequent owner of all or any portion of the Property (without in any way implying that Beneficiary has or will consent to any such conveyance or transfer of the Property).  All persons or entities who may have or acquire an interest in the Property shall be deemed to have notice of, and be bound by, the terms of the Loan Agreement and the other Loan Documents; however, no such party shall be entitled

 

  

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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 to any rights thereunder without the prior written consent of Beneficiary (which may be issued or withheld in Beneficiary’s sole and absolute discretion).

 

Section 8.3. Attorney-in-Fact.  Grantor hereby irrevocably appoints Beneficiary and its successors and assigns, as its attorney-in-fact, which agency is coupled with an interest, (a) to execute and/or record any notices of completion, cessation of labor, or any other notices that Beneficiary deems appropriate to protect Beneficiary's interest, if Grantor shall fail to do so within ten (10) days after written request by Beneficiary, (b) upon the issuance of a deed pursuant to the foreclosure of this Deed of Trust or the delivery of a deed in lieu of foreclosure, to execute all instruments of assignment, conveyance or further assurance with respect to the Leases, Rents, Personal Property, and Fixtures in favor of the grantee of any such deed and as may be necessary or desirable for such purpose, (c) to prepare, execute and file or record financing statements, continuation statements, applications for registration and like papers necessary to create, perfect or preserve Beneficiary's security interests and rights in or to any of the Collateral, and (d) upon the occurrence of an Event of Default, to perform any obligation of Grantor hereunder or under any of the other Loan Documents; however: (1) Beneficiary shall not under any circumstances be obligated to perform any obligation of Grantor; (2) any sums advanced by Beneficiary in such performance shall be added to and included in the Obligations and shall bear interest at the Default Rate from the expiration of the applicable Demand Period until paid by Grantor; (3) Beneficiary as such attorney-in-fact shall only be accountable for such funds as are actually received by Beneficiary; and (4) Beneficiary shall not be liable to Grantor or any other person or entity for any failure to take any action which it is empowered to take under this Section 8.3.

 

Section 8.4. Successors and Assigns.  This Deed of Trust shall be binding upon and inure to the benefit of Beneficiary, Trustee and Grantor and their respective successors and assigns provided that Grantor shall not, without the prior written consent of Beneficiary (which may be granted or withheld in Beneficiary’s sole and absolute discretion), assign any rights, duties or obligations hereunder.

 

Section 8.5. No Waiver.  Any failure by Trustee or Beneficiary to insist upon strict performance of any of the terms, provisions or conditions of the Loan Documents shall not be deemed to be a waiver of same, and Trustee or Beneficiary shall have the right at any time to insist upon strict performance of all of such terms, provisions and conditions.

 

Section 8.6. Subrogation.  To the extent proceeds of the Note have been used to extinguish, extend or renew any indebtedness against the Collateral, then Beneficiary shall be subrogated to all of the rights, liens and interests existing against the Collateral and held by the holder of such indebtedness and such former rights, liens and interests, if any, are not waived, but are continued in full force and effect in favor of Beneficiary.

 

Section 8.7. Loan Agreement.  If any conflict or inconsistency exists between this Deed of Trust and the Loan Agreement, the Loan Agreement shall govern.

 

Section 8.8. Release or Reconveyance.  Upon the full, final and indefeasible payment and performance of the Obligations, Beneficiary, at Grantor's expense, shall release the liens and security interests created by this Deed of Trust or reconvey the Collateral to Grantor.

 

  

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Section 8.9. Waiver of Stay, Moratorium and Similar Rights.  Grantor agrees, to the full extent that it may lawfully do so, that it will not at any time insist upon or plead or in any way take advantage of any appraisement, valuation, stay, marshalling of assets, extension, redemption or moratorium law now or hereafter in force and effect so as to prevent or hinder the enforcement of the provisions of this Deed of Trust or the indebtedness secured hereby, or any agreement between Grantor and Beneficiary or any rights or remedies of Beneficiary.

 

Section 8.10. Limitation on Liability.  Grantor's liability hereunder is subject to the limitation on liability provisions of Article 10 of the Loan Agreement.

 

Section 8.11. Obligations of Grantor, Joint and Several.  If more than one person or entity has executed this Deed of Trust as “Grantor,” the obligations of all such persons or entities hereunder shall be joint and several.

 

Section 8.12. Governing Law.  This Deed of Trust shall be governed by the laws of the State of California.

 

Section 8.13. Headings.  The Article, Section and Subsection titles hereof are inserted for convenience of reference only and shall in no way alter, modify or define, or be used in construing, the text of such Articles, Sections or Subsections.

 

Section 8.14. Entire Agreement.  This Deed of Trust and the other Loan Documents embody the entire agreement and understanding between Beneficiary and Grantor and supersede all prior agreements and understandings between such parties relating to the subject matter hereof and thereof. Accordingly, the Loan Documents may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the parties.  There are no unwritten oral agreements between the parties.

 

 

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IN WITNESS WHEREOF, this Deed of Trust has been executed by Grantor and is effective as of the day and year first above written.

 

MISSION WEST PROPERTIES, L.P. I,

a Delaware limited partnership

By:          Mission West Properties, Inc.

a Maryland corporation

its general partner

By:           /s/ Raymond V. Marino                                                      

Name:  Raymond V. Marino

Title:  President & COO

 

[Signature Page to Deed of Trust]

 

  

  

  

	
CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT

	  	  	
File No:

	
STATE OF

	
California

	
)SS

	  	
APN No:

	
COUNTY OF

	  	
)

	  
	
On

	  	
before me,

	  	
, Notary Public, personally appeared

	  	  	  
	
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

 

	
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

 

	
WITNESS my hand and official seal.

	  
	
Signature

	  	  
	  
	  
	  	
This area for official notarial seal.

	  
	  	  	  
	
OPTIONAL SECTION

CAPACITY CLAIMED BY SIGNER

	  
	
Though statute does not require the Notary to fill in the data below, doing so may prove invaluable to persons relying on the documents.

	  
	  	   	
INDIVIDUAL

	  
	  	  	
CORPORATE OFFICER(S) TITLE(S)

	  
	  	  	
PARTNER(S)

	  	
LIMITED

	  	
GENERAL

	  
	  	  	
ATTORNEY-IN-FACT

	  
	  	  	
TRUSTEE(S)

	  
	  	  	
GUARDIAN/CONSERVATOR

	  
	  	  	
OTHER

	  
	
SIGNER IS REPRESENTING:

	  	  
	  	
Name of Person or Entity

	  	
Name of Person or Entity

	  
	  
	  	  	  
	
OPTIONAL SECTION

	  
	
Though the data requested here is not required by law, it could prevent fraudulent reattachment of this form.

	  
	
THIS CERTIFICATE MUST BE ATTACHED TO THE DOCUMENT DESCRIBED BELOW

	  
	
TITLE OR TYPE OF DOCUMENT:

	  	  
	  
	
NUMBER OF PAGES

	  	
DATE OF DOCUMENT

	  	  
	  
	
SIGNER(S) OTHER THAN NAMED ABOVE

	  	  
	
Reproduced by First American Title Insurance Company National Commercial Services 11/2007

	  

[Acknowledgment Page to Deed of Trust]

A/73448631.2

  

  

  

Exhibit A

Legal Description

3301 Olcott St., Santa Clara, CA

 

Real property in the City of Santa Clara, County of Santa Clara, State of California, described as follows:

 

PARCEL 1, AS SHOWN ON THAT CERTAIN PARCEL MAP RECORDED JULY 1, 1977 IN BOOK 399, PAGE 51 OF MAPS, IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA.

 

EXCEPTING THEREFROM THAT PORTION OF THE PREMISES AS GRANTED TO THE STATE OF CALIFORNIA, IN THAT CERTAIN INSTRUMENT RECORDED APRIL 23, 1982 IN BOOK G 744 PAGE 72 OF OFFICIAL RECORDS, AND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

 

COMMENCING AT A POINT ON THE GENERAL SOUTHERLY LINE OF THE EXISTING STATE FREEWAY IN SANTA CLARA COUNTY, ROAD 04-SC1-101, SHOWN AS BAYSHORE FREEWAY, AS SAID SOUTHERLY FREEWAY LINE WAS ESTABLISHED, DEFINED AND DESCRIBED IN PARCEL 3 OF THE DEED TO STATE OF CALIFORNIA RECORDED JUNE 6, 1960 IN VOLUME 4815 AT PAGE 705, OFFICIAL RECORDS OF SANTA CLARA COUNTY, SAID POINT BEING ALSO THE NORTHEASTERLY CORNER OF PARCEL 6 SHOWN UPON THAT CERTAIN RECORD OF SURVEY MAP FILED FOR RECORD ON MAY 6, 1963 IN BOOK 160 OF MAPS AT PAGES 50 AND 51 IN THE OFFICE OF THE RECORDER OF SANTA CLARA COUNTY; THENCE ALONG THE EASTERLY LINE OF SAID PARCEL 6, SOUTH 0° 58' 53" WEST, 29.75 FEET; THENCE LEAVING SAID EASTERLY LINE, SOUTH 65° 50' 31" EAST, 437.09 FEET TO A POINT ON THE LINE COMMON TO PARCEL "C" AND PARCEL "D" AS SAID PARCELS C AND D ARE SHOWN UPON THAT CERTAIN MAP ENTITLED "PARCEL MAP-LANDS OF KAISER AETNA", WHICH MAP WAS FILED FOR RECORD ON SEPTEMBER 23, 1975 IN BOOK 361 OF MAPS AT PAGE 46, IN THE OFFICE OF THE RECORDER OF SANTA CLARA COUNTY; THENCE ALONG THE SOUTHEASTERLY PROLONGATION OF LAST SAID COURSE, SOUTH 65° 50' 31" EAST, 298.72 FEET TO THE BEGINNING OF A TANGENT CURVE TO THE RIGHT WITH A RADIUS OF 249.00 FEET, WHICH CURVE IS ALSO TANGENT TO THE NORTHERLY PROLONGATION OF THE COURSE DESCRIBED AS "NORTH 20° 29' 40" WEST 124.04 FEET" IN THAT CERTAIN FINAL ORDER OF CONDEMNATION RECORDED JANUARY

 

Exhibit A-1

  

  

 

 19, 1961 IN VOLUME 5048 AT PAGE 9, OFFICIAL RECORDS OF SANTA CLARA COUNTY; THENCE ALONG SAID TANGENT CURVE TO THE RIGHT WITH A RADIUS OF 249.00 FEET, THROUGH AN ANGLE OF 45° 20' 51", AN ARC LENGTH OF 197.07 FEET TO SAID NORTHERLY PROLONGATION; THENCE ALONG SAID NORTHERLY PROLONGATION SOUTH 20° 29' 40" EAST 326.67 FEET TO THE NORTHERLY TERMINUS OF SAID 124.04 FOOT COURSE, BEING THE INTERSECTION OF LAST SAID COURSE WITH THE COURSE DESCRIBED AS "SOUTH 59° 36' 10" EAST 385.76 FEET" IN SAID FINAL ORDER OF CONDEMNATION; THENCE ALONG LAST DESCRIBED COURSE SOUTH 89° 36' 10" EAST 49.24 FEET TO THE GENERAL SOUTHWESTERLY LINE OF SAID EXISTING STATE FREEWAY AS DEFINED AND DESCRIBED IN SAID DEED (4815 OR 705); THENCE ALONG SAID GENERAL SOUTHWESTERLY AND SOUTHERLY FREEWAY LINE NORTH 20° 29' 40" WEST, 351.97 FEET, ALONG A TANGENT CURVE TO THE LEFT WITH A RADIUS OF 245.00 FEET, THROUGH AN ANGLE OF 42° 11' 22", AN ARC LENGTH OF 180.40 FEET, NORTH 62° 41' 02" WEST, 351.61 FEET AND NORTH 69° 22' 12" WEST, 450.90 FEET TO THE POINT OF COMMENCEMENT, EXCEPTING THEREFROM ALL THAT PORTION OF SAID PARCEL "C" (361-MAPS-46) INCLUDED WITHIN THE EXTERIOR BOUNDARIES OF THE HEREINABOVE DESCRIBED REAL PROPERTY.

 

APN:  224-47-019

Exhibit A-2exh10_165.htm

Exhibit 10.16.5

 

Hartford Loan No. BHM0J5QN8

 

CARVEOUT INDEMNITY AGREEMENT

 

This Carveout Indemnity Agreement (this “Agreement”) is executed as of August 4, 2010, by MISSION WEST PROPERTIES, INC., a Maryland corporation having its principal place of business at 10050 Bandley Drive, Cupertino, California 95014 (“Carveout Indemnitor”), to and for the benefit of HARTFORD LIFE INSURANCE COMPANY and HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY, each a Connecticut corporation, having an address c/o Hartford Investment Management Company, 55 Farmington Avenue, Hartford, Connecticut 06105 (collectively, “Lender”).

 

RECITALS:

 

WHEREAS, pursuant to that certain Fixed Rate Term Loan Agreement of even date herewith (the “Loan Agreement”), by and among Lender, Mission West Properties, L.P. and Mission West Properties, L.P. I, (collectively, “Borrower”), Lender has provided or may provide financing (the “Loan”) to Borrower as evidenced by (i) the Promissory Note dated as of the Funding Date, in the stated principal amount of $30,000,000.00, executed by Borrower and payable to the order of Hartford Life Insurance Company, a Connecticut corporation, and (ii) the Promissory Note dated as of the Funding Date, in the stated principal amount of $10,000,000.00, executed by Borrower and payable to the order of Hartford Life and Accident Insurance Company, a Connecticut corporation (collectively, the “Note”); and

 

WHEREAS, the Loan is secured by, among other things, those certain mortgages, deeds of trust, deeds to secure debt, and assignments of leases and rents, all dated as of even date herewith encumbering certain improved real estate located in the State of California (collectively, the “Mortgage”), and is further evidenced, secured or governed by other instruments and documents executed in connection with the Loan; and

 

WHEREAS, Lender is not willing to make the Loan, or otherwise extend credit, to Borrower unless Carveout Indemnitor agrees to provide for the benefit of Lender the indemnification and guaranty contained herein; and

 

WHEREAS, Carveout Indemnitor is the owner of a direct or indirect interest in Borrower and will directly benefit from Lender’s making the Loan to Borrower.

 

NOW, THEREFORE, as an inducement to Lender to make the Loan to Borrower, and for other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the parties do hereby agree as follows:

 

  

  

  

 

1. Definitions.

 

(a) As used herein, the term “Recourse Obligations” means, collectively (i) any and all liabilities, costs, losses, damages, expenses or claims which are suffered or incurred by Lender and for which Borrower has liability under Section 10.1(b)(ii) of the Loan Agreement, and (ii) for which Carveout Indemnitor has liability under this Agreement.

 

(b) All capitalized terms used and not defined herein shall have the respective meanings given to such terms in the Loan Agreement.

 

(c) Unless otherwise noted, all “Section” references shall be to Sections of this Agreement.  All uses of the word “including” shall mean “including, without limitation” unless the context shall indicate otherwise.  Unless otherwise specified, the words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.  Unless otherwise specified, all meanings attributed to defined terms herein shall be equally applicable to both the singular and plural forms of the terms so defined.  All references to the Loan Documents shall mean such document as it is constituted as of the date hereof, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

 

2. Indemnification.  Carveout Indemnitor hereby indemnifies, defends and holds harmless Lender from and against any and all liabilities, costs, losses (including any reduction in value of any Property or any other Collateral or the loss of Lender’s security interest therein), damages, expenses (including reasonable attorneys’ fees and disbursements, and court costs, if any), or claims suffered or incurred by Lender by reason of or in connection with any of the following:

 

(A) Any fraud committed by any Borrower Party in connection with the Loan;

 

(B) Any material misrepresentation contained in any of the Loan Documents or any report furnished pursuant to any of the Loan Documents by any Borrower Party;

 

(C) The failure by Borrower to maintain insurance in accordance with Section 3.1 of the Loan Agreement;

 

(D) The failure of any Borrower Party to apply Operating Revenues received by any Borrower Party to pay Debt Service, Impounds (if any), Operating Expenses (including in fulfilling the obligations of any Individual Borrower as “landlord” under any Lease) and reasonable and necessary capital expenditures or costs during the 12-month period immediately preceding the occurrence of the Event of Default triggering Lender’s exercise of remedies; provided, however, that Carveout Indemnitor shall not have liability under this subparagraph (D) to the extent Operating Revenues generated during the 12-month period immediately preceding the occurrence of the Event of Default triggering Lender’s exercise of remedies were not sufficient to pay in full all such amounts and all Operating Revenues so received by any Borrower Party were applied to pay such amounts to the full extent of Operating Revenues so received;

 

  

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(E) The misappropriation of any Net Proceeds or condemnation awards by any Borrower Party;

 

(F) The failure of any Borrower Party to (x) properly apply any and all security deposits held by any Borrower Party, (y) properly return same to Tenants when due, or (z) deliver security deposits to Lender, any receiver or any Person purchasing any Property or any part thereof at a foreclosure sale or upon the taking of possession of such Property or any part thereof by Lender, such receiver or such other Person; provided, however, that Carveout Indemnitor shall not have the liability under this subparagraph (F) if the required activity under (z) above is limited or prohibited by applicable Legal Requirements or if Carveout Indemnitor is operating under the express written direction of Lender;

 

(G) Intentional removal or destruction of property (without the concurrent replacement thereof with property of at least equivalent value and utility) constituting any material portion of the Collateral, or any other intentional and material waste of any portion of the Collateral by any Borrower Party;

 

(H) Any Borrower Party contesting or in any way interfering with, directly or indirectly, any foreclosure action, Uniform Commercial Code sale and/or deed in lieu of foreclosure transaction commenced by Lender or with any other enforcement of Lender’s rights, power or remedies under any of the Loan Documents (whether by making any motion, bringing any counterclaim, claiming any defense, seeking any injunction or other restraint, commencing any action, or otherwise) in connection with Lender’s rights arising from an Event of Default; provided, however, that if any Borrower Party obtains a final, non-appealable order successfully contesting the exercise by Lender of a right or remedy, then Carveout Indemnitor shall not have liability under this subparagraph (H);

 

(I) Any Borrower Party (i) filing a voluntary petition under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or (ii) making an assignment for the benefit of creditors; or

 

(J) Any Borrower Party (i) filing, or joining in the filing of, an involuntary petition against any other Borrower Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or (ii) soliciting or causing to be solicited petitioning creditors for any involuntary petition against any other Borrower Party, or (iii) filing an answer consenting to or otherwise acquiescing in or joining in any involuntary petition filed against any other Borrower Party by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or (iv) voting adversely to Lender’s interest in any proceeding under the Bankruptcy Code or any other state or Federal bankruptcy or insolvency law which involves any Borrower Party or any portion of the Collateral, or (v) consenting to or acquiescing or joining in an application for the appointment of a custodian, receiver, trustee or examiner for any Borrower Party or any portion of the Collateral (unless such action is at the written request of Lender).

 

Notwithstanding the foregoing, if Borrower and any necessary Borrower Parties consent, pursuant to a stipulation in form reasonably required by Lender (to be executed by Borrower and any necessary Borrower Parties and delivered to Lender within five (5) Business Days following 

 

  

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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     Lender’s request), to the appointment of a receiver for any Property identified by Lender (the identity of such receiver to be designated by Lender and approved by Borrower Parties, such approval not to be unreasonably withheld), and no Borrower Party seeks or participates in the removal of said receiver (absent a material violation by said receiver of the order appointing the receiver, in which case a substitute receiver designated by Lender and approved by Borrower Parties, such approval not to be unreasonably withheld, will be appointed) then Carveout Indemnitor shall not have any liability under this Section 2 solely as a result of any reduction in value of any Property or any other Collateral during the period that Lender is pursuing its rights and remedies as a result of an Event of Default.

 

3. Guaranty.

 

(a) Carveout Indemnitor hereby irrevocably and unconditionally guarantees to Lender and its successors and assigns the prompt and full payment and performance of the Obligations, as and when the same shall be due and payable (whether by lapse of time, by acceleration of maturity or otherwise), in the event any prohibited Transfer occurs in violation of Section 7.1 of the Loan Agreement (including the voluntary placement of a Lien on all or any portion of the Collateral in violation of the Loan Documents).

 

(b) This guaranty is an irrevocable, absolute, continuing guaranty of payment and performance and not a guaranty of collection.  This guaranty may not be revoked by Carveout Indemnitor and shall continue to be effective with respect to any obligations of Carveout Indemnitor arising or created after any attempted revocation by Carveout Indemnitor and after (if Carveout Indemnitor is a natural person) Carveout Indemnitor’s death (in which event this Agreement shall be binding upon Carveout Indemnitor’s estate and Carveout Indemnitor’s legal representatives and heirs).  Carveout Indemnitor hereby irrevocably and unconditionally covenants and agrees that, to the extent that Carveout Indemnitor has any liability or obligations under this Section 3, Carveout Indemnitor is liable for the Obligations as a primary obligor.

 

4. Obligations Not Reduced by Offset. The liabilities and obligations of Carveout Indemnitor to Lender hereunder shall not be reduced, discharged or released because or by reason of any existing or future offset, claim or defense of Carveout Indemnitor, or any other party, against Lender or against payment of such liabilities or obligations, whether such offset, claim or defense arises in connection with the Obligations (or the transactions creating the Obligations) or otherwise.

 

5. No Duty To Pursue Others. It shall not be necessary for Lender (and Carveout Indemnitor hereby waives any rights which Carveout Indemnitor may have to require Lender), in order to enforce the obligations of Carveout Indemnitor hereunder, first to (i) institute suit or exhaust its remedies against Borrower or others liable on the Loan or the Obligations or any other person, (ii) enforce Lender’s rights or exhaust any remedies available to Lender against any portion of any Property, (iii) enforce Lender’s rights against any other guarantors, (iv) join Borrower or any other person liable on the Obligations in any action seeking to enforce this Agreement, or (v) resort to any other means of obtaining payment of the Obligations. Lender shall not be required to mitigate damages or take any other action to reduce, collect or enforce the Obligations.

 

  

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6. Waivers.

 

(a) Carveout Indemnitor agrees to the provisions of the Loan Documents, and hereby waives notice of (i) any loans or advances made by Lender to Borrower, (ii) acceptance of this Agreement, (iii) any amendment or extension of the Loan Agreement, the Note, the Mortgage or of any other Loan Documents, (iv) the execution and delivery by Borrower and Lender of any other loan or credit agreement or of Borrower’s execution and delivery of any promissory notes or other documents arising under the Loan Documents or in connection with any Property, (v) the occurrence of any Event of Default under the Loan Documents, (vi) Lender’s transfer or disposition of the Obligations, or any part thereof, (vii) sale or foreclosure (or posting or advertising for sale or foreclosure) of any Property, (viii) protest, proof of non-payment or default by Borrower, (ix) any other action at any time taken or omitted by Lender, and (x) generally, all demands and notices of every kind in connection with this Agreement, the Loan Documents, any documents or agreements evidencing, securing or relating to any of the Obligations.

 

(b) Carveout Indemnitor waives all benefits and defenses it may have under California Civil Code Section 2810 and agrees that Lender’s rights under this Guaranty shall be enforceable even if Borrower had no liability at the time of execution of the Loan Documents or later ceases to be liable.

 

(c) Carveout Indemnitor waives all benefits and defenses it may have under California Civil Code Section 2809 with respect to its obligations under this Agreement and agrees that Lender’s rights under the Loan Documents will remain enforceable even if the amount secured by the Loan Documents is larger in amount and more burdensome than that for which Borrower is responsible.

 

(d) Carveout Indemnitor waives any rights or benefits it may have by reason of California Code of Civil Procedure Section 580a which could limit the amount which Lender could recover in a foreclosure of any Property to the difference between the amount owing under the Loan Documents and the fair value of the property or interests sold at a nonjudicial foreclosure sale or sales of any other real property held by Lender as security for the obligations under the Loan Documents.

 

(e) Carveout Indemnitor waives all rights, defenses and benefits that are or may become available to the guarantor or other surety by reason of California Civil Code Sections 2787 to 2855, inclusive.

 

(f) Upon Borrower’s default under the Loan Documents, Lender may elect to foreclose nonjudicially on real property given by Borrower as security under the Loan Documents and also to exercise its rights under this Agreement.  Carveout Indemnitor acknowledges that its right to seek reimbursement from Borrower for any amounts paid by Carveout Indemnitor to Lender under this Agreement will be eliminated if Lender elects to so foreclose on Borrower’s property.  Nevertheless, Carveout Indemnitor waives any such right to reimbursement and agrees that a nonjudicial foreclosure by Lender against any real property security owned by Borrower will not affect the enforceability of this Agreement.  In order to further effectuate such waiver, Carveout Indemnitor hereby waives all rights and defenses arising 

 

  

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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               out of an election of remedies by Lender, even though that election of remedies, such as nonjudicial foreclosure with respect to the security for the Recourse Obligations, has destroyed its rights of subrogation and reimbursement against Borrower by the operation of Section 580d of the Code of Civil Procedure or otherwise.

 

(g) This Agreement is an unconditional and irrevocable waiver of any rights and defenses Carveout Indemnitor may have with respect to this Agreement because the Recourse Obligations secured by real property.  These rights and defenses include, but are not limited to, any rights or defenses based upon Section 580a, 580b, 580d or 726 of the California Code of Civil Procedure.  Carveout Indemnitor acknowledges having read and understood all of the provisions of Section 2856 of the California Civil Code and that such provisions are applicable to this Agreement.  Additionally, without limiting the generality of the foregoing, Carveout Indemnitor also waives to the extent applicable any defense based upon Lender’s election to waive its lien as to all or any security for the Recourse Obligations pursuant to California Code of Civil Procedures Section 726.5 or otherwise.

 

7. Payment of Expenses.  In the event that Carveout Indemnitor should breach or fail to timely perform any provisions of this Agreement, Carveout Indemnitor shall, within the Demand Period, pay Lender all costs and expenses (including court costs and attorneys’ fees) incurred by Lender in the enforcement hereof or the preservation of Lender’s rights hereunder.  The covenant contained in this Section 7 shall survive the payment and performance of any liabilities or obligations herewith.

 

8. Effect of Bankruptcy.  In the event that, pursuant to any insolvency, bankruptcy, reorganization, receivership or other debtor relief law, or any judgment, order or decision thereunder, Lender must rescind or restore any payment, or any part thereof, received by Lender in full or partial satisfaction of the Obligations, any prior release or discharge from the terms of this Agreement given to Carveout Indemnitor by Lender shall be without effect, and this Agreement shall remain in full force and effect.  It is the intention of Carveout Indemnitor that Carveout Indemnitor’s obligations hereunder shall not be discharged except by Carveout Indemnitor’s full and final payment and performance of such obligations and then only to the extent of such full and final payment and performance.

 

9. Borrower Party (Parties).  The term “Borrower” as used herein shall include any new or successor corporation, association, partnership (general or limited), limited liability company, joint venture, trust or other organization formed as a result of any merger, reorganization, sale, transfer, devise, gift or bequest of Borrower or any interest in Carveout Indemnitor permitted by the terms of the Loan Documents.

 

10. No Reduction in Carveout Indemnitor’s Obligations.  Carveout Indemnitor hereby consents and agrees to each of the following, and agrees that Carveout Indemnitor’s liabilities and obligations under this Agreement shall not be released, diminished, impaired, reduced or adversely affected by any of the following, and Carveout Indemnitor waives any common law, equitable, statutory or other rights (including rights to notice) which Carveout Indemnitor might otherwise have as a result of or in connection with any of the following:

 

  

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(a) any renewal, extension, increase, modification, alteration or rearrangement of all or any part of the Obligations, the Loan Agreement, the Note, the Mortgage, the other Loan Documents, or any other document, instrument, contract or understanding between Borrower and Lender, or any other person, pertaining to the Obligations, or any failure of Lender to notify Carveout Indemnitor of any such action;

 

(b) any adjustment, indulgence, forbearance or compromise that might be granted or given by Lender to Borrower, Carveout Indemnitor or any other Person at any time liable for the payment of all or any portion of the Obligations;

 

(c) the insolvency, bankruptcy, arrangement, adjustment, composition, liquidation, disability, dissolution or lack of power of Borrower, Carveout Indemnitor or any other Person at any time liable for the payment of all or part of the Obligations;

 

(d) any dissolution of Borrower, or any other Person at any time liable for the payment of all or any portion of the Obligations;

 

(e) any sale, lease or transfer of any or all of the assets of Borrower or Carveout Indemnitor, or any changes in the shareholders, partners or members of Borrower or Carveout Indemnitor, or any reorganization of Borrower or Carveout Indemnitor;

 

(f) the invalidity, illegality or unenforceability of all or any part of the Obligations, or any document or agreement executed in connection with or evidencing the Obligations, including any Loan Document, for any reason whatsoever, including the fact that (i) the Obligations, or any part thereof, exceeds the amount permitted by law, (ii) the act of creating the Obligations or any part thereof is ultra vires, (iii) the officers or representatives executing the Loan Agreement, the Note, the Mortgage or the other Loan Documents or otherwise creating the Obligations acted in excess of their authority, (iv) the Obligations violate applicable usury laws, (v) Borrower has valid defenses, claims or offsets (whether at law, in equity or by agreement) which render the Obligations wholly or partially uncollectible from Borrower, (vi) the creation, performance or repayment of the Obligations (or the execution, delivery and performance of any document or instrument representing part of the Obligations or executed in connection with the Obligations, or given to secure the repayment of the Obligations) is illegal, uncollectible or unenforceable, or (vii) the Loan Agreement, the Note, the Mortgage or any of the other Loan Documents have been forged or otherwise are irregular or not genuine or authentic, it being agreed that Carveout Indemnitor shall remain liable hereon regardless of whether Carveout Indemnitor or any other Person is found not liable on the Obligations or any part thereof for any reason;

 

(g) any full or partial release of the liability of Borrower with respect to the Obligations, or any part thereof, or of any co-guarantors, or any other person or entity now or hereafter liable, whether directly or indirectly, jointly, severally, or jointly and severally, to pay, perform, guarantee or assure the payment of the Obligations, or any part thereof, it being recognized, acknowledged and agreed by Carveout Indemnitor that Carveout Indemnitor may be required to pay the Obligations in full without assistance or support of any other party, and Carveout Indemnitor has not been induced to enter into this Agreement on the basis of a contemplation, belief, understanding or agreement that other persons will be liable to pay or 

 

  

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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       perform the Obligations, or that Lender will look to each and every Carveout Indemnitor or any individual Carveout Indemnitor to pay or perform the Obligations;

 

(h) the taking or accepting of any other security, collateral or guaranty, or other assurance of payment, for all or any part of the Obligations;

 

(i) any release, surrender, exchange, subordination, deterioration, waste, loss or impairment (including negligent, willful, unreasonable or unjustifiable impairment) of any Property at any time existing in connection with, or assuring or securing payment of, all or any part of the Obligations;

 

(j) the alleged failure of Lender or any other party to exercise diligence or reasonable care in the preservation, protection, enforcement, sale or other handling or treatment of all or any part of any Property, including any neglect, delay, omission, failure or refusal of Lender (i) to take or prosecute any action for the collection of any of the Obligations, or (ii) to foreclose, or initiate any action to foreclose, or, once commenced, prosecute to completion any action to foreclose upon any security therefor, or (iii) to take or prosecute any action in connection with any instrument or agreement evidencing or securing all or any part of the Obligations;

 

(k) the fact that any security, security interest or lien contemplated or intended to be given, created or granted as security for the repayment of the Obligations, or any part thereof, shall not be properly perfected or created, or shall prove to be unenforceable or subordinate to any other security interest or lien, it being recognized and agreed by Carveout Indemnitor that Carveout Indemnitor is not entering into this Agreement in reliance on, or in contemplation of the benefits of, the validity, enforceability, collectibility or value of any of the collateral for the Obligations;

 

(l) any existing or future right of offset, claim or defense of Borrower against Lender, or any other person, or against payment of the Obligations, whether such right of offset, claim or defense arises in connection with the Obligations (or the transactions creating the Obligations) or otherwise;

 

(m) the reorganization, merger or consolidation of Borrower into or with any other corporation or entity;

 

(n) any payment by Borrower to Lender is held to constitute a preference under bankruptcy laws, or for any reason Lender is required to refund such payment or pay such amount to Borrower or someone else; and/or

 

(o) any other action taken or omitted to be taken with respect to the Loan Documents, the Obligations, or any Property, whether or not such action or omission prejudices Carveout Indemnitor or increases the likelihood that Carveout Indemnitor will be required to pay the Obligations pursuant to the terms hereof, it being the unambiguous and unequivocal intention of Carveout Indemnitor that Carveout Indemnitor shall be obligated to pay the Obligations when due as required by this Agreement, notwithstanding any occurrence, circumstance, event, action, or omission whatsoever, whether contemplated or unanticipated, and whether or not otherwise or 

 

 

  

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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 particularly described herein, which obligation shall be deemed satisfied only upon the full and final payment and satisfaction of the Obligations.

 

11. Representation, Warranties and Covenants of Carveout Indemnitor.  To induce Lender to enter into the Loan Documents and extend credit to Borrower, Carveout Indemnitor represents and warrants to Lender and covenants as follows:

 

(a) Carveout Indemnitor is an affiliate of Borrower, is the owner of a direct or indirect interest in Borrower, and has received, or will receive, direct or indirect benefit from the making of this Agreement with respect to the Obligations;

 

(b) Carveout Indemnitor is familiar with, and has independently reviewed books and records regarding the financial condition of Borrower and is familiar with the value of each Property intended to be serve as security for the payment of the Note or Obligations; however, Carveout Indemnitor is not relying on such financial condition or any Property as an inducement to enter into this Agreement;

 

(c) Neither Lender nor any other Person has made any representation, warranty or statement to Carveout Indemnitor in order to induce Carveout Indemnitor to execute this Agreement;

 

(d) As of the date hereof, and after giving effect to this Agreement and the contingent obligation evidenced hereby, Carveout Indemnitor is solvent, and has assets which, fairly valued, exceed its obligations, liabilities (including contingent liabilities) and debts, and has property and assets sufficient to satisfy and repay its obligations and liabilities;

 

(e) As of the date hereof, the execution, delivery and the contemplated performance by Carveout Indemnitor of this Agreement and the consummation of the transactions contemplated hereunder do not contravene or conflict with any law, statute or regulation to which Carveout Indemnitor is subject or constitute a default (or an event which with notice or lapse of time or both would constitute a default) under, or result in the breach of, any indenture, mortgage, deed of trust, charge, lien, or any contract, agreement or other instrument to which Carveout Indemnitor is a party or which may be applicable to Carveout Indemnitor that would have a material adverse effect on the Carveout Indemnitor.  This Agreement and any other Loan Documents to which Carveout Indemnitor is a party are legal and binding obligations of Carveout Indemnitor and is enforceable in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to the enforcement of creditors’ rights and subject to general principles of equity.

 

(f) All representations and warranties made by Carveout Indemnitor herein shall survive the execution hereof.

 

(g) Any financial statements delivered by Carveout Indemnitor to Lender as described in Section 5.3 of the Loan Agreement are true, complete and correct in all material respects, with no material change as of the date hereof.  Except as disclosed in such financial statements, there is (a) no liability (fixed or contingent) affecting Carveout Indemnitor and (b) no litigation, administrative proceeding, investigation or other legal action (including any proceeding under any state or federal bankruptcy or insolvency law) pending or, to the 

 

  

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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   knowledge of Carveout Indemnitor, threatened, against Carveout Indemnitor that would have a material adverse effect on Carveout Indemnitor.  Carveout Indemnitor is not contemplating either the filing of a petition by it under state or federal bankruptcy or insolvency laws or the liquidation of all or a major portion of its assets or property, and Carveout Indemnitor has no knowledge of any Person contemplating the filing of any such petition against it.

 

(h) Carveout Indemnitor is not a party to any agreement or instrument or subject to any court order, injunction, permit, or restriction which would have a material adverse effect the business, operations, or condition (financial or otherwise) of Carveout Indemnitor.  Carveout Indemnitor is not in violation of any agreement which violation would have a material adverse effect on Carveout Indemnitor’s business, properties, or assets, operations or condition, financial or otherwise.

 

(i) Except as disclosed in the third party reports for each Property delivered to Lender as of the date hereof, Carveout Indemnitor has, or has caused the Individual Borrowers to have, all material requisite licenses, permits, franchises, qualifications, certificates of occupancy or other governmental authorizations to carry on its business.

 

(j) Carveout Indemnitor has filed (or has obtained effective extensions for filing) all federal, state and local tax returns required to be filed and have paid or made adequate provision for the payment of all federal, state and local taxes, charges and assessments payable by Carveout Indemnitor.

 

(k) There is no material statement of fact as of the date hereof made by or on behalf of Carveout Indemnitor in any Loan Document to which it is a party contains any untrue statement of a material fact.  To the best of Carveout Indemnitor’s knowledge, there is no material fact as of the date hereof known to Carveout Indemnitor which has not been disclosed to Lender that could have a material adverse effect, or as far as Carveout Indemnitor can reasonably predict, might have a material adverse effect on the business, operations or condition (financial or otherwise) of Carveout Indemnitor.

 

12. Subordination of all Carveout Indemnitor Claims.  As used herein, the term “Carveout Indemnitor Claims” shall mean all debts and liabilities of Borrower to Carveout Indemnitor, whether such debts and liabilities now exist or are hereafter incurred or arise, or whether the obligations of Borrower therein be direct, contingent, primary, secondary, several, joint and several, or otherwise, and irrespective of whether such debts or liabilities be evidenced by note, contract, open account, or otherwise, and irrespective of the person in whose favor such debts or liabilities may, at their inception, have been, or may hereafter be created, or the manner in which they have been or may hereafter be acquired by Carveout Indemnitor.  Carveout Indemnitor Claims shall include without limitation all rights and claims of Carveout Indemnitor against Borrower (arising as a result of subrogation or otherwise) as a result of Carveout Indemnitor’s payment of all or a portion of the Obligations. Upon the occurrence of a Potential Default or an Event of Default, Carveout Indemnitor shall not receive or collect, directly or indirectly, from Borrower or any other party any amount of Carveout Indemnitor Claims.

 

13. Claims in Bankruptcy.  In the event of receivership, bankruptcy, reorganization, arrangement, debtor’s relief, or other insolvency proceedings involving Borrower as debtor, 

 

  

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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        Lender shall have the right to prove its claim in any such proceeding so as to establish its rights hereunder and receive directly from the receiver, trustee or other court custodian dividends and payments which would otherwise be payable upon Carveout Indemnitor Claims.  Carveout Indemnitor hereby assigns such dividends and payments to Lender.  Should Lender receive, for application upon the Obligations, any such dividend or payment which is otherwise payable to Carveout Indemnitor, and which, as between Borrower and Carveout Indemnitor, shall constitute a credit upon Carveout Indemnitor Claims, then upon payment to Lender in full of the Obligations, Carveout Indemnitor shall become subrogated to the rights of Lender to the extent that such payments to Lender on Carveout Indemnitor Claims have contributed toward the liquidation of the Obligations, and such subrogation shall be with respect to that amount of the Obligations which would have been unpaid if Lender had not received dividends or payments upon Carveout Indemnitor Claims.

 

14. Payments Held in Trust.  In the event that, notwithstanding anything to the contrary in this Agreement, Carveout Indemnitor should receive any funds, payment, claim or distribution which are prohibited by this Agreement, Carveout Indemnitor agrees to hold in trust for Lender an amount equal to the amount of all funds, payments, claims or distributions so received, and agrees that it shall have absolutely no dominion over the amount of such funds, payments, claims or distributions so received except to pay them promptly to Lender, and Carveout Indemnitor covenants promptly to pay the same to Lender.

 

15. Liens Subordinate.  Carveout Indemnitor agrees that any liens, security interests, judgment liens, charges or other encumbrances upon Borrower’s assets securing payment of Carveout Indemnitor Claims shall be and remain inferior and subordinate to any liens, security interests, judgment liens, charges or other encumbrances upon Borrower’s assets securing payment of the Obligations, regardless of whether such encumbrances in favor of Carveout Indemnitor or Lender presently exist or are hereafter created or attach.  Without the prior written consent of Lender (which may be granted or withheld in Lender’s sole discretion), Carveout Indemnitor shall not (i) exercise or enforce any creditor’s right it may have against Borrower, or (ii) foreclose, repossess, sequester or otherwise take steps or institute any action or proceedings (judicial or otherwise, including the commencement of, or joinder in, any liquidation, bankruptcy, rearrangement, debtor’s relief or insolvency proceeding) to enforce any liens, mortgages, deeds of trust, security interests, collateral rights, judgments or other encumbrances on assets of Borrower securing payment of the Obligations held by Carveout Indemnitor.

 

16. Miscellaneous.

 

(a) Waiver.  No failure to exercise, and no delay in exercising, on the part of Lender, any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right.  The rights of Lender hereunder shall be in addition to all other rights provided by law or in equity.  No modification or waiver of any provision of this Agreement, nor any consent to depart therefrom, shall be effective unless in writing and no such consent or waiver shall extend beyond the particular case and purpose involved.  No notice or demand given in any case shall constitute a waiver of the right to take other action in the same, similar or other instances without such notice or demand.

 

  

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(b) Notices.  Any notice, demand, statement, request or consent made hereunder shall be given and deemed received in accordance with the terms of Section 9.1 of the Loan Agreement.

 

(c) Governing Law.  This Agreement shall be governed in accordance with the State of California and the applicable law of the United States of America.

 

(d) Invalid Provisions.  If any provision of this Agreement is held to be illegal, invalid, or unenforceable under present or future laws effective during the term of this Agreement, such provision shall be fully severable and this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part of this Agreement, and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Agreement, unless such continued effectiveness of this Agreement, as modified, would be contrary to the basic understandings and intentions of the parties as expressed herein.

 

(e) Amendments.  This Agreement may be amended only by an instrument in writing executed by the party or an authorized representative of the party against whom such amendment is sought to be enforced.

 

(f) Parties Bound; Assignment; Joint and Several.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, assigns and legal representatives; provided, however, that Carveout Indemnitor may not, without the prior written consent of Lender (which consent may be granted or withheld in Lender’s sole discretion), assign any of its rights, powers, duties or obligations hereunder.  If Carveout Indemnitor consists of more than one person or party, the obligations and liabilities of each such person or party shall be joint and several.

 

(g) Headings.  Section headings are for convenience of reference only and shall in no way affect the interpretation of this Agreement.

 

(h) Recitals.  The recital and introductory paragraphs hereof are a part hereof, form a basis for this Agreement and shall be considered prima facie evidence of the facts and documents referred to therein.

 

(i) Counterparts.  To facilitate execution, this Agreement may be executed in as many counterparts as may be convenient or required.  It shall not be necessary that the signature of, or on behalf of, each party, or that the signature of all persons required to bind any party, appear on each counterpart.  All counterparts shall collectively constitute a single instrument.  It shall not be necessary in making proof of this Agreement to produce or account for more than a single counterpart containing the respective signatures of, or on behalf of, each of the parties hereto.

 

(j) Rights and Remedies.  If Carveout Indemnitor becomes liable for any indebtedness owing by Borrower to Lender, by endorsement or otherwise, other than under this Agreement, such liability shall not be in any manner impaired or affected hereby and the rights of Lender hereunder shall be cumulative of any and all other rights that Lender may ever have against Carveout Indemnitor.  The exercise by Lender of any right or remedy hereunder or under

 

  

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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              any other instrument, or at law or in equity, shall not preclude the concurrent or subsequent exercise of any other right or remedy.  All rights and remedies of Lender under this Agreement are cumulative with, and in addition to, any rights and remedies of Lender under any other guaranty or with respect to any other guarantor or obligor under any other document or instrument.

 

(k) Entirety.  THIS AGREEMENT EMBODIES THE FINAL AND ENTIRE AGREEMENT OF CAREVOUT INDEMNITOR AND LENDER WITH RESPECT TO CARVEOUT INDEMNITOR’S INDEMNIFICATION AND GUARANTY WITH RESPECT TO THE OBLIGATIONS AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF.  THIS AGREEMENT IS INTENDED BY CAREVOUT INDEMNITOR AND LENDER AS A FINAL AND COMPLETE EXPRESSION OF THE TERMS OF THE INDEMNIFICATION AND GUARANTY, AND NO COURSE OF DEALING BETWEEN CAREVOUT INDEMNITOR AND LENDER, NO COURSE OF PERFORMANCE, NO TRADE PRACTICES, AND NO EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE OF ANY NATURE SHALL BE USED TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF THIS AGREEMENT.  THERE ARE NO ORAL AGREEMENTS BETWEEN CARVEOUT INDEMNITOR AND LENDER.

 

(l) Waiver of Right To Trial By Jury.  CARVEOUT INDEMNITOR AND LENDER HEREBY AGREE NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THIS AGREEMENT, THE LOAN AGREEMENT, THE NOTE, THE MORTGAGE, OR THE OTHER LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH.  THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY CARVEOUT INDEMNITOR AND LENDER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE.  LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY CARVEOUT INDEMNITOR AND LENDER.

 

[Remainder of Page Intentionally Left Blank; Signature

and Acknowledgement  Pages Follow.]

  

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IN WITNESS WHEREOF, this Agreement has been executed by Carveout Indemnitor and is effective as of the day and year first above written.

 

CARVEOUT INDEMNITOR:

 

MISSION WEST PROPERTIES, INC.,

a Maryland corporation

By:           /s/ Raymond V. Marino                                                      

Name:  Raymond V. Marino

Title:  President & COO

 

[Signature Page to Carveout Indemnity Agreement]

  

  

  

	
CALIFORNIA ALL-PURPOSE ACKNOWLEDGEMENT

	  	  	
File No:

	
STATE OF

	
California

	
)SS

	  	
APN No:

	
COUNTY OF

	  	
)

	  
	
On

	  	
before me,

	  	
, Notary Public, personally appeared

	  	  	  
	
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

 

	
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

 

	
WITNESS my hand and official seal.

	  
	
Signature

	  	  
	  
	  
	  	
This area for official notarial seal.

	  
	  	  	  
	
OPTIONAL SECTION

CAPACITY CLAIMED BY SIGNER

	  
	
Though statute does not require the Notary to fill in the data below, doing so may prove invaluable to persons relying on the documents.

	  
	  	  	
INDIVIDUAL

	  
	  	  	
CORPORATE OFFICER(S) TITLE(S)

	  
	  	  	
PARTNER(S)

	  	
LIMITED

	  	
GENERAL

	  
	  	  	
ATTORNEY-IN-FACT

	  
	  	  	
TRUSTEE(S)

	  
	  	  	
GUARDIAN/CONSERVATOR

	  
	  	  	
OTHER

	  
	
SIGNER IS REPRESENTING:

	  	  
	  	
Name of Person or Entity

	  	
Name of Person or Entity

	  
	  
	  	  	  
	
OPTIONAL SECTION

	  
	
Though the data requested here is not required by law, it could prevent fraudulent reattachment of this form.

	  
	
THIS CERTIFICATE MUST BE ATTACHED TO THE DOCUMENT DESCRIBED BELOW

	  
	
TITLE OR TYPE OF DOCUMENT:

	  	  
	  
	
NUMBER OF PAGES

	  	
DATE OF DOCUMENT

	  	  
	  
	
SIGNER(S) OTHER THAN NAMED ABOVE

	  	  
	
Reproduced by First American Title Insurance Company National Commercial Services 11/2007

	  

 

[Acknowledgment Page to Carveout Indemnity Agreement]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00180-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00180-of-00352.parquet"}]]