Document:

dex101.htm

    FIRST AMENDMENT TO LOAN
AGREEMENT AND AMENDMENT TO OTHER LOAN DOCUMENTS

     

    THIS FIRST AMENDMENT TO LOAN
AGREEMENT AND AMENDMENT TO OTHER LOAN DOCUMENTS (this “Amendment”) made
as of the 10th day of
July, 2008, by and among RICHARD MERUELO AS TRUSTEE OF THE
RICHARD MERUELO LIVING TRUST U/D/T DATED SEPTEMBER 15, 1989, a trust
established under the laws of the State of California (the “Trust”), MERCO GROUP-ROOSEVELT BUILDING,
LLC, a California limited liability company (“Merco”; Merco and Trust are
hereinafter referred to individually as a “Borrower” and collectively as
“Borrowers”), RICHARD
MERUELO, a resident of the State of Florida (“Richard Meruelo”), KEYBANK NATIONAL ASSOCIATION,
a national banking association (“KeyBank”), and KEYBANK NATIONAL ASSOCIATION,
a national banking association, as Agent for the Banks (the
“Agent”).

     

    W
I T N E S S E T H:

     

    WHEREAS, Borrowers, Agent and
KeyBank entered into that certain Loan Agreement dated as of January 30,
2007 (the “Loan Agreement”); and

     

    WHEREAS, Borrowers and Richard
Meruelo have requested that the Agent and KeyBank make certain modifications to
the terms of the Loan Agreement; and

     

    WHEREAS, the Agent and KeyBank
have agreed to make such modifications subject to the execution and delivery by
Borrowers and Richard Meruelo of this Amendment.

     

    NOW, THEREFORE, for and in
consideration of the sum of TEN and NO/100 DOLLARS ($10.00), and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto do hereby covenant and agree as
follows:

     

    1. Definitions.  All
the terms used herein which are not otherwise defined herein shall have the
meanings set forth in the Loan Agreement.

     

    2. Modification of the Loan
Agreement.  Borrowers, Richard Meruelo, KeyBank and Agent do
hereby modify and amend the Loan Agreement as follows:

     

    (a) By
deleting in its entirety the definition of “Acknowledgment” appearing in §1.1 of
the Loan Agreement, and inserting in lieu thereof the following:

     

    “Acknowledgment.  Collectively,
(i) that certain Acknowledgment dated as of January 30, 2007 executed by MMPI in
favor of Agent, and (ii) that certain Acknowledgment dated as of July 10, 2008
executed by South Alameda in favor of Agent.”

     

    (b) By
deleting in its entirety the definition of “Assignment of Interests” appearing
in §1.1 of the Loan Agreement, and inserting in lieu thereof the
following:

     

    
      
        
        

      

      
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    “Assignment of
Interests.  Collectively, (i) those certain Assignments of
Interests dated as of January 30, 2007 by each Borrower in favor of Agent, and
(ii) that certain Assignment of Interests dated as of July 10, 2008 from Homero
Meruelo and Belinda Meruelo in favor of Agent.”

     

    (c) By
deleting in its entirety the definition of “Change of Control” appearing in §1.1
of the Loan Agreement, and inserting in lieu thereof the following:

     

    “Change of
Control.  A Change of Control shall exist in the event that
Richard Meruelo shall fail to own at least eighty (80%) economic, voting and
other beneficial interests in Merco free of any lien, encumbrance or other
adverse claim, shall fail to be the sole manager of Merco, or shall fail to
control the management and policies of Merco.”

     

    (d) By
deleting in its entirety the definition of “Collateral” appearing in §1.1 of the
Loan Agreement, and inserting in lieu thereof the following:

     

    “Collateral. All of
the property rights and interests of the Borrowers, Guarantor, Homero Meruelo,
an individual resident of the State of Florida, and Belinda Meruelo, an
individual resident of the State of Florida, that are subject to the security
interests and liens created by the Security Documents.”

     

    (e) By
deleting in its entirety the definition of “Guarantor” appearing in §1.1 of the
Loan Agreement, and inserting in lieu thereof the following:

     

    “Guarantor.  Richard
Meruelo and South Alameda, individually or collectively, as the case may
be.”

     

    (f) By
deleting in its entirety the definition of “Guaranty” appearing in §1.1 of the
Loan Agreement, and inserting in lieu thereof the following:

     

    “Guaranty.  Collectively,
(i) the Unconditional Guaranty of Payment and Performance dated as of January
30, 2007 made by Richard Meruelo in favor of the Agent and the Banks, and (ii)
the Unconditional Guaranty of Payment and Performance dated as of July 10, 2008
made by South Alameda in favor of Agent and the Banks.”

     

    (g) By
deleting in its entirety the definition of “Maturity Date” appearing in §1.1 of
the Loan Agreement, and inserting in lieu thereof the following:

     

    “Maturity
Date.  September 30, 2008, or such earlier date on
which the Loans shall become due and payable pursuant to the terms
hereof.”

     

    
      
        
        

      

      
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    (h) By adding
the following at the end of the definition of “Market Value” appearing in
§1.1  of the Loan Agreement:

     

    “; provided, however, that the
computation of Market Value shall also take into account any stock splits or
reverse splits, or shares issued in connection with dividends or other similar
transactions, undertaken by MMPI after the date of this
Agreement.  For example, if the Market Value as of the date of
purchase of MMPI common stock is $5.00 per share and MMPI subsequently executes
a 2:1 reverse stock split as to shares of its common stock such that the trading
price of such shares increases by 100%, the Market Value measurement set forth
herein shall divide such trading price by two to account for such reverse
split.”

     

    (i) By
inserting the following definition of “Richard Meruelo” in §1.1 of the Loan
Agreement, as follows:

     

    “Richard
Meruelo.  Richard Meruelo, a resident of the State of
Florida.”

     

    (j) By
inserting the following definition of “South Alameda” in §1.1 of the Loan
Agreement, as follows:

     

    “South
Alameda.  333 South Alameda Corporation, a Florida
corporation.”

     

    (k) By
inserting the following definition of “South Alameda Contract” in §1.1 of the
Loan Agreement, as follows:

     

    “South Alameda
Contract.  That certain Standard Offer, Agreement and Escrow
Instructions for Purchase of Real Estate dated March 13, 2008 between MMPI and
Berdan Holdings, LLC, as amended and reinstated by Amendment and Reinstatement
of Purchase and Sale Agreement dated June 27, 2008 between Meruelo Maddux - 2000
San Fernando Road LLC (as seller) and Berdan Holdings, LLC (as buyer), pursuant
to which Berdan Holdings, LLC has agreed to purchase the South Alameda Property,
and any attachments, schedules or exhibits thereto, as such purchase and sale
agreement may be modified or amended from time to time, or any other agreement
pursuant to which South Alameda shall hereafter agree to sell the South Alameda
Property.”

     

    (l) By
inserting the following definition of “South Alameda Indebtedness” in to §1.1 of
the Loan Agreement, as follows:

     

    (m) “South Alameda
Indebtedness” means any Indebtedness secured by a Lien encumbering the
South Alameda Property.” By inserting the following definition of “South Alameda
Property” in §1.1 of the Loan Agreement, as follows:

     

    “South Alameda
Property.  The property located at 2000 North San Fernando
Road, Los Angeles, California.”

     

    (n) By
inserting the following definition of “South Alameda Transaction” in §1.1 of the
Loan Agreement, as follows:

     

    
      
        
        

      

      
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    “South Alameda
Transaction.  The transaction pursuant to which South Alameda
acquired the South Alameda Property from a subsidiary of MMPI.”

     

    (o) By
deleting §2.5(a) of the Loan Agreement in its entirety, and inserting in lieu
thereof the following new §2.5(a):

     

    “(a)           Each
Base Rate Loan shall bear interest for the period commencing with the Drawdown
Date thereof and ending on the date on which such Base Rate Loan is repaid at
the per annum rate equal to the sum of the Base Rate plus one percent
(1.00%).”

     

    (p) By
deleting § 2.9 of the Loan Agreement, and inserting in lieu thereof the
following:

     

                          “§2.9.                      Extension
of Maturity Date.  The Borrowers shall have the one-time right
and option to extend the Maturity Date to October 31, 2008, upon satisfaction of
the following conditions precedent, which must be satisfied prior to the
effectiveness of any extension of the Maturity Date:

     

    
      	
              (i)  

            	
              Extension
      Request.  The Borrowers shall deliver written notice of
      such request (the “Extension Request”) to the Agent not later than the
      date which is ten (10) days prior to the Maturity Date (as determined
      without regard to such extension).  Any such Extension Request
      shall be irrevocable and binding on the
  Borrowers.

            

    

     

    
      	
              (ii)  

            	
              Payment of Extension
      Fee.  The Borrowers shall pay to the Agent for the pro rata accounts
      of the Banks in accordance with their respective Commitments an extension
      fee in an amount equal to twenty-five (25) basis points on the Outstanding
      principal balance of the Loans as of the Maturity Date (as determined
      without regard to such extension), which fee shall, when paid, be fully
      earned and non-refundable under any
  circumstances.

            

    

     

    
      	
              (iii)  

            	
              Principal
      Reduction.  The Borrowers shall have paid to the Agent on
      or before the Maturity Date, for the pro rata accounts of the Banks in
      accordance with their respective Commitments, the sum of $15,000,000, to
      be applied by Agent against the outstanding principal balance of the
      Loans; provided, however, that no such payment shall have been made by
      sale or other disposition of the Collateral (other than the South Alameda
      Property).

            

    

     

    
      	
              (iv)  

            	
              No
      Default.  On the date the Extension Request is given and
      on the Maturity Date (as determined without regard to such extension)
      there shall exist no Default or Event of
  Default.

            

    

     

    
      
        
        

      

      
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              (v)  

            	
              Representations and
      Warranties.  The representations and warranties made by
      the Borrowers and the Guarantor in the Loan Documents or otherwise made by
      or on behalf of the Borrowers and the Guarantor in connection therewith or
      after the date thereof shall have been true and correct in all material
      respects when made and shall also be true and correct in all material
      respects on the date the Extension Request is given and on the Maturity
      Date (as determined without regard to such extension) except to the extent
      such representations and warranties expressly relate to an earlier
      date.

            

    

     

    
      	
              (vi)  

            	
              Pledged
      Stock.  There is an effective Registration Statement
      covering the resale of the Pledged Stock and all blue sky filings required
      for the resell of the Pledged Stock have been made and are
      effective.”

            

    

     

    (q) By
deleting §3.2 of the Loan Agreement in its entirety.

     

    (r) By
deleting §4.16 of the Loan Agreement in its entirety, and inserting in lieu
thereof the following new §4.16:

     

    “§4.16    
Representative
of Borrowers.  Each of Borrowers
hereby appoints Richard Meruelo as its agent, attorney in fact and
representative for the purpose of making Requests for Loans, Conversion
Requests, payment and prepayment of Loans, the giving and receipt of notices by
and to Borrowers under this Agreement and all other purposes incidental to any
of the foregoing.  Each Borrower agrees that any action taken by
Richard Meruelo as the agent, attorney-in fact and representative of such
Borrower shall be binding on such Borrower to the same extent as if directly
taken by such Borrower.”

     

    (s) By
deleting §6.1(a) of the Loan Agreement in its entirety, and inserting in lieu
thereof the following new §6.1(a):

     

    “(a)           Incorporation; Good
Standing, Etc.  Merco is a California limited liability company
duly organized pursuant to its operating agreement and articles of organization
and amendments thereto filed with the Secretary of the State of California and
is validly existing and in good standing under the laws of the State of
Delaware.  The Trust is a trust duly organized pursuant to its trust
agreement and is validly existing and in good standing under the laws of the
State of California.  Richard Meruelo is a resident of the State of
Florida, residing at 9540 Journeys End Road, Coral Gables,
Florida  33156.  Richard Meruelo maintains an office in
California at 761 Terminal Street, Los Angeles,
California  90021.  South Alameda is corporation duly
organized pursuant to its bylaws and articles of incorporation and amendments
thereto filed with the Secretary of State of the State of Florida and is validly
existing and in good standing under the laws of the State of
California.  Each Borrower and Guarantor (i) has all requisite power
to own its properties and interests and conduct its business as now conducted
and as presently contemplated, and (ii)  is in good standing as a
foreign entity and is duly authorized to do business in each other jurisdiction
where a failure to be so qualified in such other jurisdiction could have a
Material Adverse Effect.”

     

    
      
        
        

      

      
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    (t) By
deleting §7.2 of the Loan Agreement in its entirety, and inserting in lieu
thereof the following new §7.2:

     

    “§7.2       Maintenance
of Office.  Each Borrower and South Alameda will maintain its
chief executive office at 761 Terminal Street, Building 1, 2nd Floor,
Los Angeles, California  90021, or at such other place in the United
States of America as such Borrower and South Alameda shall designate upon prior
written notice to the Agent and the Banks, where notices, presentations and
demands to or upon the Borrowers in respect of the Loan Documents may be given
or made.  Richard Meruelo will maintain its residence at 9540 Journeys
End Road, Coral Gables, Florida  33156, or at such other place in the
United States of America as Richard Meruelo shall designate upon prior written
notice to the Agent and the Banks, where notices, presentations and demands to
or upon the Richard Meruelo in respect of the Loan Documents may be given or
made.”

     

    (u) By adding
the following as a new Section 7.16 to the Loan Agreement:

     

    “7.16 Reinstatement of Refunded
Payments.  If, for any reason, any payment to Lender of any of
the Obligations is required to be refunded by Agent or the Banks to Borrowers,
or paid or turned over to any other person, including, without limitation, by
reason of the operation of bankruptcy, reorganization, receivership or
insolvency laws or similar laws of general application relating to creditors’
rights and remedies now or hereafter enacted, Borrowers agree to pay to Agent
and the Banks on demand an amount equal to the amount so required to be
refunded, paid or turned over (the “Turnover Payment”), the obligations of
Borrowers shall not be treated as having been discharged by the original payment
to Agent or the Banks giving rise to the Turnover Payment, and this Agreement
and the Notes and the other Loan Documents shall be treated as having remained
in full force and effect for any such Turnover Payment so made by Agent and the
Banks, as well as for any amounts not theretofore paid to Agent and the Banks on
account of such obligations.”

     

    (v)   By
deleting §12.1(r) of the Loan Agreement in its entirety, and inserting in lieu
thereof the following new §12.1(r):

     

    “(r)          the
Market Value of the common stock of MMPI shall at any time be less than $1.50
per share;”

     

    (w)   By
inserting new §12.1(y) into the Loan Agreement, as follows:

     

    
      
        
        

      

      
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    “(y)          if
the South Alameda Transaction (as defined in the First Amendment to Loan
Agreement and Amendment to Other Loan Documents dated July 10, 2008 is set aside
for any reason and Borrowers have not, within ten (10) days thereafter either
(i) made a payment to Lender for application to the outstanding principal
balance of the Loans in the amount of $15,000,000 from a source other than the
Collateral, or (ii) provided, or caused South Alameda to provide, to Lender
additional Collateral satisfactory to Agent having a value of at least
$15,000,000 and executed or caused South Alameda to execute such amendments to
the Security Documents as Agent may reasonably require to reflect the pledge of
such additional Collateral to Agent, together with such other documents,
instruments and opinions of counsel as Agent may reasonably
require.”

     

    3. Base Rate
Loans.  Notwithstanding anything to the contrary in the Loan
Agreement or the other Loan Documents, all Loans shall be Base Rate Loans and
bear interest at the Base Rate; it being acknowledged and agreed by Borrowers
that in no event shall Borrowers be permitted to obtain or maintain any LIBOR
Rate Loans from and after the date of this Amendment.

     

    4. Application of
Distributions.  Notwithstanding anything to the contrary in the
Loan Agreement, the Cash Collateral Agreement or the other Loan Documents,
Distributions (as defined in the Assignment of Interests) shall, at Agent’s
option, be paid into the Interest Reserve established by §2.11 of the Loan
Agreement, or be applied by Agent as a partial prepayment of the Loans in
accordance with §3.5 of the Loan Agreement. Borrowers acknowledge and agree that
nothing contained in this Amendment shall modify Borrowers’ obligations under
the Loan Documents to promptly pay, or cause MMPI to promptly pay, Distributions
into the Collateral Account (as defined in the Cash Collateral
Agreement).

     

    5. Modification and Extension
Fee.  Borrowers, Richard Meruelo, KeyBank and Agent hereby
acknowledge and agree Borrowers shall pay to Agent on behalf of the Banks a
modification and extension fee in the amount of One Hundred Sixty Five Thousand
and no/100 Dollars($165,000.00) (the “Modification and Extension Fee”). The
Modification and Extension Fee shall be fully earned when paid and
non-refundable under any circumstances.

     

    6. Payment of Interest and
Legal Fees.  Borrowers, Richard Meruelo, KeyBank and Agent
hereby acknowledge and agree Borrowers shall pay to Agent on behalf of the Banks
all accrued but unpaid interest due under the Note (including interest at the
Default Rate) and the other Loan Documents (the “Unpaid Interest”), together
with all legal fees and expenses accrued but unpaid by Borrowers under the Loan
Agreement and the other Loan Documents (the “Legal Fees”). Such payments shall
be due and payable by wire transfer of immediately available funds to a bank
account designated by KeyBank on the date hereof.

     

    7. References to Loan Agreement
and Other Loan Documents.  All references in the Loan Documents
to the Loan Agreement and other Loan Documents shall be deemed a reference to
the Loan Agreement and such other Loan Documents as modified and amended
herein.

     

    
      
        
        

      

      
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    8. Acknowledgment of Borrowers
and Richard Meruelo.  Borrowers and Richard Meruelo hereby
acknowledge, represent and agree that the Loan Documents, as modified and
amended herein, remain in full force and effect and constitute the valid and
legally binding obligation of Borrowers and Richard Meruelo, as applicable,
enforceable against Borrowers and Richard Meruelo in accordance with their
respective terms, and that the execution and delivery of this Amendment and any
other documents in connection therewith do not constitute, and shall not be
deemed to constitute, a release, waiver or satisfaction of Borrowers’ or Richard
Meruelo’s obligations under the Loan Documents.

     

    9. Representations and
Warranties.  Borrowers and Richard Meruelo represent and
warrant to Agent and KeyBank as follows:

     

    (a) Authorization.  The
execution, delivery and performance of this Amendment and the transactions
contemplated hereby (i) are within the authority of Borrowers, (ii) have been
duly authorized by all necessary proceedings on the part of the Borrowers, (iii)
do not and will not conflict with or result in any breach or contravention of
any provision of law, statute, rule or regulation to which any of the Borrowers
or Richard Meruelo is subject or any judgment, order, writ, injunction, license
or permit applicable to any of the Borrowers or Richard Meruelo, (iv) do not and
will not conflict with or constitute a default (whether with the passage of time
or the giving of notice, or both) under any provision of the Governing Documents
of, or any agreement or other instrument binding upon any such Person or any of
its properties (including, without limitation, the Collateral), and (v) do
not and will not result in or require the imposition of any lien or other
encumbrance on any of the properties, assets or rights of any of the Borrowers
or Richard Meruelo, other than the liens and encumbrances created by the Loan
Documents.

     

    (b) Enforceability.  The
execution and delivery of this Amendment are valid and legally binding
obligations of Borrowers and Richard Meruelo enforceable in accordance with the
respective terms and provisions hereof, except as enforceability is limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors’ rights and except to the
extent that availability of the remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding
therefor may be brought.

     

    (c) Approvals.  The
execution, delivery and performance of this Amendment and the transactions
contemplated hereby do not require the approval or consent of any Person or the
authorization, consent, approval of or any license or permit issued by, or any
filing or registration with, or the giving of any notice to, any court,
department, board, commission or other governmental agency or authority other
than those already obtained.

     

    (d) Reaffirmation.  Borrowers
and Richard Meruelo reaffirm and restate as of the date hereof each and every
representation and warranty made by the Borrowers, Richard Meruelo and their
respective Subsidiaries in the Loan Documents or otherwise made by or on behalf
of such Persons in connection therewith except for representations or warranties
that expressly relate to an earlier date.

     

    10. No
Default.  By execution hereof, the Borrowers and Richard
Meruelo certify that each of the Borrowers and Richard Meruelo is and will be in
compliance with all covenants under the Loan Documents after the execution and
delivery of this Amendment, and that no Default or Event of Default exists after
giving effect to this Amendment.

     

    
      
        
        

      

      
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    11. Waiver of Claims.
Borrowers and Richard Meruelo acknowledge, represent and agree that none of such
Persons has any defenses, setoffs, claims, counterclaims or causes of action of
any kind or nature whatsoever with respect to the Loan Documents, the
administration or funding of the Loan or with respect to any acts or omissions
of Agent or KeyBank, or any past or present officers, agents or employees of
Agent or KeyBank, and each of such Persons does hereby expressly waive, release
and relinquish any and all such defenses, setoffs, claims, counterclaims and
causes of action, if any.

     

    12. Ratification.  Except
as hereinabove set forth, all terms, covenants and provisions of the Loan
Agreement and the other Loan Documents remain unaltered and in full force and
effect, and the parties hereto do hereby expressly ratify and confirm the Loan
Agreement and the other Loan Documents as modified and amended
herein.  Nothing in this Amendment or any other document delivered in
connection herewith shall be deemed or construed to constitute, and there has
not otherwise occurred, a novation, cancellation, satisfaction, release,
extinguishment or substitution of the indebtedness evidenced by the Notes or the
other obligations of Borrowers and Richard Meruelo under the Loan
Documents.

     

    13. Effective
Date.  This Amendment shall be deemed effective and in full
force and effect as of the date hereof upon satisfaction of each of the
following conditions: (a) the execution and delivery of this Amendment by
Borrowers, Richard Meruelo, Agent and KeyBank, (b) the delivery to Agent of the
Unconditional Guaranty of Payment and Performance from South Alameda, in form
and substance satisfactory to Agent, (c) the delivery to Agent of the Assignment
of Interests by Homero Meruelo and Belinda Mereulo, in form and substances
satisfactory to Agent, (d) the delivery to Agent of an Acknowledgement of the
foregoing Assignment of Interests executed by South Alameda, in form and
substance satisfactory to Agent, and (e) receipt by KeyBank of the Unpaid
Interest, Legal Fees and the Modification and Extension Fee.

     

    14. Amendment as Loan
Document.  This Amendment shall constitute a Loan
Document.

     

    15. Counterparts.  This
Amendment may be executed in any number of counterparts which shall together
constitute but one and the same agreement.

     

    16. MISCELLANEOUS.  THIS
AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF CALIFORNIA.  This Amendment shall be binding upon and shall
inure to the benefit of the parties hereto and their respective permitted
successors, successors-in-title and assigns as provided in the Loan
Agreement.

     

    [Remainder
of Page Intentionally Left Blank]

     

    
      
        
        

      

      
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    IN WITNESS WHEREOF, the
parties hereto have hereto set their hands and affixed their seals as of the day
and year first above written.

     

    BORROWERS:

     

    RICHARD
MERUELO AS TRUSTEE OF THE RICHARD MERUELO LIVING TRUST U/D/T DATED SEPTEMBER 15,
1989

     

    /s/ Richard
Meruelo (SEAL)

     

    Richard
Meruelo as Trustee of the Richard Meruelo Living Trust U/D/T dated September 15,
1989

     

    

     

    

     

    MERCO GROUP-ROOSEVELT BUILDING,
LLC, a California limited liability company

     

    By:  /s/ Richard
Meruelo (SEAL)                                                                                

    Richard
Meruelo as Trustee of the Richard Meruelo Living Trust U/D/T dated September 15,
1989, as Managing Member and Manager

     

     

    
 

     

    RICHARD
MERUELO:

     

    /s/ Richard
Meruelo (SEAL)

    RICHARD
MERUELO, a resident of the State of Florida

     

    

     

    

     

    [SIGNATURES
CONTINUE ON FOLLOWING PAGE]

     

    
      
        
        

      

      
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    BANKS:

    

    KEYBANK
NATIONAL ASSOCIATION

    individually
and as Agent

     

    By:/s/ Jason R.
Weaver                                                                           

     

    Name:
Jason R.
Weaver                                                                           

     

    Title:  Senior Vice
Presidentdex102.htm

    UNCONDITIONAL GUARANTY OF
PAYMENT AND PERFORMANCE

     

        FOR AND IN
CONSIDERATION OF the sum of Ten and No/100 Dollars ($10.00) and other good and
valuable consideration paid or delivered to the undersigned 333 SOUTH ALAMEDA CORPORATION,
a Florida corporation (“Guarantor”), the receipt and sufficiency whereof are
hereby acknowledged by Guarantor, and for the purpose of seeking to induce KEYBANK NATIONAL ASSOCIATION,
a national banking association (hereinafter referred to as “Lender”, which term
shall also include each other Bank which may now be or hereafter become a party
to the “Loan Agreement” (as hereinafter defined), and shall also include any
such individual Bank acting as agent for all of the Banks), to extend credit or
otherwise provide financial accommodations to RICHARD MERUELO AS TRUSTEE OF THE
RICHARD MERUELO LIVING TRUST U/D/T dated September 18, 1989 and MERCO GROUP – ROOSEVELT BUILDING,
LLC, a California limited liability company (hereinafter referred to
collectively as “Borrowers”), which extension of credit and provision of
financial accommodations will be to the direct interest, advantage and benefit
of Guarantor, Guarantor does hereby absolutely, unconditionally and irrevocably
guarantee to Lender the complete payment and performance of the following
liabilities, obligations and indebtedness of Borrowers to Lender (hereinafter
referred to collectively as the “Obligations”):

     

    (a) the full
and prompt payment when due, whether by acceleration or otherwise, either before
or after maturity thereof, of the Notes made by Borrowers to the order of the
Lenders in the aggregate principal face amount of Thirty-Three Million and
No/100 Dollars ($33,000,000.00), together with interest as provided in the Notes
and together with any replacements, supplements, renewals, modifications,
consolidations, restatements, increases and extensions thereof (the “Initial
Note”); and

     

    (b) the full
and prompt payment when due, whether by acceleration or otherwise, either before
or after maturity thereof, of each other note as may be issued under that
certain Loan Agreement dated as of January 30, 2007, as amended by that
certain First Amendment to Loan Agreement and Amendment to Other Loan Documents
dated as of even date herewith (as the same may be subsequently modified,
amended, restated, consolidated, supplemented, extended or renewed, hereinafter
referred to as the “Loan Agreement”) (hereinafter referred to as the “Loan
Agreement”) among Borrowers, KeyBank, for itself and as agent, and the other
lenders now or hereafter a party thereto, together with interest as provided in
each such note, together with any replacements, supplements, renewals,
modifications, consolidations, restatements, increases, and extensions thereof
(the Initial Note and each of the notes described in this subparagraph (b) are
hereinafter referred to collectively as the “Note”); and

     

    (c) the full
and prompt payment and performance of any and all obligations of Borrowers to
Lender under the terms of the Loan Agreement, together with any replacements,
supplements, renewals, modifications, consolidations, restatements and
extensions thereof; and

     

    (d) the full
and prompt payment and performance of any and all obligations of Borrowers to
Lender under the Security Documents, together with any replacements,
supplements, renewals, modifications, consolidations, restatements and
extensions thereof; and

     

    (e) the full
and prompt payment and performance of any and all Hedge Obligations to the
holders of any Hedge Obligations; and

     

    
      
         

      

      
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    (f) the full
and prompt payment and performance of any and all other obligations of Borrowers
to Lender under any other agreements, documents or instruments now or hereafter
evidencing, securing or otherwise relating to the indebtedness evidenced by the
Note or the Loan Agreement or the Hedge Obligations (the Note, the Loan
Agreement, the Security Documents and said other agreements, documents and
instruments are hereinafter collectively referred to as the “Loan Documents” and
individually referred to as a “Loan Document”).

     

    1. Agreement to Pay and
Perform; Costs of Collection.  Guarantor does hereby agree that
following an Event of Default under the Loan Documents if the Note or the other
Obligations are not paid by Borrowers in accordance with their terms, or if any
and all sums which are now or may hereafter become due from Borrowers to Lender
under the Loan Documents or the other Obligations are not paid by Borrowers in
accordance with their terms, or if any and all other obligations of Borrowers to
Lender under the Note or of Borrowers under the other Loan Documents or
agreements relating to the Hedge Obligations are not performed by Borrowers, as
applicable, in accordance with their terms, Guarantor will immediately upon
demand make such payments and perform such obligations.  Guarantor
further agrees to pay Lender on demand all reasonable costs and expenses
(including court costs and reasonable attorneys’ fees and disbursements) paid or
incurred by Lender in endeavoring to collect the Obligations guaranteed hereby,
to enforce any of the Obligations of Borrowers guaranteed hereby, or any portion
thereof, or to enforce this Guaranty, and until paid to Lender, such sums shall
bear interest at the rate for overdue amounts set forth in the Loan Agreement
unless collection from Guarantor of interest at such rate would be contrary to
applicable law, in which event such sums shall bear interest at the highest rate
which may be collected from Guarantor under applicable law.

     

    2. Reinstatement of Refunded
Payments.  If, for any reason, any payment to Lender of any of
the Obligations guaranteed hereunder is required to be refunded by Lender to
Borrowers, or paid or turned over to any other person, including, without
limitation, by reason of the operation of bankruptcy, reorganization,
receivership or insolvency laws or similar laws of general application relating
to creditors’ rights and remedies now or hereafter enacted, Guarantor agrees to
pay to the Lender on demand an amount equal to the amount so required to be
refunded, paid or turned over (the “Turnover Payment”), the obligations of
Guarantor shall not be treated as having been discharged by the original payment
to Lender giving rise to the Turnover Payment, and this Guaranty shall be
treated as having remained in full force and effect for any such Turnover
Payment so made by Lender, as well as for any amounts not theretofore paid to
Lender on account of such obligations.

     

    3. Rights of Lender to Deal
with Collateral, Borrowers and Other Persons.  Guarantor hereby
consents and agrees that Lender may at any time, and from time to time, without
thereby releasing Guarantor from any liability hereunder and without notice to
or further consent from Guarantor or any other Person or entity, either with or
without consideration:  release or surrender any lien or other
security of any kind or nature whatsoever held by it or by any person, firm or
corporation on its behalf or for its account, securing any indebtedness or
liability hereby guaranteed; substitute for any collateral so held by it, other
collateral of like kind, or of any kind; modify the terms of the Note or the
Loan Documents or the agreements relating to the Hedge Obligations; extend or
renew the Obligations for any period; grant releases, compromises and
indulgences with respect to the Obligations or the Loan Documents and to any
persons or entities now or hereafter liable thereunder or hereunder; release any
other guarantor, surety, endorser or accommodation party of the Note, the
Security Documents, any other Loan Documents or the agreements relating to the
Hedge Obligations; or take or fail to take any action of any type
whatsoever.  No such action which Lender shall take or fail to take in
connection with the Obligations or the Loan Documents, or any of them, or any
security for the payment of the indebtedness of Borrowers to Lender
or for the performance of any obligations or undertakings of Borrowers or
Guarantor, nor any course of dealing with Borrowers or any other person, shall
release Guarantor’s obligations hereunder, affect this Guaranty in any way or
afford Guarantor any recourse against Lender.  The provisions of this
Guaranty shall extend and be applicable to all replacements, supplements,
renewals, amendments, extensions, consolidations, restatements and modifications
of the Note, the Loan Documents or the agreements relating to the Hedge
Obligations, and any and all references herein to the Note, the Loan Documents
or the agreements relating to the Hedge Obligations shall be deemed to include
any such replacements, supplements, renewals, extensions, amendments,
consolidations, restatements or modifications thereof.  Without
limiting the generality of the foregoing, Guarantor acknowledges the terms of
Section 18.3 of the Loan Agreement and agrees that this Guaranty shall extend
and be applicable to each new or replacement note delivered by Borrowers
pursuant thereto without notice to or further consent from
Guarantor.

     

    
      
         

      

      
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    4. No Contest with Lender;
Subordination.  So long as any of the Obligations hereby
guaranteed remain unpaid or undischarged, Guarantor will not, by paying any sum
recoverable hereunder (whether or not demanded by Lender) or by any means or on
any other ground, claim any set-off or counterclaim against Borrowers in respect
of any liability of Guarantor to Borrowers or, in proceedings under federal
bankruptcy law or insolvency proceedings of any nature, prove in competition
with Lender in respect of any payment hereunder or be entitled to have the
benefit of any counterclaim or proof of claim or dividend or payment by or on
behalf of Borrowers or the benefit of any other security for any of the
Obligations hereby guaranteed which, now or hereafter, Lender may hold or in
which it may have any share.  Guarantor hereby expressly waives any
right of contribution from or indemnity against Borrowers, whether at law or in
equity, arising from any payments made by Guarantor pursuant to the terms of
this Guaranty, and Guarantor acknowledges that Guarantor has no right whatsoever
to proceed against Borrowers for reimbursement of any such
payments.  In connection with the foregoing, Guarantor expressly
waives any and all rights of subrogation to Lender against Borrowers, and
Guarantor hereby waives any rights to enforce any remedy which Lender may have
against Borrowers and any rights to participate in any collateral for Borrowers’
obligations under the Loan Documents or the agreements relating to the Hedge
Obligations.  Guarantor hereby subordinates any and all indebtedness
of Borrowers now or hereafter owed to Guarantor to all indebtedness of Borrowers
to Lender, and agrees with Lender that (a) Guarantor shall not demand or accept
any payment from Borrowers on account of such indebtedness, (b) Guarantor shall
not claim any offset or other reduction of Guarantor’s obligations hereunder
because of any such indebtedness, and (c) Guarantor shall not take any action to
obtain any interest in any of the security described in and encumbered by the
Loan Documents or the agreements relating to the Hedge Obligations because of
any such indebtedness; provided, however, that, if Lender so requests, such
indebtedness shall be collected, enforced and received by Guarantor as trustee
for Lender and be paid over to Lender on account of the indebtedness of
Borrowers to Lender, but without reducing or affecting in any manner the
liability of Guarantor under the other provisions of this Guaranty except to the
extent the principal amount or other portion of such outstanding indebtedness
shall have been reduced by such payment.

     

    
      
         

      

      
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    5. Waiver of
Defenses.  Guarantor hereby agrees that its obligations
hereunder shall not be affected or impaired by, and hereby waives and agrees not
to assert or take advantage of any right or defense based on:

     

    (a) (i) any
change in the amount, interest rate or due date or other term of any of the
obligations hereby guaranteed, (ii) any change in the time, place or manner of
payment of all or any portion of the obligations hereby guaranteed, (iii) any
amendment or waiver of, or consent to the departure from or other indulgence
with respect to, the Loan Agreement, any other Loan Document, or any other
document or instrument evidencing or relating to any obligations hereby
guaranteed, or (iv) any waiver, renewal, extension, addition, or supplement to,
or deletion from, or any other action or inaction under or in respect of, the
Loan Agreement, any of the other Loan Documents, or any other documents,
instruments or agreements relating to the obligations hereby guaranteed or any
other instrument or agreement referred to therein or evidencing any obligations
hereby guaranteed or any assignment or transfer of any of the
foregoing;

     

    (b) any
subordination of the payment of the obligations hereby guaranteed to the payment
of any other liability of the Borrowers or any other Person;

     

    (c) any act
or failure to act by Borrowers or any other Person which may adversely affect
Guarantor’s subrogation rights, if any, against Borrowers or any other Person to
recover payments made under this Guaranty;

     

    (d) any
nonperfection or impairment of any security interest or other Lien on any
collateral, if any, securing in any way any of the obligations hereby
guaranteed;

     

    (e) any
application of sums paid by the Borrowers or any other Person with respect to
the liabilities of Lender, regardless of what liabilities of the Borrowers
remain unpaid;

     

    (f) any
defense of Borrowers, including without limitation, the invalidity, illegality
or unenforceability of any of the Obligations;

     

    (g) either
with or without notice to Guarantor, any renewal, extension, modification,
amendment or another changes in the Obligations, including but not limited to
any material alteration of the terms of payment or performance of the
Obligations; or

     

    (h) any
statute of limitations in any action hereunder or for the collection of the Note
or for the payment or performance of any obligation hereby
guaranteed;

     

    (i) the
incapacity, lack of authority, death or disability of Borrowers or any other
Person or entity, or the failure of Lender to file or enforce a claim against
the estate (either in administration, bankruptcy or in any other proceeding) of
Borrowers or any other Person;

     

    (j) the
dissolution or termination of existence of Borrowers or any other
Person;

     

    (k) the
voluntary or involuntary liquidation, sale or other disposition of all or
substantially all of the assets of Borrowers or any other Person;

     

    
      
         

      

      
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    (l) the
voluntary or involuntary receivership, insolvency, bankruptcy, assignment for
the benefit of creditors, reorganization, assignment, composition, or
readjustment of, or any similar proceeding affecting, Borrowers or any other
Person, or any of Borrowers’ or any other Person’s properties or
assets;

     

    (m) the
damage, destruction, foreclosure or surrender of all or any part of the
Collateral;

     

    (n) the
failure of Lender to give notice of the existence, creation or incurring of any
new or additional indebtedness or obligation of Borrowers or of any action or
nonaction on the part of any other person whomsoever in connection with any
obligation hereby guaranteed;

     

    (o) any
failure or delay of Lender to commence an action against Borrowers or any other
Person, to assert or enforce any remedies against Borrowers under the Note or
the other Loan Documents or agreements relating to the Hedge Obligations, or to
realize upon any security;

     

    (p) any
failure of any duty on the part of Lender to disclose to Guarantor any facts it
may now or hereafter know regarding Borrowers (including, without limitation
Borrowers’ financial condition), any other Person, the Collateral, or any other
assets or liabilities of such Persons, whether such facts materially increase
the risk to Guarantor or not (it being agreed that Guarantor assumes
responsibility for being informed with respect to such
information);

     

    (q) failure
to accept or give notice of acceptance of this Guaranty by Lender;

     

    (r) failure
to make or give notice of presentment and demand for payment of any of the
indebtedness or performance of any of the obligations hereby
guaranteed;

     

    (s) failure
to make or give protest and notice of dishonor or of default to Guarantor or to
any other party with respect to the indebtedness or performance of obligations
hereby guaranteed;

     

    (t) any and
all other notices whatsoever to which Guarantor might otherwise be
entitled;

     

    (u) any lack
of diligence by Lender in collection, protection or realization upon any
collateral securing the payment of the indebtedness or performance of
obligations hereby guaranteed;

     

    (v) the
invalidity or unenforceability of the Note, or any of the other Loan Documents,
or any of the agreements relating to the Hedge Obligations, or any assignment or
transfer of the foregoing;

     

    (w) the
compromise, settlement, release or termination of any or all of the obligations
of Borrowers under the Note or the other Loan Documents or any of the agreements
relating to the Hedge Obligations;

     

    (x) any
transfer by Borrowers or any other Person of all or any part of the security
encumbered by the Loan Documents;

     

    
      
         

      

      
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    (y) the
failure of Lender to perfect any security or to extend or renew the perfection
of any security;

     

    (z) any and
all of the rights and defenses described in Section 2856(a) of the California
Civil Code;

     

    (aa) any and
all of the rights of subrogation, reimbursement, indemnification and
contribution and other rights and defenses that are or may become available to
Guarantor by reason of Sections 2787 to 2855 (inclusive), 2899 and 3433 of the
California Civil Code;

     

    (bb) except to
the extent prohibited by Section 9602 of the California Commercial Code, any and
all rights and defenses that Guarantor might otherwise have under the California
Commercial Code; or

     

    (cc) to the
fullest extent permitted by law, any other legal, equitable or surety defenses
whatsoever to which Guarantor might otherwise be entitled, it being the
intention that the obligations of Guarantor hereunder are absolute,
unconditional and irrevocable.

     

        Guarantor
understands that the exercise by Lender of certain rights and remedies may
affect or eliminate Guarantor’s right of subrogation against the Borrowers and
that Guarantor may therefore incur partially or totally nonreimbursable
liability hereunder.  Nevertheless, Guarantor hereby authorizes and
empowers Lender, its successors, endorsees and assigns, to exercise in its or
their sole discretion, any rights and remedies, or any combination thereof,
which may then be available, it being the purpose and intent of Guarantor that
the obligations hereunder shall be absolute, continuing, independent and
unconditional under any and all circumstances.  Notwithstanding any
other provision of this Guaranty to the contrary, Guarantor hereby waives and
releases any claim or other rights which Guarantor may now have or hereafter
acquire against the Borrowers or any other Person of all or any of the
obligations of Guarantor hereunder that arise from the existence or performance
of Guarantor’s obligations under this Guaranty or any of the other Loan
Documents, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification, any right to
participate in any claim or remedy of Lender against the Borrowers or any other
Person or any Collateral which Lender now has or hereafter acquires, whether or
not such claim, remedy or right arises in equity or under contract, statute or
common law, by any payment made hereunder or otherwise, including, without
limitation, the right to take or receive from the Borrowers, directly or
indirectly, in cash or other property or by setoff or in any other manner,
payment or security on account of such claim or other rights.

     

        Without
limitation on the generality of the other waivers contained in this Guaranty,
Guarantor hereby waives all rights and defenses arising out of an election of
remedies by the Lender, even though that election of remedies, such as a
nonjudicial foreclosure with respect to security for a guaranteed obligation,
has destroyed or otherwise impaired Guarantor’s rights of subrogation and
reimbursement against the principal (whether by the operation of any provision
of the California Code of Civil Procedure or otherwise).

     

    
      
         

      

      
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        In addition,
Guarantor hereby agrees that its obligations hereunder shall not be released,
diminished, impaired, reduced, dependent upon or affected by, and hereby waives
and agrees not to assert or take advantage of any defense based on, any one or
more of the following:  (i) the genuineness, validity, regularity or
enforceability of, or the existence of any default with respect to, the
Obligations, any security therefor, or any related instrument, documents,
obligation, transaction or matter; (ii) the nature, extent, condition, value or
continued existence of any security given in connection with the Obligations;
(iii) any action or failure to take action by any holder of the Obligations
under or with respect to this Guaranty or the Obligations, any security
therefor, or any related documents, transaction or matter; (iv) any other
dealings between any holder of the Obligations and Lender; (v) any exculpatory
language or provisions limiting or restricting Lender’s rights or remedies
against the Borrowers or any other Person under the Loan Documents; or (vi) any
claim by or on behalf of Borrowers of any credit or right of setoff with respect
to the Note or any of the Obligations.

     

    6. Guaranty of Payment and
Performance and Not of Collection.  This is a Guaranty of
payment and performance and not of collection.  The liability of
Guarantor under this Guaranty shall be primary, direct and immediate and not
conditional or contingent upon the pursuit of any remedies against Borrowers or
any other Person, nor against securities or liens available to Lender, its
successors, successors in title, endorsees or assigns.  Guarantor
hereby waives any right to require that an action be brought against Borrowers
or any other Person or to require that resort be had to any security or to any
balance of any deposit account or credit on the books of Lender in favor of
Borrowers or any other Person.

     

    7. Rights and Remedies of
Lender.  In the event of an Event of Default under the Note or
the Loan Documents, or any of them, that is continuing (it being understood that
the Lender has no obligation to accept cure after an Event of Default occurs),
Lender shall have the right to enforce its rights, powers and remedies
thereunder or hereunder or under any other Loan Document, in any order, and all
rights, powers and remedies available to Lender in such event shall be
nonexclusive and cumulative of all other rights, powers and remedies provided
thereunder or hereunder or by law or in equity.  Accordingly,
Guarantor hereby authorizes and empowers Lender upon the occurrence of any Event
of Default under the Note or the Loan Documents, at its sole discretion, and
without notice to Guarantor, to exercise any right or remedy which Lender may
have, including, but not limited to, judicial foreclosure, exercise of rights of
power of sale, acceptance of a deed or assignment in lieu of foreclosure,
appointment of a receiver to collect rents and profits, exercise of remedies
against personal property, or enforcement of any assignment of leases, as to any
security, whether real, personal or intangible.  At any public or
private sale of any security or collateral for any of the Obligations guaranteed
hereby, whether by foreclosure or otherwise, Lender may, in its discretion,
purchase all or any part of such security or collateral so sold or offered for
sale for its own account and may apply against the amount bid therefor all or
any part of the balance due it pursuant to the terms of the Note or Security
Documents or any other Loan Document or agreements relating to the Hedge
Obligations without prejudice to Lender’s remedies hereunder against Guarantor
for deficiencies.  If the Obligations guaranteed hereby are partially
paid by reason of the election of Lender to pursue any of the remedies available
to Lender, or if such Obligations are otherwise partially paid, this Guaranty
shall nevertheless remain in full force and effect, and Guarantor shall remain
liable for the entire balance of the Obligations guaranteed hereby even though
any rights which Guarantor may have against Borrowers or any other Person may be
destroyed or diminished by the exercise of any such remedy.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    8. Application of
Payments.  Guarantor hereby authorizes Lender, without notice
to Guarantor, to apply all payments and credits received from Borrowers or from
Guarantor or realized from any security in such manner and in such priority as
Lender in its sole judgment shall see fit to the Obligations.

     

    9. Business Failure, Bankruptcy
or Insolvency.  In the event of the business failure of
Guarantor or if there shall be pending any bankruptcy or insolvency case or
proceeding with respect to Guarantor under federal bankruptcy law or any other
applicable law or in connection with the insolvency of Guarantor, or if a
liquidator, receiver, or trustee shall have been appointed for Guarantor or
Guarantor’s properties or assets, Lender may file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of Lender allowed in any proceedings relative to Guarantor, or any of
Guarantor’s properties or assets, and, irrespective of whether the indebtedness
or other obligations of Borrowers guaranteed hereby shall then be due and
payable, by declaration or otherwise, Lender shall be entitled and empowered to
file and prove a claim for the whole amount of any sums or sums owing with
respect to the indebtedness or other obligations of Borrowers guaranteed hereby,
and to collect and receive any moneys or other property payable or deliverable
on any such claim.  Guarantor covenants and agrees that upon the
commencement of a voluntary or involuntary bankruptcy proceeding by or against
Borrowers, Guarantor shall not seek a supplemental stay or otherwise pursuant to
11 U.S.C. §105 or any other provision of the Bankruptcy Code, as amended, or any
other debtor relief law (whether statutory, common law, case law, or otherwise)
of any jurisdiction whatsoever, now or hereafter in effect, which may be or
become applicable, to stay, interdict, condition, reduce or inhibit the ability
of Lender to enforce any rights of Lender against Guarantor by virtue of this
Guaranty or otherwise.

     

    10. Covenants of
Guarantor.  Guarantor hereby covenants and agrees with Lender
that until all indebtedness guaranteed hereby has been completely repaid and all
obligations and undertakings of Borrowers under, by reason of, or pursuant to
the Note and the other Loan Documents and the agreements relating to the Hedge
Obligations have been completely performed and Lender has no further obligation
to make Loans, Guarantor will comply with any and all covenants applicable to
Guarantor set forth in the Loan Agreement.  Guarantor will deliver or
cause to be delivered to the Lender from time to time such financial data and
information in the possession of the Guarantor regarding the Guarantor as the
Lender may reasonably request.

     

    11. Security and Rights of
Set-off.  Guarantor hereby grants to Lender, as security for
the full and prompt payment and performance of Guarantor’s obligations
hereunder, a continuing lien on and security interest in any and all securities
or other property belonging to Guarantor now or hereafter held by Lender and in
any and all deposits (general or specific, time or demand, provisional or final,
regardless of currency, maturity, or the branch of Lender where the deposits are
held) now or hereafter held by Lender and other sums credited by or due from
Lender to Guarantor or subject to withdrawal by Guarantor; and regardless of the
adequacy of any collateral or other means of obtaining repayment of such
obligations, during the continuance of any Event of Default under the Note or
the Loan Documents, Lender may at any time and without notice to Guarantor
set-off and apply the whole or any portion or portions of any or all such
deposits and other sums against amounts payable under this Guaranty, whether or
not any other person or persons could also withdraw money
therefrom.  Any security now or hereafter held by or for Guarantor and
provided by Borrowers, or by anyone on Borrowers’ behalf, in respect of
liabilities of Guarantor hereunder shall be held in trust for Lender as security
for the liabilities of Guarantor hereunder.

     

    
      
         

      

      
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    12. Changes in Writing; No
Revocation.  This Guaranty may not be changed orally, and no
obligation of Guarantor can be released or waived by Lender except as provided
in §27 of the Loan Agreement.  This Guaranty shall be irrevocable by
Guarantor until all indebtedness guaranteed hereby has been completely repaid
and all obligations and undertakings of Borrowers under, by reason of, or
pursuant to the Note and the Loan Documents and the agreements relating to the
Hedge Obligations have been completely performed and the Lenders have no further
obligation to advance Loans.

     

    13. Notices.  All
notices, demands or requests provided for or permitted to be given pursuant to
this Guaranty (hereinafter in this paragraph referred to as “Notice”) must be in
writing and shall be deemed to have been properly given or served by personal
delivery or by sending same by overnight courier or by depositing the same in
the United States mail, postpaid and registered or certified, return receipt
requested, at the addresses set forth below.  Each Notice shall be
effective upon being delivered personally or upon being sent by overnight
courier or upon being deposited in the United States Mail as
aforesaid.  The time period in which a response to any such Notice
must be given or any action taken with respect thereto, however, shall commence
to run from the date of receipt if personally delivered or sent by overnight
courier or, if so deposited in the United States Mail, the earlier of three (3)
Business Days following such deposit and the date of receipt as disclosed on the
return receipt.  Rejection or other refusal to accept or the inability
to deliver because of changed address of which no Notice was given shall be
deemed to be receipt of the Notice sent.  By giving at least fifteen
(15) days prior Notice thereof, Guarantor or Lender shall have the right from
time to time and at any time during the term of this Guaranty to change their
respective addresses and each shall have the right to specify as its address any
other address within the United States of America.  For the purposes
of this Guaranty:

     

    The
address of Lender is:

    

    KeyBank
National Association, as Agent

    127
Public Square

    Cleveland,
Ohio  44114-1306

    Attn:
Real Estate Capital Services

    

    with a
copy to:

    

    KeyBank
National Association

    127
Public Square

    Cleveland,
Ohio  44114-1306

    Attn: Jason
Weaver

     

    The
address of Guarantor is:

     

         333 South Alameda
Corporation 

         761 Terminal
Street, Building 1

         Los Angeles,
California 90021

    

    
      
         

      

      
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    14. Governing
Law.  GUARANTOR ACKNOWLEDGES AND AGREES
THAT THIS GUARANTY AND THE OBLIGATIONS OF GUARANTOR HEREUNDER SHALL BE GOVERNED
BY AND INTERPRETED AND DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA.

     

    15. CONSENT TO JURISDICTION;
WAIVERS.  GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY (A)
SUBMITS TO PERSONAL JURISDICTION IN THE STATE OF CALIFORNIA OVER ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY, AND
(B) WAIVES ANY AND ALL PERSONAL RIGHTS UNDER THE LAWS OF ANY STATE (I) TO
THE RIGHT, IF ANY, TO TRIAL BY JURY(LENDER HAVING ALSO WAIVED SUCH RIGHT TO
TRIAL BY JURY), (II) TO OBJECT TO JURISDICTION WITHIN THE STATE OF CALIFORNIA OR
VENUE IN ANY PARTICULAR FORUM WITHIN THE STATE OF CALIFORNIA, AND (III) TO THE
RIGHT, IF ANY, TO CLAIM OR RECOVER ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN OR IN ADDITION TO ACTUAL
DAMAGES.  EACH LENDER IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND
ALL RIGHTS UNDER THE LAWS OF ANY STATE TO THE RIGHT, IF ANY, TO TRIAL BY
JURY.  GUARANTOR AGREES THAT, IN ADDITION TO ANY METHODS OF SERVICE OF
PROCESS PROVIDED FOR UNDER APPLICABLE LAW, ALL SERVICE OF PROCESS IN ANY SUCH
SUIT, ACTION OR PROCEEDING MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED, DIRECTED TO GUARANTOR AT THE ADDRESS SET FORTH IN PARAGRAPH
13 ABOVE, AND SERVICE SO MADE SHALL BE COMPLETE FIVE (5) DAYS AFTER THE SAME
SHALL BE SO MAILED.  NOTHING CONTAINED HEREIN, HOWEVER, SHALL PREVENT
LENDER FROM BRINGING ANY SUIT, ACTION OR PROCEEDING OR EXERCISING ANY RIGHTS
AGAINST ANY SECURITY AND AGAINST GUARANTOR PERSONALLY, AND AGAINST ANY PROPERTY
OF GUARANTOR, WITHIN ANY OTHER STATE.  INITIATING SUCH SUIT, ACTION OR
PROCEEDING OR TAKING SUCH ACTION IN ANY STATE SHALL IN NO EVENT CONSTITUTE A
WAIVER OF THE AGREEMENT CONTAINED HEREIN THAT THE LAWS OF THE STATE OF
CALIFORNIA SHALL GOVERN THE RIGHTS AND OBLIGATIONS OF GUARANTOR AND LENDER
HEREUNDER OR OF THE SUBMISSION HEREIN MADE BY GUARANTOR TO PERSONAL JURISDICTION
WITHIN THE STATE OF CALIFORNIA.  GUARANTOR HEREBY WAIVES ANY OBJECTION
THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH
COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT
COURT.  GUARANTOR CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY
OF ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH LENDER WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND
ACKNOWLEDGE THAT LENDER HAS BEEN INDUCED TO ENTER INTO THIS GUARANTY AND THE
OTHER LOAN DOCUMENTS TO WHICH THEY ARE PARTIES BY, AMONG OTHER THINGS, THE
WAIVERS AND CERTIFICATIONS CONTAINED IN THIS PARAGRAPH 15.  GUARANTOR
ACKNOWLEDGES THAT THEY HAVE HAD AN OPPORTUNITY TO REVIEW THIS PARAGRAPH 15 WITH
THEIR LEGAL COUNSEL AND THAT GUARANTOR AGREES TO THE FOREGOING AS THEIR FREE,
KNOWING AND VOLUNTARY ACT.

     

    
      
         

      

      
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    16. Successors and
Assigns.  The provisions of this Guaranty shall be binding upon
Guarantor and his respective heirs, successors, successors in title, legal
representatives, and assigns, and shall inure to the benefit of Lender, its
successors, successors in title, legal representatives and
assigns.  Guarantor shall not assign or transfer any of its rights or
obligations under this Guaranty without the prior written consent of
Lender.

     

    17. Assignment by
Lender.  This Guaranty is assignable by Lender in whole or in
part in conjunction with any assignment of the Obligations or portions thereof,
and any assignment hereof or any transfer or assignment of the Obligations or
portions thereof by Lender shall operate to vest in any such assignee the rights
and powers, in whole or in part, as appropriate, herein conferred upon and
granted to Lender.

     

    18. Severability.  If
any term or provision of this Guaranty shall be determined to be illegal or
unenforceable, all other terms and provisions hereof shall nevertheless remain
effective and shall be enforced to the fullest extent permitted by
law.

     

    19. Disclosure.  Guarantor
agrees that in addition to disclosures made in accordance with standard banking
practices, any Lender may disclose information obtained by such Lender pursuant
to this Guaranty to assignees or participants and potential assignees or
participants hereunder subject to the terms of the Loan Agreement.

     

    20. No Unwritten
Agreements.  THIS GUARANTY REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES AND 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.

     

    21. Time of the
Essence.  Time is of the essence with respect to each and every
covenant, agreement and obligation of Guarantor under this
Guaranty.

     

    22. Ratification.  Guarantor
does hereby restate, reaffirm and ratify each and every warranty and
representation regarding Guarantor set forth in the Loan Agreement as if the
same were more fully set forth herein.

     

    23. Counterparts.  This
Guaranty and any amendment hereof may be executed in several counterparts and by
each party on a separate counterpart, each of which when so executed and
delivered shall be an original, and all of which together shall constitute one
instrument.  In proving this Guaranty it shall not be necessary to
produce or account for more than one such counterpart signed by the party
against whom enforcement is sought.

     

    
      
         

      

      
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    24. Termination of
Guaranty.  Without modifying or limiting any provision of this
Guaranty or any agreement contained herein, this Guaranty shall continue in
effect until an amount equal to FIFTEEN MILLION AND NO/100 DOLLARS ($15,000,000)
is paid to Agent, in connection with any sale, transfer, assignment, conveyance,
option or other disposition of, or any pledge, mortgage, encumbrance, financing
or refinancing of the South Alameda Property for application by Agent in
satisfaction of the Obligations in such order as Agent determines in its sole
discretion, and are not subject to any bankruptcy preference period or any other
disgorgement, or until all of the Obligations and all of the obligations of
Guarantor to Lender under this Guaranty are fully and finally paid, performed
and discharged in accordance with their terms (and without regard to any
extension, reduction or other alteration thereof in any proceeding under the
Bankruptcy Code, or any other debtor relief law) and are not subject to any
bankruptcy preference period or any other disgorgement.

     

    25. Sale or Refinance of the
South Alameda Property.

     

    (a) Guarantor
acknowledges and agrees that an amount equal to FIFTEEN MILLION AND NO/100
DOLLARS ($15,000,000) paid to Guarantor, or its shareholders, in connection with
any sale, transfer, assignment, conveyance, option or other disposition
(including, without limitation, disposition by means of a foreclosure) of, or
any pledge, mortgage, encumbrance, financing or refinancing of the South Alameda
Property shall be paid directly by Guarantor to Agent for application by Agent
in satisfaction of the Obligations in such order as Agent determines in its sole
discretion. Guarantor further agrees not to sell, transfer, assign, convey,
grant an option or otherwise dispose (including, without limitation, disposition
by means of a foreclosure) of, or pledge, mortgage, encumber, finance or
refinance the South Alameda Property unless any such transaction will result in
Guarantor receiving proceeds sufficient to make a payment to Guarantor in an
amount equal to $15,000,000 pursuant to this Paragraph 25(a).

     

    (b) Guarantor
represents and warrants to, and covenants with, Lender as follows:

     

    (1)           As
of the date hereof, and after giving effect to the transactions contemplated by
this Guaranty, Guarantor is not insolvent on a balance sheet basis, the sum of
Guarantor’s assets exceeds the sum of Guarantor’s liabilities, Guarantor is able
to pay its debts as they become due, and Guarantor has sufficient capital to
carry on its business.  

     

    (2)           As
of the date hereof, Guarantor has no Indebtedness and the South Alameda Property
is not subject to any Liens, except for the Indebtedness and Liens described on
Exhibit A
attached hereto. Guarantor covenants and agrees that until such time as the
payment contemplated by Paragraph 25(a) hereof is made, except for any
Indebtedness and any Lien described on Exhibit A, and except for any Lien for
real property taxes and assessments, Guarantor shall not incur any Indebtedness
and shall create any Lien on the South Alameda Property without the prior
written consent of Lender being first obtained, which consent may be withheld in
Lender’s sole discretion.

     

    (c) Guarantor
acknowledges that Homero Meruelo and Belinda Meruelo (the shareholders of
Guarantor) have executed an Assignment of Interests in favor of Agent of even
date herewith to secure the Obligations. Agent agrees to cause the full release
and/or cancellation of such Assignment of Interests upon Agent’s receipt of the
sum of FIFTEEN MILLION AND NO/100 DOLLARS ($15,000,000.00) in connection with
any sale, transfer, assignment, conveyance, option or other disposition of, or
any pledge, mortgage, encumbrance, financing or refinancing of the South Alameda
Property.

     

    
      
         

      

      
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    (d) In the
event that Guarantor shall receive any payments made under or with respect to
the sale, transfer, assignment, conveyance, option or other disposition
(including disposition by means of a foreclosure) of, or any pledge, mortgage,
encumbrance, financing or refinancing of the South Alameda Property, Guarantor
shall hold all such payments in trust for Agent, will not commingle such
payments with other funds of Guarantor, and will immediately pay and deliver in
kind, the amount required by subsection (a) above directly to Agent for
application by Agent in satisfaction of the Obligations in such order as Agent
determines in its sole discretion. Upon execution by Guarantor of the South
Alameda Contract, Guarantor shall execute irrevocable instructions to the escrow
agent for the purchase and sale transaction, directing such escrow agent to pay
to Agent the amounts required to be paid pursuant to subsection (a) above, which
payment shall be deemed to have been made by Guarantor pursuant to this
Guaranty.

     

    26. Definitions.  All
terms used herein and not otherwise defined herein shall have the meanings set
forth in the Loan Agreement.

     

    [CONTINUED
ON NEXT PAGE]

     

    
      
         

      

      
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    IN
WITNESS WHEREOF, Guarantor has executed this Guaranty under seal as of this 10th
day of July, 2008.

     

     

    GUARANTOR:

     

    
      
        	 	333
      SOUTH ALAMEDA CORPORATION, a Florida
      corporation	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Richard
      Meruelo	 
	 	 	Name:
      Richard Meruelo	 
	 	 	Title:
      President	 
	 	 	 	 

      

    

    

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    

     

          Lender joins in the execution of
this Guaranty for the sole and limited purpose of evidencing its agreement to
waiver of the right to trial by jury contained in Paragraph 15 hereof and
Section 25 of the Loan Agreement.

     

     

    
      
        	 	KEY
      BANK NATIONAL ASSOCIATION, as
      Agent	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Jason
      R. Weaver	 
	 	 	Name:
      Jason R Weaver	 
	 	 	Title:
      Senior Vice President 	 
	 	 	 	 

      

    

     

     

     

    
 

     

    
      
         

      

      
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    EXHIBIT
A

     

    

     

    A.           LIENS:
There are no Liens against the South Alameda Property other than the Liens
described in Schedule B, Section Two of that certain First American Title
Insurance Company Commitment No. NCS-335134-LA2 dated May 23, 2008.

     

    B.           INDEBTEDNESS:
The Corporation has no Indebtedness other than Indebtedness secured by the Liens
described in subsection (A) above, and the obligation of the Corporation to
Meruelo Maddux - 2000 San Fernando Road LLC pursaunt to that Closing Agreement
dated May 27, 2008, a true and correct copy of which has been delivered by
Guarantor to Lender.

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